\nSection 1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . .2<\/p>\n ARTICLE II
\n TERMS OF MERGER<\/p>\n
Section 2.1 Statutory Merger. . . . . . . . . . . . . . . . . . . . . . . .7
\nSection 2.2 Effective Time. . . . . . . . . . . . . . . . . . . . . . . . .7
\nSection 2.3 Certificate of Incorporation; Bylaws. . . . . . . . . . . . . .7
\nSection 2.4 Directors and Officers. . . . . . . . . . . . . . . . . . . . .8<\/p>\n
ARTICLE III
\n CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES<\/p>\n
Section 3.1 Merger Consideration; Conversion and Cancellation
\n of Securities . . . . . . . . . . . . . . . . . . . . . . . . .8
\nSection 3.2 Exchange of Certificates. . . . . . . . . . . . . . . . . . . .9
\nSection 3.3 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
\nSection 3.4 Stock Transfer Books. . . . . . . . . . . . . . . . . . . . . 12<\/p>\n
ARTICLE IV
\n REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
Section 4.1 Organization and Qualification; Subsidiaries. . . . . . . . . 13
\nSection 4.2 Certificate of Incorporation; Bylaws. . . . . . . . . . . . . 13
\nSection 4.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 13
\nSection 4.4 Authorization of Agreement. . . . . . . . . . . . . . . . . . 14
\nSection 4.5 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 15
\nSection 4.6 No Violation. . . . . . . . . . . . . . . . . . . . . . . . . 15
\nSection 4.7 Reports; Financial Statements . . . . . . . . . . . . . . . . 16
\nSection 4.8 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . 16
\nSection 4.9 Absence of Certain Changes or Events. . . . . . . . . . . . . 16
\nSection 4.10 Title to Properties . . . . . . . . . . . . . . . . . . . . . 17
\nSection 4.11 Material Contracts. . . . . . . . . . . . . . . . . . . . . . 17
\nSection 4.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 17
\nSection 4.13 Permits; Compliance . . . . . . . . . . . . . . . . . . . . . 18
\nSection 4.14 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 18
\nSection 4.15 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . 18<\/p>\n
i<\/p>\n
Section 4.16 Registration Statement; Proxy Statement\/Prospectus. . . . . . 18
\nSection 4.17 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 19
\nSection 4.18 Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
\nSection 4.19 Environmental Laws and Regulations. . . . . . . . . . . . . . 21
\nSection 4.20 Intellectual Property . . . . . . . . . . . . . . . . . . . . 22
\nSection 4.21 Pooling; Tax Matters. . . . . . . . . . . . . . . . . . . . . 24
\nSection 4.22 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . 24
\nSection 4.23 Certain Business Practices. . . . . . . . . . . . . . . . . . 25
\nSection 4.24 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
\nSection 4.25 Opinion of Financial Advisor. . . . . . . . . . . . . . . . . 25
\nSection 4.26 Interest Rate and Foreign Exchange Contracts. . . . . . . . . 25
\nSection 4.27 Company Rights Agreement. . . . . . . . . . . . . . . . . . . 25<\/p>\n
ARTICLE V
\n REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANIES<\/p>\n
Section 5.1 Organization and Qualification; Subsidiaries. . . . . . . . . 26
\nSection 5.2 Certificate of Incorporation; Bylaws. . . . . . . . . . . . . 26
\nSection 5.3 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . 26
\nSection 5.4 Authorization of Agreement. . . . . . . . . . . . . . . . . . 27
\nSection 5.5 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 27
\nSection 5.6 No Violation. . . . . . . . . . . . . . . . . . . . . . . . . 27
\nSection 5.7 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
\nSection 5.8 Absence of Certain Changes or Events. . . . . . . . . . . . . 28
\nSection 5.9 Registration Statement; Proxy Statement\/Prospectus. . . . . . 29
\nSection 5.10 Pooling; Tax Matters. . . . . . . . . . . . . . . . . . . . . 29
\nSection 5.11 Affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . 29<\/p>\n
ARTICLE VI
\n COVENANTS RELATING TO THE CONDUCT OF BUSINESS<\/p>\n
Section 6 Conduct of Business of the Company. . . . . . . . . . . . . . 29<\/p>\n
ARTICLE VII
\n ADDITIONAL AGREEMENTS<\/p>\n
Section 7.1 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . 33
\nSection 7.2 Access and Information. . . . . . . . . . . . . . . . . . . . 34
\nSection 7.3 Meeting of Stockholders . . . . . . . . . . . . . . . . . . . 35
\nSection 7.4 Registration Statement; Proxy Statement . . . . . . . . . . . 35
\nSection 7.5 Appropriate Action; Consents; Filings . . . . . . . . . . . . 36
\nSection 7.6 Affiliates; Pooling; Tax Treatment. . . . . . . . . . . . . . 37<\/p>\n
ii<\/p>\n
Section 7.7 Public Announcements. . . . . . . . . . . . . . . . . . . . . 38
\nSection 7.8 Stock Exchange Listing. . . . . . . . . . . . . . . . . . . . 39
\nSection 7.9 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . 39
\nSection 7.10 Indemnification of Directors and Officers; Directors & Officers Insurance. . . . . . . . . . . . . . . . . . . . . . 40
\nSection 7.11 Event Notices . . . . . . . . . . . . . . . . . . . . . . . . 40
\nSection 7.12 Assumption of Obligations to Issue Stock. . . . . . . . . . . 41
\nSection 7.13 Conveyance Taxes. . . . . . . . . . . . . . . . . . . . . . . 42
\nSection 7.14 Voting Agreement. . . . . . . . . . . . . . . . . . . . . . . 42
\nSection 7.15 Option Agreement. . . . . . . . . . . . . . . . . . . . . . . 42
\nSection 7.16 Rights Agreement. . . . . . . . . . . . . . . . . . . . . . . 42
\nSection 7.17 Reasonable Efforts and Further Assurances . . . . . . . . . . 42<\/p>\n
ARTICLE VIII
\n CLOSING CONDITIONS<\/p>\n
Section 8.1 Conditions to Obligations of Each Party Under This
\n Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 43
\nSection 8.2 Additional Conditions to Obligations of the Acquiror
\n Companies . . . . . . . . . . . . . . . . . . . . . . . . . . 44
\nSection 8.3 Additional Conditions to Obligations of the Company . . . . . 46<\/p>\n
ARTICLE IX
\n TERMINATION, AMENDMENT AND EXPENSES<\/p>\n
Section 9.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . 47
\nSection 9.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . 48
\nSection 9.3 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . 49
\nSection 9.4 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
\nSection 9.5 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 49<\/p>\n
ARTICLE X
\n GENERAL PROVISIONS<\/p>\n
Section 10.1 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . 50
\nSection 10.2 Effectiveness of Representations, Warranties and
\n Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . 50
\nSection 10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
\nSection 10.4 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
\nSection 10.5 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 52
\nSection 10.6 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 52
\nSection 10.7 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . 52
\nSection 10.8 Parties in Interest . . . . . . . . . . . . . . . . . . . . . 52
\nSection 10.9 Failure or Indulgence Not Waiver; Remedies Cumulative. . . . 52
\nSection 10.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 53
\nSection 10.11 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 53
\n<\/c><\/s><\/caption>\n<\/table>\n
iii<\/p>\n
ANNEXES<\/p>\n
Annex A Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . A-1
\nAnnex B Stock Option Agreement . . . . . . . . . . . . . . . . . . . . B-1
\nAnnex C Affiliate’s Agreement (Netscape Communications Corporation
\n Affiliates). . . . . . . . . . . . . . . . . . . . . . . . . C-1
\nAnnex D Affiliate’s Agreement (America Online, Inc. Affiliates). . . . D-1
\nAnnex E Form of Certificate of Officer of America Online, Inc. . . . . E-1
\nAnnex F Form of Certificate of Officer of Netscape Communications
\n Corporation. . . . . . . . . . . . . . . . . . . . . . . . . F-1<\/p>\n
[Annexes A, B, C, D, E and F have been omitted]<\/p>\n
iv<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER, dated as of November 23, 1998 (this
\n“Agreement”), is by and among America Online, Inc., a Delaware corporation
\n(“Acquiror”), Apollo Acquisition Corp., a Delaware corporation and a
\nnewly-formed wholly owned direct subsidiary of Acquiror (“Newco”), and
\nNetscape Communications Corporation, a Delaware corporation (the “Company”).
\nAcquiror and Newco are sometimes referred to herein as the “Acquiror
\nCompanies”.<\/p>\n
RECITALS:<\/p>\n
WHEREAS, the Boards of Directors of Acquiror, Newco and the Company deem
\nit advisable and in the best interests of their respective companies and
\ntheir respective stockholders to enter into a business combination by means
\nof the merger of Newco with and into the Company under the terms of this
\nAgreement and have approved and adopted this Agreement;<\/p>\n
WHEREAS, concurrently with the execution and delivery of this Agreement
\nand as a condition and inducement to the willingness of Acquiror and Newco to
\nenter into this Agreement, certain holders of common stock, par value $0.0001
\nper share, of the Company have each entered into a Voting Agreement in the
\nform attached hereto as Annex A (the “Voting Agreement”) dated as of the date
\nhereof pursuant to which such holders have agreed to vote their shares of
\nCompany Common Stock (as defined herein) in the manner set forth therein;<\/p>\n
WHEREAS, concurrently with the execution and delivery of this Agreement
\nand as a condition and inducement to the willingness of Acquiror and Newco to
\nenter into this Agreement, the Company has entered into a Stock Option
\nAgreement dated as of the date hereof in the form attached hereto as Annex B
\n(the “Option Agreement”) granting Acquiror an irrevocable option to purchase
\nfrom the Company up to a number of authorized but unissued shares
\nrepresenting 19.9% of the outstanding shares of Company Common Stock, upon
\nthe terms and subject to the conditions set forth therein;<\/p>\n
WHEREAS, upon the terms and subject to the conditions of this Agreement
\nand in accordance with the Delaware General Corporation Law (the “DGCL”),
\nNewco will merge with and into the Company (the “Merger”) and the Company
\nwill survive (the “Surviving Corporation”); and<\/p>\n
WHEREAS, for United States federal income tax purposes, it is intended
\nthat the Merger will qualify as a reorganization within the meaning of
\nSection 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”),
\nand that this Agreement shall be, and is hereby, adopted as a plan of
\nreorganization for purposes of Section 368 of the Code.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the respective
\nrepresentations, warranties, covenants and agreements set forth in this
\nAgreement, the parties hereto agree as follows:<\/p>\n
ARTICLE I<\/p>\n
DEFINITIONS<\/p>\n
Section 1 DEFINED TERMS. For all purposes in this Agreement, the
\nfollowing terms shall have the respective meanings set forth in this Section
\n1.<\/p>\n
“Acquiror Common Stock” will mean the common stock, par value $0.01 per
\nshare, of Acquiror and, unless the context requires otherwise, includes the
\nassociated Acquiror Rights.<\/p>\n
“Acquiror Rights” will mean rights to purchase shares of the preferred
\nstock of Acquiror pursuant to that certain Rights Agreement, dated as of May
\n12, 1998, between Acquiror and BankBoston, N.A., as Rights Agent.<\/p>\n
“Acquiror’s Disclosure Schedule” will mean a schedule of even date
\nherewith delivered by Acquiror to the Company concurrently with the execution
\nof this Agreement, which, among other things, will identify exceptions to
\nAcquiror’s representations and warranties contained in Article V by specific
\nsection references.<\/p>\n
“Affiliate” will, with respect to any Person, mean any other Person that
\ncontrols, is controlled by or is under common control with the former.<\/p>\n
“Agreement” will mean this Agreement and Plan of Merger made and entered
\ninto as of November 23, 1998 by and among Acquiror, Newco and the Company,
\nincluding any amendments hereto and Schedules hereto (including Acquiror’s
\nDisclosure Schedule and the Company’s Disclosure Schedules but excluding the
\nAnnexes hereto).<\/p>\n
“Business Day” will mean any day other than a day on which banks in the
\nStates of Virginia or California are authorized or obligated to be closed.<\/p>\n
“Business Segment” will mean either of the Company’s two business
\nsegments: its Enterprise business segment and its Netcenter business segment.<\/p>\n
“Certificate of Merger” will have the meaning ascribed to such term in
\nSection 2.2.<\/p>\n
“Closing” will mean a meeting, which will be held in accordance with
\nSection 3.3, of all Persons interested in the transactions contemplated by
\nthis Agreement at which all documents necessary to evidence the fulfillment
\nor waiver of all conditions precedent to the consummation of the transactions
\ncontemplated by this Agreement are executed and delivered.<\/p>\n
2<\/p>\n
“Closing Date” will mean the date the Closing occurs.<\/p>\n
“Company Common Stock” will mean the common stock, par value $0.0001 per
\nshare, of the Company and, unless the context requires otherwise, includes
\nthe associated Company Rights.<\/p>\n
“Company Option Plans” will mean collectively the following stock option
\nplans of the Company: the Company’s 1994 Stock Option Plan, as amended; the
\nCompany’s 1995 Stock Plan; the Company’s 1998 Stock Option Plan; the
\nCompany’s 1995 Director Option Plan; the Collabra Software, Inc. 1993
\nIncentive Stock Plan; the Insoft, Inc. 1993 Stock Option Plan; the Netcode
\nCorp. 1996 Stock Plan; the DigitalStyle Corp. 1995 Stock Option\/Stock
\nIssuance Plan; the Portola Communications, Inc. 1996 Stock Option Plan; the
\nKiva Software Corp. 1995 Stock Option Plan; and the Mosaic Communications
\nCorporation 1994 Stock Option Plan.<\/p>\n
“Company Rights” will mean rights to purchase shares of the preferred
\nstock of the Company pursuant to the Company Rights Agreement.<\/p>\n
“Company Rights Agreement” will mean the agreement of the Company,
\nentered into as of November 23, 1998 between the Company and BankBoston N.A.,
\nas Rights Agent.<\/p>\n
“Company Stockholders’ Meeting” will have the meaning ascribed to such
\nterm in Section 4.16.<\/p>\n
“Company Stock Purchase Plan” will mean the Company’s 1995 Employee
\nStock Purchase Plan.<\/p>\n
“Company’s Disclosure Schedule” will mean a schedule of even date
\nherewith delivered by the Company to the Acquiror Companies concurrently with
\nthe execution of this Agreement, which, among other things, will identify
\nexceptions to the Company’s representations and warranties contained in
\nArticle IV by specific section and subsection references.<\/p>\n
“Confidentiality Agreement” will mean the Confidential Non-Disclosure
\nAgreement by and between Acquiror and the Company dated as of September 16,
\n1998, as amended.<\/p>\n
“control” (including the terms “controlled,” “controlled by” and “under
\ncommon control with”) will mean the possession, directly or indirectly or as
\ntrustee or executor, of the power to direct or cause the direction of the
\nmanagement or policies of a Person, whether through the ownership of stock or
\nas trustee or executor, by contract or credit arrangement or otherwise.<\/p>\n
“Court” will mean any court or arbitration tribunal of the United
\nStates, any domestic state, or any foreign country, and any political
\nsubdivision thereof.<\/p>\n
“DGCL” will mean the Delaware General Corporation Law, as amended.<\/p>\n
3<\/p>\n
“Effective Time” will mean the date and time of the completion of the
\nfiling of the Certificate of Merger with the Secretary of State of the State
\nof Delaware in accordance with Section 2.2.<\/p>\n
“Environmental Claim” means any claim, action, cause of action,
\ninvestigation or notice by any person or entity alleging potential liability
\n(including, without limitation, potential liability for investigatory costs,
\ncleanup costs, governmental response costs, natural resources damages,
\nproperty damages, personal injuries, or penalties) arising out of, based on
\nor resulting from (a) the presence, release or disposal of any Hazardous
\nMaterials at any location, whether or not owned or operated by the Company,
\nor (b) circumstances forming the basis of any violation, or alleged
\nviolation, of any Environmental Law.<\/p>\n
“Environmental Law” will mean any Law pertaining to: (i) the protection
\nof health, safety and the indoor or outdoor environment; (ii) the
\nconservation, management or use of natural resources and wildlife; (iii) the
\nprotection or use of surface water and ground water; (iv) the management,
\nmanufacture, possession, presence, use, generation, transportation,
\ntreatment, storage, disposal, release, threatened release, abatement,
\nremoval, remediation or handling of, or exposure to, any Hazardous Material;
\nor (v) pollution (including any release to air, land, surface water and
\nground water); and includes, without limitation, the Comprehensive
\nEnvironmental, Response, Compensation, and Liability Act of 1980, as amended,
\nand the Regulations promulgated thereunder and the Solid Waste Disposal Act,
\nas amended, 42 U.S.C. Section 6901 ET SEQ.<\/p>\n
“Exchange Act” will mean the Securities Exchange Act of 1934, as
\namended, and the Regulations promulgated thereunder.<\/p>\n
“Exchange Agent” will mean a bank or trust company organized under the
\nLaws of the United States or any of the states thereof and having a net worth
\nin excess of $100 million designated and appointed to act in the capacities
\nrequired under Section 3.2.<\/p>\n
“Foreign Competition Laws” will mean foreign statutes, rules,
\nRegulations, Orders, decrees, administrative and judicial directives, and
\nother foreign Laws, that are designed or intended to prohibit, restrict or
\nregulate actions having the purpose or effect of monopolization, lessening of
\ncompetition or restraint of trade.<\/p>\n
“GAAP” will have the meaning ascribed to such term in Section 4.7(b).<\/p>\n
“Governmental Authority” will mean any governmental agency or authority
\n(other than a Court) of the United States, any domestic state, or any foreign
\ncountry, and any political subdivision or agency thereof, and will include
\nany authority having governmental or quasi-governmental powers.<\/p>\n
“Hazardous Material” will mean any substance, chemical, compound,
\nproduct, solid, gas, liquid, waste, by-product, pollutant, contaminant or
\nmaterial which is hazardous or toxic and is regulated under any Environmental
\nLaw, and includes without limitation, asbestos or any <\/p>\n
4<\/p>\n
substance containing asbestos, polychlorinated biphenyls or petroleum
\n(including crude oil or any fraction thereof).<\/p>\n
“Intellectual Property” will mean: trademarks, service marks, trade
\nnames, URLs and Internet domain names, designs, slogans and general
\nintangibles of like nature, together with all goodwill related to the
\nforegoing (collectively, “Trademarks”); patents (including any registrations,
\ncontinuations, continuations in part, renewals and applications for any of
\nthe foregoing); copyrights (including any registrations and applications
\ntherefor); computer software; databases; technology, trade secrets and other
\nconfidential information, know-how, proprietary processes, formulae,
\nalgorithms, models, user interfaces, customer lists, inventions, source
\ncodes, object codes, methodologies and, with respect to all of the foregoing,
\nrelated confidential documentation (collectively, “Trade Secrets”).<\/p>\n
“Knowledge” – an individual will be deemed to have “Knowledge” of a
\nparticular fact or other matter if (a) such individual is actually aware of
\nsuch fact or other matter, or (b) such fact or matter is reflected in one or
\nmore documents (including e-mails) in such individual’s files. A Person
\n(other than an individual) will be deemed to have “Knowledge” of a particular
\nfact or other matter if any individual who on the date hereof is serving as a
\ndirector, executive officer (including any Senior Vice President), in-house
\ncounsel, and, in the case of the Company, the Vice-President of Website
