\n 8.1 Non-Survival of Representations and Warranties……………………………………………..47
\n 8.2 Notices………………………………………………………………………………..47
\n 8.3 Interpretation………………………………………………………………………….48
\n 8.4 Counterparts……………………………………………………………………………49
\n 8.5 Entire Agreement; Third Party Beneficiaries………………………………………………..49
\n 8.6 Severability……………………………………………………………………………49
\n 8.7 Other Remedies; Specific Performance………………………………………………………49
\n 8.8 Governing Law…………………………………………………………………………..50
\n 8.9 Rules of Construction……………………………………………………………………50
\n 8.10 Assignment……………………………………………………………………………..50
\n 8.11 Waiver of Jury Trial…………………………………………………………………….50
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n INDEX OF EXHIBITS
\n —————–<\/p>\n
Exhibit A Form of Company Voting Agreement<\/p>\n
Exhibit B Form of Company Affiliate Agreement<\/p>\n
AGREEMENT AND PLAN OF REORGANIZATION<\/p>\n
This AGREEMENT AND PLAN OF REORGANIZATION (this “Agreement”) is made and
\nentered into as of March 12, 2001, among Novell, Inc., a Delaware corporation
\n(“Parent”), Ceres Neptune Acquisition Corp., a Delaware corporation and a
\nwholly-owned subsidiary of Parent (“Merger Sub”), and Cambridge Technology
\nPartners (Massachusetts), Inc., a Delaware corporation (“Company”).<\/p>\n
RECITALS
\n ——–<\/p>\n
A. Upon the terms and subject to the conditions of this Agreement and in
\naccordance with the Delaware General Corporation Law (“Delaware Law”), Parent,
\nMerger Sub and Company intend to enter into a business combination transaction.<\/p>\n
B. The Board of Directors of Company (i) has determined that the Merger
\n(as defined in Section 1.1) is consistent with and in furtherance of the long-
\nterm business strategy of Company and in the best interests of Company and its
\nstockholders, (ii) has approved this Agreement, the Merger and the other
\ntransactions contemplated by this Agreement, (iii) has adopted a resolution
\ndeclaring the Merger Agreement advisable and (iv) has determined to recommend
\nthat the stockholders of Company adopt this Agreement.<\/p>\n
C. The Board of Directors of Parent (i) has determined that the Merger is
\nconsistent with and in furtherance of the long-term business strategy of Parent
\nand in the best interests of Parent, (ii) has approved this Agreement, the
\nMerger and the other transactions contemplated by this Agreement, and (iii) has
\nadopted a resolution declaring the Merger Agreement advisable and approving the
\nissuance of shares of Parent Common Stock (as defined below) pursuant to the
\nMerger (the “Share Issuance”).<\/p>\n
D. The Board of Directors of Merger Sub (i) has determined that the Merger
\n(as defined in Section 1.1) is in the best interest of Merger Sub and its sole
\nstockholder, Parent, (ii) has approved this Agreement, the Merger and the other
\ntransactions contemplated by this Agreement, (iii) has adopted a resolution
\ndeclaring the Merger Agreement advisable and (iv) has determined unanimously to
\nrecommend that Parent, in its capacity as sole stockholder of Merger Sub, adopt
\nthis Agreement.<\/p>\n
E. Concurrently with the execution of this Agreement: (i) certain
\nstockholders of Company are entering into Voting Agreements in substantially the
\nform attached hereto as Exhibit A (the “Company Voting Agreements”) and (ii)
\n ———
\ncertain Company Affiliates (as defined in Section 5.11 below) are entering into
\nCompany Affiliate Agreements in substantially the form attached hereto as
\nExhibit B (the “Company Affiliate Agreements”).<\/p>\n
F. The parties intend, by executing this Agreement, to adopt a plan of
\nreorganization within the meaning of Section 368(a) of the Internal Revenue Code
\nof 1986, as amended (the “Code”).<\/p>\n
NOW, THEREFORE, in consideration of the covenants, promises and
\nrepresentations set forth herein, and for other good and valuable consideration,
\nthe receipt and sufficiency of which are hereby acknowledged, the parties agree
\nas follows:<\/p>\n
ARTICLE I
\n THE MERGER<\/p>\n
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
\n ———-
\nsubject to and upon the terms and conditions of this Agreement and the
\napplicable provisions of Delaware Law, Merger Sub shall be merged with and into
\nCompany (the “Merger”), the separate corporate existence of Merger Sub shall
\ncease and Company shall continue as the surviving corporation. Company as the
\nsurviving corporation after the Merger is hereinafter sometimes referred to as
\nthe “Surviving Corporation.”<\/p>\n
1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
\n ———————–
\nthe parties hereto shall cause the Merger to be consummated by filing on the
\nClosing Date (as defined in Section 1.2) a Certificate of Merger with the
\nSecretary of State of the State of Delaware in accordance with the relevant
\nprovisions of Delaware Law (the “Certificate of Merger”) (the time of such
\nfiling (or such later time as may be agreed in writing by Company and Parent and
\nspecified in the Certificate of Merger) being the “Effective Time”). The closing
\nof the Merger (the “Closing”) shall take place at the offices of Wilson Sonsini
\nGoodrich & Rosati, Professional Corporation, at a time and date to be specified
\nin writing by the parties, which shall be no later than the second business day
\nafter the satisfaction or waiver of the conditions set forth in Article VI, or
\nat such other time, date and location as the parties hereto agree in writing
\n(the “Closing Date”).<\/p>\n
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
\n ——————–
\nshall be as provided in this Agreement and the applicable provisions of Delaware
\nLaw. Without limiting the generality of the foregoing, and subject thereto, at
\nthe Effective Time all the property, rights, privileges, powers and franchises
\nof Company and Merger Sub shall vest in the Surviving Corporation, and all
\ndebts, liabilities and duties of Company and Merger Sub shall become the debts,
\nliabilities and duties of the Surviving Corporation.<\/p>\n
1.4 Certificate of Incorporation; Bylaws.
\n ————————————<\/p>\n
(a) At the Effective Time, the Certificate of Incorporation of Merger
\nSub as in effect on the date hereof and subject to the following proviso, shall
\nbe the Certificate of Incorporation of the Surviving Corporation; provided,
\nhowever, that the Certificate of Incorporation of the Surviving Corporation
\nshall be amended so that the name of the Surviving Corporation shall be
\n“Cambridge Technology Partners, Inc.”.<\/p>\n
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
\nEffective Time, shall be, at the Effective Time, the Bylaws of the Surviving
\nCorporation.<\/p>\n
1.5 Directors and Officers. The directors of Merger Sub immediately prior
\n ———————-
\nto the Effective Time shall be the initial directors of the Surviving
\nCorporation until their successors shall have been duly elected and qualified or
\nuntil their earlier death, resignation or removal in accordance<\/p>\n
-2-<\/p>\n
with the Certificate of Incorporation and Bylaws of the Surviving Corporation,
\nor as otherwise provided by applicable law. The officers of the Company
\nimmediately prior to the Effective Time shall be the initial officers of the
\nSurviving Corporation until their successors shall have been duly elected and
\nqualified or until their earlier death, resignation or removal in accordance
\nwith the Certificate of Incorporation and Bylaws of the Surviving Corporation,
\nor as otherwise provided by applicable law.<\/p>\n
1.6 Effect on Capital Stock. Subject to the terms and conditions of this
\n ———————–
\nAgreement, at the Effective Time, by virtue of the Merger and without any action
\non the part of Parent, Merger Sub, Company or the holders of any of the
\nfollowing securities, the following shall occur:<\/p>\n
(a) Conversion of Company Common Stock. Each share of Common Stock, par
\n ———————————-
\nvalue $0.01 per share, of Company (the “Company Common Stock”) issued and
\noutstanding immediately prior to the Effective Time (other than any share of
\nCompany Common Stock to be canceled and extinguished pursuant to Section 1.6(b))
\nwill be automatically converted (subject to Sections 1.6(e) and (f)) into 0.668
\n(the “Exchange Ratio”) of a validly issued, fully paid and nonassessable share
\nof Common Stock, par value $0.10 per share, of Parent (the “Parent Common
\nStock”), which shall be referred to in this Agreement as the “Merger
\nConsideration.” If any shares of Company Common Stock outstanding immediately
\nprior to the Effective Time are unvested or are subject to a repurchase option,
\nrisk of forfeiture or other condition under any applicable restricted stock
\npurchase agreement or other agreement with Company, then the shares of Parent
\nCommon Stock issued in exchange for such shares of Company Common Stock will
\nalso be unvested and subject to the same repurchase option, risk of forfeiture
\nor other condition, and the certificates representing such shares of Parent
\nCommon Stock may accordingly be marked with appropriate legends.<\/p>\n
(b) Cancellation of Company-Owned Stock. Each share of Company Common
\n ———————————–
\nStock held by Company or any direct or indirect wholly-owned subsidiary of
\nCompany immediately prior to the Effective Time shall be canceled and
\nextinguished without any conversion thereof.<\/p>\n
(c) Stock Options; Earn-Out Right. At the Effective Time, all options to
\n —————————–
\npurchase Company Common Stock then outstanding under Company’s 1998 Stock Option
\nPlan, 1997 Stock Option Plan, 1991 Stock Option Plan, 1995 Non-employee
\nDirector Stock Option Plan, Axiom Stock Option Plan, IOS Gruppen Stock Plan and
\nSCG Option Plan (collectively, the “Company Option Plans”), whether vested or
\nunvested, and the Company Option Plans themselves, shall be assumed by Parent in
\naccordance with Section 5.8. At the Effective Time, all obligations to deliver
\nshares of Company Common Stock (the “Earn-Out Agreement”) under the Agreement
\nfor the Purchase of the Business and Assets of OSIX Pty Ltd., dated November 3,
\n2000, among the Company, Cambridge Technology Partners Pty Ltd., the Warrantors
\nand OSIX Pty Ltd., shall be assumed by Parent in accordance with Section 5.8(c)
\nhereof.<\/p>\n
(d) Capital Stock of Merger Sub. Each share of Common Stock, $0.01 par
\n —————————
\nvalue per share, of Merger Sub (the “Merger Sub Common Stock”) issued and
\noutstanding immediately prior to the Effective Time shall be converted into one
\nvalidly issued, fully paid and nonassessable share of Common Stock, $0.01 par
\nvalue per share, of the Surviving Corporation. Each certificate<\/p>\n
-3-<\/p>\n
evidencing ownership of shares of Merger Sub Common Stock shall evidence
\nownership of such shares of capital stock of the Surviving Corporation.<\/p>\n
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted
\n —————————–
\nto reflect appropriately the effect of any stock split, reverse stock split,
\nstock dividend (including any dividend or distribution of securities convertible
\ninto or exercisable or exchangeable for Parent Common Stock or Company Common
\nStock), extraordinary cash dividend, reorganization, recapitalization,
\nreclassification, combination, exchange of shares or other like change with
\nrespect to Parent Common Stock or Company Common Stock occurring or having a
\nrecord date on or after the date hereof and prior to the Effective Time.<\/p>\n
(f) Fractional Shares.
\n —————–<\/p>\n
(i) No fraction of a share of Parent Common Stock will be issued by
\nvirtue of the Merger, but in lieu thereof, each holder of shares of Company
\nCommon Stock who would otherwise be entitled to a fraction of a share of Parent
\nCommon Stock (after aggregating all fractional shares of Parent Common Stock
\nthat otherwise would be received by such holder) shall, upon surrender of such
\nholder’s Certificates(s) (as defined in Section 1.7(c) hereof), receive from the
\nExchange Agent (as defined in Section 1.7(a) hereof) an amount of cash (rounded
\nto the nearest whole cent), without interest, representing such holder’s
\nproportionate interest in the net proceeds from the sale by the Exchange Agent
\nin one or more transactions (which sale transactions shall be made at such
\ntimes, in such manner and on such terms as the Exchange Agent shall determine in
\nits reasonable discretion) on behalf of all such holders of the aggregate of the
\nfractional shares of Parent Common Stock as applicable (the “Excess Parent
\nCommon Stock”). The sale of the Excess Parent Common Stock by the Exchange Agent
\nshall be executed on the Nasdaq National Market (“Nasdaq”) and shall be executed
\nin round lots to the extent practicable. Until the proceeds of such sale or
\nsales have been distributed to the former holders of Company Common Stock, the
\nExchange Agent shall hold such proceeds for the benefit of such holders without
\nliability or obligation to invest such amounts or to pay interest thereon to
\nsuch holders. Parent shall reimburse the Exchange Agent for all reasonable
\ncommissions, transfer taxes and other out-of-pocket transaction costs, including
\nexpenses incurred and commissions paid by the Exchange Agent in connection with
\nthe sale of the Excess Parent Common Stock. The Exchange Agent shall determine
\nthe portion of such net proceeds to which each former holder of shares of
\nCompany Common Stock shall be entitled, if any, by multiplying the amount of the
\naggregate net proceeds by a fraction the numerator of which is the amount of the
\nfractional share interest to which such former holder of shares of Company
\nCommon Stock is entitled (after taking into account all shares of Company Common
\nStock then held by such former holder) and the denominator of which is the
\naggregate amount of fractional interests to which all former holders of shares
\nof Company Common Stock are entitled.<\/p>\n
(ii) Notwithstanding the provisions of Section 1.6(f)(i) hereof,
\nParent may elect, at its option exercised prior to the Effective Time, and in
\nlieu of the issuance and sale of the Excess Parent Common Stock and the making
\nof the payments contemplated in Section 1.6(f)(i) hereof, to pay to the Exchange
\nAgent an amount of cash sufficient for the Exchange Agent to pay each former
\nholder of shares of Company Common Stock who would otherwise be entitled to a
\nfraction of a share of Parent Common Stock (after aggregating all fractional
\nshares of Parent Common Stock to be received by such holder) an amount of cash
\n(rounded to the nearest whole<\/p>\n
-4-<\/p>\n
cent) equal to the product obtained by multiplying (x) such fraction of a share
\nof Parent Common Stock by (y) the average closing price of one share of Parent
\nCommon Stock for the five (5) most recent days that Parent Common Stock has
\ntraded ending on the trading day immediately prior to the Effective Time, as
\nreported on Nasdaq.<\/p>\n
1.7 Surrender of Certificates.
\n ————————–<\/p>\n
(a) Exchange Agent. Prior to the Effective Time, Parent shall select a
\n ————–
\nbank or trust company reasonably acceptable to Company to act as the exchange
\nagent (the “Exchange Agent”) in the Merger.<\/p>\n
(b) Parent to Provide Common Stock. As of the Effective Time, Parent
\n ——————————
\nshall deposit with the Exchange Agent, for exchange in accordance with this
\nArticle I, the shares of Parent Common Stock issuable pursuant to Section 1.6(a)
\nin exchange for outstanding shares of Company Common Stock, and cash in an
\namount sufficient for payment in lieu of fractional shares pursuant to Section
\n1.6(f) and any dividends or distributions to which holders of shares of Company
\nCommon Stock may be entitled pursuant to Section 1.7(d).<\/p>\n
(c) Exchange Procedures. As soon as practicable after the Effective Time
\n ——————-
\n(but in no event more than five business days after the Effective Time) Parent
\nshall cause the Exchange Agent to mail to each holder of record (as of the
\nEffective Time) of a certificate or certificates, which immediately prior to the
\nEffective Time represented outstanding shares of Company Common Stock (the
\n“Certificates”) (i) a letter of transmittal in customary form (which shall
\nspecify that delivery shall be effected, and risk of loss and title to the
\nCertificates shall pass, only upon delivery of the Certificates to the Exchange
\nAgent) and (ii) instructions for use in effecting the surrender of the
\nCertificates in exchange for certificates representing shares of Parent Common
\nStock pursuant to Section 1.6(a), cash in lieu of any fractional shares pursuant
\nto Section 1.6(f), and any dividends or other distributions pursuant to Section
\n1.7(d). Upon surrender of Certificates for cancellation to the Exchange Agent or
\nto such other agent or agents as may be appointed by Parent, together with such
\nletter of transmittal, duly completed and validly executed in accordance with
\nthe instructions thereto, the holders of such Certificates shall be entitled to
\nreceive in exchange therefor certificates representing the number of whole
\nshares of Parent Common Stock into which their shares of Company Common Stock
\nwere converted pursuant to Section 1.6(a), together with payment in lieu of
\nfractional shares which such holders have the right to receive pursuant to
\nSection 1.6(f) and any dividends or other distributions payable pursuant to
\nSection 1.7(d), and the Certificates so surrendered shall forthwith be canceled.
\nUntil so surrendered, outstanding Certificates will be deemed, from and after
\nthe Effective Time, to evidence only the ownership of the number of whole shares
\nof Parent Common Stock into which such shares of Company Common Stock shall have
\nbeen so converted (including any voting, notice or other rights associated with
\nthe ownership of such shares of Parent Common Stock under the Certificate of
\nIncorporation or Bylaws of Parent or under Delaware Law) and the right to
\nreceive an amount in cash in lieu of the issuance of any fractional shares in
\naccordance with Section 1.6(f) and any dividends or other distributions payable
\npursuant to Section 1.7(d).<\/p>\n
(d) Distributions With Respect to Unexchanged Shares. Dividends or other
\n ————————————————
\ndistributions declared or made after the date of this Agreement with respect to
\nParent Common<\/p>\n
-5-<\/p>\n
Stock with a record date after the Effective Time will be paid to the holders of
\nany unsurrendered Certificates with respect to the shares of Parent Common Stock
\nrepresented thereby when the holders of record of such Certificates surrender
\nsuch Certificates.<\/p>\n
(e) Transfers of Ownership. If certificates representing shares of
\n ———————-
\nParent Common Stock are to be issued in a name other than that in which the
\nCertificates surrendered in exchange therefor are registered, it will be a
\ncondition of the issuance thereof that the Certificates so surrendered will be
\nproperly endorsed and otherwise in proper form for transfer and that the persons
\nrequesting such exchange will have (i) paid to Parent or any agent designated by
\nit any transfer or other taxes required by reason of the issuance of
\ncertificates representing shares of Parent Common Stock in any name other than
\nthat of the registered holder of the Certificates surrendered, or (ii)
\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) Required Withholding. Each of the Exchange Agent, Parent and the
\n ——————–
\nSurviving Corporation shall be entitled to deduct and withhold from any
\nconsideration payable or otherwise deliverable pursuant to this Agreement to any
\nholder or former holder of Company Common Stock such amounts as may be required
\nto be deducted or withheld therefrom under the Code or state, local or foreign
\nlaw. To the extent such amounts are so deducted or withheld, such amounts shall
\nbe treated for all purposes under this Agreement as having been paid to the
\nperson to whom such amounts would otherwise have been paid.<\/p>\n
(g) No Liability. Notwithstanding anything to the contrary in this
\n ————
\nSection 1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor
\nany party hereto shall be liable to a holder of shares of Parent Common Stock or
\nCompany Common Stock for any amount properly paid to a public official pursuant
\nto any applicable abandoned property, escheat or similar law.<\/p>\n
1.8 No Further Ownership Rights in Company Common Stock. All shares of
\n —————————————————
\nParent Common Stock issued in accordance with the terms hereof (including any
\ncash paid in respect thereof pursuant to Sections 1.6(f) and 1.7(d)) shall be
\ndeemed to have been issued in full satisfaction of all rights pertaining to such
\nshares of Company Common Stock. There shall be no further registration of
\ntransfers on the records of the Surviving Corporation of shares of Company
\nCommon Stock which were outstanding immediately prior to the Effective Time. If,
\nafter the Effective Time, Certificates are presented to the Surviving
\nCorporation for any reason, they shall be canceled and exchanged as provided in
\nthis Article I.<\/p>\n
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
\n ————————————–
\nCertificates shall have been lost, stolen or destroyed, the Exchange Agent shall
\nissue and pay in exchange for such lost, stolen or destroyed Certificates, upon
\nthe making of an affidavit of that fact by the holder thereof, certificates
\nrepresenting the shares of Parent Common Stock into which the shares of Company
\nCommon Stock represented by such Certificates were converted pursuant to Section
\n1.6(a), cash for fractional shares, if any, as may be required pursuant to
\nSection 1.6(f) and any dividends or distributions payable pursuant to Section
\n1.7(d); provided, however, that the Exchange Agent, may, in its discretion and
\nas a condition precedent to the issuance of such certificates representing
\nshares of Parent Common Stock and the payment of cash and other distributions,
\nrequire the owner of such lost, stolen or destroyed Certificates to deliver a
\nbond in such sum as it may reasonably direct as<\/p>\n
-6-<\/p>\n
indemnity against any claim that may be made against Parent, the Surviving
\nCorporation or the Exchange Agent with respect to the Certificates alleged to
\nhave been lost, stolen or destroyed.<\/p>\n
1.10 Tax and Accounting Consequences.
\n ——————————-<\/p>\n
(a) It is intended by the parties hereto that the Merger shall
\nconstitute a reorganization within the meaning of Section 368(a) of the Code.
