\n4.1(a) Exceptions to Company Conduct<\/p>\n4.1(b) Exceptions to Parent Conduct<\/p>\n
6.3(j) Company Required Consents<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
v<\/p>\n
AGREEMENT AND PLAN OF REORGANIZATION<\/p>\n
This AGREEMENT AND PLAN OF REORGANIZATION (this “AGREEMENT”) is made and
\nentered into as of February 24, 1998 among Healtheon Corporation, a Delaware
\ncorporation (“PARENT”), MedNet Acquisition Corp., a Georgia corporation and a
\nwholly-owned subsidiary of Parent (“MERGER SUB”), and ActaMed Corporation, a
\nGeorgia corporation (the “COMPANY”). <\/p>\n
RECITALS<\/p>\n
A. The Boards of Directors of each of the Company, Parent and Merger
\nSub believe it is in the best interests of each Company and their respective
\nshareholders that Parent acquire the Company through the statutory merger of
\nMerger Sub with and into the Company (the “MERGER”) and, in furtherance
\nthereof, have approved the Merger.<\/p>\n
B. Pursuant to the Merger, among other things, and subject to the
\nterms and conditions of this Agreement, all of the issued and outstanding
\nshares of capital stock of the Company (“COMPANY CAPITAL STOCK”) and all
\noutstanding options, warrants or other rights to acquire or receive shares of
\nCompany Capital Stock shall be converted into the right to receive shares of
\nvoting Common Stock of Parent (“PARENT COMMON STOCK”).<\/p>\n
C. It is the intention of the parties to this Agreement that the
\nMerger for federal income tax purposes shall qualify as a “reorganization”
\nwithin the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
\namended (the “CODE”), and for accounting purposes shall qualify for treatment
\nas a pooling of interests.<\/p>\n
D. The Company, Parent and Merger Sub desire to make certain
\nrepresentations and warranties and other agreements in connection with the
\nMerger.<\/p>\n
NOW, THEREFORE, in consideration of the covenants, promises and
\nrepresentations set forth herein, and for other good and valuable
\nconsideration, intending to be legally bound hereby the parties agree as
\nfollows:<\/p>\n
ARTICLE I<\/p>\n
THE MERGER<\/p>\n
1.1 THE MERGER. At the Effective Time (as defined in Section 1.2) and
\nsubject to and upon the terms and conditions of this Agreement and the
\napplicable provisions of the Delaware General Corporation Law (“DELAWARE
\nLAW”) and Georgia Business Corporation Code (“GEORGIA LAW”), Merger Sub shall
\nbe merged with and into the Company, the separate corporate existence of
\nMerger Sub shall cease, and the Company shall continue as the surviving
\ncorporation and as a wholly-owned subsidiary of Parent. The Company as the
\nsurviving corporation after the Merger is hereinafter sometimes referred to
\nas the “SURVIVING CORPORATION.” The Merger shall be consummated<\/p>\n
pursuant to the terms of this Agreement, which has been approved and adopted
\nby the respective Boards of Directors of the Company, Merger Sub and Parent,
\nand by Parent, as the sole shareholder of Merger Sub.<\/p>\n
1.2 EFFECTIVE TIME. Unless this Agreement is earlier terminated
\npursuant to Section 8.1, the closing of the Merger (the “CLOSING”) will take
\nplace as promptly as practicable, but no later than five (5) business days,
\nfollowing satisfaction or waiver of the conditions set forth in Article VI,
\nat the offices of Wilson Sonsini Goodrich & Rosati (“WSGR”), 650 Page Mill
\nRoad, Palo Alto, California, unless another place or time is agreed to by
\nParent and the Company. The date upon which the Closing actually occurs is
\nherein referred to as the “CLOSING DATE.” On the Closing Date, the parties
\nhereto shall cause the Merger to be consummated by filing the Articles of
\nMerger (or like instrument) with the Secretary of State of the State of
\nGeorgia (the “CERTIFICATE OF MERGER”), in accordance with the relevant
\nprovisions of applicable law (the time of acceptance by the Secretary of
\nState of Georgia of such filing being referred to herein as the “EFFECTIVE
\nTIME”). The parties currently intend that the Closing Date will occur on or
\nprior to May 15, 1998.<\/p>\n
1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the
\nMerger shall be as provided in the applicable provisions of Georgia Law.
\nWithout limiting the generality of the foregoing, and subject thereto, at the
\nEffective Time, all the property, rights, privileges, powers and franchises
\nof the Company and Merger Sub shall vest in the Surviving Corporation, and
\nall debts, liabilities and duties of the Company and Merger Sub shall become
\nthe debts, liabilities and duties of the Surviving Corporation.<\/p>\n
1.4 ARTICLES OF INCORPORATION; BYLAWS.<\/p>\n
(a) Unless otherwise determined by Parent prior to the Effective
\nTime, at the Effective Time, the Articles of Incorporation of Merger Sub
\nshall be the Articles of Incorporation of the Surviving Corporation until
\nthereafter amended as provided by law and such Articles of Incorporation;
\nprovided, however, that Article I of the Articles of Incorporation of the
\nSurviving Corporation shall be amended to read as follows: “The name of the
\ncorporation is ActaMed Corporation.”<\/p>\n
(b) Unless otherwise determined by Parent, the Bylaws of the
\nMerger Sub, as in effect immediately prior to the Effective Time, shall be
\nthe Bylaws of the Surviving Corporation until thereafter amended.<\/p>\n
1.5 DIRECTORS AND OFFICERS. As promptly as practicable following the
\nEffective Time, unless otherwise unanimously agreed to by Parent’s Board of
\nDirectors, the board of directors of Merger Sub shall be comprised of an
\nequal number of representatives from each of the Company and of Parent, each
\nto hold office in accordance with the Articles of Incorporation and Bylaws of
\nthe Surviving Corporation. The officers of Merger Sub immediately prior to
\nthe Effective Time shall be the initial officers of the Surviving
\nCorporation, each to hold office in accordance with the Bylaws of the
\nSurviving Corporation.<\/p>\n
2<\/p>\n
1.6 MAXIMUM SHARES TO BE ISSUED; EFFECT ON CAPITAL STOCK. The maximum
\nnumber of shares of Parent Common Stock to be issued (including Parent Common
\nStock to be reserved for issuance upon exercise of any of the Company’s stock
\noptions or other securities convertible into, exchangeable for or exercisable
\nfor Company Capital Stock to be assumed by Parent) in exchange for the
\nacquisition by Parent of all outstanding Company Capital Stock and all
\nunexpired and unexercised options, warrants or other rights to acquire
\nCompany Capital Stock shall be the Aggregate Share Number (as defined in
\nSection 1.6(g)(iii)). No adjustment shall be made in the number of shares of
\nParent Common Stock issued in the Merger as a result of any cash proceeds
\nreceived by the Company from the date hereof to the Effective Time pursuant
\nto the exercise of options, warrants or other rights to acquire Company
\nCapital Stock. Subject to the terms and conditions of this Agreement, as of
\nthe Effective Time, by virtue of the Merger and without any action on the
\npart of Merger Sub, the Company or the holder of any shares of the Company
\nCapital Stock, the following shall occur:<\/p>\n
(a) CONVERSION OF COMPANY COMMON STOCK. Each share of Company
\nCapital Stock (including any shares of Common Stock of the Company (“COMPANY
\nCOMMON STOCK”) issued upon conversion of Preferred Stock of the Company
\n(“COMPANY PREFERRED STOCK”) and upon exercise, conversion or exchange of all
\nother outstanding securities immediately prior to the Closing) issued and
\noutstanding immediately prior to the Effective Time (other than any shares of
\nCompany Capital Stock to be canceled pursuant to Section 1.6(b) and any
\nDissenting Shares (as defined and to the extent provided in Section 1.7(a))
\nwill be canceled and extinguished and be converted automatically into the
\nright to receive that number of shares of Parent Common Stock equal to the
\nExchange Ratio (as defined in Section 1.6(g)(iv) below), upon surrender of
\nthe certificate representing such share of Company Common Stock in the manner
\nprovided in Section 1.8.<\/p>\n
(b) CANCELLATION OF PARENT-OWNED AND COMPANY-OWNED STOCK. Each
\nshare of Company Capital Stock owned by Merger Sub, Parent, the Company or
\nany direct or indirect wholly-owned subsidiary of Parent or the Company
\nimmediately prior to the Effective Time shall be canceled and extinguished
\nwithout any conversion thereof.<\/p>\n
(c) STOCK OPTIONS. At the Effective Time, all options to purchase
\nCompany Common Stock then outstanding under the Company’s Option Plans or
\notherwise shall be assumed by Parent in accordance with provisions described
\nbelow. “Option Plans” means collectively the Company’s 1997 Stock Option
\nPlan, 1996 Stock Option Plan, 1996 Directors Stock Option Plan, 1995 Stock
\nOption Plan, 1994 Stock Option Plan, 1993 Stock Option Plan and 1992 Stock
\nOption Plan.<\/p>\n
(i) At the Effective Time, each outstanding option and
\nwarrant to purchase shares of Company Common Stock (each a “COMPANY OPTION”)
\nunder the Option Plans or otherwise, whether vested or unvested, shall be, in
\nconnection with the Merger, assumed by Parent. Each Company Option so
\nassumed by Parent under this Agreement shall continue to have, and be subject
\nto, the same terms and conditions set forth in the Option Plans and\/or as
\nprovided in the<\/p>\n
3<\/p>\n
respective option agreements governing such Company Option immediately prior
\nto the Effective Time, except that (A) such Company Option shall be
\nexercisable for that number of whole shares of Parent Common Stock equal to
\nthe product of the number of shares of Company Common Stock that were
\nissuable upon exercise of such Company Option immediately prior to the
\nEffective Time multiplied by the Exchange Ratio, rounded down (in the case of
\nCompany Options granted under the Option Plan) to the nearest whole number of
\nshares of Parent Common Stock, (B) the per share exercise price for the
\nshares of Parent Common Stock issuable upon exercise of such assumed Company
\nOption shall be equal to the quotient determined by dividing the exercise
\nprice per share of Company Common Stock at which such Company Option was
\nexercisable immediately prior to the Effective Time by the Exchange Ratio,
\nrounded up to the nearest whole cent, and (C) Parent and its Board of
\nDirectors shall be substituted for the Company and the Committee of the
\nCompany’s Board of Directors (including, if applicable, the entire Board of
\nDirectors of the Company) administering such Company Stock Plan.<\/p>\n
(ii) Promptly following the Effective Time, Parent will issue
\nto each holder of an outstanding Company Option a document evidencing the
\nforegoing assumption of such Company Option by Parent. At or prior to the
\nEffective Time, Parent shall take all corporate action necessary to reserve
\nfor issuance sufficient shares of Parent Common Stock for delivery upon
\nexercise of Company Options assumed by it in accordance with this Section 1.6.<\/p>\n
(d) CAPITAL STOCK OF MERGER SUB. Each share of Common Stock of
\nMerger Sub issued and outstanding immediately prior to the Effective Time
\nshall be converted into and exchanged for one validly issued, fully paid and
\nnonassessable share of Common Stock of the Surviving Corporation. Each stock
\ncertificate of Merger Sub evidencing ownership of any such shares shall
\ncontinue to evidence ownership of such shares of capital stock of the
\nSurviving Corporation.<\/p>\n
(e) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be
\nequitably adjusted to reflect fully the effect of any stock split, reverse
\nsplit, stock dividend (including any dividend or distribution of securities
\nconvertible into Parent Common Stock or Company Capital Stock),
\nreorganization, recapitalization or other like change with respect to Parent
\nCommon Stock or Company Capital Stock occurring after the date hereof and
\nprior to the Effective Time. Any such change for which a record date is
\nestablished shall be deemed for the purposes of this Section 1.6(e) to have
\noccurred on the record date.<\/p>\n
(f) FRACTIONAL SHARES. No fraction of a share of Parent Common
\nStock will be issued.<\/p>\n
(g) DEFINITIONS.<\/p>\n
(i) COMPANY FULLY DILUTED CAPITALIZATION NUMBER. The
\n“Company Fully-Diluted Capitalization Number” shall mean all of the issued
\nand outstanding shares of the Company Common Stock as of the Effective Time
\ncalculated on a fully-diluted basis as if all outstanding convertible
\nsecurities had been fully converted and all outstanding warrants, options and
\nother rights<\/p>\n
4<\/p>\n
for the purchase of shares of Company Common Stock or convertible securities
\nhad been fully exercised immediately prior to such issuance (and the
\nresulting securities fully converted into Company Common Stock, if so
\nconvertible) as of such date.<\/p>\n
(ii) PARENT FULLY-DILUTED CAPITALIZATION NUMBER. The “Parent
\nFully-Diluted Capitalization Number” shall mean all of the issued and
\noutstanding shares of Parent Common Stock as of the Effective Time calculated
\non a fully-diluted basis as if all outstanding convertible securities had
\nbeen fully converted and all outstanding warrants, options and other rights
\nfor the purchase of shares of Parent Common Stock or convertible securities
\nhad been fully exercised immediately prior to such issuance (and the
\nresulting securities fully converted into Parent Common Stock, if so
\nconvertible) as of such date.<\/p>\n
(iii) AGGREGATE SHARE NUMBER. The “Aggregate Share Number”
\nshall mean the number of shares of Parent Common Stock equal to (a) the
\nParent Fully Diluted Capitalization Number multiplied by (b) 44.68 divided by
\n(c) 55.32.<\/p>\n
(iv) EXCHANGE RATIO. The “Exchange Ratio” shall mean the
\nquotient obtained by dividing (x) the Aggregate Share Number by (y) the
\nCompany Fully Diluted Capitalization Number.<\/p>\n
1.7 DISSENTING SHARES.<\/p>\n
(a) Notwithstanding any provision of this Agreement to the
\ncontrary, any shares of Company Capital Stock held by a holder who has
\ndemanded and perfected dissenters’ rights for such shares in accordance with
\nGeorgia Law and who, as of the Effective Time, has not effectively withdrawn
\nor lost such dissenters’ rights (“DISSENTING SHARES”) shall not be converted
\ninto or represent a right to receive Parent Common Stock pursuant to Section
\n1.6, but the holder thereof shall only be entitled to receive payment in cash
\nfor the fair value of such holder’s shares as determined pursuant to the
\napplicable provisions of Georgia Law; provided, that no such payment shall be
\nmade to any dissenting shareholder unless and until such dissenting
\nshareholder has complied with the applicable provisions of Georgia Law and
\nsurrendered to the Company the certificate or certificates representing the
\nDissenting Shares.<\/p>\n
(b) Notwithstanding the provisions of subsection (a), if any
\nholder of shares of Company Capital Stock who demands appraisal of such
\nshares under Georgia Law shall effectively withdraw or lose (through failure
\nto perfect or otherwise) the right to appraisal, then, as of the later of the
\nEffective Time and the occurrence of such event, such holder’s shares shall
\nautomatically be converted into and represent only the right to receive
\nParent Common Stock as provided in Section 1.6, without interest thereon,
\nupon surrender of the certificate representing such shares.<\/p>\n
(c) The Company shall give Parent (i) prompt notice of any written
\nnotice by any shareholder of intent to demand payment for such shareholder’s
\nshares of Company Capital Stock,<\/p>\n
5<\/p>\n
withdrawals of such demands, and any other instruments served pursuant to
\nGeorgia Law and received by the Company and (ii) the opportunity to
\nparticipate in all negotiations and proceedings with respect to demands for
\ndissenters’ rights under Georgia Law. The Company shall not, except with the
\nprior written consent of Parent, voluntarily make any payment with respect to
\nany demands for dissenters’ rights or offer to settle or settle any such
\ndemands.<\/p>\n
1.8 SURRENDER OF CERTIFICATES.<\/p>\n
(a) EXCHANGE AGENT. WSGR shall serve as the exchange agent (the
\n“EXCHANGE AGENT”) in the Merger.<\/p>\n
(b) PARENT TO PROVIDE COMMON STOCK. Immediately prior to the
\nEffective Time, Parent shall make available to the Exchange Agent for
\nexchange in accordance with this Article I, certificates representing the
\naggregate number of shares of Parent Common Stock issuable pursuant to
\nSection 1.6 in exchange for outstanding shares of Company Capital Stock. <\/p>\n
(c) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
\nSurviving Corporation shall cause to be mailed to each holder of record of a
\ncertificate or certificates (the “CERTIFICATES”) which immediately prior to
\nthe Effective Time represented outstanding shares of Company Capital Stock
\nand which shares were converted into the right to receive shares of Parent
\nCommon Stock pursuant to Section 1.6, (i) a letter of transmittal (which
\nshall specify that delivery shall be effected, and risk of loss and title to
\nthe Certificates shall pass, only upon delivery of the Certificates to the
\nExchange Agent and shall be in such form and have such other provisions as
\nParent may reasonably specify) and (ii) instructions for use in effecting the
\nsurrender of the Certificates in exchange for certificates representing
\nshares of Parent Common Stock. Upon surrender of a Certificate for
\ncancellation to the Exchange Agent or to such other agent or agents as may be
\nappointed by Parent, together with such letter of transmittal, duly completed
\nand validly executed in accordance with the instructions thereto, the holder
\nof such Certificate shall be entitled to receive in exchange therefor a
\ncertificate representing the number of whole shares of Parent Common Stock,
\nto which such holder is entitled pursuant to Section 1.6, and the Certificate
\nso surrendered shall forthwith be canceled and the holder thereof shall no
\nlonger have any rights with respect to such Certificate. Until so
\nsurrendered, each outstanding Certificate that, prior to the Effective Time,
\nrepresented shares of Company Capital Stock will be deemed from and after the
\nEffective Time, for all corporate purposes, other than the payment of
\ndividends, to evidence the ownership of the number of full shares of Parent
\nCommon Stock into which such shares of Company Capital Stock shall have been
\nso converted.<\/p>\n
(d) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. No
\ndividends or other distributions with respect to Parent Common Stock declared
\nor made after the Effective Time and with a record date after the Effective
\nTime will be paid to the holder of any unsurrendered Certificate with respect
\nto the shares of Parent Common Stock represented thereby until the holder of
\nrecord of such Certificate shall surrender such Certificate. Subject to
\napplicable law, following surrender of any such Certificate, there shall be
\npaid to the record holder of the certificates representing whole<\/p>\n
6<\/p>\n
shares of Parent Common Stock issued in exchange therefor, without interest,
\nat the time of such surrender, the amount of dividends or other distributions
\nwith a record date after the Effective Time theretofore payable with respect
\nto such whole shares of Parent Common Stock.<\/p>\n
(e) TRANSFERS OF OWNERSHIP. If any certificate for shares of
\nParent Common Stock is to be issued in a name other than that in which the
\nCertificate surrendered in exchange therefor is registered, it will be a
\ncondition of the issuance thereof that the Certificate so surrendered will be
\nproperly endorsed and otherwise in proper form for transfer and that the
\nperson requesting such exchange will have paid to Parent or any agent
\ndesignated by it any transfer or other taxes required by reason of the
\nissuance of a certificate for shares of Parent Common Stock in any name other
\nthan that of the registered holder of the Certificate surrendered, or
\nestablished to the satisfaction of Parent or any agent designated by it that
\nsuch tax has been paid or is not payable.<\/p>\n
(f) NO LIABILITY. Notwithstanding anything to the contrary in
\nthis Section 1.8, none of the Exchange Agent, the Surviving Corporation or
\nany party hereto shall be liable to a holder of shares of Parent Common Stock
\nor Company Capital Stock for any amount properly paid to a public official
\npursuant to any applicable abandoned property, escheat or similar law.<\/p>\n
1.9 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. All shares of
\nParent Common Stock issued upon the surrender for exchange of shares of
\nCompany Capital Stock in accordance with the terms hereof (including any cash
\npaid in respect thereof) shall be deemed to have been issued in full
\nsatisfaction of all rights pertaining to such shares of Company Capital
\nStock, and there shall be no further registration of transfers on the records
\nof the Surviving Corporation of shares of Company Capital Stock which were
\noutstanding immediately prior to the Effective Time. If, after the Effective
\nTime, Certificates are presented to the Surviving Corporation for any reason,
\nthey shall be canceled and exchanged as provided in this Article I.<\/p>\n
1.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
\nCertificates evidencing shares of Company Capital Stock shall have been lost,
\nstolen or destroyed, the Exchange Agent shall issue in exchange for such
\nlost, stolen or destroyed Certificates, upon the making of an affidavit of
\nthat fact by the holder thereof, such shares of Parent Common Stock as may be
\nrequired pursuant to Section 1.6; provided, however, that Parent may, in its
\ndiscretion and as a condition precedent to the issuance thereof, require the
\nowner of such lost, stolen or destroyed Certificates to deliver a bond in
\nsuch sum as it may reasonably direct as indemnity against any claim that may
\nbe made against Parent or the Exchange Agent with respect to the Certificates
\nalleged to have been lost, stolen or destroyed.<\/p>\n
1.11 TAX AND ACCOUNTING CONSEQUENCES. It is intended by the parties
\nhereto that the Merger shall (i) constitute a reorganization within the
\nmeaning of Section 368 of the Code and (ii) qualify for accounting treatment
\nas a pooling of interests.<\/p>\n
1.12 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after
\nthe Effective Time, any such further action is necessary or desirable to
\ncarry out the purposes of this Agreement and to<\/p>\n
7<\/p>\n
vest the Surviving Corporation with full right, title and possession to all
\nassets, property, rights, privileges, powers and franchises of the Company
\nand Merger Sub, the officers and directors of the Company and Merger Sub are
\nfully authorized in the name of their respective corporations or otherwise to
\ntake, and will take, all such lawful and necessary action.<\/p>\n
ARTICLE II<\/p>\n
REPRESENTATIONS AND WARRANTIES OF THE COMPANY<\/p>\n
The Company hereby represents and warrants to Parent and Merger Sub,
\nsubject to such exceptions as are specifically disclosed in the disclosure
\nschedules (referencing the appropriate section number or subsection, as the
\ncase may be) supplied by the Company to Parent attached hereto as EXHIBIT A
\n(the “COMPANY SCHEDULES”) and dated as of the date hereof, as follows:<\/p>\n
2.1 ORGANIZATION OF THE COMPANY. The Company is a corporation duly
\norganized, validly existing and in good standing under the laws of the State
\nof Georgia. The Company has the corporate power to own its properties and to
\ncarry on its business as now being conducted. The Company is duly qualified
\nto do business and in good standing as a foreign corporation in each
\njurisdiction in which the failure to be so qualified would have a material
\nadverse effect on the business, assets (including intangible assets),
\nfinancial condition or results of operations of the Company (hereinafter
\nreferred to as a “COMPANY MATERIAL ADVERSE EFFECT”). The Company has
\ndelivered a true and correct copy of its Articles of Incorporation and
\nBylaws, each as amended to date, to Parent.<\/p>\n
2.2 COMPANY CAPITAL STRUCTURE.<\/p>\n
(a) The authorized capital stock of the Company consists of
\n50,000,000 shares of authorized Common Stock, of which 9,384,200 shares are
\nissued and outstanding; 8,800,880 shares of authorized Series A Preferred
\nStock, all of which are issued and outstanding; 3,448,276 shares of
\nauthorized Series B Preferred Stock, all of which are issued and outstanding;
\n10,344,828 shares of authorized Series C Preferred Stock, all of which are
\nissued and outstanding; and 7,043,478 shares of authorized Series D Preferred
\nStock, of which 3,695,652 are issued and outstanding and the balance of which
\nmay be issued pursuant to the Asset Purchase Agreement between the Company
\nand SmithKline Beecham Clinical Laboratories, Inc. (“SBCL”) dated as of
\nDecember 31, 1997 (the “SBCL ASSETS PURCHASE AGREEMENT”). The Company
\nCapital Stock is held of record by the persons, with the addresses of record
\nand in the amounts set forth on Schedule 2.2(a). All outstanding shares of
\nCompany Capital Stock are duly authorized, validly issued, fully paid and
\nnon-assessable and not subject to preemptive rights created by statute, the
\nArticles of Incorporation or Bylaws of the Company or any agreement to which
\nthe Company is a party or by which it is bound.<\/p>\n
(b) The Company has reserved 6,061,238 shares of Common Stock for
\nissuance to directors, employees and consultants pursuant to the Option
\nPlans, of which 5,173,615 shares are<\/p>\n
8<\/p>\n
subject to outstanding, unexercised options and 887,623 shares remain
\navailable for future grant. The Company has reserved 30,087,912 shares of
\nCommon Stock for issuance upon the conversion, exercise or exchange of any
\noutstanding securities and 450,450 shares subject to a warrant issued to IBM
\n(each referred to herein as a “COMPANY CONVERTIBLE SECURITY”). All of the
\nCompany Convertible Securities and Company Options have been duly authorized
\nand validly issued, as applicable, in accordance with the applicable terms of
\nthe Option Plans and Blue Sky laws. Schedule 2.2(b) sets forth for each
\noutstanding Company Option or Company Convertible Security the name of the
\nholder of such option or Company Convertible Security, the domicile address
\nof such holder, the number of shares of Common Stock subject to such option
\nor Company Convertible Security, the exercise price of such option or Company
\nConvertible Security and the vesting schedule for such option or Company
\nConvertible Security, including the extent vested to date and whether the
\nexercisability of such option or Company Convertible Security will be
\naccelerated and become exercisable by reason of the transactions contemplated
\nby this Agreement. Except for the Company Options and Company Convertible
\nSecurities described in Schedule 2.2(b), there are no options, warrants,
\ncalls, rights, commitments or agreements of any character, written or oral,
\nto which the Company is a party or by which it is bound obligating the
\nCompany to issue, deliver, sell, repurchase or redeem, or cause to be issued,
\ndelivered, sold, repurchased or redeemed, any shares of the capital stock of
\nthe Company or obligating the Company to grant, extend, accelerate the
\nvesting of, change the price of, otherwise amend or enter into any such
\noption, warrant, call, right, commitment or agreement. The holders of
\nCompany Options and Company Convertible Securities have been or will be
\ngiven, or shall have properly waived, any required notice prior to the
\nMerger, and all such rights will be terminated at or prior to the Effective
\nTime. As a result of the Merger, Parent will be the record and sole
\nbeneficial owner of all capital stock of the Company and rights to acquire or
\nreceive such capital stock.<\/p>\n
2.3 SUBSIDIARIES. The Company does not have and has never had any
\nsubsidiaries and does not otherwise own and has never otherwise owned any
\nshares of capital stock or any interest in, or control, directly or
\nindirectly, any other corporation, partnership, limited liability company,
\nassociation, joint venture or other business entity.<\/p>\n
2.4 AUTHORITY. Subject only to the requisite approval of the Merger
\nand this Agreement by the Company’s shareholders, the Company has all
\nrequisite corporate power and authority to enter into this Agreement and to
\nconsummate the transactions contemplated hereby. The vote required of the
\nCompany’s shareholders to duly approve the Merger and this Agreement is set
\nforth on Schedule 2.4. The execution and delivery of this Agreement and the
\nconsummation of the transactions contemplated hereby have been duly
\nauthorized by all necessary corporate action on the part of the Company,
\nsubject only to the approval of the Merger by the Company’s shareholders.
