\n SECTION 4.06. Brokers……………………………………….. 24<\/p>\n ARTICLE V<\/p>\n
CONDUCT OF BUSINESS PENDING THE MERGER<\/p>\n
SECTION 5.01. Conduct of Business by the Company Pending the Merger.. 24<\/p>\n
ARTICLE VI<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 6.01. Stockholders’ Meeting……………………………. 26
\n SECTION 6.02. Proxy Statement…………………………………. 27
\n SECTION 6.03. Company Board Representation; Section 14(f)………… 27
\n SECTION 6.04. Access to Information; Confidentiality…………….. 28
\n SECTION 6.05. No Solicitation of Transactions…………………… 28
\n SECTION 6.06. Employee Benefits Matters………………………… 29
\n SECTION 6.07. Directors’ and Officers’ Indemnification…………… 29
\n SECTION 6.08. Notification of Certain Matters…………………… 30
\n SECTION 6.09. Further Action; Reasonable Best Efforts……………. 31
\n SECTION 6.10. Public Announcements…………………………….. 31
\n SECTION 6.11. Confidentiality Agreement………………………… 31<\/p>\n
ARTICLE VII <\/p>\n
CONDITIONS TO THE MERGER <\/p>\n
SECTION 7.01. Conditions to the Merger…………………………. 31<\/p>\n
ARTICLE VIII <\/p>\n
TERMINATION, AMENDMENT AND WAIVER <\/p>\n
SECTION 8.01. Termination…………………………………….. 32
\n SECTION 8.02. Effect of Termination……………………………. 33
\n SECTION 8.03. Fees and Expenses……………………………….. 34
\n SECTION 8.04. Amendment………………………………………. 35
\n SECTION 8.05. Extension; Waiver……………………………….. 35<\/p>\n
ARTICLE IX <\/p>\n
GENERAL PROVISIONS <\/p>\n
SECTION 9.01. Non-Survival of Representations, Warranties and
\n Agreements……………………………………… 35
\n SECTION 9.02. Notices………………………………………… 35
\n SECTION 9.03. Certain Definitions……………………………… 36
\n SECTION 9.04. Severability……………………………………. 37
\n SECTION 9.05. Entire Agreement; Assignment……………………… 37
\n SECTION 9.06. Parties in Interest……………………………… 38
\n SECTION 9.07. Specific Performance…………………………….. 38
\n SECTION 9.08. Governing Law…………………………………… 38
\n SECTION 9.09. Headings……………………………………….. 38
\n SECTION 9.10. Counterparts……………………………………. 38<\/p>\n
ANNEX A Conditions to the Offer
\n<\/c><\/c><\/s><\/table>\n
6
\n AGREEMENT AND PLAN OF MERGER, dated as of December 19, 1995 (this
\n“Agreement”, which term shall include all Annexes and Exhibits hereto), among
\nTHOMSON U.S. HOLDINGS INC., a Delaware corporation (“Parent”), SCS SUBSIDIARY,
\nINC., a Delaware corporation and a wholly owned subsidiary of Parent
\n(“Purchaser”), and SCS\/COMPUTE, INC., a Delaware corporation (the “Company”).<\/p>\n
WHEREAS, the respective Boards of Directors of Parent, Purchaser and
\nthe Company have approved the acquisition of the Company by Parent on the terms
\nand subject to the conditions set forth in this Agreement;<\/p>\n
WHEREAS, in furtherance of such acquisition, it is proposed that
\nPurchaser shall make a cash tender offer (the “Offer”) to acquire all of the
\nissued and outstanding shares (other than shares subject to the Stock Purchase
\nAgreement referred to below) of common stock, par value $.10 per share, of the
\nCompany (the “Shares”), at a price of $ 6.75 per Share (such amount, or any
\ngreater amount per Share pursuant to the Offer, being hereinafter referred to as
\nthe “Per Share Amount”) net to the seller in cash, upon the terms and subject to
\nthe conditions of this Agreement and the Offer;<\/p>\n
WHEREAS, the Board of Directors of the Company (the “Board”) has
\napproved the making of the Offer and resolved and agreed to recommend that
\nholders of Shares tender their Shares pursuant to the Offer;<\/p>\n
WHEREAS, also in furtherance of such acquisition, the Boards of
\nDirectors of Parent, Purchaser and the Company have each approved the merger
\n(the “Merger”) of Purchaser with and into the Company in accordance with the
\nGeneral Corporation Law of the State of Delaware (“Delaware Law”) following the
\nconsummation of the Offer and upon the terms and subject to the conditions set
\nforth herein; and<\/p>\n
WHEREAS, Parent, Purchaser and Robert W. Nolan, Sr. have entered into
\na Stock Purchase Agreement, dated as of the date hereof (the “Stock Purchase
\nAgreement”), pursuant to which Mr. Nolan has agreed to sell 1,082,570 Shares to
\nPurchaser for a purchase price per Share equal to the Per Share Amount;<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and the mutual
\nrepresentations, warranties, covenants and agreements herein contained, and
\nintending to be legally bound hereby, Parent, Purchaser and the Company hereby
\nagree as follows:<\/p>\n
ARTICLE I<\/p>\n
THE OFFER<\/p>\n
SECTION 1.01. The Offer. (a) Provided that this Agreement shall not
\nhave been terminated in accordance with Section 8.01 and none of the events set
\nforth in Annex A hereto shall have occurred or be existing, Purchaser shall
\ncommence the Offer as promptly as reasonably practicable after the date hereof,
\nbut in no event later than five business days after the initial public
\nannouncement of Purchaser’s intention to commence the Offer. The obligation of
\nPurchaser to accept for payment and pay for Shares tendered pursuant to the
\nOffer shall be subject to the condition (the “Minimum Condition”) that at least
\nthe number of Shares that when added to the Shares already owned by Parent and
\nthe number of Shares to be purchased by Purchaser pursuant to the Stock Purchase
\nAgreement shall constitute more than 50% of the then outstanding Shares on a
\nfully diluted basis (including, without limitation, all Shares issuable upon the
\nconversion of any convertible securities or upon the exercise of any options,
\nwarrants or rights) shall have been validly tendered and not withdrawn prior to
\nthe expiration of the Offer and also shall be subject to the satisfaction of the
\nother conditions set forth in Annex A hereto. Purchaser expressly reserves the
\nright to waive any such condition, to increase the Per Share Amount, and to make
\nany other changes in the terms and conditions of the Offer; provided, however,
\nthat no change may be made
\n 7
\nwithout the consent of the Company which decreases the Per Share Amount or which
\nreduces the maximum number of Shares to be purchased in the Offer or which
\nimposes conditions to the Offer in addition to those set forth in Annex A
\nhereto. The Per Share Amount shall, subject to applicable withholding of taxes,
\nbe net to the seller in cash, upon the terms and subject to the conditions of
\nthe Offer. Subject to the terms and conditions of the Offer, Purchaser shall
\npay, as promptly as practicable after expiration of the Offer, for all Shares
\nvalidly tendered and not withdrawn.<\/p>\n
(b) As soon as reasonably practicable on the date of commencement of
\nthe Offer, Purchaser shall file with the Securities and Exchange Commission (the
\n“SEC”) a Tender Offer Statement on Schedule 14D-1 (together with all amendments
\nand supplements thereto, the “Schedule 14D-1”) with respect to the Offer. The
\nSchedule 14D-1 shall contain or shall incorporate by reference an offer to
\npurchase (the “Offer to Purchase”) and forms of the related letter of
\ntransmittal and any related summary advertisement (the Schedule 14D-1, the Offer
\nto Purchase and such other documents, together with all supplements and
\namendments thereto, being referred to herein collectively as the “Offer
\nDocuments”). Parent, Purchaser and the Company agree to correct promptly any
\ninformation provided by any of them for use in the Offer Documents which shall
\nhave become false or misleading, and Parent and Purchaser further agree to take
\nall steps necessary to cause the Schedule 14D-1 as so corrected to be filed with
\nthe SEC and the other Offer Documents as so corrected to be disseminated to
\nholders of Shares, in each case as and to the extent required by applicable
\nfederal securities laws. In the event that the Offer is terminated or withdrawn
\nby Purchaser, Parent and Purchaser shall cause all tendered Shares to be
\nreturned pursuant to the instructions set forth in the letter of transmittal.<\/p>\n
SECTION 1.02. Company Action. (a) The Company hereby approves of and
\nconsents to the Offer and represents that (i) the Board, at a meeting duly
\ncalled and held on December 14, 1995, has unanimously (except for abstentions of
\ninterested directors) (A) determined that this Agreement and the transactions
\ncontemplated hereby, including each of the Offer and the Merger, are fair to and
\nin the best interests of the holders of Shares, (B) approved and adopted this
\nAgreement and the transactions contemplated hereby and (C) resolved to recommend
\nthat the stockholders of the Company accept the Offer and approve and adopt this
\nAgreement and the transactions contemplated hereby, and (ii) Fister & Associates
\nhave delivered to the Board a written opinion that the consideration to be
\nreceived by the holders of Shares pursuant to each of the Offer and the Merger
\nis fair to the holders of Shares from a financial point of view. Subject only to
\nthe fiduciary duties of the Board under applicable law as advised in writing by
\nindependent counsel, the Company hereby consents to the inclusion in the Offer
\nDocuments of the recommendation of the Board described in the immediately
\npreceding sentence. The Company has been advised by each of its directors and
\nexecutive officers (other than Robert W. Nolan, Sr. with respect to the Shares
\nto be sold pursuant to the Stock Purchase Agreement) that they intend either to
\ntender all Shares beneficially owned by them to Purchaser pursuant to the Offer
\nor to vote such Shares in favor of the approval and adoption by the stockholders
\nof the Company of this Agreement and the transactions contemplated hereby.<\/p>\n
(b) As soon as reasonably practicable on the date of commencement of
\nthe Offer, the Company shall file with the SEC a Solicitation\/Recommendation
\nStatement on Schedule 14D-9 (together with all amendments and supplements
\nthereto, the “Schedule 14D-9”) containing the recommendation of the Board
\ndescribed in Section 1.02(a) and shall disseminate the Schedule 14D-9 to the
\nextent required by Rule 14d-9 promulgated under the Securities Exchange Act of
\n1934, as amended (the “Exchange Act”), and any other applicable federal
\nsecurities laws. The Company, Parent and Purchaser agree to correct promptly any
\ninformation provided by any of them for use in the Schedule 14D-9 which shall
\nhave become false or misleading, and the Company further agrees to take all
\nsteps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
\nSEC and disseminated to holders of Shares, in each case as and to the extent
\nrequired by applicable federal securities laws. Purchaser and its counsel shall
\nbe given an opportunity to review and comment on the Schedule 14D-9 and any
\namendments thereto prior to the filing thereof with the SEC. The Company shall
\nprovide Purchaser and its counsel with a copy of any written comments or
\ntelephonic notification of any verbal comments the Company may receive from the
\nSEC or
\n 8
\nits staff with respect to the Schedule 14D-9 promptly after the receipt thereof
\nand shall provide Purchaser and its counsel with a copy of any written responses
\nand telephonic notification of any verbal responses of the Company or its
\ncounsel.<\/p>\n
(c) The Company shall promptly furnish Purchaser with mailing labels
\ncontaining the names and addresses of all record holders of Shares and with
\nsecurity position listings of Shares held in stock depositories, each as of a
\nrecent date, together with all other available listings and computer files
\ncontaining names, addresses and security position listings of record holders and
\nbeneficial owners of Shares. The Company shall furnish Purchaser with such
\nadditional information, including, without limitation, updated listings and
\ncomputer files of stockholders, mailing labels and security position listings,
\nand such other assistance as Parent, Purchaser or their agents may reasonably
\nrequest. Subject to the requirements of applicable law, and except for such
\nsteps as are necessary to disseminate the Offer Documents and any other
\ndocuments necessary to consummate the Offer or the Merger, Parent and Purchaser
\nshall hold in confidence the information contained in such labels, listings and
\nfiles, shall use such information only in connection with the Offer and the
\nMerger, and, if this Agreement shall be terminated in accordance with Section
\n8.01, shall deliver to the Company all copies of such information then in their
\npossession.<\/p>\n
ARTICLE II<\/p>\n
THE MERGER<\/p>\n
SECTION 2.01. The Merger. Upon the terms and subject to the conditions
\nset forth in Article VII, and in accordance with Delaware Law, at the Effective
\nTime (as hereinafter defined) Purchaser shall be merged with and into the
\nCompany. As a result of the Merger, the separate corporate existence of
\nPurchaser shall cease and the Company shall continue as the surviving
\ncorporation of the Merger (the “Surviving Corporation”). Notwithstanding
\nanything to the contrary contained in this Section 2.01, Parent may elect
\ninstead, at any time prior to the fifth business day immediately preceding the
\ndate on which the Proxy Statement (as hereinafter defined) is mailed initially
\nto the Company’s stockholders, to merge the Company into Purchaser or another
\ndirect or indirect wholly owned subsidiary of Parent. In such event, the parties
\nagree to execute an appropriate amendment to this Agreement in order to reflect
\nthe foregoing and to provide, as the case may be, that Purchaser or such other
\nwholly owned subsidiary of Parent shall be the Surviving Corporation.<\/p>\n
SECTION 2.02. Effective Time; Closing. As promptly as practicable
\nafter the satisfaction or, if permissible, waiver of the conditions set forth in
\nArticle VII, the parties hereto shall cause the Merger to be consummated by
\nfiling this Agreement or a certificate of merger or certificate of ownership and
\nmerger (in either case, the “Certificate of Merger”) with the Secretary of State
\nof the State of Delaware, in such form as is required by, and executed in
\naccordance with the relevant provisions of, Delaware Law (the date and time of
\nsuch filing being the “Effective Time”). Prior to such filing, a closing shall
\nbe held at the offices of Shearman & Sterling, 599 Lexington Avenue, New York,
\nNew York 10022, or such other place as the parties shall agree, for the purpose
\nof confirming the satisfaction or waiver, as the case may be, of the conditions
\nset forth in Article VII.<\/p>\n
SECTION 2.03. Effect of the Merger. At the Effective Time, the effect
\nof the Merger shall be as provided in the applicable provisions of Delaware Law.
