\n 5.18 Pilot Credit Line……………………………………….. 40
\n 5.19 Litigation……………………………………………… 40<\/p>\nSECTION SIX………………………………………………………………… 41
\n 6. Conditions to the Merger……………………………………….. 41
\n 6.1 Conditions to Obligations of Each Party to Effect the Merger…. 41
\n 6.2 Additional Conditions to Obligations of Platinum, Target
\n and Pilot………………………………………………. 41
\n 6.3 Additional Conditions to the Obligations of Acquiror and
\n Merger Sub……………………………………………… 43<\/p>\n
SECTION SEVEN………………………………………………………………. 45
\n 7. Termination, Amendment and Waiver……………………………….. 45
\n 7.1 Termination…………………………………………….. 45
\n 7.2 Effect of Termination……………………………………. 46
\n 7.3 Expenses and Termination Fees…………………………….. 47
\n 7.4 Amendment………………………………………………. 47
\n 7.5 Extension; Waiver……………………………………….. 47<\/p>\n
SECTION EIGHT………………………………………………………………. 47
\n 8. Indemnification……………………………………………….. 47
\n 8.1 Survival of Representations and Warranties…………………. 47
\n 8.2 Indemnification…………………………………………. 48
\n 8.3 Damages Threshold……………………………………….. 48
\n 8.4 Indemnification Claims…………………………………… 48
\n 8.5 Employee Retention Payments………………………………. 50
\n 8.6 Interest Penalty………………………………………… 52<\/p>\n
SECTION NINE……………………………………………………………….. 52
\n 9. General Provisions…………………………………………….. 52
\n 9.1 Notices………………………………………………… 52
\n 9.2 Interpretation………………………………………….. 53
\n 9.3 Counterparts……………………………………………. 53
\n 9.4 Entire Agreement; Nonassignability; Parties in Interest……… 53
\n 9.5 Severability……………………………………………. 53
\n 9.6 Remedies Cumulative……………………………………… 54
\n 9.7 Governing Law…………………………………………… 54
\n 9.8 Rules of Construction……………………………………. 54
\n 9.9 Amendments and Waivers…………………………………… 54
\n 9.10 Definition of Knowledge………………………………….. 54
\n<\/c><\/c><\/s><\/table>\n
-iii-<\/p>\n
5<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
This Agreement and Plan of Merger (this “Agreement”) is made and entered
\ninto as of August 24, 2000 by and among Accrue Software, Inc., a Delaware
\ncorporation (“Acquiror”), Aviator Acquisition Corp., a Delaware corporation and
\na wholly owned subsidiary of Acquiror (“Merger Sub”), Aviator Holding
\nCorporation, a Delaware corporation (“Target”), Pilot Software, Inc., a Delaware
\ncorporation and wholly owned subsidiary of Target (“Pilot”), and Platinum Equity
\nHoldings, LLC., a Delaware limited liability company and the sole stockholder of
\nTarget (“Platinum”).<\/p>\n
RECITALS<\/p>\n
A. The Boards of Directors of Target, Acquiror and Merger Sub believe it
\nis in the best interests of their respective companies and the stockholders of
\ntheir respective companies that Target and Merger Sub combine into a single
\ncompany through the merger of Merger Sub with and into Target (the “Merger”)
\nand, in furtherance thereof, have approved the Merger. Pursuant to the Merger,
\namong other things, the outstanding shares of capital stock of Target shall be
\nconverted into shares of the voting Common Stock, par value $0.001 per share, of
\nAcquiror ( “Acquiror Common Stock”), as set forth herein.<\/p>\n
B. Target, Acquiror, Merger Sub, Pilot and Platinum desire to make
\ncertain representations and warranties and other agreements in connection with
\nthe Merger.<\/p>\n
C. The parties intend, by executing this Agreement, to adopt a plan of
\nreorganization within the meaning of Section 368 of the Internal Revenue Code of
\n1986, as amended (the “Code”), and to cause the Merger to qualify as a
\nreorganization under the provisions of Sections 368(a)(1)(A) and 368(a)(2)(E) of
\nthe Code.<\/p>\n
AGREEMENT<\/p>\n
The parties hereby agree as follows:<\/p>\n
SECTION ONE<\/p>\n
1. THE MERGER.<\/p>\n
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2)
\nand subject to and upon the terms and conditions of this Agreement, the
\nCertificate of Merger attached hereto as Exhibit A (the “Certificate of Merger”)
\nand the applicable provisions of the Delaware General Corporation Law (“Delaware
\nLaw”), Merger Sub shall be merged with and into Target, the separate corporate
\nexistence of Merger Sub shall cease and Target shall continue as the surviving
\ncorporation of the Merger. Target as the surviving corporation after the Merger
\nis hereinafter sometimes referred to as the “Surviving Corporation.”<\/p>\n
1.2 CLOSING; EFFECTIVE TIME. The closing of the transactions
\ncontemplated by this Agreement (the “Closing”) shall take place as soon as
\npracticable (and in no event later than
\n 6<\/p>\n
5 business days) after the satisfaction or waiver of each of the conditions set
\nforth in Section 4 below or at such other time as the parties agree (the
\n“Closing Date”). In connection with the Closing, the parties shall cause the
\nMerger to be consummated by filing the Certificate of Merger, together with the
\nrequired officers’ certificates, with the Secretary of State of the State of
\nDelaware, in accordance with the relevant provisions of Delaware Law (the time
\nof such filing being the “Effective Time”). The Closing shall take place at the
\noffices of Venture Law Group, 2775 Sand Hill Road, Menlo Park, California, or at
\nsuch other location as the parties agree.<\/p>\n
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the
\nMerger shall be as provided in this Agreement, the Certificate of Merger and the
\napplicable provisions of Delaware Law. At the Effective Time, all the property,
\nrights, privileges, powers and franchises of Target and Merger Sub shall vest in
\nthe Surviving Corporation, and all debts, liabilities and duties of Target and
\nMerger Sub shall become the debts, liabilities and duties of the Surviving
\nCorporation.<\/p>\n
1.4 CERTIFICATE OF INCORPORATION; BYLAWS.<\/p>\n
(a) At the Effective Time, the Certificate of Incorporation of
\nMerger Sub, as in effect immediately prior to the Effective Time, shall be the
\nCertificate of Incorporation of the Surviving Corporation until thereafter
\namended as provided by Delaware Law and such Certificate of Incorporation.<\/p>\n
(b) At the Effective time, the Bylaws of Merger Sub, as in
\neffect immediately prior to the Effective Time, shall be the Bylaws of the
\nSurviving Corporation until thereafter amended as provided by law, the
\nCertificate of Incorporation of the Surviving Corporation and such Bylaws.<\/p>\n
1.5 DIRECTORS AND OFFICERS. At the Effective Time, the directors of
\nMerger Sub immediately prior to the Effective Time shall be the directors of the
\nSurviving Corporation, and the officers of Merger Sub immediately prior to the
\nEffective Time shall be the officers of the Surviving Corporation, in each case
\nuntil their respective successors are duly elected or appointed and qualified.<\/p>\n
1.6 EFFECT ON CAPITAL STOCK. By virtue of the Merger and without any
\naction on the part of Merger Sub, Target or any of their respective
\nstockholders, the following shall occur at the Effective Time:<\/p>\n
(a) CONVERSION OF TARGET COMMON STOCK. The shares of Common
\nStock, par value $0.01 per share, of Target (“Target Common Stock”) issued and
\noutstanding immediately prior to the Effective Time, shall be converted and
\nexchanged, in the aggregate, for 940,000 shares of Acquiror Common Stock;
\nprovided, however, that in the event that the average of the last reported per
\nshare sale prices of Acquiror Common Stock (as quoted on The Nasdaq National
\nMarket and reported in The Wall Street Journal) over the period of 10 trading
\ndays up to and including the second trading day preceding the Closing Date (the
\n“Acquiror Average Price”) is greater than $30.64, then the number of shares of
\nAcquiror Common Stock into which the issued and outstanding shares of Target
\nCommon Stock shall be converted shall be reduced <\/p>\n
-2-
\n 7<\/p>\n
to be equal to (a) $28,800,000 divided by (b) the Acquiror Average Price; and,
\nprovided further, that in the event that the Acquiror Average Price is less than
\n$21.28, then the number of shares of Acquiror Common Stock into which the issued
\nand outstanding shares of Target Common Stock shall be converted shall be
\nincreased to be equal to (x) $20,000,000 divided by (y) the Acquiror Average
\nPrice. (The shares of Acquiror Common Stock into which the issued and
\noutstanding shares of Target Common Stock are converted as a result of the
\nMerger are sometimes referred to herein as the “Merger Consideration.”) The
\nissued and outstanding shares of Target Common Stock, when so converted, shall
\nno longer be outstanding and shall automatically be cancelled and retired and
\nshall cease to exist, and Platinum, as the holder of all of the issued and
\noutstanding shares of Target Common Stock prior to the Effective Time, shall
\ncease to have any rights with respect thereto, except the right to receive the
\nMerger Consideration upon the surrender of the certificate evidencing such
\nshares of Target Common Stock in accordance with Section 1.7, without interest.<\/p>\n
(b) CANCELLATION OF TARGET COMMON STOCK OWNED BY TARGET. At the
\nEffective Time, any shares of Target Common Stock owned by Target as treasury
\nstock immediately prior to the Effective Time shall be cancelled and
\nextinguished without any conversion thereof.<\/p>\n
(c) CAPITAL STOCK OF MERGER SUB. At the Effective Time, each
\nshare of Common Stock of Merger Sub (“Merger Sub Common Stock”) issued and
\noutstanding immediately prior to the Effective Time shall be converted into and
\nexchanged for one validly issued, fully paid and nonassessable share of Common
\nStock of the Surviving Corporation. Each stock certificate of Merger Sub
\nevidencing ownership of any such shares shall continue to evidence ownership of
\nsuch shares of capital stock of the Surviving Corporation.<\/p>\n
(d) ADJUSTMENTS; MAXIMUM ISSUANCE. The computation of the Merger
\nConsideration pursuant to Section 1.6(a) shall be adjusted to reflect fully the
\neffect of any stock split, reverse split, stock dividend (including any dividend
\nor distribution of securities convertible into Acquiror Common Stock),
\nreorganization, recapitalization or other like change with respect to Acquiror
\nCommon Stock occurring after the date of this Agreement and prior to the
\nEffective Time. Except as set forth in Section 1.6(a), no other adjustment shall
\nbe made in the number of shares of Acquiror Common Stock issued in the Merger as
\na result of any increase or decrease in the market price of the Acquiror Common
\nStock prior to the Effective Time.<\/p>\n
(e) DISSENTERS’ RIGHTS. Platinum hereby agrees not to exercise
\nand waives any appraisal or dissenters’ rights with respect to the Target Common
\nStock held by it.<\/p>\n
(f) FRACTIONAL SHARES. No fraction of a share of Acquiror Common
\nStock will be issued, but in lieu thereof, if Platinum would otherwise be
\nentitled to a fraction of a share of Acquiror Common Stock, Platinum shall
\nreceive from Acquiror an amount of cash (rounded to the nearest whole cent)
\nequal to the product of (i) such fraction, multiplied by (ii) the Acquiror
\nAverage Price.<\/p>\n
-3-
\n 8<\/p>\n
1.7 SURRENDER OF CERTIFICATES; ISSUANCE OF MERGER CONSIDERATION. As
\nsoon as practicable after the Effective Time, Acquiror shall cause the shares of
\nAcquiror Common Stock constituting the Merger Consideration to be issued and
\nshall, upon delivery to Acquiror of the certificate or certificates evidencing
\nthe issued and outstanding shares of Target Common Stock (the “Target
\nCertificates”), deliver certificates representing such shares of Acquiror Common
\nStock to Platinum. The Target Certificates so surrendered shall forthwith be
\ncancelled and, until so surrendered, the Target Certificates will be deemed from
\nand after the Effective Time, for all corporate purposes, other than the payment
\nof dividends, to evidence the ownership of the Merger Consideration and the
\nright to receive an amount in cash in lieu of the issuance of any fractional
\nshare in accordance with Section 1.6(f).<\/p>\n
1.8 DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
\ndividends or other distributions with respect to Acquiror Common Stock with a
\nrecord date after the Effective Time will be paid to Platinum with respect to
\nthe shares of Acquiror Common Stock represented thereby until Platinum
\nsurrenders the Target Certificates. Subject to applicable law, following
\nsurrender of the Target Certificates, there shall be paid to Platinum, at the
\ntime of such surrender, without interest the amount of any such dividends or
\nother distributions with a record date after the Effective Time payable (but for
\nthe provisions of this Section 1.8) with respect to such shares of Acquiror
\nCommon Stock.<\/p>\n
1.9 NO FURTHER OWNERSHIP RIGHTS IN TARGET COMMON STOCK. The
\nshares of Acquiror Common Stock issued upon the surrender for exchange of shares
\nof Target Common Stock in accordance with the terms hereof (including any cash
\npaid in lieu of any fractional share) shall be deemed to have been issued in
\nfull satisfaction of all rights pertaining to such shares of Target Common
\nStock, and there shall be no further registration of transfers on the records of
\nthe Surviving Corporation of shares of Target Common Stock which were
\noutstanding immediately prior to the Effective Time.<\/p>\n
1.10 TAX CONSEQUENCES. It is intended by the parties that the
\nMerger shall constitute a reorganization within the meaning of Section 368 of
\nthe Code.<\/p>\n
1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. If at any time
\nafter the Effective Time, any further action is necessary or desirable to carry
\nout the purposes of this Agreement and to vest the Surviving Corporation with
\nfull right, title and possession to all assets, property, rights, privileges,
\npowers and franchises of Target and Merger Sub, the officers and directors of
\nTarget and Merger Sub are fully authorized in the name of their respective
\ncorporations or otherwise to take, and will take, all such lawful and necessary
\naction, so long as such action is not inconsistent with this Agreement.<\/p>\n
1.12 WITHHOLDING. Each of Acquiror and the Surviving
\nCorporation shall be entitled to deduct and withhold from any consideration
\npayable or otherwise deliverable pursuant to this Agreement to Platinum such
\namounts as may be required to be deducted or withheld therefrom under the Code
\nor any provision of state, local or foreign tax law or under any other
\napplicable legal requirement. To the extent such amounts are so deducted or
\nwithheld, such amounts shall be treated for all purposes under this Agreement as
\nhaving been paid to Platinum.<\/p>\n
-4-
\n 9<\/p>\n
SECTION TWO<\/p>\n
2. REPRESENTATIONS AND WARRANTIES OF TARGET, PILOT AND PLATINUM. Except
\nas disclosed in a letter dated as of the date of this Agreement and delivered by
\nTarget to Acquiror prior to the execution and delivery of this Agreement and
\nreferring to the representations and warranties in this Agreement (the “Target
\nDisclosure Letter”), Target, Pilot and Platinum jointly and severally represent
\nand warrant to Acquiror and Merger Sub as follows:<\/p>\n
2.1 ORGANIZATION.<\/p>\n
(a) Target and Pilot are corporations, duly organized, validly
\nexisting and in good standing under the laws of the State of Delaware. Target is
\na holding corporation which conducts no business activities and has no material
\nassets, other than its ownership interest in Pilot, and no material liabilities.