\nThe Company’s Board of Directors has unanimously approved the Merger and this
\nAgreement. This Agreement has been duly executed and delivered by the
\nCompany and constitutes the valid and binding obligation of the Company,
\nenforceable in accordance with its terms (except in all cases as such
\nenforceability may be limited by applicable bankruptcy, insolvency,
\nreorganization, receivership, conservatorship, moratorium, or similar Laws
\naffecting the enforcement of creditors’ rights generally and except that the
\navailability of the equitable remedy of specific performance or<\/p>\n
9<\/p>\n
injunctive relief is subject to the discretion of the court before which any
\nproceeding may be brought). Except as set forth on Schedule 2.4, subject
\nonly to the approval of the Merger and this Agreement by the Company’s
\nshareholders, the execution and delivery of this Agreement by the Company
\ndoes not, and, as of the Effective Time, the consummation of the transactions
\ncontemplated hereby will not, conflict with, or result in any violation of,
\nor default under (with or without notice or lapse of time, or both), or give
\nrise to a right of termination, cancellation or acceleration of any
\nobligation or loss of any benefit under (any such event, a “COMPANY
\nCONFLICT”) (i) any provision of the Articles of Incorporation or Bylaws of
\nthe Company or (ii) any mortgage, indenture, lease, contract or other
\nagreement or instrument, permit, concession, franchise, license, judgment,
\norder, decree, statute, law, ordinance, rule or regulation applicable to the
\nCompany or its properties or assets. No consent, waiver, approval, order or
\nauthorization of, or registration, declaration or filing with, any court,
\nadministrative agency or commission or other federal, state, county, local or
\nforeign governmental authority, instrumentality, agency or commission
\n(“GOVERNMENTAL ENTITY”) or any third party (so as not to trigger any Company
\nConflict) is required by or with respect to the Company in connection with
\nthe execution and delivery of this Agreement or the consummation of the
\ntransactions contemplated hereby, except for (i) the filing of the Agreement
\nof Merger with the Georgia Secretary of State, (ii) such consents, waivers,
\napprovals, orders, authorizations, registrations, declarations and filings as
\nmay be required under applicable federal and state securities laws (iii) such
\nnotices or filings with the Internal Revenue Service or the Pension Benefit
\nGuaranty Corporation with respect to any employee benefit plans or under the
\nHSR Act, and (iv) such other consents, waivers, authorizations, filings,
\napprovals and registrations which are set forth on Schedule 2.4.<\/p>\n
2.5 FINANCIAL STATEMENTS. Schedule 2.5 sets forth the Company’s
\nunaudited balance sheet as of December 31, 1997, and the related unaudited
\nstatement of operations for the twelve month period ended December 31, 1997
\n(the “COMPANY UNAUDITED FINANCIALS”), and the audited balance sheet as of
\nDecember 31, 1996, and the related audited statement of operations for the
\ntwelve-month period ended December 31, 1996 (the “COMPANY AUDITED
\nFINANCIALS”) (collectively, such financial statements are sometimes referred
\nto herein as “COMPANY FINANCIAL STATEMENTS”). The Company Unaudited
\nFinancials and the Company Audited Financials have been prepared in
\naccordance with GAAP applied on a basis consistent throughout the periods
\nindicated and consistent with each other (except that the Company Unaudited
\nFinancials do not contain all the notes that may be required by GAAP, and may
\nrequire subsequent reclassification for proper recording of the accounting
\ntreatment of the acquisition of the SBCL SCAN business. As of the date
\nhereof, the final accounting treatment of that transaction has not been
\ndetermined). The Company Unaudited Financials and Company Audited Financials
\npresent fairly the financial condition, operating results and, in the case of
\nCompany Audited Financials only, the cash flows of the Company as of the
\ndates and during the periods indicated therein, subject in the case of the
\nCompany Unaudited Financials, to normal year-end adjustments, which will not
\nbe material in amount or significance except for the effects of
\nreclassification that may be required by the final accounting treatment of
\nthe SBCL SCAN acquisition. The Company’s unaudited balance sheet dated as of
\nDecember 31, 1997, shall be referred to as the “COMPANY CURRENT BALANCE
\nSHEET”.<\/p>\n
10<\/p>\n
2.6 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 2.6,
\nthe Company does not have any liability, indebtedness, obligation, expense,
\nclaim, deficiency, guaranty or endorsement of any type, whether accrued,
\nabsolute, contingent, matured, unmatured or other (whether or not required to
\nbe reflected in financial statements in accordance with generally accepted
\naccounting principles), which individually or in the aggregate, (i) has not
\nbeen reflected in the Company Current Balance Sheet, or (ii) has not arisen
\nin the ordinary course of the Company’s business since the date of the
\nCompany Current Balance Sheet, consistent with past practices.<\/p>\n
2.7 NO CHANGES. Except as set forth in Schedule 2.7, since the date of
\nthe Company Current Balance Sheet, there has not been, occurred or arisen any:<\/p>\n
(a) transaction by the Company except in the ordinary course of
\nbusiness as conducted as of the date of the Company Current Balance Sheet and
\nconsistent with past practices;<\/p>\n
(b) amendments or changes to the Articles of Incorporation or
\nBylaws of the Company;<\/p>\n
(c) capital expenditure or commitment by the Company, either
\nindividually or in the aggregate, exceeding $25,000;<\/p>\n
(d) destruction of, damage to or loss of any material assets,
\nbusiness or customer of the Company (whether or not covered by insurance);<\/p>\n
(e) labor trouble or claim of wrongful discharge or other unlawful
\nlabor practice or action;<\/p>\n
(f) change in accounting methods or practices (including any
\nchange in depreciation or amortization policies or rates) by the Company;<\/p>\n
(g) revaluation by the Company of any of its assets (other than as
\nmay be required by the final accounting of the SBCL SCAN business);<\/p>\n
(h) declaration, setting aside or payment of a dividend or other
\ndistribution with respect to the capital stock of the Company, or any direct
\nor indirect redemption, purchase or other acquisition by the Company of any
\nof its capital stock;<\/p>\n
(i) increase in the salary or other compensation payable or to
\nbecome payable to any of its officers, directors, employees or advisors, or
\nthe declaration, payment or commitment or obligation of any kind for the
\npayment of a bonus or other additional salary or compensation to any such
\nperson except as otherwise contemplated by this Agreement or in the ordinary
\ncourse of business and consistent with past practices and Schedule 2.7(i)
\nlists all salary increases in excess of 10% and any bonus or other
\ncompensation arrangement exceeding $10,000;<\/p>\n
11<\/p>\n
(j) sale, lease, license or other disposition of any of the assets
\nor properties of the Company, except in the ordinary course of business and
\nconsistent with past practices;<\/p>\n
(k) material amendment or termination of any material contract,
\nagreement or license to which the Company is a party or by which it is bound;<\/p>\n
(l) loan by the Company to any person or entity, incurring by the
\nCompany of any indebtedness, guaranteeing by the Company of any indebtedness,
\nissuance or sale of any debt securities of the Company or guaranteeing of any
\ndebt securities of others, except for advances to employees for travel and
\nbusiness expenses in the ordinary course of business, consistent with past
\npractices;<\/p>\n
(m) waiver or release of any right or claim of the Company,
\nincluding any write-off or other compromise of any account receivable of the
\nCompany;<\/p>\n
(n) commencement or notice or threat of commencement of any
\nlawsuit or proceeding against or investigation of the Company or its affairs;<\/p>\n
(o) notice of any claim of ownership by a third party of the
\nCompany’s Intellectual Property (as defined in Section 2.11 below) or of
\ninfringement by the Company of any third party’s Intellectual Property rights;<\/p>\n
(p) issuance or sale by the Company of any of its shares of
\ncapital stock, or securities exchangeable, convertible or exercisable
\ntherefor, or of any other of its securities;<\/p>\n
(q) change in pricing or royalties set or charged by the Company
\nto its customers or licensees or in pricing or royalties set or charged by
\npersons who have licensed Intellectual Property to the Company;<\/p>\n
(r) event or condition of any character that has or could be
\nreasonably expected to have a Company Material Adverse Effect on the Company;
\nor<\/p>\n
(s) negotiation or agreement by the Company or any officer or
\nemployees thereof to do any of the things described in the preceding clauses
\n(a) through (r) (other than negotiations with Parent and its representatives
\nregarding the transactions contemplated by this Agreement).<\/p>\n
2.8 TAX AND OTHER RETURNS AND REPORTS.<\/p>\n
(a) DEFINITIONS. <\/p>\n
(i) “TAX” or, collectively, “TAXES”, means any and all
\nfederal, state, local and foreign taxes, assessments and other governmental
\ncharges, duties, impositions and liabilities, including taxes based upon or
\nmeasured by gross receipts, income, profits, sales, use and occupation,<\/p>\n
12<\/p>\n
and value added, ad valorem, transfer, franchise, withholding, payroll,
\nrecapture, employment, excise and property taxes, together with all interest,
\npenalties and additions imposed with respect to such amounts and any
\nobligations under any agreements or arrangements with any other person with
\nrespect to such amounts and including any liability for taxes of a
\npredecessor entity.<\/p>\n
(ii) “KNOWLEDGE” as used herein shall mean the personal
\nknowledge (including references to such person being aware of a particular
\nmatter), after reasonable inquiry, of, (a) in the case of the Company, P.E.
\nSadler, Michael K. Hoover, Lew Belote, Nancy J. Ham, J. Philip Hardin, J.R.
\nHughes and (to the extent not already identified in the foregoing list) all
\ndirectors of the Company on the date of this Agreement, and (b) in the case
\nof Parent, Jim Clark, W. Michael Long, Kallen Chan, Pavan Nigam, Dennis
\nDrislane, Chuck Saunders, Denise M. Shea, Ron Alvarez and (to the extent not
\nalready identified in the foregoing list) all directors of Parent on the date
\nof this Agreement.<\/p>\n
(b) TAX RETURNS AND AUDITS. Except as set forth in Schedule 2.8:<\/p>\n
(i) The Company as of the Effective Time will have prepared
\nand filed all required federal, state, local and foreign returns, estimates,
\ninformation statements and reports (“RETURNS”) due on or before the Effective
\nTime relating to any and all Taxes concerning or attributable to the Company
\nor its operations and such Returns are or will be prior to filing true and
\ncorrect in all material respects and have been completed in accordance with
\napplicable law.<\/p>\n
(ii) The Company as of the Effective Time: (A) will have
\npaid (if due on or before the Effective Time) or accrued on the Company
\nCurrent Balance Sheet all Taxes it is required to pay, or which are
\nattributable to the period ending December 31, 1997 and (B) will have
\nwithheld with respect to its employees all federal and state income taxes,
\nFICA, FUTA and other Taxes required to be withheld.<\/p>\n
(iii) The Company has not been delinquent in the payment of
\nany Tax nor is there any Tax deficiency outstanding, assessed, or to its
\nKnowledge proposed against the Company, nor has the Company executed any
\nwaiver of any statute of limitations on or extending the period for the
\nassessment or collection of any Tax.<\/p>\n
(iv) No audit or other examination of any Return of the
\nCompany is currently in progress, nor has the Company been notified of any
\nrequest for such an audit or other examination.<\/p>\n
(v) The Company does not have any liabilities for unpaid
\nfederal, state, local and foreign Taxes which have not been accrued or
\nreserved for in accordance with GAAP on the Company Current Balance Sheet,
\nwhether asserted or unasserted, contingent or otherwise, and the Company has
\nno Knowledge of any basis for the assertion of any such liability
\nattributable to the Company, its assets or operations.<\/p>\n
13<\/p>\n
(vi) The Company has provided to Parent or has made
\navailable to representatives of Parent for inspection copies of all federal
\nand state income and all state sales and use Tax Returns for all periods
\nsince the date of Company’s incorporation.<\/p>\n
(vii) There are (and as of immediately following the
\nEffective Date there will be) no liens, pledges, charges, claims, security
\ninterests or other encumbrances of any sort on the assets (“LIENS”) of the
\nCompany relating to or attributable to Taxes.<\/p>\n
(viii) The Company has no Knowledge of any basis for the
\nassertion of any claim relating or attributable to Taxes which, if adversely
\ndetermined, would result in any Lien on the Company.<\/p>\n
(ix) None of the Company’s assets are treated as “tax-exempt
\nuse property” within the meaning of Section 168(h) of the Code.<\/p>\n
(x) As of the Effective Time, there will not be any
\ncontract, agreement, plan or arrangement, including but not limited to the
\nprovisions of this Agreement, covering any employee or former employee of the
\nCompany that, individually or collectively, could give rise to the payment of
\nany amount that would not be deductible pursuant to Section 280G or 162 of
\nthe Code.<\/p>\n
(xi) The Company has not filed any consent agreement under
\nSection 341(f) of the Code or agreed to have Section 341(f)(2) of the Code
\napply to any disposition of a subsection (f) asset (as defined in Section
\n341(f)(4) of the Code) owned by the Company.<\/p>\n
(xii) The Company is not a party to a tax sharing or
\nallocation agreement nor does the Company owe any amount under any such
\nagreement.<\/p>\n
(xiii) The Company is not, and has not been at any time, a
\n“United States real property holding corporation” within the meaning of
\nSection 897(c)(2) of the Code.<\/p>\n
(xiv) Since December 31, 1997 no taxes have been incurred
\nexcept in the ordinary course of business. <\/p>\n
2.9 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
\n(noncompete or otherwise), commitment, judgment, injunction, order or decree
\nto which the Company is a party or otherwise binding upon the Company which
\nhas or reasonably could be expected to have the effect of prohibiting or
\nimpairing any business practice of the Company, any acquisition of property
\n(tangible or intangible) by the Company or the conduct of business by the
\nCompany. Without limiting the foregoing, the Company has not entered into
\nany agreement under which the Company is restricted from developing, selling,
\nlicensing, marketing, promoting or otherwise distributing any products,
\nservices or technology to any class of customers, or entering into any
\nstrategic alliances, in any geographic area, during any period of time or in
\nany segment of the market.<\/p>\n
14<\/p>\n
2.10 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.<\/p>\n
(a) The Company owns no real property, nor has it ever owned any
\nreal property. Schedule 2.10(a) sets forth a list of all real property
\ncurrently leased by the Company, the name of the lessor, the date of the
\nlease and each amendment thereto and the aggregate annual rental and\/or other
\nfees payable under any such lease and any security interest in the Company’s
\nassets created by such lease. All such leases are in full force and effect,
\nare valid and effective in accordance with their respective terms, and there
\nis not, under any of such leases, any existing default or event of default
\n(or event which with notice or lapse of time, or both, would constitute a
\ndefault).<\/p>\n
(b) The Company has good and valid title to, or, in the case of
\nleased properties and assets, valid leasehold interests in, all of its
\ntangible properties and assets, real, personal and mixed, used or held for
\nuse in its business, free and clear of any Liens, except as reflected in the
\nCompany Financial Statements or in Schedule 2.10(b) and except for liens for
\ntaxes not yet due and payable and such imperfections of title and
\nencumbrances, if any, which are not material in character, amount or extent,
\nand which do not materially detract from the value, or materially interfere
\nwith the present use, of the property subject thereto or affected thereby.<\/p>\n
2.11 INTELLECTUAL PROPERTY.<\/p>\n
(a) The Company owns, or is licensed or otherwise possesses
\nlegally enforceable rights to use, all patents, trademarks, trade names,
\nservice marks, copyrights, and any applications therefor, maskworks, net
\nlists, schematics, technology, know-how, computer software programs or
\napplications (in both source code and object code form), and tangible or
\nintangible proprietary information or material that are used in the business
\nof the Company as currently conducted or as proposed to be conducted by the
\nCompany (the “COMPANY INTELLECTUAL PROPERTY RIGHT(S)”). Schedule 2.11(a)
\nsets forth a complete list of all patents, registered and material
\nunregistered trademarks, registered copyrights, trade names and service
\nmarks, and any applications therefor, included in the Company Intellectual
\nProperty Rights, and specifies, where applicable, the jurisdictions in which
\neach such Company Intellectual Property Right has been issued or registered
\nor in which an application for such issuance and registration has been filed,
\nincluding the respective registration or application numbers and the names of
\nall registered owners. <\/p>\n
(b) Schedule 2.11(b) sets forth a complete list of all licenses,
\nsublicenses and other agreements to which the Company is a party and pursuant
\nto which the Company or any other person is authorized to use any Company
\nIntellectual Property Right (excluding object code end-user licenses granted
\nto end-users in the ordinary course of business that permit use of software
\nproducts without a right to modify, distribute or sublicense the same
\n(“END-USER LICENSES”)) or trade secret of the Company, and includes the
\nidentity of all parties thereto, a description of the nature and subject
\nmatter thereof, the applicable royalty or other fees and the term thereof.
