\n 8.4 Counterparts………………………………………..57
\n 8.5 Entire Agreement; Third Party Beneficiaries…………….57
\n 8.6 Severability………………………………………..57
\n 8.7 Other Remedies; Specific Performance; Fees……………..57
\n 8.8 Governing Law……………………………………….58
\n 8.9 Rules of Construction………………………………..58
\n 8.10 Assignment………………………………………….58
\n 8.11 Waiver Of Jury Trial…………………………………58
\n<\/c><\/s><\/table>\n INDEX OF EXHIBITS<\/p>\n
Exhibit A Form of Stock Option Agreement<\/p>\n
Exhibit B Form of Voting Agreement<\/p>\n
-iii-
\n 5
\n AGREEMENT AND PLAN OF MERGER<\/p>\n
This AGREEMENT AND PLAN OF MERGER (this “AGREEMENT”) is made and
\nentered into as of January 16, 2001, among Macromedia, Inc., a Delaware
\ncorporation (“PARENT”), Alaska Acquisition Corporation, a Delaware corporation
\nand a wholly owned first-tier subsidiary of Parent (“MERGER SUB”), and Allaire
\nCorporation, a Delaware corporation (“COMPANY”).<\/p>\n
RECITALS<\/p>\n
A. The respective Boards of Directors of Parent, Merger Sub and
\nCompany have approved this Agreement, and declared advisable the merger of
\nMerger Sub with Company (the “MERGER”) upon the terms and subject to the
\nconditions of this Agreement and in accordance with the General Corporation Law
\nof the State of Delaware (“DELAWARE LAW”).<\/p>\n
B. For United States federal income tax purposes, the Merger is
\nintended to qualify as a “reorganization” pursuant to the provisions of Section
\n368 of the Internal Revenue Code of 1986, as amended (the “CODE”), except in the
\nevent that a Conversion Event (as defined in Section 1.6) occurs. For accounting
\npurposes, the Merger is intended to be accounted for as a purchase under United
\nStates generally accepted accounting principles (“GAAP”).<\/p>\n
C. Concurrently with the execution of this Agreement, and as a
\ncondition and inducement to Parent’s willingness to enter into this Agreement,
\nCompany shall execute and deliver a Stock Option Agreement in favor of Parent in
\nsubstantially the form attached hereto as Exhibit A (the “STOCK OPTION
\nAGREEMENT”). The Board of Directors of Company has approved the Stock Option
\nAgreement.<\/p>\n
D. Concurrently with the execution of this Agreement, and as a
\ncondition and inducement to Parent’s willingness to enter into this Agreement,
\ncertain stockholders of Company are entering into Voting Agreements with Parent
\nin the form of Exhibit B (the “VOTING AGREEMENT”).<\/p>\n
In consideration of the foregoing and the representations,
\nwarranties, covenants and agreements set forth in this Agreement, the parties
\nagree as follows:<\/p>\n
ARTICLE I
\n THE MERGER<\/p>\n
1.1 The Merger. Unless the Conversion Event occurs, upon the terms
\nand subject to the conditions of this Agreement and the applicable provisions of
\nDelaware Law, at the Effective Time, Company shall be merged with and into
\nMerger Sub, the separate corporate existence of Company shall cease, and Merger
\nSub shall continue as the surviving corporation of the Merger. If the Conversion
\nEvent occurs, then upon the terms and subject to the conditions of this
\nAgreement and the applicable provisions of Delaware Law, at the Effective Time,
\nMerger Sub shall be merged with and into Company, the separate corporate
\nexistence of Merger Sub shall<\/p>\n
-1-
\n 6
\ncease, and Company shall continue as the surviving corporation of the Merger.
\nThe corporation surviving the Merger shall be referred to herein as the
\n“SURVIVING CORPORATION.”<\/p>\n
1.2 Effective Time; Closing. Subject to the provisions of this
\nAgreement, the parties hereto shall cause the Merger to be consummated by filing
\na certificate of merger, in such appropriate form as determined by the parties,
\nwith the Secretary of State of the State of Delaware in accordance with the
\nrelevant provisions of Delaware Law (the “CERTIFICATE OF MERGER”) (the time of
\nsuch filing (or such later time as may be agreed in writing by Company and
\nParent and specified in the Certificate of Merger) being the “EFFECTIVE TIME”)
\nas soon as practicable on or after the Closing Date. The closing of the Merger
\n(the “CLOSING”) shall take place at the offices of Fenwick & West LLP, 275
\nBattery Street, San Francisco, California, at a time and date to be specified by
\nthe parties, which shall be no later than the second business day after the
\nsatisfaction or waiver of the conditions set forth in Article VI, or at such
\nother time, date and location as the parties hereto agree in writing (the
\n“CLOSING DATE”).<\/p>\n
1.3 Effect of the Merger. At the Effective Time, the effect of the
\nMerger shall be as provided in this Agreement and the applicable provisions of
\nDelaware Law. Without limiting the generality of the foregoing, at the Effective
\nTime, all the property, rights, privileges, powers and franchises of Company and
\nMerger Sub shall vest in the Surviving Corporation, and all debts, liabilities
\nand duties of Company and Merger Sub shall become the debts, liabilities and
\nduties of the Surviving Corporation.<\/p>\n
1.4 Certificate of Incorporation; Bylaws.<\/p>\n
(a) The Certificate of Merger shall provide that, at the
\nEffective Time, the Certificate of Incorporation of the Surviving Corporation
\nshall be in substantially the form of the Certificate of Incorporation of the
\nMerger Sub as in effect immediately prior to the Effective Time; provided,
\nhowever, that as of the Effective Time, Article I of the Certificate of
\nIncorporation of the Surviving Corporation shall read: “The name of the
\ncorporation is “Allaire Corporation.”<\/p>\n
(b) At the Effective Time, the Bylaws of Merger Sub, as in
\neffect immediately prior to the Effective Time, shall be the Bylaws of the
\nSurviving Corporation until thereafter amended.<\/p>\n
1.5 Directors and Officers. The initial directors of the Surviving
\nCorporation shall be the directors of Merger Sub immediately prior to the
\nEffective Time, until their respective successors are duly elected or appointed
\nand qualified. The initial officers of the Surviving Corporation shall be the
\nofficers of Merger Sub immediately prior to the Effective Time, until their
\nrespective successors are duly appointed.<\/p>\n
1.6 Effect on Capital Stock. Subject to the terms and conditions of
\nthis Agreement, at the Effective Time, by virtue of the Merger and without any
\naction on the part of Merger Sub, Company or the holders of any of the following
\nsecurities:<\/p>\n
(a) Conversion of Company Common Stock.<\/p>\n
-2-
\n 7
\n (i) Except as provided in Section 1.6(a)(ii),
\neach share of common stock, par value $0.01 per share, of Company (“COMPANY
\nCOMMON STOCK”) issued and outstanding immediately prior to the Effective Time,
\nother than any shares of Company Common Stock to be canceled pursuant to Section
\n1.6(b), will be canceled and extinguished and automatically converted (subject
\nto Section 1.6(e)) into the right to receive (x) 0.20 (the “EXCHANGE RATIO”) of
\na share of common stock, par value $0.001 per share, of Parent (“PARENT COMMON
\nSTOCK”) and (y) $3.00 in cash (the “CASH CONSIDERATION”), upon surrender of the
\ncertificate representing such share of Company Common Stock in the manner
\nprovided in Section 1.7. Unless otherwise stated or otherwise indicated by the
\ncontext, all references in this Agreement and the Stock Option Agreement to
\n“Company Common Stock” shall be deemed to include the associated preferred share
\npurchase rights (“RIGHTS”) issued pursuant to the Rights Agreement, dated as of
\nDecember 8, 2000, between Company and Fleet Bank, N.A., as Rights Agent (the
\n“RIGHTS AGREEMENT”). No fraction of a share of Parent Common Stock will be
\nissued by virtue of the Merger, but in lieu thereof, a cash payment shall be
\nmade pursuant to Section 1.7(e).<\/p>\n
(ii) If the Conversion Event occurs, then upon
\nthe Effective Time, each share of Company Common Stock issued and outstanding
\nimmediately prior to the Effective Time, other than any shares of Company Common
\nStock to be canceled pursuant to Section 1.6(b), will be canceled and
\nextinguished and automatically converted (subject to Section 1.6(e)) into the
\nright to receive an amount of cash (rounded to the nearest whole cent) equal to
\nthe sum of (x) the amount of cash that is the product of (A) the Trigger Price
\n(as defined below) multiplied by (B) the Exchange Ratio (the “SUBSTITUTE CASH
\nCONSIDERATION”) plus (y) the Cash Consideration, upon surrender of the
\ncertificate representing such share of Company Common Stock in the manner
\nprovided in Section 1.7.<\/p>\n
(b) Cancellation of Company-Owned and Parent-Owned Stock.
\nEach share of Company Common Stock held by Company or owned by Merger Sub,
\nParent or any direct or indirect wholly owned subsidiary of Company or of Parent
\nimmediately prior to the Effective Time shall be canceled and extinguished
\nwithout any conversion thereof.<\/p>\n
(c) Stock Options; Employee Stock Purchase Plan. At the
\nEffective Time, all options to purchase Company Common Stock then outstanding,
\nwhether under Company’s 1997 Stock Incentive Plan, Company’s 1998 Stock
\nIncentive Plan or Company’s 2000 Stock Incentive Plan (collectively, the
\n“COMPANY OPTION PLANS”), pursuant to another Company compensatory plan or
\notherwise (each such option, whether issued pursuant to the Company Option Plans
\nor otherwise, a “COMPANY OPTION”), and each warrant outstanding to acquire
\nCompany Common Stock (the “COMPANY WARRANTS”) shall be assumed by Parent in
\naccordance with Section 5.8 of this Agreement. Rights outstanding under
\nCompany’s 1998 Employee Stock Purchase Plan (the “COMPANY ESPP”) shall be
\ntreated as set forth in Section 5.8 of this Agreement.<\/p>\n
(d) Capital Stock of Merger Sub.<\/p>\n
(i) Except as provided in Section 1.6(d)(ii),
\neach share of common stock, par value $0.001 per share, of Merger Sub (“MERGER
\nSUB COMMON STOCK”) issued and outstanding immediately prior to the Effective
\nTime shall continue to be outstanding as one<\/p>\n
-3-
\n 8
\nvalidly issued, fully paid and nonassessable share of common stock, $0.01 par
\nvalue per share of the Surviving Corporation. Following the Effective Time, each
\ncertificate evidencing ownership of shares of Merger Sub Common Stock shall
\nevidence ownership of such shares of capital stock of the Surviving Corporation.<\/p>\n
(ii) If the Conversion Event occurs, then each
\nshare of Merger Sub Common Stock issued and outstanding immediately prior to the
\nEffective Time shall be converted into one validly issued, fully paid and
\nnonassessable share of common stock, $0.01 par value per share, of the Surviving
\nCorporation. Following the Effective Time, each certificate evidencing ownership
\nof shares of Merger Sub Common Stock shall evidence ownership of such shares of
\ncapital stock of the Surviving Corporation.<\/p>\n
(e) Adjustments to Merger Consideration. The Exchange
\nRatio, the Cash Consideration and the Substitute Cash Amount, as applicable,
\nshall be adjusted to reflect appropriately the effect of any stock split,
\nreverse stock split, stock dividend (including any dividend or distribution of
\nsecurities convertible into Parent Common Stock or Company Common Stock),
\nreorganization, recapitalization, reclassification or other like change with
\nrespect to Parent Common Stock or Company Common Stock occurring on or after the
\ndate hereof and prior to the Effective Time.<\/p>\n
(f) As used in this Agreement, the following terms shall
\nhave the following meanings:<\/p>\n
(i) The “CONVERSION EVENT” shall occur if the
\nproduct of (A) the Trigger Price multiplied by (B) the Exchange Ratio shall be
\nless than the amount of the Cash Consideration.<\/p>\n
(ii) The term “MERGER CONSIDERATION” means the
\naggregate amount of consideration per share of Company Common Stock issuable in
\nthe Merger, determined as the sum of (A) the Cash Consideration and (B) the
\nfraction of a share of Parent Common Stock, determined by application of the
\nExchange Ratio, or the Substitute Cash Consideration, whichever is applicable
\nunder Section 1.6(a).<\/p>\n
(iii) The “TRIGGER PRICE” shall mean the closing
\nsale price of Parent Common Stock during regular trading hours on the Nasdaq
\nNational Market on the day which is two trading days before the date fixed for
\nthe Company Stockholders’ Meeting in the Proxy Statement\/Prospectus (as each
\nsuch term is defined in Section 2.17).<\/p>\n
1.7 Exchange of Certificates.<\/p>\n
(a) Exchange Agent. Parent shall select an institution
\nreasonably acceptable to Company to act as the exchange agent (the “EXCHANGE
\nAGENT”) in the Merger.<\/p>\n
(b) Exchange Fund. As promptly as practicable after the
\nEffective Time, Parent shall make available to the Exchange Agent for exchange
\nin accordance with this Article I, the Merger Consideration (such shares of
\nParent Common Stock or Substitute Cash Consideration and Cash Consideration
\ntogether with any cash in lieu of fractional shares and any<\/p>\n
-4-
\n 9
\ndividends or distributions with respect thereto, are hereinafter referred to as
\nthe “EXCHANGE FUND”) issuable pursuant to Section 1.6 in exchange for
\noutstanding shares of Company Common Stock.<\/p>\n
(c) Exchange Procedures. As promptly as practicable after
\nthe Effective Time, Parent shall instruct the Exchange Agent to mail to each
\nholder of record of a certificate or certificates (“CERTIFICATES”) that
\nimmediately prior to the Effective Time represented outstanding shares of
\nCompany Common Stock which were converted into the right to receive the Merger
\nConsideration pursuant to Section 1.6, (i) a letter of transmittal in customary
\nform (that shall specify that delivery shall be effected, and risk of loss and
\ntitle to the Certificates shall pass, only upon proper delivery of the
\nCertificates to the Exchange Agent and shall contain such other provisions as
\nParent may reasonably specify) and (ii) instructions for use in effecting the
\nsurrender of the Certificates in exchange for the Merger Consideration. Upon
\nsurrender of Certificates for cancellation to the Exchange Agent together with
\nsuch letter of transmittal, duly completed and validly executed in accordance
\nwith the instructions thereto, the holders of such Certificates shall be
\nentitled to receive in exchange therefor the Merger Consideration into which
\ntheir shares of Company Common Stock were converted at the Effective Time,
\n(including, if shares of Parent Common Stock are issued to holders of Company
\nCommon Stock in the Merger, payment in lieu of fractional shares of Parent
\nCommon Stock that such holders have the right to receive pursuant to Section
\n1.7(e) and any dividends or distributions payable pursuant to Section 1.7(d))
\nand the Certificates so surrendered shall forthwith be canceled. Until so
\nsurrendered, outstanding Certificates will be deemed from and after the
\nEffective Time, for all corporate purposes, to evidence only the ownership of
\nthe Merger Consideration (which, if Parent Common Stock is issued to holders of
\nCompany Common Stock in the Merger, shall include the full number of shares of
\nsuch Parent Common Stock together with the right to receive any dividends or
\ndistributions payable pursuant to Section 1.7(d)). No interest will be paid or
\naccrued on any Cash Consideration, Substitute Cash Consideration or cash in lieu
\nof fractional shares of Parent Common Stock or on any unpaid dividends or
\ndistributions payable to holders of Certificates. In the event of a transfer of
\nownership of shares of Company Common Stock that is not registered in the
\ntransfer records of Company, the Merger Consideration, including any certificate
\nrepresenting the proper number of shares of Parent Common Stock, may be issued
\nto a transferee if the Certificate representing such shares of Company Common
\nStock is presented to the Exchange Agent, accompanied by all documents required
\nto evidence and effect such transfer and by evidence that any applicable stock
\ntransfer taxes have been paid.<\/p>\n
(d) Distributions With Respect to Unexchanged Shares. In
\nthe event that shares of Parent Common Stock are issued to the holders of
\nCompany Common Stock in the Merger, no dividends or other distributions declared
\nor made after the date of this Agreement with respect to Parent Common Stock
\nwith a record date after the Effective Time will be paid to the holders of any
\nunsurrendered Certificates with respect to the shares of Parent Common Stock
\nrepresented thereby until the holders of record of such Certificates shall
\nsurrender such Certificates. If such shares of Parent Common Stock are issued,
\nsubject to applicable law, following surrender of any such Certificates, the
\nExchange Agent shall deliver to the holders of certificates representing whole
\nshares of Parent Common Stock issued in exchange therefor, without interest, (i)
\npromptly, the amount of any cash payable with respect to a fractional share of
\nParent Common Stock to which such holder is entitled pursuant to Section 1.7(e)
\nand the<\/p>\n
-5-
\n 10
\namount of dividends or other distributions with a record date after the
\nEffective Time theretofore paid with respect to such whole shares of Parent
\nCommon Stock, and (ii) at the appropriate payment date, the amount of dividends
\nor other distributions with a record date after the Effective Time but prior to
\nsurrender and a payment date occurring after surrender, payable with respect to
\nsuch whole shares of Parent Common Stock.<\/p>\n
(e) Fractional Shares. In the event that Parent Common
\nStock is issued to the holders of shares of Company Common Stock in the Merger:<\/p>\n
(i) as promptly as practicable following the
\nEffective Time, the Exchange Agent shall determine the excess of (A) the number
\nof full shares of Parent Common Stock delivered to the Exchange Agent pursuant
\nto Section 1.7(b), over (B) the aggregate number of full shares of
\nParent Common Stock to be distributed to holders of Company Common Stock
\npursuant to Section 1.7(c) (such excess, the “EXCESS SHARES”). Following the
\nEffective Time, the Exchange Agent, as agent for the holders of Company Common
\nStock, shall sell the Excess Shares at then prevailing prices on the Nasdaq
\nStock Market in the manner set forth in paragraph (ii) of this Section 1.7(e).<\/p>\n
(ii) The sale of the excess shares by the
\nExchange Agent shall be executed on the Nasdaq Stock Market and shall be
\nexecuted in round lots to the extent practicable. The Exchange Agent shall use
\nall commercially reasonable efforts to complete the sale of the Excess Shares as
\npromptly following the Effective Time as, in the Exchange Agent’s reasonable
\njudgment, is practicable consistent with obtaining the best execution of such
\nsales in light of prevailing market conditions. Until the net proceeds of such
\nsales have been distributed to the holders of Company Common Stock, the Exchange
\nAgent will hold such proceeds in trust for the holders of Company Common Stock.