\nPilot has the requisite corporate power and authority and all necessary
\ngovernment approvals to own, lease and operate its properties and to carry on
\nits business as now being conducted, except where the failure to have such
\npower, authority and governmental approvals would not, individually or in the
\naggregate, have a material adverse effect on the condition (financial or
\notherwise), properties, assets, liabilities, business, operations or results of
\noperations (a “Material Adverse Effect”) of Target, Pilot and the Subsidiaries
\n(as defined in Section 2.1(c) below), taken as a whole.<\/p>\n
(b) Target and Pilot are each duly qualified or licensed as a
\nforeign corporation to do business, and are each in good standing, in each
\njurisdiction where the character of the properties owned, leased or operated by
\nthem or the nature of their business makes such qualification or licensing
\nnecessary, except for such failures to be so qualified or licensed and in good
\nstanding that would not, individually or in the aggregate, have a Material
\nAdverse Effect on Target, Pilot and the Subsidiaries, taken as a whole.<\/p>\n
(c) Except for its ownership of all of the outstanding shares of
\ncapital stock of Pilot, Target does not, directly or indirectly, own any equity
\nor similar interest in, or any interest convertible into or exchangeable or
\nexercisable for, any equity or similar interest in, any corporation,
\npartnership, limited liability company, joint venture or other business
\nassociation or entity. A true and complete list of all of the direct and
\nindirect subsidiaries of Pilot (collectively, the “Subsidiaries” and each,
\nindividually, a “Subsidiary”), indicating in each case the jurisdiction of
\nincorporation of each Subsidiary, and a list of the holder of the outstanding
\nshares of capital stock (or other ownership interests, including all
\nsubscriptions, options, warrants, puts, calls, rights, exchangeable or
\nconvertible securities or other commitments or agreements of any character
\nrelating to the issued or unissued capital stock or other securities thereof) of
\neach such Subsidiary, is set forth in Section 2.1 of the Target Disclosure
\nLetter and, except as set forth in such Section 2.1 of the Target Disclosure
\nLetter, neither Pilot nor any Subsidiary, directly or indirectly, owns any
\nequity or similar interest in, or any interest convertible into or exchangeable
\nor exercisable for, any equity or similar interest in, any corporation,
\npartnership, limited liability company, joint venture or other business
\nassociation or entity. All of the outstanding shares of capital stock (or other
\nownership interests, including all subscriptions, options, warrants, puts,<\/p>\n
-5-
\n 10<\/p>\n
calls, rights, exchangeable or convertible securities or other commitments or
\nagreements of any character relating to the issued or unissued capital stock or
\nother securities thereof) of each Subsidiary are duly authorized, validly
\nissued, fully paid and nonassessable, and free and clear of all liens, charges,
\nclaims, encumbrances or rights of others. Pilot Software Limited is duly
\norganized and validly existing in good standing under the laws of the United
\nKingdom, and Pilot Software GmbH is duly organized and validly existing in good
\nstanding under the laws of Germany. (Pilot Software Limited and Pilot Software
\nGmbH are collectively referred to herein as the “Material Subsidiaries”). Each
\nof the Material Subsidiaries has the requisite power and authority and all
\nnecessary government approvals to own, lease and operate its properties and to
\ncarry on its business as now being conducted, except where the failure to have
\nsuch power, authority and governmental approvals would not, individually or in
\nthe aggregate, have a Material Adverse Effect on Target, Pilot and the
\nSubsidiaries, taken as a whole. The Subsidiaries other than the Material
\nSubsidiaries have no employees and conduct no business operations except as
\ndescribed in Section 2.1 of the Target Disclosure Letter.<\/p>\n
2.2 CERTIFICATE OF INCORPORATION AND BYLAWS. Target and Pilot have
\ndelivered a true and correct copy of the Certificate of Incorporation and Bylaws
\nor other charter documents, as applicable, of Target, Pilot and each Subsidiary,
\neach as amended to date, to Acquiror. Neither Target, Pilot, nor any Subsidiary
\nis in violation of any of the provisions of its Certificate of Incorporation or
\nBylaws or substantially equivalent organizational documents.<\/p>\n
2.3 CAPITAL STRUCTURE.<\/p>\n
(a) The authorized capital stock of Target consists of 1,000
\nshares of Common Stock, of which 800 are issued and outstanding, all of which
\nare held beneficially and of record by Platinum free and clear of any liens,
\nclaims, options charges or other encumbrances. There are no other outstanding
\nshares of capital stock or voting securities of Target and no outstanding
\ncommitments to issue any shares of capital stock or voting securities of Target,
\nincluding all subscriptions, options, warrants, puts, calls, rights,
\nexchangeable or convertible securities or other commitments or agreements of any
\ncharacter relating to the issued or unissued capital stock or other securities
\nthereof. All outstanding shares of Target Common Stock are duly authorized,
\nvalidly issued, fully paid and non-assessable and are free of any liens or
\nencumbrances other than any liens or encumbrances created by or imposed upon the
\nholder thereof, and are not subject to preemptive rights or rights of first
\nrefusal created by statute, the Certificate of Incorporation or Bylaws of Target
\nor any agreement to which Target is a party or by which it is bound. All
\noutstanding shares of Target Common Stock were issued in compliance with all
\napplicable federal and state securities laws.<\/p>\n
(b) The authorized capital stock of Pilot consists of 28,844,720
\nshares of Common Stock, of which 20,000,000 shares are issued and outstanding,
\nall of which are held beneficially and of record by Target. Except for the stock
\noptions granted to employees under Pilot’s stock option plan (the “Pilot Stock
\nOptions”), there are no other outstanding shares of capital stock or voting
\nsecurities of Pilot and no outstanding commitments to issue any shares of
\ncapital stock or voting securities of Pilot, including all subscriptions,
\noptions, warrants, puts, calls, rights, exchangeable or convertible securities
\nor other commitments or agreements of any <\/p>\n
-6-
\n 11<\/p>\n
character relating to the issued or unissued capital stock or other securities
\nthereof. All outstanding shares of Pilot capital stock are duly authorized,
\nvalidly issued, fully paid and non-assessable and are free of any liens or
\nencumbrances other than any liens or encumbrances created by or imposed upon the
\nholder thereof, and are not subject to preemptive rights or rights of first
\nrefusal created by statute, the Certificate of Incorporation or Bylaws of Pilot
\nor any agreement to which Pilot is a party or by which it is bound. All
\noutstanding shares of Pilot Common Stock were issued in compliance with all
\napplicable federal and state securities laws.<\/p>\n
(c) Except for (i) the Pilot Stock Options and (ii) the rights
\ncreated pursuant to this Agreement, there are no subscriptions options,
\nwarrants, puts, calls, rights, exchangeable or convertible securities or other
\ncommitments, agreements or arrangements of any character to which Target, Pilot
\nor any Subsidiary is a party or by which Target, Pilot or any Subsidiary is
\nbound relating to the issued or unissued capital stock of Target, Pilot or any
\nSubsidiary or obligating Target, Pilot or any Subsidiary to issue, deliver,
\nsell, repurchase or redeem, or cause to be issued, delivered, sold, repurchased
\nor redeemed, any shares of capital stock of Target, Pilot or any Subsidiary or
\nobligating Target, Pilot or any Subsidiary to grant or enter into any such
\noption, warrant, call, right, commitment or agreement. There are no contracts,
\ncommitments or agreements relating to voting, purchase or sale of Target’s,
\nPilot’s or any Subsidiary’s capital stock between or among Target, Pilot or any
\nSubsidiary.<\/p>\n
2.4 AUTHORITY. Each of Target, Pilot and Platinum has all requisite
\ncorporate power and authority to enter into this Agreement and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nand the consummation of the transactions contemplated hereby have been duly
\nauthorized by all necessary corporate action on the part of Target, Pilot and
\nPlatinum. Target’s Board of Directors and Platinum’s Board of Managers have
\nunanimously approved the Merger and this Agreement. Platinum, in its capacity as
\nthe sole stockholder of Target, has irrevocably adopted and approved this
\nAgreement, the Certificate of Merger and the transactions contemplated hereby
\nand thereby. This Agreement has been duly executed and delivered by each of
\nTarget, Pilot and Platinum and, assuming due authorization, execution and
\ndelivery by Acquiror and Merger Sub, constitutes the valid and binding
\nobligation of Target, Pilot and Platinum, enforceable against such party in
\naccordance with its terms.<\/p>\n
-7-
\n 12<\/p>\n
2.5 NO CONFLICTS; REQUIRED FILINGS AND CONSENTS.<\/p>\n
(a) The execution and delivery of this Agreement by Target,
\nPilot and Platinum does not, and the consummation of the transactions
\ncontemplated hereby will not, conflict with, or result in any violation of, or
\ndefault under (with or without notice or lapse of time, or both), or give rise
\nto a right of termination, cancellation or acceleration of any obligation or
\nloss of any benefit under (i) any provision of the Certificate of Incorporation,
\nBylaws or Operating Agreement of Target, Pilot, Platinum or any Subsidiary, as
\namended, or (ii) any material mortgage, indenture, lease, contract or other
\nagreement or instrument, permit, concession, franchise, license, judgment,
\norder, decree, statute, law, ordinance, rule or regulation applicable to Target,
\nPilot, Platinum or any Subsidiary or any of their properties or assets.<\/p>\n
(b) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with, any court, administrative agency or
\ncommission or other governmental authority or instrumentality (“Governmental
\nEntity”) is required by or with respect to Target, Pilot, Platinum or any
\nSubsidiary in connection with the execution and delivery of this Agreement or
\nthe consummation of the transactions contemplated hereby, except for (i) the
\nfiling of the Certificate of Merger, together with the required officers’
\ncertificates, as provided in Section 1.2, (ii) such consents, approvals, orders,
\nauthorizations, registrations, declarations and filings as may be required under
\nthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), the
\nSecurities Act of 1933, as amended (the “Securities Act”), applicable state
\nsecurities laws and the securities laws of any foreign country; (iii) such
\nfilings as may be required under the Hart-Scott-Rodino Antitrust Improvements
\nAct of 1976, as amended (“HSR”); and (iv) such other consents, authorizations,
\nfilings, approvals and registrations which, if not obtained or made, would not
\nhave a Material Adverse Effect on Target, Pilot or any Subsidiary, taken as a
\nwhole, and would not prevent, or materially alter or delay any of the
\ntransactions contemplated by this Agreement.<\/p>\n
2.6 FINANCIAL STATEMENTS. Section 2.6 of the Target Disclosure
\nLetter includes a true, correct and complete copy of Pilot’s financial
\nstatements on a consolidated basis as of and for the period from August 12, 1997
\nthrough December 31, 1997 and as of and for each of the fiscal years ended
\nDecember 31, 1998 and 1999, respectively, which financial statements have been
\nreviewed and certified by independent auditors, and Pilot’s unaudited financial
\nstatements (balance sheet, statement of operations and statement of cash flows)
\non a consolidated basis as of, and for the six-month period ended, June 30, 2000
\n(collectively, the “Pilot Financial Statements”). The only material asset of
\nTarget is the shares of capital stock of Pilot held by Target, and Target has no
\nmaterial liabilities. Accordingly, the financial statements of Target on a
\nconsolidated basis as of and for the fiscal years ended December 31, 1997, 1998
\nand 1999, and as of and for the six-month period ended June 30, 2000, are
\nidentical to the financial statements of Pilot in all material respects (such
\nfinancial statements of Target referred to herein collectively with the Pilot
\nFinancial Statements as the “Financial Statements”). The Financial Statements
\nhave been prepared in accordance with U.S. generally accepted accounting
\nprinciples (“GAAP”), applied on a consistent basis throughout the periods
\nindicated and with each other, except that the unaudited financial statements
\nmay not have all required notes thereto. The Financial Statements accurately set
\nout and describe the financial condition and operating results of Target and its<\/p>\n
-8-
\n 13<\/p>\n
consolidated Subsidiaries as of the dates, and for the periods, indicated
\ntherein, subject to normal year-end audit adjustments. Pilot maintains and will
\ncontinue to maintain through the Effective Time a standard system of accounting
\nestablished and administered in accordance with generally accepted accounting
\nprinciples.<\/p>\n
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Neither Target, Pilot nor
\nany Subsidiary has material obligations or liabilities of any nature (matured or
\nunmatured, fixed or contingent) other than (a) those set forth or adequately
\nprovided for in the Balance Sheet reflected in the Financial Statements for the
\nperiod ended June 30, 2000 (the “Target Balance Sheet”), (b) those not required
\nto be set forth in the Target Balance Sheet under GAAP, (c) those incurred in
\nthe ordinary course of business and consistent with past practice since the date
\nof the Target Balance Sheet, and (d) those incurred in connection with the
\nexecution of this Agreement.<\/p>\n
2.8 ABSENCE OF CERTAIN CHANGES. Except for the transactions
\ncontemplated by this Agreement, since June 30, 2000 ( the “Target Balance Sheet
\nDate”) there has not been, occurred or arisen any:<\/p>\n
(a) transaction by Target, Pilot or any Subsidiary except in the
\nordinary course of business and consistent with past practices;<\/p>\n
(b) amendments or changes to the Certificate of Incorporation,
\nBylaws, Operating Agreement or other substantially equivalent charter document
\n(collectively, “Charter Documents”) of Target, Pilot or any Subsidiary, other
\nthan non-substantive amendments or changes to the Charter Documents of a
\nSubsidiary relating to routine matters such as election of directors that are
\nreflected in such Charter Documents pursuant to local law and which will not
\nhave a Material Adverse Effect on such Subsidiary;<\/p>\n
(c) capital expenditure or commitment by Target, Pilot or any
\nSubsidiary, in any individual amount exceeding $50,000, or in the aggregate,
\nexceeding $100,000;<\/p>\n
(d) destruction of, damage to, or loss of any assets (including,
\nwithout limitation, intangible assets), of Target, Pilot or any Subsidiary
\n(whether or not covered by insurance) which would have a Material Adverse Effect
\non Target, Pilot and the Subsidiaries, taken as a whole;<\/p>\n
(e) labor trouble or claim of wrongful discharge or other
\nunlawful labor practice or action which would have a Material Adverse Effect on
\nTarget, Pilot and the Subsidiaries, taken as a whole;<\/p>\n
(f) material change in accounting methods or practices
\n(including any change in depreciation or amortization policies or rates, any
\nchange in policies in making or reversing accruals, or any change in
\ncapitalization of software development costs) by Pilot;<\/p>\n
(g) revaluation by the Target, Pilot or any Subsidiary of any of
\ntheir respective assets having a value prior to such revaluation in excess of
\n$50,000;<\/p>\n
-9-
\n 14<\/p>\n
(h) declaration, setting aside, or payment of a dividend or
\nother distribution in respect to the capital stock of Target, or any direct or
\nindirect redemption, purchase or other acquisition by Target of any of its
\ncapital stock;<\/p>\n
(i) increase in the salary or other compensation payable or to
\nbecome payable by Target, Pilot or any Subsidiary to any officers, directors,
\nemployees or advisors of Target, Pilot or any Subsidiary, except in the ordinary
\ncourse of business consistent with past practice, or the declaration, payment,
\nor commitment or obligation of any kind for the payment by Target, Pilot or any
\nSubsidiary of a bonus or other additional salary or compensation to any such
\nperson except as otherwise contemplated by this Agreement, or other than as set
\nforth in Section 2.16 below, the establishment of any bonus, insurance, deferred
\ncompensation, pension, retirement, profit sharing, stock option (including
\nwithout limitation, the granting of stock options, stock appreciation rights,
\nperformance awards), stock purchase or other employee benefit plan;<\/p>\n
(j) sale, lease, license of other disposition of any of the
\nassets or properties of Target, Pilot or any Subsidiary, except in the ordinary
\ncourse of business;<\/p>\n
(k) termination or material amendment of any Material Contract
\n(as defined in Section 2.19 below);<\/p>\n
(l) loan by Target, Pilot or any Subsidiary to any person or
\nentity, or guaranty by Target, Pilot or any Subsidiary of any loan, except for
\n(x) travel or similar advances made to employees in connection with their
\nemployment duties in the ordinary course of business, consistent with past
\npractices and (y) trade payables to non-affiliates and in the ordinary course of
\nbusiness, consistent with past practices;<\/p>\n
(m) waiver or release of any right or claim of Target, Pilot or
\nany Subsidiary, including any write-off or other compromise of any account
\nreceivable of Target, Pilot or any Subsidiary, except in the ordinary course of
\nbusiness and consistent with past practice;<\/p>\n
(n) the commencement or notice or threat of commencement of any
\nlawsuit or proceeding against or investigation of Target, Pilot or any
\nSubsidiary or their respective affairs;<\/p>\n
(o) written notice of any claim of ownership by a third party of
\nany Intellectual Property (as such term is defined in Section 2.13 below) that
\nis owned by Pilot, or of infringement by Target, Pilot or any Subsidiary of any
\nthird party’s intellectual property rights;<\/p>\n
(p) issuance or sale by Target, Pilot or any Subsidiary of any
\nof its shares of capital stock, or securities exchangeable, convertible or
\nexercisable therefor, or of any other of its securities;<\/p>\n
(q) change in pricing or royalties set or charged by Target,
\nPilot or any Subsidiary to its customers or licensees or in pricing or royalties
\nset or charged by persons who <\/p>\n
-10-
\n 15<\/p>\n
have licensed Intellectual Property to Target, Pilot or any Subsidiary, except
\nin the ordinary course of business and consistent with past practice;<\/p>\n
(r) payment, discharge or satisfaction of any claim, liability
\nor obligation (absolute, accrued, asserted or unasserted, contingent or
\notherwise), other than to non-affiliated third parties in the ordinary course of
\nbusiness; or<\/p>\n
(s) agreement by Target, Pilot or any Subsidiary, or any of
\ntheir respective officers or employees of either on behalf of such entity to do
\nany of the things described in the preceding clauses (a) through (r).<\/p>\n
2.9 LITIGATION. There is no private or governmental action, suit,
\nproceeding, claim, arbitration or investigation pending before any agency, court
\nor tribunal, foreign or domestic, or, to the knowledge of Platinum, Target and
\nPilot, threatened against Target, Pilot or any Subsidiary or any of their
\nrespective properties or any of their respective officers or directors (in their
\ncapacities as such) that, individually or in the aggregate, could reasonably be
\nexpected to have a Material Adverse Effect on Target, Pilot and the
\nSubsidiaries, taken as a whole. There is no judgment, decree or order against
\nTarget, Pilot, any Subsidiary or Platinum or any of their respective directors
\nor officers (in their capacities as such), that could prevent, enjoin, or
\nmaterially alter or delay any of the transactions contemplated by this
\nAgreement, or that could reasonably be expected to have a Material Adverse
\nEffect on Target, Pilot and the Subsidiaries, taken as a whole. All litigation
\nto which Target, Pilot or any Subsidiary is a party (or threatened in writing to
\nbecome a party) is disclosed in the Target Disclosure Letter.<\/p>\n
2.10 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
\njudgment, injunction, order or decree binding upon Target, Pilot or any
\nSubsidiary which has or could reasonably be expected to have the effect of
\nprohibiting or materially impairing any current or currently proposed business
\npractice of Target, Pilot or any Subsidiary, any acquisition of property by
\nTarget, Pilot or any Subsidiary or the overall conduct of business by Target,
\nPilot or any Subsidiary as currently conducted or as currently proposed to be
\nconducted by Target, Pilot or any Subsidiary. Neither Target, Pilot nor any
\nSubsidiary has entered into any agreement under which Target, Pilot or any
\nSubsidiary is restricted from competing in any line of business or selling,
\nlicensing or otherwise distributing any of its products to any customers or
\nclass of customers, in any geographic area, during any period of time or in any
\nsegment of the market.<\/p>\n
2.11 PERMITS; COMPANY PRODUCTS; REGULATION.<\/p>\n
(a) Target, Pilot and each Subsidiary are in possession of all
\nfranchises, grants, authorizations, licenses, permits, easements, variances,
\nexceptions, consents, certificates, approvals and orders necessary for Target,
\nPilot and the Subsidiaries to own, lease and operate their respective properties
\nand to carry on their respective businesses as they are now being conducted (the
\n“Target Authorizations”), and no suspension or cancellation of any Target
\nAuthorization is pending or threatened, except where the failure to have, or the
\nsuspension or cancellation of, any Target Authorization would not have a
\nMaterial Adverse Effect on Target, Pilot and the Subsidiaries, taken as a whole,
\nor prevent Target or Pilot from performing their respective obligations under
\nthis Agreement. None of Target, Pilot or any Subsidiary is in <\/p>\n
-11-
\n 16<\/p>\n
conflict with, or in default or violation of, (i) any Target Authorization, or
\n(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
\npermit, franchise or other instrument or obligation to which it is a party or by
\nwhich it or any its property or assets is bound or affected, except for any such
\nconflict, default or violation that would not, individually or in the aggregate,
\nhave a Material Adverse Effect on Target, Pilot and the Subsidiaries, taken as a
\nwhole, or prevent Target or Pilot from performing their respective obligations
\nunder this Agreement.<\/p>\n
(b) Except as would not have a Material Adverse Effect on
\nTarget, Pilot and the Subsidiaries, taken as a whole, there have been no written
\nnotices, citations or decisions by any governmental or regulatory body that any
\nproduct produced, manufactured, marketed or distributed at any time by Target,
\nPilot or any Subsidiary (the “Products”) is defective or fails to meet any
\napplicable standards promulgated by any such governmental or regulatory body. To
\nthe knowledge of Platinum, Target and Pilot, Target, Pilot and each Material
\nSubsidiary has complied in all material respects with the laws, regulations,
\npolicies, procedures and specifications with respect to the design, manufacture,
\nlabeling, testing and inspection of the Products. There have been no recalls,
\nfield notifications or seizures ordered or threatened by any such governmental
\nor regulatory body with respect to any of the Products.<\/p>\n
(c) Target, Pilot or a Material Subsidiary has obtained, in all
\ncountries where any of them is marketing or has marketed any Products, all
\napplicable licenses, registrations, approvals, clearances and authorizations
\nrequired by local, state or federal agencies in such countries regulating the
\nsafety, effectiveness and market clearance of the Products currently or
\npreviously marketed in such countries, except for any such failures as would
\nnot, individually or in the aggregate, have a Material Adverse Effect on Target,
\nPilot and the Subsidiaries, taken as a whole, or prevent Target or Pilot from
\nperforming their respective obligations under this Agreement.<\/p>\n
2.12 TITLE TO PROPERTY.<\/p>\n
(a) Target, Pilot and each Subsidiary has good and marketable
\ntitle to all of its respective properties, interests in properties and assets,
\nreal and personal, reflected in the Target Balance Sheet or acquired after the
\nTarget Balance Sheet Date (except properties, interests in properties and assets
\nsold or otherwise disposed of since the Target Balance Sheet Date in the
\nordinary course of business), or with respect to leased properties and assets,
\nvalid leasehold interests in, free and clear of all mortgages, liens, pledges,
\ncharges or encumbrances of any kind or character, except (i) the lien of current
\ntaxes not yet due and payable, (ii) such imperfections of title, liens and
\neasements as do not and will not materially detract from or interfere with the
\nuse of the properties subject thereto or affected thereby, or otherwise
\nmaterially impair business operations involving such properties, and (iii) liens
\nsecuring debt which is reflected on the Target Balance Sheet. The plant,
\nproperty and equipment of Target, Pilot and the Material Subsidiaries that are
\nused in the operations of their respective businesses are in good operating
\ncondition and repair (except for ordinary wear and tear). All properties used in
\nthe operations of Target, Pilot and the Subsidiaries are reflected in the Target
\nBalance Sheet to the extent GAAP requires the same to be reflected. Section
\n2.12(a) of the Target Disclosure Letter sets forth a true, correct and complete
\nlist of all real property owned or leased by Target, Pilot or any Subsidiary,
\nthe name of <\/p>\n
-12-
\n 17<\/p>\n
the lessor, the date of the lease and each amendment thereto. All amendments to
\nsuch leases were entered into in the ordinary course of business and do not
\nchange the material terms of such leases, other than extensions, renewals and
\nreasonable pricing adjustments. To the knowledge of Platinum, Target and Pilot,
\nsuch leases are valid and effective in accordance with their respective terms,
\nand there is not under any such leases any existing material default or material
\nevent of default (or event which with notice or lapse of time, or both, would
\nconstitute such a default).<\/p>\n
(b) Prior to the execution of this Agreement, Target has
\nprovided to Acquiror a letter, dated as of the date of this Agreement, which
\nsets forth a true, correct and complete list of all equipment with a value in
\nexcess of $1,000 (the “Equipment”) owned or leased by Target, Pilot and the
\nSubsidiaries as of July 31, 2000, and such Equipment is, taken as a whole, (i)
\nadequate for the conduct of the business of Target, Pilot and the Subsidiaries,
\nconsistent with past practice, and (ii) in good operating condition (except for
\nordinary wear and tear).<\/p>\n
2.13 INTELLECTUAL PROPERTY.<\/p>\n
(a) Target, Pilot and each of the Subsidiaries owns, or is
\nlicensed or otherwise possesses legally enforceable rights to use all patents,
\npatent rights, trademarks, trademark rights, trade names, trade name rights,
\nservice marks, copyrights, and any applications for any of the foregoing, net
\nlists, schematics, industrial models, inventions, technology, know-how, trade
\nsecrets, inventory, ideas, algorithms, processes, computer software programs or
\napplications (in both source code and object code form), and tangible or
\nintangible proprietary information or material that are used or currently
\nproposed to be used in the business of Target, Pilot or any Subsidiary as
\ncurrently conducted or as currently proposed to be conducted (“Intellectual
\nProperty”).<\/p>\n
(b) Section 2.13 of the Target Disclosure Letter lists (i) all
\npatents and patent applications and all registered trademarks, trade names and
\nservice marks and registered copyrights included in the Intellectual Property
\nthat is owned by Target, Pilot or any Subsidiary, including the jurisdictions
\nin which each such Intellectual Property right has been issued or registered or
\nin which any application for such issuance and registration has been filed, (ii)
\nall material licenses, sublicenses and other agreements as to which Pilot,
\nTarget or any Subsidiary is a party and pursuant to which any third party is
\nauthorized to use any Intellectual Property, other than non-exclusive licenses
\nto use Products in object code format only entered into with end users in the
\nordinary course of business, and (iii) all licenses, sublicenses and other
\nagreements as to which Target, Pilot or any Subsidiary is authorized to use any
\nthird party patents, trademarks or copyrights, including software (“Third Party
\nIntellectual Property Rights”) which are incorporated in, are, or form a part of
\nany Product. None of Target, Pilot or any Subsidiary is in violation of any
\nlicense, sublicense or agreement described in Section 2.13 of the Target
\nDisclosure Letter. The execution and delivery of this Agreement by Target and
\nPilot and the consummation of the transactions contemplated hereby, will neither
\ncause Target, Pilot or any Subsidiary to be in violation or default under any
\nsuch license, sublicense or agreement, nor entitle any other party to any such
\nlicense, sublicense or agreement to terminate or modify such license, sublicense
\nor agreement. Target, Pilot or a Material Subsidiary is the sole and exclusive<\/p>\n
-13-
\n 18<\/p>\n
owner, with all right, title and interest in and to (free and clear of any
\nliens), the Intellectual Property that is owned by Target Pilot or a Subsidiary.