\nDevelopment, of such Person has Knowledge of such fact or other matter.<\/p>\n
“Law” will mean all laws, statutes, ordinances and Regulations of any
\nGovernmental Authority including all decisions of Courts having the effect of
\nlaw.<\/p>\n
“Lien” will mean any mortgage, pledge, security interest, attachment,
\nencumbrance, lien or charge of any kind (including any agreement to give any
\nof the foregoing); PROVIDED, HOWEVER, that the term “Lien” shall not include
\n(i) statutory liens for Taxes, which are not yet due and payable or are being
\ncontested in good faith by appropriate proceedings, (ii) statutory or common
\nlaw liens to secure landlords, lessors or renters under leases or rental
\nagreements confined to the premises rented, (iii) deposits or pledges made in
\nconnection with, or to secure payment of, workers’ compensation, unemployment
\ninsurance, old age pension or other social security programs mandated under
\napplicable Laws, (iv) statutory or common law liens in favor of carriers,
\nwarehousemen, mechanics and materialmen, to secure claims for labor,
\nmaterials or supplies and other like liens, and (v) restrictions on transfer
\nof securities imposed by applicable state and federal securities Laws.<\/p>\n
“Litigation” will mean any suit, action, arbitration, cause of action,
\nclaim, complaint, criminal prosecution, investigation, demand letter,
\ngovernmental or other administrative proceeding, whether at law or at equity,
\nbefore or by any Court or Governmental Authority or before any arbitrator.<\/p>\n
“Material Adverse Effect” will mean, with respect to a specified Person
\n(including, for purposes of this definition as used in Section 4.9 and
\nSection 8.2(a)(ii), a Business Segment), any change, event or effect that
\nindividually or in the aggregate (taking into account all other such <\/p>\n
5<\/p>\n
changes, events or effects) has had, or would be reasonably likely to have, a
\nmaterial adverse effect on the consolidated business, results of operations,
\nor financial condition of such Person and its Subsidiaries, if any, taken as
\na whole, except to the extent that any such change, event or effect is
\nattributable to or results from (i) the direct effect of the public
\nannouncement or pendency of the transactions contemplated hereby on current
\nor prospective customers or revenues of the Company, (ii) changes in general
\neconomic conditions or changes affecting the industry generally in which such
\nPerson operates or (iii) shareholder class action litigation arising from
\nallegations of a breach of fiduciary duty relating to this Agreement;
\nPROVIDED, HOWEVER, that with respect to clause (i) of this sentence, the
\nCompany shall bear the burden of proof in any proceeding before a Court with
\nregard to establishing that any change, event or effect is attributable to or
\nresults from the direct effect of the public announcement or pendency of the
\ntransactions contemplated hereby.<\/p>\n
“Merger” will mean the merger of Newco with and into the Company
\nprovided for in this Agreement.<\/p>\n
“Newco” will mean Apollo Acquisition Corp., a newly-formed Delaware
\ncorporation and a wholly owned direct Subsidiary of Acquiror.<\/p>\n
“Order” will mean any judgment, order or decree of any Court or
\nGovernmental Authority.<\/p>\n
“Permit” will mean any and all permits, licenses, authorizations,
\nOrders, certificates, registrations or other approvals granted by any
\nGovernmental Authority.<\/p>\n
“Person” will mean an individual, partnership, limited liability
\ncompany, corporation, joint stock company, trust, estate, joint venture,
\nassociation or unincorporated organization, or any other form of business or
\nprofessional entity, but will not include a Governmental Authority.<\/p>\n
“Repurchase Rights” will mean the Company’s rights to repurchase stock
\nunder any of the Company Option Plans pursuant to the terms of the applicable
\nCompany Option Plans.<\/p>\n
“Regulation” will mean any rule or regulation of any Governmental
\nAuthority having the effect of Law.<\/p>\n
“SEC” will mean the Securities and Exchange Commission.<\/p>\n
“Securities Act” will mean the Securities Act of 1933, as amended, and
\nthe Regulations promulgated thereunder.<\/p>\n
A “Subsidiary” of a specified Person will be any corporation,
\npartnership, limited liability company, joint venture or other legal entity
\nof which the specified Person (either alone or through or together with any
\nother Subsidiary) owns, directly or indirectly, fifty percent (50%) or more
\nof the stock or other equity or partnership interests the holders of which
\nare generally <\/p>\n
6<\/p>\n
entitled to vote for the election of the Board of Directors or other
\ngoverning body of such corporation or other legal entity.<\/p>\n
“Tax Returns” will mean any declaration, return, report, schedule,
\ncertificate, statement or other similar document (including relating or
\nsupporting information) required to be filed with a Governmental Authority,
\nor where none is required to be filed with a Governmental Authority, the
\nstatement or other document issued by a Governmental Authority in connection
\nwith any Tax, including, without limitation, any information return, claim
\nfor refund, amended return or declaration of estimated Tax.<\/p>\n
“Taxes” will mean any and all federal, state, local, foreign,
\nprovincial, territorial or other taxes, imposts, tariffs, fees, levies or
\nother similar assessments or liabilities and other charges of any kind,
\nincluding income taxes, ad valorem taxes, excise taxes, withholding taxes,
\nstamp taxes or other taxes of or with respect to gross receipts, premiums,
\nreal property, personal property, windfall profits, sales, use, transfers,
\nlicensing, employment, social security, workers’ compensation, unemployment,
\npayroll and franchises imposed by or under any Law; and such terms will
\ninclude any interest, fines, penalties, assessments or additions to tax
\nresulting from, attributable to or incurred in connection with any such tax
\nor any contest or dispute thereof.<\/p>\n
ARTICLE II<\/p>\n
TERMS OF MERGER<\/p>\n
Section 2.1 STATUTORY MERGER. Subject to the terms and conditions and
\nin reliance upon the representations, warranties, covenants and agreements
\ncontained herein, Newco will merge with and into the Company at the Effective
\nTime. The terms and conditions of the Merger and the mode of carrying the
\nsame into effect will be as set forth in this Agreement. As a result of the
\nMerger, the separate corporate existence of Newco will cease and the Company
\nwill continue as the Surviving Corporation and shall succeed to and assume
\nall of the rights and obligations of Newco in accordance with the DGCL. The
\nMerger shall have the effect set forth in the DGCL.<\/p>\n
Section 2.2 EFFECTIVE TIME. As soon as practicable after the
\nsatisfaction or, if permissible, waiver of the conditions set forth in
\nArticle VIII, the parties hereto will cause the Merger to be consummated by
\nfiling a certificate of merger (the “Certificate of Merger”) with the
\nSecretary of State of the State of Delaware, in such form as required by, and
\nexecuted in accordance with the relevant provisions of, the DGCL. The Merger
\nshall become effective at the time at which the Certificate of Merger has
\nbeen duly filed with the Secretary of State of the State of Delaware (the
\ntime the Merger becomes effective in accordance with the foregoing being
\nreferred to as the “Effective Time”).<\/p>\n
Section 2.3 CERTIFICATE OF INCORPORATION; BYLAWS. At the Effective
\nTime, the certificate of incorporation of the Company shall be amended and
\nrestated by deleting its provisions and substituting therefore the provisions
\nof the certificate of incorporation of Newco except that from and after the
\nEffective Time Article First of the certificate of incorporation will read in
\nits <\/p>\n
7<\/p>\n
entirety substantially as follows: The name of the corporation is “Netscape
\nCommunications Corporation.” At the Effective Time, the by-laws of Newco, as
\nin effect immediately prior to the Effective Time, shall be the by-laws of
\nthe Surviving Corporation until thereafter amended as provided by Law and the
\ncertificate of incorporation of the Surviving Corporation and such by-laws.<\/p>\n
Section 2.4 DIRECTORS AND OFFICERS. The directors of Newco
\nimmediately prior to the Effective Time will be the directors of the
\nSurviving Corporation, each to hold office in accordance with the certificate
\nof incorporation and by-laws of the Surviving Corporation, and the officers
\nof the Company immediately prior to the Effective Time will be the officers
\nof the Surviving Corporation, in each case until their respective successors
\nare duly elected or appointed and qualify for such election.<\/p>\n
ARTICLE III<\/p>\n
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES<\/p>\n
Section 3.1 MERGER CONSIDERATION; CONVERSION AND CANCELLATION OF
\nSECURITIES. At the Effective Time, by virtue of the Merger and without any
\naction on the part of the holders of any of the following securities:<\/p>\n
(a) Subject to the other provisions of this Article III, each
\nshare of Company Common Stock issued and outstanding immediately prior to the
\nEffective Time (excluding any Company Common Stock described in Section
\n3.1(c)) will be converted into the right to receive 0.45 (the “Exchange
\nRatio”) shares of Acquiror Common Stock (the “Merger Consideration”).
\nNotwithstanding the foregoing, if between the date of this Agreement and the
\nEffective Time the outstanding shares of Acquiror Common Stock or Company
\nCommon Stock shall have been changed into a different number of shares or a
\ndifferent class, by reason of any stock dividend, subdivision,
\nreclassification, recapitalization, split, conversion, consolidation,
\ncombination or exchange of shares, the Exchange Ratio will be correspondingly
\nadjusted to reflect such stock dividend, subdivision, reclassification,
\nrecapitalization, split, conversion, consolidation, combination or exchange
\nof shares.<\/p>\n
(b) Subject to the other provisions of this Article III, all
\nshares of Company Common Stock will, upon conversion thereof into shares of
\nAcquiror Common Stock at the Effective Time, cease to be outstanding and will
\nautomatically be cancelled and retired, and each certificate previously
\nevidencing Company Common Stock outstanding immediately prior to the
\nEffective Time (other than Company Common Stock described in Section 3.1(c))
\nwill thereafter represent only the right to receive (i) the number of whole
\nshares of Acquiror Common Stock and (ii) as provided in Section 3.2(e), cash
\nin lieu of fractional shares into which the shares of Company Common Stock
\nrepresented by such certificate have been converted pursuant to this Section
\n3.1(b). The holders of certificates previously evidencing Company Common
\nStock will cease to have any rights with respect to such Company Common
\nStock except as otherwise provided herein or by Law.<\/p>\n
8<\/p>\n
(c) Notwithstanding any provision of this Agreement to the
\ncontrary, each share of Company Common Stock held in the treasury of the
\nCompany and each share of Company Common Stock, if any, owned by Acquiror or
\nany direct or indirect wholly owned Subsidiary of Acquiror or of the Company
\nimmediately prior to the Effective Time will be cancelled.<\/p>\n
(d) Each share of common stock, par value $.01 per share, of Newco
\nissued and outstanding immediately prior to the Effective Time shall be
\nconverted into and become one fully paid and nonassessable share of common
\nstock, par value $.01 per share, of the Surviving Corporation.<\/p>\n
Section 3.3 EXCHANGE OF CERTIFICATES.<\/p>\n
(a) EXCHANGE FUND. On the day of the Effective Time, Acquiror
\nwill deposit, or cause to be deposited, with the Exchange Agent, for the
\nbenefit of the former holders of Company Common Stock, for exchange in
\naccordance with this Article III, through the Exchange Agent, certificates
\nrepresenting shares of Acquiror Common Stock issuable pursuant to Section 3.1
\nin exchange for certificates representing Company Common Stock immediately
\nprior to the Effective Time (such shares of Acquiror Common Stock so
\ndeposited, together with cash realized and held by the Exchange Agent for the
\nbenefit of such former holders of Company Common Stock in accordance with
\nSection 3.2(e), being referred to as the “Exchange Fund”). Thereafter,
\nAcquiror will deposit, or cause to be deposited, with the Exchange Agent, for
\nthe benefit of any former holders of Company Common Stock who have not yet
\nsurrendered their shares of Company Common Stock for exchange, at the
\nappropriate payment date, the amount of dividends or other distributions,
\nwith a record date after the Effective Time but prior to surrender, payable
\nwith respect to any shares of Acquiror Common Stock remaining in the Exchange
\nFund on such record date. The Exchange Agent will, pursuant to irrevocable
\ninstructions from Acquiror, deliver Acquiror Common Stock and any such
\ndividends or distributions related thereto, in exchange for certificates
\ntheretofore evidencing Company Common Stock surrendered to the Exchange Agent
\npursuant to Section 3.2(c).<\/p>\n
(b) LETTER OF TRANSMITTAL. Promptly after the Effective Time,
\nAcquiror will cause the Exchange Agent to mail to each record holder of a
\ncertificate or certificates representing Company Common Stock immediately
\nprior to the Effective Time (i) a letter of transmittal which shall specify
\nthat delivery shall be effected, and risk of loss and title to the
\ncertificates formerly representing Company Common Stock shall pass, only upon
\ndelivery of such certificates to the Exchange Agent and shall be in such form
\nand have such other provisions, including appropriate provisions with respect
\nto back-up withholding, as Acquiror may reasonably specify, and (ii)
\ninstructions for use in effecting the surrender of the certificates formerly
\nrepresenting Company Common Stock. Upon surrender of a certificate formerly
\nrepresenting Company Common Stock for cancellation to the Exchange Agent,
\ntogether with such letter of transmittal, duly executed and completed in
\naccordance with the instructions thereto, the holder thereof shall be
\nentitled to receive in exchange therefor that portion of the Exchange Fund
\nwhich such holder has the right to receive pursuant to the provisions of this
\nArticle III, after giving effect to any required withholding Tax, and the
\ncertificate formerly <\/p>\n
9<\/p>\n
representing Company Common Stock so surrendered shall forthwith be
\ncancelled. No interest will be paid or accrued on the cash to be paid which
\nis in the Exchange Fund.<\/p>\n
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
\nExchange Agent will distribute to each former holder of Company Common Stock,
\nupon surrender to the Exchange Agent for cancellation of one or more
\ncertificates, accompanied by a duly executed letter of transmittal that
\ntheretofore evidenced shares of Company Common Stock, certificates evidencing
\nthe appropriate number of shares of Acquiror Common Stock into which such
\nshares of Company Common Stock were converted pursuant to the Merger and any
\ndividends or distributions related thereto which such former holder of
\nCompany Common Stock is entitled to receive pursuant to the provisions of
\nthis Article III. If shares of Acquiror Common Stock are to be issued to a
\nPerson other than the Person in whose name the surrendered certificate or
\ncertificates are registered, it will be a condition of issuance of Acquiror
\nCommon Stock that the surrendered certificate or certificates shall be
\nproperly endorsed, with signatures guaranteed by a member firm of the New
\nYork Stock Exchange or a bank chartered under the Laws of the United States,
\nor otherwise in proper form for transfer and that the Person requesting such
\npayment shall pay any transfer or other Taxes required by reason of the
\nissuance of Acquiror Common Stock to a Person other than the registered
\nholder of the surrendered certificate or certificates or such Person shall
\nestablish to the satisfaction of Acquiror that any such Tax has been paid or
\nis not applicable. Notwithstanding the foregoing, neither the Exchange Agent
\nnor any party hereto will be liable to any former holder of Company Common
\nStock for any Acquiror Common Stock or cash or dividends or distributions
\nthereon delivered to a public official pursuant to any applicable escheat Law.<\/p>\n
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF COMPANY
\nCOMMON STOCK. No dividends or other distributions declared or made with
\nrespect to Acquiror Common Stock on or after the Effective Time will be paid
\nto the holder of any certificate that theretofore evidenced shares of Company
\nCommon Stock until the holder of such certificate shall surrender such
\ncertificate. Subject to the effect of any applicable escheat Law, following
\nsurrender of any such certificate, there will be paid from the Exchange Fund
\nto the holder of the certificates evidencing whole shares of Acquiror Common
\nStock issued in exchange therefor, without interest, (i) promptly, the amount
\nof dividends or other distributions with a record date after the Effective
\nTime theretofore paid with respect to such whole shares of Acquiror Common
\nStock, and (ii) at the appropriate payment date, the amount of dividends or
\nother distributions, with a record date after the Effective Time but prior to
\nsurrender and a payment date occurring after surrender, payable with respect
\nto such whole shares of Acquiror Common Stock.<\/p>\n
(e) NO FRACTIONAL SHARES.<\/p>\n
(i) No certificates or scrip representing fractional shares
\nof Acquiror Common Stock shall be issued upon the surrender for exchange of
\ncertificates formerly representing shares of Company Common Stock pursuant to
\nthis Article III; no dividend, stock split or other change in the capital
\nstructure of Acquiror shall relate to any fractional security; and such
\nfractional interests shall not entitle the owner thereof to vote or to any
\nrights of a security holder.<\/p>\n
10<\/p>\n
(ii) As promptly as practicable following the Effective
\nTime, the Exchange Agent will determine the excess of (A) the number of whole
\nshares of Acquiror Common Stock delivered to the Exchange Agent by Acquiror
\npursuant to Section 3.2(a) over (B) the aggregate number of whole shares of
\nAcquiror Common Stock to be distributed to holders of Company Common Stock
\npursuant to Section 3.2(c) (such excess being herein called the “Excess
\nShares”). Following the Effective Time, the Exchange Agent will, on behalf
\nof former stockholders of the Company, sell the Excess Shares at
\nthen-prevailing prices on the New York Stock Exchange, Inc. (the “NYSE”), all
\nin the manner provided in Section 3.2(e)(iii).<\/p>\n
(iii) The sale of the Excess Shares by the Exchange Agent
\nwill be executed on the NYSE through one or more member firms of the NYSE and
\nwill be executed in round lots to the extent practicable. The Exchange Agent
\nwill use reasonable efforts to complete the sale of the Excess Shares as
\npromptly following the Effective Time as, in the Exchange Agent’s sole
\njudgment, is practicable consistent with obtaining the best execution of such
\nsales in light of prevailing market conditions. Until the net proceeds of
\nsuch sale or sales have been distributed to the holders of Company Common
\nStock, the Exchange Agent will hold such proceeds in trust for the former
\nholders of Company Common Stock (the “Common Shares Trust”). The Surviving
\nCorporation will pay all commissions, transfer taxes and other out-of-pocket
\ntransaction costs, including the expenses and compensation of the Exchange
\nAgent incurred in connection with such sale of the Excess Shares. The
\nExchange Agent will determine the portion of the Common Shares Trust to which
\neach former holder of Company Common Stock is entitled, if any, by