\nThe execution and delivery of this Agreement by the Company, and the
\nconsummation of the transactions contemplated hereby, will neither cause the
\nCompany to be in violation or default under any such license, sublicense or
\nagreement, nor entitle any other party to any such license, sublicense or
\nagreement to terminate or<\/p>\n
15<\/p>\n
modify such license, sublicense or agreement. Except as set forth in
\nSchedules 2.11(a) or 2.11(b), the Company is the sole and exclusive owner or
\nlicensee of, with all right, title and interest in and to (free and clear of
\nany liens or encumbrances), the Company Intellectual Property Rights, and has
\nsole and exclusive rights (and is not contractually obligated to pay any
\ncompensation to any third party in respect thereof) to the use thereof or the
\nmaterial covered thereby in connection with the services or products in
\nrespect of which the Company Intellectual Property Rights are being used. <\/p>\n
(c) No claims with respect to the Company Intellectual Property
\nRights have been asserted or are, to the Company’s Knowledge, threatened by
\nany person, nor are there any valid grounds for any claims (i) to the effect
\nthat the manufacture, sale, licensing or use of any of the products of the
\nCompany infringes on any copyright, patent, trade mark, service mark, trade
\nsecret or other proprietary right, (ii) against the use by the Company of any
\ntrademarks, service marks, trade names, trade secrets, copyrights, maskworks,
\npatents, technology, know-how or computer software programs and applications
\nused in the Company’s business as currently conducted or as proposed to be
\nconducted by the Company, or (iii) challenging the ownership by the Company,
\nvalidity or effectiveness of any of the Company Intellectual Property Rights.
\n All registered trademarks, service marks and copyrights held by the Company
\nare valid and subsisting. The Company has not infringed, and the business of
\nthe Company as currently conducted or as proposed to be conducted does not
\ninfringe, any copyright, patent, trademark, service mark, trade secret or
\nother proprietary right of any third party. There is no material
\nunauthorized use, infringement or misappropriation of any of the Company
\nIntellectual Property Rights by any third party, including any employee or
\nformer employee of the Company. No Company Intellectual Property Right or
\nproduct of the Company or any of its subsidiaries is subject to any
\noutstanding decree, order, judgment, or stipulation restricting in any manner
\nthe licensing thereof by the Company. Each employee, consultant or contractor
\nof the Company has executed a proprietary information and confidentiality
\nagreement substantially in the Company’s standard forms. Except for software
\nlicensed to the Company, all software included in the Company Intellectual
\nProperty Rights (i) is original with the Company and has been either created
\nby employees of the Company on a work-for-hire basis or by consultants or
\ncontractors who have created such software themselves and have assigned all
\nrights they may have had in such software to the Company, or (ii) was
\nacquired by the Company and the seller of such software made representations
\nsubstantially similar to those contained in (i) in connection with the
\nacquisition of such software.<\/p>\n
2.12 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth on
\nSchedule 2.12(a), the Company does not have, is not a party to nor is it
\nbound by:<\/p>\n
(i) any collective bargaining agreements,<\/p>\n
(ii) any agreements or arrangements that contain any
\nseverance pay or post-employment liabilities or obligations,<\/p>\n
(iii) any bonus, deferred compensation, pension, profit
\nsharing or retirement plans, or any other employee benefit plans or
\narrangements,<\/p>\n
16<\/p>\n
(iv) any employment or consulting agreement, contract or
\ncommitment with an employee or individual consultant or salesperson or any
\nconsulting or sales agreement, contract or commitment under which any firm or
\nother organization provides services to the Company,<\/p>\n
(v) any agreement or plan, including, without limitation,
\nany stock option plan, stock appreciation rights plan or stock purchase plan,
\nany of the benefits of which will be increased, or the vesting of benefits of
\nwhich will be accelerated, by the occurrence of any of the transactions
\ncontemplated by this Agreement or the value of any of the benefits of which
\nwill be calculated on the basis of any of the transactions contemplated by
\nthis Agreement,<\/p>\n
(vi) any fidelity or surety bond or completion bond,<\/p>\n
(vii) any lease of personal property having a value
\nindividually in excess of $25,000,<\/p>\n
(viii) any agreement of indemnification or guaranty,<\/p>\n
(ix) any agreement, contract or commitment containing any
\ncovenant limiting the freedom of the Company to engage in any line of
\nbusiness or to compete with any person,<\/p>\n
(x) any agreement, contract or commitment relating to
\ncapital expenditures and involving future payments in excess of $25,000,<\/p>\n
(xi) any agreement, contract or commitment relating to the
\ndisposition or acquisition of assets or any interest in any business
\nenterprise outside the ordinary course of the Company’s business,<\/p>\n
(xii) any mortgages, indentures, loans or credit agreements,
\nsecurity agreements or other agreements or instruments relating to the
\nborrowing of money or extension of credit, including guaranties referred to
\nin clause (viii) hereof,<\/p>\n
(xiii) any purchase order or contract for the purchase of raw
\nmaterials involving $25,000 or more,<\/p>\n
(xiv) any construction contracts,<\/p>\n
(xv) any distribution, joint marketing or development
\nagreement, <\/p>\n
17<\/p>\n
(xvi) any agreement pursuant to which the Company has granted
\nor may be required to grant in the future, to any party, a source-code
\nlicense or option or other right to use or acquire source-code, or <\/p>\n
(xvii) any other agreement, contract or commitment that
\ninvolves $25,000 or more or is not cancelable without penalty within thirty
\n(30) days.<\/p>\n
Except for such alleged breaches, violations and defaults, and events that
\nwould constitute a breach, violation or default with the lapse of time,
\ngiving of notice, or both, as are noted in Schedule 2.12(b), the Company has
\nnot breached, violated or defaulted under, or received notice that it has
\nbreached, violated or defaulted under, any of the terms or conditions of any
\nagreement, contract or commitment required to be set forth on Schedule
\n2.12(a) or Schedule 2.11(b) (any such agreement, contract or commitment, a
\n“COMPANY CONTRACT”). Each Company Contract is in full force and effect and,
\nexcept as otherwise disclosed in Schedule 2.12(b), is not subject to any
\ndefault thereunder of which the Company has Knowledge by any party obligated
\nto the Company pursuant thereto.<\/p>\n
2.13 INTERESTED PARTY TRANSACTIONS. Except as set forth on Schedule
\n2.13, (i) no officer, director or, to the Knowledge of the Company (without
\nany duty to investigate), any shareholder of the Company has, directly or
\nindirectly, an economic interest in any entity which furnished or sold, or
\nfurnishes or sells, services or products that the Company furnishes or sells,
\nor proposes to furnish or sell, (ii) no officer or director, or to the
\nKnowledge of the Company (without any duty to investigate), any shareholder
\nof the Company has, directly or indirectly, an economic interest in any
\nentity that purchases from or sells or furnishes to, the Company, any goods
\nor services or (iii) no officer, director or shareholder of the Company has,
\ndirectly or indirectly, a beneficial interest in any contract or agreement
\nset forth in Schedule 2.12(a) or Schedule 2.11(b); provided, that ownership
\nof no more than one percent (1%) of the outstanding voting stock of a
\npublicly traded corporation shall not be deemed an “economic interest in any
\nentity” for purposes of this Section 2.13. For the purposes of this
\nsubsection, “officer” and “director” shall include any parent, child, sibling
\nor spouse of any of such persons, or any trust, partnership or corporation in
\nwhich such officer or director has a controlling interest.<\/p>\n
2.14 COMPLIANCE WITH LAWS. The Company has complied in all material
\nrespects with, is not in material violation of, and has not received any
\nnotices of violation with respect to, any foreign, federal, state or local
\nstatute, law or regulation.<\/p>\n
2.15 LITIGATION. Except as set forth in Schedule 2.15, there is no
\naction, suit or proceeding of any nature pending or to the Company’s
\nKnowledge threatened against the Company, its properties or any of its
\nofficers or directors in their respective capacities as such. Except as set
\nforth in schedule 2.15, to the Company’s Knowledge, there is no investigation
\npending or threatened against the Company, its properties or any of its
\nofficers or directors (in their respective capacities as such) by or before
\nany governmental entity. Schedule 2.15 sets forth, with respect to any
\npending or threatened action, suit, proceeding or investigation, the forum,
\nthe parties thereto, the subject matter thereof and the amount of damages
\nclaimed or other remedy requested. No Governmental Entity has <\/p>\n
at any time challenged or questioned the legal right of the Company to
\nmanufacture, offer or sell any of its products in the present manner or style
\nthereof.<\/p>\n
2.16 INSURANCE. Set forth on Schedule 2.16 is a list of all of the
\nCompany’s insurance policies and fidelity bonds. With respect to the
\ninsurance policies and fidelity bonds covering the assets, business,
\nequipment, properties, operations, employees, officers and directors of the
\nCompany, there is no claim by the Company pending under any of such policies
\nor bonds as to which coverage has been questioned, denied or disputed by the
\nunderwriters of such policies or bonds. All premiums due and payable under
\nall such policies and bonds have been paid or will be paid when due and the
\nCompany is otherwise in material compliance with the terms of such policies
\nand bonds (or other policies and bonds providing substantially similar
\ninsurance coverage). The Company has no Knowledge of any threatened
\ntermination of, or material premium increase with respect to, any of such
\npolicies.<\/p>\n
2.17 MINUTE BOOKS. The minute books of the Company made available to
\ncounsel for Parent are the only minute books of the Company and contain a
\nreasonably accurate summary of all meetings of directors (or committees
\nthereof) and shareholders or actions by written consent since the time of
\nincorporation of the Company.<\/p>\n
2.18 ENVIRONMENTAL MATTERS.<\/p>\n
(a) HAZARDOUS MATERIAL. The Company has not operated any
\nunderground storage tanks, and has no Knowledge of the existence, at any
\ntime, of any underground storage tank (or related piping or pumps), at any
\nproperty that the Company has at any time owned, operated, occupied or
\nleased. The Company has not released any amount of any substance that has
\nbeen designated by any Governmental Entity or by applicable federal, state or
\nlocal law to be radioactive, toxic, hazardous or otherwise a danger to health
\nor the environment, including, without limitation, PCBs, asbestos, oil and
\npetroleum products, urea-formaldehyde and all substances listed as a
\n“hazardous substance,” “hazardous waste,” “hazardous material” or “toxic
\nsubstance” or words of similar import, under any law, including but not
\nlimited to, the Comprehensive Environmental Response, Compensation, and
\nLiability Act of 1980, as amended; the Resource Conservation and Recovery Act
\nof 1976, as amended; the Federal Water Pollution Control Act, as amended; the
\nClean Air Act, as amended, and the regulations promulgated pursuant to said
\nlaws, (a “HAZARDOUS MATERIAL”). No Hazardous Materials are present as a
\nresult of the actions or omissions of the Company, or, to the Company’s
\nKnowledge, as a result of any actions of any third party or otherwise, in, on
\nor under any property, including the land and the improvements, ground water
\nand surface water thereof, that the Company has at any time owned, operated,
\noccupied or leased.<\/p>\n
(b) HAZARDOUS MATERIALS ACTIVITIES. The Company has not
\ntransported, stored, used, manufactured, disposed of, released or exposed its
\nemployees or others to Hazardous Materials in violation of any law in effect
\non or before the Effective Time, nor has the Company disposed of,
\ntransported, sold, or manufactured any product containing a Hazardous
\nMaterial (any or all of the foregoing being collectively referred to as
\n“HAZARDOUS MATERIALS ACTIVITIES”) in violation of any rule, <\/p>\n
19<\/p>\n
regulation, treaty or statute promulgated by any Governmental Entity in
\neffect prior to or as of the date hereof to prohibit, regulate or control
\nHazardous Materials or any Hazardous Material Activity.<\/p>\n
(c) PERMITS. The Company currently holds all environmental
\napprovals, permits, licenses, clearances and consents (the “ENVIRONMENTAL
\nPERMITS”) necessary for the conduct of the Company’s Hazardous Material
\nActivities and other businesses of the Company as such activities and
\nbusinesses are currently being conducted.<\/p>\n
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
\nproceeding, amendment, procedure, writ, injunction or claim is pending, or to
\nthe Company’s Knowledge, threatened concerning any Environmental Permit,
\nHazardous Material or any Hazardous Materials Activity of the Company. The
\nCompany is not aware of any fact or circumstance which could involve the
\nCompany in any environmental litigation or impose upon the Company any
\nenvironmental liability.<\/p>\n
2.19 BROKERS’ AND FINDERS’ FEES; THIRD PARTY EXPENSES. Except as set
\nforth on Schedule 2.19, the Company has not incurred, nor will it incur,
\ndirectly or indirectly, any liability for brokerage or finders’ fees,
\ninvestment banking fees, consulting fees or agents’ commissions or any
\nsimilar charges in connection with this Agreement or any transaction
\ncontemplated hereby. Schedule 2.19 sets forth the principal terms and
\nconditions of any agreement, written or oral, with respect to such fees.
\nSchedule 2.19 also sets forth the Company’s current reasonable estimate of
\nall Company Third Party Expenses (as defined in Section 5.4) expected to be
\nincurred by the Company in connection with the negotiation and effectuation
\nof the terms and conditions of this Agreement and the transactions
\ncontemplated hereby.<\/p>\n
2.20 EMPLOYEE MATTERS AND BENEFIT PLANS.<\/p>\n
(a) DEFINITIONS. For purposes of this Section 2.20 and Section
\n3.20 of this Agreement, the following terms shall have the meanings set forth
\nbelow:<\/p>\n
(i) “COMPANY AFFILIATE” shall mean any other person or
\nentity under common control with the Company within the meaning of Section
\n414(b) or (c) and the regulations thereunder. In addition, for any Company
\nEmployee Plan subject to Section 412(n), the term Company Affiliate shall
\nmean any other person or entity under common control with the Company within
\nthe meaning of Section 414(b), (c), (m) or (o) of the Code;<\/p>\n
(ii) “ERISA” shall mean the Employee Retirement Income
\nSecurity Act of 1974, as amended;<\/p>\n
(iii) “COMPANY EMPLOYEE PLAN” shall refer to any plan,
\nprogram, policy, practice, contract, agreement or other arrangement providing
\nfor compensation, severance, termination pay, performance awards, stock or
\nstock-related awards, fringe benefits or other employee benefits or
\nremuneration of any kind, whether formal or informal, funded or unfunded and <\/p>\n
20<\/p>\n
whether or not legally binding, including without limitation, each “employee
\nbenefit plan”, within the meaning of Section 3(3) of ERISA which is or has
\nbeen maintained, contributed to, or required to be contributed to, by the
\nCompany or any Company Affiliate for the benefit of any “Company Employee”
\n(as defined below), and any Company Employee Plan which has been maintained,
\ncontributed to, or required to have been contributed to by the Company or any
\nCompany Affiliate pursuant to which the Company or any Company Affiliate has
\nor may have any material liability contingent or otherwise;<\/p>\n
(iv) “COMPANY EMPLOYEE” shall mean any current, former, or
\nretired employee, officer, or director of the Company or any Company
\nAffiliate;<\/p>\n
(v) “COMPANY EMPLOYEE AGREEMENT” shall refer to each
\nwritten management, employment, severance, consulting, relocation,
\nrepatriation, expatriation, visas, work permit or similar agreement or
\ncontract between the Company or any Company Affiliate and any Employee or
\nconsultant. Except as set forth on Schedule 2.20(a)(v), the Company
\nrepresents and warrants that there are no oral agreements between the Company
\nor any Affiliate and any Employee or consultant pertaining to management,
\nemployment, severance, consulting, relocation, repatriation, expatriation,
\nvisas, work permit or similar matters or arrangements;<\/p>\n
(vi) “IRS” shall mean the Internal Revenue Service;<\/p>\n
(vii) “MULTIEMPLOYER PLAN” shall mean any “Pension Plan” (as
\ndefined below) which is a “multiemployer plan”, as defined in Section 3(37)
\nof ERISA; and<\/p>\n
(viii) “COMPANY PENSION PLAN” shall refer to each Company
\nEmployee Plan which is an “employee pension benefit plan”, within the meaning
\nof Section 3(2) of ERISA.<\/p>\n
(ix) “COMPANY DEFINED BENEFIT PLAN” shall mean any Pension
\nPlan that is a “defined benefit plan,” as defined in ERISA Section 3(35). <\/p>\n
(b) SCHEDULE. Schedule 2.20(b) contains an accurate and complete
\nlist of each Company Employee Plan and each Company Employee Agreement. The
\nCompany does not have any plan or commitment, whether legally binding or not,
\nto establish any new Company Employee Plan or Company Employee Agreement, to
\nmodify any Company Employee Plan or Company Employee Agreement (except to the
\nextent required by law or to conform any such Company Employee Plan or
\nCompany Employee Agreement to the requirements of any applicable law, in each
\ncase as previously disclosed to Parent in writing, or as required by this
\nAgreement), or to enter into any Company Employee Plan or Company Employee
\nAgreement, nor does it have any intention or commitment to do any of the
\nforegoing. <\/p>\n
(c) DOCUMENTS. The Company has provided to Parent (i) correct and
\ncomplete copies of all nonprivileged documents embodying or materially
\naffecting the interpretation or application of each Company Employee Plan and
\neach Company Employee Agreement including all amendments thereto, and, to the
\nKnowledge of the Company, there are no privileged documents <\/p>\n
21<\/p>\n
pertaining to such matters; (ii) the most recent annual actuarial valuations,
\nif any, prepared for each Company Defined Benefit Plan; (iii) the three most
\nrecent annual reports (Series 5500 and all schedules thereto), if any,
\nrequired under ERISA or the Code in connection with each Company Employee
\nPlan or related trust; (iv) if the Company Employee Plan is funded, the most
\nrecent annual and periodic accounting of Company Employee Plan assets; (v)
\nthe most recent summary plan description together with the most recent
\nsummary of material modifications, if any, required under ERISA with respect
\nto each Company Employee Plan which has a material adverse effect on such
\nCompany Employee Plan; (vi) the most recent IRS determination, opinion,
\nnotification or advisory letters as applicable, and rulings relating to
\nCompany Employee Plans and copies of all applications and correspondence to
\nor from the IRS or the Department of Labor (“DOL”) with respect to any
\nCompany Employee Plan; (vii) all communications material to any Company
\nEmployee or Company Employees relating to any Company Employee Plan and any
\nproposed Company Employee Plans, in each case, relating to any amendments,
\nterminations, establishments, increases or decreases in benefits,
\nacceleration of payments or vesting schedules or other events which would
\nresult in any material liability to the Company; and (viii) all registration
\nstatements and prospectuses prepared in connection with each Company Employee
\nPlan not otherwise publicly available on the SEC website.<\/p>\n
(d) EMPLOYEE PLAN COMPLIANCE. Except as set forth on Schedule
\n2.20(d), (i) the Company has performed in all material respects all
\nobligations required to be performed by it under each Company Employee Plan,
\nand each Company Employee Plan has been established and maintained in all
\nmaterial respects in accordance with its terms and in compliance with all
\napplicable laws, statutes, orders, rules and regulations, including but not
\nlimited to ERISA or the Code; (ii) no “prohibited transaction”, within the
\nmeaning of Section 4975 of the Code or Section 406 of ERISA, has occurred
\nwith respect to any Company Employee Plan for which an exemption is not
\napplicable; (iii) there are no actions, suits or claims pending, or, to the
\nKnowledge of the Company, threatened or anticipated (other than routine
\nclaims for benefits) against any Company Employee Plan or against the assets
\nof any Company Employee Plan; and (iv) each Company Employee Plan can be
\namended, terminated or otherwise discontinued after the Effective Time in
\naccordance with its terms, without material liability to the Company, Parent
\nor any of its Affiliates (other than ordinary administration expenses
\ntypically incurred in a termination event); (v) there are no inquiries or
\nproceedings pending or, to the Knowledge of the Company or any Affiliates,
\nthreatened by the IRS or DOL with respect to any Company Employee Plan; and
\n(vi) neither the Company nor any Company Affiliate is subject to any material
\npenalty or tax with respect to any Company Employee Plan under Section 502(i)
\nof ERISA or Section 4975 through 4980 of the Code.<\/p>\n
(e) PENSION PLANS. Except as set forth on Schedule 2.20(e), the
\nCompany does not now, nor has it ever, maintained, established, sponsored,
\nparticipated in, or contributed to, any Pension Plan which is subject to Part
\n3 of Subtitle B of Title I of ERISA, Title IV of ERISA or Section 412 of the
\nCode.<\/p>\n
(f) MULTIEMPLOYER PLANS. At no time has the Company contributed
\nto or been requested to contribute to any Multiemployer Plan.<\/p>\n
22<\/p>\n
(g) NO POST-EMPLOYMENT OBLIGATIONS. Except as set forth in
\nSchedule 2.20(g), no Company Employee Plan provides, or has any liability to
\nprovide, life insurance, medical or other employee welfare benefits to any
\nCompany Employee upon his or her retirement or termination of employment for
\nany reason, except as may be required by statute, and the Company has never
\nrepresented, promised or contracted (whether in oral or written form) to any
\nCompany Employee (either individually or to Company Employees as a group)
\nthat such Company Employee(s) would be provided with life insurance, medical
\nor other employee welfare benefits upon their retirement or termination of
\nemployment, except to the extent required by statute. The term “other
\nemployee welfare benefits” means those benefits traditionally provided under
\nan “employee benefit welfare plan” as defined in ERISA Section 3(1). <\/p>\n
(h) COBRA. Neither the Company nor any Company Affiliate has,
\nprior to the Effective Time and in any material respect, violated any of the
\nhealth care continuation requirements of COBRA, the requirements of the FMLA
\nor any similar provisions of state law applicable to its Company Employees. <\/p>\n
(i) EFFECT OF TRANSACTION.<\/p>\n
(i) Except as set forth on Schedule 2.20(i)(i), the execution
\nof this Agreement and the consummation of the transactions contemplated
\nhereby will not (either alone or upon the occurrence of any additional or
\nsubsequent events) constitute an event under any Company Employee Plan,
\nCompany Employee Agreement, trust or loan that will or may result in any
\npayment (whether of severance pay or otherwise), acceleration, forgiveness of
\nindebtedness, vesting, distribution, increase in benefits or obligation to
\nfund benefits with respect to any Company Employee.<\/p>\n
(ii) Except as set forth on Schedule 2.20(i)(ii), no payment
\nor benefit which will or may be made by the Company or Parent or any of their
\nrespective affiliates with respect to any Employee will be characterized as
\nan “excess parachute payment” within the meaning of Section 280G(b)(1) of the
\nCode.<\/p>\n
(j) EMPLOYMENT MATTERS. The Company (i) is in compliance in all
\nmaterial respects with all applicable foreign, federal, state and local laws,
\nrules and regulations respecting employment, employment practices, terms and
\nconditions of employment and wages and hours, in each case, with respect to
\nCompany Employees; (ii) has withheld all amounts required by law or by
\nagreement to be withheld from the wages, salaries and other payments to
\nCompany Employees; (iii) is not liable for any arrears of wages, other than
\narrears normally included in its payroll schedule and system, or any taxes or
\nany penalty for failure to comply with any of the foregoing; and (iv) is not
\nliable for any payment to any trust or other fund or to any governmental or
\nadministrative authority, with respect to unemployment compensation benefits,
\nsocial security or other benefits or obligations for Company Employees (other
\nthan routine payments to be made in the normal course of business and
\nconsistent with past practice).<\/p>\n
23<\/p>\n
(k) LABOR. To the Knowledge of the Company, no work stoppage or
\nlabor strike against the Company is pending or threatened. Except as set
\nforth in Schedule 2.20(k), the Company is not involved in or, to the
\nKnowledge of the Company, threatened with, any labor dispute, grievance, or
\nlitigation relating to labor, safety or discrimination matters involving any
\nCompany Employee, including, without limitation, charges of unfair labor
\npractices or discrimination complaints, which, if adversely determined,
\nwould, individually or in the aggregate, result in a material liability to
\nthe Company. To the Knowledge of the Company, neither the Company nor any of
\nits subsidiaries has engaged in any unfair labor practices within the meaning
\nof the National Labor Relations Act which would, individually or in the
\naggregate, directly or indirectly result in a liability to the Company.