\nTarget, Pilot or a Material Subsidiary has a valid license to all Intellectual
\nProperty that is licensed or otherwise used or currently proposed to be used by
\nTarget, Pilot or a Subsidiary. None of Target, Pilot or any Subsidiary is
\ncontractually obligated to pay any compensation to any third party with respect
\nto the use of such third party’s Intellectual Property or the material covered
\nthereby by Target, Pilot or any Subsidiary in connection with the services or
\nproducts in respect of which such third party’s Intellectual Property is being
\nused.<\/p>\n
(c) To the knowledge of Platinum, Target and Pilot, there is no
\nmaterial unauthorized use, disclosure, infringement or misappropriation of any
\nIntellectual Property rights, any trade secret material to Target, Pilot or any
\nSubsidiary or any Third Party Intellectual Property Rights, including any
\nemployee or former employee of Target, Pilot or any Subsidiary. Neither Target,
\nPilot nor any Subsidiary has entered into any agreement to indemnify any other
\nperson against any charge of infringement of any Intellectual Property, other
\nthan indemnification provisions contained in agreements arising in the ordinary
\ncourse of business and other than the indemnification of officers, directors and
\nagents provided for in their respective charters or bylaws.<\/p>\n
(d) Neither Target, Pilot nor any Subsidiary is or will be as a
\nresult of the execution and delivery of this Agreement or the performance of its
\nobligations under this Agreement, in breach of any license, sublicense or other
\nagreement relating to the Intellectual Property or Third Party Intellectual
\nProperty Rights, the breach of which would have a Material Adverse Effect on
\nTarget, Pilot and the Subsidiaries, taken as a whole.<\/p>\n
(e) As of the date hereof, none of Target, Pilot and the
\nSubsidiaries has received any written assertion of any claim challenging the
\nvalidity of any Intellectual Property. None of Target, Pilot and the
\nSubsidiaries has been sued in any suit, action or proceeding which involves a
\nclaim of infringement of any patents, trademarks, service marks, copyrights or
\nviolation of any trade secret or other proprietary right of any third party. To
\nthe knowledge of Platinum, Target and Pilot, neither the conduct of the business
\nof Target, Pilot and each Subsidiary as currently conducted nor the manufacture,
\nsale, licensing or use of any of the Products as now manufactured, sold or
\nlicensed or used, nor the use in any way of the Intellectual Property in the
\nmanufacture, use, sale or licensing by Target, Pilot or any Subsidiary of any
\nProducts currently proposed, infringes or conflicts with, in any way, any
\nlicense, trademark, trademark right, trade name, trade name right, patent,
\npatent right, industrial model, invention, service mark or copyright of any
\nthird party. Neither Target, Pilot nor any Subsidiary has brought any action,
\nsuit or proceeding against any third party for infringement of Intellectual
\nProperty or breach of provisions in any license or agreement relating to
\nIntellectual Property rights. There are no pending, or, to the knowledge of
\nPlatinum, Target and Pilot, threatened, interference, re-examinations,
\noppositions or nullities involving any patents, patent rights or applications
\ntherefor of Target, Pilot or any Subsidiary.<\/p>\n
(f) Target, Pilot and the Subsidiaries have secured valid
\nwritten assignments from all consultants and employees who contributed to the
\ncreation or development<\/p>\n
-14-
\n 19<\/p>\n
of the Intellectual Property of the rights to such contributions that Pilot does
\nnot already own by operation of law.<\/p>\n
(g) Each of Target, Pilot and the Material Subsidiaries has a
\npolicy requiring each employee, consultant and independent contractor to execute
\nproprietary information and confidentiality agreements substantially in Pilot’s
\nstandard forms and all current and former employees, consultant and independent
\ncontractors of Target, Pilot and each Material Subsidiary have executed such an
\nagreement. All use, disclosure or appropriation of Intellectual Property not
\notherwise protected by patents, patent applications or copyright (“Confidential
\nInformation”) owned by Target, Pilot and the Subsidiaries by or to a third party
\nhas been pursuant to the terms of a written agreement between Target, Pilot or
\nthe applicable Subsidiary and such third party. All use, disclosure or
\nappropriation by Target, Pilot or a Subsidiary of Confidential Information not
\nowned by Target, Pilot or a Subsidiary has been pursuant to the terms of a
\nwritten agreement between Target, Pilot or a Subsidiary and the owner of such
\nConfidential Information, or is otherwise lawful.<\/p>\n
2.14 ENVIRONMENTAL MATTERS.<\/p>\n
(a) The following terms shall be defined as follows:<\/p>\n
(i) “Environmental and Safety Laws” shall mean any federal,
\nstate or local laws, ordinances, codes, regulations, rules, policies and orders,
\nas each may be amended from time to time, that are intended to assure the
\nprotection of the environment, or that classify, regulate, call for the
\nremediation of, require reporting with respect to, or list or define air, water,
\ngroundwater, solid waste, hazardous or toxic substances, materials, wastes,
\npollutants or contaminants; which regulate the manufacture, handling, transport,
\nuse, treatment, storage or disposal of Hazardous Materials or materials
\ncontaining Hazardous Materials; or which are intended to assure the protection,
\nsafety and good health of employees, workers or other persons, including the
\npublic.<\/p>\n
(ii) “Hazardous Materials” shall mean any toxic or hazardous
\nsubstance, material or waste or any pollutant or contaminant, or infectious or
\nradioactive substance or material, including without limitation, those
\nsubstances, materials and wastes defined in or regulated under any Environmental
\nand Safety Laws; petroleum and petroleum products including crude oil and any
\nfractions thereof; natural gas, synthetic gas, and any mixtures thereof; radon;
\nasbestos; and any other pollutant or contaminant<\/p>\n
(iii) “Property” shall mean all real property leased or
\nowned by Target, Pilot or the Subsidiaries either currently or in the past.<\/p>\n
(iv) “Facilities” shall mean all buildings and improvements
\non the Property of Target, Pilot or the Subsidiaries.<\/p>\n
(b) (i) To the knowledge of Platinum, Target and Pilot, no
\nmethylene chloride or asbestos is contained in or has been used at or released
\nfrom the Facilities; (ii) all Hazardous Materials and wastes have been disposed
\nof in accordance with all Environmental and <\/p>\n
-15-
\n 20<\/p>\n
Safety Laws; (iii) neither Target, Pilot nor any Subsidiary has received any
\nwritten notice of any noncompliance of the Facilities or of its past or present
\noperations with Environmental and Safety Laws; (iv) no notices, administrative
\nactions or suits are pending or threatened relating to Hazardous Materials or a
\nviolation of any Environmental and Safety Laws; (v) neither Target, Pilot nor
\nany Subsidiary is a potentially responsible party under the federal
\nComprehensive Environmental Response, Compensation and Liability Act (“CERCLA”),
\nor any state analog statute, arising out of events occurring prior to the
\nClosing Date; (vi) there has not been in the past, and are not now, any
\ncontamination, disposal, spilling, dumping, incineration, discharge, storage,
\ntreatment or handling of Hazardous Materials on, under or migrating to or from
\nthe Facilities or Property (including without limitation, soils and surface and
\nground waters); (vii) there have not been in the past, and are not now, any
\nunderground tanks or underground improvements at, on or under the Property
\nincluding without limitation, treatment or storage tanks, sumps, or water, gas
\nor oil wells; (viii) there are no polychlorinated biphenyls (“PCBs”) deposited,
\nstored, disposed of or located on the Property or Facilities or any equipment on
\nthe Property containing PCBs at levels in excess of 50 parts per million; (ix)
\nthere is no formaldehyde on the Property or in the Facilities, nor any
\ninsulating material containing urea formaldehyde in the Facilities; (x) the
\nFacilities and Target’s, Pilot’s and each Subsidiary’s uses and activities
\ntherein have at all times complied with all Environmental and Safety Laws; (xi)
\nTarget, Pilot and the Subsidiaries have all the permits and licenses required to
\nbe issued and are in full compliance with the terms and conditions of those
\npermits; and (xii) neither Target, Pilot nor any Subsidiary is liable for any
\noff-site contamination nor under any Environmental and Safety Laws.<\/p>\n
2.15 TAXES.<\/p>\n
(a) For purposes of this Section 2.15 and other provisions of
\nthis Agreement relating to Taxes, the following definitions shall apply:<\/p>\n
(i) The term “Taxes” shall mean all taxes, however
\ndenominated, including any interest, penalties or other additions to tax that
\nmay become payable in respect thereof, (A) imposed by any federal, territorial,
\nstate, local or foreign government or any agency or political subdivision of any
\nsuch government, which taxes shall include, without limiting the generality of
\nthe foregoing, all income or profits taxes (including but not limited to,
\nfederal, state and foreign income taxes), payroll and employee withholding
\ntaxes, unemployment insurance contributions, social security taxes, sales and
\nuse taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
\ntaxes, withholding taxes, business license taxes, occupation taxes, real and
\npersonal property taxes, stamp taxes, environmental taxes, transfer taxes,
\nworkers’ compensation, Pension Benefit Guaranty Corporation premiums and other
\ngovernmental charges, and other obligations of the same or of a similar nature
\nto any of the foregoing, which are required to be paid, withheld or collected,
\n(B) any liability for the payment of amounts referred to in (A) as a result of
\nbeing a member of any affiliated, consolidated, combined or unitary group, or
\n(C) any liability for amounts referred to in (A) or (B) as a result of any
\nobligations to indemnify another person.<\/p>\n
-16-<\/p>\n
21<\/p>\n
(ii) The term “Returns” shall mean all reports, estimates,
\ndeclarations of estimated tax, information statements and returns required to be
\nfiled in connection with any Taxes, including information returns with respect
\nto backup withholding and other payments to third parties.<\/p>\n
(b) All Returns required to be filed by or on behalf of Target,
\nPilot or any Subsidiary have been duly filed on a timely basis and such Returns
\nare true, complete and correct. All Taxes shown to be payable on such Returns or
\non subsequent assessments with respect thereto, and all payments of estimated
\nTaxes required to be made by or on behalf of Target, Pilot or any Subsidiary
\nunder Section 6655 of the Code or comparable provisions of state, local or
\nforeign law, have been paid in full on a timely basis, and no other Taxes are
\npayable by Target, Pilot or any Subsidiary with respect to items or periods
\ncovered by such Returns (whether or not shown on or reportable on such Returns).
\nTarget, Pilot and each Subsidiary have withheld and paid over all Taxes required
\nto have been withheld and paid over, and complied with all information reporting
\nand backup withholding in connection with amounts paid or owing to any employee,
\ncreditor, independent contractor, or other third party. There are no liens on
\nany of the assets of Target, Pilot or any Subsidiary with respect to Taxes,
\nother than liens for Taxes not yet due and payable or for Taxes that Target,
\nPilot or such Subsidiary is contesting in good faith through appropriate
\nproceedings. Neither Target, Pilot nor any Subsidiary has been at any time a
\nmember of an affiliated group of corporations filing consolidated, combined or
\nunitary income or franchise tax returns for a period for which the statute of
\nlimitations for any Tax potentially applicable as a result of such membership
\nhas not expired. Target has been since January 1, 1999, and will continue
\nthrough the Effective Time to be, an S corporation within the meaning of Section
\n1361(a) of the Code and all applicable state tax laws, and Pilot has been since
\nJanuary 1, 1999, and will continue through the Effective Time to be, a qualified
\nsubchapter S subsidiary within the meaning of Section 1361(b)(3) of the Code and
\nall applicable state tax laws. Each Subsidiary is treated as an association
\ntaxable as a corporation for U.S. federal income tax purposes pursuant to
\nTreasury Regulation Section 301.7701-3.<\/p>\n
(c) The amount of Target’s, Pilot’s and any Subsidiary’s
\nliabilities for unpaid Taxes for all periods through the date of the Financial
\nStatements do not, in the aggregate, exceed the amount of the current liability
\naccruals for Taxes reflected on the Financial Statements, and the Financial
\nStatements properly accrue in accordance with GAAP all liabilities for Taxes of
\nTarget, Pilot and the Subsidiaries payable after the date of the Financial
\nStatements attributable to transactions and events occurring prior to such date.
\nNo liability for Taxes of Target, Pilot or any Subsidiary has been incurred or
\nmaterial amount of taxable income has been realized (or prior to and including
\nthe Effective Time will be incurred or realized) since such date other than in
\nthe ordinary course of business.<\/p>\n
(d) Acquiror has been furnished with true and complete copies of
\n(i) relevant portions of income tax audit reports, statements of deficiencies,
\nclosing or other agreements received by or on behalf of Target, Pilot or any
\nSubsidiary relating to Taxes, (ii) all federal, state and foreign income or
\nfranchise tax returns and state sales and use tax Returns for or including
\nTarget, Pilot and the Subsidiaries filed since August 12, 1997 and (iii) S<\/p>\n
-17-
\n 22<\/p>\n
Corporation and qualified subchapter S subsidiary election forms for Target and
\nPilot, respectively, filed with the Internal Revenue Service and applicable
\nstate tax authorities and, if any, documents from such Tax authorities
\nacknowledging receipt of and acceptance of such forms.<\/p>\n
(e) No audit of the Returns of or including Target, Pilot and
\nthe Subsidiaries by a government or taxing authority is in process, threatened
\nor pending. No deficiencies exist or, to the knowledge of Platinum, Target and
\nPilot, have been asserted with respect to Taxes of Target, Pilot or any
\nSubsidiary, and neither Target, Pilot nor any Subsidiary has received any notice
\nthat Target, Pilot or any Subsidiary has not filed a Return or paid Taxes
\nrequired to be filed or paid. Neither Target, Pilot nor any Subsidiary is a
\nparty to any action or proceeding for assessment or collection of Taxes, nor has
\nsuch event been asserted or threatened in writing against Target, Pilot, any
\nSubsidiary or any of their respective assets. No waiver or extension of any
\nstatute of limitations is in effect with respect to Taxes or Returns of Target,
\nPilot or any Subsidiary. Target, Pilot and each Subsidiary have disclosed on
\ntheir federal and state income and franchise tax returns all positions taken
\ntherein that could give rise to a substantial understatement penalty within the
\nmeaning of Code Section 6662 or comparable provisions of applicable state tax
\nlaws.<\/p>\n
(f) Target, Pilot and the Subsidiaries are not (nor have they
\never been) parties to any tax sharing agreement other than among Pilot and the
\nSubsidiaries. Since August 12, 1997, neither Target, Pilot nor any Subsidiary
\nhas been a distributing corporation or a controlled corporation in a transaction
\ndescribed in Section 355(a) of the Code.<\/p>\n
(g) Target is not, nor has it been, a United States real
\nproperty holding corporation within the meaning of Section 897(c)(2) of the Code
\nduring the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
\nTarget is not a “consenting corporation” under Section 341(f) of the Code.
\nNeither Target, Pilot nor any Subsidiary has entered into any compensatory
\nagreements with respect to the performance of services which payment thereunder
\nwould result in a nondeductible expense to Target, Pilot or such Subsidiary
\npursuant to Section 280G or 162(m) of the Code or an excise tax to the recipient
\nof such payment pursuant to Section 4999 of the Code. Neither Target, Pilot nor
\nany Subsidiary has agreed to make, and, to the knowledge of Platinum, Target and
\nPilot, none of Target, Pilot or any Subsidiary is required to make, other than
\nby reason of the Merger, any adjustment under Code Section 481(a) by reason of,
\na change in accounting method, and Target, Pilot and each Subsidiary will not
\notherwise have any income reportable for a period ending after the Closing Date
\nattributable to a transaction or other event (e.g., an installment sale)
\noccurring prior to the Closing Date with respect to which Target, Pilot or such
\nSubsidiary received the economic benefit prior to the Closing Date. Neither
\nTarget, Pilot nor any Subsidiary is, nor has it been, a “reporting corporation”
\nsubject to the information reporting and record maintenance requirements of
\nSection 6038A and the regulations thereunder.<\/p>\n
2.16 EMPLOYEE BENEFIT PLANS.<\/p>\n
(a) Schedule 2.16 lists, with respect to Target, Pilot, each
\nSubsidiary, <\/p>\n
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\n 23<\/p>\n
(i) all employee benefit plans (as defined in Section 3(3) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”)), (ii) each loan to
\na non-officer employee in excess of $10,000, loans to officers and directors and
\nany stock option, stock purchase, phantom stock, stock appreciation right,
\nsupplemental retirement, severance, sabbatical, medical, dental, vision care,
\ndisability, employee relocation, cafeteria benefit (Code Section 125) or
\ndependent care (Code Section 129), life insurance or accident insurance plans,
\nprograms or arrangements, (iii) all contracts and agreements relating to
\nemployment that provide for annual compensation in excess of $100,000 and all
\nseverance agreements, with any of the directors, officers or employees (other
\nthan, in each case, any such contract or agreement that is terminable by Target
\nor Pilot at will or without penalty or other adverse consequence), (iv) all
\nbonus, pension, profit sharing, savings, deferred compensation or incentive
\nplans, programs or arrangements, (v) other fringe or employee benefit plans,
\nprograms or arrangements that apply to senior management and that do not
\ngenerally apply to all employees, and (vi) any current or former employment or
\nexecutive compensation or severance agreements, written or otherwise, as to
\nwhich unsatisfied obligations of greater than $25,000 remain for the benefit of,
\nor relating to, any present or former employee, consultant or director
\n(together, the “Target Employee Plans”).<\/p>\n
(b) Target has furnished to Acquiror a copy of each of the
\nTarget Employee Plans and related plan documents (including trust documents,
\ninsurance policies or contracts, employee booklets, summary plan descriptions
\nand other authorizing documents, and, to the extent still in its possession, any
\nmaterial employee communications relating thereto) and has, with respect to each
\nTarget Employee Plan which is subject to ERISA reporting requirements, provided
\ncopies of the Form 5500 reports filed for the last three plan years. Any Target
\nEmployee Plan intended to be qualified under Section 401(a) of the Code (i) has
\nobtained from the Internal Revenue Service an opinion letter or favorable
\ndetermination letter as to its initial qualified status under the Code,
\nincluding all amendments to the Code effected by the Tax Reform Act of 1986 and
\nsubsequent legislation, (ii) may rely on an opinion letter issued to a prototype
\nplan sponsor with respect to a standardized plan adopted in accordance with the
\nrequirements for such reliance, or (iii) has applied to the Internal Revenue
\nService for such a determination letter (or has time remaining to apply for such
\na determination letter) prior to the expiration of the requisite period under
\napplicable Treasury Regulations or Internal Revenue Service pronouncements in
\nwhich to apply for such determination letter and to make any amendments
\nnecessary to obtain a favorable determination with respect to all periods since
\nthe date of adoption of such Target Employee Plan. Target has also furnished
\nAcquiror with the most recent Internal Revenue Service determination letter
\nissued with respect to each such Target Employee Plan, and nothing has occurred
\nsince the issuance of each such letter which could reasonably be expected to
\ncause the loss of the tax-qualified status of any Target Employee Plan subject
\nto Code Section 401(a).<\/p>\n
(c) None of the Target Employee Plans promises or provides
\nretiree medical or other retiree welfare or life insurance benefits to any
\nperson. There has been no “prohibited transaction,” as such term is defined in
\nSection 406 of ERISA and Section 4975 of the Code, and not exempt under Section
\n408 of ERISA or Section 4975 of the Code, with respect to any Target Employee
\nPlan, which could reasonably be expected to have, in the aggregate, a Material
\nAdverse Effect on Target, Pilot and the Subsidiaries, taken as a whole. Each
\nTarget Employee <\/p>\n
-19-
\n 24<\/p>\n
Plan has been administered in accordance with its terms and in compliance with
\nthe requirements prescribed by any and all statutes, rules and regulations
\n(including ERISA and the Code), except as would not have, in the aggregate, a
\nMaterial Adverse Effect on Target, Pilot and the Subsidiaries, taken as a whole.
\nNeither Target, Pilot nor any Subsidiary is subject to any liability or penalty
\nunder Sections 4976 through 4980D of the Code or Title I of ERISA with respect
\nto any of the Target Employee Plans. All contributions required to be made to
\nany Target Employee Plan have been made on or before their due dates and a
\nreasonable amount has been accrued for contributions to each Target Employee
\nPlan for the current plan years. With respect to each Target Employee Plan, no
\n“reportable event” within the meaning of Section 4043 of ERISA (excluding any
\nsuch event for which the thirty (30) day notice requirement has been waived
\nunder the regulations to Section 4043 of ERISA) nor any event described in
\nSection 4062, 4063, 4064 or 4041 or ERISA has occurred. Neither any Target
\nEmployee Plan nor any plan maintained, sponsored or contributed to by any trade
\nor business (whether or not incorporated) which is treated as a single employer
\nwith Target (an “ERISA Affiliate”) within the meaning of Section 414(b), (c),
\n(m) or (o) of the Code is covered by Title IV of ERISA, and no fact or event
\nexists that could give rise to any liability under Title IV of ERISA or under
\nSection 412 of the Code. No suit, administrative proceeding, action or other
\nlitigation has been brought, or, to the knowledge of Platinum, Target and Pilot,
\nis threatened, against or with respect to any such Target Employee Plan,
\nincluding any audit or inquiry by the IRS or United States Department of Labor.
\nNone of Target, Pilot, any Subsidiary is a party to, or has made any
\ncontribution to or otherwise incurred any obligation under, any “multiemployer
\nplan” as defined in Section 3(37) of ERISA or any single employer plan under
\nmultiple controlled groups within the meaning of Section 4063 or 4064 of ERISA.