\nThe parties hereto adopt this Agreement as a “plan of reorganization” within the
\nmeaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury
\nRegulations.<\/p>\n
(b) It is intended by the parties hereto that the Merger shall qualify
\nas a “purchase” transaction for accounting purposes.<\/p>\n
1.11 Taking of Necessary Action; Further Action. If, at any time after the
\n ——————————————
\nEffective Time, any further action is necessary or desirable to carry out the
\npurposes of this Agreement and to vest the Surviving Corporation with full
\nright, title and possession to all assets, property, rights, privileges, powers
\nand franchises of Company and Merger Sub, the officers and directors of Parent
\nand the Surviving Corporation shall be fully authorized (in the name of Merger
\nSub, Company, the Surviving Corporation and otherwise) to take all such
\nnecessary action.<\/p>\n
ARTICLE II
\n REPRESENTATIONS AND WARRANTIES OF COMPANY<\/p>\n
Company represents and warrants to Parent and Merger Sub, subject to such
\nexceptions as are disclosed in writing in the disclosure schedules supplied by
\nCompany to Parent dated as of the date hereof (the “Company Schedule”), which
\ndisclosure shall provide an exception to or otherwise qualify the
\nrepresentations or warranties of Company contained in the Section of this
\nAgreement corresponding by number to such disclosure and the other
\nrepresentations and warranties herein to the extent it is readily apparent on
\nthe face of such disclosure that such disclosure is applicable to such other
\nrepresentations or warranties, as follows:<\/p>\n
2.1 Organization of Company.
\n ————————<\/p>\n
(a) Company and each of its subsidiaries is a corporation duly
\norganized, validly existing and in good standing under the laws of the
\njurisdiction of its incorporation; has the corporate power and authority to own,
\nlease and operate its assets and property and to carry on its business as now
\nbeing conducted and as proposed to be conducted; and is duly qualified to do
\nbusiness and in good standing as a foreign corporation in each jurisdiction in
\nwhich the failure to be so qualified would have a Material Adverse Effect (as
\ndefined in Section 8.3) on Company.<\/p>\n
(b) Company has delivered to Parent a true and complete list of all of
\nCompany’s subsidiaries, indicating the jurisdiction of incorporation of each
\nsubsidiary and Company’s equity interest therein (to the extent such entity is
\nnot wholly owned) and except for securities held by the Company and minority
\nownership interests in certain of Company’s subsidiaries held by third parties
\n(as described on such list of subsidiaries), there are no outstanding equity
\nsecurities, partnership interests or similar ownership interests (or any
\nsecurity exchangeable or convertible into, or exercisable for, any of the
\nforegoing) in any subsidiary of Company.<\/p>\n
-7-<\/p>\n
(c) Company has delivered or made available to Parent a true and correct
\ncopy of the Certificate of Incorporation and Bylaws of Company and similar
\ngoverning instruments of each of its material subsidiaries, each as in effect on
\nthe date hereof, and each such instrument is in full force and effect. Neither
\nCompany nor any of its subsidiaries is in violation of any of the provisions of
\nits Certificate of Incorporation or Bylaws or equivalent governing instruments.<\/p>\n
2.2 Company Capital Structure. The authorized capital stock of Company
\n ————————-
\nconsists of 250,000,000 shares of Common Stock, par value $0.01 per share, of
\nwhich there were 63,532,271 shares issued and outstanding as of March 1, 2001,
\nand 2,000,000 shares of Preferred Stock, par value $0.01 per share (“Company
\nPreferred Stock”), of which there were no shares issued and outstanding as of
\nMarch 11, 2001. All outstanding shares of Company Common Stock are duly
\nauthorized, validly issued, fully paid and nonassessable and are not subject to
\npreemptive rights created by statute, the Certificate of Incorporation or Bylaws
\nof Company or any agreement or document to which Company is a party or by which
\nit is bound. As of March 11, 2001 Company had reserved an aggregate of
\n23,189,746 shares of Company Common Stock, net of exercises, for issuance to
\nemployees, consultants and non-employee directors pursuant to the Company
\nOption Plans, under which options are outstanding for an aggregate of 17,545,280
\nshares and under which 17,545,280 shares are available for grant or issuance as
\nof March 11, 2001. All shares of Company Common Stock subject to issuance as
\naforesaid, upon issuance on the terms and conditions specified in the
\ninstruments pursuant to which they are issuable, would be duly authorized,
\nvalidly issued, fully paid and nonassessable. The Company has provided to the
\nParent information describing option activity through March 11, 2001.<\/p>\n
2.3 Obligations With Respect to Capital Stock. Except as set forth in
\n —————————————–
\nSection 2.2 above and in Section 2.3 of the Company Schedule, there are no
\nequity securities, partnership interests or similar ownership interests of any
\nclass of Company, or any securities exchangeable or convertible into or
\nexercisable for any such equity securities (including options and warrants),
\npartnership interests or similar ownership interests issued, reserved for
\nissuance or outstanding. Except as set forth in Section 2.2 above and in Section
\n2.3 of the Company Schedule, and except for the rights (“Rights”) issued
\npursuant to the Rights Agreement, dated as of June 23, 1997, between Company and
\nChaseMellon Shareholder Services, L.L.C., as rights agent, as amended (the
\n“Rights Agreement”), there are no commitments or agreements of any character to
\nwhich Company or any of its subsidiaries is a party or by which it is bound
\nobligating Company or any of its subsidiaries to issue, deliver or sell, or
\ncause to be issued, delivered or sold, or repurchase, redeem or otherwise
\nacquire, or cause the repurchase, redemption or acquisition, of any shares of
\ncapital stock of Company or any of its subsidiaries or obligating Company or any
\nof its subsidiaries to grant, extend, accelerate the vesting of or enter into
\nany such commitment or agreement. Except as set forth in Section 2.3 of the
\nCompany Schedule, there are no registration rights and, to the knowledge of
\nCompany there are no voting trusts, proxies or other agreements or
\nunderstandings with respect to any equity security of any class of Company or
\nwith respect to any equity security, partnership interest or similar ownership
\ninterest of any class of any of its subsidiaries.<\/p>\n
2.4 Authority.
\n ———<\/p>\n
(a) Company has all requisite corporate power and authority to enter
\ninto this Agreement and to consummate the transactions contemplated hereby. The
\nexecution and delivery of<\/p>\n
-8-<\/p>\n
this Agreement and the consummation of the transactions contemplated hereby have
\nbeen duly authorized by all necessary corporate action on the part of Company,
\nsubject only to the adoption of this Agreement by Company’s stockholders and the
\nfiling and recordation of the Certificate of Merger pursuant to Delaware Law. A
\nvote of the holders of at least a majority of the outstanding shares of the
\nCompany Common Stock is required for Company’s stockholders to approve and adopt
\nthis Agreement and approve the Merger. This Agreement has been duly executed and
\ndelivered by Company and, assuming the due authorization, execution and delivery
\nby Parent and Merger Sub, constitutes the valid and binding obligation of
\nCompany, enforceable in accordance with its terms, except as enforceability may
\nbe limited by bankruptcy and other similar laws and general principles of
\nequity. Except as set forth in Section 2.4 of the Company Schedule, the
\nexecution and delivery of this Agreement by Company do not, and the performance
\nof this Agreement by Company will not, (i) conflict with or violate the
\nCertificate of Incorporation or Bylaws of Company or the equivalent
\norganizational documents of any of its subsidiaries, (ii) subject to compliance
\nwith the requirements set forth in Section 2.4(b) below, materially conflict
\nwith or violate any law, rule, regulation, order, judgment or decree applicable
\nto Company or any of its subsidiaries or by which its or any of their respective
\nproperties is bound or affected, or (iii) result in any breach of, or constitute
\na default (or an event that with notice or lapse of time or both would become a
\ndefault) under, or impair Company’s rights or alter the rights or obligations of
\nany third party under, or give to others any rights of termination, amendment,
\nacceleration or cancellation of, or result in the creation of a lien or
\nencumbrance on any of the properties or assets of Company or any of its
\nsubsidiaries pursuant to, any material note, bond, mortgage, indenture,
\ncontract, agreement, lease, license, permit, franchise or other instrument or
\nobligation to which Company or any of its subsidiaries is a party or by which
\nCompany or any of its subsidiaries or its or any of their respective properties
\nare bound or affected, except to the extent such conflict, violation, breach,
\ndefault, impairment or other effect would not, in the case of clause (ii) or
\n(iii), reasonably be expected to have a Material Adverse Effect on Company.<\/p>\n
(b) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with any court, administrative agency or commission or
\nother governmental authority or instrumentality (“Governmental Entity”) is
\nrequired by or with respect to Company in connection with the execution and
\ndelivery of this Agreement or the consummation of the transactions contemplated
\nhereby, except for (i) the filing of a Form S-4 Registration Statement and any
\namendments thereto (the “S-4”) with the Securities and Exchange Commission
\n(“SEC”) in accordance with the Securities Act of 1933, as amended (the
\n“Securities Act”), (ii) the filing of the Certificate of Merger with the
\nSecretary of State of Delaware, (iii) the filing of the Proxy
\nStatement\/Prospectus (as defined in Section 2.17) with the SEC in accordance
\nwith the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
\nsuch reports or other filings under the Exchange Act as may be required by this
\nAgreement and the transactions contemplated hereby, (iv) such consents,
\napprovals, orders, authorizations, registrations, declarations and filings as
\nmay be required under applicable federal and state securities laws and the
\nHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”)
\nand the laws of any foreign country, (v) such consents, approvals, orders,
\nauthorizations and filings as may be required by Nasdaq, and (vi) such other
\nconsents, authorizations, filings, approvals and registrations which, if not
\nobtained or made, would not have a Material Adverse Effect on the Company or a
\nMaterial Adverse Effect on the ability of the parties to consummate the Merger.<\/p>\n
-9-<\/p>\n
2.5 SEC Filings; Company Financial Statements.
\n ——————————————<\/p>\n
(a) Company has filed all forms, reports and documents required to be
\nfiled with the SEC since January 1, 1998. All such required forms, reports and
\ndocuments (including those that Company may file subsequent to the date hereof)
\nare referred to herein as the “Company SEC Reports.” Except as set forth in
\nSection 2.5 of the Company Schedule, as of their respective dates, the Company
\nSEC Reports (i) were prepared in accordance with the requirements of the
\nSecurities Act or the Exchange Act, as the case may be, and the rules and
\nregulations of the SEC thereunder applicable to such Company SEC Reports, and
\n(ii) did not at the time they were filed (or if amended or superseded by a
\nfiling prior to the date of this Agreement, then on the date of such filing)
\ncontain any untrue statement of a material fact or omit to state a material fact
\nrequired to be stated therein or necessary in order to make the statements
\ntherein, in the light of the circumstances under which they were made, not
\nmisleading. None of Company’s subsidiaries is required to file any forms,
\nreports or other documents with the SEC.<\/p>\n
(b) Except as set forth in Section 2.5 of the Company Schedule, each of
\nthe consolidated financial statements (including, in each case, any related
\nnotes thereto) contained in the Company SEC Reports, (i) complied as to form in
\nall material respects with the then current published rules and regulations of
\nthe SEC with respect thereto, (ii) was prepared in accordance with generally
\naccepted accounting principles (“GAAP”) applied on a consistent basis throughout
\nthe periods involved (except as may be indicated in the notes thereto or, in the
\ncase of unaudited interim financial statements, as may be permitted by the SEC
\non Form 10-Q under the Exchange Act) and (iii) fairly presented the consolidated
\nfinancial position of Company and its subsidiaries at the respective dates
\nthereof and the consolidated results of its operations and cash flows for the
\nperiods indicated, except that the unaudited interim financial statements were
\nor are subject to normal and recurring year-end adjustments which were not, or
\nare not expected to be, material in amount. The balance sheet of Company as of
\nDecember 31, 2000 and the Statement of Operations and the Statement of Cash
\nFlow, each for the year ended December 31, 2000, copies of which are attached as
\nSection 2.5 of the Company Schedule, are hereinafter referred to as the “Year
\n2000 Financials”; and the Year 2000 Financials together with the consolidated
\nfinancial statements contained in the Company SEC Reports are referred to
\nhereinafter as the “Company Financials.” The Year 2000 Financials were prepared
\nin accordance with GAAP applied on a consistent basis except that they do not
\nyet include the footnotes that are necessary for completion and compliance with
\nGAAP. Except as disclosed in the Company Financials, neither Company nor any of
\nits subsidiaries has any liabilities (absolute, accrued, contingent or
\notherwise) of a nature required to be disclosed on a balance sheet or in the
\nrelated notes to the consolidated financial statements prepared in accordance
\nwith GAAP except liabilities (i) provided for in the balance sheet dated
\nDecember 31, 2000, (ii) incurred since December 31, 2000 in the ordinary course
\nof business consistent with past practices, or (iii) liabilities or obligations
\nunder or related to this Agreement and the transactions contemplated hereby.<\/p>\n
(c) Company has heretofore furnished to Parent a complete and correct
\ncopy of any amendments or modifications, which have not yet been filed with the
\nSEC but which are required to be filed, to agreements, documents or other
\ninstruments which previously had been filed by Company with the SEC pursuant to
\nthe Securities Act or the Exchange Act.<\/p>\n
-10-<\/p>\n
2.6 Absence of Certain Changes or Events. Except as disclosed in Section
\n ————————————
\n2.6 of the Company Schedule, since December 31, 2000, there has not been: (i)
\nany Material Adverse Effect on Company, (ii) any declaration, setting aside or
\npayment of any dividend on, or other distribution (whether in cash, stock or
\nproperty) in respect of, any of the Company’s capital stock, or any purchase,
\nredemption or other acquisition by Company of any of the Company’s capital stock
\nor any other securities of Company or its subsidiaries or of any options,
\nwarrants, calls or rights to acquire any such shares or other securities except
\nfor repurchases from employees following their termination pursuant to the terms
\nof their pre-existing stock option or purchase agreements, (iii) any split,
\ncombination or reclassification of any of Company’s capital stock, (iv) except
\nfor agreements contemplated under Section 5.8(a), any granting by Company or any
\nof its subsidiaries of any increase in compensation or fringe benefits, except
\nfor increases of cash compensation and fringe benefits in the ordinary course of
\nbusiness and consistent with past practice, or any payment by Company or any of
\nits subsidiaries of any bonus, except for bonuses made in the ordinary course of
\nbusiness consistent with past practice, or any granting by Company or any of its
\nsubsidiaries of any increase in severance or termination pay or any entry by
\nCompany or any of its subsidiaries into any currently effective employment,
\nseverance, termination or indemnification agreement or any agreement the
\nbenefits of which are contingent or the terms of which are materially altered
\nupon the occurrence of a transaction contemplated hereby, (v) entry by Company
\nor any of its subsidiaries into any material licensing or other material
\nagreement with regard to the acquisition or disposition of any Intellectual
\nProperty (as defined in Section 2.8 hereof) other than in the ordinary course of
\nbusiness consistent with past practice or any amendment or consent with respect
\nto any licensing agreement filed or required to be filed by Company with the
\nSEC, and other than licenses disclosed on Section 2.8 of the Company Schedule,
\n(vi) any material change by Company in its accounting methods, principles or
\npractices, except as required by concurrent changes in GAAP, or (vii) any
\nmaterial revaluation by Company of any of its assets, including, without
\nlimitation, writing down the value of capitalized inventory or writing off notes
\nor accounts receivable other than in the ordinary course of business.<\/p>\n
2.7 Taxes.
\n —–<\/p>\n
(a) Definition of Taxes. For the purposes of this Agreement, “Tax” or,
\n ——————-
\ncollectively, “Taxes”, means (i) any and all federal, state, local and foreign
\ntaxes, assessments and other governmental charges, duties, impositions and
\nliabilities, including taxes based upon or measured by gross receipts, income,
\nprofits, sales, use and occupation, and value added, ad valorem, transfer,
\nfranchise, withholding, payroll, recapture, employment, excise and property
\ntaxes, together with all interest, penalties and additions imposed with respect
\nto such amounts; (ii) any liability for the payment of any amounts of the type
\ndescribed in clause (i) as a result of being a member of an affiliated,
\nconsolidated, combined or unitary group for any period; and (iii) any liability
\nfor the payment of any amounts of the type described in clause (i) or (ii) as a
\nresult of any express or implied obligation to indemnify any other person or as
\na result of any obligations under any agreements or arrangements with any other
\nperson with respect to such amounts and including any liability for taxes of a
\npredecessor entity.<\/p>\n
-11-<\/p>\n
(b) Tax Returns and Audits.
\n ———————-<\/p>\n
(i) Company and each of its subsidiaries have timely filed all
\nfederal, state, local and foreign returns, estimates, information statements and
\nreports (“Returns”) relating to Taxes required to be filed by Company and each
\nof its subsidiaries with any Tax authority, except such Returns which are not
\nmaterial to Company, and such Returns are true and correct and have been
\ncompleted in accordance with applicable law, except where a failure to be true
\nand correct or to have been so completed would not have a Material Adverse
\nEffect on Company. Company and each of its subsidiaries have timely paid all
\nTaxes shown to be due on such Returns.<\/p>\n
(ii) Company and each of its subsidiaries have withheld with respect
\nto their past and present employees, officers, directors and independent
\ncontractors, stockholders, creditors and all other third parties, all Taxes and
\nother deductions required to be withheld and have, within the time and in the
\nmanner required by law, paid such withheld amounts to the property governmental
\nauthorities, except where the failure to pay such Taxes would not have a
\nMaterial Adverse Effect on Company.<\/p>\n
(iii) Except as set forth in Section 2.7 of the Company Schedule,
\nneither Company nor any of its subsidiaries has been delinquent in the payment
\nof any material Tax nor is there any material Tax deficiency outstanding,
\nproposed or assessed against Company or any of its subsidiaries, nor has Company
\nor any of its subsidiaries executed any unexpired waiver of any statute of
\nlimitations on or extending the period for the assessment or collection of any
\nTax.<\/p>\n
(iv) Except as set forth in Section 2.7 of the Company Schedule, no
\naudit or other examination of any Return of Company or any of its subsidiaries
\nby any Tax authority is presently in progress, nor has Company or any of its
\nsubsidiaries been notified of any request for such an audit or other examination
\nwhich could have a Material Adverse Effect on Company.<\/p>\n
(v) Except as set forth in Section 2.7 of the Company Schedule, no
\nadjustment relating to any Returns filed by Company or any of its subsidiaries
\n(and no claim by a Tax authority in a jurisdiction in which Company does not
\nfile Returns that Company may be subject to taxation by such jurisdiction) has
\nbeen proposed in writing formally or informally by any Tax authority to Company
\nor any of its subsidiaries or any representative thereof which could have a
\nMaterial Adverse Effect on Company.<\/p>\n
(vi) Neither Company nor any of its subsidiaries has any liability for
\nany material unpaid Taxes which has not been accrued for or reserved on the
\nbalance sheet of the Company dated December 31, 2000 in accordance with GAAP,
\nwhether asserted or unasserted, contingent or otherwise, other than any
\nliability for unpaid Taxes that may have accrued since September 30, 2000 in
\nconnection with the operation of the business of Company and its subsidiaries in
\nthe ordinary course.<\/p>\n
(vii) Neither Company nor any of its subsidiaries (i) has ever been a
\nmember of an affiliated group filing a consolidated federal income Tax Return
\n(other than a consolidated group the common parent of which is Company or a
\nsubsidiary), (ii) is a party to any Tax sharing or Tax allocation agreement,
\narrangement or understanding with a person other than the<\/p>\n
-12-<\/p>\n
Company and its subsidiaries, (iii) is liable for the Taxes of any other person
\nother than the Company and its subsidiaries under Treasury Regulation 1.1502-6
\n(or any similar provision of state, local or foreign law), as a transferee or
\nsuccessor, by contract or otherwise, and (iv) is a party to any joint venture,
\npartnership or other arrangement that could be treated as a partnership for
\nincome Tax purposes.<\/p>\n
(viii) Neither Company nor any of its subsidiaries has constituted
\neither a “distributing corporation” or a “controlled corporation” in a
\ndistribution of stock qualifying for tax-free treatment under Section 355 of the
\nCode (i) in the two years prior to the date of this Agreement or (ii) in a
\ndistribution which could otherwise constitute part of a “plan” or “series of
\nrelated transactions” (within the meaning of Section 355(e) of the Code) in
\nconjunction with the Merger.<\/p>\n
(ix) Neither Company nor any of its subsidiaries has taken any action
\nor knows of any fact that is reasonably likely to prevent the Merger from
\nqualifying as a “reorganization” within the meaning of Section 368(a) of the
\nCode.<\/p>\n
2.8 Company Intellectual Property. For the purposes of this Agreement, the
\n —————————–
\nfollowing terms have the following definitions:<\/p>\n
“Intellectual Property” shall mean any or all of the following and all
\nrights in, arising out of, or associated therewith: (i) all United States,
\ninternational and foreign patents and applications therefor and all reissues,
\ndivisions, renewals, extensions, provisionals, continuations and continuations-
\nin-part thereof; (ii) all inventions (whether patentable or not), invention
\ndisclosures, improvements, trade secrets, proprietary information, know how,
\ntechnology, technical data and customer lists; (iii) all copyrights, copyrights
\nregistrations and applications therefor, and all other rights corresponding
\nthereto throughout the world; (iv) all industrial designs and any registrations
\nand applications therefor throughout the world; (v) all trade names, logos,
\ncommon law trademarks and service marks, trademark and service mark
\nregistrations and applications therefor throughout the world; (vi) all databases
\nand data collections and all rights therein throughout the world; and (vii) all
\ndomain names.<\/p>\n
“Company Intellectual Property” shall mean any material Intellectual
\nProperty that is owned by Company or any of its subsidiaries.<\/p>\n
(a) To the knowledge of the Company, except as may be set forth on
\nSchedule 2.8 of the Company Schedule, no Company Intellectual Property or
\nproduct or service of Company or any of its subsidiaries is subject to any
\nproceeding or outstanding decree, order, judgment, contract, license, agreement,
\nor stipulation restricting in any manner the use, transfer, or licensing thereof
\nby Company or any of its subsidiaries, other than in the ordinary course of
\nbusiness, or which may affect the validity, use or enforceability of such
\nCompany Intellectual Property.<\/p>\n
(b) Except as may be set forth on Schedule 2.8 of the Company Schedule,
\nCompany and its subsidiaries own and have good and exclusive title to all
\nCompany Intellectual Property free and clear of any material liens or
\nencumbrances (excluding non-exclusive licenses). Except as may be set forth on
\nSchedule 2.8 of the Company Schedule, Company has licenses<\/p>\n
-13-<\/p>\n
(sufficient for the conduct of its business as currently conducted) to all other
\nmaterial Intellectual Property used by Company.<\/p>\n
(c) [Intentionally left blank.]
\n ————————<\/p>\n
(d) To the knowledge of the Company, except as may be set forth on
\nSchedule 2.8 of the Company Schedule, to the extent that any material
\nIntellectual Property has been developed or created by a third party for Company
\nor any of its subsidiaries, Company has obtained ownership of, and is the
\nexclusive owner of, by operation of law or by valid assignment, to the fullest
\nextent it is legally possible to do so, or has obtained a license (sufficient
\nfor the conduct of its business and the business of its subsidiaries) to all
\nsuch third party’s Intellectual Property in such work or material.<\/p>\n
(e) Except as may be set forth on Schedule 2.8 of the Company Schedule,
\nneither Company nor any of its subsidiaries has transferred ownership of, or
\ngranted any exclusive license with respect to, any Intellectual Property that is
\nor was material Company Intellectual Property, to any third party except to
\ncustomers pursuant to written agreements in the ordinary course of business.<\/p>\n
(f) To the knowledge of Company, except as may be set forth on Schedule
\n2.8 of the Company Schedule, the operation of the business of Company and its
\nsubsidiaries as such business currently is conducted has not and does not
\nmaterially infringe or misappropriate the Intellectual Property of any third
\nparty or, to its knowledge, constitute unfair competition or trade practices
\nunder the laws of any jurisdiction.<\/p>\n
(g) Except as may be set forth on Schedule 2.8 of the Company Schedule,
\nto the knowledge of the Company, neither Company nor any of its subsidiaries has
\nreceived notice from any third party that the operation of the business of
\nCompany or any of its subsidiaries, infringes or misappropriates the
\nIntellectual Property of any third party or constitutes unfair competition or
\ntrade practices under the laws of any jurisdiction.<\/p>\n
(h) Except as may be set forth on Schedule 2.8 of the Company Schedule,
\nto the knowledge of Company, no person has materially infringed or
\nmisappropriated or is materially infringing or misappropriating any Company
\nIntellectual Property.<\/p>\n
(i) Company and each of its subsidiaries have taken reasonable steps to
\nprotect Company’s and its subsidiaries’ rights in Company’s confidential
\ninformation and trade secrets that it wishes to protect or any trade secrets or
\nconfidential information of third parties provided to Company except where the
\nfailure to do so is not reasonably expected to be material to Company and its
\nsubsidiaries.<\/p>\n
2.9 Compliance; Permits; Restrictions.
\n ———————————<\/p>\n
(a) Neither Company nor any of its subsidiaries is, in any respect, in
\nconflict with, or in default or violation of (i) any law, rule, regulation,
\norder, judgment or decree applicable to Company or any of its subsidiaries or by
\nwhich its or any of their respective properties is bound or affected (except as
\nnoted on Section 2.10 of the Company Schedule), or (ii) any note, bond,
\nmortgage, indenture, contract, agreement, lease, license, permit, franchise or
\nother instrument or<\/p>\n
-14-<\/p>\n
obligation to which Company or any of its subsidiaries is a party or by which
\nCompany or any of its subsidiaries or its or any of their respective properties
\nis bound or affected, except for such conflict, default or violation which would
\nnot reasonably be expected to have a Material Adverse Effect on Company. To the
\nknowledge of Company, no investigation or review by any Governmental Entity
\nwhich would reasonably be expected to materially impact the Company is pending
\nor threatened against Company or its subsidiaries, nor has any Governmental
\nEntity indicated in writing to Company or any subsidiary an intention to conduct
\nthe same. To the knowledge of Company, there is no material agreement, judgment,
\ninjunction, order or decree binding upon Company or any of its subsidiaries
\nwhich has or could reasonably be expected to have the effect of prohibiting or
\nmaterially impairing any business practice of Company or any of its
\nsubsidiaries, any acquisition of material property by Company or any of its
\nsubsidiaries or the conduct of business by Company as currently conducted.<\/p>\n
(b) Company and its subsidiaries hold all permits, licenses, variances,
\nexemptions, orders and approvals from governmental authorities which are
\nmaterial to the operation of the business of Company (collectively, the “Company
\nPermits”). Company and its subsidiaries are in compliance in all material
\nrespects with the terms of the Company Permits.<\/p>\n
2.10 Litigation. As of the date of this Agreement, except as set forth in
\n ———-
\nSection 2.10 of the Company Schedule, there is no action, suit, proceeding,
\nclaim, arbitration or investigation pending, and to Company’s knowledge, no
\naction, suit, proceeding, claim, arbitration or investigation against Company or
\nany of its subsidiaries has been threatened, which, in either case, if decided
\nadversely, would reasonably be expected to have a Material Adverse Effect on
\nCompany, or which in any manner challenges or seeks to prevent, enjoin, alter or
\ndelay any of the transactions contemplated by this Agreement.<\/p>\n
2.11 Brokers’ and Finders’ Fees. Except for fees payable to Salomon Smith
\n ————————–
\nBarney, Inc. pursuant to an engagement letter, a copy of which has been provided
\nto Parent, Company has not incurred, nor will it incur, directly or indirectly,