\nThe Exchange Agent will determine the portion of such net proceeds to which each
\nholder of Company Common Stock shall be entitled, if any, by multiplying the
\namount of the aggregate net proceeds by a fraction the numerator of which is the
\namount of the fractional share interest to which such holder of Company Common
\nStock is entitled (after taking into account all shares of Parent Common Stock
\nto be issued to such holder) and the denominator of which is the aggregate
\namount of fractional share interests to which all holders of Company Common
\nStock are entitled. As soon as practicable after the determination of the amount
\nof cash, if any, to be paid to holders of Company Common Stock with respect to
\nfractional share interests, the Exchange Agent shall promptly pay such amounts
\nto such holders of Company Common Stock in accordance with the terms of Section
\n1.7(c).<\/p>\n
(iii) Notwithstanding the provisions of
\nparagraphs (i) and (ii) of this Section 1.7(e), Parent may decide, at its
\noption, exercised prior to the Effective Time, in lieu of the issuance and sale
\nof Excess Shares and the making of the payments contemplated in such paragraphs,
\nthat Parent shall pay to the Exchange Agent an amount sufficient for the
\nExchange Agent to pay each holder of Company Common Stock the amount such holder
\nwould have received pursuant to Section 1.7(e)(ii) assuming that the sales of
\nParent Common Stock were made at a price equal to the average of the closing
\nprices of the Parent Common Stock on the Nasdaq Stock Market for the five
\nconsecutive trading days immediately following the Effective Time and, in such
\ncase, all references herein to the cash proceeds of the sale of the Excess
\nShares and similar references shall be deemed to mean and refer to the payments
\ncalculated as set forth<\/p>\n
-6-
\n 11
\nin this paragraph (iii). In such event, Excess Shares shall not be issued or
\notherwise transferred to the Exchange Agent pursuant to Sections 1.7(b) or (e).<\/p>\n
(f) Required Withholding. Each of the Exchange Agent,
\nParent and the Surviving Corporation shall be entitled to deduct and withhold
\nfrom any consideration payable or otherwise deliverable pursuant to this
\nAgreement to any holder or former holder of Company Common Stock such amounts as
\nmay be required to be deducted or withheld therefrom under the Code or under any
\nprovision of state, local or foreign tax law or under any other applicable Legal
\nRequirement (as defined in Section 2.2(c)). To the extent such amounts are so
\ndeducted or withheld, such amounts shall be treated for all purposes under this
\nAgreement as having been paid to the person to whom such amounts would otherwise
\nhave been paid.<\/p>\n
(g) Lost, Stolen or Destroyed Certificates. In the event
\nthat any Certificates shall have been lost, stolen or destroyed, the Exchange
\nAgent shall issue in exchange for such lost, stolen or destroyed Certificates,
\nupon the making of an affidavit of that fact by the holder thereof, the Merger
\nConsideration into which the shares of Company Common Stock represented by such
\nCertificates were converted pursuant to Section 1.6, including, if applicable,
\ncash for fractional shares, if any, as may be required pursuant to Section
\n1.7(e) and any dividends or distributions payable pursuant to Section 1.7(d);
\nprovided, however, that Parent may, in its discretion and as a condition
\nprecedent to the issuance of such Merger Consideration, cash and other
\ndistributions, require the owner of such lost, stolen or destroyed Certificates
\nto deliver a bond in such sum as it may reasonably direct as indemnity against
\nany claim that may be made against Parent, the Surviving Corporation or the
\nExchange Agent with respect to the Certificates alleged to have been lost,
\nstolen or destroyed.<\/p>\n
(h) No Liability. Notwithstanding anything to the contrary
\nin this Section 1.7, neither the Exchange Agent, Parent, the Surviving
\nCorporation nor any party hereto shall be liable to a holder of shares of Parent
\nCommon Stock or rights to other Merger Consideration or of Company Common Stock
\nfor any amount properly paid to a public official pursuant to any applicable
\nabandoned property, escheat or similar law.<\/p>\n
(i) Termination of Exchange Fund. Any portion of the
\nExchange Fund which remains undistributed to the holders of Company Common Stock
\nfor six months after the Effective Time shall be delivered to Parent, upon
\ndemand, and any holders of Company Common Stock who have not theretofore
\ncomplied with the provisions of this Section 1.7 shall thereafter look only to
\nParent for the Merger Consideration to which they are entitled including, if
\napplicable, any dividends or other distributions with respect to Parent Common
\nStock to which they are entitled pursuant to Section 1.7(d) and, any cash in
\nlieu of fractional shares of Parent Common Stock to which they are entitled
\npursuant to Section 1.7(e), in each case, without any interest thereon.<\/p>\n
1.8 No Further Ownership Rights in Company Common Stock. All Merger
\nConsideration issued in accordance with the terms hereof (including any shares
\nof Parent Common Stock and cash paid in respect thereof pursuant to Section
\n1.7(d) and (e)) shall be deemed to have been issued in full satisfaction of all
\nrights pertaining to such shares of Company Common Stock, and there shall be no
\nfurther registration of transfers on the records of the<\/p>\n
-7-
\n 12
\nSurviving Corporation of shares of Company Common Stock that were outstanding
\nimmediately prior to the Effective Time. If after the Effective Time
\nCertificates are presented to the Surviving Corporation for any reason, they
\nshall be canceled and exchanged as provided in this Article I.<\/p>\n
1.9 Restricted Stock. If any shares of Company Common Stock that are
\noutstanding immediately prior to the Effective Time are unvested or are subject
\nto a repurchase option, risk of forfeiture or other condition providing that
\nsuch shares (“COMPANY RESTRICTED STOCK”) may be forfeited or repurchased by
\nCompany upon any termination of the stockholders’ employment, directorship or
\nother relationship with Company (and\/or any affiliate of Company) under the
\nterms of any restricted stock purchase agreement or other agreement with Company
\nthat does not by its terms provide that such repurchase option, risk of
\nforfeiture or other condition fully lapses upon consummation of the Merger, then
\n(i) the shares of Parent Common Stock issued upon the conversion of such shares
\nof Company Common Stock in the Merger will continue to be unvested and subject
\nto the same repurchase options, risks of forfeiture or other conditions
\nfollowing the Effective Time, and the certificates representing such shares of
\nParent Common Stock may accordingly be marked with appropriate legends noting
\nsuch repurchase options, risks of forfeiture or other conditions and (ii) any
\ncash payable upon the conversion of such shares of Company Restricted Stock in
\nthe Merger will be paid to each holder of such shares upon the vesting or lapse
\nof the right of repurchase thereof. Company shall take all actions that may be
\nnecessary to ensure that, from and after the Effective Time, Parent is entitled
\nto exercise any such repurchase option or other right set forth in any such
\nrestricted stock purchase agreement or other agreement. A listing of the holders
\nof Company Restricted Stock, together with the number of shares and the vesting
\nschedule of Company Restricted Stock held by each, is set forth in Part 1.9 of
\nthe Company Disclosure Letter.<\/p>\n
1.10 Tax and Accounting Consequences.<\/p>\n
(a) Unless the Conversion Event occurs, it is intended by
\nthe parties hereto that the Merger shall constitute a “reorganization” within
\nthe meaning of Section 368 of the Code. Unless the Conversion Event occurs, the
\nparties hereto adopt this Agreement as a “plan of reorganization” within the
\nmeaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
\nRegulations.<\/p>\n
(b) It is intended by the parties hereto that the Merger
\nshall be treated for accounting purposes as a purchase.<\/p>\n
1.11 Taking of Necessary Action; Further Action. If, at any time
\nafter the Effective Time, any further action is necessary or desirable to carry
\nout the purposes of this Agreement and to vest the Surviving Corporation with
\nfull right, title and possession to all assets, property, rights, privileges,
\npowers and franchises of Company and Merger Sub, the officers and directors of
\nCompany and Merger Sub will take all such lawful and necessary action. Parent
\nshall cause Merger Sub to perform all of its obligations relating to this
\nAgreement and the transactions contemplated hereby.<\/p>\n
-8-
\n 13
\n ARTICLE II
\n REPRESENTATIONS AND WARRANTIES OF COMPANY<\/p>\n
As of the date of this Agreement, Company represents and warrants to
\nParent and Merger Sub, subject to the exceptions specifically disclosed in
\nwriting in the disclosure letter and referencing a specific representation
\ndelivered by Company to Parent dated as of the date hereof and certified by a
\nduly authorized officer of Company (in such person’s capacity as an officer and
\nnot as an individual) (the “COMPANY DISCLOSURE LETTER”), as follows:<\/p>\n
2.1 Organization; Subsidiaries.<\/p>\n
(a) Company and each of its material subsidiaries (which
\nmaterial subsidiaries are set forth on Part 2.1 to the Company Disclosure
\nLetter) (i) is a corporation duly organized, validly existing and in good
\nstanding under the laws of the jurisdiction in which it is organized; (ii) has
\nthe corporate or other power and authority to own, lease and operate its assets
\nand property and to carry on its business as now being conducted; and (iii)
\nexcept as would not be material to Company, is duly qualified or licensed to do
\nbusiness in each jurisdiction where the character of the properties owned,
\nleased or operated by it or the nature of its activities makes such
\nqualification or licensing necessary.<\/p>\n
(b) Other than the corporations identified in Part 2.1 of
\nthe Company Disclosure Letter, neither Company nor any of the other corporations
\nidentified in Part 2.1 of the Company Disclosure Letter owns any capital stock
\nof, or any equity interest of any nature in, any corporation, partnership, joint
\nventure arrangement or other business entity, other than the entities identified
\nin Part 2.1 of the Company Disclosure Letter, except for passive investments in
\nequity interests of public companies as part of the cash management program of
\nCompany. Neither Company nor any of its subsidiaries has agreed or is obligated
\nto make, or is bound by any written or oral agreement, contract, lease,
\ninstrument, note, option, warranty, purchase order, license, insurance policy,
\nbenefit plan or legally binding commitment or undertaking of any nature, as in
\neffect as of the date hereof or as may hereinafter be in effect under which it
\nmay become obligated to make any future investment in or capital contribution to
\nany other entity. Neither Company, nor any of its subsidiaries, has, at any
\ntime, been a general partner of any general partnership, limited partnership or
\nother entity. Part 2.1 of the Company Disclosure Letter indicates the
\njurisdiction of organization of each entity listed therein and Company’s direct
\nor indirect equity interest therein.<\/p>\n
(c) Company has delivered or made available to Parent a
\ntrue and correct copy of the Certificate of Incorporation and Bylaws of Company
\nand similar governing instruments of each of its material subsidiaries, each as
\namended to date (collectively, the “COMPANY CHARTER DOCUMENTS”), and each such
\ninstrument is in full force and effect. Neither Company nor any of its
\nsubsidiaries is in violation of any of the provisions of the Company Charter
\nDocuments. Company has delivered or made available to Parent all proposed or
\nconsidered amendments to the Company Charter Documents.<\/p>\n
-9-
\n 14
\n 2.2 Company Capitalization.<\/p>\n
(a) The authorized capital stock of Company consists solely
\nof 100,000,000 shares of Company Common Stock, of which there were 27,604,931
\nshares issued and outstanding as of the close of business on January 12, 2001,
\nand 5,000,000 shares of preferred stock, par value $0.01 per share, of which no
\nshares are issued or outstanding. All outstanding shares of Company Common Stock
\nare duly authorized, validly issued, fully paid and nonassessable and are not
\nsubject to preemptive rights created by statute, the Certificate of
\nIncorporation or Bylaws of Company or any agreement or document to which Company
\nis a party or by which it is bound. As of January 12, 2001, there are 16,610
\nshares of Company Common Stock held in treasury by Company. From and after the
\nEffective Time, the shares of Parent Common Stock issued in exchange for any
\nshares of Company Restricted Stock will, without any further act of Parent,
\nCompany or any other person, become subject to the restrictions, conditions and
\nother provisions of such Company Restricted Stock, and Parent will automatically
\nsucceed to and become entitled to exercise Company’s rights and remedies under
\nsuch Company Restricted Stock.<\/p>\n
(b) As of the close of business on January 12, 2001, (i)
\n11,664,087 shares of Company Common Stock are subject to issuance pursuant to
\noutstanding Company Options for an aggregate exercise price of $230,609,946,
\n(ii) 15,056 shares of Company Common Stock are subject to issuance pursuant to
\noutstanding Company Warrants; and (iii) 577,223 shares of Company Common Stock
\nare reserved for future issuance under the Company ESPP. Part 2.2(b) of the
\nCompany Disclosure Letter sets forth the following information with respect to
\neach Company Option and each Company Warrant outstanding as of the date of this
\nAgreement: (i) the name of the optionee or warrant holder; (ii) the number of
\nshares of Company Common Stock subject to such Company Option or Company
\nWarrant; (iii) the exercise price of such Company Option or Company Warrant;
\n(iv) the date on which such Company Option or Company Warrant was granted or
\nassumed; (v) the date on which such Company Option or Company Warrant expires
\nand (vi) whether the exercisability of such Company Option or Company Warrant
\nwill be accelerated in any way by the transactions contemplated by this
\nAgreement, and indicates the extent of any such acceleration. Company has
\ndelivered to Parent an accurate and complete copy of the Company Option Plans
\nand the form of all stock option agreements evidencing Company Options and an
\naccurate and complete copy of each Company Warrant. All shares of Company Common
\nStock subject to issuance as aforesaid, upon issuance on the terms and
\nconditions specified in the instruments pursuant to which they are issuable,
\nwill be duly authorized, validly issued, fully paid and nonassessable. Except as
\nset forth in Part 2.2(b) of the Company Disclosure Letter, there are no
\ncommitments or agreements of any character to which Company is bound which
\nprovides for the acceleration of the vesting of any Company Option as a result
\nof the Merger or the other transactions contemplated by this Agreement or the
\noccurrence of any subsequent event (such as the termination of employment of the
\noption holder following consummation of the Merger).<\/p>\n
(c) All outstanding shares of Company Common Stock, all
\noutstanding Company Options, all outstanding Company Warrants and all
\noutstanding shares of capital stock of each subsidiary of Company have been
\nissued and granted in compliance with (i) all applicable securities laws and
\nother applicable material Legal Requirements and (ii) all material<\/p>\n
-10-
\n 15
\nrequirements set forth in applicable agreements or instruments. For the purposes
\nof this Agreement, “LEGAL REQUIREMENTS” means any federal, state, local,
\nmunicipal, foreign or other law, statute, constitution, principle of common law,
\nresolution, ordinance, code, edict, decree, rule, regulation, ruling or
\nrequirement issued, enacted, adopted, promulgated, implemented or otherwise put
\ninto effect by or under the authority of any court, administrative agency or
\ncommission or other governmental authority or instrumentality, foreign or
\ndomestic (each, a “GOVERNMENTAL ENTITY”).<\/p>\n
2.3 Obligations With Respect to Capital Stock. Except as set forth in
\nPart 2.2 or Part 2.3 of the Company Disclosure Letter, there are no equity
\nsecurities, partnership interests or similar ownership interests of any class of
\nCompany equity security, or any securities exchangeable or convertible into or
\nexercisable for such equity securities, partnership interests or similar
\nownership interests, issued, reserved for issuance or outstanding. Except for
\nsecurities Company owns free and clear of all claims and Encumbrances, directly
\nor indirectly through one or more subsidiaries, and except for shares of capital
\nstock or other similar ownership interests of certain subsidiaries of Company
\nthat are owned by certain nominee equity holders as required by the applicable
\nlaw of the jurisdiction of organization of such subsidiaries, as of the date of
\nthis Agreement, there are no equity securities, partnership interests or similar
\nownership interests of any class of equity security of any subsidiary of
\nCompany, or any security exchangeable or convertible into or exercisable for
\nsuch equity securities, partnership interests or similar ownership interests,
\nissued, reserved for issuance or outstanding. Except as set forth in Part 2.2 or
\nPart 2.3 of the Company Disclosure Letter, there are no subscriptions, options,
\nwarrants, equity securities, convertible debt, partnership interests or similar
\nownership interests, calls, rights (including preemptive rights), commitments or
\nagreements of any character to which Company or any of its subsidiaries is a
\nparty or by which it is bound obligating Company or any of its subsidiaries to
\nissue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
\nredeem or otherwise acquire, or cause the repurchase, redemption or acquisition
\nof, any shares of capital stock, partnership interests or similar ownership
\ninterests of Company or any of its subsidiaries or obligating Company or any of
\nits subsidiaries to grant, extend, accelerate the vesting of or enter into any
\nsuch subscription, option, warrant, equity security, call, right, commitment or
\nagreement. Except as set forth in Part 2.3 of the Company Disclosure Letter or
\nas contemplated by this Agreement, the Stock Option Agreement and the Rights
\nAgreement, there are no registration rights, and there is no voting trust,
\nproxy, rights agreement, “poison pill” anti-takeover plan or other agreement or
\nunderstanding to which Company is a party or by which it is bound with respect
\nto any equity security of any class of Company or with respect to any equity
\nsecurity, partnership interest or similar ownership interest of any class of any
\nof its subsidiaries. Stockholders of Company will not be entitled to dissenters’
\nor appraisal rights under applicable state law in connection with the Merger.<\/p>\n
For purposes of this Agreement, “ENCUMBRANCES” means any lien,
\npledge, hypothecation, charge, mortgage, security interest, encumbrance, claim,
\ninfringement, interference, option, right of first refusal, preemptive right,
\ncommunity property interest or restriction of any nature (including any
\nrestriction on the voting of any security, any restriction on the transfer of
\nany security (other than restrictions on transfer under applicable securities
\nlaws) or other asset, any restriction on the receipt of any income derived from
\nany asset, any restriction on the use of any asset and any restriction on the
\npossession, exercise or transfer of<\/p>\n
-11-
\n 16
\nany other attribute of ownership of any asset), but excluding liens for Taxes
\nnot yet due and payable and such encumbrances, if any, which are not material in
\ncharacter, amount or extent.<\/p>\n
2.4 Authority; Non-Contravention.<\/p>\n
(a) Company has all requisite corporate power and authority
\nto enter into this Agreement and the Stock Option Agreement and to consummate
\nthe transactions contemplated hereby and thereby. The execution and delivery of
\nthis Agreement and the Stock Option Agreement and the consummation of the
\ntransactions contemplated hereby and thereby have been duly authorized by all
\nnecessary corporate action on the part of Company, subject only to the approval
\nand adoption of this Agreement and the approval of the Merger by Company’s
\nstockholders (the “COMPANY STOCKHOLDER APPROVALS”) and the filing of the
\nCertificate of Merger pursuant to Delaware Law. The affirmative vote of the
\nholders of a majority of the outstanding shares of Company Common Stock is
\nsufficient for Company’s stockholders to approve and adopt this Agreement and
\napprove the Merger, and no other approval of any holder of any securities of
\nCompany is required in connection with the consummation of the transactions
\ncontemplated hereby. This Agreement and the Stock Option Agreement have each
\nbeen duly executed and delivered by Company and, assuming the due execution and
\ndelivery by Parent and Merger Sub, constitute the valid and binding obligations
\nof Company, enforceable against Company in accordance with their terms, except
\nas enforceability may be limited by bankruptcy and other similar laws affecting
\nthe rights of creditors generally and general principles of equity.<\/p>\n
(b) The execution and delivery of this Agreement and the
\nStock Option Agreement by Company does not, and the performance of this
\nAgreement and the Stock Option Agreement by Company will not, (i) conflict with
\nor violate the Company Charter Documents, (ii) subject to obtaining the Company
\nStockholder Approvals and compliance with the requirements set forth in Section
\n2.4(c), conflict with or violate any material law, rule, regulation, order,
\njudgment or decree applicable to Company or any of its subsidiaries or by which
\nCompany or any of its subsidiaries or any of their respective material
\nproperties is bound or affected, or (iii) except as set forth in Part 2.4(b) of
\nthe Company Disclosure Letter, result in any material breach of or constitute a
\nmaterial default (or an event that with notice or lapse of time or both would
\nbecome a material default) under, or impair Company’s (or a subsidiary’s) rights
\nor alter the rights or obligations of any third party under, or give to others
\nany rights of termination, amendment, acceleration or cancellation of, or result
\nin the creation of an Encumbrance on any of the material properties or assets of
\nCompany or any of its subsidiaries pursuant to, any material note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit, franchise,
\nconcession, or other instrument or obligation to which Company or any of its
\nsubsidiaries is a party or by which Company or any of its subsidiaries or its or
\nany of their respective material properties are bound or affected. Part 2.4(b)
\nof the Company Disclosure Letter list all consents, waivers and approvals under
\nany of Company’s or any of its subsidiaries’ agreements, contracts, licenses or
\nleases required to be obtained in connection with the consummation of the
\ntransactions contemplated hereby, which, if individually or in the aggregate
\nwere not obtained, would result in a material loss of benefits to Company,
\nParent or the Surviving Corporation as a result of the Merger.<\/p>\n
-12-
\n 17
\n (c) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with any Governmental Entity or other
\nperson, is required to be obtained or made by Company in connection with the
\nexecution and delivery of this Agreement and the Stock Option Agreement or the
\nconsummation of the Merger, except for (i) the filing of the Certificate of
\nMerger with the Secretary of State of the State of Delaware and appropriate
\ndocuments with the relevant authorities of other states in which Company is
\nqualified to do business, (ii) the filing of the Proxy Statement\/Prospectus (as
\ndefined in Section 2.17) with the Securities and Exchange Commission (“SEC”) in
\naccordance with the Securities Exchange Act of 1934, as amended (the “EXCHANGE
\nACT”) and the effectiveness of the Registration Statement (as defined in Section
\n2.17), (iii) such consents, approvals, orders, authorizations, registrations,
\ndeclarations and filings as may be required under applicable federal, foreign
\nand state securities (or related) laws and the Hart-Scott-Rodino Antitrust
\nImprovements Act of 1976, as amended (the “HSR ACT”), and the securities or
\nantitrust laws of any foreign country, and (iv) such other consents,
\nauthorizations, filings, approvals and registrations which if not obtained or
\nmade would not be material to Company, Parent or the Surviving Corporation or
\nhave a material adverse effect on the ability of the parties hereto to
\nconsummate the Merger.<\/p>\n
2.5 SEC Filings; Company Financial Statements.<\/p>\n