\nmultiplying the amount of the aggregate net proceeds comprising the Common
\nShares Trust by a fraction, the numerator of which is the amount of the
\nfractional share interest to which such former holder of Company Common Stock
\nis entitled (after taking into account all shares of Company Common Stock
\nheld at the Effective Time by such holder) and the denominator of which is
\nthe aggregate amount of fractional share interests to which all holders of
\nCompany Common Stock are entitled. For purposes of this Section 3.2(e),
\nshares of Company Common Stock of any former holder represented by two or
\nmore certificates may be aggregated and in no event shall any holder be paid
\nan amount of cash in respect of more than one share of Acquiror Common Stock.<\/p>\n
(iv) As soon as practicable after the determination of the
\namount of cash, if any, to be paid to the former holders of Company Common
\nStock with respect to any fractional share interests, the Exchange Agent will
\nhold such cash amounts for the benefit of, and pay such cash amounts to, such
\nformer holders of Company Common Stock subject to and in accordance with the
\nterms of Section 3.2(c).<\/p>\n
(f) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
\nFund which remains unclaimed by the former holders of Company Common Stock
\nfor twelve months after the Effective Time will be delivered to Acquiror,
\nupon demand, and any former holders of Company Common Stock who have not
\ntheretofore complied with this Article III will, subject to applicable
\nabandoned property, escheat and other similar Laws, thereafter look only to
\nAcquiror for Acquiror Common Stock and any cash to which they are entitled.<\/p>\n
11<\/p>\n
(g) WITHHOLDING OF TAX. Acquiror or the Exchange Agent will be
\nentitled to deduct and withhold from the consideration otherwise payable
\npursuant to this Agreement to any former holder of Company Common Stock such
\namounts as Acquiror (or any Affiliate thereof) or the Exchange Agent are
\nrequired to deduct and withhold with respect to the making of such payment
\nunder the Code, or any provision of state, local or foreign Tax Law. To the
\nextent that amounts are so withheld by Acquiror or the Exchange Agent, such
\nwithheld amounts will be treated for all purposes of this Agreement as having
\nbeen paid to the former holder of Company Common Stock in respect of whom
\nsuch deduction and withholding was made by Acquiror.<\/p>\n
(h) LOST CERTIFICATES. If any certificate evidencing Company
\nCommon Stock shall have been lost, stolen or destroyed, upon the making of an
\naffidavit of that fact by the Person claiming such certificate to be lost,
\nstolen or destroyed and, if required by Acquiror, the posting by such Person
\nof a bond, in such reasonable amount as Acquiror may direct, as indemnity
\nagainst claims that may be made against it with respect to such certificate,
\nthe Exchange Agent will issue in exchange for such lost, stolen or destroyed
\ncertificate of Acquiror Common Stock to which the holder may be entitled
\npursuant to this Article III and cash and any dividends or other
\ndistributions to which the holder thereof may be entitled pursuant to Section
\n3.2(d) or Section 3.2(e).<\/p>\n
Section 3.3 CLOSING. The Closing will take place at the offices of
\nSkadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street, 31st Floor,
\nBoston, Massachusetts at 10:00 a.m. on the second Business Day following the
\ndate on which the conditions to the Closing have been satisfied or waived or
\nat such other place, time and date as the parties hereto may agree. At the
\nconclusion of the Closing on the Closing Date, the parties hereto will cause
\nthe Certificate of Merger to be filed with the Secretary of State of the
\nState of Delaware.<\/p>\n
Section 3.4 STOCK TRANSFER BOOKS. At the Effective Time, the stock
\ntransfer books of the Company will be closed and there will be no further
\nregistration of transfers of shares of Company Common Stock thereafter on the
\nrecords of the Company. If, after the Effective Time, certificates formerly
\nrepresenting Company Common Stock are presented to the Surviving Corporation,
\nthey shall be cancelled and exchanged for certificates representing Acquiror
\nCommon Stock.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to the Acquiror Companies,
\nsubject to the exceptions set forth in the Company’s Disclosure Schedule
\n(which exceptions shall specifically identify a Section, Subsection or clause
\nof a single Section or Subsection hereof, as applicable, to which such
\nexception relates, it being understood and agreed that each such exception
\nshall be deemed to be disclosed both under such Section, Subsection or clause
\nhereof and any other Section, Subsection or clause hereof to which such
\ndisclosure reasonably relates) that:<\/p>\n
12<\/p>\n
Section 4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The Company
\nand each Subsidiary of the Company are legal entities duly organized, validly
\nexisting and in good standing under the Laws of their respective
\njurisdictions of incorporation or organization, have all requisite power and
\nauthority to own, lease and operate their respective properties and to carry
\non their business as it is now being conducted and are duly qualified and in
\ngood standing to do business in each jurisdiction in which the nature of the
\nbusiness conducted by them or the ownership or leasing of their respective
\nproperties makes such qualification necessary. Section 4.1 of the Company’s
\nDisclosure Schedule sets forth, as of the date of this Agreement, a true and
\ncomplete list of all the Company’s directly or indirectly owned Subsidiaries,
\ntogether with the jurisdiction of incorporation of each Subsidiary and the
\npercentage of each Subsidiary’s outstanding capital stock or other equity
\ninterests owned by the Company or another Subsidiary of the Company. Neither
\nthe Company nor any of its Subsidiaries owns an equity interest in any
\npartnership or joint venture arrangement or other business entity that is
\nmaterial to the Company.<\/p>\n
Section 4.2 CERTIFICATE OF INCORPORATION; BYLAWS. The Company has
\nfurnished or made available to Acquiror complete and correct copies of the
\ncertificate of incorporation and the bylaws or the equivalent organizational
\ndocuments, in each case as amended or restated to the date hereof, of the
\nCompany and each of its Subsidiaries. Neither the Company nor any of its
\nSubsidiaries is in violation of any of the provisions of its certificate of
\nincorporation or bylaws or equivalent organizational documents.<\/p>\n
Section 4.3 CAPITALIZATION.<\/p>\n
(a) The authorized capital stock of the Company consists of (i)
\n200,000,000 shares of Company Common Stock of which, as of November 23, 1998,
\n99,938,928 shares were issued and outstanding, all of which are duly
\nauthorized, validly issued, fully paid and nonassessable and were not issued
\nin violation of any preemptive or similar rights of any Person and (ii)
\n5,000,000 shares of preferred stock, par value $.0001 per share, of which, as
\nof November 23, 1998, none were issued.<\/p>\n
(b) Except for the Company Rights, as of the date hereof, no
\nshares of Company Common Stock are reserved for issuance, and there are no
\ncontracts, agreements, commitments or arrangements obligating the Company to
\noffer, sell, issue or grant any shares of, or any options, warrants or rights
\nof any kind to acquire any shares of, or any securities that are convertible
\ninto or exchangeable for any shares of, capital stock of the Company, to
\nredeem, purchase or acquire, or offer to purchase or acquire, any outstanding
\nshares of, or any outstanding options, warrants or rights of any kind to
\nacquire any shares of, or any outstanding securities that are convertible
\ninto or exchangeable for any shares of, capital stock of the Company or to
\ngrant any Lien on any shares of capital stock of the Company.<\/p>\n
13<\/p>\n
(c) The authorized, issued and outstanding capital stock of, or
\nother equity interests in, each of the Company’s Subsidiaries and the names
\nof the holders of record of the capital stock or other equity interests of
\neach such Subsidiary, in each case, as of the date hereof, are set forth in
\nSection 4.3(c) of the Company’s Disclosure Schedule. The issued and
\noutstanding shares of capital stock of, or other equity interests in, each of
\nthe Subsidiaries of the Company that are owned by the Company or any of its
\nSubsidiaries have been duly authorized and are validly issued, and, with
\nrespect to capital stock, are fully paid and nonassessable, and were not
\nissued in violation of any preemptive or similar rights of any Person. All
\nsuch issued and outstanding shares or other equity interests, that are
\nindicated as owned by the Company or one of its Subsidiaries in Section
\n4.3(c) of the Company’s Disclosure Schedule, are owned beneficially as set
\nforth therein and free and clear of all Liens. No shares of capital stock
\nof, or other equity interests in, any Subsidiary of the Company are reserved
\nfor issuance, and there are no contracts, agreements, commitments or
\narrangements obligating the Company or any of its Subsidiaries (i) to offer,
\nsell, issue, grant, pledge, dispose of or encumber any shares of capital
\nstock of, or other equity interests in, or any options, warrants or rights of
\nany kind to acquire any shares of capital stock of, or other equity interests
\nin, or any securities that are convertible into or exchangeable for any
\nshares of capital stock of, or other equity interests in, any of the
\nSubsidiaries of the Company, (ii) to redeem, purchase or acquire, or offer to
\npurchase or acquire, any outstanding shares of capital stock of, or other
\nequity interests in, or any outstanding options, warrants or rights of any
\nkind to acquire any shares of capital stock of, or other equity interest in,
\nor any outstanding securities that are convertible into or exchangeable for,
\nany shares of capital stock of, or other equity interests in, any of the
\nSubsidiaries of the Company or (iii) to grant any Lien on any outstanding
\nshares of capital stock of, or other equity interest in, any of the
\nSubsidiaries of the Company.<\/p>\n
(d) There are no voting trusts, proxies or other similar
\nagreements or understandings to which the Company or any of its Subsidiaries
\nis a party or by which the Company or any of its Subsidiaries is bound with
\nrespect to the voting of any shares of capital stock of the Company or any of
\nits Subsidiaries or, except for the Option Agreement, with respect to the
\nregistration of the offering, sale or delivery of any shares of capital stock
\nof the Company or any of its Subsidiaries under the Securities Act.<\/p>\n
Section 4.4 AUTHORIZATION OF AGREEMENT. The Company has all requisite
\ncorporate power and authority to execute and deliver this Agreement, the
\nOption Agreement and each instrument required hereby to be executed and
\ndelivered by it at the Closing, to perform its obligations hereunder and
\nthereunder and to consummate the transactions contemplated hereby and
\nthereby. The execution and delivery by the Company of this Agreement, the
\nOption Agreement and each instrument required hereby to be executed and
\ndelivered by it at the Closing and the performance of its obligations
\nhereunder and thereunder have been duly and validly authorized by all
\nrequisite corporate action on the part of the Company other than, with
\nrespect to the Merger, the approval and adoption of this Agreement by the
\nstockholders of the Company, which approval and adoption in accordance with
\nthe DGCL and the Company’s certificate of incorporation shall require the
\naffirmative vote of the holders of at least a majority <\/p>\n
14<\/p>\n
of the outstanding shares of Company Common Stock. This Agreement and the
\nOption Agreement have been duly executed and delivered by the Company and,
\nassuming due authorization, execution and delivery hereof by the Acquiror
\nCompanies, this Agreement constitutes the legal, valid and binding obligation
\nof the Company, enforceable against the Company in accordance with its
\nterms, subject to bankruptcy, insolvency, reorganization, moratorium or
\nsimilar Laws now or hereafter in effect relating to creditors’ rights
\ngenerally or to general principles of equity.<\/p>\n
Section 4.5 APPROVALS. Except for the applicable requirements, if
\nany, of (a) the Securities Act, (b) the Exchange Act, (c) state securities
\nor blue sky Laws, (d) the Hart-Scott-Rodino Antitrust Improvements Act of
\n1976, as amended (the “HSR Act”), (e) Foreign Competition Laws, (f) the
\nfiling and recordation of appropriate merger documents as required by the
\nDGCL and (g) those Laws, Regulations and Orders noncompliance with which
\nwould not in the aggregate materially impair the ability of the Company to
\nperform its obligations under this Agreement or be material in any respect to
\nthe Company, no filing or registration with, no waiting period imposed by and
\nno Permit, Order, authorization, consent or approval of, any Court or
\nGovernmental Authority is required under any Law, Regulation or Order
\napplicable to the Company or any of its Subsidiaries to permit the Company to
\nexecute, deliver or perform this Agreement or any instrument required hereby
\nto be executed and delivered by it at the Closing.<\/p>\n
Section 4.6 NO VIOLATION. Assuming effectuation of all filings and
\nregistrations with, termination or expiration of any applicable waiting
\nperiods imposed by and receipt of all Permits or Orders of, Courts and\/or
\nGovernmental Authorities indicated as required in Section 4.5 and receipt of
\nthe approval of this Agreement by the stockholders of the Company as required
\nby the DGCL, neither the execution and delivery by the Company of this
\nAgreement or any instrument required hereby to be executed and delivered by
\nit at the Closing, nor the performance by the Company of its obligations
\nhereunder, nor the execution, delivery and performance of the Voting
\nAgreement by the parties thereto, will violate or breach the terms of or
\ncause a default, or accelerate the performance of any obligation of the
\nCompany or any Company Subsidiary or give rise to any payment obligation of
\nany such Person, or give rise to any right of termination (any of the
\nforegoing a “Change of Control Effect”), or require any consent, approval or
\nwaiver (any of the foregoing a “Change of Control Consent”) of any third
\nparty that is not a Governmental Authority, under, any Law, Regulation or
\nOrder applicable to the Company or the certificate of incorporation or
\nbylaws of the Company or (b) with the passage of time or the giving of notice
\nhave any of the effects set forth in clause (a) of this Section, except in
\nthe case of matters referred to in clauses (a)(i) or (b) (in the case of (b),
\nsolely with respect to clause (a)(i)) of this Section that would not,
\nindividually or in the aggregate, have a material adverse effect upon the
\nability of the Company to perform its obligations under this Agreement or be
\nmaterial in any respect to the Company. Prior to the execution of this
\nAgreement, the Board of Directors of the Company has taken all requisite
\naction to cause this Agreement and the transactions contemplated hereby
\n(including those <\/p>\n
15<\/p>\n
contemplated by the Option Agreement and the Voting Agreement) to be exempt
\nfrom the provisions of Section 203 of the DGCL.<\/p>\n
Section 4.7 REPORTS; FINANCIAL STATEMENTS.<\/p>\n
(a) The Company has timely filed all reports required to be filed
\nby it with the SEC since January 1, 1997 pursuant to the Exchange Act, which
\nreports complied, at the time of filing in all material respects with
\napplicable requirements of the Exchange Act, (collectively, the “Company SEC
\nReports”). None of the Company SEC Reports, as of their respective dates,
\ncontained or, if filed after the date hereof, will contain, any untrue
\nstatement of a material fact or omitted, or, if filed after the date hereof,
\nwill omit, to state a material fact required to be stated therein or
\nnecessary in order to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading, except to the
\nextent superseded by a Company SEC Report filed subsequently and prior to the
\ndate hereof.<\/p>\n
(b) The consolidated statements of financial position and the
\nrelated consolidated statements of operations, stockholders’ equity and cash
\nflows (including the related notes thereto) of the Company included in the
\nCompany SEC Reports complied in all material respects with applicable
\naccounting requirements and the published rules and Regulations of the SEC
\nwith respect thereto, have been prepared in conformity with United States
\ngenerally accepted accounting principles (“GAAP”) (except, in the case of
\nunaudited statements, as permitted by Form 10-Q of the SEC) applied on a
\nbasis consistent with prior periods (except as otherwise noted therein), and
\npresent fairly the consolidated financial position of the Company as at their
\nrespective dates, and the consolidated results of its operations and its cash
\nflows for the periods presented therein subject, in the case of the unaudited
\ninterim financial statements, to normal year-end adjustments that have not
\nbeen and are not expected to be material in amount.<\/p>\n
Section 4.8 NO UNDISCLOSED LIABILITIES. Neither the Company nor any of
\nits Subsidiaries has any liabilities or obligations of any nature, whether
\nor not accrued, contingent or otherwise, except (a) liabilities or
\nobligations reflected in the Company SEC Reports through the date of the
\nfiling of the Company’s Quarterly Report on Form 10-Q in respect of the
\nfiscal quarter ending July 31, 1998, (b) liabilities or obligations incurred
\nin the ordinary course of business consistent with past practice since July
\n31, 1998 which are not, and will not have, individually or in the aggregate,
\na Material Adverse Effect on the Company and (c) liabilities or obligations
\nwhich are not and will not have, individually or in the aggregate, a Material
\nAdverse Effect on the Company.<\/p>\n
Section 4.9 ABSENCE OF CERTAIN CHANGES OR EVENTS.<\/p>\n
Since July 31, 1998, there is not and has not been a Material
\nAdverse Effect on any Business Segment.<\/p>\n
16<\/p>\n
Section 4.10 TITLE TO PROPERTIES. The Company or its Subsidiaries,
\nindividually or together, have good, valid and marketable title to or a valid
\nleasehold in, all of the properties and assets (real, personal and mixed,
\ntangible and intangible) that are necessary to the conduct of the business of
\nthe Company and its Subsidiaries as it is currently being conducted,
\nincluding all of the properties and assets reflected in the Company’s
\nconsolidated balance sheet as at July 31, 1998, which was filed with the SEC
\nas part of its report on Form 10-Q, other than any such properties or assets
\nthat have been sold or otherwise disposed of in the ordinary course of
\nbusiness since July 31, 1998. None of such properties are securities pledged
\nfor interest rate swap, cap or floor contracts. The Company or its
\nSubsidiaries, individually or together, hold under valid lease agreements all
\nreal and personal properties being held by the Company or its Subsidiaries
\nunder capitalized leases, and all real and personal property held by the
\nCompany or its Subsidiaries that is subject to operating leases, and enjoy
\npeaceful and undisturbed possession of such properties under such leases,
\nother than (i) any properties as to which such leases have expired in
\naccordance with their terms without any liability of any party thereto and
\n(ii) any immaterial properties. Neither the Company nor any of its
\nSubsidiaries has received any written notice or has Knowledge of any adverse
\nclaim to the title to any properties owned by them or with respect to any
\nlease under which any properties are held by them, other than any claims
\nthat, individually or in the aggregate, are immaterial to the Company.