\nTarget and Pilot have prepared in good faith and timely filed all requisite
\ngovernment reports (which were true and correct as of the date filed) with
\nrespect to each Target Employee Plan sponsored by Target, Pilot or any
\nSubsidiary.<\/p>\n
(d) With respect to each Target Employee Plan, Target and Pilot
\nhave complied with (i) the applicable health care continuation and notice
\nprovisions of the Consolidated Omnibus Budget Reconciliation Act of 1985
\n(“COBRA”) and the regulations thereunder or any similar applicable state law,
\n(ii) the applicable requirements of the Health Insurance Portability Amendments
\nAct (“HIPAA”) and the regulations thereunder and (iii) the applicable
\nrequirements of the Family Medical Leave Act of 1993 and the regulations
\nthereunder or any similar applicable state law, except to the extent, in each of
\nthe foregoing cases, that such failure to comply would not, in the aggregate,
\nhave a Material Adverse Effect on Target, Pilot and the Subsidiaries, taken as a
\nwhole.<\/p>\n
(e) There has been no amendment to, written interpretation or
\nannouncement (whether or not written) by Target, Pilot or any Subsidiary
\nrelating to, or change in participation or coverage under, any Target Employee
\nPlan which would materially increase the expense of maintaining such Plan above
\nthe level of expense incurred with respect to such Target Employee Plan for the
\nmost recent fiscal year included in the Financial Statements.<\/p>\n
2.17 CERTAIN AGREEMENTS AFFECTED BY THE MERGER. Neither the
\nexecution and delivery of this Agreement nor the consummation of the
\ntransactions contemplated hereby will (i) result in any payment (including,
\nwithout limitation, severance, unemployment compensation, <\/p>\n
-20-
\n 25<\/p>\n
golden parachute, bonus or otherwise) becoming due to any director or employee
\nof Target, Pilot or any Subsidiary, (ii) materially increase any benefits
\notherwise payable by Target, Pilot or any Subsidiary, (iii) result in the
\nacceleration of the time of payment or vesting of any such benefits or (iv)
\nexcept as set forth in Section 2.17 of the Target Disclosure Letter, result in
\nany payment to any employee or consultant of Target, Pilot or any Subsidiary
\nthat is nondeductible under Section 280G or Section 162(m) of the Code.<\/p>\n
2.18 EMPLOYEE MATTERS. To the knowledge of Platinum, Target and
\nPilot, Target, Pilot and each Subsidiary are in compliance in all material
\nrespects with all currently applicable federal, state, local and foreign laws
\nand regulations respecting employment, discrimination in employment, terms and
\nconditions of employment, wages, hours and occupational safety and health and
\nemployment practices, and is not engaged in any unfair labor practice. There are
\nno pending claims against Target, Pilot or any Subsidiary under any workers
\ncompensation plan or policy, state disability insurance policy or other short or
\nlong-term disability plan or policy or any other program for continuation of
\nsalary in the event of disability. None of Target, Pilot or any Subsidiary has
\nany material obligations resulting from any failure to comply with or violation
\nof COBRA or any similar state law with respect to any former employees. There
\nare no controversies pending, or, the knowledge of Platinum, Target and Pilot,
\nthreatened, between Target, Pilot or any Subsidiary and any of their respective
\nemployees or former employees. Neither Target, Pilot nor any Subsidiary is a
\nparty to any collective bargaining agreement or other labor union contract, and,
\nto the knowledge of Platinum, Target and Pilot, there have been no activities or
\nproceedings of any labor union or other group to organize any employees of
\nTarget, Pilot or any Subsidiary. None of Target, Pilot or any Subsidiary has
\nincurred any liability under or failed to comply with the Worker Adjustment
\nRetraining Notification Act (the “WARN Act”). Section 2.18 of the Target
\nDisclosure Letter contains a list of all employees who are currently on a leave
\nof absence (whether paid or unpaid), the reasons therefor, the expected return
\ndate (if known), and whether reemployment of such employee is guaranteed by
\ncontract or statute, and a list of all employees who have requested a leave of
\nabsence to commence at any time after the date of this Agreement, the reason
\ntherefor, the expected length of such leave (if known), and whether reemployment
\nof such employee is guaranteed by contract or statute.<\/p>\n
2.19 MATERIAL CONTRACTS.<\/p>\n
(a) Subsections (i) through (ix) of Section 2.19(a) of the
\nTarget Disclosure Letter contain a list of all contracts and agreements to which
\nTarget, Pilot or any Subsidiary is a party that are material to the business,
\nresults of operations, or condition (financial or otherwise), of Target, Pilot
\nand the Subsidiaries taken as a whole (such contracts, agreements and
\narrangements as are required to be set forth in Section 2.19(a) of the Target
\nDisclosure Letter being referred to herein collectively as the “Material
\nContracts”). Material Contracts shall include, without limitation, the following
\nand shall be categorized in the Target Disclosure Letter as follows:<\/p>\n
(i) each contract and agreement (other than routine purchase
\norders and pricing quotes in the ordinary course of business covering a period
\nof less than 1 year) <\/p>\n
-21-
\n 26<\/p>\n
for the purchase of inventory, spare parts, other materials
\nor personal property with any supplier or for the furnishing of services to
\nTarget, Pilot or any Subsidiary under the terms of which Target, Pilot or any
\nSubsidiary: (A) paid or otherwise gave consideration of more than $100,000 in
\nthe aggregate during the calendar year ended December 31, 1999, (B) is likely to
\npay or otherwise give consideration of more than $100,000 in the aggregate
\nduring the calendar year ended December 31, 2000, (C) is likely to pay or
\notherwise give consideration of more than $100,000 in the aggregate over the
\nremaining term of such contract, or (D) cannot be cancelled by Target, Pilot or
\nsuch Subsidiary without penalty or further payment of less than $50,000;<\/p>\n
(ii) each customer contract and agreement (other than
\nroutine purchase orders, pricing quotes with open acceptance and other tender
\nbids, in each case, entered into in the ordinary course of business and covering
\na period of less than one year) to which Target, Pilot or any Subsidiary is a
\nparty which (A) involved consideration of more than $100,000 in the aggregate
\nduring the calendar year ended December 31, 1999, (B) is likely to involve
\nconsideration of more than $100,000 in the aggregate during the calendar year
\nended December 31, 2000 or (C) pursuant to its terms, is likely to involve
\nconsideration of more than $100,000 in the aggregate over the remaining term of
\nthe contract;<\/p>\n
(iii) (A) all distributor, manufacturer’s representative,
\nbroker, franchise, agency and dealer contracts and agreements to which Target,
\nPilot or any Subsidiary is a party which involved consideration of more than
\n$50,000 during the calendar year ended December 31, 1999 or is likely to involve
\nconsideration of at least $50,000 during the calendar year ended December 31,
\n2000, and (B) all sales promotion, market research, marketing and advertising
\ncontracts and agreements to which Target, Pilot or any Subsidiary is a party
\nwhich: (1) involved consideration of more than $100,000 in the aggregate during
\nthe calendar year ended December 31 1999, (2) are likely to involve
\nconsideration of more than $100,000 in the aggregate during the calendar year
\nended December 31, 2000, or (3) pursuant to their terms, are likely to involve
\nconsideration of more than $100,000 in the aggregate over the remaining term of
\nthe contract;<\/p>\n
(iv) all management contracts with independent contractors
\nor consultants (or similar arrangements) to which Target, Pilot or any
\nSubsidiary is a party and which (A) involved consideration or more than $100,000
\nin the aggregate during the calendar year ended December 31, 1999, (B) are
\nlikely to involve consideration of more than $100,000 in the aggregate during
\nthe calendar year ended December 31, 2000, or (C) pursuant to their terms, are
\nlikely to involve consideration of more than $100,000 in the aggregate over the
\nremaining term of the contract;<\/p>\n
(v) all contracts and agreements (excluding routine checking
\naccount overdraft agreements involving petty cash amounts) under which Target,
\nPilot or any Subsidiary has created, incurred, assumed or guaranteed (or may
\ncreate, incur, assume or guarantee) indebtedness in excess of $100,000 or under
\nwhich Target, Pilot or any Subsidiary has imposed (or may impose) a security
\ninterest or lien on any of their respective assets, whether tangible or
\nintangible, to secure such indebtedness;<\/p>\n
-22-
\n 27<\/p>\n
(vi) all contracts and agreements between or among Target,
\nPilot or any Subsidiary, on the one hand, and any affiliate of Target, Pilot or
\nany Subsidiary (other than a wholly owned direct or indirect subsidiary of
\nTarget), on the other hand, including, but not limited to, Platinum; and<\/p>\n
(vii) all contracts and agreements to which Target, Pilot or
\nany Subsidiary is a party under which it has agreed to supply products to a
\ncustomer at specified prices;<\/p>\n
(b) Except as would not, individually or in the aggregate, have
\na Material Adverse Effect on Target, Pilot and the Subsidiaries, taken as a
\nwhole, each license or agreement listed in Section 2.13 of the Target Disclosure
\nLetter and each Material Contract is a legal, valid and binding agreement, and,
\nto the knowledge of Platinum, Target and Pilot, none of such licenses,
\nagreements or Material Contracts is in default by its terms or claimed in
\nwriting to be in default or has been cancelled by the other party. Target has
\nfurnished Acquiror with true and complete copies of all such licenses,
\nagreements and Material Contracts, together with all amendments, waivers or
\nother changes thereto.<\/p>\n
2.20 INTERESTED PARTY TRANSACTIONS. Neither Target, Pilot nor any
\nSubsidiary is indebted to any director, officer, employee, agent or stockholder
\nexcept for amounts due as normal salaries and bonuses and in reimbursement of
\nordinary expenses and the bonuses described in Section 2.17 of the Target
\nDisclosure Letter, and no such person is indebted to Target, Pilot or any
\nSubsidiary.<\/p>\n
2.21 INSURANCE. Section 2.21 of the Target Disclosure Letter
\nsummarizes the policies of insurance covering Target, Pilot and the Subsidiaries
\nand indicates, in each case, the owner of such policy. There is no material
\nclaim pending under any of such policies as to which coverage has been
\nquestioned, denied or disputed. All premiums due and payable under all such
\npolicies have been paid. Neither Platinum, Target, Pilot nor any Subsidiary has
\nreceived any written notice of termination of any of such policies.<\/p>\n
2.22 COMPLIANCE WITH LAWS. To the knowledge of Platinum, Target and
\nPilot, Target, Pilot and each Material Subsidiary operates its business in
\ncompliance with all federal, state, local or foreign statute, law or regulation
\nwith respect to the conduct of its business, or the ownership or operation of
\nits business, except for such failures to comply as could not reasonably be
\nexpected to have a Material Adverse Effect on Target, Pilot and the
\nSubsidiaries, taken as a whole.<\/p>\n
2.23 MINUTE BOOKS. The minute books of Target, Pilot and the
\nSubsidiaries made available to Acquiror contain a complete summary of all
\nmeetings of directors and stockholders or actions by written consent since the
\ntime of incorporation of Target, Pilot and the respective Subsidiaries through
\nthe date of this Agreement, and reflect all transactions referred to in such
\nminutes accurately in all material respects.<\/p>\n
2.24 BROKERS’ AND FINDERS’ FEES. Neither Target nor Pilot has
\nincurred, nor will either of them incur, directly or indirectly, any liability
\nfor brokerage or finders’ fees or <\/p>\n
-23-
\n 28<\/p>\n
agents’ commissions or investment bankers’ fees or any similar charges payable
\nby Target, Pilot or any Subsidiary in connection with this Agreement or any
\ntransaction contemplated hereby.<\/p>\n
2.25 VOTE REQUIRED. The affirmative vote of the holders of a
\nmajority of the shares of Target Common Stock outstanding is the only vote of
\nTarget’s stockholders necessary to approve this Agreement and the transactions
\ncontemplated hereby. Prior to the execution of this Agreement, Platinum, the
\nsole stockholder of Target, has irrevocably adopted and approved this Agreement,
\nthe Certificate of Merger and the transactions contemplated hereby and thereby.<\/p>\n
2.26 ACCOUNTS RECEIVABLE. Target has made available to Acquiror a
\nlist of all accounts receivable of Target, Pilot and each Subsidiary reflected
\non the Financial Statements (“Accounts Receivable”) along with a range of days
\nelapsed since invoice. All Accounts Receivable of Target, Pilot and the
\nSubsidiaries arose in the ordinary course of business, are carried at values
\ndetermined in accordance with GAAP consistently applied. No person has any lien
\non any of such Accounts Receivable and no request or agreement for deduction or
\ndiscount has been made with respect to any of such Accounts Receivable.<\/p>\n
2.27 CUSTOMERS. As of the date hereof, no customer which
\nindividually accounted for more than 5% of Target’s gross revenues on a
\nconsolidated basis during the 12-month period preceding the date hereof has
\ncancelled or otherwise terminated, or made any written threat to Target, Pilot
\nor any of the Subsidiaries to cancel or otherwise terminate, its relationship
\nwith Target, Pilot or any of the Subsidiaries, and, to the knowledge of
\nPlatinum, Target and Pilot, no such customer intends to cancel or otherwise
\nterminate its relationship with Target, Pilot or any Subsidiary. Neither Target,
\nPilot nor any Subsidiary has knowingly breached, so as to provide a benefit to
\nTarget, Pilot or any Subsidiary that was not intended by the parties, any
\nagreement with, or engaged in any fraudulent conduct with respect to, any
\ncustomer of Target, Pilot or any Subsidiary.<\/p>\n
2.28 THIRD PARTY CONSENTS. Except as set forth in the Target
\nDisclosure Letter, no consent or approval is needed from any third party in
\norder to effect the Merger, this Agreement or any of the transactions
\ncontemplated hereby.<\/p>\n
2.29 NO COMMITMENTS REGARDING FUTURE PRODUCTS. Section 2.29 of the
\nTarget Disclosure Letter describes all obligations of Target, Pilot or any
\nSubsidiary to provide future enhancements of existing products, to add features
\nnot presently available on existing products or to otherwise enhance the
\nperformance of its existing products (other than beta or similar arrangements
\npursuant to which customers from time to time test or evaluate products). All
\nProducts substantially comply with published specifications for such Products,
\nand neither Target, Pilot nor any Subsidiary has received material complaints
\nfrom customers about Products that remain unresolved. Section 2.29 of the Target
\nDisclosure Letter accurately sets forth a complete list of material products in
\ndevelopment (exclusive of mere enhancements to and additional features for
\nexisting Products).<\/p>\n
2.30 REPRESENTATIONS COMPLETE. None of the representations or
\nwarranties made by Target, Pilot and Platinum herein or in any Schedule hereto,
\nincluding the Target Disclosure Letter, or certificate furnished by Target,
\nPilot or Platinum pursuant to this <\/p>\n
-24-
\n 29<\/p>\n
Agreement, when all such documents are read together in their entirety, contains
\nor will contain at the Effective Time any untrue statement of a material fact,
\nor omits or will omit at the Effective Time to state any material fact necessary
\nin order to make the statements contained herein or therein, in the light of the
\ncircumstances under which made, not misleading.<\/p>\n
2.31 PLATINUM AGREEMENTS. Section 2.31 of the Target Disclosure
\nLetter sets forth all agreements, obligations, instruments, commitments and
\narrangements by and between Target, Pilot or any Subsidiary on the one hand and
\nPlatinum or any of its affiliates on the other hand (a) in effect as of the date
\nof this Agreement and (b) to be in effect as of the Closing (the “Related Party
\nAgreements”). None of Target, Pilot or any Subsidiary have any obligation under
\nthe Purchase Agreement dated August 7, 1997 by and among Target, Aviator
\nAcquisition Corp., Platinum and Cognizant Corporation or any agreements attached
\nas exhibits to or entered into in connection with such Purchase Agreement (the
\n“Cognizant Agreements”).<\/p>\n
SECTION THREE<\/p>\n
3. REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND MERGER SUB.<\/p>\n
Except as disclosed in a letter dated as of the date of this
\nAgreement and delivered by Acquiror to Target prior to the execution and
\ndelivery of this Agreement and referring to the representations and warranties
\nin this Agreement (the “Acquiror Disclosure Letter”), Acquiror and Merger Sub
\nhereby jointly and severally represent and warrant to Target as follows:<\/p>\n
3.1 ORGANIZATION, STANDING AND POWER. Each of Acquiror and Merger
\nSub is a corporation duly organized, validly existing and in good standing under
\nthe laws of its jurisdiction of organization. Each of Acquiror and Merger Sub
\nhas the corporate power to own its properties and to carry on its business as
\nnow being conducted and as proposed to be conducted.<\/p>\n
3.2 ACQUIROR COMMON STOCK. The shares of Acquiror Common Stock to be
\nissued pursuant to the Merger will be duly authorized, validly issued, fully
\npaid, and non-assessable and are free of any liens or encumbrances other than
\nany liens or encumbrances created by or imposed upon the holder thereof, and are
\nnot subject to preemptive rights or rights of first refusal created by statute,
\nthe Certificate of Incorporation or Bylaws of Acquiror or any agreement to which
\nAcquiror is a party or by which it is bound. The shares of Acquiror Common Stock
\nto be issued pursuant to the Merger will be issued in compliance with all
\napplicable federal and state securities laws and in compliance with the rules
\nand regulations of the National Association of Securities Dealers (the “NASD”).<\/p>\n
3.3 AUTHORITY. Acquiror and Merger Sub have all requisite corporate
\npower and authority to enter into this Agreement and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nand the consummation of the transactions contemplated hereby have been duly
\nauthorized by all necessary corporate action on the part of Acquiror and Merger
\nSub (other than, with respect to the Merger, the filing and recordation of
\nappropriate merger documents as required by Delaware law). This Agreement has
\nbeen duly executed and delivered by Acquiror and Merger Sub and constitutes the
\nvalid and binding <\/p>\n
-25-
\n 30<\/p>\n
obligations of Acquiror and Merger Sub. Acquiror is not required to obtain
\nstockholder approval of the Merger.<\/p>\n
3.4 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.<\/p>\n
(a) The execution and delivery of this Agreement do not, and the
\nconsummation of the transactions contemplated hereby will not, conflict with, or
\nresult in any violation of, or default under (with or without notice or lapse of
\ntime, or both), or give rise to a right of termination, cancellation or
\nacceleration of any obligation or loss of a benefit under (i) any provision of
\nthe Certificate of Incorporation or Bylaws of Acquiror or Merger Sub, as
\namended, or (ii) any material mortgage, indenture, lease, contract or other
\nagreement or instrument, permit, concession, franchise, license, judgment,
\norder, decree, statute, law, ordinance, rule or regulation applicable to
\nAcquiror or Merger Sub or their properties or assets.<\/p>\n
(b) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with, any Governmental Entity, is required
\nby or with respect to Acquiror or Merger Sub in connection with the execution
\nand delivery of this Agreement by Acquiror and Merger Sub or the consummation by
\nAcquiror and Merger Sub of the transactions contemplated hereby, except for (i)
\nthe filing of the Certificate of Merger, together with the required officers’
\ncertificates, as provided in Section 1.2, (ii) such consents, approvals, order,
\nauthorizations, registrations, declarations and filings as may be required under
\nthe Exchange Act, including without limitation, the filing of a Form 8-K with
\nthe SEC, the Securities Act, and rules and regulations of the NASD, (iii) any
\nfilings as may be required under applicable state securities laws and the
\nsecurities laws of any foreign country, (iv) such filings as may be required
\nunder HSR, and (v) such other consents, authorizations, filings, approvals and
\nregistrations which, if not obtained or made, would not, individually or in the
\naggregate, have a Material Adverse Effect on Acquiror and its subsidiaries,
\ntaken as a whole and would not prevent, materially alter or delay any the
\ntransactions contemplated by this Agreement.<\/p>\n
3.5 SEC FILINGS; FINANCIAL STATEMENTS.<\/p>\n
(a) As of the time it was filed with the SEC, (or, if amended or
\nsuperseded by a filing prior to the date of this Agreement, then on the date of
\nsuch filing): (i) each report, registration statement and definitive proxy
\nstatement filed by Acquiror with the SEC (the “Acquiror SEC Documents”) complied
\nin all material respects with the applicable requirements of the Securities Act
\nor the Exchange Act, as the case may be, and the rules and regulations
\npromulgated by the SEC thereunder; and (ii) none of Acquiror’s SEC Documents
\ncontained when made any untrue statement of a material fact or omitted to state
\na material fact required to be stated therein or necessary in order to make the
\nstatements therein, in the light of the circumstances under which they were
\nmade, not misleading, except to the extent corrected by a subsequently filed SEC
\ndocument.<\/p>\n
(b) The financial statements (including the notes thereto)
\ncontained in the Acquiror SEC Documents: (i) complied as to form in all material
\nrespects with the published rules and regulations of the SEC applicable thereto;
\n(ii) were prepared in accordance with GAAP <\/p>\n
-26-
\n 31<\/p>\n
applied on a consistent basis throughout the periods covered, except as may be
\nindicated in the notes to such financial statements and (in the case of
\nunaudited statements) as permitted by Form 10-Q of the SEC, and except that
\nunaudited financial statements may not contain footnotes and are subject to
\nnormal and recurring year-end audit adjustments, and (iii) fairly present in all
\nmaterial respects the financial position of Acquiror as of the respective dates
\nthereof and the results of operations, stockholders’ equity and cash flows of
\nAcquiror for the periods covered thereby.<\/p>\n
3.6 ABSENCE OF UNDISCLOSED LIABILITIES. Acquiror has no material
\nobligations or liabilities of any nature (matured or unmatured, fixed or
\ncontingent) other than (a) those set forth or adequately provided for in the
\nbalance sheet included in Acquiror’s Annual Report on Form 10-K for the period
\nended March 31, 2000 (the “Acquiror Balance Sheet”), (ii) those not required to
\nbe set forth in the Buyer Balance Sheet under GAAP, and (iii) those incurred in
\nthe ordinary course of business since the Buyer Balance Sheet Date and
\nconsistent with past practice.<\/p>\n
3.7 ABSENCE OF CERTAIN CHANGES. Since March 31, 2000 (the “Acquiror
\nBalance Sheet Date”), Acquiror has conducted its business in the ordinary course
\nin a manner consistent with past practice and there has not occurred: (a) any
\nchange, event or condition (whether or not covered by insurance) that has
\nresulted in, or might reasonably be expected to result in, a Material Adverse
\nEffect on Acquiror and its subsidiaries, taken as a whole, other than Acquiror’s
\nacquisition of the Infocharger division of Tantau Software, Inc., as disclosed
\nin the Acquiror SEC Documents; (b) any declaration, setting aside, or payment of
\na dividend or other distribution with respect to the shares of Acquiror, or any
\ndirect or indirect redemption, purchase or other acquisition by Acquiror of any