\nany liability for brokerage or finders’ fees or agents’ commissions or any
\nsimilar charges in connection with this Agreement or any transaction
\ncontemplated hereby.<\/p>\n
2.12 Employee Matters and Benefit Plans.
\n ———————————-<\/p>\n
(a) Definitions. With the exception of the definition of “Affiliate” set
\n ———–
\nforth in Section 2.12 (a)(i) below (which definition shall apply only to
\nSections 2.12 and 5.8 hereof), for purposes of this Agreement, the following
\nterms shall have the meanings set forth below:<\/p>\n
(i) “Affiliate” shall mean any other person or entity under common
\n ———
\ncontrol with Company within the meaning of Section 414(b), (c), (m) or (o) of
\nthe Code and the regulations issued thereunder;<\/p>\n
(ii) “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation
\n —–
\nAct of 1985, as amended;<\/p>\n
(iii) “Code” shall mean the Internal Revenue Code of 1986, as amended;
\n —-<\/p>\n
-15-<\/p>\n
(iv) “Company Employee Plan” shall mean any material plan, program,
\n ———————
\npolicy, practice, contract, agreement or other arrangement providing for
\ncompensation, severance, termination pay, deferred compensation, performance
\nawards, stock or stock-related awards, fringe benefits or other employee
\nbenefits or remuneration of any kind, whether written or unwritten or otherwise,
\nfunded or unfunded, including without limitation, each “employee benefit plan,”
\nwithin the meaning of Section 3(3) of ERISA which is or has been maintained,
\ncontributed to, or required to be contributed to, by Company or any Affiliate
\nfor the benefit of any Employee, or with respect to which Company or any
\nAffiliate has or may have any liability or obligation;<\/p>\n
(v) “DOL” shall mean the Department of Labor;
\n —<\/p>\n
(vi) “Employee” shall mean any current or former or retired employee,
\n ——–
\nconsultant or director of Company or any Affiliate;<\/p>\n
(vii) “Employment Agreement” shall mean each management, employment,
\n ——————–
\nseverance, consulting, relocation, repatriation, expatriation, visas, work
\npermit or other agreement, contract or understanding relating to employment or
\ncompensation between Company or any Affiliate and any Employee;<\/p>\n
(viii) “ERISA” shall mean the Employee Retirement Income Security Act
\n —–
\nof 1974, as amended;<\/p>\n
(ix) “FMLA” shall mean the Family Medical Leave Act of 1993, as
\n —-
\namended;<\/p>\n
(x) “International Employee Plan” shall mean each Company Employee
\n —————————
\nPlan that has been adopted or maintained by Company or any Affiliate, whether
\ninformally or formally, or with respect to which Company or any Affiliate will
\nor may have any liability, for the benefit of Employees who perform services
\noutside the United States;<\/p>\n
(xi) “IRS” shall mean the Internal Revenue Service;
\n —<\/p>\n
(xii) “Multiemployer Plan” shall mean any “Pension Plan” (as defined
\n ——————
\nbelow) which is a “multiemployer plan,” as defined in Section 3(37) of ERISA;<\/p>\n
(xiii) “Pension Plan” shall mean each Company Employee Plan which is
\n ————
\nan “employee pension benefit plan,” within the meaning of Section 3(2) of ERISA.<\/p>\n
(b) Schedule. Section 2.12(b) of the Company Schedule contains an
\n ——–
\naccurate and complete list of each Company Employee Plan, International Employee
\nPlan, and each Employment Agreement applicable to an officer of the Company.
\nCompany has provided Parent with the form of employee non-disclosure,
\ninventions, non-competition and non-solicitation agreement applicable to newly
\nhired officers of the Company. Company does not have any plan or commitment to
\nestablish any new Company Employee Plan, International Employee Plan, or
\nEmployment Agreement, to modify any Company Employee Plan or Employment
\nAgreement (except to the extent required by law or to conform any such Company
\nEmployee Plan or Employment Agreement to the requirements of any applicable law,
\nin each case as previously disclosed to Parent in writing, or as<\/p>\n
-16-<\/p>\n
required by this Agreement), or to adopt or enter into any Company Employee
\nPlan, International Employee Plan, or Employment Agreement.<\/p>\n
(c) Documents. Company has provided to Parent correct and complete
\n ———
\ncopies of: (i) all material documents embodying each Company Employee Plan,
\nInternational Employee Plan, and each Employment Agreement applicable to an
\nofficer of Company including (without limitation) all amendments thereto and all
\nrelated trust documents, group annuity contracts and group insurance contracts;
\n(ii) the most recent annual actuarial valuations, if any, prepared for each
\nCompany Employee Plan; (iii) the three (3) most recent annual reports (Form
\nSeries 5500 and all schedules and financial statements attached thereto), if
\nany, required under ERISA or the Code in connection with each Company Employee
\nPlan; (iv) if the Company Employee Plan is funded, the most recent annual and
\nperiodic accounting of Company Employee Plan assets; (v) the most recent summary
\nplan description together with the summary(ies) of material modifications
\nthereto, if any, required under ERISA with respect to each Company Employee
\nPlan; (vi) all IRS determination, opinion, notification and advisory letters;
\nand (vii) the three (3) most recent plan years discrimination tests for each
\nCompany Employee Plan.<\/p>\n
(d) Employee Plan Compliance. Except as set forth on Section 2.12(d),
\n ————————
\n(i) Company has performed in all material respects all obligations required to
\nbe performed by it under, is not in default or material violation of, and has no
\nknowledge of any default or material violation by any other party to each
\nCompany Employee Plan, and each Company Employee Plan has been established and
\nmaintained in all material respects in accordance with its terms and in
\ncompliance with all applicable laws, statutes, orders, rules and regulations,
\nincluding but not limited to ERISA or the Code; (ii) each Company Employee Plan
\nintended to qualify under Section 401(a) of the Code and each trust intended to
\nqualify under Section 501(a) of the Code has either received a favorable
\ndetermination, opinion, notification or advisory letter from the IRS with
\nrespect to each such Company Employee Plan as to its qualified status under the
\nCode, including all amendments to the Code effected by the Tax Reform Act of
\n1986 and subsequent legislation, or has remaining a period of time under
\napplicable Treasury regulations or IRS pronouncements in which to apply for such
\na letter and make any amendments necessary to obtain a favorable determination
\nas to the qualified status of each such Company Employee Plan; (iii) no
\n“prohibited transaction,” within the meaning of Section 4975 of the Code or
\nSections 406 and 407 of ERISA, and not otherwise exempt under Section 4975 of
\nthe Code or Section 408 of ERISA (or any administrative class exemption issued
\nthereunder), has occurred with respect to any Company Employee Plan; (iv) there
\nare no actions, suits or claims pending, or, to the knowledge of Company,
\nthreatened or reasonably anticipated (other than routine claims for benefits)
\nagainst any Company Employee Plan or against the assets of any Company Employee
\nPlan which could reasonably be expected to result in a material liability to
\nCompany or to any Company Employee Plan; (v) each Company Employee Plan (other
\nthan any stock option plan) can be amended, terminated or otherwise discontinued
\nafter the Effective Time, without material liability to Parent, Company or any
\nof its Affiliates (other than ordinary administration expenses); (vi) there are
\nno audits, inquiries or proceedings pending or, to the knowledge of Company,
\nthreatened by the IRS or DOL with respect to any Company Employee Plan; and
\n(vii) neither Company nor any Affiliate is subject to any penalty or Tax with
\nrespect to any Company Employee Plan under Section 502(i) of ERISA or Sections
\n4975 through 4980 of the Code.<\/p>\n
-17-<\/p>\n
(e) Pension Plan. Neither Company nor any Affiliate has ever maintained,
\n ————
\nestablished, sponsored, participated in, or contributed to, any Pension Plan
\nwhich is subject to Title IV of ERISA or Section 412 of the Code.<\/p>\n
(f) Collectively Bargained, Multiemployer and Multiple Employer Plans.
\n —————————————————————–
\nAt no time has Company or any Affiliate contributed to or been obligated to
\ncontribute to any Multiemployer Plan. Neither Company, nor any Affiliate has at
\nany time ever maintained, established, sponsored, participated in, or
\ncontributed to any multiple employer plan, or to any plan described in Section
\n413 of the Code.<\/p>\n
(g) No Post-Employment Obligations. No Company Employee Plan provides,
\n ——————————
\nor reflects or represents any liability to provide retiree health to any person
\nfor any reason, except as may be required by COBRA or other applicable statute,
\nand Company has never represented, promised or contracted (whether in oral or
\nwritten form) to any Employee (either individually or to Employees as a group)
\nor any other person that such Employee(s) or other person would be provided with
\nretiree health, except to the extent required by statute.<\/p>\n
(h) Health Care Compliance. Neither Company nor any Affiliate has, prior
\n ———————-
\nto the Effective Time and in any material respect, violated any of the health
\ncare continuation requirements of COBRA, the requirements of FMLA, the
\nrequirements of the Health Insurance Portability and Accountability Act of 1996,
\nthe requirements of the Women’s Health and Cancer Rights Act of 1998, the
\nrequirements of the Newborns’ and Mothers’ Health Protection Act of 1996, or any
\namendment to each such act, or any similar provisions of state law applicable to
\nits Employees.<\/p>\n
(i) Effect of Transaction. Except as set forth on Section 2.12(i) of the
\n ———————
\nCompany Schedule, the execution of this Agreement and the consummation of the
\ntransactions contemplated hereby will not (either alone or upon the occurrence
\nof any additional or subsequent events) constitute an event under any Company
\nEmployee Plan, Employment Agreement, trust or loan that will or may result in
\nany payment (whether of severance pay or otherwise), acceleration, forgiveness
\nof indebtedness, vesting, distribution, increase in benefits or obligation to
\nfund benefits with respect to any Employee.<\/p>\n
(j) Employment Matters. Company: (i) is in compliance in all material
\n ——————
\nrespects with all applicable foreign, federal, state and local laws, rules and
\nregulations respecting employment, employment practices, terms and conditions of
\nemployment and wages and hours, in each case, with respect to Employees; (ii)
\nhas in all material respects withheld and reported all amounts required by law
\nor by agreement to be withheld and reported with respect to wages, salaries and
\nother payments to Employees; (iii) is not liable for any material arrears of
\nwages or any material Taxes or any material penalty for failure to comply with
\nany of the foregoing; and (iv) is not liable for any material payment to any
\ntrust or other fund governed by or maintained by or on behalf of any
\nGovernmental Entity, with respect to unemployment compensation benefits, social
\nsecurity or other benefits or obligations for Employees (other than routine
\npayments to be made in the normal course of business and consistent with past
\npractice or as properly accrued on the Company’s financials). There are no
\nmaterial pending, threatened or reasonably anticipated claims or actions against
\nCompany under any worker’s compensation policy or long-term disability policy.<\/p>\n
-18-<\/p>\n
(k) Labor. No work stoppage or labor strike against Company is pending,
\n —–
\nthreatened or reasonably anticipated. To Company’s knowledge, there have been no
\nactivities or proceedings of any labor union to organize any Employees. Except
\nas set forth in Schedule 2.12(k), there are no actions, suits, claims, labor
\ndisputes or grievances pending, or, to the knowledge of Company, threatened or
\nreasonably anticipated relating to any labor, safety or discrimination matters
\ninvolving any Employee, including, without limitation, charges of unfair labor
\npractices or discrimination complaints, which, if adversely determined, would,
\nindividually or in the aggregate, result in any material liability to Company.
\nNeither Company nor any of its subsidiaries has engaged in any unfair labor
\npractices within the meaning of the National Labor Relations Act. Except as set
\nforth in Schedule 2.12(k), Company is not presently, nor has it been in the
\npast, a party to, or bound by, any collective bargaining agreement or union
\ncontract with respect to Employees and no collective bargaining agreement is
\nbeing negotiated by Company.<\/p>\n
(l) International Employee Plan. Each International Employee Plan has
\n —————————
\nbeen established, maintained and administered in all material respects in
\ncompliance with its terms and conditions and with the requirements prescribed by
\nany and all statutory or regulatory laws that are applicable to such
\nInternational Employee Plan. Furthermore, no International Employee Plan has
\nunfunded liabilities, that as of the Effective Time, will not be offset by
\ninsurance or fully accrued or properly reflected on the Company’s financials.
\nExcept as required by law, no condition exists that would prevent Company or
\nParent (after the Effective Time) from terminating or amending any International
\nEmployee Plan at any time for any reason without material liability to Company
\nor its Affiliates (other than ordinary administration expenses or routine claims
\nfor benefits).<\/p>\n
2.13 [Intentionally left blank.]
\n ————————<\/p>\n
2.14 Environmental Matters.
\n ———————<\/p>\n
(a) Hazardous Materials Activities. Except as would not reasonably be
\n ——————————
\nlikely to result in a Material Adverse Effect to Company (in any individual case
\nor in the aggregate), (i) neither Company nor any of its subsidiaries has
\ntransported, stored, used, manufactured, disposed of, released or exposed its
\nemployees or others to pollutants, contaminants, wastes, any toxic, radioactive
\nor otherwise hazardous materials (“Hazardous Materials”) in violation of any law
\nin effect on or before the Closing Date, and (ii) neither Company nor any of its
\nsubsidiaries has disposed of, transported, sold, used, released, exposed its
\nemployees or others to or manufactured any product containing a Hazardous
\nMaterial (collectively, “Hazardous Materials Activities”) in violation of any
\nrule, 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
(b) Environmental Liabilities. Except as set forth in Section 2.14 of
\n ————————-
\nthe Company Schedule, no action, proceeding, revocation proceeding, amendment
\nprocedure, writ, injunction or claim is pending, or to Company’s knowledge,
\nthreatened concerning any Company Permit relating to any environmental matter,
\nHazardous Material or any Hazardous Materials Activity of Company or any of its
\nsubsidiaries. Company is not aware of any fact or circumstance which could
\ninvolve Company or any of its subsidiaries in any environmental litigation or
\nimpose upon Company or any of its subsidiaries any environmental liability.<\/p>\n
-19-<\/p>\n
2.15 [Intentionally left blank.]
\n ————————<\/p>\n
2.16 Agreements, Contracts and Commitments. Except as set forth in Section
\n ————————————-
\n2.16 of the Company Schedule, neither Company nor any of its subsidiaries is a
\nparty to or is bound by:<\/p>\n
(a) any employment or consulting agreement, contract or commitment with
\nany executive officer or higher level employee or member of Company’s Board of
\nDirectors, other than those that are terminable by Company or any of its
\nsubsidiaries on no more than thirty (30) days’ notice without liability or
\nfinancial obligation to Company;<\/p>\n
(b) any agreement or plan, including, without limitation, any stock
\noption plan, stock appreciation right plan or stock purchase plan, any of the
\nbenefits of which will be increased, or the vesting of benefits of which will be
\naccelerated, by the occurrence of any of the transactions contemplated by this
\nAgreement or the value of any of the benefits of which will be calculated on the
\nbasis of any of the transactions contemplated by this Agreement;<\/p>\n
(c) any material agreement of indemnification or any guaranty other than
\nany agreement of indemnification entered into in the ordinary course of
\nbusiness;<\/p>\n
(d) any agreement, contract or commitment containing any covenant
\nlimiting in any material respect the right of Company or any of its subsidiaries
\nto engage in any line of business or to compete with any person or granting any
\nexclusive distribution rights;<\/p>\n
(e) any agreement, contract or commitment that directly or indirectly
\nprevents Company or any of its subsidiaries from providing services to or
\nperforming work for competitors of any customer of Company or any other similar
\nrestriction imposed on Company by a customer.<\/p>\n
(f) any agreement, contract or commitment currently in force relating to
\nthe disposition or acquisition by Company or any of its subsidiaries after the
\ndate of this Agreement of a material amount of assets not in the ordinary course
\nof business or pursuant to which Company has any material ownership interest in
\nany corporation, partnership, joint venture or other business enterprise other
\nthan Company’s subsidiaries;<\/p>\n
(g) any customer, dealer, distributor, marketing or development
\nagreement currently in force under which Company or any of its subsidiaries have
\ncontinuing material obligations to provide any product, technology or service
\nand which may not be canceled without penalty upon notice of ninety (90) days or
\nless, or any material agreement entered into outside the ordinary course
\npursuant to which Company or any of its subsidiaries have continuing material
\nobligations to develop any Intellectual Property that may not be canceled
\nwithout penalty upon notice of ninety (90) days or less;<\/p>\n
(h) any agreement, contract or commitment currently in force and entered
\ninto outside the ordinary course of business to provide source code to any third
\nparty for any product or technology that is material to Company and its
\nsubsidiaries taken as a whole;<\/p>\n
(i) [Intentionally left blank.]<\/p>\n
-20-<\/p>\n
(j) any mortgages, indentures, guarantees, loans or credit agreements,
\nsecurity agreements or other agreements or instruments relating to the borrowing
\nof money or extension of credit in excess of $2,000,000 individually;<\/p>\n
(k) any material settlement agreement entered into within two (2) years
\nprior to the date of this Agreement;<\/p>\n
(l) any agreement entered into in the ordinary course of business
\nproviding for revenue to Company derived from North America of more than
\n$3,000,000; or<\/p>\n
(m) any other agreement, contract or commitment that has a value of
\n$5,000,000 or more individually other than in the ordinary course of business.<\/p>\n
Neither Company nor any of its subsidiaries, nor to Company’s knowledge any
\nother party to a Company Contract (as defined below), is in breach, violation or
\ndefault under, and neither Company nor any of its subsidiaries has received
\nwritten notice that it has breached, violated or defaulted under, any of the
\nmaterial terms or conditions of any of the agreements, contracts or commitments
\nto which Company or any of its subsidiaries is a party or by which it is bound
\nthat are required to be disclosed in the Company Schedule (any such agreement,
\ncontract or commitment, a “Company Contract”) in such a manner as would permit
\nany other party to cancel or terminate any such Company Contract, or would
\npermit any other party to seek material damages or other remedies (for any or
\nall of such breaches, violations or defaults, in the aggregate).<\/p>\n
2.17 Statements; Proxy Statement\/Prospectus. None of the information
\n ————————————–
\nsupplied or to be supplied by Company for inclusion or incorporation by
\nreference in (i) the S-4 (as defined in Section 2.4(b)) will at the time it
\nbecomes effective under the Securities Act, contain any untrue statement of a
\nmaterial fact or omit to state any material fact required to be stated therein
\nor necessary in order to make the statements therein not misleading and (ii) the
\nproxy statement\/prospectus to be sent to the stockholders of Company in
\nconnection with the meeting of Company’s stockholders to consider the adoption
\nof this Agreement (the “Company Stockholders’ Meeting”) (such proxy
\nstatement\/prospectus as amended or supplemented is referred to herein as the
\n“Proxy Statement\/Prospectus”) shall not, on the date the Proxy
\nStatement\/Prospectus is first mailed to Company’s stockholders, at the time of
\nthe Company Stockholders’ Meeting and at the Effective Time, contain any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary in order to make the statements therein, in light of
\nthe circumstances under which they are made, not false or misleading, or omit to
\nstate any material fact necessary to correct any statement in any earlier
\ncommunication with respect to the solicitation of proxies for the Company
\nStockholders’ Meeting which has become false or misleading. The Proxy
\nStatement\/Prospectus will comply as to form in all material respects with the
\nprovisions of the Exchange Act and the rules and regulations thereunder. If at
\nany time prior to the Effective Time, any event relating to Company or any of
\nits affiliates, officers or directors should be discovered by Company which
\nshould be set forth in an amendment to the S-4 or a supplement to the Proxy
\nStatement\/Prospectus, Company shall promptly inform Parent. Notwithstanding the
\nforegoing, Company makes no representation or warranty with respect to any
\ninformation supplied by Parent or Merger Sub which is contained in any of the
\nforegoing documents.<\/p>\n
-21-<\/p>\n
2.18 Board Approval. The Board of Directors of Company has, as of the date
\n ————–
\nof this Agreement, unanimously (i) determined that the Merger is consistent with
\nand in furtherance of the long-term business strategy of Company and in the best
\ninterests of, Company and its stockholders, (ii) approved this Agreement, the
\nMerger and the other transactions contemplated by this Agreement, (iii) adopted
\na resolution declaring the Merger Agreement advisable and (iv) determined to
\nrecommend that the stockholders of Company adopt this Agreement.<\/p>\n
2.19 State Takeover Statutes. The Board of Directors of Company has
\n ———————–
\napproved the Merger, this Agreement, the Company Voting Agreement and the
\ntransactions contemplated hereby and thereby, and such approval is sufficient to
\nrender inapplicable to the Merger, this Agreement, the Company Voting Agreement
\nand the transactions contemplated hereby and thereby the provisions of Section
\n203 of Delaware Law to the extent, if any, such Section is applicable to the
\nMerger, this Agreement, the Company Voting Agreement and the transactions
\ncontemplated hereby and thereby. To the Company’s knowledge, no other state
\ntakeover statute or similar statute or regulation applies to or purports to
\napply to the Merger, this Agreement, the Company Voting Agreement or the
\ntransactions contemplated hereby and thereby.<\/p>\n
2.20 Fairness Opinion. Company has received a written opinion from Salomon
\n —————-
\nSmith Barney, Inc., dated as of the date hereof, to the effect that as of the
\ndate hereof, the Exchange Ratio is fair to Company’s stockholders from a
\nfinancial point of view and has delivered to Parent a copy of such opinion.<\/p>\n
2.21 Company Rights Agreement. Company, including its Board of Directors,
\n ————————
\nhas irrevocably taken all actions necessary to render the Rights Agreement
\ninapplicable to the Merger and the other transactions contemplated by this
\nAgreement and a copy of the amendment to such Rights Agreement effecting such
\nchange has been provided to Parent.<\/p>\n
2.22 Investment Company. Company is not subject to registration as an
\n ——————
\n“investment company” under the Investment Company Act of 1940.<\/p>\n
ARTICLE III
\n REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB<\/p>\n
Parent and Merger Sub jointly and severally represent and warrant to
\nCompany, subject to such exceptions as are disclosed in writing in the
\ndisclosure Schedule supplied by Parent to Company dated as of the date hereof
\n(the “Parent Schedule”), which disclosure shall provide an exception to or
\notherwise qualify the representations or warranties of Parent and Merger Sub
\ncontained in the Section of this Agreement corresponding by number to such
\ndisclosure and the other representations and warranties herein to the extent it