(a) Company has filed all forms, reports and documents
\nrequired to be filed by Company with the SEC since January 22, 1999 and has made
\navailable to Parent such forms, reports and documents in the form filed with the
\nSEC. All such required forms, reports and documents (including those that
\nCompany may file subsequent to the date hereof) are referred to herein as the
\n“COMPANY SEC REPORTS.” As of their respective dates, the Company SEC Reports (i)
\nwere prepared in accordance with the requirements of the Securities Act of 1933,
\nas amended (the “SECURITIES ACT”), or the Exchange Act, as the case may be, and
\nthe rules and regulations of the SEC thereunder applicable to such Company SEC
\nReports and (ii) did not at the time they were filed (or if amended or
\nsuperseded by a filing prior to the date of this Agreement, then on the date of
\nsuch filing) contain any untrue statement of a material fact or omit to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in the light of the circumstances under which they were
\nmade, not misleading, except to the extent corrected prior to the date of this
\nAgreement by a subsequently filed Company SEC Report. None of Company’s
\nsubsidiaries is required to file any forms, reports or other documents with the
\nSEC.<\/p>\n
(b) Each of the consolidated financial statements
\n(including, in each case, any related notes thereto) contained in the Company
\nSEC Reports (the “COMPANY FINANCIALS”), including each Company SEC Report filed
\nafter the date hereof until the Closing, (i) complied as to form in all material
\nrespects with the published rules and regulations of the SEC with respect
\nthereto, (ii) was prepared in accordance with GAAP applied on a consistent basis
\nthroughout the periods involved (except as may be indicated in the notes thereto
\nor, in the case of unaudited interim financial statements, as may be permitted
\nby the SEC on Form 10-Q, 8-K or any successor form under the Exchange Act) and
\n(iii) fairly presented the consolidated financial position of Company and its
\nsubsidiaries as at the respective dates thereof and the consolidated results of
\nCompany’s operations and cash flows for the periods indicated, except that the
\nunaudited interim financial statements may not contain footnotes and were or are
\nsubject to normal and recurring year-end adjustments. The balance sheet of
\nCompany contained in<\/p>\n
-13-
\n 18
\nCompany SEC Reports as of September 30, 2000 is hereinafter referred to as the
\n“COMPANY BALANCE SHEET.” Except as disclosed in the Company Financials, since
\nthe date of the Company Balance Sheet, neither Company nor any of its
\nsubsidiaries has any liabilities (absolute, accrued, contingent or otherwise)
\nrequired under GAAP to be set forth on a balance sheet which are, individually
\nor in the aggregate, material to the business, results of operations or
\nfinancial condition of Company and its subsidiaries taken as a whole, except for
\nliabilities incurred since the date of the Company Balance Sheet in the ordinary
\ncourse of business consistent with past practices and liabilities incurred in
\nconnection with this Agreement.<\/p>\n
(c) Company has heretofore furnished to Parent a complete
\nand correct copy of any amendments or modifications, which have not yet been
\nfiled with the SEC but which are required to be filed, to agreements, documents
\nor other instruments which previously had been filed by Company with the SEC
\npursuant to the Securities Act or the Exchange Act.<\/p>\n
2.6 Absence of Certain Changes or Events. Except as set forth in Part
\n2.6 of the Company Disclosure Letter or as disclosed in Company SEC Reports,
\nsince the date of the Company Balance Sheet there has not been: (i) any Material
\nAdverse Effect (as defined in Section 8.3)) with respect to Company, (ii) any
\ndeclaration, setting aside or payment of any dividend on, or other distribution
\n(whether in cash, stock or property) in respect of, any of Company’s or any of
\nits subsidiaries’ capital stock, or any purchase, redemption or other
\nacquisition by Company of any of Company’s capital stock or any other securities
\nof Company or its subsidiaries or any grant or issuance of any options,
\nwarrants, calls or rights to acquire any such shares or other securities except
\nfor repurchases from employees following their termination pursuant to the terms
\nof their pre-existing stock option or purchase agreements, (iii) any split,
\ncombination or reclassification of any of Company’s or any of its subsidiaries’
\ncapital stock, (iv) any granting by Company or any of its subsidiaries of any
\nincrease in compensation or fringe benefits to any of their officers or
\nemployees (other than increases for employees in the ordinary course of business
\nconsistent with past practice), or any payment by Company or any of its
\nsubsidiaries of any bonus to any of their officers or employees, or any granting
\nby Company or any of its subsidiaries of any increase in severance or
\ntermination pay or any entry by Company or any of its subsidiaries into, or
\nmaterial modification or amendment of, any currently effective employment,
\nseverance, termination or indemnification agreement or any agreement the
\nbenefits of which are contingent or the terms of which are materially altered
\nupon the occurrence of a transaction involving Company of the nature
\ncontemplated hereby or any acceleration or release of any vesting condition to
\nthe right to exercise any option, warrant or other right to purchase or
\notherwise acquire any shares of Company’s capital stock or any acceleration or
\nrelease of any right to repurchase shares of Company’s capital stock upon the
\ntermination of employment or services with Company, (v) any material change or
\nalteration in the policy of Company relating to the granting of stock options or
\nother equity compensation to its employees and consultants, (vi) entry by
\nCompany or any of its subsidiaries into, or material modification, amendment or
\ncancellation of, any development services, licensing, distribution, sales, sales
\nservices or other similar agreement with respect to any material Intellectual
\nProperty (as defined in Section 2.9) other than in the ordinary course of
\nbusiness consistent with past practices, (vii) any acquisition, sale or transfer
\nof any material asset by Company or any of its subsidiaries other than in the
\nordinary course of business, (viii) any material change by Company in its
\naccounting methods, principles or practices, except as required by concurrent
\nchanges in<\/p>\n
-14-
\n 19
\nGAAP, or (ix) any material revaluation by Company of any of its assets,
\nincluding writing off notes or accounts receivable other than in the ordinary
\ncourse of business.<\/p>\n
2.7 Taxes.<\/p>\n
(a) Company and each of its subsidiaries have timely filed
\nall federal, state, local and foreign returns, estimates, information statements
\nand reports (“RETURNS”) relating to Taxes required to be filed by or on behalf
\nof Company and each of its subsidiaries with any Tax authority, except such
\nReturns which are not material to Company; such Returns are true, correct and
\ncomplete in all material respects; and Company and each of its subsidiaries have
\npaid all Taxes shown to be due on such Returns.<\/p>\n
(b) Except as is not material to Company, Company and each
\nof its subsidiaries have withheld all federal and state income taxes, Taxes
\npursuant to the Federal Insurance Contribution Act (“FICA”), Taxes pursuant to
\nthe Federal Unemployment Tax Act (“FUTA”) and other Taxes required to be
\nwithheld.<\/p>\n
(c) Neither Company nor any of its subsidiaries has been
\ndelinquent in the payment of any material Tax nor is there any material Tax
\ndeficiency outstanding, proposed or assessed against Company or any of its
\nsubsidiaries, nor has Company or any of its subsidiaries executed any unexpired
\nwaiver of any statute of limitations on or extending the period for the
\nassessment or collection of any Tax.<\/p>\n
(d) Except as is not material to Company, no audit or other
\nexamination of any Return of Company or any of its subsidiaries by any Tax
\nauthority is presently in progress, nor has Company or any of its subsidiaries
\nbeen notified of any request for such an audit or other examination.<\/p>\n
(e) Except as is not material to Company, no adjustment
\nrelating to any Returns filed by Company or any of its subsidiaries has been
\nproposed in writing formally or informally by any Tax authority to Company or
\nany of its subsidiaries or any representative thereof.<\/p>\n
(f) Neither Company nor any of its subsidiaries has any
\nliability for unpaid Taxes which has not been accrued for or reserved on the
\nCompany Balance Sheet in accordance with GAAP, whether asserted or unasserted,
\ncontingent or otherwise, which is material to Company, other than any liability
\nfor unpaid Taxes that may have accrued since the date of the Company Balance
\nSheet in connection with the operation of the business of Company and its
\nsubsidiaries in the ordinary course.<\/p>\n
(g) Except as provided in Section 422 of the Code, there is
\nno contract, agreement, plan or arrangement to which Company or any of its
\nsubsidiaries is a party, including this Agreement and the agreements entered
\ninto in connection with this Agreement, covering any employee or former employee
\nof Company or any of its subsidiaries that, individually or collectively, would
\nbe reasonably likely to give rise to the payment of any amount that would not be
\nfully deductible at or prior to the time of payment or exercise pursuant to
\nSections 280G, 404 or 162(m) of the Code. There is no contract, agreement, plan
\nor arrangement to which Company<\/p>\n
-15-
\n 20
\nis a party or by which it is bound to compensate any individual for excise taxes
\npaid pursuant to Section 4999 of the Code.<\/p>\n
(h) Neither Company nor any of its subsidiaries has filed
\nany consent agreement under Section 341(f) of the Code or agreed to have Section
\n341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
\ndefined in Section 341(f)(4) of the Code) owned by Company.<\/p>\n
(i) None of Company and its subsidiaries (A) has been a
\nmember of an affiliated group filing a consolidated federal income tax Return
\n(other than a group the common parent of which was Company) or (B) has any
\nliability for the Taxes of any person (other than any of Company and its
\nsubsidiaries) under Reg. Section 1.1502-6 (or any similar provision of state,
\nlocal, or foreign law), as a transferee or successor, by contract, or otherwise.<\/p>\n
(j) Except as may be required as a result of the Merger,
\nCompany and its subsidiaries have not been and will not be required to include
\nany adjustment in Taxable income for any Tax period (or portion thereof)
\npursuant to Section 481 of the Code or any comparable provision under state or
\nforeign Tax laws as a result of transactions, events or accounting methods
\nemployed prior to the Closing.<\/p>\n
(k) None of Company’s or its subsidiaries’ assets are tax
\nexempt use property within the meaning of Section 168(h) of the Code.<\/p>\n
(l) Company has not been distributed in a transaction
\nqualifying under Section 355 of the Code within the last two years, nor has
\nCompany distributed any corporation in a transaction qualifying under Section
\n355 of the Code within the last two years.<\/p>\n
(m) To Company’s knowledge, there is no fact or
\ncircumstance, and Company has no present plan or intention to take any action,
\nthat would be reasonably likely to prevent the Merger from qualifying as a
\n“reorganization” pursuant to the provisions of Section 368 of the Code.<\/p>\n
(n) Company has delivered to Parent or its legal or
\naccounting representatives, copies of all foreign, federal and state income tax
\nand all state sales and use tax Returns filed for Company and each of its
\nsubsidiaries and each of Company’s and its subsidiaries’ predecessor entities,
\nif any, for all periods since December 31, 1995.<\/p>\n
For the purposes of this Agreement, “TAX” or “TAXES” refers
\nto any and all federal, state, local and foreign taxes, assessments and other
\ngovernmental charges, duties, impositions and liabilities relating to taxes,
\nincluding taxes based upon or measured by gross receipts, income, profits,
\nsales, use and occupation, and value added, ad valorem, transfer, franchise,
\nwithholding, payroll, recapture, employment, excise and property taxes, together
\nwith all interest, penalties and additions imposed with respect to such amounts.<\/p>\n
-16-
\n 21
\n 2.8 Title to Properties.<\/p>\n
(a) Neither Company nor any of its subsidiaries owns any
\ninterest in real property, other than the Material Leases listed in Part 2.8 of
\nthe Company Disclosure Letter. Part 2.8 of the Company Disclosure Letter list
\nall real property leases to which Company is a party that require Company to
\nmake annual lease payments in excess of $50,000 and each amendment thereto that
\nis in effect as of the date of this Agreement. All Material Leases are in full
\nforce and effect, are valid and effective in accordance with their respective
\nterms, and there is not, under any of such leases, any existing default or event
\nof default (or event which with notice or lapse of time, or both, would
\nconstitute a default) that would give rise to a claim against Company in excess
\nof $50,000.<\/p>\n
(b) Company has good and valid title to, or, in the case of
\nleased properties and assets, valid leasehold interests in, all of its tangible
\nproperties and assets, real, personal and mixed, used or held for use in its
\nbusiness, free and clear of any Encumbrances, except as reflected in the Company
\nFinancials. Each of Company’s subsidiaries has good and valid title to, or, in
\nthe case of leased properties and assets, valid leasehold interests in, all of
\nits tangible properties and assets, real, personal and mixed, used or held for
\nuse in its business, free and clear of any Encumbrances, except as reflected in
\nthe Company Financials.<\/p>\n
2.9 Intellectual Property. For the purposes of this Agreement, the
\nfollowing terms have the following definitions:<\/p>\n
“INTELLECTUAL PROPERTY” shall mean any or all of the
\nfollowing and all rights in, arising out of, or associated therewith: (i) all
\nUnited States, international and foreign patents and applications therefor and
\nall reissues, divisions, renewals, extensions, provisionals, continuations and
\ncontinuations-in-part thereof; (ii) all inventions (whether patentable or not),
\ninvention disclosures, improvements, trade secrets, proprietary information,
\nknow how, technology, technical data and customer lists, and all documentation
\nrelating to any of the foregoing; (iii) all copyrights, copyrights
\nregistrations, mask works and applications therefor, and all other rights
\ncorresponding thereto throughout the world; (iv) all industrial designs and any
\nregistrations and applications therefor throughout the world; (v) all trade
\nnames, URLs, logos, common law trademarks and service marks, trademark and
\nservice mark registrations and applications therefor throughout the world; (vi)
\nall databases and data collections and all rights therein throughout the world;
\n(vii) all moral and economic rights of authors and inventors, however
\ndenominated, throughout the world, and (viii) all similar or equivalent rights
\nto any of the foregoing anywhere in the world.<\/p>\n
“COMPANY INTELLECTUAL PROPERTY” shall mean any Intellectual
\nProperty that is owned by, or exclusively licensed to, Company or one of its
\nsubsidiaries.<\/p>\n
“REGISTERED INTELLECTUAL PROPERTY” means all United States,
\ninternational and foreign: (i) patents; (ii) registered trademarks, service
\nmarks or other registrations related to trademarks or service marks; and (iii)
\nregistered copyrights and mask works.<\/p>\n
-17-
\n 22
\n “COMPANY REGISTERED INTELLECTUAL PROPERTY” means all of the
\nRegistered Intellectual Property owned by, or filed in the name of, Company or
\none of its subsidiaries.<\/p>\n
(a) Except as set forth in Part 2.9(a) of the Company
\nDisclosure Letter, no material Company Intellectual Property or product or
\nservice of Company or any of its subsidiaries is subject to any proceeding or
\noutstanding decree, order, judgment, agreement or stipulation restricting in any
\nmanner the use, transfer or licensing thereof by Company, or which may affect
\nthe validity, use or enforceability of such Company Intellectual Property.<\/p>\n
(b) Each material item of Company Registered Intellectual
\nProperty is valid and subsisting, all necessary registration, maintenance and
\nrenewal fees currently due in connection with such Registered Intellectual
\nProperty have been made and all necessary documents, recordations and
\ncertificates in connection with such Registered Intellectual Property have been
\nfiled with the relevant patent, copyright, trademark or other authorities in the
\nUnited States, international or foreign jurisdictions, as the case may be, for
\nthe purposes of maintaining such Registered Intellectual Property.<\/p>\n
(c) Company or one of its subsidiaries owns and has good
\nand exclusive title to, or has license (sufficient for the conduct of its
\nbusiness as currently conducted and as proposed by Company and its subsidiaries
\nto be conducted) to, each material item of Company Intellectual Property free
\nand clear of any Encumbrance (excluding licenses and related restrictions); and
\nCompany or one of its subsidiaries is the exclusive owner of all trademarks and
\ntrade names used in connection with the operation or conduct of the business of
\nCompany and its subsidiaries, including the sale of any products or the
\nprovision of any services by Company and its subsidiaries.<\/p>\n
(d) Company or one of its subsidiaries owns exclusively,
\nand has good title to, all copyrighted works that are Company products or which
\nCompany otherwise expressly purports to own.<\/p>\n
(e) To the extent that any material Intellectual Property
\nhas been developed or created by a third party for Company or any of its
\nsubsidiaries, Company or its subsidiaries, as the case may be, has a written
\nagreement with such third party with respect thereto and Company or its
\nsubsidiary thereby either (i) has obtained ownership of and is the exclusive
\nowner of, or (ii) has obtained a written license (sufficient for the conduct of
\nits business as currently conducted and as proposed by Company and its
\nsubsidiaries to be conducted) to all such third party’s Intellectual Property in
\nsuch work, material or invention by operation of law or by valid assignment, to
\nthe full extent it is legally possible to do so.<\/p>\n
(f) Neither Company nor any of its subsidiaries has
\ntransferred ownership of, or granted any exclusive license with respect to, any
\nIntellectual Property that is or was material Company Intellectual Property, to
\nany third party.<\/p>\n
(g) Part 2.9(g) of the Company Disclosure Letter lists all
\nmaterial contracts, licenses and agreements to which Company or any of its
\nsubsidiaries is a party (i) with respect to Company Intellectual Property
\nlicensed or transferred to any third party (other than agreements<\/p>\n
-18-
\n 23
\nentered into in the ordinary course consistent with past practice); or (ii)
\npursuant to which a third party has licensed or transferred any material
\nIntellectual Property to Company or one of its subsidiaries.<\/p>\n
(h) The operation of the business of Company and its
\nsubsidiaries as such business currently is conducted, including Company’s
\ndesign, development, marketing and sale of the products or services of Company
\n(including with respect to products currently under development) (i) has not,
\ndoes not and will not infringe or misappropriate (A) to Company’s knowledge, any
\npatent of any third party, or (B) any other Intellectual Property of any third
\nparty or (ii) to Company’s knowledge, constitute unfair competition or trade
\npractices under the laws of any jurisdiction.<\/p>\n
(i) Except as set forth in Part 2.9(i) of the Company
\nDisclosure Letter, Company has not received written, or to the knowledge of
\nCompany, non-written notice from any third party that the operation of the
\nbusiness of Company or of any of its subsidiaries or any act, product or service
\nof Company or of any of its subsidiaries, infringes or misappropriates the
\nIntellectual Property of any third party or constitutes unfair competition or
\ntrade practices under the laws of any jurisdiction.<\/p>\n
(j) To the knowledge of Company, no person has or is
\nmaterially infringing or misappropriating any material Company Intellectual
\nProperty.<\/p>\n
(k) Company and its subsidiaries have taken reasonable
\nsteps to protect Company’s and its subsidiaries’ rights in Company’s and such
\nsubsidiaries’ confidential information and trade secrets that they wish to
\nprotect or any trade secrets or confidential information of third parties
\nprovided to Company or such subsidiaries, and, without limiting the foregoing,
\nCompany and its subsidiaries have and enforce a policy requiring each employee
\nand each contractor who has access to material, nonpublic Company Intellectual
\nProperty to execute a proprietary information and confidentiality agreement
\nsubstantially in the form provided to Parent, and all current and former
\nemployees and such contractors of Company and its subsidiaries have executed
\nsuch an agreement. Other than source code provided under “open source”
\narrangements or escrow or other agreements, in each case, described in Part
\n2.9(k) of the Company Disclosure Letter, Company has not provided source code to
\nany Company Intellectual Property to any third party.<\/p>\n
(l) No of the Company Intellectual Property nor any product
\nor service of Company contains any defect in connection with processing data
\ncontaining dates in leap years or in the year 2000 or any preceding or following
\nyears, nor has Company received any written, or to Company’s knowledge,
\nnon-written allegation from any person that has been licensed to use any of
\nCompany’s or any of its subsidiaries’ software products of such a processing
\ndefect.<\/p>\n
(m) All material contracts, licenses and agreements
\nrelating to Company’s Intellectual Property are in full force and effect. Except
\nas set forth in Part 2.9(m) of the Company Disclosure Letter, the consummation
\nof the transactions contemplated by this Agreement will neither violate nor
\nresult in the breach, modification, cancellation, termination, or suspension of
\nsuch contracts, licenses and agreements. Except as set forth in Part 2.9(m) of<\/p>\n
-19-
\n 24
\nthe Company Disclosure Letter, Company and each of its subsidiaries are in
\nmaterial compliance with, and have not materially breached any term of any of
\nsuch contracts, licenses and agreements and, to the knowledge of Company and its
\nsubsidiaries, all other parties to such contracts, licenses and agreements are
\nin compliance in all material respects with, and have not materially breached
\nany term of, such contracts, licenses and agreements. Assuming Company has
\nobtained prior to the Closing Date the third party consents set forth in Part
\n2.9(m) of the Company Disclosure Letter, following the Closing Date, the
\nSurviving Corporation will be permitted to exercise all of Company’s rights
\nunder such contracts, licenses and agreements to the same extent Company would
\nhave been able to had the transactions contemplated by this Agreement not
\noccurred and without the payment of any additional amounts or consideration
\nother than ongoing fees, royalties or payments which Company would otherwise be
\nrequired to pay.<\/p>\n
2.10 Compliance with Laws.<\/p>\n
(a) Neither Company nor any of its subsidiaries is in
\nconflict with, or in default or violation of (i) any law, rule, regulation,
\norder, judgment or decree applicable to Company or any of its subsidiaries or by
\nwhich Company or any of its subsidiaries or any of their respective properties
\nis bound or affected, or (ii) any note, bond, mortgage, indenture, contract,
\nagreement, lease, license, permit, franchise or other instrument or obligation
\nto which Company or any of its subsidiaries is a party or by which Company or
\nany of its subsidiaries or its or any of their respective properties is bound or
\naffected, except for conflicts, violations and defaults that, individually or in
\nthe aggregate, would not cause Company to lose any material benefit or incur any
\nmaterial liability. Except as set forth in Part 2.10(a) of the Company
\nDisclosure Letter, no investigation or review by any Governmental Entity is
\npending or, to Company’s knowledge, has been threatened in a writing delivered
\nto Company against Company or any of its subsidiaries, nor, to Company’s
\nknowledge, has any Governmental Entity indicated an intention to conduct an
\ninvestigation of Company or any of its subsidiaries. There is no agreement,
\njudgment, injunction, order or decree binding upon Company or any of its
\nsubsidiaries which has or could reasonably be expected to have the effect of