\nof its shares of capital stock; other than the repurchase of unvested shares
\nfrom employees, consultants and directors pursuant to contractual arrangements;
\n(c) any material amendment or change to Acquiror’s Certificate of Incorporation
\nor Bylaws; or (d) any negotiation or agreement by Acquiror to do any of the
\nthings described in the preceding clauses (a) through (c) (other than
\nnegotiations with Target and its representatives regarding the transactions
\ncontemplated by this Agreement).<\/p>\n
3.8 LITIGATION. There is no private or governmental action, suit,
\nproceeding, claim, arbitration or investigation pending before any agency, court
\nor tribunal, foreign or domestic, or, to the knowledge of Acquiror, threatened
\nagainst Acquiror or any of its subsidiaries or any of their respective
\nproperties or any of their respective officers or directors (in their capacities
\nas such) that, individually or in the aggregate, could reasonably be expected to
\nhave a Material Adverse Effect on Acquiror and its subsidiaries, taken as a
\nwhole. There is no judgment, decree or order against Acquiror or any of its
\nsubsidiaries or, to the knowledge of Acquiror, any of their respective directors
\nor officers (in their capacities as such) that could prevent, enjoin, or
\nmaterially alter or delay any of the transactions contemplated by this
\nAgreement, or that could reasonably be expected to have a Material Adverse
\nEffect on Acquiror and its subsidiaries, taken as a whole.<\/p>\n
3.9 BROKER’S AND FINDERS’ FEES. Acquiror has not incurred, nor will
\nit incur, directly or indirectly, any liability for brokerage or finders’ fees
\nor agents’ commissions or <\/p>\n
-27-
\n 32<\/p>\n
investment bankers’ fees or any similar charges in connection with this
\nAgreement or any transaction contemplated hereby.<\/p>\n
3.10 TAX MATTERS. Neither Acquiror nor any of its subsidiaries nor,
\nto the knowledge of Acquiror, any of their respective affiliates or agents is
\naware of any agreement, plan or other circumstance that would prevent the Merger
\nfrom constituting a transaction under Section 368(a) of the Code.<\/p>\n
SECTION FOUR<\/p>\n
4. CONDUCT PRIOR TO THE EFFECTIVE TIME.<\/p>\n
4.1 CONDUCT OF BUSINESS OF TARGET AND ACQUIROR. During the period
\nfrom the date of this Agreement and continuing until the earlier of the
\ntermination of this Agreement or the Effective Time, each of Target and Acquiror
\nagrees (except to the extent expressly contemplated by this Agreement or as
\nconsented to in writing by the other), to carry on its and its subsidiaries’
\nbusiness in the usual, regular and ordinary course in substantially the same
\nmanner as heretofore conducted, to pay and to cause its subsidiaries to pay
\ndebts and Taxes when due (subject to good faith disputes over such debts or
\nTaxes and in the case of Taxes of Target, Pilot or any of the Subsidiaries, to
\nAcquiror’s consent to the filing of material Tax Returns if applicable), to pay
\nor perform other obligations when due, and to use commercially reasonable
\nefforts consistent with past practice and policies to preserve intact its and
\nits subsidiaries’ present business organization, keep available the services of
\nits and its subsidiaries’ present officers and key employees and preserve its
\nand its subsidiaries’ relationships with customers, suppliers, distributors,
\nlicensors, licensees, and others having business dealings with it or its
\nsubsidiaries, to the end that its and its subsidiaries’ goodwill and ongoing
\nbusinesses shall be unimpaired at the Effective Time. The foregoing
\nnotwithstanding, Acquiror acknowledges and agrees that the four employees of
\nPilot listed in Section 4.1 of Target’s Disclosure Letter will terminate their
\nemployment with Pilot prior to the Effective Time to accept employment with
\nPlatinum or an affiliate of Platinum. Each of Target and Acquiror agrees to
\npromptly notify the other of any event or occurrence not in the ordinary course
\nof its or its subsidiaries’ businesses, and of any event which could have a
\nMaterial Adverse Effect on it and its subsidiaries, taken as a whole. Without
\nlimiting the foregoing, except as expressly contemplated by this Agreement,
\nneither Target nor Acquiror shall do, cause or permit any of the following, or
\nallow, cause or permit any of its subsidiaries to do, cause or permit any of the
\nfollowing, without the prior written consent of the other:<\/p>\n
(a) CHARTER DOCUMENTS. Cause or permit any amendments to its
\nCertificate of Incorporation or Bylaws;<\/p>\n
(b) DIVIDENDS; CHANGES IN CAPITAL STOCK. Declare or pay any
\ndividends on or make any other distributions (whether in cash, stock or
\nproperty) in respect of any of its capital stock, or split, combine or
\nreclassify any of its capital stock or issue or authorize the issuance of any
\nother securities in respect of, in lieu of or in substitution for shares of its
\ncapital stock, or repurchase or otherwise acquire, directly or indirectly, any
\nshares of its capital stock except from former employees, directors and
\nconsultants in accordance with agreements <\/p>\n
-28-
\n 33<\/p>\n
providing for the repurchase of shares in connection with any termination of
\nservice to it or its subsidiaries;<\/p>\n
(c) OTHER. Take, or agree in writing or otherwise to take, any
\nof the actions described in Sections 4.1(a) or (b) above, or any action which
\nwould make any of its representations or warranties contained in this Agreement
\nuntrue or incorrect or prevent it from performing or cause it not to perform its
\ncovenants hereunder.<\/p>\n
4.2 CONDUCT OF BUSINESS OF TARGET AND PILOT. During the period from
\nthe date of this Agreement and continuing until the earlier of the termination
\nof this Agreement or the Effective Time, except as expressly contemplated by
\nthis Agreement, neither Target nor Pilot shall, or shall cause or permit any of
\nthe following, or shall allow, cause or permit any of the Subsidiaries to, or to
\ncause or permit any of the following, without the prior written consent of
\nAcquiror:<\/p>\n
(a) MATERIAL CONTRACTS. Enter into any material contract or
\ncommitment, or violate, amend or otherwise modify or waive any of the terms of
\nany of its Material Contracts, other than in the ordinary course of business
\nconsistent with past practice;<\/p>\n
(b) ISSUANCE OF SECURITIES. Issue, deliver or sell or authorize
\nor propose the issuance, delivery or sale of, or purchase or propose the
\npurchase of, any shares of its or the Subsidiaries’ capital stock or securities
\nconvertible into, or subscriptions, rights, warrants or options to acquire, or
\nother agreements or commitments of any character obligating it to issue any such
\nshares or other convertible securities;<\/p>\n
(c) INTELLECTUAL PROPERTY. Transfer or grant to any person or
\nentity any rights to its Intellectual Property, other than non-exclusive
\nlicenses of object code to customers entered into in the ordinary course of
\nbusiness and consistent with past practice;<\/p>\n
(d) EXCLUSIVE RIGHTS. Enter into or amend any agreements
\npursuant to which any other party is granted exclusive marketing or other
\nexclusive rights of any type or scope with respect to any Products or technology
\nof Target, Pilot or any Subsidiary;<\/p>\n
(e) DISPOSITIONS. Sell, lease, license or otherwise dispose of
\nor encumber any of its properties or assets which are material, individually or
\nin the aggregate, to Target, Pilot and the Subsidiaries, taken as a whole,
\nexcept in the ordinary course of business consistent with past practice;<\/p>\n
(f) INDEBTEDNESS. Incur any indebtedness for borrowed money,
\nincluding under existing credit lines, or guarantee any such indebtedness or
\nissue or sell any debt securities or guarantee any debt securities of others;<\/p>\n
(g) LEASES. Enter into operating leases providing for annual
\npayments in excess of $50,000;<\/p>\n
-29-
\n 34<\/p>\n
(h) PAYMENT OF OBLIGATIONS. Pay, discharge or satisfy any claim,
\nliability or obligation (absolute, accrued, asserted or unasserted, contingent
\nor otherwise), including, but not limited to, pursuant to the Related Party
\nAgreements, other than (i) to non-affiliated third parties in the ordinary
\ncourse of business and not in excess of $50,000 in any one case or $100,000 in
\nthe aggregate, and (ii) the payment, discharge or satisfaction of liabilities to
\nnon-affiliated third parties reflected or reserved against in the Financial
\nStatements;<\/p>\n
(i) CAPITAL EXPENDITURES. Make any capital expenditures, capital
\nadditions or capital improvements except in the ordinary course of business and
\nconsistent with past practice and not in excess of $50,000 in any one case or
\n$100,000 in the aggregate;<\/p>\n
(j) INSURANCE. Materially reduce the amount of any material
\ninsurance coverage provided by existing insurance policies;<\/p>\n
(k) TERMINATION OR WAIVER. Terminate or waive any right of
\nsubstantial value, other than in the ordinary course of business;<\/p>\n
(l) EMPLOYEE BENEFIT PLANS; NEW HIRES; PAY INCREASES. Except for
\nthe transactions contemplated by Section 5.13 and Section 5.14, adopt or amend
\nany employee benefit (including commissions) or stock purchase or option plan,
\nor hire any new director level or officer level employee (except that it may
\nhire a replacement for any current director level or officer level employee if
\nit first provides Acquiror advance notice regarding such hiring decision), pay
\nany special bonus or special remuneration to any employee or director, or
\nincrease the salaries or wage rates of its employees, or pay commissions to
\nemployees except for commissions reflected or reserved against in the Financial
\nStatements or incurred in the ordinary course of business since the Target
\nBalance Sheet Date;<\/p>\n
(m) SEVERANCE ARRANGEMENT. Except for the transactions
\ncontemplated by Section 5.13, grant or enter into any agreement providing for
\nany severance or termination pay to any employee, director or officer.<\/p>\n
(n) LAWSUITS. Commence a lawsuit other than (i) for the routine
\ncollection of bills, (ii) in such cases where it in good faith determines that
\nfailure to commence suit would result in the material impairment of a valuable
\naspect of its business, provided that it consults with Acquiror prior to the
\nfiling of such a suit, or (iii) for a breach of this Agreement;<\/p>\n
(o) ACQUISITIONS. Acquire or agree to acquire by merging or
\nconsolidating with, or by purchasing a substantial portion of the assets of, or
\nby any other manner, any business or any corporation, partnership, association
\nor other business organization or division thereof, or otherwise acquire or
\nagree to acquire any assets which are material, individually or in the
\naggregate, to Target, Pilot and the Subsidiaries, taken as a whole;<\/p>\n
(p) TAXES. Other than in the ordinary course of business, make
\nor change any material election in respect of Taxes, adopt or change any
\naccounting method in respect of Taxes, file any material Tax Return or any
\namendment to a material Tax Return, enter into any closing agreement, settle any
\nclaim or assessment in respect of Taxes, or consent to any <\/p>\n
-30-
\n 35<\/p>\n
extension or waiver of the limitation period applicable to any claim or
\nassessment in respect of Taxes;<\/p>\n
(q) NOTICES. Fail to give any notices and other information
\nrequired to be given to the employees of Target, Pilot or any Subsidiary, any
\ncollective bargaining unit representing any group of employees of Target, Pilot
\nor any Subsidiary and any applicable government authority under the WARN Act,
\nthe National Labor Relations Act, the Internal Revenue Code, COBRA, and other
\napplicable law in connection with the transactions provided for in this
\nAgreement;<\/p>\n
(r) REVALUATION. Revalue any of its assets, including without
\nlimitation writing down the value of inventory or writing off notes or accounts
\nreceivable other than in the ordinary course of business; or<\/p>\n
(s) OTHER. Take or agree in writing or otherwise to take, any of
\nthe actions described in Sections 4.2(a) through (r) above, or any action which
\nwould make any of its representations or warranties contained in this Agreement
\nuntrue or incorrect or prevent it from performing or cause it not to perform its
\ncovenants hereunder.<\/p>\n
4.3 NO SOLICITATION. Platinum, Target and Pilot will not, and will
\nnot permit any of their respective officers, directors, employees or other
\nagents or the Subsidiaries or any of their respective officers, directors,
\nemployees or other agents to, directly or indirectly, (a) take any action to
\nsolicit, initiate, entertain or encourage any Takeover Proposal (as defined
\nbelow) or (b) engage in negotiations with, or disclose any nonpublic information
\nrelating to Target, Pilot or any of the Subsidiaries to, or afford access to the
\nproperties, books or records of Target, Pilot or any of the Subsidiaries to, any
\nperson that has advised Target that it may be considering making, or that has
\nmade, a Takeover Proposal or (c) agree to or endorse any Takeover Proposal.
\nTarget will promptly notify Acquiror after receipt of any Takeover Proposal or
\nany notice that any person is considering making a Takeover Proposal or any
\nrequest for nonpublic information relating to Target, Pilot or any of the
\nSubsidiaries or for access to the properties, books or records of Target, Pilot
\nor any of the Subsidiaries by any person that has advised Target that it may be
\nconsidering making, or that has made, a Takeover Proposal. For purposes of this
\nAgreement, “Takeover Proposal” means any offer or proposal for, or any
\nindication of interest in, a merger or other business combination involving
\nTarget, Pilot or any Subsidiary or the acquisition of any significant equity
\ninterest in, or a significant portion of the assets of, Target, Pilot or any
\nSubsidiary, other than the transactions contemplated by this Agreement.<\/p>\n
SECTION FIVE<\/p>\n
5. ADDITIONAL AGREEMENTS.<\/p>\n
5.1 COMMERCIALLY REASONABLE EFFORTS AND FURTHER ASSURANCES. Each of
\nthe parties to this Agreement shall use commercially reasonable efforts to
\neffectuate the transactions contemplated hereby and to fulfill and cause to be
\nfulfilled the conditions to closing under this Agreement. Each party hereto, at
\nthe reasonable request of another party hereto, shall execute and deliver such
\nother instruments and do and perform such other acts and things as may <\/p>\n
-31-
\n 36<\/p>\n
be necessary or desirable for effecting completely the consummation of this
\nAgreement and the transactions contemplated hereby.<\/p>\n
5.2 CONSENTS; COOPERATION.<\/p>\n
(a) Each of Acquiror and Target shall use its commercially
\nreasonable efforts to promptly (i) obtain from any Governmental Entity any
\nconsents, licenses, permits, waivers, approvals, authorizations or orders
\nrequired to be obtained or made by Acquiror or Target or any of their
\nsubsidiaries in connection with the authorization, execution and delivery of
\nthis Agreement and the consummation of the transactions contemplated hereunder,
\nincluding those required under HSR, and (ii) make all necessary filings, and
\nthereafter make any other required submissions, with respect to this Agreement
\nand the Merger required under the Securities Act and the Exchange Act and any
\nother applicable federal, state or foreign securities laws.<\/p>\n
(b) Each of Acquiror and Target shall use commercially
\nreasonable efforts to resolve such objections, if any, as may be asserted by any
\nGovernmental Entity with respect to the transactions contemplated by this
\nAgreement under the HSR, the Sherman Act, as amended, the Clayton Act, as
\namended, the Federal Trade Commission Act, as amended, and any other Federal,
\nstate or foreign statutes, rules, regulations, orders or decrees that are
\ndesigned to prohibit, restrict or regulate actions having the purpose or effect
\nof monopolization or restraint of trade (collectively, “Antitrust Laws”). In
\nconnection therewith, if any administrative or judicial action or proceeding is
\ninstituted (or threatened to be instituted) challenging any transaction
\ncontemplated by this Agreement as violative of any Antitrust Law, each of
\nAcquiror and Target shall cooperate and use commercially reasonable efforts to
\ncontest and resist any such action or proceeding and to have vacated, lifted,
\nreversed, or overturned any decree, judgment, injunction or other order, whether
\ntemporary, preliminary or permanent (each an “Order”), that is in effect and
\nthat prohibits, prevents, or restricts consummation of the Merger or any such
\nother transactions, unless by mutual agreement Acquiror and Target decide that
\nlitigation is not in their respective best interests. The parties hereto will
\nconsult and cooperate with one another, and consider in good faith the views of
\none another, in connection with any analyses, appearances, presentations,
\nmemoranda, briefs, arguments, opinions and proposals made or submitted by or on
\nbehalf of any party hereto in connection with proceedings under or relating to
\nany Antitrust Laws. Notwithstanding the provisions of the immediately preceding
\nsentence, it is expressly understood and agreed that Acquiror shall have no
\nobligation to litigate or contest any administrative or judicial action or
\nproceeding or any Order beyond September 30, 2000. Each of Acquiror and Target
\nshall use commercially reasonable efforts to take such action as may be required
\nto cause the expiration of the notice periods under the HSR or other Antitrust
\nLaws with respect to such transactions as promptly as possible after the
\nexecution of this Agreement.<\/p>\n
(c) Notwithstanding anything to the contrary in Section 5.2(a)
\nor (b), (i) neither Acquiror nor any of it subsidiaries shall be required to
\ndivest any of their respective businesses, product lines or assets, or to take
\nor agree to take any other action or agree to any limitation that could
\nreasonably be expected to have a Material Adverse Effect on Acquiror and its
\nsubsidiaries, taken as a whole, before or after the Effective Time or (ii)
\nneither Target, Pilot <\/p>\n
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\n 37<\/p>\n
nor any Subsidiary shall be required to divest any of its respective businesses,
\nproduct lines or assets, or to take or agree to take any other action or agree
\nto any limitation that could reasonably be expected to have a Material Adverse
\nEffect on Target, Pilot and the Subsidiaries, taken as a whole.<\/p>\n
(d) From the date of this Agreement until the earlier of the
\nEffective Time or the termination of this Agreement, each party shall promptly
\nnotify the other party in writing of any pending or, to the knowledge of such
\nparty, threatened action, proceeding or investigation by any Governmental Entity
\nor any other person (i) challenging or seeking material damages in connection
\nwith this Agreement or the transactions contemplated hereunder or (ii) seeking
\nto restrain or prohibit the consummation of the Merger or the transactions
\ncontemplated hereunder or otherwise limit the right of Acquiror or its
\nsubsidiaries to own or operate all or any portion of the businesses or assets of
\nTarget, Pilot or any Subsidiary.<\/p>\n
(e) Each of Acquiror and Target shall give or cause to be given
\nany required notices to third parties, and use commercially reasonable efforts
\nto obtain all consents, waivers and approvals from third parties (i) necessary,
\nproper or advisable to consummate the transactions contemplated hereunder, (ii)
\ndisclosed or required to be disclosed in the Target Disclosure Letter or the
\nAcquiror Disclosure Letter, or (iii) required to prevent a Material Adverse
\nEffect on Target, Pilot and the Subsidiaries, taken as a whole, or on Acquiror
\nand its subsidiaries, taken as a whole, from occurring prior or after the
\nEffective Time. In the event that Acquiror or Target shall fail to obtain any
\nthird party consent, waiver or approval described in this Section 5.2(e), it
\nshall use commercially reasonable efforts, and shall take any such actions
\nreasonably requested by the other party, to minimize any adverse effect upon
\nAcquiror and Target, their respective subsidiaries and their respective
\nbusinesses resulting (or which could reasonably be expected to result after the
\nEffective Time) from the failure to obtain such consent, waiver or approval.<\/p>\n
(f) Each of Acquiror and Target will, and will cause their
\nrespective subsidiaries to, take all commercially reasonable actions necessary
\nto comply promptly with all legal requirements which may be imposed on them with
\nrespect to the consummation of the transactions contemplated by this Agreement
\nand will promptly cooperate with and furnish information to any party hereto
\nnecessary in connection with any such requirements imposed upon such other party
\nin connection with the consummation of the transactions contemplated by this
\nAgreement and will take all commercially reasonable actions necessary to obtain
\n(and will cooperate with the other parties hereto in obtaining) any consent,
\napproval, order or authorization of, or any registration, declaration or filing
\nwith, any Governmental Entity or other person, required to be obtained or made
\nin connection with the taking of any action contemplated by this Agreement.<\/p>\n
5.3 ACCESS TO INFORMATION.<\/p>\n
(a) Target shall afford Acquiror and its accountants, counsel
\nand other representatives, reasonable access during normal business hours during
\nthe period prior to the Effective Time to (i) all of Target’s Pilot’s and each
\nSubsidiary’s properties, books, contracts, <\/p>\n
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\n 38<\/p>\n
commitments and records, and (ii) all other information concerning the business,
\nproperties and personnel of Target, Pilot and the Subsidiaries as Acquiror may
\nreasonably request. Target agrees to provide to Acquiror and its accountants,
\ncounsel and other representatives copies of internal financial statements
\npromptly upon request. Acquiror shall afford Target and its accountants, counsel
\nand other representatives, reasonable access during normal business hours during
\nthe period prior to the Effective Time to (i) all of Acquiror’s and its
\nsubsidiaries’ properties, books, contracts, commitments and records, and (ii)
\nall other information concerning the business, properties and personnel of
\nAcquiror and its subsidiaries as Target may reasonably request. Acquiror agrees
\nto provide to Target and its accountants, counsel and other representatives
\ncopies of internal financial statements promptly upon request.<\/p>\n
(b) Subject to compliance with applicable law, from the date
\nhereof until the Effective Time, each of Acquiror and Target shall confer on a
\nregular and frequent basis with one or more representatives of the other party
\nto report operational matters of materiality and the general status of ongoing
\noperations.<\/p>\n
(c) Acquiror agrees to provide reasonable advance notice (by
\ntelephone, facsimile, email or otherwise) to the Chief Financial Officer or
\nother designated representative of Platinum prior to engaging in any scheduled
\nmeeting or series of related meetings at which an aggregate of at least five
\nemployees of Pilot and the Subsidiaries are expected or would reasonably be
\nexpected to be present, and to provide a reasonable opportunity for one or more
\nrepresentatives of Platinum to attend such meeting or meetings by telephone or
\nin person. In addition, Acquiror agrees to provide reasonable advance notice (by
\ntelephone, facsimile, email or otherwise) to the Chief Financial Officer or
\nother designated representative of Platinum prior to delivering any written
\ncorrespondence to any employee or employees of Pilot or any Subsidiary, and to
\nprovide a reasonable opportunity for Platinum to review and provide comments
\nwith respect to any such correspondence. Acquiror agrees to cooperate in good
\nfaith to consider the incorporation of any such comments of Platinum into such
\nwritten correspondence. Acquiror agrees not to take any action which directly
\nrelates to or is intended to result in the operation of the business of Target,
\nPilot and the Subsidiaries in the name of Acquiror until the Effective Time.