\nWithout limiting the generality of the foregoing, and subject thereto, at the
\nEffective Time all the property, rights, privileges, powers and franchises of
\nthe Company and Purchaser shall vest in the Surviving Corporation, and all
\ndebts, liabilities, obligations, restrictions, disabilities and duties of the
\nCompany and Purchaser shall become the debts, liabilities, obligations,
\nrestrictions, disabilities and duties of the Surviving Corporation.<\/p>\n
SECTION 2.04. Certificate of Incorporation; By-laws. (a) Unless
\notherwise determined by Parent prior to the Effective Time, at the Effective
\nTime the Certificate of Incorporation of Purchaser, as in effect immediately
\nprior to the Effective Time, shall be the
\n 9
\nCertificate of Incorporation of the Surviving Corporation until thereafter
\namended as provided by law and such Certificate of Incorporation; provided,
\nhowever, that, at the Effective Time, Article I of the Certificate of
\nIncorporation of the Surviving Corporation shall be amended to read as follows:
\n“The name of the corporation is SCS\/Compute, Inc.”<\/p>\n
(b) Unless otherwise determined by Parent prior to the Effective Time,
\nthe By-laws of Purchaser, as in effect immediately prior to the Effective Time,
\nshall be the By-laws of the Surviving Corporation until thereafter amended as
\nprovided by law, the Certificate of Incorporation of the Surviving Corporation
\nand such By-laws.<\/p>\n
SECTION 2.05. Directors and Officers. The directors of Purchaser
\nimmediately prior to the Effective Time shall be the initial directors of the
\nSurviving Corporation, each to hold office in accordance with the Certificate of
\nIncorporation and By-laws of the Surviving Corporation, and the officers of the
\nCompany immediately prior to the Effective Time shall be the initial officers of
\nthe Surviving Corporation, in each case until their respective successors are
\nduly elected or appointed and qualified.<\/p>\n
SECTION 2.06. Conversion of Securities. At the Effective Time, by
\nvirtue of the Merger and without any action on the part of Purchaser, the
\nCompany or the holders of any of the following securities:<\/p>\n
(a) Each of the Shares issued and outstanding immediately prior
\n to the Effective Time (other than any Shares to be cancelled pursuant to
\n Section 2.06(b) and any Dissenting Shares) (as hereinafter defined) shall
\n be cancelled and shall be converted automatically into the right to receive
\n an amount equal to the Per Share Amount, in cash (the “Merger
\n Consideration”) payable, without interest, to the holder of such Share,
\n upon surrender, in the manner provided in Section 2.08, of the certificate
\n that formerly evidenced such Share;<\/p>\n
(b) Each Share held in the treasury of the Company and each Share
\n owned by Purchaser, Parent or any direct or indirect wholly owned
\n subsidiary of Parent or of the Company immediately prior to the Effective
\n Time shall be cancelled without any conversion thereof and no payment or
\n distribution shall be made with respect thereto; and<\/p>\n
(c) Each share of Common Stock, par value $.10 per share, of
\n Purchaser issued and outstanding immediately prior to the Effective Time
\n shall be converted into and exchanged for one validly issued, fully paid
\n and nonassessable share of Common Stock, par value $.10 per share, of the
\n Surviving Corporation.<\/p>\n
SECTION 2.07. Stock Options. Immediately prior to the Effective Time,
\neach outstanding option to purchase Shares (each, an “Option”), whether or not
\nthen exercisable, shall be cancelled by the Company, and each holder of a
\ncancelled Option shall be entitled to receive from Purchaser at the same time as
\npayment for Shares is made by Purchaser in connection with the Merger, in
\nconsideration for the cancellation of such Option, an amount in cash equal to
\nthe product of (i) the number of Shares previously subject to such Option and
\n(ii) the excess, if any, of the Per Share Amount over the exercise price per
\nShare previously subject to such Option.<\/p>\n
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any provision of
\nthis Agreement to the contrary, Shares that are outstanding immediately prior to
\nthe Effective Time and which are held by stockholders who shall not have voted
\nin favor of the Merger or consented thereto in writing and who shall have
\ndemanded properly in writing appraisal for such Shares in accordance with
\nSection 262 of Delaware Law (collectively, the “Dissenting Shares”) shall not be
\nconverted into or represent the right to receive the Merger Consideration. Such
\nstockholders shall be entitled to receive payment of the appraised value of such
\nShares held by them in accordance with the provisions of such Section 262,
\nexcept that all Dissenting Shares held by stockholders who shall have failed to
\nperfect or who effectively shall have withdrawn or lost their rights to
\nappraisal of such Shares under such Section 262 shall thereupon be deemed to
\nhave been converted into and to have become
\n 10
\nexchangeable for, as of the Effective Time, the right to receive the Merger
\nConsideration, without any interest thereon, upon surrender, in the manner
\nprovided in Section 2.09, of the certificate or certificates that formerly
\nevidenced such Shares.<\/p>\n
(b) The Company shall give Parent (i) prompt notice of any demands for
\nappraisal received by the Company, withdrawals of such demands, and any other
\ninstruments served pursuant to Delaware Law and received by the Company and (ii)
\nthe opportunity to direct all negotiations and proceedings with respect to
\ndemands for appraisal under Delaware Law. The Company shall not, except with the
\nprior written consent of Parent, make any payment with respect to any demands
\nfor appraisal or offer to settle or settle any such demands.<\/p>\n
SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a) Prior to
\nthe Effective Time, Purchaser shall designate a bank or trust company to act as
\nagent (the “Paying Agent”) for the holders of Shares in connection with the
\nMerger to receive the funds to which holders of Shares shall become entitled
\npursuant to Section 2.06(a). Such funds shall be invested by the Paying Agent as
\ndirected by the Surviving Corporation, provided that such investments shall be
\nin obligations of or guaranteed by the United States of America or of any agency
\nthereof and backed by the full faith and credit of the United States of America,
\nin commercial paper obligations rated A-1 or P-1 or better by Moody’s Investors
\nServices, Inc. or Standard & Poor’s Corporation, respectively, or in deposit
\naccounts, certificates of deposit or banker’s acceptances of, repurchase or
\nreverse repurchase agreements with, or Eurodollar time deposits purchased from,
\ncommercial banks with capital, surplus and undivided profits aggregating in
\nexcess of $500 million (based on the most recent financial statements of such
\nbank which are then publicly available at the SEC or otherwise); provided,
\nhowever, that no loss on any investment made pursuant to this Section 2.09 shall
\nrelieve the Surviving Corporation of its obligation to pay the Per Share Amount
\nfor each Share outstanding immediately prior to the Effective Time (other than
\nShares cancelled pursuant to Section 2.06(b) and any Dissenting Shares). The
\nSurviving Corporation and Parent shall be responsible for the fees and expenses
\nof or incurred by the Paying Agent.<\/p>\n
(b) Promptly after the Effective Time, the Surviving Corporation shall
\ncause to be mailed to each person who was, at the Effective Time, a holder of
\nrecord of Shares entitled to receive the Merger Consideration pursuant to
\nSection 2.06(a) a form of letter of transmittal (which shall specify that
\ndelivery shall be effected, and risk of loss and title to the certificates
\nevidencing such Shares (the “Certificates”) shall pass, only upon proper
\ndelivery of the Certificates to the Paying Agent) and instructions for use in
\neffecting the surrender of the Certificates pursuant to such letter of
\ntransmittal. Upon surrender to the Paying Agent of a Certificate, together with
\nsuch letter of transmittal, duly completed and validly executed in accordance
\nwith the instructions thereto, and such other documents as may be required
\npursuant to such instructions, the holder of such Certificate shall be entitled
\nto receive in exchange therefor the Merger Consideration for each Share formerly
\nevidenced by such Certificate, and such Certificate shall then be cancelled. No
\ninterest shall accrue or be paid on the Merger Consideration payable upon the
\nsurrender of any Certificate for the benefit of the holder of such Certificate.
\nIf payment of the Merger Consideration is to be made to a person other than the
\nperson in whose name the surrendered Certificate is registered on the stock
\ntransfer books of the Company, it shall be a condition of payment that the
\nCertificate so surrendered shall be endorsed properly or otherwise be in proper
\nform for transfer and that the person requesting such payment shall have paid
\nall transfer and other taxes required by reason of the payment of the Merger
\nConsideration to a person other than the registered holder of the Certificate
\nsurrendered or shall have established to the satisfaction of the Surviving
\nCorporation that such taxes either have been paid or are not applicable.<\/p>\n
(c) At any time following the sixth month after the Effective Time,
\nthe Surviving Corporation shall be entitled to require the Paying Agent to
\ndeliver to it any funds which had been made available to the Paying Agent and
\nnot disbursed to holders of Shares (including, without limitation, all interest
\nand other income received by the Paying Agent in respect of all funds made
\navailable to it), and thereafter such holders shall be entitled to look
\n 11
\nto the Surviving Corporation (subject to abandoned property, escheat and other
\nsimilar laws) only as general creditors thereof with respect to any Merger
\nConsideration that may be payable upon due surrender of the Certificates held by
\nthem. Notwithstanding the foregoing, neither the Surviving Corporation nor the
\nPaying Agent shall be liable to any holder of a Share for any Merger
\nConsideration delivered in respect of such Share to a public official pursuant
\nto any abandoned property, escheat or other similar law.<\/p>\n
(d) At the close of business on the day of the Effective Time, the
\nstock transfer books of the Company shall be closed and thereafter there shall
\nbe no further registration of transfers of Shares on the records of the Company.
\nFrom and after the Effective Time, the holders of Shares outstanding immediately
\nprior to the Effective Time shall cease to have any rights with respect to such
\nShares except as otherwise provided herein or by applicable law.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to Parent and Purchaser
\nthat:<\/p>\n
SECTION 3.01. Organization and Qualification. The Company is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof the jurisdiction of its incorporation and has the requisite power and
\nauthority and all necessary governmental approvals to own, lease and operate its
\nproperties and to carry on its business as it is now being conducted, except
\nwhere the failure to be so organized, existing or in good standing or to have
\nsuch power, authority and governmental approvals would not, individually or in
\nthe aggregate, have a Material Adverse Effect (as defined below). The Company is
\nduly qualified or licensed as a foreign corporation to do business, and is in
\ngood standing, in each jurisdiction where the character of the properties owned,
\nleased or operated by it or the nature of its business makes such qualification
\nor licensing necessary, except for such failures to be so qualified or licensed
\nand in good standing that would not, individually or in the aggregate, have a
\nMaterial Adverse Effect. “Material Adverse Effect”, when used in connection with
\nthe Company, means any change or effect that when taken together with all other
\nadverse changes and effects that are within the scope of the representations and
\nwarranties made by the Company in this Agreement is or is reasonably likely to
\nbe materially adverse to the business, operations, properties, condition
\n(financial or otherwise), assets or liabilities (including, without limitation,
\ncontingent liabilities) or prospects of the Company. The Company does not
\ndirectly or indirectly own any equity or similar interest in, or any interest
\nconvertible into or exchangeable or exercisable for, any equity or similar
\ninterest in, any corporation, partnership, joint venture or other business
\nassociation or entity.<\/p>\n
SECTION 3.02. Certificate of Incorporation and By-laws. The Company
\nhas heretofore furnished to Parent a complete and correct copy of the
\nCertificate of Incorporation and the By-laws or equivalent organizational
\ndocuments, each as amended to date, of the Company. Such Certificate of
\nIncorporation and By-laws are in full force and effect. The Company is not in
\nviolation of any provision of its Certificate of Incorporation or By-laws.<\/p>\n
SECTION 3.03. Capitalization. The authorized capital stock of the
\nCompany consists of 15,000,000 Shares and 2,000,000 shares of Series A Preferred
\nStock. As of the date hereof, (i) 2,571,977 Shares are issued and outstanding,
\nall of which are validly issued, fully paid and nonassessable, (ii) 514,300
\nShares are held in the treasury of the Company and (iii) 300,000 Shares are
\nreserved for future issuance pursuant to Options. Except as set forth in this
\nSection 3.03, and except as set forth in Section 3.03 of the Disclosure Schedule
\npreviously delivered by the Company to Parent (the “Disclosure Schedule”), which
\nsets forth the holder of each Option, the date of grant and the applicable
\nexercise price, there are no options, warrants or other rights (including those
\ncommonly referred to as “shareholder rights” or “poison pill” rights),
\nagreements, arrangements or commitments of any character relating to the issued
\nor unissued capital stock of the Company or obligating the Company to issue or
\nsell any shares of capital stock of, or other equity interests in, the Company.