\nis readily apparent on the face of such disclosure that such disclosure is
\napplicable to such other representations or warranties, as follows:<\/p>\n
3.1 Organization of Parent.
\n ———————-<\/p>\n
(a) Parent and each of its subsidiaries, including Merger Sub, is a
\ncorporation duly organized, validly existing and in good standing under the laws
\nof the jurisdiction of its incorporation; has the corporate power and authority
\nto own, lease and operate its assets and<\/p>\n
-22-<\/p>\n
property and to carry on its business as now being conducted and as proposed to
\nbe conducted; and is duly qualified to do business and in good standing as a
\nforeign corporation in each jurisdiction in which the failure to be so qualified
\nwould have a Material Adverse Effect on Parent.<\/p>\n
(b) Parent has delivered to Company a true and complete list of all of
\nParent’s subsidiaries, indicating the jurisdiction of incorporation of each
\nsubsidiary and Parent’s equity interest therein (to the extent such entity is
\nnot wholly owned).<\/p>\n
(c) Parent has delivered or made available to Company a true and correct
\ncopy of the Certificate of Incorporation and Bylaws of Parent and similar
\ngoverning instruments of each of its material subsidiaries, including Merger
\nSub, each as amended to date, and each such instrument is in full force and
\neffect. Neither Parent nor any of its subsidiaries is in violation of any of the
\nprovisions of its Certificate of Incorporation or Bylaws or equivalent governing
\ninstruments.<\/p>\n
3.2 Parent Capital Structure. The authorized capital stock of Parent
\n ————————
\nconsists of 600,000,000 shares of Common Stock, par value $0.10 per share, of
\nwhich there were 317,653,609 shares issued and outstanding as of January 31,
\n2001 and 500,000 shares of Preferred Stock, par value $0.10 per share, of which
\nno shares are issued or outstanding. The authorized capital stock of Merger Sub
\nconsists of 100 shares of Common Stock, par value $0.10 per share, all of which,
\nas of the date hereof, are issued and outstanding and are held by Parent. All
\noutstanding shares of Parent Common Stock are duly authorized, validly issued,
\nfully paid and non-assessable and are not subject to preemptive rights created
\nby statute, the Certificate of Incorporation or Bylaws of Parent or any
\nagreement or document to which Parent is a party or by which it is bound. As of
\nJanuary 31, 2001, 2001, Parent had reserved an aggregate of 94,627,729 shares of
\nParent Common Stock, net of exercises, for issuance to employees, consultants
\nand non-employee directors pursuant to Parent’s 2000 Stock Plan, 2000
\nNonqualified Stock Option Plan, the 1991 Stock Plan, Non-Employee Director Plan,
\nthe 1997 Stock Plan and the 1989 Stock Purchase Plan (the “Parent Stock Option
\nPlans”), under which options are outstanding for 62,265,857 shares and under
\nwhich 32,361,872 shares are available for grant as of January 31, 2001. All
\nshares of Parent Common Stock subject to issuance as aforesaid, upon issuance on
\nthe terms and conditions specified in the instruments pursuant to which they are
\nissuable, would be duly authorized, validly issued, fully paid and
\nnonassessable.<\/p>\n
3.3 Obligations With Respect to Capital Stock. Except as set forth in
\n —————————————–
\nSection 3.2, there are no equity securities, partnership interests or similar
\nownership interests of any class of Parent, or any securities exchangeable or
\nconvertible into or exercisable for such equity securities, partnership
\ninterests or similar ownership interests issued, reserved for issuance or
\noutstanding. Except for securities Parent owns, directly or indirectly through
\none or more subsidiaries, there are no equity securities, partnership interests
\nor similar ownership interests of any class of any subsidiary of Parent, or any
\nsecurity exchangeable or convertible into or exercisable for such equity
\nsecurities, partnership interests or similar ownership interests issued,
\nreserved for issuance or outstanding. Except as set forth in Section 3.2, there
\nare no options, warrants, equity securities, partnership interests or similar
\nownership interests, calls, rights (including preemptive rights), commitments or
\nagreements of any character to which Parent or any of its subsidiaries is a
\nparty or by which it is bound obligating Parent or any of its subsidiaries to
\nissue, deliver or sell, or cause to be issued, delivered or sold, or repurchase,
\nredeem or otherwise acquire, or cause the repurchase, redemption or<\/p>\n
-23-<\/p>\n
acquisition, of any shares of capital stock of Parent or any of its subsidiaries
\nor obligating Parent or any of its subsidiaries to grant, extend, accelerate the
\nvesting of or enter into any such option, warrant, equity security, partnership
\ninterest or similar ownership interest, call, right, commitment or agreement.
\nThere are no registration rights and, to the knowledge of Parent there are no
\nvoting trusts, proxies or other agreements or understandings with respect to any
\nequity security of any class of Parent or with respect to any equity security,
\npartnership interest or similar ownership interest of any class of any of its
\nsubsidiaries.<\/p>\n
3.4 Authority.
\n ———<\/p>\n
(a) Parent and Merger Sub have all requisite corporate power and
\nauthority to enter into this Agreement and to consummate the transactions
\ncontemplated hereby and thereby. The execution and delivery of this Agreement
\nand the consummation of the transactions contemplated hereby, have been duly
\nauthorized by all necessary corporate action on the part of Parent and Merger
\nSub, subject only to the filing and recordation of the Certificate of Merger
\npursuant to Delaware Law. This Agreement has been duly executed and delivered by
\nParent and Merger Sub and, assuming the due authorization, execution and
\ndelivery by Company constitutes the valid and binding obligation of Parent and
\nMerger Sub, enforceable in accordance with its terms, except as enforceability
\nmay be limited by bankruptcy and other similar laws and general principles of
\nequity. The execution and delivery of this Agreement by Parent and Merger Sub
\ndoes not, and the performance of this Agreement by Parent and Merger Sub will
\nnot, (i) conflict with or violate the Certificate of Incorporation or Bylaws of
\nParent or the equivalent organizational documents of any of its subsidiaries,
\nincluding Merger Sub (ii) subject to compliance with the requirements set forth
\nin Section 3.4(b) below, conflict with or violate any law, rule, regulation,
\norder, judgment or decree applicable to Parent or any of its subsidiaries,
\nincluding Merger Sub or by which its or any of their respective properties is
\nbound or affected, or (iii) result in any breach of, or constitute a default (or
\nan event that with notice or lapse of time or both would become a default)
\nunder, or impair Parent’s or Merger Sub’s rights or alter the rights or
\nobligations of any third party under, or give to others any rights of
\ntermination, amendment, acceleration or cancellation of, or result in the
\ncreation of a lien or encumbrance on any of the properties or assets of Parent
\nor any of its subsidiaries, including Merger Sub pursuant to, any material note,
\nbond, mortgage, indenture, contract, agreement, lease, license, permit,
\nfranchise or other instrument or obligation to which Parent or any of its
\nsubsidiaries, including Merger Sub is a party or by which Parent or any of its
\nsubsidiaries, including Merger Sub or its or any of their respective properties
\nare bound or affected, except to the extent such conflict, violation, breach,
\ndefault, impairment or other effect could not, in the case of clause (ii) or
\n(iii), individually or in the aggregate, reasonably be expected to have a
\nMaterial Adverse Effect on Parent.<\/p>\n
(b) No consent, approval, order or authorization of, or registration,
\ndeclaration or filing with any Governmental Entity is required by or with
\nrespect to Parent or Merger Sub in connection with the execution and delivery of
\nthis Agreement or the consummation of the transactions contemplated hereby or
\nthereby, except for (i) the filing of a S-4 with the SEC in accordance with the
\nSecurities Act, (ii) the filing of the Certificate of Merger with the Secretary
\nof State of Delaware, (iii) the filing of the Proxy Statement\/Prospectus with
\nthe SEC in accordance with the Securities Act, (iv) such consents, approvals,
\norders, authorizations, registrations, declarations and filings as may be
\nrequired under applicable federal and state securities laws and the HSR Act and
\nthe laws of any foreign country and (v) such other consents, authorizations,
\nfilings, approvals<\/p>\n
-24-<\/p>\n
and registrations which, if not obtained or made, would not be material to
\nParent or Company or have a material adverse effect on the ability of the
\nparties to consummate the Merger.<\/p>\n
3.5 SEC Filings; Parent Financial Statements.
\n —————————————–<\/p>\n
(a) Parent has filed all forms, reports and documents required to be
\nfiled with the SEC since January 1, 1998. All such required forms, reports and
\ndocuments (including those that Parent may file subsequent to the date hereof)
\nare referred to herein as the “Parent SEC Reports.” As of their respective
\ndates, the Parent SEC Reports (i) were prepared in accordance with the
\nrequirements of the Securities Act or the Exchange Act, as the case may be, and
\nthe rules and regulations of the SEC thereunder applicable to such Parent SEC
\nReports, and (ii) did not at the time they were filed (or if amended or
\nsuperseded by a filing prior to the date of this Agreement, then on the date of
\nsuch filing) contain any untrue statement of a material fact or omit to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in the light of the circumstances under which they were
\nmade, not misleading. None of Parent’s subsidiaries is required to file any
\nforms, reports or other documents with the SEC.<\/p>\n
(b) Each of the consolidated financial statements (including, in each
\ncase, any related notes thereto) contained in the Parent SEC Reports (the
\n“Parent Financials”), (i) complied as to form in all material respects with the
\npublished rules and regulations of the SEC with respect thereto, (ii) was
\nprepared in accordance with GAAP applied on a consistent basis throughout the
\nperiods involved (except as may be indicated in the notes thereto or, in the
\ncase of unaudited interim financial statements, as may be permitted by the SEC
\non Form 10-Q under the Exchange Act) and (iii) fairly presented the consolidated
\nfinancial position of Parent and its subsidiaries at the respective dates
\nthereof and the consolidated results of its operations and cash flows for the
\nperiods indicated, except that the unaudited interim financial statements were
\nor are subject to normal and recurring year-end adjustments which were not, or
\nare not expected to be, material in amount. The balance sheet of Parent
\ncontained in the Parent SEC Reports as of October 31, 2000 is hereinafter
\nreferred to as the “Parent Balance Sheet.” Except as disclosed in the Parent
\nFinancials, neither Parent nor any of its subsidiaries has any liabilities
\n(absolute, accrued, contingent or otherwise) of a nature required to be
\ndisclosed on a balance sheet or in the related notes to the consolidated
\nfinancial statements prepared in accordance with GAAP which are, individually or
\nin the aggregate, material to the business, results of operations or financial
\ncondition of Parent and its subsidiaries taken as a whole, except liabilities
\n(i) provided for in the Parent Balance Sheet, or (ii) incurred since the date of
\nthe Parent Balance Sheet in the ordinary course of business consistent with past
\npractices.<\/p>\n
(c) Parent has heretofore furnished to Company a complete and correct
\ncopy of any amendments or modifications, which have not yet been filed with the
\nSEC but which are required to be filed, to agreements, documents or other
\ninstruments which previously had been filed by Parent with the SEC pursuant to
\nthe Securities Act or the Exchange Act.<\/p>\n
3.6 Absence of Certain Changes or Events. Since the date of the Parent
\n ————————————
\nBalance Sheet, there has not been: (i) any Material Adverse Effect on Parent,
\n(ii) any declaration, setting aside or payment of any dividend on, or other
\ndistribution (whether in cash, stock or property) in respect of, any of the
\nParent’s capital stock, (iii) any split, combination or reclassification of any
\nof Parent’s capital stock, (iv) any material change by Parent in its accounting
\nmethods, principles or practices,<\/p>\n
-25-<\/p>\n
except as required by concurrent changes in GAAP, or (v) any revaluation by
\nParent of any of its assets, including, without limitation, writing down the
\nvalue of capitalized inventory or writing off notes or accounts receivable other
\nthan in the ordinary course of business.<\/p>\n
3.7 Compliance; Permits; Restrictions.
\n ———————————-<\/p>\n
(a) Neither Parent nor any of its subsidiaries is, in any respect, in
\nconflict with, or in default or violation of (i) any law, rule, regulation,
\norder, judgment or decree applicable to Parent or any of its subsidiaries or by
\nwhich its or any of their respective properties is bound or affected, or (ii)
\nany note, bond, mortgage, indenture, contract, agreement, lease, license,
\npermit, franchise or other instrument or obligation to which Parent or any of
\nits subsidiaries is a party or by which Parent or any of its subsidiaries or its
\nor any of their respective properties is bound or affected, except for such
\nconflict default or violation which would not reasonably be expected to have a
\nMaterial Adverse Effect on Parent. To the knowledge of Parent, no investigation
\nor review by any Governmental Entity is pending or threatened against Parent or
\nits subsidiaries, nor has any Governmental Entity indicated in writing to Parent
\nor any subsidiary an intention to conduct the same. To the knowledge of Parent,
\nthere is no material agreement, judgment, injunction, order or decree binding
\nupon Parent or any of its subsidiaries which has or could reasonably be expected
\nto have the effect of prohibiting or materially impairing any business practice
\nof Parent or any of its subsidiaries, any acquisition of material property by
\nParent or any of its subsidiaries or the conduct of business by Parent as
\ncurrently conducted.<\/p>\n
(b) Parent and its subsidiaries hold all permits, licenses, variances,
\nexemptions, orders and approvals from governmental authorities which are
\nmaterial to the operation of the business of Parent (collectively, the “Parent
\nPermits”). Parent and its subsidiaries are in compliance in all material
\nrespects with the terms of the Parent Permits.<\/p>\n
3.8 Litigation. As of the date of this Agreement, there is no action, suit,
\n ———-
\nproceeding, claim, arbitration or investigation pending, or as to which Parent
\nor any of its subsidiaries has received any notice of assertion nor, to Parent’s
\nknowledge, is there a threatened action, suit, proceeding, claim, arbitration or
\ninvestigation against Parent or any of its subsidiaries which reasonably would
\nbe likely to be material to Parent, or which in any manner challenges or seeks
\nto prevent, enjoin, alter or delay any of the transactions contemplated by this
\nAgreement.<\/p>\n
3.9 Environmental Matters.
\n ———————-<\/p>\n
(a) Hazardous Materials Activities. Except as would not reasonably be
\n ——————————
\nlikely to result in a Material Adverse Effect to Parent (in any individual case
\nor in the aggregate), (i) neither Parent nor any of its subsidiaries has
\ntransported, stored, used, manufactured, disposed of, released or exposed its
\nemployees or others to Hazardous Materials in violation of any law in effect on
\nor before the Closing Date, and (ii) neither Parent nor any of its subsidiaries
\nhas engaged in Hazardous Materials Activities in violation of any rule,
\nregulation, treaty or statute promulgated by any Governmental Entity in effect
\nprior to or as of the date hereof to prohibit, regulate or control Hazardous
\nMaterials or any Hazardous Material Activity.<\/p>\n
-26-<\/p>\n
(b) Environmental Liabilities. No action, proceeding, revocation
\n ————————-
\nproceeding, amendment procedure, writ, injunction or claim is pending, or to
\nParent’s knowledge, threatened concerning any Parent Permit relating to any
\nenvironmental matter, Hazardous Material or any Hazardous Materials Activity of
\nParent or any of its subsidiaries. Parent is not aware of any fact or
\ncircumstance which could involve Parent or any of its subsidiaries in any
\nenvironmental litigation or impose upon Parent or any of its subsidiaries any
\nenvironmental liability.<\/p>\n
3.10 Labor Matters. (i) There are no controversies pending or, to the
\n ————-
\nknowledge of each of Parent and its respective subsidiaries, threatened, between
\nParent or any of its subsidiaries and any of their respective employees which
\ncontroversies have had, or would reasonably be expected to have a Material
\nAdverse Effect on Parent; (ii) as of the date of this Agreement, neither Parent
\nnor any of its subsidiaries is a party to any collective bargaining agreement or
\nother labor union contract applicable to persons employed by Parent or its
\nsubsidiaries nor does Parent or its subsidiaries know of any activities or
\nproceedings of any labor union to organize any such employees; and (iii) as of
\nthe date of this Agreement, neither Parent nor any of its subsidiaries has any
\nknowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
\nthereof, by or with respect to any employees of Parent or any of its
\nsubsidiaries.<\/p>\n
3.11 Statements; Proxy Statement\/Prospectus. None of the information
\n ————————————–
\nsupplied or to be supplied by Parent for inclusion or incorporation by reference
\nin (i) the S-4 will at the time it becomes effective under the Securities Act,
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ntherein not misleading and (ii) the Proxy Statement\/Prospectus shall not, on the
\ndate the Proxy Statement\/Prospectus is first mailed to Company’s stockholders,
\nat the time of the Company Stockholders’ Meeting and at the Effective Time,
\ncontain any untrue statement of a material fact or omit to state any material
\nfact required to be stated therein or necessary in order to make the statements
\ntherein, in light of the circumstances under which they are made, not false or
\nmisleading, or omit to state any material fact necessary to correct any
\nstatement in any earlier communication with respect to the solicitation of
\nproxies for the Company Stockholders’ Meeting which has become false or
\nmisleading. The Proxy Statement\/Prospectus will comply as to form in all
\nmaterial respects with the provisions of the Securities Act and the rules and
\nregulations thereunder. If at any time prior to the Effective Time, any event
\nrelating to Parent or any of its affiliates, officers or directors should be
\ndiscovered by Parent which should be set forth in an amendment to the S-4 or a
\nsupplement to the Proxy Statement\/Prospectus, Parent shall promptly inform
\nCompany. Notwithstanding the foregoing, Parent makes no representation or
\nwarranty with respect to any information supplied by Company which is contained
\nin any of the foregoing documents.<\/p>\n
3.12 Board Approval. The Boards of Directors of Parent and Merger Sub have,
\n ————–
\nas of the date of this Agreement, (i) determined that the Merger is consistent
\nwith and in furtherance of the long-term business strategy of Parent or Merger
\nSub, as the case may be, and fair to, and in the best interests of, Parent or
\nMerger Sub, as the case may be, and (ii) duly approved the Merger, this
\nAgreement and the other transactions contemplated hereby and (iii) adopted a
\nresolution declaring the Merger Agreement advisable and approving the Share
\nIssuance (in the case of Parent).<\/p>\n
3.13 Parent Intellectual Property. To the knowledge of Parent, the
\n —————————-
\noperation of the business of Parent and its subsidiaries as such business
\ncurrently is conducted does not materially<\/p>\n
-27-<\/p>\n
infringe or misappropriate the Intellectual Property of any third party where
\nsuch infringement would have a Material Adverse Effect on Parent.<\/p>\n
3.14 Taxes. Parent and each of its subsidiaries have timely filed all
\n —–
\nReturns relating to Taxes required to be filed by Parent and each of its
\nsubsidiaries with any Tax authority, except such Returns which are not material
\nto Company, and such Returns are true and correct in all material respects and
\nhave been completed in accordance with applicable law. Parent and each of its
\nsubsidiaries have timely paid all Taxes shown to be due on such Returns. Neither
\nParent nor any of its subsidiaries has been delinquent in the payment of any
\nmaterial Tax nor is there any material Tax deficiency outstanding, proposed or
\nassessed against Parent or any of its subsidiaries. Neither Parent nor any of
\nits subsidiaries has any liability for any material unpaid Taxes which has not
\nbeen accrued for or reserved on the Parent Balance Sheet in accordance with
\nGAAP, whether asserted or unasserted, contingent or otherwise, other than any
\nliability for unpaid Taxes that may have accrued since October 31, 2000 in
\nconnection with the operation of the business of Parent and its subsidiaries in
\nthe ordinary course. Neither Parent nor any of its subsidiaries has taken any
\naction or knows of any fact that is reasonably likely to prevent the Merger from