\nExcept as set forth in Schedule 2.20(k), the Company is not presently, nor
\nhas it been in the past, a party to, or bound by, any collective bargaining
\nagreement or union contract with respect to Company Employees and no
\ncollective bargaining agreement is being negotiated by the Company.<\/p>\n
2.21 ACCOUNTING AND REGULATORY MATTERS. The Company has no Knowledge of
\nany action taken or agreed to be taken by the Company or any affiliate of the
\nCompany or has any Knowledge of any fact or circumstance that is reasonably
\nlikely to (a) prevent the Merger from qualifying for pooling-of-interests
\naccounting treatment, or (b) materially impede or delay receipt of any
\nconsents of regulatory authorities referred to in Section 6.1(c), Section
\n6.1(e) and Section 6.1(h) or result in the imposition of a condition or
\nrestriction of the type referred to in the last sentence of such Section. An
\n“AFFILIATE” of a Person shall mean: (i) any other Person directly, or
\nindirectly through one or more intermediaries, controlling, controlled by or
\nunder common control with such Person; (ii) any officer, director, partner,
\nemployer, or direct or indirect beneficial owner of any 5% or greater equity
\nor voting interest of such Person; or (iii) any other Persons for which a
\nPerson described in clause (ii) acts in any such capacity.<\/p>\n
2.22 REPRESENTATIONS COMPLETE. None of the representations or
\nwarranties made by the Company (as modified by the Company Schedules), nor
\nany statement made in any schedule or certificate furnished by the Company
\npursuant to this Agreement, or furnished in or in connection with documents
\nmailed or delivered to the shareholders of the Company in connection with
\nsoliciting their consent to this Agreement and the Merger, contains or will
\ncontain at the Effective Time, any untrue statement of a material fact, or
\nomits or will omit at the Effective Time to state any material fact necessary
\nin order to make the statements contained herein or therein, in the light of
\nthe circumstances under which made, not misleading.<\/p>\n
ARTICLE III<\/p>\n
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB<\/p>\n
Parent and Merger Sub hereby represent and warrant to the Company,
\nsubject to such exceptions as are specifically disclosed in the disclosure
\nschedule (referencing the appropriate section number or subsection, as the
\ncase may be) supplied by the Parent and Merger Sub to the <\/p>\n
24<\/p>\n
Company attached hereto as EXHIBIT B (the “PARENT AND MERGER SUB SCHEDULES”)
\nand dated as of the date hereof, as follows:<\/p>\n
3.1 ORGANIZATION OF PARENT AND MERGER SUB. Parent is a corporation
\nduly organized, validly existing and in good standing under the laws of the
\nState of Delaware. Merger Sub is a corporation duly organized, validly
\nexisting and in good standing under the laws of the State of Delaware.
\nParent has the corporate power to own its properties and to carry on their
\nbusiness as now being conducted. Parent is duly qualified to do business and
\nin good standing as a foreign corporation in each jurisdiction in which the
\nfailure to be so qualified would have a material adverse effect on the
\nbusiness, assets (including intangible assets), financial condition or
\nresults of operations of Parent (hereinafter referred to as a “PARENT
\nMATERIAL ADVERSE EFFECT”). Parent has delivered a true and correct copy of
\nits Certificate of Incorporation and Bylaws, each as amended to date, to the
\nCompany. Merger Sub has delivered a true and correct copy of its Certificate
\nof Incorporation and Bylaws, each as amended to date, to the Company. <\/p>\n
3.2 PARENT AND MERGER SUB CAPITAL STRUCTURE.<\/p>\n
(a) The authorized capital stock of Parent consists of 37,000,000
\nshares of authorized Common Stock, of which 3,571,480 shares are issued and
\noutstanding, 10,305,000 shares of authorized Series A Preferred Stock, of
\nwhich 10,305,000 shares are issued and outstanding, 10,305,000 shares of
\nauthorized Series A-1 Preferred Stock, none of which is issued and
\noutstanding, 6,105,000 shares of authorized Series B Preferred Stock, of
\nwhich 3,290,000 shares are issued and outstanding, 6,105,000 shares of
\nauthorized Series B-1 Preferred Stock, none of which is issued and
\noutstanding, 2,600,000 shares of authorized Series C Preferred Stock, of
\nwhich 2,600,000 shares are issued and outstanding, 2,600,000 shares of
\nauthorized Series C-1 Preferred Stock, none of which is issued and
\noutstanding, 5,000,000 shares of authorized Series D Preferred Stock, of
\nwhich 4,807,692 shares are issued and outstanding, 5,000,000 shares of
\nauthorized Series D-1 Preferred Stock, none of which is issued and
\noutstanding. The shares of the capital stock of Parent are held of record by
\nthe persons, with the addresses of record and in the amounts set forth on
\nSchedule 3.2(a). All outstanding shares of Parent Capital Stock are duly
\nauthorized, validly issued, fully paid and non-assessable and not subject to
\npreemptive rights created by statute, the Certificate of Incorporation or
\nBylaws of Parent or any agreement to which Parent is a party or by which it
\nis bound.<\/p>\n
(b) The authorized capital stock of Merger Sub consists of 100
\nshares of authorized Common Stock, all of which are issued and outstanding
\nand held of record by Parent. All outstanding shares of the capital stock of
\nMerger Sub are duly authorized, validly issued, fully paid and non-assessable
\nand not subject to preemptive rights created by statute, the Certificate of
\nIncorporation or Bylaws of Merger Sub or any agreement to which the Merger
\nSub is a party or by which it is bound.<\/p>\n
(c) Parent has reserved (i) 9,000,000 shares of Common Stock for
\nissuance to directors, employees and consultants pursuant to Parent’s 1996
\nStock Plan (“PARENT STOCK PLAN”), of which 6,441,520 shares are subject to
\noutstanding, unexercised options (“PARENT OPTIONS”) and <\/p>\n
25<\/p>\n
2,558,480 shares remain available for future grant, (ii) 500,000 shares of
\nCommon Stock for issuance pursuant to an outstanding warrant (“COMMON
\nWARRANT”) and (iii) 2,811,947 shares of Series B Preferred Stock for issuance
\npursuant to outstanding warrants (“PREFERRED WARRANTS”). The Parent Options,
\nthe Common Warrant and the Preferred Warrants are collectively referred to
\nherein as “PARENT CONVERTIBLE SECURITIES.” Schedule 3.2(b) sets forth for
\neach outstanding Parent Convertible Security, the name of the holder of such
\nParent Convertible Security, the domicile address of such holder, the number
\nof shares of Common Stock subject to such Parent Convertible Security, the
\nexercise price of such Parent Convertible Security and the vesting schedule
\nfor such Parent Convertible Security, including the extent vested to date and
\nwhether the exercisability of such Parent Convertible Security will be
\naccelerated and become exercisable by reason of the transactions contemplated
\nby this Agreement. Except for the Parent Convertible Securities described in
\nSchedule 3.2(b), there are no options, warrants, calls, rights, commitments
\nor agreements of any character, written or oral, to which Parent is a party
\nor by which it is bound obligating Parent to issue, deliver, sell, repurchase
\nor redeem, or cause to be issued, delivered, sold, repurchased or redeemed,
\nany shares of the capital stock of Parent or obligating Parent to grant,
\nextend, accelerate the vesting of, change the price of, otherwise amend or
\nenter into any such option, warrant, call, right, commitment or agreement. <\/p>\n
3.3 SUBSIDIARIES. Other than Merger Sub, Parent does not have any
\nsubsidiaries and does not otherwise own and has never otherwise owned any
\nshares of capital stock or any interest in, or control, directly or
\nindirectly, any other corporation, partnership, limited liability company,
\nassociation, joint venture or other business entity.<\/p>\n
3.4 AUTHORITY. Subject only to the requisite approval of the Merger and
\nthis Agreement by Parent’s stockholders and Merger Sub’s shareholder, each of
\nParent and Merger Sub has all requisite corporate power and authority to enter
\ninto this Agreement and to consummate the transactions contemplated hereby. A
\nmajority vote is required of the holders of Parent’s Common Stock and the
\nholders of Parent’s Preferred Stock, each voting as a separate class, to duly
\napprove the Merger and this Agreement. A majority vote is required of the
\nholders of Merger Sub’s Common Stock to duly approve the Merger and this
\nAgreement. The execution and delivery of this Agreement and the consummation of
\nthe transactions contemplated hereby have been duly authorized by all necessary
\ncorporate action on the part of the Company and Merger Sub, subject only to the
\napproval of the Merger by Parent’s stockholders and Merger Sub’s shareholder.
\nEach of Parent’s Board of Directors and Merger Sub’s Board of Directors have
\nunanimously approved the Merger and this Agreement. This Agreement has been
\nduly executed and delivered by Parent and Merger Sub and constitutes the valid
\nand binding obligation of Parent and Merger Sub, enforceable in accordance with
\nits terms (except in all cases as such enforceability may be limited by
\napplicable bankruptcy, insolvency, reorganization, receivership,
\nconservatorship, moratorium, or similar Laws affecting the enforcement of
\ncreditors’ rights generally and except that the availability of the equitable
\nremedy of specific performance or injunctive relief is subject to the discretion
\nof the court before which any proceeding may be brought). Except as set forth
\non Schedule 3.4, subject only to the approval of the Merger and this Agreement
\nby Parent’s stockholders and Merger Sub’s shareholders, the execution and
\ndelivery of this Agreement by Parent and Merger Sub does not, and, as of the
\nEffective Time, <\/p>\n
26<\/p>\n
the consummation of the transactions contemplated hereby will not, conflict
\nwith, or result in any violation of, or default under (with or without notice
\nor lapse of time, or both), or give rise to a right of termination,
\ncancellation or acceleration of any obligation or loss of any benefit under
\n(any such event, a “PARENT CONFLICT”) (i) any provision of the Certificate of
\nIncorporation or Bylaws of Parent, (ii) any provision of the Articles of
\nIncorporation or Bylaws of Merger Sub, or (iii) any mortgage, indenture,
\nlease, contract or other agreement or instrument, permit, concession,
\nfranchise, license, judgment, order, decree, statute, law, ordinance, rule or
\nregulation applicable to Parent or its properties or assets. No consent,
\nwaiver, approval, order or authorization of, or registration, declaration or
\nfiling with, any Governmental Entity or any third party (so as not to trigger
\nany Parent Conflict) is required by or with respect to Parent or Merger Sub
\nin connection with the execution and delivery of this Agreement or the
\nconsummation of the transactions contemplated hereby, except for (i) the
\nfiling of the Articles of Merger with the Georgia Secretary of State, (ii)
\nsuch consents, waivers, approvals, orders, authorizations, registrations,
\ndeclarations and filings as may be required under applicable federal and
\nstate securities laws, (iii) such notices or filings with the Internal
\nRevenue Service or the Pension Benefit Guaranty Corporation with respect to
\nany employee benefit plans or under the HSR Act and (iv) such other consents,
\nwaivers, authorizations, filings, approvals and registrations which are set
\nforth on Schedule 3.4. Parent, as the sole shareholder of Merger Sub, has
\nvoted prior to the Effective Time the shares of Merger Sub’s Common Stock in
\nfavor of approval of this Agreement, as and to the extent required by
\napplicable law.<\/p>\n
3.5 FINANCIAL STATEMENTS. Schedule 3.5 sets forth the Parent’s
\nunaudited balance sheet as of December 31, 1997, and the related unaudited
\nstatement of income and cash flow for the twelve month period ended December
\n31, 1997 (the “PARENT UNAUDITED FINANCIALS”), and the audited balance sheet
\nas of December 31, 1996, and the related audited statement of income and cash
\nflow for the twelve-month period ended December 31, 1996 (the “PARENT AUDITED
\nFINANCIALS”) (collectively, such financial statements are sometimes referred
\nto herein as “PARENT FINANCIAL STATEMENTS”). The Parent Unaudited Financials
\nand the Parent Audited Financials have been prepared in accordance with GAAP
\napplied on a basis consistent throughout the periods indicated and consistent
\nwith each other (except that the Parent Unaudited Financials do not contain
\nall the notes that may be required by GAAP). The Parent Unaudited Financials
\nand Parent Audited Financials present fairly the financial condition,
\noperating results and cash flows of the Parent as of the dates and during the
\nperiods indicated therein, subject in the case of the Parent Unaudited
\nFinancials, to normal year-end adjustments, which will not be material in
\namount or significance. Parent’s unaudited balance sheet dated as of
\nDecember 31, 1997, shall be referred to as the “PARENT CURRENT BALANCE SHEET”.<\/p>\n
3.6 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 3.6,
\nParent does not have any liability, indebtedness, obligation, expense, claim,
\ndeficiency, guaranty or endorsement of any type, whether accrued, absolute,
\ncontingent, matured, unmatured or other (whether or not required to be
\nreflected in financial statements in accordance with generally accepted
\naccounting principles), which individually or in the aggregate, (i) has not
\nbeen reflected in the Parent Current Balance Sheet, or (ii) has not arisen in
\nthe ordinary course of Parent’s business since the date of the Parent Current
\nBalance Sheet, consistent with past practices.<\/p>\n
27<\/p>\n
3.7 NO CHANGES. Except as set forth in Schedule 3.7, since the date of
\nthe Parent Current Balance Sheet, there has not been, occurred or arisen any:<\/p>\n
(a) transaction by Parent except in the ordinary course of
\nbusiness as conducted as of the date of the Parent Current Balance Sheet and
\nconsistent with past practices;<\/p>\n
(b) amendments or changes to the Certificate of Incorporation or
\nBylaws of Parent;<\/p>\n
(c) capital expenditure or commitment by Parent, either
\nindividually or in the aggregate, exceeding $25,000;<\/p>\n
(d) destruction of, damage to or loss of any material assets,
\nbusiness or customer of Parent (whether or not covered by insurance);<\/p>\n
(e) labor trouble or claim of wrongful discharge or other unlawful
\nlabor practice or action;<\/p>\n
(f) change in accounting methods or practices (including any
\nchange in depreciation or amortization policies or rates) by Parent;<\/p>\n
(g) revaluation by Parent of any of its assets;<\/p>\n
(h) declaration, setting aside or payment of a dividend or other
\ndistribution with respect to the capital stock of Parent, or any direct or
\nindirect redemption, purchase or other acquisition by Parent of any of its
\ncapital stock;<\/p>\n
(i) increase in the salary or other compensation payable or to
\nbecome payable to any of Parent’s officers, directors, employees or advisors,
\nor the declaration, payment or commitment or obligation of any kind for the
\npayment of a bonus or other additional salary or compensation to any such
\nperson except as otherwise contemplated by this Agreement or in the ordinary
\ncourse of business and consistent with past practices and Schedule 3.7(i)
\nlists all salary increases in excess of 10% and any bonus or other
\ncompensation arrangement exceeding $10,000;<\/p>\n
(j) sale, lease, license or other disposition of any of the assets
\nor properties of Parent, except in the ordinary course of business as
\nconducted on that date and consistent with past practices;<\/p>\n
(k) material amendment or termination of any material contract,
\nagreement or license to which Parent is a party or by which it is bound;<\/p>\n
(l) loan by Parent to any person or entity, incurring by Parent of
\nany indebtedness, guaranteeing by Parent of any indebtedness, issuance or
\nsale of any debt securities of <\/p>\n
28<\/p>\n
Parent or guaranteeing of any debt securities of others, except for advances
\nto employees for travel and business expenses in the ordinary course of
\nbusiness, consistent with past practices;<\/p>\n
(m) waiver or release of any right or claim of Parent, including
\nany write-off or other compromise of any account receivable of Parent;<\/p>\n
(n) commencement or notice or threat of commencement of any
\nlawsuit or proceeding against or investigation of Parent or its affairs;<\/p>\n
(o) notice of any claim of ownership by a third party of Parent’s
\nIntellectual Property (as defined in Section 3.11 below) or of infringement
\nby Parent’s of any third party’s Intellectual Property rights;<\/p>\n
(p) issuance or sale by Parent of any of its shares of capital
\nstock, or securities exchangeable, convertible or exercisable therefor, or of
\nany other of its securities;<\/p>\n
(q) change in pricing or royalties set or charged by Parent to its
\ncustomers or licensees or in pricing or royalties set or charged by persons
\nwho have licensed Intellectual Property to Parent;<\/p>\n
(r) event or condition of any character that has or could be
\nreasonably expected to have a Parent Material Adverse Effect on Parent; or<\/p>\n
(s) negotiation or agreement by Parent or any officer or employees
\nthereof to do any of the things described in the preceding clauses (a)
\nthrough (r) (other than negotiations with the Company and its representatives
\nregarding the transactions contemplated by this Agreement).<\/p>\n
3.8 TAX AND OTHER RETURNS AND REPORTS.<\/p>\n
(a) TAX RETURNS AND AUDITS. Except as set forth in Schedule 3.8:<\/p>\n
(i) Parent as of the Effective Time will have prepared and
\nfiled all required Returns relating to any and all Taxes concerning or
\nattributable to Parent or its operations and such Returns are true and
\ncorrect in all material respects and have been completed in accordance with
\napplicable law.<\/p>\n
(ii) Parent as of the Effective Time: (A) will have paid
\nor accrued on the Parent Unaudited Financials all Taxes it is required to pay
\nor which are attributable to the period ending December 31, 1997 and (B) will
\nhave withheld with respect to its employees all federal and state income
\ntaxes, FICA, FUTA and other Taxes required to be withheld.<\/p>\n
(iii) Parent has not been delinquent in the payment of any
\nTax nor is there any Tax deficiency outstanding, assessed, or to its
\nKnowledge proposed against Parent, nor has <\/p>\n
29<\/p>\n
Parent executed any waiver of any statute of limitations on or extending the
\nperiod for the assessment or collection of any Tax.<\/p>\n
(iv) No audit or other examination of any Return of Parent
\nis currently in progress, nor has Parent been notified of any request for
\nsuch an audit or other examination.<\/p>\n
(v) Parent does not have any liabilities for unpaid
\nfederal, state, local and foreign Taxes which have not been accrued or
\nreserved against in accordance with GAAP on the Parent Current Balance Sheet,
\nwhether asserted or unasserted, contingent or otherwise, and Parent has no
\nKnowledge of any basis for the assertion of any such liability attributable
\nto the Company, its assets or operations.<\/p>\n
(vi) Parent has provided to the Company copies of all
\nfederal and state income and all state sales and use Tax Returns for all
\nperiods since the date of Parent’s incorporation.<\/p>\n
(vii) There are (and as of immediately following the
\nEffective Date there will be) no Liens on the assets of Parent relating to or
\nattributable to Taxes.<\/p>\n
(viii) Parent has no Knowledge of any basis for the assertion
\nof any claim relating or attributable to Taxes which, if adversely
\ndetermined, would result in any Lien on the assets of Parent.<\/p>\n
(ix) None of Parent’s assets are treated as “tax-exempt use
\nproperty” within the meaning of Section 168(h) of the Code.<\/p>\n
(x) As of the Effective Time, there will not be any
\ncontract, agreement, plan or arrangement, including but not limited to the
\nprovisions of this Agreement, covering any employee or former employee of
\nParent that, individually or collectively, could give rise to the payment of
\nany amount that would not be deductible pursuant to Section 280G or 162 of
\nthe Code.<\/p>\n
(xi) Parent has not filed any consent agreement under
\nSection 341(f) of the Code or agreed to have Section 341(f)(2) of the Code
\napply to any disposition of a subsection (f) asset (as defined in Section
\n341(f)(4) of the Code) owned by Parent.<\/p>\n
(xii) Parent is not a party to a tax sharing or allocation
\nagreement nor does Parent owe any amount under any such agreement.<\/p>\n
(xiii) Parent is not, and has not been at any time, a “United
\nStates real property holding corporation” within the meaning of Section
\n897(c)(2) of the Code.<\/p>\n
(xiv) Since December 31, 1997 no Taxes have been incurred
\nexcept in the ordinary course of business. <\/p>\n
30<\/p>\n
Parent’s tax basis in its assets for purposes of determining its future
\namortization, depreciation and other federal income tax deductions is
\naccurately reflected on the Parent’s tax books and records.<\/p>\n
3.9 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
\n(noncompete or otherwise), commitment, judgment, injunction, order or decree
\nto which Parent is a party or otherwise binding upon Parent which has or
\nreasonably could be expected to have the effect of prohibiting or impairing
\nany business practice of Parent, any acquisition of property (tangible or
\nintangible) by Parent or the conduct of business by Parent. Without limiting
\nthe foregoing, Parent has not entered into any agreement under which Parent
\nis restricted from developing, selling, licensing, marketing, promoting or
\notherwise distributing any products, services or technology to any class of
\ncustomers, or entering into any strategic alliances, in any geographic area,
\nduring any period of time or in any segment of the market.<\/p>\n
3.10 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.<\/p>\n
(a) Parent owns no real property, nor has it ever owned any real
\nproperty. Schedule 3.10(a) sets forth a list of all real property currently
\nleased by Parent, the name of the lessor, the date of the lease and each
\namendment thereto and the aggregate annual rental and\/or other fees payable
\nunder any such lease and any security interest in Parent’s assets created by
\nsuch lease. All such leases are in full force and effect, are valid and
\neffective in accordance with their respective terms, and there is not, under
\nany of such leases, any existing default or event of default (or event which
\nwith notice or lapse of time, or both, would constitute a default).<\/p>\n
(b) Parent has good and valid title to, or, in the case of leased
\nproperties and assets, valid leasehold interests in, all of its tangible
\nproperties and assets, real, personal and mixed, used or held for use in its
\nbusiness, free and clear of any Liens, except as reflected in the Parent
\nFinancial Statements or in Schedule 3.10(b) and except for liens for taxes
\nnot yet due and payable and such imperfections of title and encumbrances, if
\nany, which are not material in character, amount or extent, and which do not
\nmaterially detract from the value, or materially interfere with the present
\nuse, of the property subject thereto or affected thereby.<\/p>\n
3.11 INTELLECTUAL PROPERTY.<\/p>\n
(a) Parent owns, or is licensed or otherwise possesses legally
\nenforceable rights to use, all patents, trademarks, trade names, service
\nmarks, copyrights, and any applications therefor, maskworks, net lists,
\nschematics, technology, know-how, computer software programs or applications
\n(in both source code and object code form), and tangible or intangible
\nproprietary information or material that are used in the business of Parent
\nas currently conducted or as proposed to be conducted by Parent (the “PARENT
\nINTELLECTUAL PROPERTY RIGHT(S)”). Schedule 3.11(a) sets forth a complete
\nlist of all patents, registered and material unregistered trademarks,
\nregistered copyrights, trade names and service marks, and any applications
\ntherefor, included in the Parent Intellectual Property Rights, and specifies,
\nwhere applicable, the jurisdictions in which each such Parent Intellectual
\nProperty Right has been issued or registered or in which an application for
\nsuch issuance <\/p>\n
31<\/p>\n
and registration has been filed, including the respective registration or
\napplication numbers and the names of all registered owners. <\/p>\n
(b) Schedule 3.11(b) sets forth a complete list of all licenses,
\nsublicenses and other agreements to which Parent is a party and pursuant to
\nwhich Parent or any other person is authorized to use any Parent Intellectual
\nProperty Right (excluding End-User Licenses) or trade secret of Parent, and
\nincludes the identity of all parties thereto, a description of the nature and
\nsubject matter thereof, the applicable royalty or other fees and the term
\nthereof. The execution and delivery of this Agreement by Parent, and the
\nconsummation of the transactions contemplated hereby, will neither cause
\nParent to be in violation or default under any such license, sublicense or
\nagreement, nor entitle any other party to any such license, sublicense or
\nagreement to terminate or modify such license, sublicense or agreement.