\nAs of
\n 12
\nthe date hereof, 100,000 shares of Series A Preferred Stock are issued and
\noutstanding. All Shares subject to issuance as aforesaid, upon issuance on the
\nterms and conditions specified in the instruments pursuant to which they are
\nissuable, will be duly authorized, validly issued, fully paid and nonassessable.<\/p>\n
SECTION 3.04. Authority Relative to this Agreement. The Company has
\nall necessary corporate power and authority to execute and deliver this
\nAgreement, to perform its obligations hereunder and to consummate the
\ntransactions contemplated hereby (the “Transactions”). The execution and
\ndelivery of this Agreement by the Company and the consummation by the Company of
\nthe Transactions have been duly and validly authorized by all necessary
\ncorporate action on the part of the Company and no other corporate proceedings
\non the part of the Company are necessary to authorize this Agreement or to
\nconsummate the Transactions (other than, with respect to the Merger, the
\napproval and adoption of this Agreement by the holders of a majority of the then
\noutstanding Shares if and to the extent required by applicable law, and the
\nfiling and recordation of appropriate merger documents as required by Delaware
\nLaw). This Agreement has been duly and validly executed and delivered by the
\nCompany and, assuming the due authorization, execution and delivery by Parent
\nand Purchaser, constitutes a legal, valid and binding obligation of the Company
\nenforceable against the Company in accordance with its terms, except as
\nenforceability may be limited by bankruptcy, insolvency, reorganization,
\nmoratorium or other laws affecting creditors’ rights generally (including,
\nwithout limitation, the effect of statutory and other law regarding fraudulent
\nconveyances, fraudulent transfers and preferential transfers) and as may be
\nlimited by the exercise of judicial discretion and the application of principles
\nof equity including, without limitation, requirements of good faith, fair
\ndealing, conscionability and materiality (regardless of whether considered in a
\nproceeding in equity or at law). The Company has taken all appropriate actions
\nso that the restrictions on business combinations contained in Section 203 of
\nDelaware Law will not apply with respect to or as a result of the Transactions
\nor the Stock Purchase Agreement or the transactions contemplated thereby.<\/p>\n
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
\nexecution and delivery of this Agreement by the Company do not, and the
\nperformance of this Agreement by the Company will not, (i) conflict with or
\nviolate the Certificate of Incorporation or By-laws of the Company, (ii)
\nconflict with or violate any law, rule, regulation, order, judgment or decree
\napplicable to the Company or by which any property or asset of the Company is
\nbound or affected or (iii) except as set forth in Section 3.05(a) of the
\nDisclosure Schedule, result in any breach of or constitute a default (or an
\nevent which with notice or lapse of time or both would become a default) under,
\nor give to others any right of termination, amendment, acceleration or
\ncancellation of, or result in the creation of a lien or other encumbrance on any
\nproperty or asset of the Company pursuant to, any Material Contract, note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit or franchise or
\nother instrument or obligation to which the Company is a party or by which the
\nCompany or any property or asset of the Company is bound or affected.<\/p>\n
(b) The execution and delivery of this Agreement by the Company do
\nnot, and the performance of this Agreement by the Company will not, require any
\nconsent, approval, authorization or permit of, or filing with or notification
\nto, any governmental or regulatory authority, domestic or foreign, except (i)
\nfor applicable requirements, if any, of the Exchange Act, state securities or
\n“blue sky” laws (“Blue Sky Laws”) and state takeover laws, the pre-merger
\nnotification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
\n1976, as amended, and the rules and regulations thereunder (the “HSR Act”) and
\nfiling and recordation of appropriate merger documents as required by Delaware
\nLaw and (ii) where failure to obtain such consents, approvals, authorizations or
\npermits, or to make such filings or notifications, would not prevent or delay
\nconsummation of the Offer or the Merger, or otherwise prevent the Company from
\nperforming its obligations under this Agreement, and would not, individually or
\nin the aggregate, have a Material Adverse Effect.<\/p>\n
SECTION 3.06. Compliance. The Company is not in conflict with, or in
\ndefault or violation of, (i) any law, rule, regulation, order, judgment or
\ndecree applicable to the Company or by which any property or asset of the
\nCompany is bound or affected, or (ii) any note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit,
\n 13
\nfranchise or other instrument or obligation to which the Company is a party or
\nby which the Company or any property or asset of the Company is bound or
\naffected, except for any such conflicts, defaults or violations that would not,
\nindividually or in the aggregate, have a Material Adverse Effect.<\/p>\n
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company has
\nfiled all forms, reports and documents required to be filed by it with the SEC
\nsince January 31, 1993, and has heretofore made available to Parent, in the form
\nfiled with the SEC, (i) its Annual Reports on Form 10-K for the fiscal years
\nended January 31, 1993, 1994 and 1995, respectively, (ii) its Quarterly Reports
\non Form 10-Q for the periods ended April 30, 1995, July 31, 1995 and October 31,
\n1995 and (iii) all proxy statements relating to the Company’s meetings of
\nstockholders (whether annual or special) held since January 31, 1993, and (iv)
\nall other forms, reports and other registration statements (other than Quarterly
\nReports on Form 10-Q not referred to in clause (ii) above) filed by the Company
\nwith the SEC since January 31, 1993 (the forms, reports and other documents
\nreferred to in clauses (i), (ii), (iii) and (iv) above being referred to herein,
\ncollectively, as the “SEC Reports”). The SEC Reports (i) were prepared in
\naccordance with the requirements of the Securities Act of 1933, as amended (the
\n“Securities Act”), and the Exchange Act, as the case may be, and the rules and
\nregulations thereunder and (ii) did not at the time they were filed (or at the
\neffective date thereof in the case of registration statements) contain any
\nuntrue statement of a material fact or omit to state a material fact required to
\nbe stated therein or necessary in order to make the statements made therein, in
\nthe light of the circumstances under which they were made, not misleading.<\/p>\n
(b) Each of the financial statements (including, in each case, any
\nnotes thereto) contained in the SEC Reports was prepared in accordance with
\ngenerally accepted accounting principles applied on a consistent basis
\nthroughout the periods indicated (except as may be indicated in the notes
\nthereto) and each fairly presented the financial position, results of operations
\nand changes in financial position of the Company as at the respective dates
\nthereof and for the respective periods indicated therein (subject, in the case
\nof unaudited statements, to normal and recurring year-end adjustments which were
\nnot and are not expected, individually or in the aggregate, to have a Material
\nAdverse Effect).<\/p>\n
(c) Except as and to the extent set forth on the balance sheet of the
\nCompany as at January 31, 1995, including the notes thereto (the “1994 Balance
\nSheet”) or disclosed in any SEC Report filed by the Company after January 31,
\n1995, the Company has no liability or obligation of any nature (whether accrued,
\nabsolute, contingent or otherwise) which would be required to be reflected on a
\nbalance sheet, or in the notes thereto, prepared in accordance with generally
\naccepted accounting principles, except for liabilities and obligations incurred
\nin the ordinary course of business consistent with past practice since January
\n31, 1995 which would not, individually or in the aggregate, have a Material
\nAdverse Effect.<\/p>\n
(d) The Company has heretofore furnished to Parent complete and
\ncorrect copies of all amendments and modifications (if any) listed in Section
\n3.07(d) of the Disclosure Schedule that have not been filed by the Company with
\nthe SEC to all agreements, documents and other instruments that previously had
\nbeen filed by the Company with the SEC and are currently in effect.<\/p>\n
SECTION 3.08. Absence of Certain Changes or Events. Since January 31,
\n1995, except as contemplated by this Agreement or disclosed in any SEC Report
\nfiled since January 31, 1995 and prior to the date of this Agreement, the
\nCompany has conducted its business only in the ordinary course and in a manner
\nconsistent with past practice and, since January 31, 1995, there has not been
\n(i) any change in the business, operations, properties, condition (financial or
\notherwise), assets or liabilities (including, without limitation, contingent
\nliabilities) or prospects of the Company having, individually or in the
\naggregate, a Material Adverse Effect, (ii) any damage, destruction or loss
\n(whether or not covered by insurance) with respect to any property or asset of
\nthe Company and having, individually or in the aggregate, a Material Adverse
\nEffect, (iii) any change by the Company in its accounting methods, principles or
\npractices, (iv) any revaluation by the Company of any
\n 14
\nasset (including, without limitation, any writing down of the value of inventory
\nor writing off of notes or accounts receivable), other than in the ordinary
\ncourse of business consistent with past practice, (v) any entry by the Company
\ninto any commitment or transaction material to the Company, (vi) except as set
\nforth in Section 3.08 of the Disclosure Schedule, any declaration, setting aside
\nor payment of any dividend or distribution in respect of any capital stock of
\nthe Company or any redemption, purchase or other acquisition of any of its
\nsecurities, (vii) prior to the date of this Agreement, no breach of any of the
\ncontracts referred to in Section 3.17, and, to the best knowledge of the
\nCompany, no threat of any such breach, or (viii) except as set forth in Section
\n3.08 of the Disclosure Schedule, any increase in or establishment of any bonus,
\ninsurance, severance, deferred compensation, pension, retirement, profit
\nsharing, stock option (including, without limitation, the granting of stock
\noptions, stock appreciation rights, performance awards, or restricted stock
\nawards), stock purchase or other employee benefit plan, or any other increase in
\nthe compensation payable or to become payable to any officers or key employees
\nof the Company, except in the ordinary course of business consistent with past
\npractice.<\/p>\n
SECTION 3.09. Absence of Litigation. Except as disclosed in the SEC
\nReports filed prior to the date of this Agreement, there is no claim, action,
\nproceeding or investigation pending or, to the best knowledge of the Company,
\nthreatened against the Company or any property or asset of the Company before
\nany court, arbitrator or administrative, governmental or regulatory authority or
\nbody, domestic or foreign. As of the date hereof, neither the Company nor any
\nproperty or asset of the Company is subject to any order, writ, judgment,
\ninjunction, decree, determination or award having, or that could reasonably be
\nexpected to have, individually or in the aggregate, a Material Adverse Effect.<\/p>\n
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the
\nDisclosure Schedule contains a true and complete list of (i) all employee
\nbenefit plans (within the meaning of Section 3(3) of the Employee Retirement
\nIncome Security Act of 1974, as amended (“ERISA”)) and all bonus, stock option,
\nstock purchase, restricted stock, incentive, deferred compensation, retiree
\nmedical or life insurance, supplemental retirement, severance or other benefit
\nplans, programs or arrangements, and all employment, termination, severance or
\nother contracts or agreements to which the Company is a party, with respect to
\nwhich the Company has any obligation or which are maintained, contributed to or
\nsponsored by the Company for the benefit of any current or former employee,
\nofficer or director of the Company and (ii) each employee benefit plan for which
\nthe Company could incur liability under Section 4069 of ERISA, in the event such
\nplan were terminated, or under Section 4212(c) of ERISA, or in respect of which
\nthe Company remains secondarily liable under Section 4204 of ERISA
\n(collectively, the “Plans”). Each Plan is in writing and the Company has
\npreviously furnished to Parent a true and complete copy of each Plan and a true
\nand complete copy of each material document prepared in connection with each
\nsuch Plan, including, without limitation, (i) a copy of each trust or other
\nfunding arrangement, (ii) each summary plan description and summary of material
\nmodifications, (iii) the most recently filed Internal Revenue Service (“IRS”)
\nForm 5500, (iv) the most recently received IRS determination letter for each
\nsuch Plan and (v) the most recently prepared actuarial report and financial
\nstatement in connection with each such Plan. The Company has no express or
\nimplied commitment (i) to create, incur liability with respect to or cause to
\nexist any other employee benefit plan, program or arrangement, (ii) to enter
\ninto any contract or agreement to provide compensation or benefits to any
\nindividual or (iii) to modify, change or terminate any Plan, other than with
\nrespect to a modification, change or termination required by ERISA or the
\nInternal Revenue Code of 1986, as amended (the “Code”).<\/p>\n
(b) Other than as specifically disclosed in Section 3.10 of the
\nDisclosure Schedule, none of the Plans is a multiemployer plan, within the
\nmeaning of Section 3(37) or 4001(a)(3) of ERISA (a “Multiemployer Plan”), or a
\nsingle employer pension plan, within the meaning of Section 4001(a)(15) of
\nERISA, for which the Company or any Subsidiary could incur liability under
\nSection 4063 or 4064 of ERISA (a “Multiple Employer Plan”). None of the Plans
\n(i) provides for the payment of separation, severance, termination or
\nsimilar-type benefits to any person, (ii) obligates the Company or any
\nSubsidiary to pay separation, severance, termination or other benefits as a
\nresult of any Transaction or (iii) obligates the Company or any Subsidiary to
\nmake any payment or provide any benefit
\n 15
\nthat could be subject to a tax under Section 4999 of the Code. None of the Plans
\nprovides for or promises retiree medical, disability or life insurance benefits
\nto any current or former employee, officer or director of the Company. With
\nrespect to each Multiemployer Plan and Multiple Employer Plan, Section 3.10(b)
\nof the Disclosure Schedule sets forth an accurate statement of the total amount
\nof withdrawal liability that the Company would incur in the event of a complete
\nwithdrawal, within the meaning of Title IV of ERISA, from each such Plan.<\/p>\n
(c) Each Plan which is intended to be qualified under Section 401(a)
\nof the Code has received a favorable determination letter from the IRS that such
\nPlan is so qualified, and each trust established in connection with any Plan
\nwhich is intended to be exempt from federal income taxation under Section 501(a)
\nof the Code has received a determination letter from the IRS that such trust is
\nso exempt. No fact or event has occurred since the date of any such
\ndetermination letter from the IRS that could adversely affect the qualified
\nstatus of any such Plan or the exempt status of any such trust. Each trust
\nmaintained or contributed to by the Company or any Subsidiary which is intended
\nto be qualified as a voluntary employees’ beneficiary association exempt from
\nfederal income taxation under Sections 501(a) and 501(c)(9) of the Code has
\nreceived a favorable determination letter from the IRS that it is so qualified
\nand so exempt, and no fact or event has occurred since the date of such
\ndetermination by the IRS that could adversely affect such qualified or exempt
\nstatus.<\/p>\n
(d) There has been no prohibited transaction (within the meaning of
\nSection 406 of ERISA or Section 4975 of the Code) with respect to any Plan not
\nexempt pursuant to Section 408 of ERISA or Section 4975 of the Code. Neither the
\ncompany nor any Subsidiary is currently liable or has previously incurred any
\nliability for any tax or penalty arising under Section 4971, 4972, 4979, 4980 or
\n4980B of the Code or Section 502(c) of ERISA, and no fact or event exists which
\ncould give rise to any such liability. Neither the Company nor any Subsidiary
\nhas incurred any liability under, arising out of or by operation of Title IV of
\nERISA (other than liability for premiums to the Pension Benefit Guaranty
\nCorporation arising in the ordinary course), including, without limitation, any
\nliability in connection with (i) the termination or reorganization of any
\nemployee pension benefit plan subject to Title IV of ERISA or (ii) the
\nwithdrawal from any Multiemployer Plan or Multiple Employer Plan, and no fact or
\nevent exists which could give rise to any such liability. No complete or partial
\ntermination has occurred within the five years preceding the date hereof with
\nrespect to any Plan. No reportable event (within the meaning of Section 4043 of
\nERISA) has occurred or is expected to occur with respect to any Plan subject to
\nTitle IV of ERISA. No asset of the Company is the subject of any lien arising
\nunder Section 302(f) of ERISA or Section 412(n) of the Code; the Company has not
\nbeen required to post any security under Section 307 of ERISA or Section
\n401(a)(29) of the Code; and no fact or event exists which could give rise to any
\nsuch lien or requirement to post any such security.<\/p>\n
(e) Each Plan is now and has been operated in all material respects in
\naccordance with the requirements of all applicable laws, including, without
\nlimitation, ERISA and the Code, and the Company has performed all obligations
\nrequired to be performed by it under, is not in any respect in default under or
\nin violation of, and has no knowledge of any default or violation by any party
\nto, any Plan. No Plan has incurred an “accumulated funding deficiency” (within
\nthe meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
\nwaived. All contributions, premiums or payments required to be made with respect
\nto any Plan are fully deductible for income tax purposes and no such deduction
\npreviously claimed has been challenged by any government entity. The 1994
\nBalance Sheet reflects an accrual of all amounts of employer contributions and
\npremiums accrued but unpaid with respect to the Plans. With respect to each Plan
\nsubject to Title IV of ERISA, the accumulated benefit obligations of such Plan
\n(determined as of the date of the most recent actuarial valuation prepared for
\nsuch Plan) does not exceed the fair market value of the assets of such Plan
\n(determined as of the date of such valuation) attributable to such obligations.<\/p>\n
(f) The Company has not incurred any liability under, and has complied
\nin
\n 16
\nall respects with, the Worker Adjustment Retraining Notification Act and the
\nregulations promulgated thereunder (“WARN”) and does not reasonably expect to
\nincur any such liability as a result of actions taken or not taken prior to the
\nEffective Time. Section 3.10(f) of the Disclosure Schedule lists (i) all the
\nemployees terminated or laid off by the Company during the 90 days prior to the
\ndate hereof and (ii) all the employees of the Company who have experienced a
\nreduction in hours of work of more than 50% during any month during the 90 days
\nprior to the date hereof and describes all notices given by the Company in
\nconnection with WARN. The Company will, by written notice to Parent and
\nPurchaser, update Section 3.10(f) of the Disclosure Schedule to include any such
\nterminations, layoffs and reductions in hours from the date hereof through the
\nEffective Time and will provide Parent and Purchaser with any related
\ninformation which they may reasonably request.<\/p>\n
SECTION 3.11. Labor Matters. (i) There are no controversies pending
\nor, to the best knowledge of the Company, threatened between the Company and any
\nof its employees, which controversies have or could have a Material Adverse
\nEffect; (ii) the Company is not a party to any collective bargaining agreement
\nor other labor union contract applicable to persons employed by the Company,
\nnor, to the best knowledge of the Company, are there any activities or
\nproceedings of any labor union to organize any such employees; (iii) there are
\nno unfair labor practice complaints pending against the Company before the
\nNational Labor Relations Board or any current union representation questions
\ninvolving employees of the Company; and (iv) there is no strike, slowdown, work
\nstoppage or lockout existing, or, to the best knowledge of the Company,
\nthreatened, by or with respect to any employees of the Company.<\/p>\n
SECTION 3.12. Offer Documents; Schedule 14D-9; Proxy Statement.