\nAcquiror may investigate and plan organizational changes with respect to Target,
\nPilot and the Subsidiaries, but shall not implement such changes prior to the
\nEffective Time without the written consent of Platinum.<\/p>\n
(d) No information or knowledge obtained in any investigation
\npursuant to this Section 5.3 shall affect or be deemed to modify any
\nrepresentation or warranty contained herein or the conditions to the obligations
\nof the parties to consummate the Merger.<\/p>\n
5.4 CONFIDENTIALITY. The parties acknowledge that Acquiror and
\nTarget have previously executed a non-disclosure agreement (the “Confidentiality
\nAgreement”), which Confidentiality Agreement shall continue in full force and
\neffect in accordance with its terms.<\/p>\n
5.5 PUBLIC DISCLOSURE. Unless otherwise permitted by this Agreement,
\nAcquiror and Target shall consult with each other before issuing any press
\nrelease or otherwise making any public statement or making any other public (or
\nnon-confidential) disclosure <\/p>\n
-34-
\n 39<\/p>\n
(whether or not in response to an inquiry) regarding the terms of this Agreement
\nand the transactions contemplated hereby, and neither shall issue any such press
\nrelease or make any such statement or disclosure without the prior approval of
\nthe other (which approval shall not be unreasonably withheld), except as may be
\nrequired by law or by obligations pursuant to any listing agreement with any
\nnational securities exchange or with the NASD.<\/p>\n
5.6 FIRPTA. Target shall, prior to the Closing Date, provide
\nAcquiror with a properly executed Foreign Investment and Real Property Tax Act
\nof 1980 (“FIRPTA”) Notification Letter, which shall state that shares of capital
\nstock of Target do not constitute “United States real property interests” under
\nSection 897(c) of the Code, for purposes of satisfying Acquiror’s obligations
\nunder Treasury Regulation Section 1.1445-2(c)(3). In addition, simultaneously
\nwith delivery of such Notification Letter, Target shall have provided to
\nAcquiror, as agent for Target, a form of notice to the Internal Revenue Service
\nin accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2)
\nalong with written authorization for Acquiror to deliver such notice form to the
\nInternal Revenue Service on behalf of Target upon the Closing of the Merger.<\/p>\n
5.7 STATE STATUTES. If any state takeover law shall become
\napplicable to the transactions contemplated by this Agreement, Acquiror and its
\nBoard of Directors or Target and its Board of Directors, as the case may be,
\nshall use their reasonable best efforts to grant such approvals and take such
\nactions as are necessary so that the transactions contemplated by this Agreement
\nmay be consummated as promptly as practicable on the terms contemplated by this
\nAgreement and otherwise to minimize the effects of such state takeover law on
\nthe transactions contemplated by this Agreement.<\/p>\n
5.8 BLUE SKY LAWS. Acquiror shall take such steps as may be
\nnecessary to comply with the securities and blue sky laws of all jurisdictions
\nwhich are applicable to the issuance of the Acquiror Common Stock in connection
\nwith the Merger. Target shall use commercially reasonable efforts to assist
\nAcquiror as may be necessary to comply with the securities and blue sky laws of
\nall jurisdictions which are applicable in connection with the issuance of
\nAcquiror Common Stock in connection with the Merger.<\/p>\n
5.9 NASDAQ NATIONAL MARKET. Prior to the Effective Time, Acquiror
\nshall have taken all steps necessary to ensure that the shares of Acquiror
\nCommon Stock issuable in connection with the Merger will be listed on The Nasdaq
\nNational Market.<\/p>\n
5.10 KEY EMPLOYEES. On the first business day following execution of
\nthis Agreement, the parties will cooperate to deliver to the employees of Pilot
\nand the Subsidiaries set forth in Section 5.10 of the Target Disclosure Letter
\n(the “Key Employees”) the following documents (collectively, the “Employee
\nAgreements”): (a) offer letters with Acquiror in Acquiror’s standard form (or,
\nin the case of employees resident in Europe, letters regarding legal transfer of
\nemployment), which shall be reasonably acceptable to Pilot, constituting offers
\nof employment with Acquiror following the Effective Time with compensation
\npackages, including with respect to salary, bonus, stock options and other
\nbenefits, that are, taken as a whole, at least comparable to packages generally
\nreceived by similarly situated employees of Acquiror, (b) <\/p>\n
-35-
\n 40<\/p>\n
Acquiror’s standard form of proprietary information and inventions agreement,
\nand (c) except as otherwise indicated in Section 5.10 of the Target Disclosure
\nLetter, Non-Competition Agreements substantially in the form attached hereto as
\nExhibit B (the “Non-Competition Agreements). Target will use commercially
\nreasonable efforts to cause the Key Employees to execute and deliver the
\nEmployee Agreements within five business days of the date of this Agreement (the
\n“Employee Cutoff Date”).<\/p>\n
5.11 REGISTRATION RIGHTS. At Closing, Acquiror will grant the
\nregistration rights set forth in an Investors’ Rights Agreement in substantially
\nthe form attached hereto as Exhibit C (the “Investors’ Rights Agreement”) with
\nrespect to the Acquiror Common Stock issued as a result of the Merger to
\nPlatinum provided Platinum has signed such agreement.<\/p>\n
5.12 ADDITIONAL AGREEMENTS OF PLATINUM.<\/p>\n
(a) AGREEMENT TO RETAIN SHARES. Platinum agrees not to transfer
\n(except as may be specifically required by court order), sell, exchange, pledge
\n(except in connection with a bona fide loan transaction, provided that any
\npledgee agrees not to transfer, sell, exchange, pledge or otherwise dispose of
\nor encumber such shares) or otherwise dispose of or encumber any shares of
\ncapital stock of Target held by Platinum as of the date of this Agreement or
\nhereinafter acquired (the “Shares”) at any time prior to the earlier of the
\nEffective Time and the termination of this Agreement in accordance with its
\nterms or otherwise dispose of or encumber the Shares, or to make any offer or
\nagreement relating thereto.<\/p>\n
(b) AGREEMENT TO VOTE SHARES. At every meeting of the
\nstockholders of Target called with respect to any of the following, and at every
\nadjournment thereof, and on every action or approval by written consent of the
\nstockholders of Target with respect to any of the following, Platinum shall vote
\nthe Shares (i) in favor of approval of this Agreement, the transactions
\ncontemplated hereby and any matter that could reasonably be expected to
\nfacilitate the Merger, and (ii) against any proposal for any recapitalization,
\nmerger, sale of assets or other business combination (other than the Merger)
\nbetween Target, Pilot or any Subsidiary and any person or entity other than
\nAcquiror, including any Takeover Proposal, or any other action or agreement that
\nwould result in a breach of any covenant, representation or warranty or any
\nother obligation or agreement of Platinum, Target, Pilot or any Subsidiary under
\nthis Agreement or which could result in any of the conditions to Platinum’s,
\nTarget’s or Pilot’s obligations under this Agreement not being fulfilled. Prior
\nto or concurrent with the execution of this Agreement, Platinum shall execute
\nand deliver the Action by Written Consent of Sole Stockholder of Target in the
\nform attached hereto as Exhibit D (the “Platinum Written Consent”). Platinum
\nagrees that the Platinum Written Consent shall be irrevocable in all respects.<\/p>\n
(c) ADDITIONAL DOCUMENTS. Platinum hereby covenants and agrees
\nto execute and deliver any additional documents necessary or desirable, in the
\nreasonable opinion of Acquiror, to carry out the purpose and intent of this
\nSection 5.12.<\/p>\n
(d) CONSENT AND WAIVER. Platinum hereby gives any consents or
\nwaivers that are reasonably required for the consummation of the Acquisition
\nunder the terms of any agreement to which Platinum is a party of pursuant to any
\nrights Platinum may have.<\/p>\n
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\n 41<\/p>\n
(e) ADDITIONAL REPRESENTATIONS AND WARRANTIES OF PLATINUM.
\nPlatinum hereby represents and warrants to Acquiror and Merger Sub that:<\/p>\n
(i) The shares of Acquiror Common Stock to be acquired by
\nPlatinum will be acquired for investment for Platinum’s own account, not as a
\nnominee or agent, and not with a view to the distribution of any part thereof.
\nPlatinum does not presently have any contract, undertaking, agreement or
\narrangement with any person to sell, transfer or grant participations to such
\nperson or to any third person, with respect to any of the Merger Consideration.
\nPlatinum has not been formed for the specific purpose of acquiring the Merger
\nConsideration.<\/p>\n
(ii) Platinum understands that the shares of Acquiror Common
\nStock to be issued in the Merger have not been, and will not be, registered
\nunder the Securities Act, by reason of a specific exemption from the
\nregistration provisions of the Securities Act which depends upon, among other
\nthings, the bona fide nature of the investment intent and the accuracy of
\nPlatinum’s representations as expressed herein. Platinum understands that such
\nshares are “restricted securities” under applicable U.S. federal and state
\nsecurities laws and that, pursuant to these laws, Platinum must hold such shares
\nindefinitely unless they are registered with the SEC and qualified by state
\nauthorities, or an exemption from such registration and qualification
\nrequirements is available. Platinum acknowledges that Acquiror has no obligation
\nto register or qualify such shares for resale except as set forth in the
\nInvestors’ Rights Agreement. Platinum further acknowledges that if an exemption
\nfrom registration or qualification is available, it may be conditioned on
\nvarious requirements including, but not limited to, the time and manner of sale,
\nthe holding period for such shares, and on requirements relating to Acquiror
\nwhich are outside of Platinum’s control, and which Acquiror is under no
\nobligation and may not be able to satisfy.<\/p>\n
(iii) Platinum understands that the shares of Acquiror
\nCommon Stock to be issued in the Merger and any securities issued in respect of
\nor exchange for such shares may bear one or all of the following legends:<\/p>\n
(A) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE
\nNOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES REPRESENTED BY
\nTHIS CERTIFICATE WERE ISSUED IN A TRANSACTION TO WHICH RULE 145 UNDER THE
\nSECURITIES ACT APPLIES. NO SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
\nEFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
\nFORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
\nTHE SECURITIES ACT OF 1933.”<\/p>\n
(B) Any legend required by the Blue Sky laws of any
\nstate to the extent such laws are applicable to the shares represented by the
\ncertificate so legended.<\/p>\n
(iv) Platinum is an accredited investor as defined in Rule
\n501(a) of Regulation D promulgated under the Securities Act.<\/p>\n
-37-
\n 42<\/p>\n
5.13 TERMINATION OF PILOT STOCK OPTIONS. Prior to the Closing,
\nPlatinum, Target and Pilot shall take all action necessary such that the Pilot
\nStock Options, as well as any other subscriptions, options, warrants, puts,
\ncalls, rights, exchangeable or convertible securities or other commitments or
\nagreements of any character relating to the issued or unissued capital stock or
\nother securities of Target, Pilot or any Subsidiary, are terminated or canceled
\nand unexercised prior to the Closing, that any consideration paid or given or to
\nbe paid or given, directly or indirectly, in connection with such termination or
\ncancellation is paid by Platinum prior to the Closing (which obligation is
\nhereby acknowledged by Platinum), and that in connection with such termination
\nor cancellation, the holders of Pilot Stock Options release Pilot and the
\nSurviving Corporation from any liability or obligation in connection with such
\nholder’s Pilot Stock Options. Platinum, Target and Pilot shall prevent any Pilot
\nStock Options (as well as any other subscriptions, options, warrants, puts,
\ncalls, rights, exchangeable or convertible securities or other commitments or
\nagreements of any character relating to the issued or unissued capital stock or
\nother securities of Target, Pilot or any Subsidiary) from being exercised prior
\nto such termination or cancellation. Upon the request of Platinum, Acquiror
\nagrees to cooperate in the event that Platinum and Pilot desire to allocate a
\nportion of the Merger Consideration to a holder of Pilot Stock Options in
\nconnection with the cancellation and termination thereof, either in the form of
\na direct issuance of shares or the grant of options to purchase shares of
\nAcquiror Common Stock under Acquiror’s stock option plan. Acquiror shall take
\nall reasonable actions deemed necessary or advisable to accommodate such
\nrequest, including, but not limited to, entering into agreements with any such
\nholder and amending this Agreement.<\/p>\n
5.14 BONUS PROGRAMS. Target acknowledges that Pilot or one or more
\nof the Subsidiaries have previously entered into agreements or arrangements with
\ncertain employees, copies of which have been provided to Acquiror and its
\ncounsel, pursuant to which such employees are or may be entitled to retention
\nbonuses (the “Stay Bonuses”) if they remain employees of Pilot or such
\nSubsidiary for a specified period of time and additional bonuses (the “Sale
\nBonuses” and, collectively with the Stay Bonuses, the “Bonuses”) that will
\nbecome payable in part upon the consummation of the Merger and in part in the
\nevent such employees remain employed by Pilot or one or more of the Subsidiaries
\n(or of Acquiror or a subsidiary of Acquiror) for a specified period following
\nthe Closing Date, including, but not limited to, as set forth in Target’s
\nDisclosure Letter. Pilot shall pay all such Bonuses that will become payable
\nprior to or as of the Closing no later than one day prior to the Closing Date
\nwith funds provided entirely by Platinum and shall withhold and pay to
\napplicable federal, state and foreign tax authorities all amounts required to be
\nwithheld and paid by such authorities. Platinum agrees to provide such funds to
\nPilot to enable Pilot to make such payments and withholding in a timely fashion.
\nPlatinum agrees to pay all such Bonuses that are due and payable following the
\nClosing and to withhold and pay to applicable federal, state and foreign tax
\nauthorities all amounts required to be withheld and paid by such authorities.
\nPlatinum further agrees to indemnify and hold harmless Acquiror, Pilot, the
\nSurviving Corporation and each Subsidiary for the payment of the Bonuses,
\nincluding any taxes owing to federal, state or foreign tax authorities with
\nrespect thereto. In order to facilitate the foregoing, Acquiror shall, or shall
\ncause the Surviving Corporation to, provide Platinum with information concerning
\nthe continued employment of those employees entitled to receive any such future
\nBonus payments.<\/p>\n
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\n 43<\/p>\n
5.15 TAX ITEMS.<\/p>\n
(a) PREPARATION OF TAX RETURNS; PAYMENT OF TAXES. Platinum shall
\nprepare or cause to be prepared and file or cause to be filed all federal, state
\nand local Tax Returns of Target, Pilot and any Subsidiary required to be filed
\n(taking into account any extensions) for taxable periods ending on or before the
\nClosing Date, including, but not limited to, the income Tax Returns of Target,
\nPilot and any Subsidiary as an S Corporation. For federal income Tax purposes,
\nthe taxable year of Target ends as of one day before the Closing Date. In any
\ncase in which a Tax is assessed with respect to a taxable period which begins
\nbefore the Closing Date and ends after the Closing Date, the resulting Tax
\nobligation shall be allocated (i) to Platinum for the period up to and including
\nthe Closing Date, and (ii) to the Acquiror for the period subsequent to the
\nClosing Date. Any allocation of Taxes attributable to any period beginning
\nbefore and ending after the Closing Date shall be made by means of a closing of
\nthe books and records of the Companies as of the close of business on the
\nClosing Date, provided that exemptions, allowances, deductions (including, but
\nnot limited to, depreciation and amortization deductions) or any Taxes (such as
\nproperty or similar Taxes) that are calculated on an annual basis shall be
\nallocated between the period ending on the Closing Date and the period after the
\nClosing Date in proportion to the number of days in each such period.<\/p>\n
(b) TAX PROCEEDINGS. In the event of a contest with a Tax
\nauthority over Taxes for which Platinum or Target is liable pursuant to this
\nAgreement, Platinum will be entitled to control, at its expense, the proceedings
\nwith respect to such Taxes. Notwithstanding the preceding sentence, Acquiror
\nwill in any event be entitled to control the proceedings which relate to a
\nconsolidated or combined return filed by Acquiror and its subsidiaries, as the
\ncase may be. Platinum will provide, or cause to be provided, to the Acquiror
\ncopies of all correspondence received from the Tax authority in connection with
\nsuch proceedings promptly after receipt thereof. Platinum shall not enter into
\nany agreement or compromise or settlement of such contest that could affect a
\nperiod that is the responsibility of Acquiror without the written consent of the
\nAcquiror (which consent shall not be unreasonably withheld). Acquiror shall be
\nafforded a reasonable opportunity to participate in the defense thereof at its
\nown expense.<\/p>\n
(c) ASSISTANCE AND COOPERATION. After the Closing Date, Platinum
\nand Acquiror shall:<\/p>\n
(i) assist (and cause their respective affiliates to assist)
\neach other in preparing any Tax Returns which Platinum is responsible for
\npreparing and filing in accordance with Section 5.15(a) hereof, or which
\nAcquiror is responsible for preparing and filing after the Closing Date;<\/p>\n
(ii) cooperate fully in preparing for any audits of, or
\ndisputes, contests or proceedings with, taxing authorities regarding any Tax
\nReturns which relate to Target, Pilot or any Subsidiary;<\/p>\n
-39-
\n 44<\/p>\n
(iii) make available to each other and to any taxing
\nauthority as reasonably requested all information, records and documents
\nrelating to Tax liabilities which are attributable to Target, Pilot or any
\nSubsidiary;<\/p>\n
(iv) preserve all such information, records and documents
\nuntil the expiration of any applicable statutes of limitations or extensions
\nthereof and as otherwise required by law;<\/p>\n
(v) make available to each other, as reasonably requested,
\npersonnel responsible for preparing or maintaining information, records and
\ndocuments in connection with Tax matters;<\/p>\n
(vi) provide timely notice to the other in writing upon
\nreceipt of notice of any pending or threatened Tax audits or assessments
\nrelating to Platinum for any period beginning prior to the Closing Date;<\/p>\n
(vii) furnish the other with copies of all correspondence
\nreceived from any Tax authority in connection with any Tax audit or information
\nrequest with respect to any period beginning prior to the Closing Date;<\/p>\n
(viii) keep confidential any information obtained pursuant
\nto this Section 5.16(c), except as may otherwise be necessary in connection with
\nthe filing of Tax Returns or claims for refund or in conducting any audit or
\nother Tax proceeding; and<\/p>\n
(ix) furnish each other with adequate information which
\nwould enable the other party to determine its entitlement to, and the amount of,
\nany refund or credit to which either party reasonably believes the other party
\nmay be entitled.<\/p>\n
(d) TAX FREE REORGANIZATION.<\/p>\n
(i) Acquiror and Platinum shall treat the Merger as a tax
\nfree reorganization under Section 368(a) of the Code for federal income tax
\npurposes (and under comparable state income tax provisions for state income tax
\npurposes).<\/p>\n
(ii) Acquiror shall cooperate with Platinum’s outside tax
\nadvisors in their rendering of a tax opinion to the effect that the Merger will
\nconstitute a reorganization within the meaning of Section 368(a) of the Code by
\nexecuting and delivering a letter to such outside tax advisors setting forth
\ncustomary representations for purposes of issuing such opinion. In rendering
\nsuch opinion, Platinum’s outside tax advisors shall be entitled to rely upon,
\namong other things, reasonable assumptions as well as customary representations
\nof the Acquiror and Merger Sub.<\/p>\n
5.16 PLATINUM AGREEMENTS. Prior to the Closing, the Related Party
\nAgreements other than the agreement dated April 30, 1999 with ProfitKey
\nAcquisition, LLC, as amended (the “Platinum Agreements”) shall be terminated,
\nand none of Target, Pilot or any <\/p>\n
-40-
\n 45<\/p>\n
Subsidiary shall have any obligation thereunder following the Closing. All
\nindebtedness or other amounts owed by Target, Pilot or any Subsidiary to
\nPlatinum (whether pursuant to a Platinum Agreement, absolute, accrued, asserted
\nor unasserted, contingent or otherwise) shall be terminated prior to the
\nClosing.<\/p>\n
5.17 COGNIZANT AGREEMENTS. Platinum agrees to satisfy any obligation
\nof Target, Pilot or any Subsidiary pursuant to or in connection with any of the
\nCognizant Agreements.<\/p>\n
5.18 PILOT CREDIT LINE. Acquiror agrees to pay off the outstanding
\nbalance under Pilot’s existing credit line with Comerica Bank within 30 days
\nfollowing the Closing Date.<\/p>\n
5.19 LITIGATION. At Acquiror’s expense, Platinum shall provide such
\nassistance to Acquiror and the Surviving Corporation with respect to any pending
\nlitigation disclosed in Section 2.9 of the Target Disclosure Letter as may be
\nreasonably requested by Acquiror. With respect to the litigation disclosed under
\nItem 2.9.1 of Section 2.9 of the Target Disclosure Letter (the “Subject
\nLitigation”), (a) Acquiror agrees that neither it nor the Surviving Corporation
\nshall enter into any settlement of such litigation in excess of $500,000 without
\nthe written consent of Platinum, which consent will not be unreasonably withheld
\nand (b) upon request of Platinum, Acquiror shall afford Platinum the opportunity
\nto participate in such litigation, receive copies of pleadings and relevant
\ncorrespondence, be informed of material developments, attend hearings and other
\nproceedings and be consulted regarding strategy. Platinum, Target and Pilot
\nrepresent and warrant that the Subject Litigation will not result in Damages (as