\nExcept as set forth in Schedules 3.11(a) or 3.11(b), Parent is the sole and
\nexclusive owner or licensee of, with all right, title and interest in and to
\n(free and clear of any liens or encumbrances), the Parent Intellectual
\nProperty Rights, and has sole and exclusive rights (and is not contractually
\nobligated to pay any compensation to any third party in respect thereof) to
\nthe use thereof or the material covered thereby in connection with the
\nservices or products in respect of which the Parent Intellectual Property
\nRights are being used. <\/p>\n
(c) No claims with respect to the Parent Intellectual Property
\nRights have been asserted or are, to Parent’s Knowledge, threatened by any
\nperson, nor are there any valid grounds for any claims, (i) to the effect
\nthat the manufacture, sale, licensing or use of any of the products of Parent
\ninfringes on any copyright, patent, trade mark, service mark, trade secret or
\nother proprietary right, (ii) against the use by Parent of any trademarks,
\nservice marks, trade names, trade secrets, copyrights, maskworks, patents,
\ntechnology, know-how or computer software programs and applications used in
\nParent’s business as currently conducted or as proposed to be conducted by
\nParent, or (iii) challenging the ownership by Parent, validity or
\neffectiveness of any of the Parent Intellectual Property Rights. All
\nregistered trademarks, service marks and copyrights held by Parent are valid
\nand subsisting. Parent has not infringed, and the business of Parent as
\ncurrently conducted or as proposed to be conducted does not infringe, any
\ncopyright, patent, trademark, service mark, trade secret or other
\nproprietary right of any third party. There is no material unauthorized use,
\ninfringement or misappropriation of any of the Parent Intellectual Property
\nRights by any third party, including any employee or former employee of
\nParent. No Parent Intellectual Property Right or product of Parent or any of
\nits subsidiaries is subject to any outstanding decree, order, judgment, or
\nstipulation restricting in any manner the licensing thereof by Parent. Each
\nemployee, consultant or contractor of Parent has executed a proprietary
\ninformation and confidentiality agreement substantially in the Parent’s
\nstandard forms. All software included in the Parent Intellectual Property
\nRights is original with Parent and has been either created by employees of
\nParent on a work-for-hire basis or by consultants or contractors who have
\ncreated such software themselves and have assigned all rights they may have
\nhad in such software to Parent.<\/p>\n
3.12 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth on
\nSchedule 3.12(a), Parent does not have, is not a party to nor is it bound by:<\/p>\n
32<\/p>\n
(i) any collective bargaining agreements,<\/p>\n
(ii) any agreements or arrangements that contain any
\nseverance pay or post-employment liabilities or obligations,<\/p>\n
(iii) any bonus, deferred compensation, pension, profit
\nsharing or retirement plans, or any other employee benefit plans or
\narrangements,<\/p>\n
(iv) any employment or consulting agreement, contract or
\ncommitment with an employee or individual consultant or salesperson or any
\nconsulting or sales agreement, contract or commitment under which any firm or
\nother organization provides services to Parent,<\/p>\n
(v) any agreement or plan, including, without limitation,
\nany stock option plan, stock appreciation rights plan or stock purchase plan,
\nany of the benefits of which will be increased, or the vesting of benefits of
\nwhich will be accelerated, by the occurrence of any of the transactions
\ncontemplated by this Agreement or the value of any of the benefits of which
\nwill be calculated on the basis of any of the transactions contemplated by
\nthis Agreement,<\/p>\n
(vi) any fidelity or surety bond or completion bond,<\/p>\n
(vii) any lease of personal property having a value
\nindividually in excess of $25,000,<\/p>\n
(viii) any agreement of indemnification or guaranty,<\/p>\n
(ix) any agreement, contract or commitment containing any
\ncovenant limiting the freedom of Parent to engage in any line of business or
\nto compete with any person,<\/p>\n
(x) any agreement, contract or commitment relating to
\ncapital expenditures and involving future payments in excess of $25,000,<\/p>\n
(xi) any agreement, contract or commitment relating to the
\ndisposition or acquisition of assets or any interest in any business
\nenterprise outside the ordinary course of the Parent’s business,<\/p>\n
(xii) any mortgages, indentures, loans or credit agreements,
\nsecurity agreements or other agreements or instruments relating to the
\nborrowing of money or extension of credit, including guaranties referred to
\nin clause (viii) hereof,<\/p>\n
(xiii) any purchase order or contract for the purchase of raw
\nmaterials involving $25,000 or more,<\/p>\n
(xiv) any construction contracts,<\/p>\n
33<\/p>\n
(xv) any distribution, joint marketing or development
\nagreement, <\/p>\n
(xvi) any agreement pursuant to which Parent has granted or
\nmay grant in the future, to any party, a source-code license or option or
\nother right to use or acquire source-code, or <\/p>\n
(xvii) any other agreement, contract or commitment that
\ninvolves $25,000 or more or is not cancelable without penalty within thirty
\n(30) days.<\/p>\n
Except for such alleged breaches, violations and defaults, and events that
\nwould constitute a breach, violation or default with the lapse of time,
\ngiving of notice, or both, as are all noted in Schedule 3.12(b), Parent has
\nnot breached, violated or defaulted under, or received notice that it has
\nbreached, violated or defaulted under, any of the terms or conditions of any
\nagreement, contract or commitment required to be set forth on Schedule
\n3.12(a) or Schedule 3.11(b) (any such agreement, contract or commitment, a
\n“PARENT CONTRACT”). Each Parent Contract is in full force and effect and,
\nexcept as otherwise disclosed in Schedule 3.12(b), is not subject to any
\ndefault thereunder of which Parent has Knowledge by any party obligated to
\nParent pursuant thereto.<\/p>\n
3.13 INTERESTED PARTY TRANSACTIONS. Except as set forth on Schedule
\n3.13, (i) no officer, director or, to the Knowledge of Parent (without any
\nduty to investigate), any shareholder of Parent has, directly or indirectly,
\nan economic interest in any entity which furnished or sold, or furnishes or
\nsells, services or products that Parent furnishes or sells, or proposes to
\nfurnish or sell, (ii) no officer, director or, to the Knowledge of Parent
\n(without any duty to investigate), any stockholder of Parent has, directly or
\nindirectly, an economic interest in any entity that purchases from or sells
\nor furnishes to, Parent, any goods or services or (iii) no officer, director
\nor shareholder of Parent has, directly or indirectly, a beneficial interest
\nin any contract or agreement set forth in Schedule 3.12(a) or Schedule
\n3.11(b); provided, that ownership of no more than one percent (1%) of the
\noutstanding voting stock of a publicly traded corporation shall not be deemed
\nan “economic interest in any entity” for purposes of this Section 3.13. For
\nthe purposes of this subsection, “officer” and “director” shall include any
\nparent, child, sibling or spouse of any of such persons, or any trust,
\npartnership or corporation in which such officer or director has a
\ncontrolling interest.<\/p>\n
3.14 COMPLIANCE WITH LAWS. Parent has complied in all material respects
\nwith, is not in material violation of, and has not received any notices of
\nviolation with respect to, any foreign, federal, state or local statute, law
\nor regulation.<\/p>\n
3.15 LITIGATION. Except as set forth in Schedule 3.15, there is no
\naction, suit or proceeding of any nature pending or to Parent’s Knowledge
\nthreatened against Parent, its properties or any of its officers or
\ndirectors, in their respective capacities as such. Except as set forth in
\nSchedule 3.15, to the Parent’s Knowledge, there is no investigation pending
\nor threatened against Parent, its properties or any of its officers or
\ndirectors (in their respective capacities as such) by or before any
\ngovernmental entity. Schedule 3.15 sets forth, with respect to any pending
\nor threatened action, suit, <\/p>\n
34<\/p>\n
proceeding or investigation, the forum, the parties thereto, the subject
\nmatter thereof and the amount of damages claimed or other remedy requested.
\nNo Governmental Entity has at any time challenged or questioned the legal
\nright of Parent to manufacture, offer or sell any of its products in the
\npresent manner or style thereof.<\/p>\n
3.16 INSURANCE. Set forth on Schedule 3.16 is a list of all of Parent’s
\ninsurance policies and fidelity bonds. With respect to the insurance
\npolicies and fidelity bonds covering the assets, business, equipment,
\nproperties, operations, employees, officers and directors of Parent, there is
\nno claim by Parent pending under any of such policies or bonds as to which
\ncoverage has been questioned, denied or disputed by the underwriters of such
\npolicies or bonds. All premiums due and payable under all such policies and
\nbonds have been paid and Parent is otherwise in material compliance with the
\nterms of such policies and bonds (or other policies and bonds providing
\nsubstantially similar insurance coverage). Parent has no Knowledge of any
\nthreatened termination of, or material premium increase with respect to, any
\nof such policies.<\/p>\n
3.17 MINUTE BOOKS. The minute books of Parent made available to counsel
\nfor the Company are the only minute books of Parent and contain a reasonably
\naccurate summary of all meetings of directors (or committees thereof) and
\nstockholders or actions by written consent since the time of incorporation of
\nParent.<\/p>\n
3.18 ENVIRONMENTAL MATTERS.<\/p>\n
(a) HAZARDOUS MATERIAL. Parent has not operated any underground
\nstorage tanks, and has no Knowledge of the existence, at any time, of any
\nunderground storage tank (or related piping or pumps), at any property that
\nParent has at any time owned, operated, occupied or leased. Parent has not
\nreleased any amount of any substance that has been designated by any
\nGovernmental Entity or by applicable federal, state or local law to be a
\nHazardous Material. No Hazardous Materials are present as a result of the
\nactions or omissions of Parent, or, to Parent’s Knowledge, as a result of any
\nactions of any third party or otherwise, in, on or under any property,
\nincluding the land and the improvements, ground water and surface water
\nthereof, that Parent has at any time owned, operated, occupied or leased.<\/p>\n
(b) HAZARDOUS MATERIALS ACTIVITIES. Parent has not engaged in any
\nHazardous Materials Activities in violation of any rule, regulation, treaty
\nor statute promulgated by any Governmental Entity in effect prior to or as of
\nthe date hereof to prohibit, regulate or control Hazardous Materials or any
\nHazardous Material Activity.<\/p>\n
(c) PERMITS. The Company currently holds all Environmental
\nPermits necessary for the conduct of Parent’s Hazardous Material Activities
\nand other businesses of Parent as such activities and businesses are
\ncurrently being conducted.<\/p>\n
(d) ENVIRONMENTAL LIABILITIES. No action, proceeding, revocation
\nproceeding, amendment, procedure, writ, injunction or claim is pending, or to
\nParent’s Knowledge, threatened <\/p>\n
35<\/p>\n
concerning any Environmental Permit, Hazardous Material or any Hazardous
\nMaterials Activity of Parent. Parent is not aware of any fact or circumstance
\nwhich could involve Parent in any environmental litigation or impose upon
\nParent any environmental liability.<\/p>\n
3.19 BROKERS’ AND FINDERS’ FEES; THIRD PARTY EXPENSES. Except as set
\nforth on Schedule 3.19, Parent has not incurred, nor will it incur, directly
\nor indirectly, any liability for brokerage or finders’ fees, investment
\nbanking fees, consulting fees or agents’ commissions or any similar charges
\nin connection with this Agreement or any transaction contemplated hereby.