\nNeither the Schedule 14D-9 nor any information supplied by the Company for
\ninclusion in the Offer Documents shall, at the respective times the Schedule
\n14D-9, the Offer Documents or any amendments or supplements thereto are filed
\nwith the SEC or are first published, sent or given to stockholders of the
\nCompany, as the case may be, contain any untrue statement of a material fact or
\nomit to state any material fact required to be stated therein or necessary in
\norder to make the statements made therein, in the light of the circumstances
\nunder which they are made, not misleading. Neither the proxy statement to be
\nsent to the stockholders of the Company in connection with the Stockholders’
\nMeeting or the information statement to be sent to such stockholders, as
\nappropriate (such proxy statement or information statement, as amended or
\nsupplemented, being referred to herein as the “Proxy Statement”), shall, at the
\ndate the Proxy Statement (or any amendment or supplement thereto) is first
\nmailed to stockholders of the Company, at the time of the Stockholders’ Meeting
\n(as hereinafter defined) and at the Effective Time, be false or misleading with
\nrespect to any material fact, or omit to state any material fact required to be
\nstated therein or necessary in order to make the statements made therein, in the
\nlight of the circumstances under which they are made, not misleading or
\nnecessary to correct any statement in any earlier communication with respect to
\nthe solicitation of proxies for the Stockholders’ Meeting which shall have
\nbecome false or misleading. The Schedule 14D-9 and the Proxy Statement shall
\ncomply in all material respects as to form with the requirements of the Exchange
\nAct and the rules and regulations thereunder.<\/p>\n
SECTION 3.13. Real Property and Leases. (a) The Company has sufficient
\ntitle to all its properties and assets to conduct its business as currently
\nconducted or as contemplated to be conducted.<\/p>\n
(b) Each parcel of real property owned or leased by the Company (i)
\nexcept as set forth in Section 3.13 of the Disclosure Schedule, is owned or
\nleased free and clear of all mortgages, pledges, liens, security interests,
\nconditional and installment sale agreements, encumbrances, charges or other
\nclaims of third parties of any kind (collectively, “Liens”), other than (A)
\nLiens for current taxes and assessments not yet past due, (B) inchoate
\nmechanics’ and materialmen’s Liens for construction in progress, (C) workmen’s,
\nrepairmen’s, warehousemen’s and carriers’ Liens arising in the ordinary course
\nof business of the Company consistent with past practice, and (D) all matters of
\nrecord, Liens and other imperfections of title and encumbrances which,
\nindividually or in the aggregate, would not have a Material Adverse Effect
\n(collectively, “Permitted Liens”), and
\n 17
\n(ii) is neither subject to any governmental decree or order to be sold nor is
\nbeing condemned, expropriated or otherwise taken by any public authority with or
\nwithout payment of compensation therefor, nor, to the best knowledge of the
\nCompany, has any such condemnation, expropriation or taking been proposed.<\/p>\n
(c) All leases of real property leased for the use or benefit of the
\nCompany to which the Company is a party and all amendments and modifications
\nthereto are in full force and effect and have not been modified or amended, and
\nthere exists no default under any such lease by the Company, nor any event which
\nwith notice or lapse of time or both would constitute a default thereunder by
\nthe Company.<\/p>\n
SECTION 3.14. Trademarks, Patents and Copyrights. (a) Section
\n3.14(a)(i) of the Disclosure Schedule sets forth a true and complete list and a
\nbrief description of all patents, patent rights, trademarks, trademark rights,
\ntrade names, trade name rights, copyrights and service marks (“Intellectual
\nProperty”, which term shall also include all trade secrets, know-how and other
\nproprietary rights and information) to which the Company holds, or has a right
\nto hold, right, title and interest (“Owned Intellectual Property”), including a
\ncomplete identification of each patent, registration or application for such
\npatent and trademark registration, and Section 3.14(a)(ii) of the Disclosure
\nSchedule sets forth a true and complete list of all Intellectual Property
\nlicensed or sublicensed to the Company (other than mass distributed software
\nlicenses on a shrink-wrap basis) (“Licensed Intellectual Property”), including a
\nlist of any license or sublicense thereof. Except as otherwise described in
\nSection 3.14(a)(i) of the Disclosure Schedule, in each case where a registration
\nor patent or application for registration or patent listed in Section 3.14(a)(i)
\nof the Disclosure Schedule is held by assignment, the assignment has been duly
\nrecorded with the U.S. Patent and Trademark Office or other appropriate
\ngovernment agency. Except as disclosed in Section 3.14(a)(iii) of the Disclosure
\nSchedule, the Company has not received any written notice or claim that the
\nrights of the Company in or to such Intellectual Property conflict with or
\ninfringe on the rights of any other Person.<\/p>\n
(b) (i) Except as set forth in Section 3.14(b) of the Disclosure
\nSchedule, the Company’s interest in all the Owned Intellectual Property is owned
\nby the Company free and clear of any security interest, pledge, mortgage, lien,
\ncharge, encumbrance, existing adverse claim or preferential arrangement and (ii)
\nno claim, action, suit, arbitration, inquiry, proceeding or investigation by or
\nbefore any Governmental Authority (other than ex parte patent office
\nproceedings) has been made or asserted or is pending (nor, to the best knowledge
\nof the Company, has any such claim, action, suit, arbitration, inquiry,
\nproceeding or investigation been threatened) against the Company either (A)
\nbased upon or challenging or seeking to deny or restrict the use by the Company
\nof any of the Owned Intellectual Property or (B) alleging that any services
\nprovided, or products manufactured or sold by the Company are being provided,
\nmanufactured or sold in violation of any patents or trademarks, or any other
\nrights of any person. To the best knowledge of the Company, no person is using
\nany trademarks, service marks or trade names that are confusingly similar to
\ntrademarks, service marks or trade names included in the Owned Intellectual
\nProperty. To the best knowledge of the Company, no person is using any patents,
\ncopyrights, trade secrets or similar property which infringe granted patents or
\ncopyrights included in the Owned Intellectual Property. The Company has not
\ngranted any license or other right to any other person with respect to the
\nCompany’s interest in the Owned Intellectual Property. The consummation of the
\nTransactions will not result in the termination or impairment of the Company’s
\ninterest in any of the Owned Intellectual Property.<\/p>\n
(c) The Company has, or has caused to be, made available to Parent
\ncorrect and complete copies of all the licenses and sublicenses for Licensed
\nIntellectual Property listed in Section 3.14(a)(ii) of the Disclosure Schedule
\nand any and all ancillary documents pertaining thereto (including, but not
\nlimited to, all amendments, consents and evidence of commencement dates and
\nexpiration dates). With respect to each of such licenses and sublicenses:<\/p>\n
(i) such license or sublicense, together with all ancillary documents
\n delivered pursuant to the first sentence of this Section 3.14(c), is valid
\n and binding
\n 18
\n obligation of the Company and in full force and effect and represents the
\n entire agreement between the respective licensor and licensee with respect
\n to the subject matter of such license or sublicense;<\/p>\n
(ii) such license or sublicense will not cease to be valid and
\n binding obligation of the Company and in full force and effect on terms
\n identical to those currently in effect as a result of the consummation of
\n the transactions contemplated by this Agreement, nor will the consummation
\n of the transactions contemplated by this Agreement constitute a breach or
\n default under such license or sublicense or otherwise give the licensor or
\n sublicensor a right to terminate such license or sublicense;<\/p>\n
(iii) with respect to each such license or sublicense: (A) the Company
\n has not received any notice of termination or cancellation under such
\n license or sublicense and no licensor or sublicensor has any right of
\n termination or cancellation under such license or sublicense except in
\n connection with the default of the Company thereunder, (B) the Company has
\n not received any notice of a breach or default under such license or
\n sublicense, which breach or default has not been cured and (C) the Company
\n has not granted to any other person any rights, adverse or otherwise, under
\n such license or sublicense;<\/p>\n
(iv) neither the Company nor, to the best knowledge of the Company,
\n any other party to such license or sublicense is in breach or default in
\n any material respect which breach has not been waived or cured, and, to the
\n best knowledge of the Company, no event has occurred that, with notice or
\n lapse of time or both would constitute such a breach or default or permit
\n termination, modification or acceleration under such license or sublicense;<\/p>\n
(v) no claim, action, suit, arbitration, inquiry, proceeding or
\n investigation by or before any Governmental Authority (other than ex parte
\n patent office proceedings) has been made or asserted or is pending (nor, to
\n the best knowledge of the Company, has any such claim, action, suit,
\n arbitration, inquiry, proceeding or investigation been threatened) against
\n the Company either (A) based upon or challenging or seeking to deny or
\n restrict the use by the Company of any of the Licensed Intellectual
\n Property or (B) alleging that any Licensed Intellectual Property is being
\n licensed, sublicensed or used in violation of any patents or trademarks, or
\n any other rights of any person; and<\/p>\n
(vi) to the best knowledge of the Company, no person is infringing
\n any granted patents, copyrights, trademarks, service marks or trade names,
\n or has misappropriated trade secrets or similar property, included in the
\n Licensed Intellectual Property.<\/p>\n
(d) The Company has taken reasonable measures to assure and maintain
\nthe confidentiality of the processes and formulae, research and development
\nresults and other know-how of the Company, the value of which is contingent upon
\nmaintenance of the confidentiality thereof and, to the best knowledge of the
\nCompany, there have not been any material breaches of any confidentiality
\nobligations owing to the Company.<\/p>\n
SECTION 3.15. Taxes. The Company has timely filed all federal, state,
\nlocal and foreign tax returns and reports required to be filed by it, all such
\nreturns are true, correct and complete and it has timely paid and discharged all
\ntaxes shown as due thereon and has paid all applicable ad valorem taxes as are
\ndue. Neither the IRS nor any other taxing authority or agency, domestic or
\nforeign, is now asserting or, to the best knowledge of the Company, threatening
\nto assert against the Company any deficiency or claim for additional taxes or
\ninterest thereon or penalties in connection therewith. The Company has not
\ngranted any waiver of any statute of limitations with respect to, or any
\nextension of a period for the assessment of, any federal, state, county,
\nmunicipal or foreign income tax. The accruals and reserves for taxes reflected
\nin the 1994 Balance Sheet are adequate to cover all taxes accruable through such
\ndate (including interest and penalties, if any, thereon) in accordance with
\ngenerally accepted accounting principles. The Company has not made an
\n 19
\nelection under Section 341(f) of the Code. There are no tax liens on any assets
\nof the Company. The Company is not a party to any agreement or arrangement what
\nwould result in the payment of any “excess parachute payments” within the
\nmeaning of section 280G of the Internal Revenue Code. No acceleration of the
\nvesting schedule for any property that is substantially unvested, within the
\nmeaning of the regulations under section 83 of the Internal Revenue Code, will
\noccur in connection with the Merger. The Company has not been includible in a
\nconsolidated return for any taxable period for which the statute of limitations
\nhas not expired. The Company is not subject to any accumulated earnings tax
\npenalty or personal holding company tax.<\/p>\n
SECTION 3.16. Environmental Matters. (a) For purposes of this
\nAgreement, the following terms shall have the following meanings: (i)
\n“Environmental Claims” means any and all actions, suits, demands, demand
\nletters, claims, liens, notices of non-compliance or violation, notices of
\nliability or potential liability, proceedings, consent orders or consent
\nagreements relating in any way to any Environmental Law, any Environmental
\nPermit or any Hazardous Materials; (ii) “Environmental Law” means any statute,
\nlaw, rule, ordinance or code, in effect now or any time prior to the Closing,
\nand any judicial or administrative interpretation thereof, including any
\njudicial or administrative order, consent decree or judgment, relating to
