\nMark Leslie President, CEO and Co-Chairman of Board
\nGeoffrey Squire Co-Chairman of Board and Executive Vice
\n President
\nFred van den Bosch Senior Vice President, Engineering
\nPeter Levine Vice President, Marketing
\nFred Crary Vice President, International and OEM Sales
\nPaul Sallaberry Vice President, North American Sales
\nKenneth Lonchar Chief Financial Officer and Vice President,
\n Finance
\nJay Jones Vice President, General Counsel and Secretary
\n<\/c><\/s><\/caption>\n<\/table>\n A-1-6
\n 7<\/p>\n
2. REPRESENTATIONS AND WARRANTIES OF OPENVISION<\/p>\n
Except as set forth in a letter dated the date of this Agreement, delivered
\nby OpenVision to VERITAS concurrently herewith, and certified by an officer of
\nOpenVision, on behalf of OpenVision, to be true, accurate and complete to the
\nbest of his knowledge (the “OpenVision Disclosure Letter”), OpenVision hereby
\nrepresents and warrants to VERITAS that:<\/p>\n
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. OpenVision, and
\neach of its subsidiaries set forth in Section 2.1 of the OpenVision Disclosure
\nLetter (the “OpenVision Subsidiaries”) (the OpenVision Subsidiaries being the
\nonly subsidiaries of OpenVision), is a corporation duly organized, validly
\nexisting and in good standing under the laws of the jurisdiction of its
\nincorporation, has all requisite corporate power and authority to own, lease and
\noperate its properties and to carry on its business as now being conducted, and
\nis duly qualified and in good standing to do business in each jurisdiction in
\nwhich the nature of its business or the ownership or leasing of its properties
\nmakes such qualification necessary, other than in such jurisdictions where the
\nfailure so to qualify would not have a Material Adverse Effect on OpenVision (as
\ndefined below). The OpenVision Disclosure Letter sets forth a correct and
\ncomplete list of the OpenVision Subsidiaries, the holders of record of each
\nOpenVision Subsidiary’s outstanding equity, and a correct and complete list of
\neach jurisdiction in which each of OpenVision and the OpenVision Subsidiaries is
\nduly qualified and in good standing to do business. OpenVision has delivered to
\nVERITAS or its counsel complete and correct copies of the Certificate of
\nIncorporation and Bylaws of OpenVision and will deliver to VERITAS or its
\ncounsel prior to the Closing Date the equivalent charter documents for each of
\nthe OpenVision Subsidiaries, in each case as amended to the date of this
\nAgreement. Other than the OpenVision Subsidiaries, OpenVision does not own,
\ndirectly or indirectly, any capital stock or other equity interest of any
\ncorporation or have any direct or indirect equity or ownership interest in any
\nother business, whether organized as a corporation, partnership, joint venture
\nor otherwise.<\/p>\n
In this Agreement, any reference to the term “Material Adverse Effect on
\nOpenVision” means any event, change or effect which would have a material
\nadverse effect on the business, assets (including intangible assets), financial
\ncondition, results of operations, or prospects of OpenVision and the OpenVision
\nSubsidiaries, taken as a whole. In addition, any reference to the terms “to
\nOpenVision’s knowledge” or “known to OpenVision” refers to the current actual
\nknowledge of any officer of OpenVision.<\/p>\n
2.2 CAPITAL STRUCTURE.<\/p>\n
(a) Stock and Options. The authorized capital stock of OpenVision
\nconsists of 50,000,000 shares of OpenVision Common Stock, $0.001 par value,
\n3,400,000 of which are designated Class B Common Stock, and 5,000,000 shares of
\nPreferred Stock, $0.01 par value (the “OpenVision Preferred Stock”). At the
\nclose of business on January 10, 1997, 15,475,774 shares of OpenVision Common
\nStock were issued and outstanding, 3,247,142 shares of OpenVision Class B Common
\nStock were issued and outstanding, no shares of OpenVision Common Stock were
\nheld by OpenVision in its treasury, 2,186,673 shares of OpenVision Common Stock
\nwere reserved for issuance upon the exercise of outstanding OpenVision Options,
\n910,082 shares of OpenVision Common Stock were available for the grant of
\nadditional awards under the OpenVision Plans, 12,500 shares of OpenVision Common
\nStock were reserved for issuance upon exercise of outstanding OpenVision
\nWarrants, and 200,808 shares of OpenVision Common Stock were reserved for
\nissuance pursuant to the OpenVision Stock Purchase Plan. No shares of OpenVision
\nPreferred Stock are issued or outstanding. All outstanding shares of OpenVision
\nCommon Stock are validly issued, fully paid and nonassessable and not subject to
\npreemptive rights by statute, the Certificate of Incorporation or Bylaws of
\nOpenVision, or any agreement or document to which OpenVision is a party or by
\nwhich it is bound. All outstanding shares of the capital stock of each of the
\nOpenVision Subsidiaries are validly issued, fully paid and nonassessable and are
\nowned by OpenVision or one of the OpenVision Subsidiaries free and clear of any
\nliens, security interests, pledges, agreements, claims, charges or encumbrances.
\nOpenVision has delivered to VERITAS a correct and complete list of each
\nOpenVision Option and OpenVision Warrant outstanding as of the date hereof,
\nincluding the name of the holder of such OpenVision Option or OpenVision
\nWarrant, the OpenVision Plan pursuant to which such OpenVision Option was
\nissued, the number of shares covered by such OpenVision Option or OpenVision
\nWarrant, the per share exercise price of such OpenVision Option or OpenVision
\nWarrant and the vesting<\/p>\n
A-1-7
\n 8<\/p>\n
commencement date and vesting schedule applicable to each such
\nOpenVision Option, including the number of shares vested as of the date of this
\nAgreement. OpenVision has further delivered to VERITAS a correct and complete
\nlist of the employees currently enrolled in the current Offering Period of the
\nOpenVision Stock Purchase Plan, the amount of the periodic payroll deduction
\nfrom each such employee’s compensation with respect to such plan, the aggregate
\namount of payroll deductions with respect to the current Purchase Period of such
\nplan for each such employee to date, and the fair market value (as determined in
\naccordance with the OpenVision Stock Purchase Plan) of the OpenVision Common
\nStock on the date of commencement of the current Offering Period. OpenVision has
\nalso delivered to VERITAS a correct and complete list of OpenVision Common Stock
\noutstanding as of the date hereof purchased pursuant to Restricted Stock Awards
\nunder OpenVision’s 1992 Stock Plan which are subject to a right of OpenVision to
\nrepurchase such shares, including the name of the holder of such stock, the
\npurchase price of such stock and the vesting commencement date and vesting
\nschedule relating to such stock providing for the lapse of OpenVision’s
\nrepurchase rights, including the number of shares vested as of the date of this
\nAgreement.<\/p>\n
(b) No Other Commitments. Except for the OpenVision Options, OpenVision
\nWarrants and OpenVision Stock Purchase Plan Options disclosed in Section 2.2(a)
\nabove, a list of which has been provided to VERITAS, there are no options,
\nwarrants, calls, rights, commitments, conversion rights or agreements of any
\ncharacter to which OpenVision or any of the OpenVision Subsidiaries is a party
\nor by which OpenVision or any of the OpenVision Subsidiaries is bound obligating
\nOpenVision or any of the OpenVision Subsidiaries to issue, deliver or sell, or
\ncause to be issued, delivered or sold, any shares of capital stock of OpenVision
\nor any of the OpenVision Subsidiaries or securities convertible into or
\nexchangeable for shares of capital stock of OpenVision or any of the OpenVision
\nSubsidiaries, or obligating OpenVision or any of the OpenVision Subsidiaries to
\ngrant, extend or enter into any such option, warrant, call, right, commitment,
\nconversion right or agreement. There are no voting trusts or other agreements or
\nunderstandings to which OpenVision is a party with respect to the voting of the
\ncapital stock of OpenVision or any of the OpenVision Subsidiaries.<\/p>\n
(c) Registration Rights. OpenVision is not under any obligation to
\nregister under the Securities Act any of its presently outstanding securities or
\nany securities that may be subsequently issued, except as disclosed in the
\nOpenVision Disclosure Letter.<\/p>\n
2.3 AUTHORITY.<\/p>\n
(a) Corporate Action. Subject to approval of this Agreement and the
\nMerger by the stockholders of OpenVision, OpenVision has all requisite corporate
\npower and authority to enter into this Agreement and the OpenVision Agreement of
\nMerger, to perform its obligations hereunder and to consummate the Merger and
\nthe other transactions contemplated by this Agreement. The execution and
\ndelivery of this Agreement and the OpenVision Agreement of Merger by OpenVision
\nand, subject to approval of this Agreement and the Merger by the stockholders of
\nOpenVision, the filing and recordation of the OpenVision Agreement of Merger
\npursuant to Delaware Law and the consummation by OpenVision of the Merger and
\nthe other transactions contemplated hereby have been duly authorized by all
\nnecessary corporate action on the part of OpenVision. This Agreement has been,
\nand upon the Closing Date the OpenVision Agreement of Merger will have been,
\nduly executed and delivered by OpenVision and this Agreement is, and the
\nOpenVision Agreement of Merger as of the Effective Time will be, valid and
\nbinding obligations of OpenVision, enforceable in accordance with their terms,
\nexcept as enforceability may be limited by bankruptcy and other similar laws and
\ngeneral principles of equity.<\/p>\n
(b) No Conflict. Neither the execution, delivery and performance of this
\nAgreement or the OpenVision Agreement of Merger, nor the consummation of the
\ntransactions contemplated hereby or thereby nor compliance with the provisions
\nhereof or thereof will: (i) conflict with, or result in any violations of, or
\ncause a default (with or without notice or lapse of time, or both) under, or
\ngive rise to a right of termination, amendment, cancellation or acceleration of
\nany obligation contained in, or the loss of any material benefit under, or
\nresult in the creation of any lien, security interest, charge or encumbrance
\nupon any of the material properties or assets of OpenVision or any of the
\nOpenVision Subsidiaries under, any term, condition or provision of (x) the
\nCertificate of Incorporation or Bylaws of OpenVision or the equivalent
\norganizational documents of any of the OpenVision Subsidiaries or (y) any loan
\nor credit agreement, note, bond, mortgage,<\/p>\n
A-1-8
\n 9<\/p>\n
indenture, lease or other material agreement, judgment, order, decree, statute,
\nlaw, ordinance, rule or regulation applicable to OpenVision or any of the
\nOpenVision Subsidiaries or their respective properties or assets, other than any
\nsuch conflicts, violations, defaults, rights, losses, liens, security interests,
\ncharges or encumbrances which, individually or in the aggregate, would not have
\na Material Adverse Effect on OpenVision; or (ii) require the affirmative vote of
\nthe holders of greater than a majority of the issued and outstanding shares of
\nOpenVision Common Stock.<\/p>\n
(c) Governmental Consents. No consent, approval, order or authorization
\nof, or registration, declaration or filing with, any court, administrative
\nagency or commission or other governmental authority or instrumentality,
\ndomestic or foreign (each a “Governmental Entity”), is required to be obtained
\nby OpenVision or any of the OpenVision Subsidiaries in connection with the
\nexecution and delivery of this Agreement or the OpenVision Agreement of Merger,
\nor the consummation of the transactions contemplated hereby or thereby, except
\nfor: (i) the filing with the SEC, and the effectiveness, of the Form S-4, and
\nthe filing of the Prospectus\/Proxy Statement relating to the meeting of the
\nstockholders of OpenVision (the “OpenVision Stockholders Meeting”) to be held
\nwith respect to the approval by OpenVision’s stockholders of this Agreement and
\nthe Merger, and the filing of such reports and information under the Exchange
\nAct, and the rules and regulations promulgated by the SEC thereunder, as may be
\nrequired in connection with this Agreement and the transactions contemplated
\nhereby; (ii) the filing of the OpenVision Agreement of Merger with the Secretary
\nof State of the State of Delaware and appropriate documents with the relevant
\nauthorities of other states in which OpenVision is qualified to do business;
\n(iii) such filings, authorizations, orders and approvals as may be required
\nunder state “control share acquisition,” “anti-takeover,” “blue sky” or other
\nsimilar statutes and regulations (collectively, “State Takeover Laws”); (iv)
\nsuch filings and notifications as may be necessary under the HSR Act; and (v)
\nsuch other filings, authorizations, orders and approvals which, if not obtained
\nor made, would not have a Material Adverse Effect on OpenVision or VERITAS or
\nhave a material adverse effect on the ability of the parties to consummate the
\nMerger.<\/p>\n
2.4 SEC DOCUMENTS.<\/p>\n
(a) SEC Reports. OpenVision has delivered to VERITAS or its counsel
\ncorrect and complete copies of each report, schedule, registration statement and
\ndefinitive proxy statement filed by OpenVision with the SEC on or after May 7,
\n1996 (the “OpenVision SEC Documents”), which are all the documents (other than
\npreliminary material) that OpenVision was required to file with the SEC on or
\nafter May 7, 1996. As of their respective dates or, in the case of registration
\nstatements, their effective dates, none of the OpenVision SEC Documents
\n(including all exhibits and schedules thereto and documents incorporated by
\nreference therein) contained any untrue statement of a material fact or omitted
\nto state a material fact required to be stated therein or necessary in order to
\nmake the statements therein, in light of the circumstances under which they were
\nmade, not misleading, and there is no requirement under the Securities Act or
\nthe Exchange Act, as the case may be, to have amended any such filing. The
\nOpenVision SEC Documents complied, when filed, in all material respects with the
\nthen applicable requirements of the Securities Act or the Exchange Act, as the
\ncase may be, and the rules and regulations promulgated by the SEC thereunder.
\nOpenVision has filed all documents and agreements which were required to be
\nfiled as exhibits to the OpenVision SEC Documents.<\/p>\n
(b) Financial Statements. The financial statements of OpenVision
\nincluded in the OpenVision SEC Documents complied as to form in all material
\nrespects with the then applicable accounting requirements and the published
\nrules and regulations of the SEC with respect thereto, were prepared in
\naccordance with generally accepted accounting principles (“GAAP”) applied on a
\nconsistent basis during the periods involved (except as may have been indicated
\nin the notes thereto) and fairly present (subject, in the case of the unaudited
\nstatements, to normal year-end audit adjustments) the consolidated financial
\nposition of OpenVision and its consolidated OpenVision Subsidiaries as at the
\nrespective dates thereof and the consolidated results of their operations and
\ncash flows for the respective periods then ended.<\/p>\n
2.5 INFORMATION SUPPLIED. None of the information supplied or to be
\nsupplied by OpenVision for inclusion or incorporation by reference in the Form
\nS-4 and Prospectus\/Proxy Statement will, at the time the Form S-4 is declared
\neffective, at the date the Prospectus\/Proxy Statement is mailed to the
\nstockholders of OpenVision and at the time of the OpenVision Stockholders
\nMeeting contain, after giving effect to any<\/p>\n
A-1-9
\n 10<\/p>\n
supplement or amendment thereto, any untrue statement of a material fact or omit
\nto state any material fact required to be stated therein or necessary to make
\nthe statements therein, in light of the circumstances under which they are made,
\nnot misleading. The Prospectus\/Proxy Statement will comply as to form in all
\nmaterial respects with the provisions of the Exchange Act and the rules and
\nregulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
\nOpenVision makes no representation or warranty with respect to any information
\nsupplied by VERITAS or Newco which is contained in any of the foregoing
\ndocuments.<\/p>\n
2.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the OpenVision
\nSEC Documents filed prior to the date of this Agreement, the businesses of
\nOpenVision and the OpenVision Subsidiaries are not being conducted in violation
\nof any law, ordinance, regulation, rule or order of any Governmental Entity
\nwhere such violation would have a Material Adverse Effect on OpenVision. Except
\nas disclosed in the OpenVision SEC Documents filed prior to the date of this
\nAgreement, OpenVision has not been notified in writing by any Governmental
\nEntity that any investigation or review with respect to OpenVision or any of the
\nOpenVision Subsidiaries is pending or threatened, nor has any Governmental
\nEntity notified OpenVision in writing of its intention to conduct the same,
\nwhich investigation or review could reasonably be expected to have a Material
\nAdverse Effect on OpenVision. OpenVision and the OpenVision Subsidiaries have
\nall permits, licenses and franchises from Governmental Entities required to
\nconduct their businesses as now being conducted, except for those whose absence
\nwould not have a Material Adverse Effect on OpenVision.<\/p>\n
2.7 LITIGATION. Except as disclosed in the OpenVision SEC Documents filed
\nprior to the date of this Agreement, or as would not reasonably be expected to
\nhave a Material Adverse Effect on OpenVision, there is no suit, action,
\narbitration, demand, claim or proceeding pending or, to the knowledge of
\nOpenVision, threatened against OpenVision or any of the OpenVision Subsidiaries;
\nnor is there any judgment, decree, injunction, ruling or order of any
\nGovernmental Entity or arbitrator or settlement agreement outstanding against
\nOpenVision or any of the OpenVision Subsidiaries. OpenVision has delivered or
\nmade available to VERITAS or its counsel correct and complete copies of all
\ncorrespondence prepared by its counsel for OpenVision’s auditors in connection
\nwith the last two completed audits of OpenVision’s financial statements and any
\nsuch correspondence since the date of the last such audit. Neither OpenVision
\nnor any of the OpenVision Subsidiaries is a party to any decree, order or
\narbitration award (or agreement entered into in any administrative, judicial or
\narbitration proceeding with any governmental authority) with respect to its
\nproperties, assets, personnel or business activities which could reasonably be
\nexpected to have a Material Adverse Effect on OpenVision. OpenVision is not in
\nviolation of, or delinquent in respect of, any decree, order or arbitration
\naward naming OpenVision or a OpenVision Subsidiary as a party or otherwise known
\nto it, or law, ordinance, statute, or governmental authority to which its
\nproperties, assets, personnel or business activities are subject or to which
\nOpenVision or a OpenVision Subsidiary is subject, including, without limitation,
\nlaws, rules and regulations relating to occupational health and safety, equal
\nemployment opportunities, fair employment practices, and sex, race, religious
\nand age discrimination, except for such violations as would not have a Material
\nAdverse Effect on OpenVision.<\/p>\n
2.8 ERISA AND OTHER COMPLIANCE.<\/p>\n
(a) The OpenVision Disclosure Letter lists all the employees of
\nOpenVision and of any OpenVision Subsidiary and their salaries or base wage as
\nof December 31, 1996. The OpenVision Disclosure Letter also identifies each
\n“employee benefit plan,” as defined in Section 3(3) of the Employee Retirement
\nIncome Security Act of 1974, as amended (“ERISA”), currently or previously
\nmaintained, contributed to or entered into by OpenVision or any of the
\nOpenVision Subsidiaries under which OpenVision or any of the OpenVision
\nSubsidiaries or any ERISA Affiliate (as defined below) thereof has any present
\nor future obligation or liability (collectively, the “OpenVision Employee
\nPlans”). For purposes of this Section 2.8, “ERISA Affiliate” shall mean any
\nentity which is a member of (A) a “controlled group of corporations,” as defined
\nin Section 414(b) of the Code, (B) a group of entities under “common control,”
\nas defined in Section 414(c) of the Code, or (C) an “affiliated service group,”
\nas defined in Section 414(m) of the Code, or treasury regulations promulgated
\nunder Section 414(o) of the Code, any of which includes OpenVision or any of the
\nOpenVision Subsidiaries. Copies of all OpenVision Employee Plans (and, if
\napplicable, related trust agreements) and all amendments thereto and written
\ninterpretations thereof (including summary plan descriptions) have been
\ndelivered to VERITAS or its counsel, together with the three most recent annual
\nreports (Form 5500,<\/p>\n
A-1-10
\n 11<\/p>\n
including, if applicable, the auditor’s reports and any Schedule B thereto)
\nprepared in connection with any such OpenVision Employee Plan. All OpenVision
\nEmployee Plans which individually or collectively would constitute an “employee
\npension benefit plan,” as defined in Section 3(2) of ERISA (collectively, the
\n“OpenVision Pension Plans”), are identified as such in the OpenVision Disclosure
\nLetter. All OpenVision Employee Plans which individually or collectively would
\nconstitute an “employee welfare benefit plan,” as defined in Section 3(1) of
\nERISA are identified as such in the OpenVision Disclosure Letter. All
\ncontributions or premiums due from OpenVision or any of the OpenVision
\nSubsidiaries with respect to any of the OpenVision Employee Plans have been made
\nas required under ERISA or have been accrued on OpenVision’s or any such
\nOpenVision Subsidiary’s financial statements as of September 30, 1996, or will
\nbe made prior to the Closing. Each OpenVision Employee Plan has been maintained
\nin compliance with its terms and with the requirements prescribed by any and all
\nstatutes, orders, rules and regulations, including, without limitation, ERISA
\nand the Code, which are applicable to such OpenVision Employee Plans, except as
\nwould not have a Material Adverse Effect on OpenVision.<\/p>\n
(b) No OpenVision Pension Plan constitutes, or has since the enactment
\nof ERISA constituted, a “multiemployer plan,” as defined in Section 3(37) of
\nERISA. No OpenVision Pension Plans are subject to Title IV of ERISA. No
\n“prohibited transaction,” as defined in Section 406 of ERISA or Section 4975 of
\nthe Code, has occurred with respect to any OpenVision Employee Plan which is
\ncovered by Title I of ERISA which would result in a material liability to
\nOpenVision or any of the OpenVision Subsidiaries taken individually, excluding
\ntransactions effected pursuant to a statutory or administrative exemption.