\nqualifying as a “reorganization” within the meaning of Section 368(a) of the
\nCode.<\/p>\n
ARTICLE IV
\n CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME<\/p>\n
4.1 Conduct of Business by Company.
\n ——————————<\/p>\n
(a) Except as set forth on Schedule 4.1(a), during the period from the
\ndate of this Agreement and continuing until the earlier of the termination of
\nthis Agreement pursuant to its terms or the Effective Time, Company and each of
\nits subsidiaries shall, except to the extent that Parent shall otherwise consent
\nin writing, which consent shall not be unreasonably withheld, carry on its
\nbusiness in the ordinary course substantially consistent with past practice and
\nin substantial compliance with all applicable laws and regulations, and use its
\ncommercially reasonable efforts substantially consistent with past practices and
\npolicies to (i) preserve intact its present business organization, (ii) keep
\navailable the services of its present executive officers and employees, and
\n(iii) preserve its relationships with customers, suppliers, distributors,
\nlicensors, licensees and others with which it has material business dealings.<\/p>\n
(b) In addition, without the prior written consent of Parent, which
\nshall not be unreasonably withheld, during the period from the date of this
\nAgreement and continuing until the earlier of the termination of this Agreement
\npursuant to its terms or the Effective Time, Company shall not, except as set
\nforth on Schedule 4.1(a), do any of the following and shall not permit its
\nsubsidiaries to do any of the following:<\/p>\n
(i) Except as required by law or pursuant to the terms of a Plan in
\neffect as of the date hereof, waive any stock repurchase rights, accelerate,
\namend or change the period of exercisability of options or restricted stock, or
\nreprice options granted under any employee, consultant, director or other stock
\nplans or authorize cash payments in exchange for any options granted under any
\nof such plans;<\/p>\n
-28-<\/p>\n
(ii) Grant any severance or termination pay to any officer or a higher
\nlevel employee except pursuant to written agreements outstanding, or policies or
\npractices existing, on the date hereof and as previously disclosed in writing or
\nmade available to Parent, or adopt any new severance plan, or amend or modify or
\nalter in any manner any severance plan, agreement or arrangement existing on the
\ndate hereof;<\/p>\n
(iii) Other than in the ordinary course of business substantially
\nconsistent with past practices, transfer or license to any person or entity or
\notherwise extend, amend or modify any rights to the Company Intellectual
\nProperty, or enter into grants to transfer or license to any person future
\npatent rights;<\/p>\n
(iv) Except as described in Schedule 4.1(b)(iv) hereto (x) declare,
\nset aside or pay any dividends on or make any other distributions (whether in
\ncash, stock, equity securities or property) in respect of any capital stock or
\n(y) split, combine or reclassify any capital stock or issue or authorize the
\nissuance of any other securities in respect of, in lieu of or in substitution
\nfor any capital stock;<\/p>\n
(v) Except as described in Schedule 4.1(b)(v) hereto, purchase, redeem
\nor otherwise acquire, directly or indirectly, any shares of capital stock of
\nCompany or its subsidiaries, except repurchases of unvested shares in connection
\nwith the termination of the employment relationship with any employee pursuant
\nto stock option or purchase agreements in effect on the date hereof (or any such
\nagreements entered into in the ordinary course consistent with past practice by
\nCompany with employees hired after the date hereof);<\/p>\n
(vi) Issue, deliver, sell, authorize, pledge or otherwise encumber, or
\npropose any of the foregoing, with respect to any shares of capital stock or any
\nsecurities convertible into shares of capital stock, or subscriptions, rights,
\nwarrants or options to acquire any shares of capital stock or any securities
\nconvertible into shares of capital stock, or enter into other agreements or
\ncommitments of any character obligating it to issue any such shares or
\nconvertible securities, other than (x) the issuance, delivery and\/or sale of (A)
\nshares of Company Common Stock pursuant to the exercise of stock options or
\nwarrants outstanding as of the date of this Agreement and (B) shares of Company
\nCommon Stock in accordance with the Earn-Out Agreement, and (y) the granting of
\nstock options in the ordinary course of business in such amounts and in all
\nother respects substantially consistent with past practices.<\/p>\n
(vii) Cause, permit or submit to a vote of Company’s stockholders any
\namendments to the Company Charter Documents (or similar governing instruments of
\nany of its subsidiaries);<\/p>\n
(viii) Acquire, or agree to acquire, by merging or consolidating with,
\nor by purchasing any equity interest in or a portion of the assets of, or by any
\nother manner, any business or any corporation, partnership, association or other
\nbusiness organization or division thereof, or otherwise acquire or agree to
\nenter into any joint ventures or strategic partnerships except, in each
\ninstance, any such acquisition which is (x) in the ordinary course of business
\nof Company or its subsidiaries or (y) not material to Company and its
\nsubsidiaries taken as a whole;<\/p>\n
-29-<\/p>\n
(ix) Sell, lease, license, encumber or otherwise dispose of any assets
\n(including capital stock of subsidiaries) which are material, individually or in
\nthe aggregate, to Company, except (i) internal reorganizations or consolidations
\ninvolving existing subsidiaries, (ii) other dispositions of assets if the fair
\nmarket value of such assets does not exceed in the aggregate $1,000,000 and
\n(iii) in the ordinary course of business;<\/p>\n
(x) Incur any indebtedness for borrowed money in excess of $1,000,000,
\nor guarantee any such indebtedness of another person (other than indebtedness of
\nowned subsidiaries), issue or sell any debt securities or options, warrants,
\ncalls or other rights to acquire any debt securities of Company, enter into any
\nagreement to maintain any financial statement condition or enter into any
\narrangement having the economic effect of any of the foregoing other than in
\nconnection with the financing of working capital consistent with past practice
\nor enter into any transaction involving more than $500,000 in capital
\nexpenditures, other than ordinary capital expenditures;<\/p>\n
(xi) Adopt or amend any Plan or any employee stock purchase or
\nemployee stock option plan; or enter into any employment contract or collective
\nbargaining agreement (other than offer letters and letter agreements entered
\ninto in the ordinary course of business consistent with past practice with
\nemployees who are terminable “at will”); pay any special bonus or special
\nremuneration to any director or employee; or increase the salaries or wage rates
\nor fringe benefits (including rights to severance or indemnification) of its
\ndirectors, officers, employees or consultants except, in each case, in the
\nordinary course of business or as may be required by law;<\/p>\n
(xii) (A) pay, discharge, settle or satisfy any material litigation
\n(whether or not commenced prior to the date of this Agreement) or any material
\nclaims, liabilities or obligations (absolute, accrued, asserted or unasserted,
\ncontingent or otherwise), other than the payment, discharge, settlement or
\nsatisfaction, in the ordinary course of business substantially consistent with
\npast practice or payment or satisfaction of liabilities recognized or disclosed
\nin the most recent financial statements (or the notes thereto) of Company
\nincluded in the Company SEC Reports or incurred since the date of such financial
\nstatements or disclosed in Section 2.9 or 2.10 of the Company Schedule in
\naccordance with their terms, provided, that the settlement of any material
\nlitigation shall require the written consent of Parent, or (B) waive the
\nbenefits of, agree to modify in any material manner, terminate, release any
\nperson from or knowingly fail to enforce the confidentiality or nondisclosure
\nprovisions of any material agreement to which Company or any of its subsidiaries
\nis a party or of which Company or any of its subsidiaries is a beneficiary;<\/p>\n
(xiii) Except in the ordinary course of business consistent with past
\npractice, modify, amend or terminate any Company Contract disclosed in Section
\n2.16 of the Company Schedule or waive, delay the exercise of, release or assign
\nany material rights or claims thereunder;<\/p>\n
(xiv) Except as required by GAAP, revalue any of its material assets
\nor make any change in accounting methods, principles or practices;<\/p>\n
(xv) Engage in any action that would reasonably be expected to cause
\nthe Merger to fail to qualify as a “reorganization” under Section 368(a) of the
\nCode, whether or not, otherwise permitted by the provisions of this Article IV;<\/p>\n
-30-<\/p>\n
(xvi) Make any Tax election or accounting method change (except as
\nrequired by GAAP or applicable Tax law) inconsistent with past practice that,
\nindividually or in the aggregate, is reasonably likely to affect the Tax
\nliability or Tax attributes of Company or any of its subsidiaries, settle or
\ncompromise any Tax liability or consent to any extension or waiver of any
\nlimitation period with respect to Taxes that is reasonably likely to have a
\nMaterial Adverse Effect on Company;<\/p>\n
(xvii) Redeem the Rights Plan or amend, modify (other than to delay
\nany “distribution date” therein until immediately prior to the expiration of a
\ntender or exchange offer) or terminate the Rights Plan prior to the Effective
\nTime unless required to do so by a court of competent jurisdiction; or<\/p>\n
(xviii) Agree in writing or otherwise to take any of the actions
\ndescribed in paragraphs (i) through (xvii) above.<\/p>\n
4.2 Conduct of Business by Parent. During the period from the date of this
\n —————————–
\nAgreement and continuing until the earlier of the termination of this Agreement
\npursuant to its terms or the Effective Time, Parent shall not, except to the
\nextent that Company shall otherwise consent in writing:<\/p>\n
(a) Declare, set aside or pay any extraordinary non-stock dividend or
\ndistribution;<\/p>\n
(b) Cause, permit or submit to a vote of Parent’s stockholders any
\namendments to the Parent Certificate of Incorporation or bylaws or permit Merger
\nSub to amend its Certificate of Incorporation or bylaws, except as specifically
\ncontemplated in Article I hereof, which amendments would adversely affect the
\nrights of Parent Common Stock;<\/p>\n
(c) Engage in any action that would reasonably be expected to cause the
\nMerger to fail to qualify as a “reorganization” under Section 368(a) of the
\nCode, whether or not, otherwise permitted by the provisions of this Article IV;<\/p>\n
(d) Agree in writing or otherwise to take any of the actions described
\nin paragraphs (a) through (c) above.<\/p>\n
ARTICLE V
\n ADDITIONAL AGREEMENTS<\/p>\n
5.1 Proxy Statement\/Prospectus; S-4; Other Filings; Board Recommendations.
\n ———————————————————————-<\/p>\n
(a) As promptly as practicable after the execution of this Agreement,
\nParent and Company shall jointly prepare and Parent shall file with the SEC the
\nS-4, which shall include a document or documents that will constitute (i) the
\nprospectus forming part of the registration statement on the S-4 and (ii) the
\nProxy Statement\/Prospectus. Each of the parties hereto shall use all
\ncommercially reasonable efforts to cause the S-4 to become effective as promptly
\nas practicable after the date hereof, and, prior to the effective date of the
\nS-4. Each of Parent and Company shall provide promptly to the other such
\ninformation concerning its business and financial statements and affairs as, in
\nthe reasonable judgment of the providing party as advised by its counsel, may be<\/p>\n
-31-<\/p>\n
required or appropriate for inclusion in the Proxy Statement\/Prospectus and the
\nS-4, or in any amendments or supplements thereto, and cause its counsel and
\nauditors to reasonably cooperate with the other’s counsel and auditors in the
\npreparation of the Proxy Statement\/Prospectus and the S-4. As promptly as
\npracticable after the effective date of the S-4, the Proxy Statement\/Prospectus
\nshall be mailed to the stockholders of Company. Each of the parties hereto shall
\ncause the Proxy Statement\/Prospectus to comply in all material respects as to
\nform and substance with respect to such party with the applicable requirements
\nof (i) the Exchange Act, (ii) the Securities Act, and (iii) the rules and
\nregulations of the Nasdaq. As promptly as practicable after the date of this
\nAgreement, each of Company and Parent will prepare and file any other filings
\nrequired to be filed by it under the Exchange Act, the Securities Act or any
\nother Federal, foreign or Blue Sky or related laws relating to the Merger and
\nthe transactions contemplated by this Agreement (the “Other Filings”). Prior to
\nthe Effective Time, Parent shall use its commercially reasonable efforts to
\nobtain all regulatory approvals needed to ensure that the Parent Common Stock to
\nbe issued in the Merger will be registered or qualified under the securities law
\nof every jurisdiction in the United States in which any registered holder of
\nCompany Common Stock has an address of record on the record date for determining
\nthe stockholders entitled to notice of and to vote at the Company Stockholders’
\nMeeting; provided that Parent shall not be required to consent to the service of
\nprocess in any jurisdiction in which it is not so subject. Each of Company and
\nParent will notify the other promptly upon the receipt of any comments from the
\nSEC or its staff or any other government officials of the receipt of notice that
\nthe S-4 has become effective, of the issuance of any stop order, of the
\nsuspension of the qualification of the Parent Common Stock issuable in
\nconnection with the Merger for offering or sale in any jurisdiction, or of any
\nrequest by the SEC or its staff or any other government officials for amendments
\nor supplements to the S-4, the Proxy Statement\/Prospectus or any Other Filing or
\nfor additional information and, except as may be prohibited by any Governmental
\nEntity or by any law applicable to such party, will supply the other with copies
\nof all correspondence between such party or any of its representatives, on the
\none hand, and the SEC or its staff or any other government officials, on the
\nother hand, with respect to the S-4, the Proxy Statement\/Prospectus, the Merger
\nor any Other Filing. Each of Company and Parent will cause all documents that it
\nis responsible for filing with the SEC or other regulatory authorities under
\nthis Section 5.2(a) to comply in all material respects with all applicable
\nrequirements of law and the rules and regulations promulgated thereunder.<\/p>\n
(b) The Proxy Statement\/Prospectus shall (i) solicit the approval of
\nthis Agreement and the Merger and include the recommendation of the Board of
\nDirectors of Company to Company’s stockholders that they vote in favor of
\napproval of this Agreement and the Merger, subject to the right of the Board of
\nDirectors of the Company to withdraw its recommendation pursuant to Section
\n5.2(c) of this Agreement, and (ii) include the opinion of Salomon Smith Barney,
\nInc. referred to in Section 2.20; provided, however, that the Board of Directors
\nof Company shall submit this Agreement to Company’s stockholders whether or not
\nat any time subsequent to the date hereof such board determines that it can no
\nlonger make such recommendation.<\/p>\n
(c) Each of Parent and Company shall promptly inform the other of any
\nevent which is required to be set forth in an amendment or supplement to the
\nProxy Statement\/Prospectus, the S-4 or any Other Filing and each of Parent and
\nCompany shall amend or supplement the Proxy Statement\/Prospectus to the extent
\nrequired by law to do so. No amendment or supplement to the<\/p>\n
-32-<\/p>\n
Proxy Statement\/Prospectus or the S-4 shall be made without the approval of
\nParent and Company, which approval shall not be unreasonably withheld or
\ndelayed.<\/p>\n
5.2 Stockholder Meetings.
\n ———————<\/p>\n
(a) Company shall call and hold the Company Stockholders’ Meeting as
\npromptly as practicable after the date hereof for the purpose of voting upon the
\napproval of this Agreement and the Merger, pursuant to the Proxy
\nStatement\/Prospectus. Nothing herein shall prevent Company from adjourning or
\npostponing the Company Stockholders’ Meeting if there are insufficient shares of
\nCompany Common Stock necessary to conduct business at its meeting of the
\nstockholders. Unless Company’s Board of Directors has withdrawn its
\nrecommendation of this Agreement and the Merger in compliance with Section
\n5.2(c), Company shall use commercially reasonable efforts to solicit from its
\nstockholders proxies in favor of the approval of this Agreement and the Merger
\npursuant to the Proxy Statement\/Prospectus. Company’s obligation to call, give
\nnotice of, convene and hold the Company Stockholders’ Meeting in accordance with
\nthis Section 5.2(a) shall not be limited to or otherwise affected by the
\ncommencement, disclosure, announcement or submission to Company of any
\nAcquisition Proposal or any change in the Board of Directors recommendation
\nregarding the Merger.<\/p>\n
(b) Subject to Section 5.2(c): (i) the Board of Directors of Company
\nshall recommend that Company’s stockholders vote in favor of and adopt and
\napprove this Agreement and the Merger at the Company Stockholders’ Meeting; (ii)
\nthe Proxy Statement\/Prospectus shall include a statement to the effect that the
\nBoard of Directors of Company has recommended that Company’s stockholders vote
\nin favor of and adopt and approve this Agreement and the Merger at the Company
\nStockholders’ Meeting; and (iii) neither the Board of Directors of Company nor
\nany committee thereof shall withdraw, amend or modify, or propose or resolve to
\nwithdraw, amend or modify in a manner adverse to Parent, the recommendation of
\nthe Board of Directors of Company that Company’s stockholders vote in favor of
\nand adopt and approve this Agreement and the Merger.<\/p>\n
(c) Nothing in this Agreement shall prevent the Board of Directors of
\nCompany from withholding, withdrawing, amending or modifying its recommendation
\nin favor of the Merger if the Board of Directors of Company reasonably concludes
\nin good faith, after consultation with its outside counsel, that the failure to
\nwithhold, withdraw, amend or modify such recommendation would be inconsistent
\nwith its fiduciary obligations under applicable law. Nothing contained in this
\nSection 5.2 shall limit Company’s obligation to hold and convene the Company
\nStockholders’ Meeting (regardless of whether the recommendation of the Board of
\nDirectors of Company shall have been withdrawn, amended or modified).<\/p>\n
5.3 Confidentiality; Access to Information.
\n —————————————<\/p>\n
(a) Confidentiality Agreement. The parties acknowledge that Company and
\n ————————-
\nParent have previously executed Confidentiality Agreements, each dated as of
\nMarch 1, 2001 (the “Confidentiality Agreements”), which Confidentiality
\nAgreements will continue in full force and effect in accordance with their
\nrespective terms.<\/p>\n
-33-<\/p>\n
(b) Access to Information. Each of Company and Parent will afford the
\n ———————
\nother and the other’s accountants, counsel and other representatives reasonable
\naccess during normal business hours, upon reasonable notice, to its properties,
\nbooks, records and personnel during the period prior to the Effective Time to
\nobtain all information concerning its business, including the status of product
\ndevelopment efforts, properties, results of operations and personnel, as the
\nother may reasonably request. No information or knowledge obtained by Company or
\nParent in any investigation pursuant to this Section 5.3 will affect or be
\ndeemed to modify any representation or warranty contained herein or the
\nconditions to the obligations of the parties to consummate the Merger.<\/p>\n
5.4 No Solicitation.
\n —————-<\/p>\n
(a) From and after the date of this Agreement until the Effective Time
\nor termination of this Agreement pursuant to Article VII, Company and its
\nsubsidiaries will not, nor will they authorize or permit any of their respective
\nofficers, directors, affiliates or employees or any investment banker, attorney
\nor other advisor or representative retained by any of them to, directly or
\nindirectly (i) solicit, initiate, encourage or induce the making, submission or
\nannouncement of any Acquisition Proposal (as defined below), (ii) participate in
\nany discussions or negotiations regarding, or furnish to any person any
\nnon-public information with respect to, or take any other action to facilitate
\nany inquiries or the making of any proposal that constitutes or may reasonably
\nbe expected to lead to, any Acquisition Proposal, (iii) engage in discussions
\nwith any person with respect to any Acquisition Proposal, (iv) approve, endorse
\nor recommend any Acquisition Proposal or (v) enter into any letter of intent or
\nsimilar document or any contract, agreement or commitment contemplating or
\notherwise relating to any Acquisition Transaction (as defined below); provided,
\nhowever, this Section 5.4(a) shall not prohibit Company from (A) furnishing
\ninformation regarding Company and its subsidiaries to, entering into a
\nconfidentiality agreement with or entering into discussions with, any person or
\ngroup in response to a Superior Offer submitted by such person or group (and not
\nwithdrawn) if (1) neither Company nor any representative of Company and its
\nsubsidiaries shall have violated any of the restrictions set forth in this
\nSection 5.4, (2) the Board of Directors of Company concludes in good faith,
\nafter consultation with its outside legal counsel, that the failure to take such
\naction would be inconsistent with its fiduciary duties under applicable law, (3)
\n(x) at least two business days prior to furnishing any such nonpublic
\ninformation to, or entering into discussions or negotiations with, such person
\nor group, Company gives Parent written notice of the identity of such person or
\ngroup and of Company’s intention to furnish nonpublic information to, or enter
\ninto discussions or negotiations with, such person or group and (y) Company
\nreceives from such person or group an executed confidentiality agreement
\ncontaining customary limitations on the use and disclosure of all written and
\noral information furnished to such person or group by or on behalf of Company,
\nand (4) contemporaneously with furnishing such information to any such person or
\ngroup, Company furnishes such information to Parent (to the extent such
\ninformation has not been previously furnished by Company to Parent) (B)
\napproving, endorsing or recommending any Superior Offer in the event that (i) a
\nSuperior Offer (as defined below) is made to Company and not withdrawn, (ii)
\nneither Company nor any of its representatives shall have violated any of the
\nrestrictions set forth in this Section 5.4 with respect to such Superior Offer,
\nand (iii) the Board of Directors of Company reasonably concludes in good faith,
\nafter consultation with its outside counsel, that the failure, in light of such
\nSuperior Offer, to withhold, withdraw, amend or modify such recommendation would
\nbe inconsistent with its fiduciary obligations under applicable law or<\/p>\n
-34-<\/p>\n
(C) complying with Rule 14e-2 promulgated under the Exchange Act with regard to
\nan Acquisition Proposal with respect to which no violation of this Section 5.4
\nshall have occurred. Company and its subsidiaries will immediately cease any and
\nall existing activities, discussions or negotiations with any parties conducted
\nheretofore with respect to any Acquisition Proposal. Without limiting the
\nforegoing, it is understood that any violation of the restrictions set forth in
\nthe preceding two sentences by any officer or director of Company or any of its
\nsubsidiaries or any investment banker, attorney or other advisor or
\nrepresentative of Company or any of its subsidiaries shall be deemed to be a
\nviolation of this Section 5.4 by Company. In addition to the foregoing, Company
\nshall (i) provide Parent with at least forty-eight (48) hours prior notice (or
\nsuch lesser prior notice as provided to the members of Company’s Board of
\nDirectors) of any meeting of Company’s Board of Directors at which Company’s
\nBoard of Directors is reasonably expected to consider a Superior Offer together
\nwith the material terms of such Superior Offer (including the identity of the
\nofferor) and (ii) provide Parent with at least three (3) business days prior
\nwritten notice (or such lesser prior notice as provided to the members of
\nCompany’s Board of Directors) of a meeting of Company’s Board of Directors at
\nwhich Company’s Board of Directors is reasonably expected to recommend a
\nSuperior Offer to its stockholders and together with such notice a copy of the
\ndefinitive documentation relating to such Superior Offer.<\/p>\n
For purposes of this Agreement, “Superior Offer” shall mean an unsolicited,
\nbona fide written offer made by a third party to consummate any of the following
\ntransactions: (i) a merger, consolidation, business combination,
\nrecapitalization, liquidation, dissolution or similar transaction involving
\nCompany pursuant to which the stockholders of Company immediately preceding such
\ntransaction hold less than 51% of the equity interest in the surviving or
\nresulting entity of such transaction; (ii) a sale or other disposition by
\nCompany of all or substantially all of its assets, or (iii) the acquisition by
\nany person or group (including by way of a tender offer or an exchange offer or
\nissuance by Company), directly or indirectly, of beneficial ownership or a right
\nto acquire beneficial ownership of shares representing in excess of 51% of the
\nvoting power of the then outstanding shares of capital stock of Company, in each
\ncase on terms that the Board of Directors of Company determines, in its
\nreasonable judgment (based on advice of its outside financial advisor) to be
\nmore favorable to Company’s stockholders than the terms of the Merger; provided,
\n ——–
\nhowever, that any such offer shall not be deemed to be a “Superior Offer” if any
\n——-
\nfinancing required to consummate the transaction contemplated by such offer is
\nnot committed or is not likely in the good faith judgment of Company’s Board of
\nDirectors (after consultation with its outside financial advisor) to be obtained
\nby such third party on a timely basis.<\/p>\n
For purposes of this Agreement, “Acquisition Proposal” shall mean any offer
\nor proposal (other than an offer or proposal by Parent) relating to any
\nAcquisition Transaction. For the purposes of this Agreement, “Acquisition
\nTransaction” shall mean any transaction or series of related transactions other
\nthan the transactions contemplated by this Agreement involving: (A) any
\nacquisition or purchase from Company by any person or “group” (as defined under
\nSection 13(d) of the Exchange Act and the rules and regulations thereunder) of
\nmore than a 15% interest in the total outstanding voting securities of Company
\nor any of its subsidiaries or any tender offer or exchange offer that if
\nconsummated would result in any person or “group” (as defined under Section
\n13(d) of the Exchange Act and the rules and regulations thereunder) beneficially
\nowning 15% or more of the total outstanding voting securities of Company or any
\nof its subsidiaries or any merger, consolidation, business combination or
\nsimilar transaction involving Company pursuant to which the<\/p>\n
-35-<\/p>\n
stockholders of Company immediately preceding such transaction hold less than
\n85% of the equity interests in the surviving or resulting entity of such
\ntransaction; (B) any sale, lease (other than in the ordinary course of
\nbusiness), exchange, transfer, license (other than in the ordinary course of
\nbusiness), acquisition or disposition of more than 15% of the assets of Company;
\nor (C) any liquidation or dissolution of Company.<\/p>\n
(b) In addition to the obligations of Company set forth in paragraph (a)
\nof this Section 5.4, Company as promptly as practicable shall advise Parent
\norally and in writing of any request received by Company for nonpublic
\ninformation which Company reasonably believes would lead to an Acquisition
\nProposal or of any Acquisition Proposal, or any inquiry received by Company with
\nrespect to, or which Company reasonably believes would lead to any Acquisition
\nProposal, the material terms and conditions of such request, Acquisition
\nProposal or inquiry, and the identity of the person or group making any such
\nrequest, Acquisition Proposal or inquiry. Company will keep Parent informed in
\nall material respects of the status and details (including material amendments
\nor proposed amendments) of any such request, Acquisition Proposal or inquiry.<\/p>\n
5.5 Public Disclosure. Parent and Company will consult with each other, and
\n —————–
\nto the extent practicable, agree, before issuing any press release or otherwise
\nmaking any public statement with respect to the Merger, this Agreement or an
\nAcquisition Proposal and will not issue any such press release or make any such
\npublic statement prior to such consultation, except as may be required by law or
\nany listing agreement with a national securities exchange or Nasdaq, in which
\ncase reasonable efforts to consult with the other party will be made prior to
\nsuch release or public statement. The parties have agreed to the text of the
\njoint press release announcing the signing of this Agreement.<\/p>\n
5.6 Commercially Reasonable Efforts; Notification.
\n ———————————————<\/p>\n
(a) Upon the terms and subject to the conditions set forth in this
\nAgreement, each of the parties agrees to use commercially reasonable efforts to
\ntake, or cause to be taken, all actions, and to do, or cause to be done, and to
\nassist and cooperate with the other parties in doing, all things necessary,
\nproper or advisable to consummate and make effective, in the most expeditious
\nmanner practicable, the Merger and the other transactions contemplated by this
\nAgreement, including to accomplish the following: (i) causing the conditions
\nprecedent set forth in Article VI to be satisfied; (ii) obtaining all necessary
\nactions or nonactions, waivers, consents, approvals, orders and authorizations
\nfrom Governmental Entities; (iii) making all necessary registrations,
\ndeclarations and filings (including registrations, declarations and filings with
\nGovernmental Entities, if any); (iv) avoiding any suit, claim, action,
\ninvestigation or proceeding by any Governmental Entity challenging the Merger or
\nany other transaction contemplated by this Agreement; (v) obtaining all
\nconsents, approvals or waivers from third parties required as a result of the
\ntransactions contemplated in this Agreement; (vi) defending any suits, claims,
\nactions, investigations or proceedings, whether judicial or administrative,
\nchallenging this Agreement or the consummation of the transactions contemplated
\nhereby, including seeking to have any stay or temporary restraining order
\nentered by any court or other Governmental Entity vacated or reversed; (vii)
\nexecuting or delivering any additional instruments reasonably necessary to
\nconsummate the transactions contemplated by, and to fully carry out the purposes
\nof, this Agreement and (viii) to cause the Merger to qualify as a
\n“reorganization” under Section 368(a) of the Code. In connection with and<\/p>\n
-36-<\/p>\n
without limiting the foregoing, subject to the other terms and conditions
\nhereof, Company and its Board of Directors shall, if any state takeover statute
\nor similar statute or regulation is or becomes applicable to the Merger, this
\nAgreement or any of the transactions contemplated by this Agreement, use
\ncommercially reasonable efforts to ensure that the Merger and the other
\ntransactions contemplated by this Agreement may be consummated as promptly as
\npracticable on the terms contemplated by this Agreement and otherwise to
\nminimize the effect of such statute or regulation on the Merger, this Agreement
\nand the transactions contemplated hereby.<\/p>\n
(b) Company shall give prompt notice to Parent upon becoming aware that
\nany representation or warranty made by it contained in this Agreement has become
\nuntrue or inaccurate, or of any failure of Company to comply with or satisfy in
\nany material respect any covenant, condition or agreement to be complied with or
\nsatisfied by it under this Agreement, in each case, where the conditions set
\nforth in Section 6.3(a) or Section 6.3(b) would not be satisfied as a result
\nthereof; provided, however, that no such notification shall affect the
\nrepresentations, warranties, covenants or agreements of the parties or the
\nconditions to the obligations of the parties under this Agreement.<\/p>\n
(c) Parent shall give prompt notice to Company upon becoming aware that
\nany representation or warranty made by it or Merger Sub contained in this
\nAgreement has become untrue or inaccurate, or of any failure of Parent or Merger
\nSub to comply with or satisfy in any material respect any covenant, condition or
\nagreement to be complied with or satisfied by it under this Agreement, in each
\ncase, where the conditions set forth in Section 6.2(a) or Section 6.2(b) would
\nnot be satisfied as a result thereof; provided, however, that no such
\nnotification shall affect the representations, warranties, covenants or
\nagreements of the parties or the conditions to the obligations of the parties
\nunder this Agreement.<\/p>\n
5.7 Third Party Consents. As soon as practicable following the date
\n ——————–
\nhereof, Parent and Company will each use its commercially reasonable efforts to
\nobtain any consents, waivers and approvals under any of its or its subsidiaries’
\nrespective material agreements, contracts, licenses or leases required to be
\nobtained in connection with the consummation of the transactions contemplated
\nhereby and necessary to enable the business of Company or Parent, as the case
\nmay be, to be operated following the Closing in substantially the same matter as
\ncurrently conducted.<\/p>\n
5.8 [Intentionally left blank.]