\ndefined in Section 8) in excess of $500,000 in the aggregate.<\/p>\n
SECTION SIX<\/p>\n
6. CONDITIONS TO THE MERGER.<\/p>\n
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
\nThe respective obligations of each party to this Agreement to consummate and
\neffect the Merger and the other transactions contemplated hereby shall be
\nsubject to the satisfaction on or prior to the Effective Time of each of the
\nfollowing conditions, any of which may be waived, in writing, by agreement of
\nall the parties hereto:<\/p>\n
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
\nrestraining order, preliminary or permanent injunction or other order issued by
\nany court of competent jurisdiction or other legal or regulatory restraint or
\nprohibition preventing the consummation of the Merger shall be in effect, nor
\nshall any proceeding brought by an administrative agency or commission or other
\ngovernmental authority or instrumentality, domestic or foreign, seeking any of
\nthe foregoing be pending; nor shall there be any action taken, or any statute,
\nrule, regulation or order enacted, entered, enforced or deemed applicable to the
\nMerger, which makes the consummation of the Merger illegal. In the event an
\ninjunction or other order shall have been issued, each party agrees to use its
\nreasonable diligent efforts to have such injunction or other order lifted.<\/p>\n
-41-
\n 46<\/p>\n
(b) GOVERNMENTAL APPROVAL. Acquiror, Platinum, Target and Merger
\nSub and their respective subsidiaries shall have timely obtained from each
\nGovernmental Entity all approvals, waivers and consents, if any, necessary for
\nconsummation of or in connection with the Merger and the several transactions
\ncontemplated hereby, including, without limitation, such approvals, waivers and
\nconsents as may be required under HSR, under the Securities Act and under any
\nstate securities laws.<\/p>\n
(c) INVESTORS’ RIGHTS AGREEMENT. Acquiror and Platinum shall
\nhave entered into the Investors’ Rights Agreement.<\/p>\n
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF PLATINUM, TARGET AND
\nPILOT. The obligations of Target to consummate and effect the Merger and the
\nother transactions contemplated hereby shall be subject to the satisfaction at
\nor prior to the Effective Time of each of the following conditions, any of which
\nmay be waived, in writing, by Target:<\/p>\n
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) Each of the
\nrepresentations and warranties of Acquiror and Merger Sub in this Agreement that
\nis expressly qualified by a reference to materiality shall be true in all
\nrespects as so qualified, and each of the representations and warranties of
\nAcquiror and Merger Sub in this Agreement that is not so qualified shall be true
\nand correct in all material respects, on and as of the Effective Time as though
\nsuch representation or warranty had been made on and as of such time (except
\nthat those representations and warranties which address matters only as of a
\nparticular date shall remain true and correct as of such date), and (ii)
\nAcquiror and Merger Sub shall have performed and complied in all material
\nrespects with all covenants, obligations and conditions of this Agreement
\nrequired to be performed and complied with by them as of the Effective Time.<\/p>\n
(b) CERTIFICATES OF ACQUIROR.<\/p>\n
(i) COMPLIANCE CERTIFICATE OF ACQUIROR. Target shall have
\nbeen provided with a certificate executed on behalf of Acquiror by its President
\nor its Chief Financial Officer to the effect that, as of the Effective Time,
\neach of the conditions set forth in Section 6.2(a) and (d) has been satisfied
\nwith respect to Acquiror.<\/p>\n
(ii) CERTIFICATE OF SECRETARY OF ACQUIROR. Target shall have
\nbeen provided with a certificate executed by the Secretary or Assistant
\nSecretary of Acquiror certifying:<\/p>\n
(A) Resolutions duly adopted by the Board of Directors
\nof Acquiror authorizing the execution of this Agreement and the execution,
\nperformance and delivery of all agreements, documents and transactions
\ncontemplated hereby; and<\/p>\n
(B) the incumbency of the officers of Acquiror
\nexecuting this Agreement and all agreements and documents contemplated hereby.<\/p>\n
(c) CERTIFICATES OF MERGER SUB.<\/p>\n
-42-
\n 47<\/p>\n
(i) COMPLIANCE CERTIFICATE OF MERGER SUB. Target shall have
\nbeen provided with a certificate executed on behalf of Merger Sub by its
\nPresident or its Chief Financial Officer to the effect that, as of the Effective
\nTime, each of the conditions set forth in Section 6.2(a) and (d) has been
\nsatisfied with respect to Merger Sub.<\/p>\n
(ii) CERTIFICATE OF SECRETARY OF MERGER SUB. Target shall
\nhave been provided with a certificate executed by the Secretary or Assistant
\nSecretary of Merger Sub certifying:<\/p>\n
(A) Resolutions duly adopted by the sole director and
\nthe sole stockholder of Merger Sub authorizing the execution of this Agreement
\nand the execution, performance and delivery of all agreements, documents and
\ntransactions contemplated hereby; and<\/p>\n
(B) the incumbency of the officers of Merger Sub
\nexecuting this Agreement and all agreements and documents contemplated hereby.<\/p>\n
(d) NO MATERIAL ADVERSE CHANGES. There shall not have occurred
\nany material adverse change in the condition (financial or otherwise),
\nproperties, assets (including intangible assets), liabilities, business,
\noperations, results of operations or prospects of Acquiror and its subsidiaries,
\ntaken as a whole.<\/p>\n
(e) GOOD STANDING. Target shall have received a certificate or
\ncertificates of the Secretary of State of the State of Delaware and any
\napplicable franchise tax authority of such state, certifying as of a date no
\nmore than three (3) business days prior to the Effective Time that each of
\nAcquiror and Merger Sub has filed all required reports, paid all required fees
\nand taxes and is, as of such date, in good standing and authorized to transact
\nbusiness as a domestic corporation.<\/p>\n
(f) REGISTRATION STATEMENT. Target shall be satisfied that the
\nregistration statement under the Securities Act contemplated by the Investors’
\nRights Agreement has been prepared to an extent that such registration statement
\nwill be filed with the SEC as soon as practicable following the Effective Time.<\/p>\n
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF ACQUIROR AND MERGER
\nSUB. The obligations of Acquiror and Merger Sub to consummate and effect the
\nMerger and the other transactions contemplated hereby shall be subject to the
\nsatisfaction at or prior to the Effective Time of each of the following
\nconditions, any of which may be waived, in writing, by Acquiror:<\/p>\n
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. (i) Each of the
\nrepresentations and warranties of Target, Platinum and Pilot in this Agreement
\nthat is expressly qualified by a reference to materiality shall be true in all
\nrespects as so qualified, and each of the representations and warranties of
\nTarget, Platinum and Pilot in this Agreement that is not so qualified shall be
\ntrue and correct in all material respects, on and as of the Effective Time as
\nthough such representation or warranty had been made on and as of such time
\n(except that those <\/p>\n
-43-
\n 48<\/p>\n
representations and warranties which address matters only as of a particular
\ndate shall remain true and correct as of such date), and (ii) Target, Platinum
\nand Pilot shall have performed and complied in all material respects with all
\ncovenants, obligations and conditions of this Agreement required to be performed
\nand complied with by them as of the Effective Time.<\/p>\n
(b) NO MATERIAL ADVERSE CHANGES. There shall not have occurred
\nany material adverse change in the condition (financial or otherwise),
\nproperties, assets (including intangible assets), liabilities, business,
\noperations, results of operations or prospects of Target, Pilot and the
\nSubsidiaries, taken as a whole.<\/p>\n
(c) CERTIFICATES OF TARGET.<\/p>\n
(i) COMPLIANCE CERTIFICATE OF TARGET. Acquiror and Merger
\nSub shall have been provided with a certificate executed on behalf of Target by
\nits President or its Chief Financial Officer to the effect that, as of the
\nEffective Time, each of the conditions set forth in Section 6.3(a) and (b) has
\nbeen satisfied.<\/p>\n
(ii) CERTIFICATE OF SECRETARY OF TARGET. Acquiror and Merger
\nSub shall have been provided with a certificate executed by the Secretary of
\nTarget certifying:<\/p>\n
(A) Resolutions duly adopted by the Board of Directors
\nand the stockholders of Target authorizing the execution of this Agreement and
\nthe execution, performance and delivery of all agreements, documents and
\ntransactions contemplated hereby;<\/p>\n
(B) The Certificate of Incorporation and Bylaws of
\nTarget, as in effect immediately prior to the Effective Time, including all
\namendments thereto; and<\/p>\n
(C) The incumbency of the officers of Target executing
\nthis Agreement and all agreements and documents contemplated hereby.<\/p>\n
(d) CERTIFICATES OF PLATINUM.<\/p>\n
(i) COMPLIANCE CERTIFICATE OF PLATINUM. Acquiror and Merger
\nSub shall have been provided with a certificate executed on behalf of Platinum
\nby its President or its Chief Financial Officer to the effect that, as of the
\nEffective Time, each of the conditions set forth in Section 6.3(a) has been
\nsatisfied.<\/p>\n
(ii) CERTIFICATE OF SECRETARY OF PLATINUM. Acquiror and
\nMerger Sub shall have been provided with a certificate executed by the Secretary
\nof Platinum certifying:<\/p>\n
(A) Resolutions duly adopted by the Board of Directors
\nof Platinum authorizing the execution of this Agreement and the execution,
\nperformance and delivery of all agreements, documents and transactions
\ncontemplated hereby; and<\/p>\n
-44-
\n 49<\/p>\n
(B) The incumbency of the officers of Platinum
\nexecuting this Agreement and all agreements and documents contemplated hereby.<\/p>\n
(e) CERTIFICATES OF PILOT.<\/p>\n
(i) COMPLIANCE CERTIFICATE OF TARGET. Acquiror and Merger
\nSub shall have been provided with a certificate executed on behalf of Pilot by
\nits President or its Chief Financial Officer to the effect that, as of the
\nEffective Time, each of the conditions set forth in Section 6.3(a) and (b) has
\nbeen satisfied.<\/p>\n
(ii) CERTIFICATE OF SECRETARY OF PILOT. Acquiror and Merger
\nSub shall have been provided with a certificate executed by the Secretary of
\nTarget certifying:<\/p>\n
(A) Resolutions duly adopted by the Board of Directors
\nand of Pilot authorizing the execution of this Agreement and the execution,
\nperformance and delivery of all agreements, documents and transactions
\ncontemplated hereby;<\/p>\n
(B) The Certificate of Incorporation and Bylaws of
\nPilot, as in effect immediately prior to the Effective Time, including all
\namendments thereto; and<\/p>\n
(C) The incumbency of the officers of Pilot executing
\nthis Agreement and all agreements and documents contemplated hereby.<\/p>\n
(f) THIRD PARTY CONSENTS. Acquiror shall have been furnished
\nwith evidence satisfactory to it that Target, Pilot and the Subsidiaries have
\nobtained those consents, waivers, approvals or authorizations of those
\nGovernmental Entities whose consent or approval are required in connection with
\nthe Merger as set forth in Sections 5.2(a), as well as any consents, waivers,
\napprovals or authorizations required under the leases of real property by Pilot
\nor any Subsidiary in Cambridge, Massachusetts and Cologne, Germany.<\/p>\n
(g) INJUNCTIONS OR RESTRAINTS ON MERGER AND CONDUCT OF BUSINESS.
\nNo proceeding brought by any administrative agency or commission of other
\ngovernmental authority or instrumentality, domestic or foreign, seeking to
\nprevent the consummation of the Merger shall be pending. In addition, no
\ntemporary restraining order, preliminary or permanent injunction or other order
\nissued by any court of competent jurisdiction or other legal or regulatory
\nrestraint provision limiting or restricting Acquiror’s conduct or operation of
\nthe business of Target, Pilot and the Subsidiaries, following the Merger shall
\nbe in effect, nor shall any proceeding brought by an administrative agency or
\ncommission or other Governmental Entity, domestic or foreign, seeking the
\nforegoing be pending.<\/p>\n
(h) FIRPTA CERTIFICATE. Target shall, prior to the Closing Date,
\nprovide Acquiror with a properly executed FIRPTA Notification Letter and a form
\nof notice to the Internal Revenue Service in accordance with the requirements of
\nTreasury Regulation Section 1.897-2(h)(2) along with written authorization for
\nAcquiror to deliver such notice form to the Internal Revenue Service on behalf
\nof Target upon the Closing of the Merger, as set forth in Section 5.6 above.<\/p>\n
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\n 50<\/p>\n
(i) RESIGNATION OF DIRECTORS AND OFFICERS. Acquiror shall have
\nreceived letters of resignation from each of the directors and officers of
\nTarget, Pilot and each Subsidiary in office immediately prior to the Effective
\nTime, which resignations in each case shall be effective as of the Effective
\nTime.<\/p>\n
(j) PILOT STOCK OPTIONS. Acquiror shall be satisfied that all of
\nthe Pilot Stock Options have been canceled or terminated in accordance with
\nSection 5.13.<\/p>\n
(k) PLATINUM AGREEMENTS. The Platinum Agreements shall have been
\nterminated, and there shall be no continuing rights or obligations thereunder
\nbetween Target, Pilot or any Subsidiary on the one hand, and Platinum or any of
\nits Affiliates on the other hand.<\/p>\n
SECTION SEVEN<\/p>\n
7. TERMINATION, AMENDMENT AND WAIVER.<\/p>\n
7.1 TERMINATION. At any time prior to the Effective Time, this
\nAgreement may be terminated and the Merger may be abandoned:<\/p>\n
(a) by mutual written consent duly authorized by the Boards of
\nDirectors of each of Acquiror and Target;<\/p>\n
(b) by either Acquiror or Target, if, without fault of the
\nterminating party,<\/p>\n
(i) the Effective Time shall not have occurred on or before
\nSeptember 30, 2000 (or such later date as may be agreed upon in writing by the
\nparties); provided, however, that if a request for additional information is
\nreceived from a Governmental Entity pursuant to the HSR Act, such date shall be
\nextended to the 90th day following acknowledgment by such Governmental Entity
\nthat Acquiror and Target have complied with such request, but in no event shall
\nsuch date be later than December 29, 2000; or<\/p>\n
(ii) there shall be any applicable federal or state law that
\nmakes consummation of the Merger illegal or otherwise prohibited or if any court
\nof competent jurisdiction or Governmental Entity shall have issued an order,
\ndecree, ruling or taken any other action restraining, enjoining or otherwise
\nprohibiting the Merger and such order, decree, ruling or other action shall have
\nbecome final and nonappealable;<\/p>\n
(c) by Acquiror, if Target, Platinum, or Pilot shall materially
\nbreach any of its representations, warranties or obligations hereunder and such
\nbreach shall not have been cured within ten calendar business days of receipt by
\nTarget of written notice of such breach, provided that Acquiror is not in
\nmaterial breach of any of its representations, warranties or obligations
\nhereunder, and provided further, that no cure period shall be required for a
\nbreach which by its nature cannot be cured;<\/p>\n
-46-
\n 51<\/p>\n
(d) by Acquiror, if at any time within two business days
\nfollowing the Employee Cutoff Date, Acquiror notifies Target or Pilot by written
\nnotice that Acquiror is not satisfied with the number of Key Employees who have
\nexecuted and delivered the Employee Agreements; provided, however, that Target
\nshall have the opportunity, during the period of four business days following
\nreceipt of such notice, to solicit additional Key Employees to execute and
\ndeliver the Employee Agreements (such additional Key Employees who do execute
\nand deliver the Employee Agreements during such period, together with the Key
\nEmployees who executed and delivered the Employee Agreements prior to the
\nEmployee Cutoff Date, being hereinafter referred to as the “Retained
\nEmployees”), in which case such termination will not be effective unless
\nAcquiror notifies Target or Pilot by written notice during the period of two
\nbusiness days following such four-day period that Acquiror is not satisified
\nwith the number of Retained Employees.<\/p>\n
(e) by Target, if Acquiror shall materially breach any of its
\nrepresentations, warranties or obligations hereunder and such breach shall not
\nhave been cured within ten calendar days following receipt by Acquiror of
\nwritten notice of such breach, provided that Target, Platinum or Pilot is not in
\nmaterial breach of any of its representations, warranties or obligations
\nhereunder, and provided further, that no cure period shall be required for a
\nbreach which by its nature cannot be cured.<\/p>\n
7.2 EFFECT OF TERMINATION. In the event of termination of this
\nAgreement as provided in Section 7.1, this Agreement shall forthwith become void
\nand there shall be no liability or obligation on the part of Acquiror, Merger
\nSub, Target, Platinum or Pilot or their respective officers, directors,
\nstockholders or affiliates, except to the extent that such termination results
\nfrom the breach by a party hereto of any of its representations, warranties or
\ncovenants set forth in this Agreement; provided that, the provisions of Section
\n5.4 (Confidentiality), Section 7.3 (Expenses and Termination Fees) and this
\nSection 7.2 shall remain in full force and effect and survive any termination of
\nthis Agreement.<\/p>\n
7.3 EXPENSES AND TERMINATION FEES.<\/p>\n
(a) Subject to subsections (b) and (c) of this Section 7.3,
\nwhether or not the Merger is consummated, all costs and expenses incurred in
\nconnection with this Agreement and the transactions contemplated hereby
\nincluding, without limitation, filing fees, including HSR fees, and the fees and
\nexpenses of advisors, accountants, legal counsel and financial printers, shall
\nbe paid by the party incurring such expense; provided, however, that up to
\n$100,000 of such costs and expenses incurred by Platinum, Target, Pilot and the
\nSubsidiaries may be paid or assumed by Target, Pilot or any Subsidiary, and any
\nof such costs and expenses in excess of $100,000 shall be paid by Platinum or an
\naffiliate of Platinum other than Target, Pilot or any Subsidiary.<\/p>\n
(b) In the event that Acquiror shall terminate this Agreement
\npursuant to Section 7.1(c), Target shall promptly reimburse Acquiror for all
\nout-of-pocket costs and expenses incurred by Acquiror in connection with this
\nAgreement and the transactions <\/p>\n
-47-
\n 52<\/p>\n
contemplated hereby (including, without limitation, filing fees and the fees and
\nexpenses of its advisors, accountants, legal counsel and financial printers).<\/p>\n
(c) In the event that Target shall terminate this Agreement
\npursuant to Section 7.1(e), Acquiror shall promptly reimburse Target for all
\nout-of-pocket costs and expenses incurred by Target in connection with this
\nAgreement and the transactions contemplated hereby (including, without
\nlimitation, filing fees and the fees and expenses of its advisors, accountants,
\nlegal counsel and financial printers).<\/p>\n
7.4 AMENDMENT. The boards of directors of the parties may cause this
\nAgreement to be amended at any time by execution of an instrument in writing
\nsigned on behalf of each of the parties.<\/p>\n
7.5 EXTENSION; WAIVER. At any time prior to the Effective Time any
\nparty may, to the extent legally allowed, (a) extend the time for the
\nperformance of any of the obligations or other acts of the other parties, (b)
\nwaive any inaccuracies in the representations and warranties made to such party
\ncontained herein or in any document delivered pursuant hereto, and (c) waive
\ncompliance with any of the agreements or conditions for the benefit of such
\nparty contained herein. Any agreement on the part of a party to any such
\nextension or waiver shall be valid only if set forth in an instrument in writing
\nsigned on behalf of such party.<\/p>\n
SECTION EIGHT<\/p>\n
8. INDEMNIFICATION.<\/p>\n
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All covenants to be
\nperformed prior to the Effective Time, and all representations and warranties in
\nthis Agreement or in any instrument delivered pursuant to this Agreement shall
\nsurvive the consummation of the Merger and continue until the first anniversary
\nof the Closing Date (the “Indemnification Termination Date”); provided that if
\nany claims for indemnification have been asserted with respect to any such
\nrepresentations and warranties prior to the Indemnification Termination Date,
\nthe representations and warranties on which any such claims are based shall
\ncontinue in effect until final resolution of any claims, and provided further
\nthat representations, warranties and covenants relating to Taxes shall survive
\nuntil 30 days after expiration of all applicable statutes of limitations
\nrelating to such Taxes (the “Tax Expiration Date”). All covenants to be
\nperformed after the Effective Time shall continue indefinitely.<\/p>\n
8.2 INDEMNIFICATION. Subject to the limitations and the procedures
\nset forth in this Section 8, from and after the Effective Time, Platinum and its
\nsuccessors and assigns shall protect, defend, indemnify and hold harmless
\nAcquiror and the Surviving Corporation and their respective subsidiaries,
\naffiliates, officers, directors, employees, representatives and agents (each, an
\n“Acquiror Indemnified Person,” and, collectively, the “Acquiror Indemnified
\nPersons”) from and against any and all losses, costs, damages, liabilities, fees
\n(including without limitation attorneys’ fees) and expenses (collectively, the
\n“Damages”), that any Acquiror Indemnified Person incurs by reason of or in
\nconnection with any claim, demand, action or cause of action relating to (i) any
\nmisrepresentation or any breach of any representation or warranty of Target,<\/p>\n
-48-
\n 53<\/p>\n
Platinum or Pilot contained in this Agreement, including any exhibits or
\nschedules attached hereto, and the Certificate of Merger, (ii) any breach of or
\ndefault in the performance of any covenant or agreement of Platinum contained in
\nthis Agreement, including any exhibits or schedules attached hereto, whether
\nbefore or after the Effective Time, or (iii) any breach of or default in the
\nperformance of any covenant or agreement of Target or Pilot contained in this
\nAgreement, including any exhibits or schedules attached hereto prior to the
\nEffective Time, which, in any such case, becomes known to Acquiror prior to the
\nIndemnification Termination Date or the Tax Expiration Date, as the case may be.