\nNothing done or omitted to be done and no transaction or holding of any asset
\nunder or in connection with any OpenVision Employee Plan has or will make
\nOpenVision or any employee, officer or director of OpenVision subject to any
\nmaterial liability under Title I of ERISA or liable for any material Tax (as
\ndefined in Section 2.14) or penalty pursuant to Sections 4972, 4975, 4976, 4977
\nor 4979 of the Code or Section 502 of ERISA.<\/p>\n
(c) With respect to each OpenVision Pension Plan that is intended to be
\nqualified under Section 401(a) of the Code (a “OpenVision 401(a) Plan”), either
\n(i) a favorable determination letter has been received from the Internal Revenue
\nService (“IRS”) as to the qualification of the OpenVision 401(a) Plan under the
\nCode as in effect immediately after the Tax Reform Act of 1986, or (ii) the
\nOpenVision 401(a) Plan has been established under a standardized prototype plan
\nfor which an Internal Revenue Service opinion letter has been obtained and upon
\nwhich the OpenVision 401(a) Plan may rely. OpenVision has delivered to VERITAS
\nor its counsel a complete and correct copy of the most recent Internal Revenue
\nService determination letter with respect to each OpenVision 401(a) Plan.<\/p>\n
(d) No OpenVision Employee Plan provides or ever has provided death,
\nmedical or health benefits (whether or not insured) with respect to current or
\nformer employees after any such employee’s retirement or other termination of
\nservice (other than benefit coverage mandated by applicable law, including,
\nwithout limitation, coverage provided pursuant to Section 4980B of the Code).<\/p>\n
(e) The OpenVision Disclosure Letter lists each employment, severance,
\ncompensation or other similar contract, arrangement or policy and each plan or
\narrangement (written or oral) providing for insurance coverage (including any
\nself-insured arrangements), workers’ benefits, vacation benefits, severance
\nbenefits, disability benefits, death benefits, hospitalization benefits,
\nretirement benefits, deferred compensation, profit-sharing, bonuses, stock
\noptions, stock purchase, phantom stock, stock appreciation or other forms of
\nincentive compensation or post-retirement insurance, compensation or benefits
\nfor employees, consultants or directors (other than workers compensation,
\nunemployment compensation and other government mandated programs) which (A) is
\nnot a OpenVision Employee Plan, (B) is entered into, maintained or contributed
\nto, as the case may be, by OpenVision or any of the OpenVision Subsidiaries, and
\n(C) covers any employee or former employee of OpenVision or any of the
\nOpenVision Subsidiaries. Such contracts, plans and arrangements as are described
\nin this Section 2.8(e) are herein referred to collectively as the “OpenVision
\nBenefit Arrangements.” Each OpenVision Benefit Arrangement has been maintained
\nin substantial compliance with its terms and with the requirements prescribed by
\nany and all statutes, orders, rules and regulations which are applicable to such
\nOpenVision Benefit Arrangement. OpenVision has delivered to VERITAS or its
\ncounsel a complete and<\/p>\n
A-1-11
\n 12<\/p>\n
correct copy of each OpenVision Benefit Arrangement document or, if such
\nOpenVision Benefit Arrangement is unwritten, a description thereof.<\/p>\n
(f) There has been no amendment to, written interpretation or
\nannouncement (whether or not written) by OpenVision or any of the OpenVision
\nSubsidiaries relating to any OpenVision Employee Plan or OpenVision Benefit
\nArrangement that would increase materially the expense of maintaining such
\nOpenVision Employee Plan or OpenVision Benefit Arrangement above the level of
\nthe expense incurred in respect thereof for the year ended June 30, 1996.<\/p>\n
(g) OpenVision has timely provided, or will have provided prior to the
\nClosing (as defined in Section 6.1), to individuals entitled thereto all
\nrequired notices and coverage pursuant to Section 4980B of the Code and the
\nConsolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),
\nwith respect to any “qualifying event” (as defined in Section 4980B(f)(3) of the
\nCode). OpenVision will timely provide to individuals entitled thereto all
\nrequired notices and coverage pursuant to Code Section 4980B and COBRA with
\nrespect to any “qualifying event” (as defined in Section 4980B(f)(3) of the
\nCode) occurring prior to and including the Closing Date. No material Tax payable
\non account of Section 4980B of the Code has been incurred with respect to any
\ncurrent or former employees (or their beneficiaries) of OpenVision or any of the
\nOpenVision Subsidiaries.<\/p>\n
(h) No benefit payable or which may become payable by OpenVision or any
\nof the OpenVision Subsidiaries pursuant to any OpenVision Employee Plan or any
\nOpenVision Benefit Arrangement or as a result of or arising under this Agreement
\nshall constitute an “excess parachute payment” (as defined in Section 280G(b)(1)
\nof the Code) which is subject to the imposition of an excise Tax under Section
\n4999 of the Code or which would not be deductible by reason of Section 280G of
\nthe Code.<\/p>\n
(i) OpenVision and each OpenVision Subsidiary is in compliance in all
\nmaterial respects with all applicable laws, agreements and contracts relating to
\nemployment, employment practices, wages, hours, and terms and conditions of
\nemployment, including, but not limited to, employee compensation matters, but
\nnot including ERISA.<\/p>\n
(j) OpenVision and each OpenVision Subsidiary has good labor relations
\nand has no knowledge of any facts indicating that the consummation of the
\ntransactions contemplated hereby will have a material adverse effect on labor
\nrelations, and has no knowledge that any of its key employees intends to leave
\nits or their employ.<\/p>\n
2.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither OpenVision nor any of the
\nOpenVision Subsidiaries has any liabilities or obligations of any nature
\n(matured or unmatured, fixed or contingent) which are, individually or in the
\naggregate, of a nature required to be disclosed on the face of a balance sheet
\nprepared in accordance with GAAP and are material to the business of OpenVision
\nand the OpenVision Subsidiaries, taken as a whole, except for such liabilities
\nor obligations as (i) were accrued or fully reserved against in the consolidated
\nbalance sheet of OpenVision at September 30, 1996 (the “OpenVision Balance
\nSheet”) or (ii) are of a normally recurring nature and were incurred after
\nSeptember 30, 1996 (the “OpenVision Balance Sheet Date”) in the ordinary course
\nof business consistent with past practice. As of the OpenVision Balance Sheet
\nDate, there were no material loss contingencies (as such term is used in
\nStatement of Financial Accounting Standards No. 5 issued by the Financial
\nAccounting Standards Board in March 1975) which are not adequately provided for
\nin the OpenVision Balance Sheet as required by said Statement No. 5.<\/p>\n
2.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
\nin the OpenVision SEC Documents filed prior to the date of this Agreement, since
\nthe OpenVision Balance Sheet Date there has not occurred:<\/p>\n
(a) any change not identified below that could reasonably be expected to
\nhave a Material Adverse Effect on OpenVision;<\/p>\n
(b) any amendments or changes in the Certificate of Incorporation or
\nBylaws of OpenVision;<\/p>\n
(c) any damage, destruction or loss, whether covered by insurance or
\nnot, materially and adversely affecting any of the material properties or the
\nbusiness of OpenVision;<\/p>\n
A-1-12
\n 13<\/p>\n
(d) any redemption, repurchase or other acquisition of shares of
\nOpenVision Common Stock by OpenVision (other than pursuant to arrangements with
\nterminated employees or consultants), or any declaration, setting aside or
\npayment of any dividend or other distribution (whether in cash, stock or
\nproperty) with respect to OpenVision Common Stock;<\/p>\n
(e) any increase in or modification of the compensation or benefits
\npayable or to become payable by OpenVision to any of its directors or employees,
\nexcept in the ordinary course of business, consistent with past practice;<\/p>\n
(f) other than as required by applicable statute or regulation, any
\nincrease in or modification of any bonus, pension, insurance or OpenVision
\nEmployee Plan or OpenVision Benefit Arrangement (including, but not limited to,
\nthe granting of stock options, restricted stock awards or stock appreciation
\nrights) made to, for or with any of its employees, other than (a) in the
\nordinary course of business, consistent with past practice, and (b) after the
\ndate of this Agreement, which is authorized, if required, pursuant to Section
\n4.3 below;<\/p>\n
(g) any acquisition or sale of a material amount of property or assets
\nof OpenVision, other than in the ordinary course of business, consistent with
\npast practice;<\/p>\n
(h) any alteration in any term of any outstanding security of OpenVision
\nincluding, but not limited to, acceleration of the vesting or any change in the
\nterms of any outstanding stock options;<\/p>\n
(i) other than in the ordinary course of business, consistent with past
\npractice, the total amount of which is not material, any (A) incurrence,
\nassumption or guarantee by OpenVision of any debt for borrowed money; (B)
\nissuance or sale of any securities convertible into or exchangeable for debt
\nsecurities of OpenVision; or (C) issuance or sale of options or other rights to
\nacquire from OpenVision, directly or indirectly, debt securities of OpenVision
\nor any securities convertible into or exchangeable for any such debt securities;<\/p>\n
(j) any creation or assumption by OpenVision of any mortgage, pledge,
\nsecurity interest, lien or other encumbrance on any asset, other than in the
\nordinary course of business, consistent with past practice, not in excess of
\n$100,000 in the aggregate;<\/p>\n
(k) any making of any loan, advance or capital contribution to or
\ninvestment in any person other than (i) loans, advances or capital contributions
\nmade in the ordinary course of business of OpenVision and (ii) other loans and
\nadvances, where the aggregate amount of all such items outstanding at any time
\ndoes not exceed $50,000;<\/p>\n
(l) any entering into, amendment of, relinquishment, termination or
\nnon-renewal by OpenVision of any material contract, lease transaction,
\ncommitment or other right or obligation other than in the ordinary course of
\nbusiness;<\/p>\n
(m) any transfer or grant of a right under the OpenVision IP Rights (as
\ndefined in Section 2.15 below), other than those transferred or granted in the
\nordinary course of business, consistent with past practices, except for any
\ngrant of a right to OpenVision source code or the grant of any exclusive rights
\nto any OpenVision IP Rights, each of which shall be set forth in the OpenVision
\nDisclosure Letter;<\/p>\n
(n) any labor dispute or charge of unfair labor practice (other than
\nroutine individual grievances), any activity or proceeding by a labor union or
\nrepresentative thereof to organize any employees of OpenVision or, to
\nOpenVision’s knowledge, any campaign being conducted to solicit authorization
\nfrom employees to be represented by such labor union; or<\/p>\n
(o) any agreement by OpenVision or, to OpenVision’s knowledge, any
\nofficer or employee thereof, to take any of the actions described in the
\npreceding clauses (a) through (n) (other than negotiations with VERITAS and its
\nrepresentatives regarding the transactions contemplated by this Agreement).<\/p>\n
A-1-13
\n 14<\/p>\n
2.11 AGREEMENTS. The OpenVision Disclosure Letter sets forth a list of any
\nof the following currently effective contracts, agreements and other instruments
\nto which OpenVision or any OpenVision Subsidiary is a party, copies of each of
\nwhich have been delivered to VERITAS or its counsel:<\/p>\n
(a) contract with or commitment to any labor union;<\/p>\n
(b) continuing contract for the future purchase, sale or manufacture of
\nproducts, material, supplies, equipment or services requiring payment to or from
\nOpenVision or any OpenVision Subsidiary of an amount in excess of $100,000 per
\nannum which is not terminable on 120 days’ or less notice without cost or other
\nliability at, or at any time after, the Effective Time or in which OpenVision or
\nsuch OpenVision Subsidiary has granted or received manufacturing rights, most
\nfavored nations pricing provisions or exclusive marketing rights relating to any
\nproduct, group of products or territory, provided, however, that only purchase
\norders for the top ten (10) vendors of OpenVision (as measured by calendar year
\n1996 OpenVision purchases) are listed in the OpenVision Disclosure Letter;<\/p>\n
(c) contract providing for the development of technology for OpenVision
\nwhich technology is used or incorporated in any products currently distributed
\nby OpenVision or is anticipated to be used or incorporated in any planned
\nproducts of OpenVision or which requires OpenVision to perform specified
\ndevelopment work for a third party;<\/p>\n
(d) joint venture contract or agreement or other agreement which has
\ninvolved, or is reasonably expected to involve, a sharing of profits or losses
\nin excess of $25,000 per annum with any other party;<\/p>\n
(e) contract or commitment for the employment of any officer, employee
\nor consultant, or any other type of contract or understanding with any officer,
\nemployee or consultant, which is not immediately terminable without cost, notice
\nor other liability (except for normal severance benefits available to employees
\ngenerally as set forth in any OpenVision Benefit Arrangement and except to the
\nextent general principles of wrongful termination law may limit OpenVision’s or
\nany of OpenVision Subsidiaries’ ability to terminate employees at will);<\/p>\n
(f) indenture, mortgage, promissory note, loan agreement, guarantee or
\nother agreement or commitment for the borrowing of money, for a line of credit
\nor for a leasing transaction of a type required to be capitalized in accordance
\nwith Statement of Financial Accounting Standards No. 13 of the Financial
\nAccounting Standards Board (other than equipment leases entered into in the
\nordinary course of business pursuant to which payments by OpenVision do not
\nexceed $100,000 in the aggregate);<\/p>\n
(g) lease or other agreement under which OpenVision or any OpenVision
\nSubsidiary is lessee of or holds or operates any items of tangible personal
\nproperty or real property owned by any third party and under which payments to
\nsuch third party exceed $60,000 per annum;<\/p>\n
(h) agreement or arrangement for the sale of any assets, properties or
\nrights having a value in excess of $25,000, other than in the ordinary course of
\nbusiness consistent with past practice;<\/p>\n
(i) agreement which restricts OpenVision or any OpenVision Subsidiary
\nfrom engaging in any aspect of its business or competing in any line of business
\nin any geographic area (including any agreement pursuant to which OpenVision has
\ngranted exclusive rights to a third party);<\/p>\n
(j) OpenVision IP Rights Agreement (as defined in Section 2.15 below),
\nother than standard form license agreements with end users (copies of which have
\nbeen delivered to VERITAS or its counsel), and, in any event, any agreement that
\ngrants rights or access to any source code included in the OpenVision IP Rights;
\nor<\/p>\n
(k) agreement between or among OpenVision or any OpenVision Subsidiary
\nregarding inter company loans, revenue or cost sharing, ownership or license of
\nOpenVision IP Rights, inter company royalties or dividends or similar matters.<\/p>\n
The OpenVision Disclosure Letter further includes a schedule of the
\noutstanding maintenance and support obligations to be performed by OpenVision
\npursuant to any contract or other arrangement, including a description of such
\nobligations, the names of the customers for whom such obligations must be
\nperformed, the<\/p>\n
A-1-14
\n 15<\/p>\n
expiration date of such obligations and the fees payable to OpenVision in
\nrespect of performance of such obligations.<\/p>\n
2.12 NO DEFAULTS. Except as disclosed in the OpenVision SEC Documents
\nfiled prior to the date of this Agreement, to OpenVision’s knowledge, neither it
\nnor any of the OpenVision Subsidiaries is in default under, and there exists no
\nevent, condition or occurrence which, after notice or lapse of time, or both,
\nwould constitute such a default by OpenVision or any of the OpenVision
\nSubsidiaries under, any contract or agreement to which OpenVision or any of the
\nOpenVision Subsidiaries is a party and which would, if terminated or modified,
\nhave a Material Adverse Effect on OpenVision.<\/p>\n
2.13 CERTAIN AGREEMENTS. Neither the execution and delivery of this
\nAgreement nor the consummation of the transactions contemplated hereby will (i)
\nresult in any payment (including, without limitation, severance, unemployment
\ncompensation, golden parachute, bonus or otherwise) becoming due to any director
\nor employee of OpenVision or any of the OpenVision Subsidiaries from OpenVision
\nor any of the OpenVision Subsidiaries, under any OpenVision Employee Plan,
\nOpenVision Benefit Arrangement or otherwise, (ii) materially increase any
\nbenefits otherwise payable under any OpenVision Employee Plan or OpenVision
\nBenefit Arrangement or (iii) result in the acceleration of the time of payment
\nor vesting of any such benefits.<\/p>\n
2.14 TAXES. OpenVision and each of the OpenVision Subsidiaries have filed,
\nor caused to be filed, all Tax (as defined below) returns required to be filed
\nby them (all of which returns were true, correct and complete in all material
\nrespects) and have paid or withheld, or caused to be paid or withheld, all Taxes
\nthat are shown on such Tax returns as due and payable, other than such Taxes as
\nare being contested in good faith and for which adequate reserves have been
\nestablished on the OpenVision Balance Sheet and other than where the failure to
\nso file, pay or withhold would not have a Material Adverse Effect on OpenVision.
\nAll Taxes required to have been paid or accrued by OpenVision and the OpenVision
\nSubsidiaries for all periods prior to the OpenVision Balance Sheet Date have
\nbeen fully paid or are adequately provided for or reflected in the OpenVision
\nBalance Sheet. Since the OpenVision Balance Sheet Date, no material Tax
\nliability has been assessed, proposed to be assessed, incurred or accrued other
\nthan in the ordinary course of business. Neither OpenVision nor any OpenVision
\nSubsidiary has received any notification that any material issues have been
\nraised (and are currently pending) by the Internal Revenue Service or any other
\ntaxing authority, including, without limitation, any sales tax authority, in
\nconnection with any of the Tax returns referred to in the first sentence of this
\nSection 2.14, and no waivers of statutes of limitations have been given or
\nrequested with respect to OpenVision or any of the OpenVision Subsidiaries. No
\ntaxing authority is currently conducting an audit of any Tax returns of
\nOpenVision or, to OpenVision’s knowledge, about to conduct such an audit. Any
\ndeficiencies asserted or assessments (including interest and penalties) made as
\na result of any examination by the Internal Revenue Service or by appropriate
\nnational, state or departmental authorities of the Tax returns of or with
\nrespect to OpenVision or any of the OpenVision Subsidiaries have been fully paid
\nor are adequately provided for in the OpenVision Balance Sheet and no material
\nproposed (but unassessed) additional Taxes have been asserted and no Tax liens
\nhave been filed other than for Taxes not yet due and payable. None of OpenVision
\nor any of the OpenVision Subsidiaries (i) has made an election to be treated as
\na “consenting corporation” under Section 341(f) of the Code or (ii) is a
\n“personal holding company” within the meaning of Section 542 of the Code.<\/p>\n
As used in this Agreement, “Tax” means any of the Taxes and “Taxes” means,
\nwith respect to any entity, (A) all income taxes (including any tax on or based
\nupon net income, gross income, income as specially defined, earnings, profits or
\nselected items of income, earnings or profits) and all gross receipts, sales,
\nuse, ad valorem, transfer, franchise, license, withholding, payroll, employment,
\nexcise, severance, stamp, occupation, premium, property or windfall profits
\ntaxes, alternative or add-on minimum taxes, customs duties or other taxes, fees,
\nassessments or charges of any kind whatsoever, together with any interest and
\nany penalties or additional amounts imposed by any taxing authority (domestic or
\nforeign) on such entity, and (B) any liability for the payment of any amount of
\nthe type described in the immediately preceding clause (A) as a result of being
\na “transferee” (within the meaning of Section 6901 of the Code or of any other
\napplicable law) of another entity or a member of an affiliated or combined
\ngroup.<\/p>\n
A-1-15
\n 16<\/p>\n
2.15 INTELLECTUAL PROPERTY.<\/p>\n
(a) The OpenVision Disclosure Letter contains a complete and accurate
\nlist of all United States and foreign: (i) patents; (ii) copyright registrations
\nand mask work registrations; (iii) trademarks registrations and trademark
\nintent-to-use registrations; (iv) registered user licenses; (v) all
\napplications, provisional applications or other filings for or to obtain any of
\nthe foregoing, and (vi) any other similar registrations or applications for
\nIntellectual Property Rights (as defined below) owned by, or filed by or on
\nbehalf of, OpenVision or any of the OpenVision Subsidiaries anywhere in the
\nworld (all of the foregoing, “OpenVision Registered Intellectual Property”).<\/p>\n
(b) The OpenVision Disclosure Letter contains a complete and accurate
\nlist of all material software programs and other products sold or licensed by
\nOpenVision or any of the OpenVision Subsidiaries.<\/p>\n
(c) All OpenVision Intellectual Property Rights are owned free and clear
\nof any liens, encumbrances or security interests.<\/p>\n
(d) OpenVision and the OpenVision Subsidiaries own, or have the right to
\nuse, sell or license such Intellectual Property Rights (as defined below) as are
\nnecessary or required for the conduct of their respective businesses as
\npresently conducted (such Intellectual Property Rights being hereinafter
\ncollectively referred to as the “OpenVision IP Rights”) and such ownership or
\nrights to use, sell or license are reasonably sufficient for such conduct of
\ntheir respective businesses, except for any failure to own or have the right to
\nuse, sell or license that would not have a Material Adverse Effect on
\nOpenVision;<\/p>\n
(e) The execution, delivery and performance of this Agreement and the
\nconsummation of the transactions contemplated hereby will not constitute a
\nmaterial breach of any material instrument or material agreement in respect of
\nany Intellectual Property Rights licensed by or to OpenVision (the “OpenVision
\nIP Rights Agreements”), will not cause the forfeiture or termination or give
\nrise to a right of forfeiture or termination of any OpenVision IP Right or
\nmaterially impair the right of OpenVision and the OpenVision Subsidiaries or the
\nOpenVision Surviving Corporation to use, sell or license any OpenVision IP Right
\nor portion thereof (except where such breach, forfeiture, termination or
\nimpairment would not have a Material Adverse Effect on OpenVision);<\/p>\n
(f) There are no royalties, honoraria, fees or other payments payable by
\nOpenVision to any person by reason of the ownership, use, license, purchase,
\nsale, disposition or acquisition of the OpenVision IP Rights (other than as set
\nforth in the OpenVision IP Rights Agreements listed in the OpenVision Disclosure
\nLetter);<\/p>\n
(g) To OpenVision’s knowledge, no third party is infringing or
\nmisappropriating any Intellectual Property Rights, including OpenVision
\nRegistered Intellectual Property, owned by OpenVision or any of the OpenVision
\nSubsidiaries.<\/p>\n
(h) Neither the manufacture, marketing, license, sale nor the intended
\nuse of any product currently licensed or sold by OpenVision or any of the
\nOpenVision Subsidiaries or currently under development by OpenVision or any of
\nthe OpenVision Subsidiaries violates any license or agreement between OpenVision
\nor any of the OpenVision Subsidiaries and any third party or infringes any
\nIntellectual Property Right of any other party; and there is no pending or, to
\nOpenVision’s knowledge, threatened claim or litigation contesting the validity,
\nownership or right to use, sell, license or dispose of any OpenVision IP Right,
\nnor has OpenVision received any notice asserting that any OpenVision IP Right or
\nthe proposed use, sale, license or disposition thereof conflicts or will
\nconflict with the rights of any other party, except for any violations,
\ninfringements, claims or litigation that would not have a Material Adverse
\nEffect on OpenVision, nor, to OpenVision’s knowledge, is there any basis for any
\nsuch assertion; and<\/p>\n
(i) OpenVision has taken reasonable and practicable steps designed to
\nsafeguard and maintain the secrecy and confidentiality of, and its proprietary
\nrights in, all material trade secrets or other confidential information
\nconstituting OpenVision IP Rights. To OpenVision’s knowledge, no current or
\nprior officers, employees or consultants of OpenVision or of any of the
\nOpenVision Subsidiaries claim an ownership interest in any OpenVision IP Rights
\nas a result of having been involved in the development of such property while
\nemployed by or consulting to OpenVision or of any of the OpenVision
\nSubsidiaries, or otherwise. All officers<\/p>\n
A-1-16
\n 17<\/p>\n
and development employees and, to OpenVision’s knowledge, all other employees
\nand consultants of OpenVision or any of the OpenVision Subsidiaries have
\nexecuted and delivered to OpenVision or the OpenVision Subsidiary an agreement
\nregarding the protection of proprietary information and the assignment to
\nOpenVision or the OpenVision Subsidiary of all Intellectual Property Rights
\narising from the services performed for OpenVision or the OpenVision Subsidiary
\nby such persons.<\/p>\n
As used herein, the term “Intellectual Property Rights” shall mean all
\nindustrial, intellectual property or other rights of a person in, to, or arising
\nout of: (i) any United States or foreign patent or any application therefor and
\nany and all reissues, divisions, continuations, renewals, extensions and
\ncontinuations-in-part thereof; (ii) inventions (whether patentable or not in any
\ncountry), invention disclosures, industrial designs, improvements, trade
\nsecrets, proprietary information, know-how, technology and technical data; (iii)
\ncopyrights, mask works, copyright registrations, mask work registrations, and
\napplications therefor in the United States or any foreign country, and all other
\nrights corresponding thereto throughout the world; (iv) United States or foreign
\nregistered or common law trademarks, service marks, trade dress, trade names,
\nlogos, intent-to-use registrations or notices, and applications to register or
\nuse any of the foregoing anywhere in the world; and (v) any other proprietary
\nrights in technology, including software, all source and object code,
\nalgorithms, architecture, structure, display screens, layouts, inventions,
\ndevelopment tools and all documentation and media constituting, describing or
\nrelating to the above, including, without limitation, manuals, memoranda,
\nrecords, business information, or trade marks, trade dress or names, anywhere in
\nthe world.<\/p>\n
2.16 FEES AND EXPENSES. Except for the fees and expenses set forth in
\nOpenVision’s engagement letter with Alex. Brown & Sons Incorporated, a copy of
\nwhich has been provided to VERITAS (the “Alex. Brown Engagement Letter”),
\nneither OpenVision nor any of the OpenVision Subsidiaries has paid or become
\nobligated to pay any fee or commission to any broker, finder or intermediary in
\nconnection with the transactions contemplated by this Agreement.<\/p>\n
2.17 INSURANCE. OpenVision and the OpenVision Subsidiaries maintain fire
\nand casualty, general liability, business interruption, directors and officers,
\nproduct liability and sprinkler and water damage insurance that OpenVision
\nbelieves to be reasonably prudent for its business. Correct and complete copies
\nof all such insurance policies presently in effect have been provided to VERITAS
\nor its counsel.<\/p>\n
2.18 OWNERSHIP OF PROPERTY. Except (a) as disclosed in the OpenVision SEC
\nDocuments filed prior to the date of this Agreement, (b) for liens for current
\nTaxes not yet delinquent or (c) for liens imposed by law and incurred in the
\nordinary course of business for obligations not yet due to carriers,
\nwarehousemen, laborers, material men and the like, OpenVision and each of the
\nOpenVision Subsidiaries owns its real and personal property free and clear of
\nall security interests, mortgages, liens, charges, claims, options and
\nencumbrances. All real and personal property of OpenVision and each of the
\nOpenVision Subsidiaries is in generally good repair and is operational and
\nusable in the operations of OpenVision, subject to ordinary wear and tear.