\n ————————<\/p>\n
5.9 Stock Options; Employee Benefits.
\n ——————————–<\/p>\n
(a) Stock Options. At the Effective Time, each outstanding option to
\n ————-
\npurchase shares of Company Common Stock (each, a “Company Stock Option”) under
\nthe Company Option Plans, whether or not vested, shall be assumed by Parent.
\nEach Company Stock Option so assumed by Parent under this Agreement will
\ncontinue to have, and be subject to, the same terms and conditions of such
\nCompany Stock Options immediately prior to the Effective Time (including,
\nwithout limitation, any repurchase rights or vesting provisions and provisions
\nregarding the acceleration of vesting on certain transactions, other than the
\ntransactions contemplated by this Agreement), except that (i) each Company Stock
\nOption will be exercisable (or will become exercisable in accordance with its
\nterms) for that number of whole shares of Parent Common Stock<\/p>\n
-37-<\/p>\n
equal to the product of the number of shares of Company Common Stock that were
\nissuable upon exercise of such Company Stock Option immediately prior to the
\nEffective Time multiplied by the Exchange Ratio, rounded down to the nearest
\nwhole number of shares of Parent Common Stock and (ii) the per share exercise
\nprice for the shares of Parent Common Stock issuable upon exercise of such
\nassumed Company Stock Option will be equal to the quotient determined by
\ndividing the exercise price per share of Company Common Stock at which such
\nCompany Stock Option was exercisable immediately prior to the Effective Time by
\nthe Exchange Ratio, rounded up to the nearest whole cent. Parent shall comply
\nwith the terms of all such Company Stock Options and use its best efforts to
\nensure, to the extent required by and subject to the provisions of, the Company
\nOption Plans, and to the extent permitted under the Code, that any Company Stock
\nOptions that qualified for tax treatment as incentive stock options under
\nSection 422 of the Code prior to the Effective Time continue to so qualify after
\nthe Effective Time. Parent shall take all corporate actions necessary to reserve
\nfor issuance a sufficient number of shares of Parent Common Stock for delivery
\nupon exercise of assumed Company Stock Options on the terms set forth in this
\nSection 5.8(a). As soon as practicable after the Effective Time, Parent shall
\ndeliver to each holder of a Company Stock Option a document evidencing the
\nforegoing assumption of such Company Stock Option by Parent.<\/p>\n
(b) [Intentionally left blank.]
\n ————————-<\/p>\n
(c) [Intentionally left blank.]
\n ————————-<\/p>\n
(d) Comparability of Employee Benefits. Following the Effective Time and
\n ———————————-
\nfor one year thereafter, Parent shall provide continuing employees of Company
\nand its Affiliates (the “Continuing Employees”) with: (a) substantially similar
\ncompensation, employee benefits, and terms and conditions of employment, in the
\naggregate, as Parent provides to similarly-situated employees of Parent; or (b)
\ncompensation, employee benefits, and terms and conditions of employment that are
\nsubstantially-similar in the aggregate, to those of Company as in effect
\nimmediately prior to Closing; or (c) a combination of clauses (a) and (b);
\nprovided that compensation, employee benefits, and terms and conditions of
\nemployment, in the aggregate, are substantially-similar to those in effect for
\nContinuing Employees immediately prior to Closing. Each Continuing Employee
\nshall–following the Closing Date, to the extent permitted by law and applicable
\ntax qualification requirements, and subject to any generally applicable break in
\nservice or similar rule, and the approval of any insurance carrier, third party
\nprovider or the like with reasonable efforts of the Parent–receive service
\ncredit for purposes of eligibility to participate and vesting (but not for
\nbenefit accrual purposes) for employment, compensation, and employee benefit
\nplan purposes with the Company and its Affiliates or its subsidiaries prior to
\nthe Closing Date. Notwithstanding any of the foregoing to the contrary, none of
\nthe provisions contained herein shall operate to duplicate any benefit provided
\nto any Continuing Employee or the funding of any such benefit.<\/p>\n
(e) Earn-Out Rights. At the Effective Time, each right to acquire shares
\n —————
\nof Company Common Stock under the Earn-Out Agreement (the “Earn-Out Rights”)
\nshall become a right to acquire shares of Parent Common Stock pursuant to the
\nformula set forth in Section 4.4 of the Earn-Out Agreement, and for purposes of
\nsuch calculation, the term “Share” shall mean Parent Common Stock. Parent shall
\ntake all corporate actions necessary to reserve for issuance a sufficient<\/p>\n
-38-<\/p>\n
number of shares of Parent Common Stock for delivery upon exercise of the
\nEarn-Out Rights on the terms set forth in this Section 5.8(d).<\/p>\n
5.10 Form S-8. As soon as practicable after the Effective Time but, in no
\n ——–
\nevent, later than five (5) business days following the Closing Date, Parent
\nshall file a registration statement on Form S-8 (or any successor or other
\nappropriate form), or another appropriate form with respect to the shares of
\nParent Common Stock subject to Company Stock Options and restricted stock and
\nshall use its reasonable efforts to maintain the effectiveness of such
\nregistration statement (and maintain the current status of the prospectus or
\nprospectuses contained therein) for so long as such Company Stock Options and
\nrestricted stock remain outstanding. With respect to those individuals who
\nsubsequent to the Merger will be subject to the reporting requirements under
\nSection 16(a) of the Exchange Act, where applicable, Parent shall administer the
\nCompany Option Plans assumed pursuant to this Agreement in a manner that
\ncomplies with Rule 16b-3 promulgated by the SEC under the Exchange Act.<\/p>\n
5.11 Indemnification.
\n —————<\/p>\n
(a) From and after the Effective Time, Parent will cause the Surviving
\nCorporation to fulfill and honor in all respects the obligations of Company (or
\nany predecessor corporation) pursuant to (i) each indemnification agreement
\nbetween Company and its directors or officers in effect immediately prior to the
\nEffective Time (the “Indemnified Parties”) and (ii) any indemnification
\nprovision under the Company Charter Documents as in effect on the date hereof.
\nThe Certificate of Incorporation and Bylaws of the Surviving Corporation will
\ncontain provisions with respect to exculpation and indemnification that are at
\nleast as favorable to the Indemnified Parties as those contained in the Company
\nCharter Documents as in effect on the date hereof, which provisions will not be
\namended, repealed or otherwise modified for a period of six (6) years from the
\nEffective Time in any manner that would adversely affect the rights thereunder
\nof any Indemnified Party or of individuals who, immediately prior to the
\nEffective Time, were employees or agents of Company, unless such modification is
\nrequired by law.<\/p>\n
(b) For a period of six (6) years following the Effective Time, Parent
\nshall maintain in effect a policy of directors’ and officers’ insurance covering
\nthose persons who are currently covered by Company’s directors’ and officers’
\ninsurance policy in effect as of the date hereof for actions or omissions
\noccurring on or prior to the Effective Time, which insurance policy shall
\ncontain terms and conditions (including, without limitation, coverage amounts)
\nthat are substantially the same as the terms and conditions of Company’s
\ndirectors’ and officers’ insurance policy in effect as of the date hereof;
\nprovided, however, that notwithstanding the foregoing, Parent shall not be
\nrequired to pay an annual premium on such insurance policy that is greater than
\none hundred fifty percent (150%) of the annual premium payable under the
\nCompany’s directors’ and officers’ insurance policy in effect as of the date
\nhereof; and provided further, however, that notwithstanding the foregoing,
\nParent may satisfy its obligations under this Section 5.11(b) by purchasing a
\n“tail” policy under Company’s existing directors’ and officers’ insurance policy
\nwhich (i) has an effective term of six (6) years from the Effective Time, (ii)
\ncovers those persons who are currently covered by Company’s directors’ and
\nofficers’ insurance policy in effect as of the date hereof for actions and
\nomissions occurring on or prior to the Effective Time, and (iii) contains terms
\nand conditions (including, without limitation, coverage amounts) that are
\nsubstantially the same as
\n -39-<\/p>\n
the terms and conditions of Company’s directors’ and officers’ insurance policy
\nin effect as of the date hereof. The provisions of this Section are intended to
\nbe in addition to the rights otherwise available to the officers or directors of
\nCompany by law, charter, statute, bylaw or agreement and shall operate for the
\nbenefit of, and shall be enforceable by, each of the Indemnified Parties,
\ntherein, their heirs and their representatives.<\/p>\n
(c) In the event Company or the Surviving Corporation or any of their
\nrespective successors or assigns (i) consolidates with or merges into any other
\nperson and shall not be the continuing or surviving corporation or entity of
\nsuch consolidation or merger or (ii) transfers a material amount of its
\nproperties and assets to any person in a single transaction or a series of
\ntransactions, then, and in each such case, Parent will either guarantee or
\notherwise remain liable for the indemnification obligations referred to in this
\nSection 5.10 or will make or cause to be made proper provision so that the
\nsuccessors and assigns of Company or the Surviving Corporation, as the case may
\nbe, assume the indemnification obligations described herein for the benefit of
\nthe Indemnified Parties.<\/p>\n
(d) The provisions of this Section 5.10 are (i) intended to be for the
\nbenefit of, and will be enforceable by, each of the Indemnified Parties and (ii)
\nin addition to, and not in substitution for, any other rights to indemnification
\nor contribution that any such Indemnified Party may have by contract or
\notherwise.<\/p>\n
5.12 Affiliate Agreements.
\n ———————<\/p>\n
(a) Set forth in Section 5.12(a) of the Company Schedule is a list of
\nthose persons who may be deemed to be, in Company’s reasonable judgment,
\naffiliates of Company within the meaning of Rule 145 promulgated under the
\nSecurities Act (each, a “Company Affiliate”). Company will provide Parent with
\nsuch information and documents as Parent reasonably requests for purposes of
\nreviewing such list. Company will use its commercially reasonable efforts to
\ndeliver or cause to be delivered to Parent, on or as promptly as practicable
\nfollowing the date hereof, from each Company Affiliate that has not delivered a
\nCompany Affiliate Agreement on or prior to the date hereof, an executed Company
\nAffiliate Agreement. Parent will be entitled to place appropriate legends on the
\ncertificates evidencing any Parent Common Stock to be received by a Company
\nAffiliate pursuant to the terms of this Agreement, and to issue appropriate stop
\ntransfer instructions to the transfer agent for the Parent Common Stock,
\nconsistent with the terms of the Company Affiliate Agreement.<\/p>\n
5.13 Regulatory Filings; Reasonable Efforts. As soon as may be reasonably
\n ————————————–
\npracticable, Company and Parent each shall file with the United States Federal
\nTrade Commission (the “FTC”) and the Antitrust Division of the United States
\nDepartment of Justice (“DOJ”) Notification and Report Forms relating to the
\ntransactions contemplated herein as required by the HSR Act, as well as
\ncomparable pre-merger notification forms required by the merger notification or
\ncontrol laws and regulations of any other applicable jurisdiction, as agreed to
\nby the parties. Company and Parent each shall each use all reasonable efforts to
\nobtain early termination of any waiting period under HSR and Company and Parent
\nshall each promptly (a) supply the other with any information which may be
\nrequired in order to effectuate such filings and (b) supply any additional
\ninformation which<\/p>\n
-40-<\/p>\n
reasonably may be required by the FTC, the DOJ or the competition or merger
\ncontrol authorities of any other jurisdiction and which the parties may
\nreasonably deem appropriate.<\/p>\n
5.14 Action by Board of Directors. Prior to the Effective Time, the Board
\n —————————-
\nof Directors of Parent, or an appropriate committee of non-employee directors
\nthereof, shall adopt a resolution consistent with the interpretative guidance of
\nthe SEC so that (i) the assumption of Company Stock Options by Company Insiders
\n(as defined below) pursuant to this Agreement, and (ii) the receipt by Company
\nInsiders of Parent Common Stock in exchange for Company Common Stock pursuant to
\nthe Merger, shall in each case be an exempt transaction for purposes of Section
\n16 of the Exchange Act by any officer or director of Company who may become a
\ncovered person of Parent for purposes of Section 16 of the Exchange Act (a
\n“Company Insider”).<\/p>\n
5.15 Nasdaq Listing. Parent shall use commercially reasonable efforts to
\n ————–
\ncause the Parent Common Stock issuable under Section 1.6, the Company Option
\nPlans and the Earn-Out Agreement to be approved for listing on the Nasdaq
\nNational Market, subject to official notice of issuance, as promptly as
\npracticable after the date hereof, and in any event prior to the Closing Date.<\/p>\n
ARTICLE VI
\n CONDITIONS TO THE MERGER<\/p>\n
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
\n ————————————————————
\nrespective obligations of each party to this Agreement to effect the Merger
\nshall be subject to the satisfaction at or prior to the Closing Date of the
\nfollowing conditions, any of which may be waived if waived in writing by both
\nParent and Company:<\/p>\n
(a) Stockholder Approval. This Agreement shall have been adopted and the
\n ——————–
\nMerger shall have been duly approved by the requisite vote under applicable law
\nby the stockholders of Company.<\/p>\n
(b) S-4 Effective; Proxy Statement. The SEC shall have declared the S-4
\n ——————————
\neffective. No stop order suspending the effectiveness of the S-4 or any part
\nthereof shall have been issued and no proceeding for that purpose, and no
\nsimilar proceeding in respect of the Proxy Statement\/Prospectus, shall have been
\ninitiated or threatened in writing by the SEC.<\/p>\n
(c) No Order; HSR Act. No Governmental Entity shall have enacted,
\n —————–
\nissued, promulgated, enforced or entered any statute, rule, regulation,
\nexecutive order, decree, injunction or other order (whether temporary,
\npreliminary or permanent) which is in effect and which has the effect of making
\nthe Merger illegal or otherwise prohibiting consummation of the Merger. All
\nwaiting periods, if any, under the HSR Act relating to the transactions
\ncontemplated hereby will have expired or terminated early and all foreign
\nantitrust approvals required to be obtained prior to the Merger in connection
\nwith the transactions contemplated hereby shall have been obtained.<\/p>\n
(d) Tax Opinions. Each of Company and Parent shall have received a
\n ————
\nwritten opinion from its respective tax counsel, in form and substance
\nreasonably satisfactory to Company or Parent, as the case may be, to the effect
\nthat the Merger will constitute a reorganization within the meaning of Section
\n368(a) of the Code and such opinion shall not have been withdrawn. The parties<\/p>\n
-41-<\/p>\n
to this Agreement agree to make reasonable representations as requested by such
\ncounsel for the purpose of rendering such opinions.<\/p>\n
6.2 Additional Conditions to Obligations of Company. The obligation of
\n ———————————————–
\nCompany to effect the Merger shall be subject to the satisfaction at or prior to
\nthe Closing Date of each of the following conditions, any of which may be
\nwaived, in writing, exclusively by Company:<\/p>\n
(a) Representations and Warranties. Each representation and warranty of
\n ——————————
\nParent and Merger Sub contained in this Agreement (i) shall have been true and
\ncorrect in all material respects as of the date of this Agreement and (ii) shall
\nbe true and correct in all respects on and as of the Closing Date with the same
\nforce and effect as if made on the Closing Date except, with respect to clause
\n(ii), (A) in each case, or in the aggregate, as does not constitute a Material
\nAdverse Effect on Parent and (B) for those representations and warranties which
\naddress matters only as of a particular date (which representations shall have
\nbeen true and correct (subject to the qualification as set forth in the
\npreceding clause (A)) as of such particular date) (it being understood that, for
\npurposes of determining the accuracy of such representations and warranties, (i)
\nall “Material Adverse Effect” qualifications and other qualifications based on
\nthe word “material” contained in such representations and warranties shall be
\ndisregarded and (ii) any update of or modification to the Parent Schedule made
\nor purported to have been made after the date of this Agreement shall be
\ndisregarded). Company shall have received a certificate with respect to the
\nforegoing signed on behalf of Parent by an authorized officer of Parent.<\/p>\n
(b) Agreements and Covenants. Parent and Merger Sub shall have performed
\n ————————
\nor complied with, in all material respects, all agreements and covenants
\nrequired by this Agreement to be performed or complied with by them on or prior
\nto the Closing Date, and Company shall have received a certificate to such
\neffect signed on behalf of Parent by an authorized officer of Parent.<\/p>\n
(c) Nasdaq Listing. The shares of Parent Common Stock issuable to the
\n ————–
\nstockholders of Company as contemplated by Section 1.6 hereof, the Company
\nOptions and the Earn-Out Agreement shall have been approved for listing on the
\nNasdaq National Market, subject to official notice of issuance.<\/p>\n
(d) Election of Director Nominees. The Board of Directors of Parent
\n —————————–
\nshall have taken appropriate action to cause the number of directors comprising
\nthe full Board of Directors of Parent to be increased by two persons, from eight
\nto 10, and two members of the Board of Directors of Company, designated by
\nCompany (the “Company Designees”), shall be appointed to fill the newly created
\nvacancies on the Board of Directors of Parent, effective upon the Effective
\nTime, and shall serve as directors of Parent until their successors, if any, are
\nduly elected and qualified or until their earlier death, resignation or removal.<\/p>\n
(e) Employment Agreement. Parent shall have offered Jack L. Messman the
\n ——————–
\npositions of President and Chief Executive Officer of Parent effective on the
\nEffective Time on terms substantially similar to those of Mr. Messman’s current
\nemployment agreement with the Company.<\/p>\n
-42-<\/p>\n
6.3 Additional Conditions to the Obligations of Parent and Merger Sub. The
\n —————————————————————–
\nobligations of Parent and Merger Sub to effect the Merger shall be subject to
\nthe satisfaction at or prior to the Closing Date of each of the following
\nconditions, any of which may be waived, in writing, exclusively by Parent:<\/p>\n
(a) Representations and Warranties. Each representation and warranty of
\n ——————————
\nCompany contained in this Agreement (i) shall have been true and correct in all
\nmaterial respects as of the date of this Agreement and (ii) shall be true and
\ncorrect in all respects on and as of the Closing Date with the same force and
\neffect as if made on and as of the Closing Date except, with respect to clause
\n(ii), (A) in each case, or in the aggregate, as does not constitute a Material
\nAdverse Effect on Company and (B) for those representations and warranties which
\naddress matters only as of a particular date (which representations shall have
\nbeen true and correct (subject to the qualification as set forth in the
\npreceding clause (A)) as of such particular date) (it being understood that, for
\npurposes of determining the accuracy of such representations and warranties, (i)
\nall “Material Adverse Effect” qualifications and other qualifications based on
\nthe word “material” contained in such representations and warranties shall be
\ndisregarded and (ii) any update of or modification to the Company Schedule made
\nor purported to have been made after the date of this Agreement shall be
\ndisregarded). Parent shall have received a certificate with respect to the
\nforegoing signed on behalf of Company by an authorized officer of Company.<\/p>\n
(b) Agreements and Covenants. Company shall have performed or complied
\n ————————
\nwith, in all material respects, all agreements and covenants required by this
\nAgreement to be performed or complied with by it at or prior to the Closing
\nDate, and Parent shall have received a certificate to such effect signed on
\nbehalf of Company by an authorized officer of Company.<\/p>\n
(c) Offer of Position of Chief Executive Officer to Jack L. Messman.