\npollution or protection of the environment, health, safety or natural resources,
\nincluding without limitation, those relating to the use, handling,
\ntransportation, treatment, storage, disposal, release or discharge of Hazardous
\nMaterials; (iii) “Environmental Permit” means any permit, approval,
\nidentification number, license or other authorization required under any
\napplicable Environmental Law; (iv) “Governmental Authority” means any United
\nStates federal, state or local or any foreign government, governmental,
\nregulatory or administrative authority, agency or commission or any court,
\ntribunal, or judicial or arbitral body; (v) “Hazardous Materials” means (A)
\npetroleum and petroleum products, by products or breakdown products, radioactive
\nmaterials, asbestos-containing materials and polychlorinated biphenyls, and (B)
\nany other chemicals, materials or substances defined or regulated as toxic or
\nhazardous or as a pollutant or contaminant or as a waste under any applicable
\nEnvironmental Law; and (vi) “leased property” and “leased properties” means the
\nreal property which the Company has the right to control pursuant to its lease
\nand not any property which the Company does not have the right to control.<\/p>\n
(b) Except as described in Section 3.16 of the Disclosure Schedule:
\n(i) the Company is and has been in material compliance with all applicable
\nEnvironmental Laws; (ii) the Company has obtained all necessary Environmental
\nPermits and is and has been in material compliance with their requirements;
\n(iii) to the best knowledge of the Company, there are no underground or
\naboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
\nor lagoons in which Hazardous Materials are being or have been treated, stored
\nor disposed of on any of the owned or leased properties or, with respect to the
\nperiod of the Company’s ownership, tenancy or operation of such property, on any
\nreal property formerly owned, leased or occupied by the Company; (iv) to the
\nbest knowledge of the Company, no owned or leased properties or any property
\nadjoining any owned or leased properties is listed or proposed for listing on
\nthe National Priorities List under the Comprehensive Environmental Response,
\nCompensation and Liability Act of 1980, as amended through the date hereof, or
\non the Comprehensive Environmental Response, Compensation and Liability
\nInformation System, as updated through the date hereof, or any analogous state
\nlist of sites requiring investigation or cleanup; (v) to the best knowledge of
\nthe Company, there is no asbestos or asbestos-containing material on any of the
\nowned or leased properties; (vi) the Company has not released, discharged or
\ndisposed of Hazardous Materials on any of the owned or leased properties or on
\nany real property formerly owned, leased or occupied by the Company in any
\nmanner or quantity that can give rise to a Material Adverse Effect; (vii) the
\nCompany is not undertaking, has not completed, and, to the best knowledge of the
\nCompany, is not required to conduct, any investigation or assessment or remedial
\nor response action relating to any release, discharge or disposal of or
\ncontamination with Hazardous Materials at any site, location or operation,
\neither voluntarily or pursuant to the order of any Governmental Authority or the
\nrequirements of any Environmental Law; and (viii) there are no past, pending or,
\nto the best knowledge of the Company, threatened Environmental Claims against
\nthe Company or any of its properties,
\n 20
\nand, to the best knowledge of the Company, there are no facts which can form the
\nbasis of any such Environmental Claim, including without limitation with respect
\nto any off-site disposal location presently or formerly used by the Company or
\nany of its predecessors.<\/p>\n
(c) The Company has made available to Parent copies of any
\nenvironmental audit reports, studies or analyses in its possession or under its
\ncontrol relating to the owned or leased properties or the operations of the
\nCompany.<\/p>\n
SECTION 3.17. Material Contracts. Section 3.17 of the Disclosure
\nSchedule lists each contract or agreement to which the Company is a party (i)
\nthat is required to be filed pursuant to Item 601(b)(10) of Regulation S-K under
\nthe Securities Act (each of which has been so filed as an Exhibit to the SEC
\nReports), (ii) that grants to a third party any commercial rights to exploit any
\nof the Intellectual Property or (iii) the absence of which would have a Material
\nAdverse Effect (each, a “Material Contract”). Each Material Contract is in full
\nforce and effect and is enforceable against the parties thereto (other than the
\nCompany) in accordance with its terms, except as may be limited by bankruptcy,
\ninsolvency, reorganization, moratorium or other laws affecting creditors’ rights
\ngenerally (including, without limitation, the effect of statutory and other law
\nregarding fraudulent conveyances, fraudulent transfers and preferential
\ntransfers) and as may be limited by the exercise of judicial discretion and the
\napplication of principles of equity, including, without limitation, requirements
\nof good faith, fair dealing, conscionability and materiality (regardless of
\nwhether considered in a proceeding in equity or at law), and no condition or
\nstate of facts exists that, with notice or the passage of time, or both, would
\nconstitute a material default by the Company or, to the best knowledge of the
\nCompany, any third party under any Material Contract. The Company has duly
\ncomplied in all material respects with the provision of each Material Contract
\nto which it is a party.<\/p>\n
SECTION 3.18. Brokers. No broker, finder or investment banker (other
\nthan Aylward and Associates) is entitled to any brokerage, finder’s or other fee
\nor commission in connection with the Transactions based upon arrangements made
\nby or on behalf of the Company. The Company has heretofore furnished to Parent a
\ncomplete and correct copy of all agreements between the Company and Aylward and
\nAssociates<\/p>\n
SECTION 3.19. Opinion of Financial Advisor. The Board of Directors of
\nthe Company has received the written opinion of Fister & Associates, dated the
\ndate of this Agreement, to the effect that the cash consideration to be received
\nin the Offer and the Merger by the Company’s public stockholders is fair to the
\nCompany’s public stockholders from a financial point of view, a copy of such
\nopinion has been delivered to Parent and such opinion has not been withdrawn or
\nmodified.<\/p>\n
SECTION 3.20. Related Party Transactions. Except as disclosed in the
\nSEC Reports, there are no material agreements, arrangements or understandings
\nbetween the Company, on the one hand, and any affiliate of the Company, on the
\nother hand.<\/p>\n
ARTICLE IV<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER<\/p>\n
Parent and Purchaser hereby, jointly and severally, represent and
\nwarrant to the Company that:<\/p>\n
SECTION 4.01. Corporate Organization. Each of Parent and Purchaser is
\na corporation duly organized, validly existing and in good standing under the
\nlaws of the jurisdiction of its organization.<\/p>\n
SECTION 4.02. Authority Relative to this Agreement. Each of Parent and
\nPurchaser has all necessary corporate power and authority to execute and deliver
\nthis Agreement, to perform its obligations hereunder and to consummate the
\nTransactions. The execution and delivery of this Agreement by Parent and
\nPurchaser and the consummation by
\n 21
\nParent and Purchaser of the Transactions have been duly and validly authorized
\nby all necessary corporate action on the part of Parent and Purchaser and no
\nother corporate proceedings on the part of Parent or Purchaser are necessary to
\nauthorize this Agreement or to consummate the Transactions (other than, with
\nrespect to the Merger, the filing and recordation of appropriate merger
\ndocuments as required by Delaware Law). This Agreement has been duly and validly
\nexecuted and delivered by Parent and Purchaser and, assuming the due
\nauthorization, execution and delivery by the Company, constitutes a legal, valid
\nand binding obligation of each of Parent and Purchaser enforceable against each
\nof Parent and Purchaser in accordance with its terms, except as enforceability
\nmay be limited by bankruptcy, insolvency, reorganization, moratorium or other
\nlaws affecting creditors’ rights generally (including, without limitation, the
\neffect of statutory and other law regarding fraudulent conveyances, fraudulent
\ntransfers and preferential transfers) and as may be limited by the exercise of
\njudicial discretion and the application of principles of equity including,
\nwithout limitation, requirements of good faith, fair dealing, conscionability
\nand materiality (regardless of whether considered in a proceeding in equity or
\nat law).<\/p>\n
SECTION 4.03. No Conflict; Required Filings and Consents. (a) The
\nexecution and delivery of this Agreement by Parent and Purchaser do not, and the
\nperformance of this Agreement by Parent and Purchaser will not, (i) conflict
\nwith or violate the Certificate of Incorporation or By-laws of either Parent or
\nPurchaser, (ii) conflict with or violate any law, rule, regulation, order,
\njudgment or decree applicable to Parent or Purchaser or by which any property or
\nasset of either of them is bound or affected, or (iii) result in any breach of
\nor constitute a default (or an event which with notice or lapse of time or both
\nwould become a default) under, or give to others any rights of termination,
\namendment, acceleration or cancellation of, or result in the creation of a lien
\nor other encumbrance on any property or asset of Parent or Purchaser pursuant
\nto, any note, bond, mortgage, indenture, contract, agreement, lease, license,
\npermit, franchise or other instrument or obligation to which Parent or Purchaser
\nis a party or by which Parent or Purchaser or any property or asset of either of
\nthem is bound or affected, except for any such conflicts, violations, breaches,
\ndefaults or other occurrences which would not, individually or in the aggregate,
\nprevent Parent or Purchaser from performing their respective obligations under
\nthis Agreement and consummating the Transactions.<\/p>\n
(b) The execution and delivery of this Agreement by Parent and
\nPurchaser do not, and the performance of this Agreement by Parent and Purchaser
\nwill not, require any consent, approval, authorization or permit of, or filing
\nwith or notification to, any governmental or regulatory authority to be obtained
\nor made by Parent or Purchaser, domestic or foreign, except (i) for applicable
\nrequirements, if any, of the Exchange Act, Blue Sky Laws and state takeover
\nlaws, the HSR Act and filing and recordation of appropriate merger documents as
\nrequired by Delaware Law and (ii) where the failure to obtain such consents,
\napprovals, authorizations or permits, or to make such filings or notifications,
\nwould not prevent or delay consummation of the Offer or the Merger, or otherwise
\nprevent Parent or Purchaser from performing their respective obligations under
\nthis Agreement.<\/p>\n
SECTION 4.04. Financing. Parent has, or will have available to it at
\nthe time Purchaser is required to pay for Shares under the terms of the Offer,
\nand will make available to Purchaser, sufficient funds to permit Purchaser to
\nacquire all of the outstanding Shares in the Offer and the Merger.<\/p>\n
SECTION 4.05. Offer Documents; Proxy Statement. The Offer Documents
\nwill not, at the time the Offer Documents are filed with the SEC or are first
\npublished, sent or given to stockholders of the Company, as the case may be,
\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
\nmade therein, in the light of the circumstances under which they are made, not
\nmisleading. The information supplied by Parent for inclusion in the Proxy
\nStatement will not, on the date the Proxy Statement (or any amendment or
\nsupplement thereto) is first mailed to stockholders of the Company, at the time
\nof the Stockholders’ Meeting or at the Effective Time, contain any statement
\nwhich, at such time and in light of the circumstances under which it is made, is
\nfalse or misleading with respect to any material
\n 22
\nfact, or omit to state any material fact required to be stated therein or
\nnecessary in order to make the statements therein not false or misleading or
\nnecessary to correct any statement in any earlier communication with respect to
\nthe solicitation of proxies for the Stockholders’ Meeting which shall have
\nbecome false or misleading. Notwithstanding the foregoing, Parent and Purchaser
\nmake no representation or warranty with respect to any information supplied by
\nthe Company or any of its representatives which is contained in any of the
\nforegoing documents or the Offer Documents. The Offer Documents shall comply in
\nall material respects as to form with the requirements of the Exchange Act and
\nthe rules and regulations thereunder.<\/p>\n
SECTION 4.06. Brokers. No broker, finder or investment banker is
\nentitled to any brokerage, finder’s or other fee or commission in connection
\nwith the Transactions based upon arrangements made by or on behalf of Parent or
\nPurchaser.<\/p>\n
ARTICLE V<\/p>\n
CONDUCT OF BUSINESS PENDING THE MERGER<\/p>\n
SECTION 5.01. Conduct of Business by the Company Pending the Merger.