\nNeither OpenVision nor any OpenVision Subsidiary is in violation of any zoning,
\nbuilding or safety ordinance, regulation or requirement or other law or
\nregulation applicable to the operation of owned or leased properties (the
\nviolation of which would have a Material Adverse Effect on OpenVision), or has
\nreceived any notice of violation with which it has not complied, except where
\nsuch violation would not have a Material Adverse Effect on OpenVision.<\/p>\n
2.19 ENVIRONMENTAL MATTERS.<\/p>\n
(a) During the period that OpenVision and the OpenVision Subsidiaries
\nhave leased or owned their respective properties or owned or operated any
\nfacilities, there have been, to OpenVision’s knowledge, no disposals, releases
\nor threatened releases of Hazardous Materials (as defined below) on, from or
\nunder such properties or facilities. OpenVision has no knowledge of any
\npresence, disposals, releases or threatened releases of Hazardous Materials on,
\nfrom, under or about any of such properties or facilities, which may have
\noccurred prior to OpenVision or any of the OpenVision Subsidiaries having taken
\npossession of any of such properties or facilities. For the purposes of this
\nAgreement, the terms “disposal,” “release,” and “threatened release” shall have
\nthe definitions assigned thereto by the Comprehensive Environmental Response,
\nCompensation and Liability Act of 1980, 42 U.S.C. sec. 9601 et seq., as amended
\n(“CERCLA”). For the purposes of this Agreement “Hazardous Materials” shall mean
\nany hazardous or toxic substance, material or waste which is or<\/p>\n
A-1-17
\n 18<\/p>\n
becomes prior to the Closing regulated under, or defined as a “hazardous
\nsubstance,” “pollutant,” “contaminant,” “toxic chemical,” “hazardous materials,”
\n“toxic substance” or “hazardous chemical” under, (1) CERCLA; (2) any similar
\ninternational, federal, state or local law; or (3) regulations promulgated under
\nany of the above laws or statutes.<\/p>\n
(b) None of the properties or facilities of OpenVision or the OpenVision
\nSubsidiaries is or has been in violation of any federal, state or local law,
\nordinance, regulation or order relating to industrial hygiene or to the
\nenvironmental conditions on, above, under or about such properties or
\nfacilities, including, but not limited to, air, soil, ground water or surface
\nwater condition (“Environmental Violation”), except for such violations as would
\nnot, individually or in the aggregate, have a Material Adverse Effect on
\nOpenVision. During the time that OpenVision or the OpenVision Subsidiaries have
\nowned or leased their respective properties and facilities, neither OpenVision,
\nnor any of the OpenVision Subsidiaries, nor, to OpenVision’s knowledge, any
\nthird party, has used, generated, manufactured or stored on, under or about such
\nproperties or facilities or transported to or from such properties or facilities
\nany Hazardous Materials (except those Hazardous Materials associated with
\ngeneral office use or janitorial supplies).<\/p>\n
(c) During the time that OpenVision or the OpenVision Subsidiaries have
\nowned or leased their respective properties and facilities, there has been no
\nlitigation brought or, to OpenVision’s knowledge, threatened against OpenVision
\nor any of the OpenVision Subsidiaries by, or any settlement reached by
\nOpenVision or any of the OpenVision Subsidiaries with, any party or parties
\nalleging the presence, disposal, release or threatened release of any Hazardous
\nMaterials on, from or under any of such properties or facilities or relating to
\nany alleged Environmental Violation.<\/p>\n
2.20 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the OpenVision
\nSEC Documents filed prior to the date of this Agreement, no officer or director
\nof OpenVision or any “affiliate” or “associate” (as those terms are defined in
\nRule 405 promulgated under the Securities Act) of any such person has had,
\neither directly or indirectly, a material interest in: (i) any person or entity
\nwhich purchases from or sells, licenses or furnishes to OpenVision or any of the
\nOpenVision Subsidiaries any goods, property, technology or intellectual or other
\nproperty rights or services; or (ii) any contract or agreement to which
\nOpenVision or any of the OpenVision Subsidiaries is a party or by which it may
\nbe bound or affected.<\/p>\n
2.21 BOARD APPROVAL. The Board of Directors of OpenVision has unanimously
\n(i) approved this Agreement and the Merger, and (ii) determined that the Merger
\nis in the best interests of the stockholders of OpenVision and the terms of the
\nMerger are fair to such stockholders.<\/p>\n
2.22 VOTE REQUIRED. The affirmative vote of at least a majority of the
\nvotes that holders of the outstanding shares of OpenVision Common Stock are
\nentitled to cast is the only vote of the holders of any class or series of
\nOpenVision’s capital stock necessary to approve this Agreement and the Merger.<\/p>\n
2.23 DISCLOSURE. No representation or warranty made by OpenVision in this
\nAgreement, nor any document, written information, statement, financial
\nstatement, certificate or exhibit prepared and furnished or to be prepared and
\nfurnished by OpenVision or its representatives pursuant hereto or in connection
\nwith the transactions contemplated hereby, when taken together, contains any
\nuntrue statement of a material fact, or omits to state a material fact necessary
\nto make the statements or facts contained herein or therein not misleading in
\nlight of the circumstances under which there were furnished.<\/p>\n
2.24 FAIRNESS OPINION. OpenVision’s Board of Directors has received an
\nopinion as of the date hereof from Alex. Brown & Sons Incorporated to the effect
\nthat, as of the date hereof, the OpenVision Applicable Ratio is fair to
\nOpenVision’s stockholders from a financial point of view.<\/p>\n
3. REPRESENTATIONS AND WARRANTIES OF VERITAS AND NEWCO<\/p>\n
Except as set forth in a letter dated the date of this Agreement, delivered
\nby VERITAS and Newco to OpenVision concurrently herewith, and certified by an
\nofficer of VERITAS and Newco, on behalf of<\/p>\n
A-1-18
\n 19<\/p>\n
VERITAS and Newco, to be true, accurate and complete to the best of his
\nknowledge (the “VERITAS Disclosure Letter”), VERITAS and Newco hereby represent
\nand warrant to OpenVision that:<\/p>\n
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. VERITAS, Newco
\nand each of VERITAS’ subsidiaries set forth in Section 3.1 of the VERITAS
\nDisclosure Letter (the “VERITAS Subsidiaries”) (the VERITAS Subsidiaries being
\nthe only subsidiaries of VERITAS), is a corporation duly organized, validly
\nexisting and in good standing under the laws of the jurisdiction of its
\nincorporation, has all requisite corporate power and authority to own, lease and
\noperate its properties and to carry on its business as now being conducted, and
\nis duly qualified and in good standing to do business in each jurisdiction in
\nwhich the nature of its business or the ownership or leasing of its properties
\nmakes such qualification necessary, other than in such jurisdictions where the
\nfailure so to qualify would not have a Material Adverse Effect on VERITAS (as
\ndefined below). The VERITAS Disclosure Letter sets forth a correct and complete
\nlist of the VERITAS Subsidiaries and a correct and complete list of each
\njurisdiction in which each of VERITAS, Newco and the VERITAS Subsidiaries is
\nduly qualified and in good standing to do business. VERITAS has delivered to
\nOpenVision or its counsel complete and correct copies of the Articles of
\nIncorporation and Bylaws of VERITAS, the Certificate of Incorporation and Bylaws
\nof Newco and will deliver to OpenVision or its counsel prior to the Closing Date
\nthe equivalent charter documents of each of the VERITAS Subsidiaries, in each
\ncase as amended to the date of this Agreement. Newco does not own and, except
\nfor the VERITAS Subsidiaries, VERITAS does not own, directly or indirectly, any
\ncapital stock or other equity interest of any corporation or have any direct or
\nindirect equity or ownership interest in any other business, whether organized
\nas a corporation, partnership, joint venture or otherwise.<\/p>\n
In this Agreement, any reference to the term “Material Adverse Effect on
\nVERITAS” means any event, change or effect which would have a material adverse
\neffect on the business, assets (including intangible assets), financial
\ncondition, results of operations or prospects of VERITAS, Newco and the VERITAS
\nSubsidiaries, taken as a whole. In addition, any reference to the terms “to
\nVERITAS’ knowledge” or “known to VERITAS” refers to the current actual knowledge
\nof any officer of VERITAS.<\/p>\n
3.2 CAPITAL STRUCTURE.<\/p>\n
(a) Stock and Options. The authorized capital stock of VERITAS consists
\nof 25,000,000 shares of VERITAS Common Stock, no par value, and 10,000,000
\nshares of Preferred Stock, no par value (the “VERITAS Preferred Stock”). At the
\nclose of business on January 10, 1997, 13,543,926 shares of VERITAS Common Stock
\nwere issued and outstanding, no shares of VERITAS Common Stock were held by
\nVERITAS in its treasury, 1,838,379 shares of VERITAS Common Stock were reserved
\nfor issuance upon the exercise of outstanding VERITAS Options, 239,793 shares of
\nVERITAS Common Stock were available for the grant of additional awards under the
\n1993 Equity Incentive Plan, 55,000 shares of VERITAS Common Stock were available
\nfor the grant of additional awards under the 1993 Director Stock Option Plan,
\nand 383,835 shares of VERITAS Common Stock were reserved for issuance upon the
\nexercise of VERITAS Stock Purchase Plan Options. No shares of VERITAS Preferred
\nStock are issued or outstanding. All outstanding shares of VERITAS Common Stock
\nare validly issued, fully paid and nonassessable and not subject to preemptive
\nrights by statute, the Articles of Incorporation or Bylaws of VERITAS, or any
\nagreement or document to which VERITAS is a party or by which it is bound. All
\noutstanding shares of the capital stock of each of the VERITAS Subsidiaries are
\nvalidly issued, fully paid and nonassessable and are owned by VERITAS or one of
\nthe VERITAS Subsidiaries free and clear of any liens, security interests,
\npledges, agreements, claims, charges or encumbrances. VERITAS has delivered to
\nOpenVision a correct and complete list of each VERITAS Option outstanding as of
\nthe date hereof, including the name of the holder of such VERITAS Option, the
\nVERITAS Plan pursuant to which such VERITAS Option was issued (if applicable),
\nthe number of shares covered by such VERITAS Option, the per share exercise
\nprice of such VERITAS Option, and the vesting schedule applicable to each such
\nVERITAS Option, including the number of shares vested as of the date of this
\nAgreement. VERITAS has also delivered to OpenVision a correct and complete list
\nof the employees currently enrolled in the current Offering Period (as defined
\nin the VERITAS Stock Purchase Plan), the amount of the periodic payroll
\ndeduction from each such employee’s compensation with respect to such plan, the
\naggregate amount of payroll deductions with respect to the current Purchase
\nPeriod (as defined in the VERITAS Stock Purchase Plan) for each such employee to
\ndate and the fair market<\/p>\n
A-1-19
\n 20<\/p>\n
value (as determined in accordance with the VERITAS Stock Purchase Plan) of the
\nVERITAS Common Stock on the date of commencement of the current Offering Period.<\/p>\n
(b) Newco Capital. The authorized capital stock of Newco will consist of
\n75,000,000 shares of Newco Common Stock, $0.001 par value, and 10,000,000 shares
\nof Newco Preferred Stock, $0.001 par value, none of which shall be outstanding
\nimmediately prior to the Effective Time. Immediately prior to the Effective
\nTime, Newco shall have reserved shares of Newco Common Stock for
\nissuance pursuant to OpenVision’s Stock Purchase Plan, 4,100,000 shares of Newco
\nCommon Stock for issuance pursuant to Newco’s 1993 Equity Incentive Plan,
\n250,000 shares of Newco Common Stock for issuance pursuant to Newco’s 1993
\nDirector Stock Option Plan and 1,000,000 shares of Newco Common Stock for
\nissuance pursuant to Newco’s 1993 Employee Stock Purchase Plan, under which
\nNewco Plans there shall be no Newco options or purchase rights outstanding.<\/p>\n
(c) No Other Commitments. Except for the VERITAS Options and VERITAS
\nStock Purchase Plan Options disclosed in Section 3.2(a) above, a list of which
\nhas been provided to OpenVision, and except as provided in this Agreement, there
\nare no options, warrants, calls, rights, commitments, conversion rights or
\nagreements of any character to which VERITAS, Newco or any of the VERITAS
\nSubsidiaries is a party or by which VERITAS, Newco or any of the VERITAS
\nSubsidiaries is bound obligating VERITAS, Newco or any of the VERITAS
\nSubsidiaries to issue, deliver or sell, or cause to be issued, delivered or
\nsold, any shares of capital stock of VERITAS, Newco or any of the VERITAS
\nSubsidiaries or securities convertible into or exchangeable for shares of
\ncapital stock of VERITAS, Newco or any of the VERITAS Subsidiaries, or
\nobligating VERITAS, Newco or any of the VERITAS Subsidiaries to grant, extend or
\nenter into any such option, warrant, call, right, commitment, conversion right
\nor agreement. There are no voting trusts or other agreements or understandings
\nto which VERITAS or Newco is a party with respect to the voting of the capital
\nstock of VERITAS or Newco or any of the VERITAS Subsidiaries.<\/p>\n
(d) Registration Rights. Neither VERITAS nor Newco is under any
\nobligation to register under the Securities Act any of its presently outstanding
\nsecurities or any securities that may be subsequently issued, except as
\ndisclosed in the VERITAS Disclosure Letter.<\/p>\n
3.3 AUTHORITY.<\/p>\n
(a) Corporate Action. Subject to approval of this Agreement and the
\nMerger by the shareholders of VERITAS, VERITAS has all requisite corporate power
\nand authority to enter into this Agreement and the VERITAS Agreement of Merger,
\nand Newco has, or will have, all requisite corporate power and authority to
\nenter into this Agreement and the Agreements of Merger, to perform their
\nrespective obligations hereunder and thereunder and to consummate the Merger and
\nthe other transactions contemplated by this Agreement. The execution and
\ndelivery of this Agreement and the VERITAS Agreement of Merger by VERITAS, and
\nthe execution and delivery of this Agreement and the Agreements of Merger by
\nNewco, and, subject to approval of this Agreement and the Merger by the
\nshareholders of VERITAS, the filing and recordation of the Agreements of Merger
\npursuant to CGCL and the Delaware Law and the consummation by VERITAS and Newco
\nof the Merger and the other transactions contemplated hereby and thereby, have
\nbeen duly authorized by all necessary corporate action on the part of VERITAS
\nand Newco, respectively. This Agreement has been, and upon the Closing the
\nVERITAS Agreement of Merger will have been, duly executed and delivered by
\nVERITAS and this Agreement is, and the VERITAS Agreement of Merger as of the
\nEffective Time will be, the valid and binding obligations of VERITAS enforceable
\nin accordance with their terms, except as enforceability may be limited by
\nbankruptcy and other similar laws and general principles of equity. This
\nAgreement has been, and upon the Closing the Agreements of Merger will have
\nbeen, duly executed and delivered by Newco, and this Agreement is, and the
\nAgreements of Merger as of the Effective Time will be, the valid and binding
\nobligations of Newco, enforceable in accordance with their terms, except as
\nenforceability may be limited by bankruptcy and other similar laws and general
\nprinciples of equity.<\/p>\n
(b) No Conflict. Neither the execution, delivery and performance of this
\nAgreement, the VERITAS Agreement of Merger in the case of VERITAS, or the
\nAgreements of Merger in the case of Newco, nor the consummation of the
\ntransactions contemplated hereby or thereby nor compliance with the provisions
\nhereof or thereof will: (i) conflict with, or result in any violations of, or
\ncause a default (with or without notice<\/p>\n
A-1-20
\n 21<\/p>\n
or lapse of time, or both) under, or give rise to a right of termination,
\namendment, cancellation or acceleration of any obligation contained in, or the
\nloss of any material benefit under, or result in the creation of any lien,
\nsecurity interest, charge or encumbrance upon any of the material properties or
\nassets of VERITAS, Newco or any of the VERITAS Subsidiaries under, any term,
\ncondition or provision of (x) the Articles of Incorporation or Bylaws of
\nVERITAS, the Certificate of Incorporation or Bylaws of Newco, or the equivalent
\norganizational documents of any of the VERITAS Subsidiaries or (y) any loan or
\ncredit agreement, note, bond, mortgage, indenture, lease or other material
\nagreement, judgment, order, decree, statute, law, ordinance, rule or regulation
\napplicable to VERITAS, Newco or any of the VERITAS Subsidiaries or their
\nrespective properties or assets, other than any such conflicts, violations,
\ndefaults, rights, losses, liens, security interests, charges or encumbrances
\nwhich, individually or in the aggregate, would not have a Material Adverse
\nEffect on VERITAS; or (ii) require the affirmative vote of the holders of
\ngreater than a majority of the issued and outstanding shares of VERITAS Common
\nStock.<\/p>\n
(c) Governmental Consents. No consent, approval, order or authorization
\nof, or registration, declaration or filing with, any Governmental Entity is
\nrequired to be obtained by VERITAS, Newco or any of the VERITAS Subsidiaries in
\nconnection with the execution and delivery of this Agreement or the Agreements
\nof Merger, or the consummation of the transactions contemplated hereby or
\nthereby, except for: (i) the filing with the SEC, and the effectiveness, of the
\nForm S-4, the filing of the Prospectus\/Proxy Statement relating to the meeting
\nof the shareholders of VERITAS (the “VERITAS Shareholders Meeting”) to be held
\nwith respect to the approval by VERITAS’ shareholders of this Agreement and the
\nMerger, and the filing of the Form S-8, and such reports and information under
\nthe Exchange Act and the rules and regulations promulgated by the SEC
\nthereunder, including, but not limited to, the filing of a Form 8A by Newco with
\nthe SEC, as may be required in connection with this Agreement and the
\ntransactions contemplated hereby; (ii) the filing of the Agreements of Merger
\nwith the Secretary of State of the State of California and the Secretary of
\nState of the State of Delaware and appropriate documents with the relevant
\nauthorities of other states in which VERITAS or Newco is qualified to do
\nbusiness; (iii) such filings, authorizations, orders and approvals as may be
\nrequired under State Takeover Laws; (iv) such filings and notifications as may
\nbe necessary under the HSR Act; (v) such filings as may be required by the
\nNasdaq Stock Market with respect to the Newco Common Stock to be issued in
\nconnection with the Merger and the Stock Rights to be assumed by Newco in the
\nMerger; and (vi) such other filings, authorizations, orders and approvals which
\nif not obtained or made, would not have a Material Adverse Effect on VERITAS or
\nOpenVision or have a material adverse effect on the ability of the parties to
\nconsummate the Merger.<\/p>\n
3.4 SEC DOCUMENTS.<\/p>\n
(a) SEC Reports. VERITAS has delivered to OpenVision or its counsel
\ncorrect and complete copies of each report, schedule, registration statement and
\ndefinitive proxy statement filed by VERITAS with the SEC on or after January 1,
\n1995 (the “VERITAS SEC Documents”), which are all the documents (other than
\npreliminary material) that VERITAS was required to file with the SEC on or after
\nJanuary 1, 1995. As of their respective dates or, in the case of registration
\nstatements, their effective dates, none of the VERITAS SEC Documents (including
\nall exhibits and schedules thereto and documents incorporated by reference
\ntherein) contained any untrue statement of a material fact or omitted to state a
\nmaterial fact required to be stated therein or necessary in order to make the
\nstatements therein, in light of the circumstances under which they were made,
\nnot misleading, and there is no requirement under the Securities Act or the
\nExchange Act, as the case may be, to have amended any such filing. The VERITAS
\nSEC Documents complied, when filed, in all material respects with the then
\napplicable requirements of the Securities Act or the Exchange Act, as the case
\nmay be, and the rules and regulations promulgated by the SEC thereunder. VERITAS
\nhas filed all documents and agreements which were required to be filed as
\nexhibits to the VERITAS SEC Documents.<\/p>\n
(b) Financial Statements. The financial statements of VERITAS included
\nin the VERITAS SEC Documents complied as to form in all material respects with
\nthe then applicable accounting requirements and the published rules and
\nregulations of the SEC with respect thereto, were prepared in accordance with
\nGAAP applied on a consistent basis during the periods involved (except as may
\nhave been indicated in the notes thereto) and fairly present (subject, in the
\ncase of the unaudited statements, to normal year-end audit adjustments) the
\nconsolidated financial position of VERITAS and its consolidated VERITAS
\nSubsidiaries as<\/p>\n
A-1-21
\n 22<\/p>\n
at the respective dates thereof and the consolidated results of their operations
\nand cash flows for the respective periods then ended.<\/p>\n
3.5 INFORMATION SUPPLIED. None of the information supplied or to be
\nsupplied by VERITAS or Newco for inclusion or incorporation by reference in the
\nForm S-4 and Prospectus\/Proxy Statement will, at the time the Form S-4 is
\ndeclared effective, at the date the Prospectus\/Proxy Statement is mailed to the
\nstockholders of VERITAS and at the time of the VERITAS Shareholders Meeting,
\ncontain, after giving effect to any supplement or amendment thereto, any untrue
\nstatement of a material fact or omit to state any material fact required to be
\nstated therein or necessary to make the statements therein, in light of the
\ncircumstances under which they are made, not misleading. The Prospectus\/Proxy
\nStatement will comply as to form in all material respects with the provisions of
\nthe Exchange Act and the rules and regulations promulgated by the SEC
\nthereunder. Notwithstanding the foregoing, VERITAS and Newco make no
\nrepresentation or warranty with respect to any information supplied by
\nOpenVision which is contained in any of the foregoing documents.<\/p>\n
3.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the VERITAS
\nSEC Documents filed prior to the date of this Agreement, the businesses of
\nVERITAS and the VERITAS Subsidiaries are not being conducted in violation of any
\nlaw, ordinance, regulation, rule or order of any Governmental Entity where such
\nviolation would have a Material Adverse Effect on VERITAS. Except as disclosed
\nin the VERITAS SEC Documents filed prior to the date of this Agreement, VERITAS
\nhas not been notified in writing by any Governmental Entity that any
\ninvestigation or review with respect to VERITAS or any of the VERITAS
\nSubsidiaries is pending or threatened, nor has any Governmental Entity notified
\nVERITAS in writing of its intention to conduct the same, which investigation or
\nreview could reasonably be expected to have a Material Adverse Effect on
\nVERITAS. VERITAS, Newco and the VERITAS Subsidiaries have all material permits,
\nlicenses and franchises from Governmental Entities required to conduct their
\nbusinesses as now being conducted, except for those whose absence would not have
\na Material Adverse Effect on VERITAS.<\/p>\n
3.7 LITIGATION. Except as disclosed in the VERITAS SEC Documents filed
\nprior to the date of this Agreement, or as would not reasonably be expected to
\nhave a Material Adverse Effect on VERITAS, there is no suit, action,
\narbitration, demand, claim or proceeding pending or, to VERITAS’ knowledge,
\nthreatened against VERITAS, Newco or any of the VERITAS Subsidiaries; nor is
\nthere any judgment, decree, injunction, ruling or order of any Governmental
\nEntity or arbitrator or settlement agreement outstanding against VERITAS, Newco
\nor any of the VERITAS Subsidiaries. VERITAS has delivered or made available to
\nOpenVision or its counsel correct and complete copies of all correspondence
\nprepared by its counsel for VERITAS auditors in connection with the last two
\ncompleted audits of VERITAS’ financial statements and any such correspondence
\nsince the date of the last such audit. Neither VERITAS, Newco nor any of the
\nVERITAS Subsidiaries is a party to any decree, order or arbitration award (or
\nagreement entered into in any administrative, judicial or arbitration proceeding
\nwith any governmental authority) with respect to its properties, assets,
\npersonnel or business activities which could reasonably be expected to have a
\nMaterial Adverse Effect on VERITAS. Neither VERITAS nor Newco is in violation
\nof, or delinquent in respect of, any decree, order or arbitration award naming
\nVERITAS, Newco or a VERITAS Subsidiary as a party or otherwise known to them, or
\nlaw, ordinance, statute, or governmental authority to which their properties,
\nassets, personnel or business activities are subject or to which VERITAS, Newco
\nor a VERITAS Subsidiary is subject, including, without limitation, laws, rules
\nand regulations relating to occupational health and safety, equal employment
\nopportunities, fair employment practices, and sex, race, religious and age
\ndiscrimination, except for such violations as would not have a Material Adverse
\nEffect on VERITAS.<\/p>\n
3.8 ERISA AND OTHER COMPLIANCE.<\/p>\n
(a) The VERITAS Disclosure Letter lists all the employees of VERITAS and
\nany VERITAS Subsidiaries and their salaries or base wage as of December 31,
\n1996. The VERITAS Disclosure Letter also identifies each “employee benefit
\nplan,” as defined in Section 3(3) of ERISA, currently or previously maintained,
\ncontributed to or entered into by VERITAS or any of the VERITAS Subsidiaries
\nunder which VERITAS or any of the VERITAS Subsidiaries or any ERISA Affiliate
\n(as defined below) thereof has any present or future obligation or liability
\n(collectively, the “VERITAS Employee Plans”). For purposes of this Section 3.8,
\n“ERISA Affiliate” shall mean any entity which is a member of (A) a “controlled
\ngroup of<\/p>\n
A-1-22
\n 23<\/p>\n
corporations,” as defined in Section 414(b) of the Code, (B) a group of entities
\nunder “common control,” as defined in Section 414(c) of the Code, or (C) an
\n“affiliated service group,” as defined in Section 414(m) of the Code, or
\ntreasury regulations promulgated under Section 414(o) of the Code, any of which
\nincludes VERITAS or any of the VERITAS Subsidiaries. Copies of all VERITAS
\nEmployee Plans (and, if applicable, related trust agreements) and all amendments
\nthereto and written interpretations thereof (including summary plan
\ndescriptions) have been delivered to OpenVision or its counsel, together with
\nthe three most recent annual reports (Form 5500, including, if applicable, the
\nauditor’s report and any Schedule B thereto) prepared in connection with any
\nsuch VERITAS Employee Plan. All VERITAS Employee Plans which individually or
\ncollectively would constitute an “employee pension benefit plan,” as defined in
\nSection 3(2) of ERISA (collectively, the “VERITAS Pension Plans”), are
\nidentified as such in the VERITAS Disclosure Letter. All VERITAS Employee Plans
\nwhich individually or collectively would constitute an “employee welfare benefit
\nplan,” as defined in Section 3(1) of ERISA are identified as such in the VERITAS
\nDisclosure Letter. All contributions or premiums due from VERITAS or any of the
\nVERITAS Subsidiaries with respect to any of the VERITAS Employee Plans have been
\nmade as required under ERISA or have been accrued on VERITAS or any such VERITAS
\nSubsidiary’s financial statements as of September 30, 1996, or will be made
\nprior to the Closing. Each VERITAS Employee Plan has been maintained in
\ncompliance with its terms and with the requirements prescribed by any and all
\nstatutes, orders, rules and regulations, including, without limitation, ERISA
\nand the Code, which are applicable to such VERITAS Employee Plans, except as
\nwould not have a Material Adverse Effect on VERITAS.<\/p>\n
(b) No VERITAS Pension Plan constitutes, or has since the enactment of
\nERISA constituted, a “multiemployer plan,” as defined in Section 3(37) of ERISA.