\nNotwithstanding anything to the contrary, nothing in this Section 4.10 shall
\nbe construed to relate to Intellectual Property (it being understood that
\nSection 4.20 contains representations and warranties relating to Intellectual
\nProperty).<\/p>\n
Section 4.11 MATERIAL CONTRACTS. Each Material Contract (as defined
\nherein) is in full force and effect, and is a legal, valid and binding
\nobligation of the Company or a Subsidiary and, to the Knowledge of the
\nCompany, each of the other parties thereto, enforceable in accordance with
\nits terms, except (a) that the enforcement thereof may be limited by (i)
\nbankruptcy, insolvency, reorganization, moratorium or other similar Laws now
\nor hereafter in effect relating to creditors’ rights generally and (ii)
\ngeneral principles of equity (regardless of whether enforceability is
\nconsidered in a proceeding in equity or at law) and (b) as would not,
\nindividually or in the aggregate, materially adversely impact any Business
\nSegment. No condition exists or event has occurred which (whether with or
\nwithout notice or lapse of time or both, or the happening or occurrence of
\nany other event) would constitute a default by the Company or a Subsidiary
\nor, to the Knowledge of the Company, any other party thereto under, or result
\nin a right in termination of, any Material Contract, except as would not,
\nindividually or in the aggregate, materially adversely impact any Business
\nSegment. The term “Material Contract” shall mean any contract which is
\nmaterial to the Company and its Subsidiaries taken as a whole or to any
\nBusiness Segment.<\/p>\n
Section 4.12 INSURANCE. The Company and its Subsidiaries self-insure
\nor maintain with third parties policies of fire and casualty, liability and
\nother forms of insurance in such amounts, with such deductibles and retained
\namounts, and against such risks and losses, as are consistent with industry
\npractice and as are reasonable for the conduct of the business as conducted
\non the date hereof and for the assets of the Company and its Subsidiaries.<\/p>\n
17<\/p>\n
Section 4.13 PERMITS; COMPLIANCE. The Company and its Subsidiaries
\nhave obtained all material Permits that are necessary to carry on their
\nbusinesses as currently conducted. Such Permits are in full force and effect
\nin all material respects, have not been violated in any material respect,
\nand, to the Knowledge of the Company, no suspension, revocation or
\ncancellation thereof has been threatened and there is no Litigation pending
\nor, to the Knowledge of the Company, threatened regarding suspension,
\nrevocation or cancellation of any of such Permits.<\/p>\n
Section 4.14 LITIGATION. As of the date hereof, there is no
\nLitigation pending, or to the Knowledge of the Company, threatened against
\nthe Company or any Subsidiary of the Company, which if adversely determined
\nwould be or have a Material Adverse Effect on the Company. As of the
\nClosing, there will be no Litigation pending, or to the Knowledge of the
\nCompany, threatened against the Company or any Subsidiary of the Company that
\nwould be or have a Material Adverse Effect on the Company.<\/p>\n
Section 4.15 COMPLIANCE WITH LAWS. Neither the Company nor any
\nSubsidiary is subject to any written agreement, written directive, memorandum
\nof understanding or Order with or by any Court or Governmental Authority
\nrestricting in any material respect its operation or requiring any materially
\nadverse actions by the Company. The Company and its Subsidiaries are in
\ncompliance in all material respects with all applicable Laws and Regulations
\nand are not in default in any material respect with respect to any material
\nOrder applicable to the Company or any of its Subsidiaries.<\/p>\n
Section 4.16 REGISTRATION STATEMENT; PROXY STATEMENT\/PROSPECTUS. The
\ninformation supplied by the Company or required to be supplied by the Company
\n(except to the extent revised or superseded by amendments or supplements) for
\ninclusion in the registration statement on Form S-4, or any amendment or
\nsupplement thereto, pursuant to which the shares of Acquiror Common Stock to
\nbe issued in the Merger will be registered with the SEC (including any
\namendments or supplements, the “Registration Statement”) shall not, at the
\ntime the Registration Statement (including any amendments or supplements
\nthereto) is declared effective by the SEC, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated
\ntherein or necessary in order to make the statements therein, in light of the
\ncircumstances under which they were made, not misleading. The information
\nsupplied by the Company or required to be supplied by the Company (except to
\nthe extent revised or superseded by amendments or supplements) for inclusion
\nin the proxy statement\/prospectus or any amendment or supplement thereto to
\nbe sent to the stockholders of the Company in connection with the meeting of
\nthe Company’s stockholders to consider the Merger (the “Company Stockholders’
\nMeeting”) (such proxy statement\/prospectus, as amended or supplemented, is
\nreferred to herein as the “Proxy Statement”) shall not, on the date the Proxy
\nStatement is first mailed to the Company’s stockholders, at the time of the
\nCompany Stockholders’ Meeting and at the Effective Time, contain any
\nstatement which, at such time, is false or misleading with respect to any
\nmaterial fact, or omit to state any material fact necessary in order to make
\nthe statements made therein, in light of the circumstances under which they <\/p>\n
18<\/p>\n
are made, not false or misleading; or omit to state any material fact
\nnecessary to correct any statement in any earlier communication with respect
\nto the solicitation of proxies by or on behalf of the Company for the Company
\nStockholders’ Meeting which has become false or misleading. The Proxy
\nStatement will comply in all material respects with the provisions of the
\nExchange Act. Notwithstanding the foregoing, the Company makes no
\nrepresentation, warranty or covenant with respect to any information supplied
\nor required to be supplied by Acquiror which is contained in or omitted from
\nany of the foregoing documents.<\/p>\n
Section 4.17 EMPLOYEE BENEFIT PLANS.<\/p>\n
(a) Section 4.17 of the Company’s Disclosure Schedule contains a
\ntrue and complete list of each deferred compensation, incentive compensation,
\nstock purchase, stock option and other equity compensation plan, “welfare”
\nplan, fund or program (within the meaning of Section 3(1) of the Employee
\nRetirement Income Security Act of 1974, as amended (“ERISA”)); each “pension”
\nplan, fund or program (within the meaning of Section 3(2) of ERISA); each
\nemployment, termination or severance agreement with individuals whose annual
\ncompensation is at a base rate exceeding $125,000, and each other material
\nemployee benefit plan, fund, program, agreement or arrangement, in each case,
\nthat is sponsored, maintained or contributed to or required to be contributed
\nto by the Company or any entity, that together with the Company would be
\ndeemed a “single employer” within the meaning of Section 4001(b) of ERISA (an
\n“ERISA Affiliate”), or to which the Company or an ERISA Affiliate is a party,
\nwhether written or oral, for the benefit of any employee or former employee
\nof the Company or any of its Subsidiaries (the “Company Plans”).<\/p>\n
(b) With respect to each Company Plan, the Company has heretofore
\ndelivered or made available to Acquiror true and complete copies of the
\nCompany Plan and any amendments thereto (or if the Company Plan is not a
\nwritten Company Plan, a description thereof), any related trust or other
\nfunding vehicle, any reports or summaries required under ERISA or the Code
\nand the most recent determination letter received from the Internal Revenue
\nService with respect to each Company Plan intended to qualify under Section
\n401 of the Code.<\/p>\n
(c) No material liability under Title IV or Section 302 of ERISA
\nhas been incurred by the Company or any ERISA Affiliate that has not been
\nsatisfied in full, and no condition exists that presents a material risk to
\nthe Company or any ERISA Affiliate of incurring any such liability.<\/p>\n
(d) No Company Plan is subject to Title IV of ERISA or Section 412
\nof the Code, nor is any Company Plan a “multiemployer pension plan”, as
\ndefined in Section 3(37) of ERISA, or subject to Section 302 of ERISA.<\/p>\n
(e) Except as would not be materially adverse to the Company, each
\nCompany Plan has been operated and administered in all respects in accordance
\nwith its terms and applicable Law, including ERISA and the Code.<\/p>\n
19<\/p>\n
(f) Each Company Plan intended to be “qualified” within the
\nmeaning of Section 401(a) of the Code and the trusts maintained thereunder
\nthat are intended to be exempt from taxation under Section 501(a) of the Code
\nhave received a favorable determination or other letter indicating that they
\nare so qualified, and, to the Knowledge of the Company, no event has occurred
\nsince the date of said letter(s) that will adversely affect the qualification
\nof such Company Plan.<\/p>\n
(g) No Company Plan provides material medical, surgical,
\nhospitalization, death or similar benefits (whether or not insured) for
\nemployees or former employees of the Company or any of its Subsidiaries for
\nperiods extending beyond their retirement or other termination of service,
\nother than (i) coverage mandated by applicable Law, (ii) death benefits under
\nany “pension plan”, or (iii) benefits the full cost of which is borne by the
\ncurrent or former employee (or his beneficiary).<\/p>\n
(h) No amounts payable under the Company Plans will fail to be
\ndeductible for federal income Tax purposes by virtue of Section 280G of the
\nCode.<\/p>\n
(i) The execution, delivery and performance of, and consummation
\nof the transactions contemplated by, this Agreement, the Option Agreement or
\nthe Voting Agreement will not (i) entitle any current or former employee or
\nofficer of the Company or any ERISA Affiliate to severance pay, unemployment
\ncompensation or any other payment, except as expressly provided in this
\nAgreement, (ii) accelerate the time of payment or vesting, or increase the
\namount of compensation due any such employee or officer, or (iii) assuming
\nthe Acquiror takes the action specified in Section 7.12(a), accelerate the
\nvesting of any stock option or of any shares of restricted stock.<\/p>\n
(j) Except as would not be material in any respect to the Company,
\nthere are no pending or, to the Knowledge of the Company, any threatened or
\nanticipated claims by or on behalf of any Company Plan, by any employee or
\nbeneficiary covered under any such Company Plan, or otherwise involving any
\nsuch Company Plan (other than routine claims for benefits).<\/p>\n
Section 4.18 TAXES. Except as set forth in Section 4.18 of the
\nCompany’s Disclosure Schedule, the Company represents and warrants as follows:<\/p>\n
(a) Except as would not be materially adverse to the Company, all
\nfederal, state, local and foreign Tax Returns required to be filed (taking
\ninto account extensions) by or on behalf of the Company, each of its
\nSubsidiaries, and each affiliated, combined, consolidated or unitary group of
\nwhich the Company or any of its Subsidiaries is or has been a member have
\nbeen timely filed, and all such Tax Returns are true, complete and correct.<\/p>\n
(b) Except as would not be materially adverse to the Company, all
\nTaxes payable by or with respect to the Company or any Subsidiary of the
\nCompany have been timely paid, or adequately reserved for in accordance with
\nGAAP. No deficiencies for any Taxes have <\/p>\n
20<\/p>\n
been proposed, asserted or assessed either orally or in writing against the
\nCompany or any of its Subsidiaries that are not adequately reserved for in
\naccordance with GAAP. All assessments for Taxes due and owing by or with
\nrespect to the Company or any Subsidiary of the Company with respect to
\ncompleted and settled examinations or concluded Litigation have been paid.<\/p>\n
(c) Prior to the date of this Agreement, the Company has provided
\nAcquiror with written schedules setting forth the taxable years of the
\nCompany for which the statutes of limitations with respect to federal and
\nmaterial state income Taxes have not expired and with respect to federal and
\nmaterial state income Taxes, those years for which examinations have been
\ncompleted and those years for which examinations are presently being
\nconducted.<\/p>\n
(d) Except as would not be materially adverse to the Company, the
\nCompany and each of its Subsidiaries have complied in all material respects
\nwith all rules and Regulations relating to the payment and withholding of
\nTaxes (including, without limitation, withholding of Taxes pursuant to
\nSections 1441 and 1442 of the Code or similar provisions under any foreign
\nLaws) and have, within the time and in the manner required by law, withheld
\nfrom employee wages and paid over to the proper Governmental Authorities all
\nmaterial amounts required to be so withheld and paid over under all
\napplicable Laws.<\/p>\n
(e) Neither the Company nor any of its Subsidiaries (i) has waived
\nany statutory period of limitations in respect of its or their Taxes or Tax
\nReturns or (ii) is a party to, bound by, or has any obligation under any Tax
\nsharing, allocation, indemnity, or similar contract or arrangement.<\/p>\n
(f) The net operating losses (“NOL”) of the Company or any
\nSubsidiary of the Company are not, as of the date hereof, subject to Section
\n382 or 269 of the Code, Regulation Section 1.1502-21T(c), or any similar
\nprovisions or Regulations otherwise limiting the use of the NOL’s of the
\nCompany or the Subsidiaries of the Company.<\/p>\n
(g) No property of the Company or any of the Subsidiaries of the
\nCompany is “tax-exempt use property” (as such term is defined in Section 168
\nof the Code).<\/p>\n
(h) None of the Company or any of the Subsidiaries of the Company
\nhas filed a consent pursuant to Section 341(f) of the Code or agreed to have
\nSection 341(f)(2) of the Code apply to any disposition of a “Subsection (f)
\nasset” (as such term is defined in Section 341(f)(4) of the Code) owned by
\nthe Company or any of the Subsidiaries of the Company.<\/p>\n
(i) The Company is not, and has not been for the five years
\npreceding the Closing, a “United States real property holding company” (as
\nsuch term is defined in Section 897(c)(2) of the Code).<\/p>\n
Section 4.19 ENVIRONMENTAL LAWS AND REGULATIONS. Except as would not
\nbe or result in a Material Adverse Effect on the Company: (a) the Company and
\nits Subsidiaries are and <\/p>\n
21<\/p>\n
have been in compliance with all applicable Environmental Laws; (b) the
\nCompany and its Subsidiaries have obtained all Permits required by any
\napplicable Environmental Law and all such permits are in full force and
\neffect; (c) neither the Company nor any of its Subsidiaries has, and the
\nCompany has no Knowledge of any other Person who has, caused any release,
\nthreatened release or disposal of any Hazardous Material at any properties or
\nfacilities previously or currently owned, leased or occupied by the Company
\nor its Subsidiaries; (d) the Company has no Knowledge that any of its or its
\nSubsidiaries’ properties or facilities are adversely affected by any release,
\nthreatened release or disposal of a Hazardous Material originating or
\nemanating from any other property; (e) neither the Company nor any of its
\nSubsidiaries (i) has any liability for response or corrective action, natural
\nresources damage, or any other harm pursuant to any Environmental Law, (ii)
\nis subject to, has notice or Knowledge of, or is required to give any notice
\nof any environmental claim or (iii) has Knowledge of any condition or
\noccurrence which could form the basis of an Environmental claim against the
\nCompany, any Subsidiary or any of their properties or facilities; (f) the
\nCompany and its Subsidiaries’ properties and facilities are not subject to
\nany, and the Company has no Knowledge of any, imminent restriction on the
\nownership, occupancy, use or transferability of their properties and
\nfacilities arising from any (i) Environmental Law or (ii) release, threatened
\nrelease or disposal of any Hazardous Material; and (g) there is no
\nEnvironmental Claim pending, or, to the Company’s knowledge, threatened,
\nagainst the Company or, to the Company’s knowledge, against any Person whose
\nliability for any Environmental Claim the Company has or may have retained or
\nassumed either contractually or by operation of law.<\/p>\n
Section 4.20 INTELLECTUAL PROPERTY.<\/p>\n
(a) Section 4.20(a) of the Company’s Disclosure Schedule sets
\nforth, for the Intellectual Property owned by the Company or its
\nSubsidiaries, a complete and accurate list of all United States and foreign
\n(a) patents and patent applications; (b) Trademark registrations (including
\nmaterial Internet domain registrations) and applications and material
\nunregistered Trademarks; (c) copyright registrations and applications,
\nindicating for each, the applicable jurisdiction, registration number (or
\napplication number), and date issued (or date filed).<\/p>\n
(b) Section 4.20(b) of the Company’s Disclosure Schedule sets
\nforth a complete and accurate list of all material license agreements
\ngranting to the Company or any of its Subsidiaries any material right to use
\nor practice any rights under any Intellectual Property other than
\nIntellectual Property which is used for infrastructural purposes and is
\ncommercially available on reasonable terms, (collectively, the “License
\nAgreements”), indicating for each the title and the parties thereto.<\/p>\n
(c) Except as would not be materially adverse to the Company or
\nany Business Segment:<\/p>\n
(i) the Company or its Subsidiaries own, free and clear of
\nLiens, Orders and arbitration awards, all owned Intellectual Property used in
\nthe Company’s business, <\/p>\n
22<\/p>\n
and have a valid and enforceable right to use all of the Intellectual
\nProperty licensed to the Company and used in the Company’s business;<\/p>\n
(ii) the Company has taken reasonable steps to protect the
\nIntellectual Property of the Company;<\/p>\n
(iii) the conduct of the Company’s and its Subsidiaries’
\nbusinesses as currently conducted does not infringe upon any rights owned or
\ncontrolled by any third party;<\/p>\n
(iv) there is no Litigation pending or to the Company’s
\nKnowledge threatened or any written claim from any Person (A) alleging that
\nthe Company’s activities or the conduct of its businesses or that of any of
\nits Subsidiaries infringes upon, violates, or constitutes the unauthorized
\nuse of the Intellectual Property rights of any third party or (B) challenging
\nthe ownership, use, validity or enforceability of any Company Intellectual
\nProperty;<\/p>\n
(v) to the Knowledge of the Company and its Subsidiaries,
\nno third party is misappropriating, infringing, diluting, or violating any
\nIntellectual Property owned by the Company or any of its Subsidiaries and no
\nsuch claims have been brought against any third party by the Company or any
\nof its Subsidiaries; and<\/p>\n
(vi) the execution, delivery and performance by the Company
\nof this Agreement, the Option Agreement and the Voting Agreement, and the
\nconsummation of the transactions contemplated hereby and thereby, will not
\nresult in the loss or impairment of, or give rise to any right of any third
\nparty to terminate, any of the Company’s or any of its Subsidiaries’ rights
\nto own any of its Intellectual Property or their respective rights under the
\nLicense Agreements, nor require the consent of any Governmental Authority or
\nthird party in respect of any such Intellectual Property.<\/p>\n
(vii) The Software owned or purported to be owned by the
\nCompany or any of its Subsidiaries, was either (i) developed by employees of
\nCompany or any of its Subsidiaries within the scope of their employment; (ii)
\ndeveloped by independent contractors who have assigned their rights to the
\nCompany or any of its Subsidiaries pursuant to written agreements; or (iii)
\notherwise acquired by the Company or a Subsidiary from a third party. For
\npurposes of this Section 4.20(c)(vii), “Software” means any and all (i)
\ncomputer programs, including any and all software implementations of
\nalgorithms, models and methodologies, whether in source code or object code,
\n(ii) databases and compilations, including any and all data and collections
\nof data, whether machine readable or otherwise, (iii) descriptions,
\nflow-charts and other work product used to design, plan, organize and develop
\nany of the foregoing, (iv) the technology supporting any Internet site(s)
\noperated by or on behalf of the Company or any of its Subsidiaries, and (iv)
\nall documentation, including user manuals and training materials, relating to
\nany of the foregoing.<\/p>\n
23<\/p>\n
(d) All material Trademarks registered in the United States have
\nbeen in continuous use by the Company or its Subsidiaries. To the Knowledge
\nof the Company and its Subsidiaries, there has been no prior use of such
\nTrademarks by any third party which would confer upon said third party
\nsuperior rights in such Trademarks; the Company and its Subsidiaries have
\nadequately policed the Trademarks against third party infringement; and the
\nmaterial Trademarks registered in the United States have been continuously
\nused in the form appearing in, and in connection with the goods and services
\nlisted in, their respective registration certificates.<\/p>\n
(e) Except as would not be materially adverse to the Company or
\nany Business Segment, the Company has taken reasonable steps in accordance
\nwith normal industry practice to protect the Company’s rights in confidential
\ninformation and Trade Secrets of the Company. Without limiting the foregoing
\nand except as would not be materially adverse to the Company or any Business
\nSegment, the Company enforces a policy of requiring each relevant employee,
\nconsultant and contractor to execute proprietary information, confidentiality
\nand assignment agreements substantially in the Company’s standard forms, and,
\nexcept under confidentiality obligations, there has been no disclosure by the
\nCompany or any Subsidiary of material confidential information or Trade
\nSecrets.<\/p>\n
(f) Except as would not be materially adverse to the Company or
\nany Business Segment, the Company has taken reasonable steps with the intent
\nof ensuring that its products (including existing products and technology and
\nproducts and technology currently under development) will, when used in
\naccordance with associated documentation on a specified platform or
\nplatforms, be capable upon installation of accurately processing, providing,
\nand receiving date data from, into, and between the Twentieth and
\nTwenty-First centuries, including the years 1999 and 2000, and making
\nleap-year calculations, provided that all other non-Company products (e.g.,
\nhardware, software and firmware) used in or in combination with the Company’s
\nproducts, properly exchange data with the Company’s products.<\/p>\n
Section 4.21 POOLING; TAX MATTERS. As of the date hereof, to the
\nKnowledge of the Company, neither the Company nor any of its Affiliates has
\ntaken or agreed to take any action or failed to take any action that would
\nprevent (a) the Merger from being treated for financial accounting purposes
\nas a “pooling of interests” in accordance with GAAP and the Regulations and
\ninterpretations of the SEC or (b) the Merger from constituting a
\nreorganization within the meaning of Section 368(a) of the Code.<\/p>\n
Section 4.22 AFFILIATE LETTERS. Section 4.22 of the Company’s
\nDisclosure Schedule contains a true and complete list of all Persons who, as
\nof the date hereof, to the Knowledge of the Company, may be deemed to be
\nAffiliates of the Company, excluding all its Subsidiaries but including all
\ndirectors and executive officers of the Company.<\/p>\n
24<\/p>\n
Section 4.23 CERTAIN BUSINESS PRACTICES. Neither the Company nor any
\nof its Subsidiaries nor any director, officer, employee or agent of the
\nCompany or any of its Subsidiaries has (i) used any funds for unlawful
\ncontributions, gifts, entertainment or other unlawful payments relating to
\npolitical activity, (ii) made any unlawful payment to any foreign or domestic
\ngovernment official or employee or to any foreign or domestic political party
\nor campaign or violated any provision of the Foreign Corrupt Practices Act of
\n1977, as amended, (iii) consummated any transaction, made any payment,
\nentered into any agreement or arrangement or taken any other action in
\nviolation of Section 1128B(b) of the Social Security Act, as amended, or (iv)
\nmade any other unlawful payment except for the foregoing matters that are not
\nmaterial in any respect to the Company.<\/p>\n
Section 4.24 BROKERS. No broker, finder, investment banker or other
\nPerson (other than Morgan Stanley Dean Witter & Co.) is entitled to any
\nbrokerage, finder’s or other fee or commission in connection with the
\ntransactions contemplated by this Agreement based upon arrangements made by