\nSchedule 3.19 sets forth the principal terms and conditions of any agreement,
\nwritten or oral, with respect to such fees. Schedule 3.19 also sets forth
\nParent’s current reasonable estimate of all Third Party Expenses (as defined
\nin Section 5.4) expected to be incurred by Parent in connection with the
\nnegotiation and effectuation of the terms and conditions of this Agreement
\nand the transactions contemplated hereby.<\/p>\n
3.20 EMPLOYEE MATTERS AND BENEFIT PLANS.<\/p>\n
(a) DEFINITIONS. For purposes of this Agreement, the following
\nterms shall have the meanings set forth below:<\/p>\n
(i) “PARENT AFFILIATE” shall mean any other person or
\nentity under common control with Parent within the meaning of Section 414(b)
\nor (c) and the regulations thereunder. In addition, for any Parent Employee
\nPlan subject to Section 412(n), the term Parent Affiliate shall mean any
\nother person or entity under common control with Parent within the meaning of
\nSection 414(b), (c), (m) or (o) of the Code;<\/p>\n
(ii) “PARENT EMPLOYEE PLAN” shall refer to any plan,
\nprogram, policy, practice, contract, agreement or other arrangement providing
\nfor compensation, severance, termination pay, performance awards, stock or
\nstock-related awards, fringe benefits or other employee benefits or
\nremuneration of any kind, whether formal or informal, funded or unfunded and
\nwhether or not legally binding, including without limitation, each “employee
\nbenefit plan”, within the meaning of Section 3(3) of ERISA which is or has
\nbeen maintained, contributed to, or required to be contributed to, by the
\nCompany or any Parent Affiliate for the benefit of any “Parent Employee” (as
\ndefined below), and any Parent Employee Plan which has been maintained,
\ncontributed to, or required to have been contributed to by Parent or any
\nParent Affiliate pursuant to which Parent or any Parent Affiliate has or may
\nhave any material liability contingent or otherwise;<\/p>\n
(iii) “PARENT EMPLOYEE” shall mean any current, former, or
\nretired employee, officer, or director of Parent or any Parent Affiliate;<\/p>\n
(iv) “PARENT EMPLOYEE AGREEMENT” shall refer to each
\nmanagement, employment, severance, consulting, relocation, repatriation,
\nexpatriation, visas, work permit or similar agreement or contract between
\nParent or any Parent Affiliate and any Parent Employee or consultant;<\/p>\n
36<\/p>\n
(v) “PARENT PENSION PLAN” shall refer to each Parent
\nEmployee Plan which is an “employee pension benefit plan”, within the meaning
\nof Section 3(2) of ERISA.<\/p>\n
(vi) “PARENT DEFINED BENEFIT PLAN” shall mean any Pension
\nPlan that is a “defined benefit plan,” as defined in ERISA Section 3(35). <\/p>\n
(b) SCHEDULE. Schedule 3.20(b) contains an accurate and complete
\nlist of each Parent Employee Plan and each Parent Employee Agreement together
\nwith a schedule of all liabilities, whether or not accrued, under each such
\nParent Employee Plan or Parent Employee Agreement only to the extent not
\nreflected on the Parent Current Balance Sheet. Parent does not have any plan
\nor commitment, whether legally binding or not, to establish any new Parent
\nEmployee Plan or Parent Employee Agreement, to modify any Parent Employee
\nPlan or Parent Employee Agreement (except to the extent required by law or to
\nconform any such Parent Employee Plan or Parent Employee Agreement to the
\nrequirements of any applicable law, in each case as previously disclosed to
\nParent in writing, or as required by this Agreement), or to enter into any
\nParent Employee Plan or Parent Employee Agreement, nor does it have any
\nintention or commitment to do any of the foregoing. <\/p>\n
(c) DOCUMENTS. Parent has provided to Company (i) correct and
\ncomplete copies of all nonprivileged documents embodying or materially
\naffecting the interpretation or application of each Parent Employee Plan and
\neach Parent Employee Agreement including all amendments thereto, and, to the
\nKnowledge of the Company, there are no privileged documents pertaining to
\nsuch matters; (ii) the most recent annual actuarial valuations, if any,
\nprepared for each Parent Defined Benefit Plan; (iii) the three most recent
\nannual reports (Series 5500 and all schedules thereto), if any, required
\nunder ERISA or the Code in connection with each Parent Employee Plan or
\nrelated trust; (iv) if the Parent Employee Plan is funded, the most recent
\nannual and periodic accounting of Parent Employee Plan assets; (v) the most
\nrecent summary plan description together with the most recent summary of
\nmaterial modifications, if any, required under ERISA with respect to each
\nParent Employee Plan which has a material adverse effect on such Parent
\nEmployee Plan; (vi) the most recent IRS determination, opinion, notification
\nor advisory letters as applicable, and rulings relating to Parent Employee
\nPlans and copies of all applications and correspondence to or from the IRS or
\nthe DOL with respect to any Parent Employee Plan; (vii) all communications
\nmaterial to any Parent Employee or Parent Employees relating to any Parent
\nEmployee Plan and any proposed Parent Employee Plans, in each case, relating
\nto any amendments, terminations, establishments, increases or decreases in
\nbenefits, acceleration of payments or vesting schedules or other events which
\nwould result in any material liability to Parent; and (viii) all registration
\nstatements and prospectuses prepared in connection with each Parent Employee
\nPlan not otherwise publicly available on the SEC website.<\/p>\n
(d) EMPLOYEE PLAN COMPLIANCE. Except as set forth on Schedule
\n3.20(d), (i) Parent has performed in all material respects all obligations
\nrequired to be performed by it under each Parent Employee Plan, and each
\nParent Employee Plan has been established and maintained in <\/p>\n
37<\/p>\n
all material respects in accordance with its terms and in compliance with all
\napplicable laws, statutes, orders, rules and regulations, including but not
\nlimited to ERISA or the Code; (ii) no “prohibited transaction”, within the
\nmeaning of Section 4975 of the Code or Section 406 of ERISA, has occurred
\nwith respect to any Parent Employee Plan for which an exemption is not
\napplicable; (iii) there are no actions, suits or claims pending, or, to the
\nKnowledge of Parent, threatened or anticipated (other than routine claims for
\nbenefits) against any Parent Employee Plan or against the assets of any
\nParent Employee Plan; and (iv) each Parent Employee Plan can be amended,
\nterminated or otherwise discontinued after the Effective Time in accordance
\nwith its terms, without material liability to the Company, Parent or any
\nParent Affiliates (other than ordinary administration expenses typically
\nincurred in a termination event); (v) there are no inquiries or proceedings
\npending or, to the Knowledge of Parent or any Affiliates, threatened by the
\nIRS or DOL with respect to any Parent Employee Plan; and (vi) neither Parent
\nnor any Parent Affiliate is subject to any material penalty or tax with
\nrespect to any Parent Employee Plan under Section 502(i) of ERISA or Section
\n4975 through 4980 of the Code.<\/p>\n
(e) PENSION PLANS. Parent does not now, nor has it ever,
\nmaintained, established, sponsored, participated in, or contributed to, any
\nPension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA,
\nTitle IV of ERISA or Section 412 of the Code.<\/p>\n
(f) MULTIEMPLOYER PLANS. At no time has Parent contributed to or
\nbeen requested to contribute to any Multiemployer Plan.<\/p>\n
(g) NO POST-EMPLOYMENT OBLIGATIONS. Except as set forth in
\nSchedule 3.20(g), no Parent Employee Plan provides, or has any liability to
\nprovide, life insurance, medical or other employee welfare benefits to any
\nParent Employee upon his or her retirement or termination of employment for
\nany reason, except as may be required by statute, and Parent has never
\nrepresented, promised or contracted (whether in oral or written form) to any
\nParent Employee (either individually or to Employees as a group) that such
\nParent Employee(s) would be provided with life insurance, medical or other
\nemployee welfare benefits upon their retirement or termination of employment,
\nexcept to the extent required by statute. The term “other employee welfare
\nbenefits” means those benefits traditionally provided under an “employee
\nbenefit welfare plan” as defined in ERISA Section 3(1). <\/p>\n
(h) COBRA. Neither Parent nor any Parent Affiliate has, prior to
\nthe Effective Time and in any material respect, violated any of the health
\ncare continuation requirements of COBRA, the requirements of the FMLA or any
\nsimilar provisions of state law applicable to its Parent Employees. <\/p>\n
(i) EFFECT OF TRANSACTION.<\/p>\n
(i) Except as set forth on Schedule 3.20(i)(i), the
\nexecution of this Agreement and the consummation of the transactions
\ncontemplated hereby will not (either alone or upon the occurrence of any
\nadditional or subsequent events) constitute an event under any Parent <\/p>\n
38<\/p>\n
Employee Plan, Parent Employee Agreement, trust or loan that will or may
\nresult in any payment (whether of severance pay or otherwise), acceleration,
\nforgiveness of indebtedness, vesting, distribution, increase in benefits or
\nobligation to fund benefits with respect to any Parent Employee.<\/p>\n
(ii) Except as set forth on Schedule 3.20(i)(ii), no
\npayment or benefit which will or may be made by Parent or Company or any of
\ntheir respective affiliates with respect to any Employee will be
\ncharacterized as an “excess parachute payment” within the meaning of Section
\n280G(b)(1) of the Code.<\/p>\n
(j) EMPLOYMENT MATTERS. Parent (i) is in compliance in all
\nmaterial respects with all applicable foreign, federal, state and local laws,
\nrules and regulations respecting employment, employment practices, terms and
\nconditions of employment and wages and hours, in each case, with respect to
\nParent Employees; (ii) has withheld all amounts required by law or by
\nagreement to be withheld from the wages, salaries and other payments to
\nParent Employees; (iii) is not liable for any arrears of wages, other than
\narrears normally included in its payroll schedule and system, or any taxes or
\nany penalty for failure to comply with any of the foregoing; and (iv) is not
\nliable for any payment to any trust or other fund or to any governmental or
\nadministrative authority, with respect to unemployment compensation benefits,
\nsocial security or other benefits or obligations for Parent Employees (other
\nthan routine payments to be made in the normal course of business and
\nconsistent with past practice).<\/p>\n
(k) LABOR. To the Knowledge of Parent, no work stoppage or labor
\nstrike against Parent is pending or threatened. Except as set forth in
\nSchedule 3.20(k), Parent is not involved in or, to the Knowledge of Parent,
\nthreatened with, any labor dispute, grievance, or litigation relating to
\nlabor, safety or discrimination matters involving any Parent Employee,
\nincluding, without limitation, charges of unfair labor practices or
\ndiscrimination complaints, which, if adversely determined, would,
\nindividually or in the aggregate, result in liability to Parent. To the
\nKnowledge of Parent, neither Parent nor any of its subsidiaries has engaged
\nin any unfair labor practices within the meaning of the National Labor
\nRelations Act which would, individually or in the aggregate, directly or
\nindirectly result in a material liability to Parent. Except as set forth in
\nSchedule 3.20(k), Parent is not presently, nor has it been in the past, a
\nparty to, or bound by, any collective bargaining agreement or union contract
\nwith respect to Parent Employees and no collective bargaining agreement is
\nbeing negotiated by Parent.<\/p>\n
3.21 ACCOUNTING AND REGULATORY MATTERS. Parent has no Knowledge of any
\naction taken by Parent or any Affiliate of Parent or agreed to be taken nor
\nhas any Knowledge of any fact or circumstance that is reasonably likely to
\n(a) prevent the Merger from qualifying for pooling-of-interests accounting
\ntreatment, or (b) materially impede or delay receipt of any consents of
\nregulatory authorities referred to in Section 6.1(c), Section 6.1(e) and
\nSection 6.1(h) or result in the imposition of a condition or restriction of
\nthe type referred to in the last sentence of such Section. <\/p>\n
3.22 REPRESENTATIONS COMPLETE. None of the representations or
\nwarranties made by Parent or Merger Sub (as modified by the Parent and Merger
\nSub Schedules), nor any statement made in <\/p>\n
39<\/p>\n
any schedule or certificate furnished by Parent or Merger Sub pursuant to
\nthis Agreement, or furnished in or in connection with documents mailed or
\ndelivered to the stockholders of Parent or Merger Sub in connection with
\nsoliciting their consent to this Agreement and the Merger, contains or will
\ncontain at the Effective Time, any untrue statement of a material fact, or
\nomits or will omit at the Effective Time to state any material fact necessary
\nin order to make the statements contained herein or therein, in the light of
\nthe circumstances under which made, not misleading.<\/p>\n
ARTICLE IV<\/p>\n
CONDUCT PRIOR TO THE EFFECTIVE TIME<\/p>\n
4.1 CONDUCT OF BUSINESS OF THE COMPANY AND PARENT.<\/p>\n
(a) COMPANY CONDUCT. During the period from the date of this
\nAgreement and continuing until the earlier of the termination of this
\nAgreement and the Effective Time, the Company agrees (except to the extent
\nthat Parent shall otherwise consent in writing or as expressly contemplated
\nherein) to carry on its business in the usual, regular and ordinary course in
\nsubstantially the same manner as heretofore conducted, to pay its debts and
\nTaxes when due, to pay or perform other obligations when due, and, to the
\nextent consistent with such business, to use all reasonable efforts
\nconsistent with past practice and policies to preserve intact its present
\nbusiness organization, keep available the services of its present officers
\nand key employees and preserve their relationships with customers, suppliers,
\ndistributors, licensors, licensees, and others having business dealings with
\nit, all with the goal of preserving unimpaired its goodwill and ongoing
\nbusinesses at the Effective Time. The Company shall promptly notify Parent
\nof any material event or occurrence or emergency not in the ordinary course
\nof its business, and any material event involving or adversely affecting the
\nCompany or its business. Except as expressly contemplated by this Agreement
\nand except as set forth on Schedule 4.1(a), the Company shall not, without
\nthe prior written consent of Parent:<\/p>\n
(i) Except as set forth in the following subparagraph,
\nenter into any commitment, activity or transaction not in the ordinary course
\nof business;<\/p>\n
(ii) Except for ProviderLink Valve-Added Reseller
\nAgreements, transfer to any person or entity any rights to any Company
\nIntellectual Property Rights (other than pursuant to End-User Licenses in the
\nordinary course of business);<\/p>\n
(iii) Enter into or amend any agreements pursuant to which
\nany other party is granted manufacturing, marketing, distribution or similar
\nrights of any type or scope with respect to any products of the Company;<\/p>\n
40<\/p>\n
(iv) Amend or otherwise modify (or agree to do so), except
\nin the ordinary course of business, or violate the terms of, any of the
\nagreements set forth or described in the Company Schedules;<\/p>\n
(v) Commence any litigation;<\/p>\n
(vi) Declare, set aside or pay any dividends on or make any
\nother distributions (whether in cash, stock or property) in respect of any of
\nits capital stock, or split, combine or reclassify any of its capital stock
\nor issue or authorize the issuance of any other securities in respect of, in
\nlieu of or in substitution for shares of capital stock of the Company, or
\nrepurchase, redeem or otherwise acquire, directly or indirectly, any shares
\nof its capital stock (or options, warrants or other rights exercisable
\ntherefor);<\/p>\n
(vii) Except as may be required by the SBCL Assets Purchase
\nAgreement, for the issuance of shares of Company Capital Stock upon exercise
\nor conversion of presently outstanding Company Options or Company Convertible
\nSecurities and except pursuant to agreements previously entered into and
\nagreements that the Company will enter into in connection with the employment
\nof non-officer employees, issue, grant, deliver or sell or authorize or
\npropose the issuance, grant, delivery or sale of, or purchase or propose the
\npurchase of, any shares of its capital stock or securities convertible into,
\nor subscriptions, rights, warrants or options to acquire, or other agreements
\nor commitments of any character obligating it to issue any such shares or
\nother convertible securities;<\/p>\n
(viii) Cause or permit any amendments to its Articles of
\nIncorporation or Bylaws;<\/p>\n
(ix) Except as may be required by the SBCL Assets Purchase
\nAgreement, acquire or agree to acquire by merging or consolidating with, or
\nby purchasing any assets or equity securities of, or by any other manner, any
\nbusiness or any corporation, partnership, association or other business
\norganization or division thereof, or otherwise acquire or agree to acquire
\nany assets which are material, individually or in the aggregate, to the
\nbusiness of the Company;<\/p>\n
(x) Sell, lease, license or otherwise dispose of any of
\nits properties or assets, except in the ordinary course of business and
\nconsistent with past practice;<\/p>\n
(xi) Incur any indebtedness for borrowed money or guarantee
\nany such indebtedness or issue or sell any debt securities of the Company or
\nguarantee any debt securities of others;<\/p>\n
(xii) Grant any severance or termination pay to any
\ndirector, officer, employee or consultant, except payments (a) required by
\nlaw or, (b) with respect to non-officer employees and consultants (i) made
\npursuant to written agreements outstanding on the date hereof <\/p>\n
41<\/p>\n
(which such agreements are disclosed on Schedule 4.1(a)(xii)), or (ii)
\npursuant to Company policy in effect on the date hereof;<\/p>\n
(xiii) Adopt or amend any employee benefit plan, program,
\npolicy or arrangement, or enter into any employment contract, extend any
\nemployment offer, pay or agree to pay any special bonus or special
\nremuneration to any director, employee or consultant, or increase the
\nsalaries or wage rates of its employees other than in the ordinary course of
\nbusiness and consistent with past practice;<\/p>\n
(xiv) Except as required by the acquisition of assets
\npursuant to the SBCL Assets Purchase Agreement, revalue any of its assets,
\nincluding without limitation writing down the value of inventory or writing
\noff notes or accounts receivable other than in the ordinary course of
\nbusiness and consistent with past practice;<\/p>\n
(xv) Take any action, including the acceleration of vesting
\nof any options, warrants, restricted stock or other rights to acquire shares
\nof the capital stock of the Company which would be reasonably likely to
\ninterfere with Parent’s ability to account for the Merger as a pooling of
\ninterests or any other action that could jeopardize the tax-free
\nreorganization hereunder; <\/p>\n
(xvi) Pay, discharge or satisfy, in an amount in excess of
\n$15,000, in any one case, or $50,000, in the aggregate, any claim, liability
\nor obligation (absolute, accrued, asserted or unasserted, contingent or
\notherwise), other than the payment, discharge or satisfaction in the ordinary
\ncourse of business of liabilities reflected or reserved against in the
\nCompany Financial Statements or incurred in the ordinary course of business
\nsince December 31, 1997;<\/p>\n
(xvii) Make or change any material election in respect of
\nTaxes, adopt or change any accounting method in respect of Taxes, enter into
\nany closing agreement, settle any claim or assessment in respect of Taxes, or
\nconsent to any extension or waiver of the limitation period applicable to any
\nclaim or assessment in respect of Taxes;<\/p>\n
(xviii) Enter into any strategic alliance, joint development
\nor joint marketing arrangement or agreement;<\/p>\n
(xix) Fail to pay or otherwise satisfy its monetary
\nobligations as they become due, except such as are being contested in good
\nfaith;<\/p>\n
(xx) Waive or commit to waive any rights with a value in
\nexcess of $10,000, in any one case, or $25,000, in the aggregate;<\/p>\n
(xxi) Cancel, materially amend or renew any insurance policy
\nother than in the ordinary course of business;<\/p>\n
42<\/p>\n
(xxii) Alter, or enter into any commitment to alter, its
\ninterest in any corporation, association, joint venture, partnership or
\nbusiness entity in which the Company directly or indirectly holds any
\ninterest on the date hereof; or<\/p>\n
(xxiii) Take, or agree in writing or otherwise to take, any of
\nthe actions described in Sections 4.1(i) through (xxii) above, or any other
\naction that would prevent the Company from performing or cause the Company
\nnot to perform its covenants hereunder.<\/p>\n
(b) PARENT CONDUCT. During the period from the date of this
\nAgreement and continuing until the earlier of the termination of this
\nAgreement and the Effective Time, Parent agrees (except to the extent that
\nCompany shall otherwise consent in writing or as expressly contemplated
\nherein) to carry on its business in the usual, regular and ordinary course in
\nsubstantially the same manner as heretofore conducted, to pay its debts and
\nTaxes when due, to pay or perform other obligations when due, and, to the
\nextent consistent with such business, to use all reasonable efforts
\nconsistent with past practice and policies to preserve intact its present
\nbusiness organization, keep available the services of its present officers
\nand key employees and preserve their relationships with customers, suppliers,
\ndistributors, licensors, licensees, and others having business dealings with
\nit, all with the goal of preserving unimpaired its goodwill and ongoing
\nbusinesses at the Effective Time. Parent shall promptly notify the Company of
\nany material event or occurrence or emergency not in the ordinary course of
\nits business, and any material event involving or adversely affecting Parent
\nor its business. Except as expressly contemplated by this Agreement and
\nexcept as set forth on Schedule 4.1(b), Parent shall not, without the prior
\nwritten consent of the Company:<\/p>\n
(i) Enter into any commitment, activity or transaction not
\nin the ordinary course of business.<\/p>\n
(ii) Transfer to any person or entity any rights to any
\nParent Intellectual Property Rights (other than pursuant to End-User Licenses
\nin the ordinary course of business);<\/p>\n
(iii) Enter into or amend any agreements pursuant to which
\nany other party is granted manufacturing, marketing, distribution or similar
\nrights of any type or scope with respect to any products of Parent;<\/p>\n
(iv) Amend or otherwise modify (or agree to do so), except
\nin the ordinary course of business, or violate the terms of, any of the
\nagreements set forth or described in the Parent and Merger Sub Schedules;<\/p>\n
(v) Commence any litigation;<\/p>\n
(vi) Declare, set aside or pay any dividends on or make any
\nother distributions (whether in cash, stock or property) in respect of any of
\nits capital stock, or split, combine or reclassify any of its capital stock
\nor issue or authorize the issuance of any other securities in respect of, in
\nlieu of or in substitution for shares of capital stock of Parent, or
\nrepurchase, redeem<\/p>\n
43<\/p>\n
or otherwise acquire, directly or indirectly, any shares of its capital stock
\n(or options, warrants or other rights exercisable therefor);<\/p>\n
(vii) Except for the issuance of shares of Parent capital
\nstock upon exercise or conversion of presently outstanding Parent Convertible
\nSecurities and except pursuant to agreements previously entered into and
\nagreements that Parent will enter into in connection with the employment of
\nnon-officer employees, issue, grant, deliver or sell or authorize or propose
\nthe issuance, grant, delivery or sale of, or purchase or propose the purchase
\nof, any shares of its capital stock or securities convertible into, or
\nsubscriptions, rights, warrants or options to acquire, or other agreements or
\ncommitments of any character obligating it to issue any such shares or other
\nconvertible securities;<\/p>\n
(viii) Cause or permit any amendments to its Certificate of
\nIncorporation or Bylaws;<\/p>\n
(ix) Acquire or agree to acquire by merging or consolidating
\nwith, or by purchasing any assets or equity securities of, or by any other
\nmanner, any business or any corporation, partnership, association or other
\nbusiness organization or division thereof, or otherwise acquire or agree to
\nacquire any assets which are material, individually or in the aggregate, to
\nthe business of Parent;<\/p>\n
(x) Sell, lease, license or otherwise dispose of any of its
\nproperties or assets, except in the ordinary course of business and
\nconsistent with past practice;<\/p>\n
(xi) Incur any indebtedness for borrowed money or guarantee
\nany such indebtedness or issue or sell any debt securities of Parent or
\nguarantee any debt securities of others;<\/p>\n
(xii) Grant any severance or termination pay to any director,