\nNo VERITAS Pension Plans are subject to Title IV of ERISA. No “prohibited
\ntransaction,” as defined in Section 406 of ERISA or Section 4975 of the Code,
\nhas occurred with respect to any VERITAS Employee Plan which is covered by Title
\nI of ERISA which would result in a material liability to VERITAS or any of the
\nVERITAS Subsidiaries taken individually, excluding transactions effected
\npursuant to a statutory or administrative exemption. Nothing done or omitted to
\nbe done and no transaction or holding of any asset under or in connection with
\nany VERITAS Employee Plan has or will make VERITAS or any employee, officer or
\ndirector of VERITAS subject to any material liability under Title I of ERISA or
\nliable for any material Tax or penalty pursuant to Sections 4972, 4975, 4976,
\n4977 or 4979 of the Code or Section 502 of ERISA.<\/p>\n
(c) With respect to each VERITAS Pension Plan that is intended to be
\nqualified under Section 401(a) of the Code (a “VERITAS 401(a) Plan”), either (i)
\na favorable determination letter has been received from the IRS as to the
\nqualification of the VERITAS 401(a) Plan under the Code as in effect immediately
\nafter the Tax Reform Act of 1986, or (ii) the VERITAS 401(a) Plan has been
\nestablished under a standardized prototype plan for which an Internal Revenue
\nService opinion letter has been obtained and upon which the VERITAS 401(a) Plan
\nmay rely. VERITAS has delivered to OpenVision or its counsel a complete and
\ncorrect copy of the most recent Internal Revenue Service determination letter
\nwith respect to each VERITAS 401(a) Plan.<\/p>\n
(d) No VERITAS Employee Plan provides or ever has provided death,
\nmedical or health benefits (whether or not insured) with respect to current or
\nformer employees after any such employee’s retirement or other termination of
\nservice (other than benefit coverage mandated by applicable law, including,
\nwithout limitation, coverage provided pursuant to Section 4980B of the Code).<\/p>\n
(e) The VERITAS Disclosure Letter lists each employment, severance,
\ncompensation or other similar contract, arrangement or policy and each plan or
\narrangement (written or oral) providing for insurance coverage (including any
\nself-insured arrangements), workers’ benefits, vacation benefits, severance
\nbenefits, disability benefits, death benefits, hospitalization benefits,
\nretirement benefits, deferred compensation, profit-sharing, bonuses, stock
\noptions, stock purchase, phantom stock, stock appreciation or other forms of
\nincentive compensation or post-retirement insurance, compensation or benefits
\nfor employees, consultants or directors (other than workers’ compensation,
\nunemployment compensation and other governmental mandated programs) which (A) is
\nnot a VERITAS Employee Plan, (B) is entered into, maintained or contributed to,
\nas the case may be, by VERITAS or any of the VERITAS Subsidiaries, and (C)
\ncovers any employee or former employee of VERITAS or any of the VERITAS
\nSubsidiaries. Such contracts, plans and arrangements as are<\/p>\n
A-1-23
\n 24<\/p>\n
described in this Section 3.8(e) are herein referred to collectively as the
\n“VERITAS Benefit Arrangements.” Each VERITAS Benefit Arrangement has been
\nmaintained in substantial compliance with its terms and with the requirements
\nprescribed by any and all statutes, orders, rules and regulations which are
\napplicable to such VERITAS Benefit Arrangement. VERITAS has delivered to
\nOpenVision or its counsel a complete and correct copy of each VERITAS Benefit
\nArrangement document or, if such VERITAS Benefit Arrangement is unwritten, a
\ndescription thereof.<\/p>\n
(f) There has been no amendment to, written interpretation or
\nannouncement (whether or not written) by VERITAS or any of the VERITAS
\nSubsidiaries relating to any VERITAS Employee Plan or VERITAS Benefit
\nArrangement that would increase materially the expense of maintaining such
\nVERITAS Employee Plan or VERITAS Benefit Arrangement above the level of the
\nexpense incurred in respect thereof for the year ended December 31, 1996.<\/p>\n
(g) VERITAS has timely provided, or will have provided prior to the
\nClosing (as defined in Section 6.1), to individuals entitled thereto all
\nrequired notices and coverage pursuant to Section 4980B of COBRA with respect to
\nany “qualifying event” (as defined in Section 4980B(f)(3) of the Code). VERITAS
\nwill timely provide to individuals entitled thereto all required notices and
\ncoverage pursuant to Code Section 4890B and COBRA with respect to any
\n“qualifying event” (as defined in Section 4980B(f)(3) of the Code) occurring
\nprior to and including the Closing Date. No material Tax payable on account of
\nSection 4980B of the Code has been incurred with respect to any current or
\nformer employees (or their beneficiaries) of VERITAS or any of the VERITAS
\nSubsidiaries.<\/p>\n
(h) No benefit payable or which may become payable by VERITAS or any of
\nthe VERITAS Subsidiaries pursuant to any VERITAS Employee Plan or any VERITAS
\nBenefit Arrangement or as a result of or arising under this Agreement shall
\nconstitute an “excess parachute payment” (as defined in Section 280G(b)(1) of
\nthe Code) which is subject to the imposition of an excise Tax under Section 4999
\nof the Code or which would not be deductible by reason of Section 280G of the
\nCode.<\/p>\n
(i) VERITAS and each VERITAS Subsidiary is in compliance in all material
\nrespects with all applicable laws, agreements and contracts relating to
\nemployment, employment practices, wages, hours and terms and conditions of
\nemployment, including, but not limited to, employee compensation matters, but
\nnot including ERISA.<\/p>\n
(j) VERITAS and each VERITAS Subsidiary has good labor relations and has
\nno knowledge of any facts indicating that the consummation of the transactions
\ncontemplated hereby will have a material adverse effect on labor relations, and
\nhas no knowledge that any of its key employees intends to leave its or their
\nemploy.<\/p>\n
3.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither VERITAS, Newco nor any of
\nthe VERITAS Subsidiaries has any liabilities or obligations of any nature
\n(matured or unmatured, fixed or contingent) which are, individually or in the
\naggregate, of a nature required to be disclosed on the face of a balance sheet
\nprepared in accordance with GAAP and are material to the business of VERITAS and
\nthe VERITAS Subsidiaries, taken as a whole, except for such liabilities or
\nobligations as (i) were accrued or fully reserved against in the consolidated
\nbalance sheet of VERITAS at September 30, 1996 (the “VERITAS Balance Sheet”) or
\n(ii) are of a normally recurring nature and were incurred after September 30,
\n1996 (the “VERITAS Balance Sheet Date”) in the ordinary course of business
\nconsistent with past practice. As of the VERITAS Balance Sheet Date, there were
\nno material loss contingencies (as such term is used in Statement of Financial
\nAccounting Standards No. 5 issued by the Financial Accounting Standards Board in
\nMarch 1975) which are not adequately provided for in the VERITAS Balance Sheet
\nas required by said Statement No. 5.<\/p>\n
3.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
\nin the VERITAS SEC Documents filed prior to the date of this Agreement, since
\nthe VERITAS Balance Sheet Date there has not occurred:<\/p>\n
(a) any change not identified below that could reasonably be expected to
\nhave a Material Adverse Effect on VERITAS;<\/p>\n
A-1-24
\n 25<\/p>\n
(b) any amendments or changes in the Articles of Incorporation or Bylaws
\nof VERITAS;<\/p>\n
(c) any damage, destruction or loss, whether covered by insurance or
\nnot, materially and adversely affecting any of the material properties or the
\nbusiness of VERITAS;<\/p>\n
(d) any redemption, repurchase or other acquisition of shares of VERITAS
\nCommon Stock by VERITAS (other than pursuant to arrangements with terminated
\nemployees or consultants), or any declaration, setting aside or payment of any
\ndividend or other distribution (whether in cash, stock or property) with respect
\nto VERITAS Common Stock;<\/p>\n
(e) any increase in or modification of the compensation or benefits
\npayable or to become payable by VERITAS to any of its directors or employees,
\nexcept in the ordinary course of business, consistent with past practice;<\/p>\n
(f) other than as required by applicable statute or regulation, any
\nincrease in or modification of any bonus, pension, insurance or VERITAS Employee
\nPlan or VERITAS Benefit Arrangement (including, but not limited to, the granting
\nof stock options, restricted stock awards or stock appreciation rights) made to,
\nfor or with any of its employees, other than (a) in the ordinary course of
\nbusiness, consistent with past practice, and (b) after the date of this
\nAgreement, which is authorized, if required, pursuant to Section 5.3 below;<\/p>\n
(g) any acquisition or sale of a material amount of property or assets
\nof VERITAS, other than in the ordinary course of business, consistent with past
\npractice;<\/p>\n
(h) any alteration in any term of any outstanding security of VERITAS,
\nincluding, but not limited to, acceleration of the vesting or any change in the
\nterms of any outstanding stock options;<\/p>\n
(i) other than in the ordinary course of business, consistent with past
\npractice, the total amount of which is not material, any (A) incurrence,
\nassumption or guarantee by VERITAS of any debt for borrowed money; (B) issuance
\nor sale of any securities convertible into or exchangeable for debt securities
\nof VERITAS; or (C) issuance or sale of options or other rights to acquire from
\nVERITAS, directly or indirectly, debt securities of VERITAS or any securities
\nconvertible into or exchangeable for any such debt securities;<\/p>\n
(j) any creation or assumption by VERITAS of any mortgage, pledge,
\nsecurity interest, lien or other encumbrance on any asset other than in the
\nordinary course of business, consistent with past practice, not in excess of
\n$100,000 in the aggregate;<\/p>\n
(k) any making of any loan, advance or capital contribution to or
\ninvestment in any person other than (i) loans, advances or capital contributions
\nmade in the ordinary course of business of VERITAS, and (ii) other loans and
\nadvances, where the aggregate amount of all such items outstanding at any time
\ndoes not exceed $50,000;<\/p>\n
(l) any entering into, amendment of, relinquishment, termination or
\nnon-renewal by VERITAS of any material contract, lease transaction, commitment
\nor other right or obligation other than in the ordinary course of business;<\/p>\n
(m) any transfer or grant of a right under the VERITAS IP Rights (as
\ndefined in Section 3.15 below), other than those transferred or granted in the
\nordinary course of business, consistent with past practices, except for any
\ngrant of a right to VERITAS source code or grant of any exclusive rights to any
\nVERITAS IP Rights, each of which shall be set forth in the VERITAS Disclosure
\nletter;<\/p>\n
(n) any labor dispute or charge of unfair labor practice (other than
\nroutine individual grievances), any activity or proceeding by a labor union or
\nrepresentative thereof to organize any employees of VERITAS or, to VERITAS’
\nknowledge, any campaign being conducted to solicit authorization from employees
\nto be represented by such labor union; or<\/p>\n
(o) any agreement by VERITAS, or to VERITAS’ knowledge, any officer or
\nemployee thereof, to take any of the actions described in the preceding clauses
\n(a) through (n) (other than negotiations with OpenVision and its representatives
\nregarding the transactions contemplated by this Agreement.)<\/p>\n
A-1-25
\n 26<\/p>\n
3.11 AGREEMENTS. The VERITAS Disclosure Letter sets forth a list of any of
\nthe following currently effective contracts, agreements and other instruments to
\nwhich VERITAS, Newco or any VERITAS Subsidiary is a party, copies of each of
\nwhich have been delivered to OpenVision or its counsel:<\/p>\n
(a) contract with or commitment to any labor union;<\/p>\n
(b) continuing contract for the future purchase, sale or manufacture of
\nproducts, material, supplies, equipment or services requiring payment to or from
\nVERITAS, Newco or any VERITAS Subsidiary in an amount in excess of $100,000 per
\nannum which is not terminable on 120 days’ or less notice without cost or other
\nliability at, or at any time after, the Effective Time or in which VERITAS,
\nNewco or such VERITAS Subsidiary has granted or received manufacturing rights,
\nmost favored nations pricing provisions or exclusive marketing rights relating
\nto any product, group of products or territory, provided, however, that only
\npurchase orders for the top ten (10) vendors of VERITAS (as measured by 1996
\nVERITAS purchases) are listed in the VERITAS Disclosure Letter;<\/p>\n
(c) contract providing for the development of technology for VERITAS
\nwhich technology is used or incorporated in any products currently distributed
\nby VERITAS or is anticipated to be used or incorporated in any planned products
\nof VERITAS or which requires VERITAS to perform specified development work for a
\nthird party;<\/p>\n
(d) joint venture contract or agreement or other agreement which has
\ninvolved or is reasonably expected to involve a sharing of profits or losses in
\nexcess of $25,000 per annum with any other party;<\/p>\n
(e) contract or commitment for the employment of any officer, employee
\nor consultant or any other type of contract or understanding with any officer,
\nemployee or consultant which is not immediately terminable without cost, notice
\nor other liability (except for normal severance benefits available to employees
\ngenerally as set forth in any VERITAS Benefit Arrangement and except to the
\nextent general principles of wrongful termination laws may limit VERITAS’ or any
\nof VERITAS’ Subsidiaries ability to terminate employees at will);<\/p>\n
(f) indenture, mortgage, promissory note, loan agreement, guarantee or
\nother agreement or commitment for the borrowing of money, for a line of credit
\nor for a leasing transaction of a type required to be capitalized in accordance
\nwith Statement of Financial Accounting Standards No. 13 of the Financial
\nAccounting Standards Board (other than equipment leases entered into in the
\nordinary course of business pursuant to which payments by VERITAS or Newco do
\nnot exceed $100,000 in the aggregate);<\/p>\n
(g) lease or other agreement under which VERITAS, Newco or any VERITAS
\nSubsidiary is lessee of or holds or operates any items of tangible personal
\nproperty or real property owned by any third party and under which payments to
\nsuch third party exceed $60,000 per annum;<\/p>\n
(h) agreement or arrangement for the sale of any assets, properties or
\nrights having a value in excess of $25,000, other than in the ordinary course of
\nbusiness consistent with past practice;<\/p>\n
(i) agreement which restricts VERITAS, Newco or any VERITAS Subsidiary
\nfrom engaging in any aspect of its business or competing in any line of business
\nin any geographic area; including any agreement pursuant to which VERITAS has
\ngranted exclusive rights to a third party;<\/p>\n
(j) VERITAS IP Rights Agreement (as defined in Section 3.15 below),
\nother than standard form license agreements with end users (copies of which have
\nbeen delivered to OpenVision or its counsel) and, in any event, any agreement
\nthat grants rights or access to any source code included in the VERITAS IP
\nRights; or<\/p>\n
(k) agreement between or among VERITAS or any VERITAS Subsidiary
\nregarding inter company loans, revenue or cost sharing, ownership or license of
\nVERITAS IP Rights, inter company royalties or dividends or similar matters.<\/p>\n
The VERITAS Disclosure Letter further includes a schedule of the
\noutstanding maintenance and support obligations to be performed by VERITAS
\npursuant to any contract or other arrangement, including a description of such
\nobligations, the names of the customers for whom such obligations must be
\nperformed, the<\/p>\n
A-1-26
\n 27<\/p>\n
expiration date of such obligations and the fees payable to VERITAS in respect
\nof performance of such obligations.<\/p>\n
3.12 NO DEFAULTS. Except as disclosed in the VERITAS SEC Documents filed
\nprior to the date of this Agreement, to VERITAS’ knowledge, neither it, Newco
\nnor any of the VERITAS Subsidiaries is in default under, and there exists no
\nevent, condition or occurrence which, after notice or lapse of time, or both,
\nwould constitute such a default by VERITAS, Newco or any of the VERITAS
\nSubsidiaries under, any contract or agreement to which VERITAS, Newco or any of
\nthe VERITAS Subsidiaries is a party and which would, if terminated or modified,
\nhave a Material Adverse Effect on VERITAS.<\/p>\n
3.13 CERTAIN AGREEMENTS. Neither the execution and delivery of this
\nAgreement nor the consummation of the transactions contemplated hereby will (i)
\nresult in any payment (including, without limitation, severance, unemployment
\ncompensation, golden parachute, bonus or otherwise) becoming due to any director
\nor employee of VERITAS or any of the VERITAS Subsidiaries from VERITAS or any of
\nthe VERITAS Subsidiaries, under any VERITAS Employee Plan, VERITAS Benefit
\nArrangement or otherwise, (ii) materially increase any benefits otherwise
\npayable under any VERITAS Employee Plan or VERITAS Benefit Arrangement or (iii)
\nresult in the acceleration of the time of payment or vesting of any such
\nbenefits.<\/p>\n
3.14 TAXES. VERITAS and each of the VERITAS Subsidiaries have filed, or
\ncaused to be filed, all Tax returns required to be filed by them (all of which
\nreturns were true, correct and complete in all material respects) and have paid
\nor withheld, or caused to be paid or withheld, all Taxes that are shown on such
\nTax returns as due and payable, other than such Taxes as are being contested in
\ngood faith and for which adequate reserves have been established on the VERITAS
\nBalance Sheet and other than where the failure to so file, pay or withhold would
\nnot have a Material Adverse Effect on VERITAS. All Taxes required to have been
\npaid or accrued by VERITAS and the VERITAS Subsidiaries for all periods prior to
\nthe VERITAS Balance Sheet Date have been fully paid or are adequately provided
\nfor or reflected in the VERITAS Balance Sheet. Since the VERITAS Balance Sheet
\nDate, no material Tax liability has been assessed, proposed to be assessed,
\nincurred or accrued other than in the ordinary course of business. Neither
\nVERITAS nor any VERITAS Subsidiary has received any notification that any
\nmaterial issues have been raised (and are currently pending) by the Internal
\nRevenue Service or any other taxing authority, including, without limitation,
\nany sales tax authority, in connection with any of the Tax returns referred to
\nin the first sentence of Section 3.14, and no waivers of statutes of limitations
\nhave been given or requested with respect to VERITAS or any of the VERITAS
\nSubsidiaries. No taxing authority is currently conducting an audit of any Tax
\nreturns of VERITAS or, to VERITAS’ knowledge, about to conduct such an audit.