\nprohibiting or materially impairing any business practice of Company or any of
\nits subsidiaries, any acquisition of material property by Company or any of its
\nsubsidiaries or the conduct of business by Company and its subsidiaries as
\ncurrently conducted.<\/p>\n
(b) Company and its subsidiaries hold all permits,
\nlicenses, variances, exemptions, orders and approvals from Governmental Entities
\nthat are material to and required for the operation of the business of Company
\nand of its subsidiaries as currently conducted (collectively, the “COMPANY
\nPERMITS”). Company and its subsidiaries are in compliance, in all material
\nrespects, with the terms of the Company Permits.<\/p>\n
2.11 Litigation. Except as set forth in Part 2.11 of the Company
\nDisclosure Letter, there are no claims, suits, actions or proceedings pending
\nor, to the knowledge of Company, threatened against, relating to or affecting
\nCompany or any of its subsidiaries, before any Governmental Entity or any
\narbitrator that seeks to restrain or enjoin the consummation of the transactions
\ncontemplated by this Agreement or which could reasonably be expected, either
\nsingularly or in the aggregate with all such claims, actions or proceedings, to
\nbe material to<\/p>\n
-20-
\n 25
\nCompany, any of its subsidiaries or the Surviving Corporation following the
\nMerger or have a material adverse effect on the ability of the parties hereto to
\nconsummate the Merger. No Governmental Entity has at any time challenged or
\nquestioned in a writing delivered to Company the legal right of Company or any
\nof its subsidiaries to design, offer or sell any of its products or services in
\nthe present manner or style thereof or otherwise to conduct its business as
\ncurrently conducted. Except as set forth in Part 2.11 of the Company Disclosure
\nLetter, as of the date hereof, to the knowledge of Company, no event has
\noccurred, and no claim, dispute or other condition or circumstance exists, that
\nwill, or that would reasonably be expected to, cause or provide a bona fide
\nbasis for a director or executive officer of Company or of any of its
\nsubsidiaries to seek indemnification from Company.<\/p>\n
2.12 Employee Benefit Plans.<\/p>\n
(a) Definitions. With the exception of the definition of
\n“Affiliate” set forth in Section 2.12(a)(i) below (which definition shall apply
\nonly to this Section 2.12), for purposes of this Agreement, the following terms
\nshall have the meanings set forth below:<\/p>\n
(i) “AFFILIATE” shall mean any other person or
\nentity under common control with Company within the meaning of Sections 414(b),
\n(c), (m) or (o) of the Code and the regulations issued thereunder;<\/p>\n
(ii) “COMPANY EMPLOYEE PLAN” shall mean any plan,
\nprogram, policy, practice, contract, agreement or other arrangement providing
\nfor compensation, severance, termination pay, performance awards, stock or
\nstock-related awards, fringe benefits or other employee benefits or remuneration
\nof any kind, whether written or unwritten or otherwise, funded or unfunded,
\nincluding without limitation, each “employee benefit plan” within the meaning of
\nSection 3(3) of ERISA which is or has been maintained, contributed to, or
\nrequired to be contributed to, by Company or any Affiliate for the benefit of
\nany Employee;<\/p>\n
(iii) “COBRA” shall mean the Consolidated Omnibus
\nBudget Reconciliation Act of 1985, as amended;<\/p>\n
(iv) “DOL” shall mean the Department of Labor;<\/p>\n
(v) “EMPLOYEE” shall mean any current, former or
\nretired employee, officer or director of Company or any Affiliate;<\/p>\n
(vi) “EMPLOYEE AGREEMENT” shall mean each
\nmanagement, employment, severance, consulting, relocation, repatriation,
\nexpatriation, visas, work permit or similar agreement or contract between
\nCompany or any Affiliate and any Employee or consultant;<\/p>\n
(vii) “ERISA” shall mean the Employee Retirement
\nIncome Security Act of 1974, as amended;<\/p>\n
(viii) “FMLA” shall mean the Family Medical Leave
\nAct of 1993, as amended;<\/p>\n
-21-
\n 26
\n (ix) “INTERNATIONAL EMPLOYEE PLAN” shall mean
\neach Company Employee Plan that has been adopted or maintained by Company,
\nwhether informally or formally, for the benefit of Employees outside the United
\nStates;<\/p>\n
(x) “IRS” shall mean the Internal Revenue
\nService;<\/p>\n
(xi) “MULTIEMPLOYER PLAN” shall mean any “PENSION
\nPLAN” (as defined below) which is a “multiemployer plan,” as defined in Section
\n3(37) of ERISA;<\/p>\n
(xii) “PBGC” shall mean the Pension Benefit
\nGuaranty Corporation; and<\/p>\n
(xiii) “PENSION PLAN” shall mean each Company
\nEmployee Plan which is an “employee pension benefit plan,” within the meaning of
\nSection 3(2) of ERISA.<\/p>\n
(b) Schedule. Part 2.12(b) of the Company Disclosure Letter
\ncontain an accurate and complete list of each Company Employee Plan and each
\nEmployee Agreement. Company does not have any plan or commitment to establish
\nany new Company Employee Plan, to modify any Company Employee Plan or Employee
\nAgreement (except to the extent required by law or to conform any such Company
\nEmployee Plan or Employee Agreement to the requirements of any applicable law,
\nin each case as previously disclosed to Parent in writing, or as required by
\nthis Agreement), or to enter into any Company Employee Plan or Employee
\nAgreement, nor does it have any intention or commitment to do any of the
\nforegoing.<\/p>\n
(c) Documents. Company has provided to Parent: (i) accurate
\nand complete copies of all documents embodying each Company Employee Plan and
\neach Employee Agreement including all amendments thereto and written
\ninterpretations thereof; (ii) the most recent annual actuarial valuations, if
\nany, prepared for each Company Employee Plan; (iii) the three most recent annual
\nreports (Form Series 5500 and all schedules and financial statements attached
\nthereto), if any, required under ERISA or the Code in connection with each
\nCompany Employee Plan or related trust; (iv) if the Company Employee Plan is
\nfunded, the most recent annual and periodic accounting of Company Employee Plan
\nassets; (v) the most recent summary plan description together with the summary
\nof material modifications thereto, if any, required under ERISA with respect to
\neach Company Employee Plan; (vi) all IRS determination, opinion, notification
\nand advisory letters, and rulings relating to Company Employee Plans and copies
\nof all applications and correspondence to or from the IRS or the DOL with
\nrespect to any Company Employee Plan; (vii) all material written agreements and
\ncontracts relating to each Company Employee Plan, including, but not limited to,
\nadministrative service agreements, group annuity contracts and group insurance
\ncontracts; (viii) all communications material to any Employee or Employees
\nrelating to any Company Employee Plan and any proposed Company Employee Plans,
\nin each case, relating to any amendments, terminations, establishments,
\nincreases or decreases in benefits, acceleration of payments or vesting
\nschedules or other events which would result in any material liability to
\nCompany; (ix) all COBRA forms and related notices; (x) all registration
\nstatements and prospectuses prepared in connection with each Company Employee
\nPlan; and (xi) a list of all employees, officers and consultants of Company
\nreflecting each such person’s current title and\/or job description and
\ncompensation.<\/p>\n
-22-
\n 27
\n (d) Employee Plan Compliance. (i) Company has performed in
\nall material respects all obligations required to be performed by it under, is
\nnot in default or violation of, and has no knowledge of any default or violation
\nby any other party to, each Company Employee Plan and\/or Employee Agreement, and
\neach Company Employee Plan has been established and maintained in all material
\nrespects in accordance with its terms and in compliance with all applicable
\nlaws, statutes, orders, rules and regulations, including but not limited to
\nERISA or the Code; (ii) each Company Employee Plan intended to qualify under
\nSection 401(a) of the Code and each trust intended to qualify under Section
\n501(a) of the Code has either received a favorable determination letter from the
\nIRS with respect to each such Plan as to its qualified status under the Code or
\nhas remaining a period of time under applicable Treasury regulations or IRS
\npronouncements in which to apply for such a determination letter and make any
\namendments necessary to obtain a favorable determination and no event has
\noccurred which would adversely affect the status of such determination letter or
\nthe qualified status of such Plan; (iii) no “prohibited transaction,” within the
\nmeaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not
\notherwise exempt under Section 408 of ERISA, has occurred with respect to any
\nCompany Employee Plan; (iv) there are no actions, suits or claims pending, or,
\nto the knowledge of Company, threatened or reasonably anticipated (other than
\nroutine claims for benefits) against any Company Employee Plan or against the
\nassets of any Company Employee Plan; (v) each Company Employee Plan can be
\namended, terminated or otherwise discontinued either before or after the
\nEffective Time in accordance with its terms, without liability to Parent,
\nCompany or any of its Affiliates (other than ordinary administration expenses
\ntypically incurred in a termination event); (vi) there are no audits, inquiries
\nor proceedings pending or, to the knowledge of Company, threatened by the IRS or
\nDOL with respect to any Company Employee Plan; (vii) neither Company nor any
\nAffiliate is subject to any penalty or tax with respect to any Company Employee
\nPlan under Section 402(i) of ERISA or Sections 4975 through 4980 of the Code;
\nand (viii) all contributions due from Company or any Affiliate with respect to
\nany of the Company Employee Plans have been made as required under ERISA or have
\nbeen accrued on the Company Balance Sheet and no further contributions will be
\ndue or will have accrued thereunder as of the Closing Date; (ix) to Company’s
\nknowledge, all individuals who, pursuant to the terms of any Employee Plan or
\nEmployee Agreement, are entitled to participate in any such Employee Plan or
\nEmployee Agreement are currently participating in such Employee Plan or Employee
\nAgreement, or have been given the opportunity to do so and have declined; (x)
\nthere has been no amendment to, written interpretation or authorized
\nannouncement (whether or not written) by Company relating to, or change in
\nemployee participation or coverage under, any Employee Plan or Employee
\nAgreement that would increase materially the expense of maintaining such
\nEmployee Plan or Employee Agreement above the level of the expense incurred in
\nrespect thereof during the calendar year 1999.<\/p>\n
(e) Pension Plans. Company does not now, nor has it ever,
\nmaintained, established, sponsored, participated in, or contributed to, any
\nPension Plan which is subject to Title IV of ERISA or Section 412 of the Code.<\/p>\n
(f) Multiemployer Plans. At no time has Company contributed
\nto or been requested to contribute to any Multiemployer Plan.<\/p>\n
-23-
\n 28
\n (g) No Post-Employment Obligations. No Company Employee
\nPlan provides, or has any liability to provide, retiree life insurance, retiree
\nhealth or other retiree employee welfare benefits to any person for any reason,
\nexcept as may be required by COBRA or other applicable statute, and Company has
\nnever represented, promised or contracted (whether in oral or written form) to
\nany Employee (either individually or to Employees as a group) or any other
\nperson that such Employee(s) or other person would be provided with retiree life
\ninsurance, retiree health or other retiree employee welfare benefit, except to
\nthe extent required by statute.<\/p>\n
(h) COBRA; FMLA. Neither Company nor any Affiliate has,
\nprior to the Effective Time, and in any material respect, violated any of the
\nhealth care continuation requirements of COBRA, the requirements of FMLA or any
\nsimilar provisions of state law applicable to its Employees. The group health
\nplans (as defined in Section 4980B(g) of the Code) that benefit employees of
\nCompany are in compliance, in all material respects, with the continuation
\ncoverage requirements of Section 4980B of the Code and Sections 601 through 608
\nof ERISA, the Americans with Disabilities Act of 1990, as amended and the FMLA,
\nand the regulations thereunder, as such requirements affect Company and its
\nemployees. As of the Closing Date, there will be no material outstanding,
\nuncorrected violations under COBRA, with respect to any of the Employee Plans or
\nEmployee Agreements, covered employees or qualified beneficiaries.<\/p>\n
(i) Effect of Transaction. The execution of this Agreement
\nand the consummation of the transactions contemplated hereby will not (either
\nalone or upon the occurrence of any additional or subsequent events) constitute
\nan event under any Company Employee Plan, Employee Agreement, trust or loan that
\nwill or may result in any payment (whether of severance pay or otherwise),
\nacceleration, forgiveness of indebtedness, vesting, distribution, increase in
\nbenefits or obligation to fund benefits with respect to any Employee. No payment
\nor benefit which will or may be made by Company or its Affiliates with respect
\nto any Employee as a result of the transactions contemplated by this Agreement
\nwill be characterized as an “excess parachute payment,” within the meaning of
\nSection 280G(b)(1) of the Code or will be treated as a nondeductible expense
\nwithin the meaning of Section 162 of the Code.<\/p>\n
(j) Employment Matters. Company and each of its
\nsubsidiaries: (i) is in compliance in all material respects with all applicable
\nforeign, federal, state and local laws, rules and regulations respecting
\nemployment, employment practices, immigration, terms and conditions of
\nemployment and wages and hours, in each case, with respect to Employees; (ii)
\nhas withheld all amounts required by law or by agreement to be withheld from the
\nwages, salaries and other payments to Employees; (iii) has properly classified
\nindependent contractors for purposes of federal and applicable state tax laws,
\nlaws applicable to employee benefits and other applicable laws; (iv) is not
\nliable in any material amounts for any arrears of wages or any taxes or any
\npenalty for failure to comply with any of the foregoing; and (v) is not liable
\nfor any material payment to any trust or other fund or to any governmental or
\nadministrative authority, with respect to unemployment compensation benefits,
\nsocial security or other benefits or obligations for Employees (other than
\nroutine payments to be made in the normal course of business and consistent with
\npast practice). There are no pending, or, to Company’s knowledge, threatened or
\nreasonably anticipated claims or actions against Company under any workers
\ncompensation policy or long-term disability policy. To Company’s knowledge, no
\nEmployee of<\/p>\n
-24-
\n 29
\nCompany has violated any employment contract, nondisclosure agreement or
\nnoncompetition agreement by which such Employee is bound due to such Employee
\nbeing employed by Company and disclosing to Company or using trade secrets or
\nproprietary information of any other person or entity. All United States-based
\nemployees of Company are legally permitted to be employed by Company in the
\nUnited States of America in their current jobs. There are no controversies
\npending or, to Company’s knowledge threatened, between Company and any
\nsubsidiary and any of their employees that would be reasonably likely to result
\nin Company’s incurring material liability. Except as set forth in Part 2.12(j)
\nof the Company Disclosure Letter, Company does not have any employment
\ncontracts, Employee Agreements, or consulting agreements currently in effect
\nthat are not terminable at will (other than agreements for the sole purpose of
\nproviding for the confidentiality of proprietary information or assignment of
\ninvention and other than consulting agreements which are not material in
\nsubstance or amount). Company will have no liability to any employee or to any
\norganization or any other entity as a result of the termination of any employee
\nleasing arrangement.<\/p>\n
(k) Labor. No work stoppage or labor strike against Company
\nis pending, threatened or reasonably anticipated. Company does not know of any
\nactivities or proceedings of any labor union to organize any Employees. There
\nare no actions, suits, claims, labor disputes or grievances pending, or, to the
\nknowledge of Company, threatened or reasonably anticipated relating to any
\nlabor, safety or discrimination matters involving any Employee, including
\ncharges of unfair labor practices or discrimination complaints, which, if
\nadversely determined, would, individually or in the aggregate, result in any
\nmaterial liability to Company. Neither Company nor any of its subsidiaries has
\nengaged in any unfair labor practices within the meaning of the National Labor
\nRelations Act. Company is not presently, nor has it been in the past, a party
\nto, or bound by, any collective bargaining agreement or union contract with
\nrespect to Employees and no collective bargaining agreement is being negotiated
\nby Company.<\/p>\n
(l) International Employee Plan. Each International
\nEmployee Plan has been established, maintained and administered in material
\ncompliance with its terms and conditions and with the requirements prescribed by
\nany and all statutory or regulatory laws that are applicable to such
\nInternational Employee Plan. Furthermore, no International Employee Plan has
\nunfunded liabilities, that as of the Effective Time, will not be offset by
\ninsurance or fully accrued on the Company Balance Sheet. Except as required by
\nlaw, no condition exists that would prevent Company or Parent from terminating
\nor amending any International Employee Plan at any time for any reason.<\/p>\n
2.13 Environmental Matters.<\/p>\n
(a) Hazardous Material. Except as would not result in
\nmaterial liability to Company, no underground storage tanks and no amount of any
\nsubstance that has been designated by any Governmental Entity or by applicable
\nfederal, state or local law to be radioactive, toxic, hazardous or otherwise a
\ndanger to health or the environment, including, without limitation, PCBs,
\nasbestos, petroleum, urea-formaldehyde and all substances listed as hazardous
\nsubstances pursuant to the Comprehensive Environmental Response, Compensation,
\nand Liability Act of 1980, as amended, or defined as a hazardous waste pursuant
\nto the United States Resource Conservation and Recovery Act of 1976, as amended,
\nand the regulations<\/p>\n
-25-
\n 30
\npromulgated pursuant to said laws, but excluding office and janitorial supplies
\n(a “HAZARDOUS MATERIAL”) are present, as a result of the actions of Company or
\nany of its subsidiaries or any affiliate of Company, or, to Company’s knowledge,
\nas a result of any actions of any third party or otherwise, in, on or under any
\nproperty, including the land and the improvements, ground water and surface
\nwater thereof that Company or any of its subsidiaries has at any time owned,
\noperated, occupied or leased.<\/p>\n
(b) Hazardous Materials Activities. Except as would not
\nresult in a material liability to Company (in any individual case or in the
\naggregate) (i) neither Company nor any of its subsidiaries has transported,
\nstored, used, manufactured, disposed of, released or exposed its employees or
\nothers to Hazardous Materials in violation of any law in effect on or before the
\nClosing Date, and (ii) neither Company nor any of its subsidiaries has disposed
\nof, transported, sold, used, released, exposed its employees or others to or
\nmanufactured any product containing a Hazardous Material (collectively
\n“HAZARDOUS MATERIALS ACTIVITIES”) in violation of any rule, regulation, treaty
\nor statute promulgated by any Governmental Entity in effect prior to or as of
\nthe date hereof to prohibit, regulate or control Hazardous Materials or any
\nHazardous Material Activity.<\/p>\n
(c) Permits. Company and its subsidiaries currently hold
\nall environmental approvals, permits, licenses, clearances and consents
\n(“ENVIRONMENTAL PERMITS”) material to and necessary for the conduct of Company’s
\nand its subsidiaries’ Hazardous Material Activities and other businesses of
\nCompany and its subsidiaries as such activities and businesses are currently
\nbeing conducted.<\/p>\n
(d) Environmental Liabilities. No action, proceeding,
\nrevocation proceeding, amendment procedure, writ or injunction is pending, and
\nto Company’s knowledge, no action, proceeding, revocation proceeding, amendment
\nprocedure, writ or injunction has been threatened by any Governmental Entity
\nagainst Company or any of its subsidiaries in a writing delivered to Company
\nconcerning any Environmental Permit of Company, Hazardous Material or any
\nHazardous Materials Activity of Company or any of its subsidiaries. Company is
\nnot aware of any fact or circumstance which could involve Company or any of its
\nsubsidiaries in any environmental litigation or impose upon Company any material
\nenvironmental liability.<\/p>\n
2.14 Certain Agreements. Except as otherwise set forth in the
\napplicable lettered subsection of Part 2.14 of the Company Disclosure Letter,
\nneither Company nor any of its subsidiaries is a party to or is bound by:<\/p>\n
(a) any employment or consulting agreement or commitment
\nwith any employee or member of Company’s Board of Directors, providing any term
\nof employment or compensation guarantee or any consulting agreement or any
\nemployment agreement that provides severance benefits or other benefits after
\nthe termination of employment of such employee regardless of the reason for such
\ntermination of employment, except as required by applicable law;<\/p>\n
(b) any agreement or plan, including any stock option plan,
\nstock appreciation right plan or stock purchase plan, any of the benefits of
\nwhich will be increased, or the vesting of<\/p>\n
-26-
\n 31
\nbenefits of which will be accelerated, by the occurrence of any of the
\ntransactions contemplated by this Agreement or the value of any of the benefits
\nof which will be calculated on the basis of any of the transactions contemplated
\nby this Agreement;<\/p>\n
(c) any agreement of indemnification (other than standard
\nindemnification agreements in licenses in the form provided to Parent), any
\nguaranty or any instrument evidencing indebtedness for borrowed money by way of
\ndirect loan, sale of debt securities, purchase money obligation, conditional
\nsale, or otherwise;<\/p>\n
(d) any agreement, obligation or commitment containing
\ncovenants purporting to limit or which effectively limit Company’s or any of its
\nsubsidiaries’ freedom to compete in any line of business or in any geographic
\narea or which would so limit Parent, Company or Surviving Corporation or any of
\nits subsidiaries after the Effective Time or granting any exclusive distribution
\nor other exclusive rights;<\/p>\n
(e) any agreement or commitment currently in force relating
\nto the disposition or acquisition by Company or any of its subsidiaries after
\nthe date of this Agreement of a material amount of assets not in the ordinary
\ncourse of business, or pursuant to which Company has any material ownership or
\nparticipation interest in any corporation, partnership, joint venture, strategic
\nalliance or other business enterprise other than Company’s subsidiaries;<\/p>\n
(f) any licensing, distribution, resale or other agreement,
\ncontract or commitment with regard to the acquisition, distribution, resale or
\nlicensing of any material Intellectual Property other than licenses,
\ndistribution, resale agreements, advertising agreements, or other similar
\nagreement entered into in the ordinary course of business consistent with past
\npractice or disclosed in Part 2.9(f) of the Company Disclosure Letter;<\/p>\n
(g) any agreement or commitment with any affiliate of
\nCompany; or<\/p>\n
(h) any agreement or commitment currently in force
\nproviding for capital expenditures by Company or its subsidiaries in excess of
\n$50,000.<\/p>\n
Each agreement that is required to be disclosed in the Company
\nDisclosure Letter pursuant to clauses (a) through (h) above or pursuant to
\nSection 2.9 and each agreement that is currently in force and required to be
\nfiled with any Company SEC Report shall be referred to herein as a “COMPANY
\nCONTRACT”. Each Company Contract is valid and in full force and effect. Neither
\nCompany nor any of its subsidiaries, nor to Company’s knowledge, any other party
\nthereto, is in material breach, violation or default under, and neither Company
\nnor any of its subsidiaries has received written notice alleging that it has
\nmaterially breached, violated or defaulted under, any of the terms or conditions
\nof any Company Contract in such a manner as would permit any other party thereto
