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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 17, 1999
ULTRADATA Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-27468 94-2746681
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(Commission File Number) (IRS Employer Identification No.)
5000 Franklin Drive, Pleasanton, California 94585
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(Address of Principal Executive Offices) (Zip Code)
(925) 463-8356
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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INFORMATION TO BE INCLUDED IN THE REPORT
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Item 1(b): Changes in Control of Registrant.
On May 17, 1999, ULTRADATA Corporation, a Delaware corporation
("Registrant" or "ULTRADATA"), entered into an Agreement and Plan of Merger
("Merger Agreement") with CFI ProServices, Inc., an Oregon corporation ("CFI")
and UFO Acquisition, Inc., a Delaware corporation and CFI's wholly-owned
subsidiary ("Merger Sub"). Pursuant to the terms of the Merger Agreement,
Merger Sub will be merged with and into Registrant ("Merger") and Registrant
will become a wholly-owned subsidiary of CFI. As a result of the Merger, each
outstanding share of Registrant Common Stock will be converted into the right to
receive $7.50 net to the seller in cash, without interest thereon, subject to
reduction for any applicable federal backup or other withholding taxes. At the
effective time of the Merger, the Registrant will terminate outstanding and
unexercised options to purchase 1,300,000 shares of Registrant Common Stock held
by certain officers and directors of the Registrant in consideration for $7.50
per share. Outstanding and unexercised options to purchase shares of Registrant
Common Stock under the Registrant's 1994 Equity Incentive Plan will be assumed
by CFI.
Completion of the Merger is subject to the satisfaction or waiver of
various conditions, including, among others, the approval of the Merger
Agreement by the Registrant's stockholders, continuing accuracy of the
representations and warranties of each party in the Merger Agreement, and the
successful completion by CFI of financing for the transaction, which is expected
to be arranged by U.S. Bancorp Libra, a member of the U.S. Bancorp family that
also includes Piper Jaffray.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
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The following exhibits are incorporated herein by reference:
Number Description
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2.01 Agreement and Plan of Merger dated May 17, 1999 by and among CFI
ProServices, Inc., UFO Acquisition, Inc. and ULTRADATA Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ULTRADATA CORPORATION
Dated: June 1, 1999 /s/ Ronald H. Bissinger
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Ronald H. Bissinger
Vice President, Finance and
Chief Financial Officer
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EXHIBIT INDEX
2.01 Agreement and Plan of Merger dated May 17, 1999 by and among CFI
ProServices, Inc., UFO Acquisition, Inc. and ULTRADATA Corporation.
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Exhibit 2.01
AGREEMENT AND PLAN OF MERGER
DATED AS OF MAY 17, 1999
AMONG
CFI PROSERVICES, INC.,
UFO ACQUISITION CO.
AND
ULTRADATA CORPORATION
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TABLE OF CONTENTS
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1. THE MERGER..................................................................... 1
1.1 The Merger............................................................ 1
1.2 Effective Time........................................................ 1
1.3 Closing of the Merger................................................. 2
1.4 Effects of the Merger................................................. 2
1.5 Certificate of Incorporation and Bylaws............................... 2
1.6 Directors............................................................. 2
1.7 Officers.............................................................. 2
1.8 Conversion of Shares.................................................. 3
1.9 Payment for Shares.................................................... 3
1.10 Dissenting Shares..................................................... 5
1.11 Stock Options......................................................... 5
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................. 6
2.1 Organization and Qualification........................................ 6
2.2 Capitalization of the Company and its Subsidiaries.................... 7
2.3 Authority Relative to this Agreement; Consents and Approvals.......... 8
2.4 SEC Reports; Financial Statements..................................... 9
2.5 Information Supplied.................................................. 10
2.6 Consents and Approvals; No Violations................................. 10
2.7 No Default............................................................ 11
2.8 No Undisclosed Liabilities; Absence of Changes........................ 11
2.9 Litigation............................................................ 11
2.10 Compliance with Applicable Law........................................ 12
2.11 Employee Benefit Plans................................................ 12
2.12 Environmental Laws and Regulations.................................... 14
2.13 Tax Matters........................................................... 15
2.14 Intangible Property................................................... 15
2.15 Brokers............................................................... 15
2.16 Material Contracts.................................................... 16
2.17 Disclosure............................................................ 16
2.18 Termination of Certain Contracts...................................... 17
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB............................... 17
3.1 Organization.......................................................... 17
3.2 Authority Relative to this Agreement.................................. 18
3.3 Information Supplied.................................................. 18
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3.4 Consents and Approvals; No Violations................................. 18
3.5 Litigation............................................................ 19
3.6 Brokers............................................................... 19
3.7 Financing............................................................. 19
4. COVENANTS...................................................................... 19
4.1 Conduct of Business of the Company.................................... 19
4.2 Preparation of Proxy Statement and Stockholders' Meeting.............. 22
4.3 No Solicitation....................................................... 22
4.4 Access to Information................................................. 24
4.5 Additional Agreements; Reasonable Best Efforts........................ 24
4.6 Consents.............................................................. 25
4.7 Public Announcements.................................................. 25