\nAny deficiencies asserted or assessments (including interest and penalties) made
\nas a result of any examination by the Internal Revenue Service or by appropriate
\nstate or departmental authorities of the Tax returns of or with respect to
\nVERITAS or any of the VERITAS Subsidiaries have been fully paid or are
\nadequately provided for in the VERITAS Balance Sheet and no material proposed
\n(but unassessed) additional Taxes have been asserted and no Tax liens have been
\nfiled other than for Taxes not yet due and payable. None of VERITAS or any of
\nthe VERITAS Subsidiaries (i) has made an election to be treated as a “consenting
\ncorporation” under Section 341(f) of the Code or (ii) is a “personal holding
\ncompany” within the meaning of Section 542 of the Code.<\/p>\n
3.15 INTELLECTUAL PROPERTY.<\/p>\n
(a) The VERITAS Disclosure Letter contains a complete and accurate list
\nof all United States and foreign: (i) patents; (ii) copyright registrations and
\nmask work registrations; (iii) trademarks registrations and trademark
\nintent-to-use registrations; (iv) registered user licenses; (v) all
\napplications, provisional applications or other filings for or to obtain any of
\nthe foregoing, and (vi) any other similar registrations or applications for
\nIntellectual Property rights (as defined below) owned by, or filed by, or on
\nbehalf of, VERITAS or any of the VERITAS Subsidiaries anywhere in the world (all
\nof the foregoing, “VERITAS Registered Intellectual Property”).<\/p>\n
(b) The VERITAS Disclosure Letter contains a complete and accurate list
\nof all material software programs and other products sold or licensed by VERITAS
\nor any of the VERITAS Subsidiaries.<\/p>\n
A-1-27
\n 28<\/p>\n
(c) All VERITAS Intellectual Property Rights are owned free and clear of
\nany liens, encumbrances or security interests.<\/p>\n
(d) VERITAS and the VERITAS Subsidiaries own, or have the right to use,
\nsell or license such Intellectual Property Rights (as defined below) as are
\nnecessary or required for the conduct of their respective businesses as
\npresently conducted (such Intellectual Property Rights being hereinafter
\ncollectively referred to as the “VERITAS IP Rights”) and such ownership or
\nrights to use, sell or license are reasonably sufficient for such conduct of
\ntheir respective businesses, except for any failure to own or have the right to
\nuse, sell or license that would not have a Material Adverse Effect on VERITAS;<\/p>\n
(e) The execution, delivery and performance of this Agreement and the
\nconsummation of the transactions contemplated hereby will not constitute a
\nmaterial breach of any material instrument or material agreement in respect of
\nany Intellectual Property Rights licensed by or to VERITAS (the “VERITAS IP
\nRights Agreements”), will not cause the forfeiture or termination or give rise
\nto a right of forfeiture or termination of any VERITAS IP Right or materially
\nimpair the right of VERITAS and the VERITAS Subsidiaries or the VERITAS
\nSurviving Corporation to use, sell or license any VERITAS IP Right or portion
\nthereof (except where such breach, forfeiture, termination or impairment would
\nnot have a Material Adverse Effect on VERITAS);<\/p>\n
(f) There are no royalties, honoraria, fees or other payments payable by
\nVERITAS to any person by reason of the ownership, use, license, purchase, sale
\nor disposition or acquisition of the VERITAS IP Rights (other than as set forth
\nin the VERITAS IP Rights Agreements listed in the VERITAS Disclosure Letter);<\/p>\n
(g) To VERITAS’ knowledge, no third party is infringing or
\nmisappropriating any Intellectual Property Rights, including VERITAS Registered
\nIntellectual Property, owned by VERITAS or any of the VERITAS Subsidiaries.<\/p>\n
(h) Neither the manufacture, marketing, license, sale or intended use of
\nany product currently licensed or sold by VERITAS or any of the VERITAS
\nSubsidiaries or currently under development by VERITAS or any of the VERITAS
\nSubsidiaries violates any license or agreement between VERITAS or any of the
\nVERITAS Subsidiaries and any third party or infringes any Intellectual Property
\nRight of any other party; and there is no pending or, to VERITAS’ knowledge,
\nthreatened claim or litigation contesting the validity, ownership or right to
\nuse, sell, license or dispose of any VERITAS IP Right, nor has VERITAS received
\nany notice asserting that any VERITAS IP Right, or the proposed use, sale,
\nlicense or disposition thereof, conflicts or will conflict with the rights of
\nany other party, except for any violations, infringements, claims or litigation
\nthat would not have a Material Adverse Effect on VERITAS, nor, to VERITAS’
\nknowledge, is there any basis for any such assertion; and<\/p>\n
(i) VERITAS has taken reasonable and practicable steps designed to
\nsafeguard and maintain the secrecy and confidentiality of, and its proprietary
\nrights in, all material trade secrets or other confidential information
\nconstituting VERITAS IP Rights. To VERITAS’ knowledge, no current or prior
\nofficers, employees or consultants of VERITAS claim an ownership interest in any
\nVERITAS IP Rights as a result of having been involved in the development of such
\nproperty while employed by or consulting with VERITAS or any of the VERITAS
\nSubsidiaries, or otherwise. All officers and development employees and, to
\nVERITAS’ knowledge, all other employees and consultants of VERITAS or any of the
\nVERITAS Subsidiaries have executed and delivered to VERITAS or the VERITAS
\nSubsidiary an agreement regarding the protection of proprietary information and
\nthe assignment to VERITAS or the VERITAS Subsidiary of all Intellectual Property
\nRights arising from the services performed for VERITAS or the VERITAS Subsidiary
\nby such persons.<\/p>\n
3.16 FEES AND EXPENSES. Except for the fees and expenses set forth in
\nVERITAS’ engagement letter with Cowen & Company and a letter agreement dated
\nDecember 1, 1996 with Steven Brooks, copies of which have been provided to
\nOpenVision, neither VERITAS, Newco nor any of the VERITAS Subsidiaries has paid
\nor become obligated to pay any fee or commission to any broker, finder or
\nintermediary in connection with the transactions contemplated by this Agreement.<\/p>\n
A-1-28
\n 29<\/p>\n
3.17 INSURANCE. VERITAS and the VERITAS Subsidiaries maintain fire and
\ncasualty, general liability, business interruption, directors and officers,
\nproduct liability and sprinkler and water damage insurance that VERITAS believes
\nto be reasonably prudent for its business. Correct and complete copies of all
\nsuch insurance policies presently in effect have been provided to OpenVision and
\nits counsel.<\/p>\n
3.18 OWNERSHIP OF PROPERTY. Except (a) as disclosed in the VERITAS SEC
\nDocuments filed prior to the date of this Agreement, (b) for liens for current
\ntaxes not yet delinquent or (c) for liens imposed by law and incurred in the
\nordinary course of business for obligations not yet due to carriers,
\nwarehousemen, laborers, material men and the like, VERITAS and each of the
\nVERITAS Subsidiaries owns its real and personal property free and clear of all
\nsecurity interests, mortgages, liens, charges, claims, options and encumbrances.
\nAll real and personal property of VERITAS and each of the VERITAS Subsidiaries
\nis in generally good repair and is operational and usable in the operations of
\nVERITAS, subject to ordinary wear and tear. Neither VERITAS nor any VERITAS
\nSubsidiary is in violation of any zoning, building or safety ordinance,
\nregulation or requirement or other law or regulation applicable to the operation
\nof owned or leased properties (the violation of which would have a Material
\nAdverse Effect on VERITAS), or has received any notice of violation with which
\nit has not complied, except where such violation would not have a Material
\nAdverse Effect on VERITAS.<\/p>\n
3.19 ENVIRONMENTAL MATTERS.<\/p>\n
(a) During the period that VERITAS and the VERITAS Subsidiaries have
\nleased or owned their respective properties or owned or operated any facilities,
\nthere have been, to VERITAS’ knowledge, no disposals, releases or threatened
\nreleases of Hazardous Materials on, from, under or about such properties or
\nfacilities. VERITAS has no knowledge of any presence, disposals, releases or
\nthreatened releases of Hazardous Materials on, from, under or about any of such
\nproperties or facilities, which may have occurred prior to VERITAS or any of the
\nVERITAS Subsidiaries having taken possession of any of such properties or
\nfacilities.<\/p>\n
(b) None of the properties or facilities of VERITAS or the VERITAS
\nSubsidiaries is or has been the subject of an Environmental Violation. During
\nthe time that VERITAS or the VERITAS Subsidiaries have owned or leased their
\nrespective properties and facilities, neither VERITAS nor any of the VERITAS
\nSubsidiaries nor, to VERITAS’ knowledge, any third party, has used, generated,
\nmanufactured or stored on, under or about such properties or facilities or
\ntransported to or from such properties or facilities any Hazardous Materials
\n(except those Hazardous Materials associated with general office use or
\njanitorial supplies).<\/p>\n
(c) During the time that VERITAS or the VERITAS Subsidiaries have owned
\nor leased their respective properties and facilities, there has been no
\nlitigation brought or, to VERITAS’ knowledge, threatened against VERITAS or any
\nof the VERITAS Subsidiaries by, or any settlement reached by VERITAS or any of
\nthe VERITAS Subsidiaries with, any party or parties alleging the presence,
\ndisposal, release or threatened release of any Hazardous Materials on, from or
\nunder any of such properties or facilities or relating to any alleged
\nEnvironmental Violation.<\/p>\n
3.20 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the VERITAS SEC
\nDocuments filed prior to the date of this Agreement, no officer or director of
\nVERITAS or any “affiliate” or “associate” (as those terms are defined in Rule
\n405 promulgated under the Securities Act) of any such person has had, either
\ndirectly or indirectly, a material interest in: (i) any person or entity which
\npurchases from or sells, licenses or furnishes to VERITAS or any of the VERITAS
\nSubsidiaries any goods, property, technology or intellectual or other property
\nrights or services; or (ii) any contract or agreement to which VERITAS or any of
\nthe VERITAS Subsidiaries is a party or by which it may be bound or affected.<\/p>\n
3.21 BOARD APPROVAL. The Board of Directors of VERITAS and Newco have each
\nunanimously approved this Agreement and the Merger, and the Board of Directors
\nof VERITAS has determined that the Merger is in the best interests of the
\nshareholders of VERITAS and the terms of the Merger are fair to such
\nshareholders.<\/p>\n
A-1-29
\n 30<\/p>\n
3.22 VOTE REQUIRED. The affirmative vote of at least a majority of the
\nvotes that holders of the outstanding shares of VERITAS Common Stock are
\nentitled to cast is the only vote of the holders of any class or series of
\nVERITAS capital stock necessary to approve this Agreement and the Merger.<\/p>\n
3.23 INTERIM OPERATIONS OF NEWCO AND NEWCO SUBSIDIARIES. Newco, VERITAS
\nSub and OpenVision Sub will be formed for the purpose of engaging in the
\ntransactions contemplated hereby, will engage in no other business activities
\nand will conduct their operations only as contemplated hereby.<\/p>\n
3.24 DISCLOSURE. No representation or warranty made by VERITAS or Newco in
\nthis Agreement, nor any document, written information, statement, financial
\nstatement, certificate or exhibit prepared and furnished or to be prepared and
\nfurnished by VERITAS, Newco or their respective representatives pursuant hereto
\nor in connection with the transactions contemplated hereby, when taken together,
\ncontains any untrue statement of a material fact, or omits to state a material
\nfact necessary to make the statements or facts contained herein or therein not
\nmisleading in light of the circumstances under which they were furnished.<\/p>\n
3.25 FAIRNESS OPINION. VERITAS’ Board of Directors has received an opinion
\nas of the date hereof from Cowen & Company to the effect that, as of the date
\nhereof, the terms of the Merger are fair to VERITAS’ shareholders from a
\nfinancial point of view.<\/p>\n
4. OPENVISION COVENANTS<\/p>\n
4.1 ADVICE OF CHANGES. During the period from the date of this Agreement
\nuntil the earlier of the Effective Time or the termination of this Agreement in
\naccordance with its terms, OpenVision will promptly advise VERITAS in writing,
\n(a) of any event occurring subsequent to the date of this Agreement that would
\nreasonably be likely to render any representation or warranty of OpenVision or
\nVERITAS contained in this Agreement, if made on or as of the date of such event
\nor the Closing Date, untrue or inaccurate in any material respect, (b) of any
\nevent that would reasonably be likely to have a Material Adverse Effect on
\nOpenVision, and (c) of any material breach by OpenVision of any covenant or
\nagreement contained in this Agreement. To ensure compliance with this Section
\n4.1, OpenVision shall use its reasonable best efforts to deliver to VERITAS as
\nsoon as practicable but in any event within thirty days after the end of each
\nmonthly accounting period ending after the date of this Agreement and before the
\nearlier of the Closing Date or the termination of this Agreement in accordance
\nwith its terms, an unaudited consolidated balance sheet, statement of operations
\nand statement of cash flows for OpenVision, which financial statements shall be
\nprepared in the ordinary course of business, in accordance with OpenVision’s
\nbooks and records and GAAP and shall fairly present the consolidated financial
\nposition of OpenVision as of their respective dates and the results of
\nOpenVision’s operations for the periods then ended except that footnotes, as
\nrequired by GAAP, for interim financial statements may be omitted.<\/p>\n
4.2 MAINTENANCE OF BUSINESS. During the period from the date of this
\nAgreement until the earlier of the Effective Time or the termination of this
\nAgreement in accordance with its terms, OpenVision will use its best efforts (i)
\nto carry on and preserve its business and its relationships with customers,
\nsuppliers, employees and others in substantially the same manner as it has prior
\nto the date hereof and, (ii) to execute on its existing operating plan through
\nthe date of the Closing. If OpenVision becomes aware of any material
\ndeterioration in the relationship with any customer, supplier or key employee,
\nit will promptly bring such information to the attention of VERITAS in writing
\nand, if requested by VERITAS, will exert its reasonable best efforts to restore
\nthe relationship.<\/p>\n
4.3 CONDUCT OF BUSINESS. During the period from the date of this Agreement
\nuntil the earlier of the Effective Time or the termination of this Agreement in
\naccordance with its terms, OpenVision will continue to conduct its business and
\nmaintain its business relationships in the ordinary and usual course and, except
\nas otherwise disclosed herein, it will not, without the prior written consent of
\nthe President of VERITAS, which consent shall not be unreasonably withheld:<\/p>\n
(a) borrow any money except for amounts that are not in the aggregate
\nmaterial to the financial condition of OpenVision and the OpenVision
\nSubsidiaries, taken as a whole;<\/p>\n
(b) enter into any transaction not in the ordinary course of its
\nbusiness;<\/p>\n
A-1-30
\n 31<\/p>\n
(c) encumber or permit to be encumbered any of its assets except in the
\nordinary course of its business consistent with past practice and to an extent
\nwhich is not material;<\/p>\n
(d) dispose of any of its assets except in the ordinary course of
\nbusiness, consistent with past practice;<\/p>\n
(e) enter into any material lease or contract for the purchase or sale
\nor license of any property, real or personal, except in the ordinary course of
\nbusiness, consistent with past practice (which shall include renewal of
\nagreements relating to OpenVision’s principal offices);<\/p>\n
(f) fail to maintain its equipment and other assets in good working
\ncondition and repair according to the standards it has maintained to the date of
\nthis Agreement, subject only to ordinary wear and tear;<\/p>\n
(g) pay (or make any oral or written commitments or representations to
\npay) any bonus, increased salary or special remuneration to any officer,
\nemployee or consultant (except for bonuses in amounts consistent with past
\npractices and normal salary increases consistent with past practices not to
\nexceed 10% per year and that are not inconsistent with the Radford Compensation
\nSurvey for software companies and except pursuant to existing arrangements
\npreviously disclosed to VERITAS) or enter into or vary the terms of any
\nemployment, consulting or severance agreement with any such person, pay any
\nseverance or termination pay (other than payments in amounts consistent with
\npast practice or made in accordance with plans or agreements existing on the
\ndate hereof), grant any stock option (except for normal grants to employees
\nconsistent with past practices) or issue any restricted stock, or enter into or
\nmodify any agreement or plan or increase benefits of the type described in
\nSection 2.8;<\/p>\n
(h) except as required by GAAP, change accounting methods;<\/p>\n
(i) declare, set aside or pay any cash or stock dividend or other
\ndistribution in respect of capital stock, or redeem or otherwise acquire any of
\nits capital stock (other than pursuant to arrangements with terminated employees
\nor consultants in the ordinary course of business, consistent with past
\npractice);<\/p>\n
(j) amend or terminate any contract, agreement or license to which it is
\na party except those amended or terminated in the ordinary course of its
\nbusiness, consistent with past practice, and which are not material in amount or
\neffect;<\/p>\n
(k) lend any amount to any person or entity, other than (i) advances for
\ntravel and expenses which are incurred in the ordinary course of business,
\nconsistent with past practice, not material in amount and documented by receipts
\nfor the claimed amounts, or (ii) any loans pursuant to any OpenVision Section
\n401(a) Plan;<\/p>\n
(l) guarantee or act as a surety for any obligation except for
\nobligations of OpenVision Subsidiaries in amounts that are not material to the
\nfinancial condition of OpenVision and the OpenVision Subsidiaries, taken as a
\nwhole;<\/p>\n
(m) waive or release any right or claim except for the waiver or release
\nof non-material claims in the ordinary course of business, consistent with past
\npractice, or the waiver or release of rights or claims described in the
\nOpenVision Disclosure Letter;<\/p>\n
(n) issue or sell any shares of its capital stock of any class (except
\nupon the exercise of an option, stock purchase right or warrant currently
\noutstanding or permitted to be granted under Section 4.3(g)), or any other of
\nits securities, or issue or create any warrants, obligations, subscriptions,
\noptions (except as expressly permitted under Section 4.3(g)), convertible
\nsecurities or other commitments to issue shares of capital stock, or accelerate
\nthe vesting or change any other term of any outstanding option or other
\nsecurity;<\/p>\n
(o) split or combine the outstanding shares of its capital stock of any
\nclass or enter into any recapitalization or agreement affecting the number or
\nrights of outstanding shares of its capital stock of any class or affecting any
\nother of its securities;<\/p>\n
(p) merge, consolidate or reorganize with, or acquire any entity, except
\nas set forth in the OpenVision Disclosure Letter;<\/p>\n
A-1-31
\n 32<\/p>\n
(q) amend its Certificate of Incorporation or Bylaws;<\/p>\n
(r) license any OpenVision IP Rights except in the ordinary course of
\nbusiness, consistent with past practice, or grant any exclusive rights (other
\nthan to Sun Microsystems, Inc.) or agree to do any development projects with
\nrespect to the OpenVision IP Rights;<\/p>\n
(s) agree to any audit assessment by any Tax authority;<\/p>\n
(t) materially change any insurance coverage or issue any certificates
\nof insurance except in the ordinary course of business consistent with past
\npractice;<\/p>\n
(u) take any action, or permit any action within OpenVision’s control,
\nwhich would (i) prevent the Merger from qualifying as a tax-free reorganization
\nunder Section 368(a)(1)(A) of the Code, (ii) prevent the Merger from qualifying
\nfor accounting as a pooling of interests, or fail to use its reasonable best
\nefforts to prevent any of its officers or directors from taking or permitting
\nany such action or (iii) result in a failure to maintain the trading of
\nOpenVision Common Stock on the Nasdaq Stock Market without causing such stock to
\nbe listed on the New York Stock Exchange or the American Stock Exchange at or
\nprior to the termination of its trading on the Nasdaq Stock Market, or fail to
\nuse its reasonable best efforts to prevent its officers or directors from taking
\nor permitting such action;<\/p>\n
(v) provide or publish to its stockholders any material which might
\nconstitute an unauthorized “prospectus” within the meaning of the Securities
\nAct; or<\/p>\n
(w) agree to take, or permit any OpenVision Subsidiary to take or agree
\nto take, or enter into negotiations with respect to, any of the actions
\ndescribed in the preceding clauses in this Section 4.3.<\/p>\n
4.4 STOCKHOLDER APPROVAL. OpenVision will call the OpenVision Stockholders
\nMeeting, to be held within 45 days after the Form S-4 shall have been declared
\neffective by the SEC, to submit this Agreement, the Merger and related matters
\nfor the consideration and approval of the OpenVision stockholders. Subject to
\nthe fiduciary obligations of OpenVision’s directors and officers and to
\nOpenVision’s legal disclosure obligations, the Prospectus\/Proxy Statement will
\ninclude a statement to the effect that OpenVision’s Board of Directors has
\nrecommended that OpenVision stockholders vote for the Merger. Such meeting will
\nbe called, held and conducted, and any proxies will be solicited, in compliance
\nwith applicable law.<\/p>\n
4.5 OPENVISION AFFILIATE AGREEMENTS.<\/p>\n
(a) Affiliate Agreement. Concurrently with the execution of this
\nAgreement, OpenVision shall cause each of those persons who may be deemed to be,
\nin OpenVision’s reasonable judgment, an “affiliate” (within the meaning of Rule
\n145 of the rules and regulations promulgated by the SEC under the Securities Act
\n(“Rule 145”)) of OpenVision, which persons are all listed on Exhibit 4.5(a)
\nhereto, to sign and deliver to VERITAS and Newco an Affiliate Agreement in the
\nform of Exhibit 4.5(b) hereto (the “OpenVision Affiliate Agreements”) agreeing
\nthat such persons (a) will have no present intent to dispose of more than fifty
\npercent (50%) of the Newco Common Stock received in the Merger; and (b) will
\nmake no disposition of OpenVision Common Stock, or the Newco Common Stock
\nreceived in exchange therefor: (i) in the 30 day period prior to the Closing
\nDate; (ii) after the Closing Date until Newco shall have publicly released its
\nfirst report of quarterly financial statements that include the combined
\nfinancial results of Newco, OpenVision and VERITAS for a period of at least 30
\ndays of combined operations; or (iii) except in compliance with SEC Rule 145(d),
\npursuant to another available exemption from the registration requirements under
\nthe Securities Act or in a registered offering. Newco shall be entitled to place
\nlegends on the certificates evidencing any Newco Common Stock to be received by
\nsuch OpenVision affiliates pursuant to the terms of this Agreement and the
\nOpenVision Agreement of Merger, and to issue appropriate stop transfer
\ninstructions to the transfer agent for Newco Common Stock, consistent with the
\nterms of such OpenVision Affiliate Agreements, whether or not such OpenVision
\nAffiliate Agreements are actually delivered to VERITAS.<\/p>\n
(b) Voting Agreement. Concurrently with the execution of this Agreement,
\nWarburg, Michael S. Fields and Geoffrey W. Squire will sign and deliver to
\nVERITAS and Newco a Voting Agreement in the form of Exhibit 4.5(c) hereto (the
\n“Voting Agreement”) agreeing that such persons will vote in favor of the Merger
\nat the OpenVision Stockholder Meeting.<\/p>\n
A-1-32
\n 33<\/p>\n
4.6 LETTERS OF OPENVISION’S ACCOUNTANTS.<\/p>\n
(a) OpenVision shall use its reasonable best efforts to cause to be
\ndelivered a letter of Ernst & Young LLP, OpenVision’s independent auditors,
\ndated a date within five business days following the date of this Agreement,
\nstating that firm’s written concurrence with the VERITAS management’s and the
\nOpenVision management’s conclusions, respectively, as to the appropriateness of
\npooling of interests accounting for the Merger under Accounting Principles Board
\nOpinion No. 16, if closed and consummated in accordance with this Agreement.<\/p>\n
(b) OpenVision shall use its reasonable best efforts to cause to be
\ndelivered to VERITAS a letter of Ernst & Young LLP dated a date within two
\nbusiness days before the date on which the Form S-4 shall become effective and
\naddressed to VERITAS, in form and substance reasonably satisfactory to VERITAS
\nand customary in scope and substance for letters delivered by independent public
\naccountants in connection with registration statements similar to the Form S-4.<\/p>\n
4.7 PROSPECTUS\/PROXY STATEMENT. OpenVision will mail to its stockholders
\nin a timely manner, for the purpose of considering and voting upon the Merger at
\nthe OpenVision Stockholders Meeting, the Prospectus\/Proxy Statement in the Form
\nS-4. OpenVision will promptly provide to VERITAS all information relating to its
\nbusiness or operations necessary for inclusion in the Prospectus\/Proxy Statement
\nto satisfy all requirements of applicable state and federal securities laws.