\nto cancel or terminate any such Company Contract, or would permit any other
\nparty to seek material damages or other remedies for any or all such alleged
\nbreaches, violations, or defaults.<\/p>\n
2.15 Brokers’ and Finders’ Fees. Except for fees payable to Credit
\nSuisse First Boston Corporation pursuant to an engagement letter, dated
\nSeptember 15, 2000, a copy of which has been provided to Parent, Company has not
\nincurred, nor will it incur, directly or indirectly, any<\/p>\n
-27-
\n 32
\nliability for brokerage or finders’ fees or agents’ commissions or any similar
\ncharges in connection with this Agreement or any transaction contemplated
\nhereby.<\/p>\n
2.16 Insurance. Company and each of its subsidiaries have policies of
\ninsurance and bonds of the type and in amounts customarily carried by persons
\nconducting business or owing assets similar to those of Company and its
\nsubsidiaries. Except as set forth in Part 2.16 of the Company Disclosure Letter,
\nthere is no material claim pending under any of such policies or bonds as to
\nwhich coverage has been denied or disputed by the underwriters of such policies
\nor bonds. All premiums due and payable under all such policies have been paid,
\nand Company and its subsidiaries are otherwise in compliance in all material
\nrespects with the terms of such policies and bonds. Except as set forth in Part
\n2.16 of the Company Disclosure Letter, to the knowledge of Company, there has
\nbeen no threatened termination of, or material premium increase with respect to,
\nany of such policies. Part 2.16 of the Company Disclosure Letter sets forth a
\ndescription of each such policy or bond which provides coverage for Company or
\nany of its subsidiaries.<\/p>\n
2.17 Disclosure. The information supplied by Company for inclusion in
\nthe Form S-4 (or any similar successor form thereto) Registration Statement to
\nbe filed by Parent with the SEC in connection with the issuance of Parent Common
\nStock in the Merger (the “REGISTRATION STATEMENT”) shall not at the time the
\nRegistration Statement is filed with the SEC and at the time it becomes
\neffective under the Securities Act contain any untrue statement of a material
\nfact or omit to state any material fact required to be stated therein or
\nnecessary in order to make the statements therein, in light of the circumstances
\nunder which they are made, not misleading. The information supplied by Company
\nfor inclusion or incorporation by reference in the proxy statement\/prospectus to
\nbe filed with the SEC as part of the Registration Statement (the “PROXY
\nSTATEMENT\/PROSPECTUS”) shall not, on the date the Proxy Statement\/Prospectus is
\nmailed to Company’s stockholders, at the time of the meeting of Company’s
\nstockholders (the “COMPANY STOCKHOLDERS’ MEETING”) to consider the Company
\nStockholder Approvals or as of the Effective Time, contain any untrue statement
\nof a material 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 are made, not false or misleading; or omit to
\nstate any material fact necessary to correct any statement in any earlier
\ncommunication with respect to the solicitation of proxies for the Company
\nStockholders’ Meeting which has become false or misleading. The Proxy
\nStatement\/Prospectus will comply as to form in all material respects with the
\nprovisions of the Securities Act, the Exchange Act and the rules and regulations
\nthereunder. If at any time prior to the Effective Time any event relating to
\nCompany or any of its affiliates, officers or directors should be discovered by
\nCompany which is required to be set forth in an amendment to the Registration
\nStatement or a supplement to the Proxy Statement\/Prospectus, Company shall
\npromptly inform Parent. Notwithstanding the foregoing, Company makes no
\nrepresentation or warranty with respect to any information supplied by Parent or
\nMerger Sub which is contained in any of the foregoing documents.<\/p>\n
2.18 Board Approval. The Board of Directors of Company has, as of the
\ndate of this Agreement, (i) determined that the Merger and the other
\ntransactions contemplated by this Agreement and the Stock Option Agreement are
\nfair to, and in the best interests of Company and its stockholders, and has
\napproved this Agreement and the Stock Option Agreement and<\/p>\n
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\n 33
\n(ii) declared the advisability of the Merger and recommends that the
\nstockholders of Company approve and adopt this Agreement and approve the Merger.<\/p>\n
2.19 Fairness Opinion. Company’s Board of Directors has received a
\nwritten opinion from Credit Suisse First Boston Corporation, dated as of the
\ndate hereof, to the effect that, as of the date hereof, the Exchange Ratio is
\nfair to Company’s stockholders from a financial point of view, and has delivered
\nto Parent a copy of such opinion.<\/p>\n
2.20 DGCL Section 203 and Rights Agreement Not Applicable. The Board
\nof Directors of Company has taken all actions so that (a) the restrictions
\ncontained in Section 203 of the Delaware Law applicable to a “business
\ncombination” (as defined in such Section 203) will not apply to the execution,
\ndelivery or performance of this Agreement, the Stock Option Agreement, the
\nVoting Agreements or to the consummation of the Merger or the other transactions
\ncontemplated by this Agreement, the Stock Option Agreement and the Voting
\nAgreements, and (b) the execution, delivery, announcement or performance of this
\nAgreement, the Option Agreement and the Voting Agreements and the consummation
\nof the Merger and the other transactions contemplated hereby or thereby will not
\ncause any change, effect or result under the Rights Agreement which is adverse
\nto the interests of Parent. Without limiting the generality of the foregoing,
\nthe Rights Agreement has been amended by all necessary action to (i) render the
\nRights Agreement inapplicable to the Merger and the other transactions
\ncontemplated by this Agreement, (ii) ensure that (x) none of Parent or its
\nsubsidiaries is an “Acquiring Person” (as defined in the Rights Agreement) by
\nvirtue of the execution, delivery, announcement or performance of this Agreement
\nor the Stock Option Agreement or the consummation of the Merger or the other
\ntransactions contemplated hereby or thereby and (y) a “Distribution Date” (as
\nsuch terms are defined in the Rights Agreement) does not occur by reason of the
\nexecution, delivery, announcement or performance of this Agreement or the Stock
\nOption Agreement, the consummation of the Merger, or the consummation of the
\ntransactions contemplated hereby or thereby, and such amendment by its terms may
\nnot be further amended by Company without the prior written consent of Parent in
\nits sole discretion. No other anti-takeover, control share acquisition, fair
\nprice, moratorium or other similar statute (each, a “TAKEOVER STATUTE”) applies
\nor purports to apply to this Agreement, the Merger, the Stock Option Agreement
\nor the other transactions contemplated hereby or thereby.<\/p>\n
2.21 Affiliates. Part 2.21 of the Company Disclosure Letter is a
\ncomplete list of those persons who may be deemed to be, in Company’s reasonable
\njudgment, affiliates of Company within the meaning of Rule 145 promulgated under
\nthe Securities Act (each, a “COMPANY AFFILIATE”). Except as set forth in the
\nCompany SEC Reports, since the date of Company’s last proxy statement filed with
\nthe SEC, no event has occurred as of the date of this Agreement that would be
\nrequired to be reported by Company pursuant to Item 404 of Regulation S-K
\npromulgated by the SEC.<\/p>\n
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\n 34
\n ARTICLE III
\n REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB<\/p>\n
As of the date of this Agreement, Parent and Merger Sub represent and
\nwarrant to Company, subject to the exceptions specifically disclosed in writing
\nin the disclosure letter and referencing a specific representation delivered by
\nParent to Company dated as of the date hereof and certified by a duly authorized
\nofficer of Parent (in such person’s capacity as an officer and not as an
\nindividual) (the “PARENT DISCLOSURE LETTER”), as follows:<\/p>\n
3.1 Organization of Parent and Merger Sub.<\/p>\n
(a) Each of Parent and Merger Sub (i) is a corporation duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction in which it is organized; (ii) has the corporate or other power and
\nauthority to own, lease and operate its assets and property and to carry on its
\nbusiness as now being conducted; and (iii) except as would not be material to
\nParent, is duly qualified or licensed to do business in each jurisdiction where
\nthe character of the properties owned, leased or operated by it or the nature of
\nits activities makes such qualification or licensing necessary.<\/p>\n
(b) Parent has delivered or made available to Company a
\ntrue and correct copy of the Certificate of Incorporation and Bylaws of Parent
\nand Merger Sub, each as amended to date (collectively, the “PARENT CHARTER
\nDOCUMENTS”), and each such instrument is in full force and effect. Neither
\nParent nor Merger Sub is in violation of any of the provisions of the Parent
\nCharter Documents. Parent has delivered or made available to Company all
\nproposed or considered amendments to the Parent Charter Documents.<\/p>\n
3.2 Parent and Merger Sub Capitalization.<\/p>\n
(a) The authorized capital stock of Parent consists solely of
\n200,000,000 shares of Parent Common Stock, of which there were 53,325,075 shares
\nissued and outstanding as of the close of business on January 11, 2001. All
\noutstanding shares of Parent Common Stock are duly authorized, validly issued,
\nfully paid and nonassessable and are not subject to preemptive rights created by
\nstatute, the Certificate of Incorporation or Bylaws of Parent or any agreement
\nor document to which Parent is a party or by which it is bound. As of the close
\nof business on January 11, 2001, (i) 13,101,530 shares of Parent Common Stock
\nare subject to issuance pursuant to outstanding options to purchase Parent
\nCommon Stock, and (ii) 400,923 shares of Parent Common Stock are reserved for
\nfuture issuance under Parent’s 1993 Employee Stock Purchase Plan. All shares of
\nParent Common Stock subject to issuance as aforesaid, upon issuance on the terms
\nand conditions specified in the instruments pursuant to which they are issuable,
\nwill be duly authorized, validly issued, fully paid and nonassessable.<\/p>\n
(b) Except as set forth in Section 3.2(a) of this Agreement or Part
\n3.2 of the Parent Disclosure Letter, there are no equity securities, partnership
\ninterests or similar ownership interests of any class of Parent equity security,
\nor any securities exchangeable or convertible into or exercisable for such
\nequity securities, partnership interests or similar ownership interests, issued,
\nreserved for issuance or outstanding.<\/p>\n
-30-
\n 35
\n (c) The authorized capital stock of Merger Sub consists of 1,000
\nshares of common stock, $0.001 par value, all of which, as of the date hereof,
\nare issued and outstanding and are held by Parent. All of the outstanding shares
\nof Merger Sub’s common stock have been duly authorized and validly issued, and
\nare fully paid and nonassessable. Merger Sub was formed for the purpose of
\nconsummating the Merger and has no material assets or liabilities except as
\nnecessary for such purpose.<\/p>\n
(d) The Parent Common Stock to be issued in the Merger, when issued
\nin accordance with the provisions of this Agreement, will be validly issued,
\nfully paid and nonassessable.<\/p>\n
3.3 Authority; Non-Contravention.<\/p>\n
(a) Parent has all requisite corporate power and authority
\nto enter into this Agreement and the Stock Option Agreement and to consummate
\nthe transactions contemplated hereby and thereby. Merger Sub has all requisite
\ncorporate power and authority to enter into this Agreement and to consummate the
\ntransactions contemplated hereby. The execution and delivery of this Agreement
\nand the Stock Option Agreement and the consummation of the transactions
\ncontemplated hereby and thereby have been duly authorized by all necessary
\ncorporate action on the part of Parent and Merger Sub. This Agreement and the
\nStock Option Agreement have been duly executed and delivered by Parent and this
\nAgreement has been duly executed and delivered by Merger Sub and, assuming the
\ndue authorization, execution and delivery by Company, constitute the valid and
\nbinding obligations of Parent and Merger Sub, respectively, enforceable against
\nParent and Merger Sub in accordance with their terms, except as enforceability
\nmay be limited by bankruptcy and other similar laws affecting the rights of
\ncreditors generally and general principles of equity.<\/p>\n
(b) The execution and delivery of this Agreement and the
\nStock Option Agreement by Parent and the execution and delivery of this
\nAgreement by Merger Sub does not, and the performance of this Agreement and the
\nStock Option Agreement by Parent and the performance of this Agreement by Merger
\nSub will not, (i) conflict with or violate the Parent Charter Documents, (ii)
\nsubject to compliance with the requirements set forth in Section 3.3(c) below,
\nconflict with or violate any material law, rule, regulation, order, judgment or
\ndecree applicable to Parent or Merger Sub or by which any of their respective
\nmaterial properties is bound or affected, or (iii) result in any material breach
\nof or constitute a material default (or an event that with notice or lapse of
\ntime or both would become a material default) under, or impair Parent’s rights
\nor alter the rights or obligations of any third party under, or give to others
\nany rights of termination, amendment, acceleration or cancellation of; or result
\nin the creation of an Encumbrance on any of the material properties or assets of
\nParent or Merger Sub pursuant to, any material note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit, franchise or other instrument or
\nobligation to which Parent or Merger Sub is a party or by which Parent or Merger
\nSub or any of their respective material properties are bound or affected. Part
\n3.3 of the Parent Disclosure Letter list all consents, waivers and approvals
\nunder any of Parent’s or any of its subsidiaries’ agreements, contracts,
\nlicenses or leases required to be obtained in connection with the consummation
\nof the transactions contemplated hereby, which, if individually or in the
\naggregate were not obtained, would result in a material loss of benefits to
\nParent or the Surviving Corporation as a result of the Merger.<\/p>\n
-31-
\n 36
\n (c) No consent, approval, order or authorization of, or
\nregistration, declaration or filing with any Governmental Entity or other person
\nis required to be obtained or made by Parent or Merger Sub in connection with
\nthe execution and delivery of this Agreement and the Stock Option Agreement or
\nthe consummation of the Merger, except for (i) the filing of the Certificate of
\nMerger with the Secretary of State of the State of Delaware, (ii) the filing of
\nthe Proxy Statement\/Prospectus and the Registration Statement with the SEC and a
\nSchedule 13D with regard to the Stock Option Agreement and the Voting Agreements
\nin accordance with the Securities Act and the Exchange Act, and the
\neffectiveness of the Registration Statement, (iii) such consents, approvals,
\norders, authorizations, registrations, declarations and filings as may be
\nrequired under applicable federal, foreign and state securities (or related)
\nlaws and the HSR Act and the securities or antitrust laws of any foreign
\ncountry, and (iv) such other consents, authorizations, filings, approvals and
\nregistrations which if not obtained or made would not be material to Parent or
\nthe Surviving Corporation or have a material adverse effect on the ability of
\nthe parties hereto to consummate the Merger.<\/p>\n
3.4 SEC Filings; Parent Financial Statements.<\/p>\n
(a) Parent has filed all forms, reports and documents
\nrequired to be filed by Parent with the SEC since June 30, 1998, and has made
\navailable to Company such forms, reports and documents in the form filed with
\nthe SEC. All such required forms, reports and documents (including those that
\nParent may file subsequent to the date hereof) are referred to herein as the
\n“PARENT SEC REPORTS.” As of their respective dates, the Parent SEC Reports (i)
\nwere prepared in accordance with the requirements of the Securities Act or the
\nExchange Act, as the case may be, and the rules and regulations of the SEC
\nthereunder applicable to such Parent SEC Reports, and (ii) did not at the time
\nthey were filed (or if amended or superseded by a filing prior to the date of
\nthis Agreement, then on the date of such filing) contain any untrue statement of
\na material fact or omit to state a material fact required to be stated therein
\nor necessary in order to make the statements therein, in the light of the
\ncircumstances under which they were made, not misleading, except to the extent
\ncorrected prior to the date of this Agreement by a subsequently filed Parent SEC
\nReport. None of Parent’s subsidiaries is required to file any forms, reports or
\nother documents with the SEC.<\/p>\n
(b) Each of the consolidated financial statements
\n(including, in each case, any related notes thereto) contained in the Parent SEC
\nReports (the “PARENT FINANCIALS”), including any Parent SEC Reports filed after
\nthe date hereof until the Closing, (i) complied as to form in all material
\nrespects with the published rules and regulations of the SEC with respect
\nthereto, (ii) was prepared in accordance with GAAP applied on a consistent basis
\nthroughout the periods involved (except as may be indicated in the notes thereto
\nor, in the case of unaudited interim financial statements, as may be permitted
\nby the SEC on Form 1O-Q, 8-K or any successor form under the Exchange Act) and
\n(iii) fairly presented the consolidated financial position of Parent and its
\nsubsidiaries as at the respective dates thereof and the consolidated results of
\nParent’s operations and cash flows for the periods indicated, except that the
\nunaudited interim financial statements may not contain footnotes and were or are
\nsubject to normal and recurring year-end adjustments. The balance sheet of
\nParent contained in Parent SEC Reports as of September 30, 2000 is hereinafter
\nreferred to as the “PARENT BALANCE SHEET.” Except as disclosed in the Parent
\nFinancials, since the date of the Parent Balance Sheet neither Parent nor any of
\nits subsidiaries<\/p>\n
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\n 37
\nhas any liabilities (absolute, accrued, contingent or otherwise) required under
\nGAAP to be set forth on a balance sheet which are, individually or in the
\naggregate, material to the business, results of operations or financial
\ncondition of Parent and its subsidiaries taken as a whole, except for
\nliabilities incurred since the date of the Parent Balance Sheet in the ordinary
\ncourse of business consistent with past practices and liabilities incurred in
\nconnection with this Agreement.<\/p>\n
(c) Parent has heretofore furnished to Company a complete
\nand correct copy of any amendments or modifications, which have not yet been
\nfiled with the SEC but which are required to be filed, to agreements, documents
\nor other instruments which previously had been filed by Parent with the SEC
\npursuant to the Securities Act or the Exchange Act.<\/p>\n
3.5 Absence of Certain Changes or Events. Since the date of the
\nParent Balance Sheet there has not been (i) any Material Adverse Effect with
\nrespect to Parent, (ii) any declaration, setting aside or payment of any
\ndividend on, or other distribution (whether in cash, stock or property) in
\nrespect of, any of Parent’s or any of its subsidiaries’ capital stock, or any
\npurchase, redemption or other acquisition by Parent of any of Parent’s capital
\nstock or any other securities of Parent or its subsidiaries or any options,
\nwarrants, calls or rights to acquire any such shares or other securities except
\nfor repurchases from employees following their termination pursuant to the terms
\nof their pre-existing stock option or purchase agreements, (iii) any split,
\ncombination or reclassification of any of Parent’s or any of its subsidiaries’
\ncapital stock, (iv) any acquisition, sale or transfer of any material asset by
\nParent or any of its subsidiaries other than in the ordinary course of business
\nor any agreement or commitment by Parent or any of its subsidiaries to do any of
\nthe foregoing, (v) any material change by Parent in its accounting methods,
\nprinciples or practices, except as required by concurrent changes in GAAP, or
\n(vi) any material revaluation by Parent of any of its material assets, including
\nwriting off notes or accounts receivable other than in the ordinary course of
\nbusiness.<\/p>\n
3.6 Litigation. There are no claims, suits, actions or proceedings
\npending or, to the knowledge of Parent, threatened against, relating to or
\naffecting Parent or any of its subsidiaries, before any Governmental Entity or
\nany arbitrator that seeks to restrain or enjoin the consummation of the
\ntransactions contemplated by this Agreement or which could reasonably be
\nexpected, either singularly or in the aggregate with all such claims, actions or
\nproceedings, to be material to Parent or have a material adverse effect on the
\nability of the parties hereto to consummate the Merger.<\/p>\n
3.7 Disclosure. The information supplied by Parent for inclusion in
\nthe Registration Statement shall not at the time the Registration Statement is
\nfiled with the SEC and at the time it becomes effective under the Securities Act
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not
\nmisleading. The information supplied by Parent for inclusion in the Proxy
\nStatement\/Prospectus shall not, on the date the Proxy Statement\/Prospectus is
\nmailed to Company’s stockholders, at the time of the Company Stockholders’
\nMeeting, or as of the Effective Time, contain any untrue statement of a material
\nfact or omit to state any material fact required to be stated therein or
\nnecessary in order to make the statements therein, in light of the circumstances
\nunder which they are made, not false or misleading, or omit to state any
\nmaterial fact necessary to correct any statement in any earlier<\/p>\n
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\n 38
\ncommunication with respect to the solicitation of proxies for the Company
\nStockholders’ Meeting which has become false or misleading. The Registration
\nStatement and Proxy Statement\/Prospectus will comply as to form in all material
\nrespects with the provisions of the Securities Act and the rules and regulations
\nthereunder. If at any time prior to the Effective Time, any event relating to
\nParent or any of its affiliates, officers or directors should be discovered by
\nParent which is required to be set forth in an amendment to the Registration
\nStatement or a supplement to the Proxy Statement\/Prospectus, Parent shall
\npromptly inform Company. Notwithstanding the foregoing, Parent makes no
\nrepresentation or warranty with respect to any information supplied by Company
\nwhich is contained in any of the foregoing documents.<\/p>\n
3.8 Brokers’ and Finders’ Fees. Except for fees payable to Morgan
\nStanley & Co., Inc., Parent has not incurred, nor will it incur, directly or
\nindirectly, any liability for brokerage or finders’ fees or agents’ commissions
\nor any similar charges in connection with this Agreement or any transaction
\ncontemplated hereby.<\/p>\n
3.9 Tax-Free Reorganization. To Parent’s knowledge, unless a
\nConversion Event occurs, there is no fact or circumstance, and Parent has no
\npresent plan or intention, that would reasonably likely to prevent the Merger
\nfrom qualifying as a “reorganization” pursuant to the provisions of Section 368
\nof the Code.<\/p>\n
ARTICLE IV
\n CONDUCT PRIOR TO THE EFFECTIVE TIME<\/p>\n
4.1 Conduct of Business by Company. During the period from the date
\nof this Agreement and continuing until the earlier of the termination of this
\nAgreement pursuant to its terms or the Effective Time, Company and each of its
\nsubsidiaries shall, except to the extent that Parent shall otherwise consent in
\nwriting, carry on its business in the usual, regular and ordinary course, in
\nsubstantially the same manner as heretofore conducted and in compliance in all
\nmaterial respects with all applicable laws and regulations, pay its debts and
\nTaxes when due subject to good faith disputes over such debts or Taxes, pay or
\nperform other material obligations when due, and use its commercially reasonable
\nefforts consistent with past practices and policies to (i) preserve intact its
\npresent business organization, (ii) keep available the services of its present
\nofficers and employees and (iii) preserve its relationships with customers,
\nsuppliers, licensors, licensees, and others with which it has business dealings.