\n —————————————————————
\nJack L. Messman shall have accepted and not withdrawn his acceptance of the
\npositions of President and Chief Executive Officer of Parent to be effective
\nupon the Effective Time.<\/p>\n
ARTICLE VII
\n TERMINATION, AMENDMENT AND WAIVER<\/p>\n
7.1 Termination. This Agreement may be terminated at any time prior to the
\n ———–
\nEffective Time, whether before or after the requisite approval of the
\nstockholders of Company and Parent:<\/p>\n
(a) by mutual written consent duly authorized by the Boards of Directors
\nof Parent and Company;<\/p>\n
(b) by either Company or Parent if the Merger shall not have been
\nconsummated by September 30, 2001 (such date, or such other date that may be
\nagreed by mutual written consent, being the “Outside Date”) for any reason;
\nprovided, however, that the right to terminate this Agreement under this Section
\n7.1(b) shall not be available to any party whose action or failure to act has
\nbeen a principal cause of or resulted in the failure of the Merger to occur on
\nor before such date if such action or failure to act constitutes a breach of
\nthis Agreement;<\/p>\n
-43-<\/p>\n
(c) by either Company or Parent if a Governmental Entity shall have
\nissued an order, decree or ruling or taken any other action, in any case having
\nthe effect of permanently restraining, enjoining or otherwise prohibiting the
\nMerger, which order, decree, ruling or other action shall have become final and
\nnonappealable;<\/p>\n
(d) by either Company or Parent if either: (i) the Company Stockholders’
\nMeeting (including any adjournments thereof) shall have been held and completed
\nand the stockholders of Company shall have taken a final vote on a proposal to
\nadopt this Agreement and (ii) the required approval of the stockholders of
\nCompany contemplated by this Agreement shall not have been obtained; provided,
\nhowever, that the right to terminate this Agreement under this Section 7.1(d)
\nshall not be available to Company or Parent where the failure to obtain Company
\nstockholder approval shall have been caused by the action or failure to act of
\nCompany or Parent, respectively, and such action or failure to act constitutes a
\nbreach by Company or Parent, respectively, of this Agreement;<\/p>\n
(e) by Company, upon a breach of any covenant or agreement on the part
\nof Parent set forth in this Agreement, or if any representation or warranty of
\nParent shall have been untrue when made or shall have become untrue, in either
\ncase such that the conditions set forth in Section 6.2(a) or Section 6.2(b)
\nwould not be satisfied as of the time of such breach or as of the time such
\nrepresentation or warranty shall have become untrue, provided, that if such
\ninaccuracy in Parent’s representations and warranties or breach by Parent is
\ncurable by Parent through exercise of its commercially reasonable efforts, then
\nCompany may not terminate this Agreement pursuant to this Section 7.1(e) for
\nthirty (30) days after delivery of written notice from Company to Parent of such
\nbreach , provided that Parent continues to exercise commercially reasonable
\nefforts to cure such breach (it being understood that Company may not terminate
\nthis Agreement pursuant to this Section 7.1(e) if such breach by Parent is cured
\nduring such thirty-day period);<\/p>\n
(f) by Parent, upon a breach of any covenant or agreement on the part of
\nCompany set forth in this Agreement, or if any representation or warranty of
\nCompany shall have been untrue when made or shall have become untrue, in either
\ncase such that the conditions set forth in Section 6.3(a) or Section 6.3(b)
\nwould not be satisfied as of the time of such breach or as of the time such
\nrepresentation or warranty shall have become untrue, provided, that if such
\ninaccuracy in Company’s representations and warranties or breach by Company is
\ncurable by Company through exercise of its commercially reasonable efforts, then
\nParent may not terminate this Agreement pursuant to this Section 7.1(f) for
\nthirty (30) days after delivery of written notice from Parent to Company of such
\nbreach, provided that Company continues to exercise commercially reasonable
\nefforts to cure such breach (it being understood that Parent may not terminate
\nthis Agreement pursuant to this Section 7.1(f) if such breach by Company is
\ncured during such thirty-day period);<\/p>\n
(g) by Parent if a Triggering Event (as defined below) shall have
\noccurred.<\/p>\n
For the purposes of this Agreement, a “Triggering Event” shall be deemed to
\nhave occurred if: (i) the Board of Directors of Company or any committee
\nthereof shall for any reason have withheld, withdrawn or refrained from making
\nor shall have modified, amended or changed in a manner adverse to Parent its
\nrecommendation in favor of the adoption of this Agreement or the approval of the
\nMerger; (ii) Company shall have failed to include in the Proxy
\nStatement\/Prospectus<\/p>\n
-44-<\/p>\n
the recommendation of the Board of Directors of Company in favor of the adoption
\nof this Agreement and the approval of the Merger; (iii) the Board of Directors
\nof Company fails to reaffirm its recommendation in favor of the adoption of this
\nAgreement within ten (10) business days after Parent requests in writing that
\nsuch recommendation be reaffirmed at any time following the public announcement
\nand during the pendency of an Acquisition Proposal; (iv) the Board of Directors
\nof Company or any committee thereof shall have approved or recommended any
\nAcquisition Proposal; (v) Company shall have entered into any letter of intent
\nor similar document or any agreement, contract or commitment accepting any
\nAcquisition Proposal; (vi) Company shall have breached any of the provisions of
\nSection 5.4 of this Agreement or (vii) a tender or exchange offer relating to
\nnot less than 15% of the then outstanding shares of capital stock of Company
\nshall have been commenced by a person unaffiliated with Parent and Company shall
\nnot have sent to its securityholders pursuant to Rule 14e-2 promulgated under
\nthe Securities Act, within ten (10) business days after such tender or exchange
\noffer is first published sent or given, a statement disclosing that Company
\nrecommends rejection of such tender or exchange offer.<\/p>\n
7.2 Notice of Termination; Effect of Termination. Any termination of this
\n ——————————————–
\nAgreement under Section 7.1 will be effective immediately upon (or if the
\ntermination is pursuant to Section 7.1(e) or 7.1(f) and the proviso therein is
\napplicable, thirty (30) days after) the delivery of written notice thereof by
\nthe terminating party to the other parties hereto. In the event of the
\ntermination of this Agreement as provided in Section 7.1, this Agreement shall
\nbe of no further force or effect, except (i) as set forth in this Section 7.2,
\nSection 7.3 and Article 8 (General Provisions), each of which shall survive the
\ntermination of this Agreement, and (ii) nothing herein shall relieve any party
\nfrom liability for any intentional or willful breach of this Agreement. No
\ntermination of this Agreement shall affect the obligations of the parties
\ncontained in the Confidentiality Agreements, all of which obligations shall
\nsurvive termination of this Agreement in accordance with their terms.<\/p>\n
7.3 Fees and Expenses.
\n —————–<\/p>\n
(a) General. Except as set forth in this Section 7.3, all fees and
\n ——-
\nexpenses incurred in connection with this Agreement and the transactions
\ncontemplated hereby shall be paid by the party incurring such fees and expenses
\nwhether or not the Merger is consummated; provided, however, that Parent and
\nCompany shall share equally all fees and expenses, other than attorneys’ and
\naccountants fees and expenses, incurred in connection with the printing and
\nfiling (with the SEC) of the Proxy Statement\/Prospectus (including any
\npreliminary materials related thereto) and the S-4 (including financial
\nstatements and exhibits) and any amendments or supplements thereto and any fees
\nrequired to be paid under the HSR Act.<\/p>\n
(b) Company Payments.
\n —————-<\/p>\n
(i) Company shall pay to Parent in immediately available funds, within
\ntwo (2) business days after demand by Parent, an amount equal to seven million
\nthree hundred thousand dollars ($7,300,000) (the “Termination Fee”) if this
\nAgreement is terminated by Parent pursuant to Section 7.1(g).<\/p>\n
-45-<\/p>\n
(ii) If (A) this Agreement is terminated by Parent or Company, as
\napplicable, pursuant to Sections 7.1(b) or (d)(i), (B) prior to such termination
\na third party shall have delivered an Acquisition Proposal and (C) within twelve
\n(12) months following the termination of this Agreement a Company Acquisition
\n(as defined below) is consummated or Company enters into an agreement or letter
\nof intent providing for a Company Acquisition, then Company shall pay Parent in
\nimmediately available funds at or prior to consummating such Company Acquisition
\nan amount equal to the Termination Fee.<\/p>\n
(iii) Company acknowledges that the agreements contained in this
\nSection 7.3(b) are an integral part of the transactions contemplated by this
\nAgreement, and that, without these agreements, Parent would not enter into this
\nAgreement; accordingly, if Company fails to pay in a timely manner the amounts
\ndue pursuant to this Section 7.3(b) and, in order to obtain such payment, Parent
\nmakes a claim that results in a judgment against Company for the amounts set
\nforth in this Section 7.3(b), Company shall pay to Parent its reasonable costs
\nand expenses (including reasonable attorneys’ fees and expenses) in connection
\nwith such suit, together with interest on the amounts set forth in this Section
\n7.3(b) at the prime rate of The Chase Manhattan Bank (or any successor thereto)
\nin effect on the date such payment was required to be made. Payment of the fees
\ndescribed in this Section 7.3(b) shall not be in lieu of damages incurred in the
\nevent of breach of this Agreement. For the purposes of this Agreement, “Company
\nAcquisition” shall mean any of the following transactions (other than the
\ntransactions contemplated by this Agreement): (i) a merger, consolidation,
\nbusiness combination, recapitalization, liquidation, dissolution or similar
\ntransaction involving Company pursuant to which the stockholders of Company
\nimmediately preceding such transaction hold less than 60% of the aggregate
\nequity interests in the surviving or resulting entity of such transaction, (ii)
\na sale or other disposition by Company of assets representing in excess of 60%
\nof the aggregate fair market value of Company’s business immediately prior to
\nsuch sale or (iii) the acquisition by any person or group (including by way of a
\ntender offer or an exchange offer or issuance by Company), directly or
\nindirectly, of beneficial ownership or a right to acquire beneficial ownership
\nof shares representing in excess of 40% of the voting power of the then
\noutstanding shares of capital stock of Company.<\/p>\n
7.4 Amendment. Subject to applicable law, this Agreement may be amended by
\n ———
\nthe parties hereto at any time by execution of an instrument in writing signed
\non behalf of each of Parent and Company.<\/p>\n
7.5 Extension; Waiver. At any time prior to the Effective Time, any party
\n —————–
\nhereto may, to the extent legally allowed, (i) extend the time for the
\nperformance of any of the obligations or other acts of the other parties hereto,
\n(ii) waive any inaccuracies in the representations and warranties made to such
\nparty contained herein or in any document delivered pursuant hereto and (iii)
\nwaive compliance with any of the agreements or conditions for the benefit of
\nsuch party contained herein. Any agreement on the part of a party hereto to any
\nsuch extension or waiver shall be valid only if set forth in an instrument in
\nwriting signed on behalf of such party. Delay in exercising any right under this
\nAgreement shall not constitute a waiver of such right.<\/p>\n
-46-<\/p>\n
ARTICLE VIII
\n GENERAL PROVISIONS<\/p>\n
8.1 Non-Survival of Representations and Warranties. The representations and
\n ———————————————-
\nwarranties of Company, Parent and Merger Sub contained in this Agreement or in
\nany certificate or instrument delivered pursuant to Article VI shall terminate
\nat the Effective Time, and only the covenants that by their terms survive the
\nEffective Time shall survive the Effective Time.<\/p>\n
8.2 Notices. All notices and other communications hereunder shall be in
\n ——-
\nwriting and shall be deemed given on the day of delivery if delivered personally
\nor sent via telecopy (receipt confirmed) or overnight courier (delivery
\nconfirmed), to the parties at the following addresses or telecopy numbers (or at
\nsuch other address or telecopy numbers for a party as shall be specified by like
\nnotice):<\/p>\n
(a) if to Parent or Merger Sub, to:<\/p>\n
Novell, Inc.
\n 1800 Novell Place
\n ORM-M-301
\n Provo, UT 84606
\n Attention: Josephine T. Parry, General Counsel
\n Telecopy No.: (801)222-5677<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati
\n Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, CA 94304
\n Attention: John L. Donahue, Esq.
\n Steve L. Camahort, Esq.
\n Telecopy No.: (650) 493-9300<\/p>\n
-47-<\/p>\n
(b) if to Company, to:<\/p>\n
Cambridge Technology Partners (Massachusetts), Inc.
\n Eight Cambridge Center
\n Cambridge, Massachusetts 02142
\n Attention: Joseph LaSala, Esq., General Counsel
\n Telecopy No.: (617)551-5101<\/p>\n
with a copy to:<\/p>\n
Morgan Lewis & Bockius LLP
\n 101 Park Avenue
\n New York, NY 10178
\n Attention: Howard L. Shecter, Esq.
\n Telecopy No.: (212) 309-7044<\/p>\n
8.3 Interpretation.
\n —————<\/p>\n
(a) When a reference is made in this Agreement to Exhibits, such
\nreference shall be to an Exhibit to this Agreement unless otherwise indicated.
\nWhen a reference is made in this Agreement to a Section, such reference shall be
\nto a Section of this Agreement. Unless otherwise indicated the words “include,”
\n“includes” and “including” when used herein shall be deemed in each case to be
\nfollowed by the words “without limitation.” The table of contents and headings
\ncontained in this Agreement are for reference purposes only and shall not affect
\nin any way the meaning or interpretation of this Agreement. Reference to the
\nsubsidiaries of an entity shall be deemed to include all direct and indirect
\nsubsidiaries of such entity.<\/p>\n
(b) For purposes of this Agreement, the term “person” shall mean any
\nindividual, corporation (including any non-profit corporation), general
\npartnership, limited partnership, limited liability partnership, joint venture,
\nestate, trust, company (including any limited liability company or joint stock
\ncompany), firm or other enterprise, association, organization, entity or
\nGovernmental Entity.<\/p>\n
(c) For purposes of this Agreement, the term “Material Adverse Effect”
\nwhen used in connection with an entity means any change, event, circumstance or
\neffect, individually or when aggregated with other changes, events,
\ncircumstances or effects, that is materially adverse to the business, financial
\ncondition or results of operations of such entity and its subsidiaries taken as
\na whole; provided, however that (i) no change, event, circumstance or effect
\ndirectly attributable to (A) changes in general economic conditions or changes
\naffecting the information technology industry generally or (B) the loss of
\ncurrent or prospective customers or other adverse event that such entity
\nsuccessfully bears the burden of proving arose from such entity entering into
\nthis Agreement shall constitute a Material Adverse Effect and (ii) in no event
\nshall a decrease in the trading price of such entity’s common stock in and of
\nitself constitute a Material Adverse Effect.<\/p>\n
-48-<\/p>\n
(d) For purposes of this Agreement, an “agreement,” “arrangement,”
\n“contract,” “commitment” or “plan” shall mean a legally binding, written
\nagreement, arrangement, contract, commitment or plan, as the case may be.<\/p>\n
(e) For purposes of this Agreement, the term “knowledge of the Company”
\nshall mean the knowledge of the Company’s officers, directors and key employees,
\nassuming that such persons have made due and diligent inquiry of the matters
\nrepresented.<\/p>\n
(f) For purposes of this Agreement, a “subsidiary” of any person means
\nanother person 50% or more of the total combined voting power of all classes of
\ncapital stock or other voting interests of which, or 50% or more of the equity
\nsecurities of which, is owned directly or indirectly by such first person.<\/p>\n
(g) For purposes of this Agreement, a “business day” means any day on
\nwhich banks are not required or authorized to close in the City of New York.<\/p>\n
8.4 Counterparts. This Agreement may be executed in one or more
\n ————
\ncounterparts, all of which shall be considered one and the same agreement and
\nshall become effective when one or more counterparts have been signed by each of
\nthe parties and delivered to the other party, it being understood that all
\nparties need not sign the same counterpart.<\/p>\n
8.5 Entire Agreement; Third Party Beneficiaries. This Agreement and the
\n ——————————————-
\ndocuments and instruments and other agreements among the parties hereto as
\ncontemplated by or referred to herein, including the Company Schedule and the
\nParent Schedule (a) constitute the entire agreement among the parties with
\nrespect to the subject matter hereof and supersede all prior agreements and
\nunderstandings, both written and oral, among the parties with respect to the
\nsubject matter hereof, it being understood, however, that the Confidentiality
\nAgreement shall continue in full force and effect until the Closing and shall
\nsurvive any termination of this Agreement; and (b) except with respect to the
\nIndemnified Parties under Section 5.10, are not intended to confer upon any
\nother person any rights or remedies hereunder.<\/p>\n
8.6 Severability. In the event that any provision of this Agreement, or the
\n ————
\napplication thereof, becomes or is declared by a court of competent jurisdiction
\nto be illegal, void or unenforceable, the remainder of this Agreement will
\ncontinue in full force and effect and the application of such provision to other
\npersons or circumstances will be interpreted so as reasonably to effect the
\nintent of the parties hereto. The parties further agree to replace such void or
\nunenforceable provision of this Agreement with a valid and enforceable provision
\nthat will achieve, to the extent possible, the economic, business and other
\npurposes of such void or unenforceable provision.<\/p>\n
8.7 Other Remedies; Specific Performance. Except as otherwise provided
\n ————————————
\nherein, any and all remedies herein expressly conferred upon a party will be
\ndeemed cumulative with and not exclusive of any other remedy conferred hereby,
\nor by law or equity upon such party, and the exercise by a party of any one
\nremedy will not preclude the exercise of any other remedy. The parties hereto
\nagree that irreparable damage would occur in the event that any of the
\nprovisions of this Agreement were not performed in accordance with their
\nspecific terms or were otherwise<\/p>\n
-49-<\/p>\n
breached. It is accordingly agreed that the parties shall be entitled to seek an
\ninjunction or injunctions to prevent breaches of this Agreement and to enforce
\nspecifically the terms and provisions hereof in any court of the United States
\nor any state having jurisdiction, this being in addition to any other remedy to
\nwhich they are entitled at law or in equity. In any action at law or suit in
\nequity to enforce this Agreement or the rights of any of the parties hereunder,
\nthe prevailing party in such action or suit shall be entitled to receive a
\nreasonable sum for its attorneys’ fees and all other reasonable costs and
\nexpenses incurred in such action or suit.<\/p>\n
8.8 Governing Law. This Agreement shall be governed by and construed in
\n ————-
\naccordance with the laws of the State of Delaware, regardless of the laws that
\nmight otherwise govern under applicable principles of conflicts of law thereof.<\/p>\n
8.9 Rules of Construction. The parties hereto agree that they have been
\n ———————
\nrepresented by counsel during the negotiation and execution of this Agreement
\nand, therefore, waive the application of any law, regulation, holding or rule of
\nconstruction providing that ambiguities in an agreement or other document will
\nbe construed against the party drafting such agreement or document.<\/p>\n
8.10 Assignment. No party may assign either this Agreement or any of its
\n ———-
\nrights, interests, or obligations hereunder without the prior written approval
\nof the other parties. Subject to the preceding sentence, this Agreement shall be
\nbinding upon and shall inure to the benefit of the parties hereto and their
\nrespective successors and permitted assigns.<\/p>\n
8.11 Waiver of Jury Trial. EACH OF PARENT, COMPANY AND MERGER SUB HEREBY
\n ——————–
\nIRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
\nCOUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
\nRELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT, COMPANY OR MERGER SUB IN
\nTHE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.<\/p>\n
*****<\/p>\n
-50-<\/p>\n
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
\nexecuted by their duly authorized respective officers as of the date first
\nwritten above.<\/p>\n
NOVELL, INC.<\/p>\n
\/s\/ Eric Schmidt
\n By:_________________________________<\/p>\n
Eric Schmidt
\n Name:_______________________________<\/p>\n
Chief Executive Officer
\n Title:______________________________<\/p>\n
CERES NEPTUNE ACQUISITION CORP.<\/p>\n
\/s\/ Eric Schmidt
\n By:_________________________________<\/p>\n
Eric Schmidt
\n Name:_______________________________<\/p>\n
Chief Executive Officer
\n Title:______________________________<\/p>\n
CAMBRIDGE TECHNOLOGY PARTNERS
\n (MASSACHUSETTS), INC.<\/p>\n
\/s\/ Jack L. Messman
\n By:_________________________________<\/p>\n
Jack L. Messman
\n Name:_______________________________<\/p>\n
President and Chief Executive Officer
\n Title:______________________________________<\/p>\n
**** REORGANIZATION AGREEMENT ****<\/p>\n
EXHIBIT A<\/p>\n
FORM OF VOTING AGREEMENT<\/p>\n
THIS VOTING AGREEMENT (this “Agreement”) is made and entered into as of
\n ———
\n_______________, among NOVELL, INC., a Delaware corporation (“Parent”), and the
\n ——
\nundersigned stockholder (the “Stockholder”) of CAMBRIDGE TECHNOLOGY PARTNERS
\n ———–
\n(MASSACHUSETTS), INC., a Delaware corporation (“Company”).
\n ——-<\/p>\n
RECITALS
\n ——–<\/p>\n
A. The Company, Merger Sub (as defined below) and Parent have entered into
\nan Agreement and Plan of Reorganization of even date herewith (the
\n“Reorganization Agreement”), which provides for the merger (the “Merger”) of
\n————————- ——-
\nCeres Neptune Acquisition Corp., a wholly-owned subsidiary of Parent (“Merger
\n ——
\nSub”), with and into the Company. Pursuant to the Merger, all outstanding
\n—
\ncapital stock of the Company shall be converted into common stock of Parent, as
\nset forth in the Reorganization Agreement;<\/p>\n
B. Stockholder is the beneficial owner (as defined in Rule 13d-3 under the
\nSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) of such number
\n ————
\nof shares of the outstanding capital stock of the Company and shares subject to
\noutstanding options as is indicated on the signature page of this Agreement; and<\/p>\n
C. In consideration of the execution of the Reorganization Agreement by
\nParent, Stockholder (in his or her or its capacity as such) agrees to vote the
\nShares (as defined below) and other such shares of capital stock of the Company
\nover which Stockholder has voting power so as to facilitate consummation of the
\nMerger.<\/p>\n
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
\nfollows:<\/p>\n
1. Certain Definitions. Capitalized terms not defined herein shall have the
\n ——————-
\nmeanings ascribed to them in the Reorganization Agreement. For purposes of this
\nAgreement:<\/p>\n
(a) “Expiration Date” shall mean the earlier to occur of (i) such date
\n —————
\nand time as the Reorganization Agreement shall have been terminated pursuant to
\nArticle VII thereof, or (ii) such date and time as the Merger shall become
\neffective in accordance with the terms and provisions of the Reorganization
\nAgreement.<\/p>\n
(b) “Person” shall mean any (i) individual, (ii) corporation, limited
\n ——
\nliability company, partnership or other entity, or (iii) governmental authority.<\/p>\n
(c) “Shares” shall mean: (i) all securities of the Company (including
\n ——
\nall shares of Company Common Stock and all options, warrants and other rights to
\nacquire shares of Company Common Stock) owned by Stockholder as of the date of
\nthis Agreement; and (ii) all additional<\/p>\n
securities of the Company (including all additional shares of Company Common
\nStock and all additional options, warrants and other rights to acquire shares of
\nCompany Common Stock) of which Stockholder acquires ownership during the period
\nfrom the date of this Agreement through the Expiration Date.<\/p>\n
(d) Transfer. A Person shall be deemed to have effected a “Transfer” of
\n ——–
\na security if such person directly or indirectly: (i) sells, pledges, encumbers,
\ngrants an option with respect to, transfers or disposes of such security or any
\ninterest in such security; or (ii) enters into an agreement or commitment
\nproviding for the sale of, pledge of, encumbrance of, grant of an option with
\nrespect to, transfer of or disposition of such security or any interest therein.<\/p>\n
2. Transfer of Shares.
\n ——————<\/p>\n
(a) Transferee of Shares to be Bound by this Agreement. Stockholder
\n ————————————————–
\nagrees that, during the period from the date of this Agreement through the
\nExpiration Date, Stockholder shall not cause or permit any Transfer of any of
\nthe Shares to be effected unless each Person to which any of such Shares, or any
\ninterest in any of such Shares, is or may be transferred shall have: (i)
\nexecuted a counterpart of this Agreement and a proxy in the form attached hereto
\nas Exhibit A (with such modifications as Parent may reasonably request); and
\n(ii) agreed in writing to hold such Shares (or interest in such Shares) subject
\nto all of the terms and provisions of this Agreement.<\/p>\n
(b) Transfer of Voting Rights. Stockholder agrees that, during the
\n ————————-
\nperiod from the date of this Agreement through the Expiration Date, Stockholder
\nshall not deposit (or permit the deposit of) any Shares in a voting trust or
\ngrant any proxy or enter into any voting agreement or similar agreement in
\ncontravention of the obligations of Stockholder under this Agreement with
\nrespect to any of the Shares.<\/p>\n
3. Agreement to Vote Shares. Until the Expiration Date, at every meeting of
\n ————————
\nstockholders of the Company called with respect to any of the following, and at
\nevery adjournment or postponement thereof, and on every action or approval by
\nwritten consent of stockholders of the Company with respect to any of the
\nfollowing, the Stockholder shall vote, to the extent not voted by the person(s)
\nappointed under the Proxy (as defined in Section 4 hereof), the Shares:<\/p>\n
(a) in favor of approval of the Merger and the adoption and approval of
\nthe Reorganization Agreement, and in favor of each of the other actions
\ncontemplated by the Reorganization Agreement and the Proxy and any action
\nrequired in furtherance thereof;<\/p>\n
(b) against approval of any proposal made in opposition to, or in
\ncompetition with, consummation of the Merger and the transactions contemplated
\nby the Reorganization Agreement;<\/p>\n
(c) against any of the following actions (other than those actions that
\nrelate to the Merger and the transactions contemplated by the Reorganization
\nAgreement): (A) any merger, consolidation, business combination, sale of assets,
\nreorganization or recapitalization of the Company or any subsidiary of the
\nCompany with any party, (B) any sale, lease or transfer of any significant part
\nof the assets of the Company or any subsidiary of the Company, (C) any<\/p>\n
-2-<\/p>\n
reorganization, recapitalization, dissolution, liquidation or winding up of the
\nCompany or any subsidiary of the Company, (D) any material change in the
\ncapitalization of the Company or any subsidiary of the Company, or the corporate
\nstructure of the Company or any subsidiary of the Company, or (E) any other
\naction that is intended, or could reasonably be expected to, impede, interfere
\nwith, delay, postpone, discourage or adversely affect the Merger or any of the
\nother transactions contemplated by the Reorganization Agreement; and<\/p>\n
(d) in favor of waiving any notice that may have been or may be required
\nrelating to any reorganization of the Company or any subsidiary of the Company,
\nany reclassification or recapitalization of the capital stock of the Company or
\nany subsidiary of the Company, or any sale of assets, change of control, or
\nacquisition of the Company or any subsidiary of the Company by any other person,
\nor any consolidation or merger of the Company or any subsidiary of the Company
\nwith or into any other person.<\/p>\n
Prior to the Expiration Date, the Stockholder shall not enter into any agreement
\nor understanding with any person to vote or give instructions in any manner
\ninconsistent with the terms of this Section 3.<\/p>\n
4. Irrevocable Proxy. Concurrently with the execution of this Agreement,
\n —————–
\nStockholder agrees to deliver to Parent a proxy in the form attached hereto as
\nExhibit A (the “Proxy”), which shall be irrevocable to the fullest extent
\npermissible by law, with respect to the Shares.<\/p>\n
5. Representations and Warranties of the Stockholder. Stockholder (i) is
\n ————————————————-
\nthe beneficial owner of the shares of Company Common Stock and the options to
\npurchase shares of Company Common Stock indicated on the signature page of this
\nAgreement, which are free and clear of any liens, adverse claims, charges or
\nother encumbrances (except any such encumbrances arising under securities laws);
\n(ii) does not beneficially own any securities of the Company other than the
\nshares of Company Common Stock and options to purchase shares of Company Common