\nNone of the information relating to OpenVision (or, to OpenVision’s knowledge,
\nany other person, contained in any document, certificate or other writing
\nfurnished or to be furnished by OpenVision) included in (i) the Prospectus\/Proxy
\nStatement at the time the Proxy Statement is mailed or at the time of the
\nmeeting of OpenVision’s stockholders to vote on the Merger or at the Effective
\nTime, as then amended or supplemented, or (ii) the Form S-4 at the time the Form
\nS-4 becomes effective or at the Effective Time, as then amended or supplemented,
\nwill contain any untrue statement of a material fact or will omit to state any
\nmaterial fact required to be stated therein or necessary to make the statements
\ntherein, in light of the circumstances in which they were made, not misleading
\nor necessary to correct any statement which has become false or misleading in
\nany earlier communication with respect to the solicitation of proxies for the
\nVERITAS and OpenVision stockholder meetings. The Prospectus\/Proxy Statement, as
\nit relates to OpenVision, will comply as to form in all material respects with
\nthe requirements of the Exchange Act and the rules and regulations thereunder in
\neffect at the time the Prospectus\/Proxy Statement is mailed.<\/p>\n
4.8 REGULATORY APPROVALS. OpenVision will promptly execute and file, or
\njoin in the execution and filing, of any application or other document that may
\nbe necessary in order to obtain the authorization, approval or consent of any
\ngovernmental body, federal, state, local or foreign, which may be reasonably
\nrequired, or which VERITAS or Newco may reasonably request, in connection with
\nthe consummation of the transactions contemplated by this Agreement. OpenVision
\nwill use its reasonable best efforts to promptly obtain all such authorizations,
\napprovals and consents. In addition, OpenVision shall use its reasonable best
\nefforts to cause Warburg, as promptly as practicable after the execution of this
\nAgreement, to file with the Federal Trade Commission (the “FTC”) and the
\nAntitrust Division of the Department of Justice (the “DOJ”), a pre-merger
\nnotification report under the HSR Act.<\/p>\n
4.9 NECESSARY CONSENTS. OpenVision will use its reasonable best efforts to
\nobtain such written consents and to take such other actions as may be necessary
\nor appropriate in addition to those set forth in Section 4.8 to allow the
\nconsummation of the transactions contemplated hereby and to allow the OpenVision
\nSurviving Corporation to carry on OpenVision’s business after the Effective
\nTime.<\/p>\n
4.10 ACCESS TO INFORMATION. OpenVision will allow VERITAS and its agents
\nreasonable access to the files, books, records, technology and offices of
\nOpenVision and each OpenVision Subsidiary, including, without limitation, any
\nand all information relating to OpenVision’s Taxes, commitments, contracts,
\nleases, licenses and real, personal, intellectual and intangible property and
\nfinancial condition. OpenVision will use its reasonable best efforts to cause
\nits accountants to cooperate with VERITAS and its agents in making available to
\nVERITAS all financial information reasonably requested, including, without
\nlimitation, the right to examine all working papers pertaining to all Tax
\nreturns and financial statements prepared or audited by such accountants.<\/p>\n
A-1-33
\n 34<\/p>\n
4.11 SATISFACTION OF CONDITIONS PRECEDENT. OpenVision will use its
\nreasonable best efforts to satisfy or cause to be satisfied all the conditions
\nprecedent that are set forth in Section 8 and to cause the Merger and the other
\ntransactions contemplated by this Agreement to be consummated.<\/p>\n
4.12 NO OTHER NEGOTIATIONS. From and after the date of this Agreement
\nuntil the earlier of the Effective Time or the termination of this Agreement in
\naccordance with its terms, OpenVision shall not, directly or indirectly, (a)
\nsolicit or initiate discussions, or, except to the extent that OpenVision has
\nreceived a Superior Proposal (as defined below), engage in negotiations with any
\nperson or, except to the extent that OpenVision has received a Superior Proposal
\n(as defined below), take any other action intended, designed or reasonably
\nlikely to facilitate the efforts of any person, other than VERITAS and Newco,
\nrelating to the possible acquisition of OpenVision or any of the OpenVision
\nSubsidiaries (whether by way of merger, purchase of capital stock, purchase of
\nassets or otherwise) or any material portion of its or their capital stock or
\nassets, (b) except to the extent that OpenVision has received a Superior
\nProposal, and provided that OpenVision has required the party submitting the
\nSuperior Proposal to execute a non-disclosure agreement comparable to the one
\nreferred to in Section 9.3 hereof, provide non-public information with respect
\nto OpenVision or any of the OpenVision Subsidiaries to any person, other than
\nVERITAS and Newco, relating to the possible acquisition of OpenVision or any of
\nthe OpenVision Subsidiaries (whether by way of merger, purchase of capital
\nstock, purchase of assets or otherwise) or any material portion of its or their
\ncapital stock or assets, (c) enter into an agreement with any person, other than
\nVERITAS and Newco, providing for the possible acquisition of OpenVision or any
\nof the OpenVision Subsidiaries (whether by way of merger, purchase of capital
\nstock, purchase of assets or otherwise) or any material portion of its or their
\ncapital stock or assets, or (d), except to the extent that OpenVision has
\nreceived a Superior Proposal, make or authorize any statement, recommendation or
\nsolicitation in support of any possible acquisition of OpenVision or any of the
\nOpenVision Subsidiaries (whether by way of merger, purchase of capital stock,
\npurchase of assets or otherwise) or any material portion of its or their capital
\nstock or assets by any person, other than by VERITAS and Newco. A “Superior
\nProposal” shall mean a written, unsolicited proposal relating to the possible
\nacquisition of OpenVision or any of the OpenVision Subsidiaries (whether by way
\nof merger, purchase of capital stock, purchase of assets or otherwise) or any
\nmaterial portion of its or their capital stock or assets by any person other
\nthan by VERITAS or Newco, which proposal is, in the reasonable good faith
\njudgment of the Board, after consultation with its legal and financial advisors,
\non financial and other terms more favorable to the stockholders of OpenVision
\nthan the terms of the Merger and which is made by a party that can reasonably be
\nexpected to consummate the transaction on the terms proposed. If OpenVision or
\nany of its Subsidiaries receives any offer or proposal to enter negotiations
\nrelating to any of the above, OpenVision shall, as promptly as practicable,
\nnotify VERITAS or Newco thereof, including information as to the identity of the
\nparty making any such offer or proposal and the specific terms of such offer or
\nproposal, as the case may be and (b) provide VERITAS or Newco with the same
\ninformation (if any) OpenVision provides to the party making the Superior
\nProposal. Nothing contained in this Agreement (but subject to the terms hereof)
\nwill prevent the Board of Directors of OpenVision, if OpenVision has received a
\nSuperior Proposal, from recommending such Superior Proposal to OpenVision’s
\nstockholders, if the Board determines that such action is required by its
\nfiduciary duties under applicable law. In such case, the Board of Directors of
\nOpenVision may withdraw or modify its recommendation concerning the approval of
\nthis Agreement and the Merger.<\/p>\n
5. VERITAS AND NEWCO COVENANTS<\/p>\n
5.1 ADVICE OF CHANGES. During the period from the date of this Agreement
\nuntil the earlier of the Effective Time or the termination of this Agreement in
\naccordance with its terms, VERITAS will promptly advise OpenVision in writing
\n(a) of any event occurring subsequent to the date of this Agreement that would
\nreasonably be likely to render any representation or warranty of VERITAS, Newco
\nor OpenVision contained in this Agreement, if made on or as of the date of such
\nevent or the Closing Date, untrue or inaccurate in any material respect, (b) of
\nany event that would reasonably be likely to have a Material Adverse Effect on
\nVERITAS, and (c) of any material breach by VERITAS or Newco of any covenant or
\nagreement contained in this Agreement. To ensure compliance with this Section
\n5.1, VERITAS shall use its reasonable best efforts to deliver to OpenVision as
\nsoon as practicable but in any event within thirty days after the end of each
\nmonthly accounting period ending after the date of this Agreement and before the
\nearlier of the Closing Date<\/p>\n
A-1-34
\n 35<\/p>\n
or the termination of this Agreement in accordance with its terms, an unaudited
\nconsolidated balance sheet, statement of operations and statement of cash flows
\nfor VERITAS, which financial statements shall be prepared in the ordinary course
\nof business, in accordance with VERITAS books and records and GAAP and shall
\nfairly present the consolidated financial position of VERITAS as of their
\nrespective dates and the results of VERITAS operations for the periods then
\nended except that footnotes, as required by GAAP for interim financial
\nstatements, may be omitted.<\/p>\n
5.2 MAINTENANCE OF BUSINESS. During the period from the date of this
\nAgreement until the earlier of the Effective Time or the termination of this
\nAgreement in accordance with its terms, VERITAS will use its best efforts (i) to
\ncarry on and preserve its business and its relationships with customers,
\nsuppliers, employees and others in substantially the same manner as it has prior
\nto the date hereof, and (ii) to execute on its existing operating plan through
\nthe date of Closing. If VERITAS becomes aware of any material deterioration in
\nthe relationship with any customer, supplier or key employee, it will promptly
\nbring such information to the attention of OpenVision in writing and, if
\nrequested by OpenVision, will exert its reasonable best efforts to restore the
\nrelationship.<\/p>\n
5.3 CONDUCT OF BUSINESS. During the period from the date of this Agreement
\nuntil the earlier of the Effective Time or the termination of this Agreement in
\naccordance with its terms, VERITAS will continue to conduct its business and
\nmaintain its business relationships in the ordinary and usual course and, except
\nas otherwise disclosed herein, it will not, without the prior written consent of
\nOpenVision, which consent shall not be unreasonably withheld:<\/p>\n
(a) borrow any money except for amounts that are not in the aggregate
\nmaterial to the financial condition of VERITAS, Newco and the VERITAS
\nSubsidiaries, taken as a whole;<\/p>\n
(b) enter into any transaction not in the ordinary course of its
\nbusiness, except for those transactions described in the VERITAS Disclosure
\nLetter;<\/p>\n
(c) encumber or permit to be encumbered any of its assets except in the
\nordinary course of its business, consistent with past practice, and to an extent
\nwhich is not material;<\/p>\n
(d) dispose of any of its assets, except in the ordinary course of
\nbusiness, consistent with past practice (which shall include renewal of
\nagreements relating to VERITAS’ principal offices);<\/p>\n
(e) enter into any material lease or contract for the purchase or sale
\nor license of any property, real or personal, except in the ordinary course of
\nbusiness, consistent with past practice;<\/p>\n
(f) fail to maintain its equipment and other assets in good working
\ncondition and repair according to the standards it has maintained to the date of
\nthis Agreement, subject only to ordinary wear and tear;<\/p>\n
(g) pay (or make any oral or written commitments or representations to
\npay) any bonus, increased salary or special remuneration to any officer,
\nemployee or consultant (except for bonuses in amounts consistent with past
\npractices, and normal salary increases consistent with past practices not to
\nexceed 10% per year and that are not inconsistent with the Radford Compensation
\nSurvey of software companies and except pursuant to existing arrangements
\npreviously disclosed to OpenVision) or enter into or vary the terms of any
\nemployment, consulting or severance agreement with any such person, pay any
\nseverance or termination pay (other than payments in amounts consistent with
\npast practices or made in accordance with plans or agreements existing on the
\ndate hereof), grant any stock option (except for normal grants to employees
\nconsistent with past practices) or issue any restricted stock, or enter into or
\nmodify any agreement or plan of the type described in Section 3.8, (except for
\namendments to the VERITAS Plans to increase the number of shares reserved
\nthereunder to the number set forth in Section 3.2(b) hereof and to accommodate
\nthe assumption of such Plans by Newco in the Merger);<\/p>\n
(h) except as required by GAAP, change accounting methods;<\/p>\n
(i) declare, set aside or pay any cash or stock dividend or other
\ndistribution in respect of capital stock, or redeem or otherwise acquire any of
\nits capital stock (other than pursuant to arrangements with terminated employees
\nor consultants in the ordinary course of business, consistent with past
\npractice);<\/p>\n
A-1-35
\n 36<\/p>\n
(j) amend or terminate any contract, agreement or license to which it is
\na party except those amended or terminated in the ordinary course of its
\nbusiness, consistent with past practice, and which are not material in amount or
\neffect;<\/p>\n
(k) lend any amount to any person or entity, other than (i) advances for
\ntravel and expenses which are incurred in the ordinary course of business,
\nconsistent with past practice, not material in amount and documented by receipts
\nfor the claimed amounts, or (ii) any loans pursuant to any VERITAS Section
\n401(a) Plan;<\/p>\n
(l) guarantee or act as a surety for any obligation except for
\nobligations of Newco or any of the VERITAS Subsidiaries in amounts that are not
\nmaterial to the financial condition of VERITAS, Newco and the VERITAS
\nSubsidiaries, taken as a whole;<\/p>\n
(m) waive or release any right or claim except for the waiver or release
\nof non-material claims in the ordinary course of business, consistent with past
\npractice, or the waiver or release of rights or claims described in the VERITAS
\nDisclosure Letter;<\/p>\n
(n) except in connection with the any transaction described in the
\nVERITAS Disclosure Letter, issue or sell any shares of its capital stock of any
\nclass (except upon the exercise of an option or warrant currently outstanding or
\npermitted to be granted by Section 5.3(g)), or any other of its securities, or
\nissue or create any warrants, obligations, subscriptions, options (except as
\nexpressly permitted by Section 5.3(g)), convertible securities or other
\ncommitments to issue shares of capital stock, or accelerate the vesting or
\nchange any other term of any outstanding option or other security;<\/p>\n
(o) split or combine the outstanding shares of its capital stock of any
\nclass or enter into any recapitalization or agreement affecting the number or
\nrights of outstanding shares of its capital stock of any class or affecting any
\nother of its securities;<\/p>\n
(p) merge, consolidate or reorganize with, or acquire any entity that
\nwould preclude or interfere with the Merger;<\/p>\n
(q) amend its Articles of Incorporation or Bylaws, or amend the
\nCertificate of Incorporation or Bylaws of Newco, except in connection with any
\ntransaction described in the VERITAS Disclosure Letter;<\/p>\n
(r) license any VERITAS IP Rights except in the ordinary course of
\nbusiness, consistent with past practice;<\/p>\n
(s) agree to any audit assessment by any Tax authority;<\/p>\n
(t) materially change any insurance coverage or issue any certificates
\nof insurance except in the ordinary course of business consistent with past
\npractices;<\/p>\n
(u) take any action, or permit any action within VERITAS’ control, which
\nwould (i) prevent the Merger from qualifying as a tax-free reorganization under
\nSection 368(a)(1)(A) of the Code, (ii) prevent the Merger from qualifying for
\naccounting as a pooling of interests, or fail to use its reasonable best efforts
\nto prevent any of its officers or directors from taking or permitting any such
\naction or (iii) result in a failure to maintain the trading of VERITAS Common
\nStock on the Nasdaq Stock Market without causing such stock to be listed on the
\nNew York Stock Exchange or the American Stock Exchange at or prior to the
\ntermination of its trading on the Nasdaq Stock Market, or fail to use its
\nreasonable best efforts to prevent its officers or directors from taking or
\npermitting such action;<\/p>\n
(v) provide or publish to its shareholders any material which might
\nconstitute an unauthorized “prospectus” within the meaning of the Securities
\nAct; or<\/p>\n
(w) agree to take, or permit Newco or any VERITAS Subsidiary to take or
\nagree to take, or enter into negotiations with respect to, any of the actions
\ndescribed in the preceding clauses in this Section 5.3.<\/p>\n
5.4 SHAREHOLDER APPROVAL. VERITAS will call the VERITAS Shareholders
\nMeeting, to be held within 45 days after the Form S-4 shall have been declared
\neffective by the SEC, to submit the Merger and related matters for the
\nconsideration and approval of the VERITAS shareholders. Subject to the fiduciary<\/p>\n
A-1-36
\n 37<\/p>\n
obligations of VERITAS’ directors and officers and to VERITAS’ legal disclosure
\nobligations, the Prospectus\/Proxy Statement will include a statement to the
\neffect that VERITAS’ Board of Directors has recommended that VERITAS
\nshareholders vote in favor of the Merger. Such meeting will be called, held and
\nconducted, and any proxies will be solicited, in compliance with applicable law.<\/p>\n
5.5 VERITAS AFFILIATE AGREEMENTS.<\/p>\n
(a) Affiliate Agreement. Concurrently with the execution of this
\nAgreement, VERITAS shall cause each of those persons who may be deemed to be, in
\nVERITAS’ reasonable judgment, an “affiliate” (within the meaning of Rule 145 of
\nthe rules and regulations promulgated by the SEC under the Securities Act (“Rule
\n145”)) of VERITAS, which persons are all listed on Exhibit 5.5(a) hereto, to
\nsign and deliver to OpenVision an Affiliate Agreement in the form of Exhibit
\n5.5(b) hereto (the “VERITAS Affiliate Agreements”) agreeing that such persons
\n(a) will have no present intent to dispose of more than fifty percent (50%) of
\nthe Newco Common Stock received in the Merger; and (b) will make no disposition
\nof VERITAS Common Stock, or the Newco Common Stock received in exchange
\ntherefor: (i) in the 30 day period prior to the Closing Date; (ii) after the
\nClosing Date until Newco shall have publicly released its first report of
\nquarterly financial statements that include the combined financial results of
\nNewco, OpenVision and VERITAS for a period of at least 30 days of combined
\noperations; or (iii) except in compliance with SEC Rule 145(d), pursuant to
\nanother available exemption from the registration requirements under the
\nSecurities Act or in a registered offering. Newco shall be entitled to place
\nlegends on the certificates evidencing any Newco Common Stock to be received by
\nsuch VERITAS affiliates pursuant to the terms of this Agreement and the VERITAS
\nAgreement of Merger, and to issue appropriate stop transfer instructions to the
\ntransfer agent for Newco Common Stock, consistent with the terms of such VERITAS
\nAffiliate Agreements, whether or not such VERITAS Affiliate Agreements are
\nactually delivered to OpenVision.<\/p>\n
(b) Voting Agreement. Concurrently with the execution of this Agreement,
\neach of the persons listed in Exhibit 5.5(a) will sign and deliver to OpenVision
\na Voting Agreement in the form of Exhibit 5.5(c) hereto (the “VERITAS Voting
\nAgreement”) agreeing that such persons will vote in favor of the Merger at the
\nVERITAS Stockholder Meeting.<\/p>\n
5.6 LETTER OF VERITAS’ ACCOUNTANTS.<\/p>\n
(a) VERITAS shall use its reasonable best efforts to cause to be
\ndelivered a letter of Ernst & Young LLP, VERITAS’ independent auditors, dated a
\ndate within five business days following the date of this Agreement, stating
\nthat firm’s written concurrence with VERITAS management’s and the OpenVision
\nmanagement’s conclusions, respectively, as to the appropriateness of pooling of
\ninterests accounting for the Merger under Accounting Principles Board Opinion
\nNo. 16, if closed and consummated in accordance with this Agreement.<\/p>\n
(b) VERITAS shall use its reasonable best efforts to cause to be
\ndelivered to OpenVision a letter of Ernst & Young LLP, dated a date within two
\nbusiness days before the date on which the Form S-4 shall become effective and
\naddressed to OpenVision, in form and substance reasonably satisfactory to
\nOpenVision and customary in scope and substance for letters delivered by
\nindependent public accountants in connection with registration statements
\nsimilar to the Form S-4.<\/p>\n
5.7 PROSPECTUS\/PROXY STATEMENT. VERITAS will mail to its shareholders in a
\ntimely manner, for the purpose of considering and voting upon the Merger at the
\nVERITAS Shareholders Meeting, the Prospectus\/Proxy Statement in the Form S-4.
\nVERITAS and Newco will prepare and file the Proxy Statement\/Prospectus with the
\nSEC as promptly as practicable, and each will use its respective best reasonable
\nefforts to cause the Form S-4 to become effective as soon after such filing as
\npracticable. In this regard, VERITAS and Newco will advise OpenVision promptly
\nas to the time at which the Form S-4 becomes effective and of the issuance by
\nthe SEC of any stop order suspending the effectiveness of the Form S-4 or the
\ninitiation of any proceedings for such purpose and each will use its respective
\nreasonable best efforts to prevent the issuance of any stop order and to obtain
\nas soon as possible the lifting thereof, if issued. Until the Effective Time,
\nVERITAS and Newco will advise OpenVision promptly of any requirement of the SEC
\nfor any amendment or supplement of the Form S-4 or for additional information,
\nand will not at any time file any<\/p>\n
A-1-37
\n 38<\/p>\n
amendment of or supplement to the prospectus contained therein (or to the
\nprospectus filled pursuant to Rule 424(b) of the SEC) (the “Prospectus”) which
\nshall not have been previously submitted to OpenVision in reasonable time prior
\nto the proposed filing thereof or to which OpenVision shall reasonably object or
\nwhich is not in compliance in all material respects with the Securities Act and
\nthe rules and regulations issued by the SEC thereunder. None of the information
\nrelating to VERITAS or Newco (or, to VERITAS’ or Newco’s knowledge, any other
\nperson, contained in any document, certificate or other writing furnished or to
\nbe furnished by VERITAS) included in (i) the Prospectus\/Proxy Statement at the
\ntime the Prospectus\/Proxy Statement is mailed or at the time of the meeting of
\nVERITAS shareholders to vote on the Merger or at the time of the meeting of the
\nstockholders of OpenVision to vote on the Merger or at the Effective Time, as
\nthen amended or supplemented, or (ii) the Form S-4 at the time the Form S-4
\nbecomes effective or at the Effective Time, as then amended or supplemented,
\nwill contain any untrue statement of a material fact or will omit to state any
\nmaterial fact required to be stated therein or necessary to make the statements
\ntherein, in light of the circumstances in which they were made, not misleading
\nor necessary to correct any statement which has become false or misleading in
\nany earlier communication with respect to the solicitation of proxies for the
\nOpenVision and VERITAS stockholder meetings. From and after the date the Form
\nS-4 becomes effective and until the Effective Time, if any event known to
\nVERITAS or Newco occurs as a result of which the Prospectus would include an
\nuntrue statement of a material fact or omit to state a material fact required to
\nbe stated therein or necessary to make the statements therein not misleading, or
\nif it is necessary at any time to amend the Form S-4 or the Prospectus to comply
\nwith the Securities Act, VERITAS and Newco will promptly notify OpenVision and
\nwill prepare an amended or supplemented Form S-4 or Prospectus which will
\ncorrect such statement or omission and will use its reasonable best efforts to
\ncause any such amendment to become effective as promptly as possible. The
\nProspectus\/Proxy Statement, as it relates to VERITAS and Newco, will comply as
\nto form in all material respects with the requirements of the Exchange Act and
\nthe rules and regulations thereunder in effect at the time the Prospectus\/Proxy
\nStatement is mailed.<\/p>\n
5.8 STATE SECURITIES LAW COMPLIANCE. VERITAS and Newco shall use their
\nrespective reasonable best efforts to (i) qualify the Newco Common Stock to be
\nissued pursuant to the Merger under the state securities or “blue sky” laws of
\nevery jurisdiction of the United States in which (a) any registered stockholder
\nof OpenVision has an address on the records of OpenVision’s transfer agent on
\nthe record date for determining the OpenVision stockholders entitled to notice
\nof and to vote on the Merger, (b) any registered shareholder of VERITAS has an
\naddress on the records of VERITAS’ transfer agent on the record date for
\ndetermining the VERITAS shareholders entitled to notice of and to vote on the
\nMerger, and (c) a Nasdaq Stock Market or other exemption from the qualification
\nrequirements under such laws is unavailable, and (ii) qualify the Stock Rights
\nto be assumed by VERITAS pursuant to Sections 1.8 and 1.9 hereof under the state
\nsecurities or “blue sky” laws of every jurisdiction of the United States in
\nwhich (a) the records of VERITAS or OpenVision, as of the Closing Date, indicate
\nthat a holder of such Stock Rights resides and (b) a Nasdaq Stock Market or
\nother exemption from the qualification requirements under such laws is
\nunavailable;<\/p>\n
5.9 REGULATORY APPROVALS. VERITAS and Newco will promptly execute and
\nfile, or join in the execution and filing, of any application or other document
\nthat may be necessary in order to obtain the authorization, approval or consent
\nof any governmental body, federal, state, local or foreign which may be
\nreasonably required, or which OpenVision may reasonably request, in connection
\nwith the consummation of the transactions contemplated by this Agreement.
\nVERITAS and Newco will each use its respective reasonable best efforts to
\npromptly obtain all such authorizations, approvals and consents. Without
\nlimiting the generality of the foregoing, as promptly as practicable after the
\nexecution of this Agreement, VERITAS and Newco shall file with the FTC and the
\nDOJ a pre-merger notification report under the HSR Act.<\/p>\n
5.10 NECESSARY CONSENTS. VERITAS and Newco will each use its respective
\nreasonable best efforts to obtain such written consents and to take such other
\nactions as may be necessary or appropriate in addition to those set forth in
\nSection 5.9 to allow the consummation of the transactions contemplated hereby
\nand to allow the VERITAS Surviving Corporation to carry on VERITAS’ business
\nafter the Effective Time.<\/p>\n
5.11 ACCESS TO INFORMATION. VERITAS will allow OpenVision and its agents
\nreasonable access to the files, books, records and offices of VERITAS, Newco and
\neach VERITAS Subsidiary, including, without limitation, any and all information
\nrelating to VERITAS Taxes, commitments, contracts, leases, licenses and<\/p>\n
A-1-38
\n 39<\/p>\n
real, personal and intangible property and financial condition. VERITAS will use
\nits reasonable best efforts to cause its accountants to cooperate with
\nOpenVision and its agents in making available to OpenVision all financial
\ninformation reasonably requested, including, without limitation, the right to
\nexamine all working papers pertaining to all Tax returns and financial
\nstatements prepared or audited by such accountants.<\/p>\n
5.12 SATISFACTION OF CONDITIONS PRECEDENT. VERITAS and Newco will each use
\nits respective reasonable best efforts to satisfy or cause to be satisfied all
\nthe conditions precedent that are set forth in Section 7 and to cause the Merger
\nand the other transactions contemplated by this Agreement to be consummated.<\/p>\n
5.13 OPENVISION EMPLOYEE PLANS AND BENEFIT ARRANGEMENTS; SEVERANCE. The
\nOpenVision Employee Plans and OpenVision Benefit Arrangements listed in the
\nOpenVision Disclosure Letter that are in effect at the date of this Agreement
\nshall, to the extent practicable, remain in effect until OpenVision employees
\nare allowed to participate in comparable VERITAS Employee Plans and VERITAS
\nBenefit Arrangements. Newco will use reasonable efforts to arrange that, as soon
\nas practicable after the Effective Time, the VERITAS Benefit Arrangements and
\nVERITAS Employee Plans provide the same or a comparable benefit or plan to each
\nemployee of OpenVision as is provided to VERITAS’ employees who are similarly
\nsituated. The VERITAS Benefit Arrangements and VERITAS Employee Plans shall give
\nfull credit for each participant’s period of service with OpenVision and each
\nERISA Affiliate prior to the Effective Time for all purposes for which such
\nservice was recognized under OpenVision Benefit Arrangements or OpenVision
\nEmployee Plans prior to the Effective Time. From and after the Effective Time,
\nNewco shall provide all employees of OpenVision and its ERISA Affiliates with
\nthe opportunity to participate in any employee stock option or other incentive
\ncompensation plan of Newco and its ERISA Affiliates on substantially the same
\nterms and subject to substantially the same conditions as are available to
\nsimilarly situated employees of VERITAS.<\/p>\n
5.14 INDEMNIFICATION AND INSURANCE.<\/p>\n
(a) OpenVision Rights.<\/p>\n
(i) The Certificate of Incorporation and Bylaws of the OpenVision
\nSurviving Corporation shall contain the provisions with respect to
\nindemnification and limitation of liability for monetary damages set forth in
\nthe Certificate of Incorporation and Bylaws of OpenVision on the date of this
\nAgreement, which provisions shall not be amended, repealed or otherwise modified
\nfor a period of ten years from the Effective Time in any manner that would
\nadversely affect the rights thereunder of individuals who at the Effective Time
\nwere directors, officers, employees or agents of OpenVision, unless such
\nmodification is required by law.<\/p>\n
(ii) From and after the Effective Time, Newco and the OpenVision
\nSurviving Corporation shall honor, in all respects, all of the indemnity
\nagreements entered into prior to the date hereof by OpenVision with its
\nrespective officers and directors, copies of which have been provided to VERITAS
\nor to its counsel, whether or not such persons continue in their positions with
\nNewco or the OpenVision Surviving Corporation following the Effective Time.