\nIn addition, Company will promptly notify Parent of any material adverse event
\ninvolving its business or operations.<\/p>\n
In addition, except as permitted by the terms of this
\nAgreement, and except as provided in Schedule 4.1 of the Company Disclosure
\nLetter, without the prior written consent of Parent, during the period from the
\ndate of this Agreement and continuing until the earlier of the termination of
\nthis Agreement pursuant to its terms or the Effective Time, Company shall not do
\nany of the following and shall not permit its subsidiaries to do any of the
\nfollowing:<\/p>\n
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\n 39
\n (a) Waive any stock repurchase rights, accelerate, amend or
\nchange the period of exercisability of options or repurchase of restricted
\nstock, or reprice options granted to any employee, consultant, director or
\nauthorize cash payments in exchange for any options or take any such action with
\nregard to any warrant or other right to acquire Company’s capital stock;<\/p>\n
(b) Grant any severance or termination pay to any officer
\nor employee except pursuant to written agreements in effect, or policies
\nexisting, on the date hereof and as previously disclosed in writing to Parent,
\nor adopt any new severance plan;<\/p>\n
(c) Transfer or license to any person or entity or
\notherwise extend, amend or modify in any material respect any rights to the
\nCompany Intellectual Property, other than non-exclusive licenses in the ordinary
\ncourse of business and consistent with past practice;<\/p>\n
(d) Declare, set aside or pay any dividends on or make any
\nother distributions (whether in cash, stock, equity securities or property) in
\nrespect of any capital stock or split, combine or reclassify any capital stock
\nor issue or authorize the issuance of any other securities in respect of, in
\nlieu of or in substitution for any capital stock;<\/p>\n
(e) Purchase, redeem or otherwise acquire, directly or
\nindirectly, any shares of capital stock of Company or its subsidiaries, except
\nrepurchases of unvested shares at cost in connection with the termination of the
\nemployment relationship with any employee pursuant to Company Stock Option or
\npurchase agreements in effect on the date hereof;<\/p>\n
(f) Issue, deliver, sell, authorize, pledge or otherwise
\nencumber any shares of capital stock or any securities convertible into shares
\nof capital stock, or subscriptions, rights, warrants or options to acquire any
\nshares of capital stock or any securities convertible into shares of capital
\nstock, or enter into other agreements or commitments of any character obligating
\nit to issue any such shares or convertible securities, other than the issuance,
\ndelivery and\/or sale of (i) shares of Company Common Stock pursuant to the
\nexercise of Company Options and Company Warrants, (ii) shares of Company Common
\nStock issuable to participants in the Company ESPP consistent with the terms
\nthereof and (iii) options granted to newly hired or newly promoted employees,
\nconsistent in amounts with Company’s prior practices and providing for vesting
\nover a four year period with 25% vesting after one year and thereafter ratably
\nmonthly, not to exceed in the aggregate options to acquire 1,000,000 shares of
\nCompany Common Stock, provided, however, that if the Closing has not occurred
\nbefore the expiration of four calendar months after the date of this Agreement,
\nthen such aggregate number of shares shall increase by 150,000 shares for each
\nfull calendar month thereafter that the Closing does not occur;<\/p>\n
(g) Cause, permit or propose any amendments to its
\nCertificate of Incorporation, Bylaws or other charter documents (or similar
\ngoverning instruments of any of its subsidiaries);<\/p>\n
(h) Acquire or agree to acquire by merging or consolidating
\nwith, or by purchasing any equity interest in or a portion of the assets of, or
\nby any other manner, any business or any corporation, partnership, association
\nor other business organization or division<\/p>\n
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\n 40
\nthereof; or otherwise acquire or agree to acquire any assets which are material,
\nindividually or in the aggregate, to the business of Company or enter into any
\nmaterial joint ventures;<\/p>\n
(i) Enter into any material strategic relationship or
\nalliance in which Company agrees to share profits, pay royalties, share
\nownership of Intellectual Property or grant exclusive rights of any nature to
\nCompany Intellectual Property to any third party;<\/p>\n
(j) Sell, lease, license, encumber or otherwise dispose of
\nany properties or assets which are material, individually or in the aggregate,
\nto the business of Company, other than non-exclusive licenses of Company
\nIntellectual Property in the ordinary course of business consistent with past
\npractice;<\/p>\n
(k) Incur any indebtedness for borrowed money or guarantee
\nany such indebtedness of another person, issue or sell any debt securities or
\noptions, warrants, calls or other rights to acquire any debt securities of
\nCompany, enter into any “keep well” or other agreement to maintain any financial
\nstatement condition or enter into any arrangement having the economic effect of
\nany of the foregoing other than (i) in connection with the financing of ordinary
\ncourse trade payables consistent with past practice or (ii) pursuant to existing
\ncredit facilities in the ordinary course of business;<\/p>\n
(l) Adopt or amend any employee benefit plan or employee
\nstock purchase or employee stock option plan, or enter into any employment
\ncontract or collective bargaining agreement (other than offer letters and letter
\nagreements entered into in the ordinary course of business consistent with past
\npractice with employees who are terminable “at will”), pay any special bonus or
\nspecial remuneration to any director or employee (other than payment of target
\nbonuses for 2000), or increase the salaries or wage rates or fringe benefits
\n(including rights to severance or indemnification) of its directors, officers,
\nemployees or consultants other than in the ordinary course of business,
\nconsistent with past practice, or change in any material respect any management
\npolicies or procedures;<\/p>\n
(m) Make any capital expenditures outside of the ordinary
\ncourse of business in excess of $5,000,000 in the aggregate;<\/p>\n
(n) Modify, amend or terminate any Company Contract or
\nother material contract or agreement to which Company or any subsidiary thereof
\nis a party or enter into any contract or agreement which provides for Company to
\nincur or pay any amounts in excess of $600,000 over the life of such contract or
\nagreement;<\/p>\n
(o) Settle any material litigation or waive, release or
\nassign any material rights or claims thereunder;<\/p>\n
(p) Enter into, modify, amend or cancel any development
\nservices, licensing, distribution, sales, sales representation or other similar
\nagreement or obligation with respect to any material Intellectual Property other
\nthan such agreements entered into in the ordinary course of business consistent
\nwith past practices;<\/p>\n
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\n 41
\n (q) Materially revalue any of its assets or, except as
\nrequired by GAAP, make any change in accounting methods, principles or
\npractices;<\/p>\n
(r) Take any action that would be reasonably likely to
\ninterfere with the treatment of the Merger as a “reorganization” within the
\nmeaning of Section 368 of the Code;<\/p>\n
(s) Except as otherwise contemplated by Sections 2.20 and
\n5.12, redeem the Rights or amend or terminate the Rights Agreement;<\/p>\n
(t) Engage in any action with the intent to directly or
\nindirectly adversely impact any of the transactions contemplated by this
\nAgreement and the Stock Option Agreement, including with respect to the Rights
\nAgreement, or with any other “poison pill” or similar plan, agreement or
\narrangement, or any Takeover Statute; or<\/p>\n
(u) Agree in writing or otherwise to take any of the
\nactions described in Section 4.1(a) through (t) above.<\/p>\n
4.2 Conduct of Business by Parent. Except as provided in
\nSection 4.2 of the Parent Disclosure Letter, without the prior written consent
\nof Company, during the period from the date of this Agreement and continuing
\nuntil the earlier of the termination of this Agreement pursuant to its terms or
\nthe Effective Time, Parent shall not do any of the following and shall not
\npermit its subsidiaries to do any of the following:<\/p>\n
(a) Declare, set aside or pay any dividends on or make any
\nother distributions (whether in cash, stock, equity securities or property) in
\nrespect of any capital stock;<\/p>\n
(b) Cause, permit or propose any amendments to its
\nCertificate of Incorporation, Bylaws or other charter documents;<\/p>\n
(c) Materially revalue any of its assets or, except as
\nrequired by GAAP, make any change in accounting methods, principles or
\npractices;<\/p>\n
(d) Take any action that would be reasonably likely to
\ninterfere with the treatment of the Merger as a “reorganization” within the
\nmeaning of Section 368 of the Code; or<\/p>\n
(e) Agree in writing or otherwise to take any of the
\nactions described in Section 4.2(a) through (d) above.<\/p>\n
ARTICLE V
\n ADDITIONAL AGREEMENTS<\/p>\n
5.1 Proxy Statement\/Prospectus; Registration Statement;
\nAntitrust and Other Filings.<\/p>\n
(a) As promptly as practicable after the execution of this
\nAgreement,<\/p>\n
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\n 42
\nCompany and Parent will prepare and file with the SEC the Proxy
\nStatement\/Prospectus, and Parent will prepare and file with the SEC the
\nRegistration Statement in which the Proxy Statement\/Prospectus will be included
\nas a prospectus. Each of Company and Parent will respond to any comments of the
\nSEC, will use its respective commercially reasonable efforts to have the
\nRegistration Statement declared effective under the Securities Act as promptly
\nas practicable after such filing and Company will cause the Proxy
\nStatement\/Prospectus to be mailed to Company’s stockholders at the earliest
\npracticable time after the Registration Statement is declared effective by the
\nSEC.<\/p>\n
(b) As promptly as practicable after the execution of this
\nAgreement, each of Company and Parent will prepare and file (i) with the United
\nStates Federal Trade Commission and the Antitrust Division of the United States
\nDepartment of Justice Notification and Report Forms relating to the transactions
\ncontemplated herein as required by the HSR Act, as well as comparable pre-merger
\nnotification forms required by the merger notification or control laws and
\nregulations of any applicable jurisdiction, as agreed to by the parties (the
\n“ANTITRUST FILINGS”) and (ii) any other filings required to be filed by it under
\nthe Exchange Act, the Securities Act or any other federal, state or foreign laws
\nrelating to the Merger and the transactions contemplated by this Agreement (the
\n“OTHER FILINGS”). Company and Parent each shall promptly supply the other with
\nany information which may be required in order to effectuate any filings
\npursuant to this Section 5.1.<\/p>\n
(c) Each of Company and Parent will notify the other
\npromptly upon the receipt of any comments from the SEC or its staff or any other
\ngovernment officials in connection with any filing made pursuant hereto and of
\nany request by the SEC or its staff or any other government officials for
\namendments or supplements to the Registration Statement, the Proxy
\nStatement\/Prospectus or any Antitrust Filings or Other Filings or for additional
\ninformation and will supply the other with copies of all correspondence between
\nsuch party or any of its representatives, on the one hand, and the SEC, or its
\nstaff or any other government officials, on the other hand, with respect to the
\nRegistration Statement, the Proxy Statement\/Prospectus, the Merger or any
\nAntitrust Filing or Other Filing. Each of Company and Parent will cause all
\ndocuments that it is responsible for filing with the SEC or other regulatory
\nauthorities under this Section 5.1 to comply in all material respects with all
\napplicable requirements of law and the rules and regulations promulgated
\nthereunder. Whenever any event occurs which is required to be set forth in an
\namendment or supplement to the Proxy Statement\/Prospectus, the Registration
\nStatement or any Antitrust Filing or Other Filing, Company or Parent, as the
\ncase may be, will promptly inform the other of such occurrence and cooperate in
\nfiling with the SEC or its staff or any other government officials, and\/or
\nmailing to stockholders of Company and\/or Parent, such amendment or supplement.<\/p>\n
5.2 Meeting of Company Stockholders.<\/p>\n
(a) Promptly after the date hereof, Company will take all
\naction necessary in accordance with the Delaware Law and its Certificate of
\nIncorporation and Bylaws to convene the Company Stockholders’ Meeting to be held
\nas promptly as practicable, and in any event (to the extent permissible under
\napplicable law) within 45 days after the declaration of effectiveness of the
\nRegistration Statement, for the purpose of voting upon approval and adoption of
\nthis<\/p>\n
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\n 43
\nAgreement and approval of the Merger. Subject to Section 5.2(c), Company will
\nuse its commercially reasonable efforts to solicit from its stockholders proxies
\nin favor of the adoption and approval of this Agreement and the approval of the
\nMerger and will take all other action necessary or advisable to secure the vote
\nor consent of its stockholders required by the rules of the Nasdaq Stock Market
\nor Delaware Law to obtain such approvals. Company may adjourn or postpone the
\nCompany Stockholders’ Meeting to the extent necessary to ensure that any
\nnecessary supplement or amendment to the Proxy Statement\/Prospectus is provided
\nto Company’s stockholders in advance of a vote on the Merger and this Agreement
\nor, if as of the time for which Company Stockholders’ Meeting is originally
\nscheduled (as set forth in the Proxy Statement\/Prospectus) there are
\ninsufficient shares of Company Common Stock represented (either in person or by
\nproxy) to constitute a quorum necessary to conduct the business of the Company
\nStockholders’ Meeting. Company shall ensure that the Company Stockholders’
\nMeeting is called, noticed, convened, held and conducted, and that all proxies
\nsolicited by the Company in connection with the Company Stockholders’ Meeting
\nare solicited, in compliance with the Delaware Law, its Certificate of
\nIncorporation and Bylaws, the rules of the Nasdaq Stock Market and all other
\napplicable legal requirements. Company’s obligation to call, give notice of,
\nconvene and hold the Company Stockholders’ Meeting in accordance with this
\nSection 5.2(a) shall not be limited or otherwise affected by the commencement,
\ndisclosure, announcement or submission to Company of any Acquisition Proposal or
\nSuperior Offer, or by any withdrawal, amendment or modification of the
\nrecommendation of the Board of Directors of Company with respect to this
\nAgreement or the Merger, and the Company Stockholders’ Meeting shall be called,
\nnoticed, convened and held prior to the calling, noticing, convening or holding
\nof any meeting of Company’s stockholders to consider approval of any Acquisition
\nProposal or Superior Offer.<\/p>\n
(b) Subject to Section 5.2(c): (i) the Board of Directors
\nof Company shall recommend that Company’s stockholders vote in favor of and
\nadopt and approve this Agreement and approve the Merger at the Company
\nStockholders’ Meeting; (ii) the Proxy Statement\/Prospectus shall include a
\nstatement to the effect that the Board of Directors of Company has recommended
\nthat Company’s stockholders vote in favor of and adopt and approve this
\nAgreement and the Merger at the Company Stockholders’ Meeting; and (iii) neither
\nthe Board of Directors of Company nor any committee thereof shall withdraw,
\namend or modify, or propose or resolve to withdraw, amend or modify in a manner
\nadverse to Parent, the recommendation of the Board of Directors of Company that
\nCompany’s stockholders vote in favor of and adopt and approve this Agreement and
\nthe Merger.<\/p>\n
(c) Nothing in this Agreement shall prevent the Board of
\nDirectors of Company from withholding, withdrawing, amending or modifying its
\nrecommendation in favor of the Merger if (i) a Superior Offer (as defined below)
\nis made to Company and is not withdrawn, (ii) Company shall have provided
\nwritten notice to Parent (a “NOTICE OF SUPERIOR OFFER”) advising Parent that
\nCompany has received a Superior Offer, specifying all of the material terms and
\nconditions of such Superior Offer and identifying the person or entity making
\nsuch Superior Offer, (iii) Parent shall not have, within five business days of
\nParent’s receipt of the Notice of Superior Offer, made an offer that Company’s
\nBoard of Directors by a majority vote determines in its good faith judgment
\n(after consultation with a financial advisor of national standing) to be at
\nleast as favorable to Company’s stockholders as such Superior Offer (it being<\/p>\n
-39-
\n 44
\nagreed that the Board of Directors of Company shall convene a meeting to
\nconsider any such offer by Parent promptly following the receipt thereof), (iv)
\nthe Board of Directors of Company reasonably concludes, after consultation with
\nits outside counsel, that, in light of such Superior Offer, the withholding,
\nwithdrawal, amendment or modification of such recommendation is required in
\norder for the Board of Directors of Company to comply with its fiduciary
\nobligations to Company’s stockholders under applicable law and (v) Company shall
\nnot have violated any of the restrictions set forth in Section 5.4 or this
\nSection 5.2. Company shall provide Parent with at least two business days prior
\nnotice (or such lesser prior notice as provided to the members of Company’s
\nBoard of Directors) of any meeting of Company’s Board of Directors at which
\nCompany’s Board of Directors is reasonably expected to consider any Acquisition
\nProposal (as defined in Section 5.4) to determine whether such Acquisition
\nProposal is a Superior Offer. Nothing contained in this Section 5.2(c) shall
\nlimit Company’s obligation to hold and convene the Company Stockholders’ Meeting
\n(regardless of whether the recommendation of the Board of Directors of Company
\nshall have been withdrawn, amended or modified).<\/p>\n
For purposes of this Agreement, “SUPERIOR OFFER” shall mean
\nan unsolicited, bona fide written offer made by a third party to consummate any
\nof the following transactions: (i) a merger or consolidation involving Company
\npursuant to which the stockholders of Company immediately preceding
\nsuch transaction hold less than 50% of the equity interest in the surviving or
\nresulting entity of such transaction or (ii) the acquisition by any person or
\n“group” (as defined under Section 13(d) of the Exchange Act and the rules and
\nregulations thereunder) (including by way of a tender offer or an exchange offer
\nor a two step transaction involving a tender offer followed with reasonable
\npromptness by a cash-out merger involving Company), directly or indirectly, of
\nownership of 100% of the then outstanding shares of capital stock of Company, on
\nterms that the Board of Directors of Company determines, in its reasonable
\njudgment (after consultation with a financial advisor of national standing) to
\nbe more favorable to the Company stockholders than the terms of the Merger;
\nprovided, however, that any such offer shall not be deemed to be a “Superior
\nOffer” if any financing required to consummate the transaction contemplated by
\nsuch offer is not committed (and Company provides Parent with written evidence
\nof such commitment) and is not likely in the reasonable judgment of Company’s
\nBoard of Directors (after consultation with its financial advisor) to be
\nobtained by such third party on a timely basis.<\/p>\n
(d) Nothing contained in this Agreement shall prohibit
\nCompany or its Board of Directors from taking and disclosing to its stockholders
\na position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the
\nExchange Act, provided, however, that the Board of Directors of Company shall
\nnot recommend that the stockholders of Company tender their shares in connection
\nwith a tender offer except to the extent that the Board of Directors determines
\nin its good faith judgment, after consultation with outside counsel and a
\nfinancial advisor of national standing, that the tender offer constitutes a
\nSuperior Offer and that such recommendation is required in order for the Board
\nof Directors of Company to comply with its fiduciary duties to the Company’s
\nstockholders under applicable law.<\/p>\n
-40-
\n 45
\n 5.3 Confidentiality; Access to Information.<\/p>\n
(a) The parties acknowledge that Company and Parent have
\npreviously executed a letter agreement, dated as of January 4, 2001 (the
\n“CONFIDENTIALITY AGREEMENT”), which Confidentiality Agreement will continue in
\nfull force and effect in accordance with its terms.<\/p>\n
(b) Parent, on the one hand, and Company, on the other,
\nwill afford the other party and the other party’s accountants, counsel and other
\nrepresentatives reasonable access to its properties, books, records and
\npersonnel during the period prior to the Effective Time to obtain all
\ninformation concerning the business, including the status of product development
\nefforts, properties, results of operations and personnel, as the other party may
\nreasonably request. No information or knowledge obtained by a party in any
\ninvestigation pursuant to this Section 5.3 will affect or be deemed to modify
\nany representation or warranty contained herein or the conditions to the
\nobligations of the parties to consummate the Merger.<\/p>\n
5.4 No Solicitation.<\/p>\n
(a) From and after the date of this Agreement until the
\nEffective Time or termination of this Agreement pursuant to its terms, Company
\nand its subsidiaries will not, nor will they authorize or permit any of their
\nrespective officers, directors, affiliates or employees or any investment
\nbanker, attorney or other advisor or representative retained by any of them to,
\ndirectly or indirectly, (i) solicit, initiate, encourage or induce the making,
\nsubmission or announcement of any Acquisition Proposal (as hereinafter defined),
\n(ii) participate in any discussions or negotiations regarding, or furnish to any
\nperson any nonpublic information with respect to, or take any other action to
\nfacilitate any inquiries or the making of any proposal that constitutes, or may
\nreasonably be expected to lead to, any Acquisition Proposal, (iii) engage in
\ndiscussions with any person with respect to any Acquisition Proposal, except as
\nto the existence of these provisions, (iv) except as permitted by Section
\n5.2(c), approve, endorse or recommend any Acquisition Proposal or (v) enter into
\nany letter of intent or similar document or any contract, agreement or
\ncommitment contemplating or otherwise relating to any Acquisition Transaction;
\nprovided, however, that prior to the approval of this Agreement and the Merger
\nat the Company Stockholders’ Meeting, this Section 5.4(a) shall not prohibit
\nCompany from furnishing nonpublic information regarding Company and its
\nsubsidiaries to, or entering into discussions with, any person or group who has
\nsubmitted (and not withdrawn) to Company an unsolicited, written, bona fide
\nAcquisition Proposal that the Board of Directors of Company reasonably concludes
\n(after consultation with a financial advisor of national standing) may
\nconstitute a Superior Offer if (1) neither Company nor any representative of
\nCompany and its subsidiaries shall have violated any of the restrictions set
\nforth in this Section 5.4, (2) the Board of Directors of Company concludes in
\ngood faith, after consultation with its outside legal counsel, that such action
\nis required in order for the Board of Directors of Company to comply with its
\nfiduciary obligations to Company’s stockholders under applicable law, (3) prior
\nto furnishing any such nonpublic information to, or entering into any such
\ndiscussions with, such person or group, Company gives Parent written notice of
\nthe identity of such person or group and all of the material terms and
\nconditions of such Acquisition Proposal and of Company’s intention to furnish
\nnonpublic information to, or enter into discussions with, such person or group,
\nand<\/p>\n
-41-
\n 46
\nCompany receives from such person or group an executed confidentiality agreement
\ncontaining terms at least as restrictive with regard to Company’s confidential
\ninformation as the Confidentiality Agreement, (4) Company gives Parent at least
\ntwo business days advance notice of its intent to furnish such nonpublic
\ninformation or enter into such discussions, and (5) contemporaneously with
\nfurnishing any such nonpublic information to such person or group, Company
\nfurnishes such nonpublic information to Parent (to the extent such nonpublic
\ninformation has not been previously furnished by Company to Parent). Company and
\nits subsidiaries will immediately cease any and all existing activities,
\ndiscussions or negotiations with any parties conducted heretofore with respect
\nto any Acquisition Proposal. Without limiting the foregoing, it is understood
\nthat any violation of the restrictions set forth in the preceding two sentences
\nby any officer, director or employee of Company or any of its subsidiaries or
\nany investment banker, attorney or other advisor or representative of Company or
\nany of its subsidiaries shall be deemed to be a breach of this Section 5.4 by
\nCompany.<\/p>\n
For purposes of this Agreement, “ACQUISITION PROPOSAL” shall mean any
\noffer or proposal (other than an offer or proposal by Parent) relating to, or
\ninvolving: (A) any acquisition or purchase by any person or “group” (as defined
\nunder Section 13(d) of the Exchange Act and the rules and regulations
\nthereunder) of more than a 15% beneficial ownership interest in the total
\noutstanding voting securities of Company or any of its subsidiaries; (B) any
\ntender offer or exchange offer that if consummated would result in any person or
\n“group” (as defined under Section 13(d) of the Exchange Act and the rules and
\nregulations thereunder) beneficially owning 15% or more of the total outstanding
\nvoting securities of Company or any of its subsidiaries; (C) any merger,
\nconsolidation, business combination or similar transaction involving Company
\npursuant to which the stockholders of Company immediately preceding such
\ntransaction hold less than 85% of the equity interests in the surviving or
\nresulting entity of such transaction; (D) any sale, lease, exchange, transfer,
\nlicense (other than in the ordinary course of business), acquisition, or
\ndisposition of any material assets of Company; or (E) any liquidation or
\ndissolution of Company.<\/p>\n
(b) In addition to the obligations of Company set forth in
\nparagraph (a) of this Section 5.4, Company as promptly as practicable shall
\nadvise Parent orally and in writing of an Acquisition Proposal or any request
\nfor nonpublic information or other inquiry which Company reasonably believes
\ncould lead to an Acquisition Proposal, the material terms and conditions of such
\nAcquisition Proposal, request or inquiry, and the identity of the person or
\ngroup making any such Acquisition Proposal, request or inquiry. Company will
\nkeep Parent informed as promptly as practicable in all material respects of the
\nstatus and details (including material amendments or proposed amendments) of any
\nsuch Acquisition Proposal, request or inquiry.<\/p>\n
5.5 Public Disclosure. Parent and Company will consult with each
\nother, and to the extent practicable, agree, before issuing any press release or
\notherwise making any public statement with respect to the Merger, this Agreement
\nor an Acquisition Proposal and will not issue any such press release or make any
\nsuch public statement prior to such consultation, except as may be required by
\nlaw or any listing agreement with a national securities exchange. The parties
\nhave agreed to the text of the joint press release announcing the execution of
\nthis Agreement.<\/p>\n
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\n 47
\n 5.6 Reasonable Efforts; Notification.<\/p>\n
(a) Upon the terms and subject to the conditions set forth
\nin this Agreement, each of the parties agrees to use all commercially reasonable
\nefforts to take, or cause to be taken, all actions, and to do, or cause to be
\ndone, and to assist and cooperate with the other parties in doing, all things
\nnecessary, proper or advisable to consummate and make effective, in the most
\nexpeditious manner practicable, the Merger and the other transactions
\ncontemplated by this Agreement, including using all commercially reasonable
\nefforts to accomplish the following: (i) causing the conditions precedent set
\nforth in Article VI to be satisfied, (ii) obtaining all necessary actions or
\nnonactions, waivers, consents, approvals, orders and authorizations from
\nGovernmental Entities and making of all necessary registrations, declarations
\nand filings (including registrations, declarations and filings with Governmental
\nEntities) and taking all steps that may be necessary to avoid any suit, claim,
\naction, investigation or proceeding by any Governmental Entity, (iii) obtaining
\nall necessary consents, approvals or waivers from third parties, (iv) defending
\nany suits, claims, actions, investigations or proceedings, whether judicial or
\nadministrative, challenging this Agreement or the consummation of the
\ntransactions contemplated hereby, including seeking to have any stay or
\ntemporary restraining order entered by any court or other Governmental Entity
\nvacated or reversed and (v) executing and delivering any additional instruments
\nnecessary to consummate the transactions contemplated by, and to fully carry out
\nthe purposes of, this Agreement. Notwithstanding anything in this Agreement to
\nthe contrary, neither Parent nor any of its affiliates shall be under any
\nobligation to make proposals, execute or carry out agreements or submit to
\norders providing for the sale or other disposition or holding separate (through
\nthe establishment of a trust or otherwise) of any assets or categories of assets
\nof Parent or any of its affiliates or Company or any of its subsidiaries or the
\nholding separate of the shares of Company Common Stock (or shares of stock of
\nthe Surviving Corporation) or imposing or seeking to impose any limitation on
\nthe ability of Parent or any of its subsidiaries or affiliates to conduct their
\nbusiness or own such assets or to acquire, hold or exercise full rights of
\nownership of the shares of Company Common Stock (or shares of stock of the
\nSurviving Corporation).<\/p>\n
(b) Each of Company and Parent will give prompt notice to
\nthe other of (i) any notice or other communication from any person alleging that
\nthe consent of such person is or may be required in connection with the Merger,
\n(ii) any notice or other communication from any Governmental Entity in
\nconnection with the Merger, (iii) any litigation relating to, involving or
\notherwise affecting Company, Parent or their respective subsidiaries that
\nrelates to the consummation of the Merger. Company shall give prompt notice to
\nParent of any representation or warranty made by it contained in this Agreement
\nbecoming untrue or inaccurate, or any failure of Company to comply with or
\nsatisfy in any material respect any covenant, condition or agreement to be
\ncomplied with or satisfied by it under this Agreement; provided, however, that
\nno such notification shall affect the representations, warranties, covenants or
\nagreements of the parties or the conditions to the obligations of the parties
\nunder this Agreement. Parent shall give prompt notice to Company of any
\nrepresentation or warranty made by it or Merger Sub contained in this Agreement
\nbecoming untrue or inaccurate, or any failure of Parent or Merger Sub to comply
\nwith or satisfy in any material respect any covenant, condition or agreement to
\nbe complied with or satisfied by it under this Agreement, or any material
\nadverse event involving its business or operations; provided, however, that no
\nsuch notification shall affect the<\/p>\n
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\n 48
\nrepresentations, warranties, covenants or agreements of the parties or the
\nconditions to the obligations of the parties under this Agreement.<\/p>\n
5.7 Third Party Consents. As soon as practicable following the date
\nhereof, Parent and Company will each use all commercially reasonable efforts to
\nobtain any consents, waivers and approvals under any of its or its subsidiaries’
\nrespective agreements, contracts, licenses or leases required to be obtained in
\nconnection with the consummation of the transactions contemplated hereby.<\/p>\n
5.8 Stock Options; Warrants and ESPP.<\/p>\n
(a) At the Effective Time, each outstanding Company Option,
\nwhether or not then exercisable, will be assumed by Parent. Each Company Option
\nso assumed by Parent under this Agreement will continue to have, and be subject
\nto, the same terms and conditions set forth in the applicable Company Stock
\nOption Plan, if any, pursuant to which the Company Option was issued and any
\noption agreement between Company and the optionee with regard to the Company
\nOption immediately prior to the Effective Time (including, without limitation,
\nany repurchase rights or vesting provisions), except that (i) each Company Stock
\nOption will be exercisable (or will become exercisable in accordance with its
\nterms) for that number of whole shares of Parent Common Stock equal to the
\nproduct of the number of shares of Company Common Stock that were issuable upon
\nexercise of such Company Option immediately prior to the Effective Time
\nmultiplied by the Option Exchange Ratio (as defined below), rounded down to the
\nnearest whole number of shares of Parent Common Stock and (ii) the per share
\nexercise price for the shares of Parent Common Stock issuable upon exercise of
\nsuch assumed Company Option will be equal to the quotient determined by dividing
\nthe exercise price per share of Company Common Stock at which such Company
\nOption was exercisable immediately prior to the Effective Time by the Option
\nExchange Ratio, rounded up to the nearest whole cent. Continuous employment with
\nCompany or its subsidiaries shall be credited to the optionee for purposes of
\ndetermining the vesting of all assumed Company Options after the Effective Time.