\nDamages in each case shall be net of the amount of any insurance proceeds and
\nindemnity and contribution actually recovered by Acquiror or the Surviving
\nCorporation prior to the Indemnification Termination Date. Notwithstanding
\nanything to the contrary in this Agreement, Platinum’s liability pursuant to
\nthis Section 8.2 shall not exceed the amount equal to 5% of the product of (A)
\nthe aggregate number of shares of Acquiror Common Stock issued in connection
\nwith the Merger, and (B) the Acquiror Average Price (the “Indemnification
\nAmount”); provided, however, that Platinum’s liability pursuant to this Section
\n8.2 for any misrepresentation or breach of the representations, warranties or
\ncovenants relating to Taxes, the Platinum Agreements or the Cognizant Agreements
\nshall not exceed the amount equal to the product of (x) the aggregate number of
\nshares of Acquiror Common Stock issued in connection with the Merger, and (y)
\nthe Acquiror Average Price (the “Tax Amount”).<\/p>\n
8.3 DAMAGES THRESHOLD. Notwithstanding the foregoing, but except
\nwith respect to the breach of the covenant set forth in Section 7.3(a) of this
\nAgreement, Platinum and its successors and assigns shall not be obligated to
\nindemnify any person pursuant to Section 8.2 unless and until the Damages for
\nwhich such party would otherwise be liable hereunder exceed $100,000 in
\naggregate amount, in which case Platinum shall be liable, upon the terms and
\nconditions of this Agreement, for the full amount of such Damages up to the
\nIndemnification Amount or the Tax Amount, as the case may be, without deduction
\nof such $100,000 threshold. In determining the amount of any Damages
\nattributable to a breach, any materiality standard contained in a
\nrepresentation, warranty or covenant shall be disregarded.<\/p>\n
8.4 INDEMNIFICATION CLAIMS.<\/p>\n
(a) Subject to the limitations and other provisions set forth
\nherein, the Indemnification Amount or the Tax Amount, as the case may be, shall
\nprovide the sole and exclusive source of payment to any Acquiror Indemnified
\nPersons for Damages with respect to which they may be entitled to
\nindemnification pursuant to Section 8.2.<\/p>\n
(b) If any Acquiror Indemnified Person (the “Claimant”) has or
\nclaims to have incurred or suffered, or reasonably anticipates incurring or
\nsuffering, Damages for which the Claimant is or may be entitled to
\nindemnification under Section 8.2 (subject to the limitations set forth in
\nSection 8.3), Acquiror will, on behalf of the Claimant and on or prior to the
\nIndemnification Termination Date, deliver a claim notice (a “Claim Notice”) to
\nPlatinum in the manner provided below. Each Claim Notice shall include (i) a
\nstatement of the facts indicating that the Claimant giving such notice is an
\nAcquiror Indemnified Person, (ii) a certification that such Claim Notice has
\nbeen sent to Platinum, (iii) a statement, in reasonable detail, of the basis <\/p>\n
-49-
\n 54<\/p>\n
for and the facts and circumstances supporting the belief that the Clamant is or
\nmay be entitled to indemnification under Section 8.2, and (iv) to the extent
\npossible, a non-binding, preliminary estimate of the amount of Damages for which
\nthe Claimant may be seeking indemnification (the “Claimed Amount”).<\/p>\n
(c) Within twenty (20) business days after receipt by Platinum
\nof a Claim Notice (unless a longer period is consented to in writing by
\nAcquiror, which consent shall not be unreasonably withheld, provided in no event
\nshall Acquiror be required to consent to a period longer than forty (40) days)
\n(the “Response Notice Period”), Platinum may deliver to Acquiror a written
\nresponse (the “Response Notice”) in which Platinum either:<\/p>\n
(i) agrees to satisfy the Claimed Amount in full (up to the
\nIndemnification Amount or the Tax Amount, as the case may be);<\/p>\n
(ii) agrees to satisfy a portion of the Claimed Amount; or<\/p>\n
(iii) contends that no portion of the Claimed Amount is
\nrequired to be satisfied.<\/p>\n
If a Response Notice is not received by the Acquiror prior to the expiration of
\nthe Response Notice Period, then Platinum shall be deemed to have agreed to
\nsatisfy the previously unpaid portion of the Claimed Amount in full, up to
\nIndemnification Amount or the Tax Amount, as the case may be.<\/p>\n
(d) If Platinum (i) delivers a Response Notice agreeing to
\nsatisfy the Claimed Amount in full (up the Indemnification Amount or the Tax
\nAmount, as the case may be), (ii) does not deliver a Response Notice prior to
\nthe expiration of the Response Notice Period, or (iii) delivers a Response
\nNotice agreeing to satisfy a portion, but not all, of the Claimed Amount , then,
\nin any such case, Platinum shall, promptly following the delivery of the
\nResponse Notice (or promptly following the expiration of the Response Notice
\nPeriod if no Response Notice has been delivered), deliver to Acquiror for the
\naccount of the Claimant payment equal to the Claimed Amount or such portion
\nthereof (provided that payments by Platinum in the aggregate shall not exceed
\nthe Indemnification Amount or the Tax Amount, as the case may be). Acquiror
\nshall be responsible for distributing such amounts received from Platinum to or
\namong Claimants.<\/p>\n
(e) If Platinum delivers a Response Notice agreeing to satisfy
\npart, but not all, of the Claimed Amount or contends that no portion of the
\nClaimed Amount is required to be satisfied, Platinum and the Claimant shall
\nattempt in good faith to resolve such dispute. If the Claimant and Platinum are
\nable to resolve such dispute, such resolution shall be binding on the Claimant
\nand Platinum.<\/p>\n
(f) If Platinum and the Claimant are unable to resolve such
\ndispute within ten (10) business days after the expiration of the Response
\nNotice Period (or such longer period as Platinum and the Claimant may agree
\nupon), then the claim described in the Claim <\/p>\n
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\n 55<\/p>\n
Notice shall be settled by binding arbitration before a single arbitrator to be
\nheld in San Jose, California under the auspices and rules of JAMS\/Endispute,
\nInc. The arbitrator in such proceeding shall be required to sign and to deliver
\nto both parties a written arbitration award. Such written award need not set
\nforth the legal or factual determinations reached in making such award. The
\nnon-prevailing party in any such proceeding shall pay the reasonable expenses
\n(including attorneys’ fees) of the prevailing party and the fees and expenses
\nassociated with the proceeding. For purposes of this Section 8.4(f), the
\nnon-prevailing party shall be deemed to be the Claimant if the Claimant is held
\nto be entitled to recover less than 50% of the amount in dispute (i.e., the
\namount of the Claimed Amount that Platinum had declined to satisfy); otherwise
\nit shall be Platinum.<\/p>\n
8.5 EMPLOYEE RETENTION PAYMENTS.<\/p>\n
(a) On the six (6) month anniversary of the Employee Cutoff
\nDate, or if such day is not a business day, on the business day immediately
\npreceding such anniversary date (such date is referred to herein as the “Six
\nMonth Anniversary Date”), Acquiror may be entitled, subject to the terms and
\nconditions of this Section 8.5, to payment from Platinum based upon the number
\nof Retained Employees who, on the Six Month Anniversary Date, either (i) are
\nemployed by Acquiror or any of its direct or indirect subsidiaries (including
\nPilot), (ii) have died or become permanently disabled in such a manner that a
\nphysician has indicated in writing that such Retained Employee will not be able
\nto perform his or her employment duties for a period of at least six consecutive
\nmonths, or (iii) are no longer employed on the Six Month Anniversary Date
\nbecause their employment was terminated prior thereto due to termination without
\nCause (as defined below) or a result of a Constructive Discharge (as defined
\nbelow) (such Retained Employees collectively referred to herein as the
\n“Remaining Employees”). Such payment, if any, shall be equal to the product of
\n(A) the difference between (x) 80% of the number of Retained Employees (rounded
\nto the nearest whole number), less (y) the number of Remaining Employees,
\nmultiplied by (B) 1.25% of the Tax Amount; provided, however, that the amount of
\nsuch payment shall not exceed 10% of the Tax Amount. Such payment shall be due
\nand payable within 30 days of the final agreement or determination regarding the
\nnumber of Remaining Employees, as determined in accordance with Section 8.5(c)
\nand 8.5(d).<\/p>\n
(b) For the purposes of this Agreement, an employee shall be
\ndeemed to have been terminated for “Cause” if his or her employment was
\nterminated by Acquiror, Pilot or such other affiliate of Acquiror that employed
\nsuch employee, with the express approval of the Board of Directors of such
\nemployer, as a result of (i) such employee’s conviction or “no contest” plea to
\na felony or other conduct of a criminal nature (other than traffic violations),
\n(ii) conduct by such employee that constituted embezzlement, theft or any other
\nillegal or wrongful conduct substantially detrimental to such employer, or (iii)
\nthe willful and continued failure by such employee to perform material duties
\nafter written notification specifying the manner in which such employee has not
\nsubstantially performed and the employee has not cured such failure within 30
\ndays of receiving such notification. For the purposes of this Agreement only, an
\nemployee’s employment shall be deemed to have terminated due to “Constructive
\nDischarge” if such employee resigns following (A) changes in the executive
\nofficers of Acquiror such that, as a result of such changes, less than 50% of
\nthe executive officers of Acquiror (as <\/p>\n
-51-
\n 56<\/p>\n
reported in the Acquiror SEC Documents) as of the Closing Date remain in such
\ncapacity, (B) a reduction in his or her compensation (including bonus programs)
\nor a material reduction in his or her employee benefits, in either case, that
\nwere in effect immediately after the Effective Time of the Merger, (B) a
\nrequirement that such employee relocate to an office more than fifty miles from
\nthe office to which such employee is then reporting without such employee’s
\nprior consent or (C) a material change in such employee’s title,
\nresponsibilities or reporting relationships without such employee’s prior
\nconsent that were in effect immediately after the Effective Time of the Merger.<\/p>\n
(c) Within ten business days after the Six Month Anniversary
\nDate, Acquiror shall deliver to Platinum a written notice (the “Employee
\nNotice”), signed by the Chief Executive Officer of Acquiror, certifying the
\nnumber of Retained Employees on the Six Month Anniversary Date. The Employee
\nNotice shall include (i) a list of the Retained Employees, (ii) the date on
\nwhich each Key Employee terminated his or her employment, (iii) the basis for
\nthe termination of each such Key Employee’s termination (e.g., voluntary
\nresignation, termination without Cause, etc.) and (iv) the current address and
\ntelephone number of each such Key Employee as shown on Acquiror’s personnel
\nrecords. In the event that Acquiror delivers an Employee Notice, Platinum shall
\nhave the right to request additional information concerning the termination of
\nthe Key Employees, and Acquiror shall provide such information promptly to the
\nextent that such information is in its possession or control. No later than 45
\ndays after receipt of the Employee Notice, Platinum shall deliver to Acquiror a
\nwritten statement (a “Platinum Notice”) indicating whether Platinum agrees with
\nthe calculation of the Retained Employees. In the event that Platinum disputes
\nthe calculation of the Retained Employees, the Platinum Notice shall set forth
\nin reasonable detail the basis for such dispute. Platinum and Acquiror shall
\nattempt in good faith to resolve such dispute. If Acquiror and Platinum are able
\nto resolve such dispute, such resolution shall be binding on Acquiror and
\nPlatinum, and Acquiror and Platinum shall execute a settlement agreement setting
\nforth the agreed upon terms of such settlement.<\/p>\n
(d) If Acquiror and Platinum are unable to resolve such dispute
\nwithin ten (10) business days after the delivery of the Platinum Notice (or such
\nlonger period as they may agree upon), then the dispute shall be settled by
\nbinding arbitration before a single arbitrator to be held in San Jose,
\nCalifornia under the auspices and rules of JAMS\/Endispute, Inc. The arbitrator
\nmay, but shall not be obligated to find entirely for Acquiror or Platinum or may
\nreach such equitable compromise as the arbitrator deems appropriate. In the
\nevent that the arbitrator determines entirely in favor of one party or the other
\n(but only in such case), the non-prevailing party shall reimburse the reasonable
\nexpenses (including attorneys’ fees) of the prevailing party and the fees and
\nexpenses associated with the proceeding.<\/p>\n
8.6 INTEREST PENALTY. In the event that Platinum shall fail to pay
\nany amounts due to Acquiror or any Claimant pursuant to this Section 8 within 30
\ndays of the date on which such payment becomes due and payable, then such amount
\nshall accrue interest at the rate of 1.5% per month. Payments pursuant to
\nSection 8.5 shall be due and payable as set forth in Section 8.5(a), and
\npayments pursuant to Section 8.4 shall be due and payable within 30 days of
\neither (i) Platinum’s agreement to satisfy all or a portion of a Claimed Amount
\nas provided in <\/p>\n
-52-
\n 57<\/p>\n
Section 8.4(d), or (ii) the final written resolution of a dispute with respect
\nto all or a portion of a Claimed Amount in accordance with Section 8.4(e) or
\n(f).<\/p>\n
SECTION NINE<\/p>\n
9. GENERAL PROVISIONS.<\/p>\n
9.1 NOTICES. Any notice required or permitted by this Agreement
\nshall be in writing and shall be deemed sufficient upon receipt, when delivered
\npersonally or by courier, overnight delivery service or confirmed facsimile, or
\n48 hours after being deposited in the regular mail as certified or registered
\nmail (airmail if sent internationally) with postage prepaid, if such notice is
\naddressed to the party to be notified at such party’s address or facsimile
\nnumber as set forth below, or as subsequently modified by written notice,<\/p>\n
(a) if to Acquiror or Merger Sub, to:<\/p>\n
Accrue Software, Inc.
\n 48634 Milmont Drive
\n Fremont, California
\n Attention: Chief Financial Officer
\n Facsimile No.: (510) 580-4509<\/p>\n
with a copy to:<\/p>\n
Venture Law Group
\n 2800 Sand Hill Road
\n Menlo Park, California 94025
\n Attention: John V. Bautista
\n Facsimile No.: (650) 233-8386<\/p>\n
(b) if to Target, to:<\/p>\n
Platinum Equity Holdings, LLC
\n 2049 Century Park East, Suite 2700
\n Los Angeles, California 90067
\n Attention: General Counsel
\n Facsimile No.: (310) 712-1850<\/p>\n
with a copy to:<\/p>\n
Riordan & McKinzie
\n 600 Anton Boulevard, 18th Floor
\n Costa Mesa, California 92626<\/p>\n
-53-
\n 58<\/p>\n
Attention: Jim Loss
\n Facsimile No.: (714) 549-3244<\/p>\n
9.2 INTERPRETATION. When a reference is made in this Agreement to
\nExhibits or Schedules, such reference shall be to an Exhibit or Schedule to this
\nAgreement unless otherwise indicated. The words “include,” “includes” and
\n“including” when used herein shall be deemed in each case to be followed by the
\nwords “without limitation.” The phrase “made available” in this Agreement shall
\nmean that the information referred to has been made available if requested by
\nthe party to whom such information is to be made available. The table of
\ncontents and headings contained in this Agreement are for reference purposes
\nonly and shall not affect in any way the meaning or interpretation of this
\nAgreement.<\/p>\n
9.3 COUNTERPARTS. This Agreement may be executed in two or more
\ncounterparts, each of which shall be deemed an original and all of which
\ntogether shall constitute one instrument.<\/p>\n
9.4 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST. This
\nAgreement and the documents and instruments and other agreements specifically
\nreferred to herein or delivered pursuant hereto, including the Exhibits, the
\nSchedules, including the Target Disclosure Letter and the Acquiror Disclosure
\nLetter (a) constitute the entire agreement among the parties with respect to the
\nsubject matter hereof and supersede all prior agreements and understandings,
\nboth written and oral, among the parties with respect to the subject matter
\nhereof, except for the Confidentiality Agreement, which shall continue in full
\nforce and effect, and shall survive any termination of this Agreement or the
\nClosing, in accordance with its terms; (b) are not intended to confer upon any
\nother person any rights or remedies hereunder, and (c) shall not be assigned by
\noperation of law or otherwise except as otherwise specifically provided;
\nprovided, however, that Platinum shall have the right to assign any of its
\nrights hereunder, but not its obligations, to any affiliate of Platinum
\nreasonably acceptable to Acquiror, if (i) such assignee agrees in writing to be
\nbound by the applicable terms and conditions of this Agreement, and (ii), if
\nrequested by Acquiror, Platinum provides an opinion of legal counsel reasonably
\nacceptable to Acquiror that such transfer would not be in violation of
\napplicable securities laws.<\/p>\n
9.5 SEVERABILITY. If one or more provisions of this Agreement are
\nheld to be unenforceable under applicable law, the parties agree to renegotiate
\nsuch provision in good faith, in order to maintain the economic position enjoyed
\nby each party as close as possible to that under the provision rendered
\nunenforceable. In the event that the parties cannot reach a mutually agreeable
\nand enforceable replacement for such provision, then (a) such provision shall be
\nexcluded from this Agreement, (b) the balance of the Agreement shall be
\ninterpreted as if such provision were so excluded and (c) the balance of the
\nAgreement shall be enforceable in accordance with its terms.<\/p>\n
9.6 REMEDIES CUMULATIVE. Except as otherwise provided herein, any
\nand all remedies herein expressly conferred upon a party will be deemed
\ncumulative with and not <\/p>\n
-54-
\n 59<\/p>\n
exclusive of any other remedy conferred hereby, or by law or equity upon such
\nparty, and the exercise by a party of any one remedy will not preclude the
\nexercise of any other remedy.<\/p>\n
9.7 GOVERNING LAW. This Agreement and all acts and transactions
\npursuant hereto and the rights and obligations of the parties hereto shall be
\ngoverned, construed and interpreted in accordance with the laws of the State of
\nCalifornia, without giving effect to principles of conflicts of law.<\/p>\n
9.8 RULES OF CONSTRUCTION. The parties hereto agree that they have
\nbeen represented by counsel during the negotiation, preparation and execution of
\nthis Agreement and, therefore, waive the application of any law, regulation,
\nholding or rule of construction providing that ambiguities in an agreement or
\nother document will be construed against the party drafting such agreement or
\ndocument.<\/p>\n
9.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
\namended or waived only with the written consent of the parties or their
\nrespective successors and assigns. Any amendment or waiver effected in
\naccordance with this Section 9.10 shall be binding upon the parties and their
\nrespective successors and assigns.<\/p>\n
9.10 DEFINITION OF KNOWLEDGE. Any reference to a party’s “knowledge”
\nin this Agreement means such party’s actual knowledge after due inquiry of
\nofficers, directors and employees of such party reasonably believed to have
\nknowledge of the matter in question.<\/p>\n
SIGNATURE PAGES FOLLOW<\/p>\n
-55-
\n 60<\/p>\n
Target, Acquiror, Merger Sub, Pilot and Platinum have executed this
\nAgreement as of the date first written above.<\/p>\n
TARGET:<\/p>\n
AVIATOR HOLDING CORPORATION<\/p>\n
By:
\n —————————————-
\n Name:
\n ————————————–
\n (Print)
\n Title:
\n ————————————-<\/p>\n
ACQUIROR:<\/p>\n
ACCRUE SOFTWARE, INC.<\/p>\n
By:
\n —————————————-
\n Name:
\n ————————————–
\n (Print)
\n Title:
\n ————————————-<\/p>\n
MERGER SUB:<\/p>\n
AVIATOR ACQUISITION CORP.<\/p>\n
By:
\n —————————————-
\n Name:
\n ————————————–
\n (Print)
\n Title:
\n ————————————-<\/p>\n
[SIGNATURE PAGE TO ACCRUE SOFTWARE, INC. AGREEMENT AND PLAN OF MERGER]<\/p>\n
61<\/p>\n
PILOT:<\/p>\n
PILOT SOFTWARE, INC.<\/p>\n
By:
\n —————————————-
\n Name:
\n ————————————–
\n (Print)
\n Title:
\n ————————————-<\/p>\n
PLATINUM:<\/p>\n
PLATINUM EQUITY HOLDINGS, LLC<\/p>\n
By:
\n —————————————-
\n Name:
\n ————————————–
\n (Print)
\n Title:
\n ————————————-<\/p>\n
[SIGNATURE PAGE TO ACCRUE SOFTWARE, INC. AGREEMENT AND PLAN OF MERGER]<\/p>\n
62<\/p>\n
EXHIBITS<\/p>\n
Exhibit A – Form of Certificate of Merger<\/p>\n
Exhibit B – Form of Non-Competition Agreement<\/p>\n
Exhibit C – Form of Investors’ Rights Agreement<\/p>\n
Exhibit D – Platinum Written Consent<\/p>\n
63<\/p>\n
EXHIBIT A<\/p>\n
FORM OF CERTIFICATE OF MERGER<\/p>\n
64<\/p>\n
EXHIBIT B<\/p>\n
FORM OF NON-COMPETITION AGREEMENT<\/p>\n
65<\/p>\n
EXHIBIT C<\/p>\n
FORM OF INVESTORS’ RIGHTS AGREEMENT<\/p>\n
66<\/p>\n
EXHIBIT D<\/p>\n
PLATINUM WRITTEN CONSENT<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6556],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9626],"class_list":["post-42997","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-accrue-software-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42997","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42997"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42997"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42997"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42997"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}