\nofficer, employee or consultant, except payments (a) required by law or, (b)
\nwith respect to non-officer employees and consultants (i) made pursuant to
\nwritten agreements outstanding on the date hereof (which such agreements are
\ndisclosed on Schedule 4.1(b)(xii)), or (ii) pursuant to Parent policy in
\neffect on the date hereof;<\/p>\n
(xiii) Adopt or amend any employee benefit plan, program,
\npolicy or arrangement, or enter into any employment contract, extend any
\nemployment offer, pay or agree to pay any special bonus or special
\nremuneration to any director, employee or consultant, or increase the
\nsalaries or wage rates of its employees other than in the ordinary course of
\nbusiness and consistent with past practice;<\/p>\n
(xiv) Revalue any of its assets, including without limitation
\nwriting down the value of inventory or writing off notes or accounts
\nreceivable other than in the ordinary course of business and consistent with
\npast practice;<\/p>\n
44<\/p>\n
(xv) Take any action, including the acceleration of vesting
\nof any options, warrants, restricted stock or other rights to acquire shares
\nof the capital stock of Parent which would be reasonably likely to interfere
\nwith Parent’s ability to account for the Merger as a pooling of interests or
\nany other action that could jeopardize the tax-free reorganization hereunder; <\/p>\n
(xvi) Pay, discharge or satisfy, in an amount in excess of
\n$15,000, in any one case, or $50,000, in the aggregate, any claim, liability
\nor obligation (absolute, accrued, asserted or unasserted, contingent or
\notherwise), other than the payment, discharge or satisfaction in the ordinary
\ncourse of business of liabilities reflected or reserved against in the Parent
\nFinancial Statements or incurred in the ordinary course of business since
\nDecember 31, 1997;<\/p>\n
(xvii) Make or change any material election in respect of
\nTaxes, adopt or change any accounting method in respect of Taxes, enter into
\nany closing agreement, settle any claim or assessment in respect of Taxes, or
\nconsent to any extension or waiver of the limitation period applicable to any
\nclaim or assessment in respect of Taxes;<\/p>\n
(xviii) Enter into any strategic alliance, joint development
\nor joint marketing arrangement or agreement; <\/p>\n
(xix) Fail to pay or otherwise satisfy its monetary
\nobligations as they become due, except such as are being contested in good
\nfaith;<\/p>\n
(xx) Waive or commit to waive any rights with a value in
\nexcess of $10,000, in any one case, or $25,000, in the aggregate;<\/p>\n
(xxi) Cancel, materially amend or renew any insurance policy
\nother than in the ordinary course of business;<\/p>\n
(xxii) Alter, or enter into any commitment to alter, its
\ninterest in any corporation, association, joint venture, partnership or
\nbusiness entity in which Parent directly or indirectly holds any interest on
\nthe date hereof; or<\/p>\n
(xxiii) Take, or agree in writing or otherwise to take, any of
\nthe actions described in Sections 4.1(i) through (xxii) above, or any other
\naction that would prevent Parent from performing or cause Parent not to
\nperform its covenants hereunder.<\/p>\n
4.2 NO COMPANY SOLICITATION. Until the earlier of the Effective Time and
\nthe date of termination of this Agreement pursuant to the provisions of Section
\n8.1 hereof, the Company will not (nor will the Company permit any of the
\nCompany’s officers, directors, shareholders, agents, representatives or
\nAffiliates to) directly or indirectly, take any of the following actions with
\nany party other than Parent and its designees: (a) solicit, initiate,
\nentertain, or encourage any proposals or offers from, or conduct discussions
\nwith or engage in negotiations with, any person relating to any possible
\nacquisition of the Company or any of its subsidiaries (whether by way of merger,
\npurchase <\/p>\n
45<\/p>\n
of capital stock, purchase of assets or otherwise), any material portion of
\nits or their capital stock or assets or any equity interest in the Company or
\nany of its subsidiaries, (b) provide information with respect to it to any
\nperson, other than Parent, relating to, or otherwise cooperate with,
\nfacilitate or encourage any effort or attempt by any such person with regard
\nto, any possible acquisition of the Company (whether by way of merger,
\npurchase of capital stock, purchase of assets or otherwise), any material
\nportion of its or their capital stock or assets or any equity interest in the
\nCompany or any of its subsidiaries, (c) enter into an agreement with any
\nperson, other than Parent, providing for the acquisition of the Company
\n(whether by way of merger, purchase of capital stock, purchase of assets or
\notherwise), any material portion of its or their capital stock or assets or
\nany equity interest in the Company or any of its subsidiaries, or (d) make or
\nauthorize any statement, recommendation or solicitation in support of any
\npossible acquisition of the Company or any of its subsidiaries (whether by
\nway of merger, purchase of capital stock, purchase of assets or otherwise),
\nany material portion of its or their capital stock or assets or any equity
\ninterest in the Company or any of its subsidiaries by any person, other than
\nby Parent. The Company shall immediately cease and cause to be terminated
\nany such contacts or negotiations with third parties relating to any such
\ntransaction or proposed transaction. In addition to the foregoing, if the
\nCompany receives prior to the Effective Time or the termination of this
\nAgreement any offer or proposal relating to any of the above, the Company
\nshall immediately notify Parent thereof, including information as to the
\nidentity of the offeror or the party making any such offer or proposal and
\nthe specific terms of such offer or proposal, as the case may be, and such
\nother information related thereto as Parent may reasonably request. Except as
\ncontemplated by this Agreement, disclosure by the Company of the terms hereof
\n(other than the prohibition of this section) shall be deemed to be a
\nviolation of this Section 4.2.<\/p>\n
4.3 NO PARENT OR MERGER SUB SOLICITATION. Until the earlier of the
\nEffective Time and the date of termination of this Agreement pursuant to the
\nprovisions of Section 8.1 hereof, Parent and Merger Sub will not (nor will
\nParent or Merger Sub permit any of their officers, directors, stockholders,
\nagents, representatives or Affiliates to) directly or indirectly, take any of
\nthe following actions with any party other than the Company and its
\ndesignees: (a) solicit, initiate, entertain, or encourage any proposals or
\noffers from, or conduct discussions with or engage in negotiations with, any
\nperson relating to any possible acquisition of Parent or any of its
\nsubsidiaries (whether by way of merger, purchase of capital stock, purchase
\nof assets or otherwise), any material portion of its or their capital stock
\nor assets or any equity interest in Parent or any of its subsidiaries, (b)
\nprovide information with respect to it to any person, other than the Company,
\nrelating to, or otherwise cooperate with, facilitate or encourage any effort
\nor attempt by any such person with regard to, any possible acquisition of
\nParent (whether by way of merger, purchase of capital stock, purchase of
\nassets or otherwise), any material portion of its or their capital stock or
\nassets or any equity interest in Parent or any of its subsidiaries, (c) enter
\ninto an agreement with any person providing for the acquisition of Parent
\n(whether by way of merger, purchase of capital stock, purchase of assets or
\notherwise), any material portion of its or their capital stock or assets or
\nany equity interest in Parent or any of its subsidiaries, or (d) make or
\nauthorize any statement, recommendation or solicitation in support of any
\npossible acquisition of Parent or any of its subsidiaries (whether by way of
\nmerger, purchase of capital stock, purchase of assets or otherwise), any
\nmaterial portion of its or their capital stock or assets or any equity
\ninterest in Parent or any of its subsidiaries by any person. Parent shall <\/p>\n
46<\/p>\n
immediately cease and cause to be terminated any such contacts or
\nnegotiations with third parties relating to any such transaction or proposed
\ntransaction. In addition to the foregoing, if Parent receives prior to the
\nEffective Time or the termination of this Agreement any offer or proposal
\nrelating to any of the above, Parent shall immediately notify the Company
\nthereof, including information as to the identity of the offeror or the party
\nmaking any such offer or proposal and the specific terms of such offer or
\nproposal, as the case may be, and such other information related thereto as
\nthe Company may reasonably request. Except as contemplated by this
\nAgreement, disclosure by Parent of the terms hereof (other than the
\nprohibition of this section) shall be deemed to be a violation of this
\nSection 4.3.<\/p>\n
ARTICLE V<\/p>\n
ADDITIONAL AGREEMENTS<\/p>\n
5.1 CALIFORNIA PERMIT; COMPANY SHAREHOLDER AND PARENT STOCKHOLDER
\n APPROVALS.<\/p>\n
(a) As soon as reasonably practical following the execution of
\nthis Agreement, Parent and the Company will prepare the necessary
\ndocumentation to obtain a permit (a “CALIFORNIA PERMIT”) from the
\nCommissioner of Corporations of the State of California (after a hearing
\nbefore such Department) pursuant to Section 25121 of the California Corporate
\nSecurities Law of 1968, so that the issuance of Parent Common Stock in the
\nMerger shall be exempt from registration under Section 3(a)(10) of the
\nSecurities Act of 1933, as amended (the “SECURITIES ACT”). The Company and
\nParent will respond to any comments from the California Department of
\nCorporations and use their commercially reasonable efforts to have the
\nCalifornia Permit granted as soon as practical after such filing. As
\npromptly as practical after the date of this Agreement, Parent and the
\nCompany shall prepare and make such filings as are required under applicable
\nBlue Sky laws relating to the transactions contemplated by this Agreement.<\/p>\n
(b) As promptly as practicable after the receipt of a California
\nPermit, the Company shall submit this Agreement and the transactions
\ncontemplated hereby, including without limitation the Merger, to the
\nCompany’s shareholders for approval as provided by Georgia Law and the
\nCompany’s Articles of Incorporation and Bylaws. The materials submitted to
\nthe Company’s shareholders shall be subject to review and approval by Parent
\nand include information regarding Parent and the Company, the terms of the
\nMerger and this Agreement and the unanimous recommendation of the Board of
\nDirectors of the Company in favor of the Merger, this Agreement and the
\ntransactions contemplated hereby.<\/p>\n
(c) As promptly as practicable after receipt of a California
\nPermit, Parent shall submit this Agreement and the transactions contemplated
\nhereby, including without limitation the Merger, to Parent’s stockholders for
\napproval and adoption as provided by Delaware law, California law and
\nParent’s Certificate of Incorporation and Bylaws. The materials submitted to
\nParent’s <\/p>\n
47<\/p>\n
stockholders shall include the unanimous recommendation of the Board of
\nDirectors of Parent in favor of the Merger, this Agreement and the
\ntransactions contemplated hereby.<\/p>\n
5.2 ACCESS TO INFORMATION. Each party shall afford the others and its
\naccountants, counsel and other representatives, reasonable access during
\nnormal business hours during the period prior to the Effective Time to (a)
\nall of its properties, books, contracts, commitments and records, and (b) all
\nother information concerning the business, properties and personnel (subject
\nto restrictions imposed by applicable law) of it as the others may reasonably
\nrequest, subject, in the case of Parent, to reasonable limits on access to
\nits technical and other nonpublic information. No information or knowledge
\nobtained in any investigation pursuant to this Section 5.2 shall affect or be
\ndeemed to modify any representation or warranty contained herein.<\/p>\n
5.3 CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep
\nthe terms of this Agreement (except to the extent contemplated hereby) and
\nsuch information or knowledge obtained in any investigation pursuant to
\nSection 5.2, or pursuant to the negotiation and execution of this Agreement
\nor the effectuation of the transactions contemplated hereby, confidential;
\nprovided, however, that the foregoing shall not apply to information or
\nknowledge which (a) a party can demonstrate was already lawfully in its
\npossession prior to the disclosure thereof by the other party, (b) is
\ngenerally known to the public and did not become so known through any
\nviolation of law, (c) became known to the public through no fault of such
\nparty, (d) is later lawfully acquired by such party without confidentiality
\nrestrictions from other sources, (e) is required to be disclosed by order of
\ncourt or government agency with subpoena powers (provided that such party
\nshall have provided the other party with prior notice of such order or
\nsubpoena and an opportunity to object or take other available action) or (f)
\nwhich is disclosed in the course of any litigation between any of the parties
\nhereto.<\/p>\n
5.4 EXPENSES. Whether or not the Merger is consummated, all fees and
\nexpenses incurred in connection with the Merger including, without
\nlimitation, all legal, accounting, financial advisory, consulting and all
\nother fees and expenses of third parties (“THIRD PARTY EXPENSES”) incurred by
\na party in connection with the negotiation and effectuation of the terms and
\nconditions of this Agreement and the transactions contemplated hereby, shall
\nbe the obligation of the respective party incurring such fees and expenses.<\/p>\n
5.5 PUBLIC DISCLOSURE. Unless otherwise required by law (including,
\nwithout limitation, federal and state securities laws) prior to the Effective
\nTime, no disclosure (whether or not in response to an inquiry) of the subject
\nmatter of this Agreement shall be made by any party hereto unless approved by
\nParent and the Company prior to release, provided that such approval shall
\nnot be unreasonably withheld.<\/p>\n
5.6 CONSENTS. Parent and the Company shall use commercially reasonable
\nefforts to obtain the consents, waivers and approvals under any of the Parent
\nContracts and Company Contracts as may be required in connection with the
\nMerger (all of such consents, waivers and <\/p>\n
48<\/p>\n
approvals are set forth in the Company Schedules and Parent and Merger Sub
\nSchedules) so as to preserve all rights of and benefits to the Parent and
\nCompany thereunder.<\/p>\n
5.7 FIRPTA COMPLIANCE. On or prior to the Closing Date, the Company
\nshall deliver to Parent a properly executed statement in a form reasonably
\nacceptable to Parent for purposes of satisfying Parent’s obligations under
\nTreasury Regulation Section 1.1445-2(c)(3).<\/p>\n
5.8 REASONABLE EFFORTS. Subject to the terms and conditions provided
\nin this Agreement, each of the parties hereto shall use its reasonable
\nefforts to ensure that its representations and warranties remain true and
\ncorrect in all material respects, and to take promptly, or cause to be taken,
\nall actions, and to do promptly, or cause to be done, all things necessary,
\nproper or advisable under applicable laws and regulations to consummate and
\nmake effective the transactions contemplated hereby, to obtain all necessary
\nwaivers, consents and approvals, to effect all necessary registrations and
\nfilings, and to remove any injunctions or other impediments or delays, legal
\nor otherwise, in order to consummate and make effective the transactions
\ncontemplated by this Agreement for the purpose of securing to the parties
\nhereto the benefits contemplated by this Agreement; provided that Parent
\nshall not be required to agree to any divestiture by Parent or the Company or
\nany of Parent’s subsidiaries or affiliates of shares of capital stock or of
\nany business, assets or property of Parent or its subsidiaries or affiliates
\nor the Company or its affiliates, or the imposition of any material
\nlimitation on the ability of any of them to conduct their businesses or to
\nown or exercise control of such assets, properties and stock.<\/p>\n
5.9 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
\nnotice to Parent, and Parent shall give prompt notice to the Company, of (i)
\nthe occurrence or non-occurrence of any event, the occurrence or
\nnon-occurrence of which is likely to cause any representation or warranty of
\nthe Company, Parent or Merger Sub, respectively, contained in this Agreement
\nto be untrue or inaccurate at or prior to the Effective Time and (ii) any
\nfailure of the Company or Parent, as the case may be, to comply with or
\nsatisfy any covenant, condition or agreement to be complied with or satisfied
\nby it hereunder; provided, however, that the delivery of any notice pursuant
\nto this Section 5.9 shall not limit or otherwise affect any remedies
\navailable to the party receiving such notice.<\/p>\n
5.10 CERTAIN BENEFIT PLANS. Subject to compliance with
\npooling-of-interest accounting treatment of the Merger, Parent shall take
\nsuch reasonable actions as are necessary to allow eligible employees of the
\nCompany to participate in the benefit programs of Parent, or alternative
\nbenefits programs substantially comparable to those applicable to employees
\nof Parent on similar terms, as soon as practicable after the Effective Time.
\nFor purposes of participation, vesting and benefit accrual under Parent’s
\nemployee benefit plans, the service of the employees of the Company prior to
\nthe Effective Time shall be treated as service with Parent. Parent shall
\ncause the Surviving Corporation to honor in accordance with their terms all
\nemployment, severance, consulting and other compensation Contracts disclosed
\nin the Company Schedules between the Company and any current or former
\ndirector, officer or employee thereof, and all provisions for vested benefits
\nor other vested amounts earned or accrued through the Effective Time under
\nthe Company Benefit Plans.<\/p>\n
49<\/p>\n
5.11 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
\nagrees to use its reasonable efforts to cause the Merger, and to take no
\naction which would cause the Merger not, to qualify for treatment as a
\npooling of interests for accounting purposes and each of the Parties agrees
\nto take no action which would cause the Merger not to qualify as a
\n“reorganization” within the meaning of Section 368(a) of the Internal Revenue
\nCode for federal income tax purposes. <\/p>\n
5.12 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each party hereto, at
\nthe request of the other party hereto, shall execute and deliver such other
\ninstruments and do and perform such other acts and things as may be necessary
\nor desirable for effecting completely the consummation of this Agreement and
\nthe transactions contemplated hereby.<\/p>\n
5.13 COMPANY’S AUDITORS. The Company will use its commercially
\nreasonable efforts to cause its management and its independent auditors to
\nfacilitate on a timely basis (i) the review of any Company audit or review
\nwork papers for up to the past three years, including the examination of
\nselected interim financial statements and data and (ii) the delivery of such
\nrepresentations from the Company’s independent accountants as may be
\nreasonably requested by Parent or its accountants in order for Parent’s
\naccountants to render the opinion called for by Section 6.1(l) hereof. <\/p>\n
5.14 PARENT’S AUDITORS. Parent will use its commercially reasonable
\nefforts to cause its management and its independent auditors to facilitate on
\na timely basis (i) the review of any Parent audit or review work papers for
\nup to the past three years, including the examination of selected interim
\nfinancial statements and data and (ii) the delivery of such representations
\nfrom Parent’s independent accountants as may be reasonably requested by the
\nCompany or its accountants in order for Company’s accountants to render the
\nopinion called for by Section 6.1(l) hereof. <\/p>\n
5.15 AGREEMENT OF AFFILIATES. Each Party has disclosed in Schedule 5.15
\nof its Schedules all Persons whom it reasonably believes is an Affiliate. If
\nthe Merger is accounted for using the pooling-of-interests method of
\naccounting, shares of Parent Common Stock held by such Persons shall not be
\ntransferable until such time as financial results covering at least 30 days
\nof combined operations of Parent and the Company have been published within
\nthe meaning of Section 201.01 of the SEC’s Codification of Financial
\nReporting Policies, regardless of whether each such Affiliate has provided
\nthe Voting Agreement (and Parent shall be entitled to place restrictive
\nlegends upon certificates for shares of Parent Common Stock issued to
\nAffiliates of the Company pursuant to this Agreement to enforce the
\nprovisions of this Section 5.14).<\/p>\n
5.16 AMENDMENT OF PARENT BYLAWS. Parent shall take all necessary
\ncorporate actions, including without limitation soliciting stockholder
\napproval (including the unanimous recommendation of Parent’s Board of
\nDirectors in favor thereof), to increase the authorized number of directors
\nto eight.<\/p>\n
5.17 INDEMNIFICATION.<\/p>\n
50<\/p>\n
(a) For a period of three years after the Effective Time, Parent
\nshall, and shall cause the Surviving Corporation to, indemnify, defend and
\nhold harmless the present and former directors, officers, employees and
\nagents of the Company (each, an “INDEMNIFIED PARTY”) against all liabilities
\narising out of actions or omissions arising out of the Indemnified Party’s
\nservice or services as directors, officers, employees or agents of the
\nCompany, ShareNet, EDI Services, Inc. or as a trustee of the Company’s 401(K)
\nplans(s) occurring at or prior to the Effective Time (including the
\ntransactions contemplated by this Agreement) to the fullest extent permitted
\nunder Delaware law (or, in the event Georgia law is more restrictive with
\nrespect to indemnification, then under Georgia law) and by the Company’s
\nArticles of Incorporation and Bylaws as in effect on the date hereof,
\nincluding provisions relating to advances of expenses incurred in the defense
\nof any litigation and whether or not Parent is insured against any such
\nmatter. Without limiting the foregoing, in any case in which approval by the
\nSurviving Corporation is required to effectuate any indemnification, the
\nSurviving Corporation shall direct, at the election of the Indemnified Party,
\nthat the determination of any such approval shall be made by independent
\ncounsel mutually and reasonably agreed upon between Parent and the
\nIndemnified Party.<\/p>\n
(b) This Section 5.17 shall survive the Effective Time and is
\nintended to benefit the Company, the Surviving Corporation and each of the
\nIndemnified Parties and his or her heirs and representatives (each of whom
\nshall be entitled to enforce this Section 5.17 against Parent or the
\nSurviving Corporation, as the case may be) and shall be binding upon all
\nsuccessors and assigns (whether by operation of law or by contract) of Parent
\nand the Surviving Corporation.<\/p>\n
ARTICLE VI<\/p>\n
CONDITIONS TO THE MERGER<\/p>\n
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER. The
\nrespective obligations of each party to this Agreement to effect the Merger
\nshall be subject to the satisfaction at or prior to the Closing of the
\nfollowing conditions:<\/p>\n
(a) COMPANY SHAREHOLDER APPROVAL. This Agreement and the Merger
\nshall have been approved by the shareholders of the Company by the requisite
\nvote under applicable law and the Company’s Articles of Incorporation and
\nBylaws. <\/p>\n
(b) PARENT STOCKHOLDER APPROVAL. This Agreement and the Merger
\n(including any amendments to Parent’s Certificate of Incorporation reasonably
\nnecessary to consummate the transactions contemplated by this Agreement)
\nshall have been approved and adopted by the stockholders of Parent by the
\nrequisite vote under applicable law and Parent’s Certificate of Incorporation
\nand Bylaws.<\/p>\n
(c) CALIFORNIA PERMIT. The Commissioner of Corporations for the
\nState of California shall have approved the terms and conditions of the
\ntransactions contemplated by this <\/p>\n
51<\/p>\n
Agreement, and the fairness of such terms and conditions pursuant to Section
\n25142 of the California Corporations Code (“CALIFORNIA CODE”) following a
\nhearing for such purpose, and shall have issued a Permit under Section 25121
\nof the California Code.<\/p>\n
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
\nrestraining order, preliminary or permanent injunction or other order issued
\nby any court of competent jurisdiction or other legal or regulatory restraint
\nor prohibition preventing the consummation of the Merger shall be in effect.<\/p>\n
(e) HSR ACT CLEARANCE. All approvals shall have been received
\nand the expiration or early termination under the Hart-Scott-Rodino Antitrust
\nImprovements Act of 1976, as amended, (the “HSR ACT”), and other applicable
\nantitrust laws (“HSR CLEARANCE”); provided that, neither party may rely on