\nFollowing the Effective Time, VERITAS’ form of indemnification agreement shall
\nbe adopted as the form of indemnification agreement for Newco and the OpenVision
\nSurviving Corporation and all continuing officers and directors of Newco or the
\nOpenVision Surviving Corporation shall be afforded the opportunity to enter into
\nsuch indemnification agreement, and shall be covered by such directors’ and
\nofficers’ liability insurance policies as Newco shall have in effect from time
\nto time.<\/p>\n
(iii) After the Effective Time, Newco and the OpenVision Surviving
\nCorporation will, jointly and severally, to the fullest extent permitted under
\napplicable law, indemnify and hold harmless, each present and former director or
\nofficer of OpenVision or any OpenVision subsidiary (collectively, for purposes
\nof Section 5.14(a), the “Indemnified Parties”) against any costs or expenses
\n(including attorneys’ fees), judgments, fines, losses, claims, damages,
\nliabilities and amounts paid in settlement in connection with any claim, action,
\nsuit, proceeding or investigation, whether civil, criminal administrative or
\ninvestigative, to the extent arising out of or pertaining to any action or
\nomission in his or her capacity as a director or officer of OpenVision arising
\nout of or pertaining to the transactions contemplated by this Agreement for a
\nperiod of six years after the date hereof. In the event of any such claim,
\naction, suit, proceeding or investigation (whether<\/p>\n
A-1-39
\n 40<\/p>\n
arising before or after the Effective Time), (a) any counsel retained for the
\ndefense of the Indemnified Parties for any period after the Effective Time will
\nbe reasonably satisfactory to the Indemnified Parties, (b) after the Effective
\nTime, the OpenVision Surviving Corporation will pay the reasonable fees and
\nexpenses of such counsel promptly after statements therefor are received, and
\n(c) the OpenVision Surviving Corporation will cooperate in the defense of any
\nsuch matter; provided, however, that the OpenVision Surviving Corporation will
\nnot be liable for any settlement effected without its written consent (which
\nconsent will not be unreasonably withheld); and provided, further, that, in the
\nevent that any claim or claims for indemnification are asserted or made within
\nsuch six-year period, all rights to indemnification in respect of any such claim
\nor claims will continue until the disposition of any and all such claims. The
\nIndemnified Parties as a group may be defended by only one law firm (in addition
\nto local counsel) with respect to any single action unless there is, under
\napplicable standards of professional conduct, a conflict on any significant
\nissue between the positions of any two or more Indemnified Parties.<\/p>\n
(iv) For the entire period from and after the Effective Time until at
\nleast six years after the Effective Time, Newco will cause the OpenVision
\nSurviving Corporation to use its commercially reasonable efforts to maintain in
\neffect directors’ and officers’ liability insurance covering those persons who
\nare currently covered by OpenVision’s directors’ and officers’ liability
\ninsurance policy (a copy of which has been heretofore delivered to VERITAS) of
\nat least the same coverage and amounts, containing terms that are no less
\nadvantageous with respect to claims arising at or before the Effective Time than
\nOpenVision’s policies in effect immediately prior to the Effective Time to those
\napplicable to the then current directors and officers of Newco and the VERITAS
\nSurviving Corporation; provided, however, that in no event shall Newco or the
\nOpenVision Surviving Corporation be required to expend in excess of 150% of the
\nannual premium currently paid by OpenVision for such coverage in which event
\nNewco shall purchase such coverage as is available for such 150% of such annual
\npremium.<\/p>\n
(v) Newco and the OpenVision Surviving Corporation shall pay all
\nexpenses, including attorneys’ fees, that may be incurred by any Indemnified
\nParties in enforcing the indemnity and other obligations provided for in this
\nSection 5.14(a).<\/p>\n
(b) VERITAS Rights.<\/p>\n
(i) The Articles of Incorporation and Bylaws of the VERITAS Surviving
\nCorporation shall contain the provisions with respect to indemnification and
\nlimitation of liability for monetary damages set forth in the Articles of
\nIncorporation and Bylaws of VERITAS on the date of this Agreement, which
\nprovisions shall not be amended, repealed or otherwise modified for a period of
\nten years from the Effective Time in any manner that would adversely affect the
\nrights thereunder of individuals who at the Effective Time were directors,
\nofficers, employees or agents of VERITAS, unless such modification is required
\nby law.<\/p>\n
(ii) From and after the Effective Time, Newco and the VERITAS
\nSurviving Corporation shall honor, in all respects, all of the indemnity
\nagreements entered into prior to the date hereof by VERITAS with its respective
\nofficers and directors, whether or not such persons continue in their positions
\nwith Newco or the VERITAS Surviving Corporation following the Effective Time.
\nFollowing the Effective Time, VERITAS’ form of indemnification agreement shall
\nbe adopted as the form of indemnification agreement for Newco and the VERITAS
\nSurviving Corporation and all continuing officers and directors of Newco or the
\nVERITAS Surviving Corporation shall be afforded the opportunity to enter into
\nsuch indemnification agreement, and shall be covered by such directors’ and
\nofficers’ liability insurance policies as Newco shall have in effect from time
\nto time.<\/p>\n
(iii) After the Effective Time, Newco and the VERITAS Surviving
\nCorporation will, jointly and severally, to the fullest extent permitted under
\napplicable law, indemnify and hold harmless, each present and former director or
\nofficer of VERITAS or any of its subsidiaries (collectively, for purposes of
\nSection 5.14(b), the “Indemnified Parties”) against any costs or expenses
\n(including attorneys’ fees), judgments, fines, losses, claims, damages,
\nliabilities and amounts paid in settlement in connection with any claim, action,
\nsuit, proceeding or investigation, whether civil, criminal administrative or
\ninvestigative, to the extent arising out of or pertaining to any action or
\nomission in his or her capacity as a director or officer of VERITAS arising out
\nof or pertaining to the transactions contemplated by this Agreement for a period
\nof six<\/p>\n
A-1-40
\n 41<\/p>\n
years after the date hereof. In the event of any such claim, action, suit,
\nproceeding or investigation (whether arising before or after the Effective
\nTime), (a) any counsel retained for the defense of the Indemnified Parties for
\nany period after the Effective Time will be reasonably satisfactory to the
\nIndemnified Parties, (b) after the Effective Time, the VERITAS Surviving
\nCorporation will pay the reasonable fees and expenses of such counsel, promptly
\nafter statements therefor are received, and (c) the VERITAS Surviving
\nCorporation will cooperate in the defense of any such matter; provided, however,
\nthat the VERITAS Surviving Corporation will not be liable for any settlement
\neffected without its written consent (which consent will not be unreasonably
\nwithheld); and provided, further, that, in the event that any claim or claims
\nfor indemnification are asserted or made within such six-year period, all rights
\nto indemnification in respect of any such claim or claims will continue until
\nthe disposition of any and all such claims. The Indemnified Parties as a group
\nmay be defended by only one law firm (in addition to local counsel) with respect
\nto any single action unless there is, under applicable standards of professional
\nconduct, a conflict on any significant issue between the positions of any two or
\nmore Indemnified Parties.<\/p>\n
(iv) For the entire period from and after the Effective Time until at
\nleast six years after the Effective Time, Newco will cause the VERITAS Surviving
\nCorporation to use its commercially reasonable efforts to maintain in effect
\ndirectors’ and officers’ liability insurance covering those persons who are
\ncurrently covered by VERITAS’ directors’ and officers’ liability insurance
\npolicy (a copy of which has been heretofore delivered to OpenVision) of at least
\nthe same coverage and amounts, containing terms that are no less advantageous
\nwith respect to claims arising at or before the Effective Time than VERITAS’
\npolicies in effect immediately prior to the Effective Time to those applicable
\nto the then current directors and officers of Newco and the VERITAS Surviving
\nCorporation; provided, however, that in no event shall Newco or the VERITAS
\nSurviving Corporation be required to expend in excess of 150% of the annual
\npremium currently paid by VERITAS for such coverage in which event Newco shall
\npurchase such coverage as is available for such 150% of such annual premium.<\/p>\n
(v) Newco and the VERITAS Surviving Corporation shall pay all
\nexpenses, including attorneys’ fees, that may be incurred by any Indemnified
\nParties in enforcing the indemnity and other obligations provided for in this
\nSection 5.14(b).<\/p>\n
(c) In the event Newco, the OpenVision Surviving Corporation or the
\nVERITAS Surviving Corporation or any of their respective successors or assigns
\n(a) consolidates with or merges into any other person or entity and shall not be
\nthe continuing or surviving corporation or entity of such consolidation or
\nmerger, or (b) transfers or conveys all or a substantial portion of its
\nproperties or assets to any person or entity, then, and in each such case, to
\nthe extent necessary to effectuate the purposes of this Section 5.14(c), proper
\nprovision shall be made so that the successors and the assigns of Newco, the
\nOpenVision Surviving Corporation and the VERITAS Surviving Corporation assume
\nthe obligations set forth in this Section 5.14.<\/p>\n
(d) The provisions of this Section 5.14 shall survive the Effective Time
\nand are intended to be for the benefit of, and shall be enforceable by, each
\nofficer and director of OpenVision or VERITAS described in Sections 5.14(a)(i)
\nand 5.14(b)(i) and his or her heirs and representatives.<\/p>\n
5.15 REGISTRATION RIGHTS AGREEMENT. Prior to the Effective Time, Newco,
\nOpenVision and the stockholders of OpenVision listed under Section 5.15 of the
\nOpenVision Disclosure Letter shall enter into a Registration Rights Agreement in
\nthe form attached hereto as Exhibit 5.15 (the “Registration Rights Agreement”).<\/p>\n
5.16 EMPLOYEE MATTERS. Prior to the Effective Time, VERITAS, Newco and
\nOpenVision shall mutually agree upon an integration plan relating to the Merger
\nwhich shall include, among other things, provisions relating to compensation and
\nother equity incentives for employees of OpenVision.<\/p>\n
5.17 BOARD REPRESENTATION. Newco shall appoint Geoffrey W. Squire and
\nWilliam H. Janeway to Newco’s Board of Directors as of the Effective Time. In
\naddition, at the Effective Time, Newco shall execute a Nomination Agreement in
\nthe form attached hereto as Exhibit 5.17 (the “Nomination Agreement”) providing
\nfor the following rights of Warburg:<\/p>\n
A-1-41
\n 42<\/p>\n
(a) provided that Warburg holds a number of shares of Newco Common Stock
\nin excess of fifteen percent (15%) of the outstanding Common Stock of Newco,
\nNewco shall nominate, in connection with each stockholder solicitation relating
\nto the election of directors, two candidates selected by Warburg, consisting of
\none representative of Warburg and one independent person reasonably acceptable
\nto Newco; or<\/p>\n
(b) provided that Warburg holds a number of shares of Newco Common Stock
\nequal to or less than fifteen percent (15%) but exceeding five percent (5%) of
\nthe outstanding Common Stock of Newco, Newco shall nominate one candidate
\nselected by Warburg.<\/p>\n
At such time as Warburg ceases to hold in excess of five percent (5%) of
\nthe outstanding Common Stock of Newco, the Nomination Agreement will terminate
\nand will have no further force or effect.<\/p>\n
6. CLOSING MATTERS<\/p>\n
6.1 THE CLOSING. Subject to the termination of this Agreement as provided
\nin Section 9 below, the Closing of the transactions contemplated by this
\nAgreement (the “Closing”) will take place at the offices of Fenwick & West, Two
\nPalo Alto Square, Palo Alto, California 94306 on a date (the “Closing Date”) and
\nat a time to be mutually agreed upon by the parties, which date shall be as soon
\nas practicable after the OpenVision Stockholders Meeting and the VERITAS
\nShareholders Meeting and, in any event, no later than the third business day
\nafter all conditions to Closing set forth herein shall have been satisfied or
\nwaived, unless another place, time and date is mutually selected by OpenVision
\nand VERITAS. Concurrently with the Closing, the Agreements of Merger will be
\nfiled in the offices of the Secretary of the State of Delaware and the VERITAS
\nAgreement of Merger shall be filed in the offices of the Secretary of State of
\nthe State of California.<\/p>\n
6.2 EXCHANGE OF CERTIFICATES.<\/p>\n
(a) Exchange Agent. ChaseMellon Shareholder Services LLC shall act as
\nexchange agent (the “Exchange Agent”) in the Merger. Promptly after the
\nEffective Time, Newco shall deposit with the Exchange Agent, for the benefit of
\nthe holders of shares of VERITAS Common Stock and OpenVision Common Stock, for
\nexchange in accordance with this Agreement and the Agreements of Merger,
\ncertificates representing the shares of Newco Common Stock (such shares of Newco
\nCommon Stock, together with any dividends or distributions with respect thereto,
\nbeing hereinafter referred to as the “Exchange Fund”) issuable pursuant to this
\nAgreement and the Agreements of Merger, and cash in an amount sufficient for
\npayment in lieu of fractional shares pursuant to Section 1.7, in exchange for
\noutstanding shares of VERITAS Common Stock and OpenVision Common Stock.<\/p>\n
(b) Exchange Procedures. As soon as practicable after the Effective
\nTime, Newco shall cause the Exchange Agent to mail to each holder of record of a
\ncertificate or certificates which immediately prior to the Effective Time
\nrepresented issued and outstanding shares of OpenVision Common Stock (including
\npersons who purchase OpenVision Common Stock prior to the Effective Time upon
\nexercise of OpenVision Stock Purchase Plan Options in accordance with Section
\n1.9(b)) (collectively, the “Certificates”), (i) a letter of transmittal (which
\nshall specify 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 shall be in such form and have such other provisions as VERITAS and
\nOpenVision may reasonably specify) and (ii) instructions for use in effecting
\nthe surrender of the Certificates in exchange for certificates representing
\nNewco Common Stock. Upon surrender of a Certificate for cancellation to the
\nExchange Agent, together with a duly executed letter of transmittal and such
\nother documents as may be reasonably required by the Exchange Agent, the holder
\nof such Certificate shall be entitled to receive in exchange therefor a
\ncertificate representing that number of whole shares of Newco Common Stock and
\ncash in lieu of fractional shares which such holder has the right to receive
\npursuant to the provisions of this Agreement and the Agreements of Merger, and
\nthe Certificate so surrendered shall forthwith be canceled. Certificates which
\nimmediately prior to the Effective Time represented issued and outstanding
\nshares of VERITAS Common Stock do not need to be delivered to the Exchange Agent
\nand from and after the Effective Time, such certificates shall be deemed to
\nevidence the ownership of an equal number of full shares of Newco Common Stock.
\nIn the event of a transfer of ownership of shares of OpenVision Common Stock
\nwhich is not registered on the transfer records of VERITAS or<\/p>\n
A-1-42
\n 43<\/p>\n
OpenVision, respectively, a certificate representing the proper number of shares
\nof Newco Common Stock may be issued to a transferee if the Certificate
\nrepresenting such VERITAS Common Stock or OpenVision Common Stock is presented
\nto the Exchange Agent, accompanied by all documents required to evidence and
\neffect such transfer and by evidence that any applicable stock transfer taxes
\nhave been paid. Until surrendered as contemplated by this Section 6.2 and the
\nAgreements of Merger, each Certificate shall be deemed, on and after the
\nEffective Time, to evidence the ownership of the number of full shares of Newco
\nCommon Stock into which such shares of OpenVision Common Stock shall have been
\nso converted and the right to receive an amount in lieu of any fractional shares
\nof Newco Common Stock as contemplated by Section 1.7, the Agreements of Merger
\nand the Delaware Law.<\/p>\n
(c) Distributions with Respect to Unsurrendered Certificates. No
\ndividends or other distributions declared or made after the Effective Time with
\nrespect to Newco Common Stock with a record date after the Effective Time shall
\nbe paid to the holder of any unsurrendered Certificate with respect to the
\nshares of Newco Common Stock represented thereby, and no cash payment in lieu of
\nfractional shares shall be paid to any such holder pursuant to Section 1.7 and
\nthe OpenVision Agreement of Merger, until the holder of record of such
\nCertificate shall surrender such Certificate. Subject to the effect of
\napplicable laws, following surrender of any such Certificate, there shall be
\npaid to the record holder of the certificates representing whole shares of Newco
\nCommon Stock issued in exchange therefor, without interest, (i) at the time of
\nsuch surrender, the amount of any cash payable in lieu of a fractional share of
\nNewco Common Stock to which such holder is entitled pursuant to Section 1.7 and
\nthe OpenVision Agreement of Merger and the amount of dividends or other
\ndistributions with a record date after the Effective Time theretofore paid with
\nrespect to such whole shares of Newco Common Stock, and (ii) at the appropriate
\npayment date, the amount of dividends or other distributions with a record date
\nafter the Effective Time but prior to surrender and a payment date subsequent to
\nsurrender payable with respect to such whole shares of Newco Common Stock.<\/p>\n
(d) No Further Ownership Rights in OpenVision Common Stock. All shares
\nof Newco Common Stock issued upon the surrender for exchange of shares of
\nOpenVision Common Stock in accordance with the terms of this Agreement and the
\nOpenVision Agreement of Merger (including any cash paid pursuant to Section 1.7
\nand Section 6.2(c)) shall be deemed to have been issued in full satisfaction of
\nall rights pertaining to such shares of OpenVision Common Stock. After the
\nEffective Time there shall be no further registration of transfers on the stock
\ntransfer books of (i) the VERITAS Surviving Corporation of the shares of VERITAS
\nCommon Stock, or (ii) the OpenVision Surviving Corporation of the shares of
\nOpenVision Common Stock, which were outstanding immediately prior to the
\nEffective Time. If, after the Effective Time, Certificates are presented to the
\nOpenVision Surviving Corporation for any reason, they shall be canceled and
\nexchanged as provided in this Section 6.2 and the Agreements of Merger.<\/p>\n
(e) Termination of Exchange Fund. Any portion of the Exchange Fund which
\nremains undistributed to the stockholders of OpenVision six months after the
\nEffective Time shall be delivered to Newco, upon demand, and any former
\nstockholders of OpenVision who have not theretofore complied with this Section
\n6.2 and the OpenVision Agreement of Merger shall thereafter look only to Newco
\nfor payment of their claim for Newco Common Stock, any cash in lieu of
\nfractional shares of Newco Common Stock and any dividends or distributions with
\nrespect to Newco Common Stock.<\/p>\n
(f) No Liability. Neither the Exchange Agent, Newco, VERITAS or
\nOpenVision shall be liable to any holder of shares of OpenVision Common Stock or
\nNewco Common Stock, as the case may be, for any amount delivered to a public
\nofficial pursuant to any applicable abandoned property, escheat or similar law.<\/p>\n
(g) Lost, Stolen or Destroyed Certificates. In the event any
\nCertificates shall have been lost, stolen or destroyed, the Exchange Agent shall
\nissue in exchange for such lost, stolen or destroyed Certificates, upon the
\nmaking of an affidavit of that fact by the holder thereof and the posting of
\nreasonable bond therefor, such shares of Newco Common Stock, cash for fractional
\nshares, if any, as may be required pursuant to Section 1.7 and any dividends or
\ndistributions payable pursuant to Section 6.2(c).<\/p>\n
6.3 ASSUMPTION OF OPTIONS. Promptly after the Effective Time, Newco shall
\n(a) notify in writing each holder of a Stock Right of the assumption of such
\nStock Right by Newco, the number of shares of Newco Common Stock that are then
\nsubject to such Stock Right and the exercise price or purchase price of such<\/p>\n
A-1-43
\n 44<\/p>\n
Stock Right, as determined pursuant to Sections 1.8 and 1.9 hereof, and (b) file
\nthe Form S-8 to register the Stock Rights.<\/p>\n
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OPENVISION<\/p>\n
The obligations of OpenVision hereunder are subject to the fulfillment or
\nsatisfaction on or before the Closing of each of the following conditions (any
\none or more of which may be waived by OpenVision, but only in a writing signed
\nby OpenVision):<\/p>\n
7.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
\nwarranties of VERITAS and Newco set forth in Section 3 (as qualified by the
\nVERITAS Disclosure Letter) shall be true and accurate on and as of the Closing
\nDate, except for changes contemplated by this Agreement and except for those
\nrepresentations and warranties that address matters only as of a particular date
\n(which shall remain true and correct as of such particular date), with the same
\nforce and effect as if they had been made at the Closing, except, in all such
\ncases, where such breaches of such representations and warranties, individually
\nor in the aggregate, have not resulted in, nor reasonably would be expected to
\nresult in liabilities amounting in the aggregate to in excess of $5,000,000 or,
\nhave not substantially impaired nor reasonably would be expected to
\nsubstantially impair, VERITAS’ ability after the Closing to continue to develop,
\nproduce, sell and distribute the products and services that are material to
\nVERITAS’ business in substantially the same manner as it has prior to the date
\nof this Agreement, and OpenVision shall receive certificates to such effect
\nexecuted by each of VERITAS’ Chief Executive Officer and Newco’s Chief Executive
\nOfficer.<\/p>\n
7.2 COVENANTS. VERITAS and Newco shall have performed and complied in all
\nmaterial respects with all of their respective covenants contained in Section 5
\non or before the Closing, and OpenVision shall receive certificates to such
\neffect executed by each of VERITAS’ Chief Executive Officer and Newco’s Chief
\nExecutive Officer.<\/p>\n
7.3 ABSENCE OF SUBSTANTIAL MATERIAL ADVERSE CHANGE. There shall not have
\nbeen any Substantial Material Adverse Change since the date of this Agreement.