\nFor the purposes of this Agreement, the term “OPTION EXCHANGE RATIO” means, in
\nthe event that the Conversion Event does not occur, the sum obtained by adding
\n(x) the Exchange Ratio plus (y) the quotient (rounded to the third decimal
\nplace) obtained by dividing (i) the Cash Consideration by (ii) the average of
\nthe closing sale prices of Parent Common Stock during regular trading hours on
\nthe Nasdaq National Market on five trading days ending on the trading day
\nimmediately preceding the Closing Date (the “CLOSING PRICE”); and if the
\nConversion Event does occur, the quotient obtained by dividing (A) the sum of
\n(I) the Substitute Cash Consideration plus (II) the Cash Consideration by (B)
\nthe Closing Price.<\/p>\n
(b) It is intended that Company Options assumed by Parent
\nshall qualify following the Effective Time as incentive stock options as defined
\nin Section 422 of the Code to the extent Company Options qualified as incentive
\nstock options immediately prior to the Effective Time and the provisions of this
\nSection 5.8 shall be applied consistent with such intent.<\/p>\n
(c) At the Effective Time, each outstanding Company
\nWarrant, whether or not then exercisable, will be assumed by Parent. Each
\nCompany Warrant so assumed by Parent under this Agreement will continue to have,
\nand be subject to, the same terms and conditions set<\/p>\n
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\n 49
\nforth in the applicable Company Warrant immediately prior to the Effective Time
\n(including, without limitation, any vesting provisions), except that: if the
\nConversion Event does not occur, each Company Warrant will be exercisable (or
\nwill become exercisable in accordance with its terms) to purchase (i) that
\nnumber of whole shares of Parent Common Stock (rounded to the nearest whole
\nshare) equal to the product of (A) the number of shares of Company Common Stock
\nsubject to the Company Warrant multiplied by (B) the Exchange Ratio, plus (ii)
\nan amount of cash equal to (C) the number of shares of Company Common Stock
\nsubject to the Company Warrant multiplied by (D) the Cash Consideration (rounded
\nto the nearest whole cent), at a per share of Parent Common Stock (and pro rata
\nportion of the aggregate cash receivable pursuant to such assumed Company
\nWarrant) exercise price equal to the aggregate exercise price of the Company
\nWarrant divided by the number of shares of Parent Common Stock subject to the
\nassumed Company Warrant following such conversion; and if the Conversion Event
\noccurs, each Company Warrant will be exercisable (or will become exercisable in
\naccordance with its terms) on a per former share of Company Common Stock basis
\nto purchase an amount of cash (rounded to the nearest whole cent) equal to the
\nsum of (E) the Cash Consideration plus (F) the Substitute Cash Consideration, at
\na per former share of Company Common Stock exercise price equal to the per share
\nof Company Common Stock exercise price of such Company Warrant immediately prior
\nto the Effective Time.<\/p>\n
(d) If, at the Effective Time, there is an offering in
\neffect under the Company ESPP, all rights to purchase shares of Company Common
\nStock shall be converted into rights to purchase a number of shares of Parent
\nCommon Stock in accordance with the terms of the Company ESPP.<\/p>\n
5.9 Form S-8. Parent agrees to file a registration statement on Form
\nS-8 for the shares of Parent Common Stock issuable with respect to assumed
\nCompany Options and with respect to the Company ESPP promptly, but in no event
\nlater than five business days, following the Effective Time and shall maintain
\nthe effectiveness of such registration statement thereafter for so long as any
\nof such options or other rights remain outstanding.<\/p>\n
5.10 Indemnification.<\/p>\n
(a) From and after the Effective Time, Parent will cause
\nthe Surviving Corporation to fulfill and honor in all respects the obligations
\nof Company pursuant to any indemnification agreement between Company and any
\nperson who served as a director of officer of Company at any time prior to the
\nEffective Time (the “INDEMNIFIED PARTIES”) and any indemnification provisions
\nunder Company’s Certificate of Incorporation or Bylaws as in effect on the date
\nhereof. The Certificate of Incorporation and Bylaws of the Surviving Corporation
\nwill contain provisions with respect to exculpation and indemnification that are
\nat least as favorable to the Indemnified Parties as those contained in the
\nCertificate of Incorporation and Bylaws of Company as in effect on the date
\nhereof, which provisions will not be amended, repealed or otherwise modified for
\na period of five years from the Effective Time in any manner that would
\nadversely affect the rights thereunder of the Indemnified Parties, unless such
\nmodification is required by law.<\/p>\n
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\n 50
\n (b) For a period of five years after the Effective Time,
\nParent will cause the Surviving Corporation to maintain in effect Company’s
\nexisting officers’ and directors’ liability insurance policy on terms comparable
\nto those currently in effect, provided, however, that the Surviving Corporation
\nmay substitute therefor policies of comparable coverage containing terms and
\nconditions that are not substantively less advantageous to the beneficiaries
\nthereof, and provided, further, that in no event will Parent or the Surviving
\nCorporation be required to expend in excess of 150% of the annual premium
\ncurrently paid by Company for any such coverage (or to provide more than such
\ncoverage as is available for such 150% of such annual premium).<\/p>\n
(c) This Section 5.10 shall survive the consummation of the
\nMerger, is intended to benefit the Surviving Corporation and each Indemnified
\nParty, shall be binding on all successors and assigns of the Surviving
\nCorporation and Parent, and shall be enforceable by the Indemnified Parties.
\nParent hereby guarantees to each person to whom the Surviving Corporation has
\nobligations under this Section 5.10 that the Surviving Corporation will fulfill
\nthose obligations and agrees that each of those persons is an intended
\nbeneficiary of that guarantee and has the right to enforce it against Parent,
\nwith regard to himself or herself.<\/p>\n
5.11 Nasdaq Listing. Parent agrees to authorize for listing on the
\nNasdaq Stock Market the shares of Parent Common Stock issuable, and those
\nrequired to be reserved for issuance, in connection with the Merger, effective
\nupon official notice of issuance.<\/p>\n
5.12 Rights Agreement; Takeover Statutes. The Board of Directors of
\nCompany shall take all further action (in addition to that referred to in
\nSection 2.20) necessary (including redeeming the Rights immediately prior to the
\nEffective Time or amending the Rights Agreement) in order to render the Rights
\ninapplicable to the Merger, and the other transactions contemplated by this
\nAgreement and the Stock Option Agreement. If any Takeover Statute is or may
\nbecome applicable to the Merger or the other transactions contemplated by this
\nAgreement or the Stock Option Agreement, each of Parent and Company and their
\nrespective Boards of Directors shall grant such approvals and take such lawful
\nactions as are necessary to ensure that such transactions may be consummated as
\npromptly as practicable on the terms contemplated by this Agreement or the Stock
\nOption Agreement, as applicable, and otherwise act to eliminate or minimize the
\neffects of such statute and any regulations promulgated thereunder on such
\ntransactions.<\/p>\n
5.13 Certain Employee Benefits. As soon as practicable after the
\nexecution of this Agreement, Company and Parent shall confer and work together
\nin good faith to agree upon mutually acceptable employee benefit and
\ncompensation arrangements (and terminate Company Employee Plans immediately
\nprior to the Effective Time if appropriate). Company shall take all action
\nnecessary in advance of the Effective Time to terminate its and its
\nsubsidiaries’ 401(k) plans effective immediately prior to the Effective Time. To
\nthe extent that Company employees become eligible to participate in any employee
\nbenefit plans or arrangements maintained by Parent and such plans by their terms
\nso permit, Parent will give such employees full credit for purposes of
\neligibility (including service and waiting period requirements), vesting,
\nbenefit accrual, and determination of the level of benefits under any employee
\nbenefit plans or arrangements maintained by Parent, for such employee’s service
\nwith Company or any of its<\/p>\n
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\n 51
\nsubsidiaries to the same extent recognized by either Company or its subsidiaries
\nimmediately prior to the Effective Time.<\/p>\n
5.14 Company Affiliates; Restrictive Legend. Parent will give stop
\ntransfer instructions to its transfer agent with respect to any Parent Common
\nStock received pursuant to the Merger by any Company Affiliate, and there will
\nbe placed on the certificates representing such Parent Common Stock, or any
\nsubstitutions therefor, a legend stating in substance:<\/p>\n
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
\n TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES ACT OF
\n 1933, AS AMENDED, APPLIES AND MAY BE TRANSFERRED ONLY (A) IN
\n CONFORMITY WITH RULE 145(D) UNDER SUCH ACT, (B) IN ACCORDANCE WITH A
\n WRITTEN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO THE ISSUER, IN
\n FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE ISSUER THAT THE
\n TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
\n REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED.<\/p>\n
5.15 Letter of Company’s Accountants. Company shall use all
\nreasonable efforts to cause to be delivered to Parent a letter of
\nPricewaterhouseCoopers LLP, Company’s independent accountants, dated no more
\nthan two business days before the date on which the Registration Statement
\nbecomes effective (and satisfactory in form and substance to Parent), that is
\ncustomary in scope and substance for letters delivered by independent public
\naccountants in connection with registration statements similar to the
\nRegistration Statement.<\/p>\n
5.16 Section 16. Provided that Company delivers to Parent the Section
\n16 Information (as defined below) in a timely fashion, the Board of Directors of
\nParent, or a committee of two or more Non-Employee Directors thereof (as such
\nterm is defined for purposes of Rule 16b-3 under the Exchange Act), shall adopt
\nresolutions prior to the consummation of the Merger, providing that the receipt
\nby the Company Insiders (as defined below) of the Parent Common Stock upon
\nconversion of the Company Common Stock, and of options for Parent Common Stock
\nupon conversion of the Company Options, in each case pursuant to the
\ntransactions contemplated hereby and to the extent such securities are listed in
\nthe Section 16 Information, are intended to be exempt from liability pursuant to
\nSection 16(b) under the Exchange Act. Such resolutions shall comply with the
\napproval conditions of Rule 16b-3 under the Exchange Act for purposes of such
\nSection 16(b) exemption, including, but not limited to, specifying the name of
\nthe Company Insiders, the number of securities to be acquired or disposed of for
\neach such person, the material terms of any derivative securities, and that the
\napproval is intended to make the receipt of such securities exempt pursuant to
\nRule 16b-3(d).<\/p>\n
“SECTION 16 INFORMATION” shall mean information regarding the Company
\nInsiders, the number of shares of Company capital stock held by each such
\nCompany Insider and expected to be exchanged for Parent Common Stock in
\nconnection with the Merger, and the number and description of the Company
\nOptions held by each such Company Insider and expected to be converted into
\noptions for Parent Common Stock in connection with the Merger. “COMPANY
\nINSIDERS” shall mean those officers and directors of Company who will be subject
\nto the<\/p>\n
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\n 52
\nreporting requirement of Section 16(b) of the Exchange Act with respect to
\nParent and who are listed in the Section 16 Information.<\/p>\n
5.17 Continuity of Business Enterprise. Unless the Conversion Event
\noccurs, Parent will continue at least one significant historic business line of
\nCompany, or use at least a significant portion of Company’s historic business
\nassets in a business, in each case within the meaning of Reg. Section
\n1.368-1(d).<\/p>\n
ARTICLE VI
\n CONDITIONS TO THE MERGER<\/p>\n
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
\nrespective obligations of each party to this Agreement to effect the Merger
\nshall be subject to the satisfaction at or prior to the Closing Date of the
\nfollowing conditions:<\/p>\n
(a) Company Stockholder Approval. This Agreement shall have
\nbeen approved and adopted, and the Merger shall have been approved, by the
\nrequisite vote of the stockholders of Company under applicable law and the
\nCompany Charter Documents.<\/p>\n
(b) Registration Statement Effective; Proxy Statement. The
\nSEC shall have declared the Registration Statement effective. No stop order
\nsuspending the effectiveness of the Registration Statement or any part thereof
\nshall have been issued and no proceeding for that purpose, and no similar
\nproceeding in respect of the Proxy Statement\/Prospectus, shall have been
\ninitiated or threatened in writing by the SEC.<\/p>\n
(c) No Order; HSR Act. No Governmental Entity shall have
\nenacted, issued, promulgated, enforced or entered any statute, rule, regulation,
\nexecutive order, decree, injunction or other order (whether temporary,
\npreliminary or permanent) which is in effect and which has the effect of making
\nthe Merger illegal or otherwise prohibiting consummation of the Merger. All
\nwaiting periods, if any, under the HSR Act relating to the transactions
\ncontemplated hereby shall have expired or been terminated.<\/p>\n
(d) Nasdaq Listing. The shares of Parent Common Stock to be
\nissued in the Merger shall have been approved for listing on the Nasdaq Stock
\nMarket, subject to official notice of issuance.<\/p>\n
(e) No Restraints. There shall not be instituted or pending
\nany action or proceeding by any Governmental Entity (i) seeking to restrain,
\nprohibit or otherwise interfere with the ownership or operation by Parent or any
\nof its subsidiaries of all or any portion of the business of Company or any of
\nits subsidiaries or of Parent or any of its subsidiaries or to compel Parent or
\nany of its subsidiaries to dispose of or hold separate all or any portion of the
\nbusiness or assets of Company or any of its subsidiaries or of Parent or any of
\nits subsidiaries, (ii) seeking to impose or confirm limitations on the ability
\nof Parent or any of its subsidiaries effectively to exercise full rights of
\nownership of the shares of Company Common Stock (or shares of stock of the
\nSurviving Corporation) including the right to vote any such shares on any
\nmatters properly<\/p>\n
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\n 53
\npresented to stockholders or (iii) seeking to require divestiture by Parent or
\nany of its subsidiaries of any such shares.<\/p>\n
6.2 Additional Conditions to Obligations of Company. The obligation
\nof Company to consummate and effect the Merger shall be subject to the
\nsatisfaction at or prior to the Closing Date of each of the following
\nconditions, any of which may be waived, in writing, exclusively by Company:<\/p>\n
(a) Representations and Warranties. Each representation and
\nwarranty of Parent and Merger Sub contained in this Agreement (i) shall have
\nbeen true and correct as of the date of this Agreement and (ii) shall be true
\nand correct on and as of the Closing Date with the same force and effect as if
\nmade on the Closing Date except, (A) in each case, or in the aggregate, as does
\nnot constitute a Material Adverse Effect on Parent or Merger Sub as of the
\nClosing Date; provided, however, such Material Adverse Effect qualification
\nshall be inapplicable with respect to the representations and warranties
\ncontained in Sections 3.2 and 3.3 (which representations shall be true and
\ncorrect at the applicable times in all material respects), and (B) for those
\nrepresentations and warranties which address matters only as of a particular
\ndate (which representations shall have been true and correct (subject to the
\nqualifications set forth in the preceding clause (A)) as of such particular
\ndate) (it being understood that, for purposes of determining the accuracy of
\nsuch representations and warranties, any update of or modification to the Parent
\nSchedules made or purported to have been made after the execution of this
\nAgreement shall be disregarded). Company shall have received a certificate with
\nrespect to the foregoing signed on behalf of Parent by an authorized officer of
\nParent.<\/p>\n
(b) Agreements and Covenants. Parent and Merger Sub shall
\nhave performed or complied in all material respects with all agreements and
\ncovenants required by this Agreement to be performed or complied with by them on
\nor prior to the Closing Date, and Company shall have received a certificate to
\nsuch effect signed on behalf of Parent by an authorized officer of Parent.<\/p>\n
(c) Material Adverse Effect. No Material Adverse Effect
\nwith respect to Parent shall have occurred since the date of this Agreement and
\nbe continuing.<\/p>\n
(d) Tax Opinion. Company shall have received an opinion of
\nFoley, Hoag & Eliot LLP, dated as of the Closing Date, in form and substance
\nreasonably satisfactory to Company, on the basis of the facts, representations
\nand assumptions set forth or referred to in such opinion, that the Merger will
\nconstitute a “reorganization” within the meaning of Section 368 of the Code and
\nthat each of Parent and Company will be a party to the reorganization within the
\nmeaning of Section 368(a) of the Code, provided, however, that if the counsel to
\nCompany does not render such option, this condition shall nonetheless be deemed
\nto be satisfied with respect to Company if counsel to Parent renders such
\nopinion to Parent. The parties to this Agreement agree to make such reasonable
\nrepresentations as requested by such counsel for the purpose of rendering such
\nopinions. If the Conversion Event occurs, this Section 6.2(d) shall not be a
\ncondition to the Merger, and shall be of no further force or effect.<\/p>\n
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\n 54
\n 6.3 Additional Conditions to the Obligations of Parent and Merger
\nSub. The obligations of Parent and Merger Sub to consummate and effect the
\nMerger shall be subject to the satisfaction at or prior to the Closing Date of
\neach of the following conditions, any of which may be waived, in writing,
\nexclusively by Parent:<\/p>\n
(a) Representations and Warranties. Each representation and
\nwarranty of Company contained in this Agreement (i) shall have been true and
\ncorrect as of the date of this Agreement and (ii) shall be true and correct on
\nand as of the Closing Date with the same force and effect as if made on and as
\nof the Closing Date except (A) in each case, or in the aggregate, as does not
\nconstitute a Material Adverse Effect on Company as of the Closing Date;
\nprovided, however, such Material Adverse Effect qualification shall be
\ninapplicable with respect to the representations and warranties contained in
\nSections 2.2, 2.3, 2.4, 2.18, 2.19 and 2.20 (which representations shall be true
\nand correct at the applicable times in all material respects), and (B) for those
\nrepresentations and warranties which address matters only as of a particular
\ndate (which representations shall have been true and correct (subject to the
\nqualifications set forth in the preceding clause (A)) as of such particular
\ndate) (it being understood that, for purposes of determining the accuracy of
\nsuch representations and warranties, any update of or modification to the
\nCompany Schedules made or purported to have been made after the execution of
\nthis Agreement shall be disregarded). Parent shall have received a certificate
\nwith respect to the foregoing signed on behalf of Company by the Chief Executive
\nOfficer or Chief Financial Officer of Company.<\/p>\n
(b) Agreements and Covenants. Company shall have performed
\nor complied 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 Date, and Parent shall have received a certificate to such effect signed
\non behalf of Company by the Chief Executive Officer or Chief Financial Officer
\nof Company.<\/p>\n
(c) Material Adverse Effect. No Material Adverse Effect
\nwith respect to Company shall have occurred since the date of this Agreement and
\nbe continuing.<\/p>\n
(d) Tax Opinion. Parent shall have received an opinion of
\nFenwick & West LLP, dated as of the Closing Date, in form and substance
\nreasonably satisfactory to it, on the basis of the facts, representations and
\nassumptions set forth or referred to in such opinion, that the Merger will
\nconstitute a reorganization within the meaning of Section 368(a) of the Code and
\nthat each of Parent and Company will be a party to the reorganization within the
\nmeaning of Section 368(a) of the Code, provided, however, that if the counsel to
\nParent does not render such option, this condition shall nonetheless be deemed
\nto be satisfied with respect to Parent if counsel to Company renders such
\nopinion to Parent. The parties to this Agreement agree to make such reasonable
\nrepresentations as requested by such counsel for the purpose of rendering such
\nopinions. If the Conversion Event occurs, this Section 6.3(d) shall not be a
\ncondition to the Merger, and shall be of no further force or effect.<\/p>\n
(e) Consents. Parent shall have been furnished with
\nevidence reasonably satisfactory to it that Company has obtained the consents,
\napprovals and waivers set forth in Part 6.3(e) of the Company Disclosure Letter.<\/p>\n
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\n 55
\n ARTICLE VII
\n TERMINATION, AMENDMENT AND WAIVER<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior
\nto the Effective Time, whether before or after the requisite approvals of the
\nstockholders of Company:<\/p>\n
(a) by mutual written consent duly authorized by the Boards
\nof Directors of Parent and Company;<\/p>\n
(b) by either Company or Parent if the Merger shall not
\nhave been consummated by September 30, 2001 for any reason; provided, however,
\nthat the right to terminate this Agreement under this Section 7.1(b) shall not
\nbe available to any party whose action or failure to act has been a principal
\ncause of or resulted in the failure of the Merger to occur on or before such
\ndate and such action or failure to act constitutes a breach of this Agreement;<\/p>\n
(c) by either Company or Parent if a Governmental Entity
\nshall have issued an order, decree or ruling or taken any other action, in any
\ncase having the effect of permanently restraining, enjoining or otherwise
\nprohibiting the Merger, which order, decree, ruling or other action is final and
\nnonappealable;<\/p>\n
(d) by either Company or Parent, if the approval and
\nadoption of this Agreement, and the approval of the Merger, by the stockholders
\nof Company shall not have been obtained by reason of the failure to obtain the
\nrequired vote at a meeting of Company stockholders duly convened therefore or at
\nany adjournment thereof; provided, however, that the right to terminate this
\nAgreement under this Section 7.1(d) shall not be available to Company where the
\nfailure to obtain the Company stockholder approval shall have been caused by (i)