\nStock indicated on the signature page of this Agreement; and (iii) has full
\npower and authority to make, enter into and carry out the terms of this
\nAgreement and the Proxy.<\/p>\n
6. Termination. This Agreement and the Proxy delivered in connection
\n ———–
\nherewith shall terminate and shall have no further force or effect as of the
\nExpiration Date.<\/p>\n
7. Miscellaneous.
\n ————-<\/p>\n
(a) Severability. If any term, provision, covenant or restriction of
\n ————
\nthis Agreement is held by a court of competent jurisdiction to be invalid, void
\nor unenforceable to any extent, then the remainder of the terms, provisions,
\ncovenants and restrictions of this Agreement shall remain in full force and
\neffect and shall in no way be affected, impaired or invalidated.<\/p>\n
(b) Binding Effect and Assignment. This Agreement and all of the
\n —————————–
\nprovisions hereof shall be binding upon and inure to the benefit of the parties
\nhereto and their respective successors and permitted assigns, but, except as
\notherwise specifically provided herein, neither this Agreement nor any of the
\nrights, interests or obligations of the parties hereto may be assigned by either
\nof the parties without prior written consent of the other.<\/p>\n
-3-<\/p>\n
(c) Amendments and Modification. This Agreement may not be modified,
\n —————————
\namended, altered or supplemented except upon the execution and delivery of a
\nwritten agreement executed by the parties hereto.<\/p>\n
(d) Specific Performance; Injunctive Relief. The parties hereto
\n —————————————
\nacknowledge that Parent shall be irreparably harmed and that there shall be no
\nadequate remedy at law for a violation of any of the covenants or agreements of
\nStockholder set forth herein. Therefore, it is agreed that, in addition to any
\nother remedies that may be available to Parent upon any such violation, Parent
\nshall have the right to enforce such covenants and agreements by specific
\nperformance, injunctive relief or by any other means available to Parent at law
\nor in equity.<\/p>\n
(e) Notices. All notices and other communications pursuant to this
\n ——-
\nAgreement shall be in writing and deemed to be sufficient if contained in a
\nwritten instrument and shall be deemed given if delivered personally,
\ntelecopied, sent by nationally-recognized overnight courier or mailed by
\nregistered or certified mail (return receipt requested), postage prepaid, to the
\nparties at the following address (or at such other address for a party as shall
\nbe specified by like notice):<\/p>\n
If to Parent:<\/p>\n
Novell, Inc.
\n 2211 North First Street
\n San Jose, CA 95131
\n Attention: Bill Smith, Director–Corporate Development
\n Telecopy No.: (408) 967-5055<\/p>\n
with a copy to:<\/p>\n
Wilson Sonsini Goodrich & Rosati, Professional
\n Corporation
\n 650 Page Mill Road
\n Palo Alto, CA 94304-1050
\n Attention: John Donahue, Esq.
\n Telecopy No.: (650) 493-9300<\/p>\n
If to Stockholder: To the address for notice set forth on the
\n signature page hereof.<\/p>\n
(f) Governing Law. This Agreement shall be governed by the laws of the
\n ————-
\nState of Delaware, without reference to rules of conflicts of law.<\/p>\n
(g) Entire Agreement. This Agreement and the Proxy contain the entire
\n —————-
\nunderstanding of the parties in respect of the subject matter hereof, and
\nsupersede all prior negotiations and understandings between the parties with
\nrespect to such subject matter.<\/p>\n
(h) Effect of Headings. The section headings are for convenience only
\n ——————
\nand shall not affect the construction or interpretation of this Agreement.<\/p>\n
(i) Counterparts. This Agreement may be executed in several
\n ————
\ncounterparts, each of which shall be an original, but all of which together
\nshall constitute one and the same agreement.<\/p>\n
-4-<\/p>\n
(j) No Obligation to Exercise Options. Notwithstanding any provision of
\n ———————————
\nthis Agreement to the contrary, nothing in this Agreement shall obligate
\nStockholder to exercise any option, warrant or other right to acquire shares of
\nCompany Common Stock.<\/p>\n
[The remainder of this page has been intentionally left blank]<\/p>\n
-5-<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
\nexecuted on the day and year first above written.<\/p>\n
NOVELL, INC. STOCKHOLDER<\/p>\n
By:_________________________________ By:________________________________
\n Signature of Authorized Signatory Signature<\/p>\n
Name:_______________________________ Name: ____________________________<\/p>\n
Title:<\/p>\n
Print Address:_____________________<\/p>\n
___________________________________
\n Telephone<\/p>\n
___________________________________
\n Facsimile No.<\/p>\n
Share beneficially owned:<\/p>\n
___ shares of Company Common Stock<\/p>\n
___ shares of Company Common Stock
\n issuable upon exercise of outstanding
\n options, warrants and other rights<\/p>\n
[Signature Page to Company Voting Agreement]<\/p>\n
IRREVOCABLE PROXY<\/p>\n
The undersigned stockholder (the “Stockholder”) of Cambridge Technology
\n ———–
\nPartners (Massachusetts), Inc., a Delaware corporation (the “Company”), hereby
\n ——-
\nirrevocably (to the fullest extent permitted by law) appoints the directors on
\nthe Board of Directors of Novell, Inc., a Delaware corporation (“Parent”), and
\n ——
\neach of them, as the sole and exclusive attorneys and proxies of the
\nundersigned, with full power of substitution and resubstitution, to vote and
\nexercise all voting and related rights (to the full extent that the undersigned
\nis entitled to do so) with respect to all of the shares of capital stock of the
\nCompany that now are or hereafter may be beneficially owned by the undersigned,
\nand any and all other shares or securities of the Company issued or issuable in
\nrespect thereof on or after the date hereof (collectively, the “Shares”) in
\n ——
\naccordance with the terms of this Proxy until the Expiration Date (as defined
\nbelow). Upon the undersigned’s execution of this Proxy, any and all prior
\nproxies given by the undersigned with respect to any Shares are hereby revoked
\nand the undersigned agrees not to grant any subsequent proxies with respect to
\nthe Shares until after the Expiration Date.<\/p>\n
This Proxy is irrevocable (to the fullest extent permitted by law), is
\ncoupled with an interest and is granted pursuant to that certain Voting
\nAgreement of even date herewith by and among Parent and the undersigned
\nstockholder (the “Voting Agreement”), and is granted in consideration of Parent
\n —————-
\nentering into that certain Agreement and Plan of Reorganization of even date
\nherewith (the “Reorganization Agreement”), among Parent, Ceres Neptune
\n ————————
\nAcquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
\nParent (“Merger Sub”), and the Company. The Reorganization Agreement provides
\n ———-
\nfor the merger of Merger Sub with and into the Company in accordance with its
\nterms (the “Merger”). As used herein, the term “Expiration Date” shall mean the
\n —— —————
\nearlier to occur of (i) such date and time as the Reorganization Agreement shall
\nhave been validly terminated pursuant to Article VII thereof or (ii) such date
\nand time as the Merger shall become effective in accordance with the terms and
\nprovisions of the Reorganization Agreement.<\/p>\n
The attorneys and proxies named above, and each of them, are hereby
\nauthorized and empowered by the undersigned, at any time prior to the Expiration
\nDate, to act as the undersigned’s attorney and proxy to vote the Shares, and to
\nexercise all voting, consent and similar rights of the undersigned with respect
\nto the Shares (including, without limitation, the power to execute and deliver
\nwritten consents) at every annual, special or adjourned meeting of stockholders
\nof the Company and in every written consent in lieu of such meeting:<\/p>\n
(i) in favor of approval of the Merger and the adoption and approval of
\nthe Reorganization Agreement, and in favor of each of the other actions
\ncontemplated by the Reorganization Agreement and any action required in
\nfurtherance thereof;<\/p>\n
(ii) against approval of any proposal made in opposition to, or in
\ncompetition with, consummation of the Merger and the transactions contemplated
\nby the Reorganization Agreement;<\/p>\n
(iii) against any of the following actions (other than those actions
\nthat relate to the Merger and the transactions contemplated by the
\nReorganization Agreement): (A) any merger,<\/p>\n
consolidation, business combination, sale of assets, reorganization or
\nrecapitalization of the Company or any subsidiary of the Company with any party,
\n(B) any sale, lease or transfer of any significant part of the assets of the
\nCompany or any subsidiary of the Company, (C) any reorganization,
\nrecapitalization, dissolution, liquidation or winding up of the Company or any
\nsubsidiary of the Company, (D) any material change in the capitalization of the
\nCompany or any subsidiary of the Company, or the corporate structure of the
\nCompany or any subsidiary of the Company, or (E) any other action that is
\nintended, or could reasonably be expected to, impede, interfere with, delay,
\npostpone, discourage or adversely affect the Merger or any of the other
\ntransactions contemplated by the Reorganization Agreement, and<\/p>\n
(iv) in favor of waiving any notice that may have been or may be
\nrequired relating to any reorganization of the Company or any subsidiary of the
\nCompany, any reclassification or recapitalization of the capital stock of the
\nCompany or any subsidiary of the Company, or any sale of assets, change of
\ncontrol, or acquisition of the Company or any subsidiary of the Company by any
\nother person, or any consolidation or merger of the Company or any subsidiary of
\nthe Company with or into any other person.<\/p>\n
The attorneys and proxies named above may not exercise this Proxy on any
\nother matter. The undersigned stockholder may vote the Shares on all other
\nmatters.<\/p>\n
Any obligation of the undersigned hereunder shall be binding upon the
\nsuccessors and assigns of the undersigned.<\/p>\n
-2-<\/p>\n
This Proxy is irrevocable (to the fullest extent permitted by law). This
\nProxy shall terminate, and be of no further force and effect, automatically upon
\nthe Expiration Date.<\/p>\n
Dated: ____________________<\/p>\n
Signature of Stockholder:______________________<\/p>\n
Print Name of Stockholder: ____________________<\/p>\n
[Signature Page to Irrevocable Proxy]<\/p>\n
EXHIBIT B
\n ———<\/p>\n
FORM OF COMPANY AFFILIATE AGREEMENT<\/p>\n
THIS COMPANY AFFILIATE AGREEMENT (this “Agreement”) is made and entered
\n ———
\ninto as of March [__], 2001, between Neptune, Inc., a Delaware corporation
\n(“Parent”), and the undersigned stockholder (“Affiliate”) of Ceres, Inc., a
\n——–
\nDelaware corporation (“Company”). Capitalized terms used but not otherwise
\n ——-
\ndefined herein shall have the meanings ascribed to them in the Reorganization
\nAgreement (as defined below).<\/p>\n
RECITALS
\n ——–<\/p>\n
A. The Company, Parent and Merger Sub (as defined below), have entered
\ninto an Agreement and Plan of Reorganization (the “Reorganization Agreement”)
\n ————————
\nwhich provides for the merger (the “Merger”) of Ceres Acquisition Corp., a
\n ——
\nwholly-owned subsidiary of Parent (“Merger Sub”), with and into the Company.
\n ———-
\nPursuant to the Merger, all issued and outstanding common stock, par value $.01
\nper share, of the Company (the “Company Common Stock”), as of the Effective Time
\n ——————–
\n(as defined in the Reorganization Agreement) will be converted into common
\nstock, par value $.10 per share, of Parent (“Parent Common Stock”) upon the
\n ——————-
\nterms and conditions set forth in the Reorganization Agreement;<\/p>\n
B. The execution and delivery of this Agreement by Affiliate is a material
\ninducement to Parent to enter into the Reorganization Agreement; and<\/p>\n
C. Affiliate has been advised that Affiliate may be deemed to be an
\n“affiliate” of Parent after the Merger as such term is defined in Rule 144 of
\nthe Rules and Regulations of the Securities and Exchange Commission (the
\n“Commission”).
\n———–<\/p>\n
NOW, THEREFORE, intending to be legally bound, the parties hereto agree as
\nfollows:<\/p>\n
1. Acknowledgments by Affiliate. The Affiliate understands and hereby
\n —————————-
\nacknowledges that the representations, warranties and covenants by the Affiliate
\nset forth herein shall be relied upon by Parent, the Company and their
\nrespective legal counsel, and that substantial losses and damages may be
\nincurred by such persons if the representations and warranties of the Affiliate
\ncontained herein are inaccurate or if the convenants of the Affiliate contained
\nherein are breached. Affiliate has carefully read this Agreement and the
\nReorganization Agreement and has had the opportunity to discuss the requirements
\nof this Agreement with Affiliate’s professional advisors, who Affiliate believes
\nare qualified to advise Affiliate with regard to such matters.<\/p>\n
2. Beneficial Ownership of Company Common Stock. The Affiliate is the sole
\n ——————————————–
\nbeneficial owner of the number of shares of Company Common Stock and options,
\nwarrants and rights to purchase Company Common Stock set forth next to its name
\non the signature page hereto (the “Affiliate Securities”). The Affiliate has the
\n ——————–
\nsole right to transfer such Affiliate Securities. The<\/p>\n
Affiliate Securities constitute all Securities of Company owned, beneficially or
\nof record, by the Affiliate. The Affiliate has not engaged in any sale or other
\ntransfer of the Affiliate Securities in contemplation of the Merger. All shares
\nof Company Common Stock and “Parent Common Stock” acquired by Affiliate
\nsubsequent to the date hereof (including shares of Parent Common Stock acquired
\nin the Merger) shall be subject to the provisions of this Agreement, to the
\nextent such provisions are then still applicable, as if held by Affiliate as of
\nthe date hereof.<\/p>\n
3. Compliance with Rule 145 and the Securities Act.
\n ———————————————–<\/p>\n
(a) Affiliate has been advised that (i) the issuance of shares of
\nParent Common Stock in connection with the Merger is expected to be effected
\npursuant to a registration statement on Form S-4 filed with the Commission in
\naccordance with the Securities Act of 1933, as amended (the “Securities Act”),
\nand the resale of such shares shall be subject to restrictions set forth in Rule
\n145 under the Securities Act (“Rule 145”), and (ii) Affiliate may be deemed to
\nbe an affiliate of the Company. Affiliate accordingly agrees not to sell,
\ntransfer or otherwise dispose of any Parent Common Stock issued to Affiliate in
\nthe Merger unless (i) such sale, transfer or other disposition is made in
\nconformity with the requirements of Rule 145(d) promulgated under the Securities
\nAct, (ii) such sale, transfer or other disposition is made pursuant to an
\neffective registration statement under the Securities Act or an appropriate
\nexemption from registration, (iii) Affiliate delivers to Parent a written
\nopinion of counsel, reasonably acceptable to Parent in form and substance, that
\nsuch sale, transfer or other disposition is otherwise exempt from registration
\nunder the Securities Act or (iv) an authorized representative of the Commission
\nshall have rendered written advice to Affiliate to the effect that the
\nCommission would take no action, or that the staff of the Commission would not
\nrecommend that the Commission take any action, with respect to the proposed
\ndisposition if consummated (the “No Action Correspondence”).<\/p>\n
(b) Parent shall give stop transfer instructions to its transfer agent
\nwith respect to any Parent Common Stock received by Affiliate in the Merger and
\nthere shall be placed on the certificates representing such Parent Common Stock,
\na legend stating in substance:<\/p>\n
“THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
\n TRANSACTION TO WHICH RULE 145 APPLIES AND MAY ONLY BE TRANSFERRED (A)
\n IN CONFORMITY WITH RULE 145(d), OR (B) PURSUANT TO AN EFFECTIVE
\n REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
\n OR (C) IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL, REASONABLY
\n ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT SUCH TRANSFER IS
\n EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
\n AMENDED.”<\/p>\n
The legend set forth above shall be removed (by delivery of a substitute
\ncertificate without such legend) and Parent shall instruct its transfer agent to
\nremove such legend, if Affiliate delivers to Parent (i) satisfactory written
\nevidence that the shares have been sold in compliance with Rule 145 (in which
\ncase, the substitute certificate shall be issued in the name of the transferee),
\n(ii) the No<\/p>\n
-2-<\/p>\n
Action Correspondence, or (iii) an opinion of counsel, in form and substance
\nreasonably satisfactory to Parent, to the effect that public sale of the shares
\nby the holder thereof is no longer subject to Rule 145.<\/p>\n
4. Termination. This Agreement shall be terminated and shall be of no
\n ———–
\nfurther force and effect in the event of the termination of the Reorganization
\nAgreement pursuant to Article VII of the Reorganization Agreement.<\/p>\n
5. Miscellaneous.
\n ————–<\/p>\n
(a) Waiver; Severability. No waiver by any party hereto of any condition
\n ——————–
\nor of any breach of any provision of this Agreement shall be effective unless in
\nwriting and signed by each party hereto. In the event that any provision of this
\nAgreement, or the application of any such provision to any person, entity or set
\nof circumstances, shall be determined to be invalid, unlawful, void or
\nunenforceable to any extent, the remainder of this Agreement, and the
\napplication of such provision to persons, entities or circumstances other than
\nthose as to which it is determined to be invalid, unlawful, void or
\nunenforceable, shall not be impaired or otherwise affected and shall continue to
\nbe valid and enforceable to the fullest extent permitted by law.<\/p>\n
(b) Binding Effect and Assignment. This Agreement and all of the
\n —————————–
\nprovisions hereof shall be binding upon and inure to the benefit of the parties
\nhereto and their respective successors and permitted assigns, but, except as
\notherwise specifically provided herein, neither this Agreement nor any of the
\nrights, interests or obligations of the parties hereto may be assigned by either
\nof the parties without prior written consent of the other party hereto.<\/p>\n
(c) Amendments and Modification. This Agreement may not be modified,
\n —————————
\namended, altered or supplemented except upon the execution and delivery of a
\nwritten agreement executed by the parties hereto.<\/p>\n
(d) Injunctive Relief. Each of the parties acknowledge that (i) the
\n —————–
\ncovenants and the restrictions contained in this Agreement are necessary,
\nfundamental, and required for the protection of Parent and the Company and to
\npreserve for Parent the benefits of the Merger; (ii) such covenants relate to
\nmatters which are of a special, unique, and extraordinary character that gives
\neach of such covenants a special, unique, and extraordinary value; and (iii) a
\nbreach of any such covenants or any other provision of this Agreement shall
\nresult in irreparable harm and damages to Parent and the Company which cannot be
\nadequately compensated by a monetary award. Accordingly, it is expressly agreed
\nthat in addition to all other remedies available at law or in equity, Parent and
\nthe Company shall be entitled to the immediate remedy of a temporary restraining
\norder, preliminary injunction, or such other form of injunctive or equitable
\nrelief as may be used by any court of competent jurisdiction to restrain or
\nenjoin any of the parties hereto from breaching any such covenant or provision
\nor to specifically enforce the provisions hereof.<\/p>\n
(e) Governing Law. This Agreement shall be governed by and construed,
\n ————-
\ninterpreted and enforced in accordance with the internal laws of the State of
\nDelaware without giving effect to any choice or conflict of law provision or
\nrule (whether of the State of Delaware or any<\/p>\n
-3-<\/p>\n
other jurisdiction) that would cause the application of the laws of any
\njurisdiction other than the State of Delaware.<\/p>\n
(f) Entire Agreement. This Agreement sets forth the entire understanding
\n —————-
\nof Affiliate and Parent relating to the subject matter hereof and supersedes all
\nprior agreements and understandings between Affiliate and Parent relating to the
\nsubject matter hereof.<\/p>\n
(g) Attorneys’ Fees. In the event of any legal actions or proceeding to
\n —————
\nenforce or interpret the provisions hereof, the prevailing party shall be
\nentitled to reasonable attorneys’ fees, whether or not the proceeding results in
\na final judgment.<\/p>\n
(h) Further Assurances. Affiliate shall execute and\/or cause to be
\n ——————
\ndelivered to Parent such instruments and other documents and shall take such
\nother actions as Parent may reasonably request to effectuate the intent and
\npurposes of this Agreement.<\/p>\n
(i) Third Party Reliance. Counsel to Parent and the Company shall be
\n ——————–
\nentitled to rely upon this Affiliate Agreement.<\/p>\n
(j) Survival. The representations, warranties, covenants and other
\n ——–
\nprovisions contained in this Agreement shall survive the Merger.<\/p>\n
(k) Notices. All notices and other communications pursuant to this
\n ——-
\nAgreement shall be in writing and deemed to be sufficient if contained in a
\nwritten instrument and shall be deemed given if delivered personally,
\ntelecopied, sent by nationally-recognized overnight courier or mailed by
\nregistered or certified mail (return receipt requested), postage prepaid, to the
\nparties at the following address (or at such other address for a party as shall
\nbe specified by like notice):<\/p>\n
If to Parent:
\n Neptune, Inc.<\/p>\n
Attention:
\n Telecopy No.:<\/p>\n
with a copy to:
\n Wilson Sonsini Goodrich & Rosati
\n Professional Corporation
\n 650 Page Mill Road
\n Palo Alto, California 94304-1050
\n Attention: John Donahue, Esq.
\n Telecopy No.:(650) 493-6811<\/p>\n
If to Affiliate: To the address for notice set forth on the signature
\n page hereof.<\/p>\n
-4-<\/p>\n
(l) Counterparts. This Agreement shall be executed in one or more
\n ————
\ncounterparts, each of which shall be deemed an original, and all of which
\ntogether shall constitute one and the same instrument.<\/p>\n
-5-<\/p>\n
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
\nexecuted on the day and year first above written.<\/p>\n
NEPTUNE, INC. AFFILIATE<\/p>\n
By:________________________ By:________________________________<\/p>\n
Name:______________________ Affiliate’s Address for Notice:<\/p>\n
Title:_____________________ ___________________________________<\/p>\n
___________________________________<\/p>\n
___________________________________<\/p>\n
Shares beneficially owned:<\/p>\n
_____ shares of Company Common Stock<\/p>\n
_____ shares of Company Common Stock
\n issuable upon exercise of outstanding
\n options, warrants and other rights<\/p>\n
_____ shares of Parent Common Stock<\/p>\n
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