\nThe Company covenants and agrees that, between the date of this Agreement and
\nthe Effective Time, unless Parent shall otherwise agree in writing, the business
\nof the Company shall be conducted only in, and the Company shall not take any
\naction except in, the ordinary course of business and in a manner consistent
\nwith past practice; and the Company shall use its best efforts to preserve
\nsubstantially intact the business organization of the Company, to keep available
\nthe services of the current officers, employees and consultants of the Company
\nand to preserve the current relationships of the Company with customers,
\nsuppliers and other persons with which the Company has significant business
\nrelations. By way of amplification and not limitation, except as contemplated by
\nthis Agreement, the Company shall not, between the date of this Agreement and
\nthe Effective Time, directly or indirectly do, or propose to do, any of the
\nfollowing without the prior written consent of Parent:<\/p>\n
(a) amend or otherwise change its Certificate of Incorporation or
\n By-laws;<\/p>\n
(b) issue, sell, pledge, dispose of, grant, encumber, or
\n authorize the issuance, sale, pledge, disposition, grant or encumbrance of,
\n (i) any shares of capital stock of any class of the Company, or any
\n options, warrants, convertible securities or other rights of any kind to
\n acquire any shares of such capital stock, or any other ownership interest
\n (including, without limitation, any phantom interest), of the Company
\n (except for the issuance of a maximum of 130,000 Shares issuable pursuant
\n to Options outstanding on the date hereof) or (ii) any assets of the
\n Company except for sales in the ordinary course of business and in a manner
\n consistent with past practice;<\/p>\n
(c) except as set forth in Section 5.01 of the Disclosure
\n Schedule, declare, set aside, make or pay any dividend or other
\n distribution, payable in cash, stock, property or otherwise, with respect
\n to any of its capital stock;<\/p>\n
(d) except as set forth in Section 5.01 of the Disclosure
\n Schedule, reclassify, combine, split, subdivide or redeem, purchase or
\n otherwise acquire, directly or indirectly, any of its capital stock;<\/p>\n
(e) (i) acquire (including, without limitation, by merger,
\n consolidation, or acquisition of stock or assets) any corporation,
\n partnership, other business organization or any division thereof or any
\n material amount of assets; (ii) incur any indebtedness for borrowed money
\n or issue any debt securities or assume, guarantee or endorse, or otherwise
\n as an accommodation become responsible for, the obligations of any person,
\n or make any loans or advances, except in the ordinary course of business
\n and consistent with past practice; (iii) enter into any
\n 23
\n contract or agreement other than in the ordinary course of business,
\n consistent with past practice; (iv) authorize any single capital commitment
\n which is in excess of $50,000 or capital expenditures which are, in the
\n aggregate, in excess of $100,000 for the Company; or (v) enter into or
\n amend any contract, agreement, commitment or arrangement with respect to
\n any matter set forth in this Section 5.01(e);<\/p>\n
(f) except as set forth in Section 5.01 of the Disclosure
\n Schedule, increase the compensation payable or to become payable to its
\n officers or employees, except for increases in accordance with past
\n practices in salaries or wages of employees of the Company who are not
\n officers of the Company, or grant any severance or termination pay to, or
\n enter into any employment or severance agreement with any director, officer
\n or other employee of the Company, or establish, adopt, enter into or amend
\n any collective bargaining, bonus, profit sharing, thrift, compensation,
\n stock option, restricted stock, pension, retirement, deferred compensation,
\n employment, termination, severance or other plan, agreement, trust, fund,
\n policy or arrangement for the benefit of any director, officer or employee;<\/p>\n
(g) take any action, other than reasonable and usual actions in
\n the ordinary course of business and consistent with past practice, with
\n respect to accounting policies or procedures (including, without
\n limitation, procedures with respect to the payment of accounts payable and
\n collection of accounts receivables);<\/p>\n
(h) make any tax election or settle or compromise any material
\n federal, state, local or foreign income tax liability;<\/p>\n
(i) settle or compromise any pending or threatened suit, action
\n or claim which is material or which relates to any of the Transactions;<\/p>\n
(j) pay, discharge or satisfy any claim, liability or obligation
\n (absolute, accrued, asserted or unasserted, contingent or otherwise), other
\n than the payment, discharge or satisfaction, in the ordinary course of
\n business and consistent with past practice, of liabilities reflected or
\n reserved against in the 1994 Balance Sheet or subsequently incurred in the
\n ordinary course of business and consistent with past practice;<\/p>\n
(k) sell, assign, transfer, license, sublicense, pledge or
\n otherwise encumber any of the Intellectual Property; or<\/p>\n
(l) announce an intention, commit or agree to do any of the
\n foregoing.<\/p>\n
ARTICLE VI<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
SECTION 6.01. Stockholders’ Meeting. (a) If required by applicable law
\nin order to consummate the Merger, the Company, acting through the Board, shall,
\nin accordance with applicable law and the Company’s Certificate of Incorporation
\nand By-laws, (i) duly call, give notice of, convene and hold an annual or
\nspecial meeting of its stockholders as soon as practicable following
\nconsummation of the Offer for the purpose of considering and taking action on
\nthis Agreement and the transactions contemplated hereby (the “Stockholders’
\nMeeting”) and (ii) subject to its fiduciary duties under applicable law as
\nadvised in writing by independent counsel, (A) include in the Proxy Statement
\nthe unanimous recommendation of the Board that the stockholders of the Company
\napprove and adopt this Agreement and the transactions contemplated hereby and
\n(B) use its best efforts to obtain such approval and adoption. At the
\nStockholders’ Meeting, Parent and Purchaser shall cause all Shares then owned by
\nthem to be voted in favor of the approval and adoption of this Agreement and the
\ntransactions contemplated hereby.
\n 24
\n (b) Notwithstanding the foregoing, in the event that Purchaser shall
\nacquire at least 90 percent of the then outstanding Shares, the parties hereto
\nagree, at the request of Purchaser, subject to Article VII, to take all
\nnecessary and appropriate action to cause the Merger to become effective, in
\naccordance with Section 253 of Delaware Law, as soon as reasonably practicable
\nafter such acquisition, without a meeting of the stockholders of the Company.<\/p>\n
SECTION 6.02. Proxy Statement. If required by applicable law, as soon
\nas practicable following consummation of the Offer, the Company shall file the
\nProxy Statement with the SEC under the Exchange Act, and shall use its best
\nefforts to have the Proxy Statement cleared as promptly as practicable by the
\nSEC. Parent, Purchaser and the Company shall cooperate with each other in the
\npreparation of the Proxy Statement, and the Company shall notify Parent of the
\nreceipt of any comments of the SEC with respect to the Proxy Statement and of
\nany requests by the SEC for any amendment or supplement thereto or for
\nadditional information and shall provide to Parent promptly copies of all
\ncorrespondence between the Company or any representative of the Company and the
\nSEC. The Company shall give Parent and its counsel the opportunity to review the
\nProxy Statement prior to its being filed with the SEC and shall give Parent and
\nits counsel the opportunity to review all amendments and supplements to the
\nProxy Statement and all responses to requests for additional information and
\nreplies to comments prior to their being filed with, or sent to, the SEC. Each
\nof the Company, Parent and Purchaser agrees to use its reasonable best efforts,
\nafter consultation with the other parties hereto, to respond promptly to all
\nsuch comments of and requests by the SEC and to cause the Proxy Statement and
\nall required amendments and supplements thereto to be mailed to the holders of
\nShares entitled to vote at the Stockholders’ Meeting at the earliest practicable
\ntime.<\/p>\n
SECTION 6.03. Company Board Representation; Section 14(f). (a)
\nPromptly upon the purchase by Purchaser of Shares pursuant to the Offer, and
\nfrom time to time thereafter, Purchaser shall be entitled to designate up to
\nsuch number of directors, rounded up to the next whole number, on the Board as
\nshall give Purchaser representation on the Board equal to the product of the
\ntotal number of directors on the Board (giving effect to the directors elected
\npursuant to this sentence) multiplied by the percentage that the aggregate
\nnumber of Shares beneficially owned by Purchaser and affiliates of Purchaser
\nfollowing such purchase bears to the total number of Shares then outstanding,
\nand the Company shall, at such time, promptly take all actions necessary to
\ncause Purchaser’s designees to be elected as directors of the Company, including
\nincreasing the size of the Board or securing the resignations of incumbent
\ndirectors or both. At such times, the Company shall use its best efforts to
\ncause persons designated by Purchaser to constitute the same percentage as
\npersons designated by Purchaser shall constitute of the Board of each committee
\nof the Board, in each case only to the extent permitted by applicable law.
\nNotwithstanding the foregoing, until the earlier of (i) the time Purchaser
\nacquires a majority of the then outstanding Shares on a fully diluted basis and
\n(ii) the Effective Time, the Company shall use its best efforts to ensure that
\nall the members of the Board and each committee of the Board as of the date
\nhereof who are not employees of the Company shall remain members of the Board
\nand of such committees.<\/p>\n
(b) The Company shall promptly take all actions required pursuant to
\nSection 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order
\nto fulfill its obligations under this Section 6.03 and shall include in the
\nSchedule 14D-9 such information with respect to the Company and its officers and
\ndirectors as is required under Section 14(f) and Rule 14f-1 to fulfill such
\nobligations. Parent or Purchaser shall supply to the Company and be solely
\nresponsible for any information with respect to either of them and their
\nnominees, officers, directors and affiliates required by such Section 14(f) and
\nRule 14f-1.<\/p>\n
(c) Following the election of designees of Purchaser pursuant to this
\nSection 6.03, prior to the Effective Time, any amendment of this Agreement or
\nthe Certificate of Incorporation or By-laws of the Company, any termination of
\nthis Agreement by the Company, any extension by the Company of the time for the
\nperformance of any of the obligations or other acts of Parent or Purchaser or
\nwaiver of any of the Company’s rights
\n 25
\nhereunder shall require the concurrence of a majority of the directors of the
\nCompany then in office who are neither (i) designees of Purchaser nor (ii)
\nemployees of the Company.<\/p>\n
SECTION 6.04. Access to Information; Confidentiality. (a) From the
\ndate hereof to the Effective Time, the Company shall, and shall cause the
\nofficers, directors, employees, auditors and agents of the Company to, afford
\nthe officers, employees and agents of Parent and Purchaser and persons providing
\nor committing to provide Parent or Purchaser with financing for the Transactions
\ncomplete access at all reasonable times to the officers, employees, agents,
\nproperties, offices, plants and other facilities, books and records of the
\nCompany, and shall furnish Parent and Purchaser and persons providing or
\ncommitting to provide Parent or Purchaser with financing for the Transactions
\nwith all financial, operating and other data and information as Parent or
\nPurchaser, through its officers, employees or agents, may reasonably request.<\/p>\n
(b) All information obtained by Parent or Purchaser pursuant to this
\nSection 6.04 shall be kept confidential in accordance with the confidentiality
\nagreement, dated October 10, 1995 (the “Confidentiality Agreement”), between
\nParent and the Company.<\/p>\n
(c) No investigation pursuant to this Section 6.04 shall affect any
\nrepresentation or warranty in this Agreement of any party hereto or any
\ncondition to the obligations of the parties hereto.<\/p>\n
SECTION 6.05. No Solicitation of Transactions. Unless this Agreement
\nshall have been terminated pursuant to Section 8.01, the Company shall not,
\ndirectly or indirectly, through any officer, director, agent or otherwise,
\nsolicit, initiate or encourage the submission of any proposal or offer from any
\nperson relating to any acquisition or purchase of all or (other than in the
\nordinary course of business) any portion of the assets of, or any equity
\ninterest in, the Company or any business combination with the Company or
\nparticipate in any negotiations regarding, or furnish to any other person any
\ninformation with respect to, or otherwise cooperate in any way with, or assist
\nor participate in, facilitate or encourage, any effort or attempt by any other
\nperson to do or seek any of the foregoing; provided, however, that nothing
\ncontained in this Section 6.05 shall prohibit the Board from responding to any
\nunsolicited proposal made in writing to acquire the Company pursuant to a
\nmerger, consolidation, share exchange, business combination or other similar
\ntransaction or to acquire all or substantially all of the assets of the Company,
\nto the extent the Board, after consultation with independent legal counsel,
\ndetermines in good faith that such action is required for the Board to comply
\nwith its fiduciary duty to stockholders imposed by Delaware Law. The Company
\nimmediately shall cease and cause to be terminated all existing discussions or
\nnegotiations with any parties conducted heretofore with respect to any of the
\nforegoing. The Company shall notify Parent promptly if any such proposal or
\noffer, or any inquiry or contact with any person with respect thereto, is made
\nand shall, in any such notice to Parent, indicate in reasonable detail the
\nidentity of the person making such proposal, offer, inquiry or contact and the
\nterms and conditions of such proposal, offer, inquiry or contact. The Company
\nagrees not to release any third party from, or waive any provision of, any
\nconfidentiality or standstill agreement to which the Company is a party.<\/p>\n
SECTION 6.06. Employee Benefits Matters. Parent intends that, for a
\nperiod of one year immediately following the Effective Time, it shall, or shall
\ncause the Surviving Corporation to, continue to maintain employee benefit and
\nwelfare plans, programs, contracts, agreements policies and executive incentives
\nand perquisites, other than equity- based plans, for the benefit of active and
\nretired employees of the Company or the Surviving Corporation which in the
\naggregate provide benefits that are no less favorable to employees than the
\nbenefits provided to such active and retired employees on the date hereof.<\/p>\n
SECTION 6.07. Directors’ and Officers’ Indemnification. (a) The
\nBy-laws of the Surviving Corporation shall contain provisions no less favorable
\nwith respect to indemnification, advancement of expenses and related matters
\nthan are set forth in Article VII of the By-laws of the Company as in effect on
\nthe date hereof, which provisions shall not be amended, repealed or otherwise
\nmodified for a period of three years from the
\n 26
\nEffective Time in any manner that would affect adversely the rights thereunder
\nof individuals who at the Effective Time were directors, officers, employees,
\nfiduciaries or agents of the Company, unless such modification shall be required
\nby law.<\/p>\n
(b) The Company shall, to the fullest extent permitted under
\napplicable law and regardless of whether the Merger becomes effective, indemnify
\nand hold harmless, and, after the Effective Time, the Surviving Corporation
\nshall, to the fullest extent permitted under applicable law, indemnify and hold
\nharmless, each present and former director, officer, employee, fiduciary and
\nagent of the Company (collectively, the “Indemnified Parties”) against all costs
\nand expenses (including attorneys’ fees), judgments, fines, losses, claims,
\ndamages, liabilities and settlement amounts paid in connection with any claim,
\naction, suit, proceeding or investigation (whether arising before or after the
\nEffective Time), whether civil, criminal, administrative or investigative,