\nthe condition set forth in this Section 6.1(e) if the failure to obtain HSR
\nClearance for the Merger is a result of such party’s failure to take
\ncommercially reasonable efforts to obtain HSR Clearance. <\/p>\n
(f) TAX OPINIONS. Parent shall have received a written opinion
\nfrom its counsel, Wilson Sonsini Goodrich & Rosati, Professional Corporation,
\nand the Company shall have received a written opinion from its counsel,
\nAlston & Bird LLP (substantially identical to the opinion received by
\nParent), to the effect that the Merger will constitute a reorganization
\nwithin the meaning of Section 368(a) of the Code; provided, however, that if
\nCompany counsel does not render such opinion, this condition shall
\nnonetheless be deemed to be satisfied if Parent’s counsel renders its opinion
\nto the Company as well as to Parent. The parties to this Agreement agree to
\nmake reasonable representations (and to cause their Affiliates to make
\nreasonable representations) as requested by counsel for the purpose of
\nrendering the opinions discussed herein.<\/p>\n
(g) INVESTORS’ RIGHTS AGREEMENT. The Investors’ Rights Agreement,
\ndated as of October 14, 1997, as amended (the “INVESTORS’ RIGHTS AGREEMENT”),
\nby and between Parent and certain holders of Parent’s securities shall have
\nbeen amended and executed by Parent, the shareholders of the Company who
\npossess registration rights pursuant to written agreements existing on the
\ndate hereof with respect to certain securities of the Company, and a
\nsufficient number of the existing holders of registration rights with respect
\nto Parent’s securities in order to permit the granting of such rights under
\nthe Investors’ Rights Agreement.<\/p>\n
(h) OTHER GOVERNMENTAL APPROVALS. All approvals from government
\nauthorities, including without limitation any requisite Blue Sky approvals,
\nwhich are appropriate or necessary for the consummation of the Merger, shall
\nhave been obtained.<\/p>\n
(i) LITIGATION. There shall be no BONA FIDE action, suit, claim
\nor proceeding of any nature pending, or overtly threatened, against Parent or
\nthe Company, their respective properties or any of their officers or
\ndirectors, arising out of, or in any way connected with, the Merger or other
\ntransactions contemplated by the terms of this Agreement.<\/p>\n
52<\/p>\n
(j) CONSENTS AND APPROVALS. Each Party shall have obtained any
\nand all consents required for consummation of the Merger or for the
\npreventing of any Default under any Contract or Permit of such Party which,
\nif not obtained or made, is reasonably likely to have, individually or in the
\naggregate, a Company Material Adverse Effect or a Parent Material Adverse
\nEffect, as applicable. No consent so obtained which is necessary to
\nconsummate the transactions contemplated hereby shall be conditioned or
\nrestricted in a manner which in the reasonable judgment of the Board of
\nDirectors of either party would so materially adversely impact the economic
\nor business benefits of the transactions contemplated by this Agreement that,
\nhad such condition or requirement been known, such party would not, in its
\nreasonable judgment, have entered into this Agreement.<\/p>\n
(k) AGREEMENT WITH SBCL. Sections 1.5 through 1.8 of the SBCL
\nAssets Purchase Agreement shall be amended to provide for payment of the
\nPurchase Price (as that term is defined therein) with Parent Common Stock for
\nany payment due on any Transfer Date (as that term is defined therein) which
\noccurs following the Effective Time, and the parties shall obtain such other
\namendments and waivers to such agreement as may be reasonably necessary to
\naccomplish the objectives of the Merger.<\/p>\n
(l) POOLING LETTERS. Each of Parent and Company shall have
\nreceived letters, dated as of the Effective Time, from Ernst & Young LLP
\nregarding such firm’s concurrence with Parent’s managements’ and Company’s
\nmanagements’ conclusions as to the appropriateness of pooling-of-interests
\naccounting for the Merger under Accounting Principles Board Opinion No. 16 if
\nthe Merger is consummated in accordance with this Agreement.<\/p>\n
(m) VOTING AGREEMENTS. Each of the persons and entities listed on
\nExhibit A and Exhibit B to the Voting Agreement set forth in EXHIBIT D
\nhereto, shall have executed and delivered such Voting Agreements in
\nsubstantially the form set forth in EXHIBIT D. <\/p>\n
(n) AFFILIATE AGREEMENTS. Each of the persons and entities listed
\nas Affiliates of Parent on Schedule 5.14 shall have executed and delivered
\nAffiliate Agreements in substantially the form of EXHIBIT C, and each of the
\npersons and entities listed as Affiliates of the Company on Schedule 5.14
\nshall have executed and delivered Affiliate Agreements in substantially the
\nform of EXHIBIT E, and all such Affiliate Agreements shall be in full force
\nand effect. <\/p>\n
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
\nobligations of the Company to consummate the Merger and the transactions
\ncontemplated by this Agreement shall be subject to the satisfaction at or
\nprior to the Closing of each of the following conditions, any of which may be
\nwaived, in writing, exclusively by the Company:<\/p>\n
(a) REPRESENTATIONS AND WARRANTIES. The representations and
\nwarranties of Parent and Merger Sub contained in this Agreement shall be true
\nand correct in all material respects on and as of the Closing Date, except
\nfor changes contemplated by this Agreement and except for those
\nrepresentations and warranties which address matters only as of a particular
\ndate (which shall remain true and correct as of such date), with the same
\nforce and effect as if made on and as of the Closing <\/p>\n
53<\/p>\n
Date, except for those representations and warranties that are qualified by
\nreferences to “material” or “Material Adverse Effect” which all shall be true
\nand correct in all respects, and except, in all such cases, for such
\nbreaches, inaccuracies or omissions of such representations and warranties
\nwhich have neither had nor reasonably would be expected to have a Material
\nAdverse Effect on Parent; and the Company shall have received a certificate
\nto such effect signed on behalf of Parent by a duly authorized officer of
\nParent.<\/p>\n
(b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have
\nperformed or complied in all material respects with all agreements and
\ncovenants required by this Agreement to be performed or complied with by them
\non or prior to the Effective Time, and the Company shall have received a
\ncertificate to such effect signed by a duly authorized officer of Parent.<\/p>\n
(c) EXCHANGE AGENT CERTIFICATION. The Exchange Agent shall have
\ndelivered to the Company a certificate, dated as of the Effective Time, to
\nthe effect that the Exchange Agent has received from Parent appropriate
\ninstructions and authorization for the Exchange Agent to issue a sufficient
\nnumber of shares of Parent Common Stock in exchange for outstanding shares of
\nCompany Common Stock and that Parent has deposited with the Exchange Agent
\nsufficient funds to pay a reasonable estimate of the cash payments necessary
\nto make all fractional share payments as required by Section 1.6(f).<\/p>\n
(d) LEGAL OPINION. The Company shall have received a legal
\nopinion from Wilson Sonsini Goodrich & Rosati, Professional Corporation,
\ncounsel to Parent, in form and substance reasonably acceptable to counsel of
\nCompany.<\/p>\n
(e) MATERIAL ADVERSE CHANGE. There shall not have occurred any
\nmaterial adverse change in the business, assets (including intangible
\nassets), liabilities, financial condition or results of operations of Parent
\nsince the date of the Parent Current Balance Sheet.<\/p>\n
(f) CONVERSION OF PREFERRED STOCK. All shares of Parent Preferred
\nStock, other than shares of Parent Series D Preferred Stock, shall have
\nconverted into Parent Common Stock in accordance with the Parent’s
\nCertificate of Incorporation; provided, however, if the Company so requests,
\nshares of Parent Series D Preferred Stock shall have also converted to Parent
\nCommon Stock.<\/p>\n
(g) BOARD OF DIRECTORS. Parent shall have amended its Bylaws so
\nas to increase the number of Directors on its Board of Directors from four to
\neight. Parent shall have taken all corporate actions to ensure that
\nimmediately upon the Closing, the Board of Directors of Parent consists of
\nJim Clark, John Doerr, Richard Kramlich, W. Michael Long, P. E. Sadler,
\nMichael K. Hoover, Tadakata Yamada and one other person to be designated by
\nthe Company prior to the Closing Date. <\/p>\n
(h) INDEMNIFICATION. The Articles of Incorporation of Merger Sub
\nshall contain officer and director indemnification provisions that are
\nsubstantially similar to the officer and <\/p>\n
54<\/p>\n
director indemnification provisions contained in the Company’s Articles of
\nIncorporation in the form delivered to Parent on the date of this Agreement. <\/p>\n
(i) DUE DILIGENCE INVESTIGATION. Company shall have completed its
\ndue diligence investigation of Parent to Company’s reasonable satisfaction,
\nprovided that no information or knowledge obtained in such investigation
\nshall affect or be deemed to modify any representation or warranty of Parent
\ncontained herein. In this regard, Company’s due diligence investigation
\nshall be conclusively deemed to have been completed to Company’s reasonable
\nsatisfaction in the event that the preliminary Parent Schedules attached
\nhereto are not subsequently modified, or otherwise do not require subsequent
\nmodification in order to make Parent’s representations and warranties true
\nand correct in all material respects on and as of the Closing Date.<\/p>\n
(j) PARENT 1997 FINANCIAL STATEMENTS. Parent shall have completed
\nand delivered to the Company a copy of its audited financial statements for
\nthe year ended December 31, 1997.<\/p>\n
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARENT AND MERGER SUB.
\nThe obligations of Parent and Merger Sub to consummate the Merger and the
\ntransactions contemplated by this Agreement shall be subject to the
\nsatisfaction at or prior to the Closing of each of the following conditions,
\nany of which may be waived, in writing, exclusively by Parent:<\/p>\n
(a) REPRESENTATIONS AND WARRANTIES. The representations and
\nwarranties of the Company contained in this Agreement shall be true and
\ncorrect in all material respects on and as of the Closing Date, except for
\nchanges contemplated by this Agreement and except for those representations
\nand warranties which address matters only as of a particular date (which
\nshall remain true and correct as of such date), with the same force and
\neffect as if made on and as of the Closing Date, except for those
\nrepresentations and warranties that are qualified by references to “material”
\nor “Material Adverse Effect” which all shall be true and correct in all
\nrespects, and except, in all such cases, for such breaches, inaccuracies or
\nomissions of such representations and warranties which have neither had nor
\nreasonably would be expected to have a Material Adverse Effect on the Company
\nor Parent; and Parent and Merger Sub shall have received a certificate to
\nsuch effect signed on behalf of the Company by the chief executive officer
\nand chief financial officer of the Company.<\/p>\n
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or
\ncomplied in all material respects with all agreements and covenants required
\nby this Agreement to be performed or complied with by it on or prior to the
\nEffective Time, and Parent and Merger Sub shall have received a certificate
\nto such effect signed by a duly authorized officer of the Company. <\/p>\n
(c) LEGAL OPINION. Parent shall have received a legal opinion
\nfrom Alston & Bird LLP, legal counsel to the Company, in form and substance
\nreasonably acceptable to counsel of Parent. <\/p>\n
55<\/p>\n
(d) MATERIAL ADVERSE CHANGE. There shall not have occurred any
\nmaterial adverse change in the business, assets (including intangible assets)
\nfinancial condition or results of operations of the Company since the date of
\nthe Company Current Balance Sheet.<\/p>\n
(e) NO ELECTION TO TREAT AS LIQUIDATION. Prior to the Closing
\nDate, there shall have been no election made by the holders of a majority of
\nthe Company’s Preferred Stock, in accordance with Section 3.2 of the
\nCompany’s Articles of Incorporation, to treat the Merger as a liquidation,
\ndissolution or winding up of the Company in accordance with such Articles of
\nIncorporation.<\/p>\n
(f) NO DISSENTERS. Holders of more than five (5%) of the
\noutstanding shares of Company Capital Stock shall not have exercised, nor
\nshall they have any continued right to exercise, dissenters’ rights under
\napplicable law with respect to their shares by virtue of the Merger.<\/p>\n
(g) THIRD-PARTY CONSENTS. Parent shall have been furnished with
\nevidence satisfactory to it that the Company has obtained the consents,
\napprovals and waivers set forth in Schedule 6.3(j). <\/p>\n
(h) DUE DILIGENCE INVESTIGATION. Parent shall have completed its
\ndue diligence investigation of the Company to Parent’s reasonable
\nsatisfaction, provided that no information or knowledge obtained in such
\ninvestigation shall affect or be deemed to modify any representation or
\nwarranty of the Company contained herein. In this regard, Parent’s due
\ndiligence investigation shall be conclusively deemed to have been completed
\nto Parent’s reasonable satisfaction in the event that the preliminary Company
\nSchedules attached hereto are not subsequently modified, or otherwise do not
\nrequire subsequent modification, in order to make the Company’s
\nrepresentations and warranties true and correct in all material respects on
\nand as of the Closing Date.<\/p>\n
(i) COMPANY 1997 FINANCIAL STATEMENTS. The Company shall have
\ncompleted and delivered to Parent a copy of its audited financial statements
\nfor the year ended December 31, 1997.<\/p>\n
ARTICLE VII<\/p>\n
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES<\/p>\n
7.1 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
\nrepresentations and warranties of the Company, Parent and Merger Sub
\ncontained in this Agreement or in any instrument delivered pursuant to this
\nAgreement (each as modified by the corresponding schedules thereto) shall
\nterminate at the Effective Time.<\/p>\n
ARTICLE VIII<\/p>\n
56<\/p>\n
TERMINATION, AMENDMENT AND WAIVER<\/p>\n
8.1 TERMINATION. Except as provided in Section 8.2 below, this
\nAgreement may be terminated and the Merger abandoned at any time prior to the
\nEffective Time:<\/p>\n
(a) by mutual consent of the Company and Parent;<\/p>\n
(b) by Parent or the Company if: (i) the Effective Time has not
\noccurred before 5:00 p.m. (Pacific time) on May 15, 1998 (provided that (A)
\nthe right to terminate this Agreement under this clause 8.1(b)(i) shall not
\nbe available to any party whose failure to use its commercially reasonable
\nefforts to fulfill any obligation hereunder has been the cause of, or
\nresulted in, the failure of the Effective Time to occur on or before such
\ndate, and (B) such date shall be automatically extended where the failure to
\nClose is a result of not obtaining HSR Clearance and the parties are
\ncontinuing to pursue such clearance); (ii) there shall be a final
\nnonappealable order of a federal or state court in effect preventing
\nconsummation of the Merger; or (iii) there shall be any statute, rule,
\nregulation or order enacted, promulgated or issued or deemed applicable to
\nthe Merger by any governmental entity that would make consummation of the
\nMerger illegal; <\/p>\n
(c) by Parent if there shall be any action taken, or any statute,
\nrule, regulation or order enacted, promulgated or issued or deemed applicable
\nto the Merger, by any Governmental Entity, which would: (i) prohibit
\nParent’s or the Company’s ownership or operation of all or any portion of the
\nbusiness of the Company or (ii) compel Parent or the Company to dispose of or
\nhold separate all or a portion of the business or assets of the Company or
\nParent as a result of the Merger;<\/p>\n
(d) by Parent if it is not in material breach of its obligations
\nunder this Agreement and there has been a breach of any representation,
\nwarranty, covenant or agreement contained in this Agreement on the part of
\nthe Company and (i) such breach has not been cured within thirty (30) days
\nafter written notice to the Company (provided that, no cure period shall be
\nrequired for a breach which by its nature cannot be cured), and (ii) as a
\nresult of such breach the conditions set forth in Section 6.3(a) or 6.3(b),
\nas the case may be, would not then be satisfied; or<\/p>\n
(e) by the Company if it is not in material breach of its
\nobligations under this Agreement and there has been a breach of any
\nrepresentation, warranty, covenant or agreement contained in this Agreement
\non the part of Parent or Merger Sub and (i) such breach has not been cured
\nwithin thirty (30) days after written notice to Parent (provided that, no
\ncure period shall be required for a breach which by its nature cannot be
\ncured), and (ii) as a result of such breach the conditions set forth in
\nSection 6.2(a) or 6.2(b), as the case may be, would not then be satisfied.<\/p>\n
Where action is taken to terminate this Agreement pursuant to this Section
\n8.1, it shall be sufficient for such action to be authorized by the Board of
\nDirectors (as applicable) of the party taking such action.<\/p>\n
57<\/p>\n
8.2 EFFECT OF TERMINATION. In the event of termination of this
\nAgreement as provided in Section 8.1, this Agreement shall forthwith become
\nvoid and there shall be no liability or obligation on the part of Parent,
\nMerger Sub or the Company, or their respective officers, directors or
\nshareholders, provided that each party shall remain liable for any breaches
\nof this Agreement prior to its termination; and provided further that, the
\nprovisions of Sections 5.3 and 5.4 and Article VIII of this Agreement shall
\nremain in full force and effect and survive any termination of this Agreement.<\/p>\n
8.3 AMENDMENT. Except as is otherwise required by applicable law after
\nthe shareholders of the Company and the Stockholders of Parent approve this
\nAgreement, this Agreement may be amended by the parties hereto at any time by
\nexecution of an instrument in writing signed on behalf of each of the parties
\nhereto.<\/p>\n
8.4 EXTENSION; WAIVER. At any time prior to the Effective Time, Parent
\nand Merger Sub, on the one hand, and the Company, on the other, may, to the
\nextent legally allowed, (i) extend the time for the performance of any of the
\nobligations of the other party hereto, (ii) waive any inaccuracies in the
\nrepresentations and warranties made to such party contained herein or in any
\ndocument delivered pursuant hereto, and (iii) waive compliance with any of
\nthe agreements or conditions for the benefit of such party contained herein.
\nAny agreement on the part of a party hereto to any such extension or waiver
\nshall be valid only if set forth in an instrument in writing signed on behalf
\nof such party.<\/p>\n
ARTICLE IX<\/p>\n
GENERAL PROVISIONS<\/p>\n
9.1 NOTICES. All notices and other communications hereunder shall be
\nin writing and shall be deemed given if delivered personally or by commercial
\ndelivery service, or mailed by registered or certified mail (return receipt
\nrequested) or sent via facsimile (with acknowledgment of complete
\ntransmission) to the parties at the following addresses (or at such other
\naddress for a party as shall be specified by like notice):<\/p>\n
(i) if to Parent or Merger Sub, to:<\/p>\n
Healtheon Corporation
\n 87 Encina
\n Palo Alto, CA 94301
\n Attention: W. Michael Long
\n Telephone No.: (650) 614-0200
\n Facsimile No.: (650) 614-3300<\/p>\n
58<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati, P.C.
\n 650 Page Mill Road
\n Palo Alto, California 94304
\n Attention: Steven E. Bochner, Esq.
\n Jeffrey A. Herbst, Esq.
\n Telephone No.: (415) 493-9300
\n Facsimile No.: (415) 493-6811<\/p>\n
(ii) if to the Company, to:<\/p>\n
ActaMed Corporation
\n 7000 Central Parkway, Suite 600
\n Atlanta, Georgia 30328
\n Attention: Michael K. Hoover
\n Telephone No.: (770) 352-1600
\n Facsimile No.: (770) 352-1601<\/p>\n
with a copy to:<\/p>\n
Alston & Bird
\n 1201 W. Peachtree Street
\n Atlanta, Georgia 30309
\n Attention: George M. Maxwell, Jr.
\n Telephone No.: (404) 881-7570
\n Facsimile No.: (404) 881-7777<\/p>\n
9.2 INTERPRETATION. The words “include,” “includes” and “including”
\nwhen used herein shall be deemed in each case to be followed by the words
\n“without limitation.” The table of contents and headings contained in this
\nAgreement are for reference purposes only and shall not affect in any way the
\nmeaning or interpretation of this Agreement.<\/p>\n
9.3 COUNTERPARTS. This Agreement may be executed in one or more
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each
\nof the parties and delivered to the other party, it being understood that all
\nparties need not sign the same counterpart.<\/p>\n
9.4 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, the Schedules and
\nExhibits hereto, and the documents and instruments and other agreements among
\nthe parties hereto referenced herein: (a) constitute the entire agreement
\namong the parties with respect to the subject matter hereof and supersede all
\nprior agreements and understandings, both written and oral, among the parties
\nwith respect to the subject matter hereof; (b) are not intended to confer
\nupon any other person any rights <\/p>\n
59<\/p>\n
or remedies hereunder (except with respect to Section 5.17); and (c) shall
\nnot be assigned by operation of law or otherwise except as otherwise
\nspecifically provided, except that Parent and Merger Sub may assign their
\nrespective rights and delegate their respective obligations hereunder to
\ntheir respective Affiliates.<\/p>\n
9.5 SEVERABILITY. In the event that any provision of this Agreement or
\nthe application thereof, becomes or is declared by a court of competent
\njurisdiction to be illegal, void or unenforceable, the remainder of this
\nAgreement will continue in full force and effect and the application of such
\nprovision to other persons or circumstances will be interpreted so as
\nreasonably to effect the intent of the parties hereto. The parties further
\nagree to replace such void or unenforceable provision of this Agreement with
\na valid and enforceable provision that will achieve, to the extent possible,
\nthe economic, business and other purposes of such void or unenforceable
\nprovision.<\/p>\n
9.6 OTHER REMEDIES. Except as otherwise provided herein, any and all
\nremedies herein expressly conferred upon a party will be deemed cumulative
\nwith and not exclusive of any other remedy conferred hereby, or by law or
\nequity upon such party, and the exercise by a party of any one remedy will
\nnot preclude the exercise of any other remedy.<\/p>\n
9.7 GOVERNING LAW. This Agreement shall be governed by and construed
\nin accordance with the laws of the State of California, regardless of the
\nlaws that might otherwise govern under applicable principles of conflicts of
\nlaws thereof. <\/p>\n
9.8 RULES OF CONSTRUCTION. The parties hereto agree that they have
\nbeen represented by counsel during the negotiation and execution of this
\nAgreement and, therefore, waive the application of any law, regulation,
\nholding or rule of construction providing that ambiguities in an agreement or
\nother document will be construed against the party drafting such agreement or
\ndocument.<\/p>\n
9.9 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
\ndamage would occur in the event that any of the provisions of this Agreement
\nwere not performed in accordance with their specific terms or were otherwise
\nbreached. It is accordingly agreed that the parties shall be entitled to an
\ninjunction or injunctions to prevent breaches of this Agreement and to
\nenforce specifically the terms and provisions hereof in any court of the
\nUnited States or any state having jurisdiction, this being in addition to any
\nother remedy to which they are entitled at law or in equity.<\/p>\n
60<\/p>\n
IN WITNESS WHEREOF, Parent, Merger Sub, and the Company have caused this
\nAgreement to be signed by their duly authorized respective officers and
\nrepresentatives, all as of the date first written above.<\/p>\n
ACTAMED CORPORATION HEALTHEON CORPORATION<\/p>\n
By \/s\/ Michael Hoover By \/s\/ W. Michael Long
\n ————————— —————————–
\n Name: Michael Hoover Name: W. Michael Long
\n Title: President and Chief Title: President and Chief
\n Executive Officer Executive Officer<\/p>\n
MEDNET ACQUISITION CORP.<\/p>\n
By \/s\/ W. Michael Long
\n —————————–
\n Name: W. Michael Long
\n Title: President<\/p>\n
***REORGANIZATION AGREEMENT**<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7750],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9622,9626],"class_list":["post-43184","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healtheon-corp","corporate_contracts_industries-technology__programming","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\/43184","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=43184"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43184"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43184"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}