\nor on behalf of the Company. Prior to the date of this Agreement, the
\nCompany has made available to Acquiror a complete and correct copy of all
\nagreements between the Company and Morgan Stanley Dean Witter & Co. pursuant
\nto which such firm will be entitled to any payment relating to the
\ntransactions contemplated by this Agreement.<\/p>\n
Section 4.25 OPINION OF FINANCIAL ADVISOR. The Board of Directors of
\nthe Company has received the opinion of Morgan Stanley Dean Witter & Co., the
\nCompany’s financial advisor, substantially to the effect that the
\nconsideration to be received by the holders of the Company Common Stock in
\nthe Merger is fair to such holders from a financial point of view, a copy of
\nwhich has been, or promptly will be, provided to Acquiror.<\/p>\n
Section 4.26 INTEREST RATE AND FOREIGN EXCHANGE CONTRACTS. All
\nmaterial interest rate swaps, caps, floors and option agreements and other
\ninterest rate risk management arrangements and foreign exchange contracts to
\nhedge its investments in foreign subsidiaries, whether entered into for the
\naccount of the Company or one of its Subsidiaries, were entered into in the
\nordinary course of business and, to the Company’s Knowledge, in accordance
\nwith prudent business practice and applicable rules, Regulations and policies
\nof any Governmental Authority and with counterparties believed to be
\nfinancially responsible at the time, and in all material respects are valid
\nand binding obligations of the Company or one of its Subsidiaries enforceable
\nin accordance with their terms (except as may be limited by bankruptcy,
\ninsolvency, moratorium, reorganization or similar Laws affecting the rights
\nof creditors generally and the availability of equitable remedies), and are
\nin full force and effect in all material respects. The Company and each of
\nits Subsidiaries have duly performed in all material respects their material
\nobligations thereunder to the extent that such obligations to perform have
\naccrued, and, to the Company’s Knowledge, there are no material breaches,
\nviolations or defaults or allegations or assertions of such by any other
\nparty thereunder.<\/p>\n
Section 4.27 COMPANY RIGHTS AGREEMENT. The Company has taken all
\naction such that (i) (A) no “Shares Acquisition Date” (as defined in the
\nCompany Rights Agreement) shall <\/p>\n
25<\/p>\n
occur and neither Acquiror nor its Affiliates, individually or taken
\ntogether, shall become an “Acquiring Person” (as defined in the Company
\nRights Agreement) and (B) the Company Rights Agreement and the Company Rights
\nshall not apply to Acquiror or any of its Affiliates, individually or taken
\ntogether, in the case of (A) or (B), solely as a result of this Agreement,
\nthe Option Agreement, the Voting Agreement or the transactions contemplated
\nhereby and thereby and (ii) all Company Rights issued under the Company
\nRights Agreement shall, immediately prior to the Effective Time, be
\ncancelled, void and of no further force or effect.<\/p>\n
ARTICLE V<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANIES<\/p>\n
The Acquiror Companies hereby represent and warrant to the Company,
\nsubject to the exceptions set forth in the Acquiror’s Disclosure Schedule
\n(which exceptions shall specifically identify a Section, Subsection or clause
\nof a single Section or Subsection hereof, as applicable, to which such
\nexception relates, it being understood and agreed that each such exception
\nshall be deemed to be disclosed both under such Section, Subsection or clause
\nhereof and any other Section, Subsection or clause hereof to which such
\ndisclosure reasonably relates) that:<\/p>\n
Section 5.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. The
\nAcquiror Companies are legal entities duly organized, validly existing and in
\ngood standing under the Laws of their respective jurisdictions of
\nincorporation or organization, have all requisite power and authority to own,
\nlease and operate their respective properties and to carry on their business
\nas it is now being conducted and are duly qualified and in good standing to
\ndo business in each jurisdiction in which the nature of the business
\nconducted by them or the ownership or leasing of their respective properties
\nmakes such qualification necessary.<\/p>\n
Section 5.2 CERTIFICATE OF INCORPORATION; BYLAWS. The Acquiror has
\nfurnished or made available to the Company complete and correct copies of the
\ncertificate of incorporation and the bylaws in each case as amended or
\nrestated to the date hereof, of Acquiror and Newco. Neither the Acquiror nor
\nNewco is in violation of any of the provisions of its certificate of
\nincorporation or bylaws.<\/p>\n
Section 5.3 CAPITALIZATION.<\/p>\n
(a) As of the date hereof, the authorized capital stock of
\nAcquiror consists of (i) 1,800,000,000 shares of Acquiror Common Stock of
\nwhich, as of November 17, 1998, 459,333,610 shares were issued and
\noutstanding, and (ii) 5,000,000 shares of preferred stock, par value $.01 per
\nshare, of which none are issued. All of the outstanding shares of Acquiror
\nCommon Stock are, and all shares to be issued as part of the Merger
\nConsideration will be, when issued in accordance with the terms hereof, duly
\nauthorized, validly issued, fully paid and nonassessable.<\/p>\n
26<\/p>\n
(b) As of the date hereof, no shares of Acquiror Common Stock are
\nreserved for issuance, and there are no contracts, agreements, commitments or
\narrangements obligating Acquiror to offer, sell, issue or grant any shares
\nof, or any options, warrants or rights of any kind to acquire any shares of,
\nor any securities that are convertible into or exchangeable for any shares
\nof, capital stock of Acquiror, to redeem, purchase or acquire, or offer to
\npurchase or acquire, any outstanding shares of, or any outstanding options,
\nwarrants or rights of any kind to acquire any shares of, or any outstanding
\nsecurities that are convertible into or exchangeable for any shares of,
\ncapital stock of Acquiror or to grant any Lien on any shares of capital
\nstock of Acquiror.<\/p>\n
Section 5.4 AUTHORIZATION OF AGREEMENT. Each of the Acquiror
\nCompanies has all requisite corporate power and authority to execute and
\ndeliver this Agreement and, in the case of Acquiror, the Option Agreement,
\nand each instrument required hereby to be executed and delivered by the
\nAcquiror Companies at the Closing, to perform its obligations hereunder and
\nthereunder and to consummate the transactions contemplated hereby and
\nthereby. The execution and delivery by the Acquiror Companies of this
\nAgreement and, in the case of Acquiror, the Option Agreement, and each
\ninstrument required hereby to be executed and delivered by the Acquiror
\nCompanies at the Closing and the performance of their respective obligations
\nhereunder and thereunder have been duly and validly authorized by the Board
\nof Directors of each of Acquiror and Newco and by Acquiror as the sole
\nstockholder of Newco. Except for filing of the Certificate of Merger, no
\nother corporate proceedings on the part of Acquiror or Newco are necessary to
\nauthorize the consummation of the transactions contemplated hereby. This
\nAgreement has been duly executed and delivered by each of the Acquiror
\nCompanies and, assuming due authorization, execution and delivery hereof by
\nthe Company, constitutes a legal, valid and binding obligation of each of the
\nAcquiror Companies, enforceable against each of the Acquiror Companies in
\naccordance with its terms, subject to bankruptcy, insolvency, reorganization,
\nmoratorium or similar Laws now or hereafter in effect relating to creditors’
\nrights generally or to general principles of equity.<\/p>\n
Section 5.5 APPROVALS. Except for the applicable requirements, if
\nany, of (a) the Securities Act, (b) the Exchange Act, (c) state securities or
\nblue sky Laws, (d) the HSR Act, (e) Foreign Competition Laws, (f) the New
\nYork Stock Exchange, (g) the filing and recordation of appropriate merger
\ndocuments as required by the DGCL and (h) those Laws, Regulations and Orders
\nnoncompliance with which would not in the aggregate materially impair the
\nability of Acquiror or Newco to perform its obligations under this Agreement
\nor be material in any respect to Acquiror, no notices to, consents or
\napprovals of, or filings or registrations with any Court or Governmental
\nAuthority is required under any Law, Regulation or Order applicable to
\nAcquiror or Newco to permit Acquiror or Newco to execute, deliver or perform
\nthis Agreement or the Option Agreement or any instrument required hereby to
\nbe executed and delivered by it at the Closing.<\/p>\n
Section 5.6 NO VIOLATION. Assuming effectuation of all filings and
\nregistrations with, termination or expiration of any applicable waiting
\nperiods imposed by and receipt of all <\/p>\n
27<\/p>\n
Permits or Orders of, Courts and\/or Governmental Authorities indicated as
\nrequired in Section 5.5, neither the execution and delivery by Acquiror or
\nNewco of this Agreement, or any instrument required hereby to be executed and
\ndelivered by Acquiror or Newco at the Closing nor the performance by Acquiror
\nor Newco of their respective obligations hereunder or thereunder will (a)
\nviolate or breach the terms of or cause a default under any Law, Regulation
\nor Order applicable to Acquiror or Newco, the articles of incorporation or
\nby-laws of Acquiror or Newco or any contract, note, bond, mortgage,
\nindenture, license, agreement or other instrument to which Acquiror or any of
\nits Subsidiaries is a party or by which it or any of its properties or assets
\nis bound, or (b) with the passage of time, the giving of notice or the taking
\nof any action by a third Person, have any of the effects set forth in clause
\n(a) of this Section, except in any such case for any matters described in
\nthis Section 5.6 that would not in the aggregate have a material adverse
\neffect upon the ability of Acquiror or Newco to perform its obligations under
\nthis Agreement or be material in any respect to Acquiror.<\/p>\n
Section 5.7 REPORTS.<\/p>\n
(a) Acquiror has timely filed all reports required to be filed by
\nit with the SEC since January 1, 1997 pursuant to the Exchange Act which
\ncomplied, at the time of filing, in all material respects with applicable
\nrequirements of the Exchange Act (collectively, the “Acquiror SEC Reports”).
\nNone of Acquiror SEC Reports, as of their respective dates, contained or, if
\nfiled after the date hereof, will contain any untrue statement of a material
\nfact or omitted or, if filed after the date hereof, will omit to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in light of the circumstances under which they were made,
\nnot misleading, except to the extent superseded by an Acquiror SEC Report
\nfiled subsequently and prior to the date hereof.<\/p>\n
(b) The consolidated statements of financial position and the
\nrelated consolidated statements of operations, stockholders’ equity and cash
\nflows (including the related notes thereto) of Acquiror included in the
\nAcquiror SEC Reports complied in all material respects with applicable
\naccounting requirements and the published rules and Regulations of the SEC
\nwith respect thereto, have been prepared in conformity with GAAP (except, in
\nthe case of unaudited statements, as permitted by Form 10-Q of the SEC)
\napplied on a basis consistent with prior periods (except as otherwise noted
\ntherein), and present fairly the consolidated financial position of Acquiror
\nas at their respective dates, and the consolidated results of its operations
\nand its cash flows for the periods presented therein subject, in the case of
\nthe unaudited interim financial statements, to normal year-end adjustments
\nthat have not been and are not expected to be material in amount.<\/p>\n
Section 5.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30,
\n1998 there is not and has not been a Material Adverse Effect on Acquiror.<\/p>\n
28<\/p>\n
Section 5.9 REGISTRATION STATEMENT; PROXY STATEMENT\/PROSPECTUS. The
\ninformation supplied by Acquiror or required to be supplied by the Acquiror
\n(except to the extent revised or superseded by amendments or supplements) for
\ninclusion in the Registration Statement, or any amendment or supplement
\nthereto, shall not, at the time the Registration Statement (including any
\namendments or supplements thereto) is declared effective by the SEC, contain
\nany untrue statement of a material fact or omit to state any material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they were made, not
\nmisleading. The information supplied by Acquiror or required to be supplied
\nby the Acquiror (except to the extent revised or superseded by amendments or
\nsupplements) for inclusion in the Proxy Statement shall not, on the date the
\nProxy Statement is first mailed to the Company’s stockholders, at the time of
\nthe Company Stockholders’ Meeting and at the Effective Time, contain any
\nstatement which, at such time, is false or misleading with respect to any
\nmaterial fact, or omit to state any material fact necessary in order to make
\nthe statements made therein, in light of the circumstances under which they
\nare made, not false or misleading, or omit to state any material fact
\nnecessary to correct any statement in any earlier communication with respect
\nto the solicitation of proxies by or on behalf of the Company for the Company
\nStockholders’ Meeting which has become false or misleading. The Registration
\nStatement will comply as to form in all material respects with the provisions
\nof the Securities Act. Notwithstanding the foregoing, Acquiror makes no
\nrepresentation, warranty or covenant with respect to any information supplied
\nor required to be supplied by the Company which is contained in or omitted
\nfrom any of the foregoing documents.<\/p>\n
Section 5.10 POOLING; TAX MATTERS. As of the date hereof, to the
\nKnowledge of Acquiror, neither Acquiror nor any of its Affiliates has taken
\nor agreed to take any action or failed to take any action that would prevent
\n(a) the Merger from being treated for financial accounting purposes as a
\n“pooling of interests” in accordance with GAAP and the Regulations and
\ninterpretations of the SEC or (b) the Merger from constituting a
\nreorganization within the meaning of Section 368(a) of the Code.<\/p>\n
Section 5.11 AFFILIATES. Section 5.11 of Acquiror’s Disclosure
\nSchedule contains a true and complete list of all Persons who, as of the date
\nhereof, to the Knowledge of Acquiror, may be deemed to be Affiliates of
\nAcquiror, excluding all its Subsidiaries but including all directors and
\nexecutive officers of Acquiror.<\/p>\n
ARTICLE VI<\/p>\n
COVENANTS RELATING TO THE CONDUCT OF BUSINESS<\/p>\n
Section 6 CONDUCT OF BUSINESS OF THE COMPANY. Except as set forth in
\nSection 6 of the Company’s Disclosure Schedule, during the period from the
\ndate of this Agreement to the Closing Date (unless Acquiror shall otherwise
\nconsent in writing and except as otherwise expressly contemplated or
\npermitted by this Agreement), the Company will, and will cause the
\nSubsidiaries of the Company to, to the extent permitted by this Agreement,
\noperate their <\/p>\n
29<\/p>\n
businesses in good faith with the goal of preserving intact their assets and
\ncurrent business organizations, keeping available the services of their
\ncurrent officers and employees, maintaining their Material Contracts and
\npreserving their relationships with customers, suppliers, creditors, brokers,
\nagents and others having business dealings with them, it being understood
\nthat the failure to so preserve, keep or maintain shall not be a breach of
\nthis Section 6 so long as such businesses are operated in good faith as
\naforesaid. Without limiting the generality of the foregoing, and except as
\notherwise expressly contemplated by this Agreement, or as set forth in
\nSection 6 of the Company’s Disclosure Schedule, or as agreed to in writing by
\nAcquiror, the Company agrees as to itself and its Subsidiaries that:<\/p>\n
(a) ISSUANCE AND REDEMPTION OF SECURITIES. Except as required by
\nthe Option Agreement or the Company Rights Agreement, and, subject to Section
\n7.6(e)(ii), except for grants of stock options in the ordinary course
\nconsistent with past practice pursuant to the Company Option Plans or Company
\nStock Purchase Plan, in each case as in effect on the date hereof, or
\nissuance of Company Common Stock pursuant to the exercise of options granted
\nthereunder or the exercise or conversion of other securities outstanding on
\nthe date hereof, the Company and its Subsidiaries shall not issue, sell or
\ngrant any shares of capital stock of any class,or any securities or rights
\nconvertible into, exchangeable for, or evidencing the right to subscribe for
\nany shares of capital stock, or any rights, warrants, options, calls,
\ncommitments or any other agreements of any character to purchase or acquire
\nany shares of capital stock or any securities or rights convertible into,
\nexchangeable for, or evidencing the right to subscribe for, any shares of
\ncapital stock or any other securities in respect of, in lieu of, or in
\nsubstitution for, shares outstanding on the date hereof. In no event shall
\nthe vesting or exercisability of any Company stock option or shares of
\nrestricted Company Common Stock granted or issued under any Company Plan be
\naccelerated as a result of or in connection with the execution, delivery or
\nperformance of this Agreement, the Option Agreement or the Voting Agreement
\nor the consummation of the transactions contemplated hereby and thereby,
\nexcept to the extent required under the terms of the applicable Company Plan
\nor applicable individual agreement as in effect on the date hereof (or if
\nentered into after the date hereof in compliance with this Section 6(a), such
\nagreement which shall be in the standard form thereof as in effect on the
\ndate hereof).<\/p>\n
(b) DIVIDENDS. The Company shall not, nor shall it permit any of
\nits Subsidiaries to (i) split, combine, subdivide or reclassify any shares of
\nits capital stock or (ii) declare, set aside for payment or pay any dividend,
\nor make any other distribution in respect of, any of its capital stock, or
\nredeem or repurchase any of its capital stock or any outstanding options,
\nwarrants or rights of any kind to acquire any shares of, or any outstanding
\nsecurities that are convertible into or exchangeable for any shares of,
\ncapital stock of the Company or any of the Company’s Subsidiaries, except for
\n(A) the distribution of the Rights pursuant to the Company Rights Agreement,
\n(B) dividends by a wholly owned Subsidiary of the Company to the Company or
\nanother wholly owned Subsidiary of the Company and (C) repurchases of
\nunvested shares in connection with the termination of a relationship with any
\nemployee, <\/p>\n
30<\/p>\n
consultant or director pursuant to stock option or purchase agreements in
\neffect on the date hereof or approved by Acquiror.<\/p>\n
(c) RESTRUCTURING. The Company and its Subsidiaries shall not
\nadopt a plan of complete or partial liquidation, dissolution, merger,
\nconsolidation, restructuring, recapitalization or other reorganization of the
\nCompany or any Subsidiary.<\/p>\n
(d) GOVERNING DOCUMENTS. Except as required by the Company Rights
\nAgreement, the Company and its Subsidiaries shall not adopt any amendments to
\ntheir articles or certificates of incorporation, as the case may be, or their
\nbylaws or other equivalent organizational documents, or alter through merger,
\nliquidation, reorganization, restructuring or in any other fashion the
\ncorporate structure or ownership of the Company or any such Subsidiary.<\/p>\n
(e) INDEBTEDNESS. The Company and its Subsidiaries shall not
\nincur any indebtedness for money borrowed other than in the ordinary course
\nof business or guarantee any such indebtedness of another Person (other than
\nthe Company or any other Subsidiary of the Company), enter into any “keep
\nwell” or other agreement to maintain any financial condition of another
\nPerson (other than the Company or any Subsidiary of the Company) or enter
\ninto any arrangement having the economic effect of any of the foregoing in
\neach case, other than (i) in connection with the financing of ordinary course
\ntrade payables in the ordinary course of business, (ii) pursuant to existing
\ncredit facilities in the ordinary course of business or (iii) the guarantee
\nby the Company of any indebtedness of any Subsidiary of the Company.<\/p>\n
(f) NO ACQUISITIONS. The Company and its Subsidiaries shall not
\nacquire or agree to acquire (i) by merging or consolidating with, or by
\npurchasing a substantial portion of the assets of, or by any other manner,
\nany business or any corporation, limited liability company, partnership,
\njoint venture, association or other business organization or division thereof
\nor (ii) any assets that, individually or in the aggregate, are material to
\nthe Company and its Subsidiaries except (without limitation of paragraph (h)
\nbelow but subject to paragraph (i) below), in the ordinary course of business
\nconsistent with past practice.<\/p>\n
(g) NO DISPOSITIONS. Except in the ordinary course of business,
\nthe Company and its Subsidiaries shall not sell, lease, license or otherwise
\nencumber or subject to any Lien or otherwise dispose of any of the properties
\nor assets of the Company or any of its Subsidiaries that, individually or in
\nthe aggregate, are material, in nature or amount, to any Business Segment.<\/p>\n
(h) CAPITAL EXPENDITURES. The Company and its Subsidiaries shall
\nnot make or agree to make any capital expenditures relating to a single
\nproject in excess of $5 million or in the aggregate in excess of $25 million.<\/p>\n
31<\/p>\n
(i) CONTRACTS. Except in the ordinary course of business, the
\nCompany and its Subsidiaries shall not (A) enter into any Material Contract,
\nor (B) modify, amend or transfer in any material respect or terminate any
\nMaterial Contract (other than the Company Rights Agreement) to which the
\nCompany or any of its Subsidiaries is a party or waive, release or assign any
\nmaterial rights or claims thereunder. Without limitation of the previous
\nsentence, without the consent of Acquiror not to be unreasonably withheld or
\ndelayed (notwithstanding the last sentence of the first paragraph of this
\nSection 6), the Company and its Subsidiaries will not enter into any
\nNetcenter agreement or commitment (including any extension, amendment,
\nrenewal or modification to any existing agreement) (i) having a term of more
\nthan one year from the date hereof (including if the other party or parties
\nthereto have the unilateral right to extend such term beyond one year from
\nthe date hereof) and (A) providing any of the following restrictions on the
\nCompany: exclusivity across Netcenter or any channels within Netcenter, “most
\nfavored nations” or rights of first refusal or first offer or (B) providing
\ninventory commitments on Netcenter with respect to twelve and one-half
\npercent (12.5%) or more of the saleable inventory on either the Netcenter
\nhome page or NetSearch page during the term of the applicable agreement, or
\n(ii) providing for or allowing the termination thereof upon the Merger, or
\nupon a “change in control” of Acquiror or the sale or spin-off of the Company
\nor portions of its business after the Effective Time.<\/p>\n
(j) EMPLOYEE MATTERS. Except as required by Law or in the
\nordinary course of business, or in accordance with this Agreement, the
\nCompany and its Subsidiaries shall not (i) increase the compensation or
\nfringe benefits of any of their respective employees, (ii) enter into any
\ncontract with any of their respective employees, officers or directors
\nregarding his or her employment, compensation or benefits, or (iii) adopt any
\nplan, arrangement or policy which would become a Company Plan or amend any
\nCompany Plan to the extent such adoption or amendment would create or
\nincrease any liability or obligation on the part of the Company or its
\nSubsidiaries.<\/p>\n
(k) ACCOUNTING POLICIES AND PROCEDURES. The Company and its
\nSubsidiaries shall not make any change to their accounting methods,
\nprinciples or practices, except as may be required by GAAP, Regulation S-X
\npromulgated by the SEC or applicable statutory accounting principles.<\/p>\n
(l) LIENS. The Company shall not, and shall not permit any of its
\nSubsidiaries to, create, incur or assume any material Lien on any of their
\nmaterial assets.<\/p>\n
(m) CLAIMS. The Company and its Subsidiaries shall not settle any
\nmaterial Litigation or waive, assign or release any material rights or claims
\nexcept in either case (i) in the ordinary course of business and (ii) for any
\nsuch settlement which (A) would not impose either material restrictions on
\nthe conduct of the business of the Company or any of its Subsidiaries or (B)
\nfor Litigation items settled for money, involve in the aggregate in excess of
\n$10,000,000 in cost to the Company or any of its Subsidiaries. The Company
\nand its Subsidiaries shall not pay, discharge or satisfy any liabilities or
\nobligations (absolute, accrued, <\/p>\n
32<\/p>\n