\narising out of or pertaining to any action or omission in their capacity as an
\nofficer, director, employee, fiduciary or agent, whether occurring before, at or
\nafter the Effective Time, whether asserted or claimed prior to, at or after the
\nEffective Time, for a period of three years after the date hereof. In the event
\nof any such claim, action, suit, proceeding or investigation, (i) the Company or
\nthe Surviving Corporation, as the case may be, shall pay the reasonable fees and
\nexpenses of counsel selected by the Indemnified Parties, which counsel shall be
\nreasonably satisfactory to the Company or the Surviving Corporation, promptly
\nafter statements therefor are received and (ii) the Company and the Surviving
\nCorporation shall cooperate in the defense of any such matter; provided,
\nhowever, that neither the Company nor the Surviving Corporation shall be liable
\nfor any settlement effected without its written consent (which consent shall not
\nbe unreasonably withheld); and provided, further, that neither the Company nor
\nthe Surviving Corporation shall be obligated pursuant to this Section 6.07(b) to
\npay the fees and expenses of more than one counsel for all Indemnified Parties
\nin any single action except to the extent that two or more of such Indemnified
\nParties shall have conflicting interests in the outcome of such action; and
\nprovided, further, that, in the event that any claim for indemnification is
\nasserted or made within such three-year period, all rights to indemnification in
\nrespect of such claim shall continue until the disposition of such claim.<\/p>\n
(c) In the event the Company or the Surviving Corporation or any of
\ntheir respective successors or assigns (i) consolidates with or merges into any
\nother person and shall not be the continuing or surviving corporation or entity
\nof such consolidation or merger or (ii) transfers all or substantially all of
\nits properties and assets to any person, then, and in each such case, proper
\nprovision shall be made so that the successors and assigns of the Company or the
\nSurviving Corporation, as the case may be, or at Parent’s option, Parent, shall
\nassume the obligations set forth in this Section 6.07.<\/p>\n
SECTION 6.08. Notification of Certain Matters. The Company shall give
\nprompt notice to Parent, and Parent shall give prompt notice to the Company, of
\n(i) the occurrence, or non-occurrence, of any event the occurrence, or
\nnon-occurrence, of which would be likely to cause any representation or warranty
\nof the Company contained in this Agreement to be untrue or inaccurate and (ii)
\nany failure of the Company, Parent or Purchaser, as the case may be, to comply
\nwith or satisfy any covenant, condition or agreement to be complied with or
\nsatisfied by it hereunder; provided, however, that the delivery of any notice
\npursuant to this Section 6.08 shall not limit or otherwise affect the remedies
\navailable hereunder to the party receiving such notice.<\/p>\n
SECTION 6.09. Further Action; Reasonable Best Efforts. Upon the terms
\nand subject to the conditions hereof, each of the parties hereto shall (i) make
\npromptly its respective filings, and thereafter make any other required
\nsubmissions, under the HSR Act with respect to the Transactions and (ii) use its
\nreasonable best efforts to take, or cause to be taken, all appropriate action,
\nand to do, or cause to be done, all things necessary, proper or advisable under
\napplicable laws and regulations to consummate and make effective the
\nTransactions, including, without limitation, using its reasonable best efforts
\nto obtain all licenses, permits (including, without limitation, Environmental
\nPermits), consents, approvals, authorizations, qualifications and orders of
\ngovernmental authorities and parties to contracts with the Company as are
\nnecessary for the consummation of the Transactions and to fulfill the conditions
\nto the Offer and the Merger. In case at any time after the Effective Time any
\n 27
\nfurther action is necessary or desirable to carry out the purposes of this
\nAgreement, the proper officers and directors of each party to this Agreement
\nshall use their reasonable best efforts to take all such action.<\/p>\n
SECTION 6.10. Public Announcements. Parent, Purchaser and the Company
\nshall consult with each other before issuing any press release or otherwise
\nmaking any public statements with respect to this Agreement or any Transaction
\nand shall not issue any such press release or make any such public statement
\nwithout the consent of the other parties, except as may be required by law or
\nthe Company’s listing agreement with the Nasdaq National Market.<\/p>\n
SECTION 6.11. Confidentiality Agreement. The Company hereby waives the
\nprovisions of the Confidentiality Agreement as and to the extent necessary to
\npermit the consummation of each Transaction as contemplated by this Agreement.
\nUpon the acceptance for payment of Shares pursuant to the Offer, the
\nConfidentiality Agreement shall be deemed to have terminated without further
\naction by the parties thereto.<\/p>\n
ARTICLE VII<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
SECTION 7.01. Conditions to the Merger. The respective obligations of
\neach party to effect the Merger shall be subject to the satisfaction at or prior
\nto the Effective Time of the following conditions:<\/p>\n
(a) Stockholder Approval. This Agreement and the transactions
\n contemplated hereby shall have been approved and adopted by the affirmative
\n vote of the stockholders of the Company to the extent required by Delaware
\n Law and the Certificate of Incorporation of the Company;<\/p>\n
(b) HSR Act. Any waiting period (and any extension thereof)
\n applicable to the consummation of the Merger under the HSR Act shall have
\n expired or been terminated;<\/p>\n
(c) No Order. No foreign, United States or state governmental
\n authority or other agency or commission or foreign, United States or state
\n court of competent jurisdiction shall have enacted, issued, promulgated,
\n enforced or entered any law, rule, regulation, executive order, decree,
\n injunction or other order (whether temporary, preliminary or permanent)
\n which is then in effect and has the effect of making the acquisition of
\n Shares by Parent or Purchaser or any affiliate of either of them illegal or
\n otherwise restricting, preventing or prohibiting consummation of the
\n Transactions; and<\/p>\n
(d) Offer. Purchaser or its permitted assignee shall have
\n purchased all Shares validly tendered and not withdrawn pursuant to the
\n Offer; provided, however, that this condition shall not be applicable to
\n the obligations of Parent or Purchaser if, in breach of this Agreement or
\n the terms of the Offer, Purchaser fails to purchase any Shares validly
\n tendered and not withdrawn pursuant to the Offer.<\/p>\n
ARTICLE VIII<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
SECTION 8.01. Termination. This Agreement may be terminated and the
\nMerger and the other Transactions may be abandoned at any time prior to the
\nEffective Time, notwithstanding any requisite approval and adoption of this
\nAgreement and the transactions contemplated hereby by the stockholders of the
\nCompany:
\n 28
\n (a) By mutual written consent duly authorized by the Boards of
\n Directors of Parent, Purchaser and the Company; or<\/p>\n
(b) By either Parent, Purchaser or the Company if (i) the
\n Effective Time shall not have occurred on or before March 31, 1996;
\n provided, however, that the right to terminate this Agreement under this
\n Section 8.01(b) shall not be available to any party whose failure to
\n fulfill any obligation under this Agreement has been the cause of, or
\n resulted in, the failure of the Effective Time to occur on or before such
\n date; or (ii) any court of competent jurisdiction in the United States or
\n other United States governmental authority shall have issued an order,
\n decree, ruling or taken any other action restraining, enjoining or
\n otherwise prohibiting the Merger and such order, decree, ruling or other
\n action shall have become final and nonappealable; or<\/p>\n
(c) By Parent if (i) due to an occurrence or circumstance that
\n would result in a failure to satisfy any condition set forth in Annex A
\n hereto, Purchaser shall have (A) failed to commence the Offer within 30
\n days following the date of this Agreement, (B) terminated the Offer without
\n having accepted any Shares for payment thereunder or (C) failed to pay for
\n Shares pursuant to the Offer within 60 days following the commencement of
\n the Offer, unless such failure to pay for Shares shall have been caused by
\n or resulted from the failure of Parent or Purchaser to perform in any
\n material respect any material covenant or agreement of either of them
\n contained in this Agreement or the material breach by Parent or Purchaser
\n of any material representation or warranty of either of them contained in
\n this Agreement or (ii) prior to the purchase of Shares pursuant to the
\n Offer, the Board or any committee thereof shall have withdrawn or modified
\n in a manner adverse to Purchaser or Parent its approval or recommendation
\n of the Offer, this Agreement, the Merger or any other Transaction or shall
\n have recommended another merger, consolidation, business combination with,
\n or acquisition of, the Company or its assets or another tender offer for
\n Shares, or shall have resolved to do any of the foregoing; or<\/p>\n
(d) By the Company, upon approval of the Board, if (i) Purchaser
\n shall have (A) failed to commence the Offer within 30 days following the
\n date of this Agreement, (B) terminated the Offer without having accepted
\n any Shares for payment thereunder or (C) failed to pay for Shares pursuant
\n to the Offer within 60 days following the commencement of the Offer, unless
\n such failure to pay for Shares shall have been caused by or resulted from
\n the failure of the Company to perform in any material respect any material
\n covenant or agreement of the Company contained in this Agreement or the
\n material breach by the Company of any material representation or warranty
\n of the Company contained in this Agreement or (ii) prior to the purchase of
\n Shares pursuant to the Offer the Board shall have withdrawn or modified in
\n a manner adverse to Purchaser or Parent its approval or recommendation of
\n the Offer, this Agreement or the Merger in order to approve the execution
\n by the Company of a definitive agreement providing for the acquisition of
\n the Company or its assets or a merger or other business combination or in
\n order to approve a tender offer or exchange offer for Shares by a third
\n party, in either case, as determined by the Board in the exercise of its
\n good faith judgment and after consultation with its legal counsel and
\n financial advisors, on terms more favorable to the Company’s stockholders
\n than the Offer and the Merger taken together; provided, however, that such
\n termination under this clause (ii) shall not be effective until the Company
\n has made payment to Parent of the Fee (as hereinafter defined) required to
\n be paid pursuant to Section 8.03(a) and has deposited with a mutually
\n acceptable escrow agent $500,000 for reimbursement to Parent and Purchaser
\n of Expenses (as hereinafter defined).<\/p>\n
SECTION 8.02. Effect of Termination. In the event of the termination
\nof this Agreement pursuant to Section 8.01, this Agreement shall forthwith
\nbecome void, and there shall be no liability on the part of any party hereto,
\nexcept (i) as set forth in Sections 8.03 and 9.01 and (ii) nothing herein shall
\nrelieve any party from liability for any breach hereof.<\/p>\n
SECTION 8.03. Fees and Expenses. (a) In the event that
\n 29
\n (i) any person shall have commenced a tender or exchange offer for
\n 10% or more (or which, assuming the maximum amount of securities which
\n could be purchased, would result in any person beneficially owning 10% or
\n more) of the then outstanding Shares or otherwise for the direct or
\n indirect acquisition of the Company or all or substantially all of its
\n assets for per Share consideration having a value greater than the Per
\n Share Amount (a “Competing Proposal”) and (w) the Board does not recommend
\n against the Competing Proposal, (x) the Offer shall have remained open for
\n at least 20 business days, (y) the Minimum Condition shall not have been
\n satisfied and (z) this Agreement shall have been terminated pursuant to
\n Section 8.01; or<\/p>\n
(ii) this Agreement is terminated (x) pursuant to Section 8.01(c)(ii)
\n or (y) pursuant to Section 8.01(d)(ii);<\/p>\n
then, in any such event, the Company shall pay Parent promptly (but in no event
\nlater than one business day after the first of such events shall have occurred)
\na fee of U.S.$1,000,000 (the “Fee”), which amount shall be payable in
\nimmediately available funds, plus all Expenses up to $500,000 in the aggregate.
\nFor purposes of this Section 8.03, the term “Expenses” shall mean all
\nout-of-pocket expenses and fees of each of Parent, Purchaser and their
\nrespective shareholders and affiliates (including, without limitation, fees and
\nexpenses payable to all banks, investment banking firms, other financial
\ninstitutions and other persons and their respective agents and counsel for
\narranging, committing to provide or providing any financing for the Transactions
\nor structuring the Transactions and all fees of counsel, accountants, experts
\nand consultants to Parent and Purchaser, and all printing and advertising
\nexpenses and all costs and expenses incurred by or on behalf of Parent and
\nPurchaser in connection with the collection under and enforcement of this
\nSection 8.03) actually incurred or accrued by any of them or on their behalf in
\nconnection with the Transactions, including, without limitation, the financing
\nthereof, and actually incurred or accrued by banks, investment banking firms,
\nother financial institutions and other persons and assumed by Parent and
\nPurchaser in connection with the negotiation, preparation, execution and
\nperformance of this Agreement, the structuring and financing of the Transactions
\nand any financing commitments or agreements relating thereto.<\/p>\n
(b) Except as set forth in this Section 8.03, all costs and expenses
\nincurred in connection with this Agreement and the Transactions shall be paid by
\nthe party incurring such expenses, whether or not any Transaction is
\nconsummated.<\/p>\n
SECTION 8.04. Amendment. Subject to Section 6.03(c), this Agreement
\nmay be amended by the parties hereto by action taken by or on behalf of their
\nrespective Boards of Directors at any time prior to the Effective Time;
\nprovided, however, that, after the approval and adoption of this Agreement and
\nthe transactions contemplated hereby by the stockholders of the Company, no
\namendment may be made which would reduce the amount or change the type of
\nconsideration into which each Share shall be converted upon consummation of the
\nMerger. This Agreement may not be amended except by an instrument in writing
\nsigned by the parties hereto.<\/p>\n
SECTION 8.05. Extension; Waiver. At any time prior to the Effective
\nTime, any party hereto may (i) extend the time for the performance of any
\nobligation or other act of any other party hereto, (ii) waive any inaccuracy in
\nthe representations and warranties contained herein or in any document delivered
\npursuant hereto and (iii) waive compliance with any agreement or condition
\ncontained herein. Any such extension or waiver shall be valid only if set forth
\nin an instrument in writing signed by the party or parties to be bound thereby.<\/p>\n
ARTICLE IX<\/p>\n
GENERAL PROVISIONS
\n 30
\n SECTION 9.01. Non-Survival of Representations, Warranties and
\nAgreements. The representations, warranties and agreements in this Agreement
\nshall terminate at the Effective Time or upon the termination of this Agreement
\npursuant to Section 8.01, as the case may be, except that the agreements set
\nforth in Articles II and Sections 6.06 and 6.07 shall survive the Effective Time
\nindefinitely and those set forth in Sections 6.04(b) and 8.03 shall survive
\ntermination indefinitely. This Section 9.01 shall not limit any covenant or
\nagreement of the parties which by its terms contemplates performance after the
\nEffective Time of the Merger.<\/p>\n
SECTION 9.02. Notices. All notices, requests, claims, demands and
\nother communications hereunder shall be in writing and shall be given (and shall
\nbe deemed to have been duly given upon receipt) by delivery in person, by
\ntelecopy or by registered or certified mail (postage prepaid, return receipt
\nrequested) to the respective parties at the following addresses (or at such
\nother address for a party as shall be specified in a notice given in accordance
\nwith this Section 9.02):<\/p>\n
if to Parent or Purchaser:<\/p>\n
Thomson U.S. Holdings Inc.