\n“Substantial Material Adverse Change” shall be deemed to have occurred only in
\nthe event that, prior to the Effective Time, there shall occur any event or
\nchange which, individually or in the aggregate of all such events or changes,
\nhave resulted, or reasonably would be expected to result in, a substantial
\nimpairment to VERITAS’ ability after the Closing to continue to develop,
\nproduce, sell and distribute the products and services that are material to
\nVERITAS’ business in substantially the same manner as it has prior to the date
\nof this Agreement.<\/p>\n
7.4 COMPLIANCE WITH LAW. There shall be no order, decree or ruling by any
\ngovernmental agency which would prohibit or render illegal the transactions
\ncontemplated by this Agreement.<\/p>\n
7.5 CONSENTS. There shall have been obtained on or before the Closing the
\npermits and authorizations listed on Exhibit 7.5 hereto, and VERITAS shall have
\nreceived the written consents, assignments, waivers, authorizations and other
\ncertificates also listed on Exhibit 7.5.<\/p>\n
7.6 FORM S-4. The Form S-4 shall have become effective under the
\nSecurities Act and shall not be the subject of any stop-order or proceedings
\nseeking a stop-order and the Prospectus\/Proxy Statement shall on the Closing
\nDate not be subject to any proceedings commenced or overtly threatened by the
\nSEC.<\/p>\n
7.7 OPINION OF VERITAS AND NEWCO’S COUNSEL. OpenVision shall have received
\nfrom Fenwick & West LLP, counsel to VERITAS and Newco, an opinion substantially
\nin the form of Exhibit 7.7.<\/p>\n
7.8 OPENVISION STOCKHOLDER APPROVAL. The principal terms of this Agreement
\nand the Merger shall have been approved and adopted by the OpenVision
\nstockholders in accordance with applicable law and OpenVision’s Certificate of
\nIncorporation and Bylaws.<\/p>\n
7.9 VERITAS SHAREHOLDER APPROVAL. The principal terms of this Agreement
\nand the Merger shall have been approved and adopted by the VERITAS shareholders
\nin accordance with applicable law and VERITAS’ Articles of Incorporation and
\nBylaws. Holders of no more than 5% of the outstanding shares of VERITAS Common
\nStock shall be eligible to exercise dissenter’s rights under Chapter 13 of the
\nCGCL.<\/p>\n
A-1-44
\n 45<\/p>\n
7.10 NO LEGAL ACTION. No temporary restraining order, preliminary
\ninjunction or permanent injunction or other order preventing the consummation of
\nthe Merger shall have been issued by any federal or state court and remain in
\neffect.<\/p>\n
7.11 TAX OPINION. Each of VERITAS and OpenVision shall have received an
\nopinion in form and substance satisfactory to them from their respective
\ncounsel, to the effect that the Merger will be treated for Federal income tax
\npurposes as a tax-free reorganization within the meaning of Section 368 of the
\nCode, provided that if the respective counsel to VERITAS or OpenVision does not
\nrender such opinion, this condition shall nonetheless be deemed satisfied with
\nrespect to such party if counsel to the other party renders such opinion to such
\nparty. The parties shall make representations related to the VERITAS and
\nOpenVision tax opinions, which representations counsel may rely upon.<\/p>\n
7.12 ELECTION OF OPENVISION DESIGNEES TO THE BOARD OF DIRECTORS OF
\nNEWCO. The Board of Directors of Newco shall have taken appropriate action to
\nelect Geoffrey W. Squire and William H. Janeway to the Board of Directors of
\nNewco, effective upon the Effective Time.<\/p>\n
7.13 POOLING OPINION. OpenVision shall have received from Ernst & Young
\nLLP an opinion, in form and substance satisfactory to OpenVision, dated as of
\nthe Closing that the Merger will be treated as a “pooling of interests” in
\naccordance with GAAP and all published rules, regulations and policies of the
\nSEC.<\/p>\n
7.14 NASDAQ LISTING. The Newco Common Stock to be issued in the Merger
\nshall have been approved for quotation on the Nasdaq Stock Market, subject to
\nnotice of issuance.<\/p>\n
7.15 INCORPORATION OF NEW DELAWARE COMPANIES. Newco shall have formed
\nVERITAS Sub and OpenVision Sub prior to the Closing Date, which corporations
\nshall be duly organized, validly existing and in good standing under the laws of
\nDelaware and which corporations shall have been formed solely for the purpose of
\nthe transactions hereunder and shall not have engaged in any business activities
\nduring the period from incorporation to the Closing Date. OpenVision shall
\nreceive a certificate to such effect signed by Newco’s Chief Executive Officer.<\/p>\n
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF VERITAS AND NEWCO<\/p>\n
The obligations of VERITAS and Newco hereunder are subject to the
\nfulfillment or satisfaction on or before the Closing of each of the following
\nconditions (any one or more of which may be waived by VERITAS, but only in a
\nwriting signed by VERITAS):<\/p>\n
8.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations and
\nwarranties of OpenVision set forth in Section 2 (as qualified by the OpenVision
\nDisclosure Letter) shall be true and accurate on and as of the Closing Date,
\nexcept for changes contemplated by this Agreement and except for those
\nrepresentations and warranties that address matters only as of a particular date
\n(which shall remain true and correct as of such particular date) with the same
\nforce and effect as if they had been made at the Closing, except in all such
\ncases, where such breaches of such representations and warranties, individually
\nor in the aggregate, have not resulted in, nor reasonably would be expected to
\nresult in, liabilities amounting in the aggregate to in excess of $5,000,000, or
\nhave not substantially impaired, nor reasonably would be expected to
\nsubstantially impair, OpenVision’s ability after the Closing to continue to
\ndevelop, produce, sell and distribute the products and services that are
\nmaterial to OpenVision’s business in substantially the same manner as it has
\nprior to the date of this Agreement, and VERITAS shall receive a certificate to
\nsuch effect executed by OpenVision’s Chief Executive Officer and Chief Financial
\nOfficer.<\/p>\n
8.2 COVENANTS. OpenVision shall have performed and complied in all
\nmaterial respects with all of its covenants contained in Section 4 on or before
\nthe Closing, and VERITAS shall receive a certificate to such effect signed by
\nOpenVision’s Chief Executive Officer and Chief Financial Officer.<\/p>\n
8.3 ABSENCE OF SUBSTANTIAL MATERIAL ADVERSE CHANGE. There shall not have
\nbeen any Substantial Material Adverse Change since the date of the Agreement.
\n“Substantial Material Adverse Change” shall be deemed to have occurred only in
\nthe event that prior to the Effective Time there shall occur any event or change
\nwhich, individually or in the aggregate of all such events or changes, have
\nresulted, or reasonably<\/p>\n
A-1-45
\n 46<\/p>\n
would be expected to result in, a substantial impairment to OpenVision’s ability
\nafter the Closing to continue to develop, produce, sell and distribute the
\nproducts and services that are material to OpenVision’s business in
\nsubstantially the same manner as it has prior to the date of this Agreement.<\/p>\n
8.4 COMPLIANCE WITH LAW. There shall be no order, decree or ruling by any
\ncourt or governmental agency which would prohibit or render illegal the
\ntransactions contemplated by this Agreement.<\/p>\n
8.5 CONSENTS. There shall have been obtained on or before the Closing the
\npermits and authorizations listed on Exhibit 8.5 hereto, and OpenVision shall
\nhave received the written consents, assignments, waivers, authorizations and
\nother certificates also listed on Exhibit 8.5.<\/p>\n
8.6 FORM S-4. The Form S-4 shall have become effective under the
\nSecurities Act and shall not be the subject of any stop-order or proceedings
\nseeking a stop-order and the Prospectus\/Proxy Statement shall on the Closing
\nDate not be subject to any proceedings commenced or overtly threatened by the
\nSEC.<\/p>\n
8.7 OPINION OF OPENVISION’S COUNSEL. VERITAS shall have received from
\nWilson, Sonsini, Goodrich & Rosati, P.C., counsel to OpenVision, an opinion
\nsubstantially in the form of Exhibit 8.7.<\/p>\n
8.8 VERITAS SHAREHOLDER APPROVAL. The principal terms of this Agreement
\nand the Merger shall have been approved and adopted by the VERITAS shareholders
\nin accordance with applicable law and VERITAS’ Articles of Incorporation and
\nBylaws. Holders of no more than five percent of the outstanding shares of
\nVERITAS Common Stock shall be eligible to exercise dissenters’ rights.<\/p>\n
8.9 OPENVISION STOCKHOLDER APPROVAL. The principal terms of this Agreement
\nand the Merger shall have been approved and adopted by the OpenVision
\nstockholders in accordance with applicable law and OpenVision’s Certificate of
\nIncorporation and Bylaws.<\/p>\n
8.10 NO LEGAL ACTION. No temporary restraining order, preliminary
\ninjunction or permanent injunction or other order preventing the consummation of
\nthe Merger shall have been issued by any federal or state court and remain in
\neffect.<\/p>\n
8.11 TAX OPINION. Each of VERITAS and OpenVision shall have received an
\nopinion in form and substance satisfactory to them from their respective counsel
\nto the effect that the Merger will be treated for Federal income tax purposes as
\na tax-free reorganization within the meaning of Section 368 of the Code,
\nprovided that if the respective counsel to VERITAS or OpenVision does not render
\nsuch opinion, this condition shall nonetheless be deemed satisfied with respect
\nto such party if counsel to the other party renders such opinion to such party.
\nThe parties shall make representations related to the VERITAS and OpenVision tax
\nopinions, which representations counsel may rely upon.<\/p>\n
8.12 POOLING OPINION. VERITAS shall have received from Ernst & Young LLP
\nan opinion, in form and substance satisfactory to VERITAS, dated as of the
\nClosing that the Merger will be treated as a “pooling of interests” in
\naccordance with GAAP and all published rules, regulations and policies of the
\nSEC.<\/p>\n
9. TERMINATION OF AGREEMENT<\/p>\n
9.1 TERMINATION. This Agreement may be terminated at any time prior to the
\nEffective Time, whether before or after approval of the Merger by the
\nstockholders of VERITAS or OpenVision:<\/p>\n
(a) by mutual written agreement of OpenVision and VERITAS;<\/p>\n
(b) by OpenVision, if there has been a breach by VERITAS or Newco of any
\nrepresentation or warranty set forth in this Agreement on the part of VERITAS or
\nNewco, and, as a result of such breach, the conditions set forth in Section 7.1
\nwould not then be satisfied, and which VERITAS or Newco fails to cure within ten
\n(10) business days after notice thereof from OpenVision (except that no cure
\nperiod shall be provided for a breach by VERITAS or Newco which by its nature
\ncannot be cured);<\/p>\n
(c) by OpenVision, if there has been a breach by VERITAS or Newco of any
\ncovenant or agreement set forth in this Agreement on the part of VERITAS or
\nNewco and as a result of such breach, the conditions set forth in Section 7.2
\nwould not then be satisfied, and which VERITAS or Newco fails to cure<\/p>\n
A-1-46
\n 47<\/p>\n
within ten (10) business days after notice thereof from OpenVision (except that
\nno cure period shall be provided for a breach by VERITAS or Newco which by its
\nnature cannot be cured);<\/p>\n
(d) by VERITAS, if there has been a breach by OpenVision of any
\nrepresentation or warranty set forth in this Agreement on the part of
\nOpenVision, and as a result of such breach, the conditions set forth in Section
\n8.1 would not then be satisfied, and which OpenVision fails to cure within ten
\n(10) business days after notice thereof from VERITAS (except that no cure period
\nshall be provided for a breach by OpenVision which by its nature cannot be
\ncured);<\/p>\n
(e) by VERITAS, if there has been a breach by OpenVision of any covenant
\nor agreement set forth in this Agreement on the part of OpenVision, and as a
\nresult of such breach, the conditions set forth in Section 8.2 would not then be
\nsatisfied, and which OpenVision fails to cure within ten (10) business days
\nafter notice thereof from VERITAS (except that no cure period shall be provided
\nfor a breach by OpenVision which by its nature cannot be cured);<\/p>\n
(f) by VERITAS or OpenVision, if all the conditions for Closing the
\nMerger shall not have been satisfied or waived on or before the Final Date (as
\ndefined below) other than as a result of a breach of this Agreement by the
\nterminating party;<\/p>\n
(g) by VERITAS or OpenVision, if a permanent injunction or other order
\nby any federal or state court which would make illegal or otherwise restrain or
\nprohibit the consummation of the Merger shall have been issued and shall have
\nbecome final and nonappealable;<\/p>\n
(h) by VERITAS or OpenVision, if the stockholders of OpenVision do not
\napprove the Merger contemplated by this Agreement at the OpenVision stockholders
\nmeeting (a “OpenVision Stockholder Rejection”);<\/p>\n
(i) by VERITAS or OpenVision, if the shareholders of VERITAS do not
\napprove the Merger contemplated by this Agreement at the VERITAS shareholders
\nmeeting (a “VERITAS Shareholder Rejection”);<\/p>\n
(j) by VERITAS, if (i) the OpenVision Board of Directors recommends a
\nSuperior Proposal or withdraws or modifies in any manner adverse to the
\nconsummation of the Merger, its unanimous recommendation to the OpenVision
\nstockholders that they approve the Merger, or (ii) the condition to Closing set
\nforth in Sections 7.13 or 8.12 is not met for any reason related to OpenVision;<\/p>\n
(k) by OpenVision, if (i) the VERITAS Board of Directors withdraws, or
\nchanges in any manner adverse to the consummation of the Merger, its unanimous
\nrecommendation to the VERITAS shareholders that they approve the Merger, or (ii)
\nthe condition to Closing set forth in Sections 7.13 or 8.12 is not met for any
\nreason related to VERITAS;<\/p>\n
(l) by OpenVision, if the average closing price of VERITAS Common Stock,
\nas presently constituted, as quoted on the Nasdaq Stock Market and reported in
\nthe Wall Street Journal, over the ten (10) trading days immediately preceding
\nthe date of the VERITAS Shareholder Meeting is less than $33.00 per share.<\/p>\n
As used herein, the Final Date shall be April 30, 1997, except that if the
\nFTC or the DOJ issues a “second request” under the HSR Act, then the Final Date
\nshall be extended to July 31, 1997; and except that if a temporary, preliminary
\nor permanent injunction or other order by any Federal or state court which would
\nprohibit or otherwise restrain consummation of the Merger shall have been issued
\nand shall remain in effect on April 30, 1997, and such injunction shall not have
\nbecome final and nonappealable, either party, by giving the other written notice
\nthereof on or prior to April 30, 1997, may extend the time for consummation of
\nthe Merger up to and including the earlier of the date such injunction shall
\nbecome final and non-appealable or July 31, 1997, so long as such party shall,
\nat its own expense, use its reasonable best efforts to have such injunction
\ndissolved.<\/p>\n
9.2 NOTICE OF TERMINATION. Any termination of this Agreement under Section
\n9.1 above will be effective by the delivery of notice of the terminating party
\nto the other party hereto.<\/p>\n
A-1-47
\n 48<\/p>\n
9.3 NO LIABILITY. Except as provided in Section 9.4 below, any termination
\nof this Agreement in accordance with this Section 9 will be without further
\nobligation or liability upon any party in favor of the other parties hereto
\nother than the obligations contained in the Amended and Restated Mutual
\nConfidential Nondisclosure Agreement dated December 11, 1996 between OpenVision
\nand VERITAS (the “Nondisclosure Agreement”), which will survive termination of
\nthis Agreement; provided, however, that nothing herein will relieve any party
\nfrom liability for any willful breach of this Agreement.<\/p>\n
9.4 BREAKUP FEES.<\/p>\n
(a) If this Agreement is terminated by OpenVision or VERITAS as a result
\nof a OpenVision Stockholder Rejection or by VERITAS pursuant to Section
\n9.1(j)(i), then OpenVision shall pay to VERITAS (by wire transfer or cashier’s
\ncheck) a nonrefundable fee of $10,000,000 within ten (10) days of the delivery
\nof the notice of termination to or by VERITAS pursuant to Section 9.2.<\/p>\n
(b) If this Agreement is terminated by OpenVision or VERITAS as a result
\nof a VERITAS Shareholder Rejection or by OpenVision pursuant to Section
\n9.1(k)(i), then VERITAS shall pay to OpenVision (by wire transfer or cashier’s
\ncheck) a nonrefundable fee of $10,000,000 within ten (10) days of the delivery
\nof the notice of termination to or by OpenVision pursuant to Section 9.2.<\/p>\n
10. SURVIVAL OF REPRESENTATIONS<\/p>\n
10.1 NO SURVIVAL OF REPRESENTATIONS. All representations, warranties and
\ncovenants of the parties contained in this Agreement will remain operative and
\nin full force and effect, regardless of any investigation made by or on behalf
\nof the parties to this Agreement, until the earlier of the termination of this
\nAgreement or the Closing Date, whereupon such representations, warranties and
\ncovenants will expire (except for covenants that by their terms survive for a
\nlonger period).<\/p>\n
11. MISCELLANEOUS<\/p>\n
11.1 GOVERNING LAW. The internal laws of the State of California
\n(irrespective of its choice of law principles) will govern the validity of this
\nAgreement, the construction of its terms and the interpretation and enforcement
\nof the rights and duties of the parties hereto, except that the fiduciary duties
\nof the directors of OpenVision and Newco shall be governed by the Delaware Law.<\/p>\n
11.2 ASSIGNMENT; BINDING UPON SUCCESSORS AND ASSIGNS. None of the parties
\nhereto may assign any of its rights or obligations hereunder without the prior
\nwritten consent of the other parties hereto. This Agreement will be binding upon
\nand inure to the benefit of the parties hereto and their respective successors
\nand permitted assigns.<\/p>\n
11.3 SEVERABILITY. If any provision of this Agreement, or the application
\nthereof, will for any reason and to any extent be invalid or unenforceable, the
\nremainder of this Agreement and application of such provision to other persons
\nor circumstances will be interpreted so as reasonably to effect the intent of
\nthe 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 greatest extent possible, the economic, business and
\nother purposes of the void or unenforceable provision.<\/p>\n
11.4 COUNTERPARTS. This Agreement may be executed in any number of
\ncounterparts, each of which will be an original as regards any party whose
\nsignature appears thereon and all of which together will constitute one and the
\nsame instrument. This Agreement will become binding when one or more
\ncounterparts hereof, individually or taken together, will bear the signatures of
\nall the parties reflected hereon as signatories.<\/p>\n
11.5 OTHER REMEDIES. Except as otherwise provided herein, any and all
\nremedies herein expressly conferred upon a party will be deemed cumulative with
\nand not exclusive of any other remedy conferred hereby or by law on such party,
\nand the exercise of any one remedy will not preclude the exercise of any other.<\/p>\n
11.6 AMENDMENT AND WAIVERS. Any term or provision of this Agreement may be
\namended, and the observance of any term of this Agreement may be waived (either
\ngenerally or in a particular instance and either retroactively or prospectively)
\nonly by a writing signed by the party or parties to be bound thereby. The<\/p>\n
A-1-48
\n 49<\/p>\n
waiver by a party of any breach hereof or default in the performance hereof will
\nnot be deemed to constitute a waiver of any other default or any succeeding
\nbreach or default. The Agreement may be amended by the parties hereto at any
\ntime before or after approval of the OpenVision stockholders or the VERITAS
\nshareholders, but, after such approval, no amendment will be made which by
\napplicable law requires the further approval of the OpenVision stockholders or
\nthe VERITAS shareholders without obtaining such further approval.<\/p>\n
11.7 EXPENSES. In the event that the Merger is consummated, the expenses
\nand fees of both parties with respect to this Agreement and the transactions
\ncontemplated hereby will be borne by Newco. In the event that the Merger is not
\nconsummated, each party will bear its respective fees and expenses incurred with
\nrespect to this Agreement and the transactions contemplated hereby; provided,
\nhowever, that OpenVision and VERITAS shall share equally all fees and expenses,
\nother than attorneys’, accountants’ and financial advisors’ fees, incurred in
\nconnection with the printing and filing of the Form S-4 (including financial
\nstatements and exhibits) and any amendment or supplements thereto.<\/p>\n
11.8 ATTORNEYS’ FEES. Should suit be brought to enforce or interpret any
\npart of this Agreement, the prevailing party will be entitled to recover, as an
\nelement of the costs of suit and not as damages, reasonable attorneys’ fees to
\nbe fixed by the court (including, without limitation, costs, expenses and fees
\non any appeal). The prevailing party will be entitled to recover its costs of
\nsuit, regardless of whether such suit proceeds to final judgment.<\/p>\n
11.9 NOTICES. All notices and other communications pursuant to this
\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
\n
\n If to OpenVision to: OpenVision Technologies, Inc.
\n 7133 Koll Center Parkway, Suite 200
\n Pleasanton, CA 94566
\n Attention: Chief Executive Officer
\n Telecopier: (510) 426-3603
\n With a copy to: Wilson, Sonsini, Goodrich & Rosati
\n 650 Page Mill Road
\n Palo Alto, CA 94304
\n Attention: Barry Taylor, Esq.
\n Telecopier: (415) 493-6811<\/p>\n And if to VERITAS or VERITAS Software Corporation<\/p>\n
Newco to: 1600 Plymouth Street
\n Mountain View, CA 94043
\n Attention: Chief Executive Officer
\n Telecopier: (415) 335-8455
\n With a copy to: Fenwick & West LLP
\n Two Palo Alto Square
\n Palo Alto, CA 94306
\n Attention: Jacqueline A. Daunt, Esq.
\n Telecopier: (415) 494-1417
\n<\/c><\/s><\/table>\n
All such notices and other communications shall be deemed to have been
\nreceived (a) in the case of personal delivery, on the date of such delivery, (b)
\nin the case of a telecopy, when the party receiving such copy shall have
\nconfirmed receipt of the communication, (c) in the case of delivery by
\nnationally-recognized overnight courier, on the business day following dispatch,
\nand (d) in the case of mailing, on the third business day following such
\nmailing.<\/p>\n
A-1-49
\n 50<\/p>\n
11.10 CONSTRUCTION OF AGREEMENT. This Agreement has been negotiated by the
\nrespective parties hereto and their attorneys and the language hereof will not
\nbe construed for or against either party. A reference to a Section or an exhibit
\nwill mean a Section in, or exhibit to, this Agreement unless otherwise
\nexplicitly set forth. The titles and headings herein are for reference purposes
\nonly and will not in any manner limit the construction of this Agreement which
\nwill be considered as a whole.<\/p>\n
11.11 NO JOINT VENTURE. Nothing contained in this Agreement will be deemed
\nor construed as creating a joint venture or partnership between any of the
\nparties hereto. No party is by virtue of this Agreement authorized as an agent,
\nemployee or legal representative of any other party. No party will have the
\npower to control the activities and operations of any other and their status is,
\nand at all times, will continue to be, that of independent contractors with
\nrespect to each other. No party will have any power or authority to bind or
\ncommit any other. No party will hold itself out as having any authority or
\nrelationship in contravention of this Section.<\/p>\n
11.12 FURTHER ASSURANCES. Each party agrees to cooperate fully with the
\nother parties and to execute such further instruments, documents and agreements
\nand to give such further written assurances as may be reasonably requested by
\nany other party to evidence and reflect the transactions described herein and
\ncontemplated hereby and to carry into effect the intents and purposes of this
\nAgreement.<\/p>\n
11.13 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. Except as otherwise
\nprovided in Sections 5.13, 5.14, 5.15, 5.17 and 11.7, no provisions of this
\nAgreement are intended, nor will be interpreted, to provide or create any third
\nparty beneficiary rights or any other rights of any kind in any client,
\ncustomer, affiliate, stockholder, partner or any party hereto or any other
\nperson or entity unless specifically provided otherwise herein, and, except as
\nso provided, all provisions hereof will be personal solely between the parties
\nto this Agreement.<\/p>\n
11.14 PUBLIC ANNOUNCEMENT. Upon execution of this Agreement, VERITAS and
\nOpenVision promptly will issue a joint press release approved by both parties
\nannouncing the Merger. Thereafter, VERITAS or OpenVision may issue such press
\nreleases, and make such other disclosures regarding the Merger, as it determines
\n(after consultation with legal counsel) are required under applicable securities
\nlaws or NASD rules; provided that VERITAS or OpenVision shall, to the extent
\npracticable, obtain the approval of the other party (which approval shall not be
\nunreasonably withheld) prior to any such release or disclosure.<\/p>\n
11.15 ENTIRE AGREEMENT. This Agreement and the exhibits hereto constitute
\nthe entire understanding and agreement of the parties hereto with respect to the
\nsubject matter hereof and supersede all prior and contemporaneous agreements or
\nunderstandings, inducements or conditions, express or implied, written or oral,
\nbetween the parties with respect hereto other than the Nondisclosure Agreement,
\nwhich shall remain in full force and effect. The express terms hereof control
\nand supersede any course of performance or usage of the trade inconsistent with
\nany of the terms hereof.<\/p>\n
A-1-50
\n 51<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and
\nPlan of Reorganization as of the date first above written.<\/p>\n
\n
\nVERITAS SOFTWARE CORPORATION, OPENVISION TECHNOLOGIES, INC.,
\na California corporation a Delaware corporation<\/p>\nBy: By:
\n —————————————– —————————————–
\n Mark Leslie Geoffrey W. Squire
\n President and Chief Executive Officer President and Chief Executive Officer<\/p>\n
VERITAS SOFTWARE CORPORATION,
\na Delaware corporation<\/p>\n
By:
\n —————————————–
\n Mark Leslie
\n President
\n<\/c><\/s><\/table>\n
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION]<\/p>\n
A-1-51<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9244],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9622,9626],"class_list":["post-43218","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-veritas-software-corp","corporate_contracts_industries-technology__software","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43218","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43218"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43218"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43218"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43218"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}