asserted or unasserted, contingent or otherwise), except in the ordinary
\ncourse of business or in accordance with their terms.<\/p>\n
(n) INTEREST RATE AND FOREIGN EXCHANGE. Except in the ordinary
\ncourse of business, the Company and its Subsidiaries shall not materially
\nrestructure or materially change its gap position, through purchases, sales,
\nhedges, swaps, caps or collars or otherwise or the manner in which any
\ncurrent hedges are classified or reported.<\/p>\n
(o) TAXES. The Company and its Subsidiaries shall not make any
\nTax election or settle or compromise any material Tax liability, except in
\nrespect of ongoing matters or in the ordinary course of business.<\/p>\n
(p) NO AGREEMENTS. The Company and its Subsidiaries shall not
\nauthorize, recommend, propose or announce an intention to do any of the
\nforegoing, or agree or enter into any contract to do any of the foregoing.<\/p>\n
(q) INSURANCE. The Company shall, and shall cause its
\nSubsidiaries to, use commercially reasonable efforts to maintain in full
\nforce and effect all self-insurance or insurance, as the case may be,
\ncurrently in effect.<\/p>\n
(r) Y2K COMPLIANCE PLAN. The Company shall, and shall cause its
\nSubsidiaries to, use commercially reasonable efforts to carry forward in all
\nmaterial respects the Y2K Review and Assessment Report and Recommendations
\ndated November 13, 1998, previously made available by the Company to Acquiror.<\/p>\n
ARTICLE VII<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
Section 7.1 NO SOLICITATION. From the date hereof until the Effective
\nTime or, if earlier, the termination of this Agreement pursuant to Article IX,
\nthe Company shall not (whether directly or indirectly through advisors, agents
\nor other intermediaries), and the Company shall cause its respective officers,
\ndirectors, advisors, representatives or other agents of the Company not to, (a)
\nsolicit, initiate or knowingly encourage any Acquisition Proposal (as defined
\nherein) or (b) engage in discussions or negotiations with, or disclose any
\nnon-public information relating to the Company or its Subsidiaries or afford
\naccess to the properties, books or records of the Company or its Subsidiaries
\nto, any Person that has made an Acquisition Proposal or has advised the Company
\nthat it is interested in making an Acquisition Proposal; PROVIDED that, if and
\nonly if (i) the Company’s Board of Directors believes in good faith, based on
\nsuch matters as it deems relevant, including the advice of the Company’s
\nfinancial advisor, that such Acquisition Proposal is a Financially Superior
\nProposal (as defined herein) and (ii) the Company’s Board of Directors
\ndetermines in good faith, based on such matters as it deems relevant, including
\nconsultation with the Company’s outside legal counsel, that the failure to<\/p>\n
33<\/p>\n
engage in such negotiations or discussions or provide such information is a
\nbreach of the fiduciary duties of the Board of Directors of the Company under
\napplicable Law, then the Company may engage in any act otherwise proscribed
\nby clause (b) above. The Company shall as promptly as practicable provide
\nAcquiror with a copy of any written Acquisition Proposal received and a
\nwritten statement with respect to any nonwritten Acquisition Proposal
\nreceived, which statement shall include the identity of the Person making the
\nAcquisition Proposal and the material terms thereof. The Company shall
\ninform Acquiror as promptly as practicable of any change in the price,
\nstructure, form of consideration or material terms and conditions regarding
\nthe Acquisition Proposal. For purposes of this Agreement, “Acquisition
\nProposal” means any offer or proposal for a merger, consolidation,
\nrecapitalization, liquidation or other business combination involving the
\nCompany or any of its Material Subsidiaries (as defined herein) or the
\nacquisition or purchase of 20% or more of any class of equity securities of
\nthe Company or any of its Material Subsidiaries, or any tender offer or
\nexchange offer, that, if consummated, would result in any Person (other than
\nAcquiror and its affiliates) beneficially owning 20% or more of any class of
\nequity securities of the Company or any of its Material Subsidiaries, or the
\nacquisition, license or purchase of a substantial portion of the technology,
\nbusiness or assets of the Company and its Subsidiaries, other than the
\ntransactions contemplated by this Agreement and other than in the ordinary
\ncourse of business. As used herein, a “Financially Superior Proposal” shall
\nmean an Acquisition Proposal which in the reasonable judgment of the
\nCompany’s Board of Directors, based on such matters as it deems relevant,
\nincluding the advice of the Company’s financial advisor, (i) will result in a
\ntransaction providing aggregate value greater than that provided pursuant to
\nthis Agreement and (ii) is reasonably capable of being financed by the Person
\nmaking such Acquisition Proposal. As used herein, “Material Subsidiary”
\nmeans any Subsidiary of the Company whose consolidated revenues, net income
\nor assets constitute 20% or more of the revenues, net income or assets of the
\nCompany and its Subsidiaries, taken as a whole. Nothing in this Agreement,
\nincluding Section 6(g), shall prohibit the Company or the Company’s Board of
\nDirectors from taking and disclosing to the Company’s stockholders a position
\nwith respect to a tender or exchange offer by a third party pursuant to Rules
\n14d-9 and 14e-2(a) promulgated under the Exchange Act or from making any
\ndisclosure required by an applicable Law.<\/p>\n
Section 7.2 ACCESS AND INFORMATION. Each of the parties will, and
\nwill cause its Subsidiaries to, (i) afford to the other party and its
\nofficers, directors, employees, accountants, consultants, legal counsel,
\nagents and other representatives (collectively, the “Representatives”) full
\naccess at reasonable times upon reasonable prior notice to the officers,
\nemployees, agents, properties, offices and other facilities of such party and
\nits Subsidiaries and to their books and records, (ii) furnish promptly to the
\nother party and its Representatives such information concerning the business,
\nproperties, contracts, records and personnel of such party and its
\nSubsidiaries (including financial, operating and other data and information)
\nas may be reasonably requested, from time to time, by or on behalf of the
\nother party. No investigation by any party hereto shall affect any
\nrepresentation or warranty in this Agreement of any party hereto or any
\ncondition to the obligations of the parties hereto. All information obtained
\nby <\/p>\n
34<\/p>\n
Acquiror or the Company pursuant to this Section 7.2 shall be kept
\nconfidential in accordance with the Confidentiality Agreement.<\/p>\n
Section 7.3 MEETING OF STOCKHOLDERS. The Company, acting through its
\nBoard of Directors, shall, in accordance with the DGCL and its certificate of
\nincorporation and bylaws, promptly and duly call, give notice of, convene and
\nhold as soon as practicable following the date upon which the Registration
\nStatement becomes effective, the Company Stockholders’ Meeting, and the
\nCompany shall consult with Acquiror in connection therewith. Unless the Board
\nof Directors determines, based on such matters as it deems relevant,
\nincluding consultation with the Company’s outside legal counsel, that to do
\nso is a breach of the fiduciary duties of the Board of Directors of the
\nCompany under applicable Law, the Board of Directors of the Company shall
\ndeclare that this Agreement is advisable and recommend that the Agreement and
\nthe transactions contemplated hereby be approved and adopted by the
\nstockholders of the Company and include in the Registration Statement and
\nProxy Statement a copy of such recommendations; PROVIDED, HOWEVER, that, the
\nBoard of Directors of the Company shall submit this Agreement to the
\nCompany’s stockholders, whether or not the Board of Directors of the Company
\nat any time subsequent to the date hereof determines that this Agreement is
\nno longer advisable or recommends that the stockholders of the Company reject
\nit. Unless the Board of Directors of the Company has withdrawn its
\nrecommendation of this Agreement in compliance herewith, the Company shall
\nuse reasonable efforts to solicit from stockholders of the Company proxies in
\nfavor of the approval and adoption of this Agreement and the Merger and to
\nsecure the vote or consent of stockholders required by the DGCL and its
\ncertificate of incorporation and bylaws to approve and adopt this Agreement
\nand the Merger.<\/p>\n
Section 7.4 REGISTRATION STATEMENT; PROXY STATEMENT.<\/p>\n
(a) As promptly as practicable following the date of this
\nAgreement, the Company shall prepare and file with the SEC a preliminary
\nproxy or information statement relating to the Merger and this Agreement and
\nobtain and furnish the information required to be included by the SEC in the
\nProxy Statement and, after consultation with Acquiror, respond promptly to
\nany comments made by the SEC with respect to the Proxy Statement to be mailed
\nto its stockholders at the earliest practicable date after the Registration
\nStatement is declared effective by the SEC, PROVIDED that no amendment or
\nsupplement to the Proxy Statement will be made by the Company without
\nconsultation with Acquiror and its counsel.<\/p>\n
(b) Acquiror shall prepare and file with the SEC the Registration
\nStatement, in which the Proxy Statement shall be included as a prospectus,
\nand shall use reasonable efforts to have the Registration Statement declared
\neffective by the SEC as promptly as practicable. Acquiror shall obtain and
\nfurnish the information required to be included in the Registration Statement
\nand, after consultation with the Company, respond promptly to any comments
\nmade by the SEC with respect to the Registration Statement and cause the
\nprospectus included therein, including any amendment or supplement thereto,
\nto be mailed to the Company’s stockholders at the earliest practicable date
\nafter the Registration Statement is declared effective <\/p>\n
35<\/p>\n
by the SEC, provided that no amendment or supplement to the Registration
\nStatement will be made by Acquiror without consultation with the Company and
\nits counsel. Acquiror shall also take any action required to be taken under
\nstate blue sky or other securities Laws in connection with the issuance of
\nAcquiror Common Stock in the Merger.<\/p>\n
Section 7.5 APPROPRIATE ACTION; CONSENTS; FILINGS.<\/p>\n
(a) The Company and Acquiror will each use reasonable efforts (i)
\nto take, or to cause to be taken, all appropriate action, and to do, or to
\ncause to be done, all things necessary, proper or advisable under applicable
\nLaw or otherwise to consummate and make effective the transactions
\ncontemplated by this Agreement, unless the Board of the Directors of the
\nCompany has withdrawn its recommendation of this Agreement in compliance
\nherewith, (ii) to obtain from any Governmental Authorities any Permits or
\nOrders required to be obtained by Acquiror or the Company or any of their
\nSubsidiaries in connection with the authorization, execution, delivery and
\nperformance of this Agreement and the consummation of the transactions
\ncontemplated hereby, including the Merger, (iii) to make all necessary
\nfilings, and thereafter make any other required submissions, with respect to
\nthis Agreement and the Merger required under (A) the Securities Act and the
\nExchange Act, and any other applicable federal or state securities Laws, (B)
\nthe HSR Act (C) Foreign Competition Laws and (D) any other applicable Law;
\nPROVIDED that Acquiror and the Company will cooperate with each other in
\nconnection with the making of all such filings, including providing copies of
\nall such documents to the nonfiling party and its advisors prior to filings
\nand, if requested, will accept all reasonable additions, deletions or changes
\nsuggested in connection therewith and (iv) to furnish all information
\nrequired for any application or other filing to be made pursuant to any
\napplicable Law or any applicable Regulations of any Governmental Authority
\n(including all information required to be included in the Proxy Statement or
\nthe Registration Statement) in connection with the transactions contemplated
\nby this Agreement PROVIDED, HOWEVER, that neither Acquiror nor any of its
\nAffiliates shall be under any obligation to make proposals, execute or carry
\nout agreements or submit to Orders providing for the sale or other
\ndisposition or holding separate (through the establishment of a trust or
\notherwise) of any material (in nature or amount) assets or categories of
\nmaterial (in nature or amount) assets of Acquiror, any of its Affiliates or
\nthe Company or the holding separate of the shares of Company Common Stock or
\nimposing or seeking to impose any material limitation on the ability of
\nAcquiror or any of its Subsidiaries or Affiliates to conduct their business
\nor own such assets or to acquire, hold or exercise full rights of ownership
\nof the shares of Company Common Stock.<\/p>\n
(b) Each of the Company and Acquiror will give prompt notice to
\nthe other of (i) any notice or other communication from any Person alleging
\nthat the consent of such Person is or may be required in connection with the
\nMerger, (ii) any notice or other communication from any Governmental
\nAuthority in connection with the Merger, (iii) any Litigation, relating to or
\ninvolving or otherwise affecting the Company, Acquiror or their Subsidiaries
\nthat relates to the consummation of the Merger; and (iv) any change that is
\nreasonably likely to have a Material Adverse Effect on the Company or
\nAcquiror.<\/p>\n
36<\/p>\n
(c) Each of the Company and Acquiror will give (or will cause
\ntheir respective Subsidiaries to give) any notices to third Persons, and use,
\nand cause their respective Subsidiaries to use, reasonable efforts to obtain
\nany consents from third Persons necessary, proper or advisable (as determined
\nin good faith by Acquiror with respect to such notices or consents to be
\ndelivered or obtained by the Company) to consummate the transactions
\ncontemplated by this Agreement.<\/p>\n
(d) To the extent requested by Acquiror, the Company shall
\ncooperate with Acquiror to identify any “Encumbrances” that may adversely
\naffect the Company’s or its Subsidiaries’ right to sublicense any
\nIntellectual Property rights owned or licensed by the Company (including the
\nright to further sublicense such rights) in the Company’s or its
\nSubsidiaries’ client or server software (including without limitation
\ndevelopment tools, tests and other development components) which will exist
\nas of the Closing Date, and any maintenance upgrades and new releases of such
\nsoftware, if any, which will be already in progress at the Company as of the
\nClosing Date, and\/or any components of the foregoing (collectively, the
\n“Software Products”). Such cooperation shall include, upon Acquiror’s
\nwritten request, granting Acquiror full access, subject to existing or other
\nreasonable confidentiality restrictions, to the Company’s technology
\nlicenses, acquisition agreements and Intellectual Property claims relating to
\nthe Software Products. “Encumbrance” means any restriction or limit that
\nwould prevent or materially limit or restrict the Company’s ability to
\nsublicense any Intellectual Property right owned or licensed by the Company
\n(including the right to further sublicense such rights) with respect to the
\nSoftware Products, including, without limitation, limitations on source code
\naccess and sublicensing rights, as well as prohibitions or required consents
\nto assignment of rights from the Company to the Acquiror upon the Closing
\nDate, which rights, if not available, would constitute an Encumbrance. The
\nCompany shall use reasonable efforts in consultation with Acquiror to remove,
\nlimit or diminish such Encumbrances in a reasonable priority order designated
\nby Acquiror, with the goal of removing or minimizing as soon as practicable
\nall such Encumbrances and having no ongoing financial obligations in
\nconnection therewith.<\/p>\n
Section 7.6 AFFILIATES; POOLING; TAX TREATMENT.<\/p>\n
(a) The Company will use reasonable efforts to obtain an executed
\nletter agreement substantially in the form of ANNEX C hereto from (i) each
\nPerson identified in Section 4.22 of the Company’s Disclosure Schedule within
\n15 days following the execution and delivery of this Agreement and (ii) from
\nany Person who, to the Company’s Knowledge, may be deemed to have become an
\nAffiliate of the Company after the date of this Agreement and prior to the
\nEffective Time as soon as practicable after attaining such status.<\/p>\n
(b) Acquiror will use reasonable efforts to obtain an executed
\nletter agreement substantially in the form of ANNEX D hereto from (i) each
\nPerson identified in Section 5.11 of Acquiror’s Disclosure Schedule within 15
\ndays following the execution and delivery of this Agreement and (ii) from any
\nPerson who, to Acquiror’s Knowledge, may be <\/p>\n
37<\/p>\n
deemed to have become an Affiliate of Acquiror after the date of this
\nAgreement and prior to the Effective Time as soon as practicable after
\nattaining such status.<\/p>\n
(c) Acquiror Companies will not be required to maintain the
\neffectiveness of the Registration Statement for the purpose of resale by
\nstockholders of the Company who may be Affiliates of the Company pursuant to
\nRule 145 under the Securities Act.<\/p>\n
(d) Acquiror and the Company will each use reasonable efforts
\nbefore and after the Closing to cause the Merger to qualify as a
\nreorganization within the meaning of Section 368(a) of the Code, and will not
\ntake, and will use reasonable efforts to prevent any Affiliate of such party
\nfrom taking, any actions which could prevent the Merger from qualifying as
\nsuch a reorganization, and will take such action as is available and may be
\nreasonably required to negate the impact of any past actions by such party or
\nits respective Affiliates which would reasonably be expected to adversely
\nimpact the qualification of the Merger as a reorganization within the meaning
\nof Section 368(a) of the Code. Acquiror and the Company will each use
\nreasonable efforts to obtain executed representation letters described in
\nSections 8.2(d) and 8.3(c), respectively, substantially in the respective
\nforms attached hereto as Annexes E and F.<\/p>\n
(e) (i) Acquiror will not knowingly take, or knowingly permit
\nany controlled Affiliate of Acquiror to take, any actions which could prevent
\nthe Merger from being treated for financial accounting purposes as a “pooling
\nof interests” under GAAP, it being understood and agreed that if Ernst & Young LLP, Acquiror’s independent accountants, advises Acquiror that an
\naction would not prevent the Merger from being so treated, such action will
\nbe conclusively deemed not to constitute a breach of this Section 7.6 (e)(i).<\/p>\n
(ii) The Company will not knowingly take, or knowingly
\npermit any controlled Affiliate of the Company to take, any actions which
\ncould prevent the Merger from being treated for financial accounting purposes
\nas a “pooling of interests” under GAAP, it being understood and agreed that
\nif Ernst & Young LLP, the Company’s independent accountants, advises the
\nCompany that an action would not prevent the Merger from being so treated,
\nsuch action will be conclusively deemed not to constitute a breach of this
\nSection 7.6 (e)(ii).<\/p>\n
Section 7.7 PUBLIC ANNOUNCEMENTS. The parties will consult with each
\nother and will mutually agree upon any press release or public announcement
\npertaining to the Merger and shall not issue any such press release or make
\nany such public announcement prior to such consultation and agreement, except
\nas may be required by applicable Law or by obligations pursuant to any
\nlisting agreement with any national securities exchange or national automated
\nquotation system, in which case the party proposing to issue such press
\nrelease or make such public announcement shall use reasonable efforts to
\nconsult in good faith with the other party before issuing any such press
\nrelease or making any such public announcement. Notwithstanding the
\nforegoing, in the event the Company’s Board of Directors withdraws its
\nrecommendation of this Agreement in compliance herewith, the Company will no
\nlonger be <\/p>\n
38<\/p>\n
required to consult with or obtain the agreement of Acquiror or Newco in
\nconnection with any press release or public announcement.<\/p>\n
Section 7.8 STOCK EXCHANGE LISTING. Acquiror will use reasonable
\nefforts to cause the shares of Acquiror Common Stock to be issued in the
\nMerger to be approved for listing (subject to official notice of issuance) on
\nthe New York Stock Exchange prior to the Effective Time.<\/p>\n
Section 7.9 EMPLOYEE BENEFIT PLANS.<\/p>\n
(a) Acquiror agrees that individuals who are employed by the
\nCompany or any Subsidiary of the Company immediately prior to the Effective
\nTime shall become employees of the Surviving Corporation or one of its
\nSubsidiaries following the Effective Time (each such employee, an “Affected
\nEmployee”); PROVIDED, HOWEVER, that this Section 7.9(a) shall not be
\nconstrued to limit the ability of the applicable employer to terminate the
\nemployment of any Affected Employee at any time.<\/p>\n
(b) Acquiror will, or will cause the Surviving Corporation to,
\ngive Affected Employees full credit for purposes of eligibility (including
\nservice and waiting period requirements), vesting, benefit accrual and
\ndetermination of the level of benefits under any employee benefit plans or
\narrangements maintained by the Acquiror, the Surviving Corporation or any
\nSubsidiary of the Acquiror for such Affected Employees’ service with the
\nCompany or any Subsidiary of the Company to the same extent recognized by the
\nCompany or any Subsidiary of the Company immediately prior to the Effective
\nTime.<\/p>\n
(c) Acquiror will, or will cause the Surviving Corporation to, (i)
\nwaive all limitations as to preexisting conditions, exclusions and waiting
\nperiods and service requirements with respect to participation and coverage
\nrequirements applicable to the Affected Employees under any welfare benefit
\nplans that such employees may be eligible to participate in after the
\nEffective Time, other than limitations, waiting periods or service
\nrequirements that are already in effect with respect to such employees and
\nthat have not been satisfied as of the Effective Time under any welfare plan
\nmaintained for the Affected Employees immediately prior to the Effective
\nTime, and (ii) provide each Affected Employee with credit for any co-payments
\nand deductibles paid prior to the Effective Time (as shown on the Company’s
\nrecords) in satisfying any applicable deductible or out-of-pocket
\nrequirements under any welfare plans that such employees are eligible to
\nparticipate in after the Effective Time.<\/p>\n
(d) For a period of six months immediately following the Effective
\nTime, the coverage and benefits provided to Affected Employees pursuant to
\nemployee benefit plans or arrangements maintained by Acquiror, the Company or
\nany Subsidiary of the Company, or any Subsidiary of the Acquiror shall be, in
\nthe aggregate, not less favorable than those provided to such employees
\nimmediately prior to the Effective Time.<\/p>\n
39<\/p>\n
Section 7.10 INDEMNIFICATION OF DIRECTORS AND OFFICERS; DIRECTORS & OFFICERS INSURANCE.<\/p>\n
(a) From and after the Effective Time, Acquiror will fulfill and
\nhonor and will cause the Surviving Corporation to fulfill and honor in all
\nrespects the obligations of the Company pursuant to any indemnification
\nagreements between the Company and its directors and officers as of or prior
\nto the date hereof (or indemnification agreements in the Company’s customary
\nform for directors joining the Company’s Board of Directors prior to the
\nEffective Time) and any indemnification provisions under the Company’s
\ncertificate of incorporation or bylaws as in effect immediately prior to the
\nEffective Time.<\/p>\n
(b) For a period of six years after the Effective Time, Acquiror
\nwill maintain or cause the Surviving Corporation to maintain in effect, if
\navailable, directors’ and officers’ liability insurance covering those
\nPersons who, as of immediately prior to the Effective Time, are covered by
\nthe Company’s directors’ and officers’ liability insurance policy (the
\n“Insured Parties”) on terms no less favorable to the Insured Parties than
\nthose of the Company’s present directors’ and officers’ liability insurance
\npolicy; PROVIDED, HOWEVER, that in no event will Acquiror or the Surviving
\nCorporation be required to expend in excess of 150% of the annual premium
\ncurrently paid by the Company for such coverage (or such coverage as is
\navailable for 150% of such annual premium).<\/p>\n
(c) The provisions of this Section 7.10 are intended to be for the
\nbenefit of, and will be enforceable by, each Person entitled to
\nindemnification hereunder and the heirs and representatives of such Person.