\n c\/o The Thomson Corporation
\n Metro Center at One Station Place
\n Stamford, Connecticut 06902
\n Telecopier No. : (203) 348-5718
\n Attention: General Counsel<\/p>\n
with a copy (which shall not by itself constitute notice) to:<\/p>\n
Research Institute of America
\n 90 Fifth Avenue
\n New York, New York 10011
\n Telecopier No.: (212) 337-4197
\n Attention: Euan C. Menzies<\/p>\n
and a copy to:<\/p>\n
Shearman & Sterling
\n 599 Lexington Avenue
\n New York, New York 10022
\n Telecopier No.: (212) 848-7179
\n Attention: David W. Heleniak, Esq.<\/p>\n
if to the Company:<\/p>\n
SCS\/Compute, Inc.
\n 2252 Welsch Industrial Court
\n St. Louis, Missouri 63146
\n Telecopier No.: (314) 432-7308
\n Attention: Chief Executive Officer<\/p>\n
with a copy (which shall not by itself constitute notice) to:<\/p>\n
Peper, Martin, Jensen, Maichel and Hetlage
\n 720 Olive Street, 24th floor
\n St. Louis, Missouri 63101
\n Telecopier No: (314) 621-4834
\n Attention: John R. Short, Esq.<\/p>\n
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
\nthe term:
\n 31
\n (a) “affiliate” of a specified person means a person who directly
\n or indirectly through one or more intermediaries controls, is controlled
\n by, or is under common control with, such specified person;<\/p>\n
(b) “beneficial owner” with respect to any Shares means a person
\n who shall be deemed to be the beneficial owner of such Shares (i) which
\n such person or any of its affiliates or associates (as such term is defined
\n in Rule 12b-2 promulgated under the Exchange Act) beneficially owns,
\n directly or indirectly, (ii) which such person or any of its affiliates or
\n associates has, directly or indirectly, (A) the right to acquire (whether
\n such right is exercisable immediately or subject only to the passage of
\n time), pursuant to any agreement, arrangement or understanding or upon the
\n exercise of conversion rights, exchange rights, warrants or options, or
\n otherwise, or (B) the right to vote pursuant to any agreement, arrangement
\n or understanding or (iii) which are beneficially owned, directly or
\n indirectly, by any other persons with whom such person or any of its
\n affiliates or associates or person with whom such person or any of its
\n affiliates or associates has any agreement, arrangement or understanding
\n for the purpose of acquiring, holding, voting or disposing of any Shares;<\/p>\n
(c) “business day” means any day on which the principal offices
\n of the SEC in Washington, D.C. are open to accept filings, or, in the case
\n of determining a date when any payment is due, any day on which banks are
\n not required or authorized to close in the City of New York;<\/p>\n
(d) “control” (including the terms “controlled by” and “under
\n common control with”) means the possession, directly or indirectly or as
\n trustee or executor, of the power to direct or cause the direction of the
\n management and policies of a person, whether through the ownership of
\n voting securities, as trustee or executor, by contract or credit
\n arrangement or otherwise;<\/p>\n
(e) “person” means an individual, corporation, partnership,
\n limited partnership, limited liability company, syndicate, person
\n (including, without limitation, a “person” as defined in Section 13(d)(3)
\n of the Exchange Act), trust, association or entity or government, political
\n subdivision, agency or instrumentality of a government; and<\/p>\n
(f) “subsidiary” or “subsidiaries” of the Company, the Surviving
\n Corporation, Parent or any other person means an affiliate controlled by
\n such person, directly or indirectly, through one or more intermediaries.<\/p>\n
SECTION 9.04. Severability. If any term or other provision of this
\nAgreement is invalid, illegal or incapable of being enforced by any rule of law,
\nor public policy, all other conditions and provisions of this Agreement shall
\nnevertheless remain in full force and effect so long as the economic or legal
\nsubstance of the Transactions is not affected in any manner materially adverse
\nto any party. Upon such determination that any term or other provision is
\ninvalid, illegal or incapable of being enforced, the parties hereto shall
\nnegotiate in good faith to modify this Agreement so as to effect the original
\nintent of the parties as closely as possible in a mutually acceptable manner in
\norder that the Transactions be consummated as originally contemplated to the
\nfullest extent possible.<\/p>\n
SECTION 9.05. Entire Agreement; Assignment. Except as set forth in
\nSections 6.04 and 6.11, this Agreement constitutes the entire agreement among
\nthe parties with respect to the subject matter hereof and supersedes all prior
\nagreements and undertakings, both written and oral, among the parties, or any of
\nthem, with respect to the subject matter hereof. This Agreement shall not be
\nassigned by operation of law or otherwise, except that Parent and Purchaser may
\nassign all or any of their rights and obligations hereunder to any affiliate of
\nParent provided that no such assignment shall relieve the assigning party of its
\nobligations hereunder if such assignee does not perform such obligations.
\n 32
\n SECTION 9.06. Parties in Interest. This Agreement shall be binding
\nupon and inure solely to the benefit of the parties hereto and their respective
\nsuccessors and assigns, and nothing in this Agreement, express or implied, is
\nintended to or shall confer upon any other person any right, benefit or remedy
\nof any nature whatsoever under or by reason of this Agreement, other than
\nSection 6.07 (which is intended to be for the benefit of the persons covered
\nthereby and may be enforced by such persons).<\/p>\n
SECTION 9.07. Specific Performance. The parties hereto agree that
\nirreparable damage would occur in the event any provision of this Agreement was
\nnot performed in accordance with the terms hereof and that the parties shall be
\nentitled to specific performance of the terms hereof, in addition to any other
\nremedy at law or in equity.<\/p>\n
SECTION 9.08. Governing Law. Except to the extent that Delaware Law
\napplies to the Transactions, this Agreement shall be governed by, and construed
\nin accordance with, the laws of the State of New York applicable to contracts
\nexecuted in and to be performed entirely within that State.<\/p>\n
SECTION 9.09. Headings. The descriptive headings contained in this
\nAgreement are included for convenience of reference only and shall not affect in
\nany way the meaning or interpretation of this Agreement.<\/p>\n
SECTION 9.10. Counterparts. This Agreement may be executed in one or
\nmore counterparts, and by the different parties hereto in separate counterparts,
\neach of which when executed shall be deemed to be an original but all of which
\ntaken together shall constitute one and the same agreement.<\/p>\n
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
\nAgreement to be executed as of the date first written above by their respective
\nofficers thereunto duly authorized.<\/p>\n
THOMSON U.S. HOLDINGS INC.<\/p>\n
By \/s\/ Nigel R. Harrison
\n Name: Nigel R. Harrison
\n Title: Executive Vice President<\/p>\n
SCS SUBSIDIARY, INC.<\/p>\n
By \/s\/ Nigel R. Harrison
\n Name: Nigel R. Harrison
\n Title: Treasurer<\/p>\n
SCS\/COMPUTE, INC.<\/p>\n
By \/s\/ Robert W. Nolan, Sr.
\n Name: Robert W. Nolan, Sr.
\n Title: President
\n 33
\n ANNEX A<\/p>\n
Conditions to the Offer<\/p>\n
Notwithstanding any other provision of the Offer, Purchaser shall not
\nbe required to accept for payment or pay for any Shares tendered pursuant to the
\nOffer, and may terminate or amend the Offer and may postpone the acceptance for
\npayment of and payment for Shares tendered, if (i) the Minimum Condition shall
\nnot have been satisfied, (ii) any applicable waiting period under the HSR Act
\nshall not have expired or been terminated prior to the expiration of the Offer,
\nor (iii) at any time on or after the date of this Agreement, and prior to the
\nacceptance for payment of Shares, any of the following conditions shall exist:<\/p>\n
(a) there shall have been instituted or be pending any action or
\n proceeding before any court or governmental, administrative or regulatory
\n authority or agency, domestic or foreign, (i) challenging or seeking to
\n make illegal, materially delay or otherwise directly or indirectly restrain
\n or prohibit or make materially more costly the making of the Offer, the
\n acceptance for payment of, or payment for, any Shares by Parent, Purchaser
\n or any other affiliate of Parent or the consummation of any other
\n Transaction, or seeking to obtain material damages in connection with any
\n Transaction; (ii) seeking to prohibit or limit materially the ownership or
\n operation by the Company, Parent or any of its subsidiaries of all or any
\n material portion of the business or assets of the Company, Parent or any of
\n its subsidiaries, or to compel the Company, Parent or any of its
\n subsidiaries to dispose of or hold separate all or any material portion of
\n the business or assets of the Company, Parent or any of its subsidiaries,
\n as a result of the Transactions; (iii) seeking to impose limitations on the
\n ability of Parent, Purchaser or any other affiliate of Parent to exercise
\n effectively full rights of ownership of any Shares, including, without
\n limitation, the right to vote any Shares acquired by Purchaser pursuant to
\n the Offer, the Stock Purchase Agreement or otherwise on all matters
\n properly presented to the Company’s stockholders, including, without
\n limitation, the approval and adoption of this Agreement and the
\n transactions contemplated hereby; (iv) seeking to require divestiture by
\n Parent, Purchaser or any other affiliate of Parent of any Shares; or (v)
\n which otherwise has a Material Adverse Effect or which is reasonably likely
\n to materially adversely affect the business, operations, properties,
\n condition (financial or otherwise), assets or liabilities (including,
\n without limitation, contingent liabilities) or prospects of Parent.<\/p>\n
(b) there shall have been any action taken, or any statute, rule,
\n regulation, legislation, interpretation, judgment, order or injunction
\n enacted, entered, enforced, promulgated, amended, issued or deemed
\n applicable to (i) Parent, the Company or any subsidiary or affiliate of
\n Parent or the Company or (ii) any Transaction, by any legislative body,
\n court, government or governmental, administrative or regulatory authority
\n or agency, domestic or foreign, other than the routine application of the
\n waiting period provisions of the HSR Act to the Offer, the Stock Purchase
\n Agreement or the Merger, which is reasonably likely to result, directly or
\n indirectly, in any of the consequences referred to in clauses (i) through
\n (v) of paragraph (a) above;<\/p>\n
(c) there shall have occurred any change, condition, event or
\n development that, when taken together with all such other changes,
\n conditions, events and developments, has a Material Adverse Effect with
\n respect to the Company;<\/p>\n
(d) (i) it shall have been publicly disclosed or Purchaser shall
\n have otherwise learned that beneficial ownership (determined for the
\n purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
\n Exchange Act) of 25% or more of the then outstanding Shares has been
\n acquired by any person, other than
\n 34
\n Parent or any of its affiliates or Mr. Robert W. Nolan, Sr. or (ii) (A) the
\n Board or any committee thereof shall have withdrawn or modified in a manner
\n adverse to Parent or Purchaser the approval or recommendation of the Offer,
\n the Merger, this Agreement, or approved or recommended any takeover
\n proposal or any other acquisition of Shares other than the Offer and the
\n Merger or (B) the Board or any committee thereof shall have resolved to do
\n any of the foregoing;<\/p>\n
(e) any representation or warranty of the Company in this
\n Agreement which is qualified as to materiality shall not be true and
\n correct or any such representation or warranty that is not so qualified
\n shall not be true and correct in any material respect, in each case as if
\n such representation or warranty was made as of such time on or after the
\n date of this Agreement;<\/p>\n
(f) the Company shall have failed to perform in any material
\n respect any obligation or to comply in any material respect with any
\n agreement or covenant of the Company to be performed or complied with by it
\n under this Agreement;<\/p>\n
(g) this Agreement shall have been terminated in accordance with
\n its terms; or<\/p>\n
(h) Purchaser and the Company shall have agreed that Purchaser
\n shall terminate the Offer or postpone the acceptance for payment of or
\n payment for Shares thereunder;<\/p>\n
which, in the reasonable judgment of Purchaser in any such case, and regardless
\nof the circumstances (including any action or inaction by Parent or any of its
\naffiliates) giving rise to any such condition, makes it inadvisable to proceed
\nwith such acceptance for payment or payment.<\/p>\n
The foregoing conditions are for the sole benefit of Purchaser and
\nParent and may be asserted by Purchaser or Parent regardless of the
\ncircumstances giving rise to any such condition or may be waived by Purchaser or
\nParent in whole or in part at any time and from time to time in their sole
\ndiscretion. The failure by Parent or Purchaser at any time to exercise any of
\nthe foregoing rights shall not be deemed a waiver of any such right; the waiver
\nof any such right with respect to particular facts and other circumstances shall
\nnot be deemed a waiver with respect to any other facts and circumstances; and
\neach such right shall be deemed an ongoing right that may be asserted at any
\ntime and from time to time.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9052],"corporate_contracts_industries":[9468],"corporate_contracts_types":[9622,9626],"class_list":["post-43129","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-thomson-corp","corporate_contracts_industries-media__other","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\/43129","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=43129"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43129"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43129"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43129"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}