\nthe action or failure to act of Company and such action or failure to act
\nconstitutes a material breach by Company of this Agreement or (ii) a breach of
\nany of the Voting Agreements by any party thereto other than Parent;<\/p>\n
(e) by Parent (at any time prior to the adoption and
\napproval of this Agreement and the Merger by the required vote of the
\nstockholders of Company) if a Triggering Event (as defined below) shall have
\noccurred;<\/p>\n
(f) by Company, upon a breach of any representation,
\nwarranty, covenant or agreement on the part of Parent set forth in this
\nAgreement, or if any representation or warranty of Parent shall have become
\nuntrue, in either case such that the conditions set forth in Section 6.2(a) or
\nSection 6.2(b) would not be satisfied as of the time of such breach or as of the
\ntime such representation or warranty shall have become untrue, provided that if
\nsuch inaccuracy in Parent’s representations and warranties or breach by Parent
\nis curable by Parent, then Company may not terminate this Agreement under this
\nSection 7.1(f) for 30 days after delivery of written notice from Company to
\nParent of such breach, provided Parent continues to exercise commercially
\nreasonable efforts to cure such breach (it being understood that Company may not
\nterminate this<\/p>\n
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\n 56
\nAgreement pursuant to this paragraph (f) if such breach by Parent is cured
\nduring such 30-day period, or if Company shall have materially breached this
\nAgreement); or<\/p>\n
(g) by Parent, upon a breach of any representation,
\nwarranty, covenant or agreement on the part of Company set forth in this
\nAgreement, or if any representation or warranty of Company shall have become
\nuntrue, in either case such that the conditions set forth in Section 6.3(a) or
\nSection 6.3(b) would not be satisfied as of the time of such breach or as of the
\ntime such representation or warranty shall have become untrue, provided that if
\nsuch inaccuracy in Company’s representations and warranties or breach by Company
\nis curable by Company, then Parent may not terminate this Agreement under this
\nSection 7.1(g) for 30 days after delivery of written notice from Parent to
\nCompany of such breach, provided Company continues to exercise commercially
\nreasonable efforts to cure such breach (it being understood that Parent may not
\nterminate this Agreement pursuant to this paragraph (g) if such breach by
\nCompany is cured during such 30-day period, or if Parent shall have materially
\nbreached this Agreement).<\/p>\n
For the purposes of this Agreement, a “TRIGGERING EVENT”
\nshall be deemed to have occurred if: (i) the Board of Directors of Company or
\nany committee thereof shall for any reason have withdrawn or shall have amended
\nor modified in a manner adverse to Parent its recommendation in favor
\nof the adoption and approval of the Agreement or the approval of the Merger;
\n(ii) Company shall have failed to include in the Proxy Statement\/Prospectus the
\nrecommendation of the Board of Directors of Company in favor of the adoption and
\napproval of the Agreement and the approval of the Merger; (iii) the Board of
\nDirectors of Company fails publicly to reaffirm its recommendation in favor of
\nthe adoption and approval of the Agreement and the approval of the Merger within
\n10 business days after Parent requests in writing that such recommendation be
\nreaffirmed at any time following the public announcement of an Acquisition
\nProposal; (iv) the Board of Directors of Company or any committee thereof shall
\nhave approved or publicly recommended any Acquisition Proposal; (v) Company
\nshall have entered into any letter of intent or similar document or any
\nagreement, contract or commitment accepting any Acquisition Proposal; (vi)
\nCompany shall have materially breached any of the provisions of Sections 5.2,
\n5.4 or 5.12; or (vii) a tender or exchange offer relating to securities of
\nCompany shall have been commenced by a person unaffiliated with Parent, and
\nCompany shall not have sent to its securityholders pursuant to Rule 14e-2
\npromulgated under the Exchange Act, within 10 business days after such tender or
\nexchange offer is first published sent or given, a statement disclosing that
\nCompany recommends rejection of such tender or exchange offer.<\/p>\n
7.2 Notice of Termination; Effect of Termination. Any proper
\ntermination of this Agreement under Section 7.1 will be effective immediately
\nupon the delivery of written notice of the terminating party to the other
\nparties hereto. In the event of the termination of this Agreement as provided in
\nSection 7.1, this Agreement shall be of no further force or effect, except (i)
\nas set forth in this Section 7.2, Section 7.3 and Article 8, each of which shall
\nsurvive the termination of this Agreement, and (ii) nothing herein shall relieve
\nany party from liability for any willful breach of any covenant of this
\nAgreement or for any intentional or willful act or omission by a party which
\nrenders any representations or warranties of such party untrue. No termination
\nof this Agreement shall affect the obligations of the parties contained in the<\/p>\n
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\n 57
\nConfidentiality Agreement, all of which obligations shall survive termination of
\nthis Agreement in accordance with their terms.<\/p>\n
7.3 Fees and Expenses.<\/p>\n
(a) Except as set forth in this Section 7.3, all fees and
\nexpenses incurred in connection with this Agreement and the transactions
\ncontemplated hereby shall be paid by the party incurring such expenses whether
\nor not the Merger is consummated; provided, however, that Parent and Company
\nshall share equally all fees and expenses, other than attorneys’ and accountants
\nfees and expenses, incurred in relation to the printing and filing with the SEC
\nof the Proxy Statement\/Prospectus (including any preliminary materials related
\nthereto) and the Registration Statement (including financial statements and
\nexhibits) and any amendments or supplements thereto.<\/p>\n
(b) In the event that this Agreement is terminated by
\nParent or Company, as applicable, pursuant to Section 7.1(d) or Section 7.1(e),
\nCompany shall promptly, but in no event later than two days after the date of
\nsuch termination, pay Parent a fee equal to $10,350,000 in immediately available
\nfunds (the “TERMINATION FEE”); provided, that in the case of a termination under
\nSection 7.1(d) prior to which no Triggering Event has occurred, (i) such payment
\nshall be made only if (A) following the date of this Agreement and prior to the
\ntermination of this Agreement, a person has publicly announced an Acquisition
\nProposal and (B) within 12 months following the termination of this Agreement a
\nCompany Acquisition (as defined below) is consummated or Company enters into a
\nletter of intent or other agreement providing for a Company Acquisition and (ii)
\nsuch payment shall be made promptly, but in no event later than two days after
\nthe consummation of such Company Acquisition or the entry by Company into such
\nagreement.<\/p>\n
(c) If this Agreement is terminated by Company under
\nSection 7.1(f) then Parent shall pay to Company no later than two days after
\ndemand by Company therefor together with a statement from Company’s Chief
\nFinancial Offer certifying the amount thereof, Company’s fees and expenses
\n(including fees of attorneys, accountants and financial advisors to Company)
\nincurred in connection with this Agreement and the transactions contemplated
\nhereby, up to an aggregate amount of such fees and expenses not to exceed
\n$1,000,000.<\/p>\n
(d) If this Agreement is terminated (A) by Parent under
\neither of Sections 7.1(e) or 7.1(g) or (B) by Company or Parent under Section
\n7.1(d), then in each such case, Company shall pay to Parent no later than two
\ndays after demand by Parent therefor together with a statement from Parent’s
\nChief Financial Offer certifying the amount thereof, Parent’s fees and expenses
\n(including fees of attorneys, accountants and financial advisors to Parent)
\nincurred in connection with this Agreement and the transactions contemplated
\nhereby, up to an aggregate amount of such fees and expenses not to exceed
\n$1,000,000; provided, however, that in the event that this Agreement is
\nterminated and, pursuant to Section 7.3(b), Parent has received the full amount
\nof the Termination Fee, Parent’s fees and expenses which are payable under this
\nSection 7.3(d) shall not include the fees of Parent’s financial advisor Morgan
\nStanley & Co., Inc., incurred in connection with the transactions contemplated
\nby this Agreement.<\/p>\n
-53-
\n 58
\n (e) Each of Parent and Company acknowledges that the
\nagreements contained in this Section 7.3 are an integral part of the
\ntransactions contemplated by this Agreement, and that, without these agreements,
\nneither Parent nor Company would enter into this Agreement. Accordingly, if
\nParent or Company fails to pay in a timely manner amounts due pursuant to
\nSection 7.3(b), 7.3(c) or 7.3(d), and, in order to obtain such payment, Parent
\nor Company makes a claim for such amounts that results in a judgment against the
\nother for the amounts described in Section 7.3(b), 7.3(c) or 7.3(d), the
\njudgment debtor shall pay to judgment creditor its reasonable costs and expenses
\n(including reasonable attorneys’ fees and expenses as provided in Section
\n8.7(b)) in connection with such suit, together with interest on the amounts
\ndescribed in Section 7.3(b), 7.3(c) and 7.3(d) (at the prime rate of The Chase
\nManhattan Bank in effect on the date such payment was required to be made) from
\nsuch date until the payment of such amount (together with such accrued
\ninterest). Payment of the fees described in this Section 7.3(b), 7.3(c) and\/or
\n7.3(d) shall not be in lieu of damages incurred in the event of breach of this
\nAgreement as described in clause (ii) of Section 7.2.<\/p>\n
For the purposes of this Agreement, “COMPANY ACQUISITION”
\nshall mean any of the following transactions (other than the transactions
\ncontemplated by this Agreement); (i) a merger, consolidation, business
\ncombination, recapitalization, liquidation, dissolution or similar transaction
\ninvolving Company pursuant to which the stockholders of Company immediately
\npreceding such transaction hold less than 50% of the aggregate equity interests
\nin the surviving or resulting entity of such transaction, (ii) a sale or other
\ndisposition by Company of assets representing in excess of 50% of the aggregate
\nfair market value of Company’s business immediately prior to such sale, or (iii)
\nthe acquisition by any person or group (including by way of a tender offer or an
\nexchange offer or issuance by Company), directly or indirectly, of beneficial
\nownership or a right to acquire beneficial ownership of shares representing in
\nexcess of 50% of the voting power of the then outstanding shares of capital
\nstock of Company.<\/p>\n
7.4 Amendment. Subject to applicable law, this Agreement may be
\namended by the parties hereto at any time by execution of an instrument in
\nwriting signed on behalf of each of Parent and Company.<\/p>\n
7.5 Extension; Waiver. At any time prior to the Effective Time any
\nparty hereto may, to the extent legally allowed, (i) extend the time for the
\nperformance of any of the obligations or other acts of the other parties hereto,
\n(ii) waive any inaccuracies in the representations and warranties made to such
\nparty contained herein or in any document delivered pursuant hereto and (iii)
\nwaive compliance with any of the agreements or conditions for the benefit of
\nsuch party contained herein. Any agreement on the part of a party hereto to any
\nsuch extension or waiver shall be valid only if set forth in an instrument in
\nwriting signed on behalf of such party. Delay in exercising any right under this
\nAgreement shall not constitute a waiver of such right.<\/p>\n
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\n 59
\n ARTICLE VIII
\n GENERAL PROVISIONS<\/p>\n
8.1 Non-Survival of Representations and Warranties. The
\nrepresentations and warranties of Company, Parent and Merger Sub contained in
\nthis Agreement shall terminate at the Effective Time, and only the covenants
\nthat by their terms survive the Effective Time shall survive the Effective Time.<\/p>\n
8.2 Notices. All notices and other communications hereunder shall be
\nin writing and shall be deemed given upon delivery either personally or by
\ncommercial delivery service, or sent via facsimile (receipt confirmed) to the
\nparties at the following addresses or facsimile numbers (or at such other
\naddress or facsimile numbers for a party as shall be specified by like notice):<\/p>\n
(a) if to Parent or Merger Sub, to:<\/p>\n
Macromedia, Inc.
\n 600 Townsend Street
\n San Francisco, California 94103
\n Attention: General Counsel
\n Facsimile No.: 415-626-0274<\/p>\n
with a copy to:<\/p>\n
Fenwick & West LLP
\n 275 Battery Street, 15th Floor
\n San Francisco, California 94110
\n Attention: Gordon K. Davidson
\n Douglas N. Cogen
\n Facsimile No.: 415-281-1350<\/p>\n
(b) if to Company, to:<\/p>\n
Allaire Corporation
\n 275 Grove Street
\n Newton, Massachusetts 02466
\n Attention: President
\n General Counsel
\n Facsimile No.: 617-219-2007<\/p>\n
with a copy to:<\/p>\n
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\n 60
\n Foley, Hoag & Eliot LLP
\n One Post Office Square
\n Boston, Massachusetts 02109
\n Attention: Robert L. Birnbaum
\n William R. Kolb
\n Facsimile No.: 617-832-7000<\/p>\n
8.3 Interpretation; Certain Defined Terms.<\/p>\n
(a) When a reference is made in this Agreement to Exhibits,
\nsuch reference shall be to an Exhibit to this Agreement unless otherwise
\nindicated. When a reference is made in this Agreement to Sections, such
\nreference shall be to a Section of this Agreement unless otherwise indicated.
\nThe words “INCLUDE,” “INCLUDES” and “INCLUDING” when used herein shall be deemed
\nin each case to be followed by the words “WITHOUT LIMITATION.” The table of
\ncontents and headings contained in this Agreement are only for reference
\npurposes and shall not affect in any way the meaning or interpretation of this
\nAgreement. When reference is made herein to “THE BUSINESS OF” an entity, such
\nreference shall be deemed to include the business of all direct and indirect
\nsubsidiaries of such entity. Reference to the subsidiaries of an entity shall be
\ndeemed to include all direct and indirect subsidiaries of such entity. Reference
\nto an agreement herein is to such agreement as amended in accordance with its
\nterms up to the date hereof. Reference to a statute herein is to such statute,
\nas amended.<\/p>\n
(b) For purposes of this Agreement, “KNOWLEDGE” means, with
\nrespect to any fact, circumstance, event or other matter in question, the actual
\nknowledge of such fact, circumstance, event or other matter of (i) an
\nindividual, if used in reference to an individual, or (ii) any officer or
\ndirector of such party, if used in reference to a person that is not an
\nindividual. Any such individual will be deemed to have actual knowledge of a
\nparticular fact, circumstance, event or other matter if (x) such fact,
\ncircumstance, event or other matter is reflected in one or more documents
\n(whether written or electronic, including e-mails sent to or by such individual)
\nin, or that have been in, such individual’s possession, including personal files
\nof such individual, (y) such fact, circumstance, event or other matter is
\nreflected in one or more documents (whether written or electronic) contained in
\nbooks and records of such party (in the case of knowledge of a party that is not
\nan individual) that would reasonably be expected to be reviewed by an individual
\nwho has the duties and responsibilities of such individual in the customary
\nperformance of such duties and responsibilities or (z) such knowledge could be
\nobtained from reasonable inquiry of the persons employed by such party charged
\nwith administrative or operational responsibility for such matters for such
\nparty.<\/p>\n
(c) For purposes of this Agreement, the term “MATERIAL
\nADVERSE EFFECT” when used in connection with an entity means any change, event,
\nviolation, inaccuracy, circumstance or effect (whether or not such change,
\nevent, violation, inaccuracy, circumstance or effect constitutes a breach of a
\nrepresentation, warranty or covenant made by an entity in this Agreement) that
\nis or is reasonably likely to be materially adverse to the business, assets
\n(including intangible assets), capitalization, financial condition, operations
\nor results of operations of such entity taken as a whole with its subsidiaries,
\nexcept to the extent that any such change, event, violation, inaccuracy,
\ncircumstance or effect directly and primarily results from<\/p>\n
-56-
\n 61
\n(i) changes in general economic conditions or changes affecting the industry
\ngenerally in which such entity operates (provided that such changes do not
\naffect such entity in a disproportionate manner) or (ii) changes in the trading
\nprices for such entity’s capital stock.<\/p>\n
(d) For purposes of this Agreement, the term “PERSON” shall
\nmean any individual, corporation (including any non-profit corporation), general
\npartnership, limited partnership, limited liability partnership, joint venture,
\nestate, trust, company (including any limited liability company or joint stock
\ncompany), firm or other enterprise, association, organization, entity or
\nGovernmental Entity.<\/p>\n
(e) For purposes of this Agreement, “SUBSIDIARY” of a
\nspecified entity will be any corporation, partnership, limited liability
\ncompany, joint venture or other legal entity of which the specified entity
\n(either alone or through or together with any other subsidiary) owns, directly
\nor indirectly, 50% or more of the stock or other equity or partnership interests
\nthe holders of which are generally entitled to vote for the election of the
\nBoard of Directors or other governing body of such corporation or other legal
\nentity.<\/p>\n
8.4 Counterparts. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered to the other party, it being understood that all
\nparties need not sign the same counterpart.<\/p>\n
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement, its
\nExhibits and the documents and instruments and other agreements among the
\nparties hereto as contemplated by or referred to herein, including the Company
\nDisclosure Letter and the Parent Disclosure Letter (a) constitute the entire
\nagreement among the parties with respect to the subject matter hereof and
\nsupersede all prior agreements and understandings, both written and oral, among
\nthe parties with respect to the subject matter hereof, it being understood that
\nthe Confidentiality Agreement shall continue in full force and effect until the
\nClosing and shall survive any termination of this Agreement; and (b) are not
\nintended to confer upon any other person any rights or remedies hereunder,
\nexcept as specifically provided in Section 5.10.<\/p>\n
8.6 Severability. In the event that any provision of this Agreement
\nor the application thereof becomes or is declared by a court of competent
\njurisdiction to be illegal, void or unenforceable, the remainder of this
\nAgreement will continue in full force and effect and the application of such
\nprovision to other persons or circumstances will be interpreted so as reasonably
\nto effect the intent of the parties hereto. The parties further agree to replace
\nsuch void or unenforceable provision of this Agreement with a valid and
\nenforceable provision that will achieve, to the extent possible, the economic,
\nbusiness and other purposes of such void or unenforceable provision.<\/p>\n
8.7 Other Remedies; Specific Performance; Fees.<\/p>\n
(a) Except as otherwise provided herein, any and all
\nremedies herein expressly conferred upon a party will be deemed cumulative with
\nand not exclusive of any other remedy conferred hereby, or by law or equity upon
\nsuch party, and the exercise by a party of any<\/p>\n
-57-
\n 62
\none remedy will not preclude the exercise of any other remedy. The parties
\nhereto agree that irreparable damage would occur in the event that any of the
\nprovisions of this Agreement were not performed in accordance with their
\nspecific terms or were otherwise breached. It is accordingly agreed that the
\nparties shall be entitled to seek an injunction or injunctions to prevent
\nbreaches of this Agreement and to enforce specifically the terms and provisions
\nhereof in any court of the United States or any state having jurisdiction, this
\nbeing in addition to any other remedy to which they are entitled at law or in
\nequity.<\/p>\n
(b) If any action, suit or other proceeding (whether at
\nlaw, in equity or otherwise) is instituted concerning or arising out of this
\nAgreement or any transaction contemplated hereunder, the prevailing party shall
\nrecover, in addition to any other remedy granted to such party therein, all such
\nparty’s costs and attorneys fees incurred in connection with the prosecution or
\ndefense of such action, suit or other proceeding.<\/p>\n
8.8 Governing Law. This Agreement shall be governed by and construed
\nin accordance with the laws of the State of Delaware, regardless of the laws
\nthat might otherwise govern under applicable principles of conflicts of law
\nthereof.<\/p>\n
8.9 Rules of Construction. The parties hereto agree that they have
\nbeen represented by counsel during the negotiation and execution of this
\nAgreement and, therefore, waive the application of any law, regulation, holding
\nor rule of construction providing that ambiguities in an agreement or other
\ndocument will be construed against the party drafting such agreement or
\ndocument.
\n 8.10 Assignment. No party may assign either this Agreement or any of
\nits rights, interests, or obligations hereunder without the prior written
\nconsent of the other parties hereto. Subject to the preceding sentence, this
\nAgreement shall be binding upon and shall inure to the benefit of the parties
\nhereto and their respective successors and permitted assigns. Any purported
\nassignment in violation of this Section shall be void.<\/p>\n
8.11 Waiver Of Jury Trial. EACH OF PARENT, COMPANY AND MERGER SUB
\nHEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
\nPROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
\nARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY
\nOR MERGER SUB IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
\nHEREOF.<\/p>\n
* * * * *<\/p>\n
-58-
\n 63<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
\nPlan of Merger to be executed by their duly authorized respective officers as of
\nthe date first written above.<\/p>\n
MACROMEDIA, INC.<\/p>\n
By: \/s\/ Robert K. Burgess
\n ————————
\n Name:
\n Title:<\/p>\n
ALASKA ACQUISITION CORPORATION<\/p>\n
By: \/s\/ Robert K. Burgess
\n ————————
\n Name:
\n Title:<\/p>\n
ALLAIRE CORPORATION<\/p>\n
By: \/s\/ David J. Orfao
\n ————————
\n Name: David J. Orfao
\n Title: CEO<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6623,8105],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9626],"class_list":["post-43088","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-allaire-corp","corporate_contracts_companies-macromedia-inc","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43088","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43088"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43088"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43088"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43088"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}