\nAcquiror will not permit the Surviving Corporation to merge or consolidate
\nwith any other Person unless the Surviving Corporation will ensure that the
\nsurviving or resulting entity assumes the obligations imposed by this Section
\n7.10.<\/p>\n
Section 7.11 EVENT NOTICES. From and after the date of this Agreement
\nuntil the Effective Time, each party hereto will promptly notify the other
\nparty hereto of (i) the occurrence or nonoccurrence of any event the
\noccurrence or nonoccurrence of which would be likely to cause any condition
\nto the obligations of such party to effect the Merger and the other
\ntransactions contemplated by this Agreement not to be satisfied and (ii) the
\nfailure of such party to comply with any covenant or agreement to be complied
\nwith by it pursuant to this Agreement which would be likely to result in any
\ncondition to the obligations of such party to effect the Merger and the other
\ntransactions contemplated by this Agreement not to be satisfied. No delivery
\nof any notice pursuant to this Section 7.11 will cure any breach of any
\nrepresentation or warranty of such party contained in this Agreement or
\notherwise limit or affect the remedies available hereunder to the party
\nreceiving such notice.<\/p>\n
40<\/p>\n
Section 7.12 ASSUMPTION OF OBLIGATIONS TO ISSUE STOCK.<\/p>\n
(a) Simultaneously with the Merger, (i) each outstanding option or
\nwarrant to purchase or acquire a share of Company Common Stock under any
\nCompany Option Plan or otherwise shall, in accordance with the terms thereof,
\nbe converted into an option or warrant to purchase the number of shares of
\nAcquiror Common Stock equal to the Exchange Ratio times the number of shares
\nof Company Common Stock which could have been obtained prior to the Effective
\nTime upon the exercise of each such option or warrant (rounded down to the
\nnearest whole share), at an exercise price per share equal to the exercise
\nprice for each such share of Company Common Stock (rounded up to the nearest
\nwhole cent) subject to such option or warrant divided by the Exchange Ratio,
\nand all references in each such option or warrant to the Company shall be
\ndeemed to refer to Acquiror, where appropriate, and (ii) Acquiror shall
\nassume the obligations of the Company under the Company Option Plans. The
\nother terms of each such option or warrant and any Company Option Plans under
\nwhich they were issued, shall continue to apply in accordance with their
\nterms, including any provisions providing for acceleration.<\/p>\n
(b) Simultaneously with the Merger, each outstanding award
\n(including restricted stock, stock equivalents and stock units) (“Company
\nAward”) under any employee incentive or benefit plans, programs or
\narrangements presently maintained by the Company or any Company Subsidiary
\nwhich provide for grants of equity-based awards shall be amended or converted
\ninto a similar instrument of Acquiror, in each case with such adjustments to
\nthe terms of such Company Awards as are appropriate to preserve the value
\ninherent in such Company Awards with no detrimental effects on the holders
\nthereof. The other terms of each Company Award, and the plans or agreements
\nunder which they were issued, shall continue to apply in accordance with
\ntheir terms, including any provisions providing for acceleration.<\/p>\n
(c) The Company and Acquiror agree that each of their respective
\nemployee incentive or benefit plans, programs and arrangements shall be
\namended, to the extent necessary and appropriate, to reflect the transactions
\ncontemplated by this Agreement, including, but not limited to the conversion
\nof shares of Company Common Stock held or to be awarded or paid pursuant to
\nsuch benefit plans, programs or arrangements into shares of Acquiror Common
\nStock on a basis consistent with the transactions contemplated by this
\nAgreement.<\/p>\n
(d) Acquiror shall (i) reserve for issuance the number of shares
\nof Acquiror Common Stock that will become subject to the benefit plans,
\nprograms, arrangements and warrants referred to in this Section 7.12 and (ii)
\nissue or cause to be issued the appropriate number of shares of Acquiror
\nCommon Stock pursuant to such plans, programs, arrangements and warrants,
\nupon the exercise or maturation of rights existing thereunder at the
\nEffective Time or thereafter granted or awarded.<\/p>\n
(e) The parties will use their reasonable efforts to mutually
\nagree with respect to the treatment of the Company Stock Purchase Plan in the
\nMerger on terms not <\/p>\n
41<\/p>\n
inconsistent with the Company Stock Purchase Plan or the terms of this
\nAgreement; provided, however, that in no event may Company Common Stock be
\npurchased under the Company Stock Purchase Plan after the Effective Time.<\/p>\n
(f) Acquiror agrees to file a registration statement on Form S-8
\nfor the shares of Acquiror Common Stock issuable with respect to options
\nunder any Company Option Plan at or prior to the Effective Time and shall use
\nits commercially reasonable efforts to maintain the effectiveness of such
\nregistration statement thereafter for as long as any of such options remain
\noutstanding, to the same extent as Acquiror maintains the effectiveness of
\nits existing Form S-8.<\/p>\n
(g) The Company hereby assigns all Repurchase Rights to the Surviving
\nCorporation as of the Effective Time.<\/p>\n
Section 7.13 CONVEYANCE TAXES. Acquiror and the Company shall
\ncooperate in the preparation, execution and filing of all returns,
\nquestionnaires, applications, or other documents regarding (i) any real
\nproperty transfer gains, sales, use, transfer, value-added, stock transfer
\n(subject to Section 3.2(c)), and stamp Taxes (ii) any recording, registration
\nand other fees, and (iii) any similar Taxes or fees that become payable in
\nconnection with the transactions contemplated hereby. The Taxes described in
\nclause (i) above shall be paid by the Company.<\/p>\n
Section 7.14 VOTING AGREEMENT. The Company shall use reasonable
\nefforts, on behalf of Acquiror and pursuant to the request of Acquiror, to
\ncause each Company stockholder named on the signature pages to the Voting
\nAgreement to execute and deliver to Acquiror the Voting Agreement
\nconcurrently with the execution of this Agreement.<\/p>\n
Section 7.15 OPTION AGREEMENT. Concurrently with the execution of
\nthis Agreement, the Company shall deliver to Acquiror an executed Option
\nAgreement in the form of ANNEX B attached hereto. The Company agrees to
\nfully perform to the fullest extent permitted under applicable Law its
\nobligations under the Option Agreement.<\/p>\n
Section 7.16 RIGHTS AGREEMENT. The Company covenants and agrees with
\nAcquiror that the Company shall not take any action which would cause (A) a
\n“Shares Acquisition Date” to occur, or Acquiror or any of its Affiliates,
\nindividually or taken together, to be or be deemed to be an “Acquiring
\nPerson” under the Company Rights Agreement, or (B) the Company Rights
\nAgreement or the Company Rights to apply to Acquiror or any of its
\nAffiliates, individually or taken together, in the case of (A) or (B), solely
\nas a result of this Agreement, the Option Agreement, the Voting Agreement or
\nthe transactions contemplated hereby and thereby. The Company agrees to take
\nall actions as are required to prevent any event described in (A) or (B) from
\noccurring, in any such case solely as a result of this Agreement, the Option
\nAgreement, the Voting Agreement or the transactions contemplated hereby and
\nthereby.<\/p>\n
Section 7.17 REASONABLE EFFORTS AND FURTHER ASSURANCES. Subject to
\nthe terms and conditions hereof, each of the parties to this Agreement shall
\nuse reasonable efforts to effectuate <\/p>\n
42<\/p>\n
the transactions contemplated hereby and to fulfill and cause to be fulfilled
\nthe conditions to Closing under this Agreement. Subject to the terms and
\nconditions hereof, each party hereto, at the reasonable request of another
\nparty hereto, shall execute and deliver such other instruments and do and
\nperform such other acts and things as may be necessary or desirable for
\neffecting completely the consummation of this Agreement and the transactions
\ncontemplated hereby.<\/p>\n
ARTICLE VIII<\/p>\n
CLOSING CONDITIONS<\/p>\n
Section 8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS
\nAGREEMENT. The respective obligations of each party to effect the Merger and
\nthe other transactions contemplated hereby will be subject to the
\nsatisfaction at or prior to the Effective Time of the following conditions,
\nany or all of which may be waived by the party entitled to the benefit
\nthereof, in whole or in part, to the extent permitted by applicable Law:<\/p>\n
(a) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Registration
\nStatement shall have become effective in accordance with the provisions of
\nthe Securities Act; no stop Order suspending the effectiveness of the
\nRegistration Statement shall be in effect; and no proceedings for that
\npurpose shall be pending before or threatened by the SEC.<\/p>\n
(b) STOCKHOLDER APPROVAL. This Agreement and the Merger shall
\nhave been approved and adopted by the requisite vote of the stockholders of
\nthe Company in accordance with the DGCL and the certificate of incorporation
\nand bylaws of the Company.<\/p>\n
(c) NO ORDER. No Court or Governmental Authority having
\njurisdiction over the Company or Acquiror shall have enacted, issued,
\npromulgated, enforced or entered any Law, Regulation or Order (whether
\ntemporary, preliminary or permanent) which is then in effect and which has
\nthe effect of making the Merger illegal or otherwise prohibiting consummation
\nof the Merger substantially on the terms contemplated by this Agreement.<\/p>\n
(d) REGULATORY APPROVALS. All approvals and consents of
\napplicable Courts and\/or Governmental Authorities required to consummate the
\nMerger shall have been received, and all applicable waiting periods under the
\nHSR Act and Foreign Competition Laws shall have expired or been terminated.<\/p>\n
(e) STOCK EXCHANGE LISTING. The shares of Acquiror Common Stock
\nto be issued pursuant to the Merger shall have been approved for listing,
\nsubject to official notice of issuance, on the New York Stock Exchange.<\/p>\n
(f) POOLING OF INTERESTS. Acquiror shall have been advised in
\nwriting by Ernst & Young LLP as of the date upon which the Effective Time is
\nto occur, in a form and in substance reasonably acceptable to Acquiror and
\nthe Company, that the transactions <\/p>\n
43<\/p>\n
contemplated by this Agreement, if consummated, can properly be accounted for
\nas a “pooling of interests” business combination in accordance with GAAP and
\nthe criteria of Accounting Principles Board Opinion No. 16 and the
\nRegulations of the SEC. It is understood and agreed that (i) the obligations
\nof the Company to effect the Merger shall not be subject to the condition set
\nforth in this Section 8.1(f) to the extent that the Company shall have
\nbreached Section 4.21(a) or Section 7.6(e)(ii) hereof, but only if but for
\nsuch breach the condition set forth in this Section 8.1(f) could have been
\nsatisfied (and provided that (A) if such breach is curable the Company shall
\nhave the opportunity, for up to 10 calendar days following satisfaction or
\nwaiver of all other conditions to the Company’s obligations to effect the
\nMerger (and during such period this Section 8.1(f) condition shall remain in
\neffect as a condition to the Company’s obligation to effect the Merger), to
\ncure such breach and thereby continue this condition in effect as a condition
\nto the Company’s obligation to effect the Merger and (B) if such breach is
\nnot curable, or shall not have been cured at the end of such 10-day period,
\nthis Section 8.1(f) condition shall cease to be in effect as a condition to
\nthe Company’s obligation to effect the Merger); and (ii) the obligations of
\nthe Acquiror Companies to effect the Merger hereby shall not be subject to
\nthe condition set forth in this Section 8.1(f) to the extent that either of
\nthe Acquiror Companies shall have breached Section 5.10(a) or Section
\n7.6(e)(i) hereof, but only if but for such breach the condition set forth in
\nthis Section 8.1(f) could have been satisfied (and provided that (A) if such
\nbreach is curable Acquiror shall have the opportunity, for up to 10 calendar
\ndays following satisfaction or waiver of all other conditions to Acquiror’s
\nobligations to effect the Merger (and during such period this Section 8.1(f)
\ncondition shall remain in effect as a condition to Acquiror’s obligation to
\neffect the Merger), to cure such breach and thereby continue this Section
\n8.1(f) condition in effect as a condition to Acquiror’s obligation to effect
\nthe Merger and (B) if such breach is not curable, or shall not have been
\ncured at the end of such 10-day period, this Section 8.1(f) condition shall
\ncease to be in effect as a condition to Acquiror’s obligation to effect the
\nMerger).<\/p>\n
Section 8.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE ACQUIROR
\nCOMPANIES. The obligations of the Acquiror Companies to effect the Merger
\nand the other transactions contemplated hereby shall be subject to the
\nsatisfaction at or prior to the Effective Time of the following additional
\nconditions, any or all of which may be waived by the Acquiror Companies, in
\nwhole or in part, to the extent permitted by applicable Law:<\/p>\n
(a) REPRESENTATIONS AND WARRANTIES.<\/p>\n
(i) Each of the representations and warranties of the
\nCompany contained in this Agreement shall be true and correct as of the date
\nhereof and at and as of the Closing Date as if made at and as of such time,
\nexcept that, to the extent such representations and warranties address
\nmatters only as of a particular date, such representations and warranties
\nshall, to such extent, be true and correct at and as of such particular date
\nas if made at and as of such particular date; PROVIDED that if any of such
\nrepresentations and warranties shall not be true and correct as aforesaid,
\nthen the condition contained in this Section 8.2(a)(i) (but not the condition
\ncontained in Section 8.2(a)(ii)) shall nevertheless be deemed satisfied if
\nthe <\/p>\n
44<\/p>\n
cumulative effect of all inaccuracies of such representations and breaches of
\nsuch warranties shall not be or have a Material Adverse Effect on the
\nCompany. The Acquiror Companies shall have received a certificate of an
\nexecutive officer of the Company, dated the date of the Effective Time, to
\nsuch effect.<\/p>\n
(ii) The representations and warranties of the Company
\ncontained in Section 4.20 shall be true and correct as of the date hereof and
\nat and as of the Closing Date as if made at and as of such time, except that
\nto the extent such representations and warranties address matters only as of
\na particular date, such representations and warranties shall, to such extent,
\nbe true and correct at and as of such particular date as if made at and as of
\nsuch particular date; provided that if any of such representations and
\nwarranties shall not be true and correct as aforesaid, then the condition
\ncontained in this Section 8.2(a)(ii) shall nevertheless be deemed satisfied
\nif the cumulative effect of all inaccuracies of such representations and
\nbreaches of such warranties shall not be or have a Material Adverse Effect on
\nany Business Segment.<\/p>\n
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or
\ncomplied in all material respects with all agreements and covenants required
\nby this Agreement to be performed or complied with by it at or prior to the
\nClosing. The Acquiror Companies shall have received a certificate of an
\nexecutive officer of the Company, dated the Closing Date, to such effect.<\/p>\n
(c) THIRD PARTY CONSENTS. All Change of Control Consents of third
\nparties required in order for a Change of Control Effect not to occur under
\nany contract, note, bond, mortgage, indenture, license, agreement or other
\ninstrument to which the Company or any of its Subsidiaries is a party or by
\nwhich it is bound and which is material to any Business Segment shall have
\nbeen obtained, except where the failure to obtain such Change of Control
\nConsents, either individually or in the aggregate, shall not have or be a
\nMaterial Adverse Effect on the Company.<\/p>\n
(d) TAX OPINION. Acquiror shall have received the opinion of its
\ntax counsel, Skadden, Arps, Slate, Meagher & Flom LLP, dated as of the
\nClosing Date, to the effect that the Merger will qualify as a reorganization
\nwithin the meaning of Section 368(a) of the Code; provided, however, that if
\nsuch firm does not render such opinion, this condition shall nonetheless be
\ndeemed satisfied if such opinion, dated as of the Closing Date, is rendered
\nto Acquiror by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
\ntax counsel to the Company. The issuance of such opinion shall be conditioned
\non the receipt by such tax counsel rendering such opinion of representation
\nletters from each of Acquiror, Newco and the Company, in each case, in form
\nand substance reasonably satisfactory to such tax counsel. The specific
\nprovisions of each such representation letter shall be in form and substance
\nreasonably satisfactory to such tax counsel rendering such opinion, and each
\nsuch representation letter shall be dated on or before the date of such
\nopinion and shall not have been withdrawn or modified in any material respect.<\/p>\n
45<\/p>\n
(e) AFFILIATE AGREEMENTS. Each of the parties identified by the
\nCompany as being an Affiliate of the Company shall have delivered to Acquiror
\nan executed Affiliate Agreement, in the form attached hereto as ANNEX C,
\nwhich shall be in full force and effect.<\/p>\n
(f) RIGHTS PLAN. The provisions of the Company Rights Agreement
\nand the Rights shall not apply to Acquiror or any of its Affiliates,
\nindividually or taken together, as a result of this Agreement, the Option
\nAgreement, the Voting Agreement or the transactions contemplated hereby or
\nthereby, or to the Merger, and all Company Rights issued thereunder shall,
\nimmediately prior to the Effective Time, be canceled, void and of no further
\nforce or effect.<\/p>\n
Section 8.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
\nobligations of the Company to effect the Merger and the other transactions
\ncontemplated hereby shall be subject to the satisfaction at or prior to the
\nEffective Time of the following additional conditions, any or all of which
\nmay be waived by the Company, in whole or in part, to the extent permitted by
\napplicable Law:<\/p>\n
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
\nand warranties of the Acquiror Companies contained in this Agreement shall be
\ntrue and correct as of the date hereof and at and as of the Closing Date as
\nif made at and as of such time, except that to the extent such
\nrepresentations and warranties address matters only as of a particular date,
\nsuch representations and warranties shall, to such extent, be true and
\ncorrect as of the date hereof and at and as of such particular date as if
\nmade at and as of such particular date; PROVIDED that if any of such
\nrepresentations and warranties shall not be true and correct as aforesaid,
\nthen this condition shall nevertheless be deemed satisfied if the cumulative
\neffect of all inaccuracies of such representations and breaches of such
\nwarranties shall not be or have a Material Adverse Effect on Acquiror. The
\nCompany shall have received a certificate of an executive officer of each of
\nthe Acquiror Companies, dated the date of the Effective Time, to such effect.<\/p>\n
(b) AGREEMENTS AND COVENANTS. The Acquiror Companies shall have
\nperformed or complied in all material respects with all agreements and
\ncovenants required by this Agreement to be performed or complied with by them
\nat or prior to the Closing. The Company shall have received a certificate of
\nan executive officer of each of the Acquiror Companies, dated the Closing
\nDate, to such effect.<\/p>\n
(c) TAX OPINION. The Company shall have received the opinion of
\nits tax counsel, Wilson Sonsini Goodrich & Rosati, Professional Corporation,
\ndated as of the Closing Date, to the effect that the Merger will qualify as a
\nreorganization within the meaning of Section 368(a) of the Code; provided,
\nhowever, that if such firm does not render such opinion, this condition shall
\nnonetheless be deemed satisfied if such opinion, dated as of the Closing
\nDate, is rendered to the Company by Skadden, Arps, Slate, Meagher & Flom LLP,
\ntax counsel to Acquiror. The issuance of such opinion shall be conditioned
\non the receipt by such tax <\/p>\n
46<\/p>\n
counsel rendering such opinion of representation letters from each of
\nAcquiror, Newco and the Company, in each case, in form and substance
\nreasonably satisfactory to such tax counsel. The specific provisions of each
\nsuch representation letter shall be in form and substance reasonably
\nsatisfactory to such tax counsel rendering such opinion, and each such
\nrepresentation letter shall be dated on or before the date of such opinion
\nand shall not have been withdrawn or modified in any material respect.<\/p>\n
ARTICLE IX<\/p>\n
TERMINATION, AMENDMENT AND EXPENSES<\/p>\n
Section 9.1 TERMINATION. This Agreement may be terminated at any time
\nprior to the Effective Time, whether before or after approval of this
\nAgreement and the Merger by the stockholders of the Company:<\/p>\n
(a) by mutual consent of Acquiror and the Company;<\/p>\n
(b) by Acquiror, upon a material breach of any covenant or
\nagreement on the part of the Company set forth in this Agreement, or if any
\nrepresentation or warranty of the Company hereunder shall be or become untrue
\nor inaccurate, in any case such that the conditions set forth in Section
\n8.2(a) or Section 8.2(b) would not be satisfied (a “Terminating Company
\nBreach”); PROVIDED that, if such Terminating Company Breach is curable by the
\nCompany through the exercise of its reasonable efforts, and the Company
\ncontinues to exercise such reasonable efforts, Acquiror may not terminate
\nthis Agreement under this Section 9.1(b) if such Terminating Company Breach
\nhas been cured prior to June 30, 1999;<\/p>\n
(c) by the Company, upon material breach of any covenant or
\nagreement on the part of the Acquiror Companies set forth in this Agreement,
\nor if any representation or warranty of the Acquiror Companies shall be or
\nbecome untrue or inaccurate, in any case such that the conditions set forth
\nin Section 8.3(a) or Section 8.3(b) would not be satisfied (a “Terminating
\nAcquiror Breach”); PROVIDED that, if such Terminating Acquiror Breach is
\ncurable by the Acquiror Companies through the exercise of their reasonable
\nefforts, and the Acquiror Companies continue to exercise such reasonable
\nefforts, the Company may not terminate this Agreement under this Section
\n9.1(c) if such Terminating Acquiror Breach has been cured prior to June 30,
\n1999;<\/p>\n
(d) by either Acquiror or the Company, if there shall be any Order
\nof a Court or Governmental Authority having jurisdiction over a party hereto
\nwhich is final and nonappealable permanently enjoining, restraining or
\nprohibiting the consummation of the Merger, unless the party relying on such
\nOrder has not complied with its obligations under Section 7.5;<\/p>\n
47<\/p>\n
(e) by either Acquiror or the Company, if the Merger shall not
\nhave been consummated before June 30, 1999 (the “Termination Date”);
\nPROVIDED, HOWEVER, that the right to terminate this Agreement under this
\nSection 9.1(e) shall not be available to any party whose failure to fulfill
\nany obligation under this Agreement has been a cause of, or resulted in, the
\nfailure of the Effective Time to occur on or before the Termination Date;<\/p>\n
(f) by either Acquiror or the Company, if this Agreement shall
\nfail to receive the requisite vote for approval and adoption by the
\nstockholders of the Company at the Company Stockholders’ Meeting;<\/p>\n
(g) by Acquiror (i) if the Board of Directors of the Company fails
\nto recommend approval and adoption of this Agreement and the Merger by the
\nstockholders of the Company or withdraws or modifies (or publicly announces
\nan intention to withdraw or modify) in any adverse manner its approval or
\nrecommendation of this Agreement or the Merger; (ii) if the Board of
\nDirectors of the Company makes any public recommendation with respect to any
\nAcquisition Proposal other than a recommendation to reject such Acquisition
\nProposal; (iii) if the Company takes any action prohibited by Section 7.1;
\n(iv) if the Company breaches in any material respect the Option Agreement; or
\n(v) if the Board of Directors of the Company resolves to take any of the
\nactions specified above.<\/p>\n
The right of any party hereto to terminate this Agreement pursuant to
\nthis Section 9.1 will remain operative and in full force and effect
\nregardless of any investigation made by or on behalf of any party hereto, any
\nPerson controlling any such party or any of their respective officers,
\ndirectors, representatives or agents, whether prior to or after the execution
\nof this Agreement.<\/p>\n
Section 9.2 EFFECT OF TERMINATION.<\/p>\n
(a) Except as provided in this Section 9.2, in the event of the
\ntermination of this Agreement pursuant to Section 9.1, this Agreement will
\nforthwith become void, and there will be no liability on the part of the
\nAcquiror Companies or the Company or any of their respective officers or
\ndirectors to the other and all rights and obligations of any party hereto
\nwill cease, except that nothing herein will relieve any party from liability
\nfor any breach, prior to termination of this Agreement in accordance with its
\nterms, of any representation, warranty, covenant or agreement contained in
\nthis Agreement.<\/p>\n
(b) If this Agreement is terminated (i) by Acquiror pursuant to
\nSection 9.1(g) or (ii) by Acquiror or Company pursuant to Section 9.1(f)
\nhereof because of the failure to obtain the required approval from the
\nCompany stockholders and, in the case of termination pursuant to this clause
\n(ii), if (A) at or prior to the Company Stockholders’ Meeting an Acquisition
\nProposal shall have been publicly announced or disclosed (whether or not such
\noffer, proposal, announcement or agreement shall have been rejected or shall
\nhave been withdrawn prior to the time of such termination or of the Company
\nStockholders’ Meeting) and <\/p>\n
48<\/p>\n
(B)(1) a third party or “group” (within the meaning of Rule 13d-5 under the
\nExchange Act), directly or indirectly, acquires Company Common Stock which
\nresults in such third party or “group” having beneficial ownership of 35% or
\nmore of the then outstanding Company Common Stock (excluding an underwriter
\nwho acquires such beneficial ownership pursuant to a bona fide underwritten
\noffering) or (2) a sale, transfer or license (having a similar effect as a
\nsale or transfer) of 35% or more of the fair market value of the assets of
\nthe Company is consummated with a third party or “group” (within the meaning
\nof Rule 13d-5 under the Exchange Act), other than in the ordinary course of
\nbusiness, or (3) a definitive agreement with respect to any transaction
\nreferred to in (1) or (2) is executed by the Company or any of its
\nSubsidiaries, in the case of (1), (2) or (3), within 6 months following
\ntermination of the Agreement pursuant to this clause (ii), then, in the case
\nof clause (i), the Company shall pay to Acquiror by wire transfer of same day
\nfunds promptly but not later than two Business Days after the date of such
\ntermination a termination fee of $100 million (the “Termination Fee”), and,
\nin the case of clause (ii), the Company shall pay the Termination Fee to
\nAcquiror by wire transfer of same day funds promptly but not later than two
\nBusiness Days after satisfaction of all conditions to the payment thereof set
\nforth in clause (ii).<\/p>\n
Section 9.3 AMENDMENT. This Agreement may be amended by the parties
\nhereto by action taken by or on behalf of their respective Boards of
\nDirectors at any time prior to the Effective Time; PROVIDED, HOWEVER, that,
\nafter approval of the Merger by the stockholders of the Company, no amendment
\nmay be made which would reduce the amount or change the type of consideration
\ninto which each share of Company Common Stock will be converted pursuant to
\nthis Agreement upon consummation of the Merger. This Agreement may not be
\namended except by an instrument in writing signed by the parties hereto.<\/p>\n
Section 9.4 WAIVER. At any time prior to the Effective Time, any party
\nhereto may (a) extend the time for the performance of any of the obligations
\nor other acts of the other party hereto, (b) waive any inaccuracies in the
\nrepresentations and warranties of the other party contained herein or in any
\ndocument delivered pursuant hereto and (c) waive compliance by the other
\nparty with any of the agreements or conditions contained herein. Any such
\nextension or waiver will be valid only if set forth in an instrument in
\nwriting signed by the party or parties to be bound thereby. For purposes of
\nthis Section 9.4, Acquiror Companies will be deemed to be one party.<\/p>\n
Section 9.5 EXPENSES. Except as set forth in Section 9.2, all
\nexpenses incurred by the parties hereto will be borne solely and entirely by
\nthe party which has incurred such expenses; PROVIDED, HOWEVER, that the
\nCompany and Acquiror shall each pay fifty percent of expenses related to
\nprinting, filing and mailing the Registration Statement and the Proxy
\nStatement and all SEC and other regulatory filing fees incurred in connection
\nwith the Registration Statement and the Proxy Statement.<\/p>\n
49<\/p>\n
ARTICLE X<\/p>\n
GENERAL PROVISIONS<\/p>\n
Section 10.1 INTERPRETATION.<\/p>\n
(a) When a reference is made in this Agreement to a section or
\narticle, such reference shall be to a section or article of this Agreement
\nunless otherwise clearly indicated to the contrary.<\/p>\n
(b) Whenever the words “include”, “includes” or “including” are
\nused in this Agreement they shall be deemed to be followed by the words
\n“without limitation.”<\/p>\n
(c) The words “hereof”, “hereby”, “herein” and “herewith” and
\nwords of similar import shall, unless otherwise stated, be construed to refer
\nto this Agreement as a whole and not to any particular provision of this
\nAgreement, and article, section, paragraph, exhibit and schedule references
\nare to the articles, sections, paragraphs, exhibits and schedules of this
\nAgreement unless otherwise specified.<\/p>\n
(d) The plural of any defined term shall have a meaning
\ncorrelative to such defined term, and words denoting any gender shall include
\nall genders. Where a word or phrase is defined herein, each of its other
\ngrammatical forms shall have a corresponding meaning.<\/p>\n
(e) A reference to any legislation or to any provision of any
\nlegislation shall include any modification or re-enactment thereof, any
\nlegislative provision substituted therefor and all Regulations and statutory
\ninstruments issued thereunder or pursuant thereto.<\/p>\n
(f) The parties have participated jointly in the negotiation and
\ndrafting of this Agreement. In the event an ambiguity or question of intent
\nor interpretation arises, this Agreement shall be construed as if drafted
\njointly by the parties, and no presumption or burden of proof shall arise
\nfavoring or disfavoring any party by virtue of the authorship of any
\nprovisions of this Agreement.<\/p>\n
Section 10.2 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND
\nAGREEMENTS.<\/p>\n
(a) Except as set forth in Section 10.2(b) of this Agreement, the
\nrepresentations, warranties and agreements of each party hereto will remain
\noperative and in full force and effect regardless of any investigation made
\nby or on behalf of any other party hereto, any Person controlling any such
\nparty or any of their officers, directors, representatives or agents whether
\nprior to or after the execution of this Agreement.<\/p>\n
(b) The representations and warranties in this Agreement will
\nterminate at the Effective Time; PROVIDED, HOWEVER, this Section 10.2 (b)
\nshall in no way limit any covenant <\/p>\n
50<\/p>\n
or agreement of the parties which by its terms contemplates performance after
\nthe Effective Time or after the termination of this Agreement pursuant to
\nArticle IX.<\/p>\n
Section 10.3 NOTICES. Any notice, request, instruction or other
\ndocument to be given hereunder by any party to another party shall be in
\nwriting and shall be deemed given when delivered personally, upon receipt of
\na transmission confirmation (with a confirming copy sent by overnight
\ncourier) if sent by facsimile or like transmission, and on the next Business
\nDay when sent by Federal Express, United Parcel Service, Express Mail or
\nother reputable overnight courier, as follows:<\/p>\n
(a) If to either of the Acquiror Companies, to:<\/p>\n
America Online, Inc.
\n 22000 AOL Way
\n Dulles, Virginia 20166-9323
\n Attention: Stephen M. Case
\n President & CEO
\n Facsimile No.: (703) 265-1422<\/p>\n
with a copy to:<\/p>\n
Skadden, Arps, Slate, Meagher & Flom LLP
\n One Beacon Street
\n Boston, Massachusetts 02108-3194
\n Attention: Louis A. Goodman, Esq.
\n Facsimile: No.: (617) 573-4822<\/p>\n
(b) If to the Company, to:<\/p>\n
Netscape Communications Corporation
\n 501 E. Middlefield Road
\n Mountain View, California 94043
\n Attention: James L. Barksdale
\n President and CEO
\n Facsimile No.: (650) 528-4126<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati
\n Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, California 94304-1050
\n Attention: Larry Sonsini, Jim Strawbridge<\/p>\n
51<\/p>\n
and Marty Korman
\n Facsimile No.: (650) 493-6811<\/p>\n
or to such other persons or addresses as may be designated in writing by the
\nparty to receive such notice. Nothing in this section shall be deemed to
\nconstitute consent to the manner and address for service of process in
\nconnection with any legal proceeding (including Litigation arising out of or
\nin connection with this Agreement), which service shall be effected as
\nrequired by applicable Law.<\/p>\n
Section 10.4 HEADINGS. The headings contained in this Agreement are
\nfor reference purposes only and will not affect in any way the meaning or
\ninterpretation of this Agreement.<\/p>\n
Section 10.5 SEVERABILITY. If any term or other provision of this
\nAgreement is invalid, illegal or incapable of being enforced by any rule of
\nlaw or public policy, all other conditions and provisions of this Agreement
\nwill nevertheless remain in full force and effect so long as the economic or
\nlegal substance of the transactions contemplated hereby is not affected in
\nany manner materially adverse to any party. Upon such determination that any
\nterm or other provision is invalid, illegal or incapable of being enforced,
\nthe parties hereto will negotiate in good faith to modify this Agreement so
\nas to effect the original intent of the parties as closely as possible in an
\nacceptable manner to the end that transactions contemplated hereby are
\nfulfilled to the extent possible.<\/p>\n
Section 10.6 ENTIRE AGREEMENT. This Agreement (not including Annexes
\nA, C, D, E and F, but including the Company’s Disclosure Schedule and
\nAcquiror’s Disclosure Schedule) and the Option Agreement constitute the
\nentire agreement of the parties, and supersede all prior agreements and
\nundertakings (other than that certain Confidentiality Agreement which will
\nremain in full force and effect until the Effective Time, at which time it
\nwill terminate), both written and oral, among the parties, with respect to
\nthe subject matter hereof and thereof.<\/p>\n
Section 10.7 ASSIGNMENT. This Agreement may not be assigned by
\noperation of Law or otherwise.<\/p>\n
Section 10.8 PARTIES IN INTEREST. This Agreement will be binding upon
\nand inure solely to the benefit of each party hereto, and, other than
\npursuant to Section 7.10, hereof, nothing in this Agreement, express or
\nimplied, is intended to or will confer upon any other Person any right,
\nbenefit or remedy of any nature whatsoever under or by reason of this
\nAgreement.<\/p>\n
Section 10.9 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
\nfailure or delay on the part of any party hereto in the exercise of any right
\nhereunder will impair such right or be construed to be a waiver of, or
\nacquiescence in, any breach of any representation, warranty, agreement or
\ncovenant herein, nor will any single or partial exercise of any such right
\npreclude other or further exercise thereof or of any other right. All rights
\nand remedies existing under this Agreement are cumulative to, and not
\nexclusive to, and not exclusive of, any rights or remedies otherwise
\navailable.<\/p>\n
52<\/p>\n
Section 10.10 GOVERNING LAW. This Agreement and the agreements,
\ninstruments and documents contemplated hereby will be governed by and
\nconstrued in accordance with the Laws of the state of Delaware (exclusive of
\nconflicts of law principles). Courts within the state of Delaware will have
\njurisdiction over any and all disputes between the parties hereto, whether in
\nlaw or equity, arising out of or relating to this agreement and the
\nagreements, instruments and documents contemplated hereby. The parties
\nconsent to and agree to submit to the jurisdiction of such Courts. Each of
\nthe parties hereby waives, and agrees not to assert in any such dispute, to
\nthe fullest extent permitted by applicable Law, any claim that (i) such party
\nis not personally subject to the jurisdiction of such Courts, (ii) such party
\nand such party’s property is immune from any legal process issued by such
\nCourts or (iii) any Litigation commenced in such Courts is brought in an
\ninconvenient forum.<\/p>\n
Section 10.11 COUNTERPARTS. This Agreement may be executed in multiple
\ncounterparts, and by the different parties hereto in separate counterparts,
\neach of which when executed will be deemed to be an original but all of which
\ntaken together will constitute one and the same agreement.<\/p>\n
53<\/p>\n
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
\nto be executed as of the date first written above by their respective
\nofficers thereunto duly authorized.<\/p>\n
AMERICA ONLINE, INC.<\/p>\n
By: \/s\/ Kenneth J. Novack
\n ——————————
\n Name: Kenneth J. Novack
\n Title: Vice Chairman<\/p>\n
APOLLO ACQUISITION CORP.<\/p>\n
By: \/s\/ Sheila A. Clark
\n ——————————
\n Name: Sheila A. Clark
\n Title: Vice President and Secrtary<\/p>\n
NETSCAPE COMMUNICATIONS CORPORATION<\/p>\n
By:
\n ——————————
\n Name:
\n Title: <\/p>\n
SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER<\/p>\n
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
\nto be executed as of the date first written above by their respective
\nofficers thereunto duly authorized.<\/p>\n
AMERICA ONLINE, INC.<\/p>\n
By:
\n ——————————
\n Name:
\n Title: <\/p>\n
APOLLO ACQUISITION CORP.<\/p>\n
By:
\n ——————————
\n Name:
\n Title: <\/p>\n
NETSCAPE COMMUNICATIONS CORPORATION<\/p>\n
By: \/s\/ James L. Barksdale
\n ——————————
\n Name: James L. Barksdale
\n Title: Pres. CEO<\/p>\n
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