4.8 Notification of Certain Matters....................................... 25
4.9 Release of Liens...................................................... 26
4.10 Company 401(k) Plan................................................... 26
4.11 Parent 401(k) Plan.................................................... 26
5. CONDITIONS TO CONSUMMATION OF THE MERGER....................................... 26
5.1 Conditions to Each Party's Obligations to Effect the Merger........... 26
5.2 Conditions to the Obligations of the Company.......................... 27
5.3 Conditions to the Obligations of Parent and Sub....................... 27
6. TERMINATION; AMENDMENT; WAIVER................................................. 28
6.1 Termination........................................................... 28
6.2 Effect of Termination................................................. 29
6.3 Fees and Expenses..................................................... 30
6.4 Amendment............................................................. 31
6.5 Extension; Waiver..................................................... 31
7. MISCELLANEOUS.................................................................. 31
7.1 Nonsurvival of Representations and Warranties......................... 31
7.2 Entire Agreement; Assignment.......................................... 31
7.3 Validity.............................................................. 32
7.4 Notices............................................................... 32
7.5 Governing Law......................................................... 33
7.6 Descriptive Headings.................................................. 33
7.7 Parties in Interest................................................... 33
7.8 Severability.......................................................... 34
7.9 Specific Performance.................................................. 34
7.10 Subsidiaries.......................................................... 34
7.11 Brokers............................................................... 34
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7.12 Counterparts.......................................................... 34
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of May 17, 1999, is among CFI
PROSERVICES, INC., an Oregon corporation ("Parent"), UFO ACQUISITION CO., a
Delaware corporation and a direct wholly owned subsidiary of Parent ("Sub"), and
ULTRADATA CORPORATION, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of the Company, Parent and Sub each have,
in light of and subject to the terms and conditions set forth herein, (i)
determined that the Merger (as defined in Section 1.1) is fair to their
respective stockholders and in the best interests of such stockholders and (ii)
approved the Merger in accordance with this Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, and intending to be
legally bound hereby, the Company, Parent and Sub hereby agree as follows:
1. THE MERGER
1.1 The Merger
At the Effective Time and upon the terms and subject to the conditions of
this Agreement and in accordance with the Delaware General Corporation Law (the
"DGCL"), Sub shall be merged with and into the Company (the "Merger").
Following the Merger, the Company shall continue as the surviving corporation
(the "Surviving Corporation") and the separate corporate existence of Sub shall
cease. At the option of Parent, upon five days prior written notice to the
Company, the Merger may be structured so that, and this Agreement shall
thereupon be deemed to be amended to provide that, either another direct or
indirect subsidiary of the Parent shall be merged with and into the Company or
the Company shall be merged with and into the Sub or another direct or indirect
wholly owned subsidiary of Parent, with the Sub or such other subsidiary of
Parent continuing as the Surviving Corporation; provided that, no such change in
structure will be deemed to apply for purposes of the Company's representations
and warranties contained in Section 2 hereof.
1.2 Effective Time
Subject to the provisions of this Agreement, Parent, Sub and the Company
shall cause the Merger to be consummated by filing an appropriate Certificate of
Merger or
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other appropriate documents (the "Certificate of Merger") with the Secretary of
State of the State of Delaware in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL, as soon as practicable on
or after the Closing Date (as defined in Section 1.3). The Merger shall become
effective upon such filing or at such time thereafter as is provided in the
Certificate of Merger (the "Effective Time").
1.3 Closing of the Merger
The closing of the Merger (the "Closing") will take place at a time and on
a date to be specified by the parties, which shall be no later than the second
business day after satisfaction or waiver of the conditions set forth in Article
5 (the "Closing Date"), at the offices of Perkins Coie LLP, 1211 S.W. Fifth
Avenue, Suite 1500, Portland, Oregon, unless another time, date or place is
agreed to in writing by the parties hereto.
1.4 Effects of the Merger
The Merger shall have the effects set forth in the DGCL. Without limiting
the generality of the foregoing, and subject thereto, at the Effective Time, all
the properties, rights, privileges, powers and franchises of the Company and Sub
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of the Company and Sub shall become the debts, liabilities and duties of the
Surviving Corporation.
1.5 Certificate of Incorporation and Bylaws
The Restated Certificate of Incorporation of the Company in effect at the
Effective Time shall be the certificate of incorporation of the Surviving
Corporation until amended in accordance with applicable law. The Bylaws of the
Company in effect at the Effective Time shall be the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
1.6 Directors
The directors of Sub at the Effective Time shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
certificate of incorporation and bylaws of the Surviving Corporation until such
director's successor is duly elected or appointed and qualified.
1.7 Officers
The officers of Sub at the Effective Time shall be the initial officers of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation until such
officer's successor is duly elected or appointed and qualified.
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1.8 Conversion of Shares
(a) At the Effective Time, each share of common stock, par value
$0.001 per share, of the Company ("Company Common Stock") issued and outstanding
immediately prior to the Effective Time (individually a "Share" and
collectively, the "Shares") (other than (i) Shares held by any subsidiary of the
Company and (ii) Shares held by Parent, Sub or any other subsidiary of Parent or
Sub and (iii) Dissenting Shares (as defined in Section 1.10 hereof)) shall, by
virtue of the Merger and without any action on the part of Sub, the Company or
the holder thereof, be converted into the right to receive (a) $7.50 in cash,
payable to the holder thereof without interest thereon, upon surrender of the
certificate formerly representing such Share (the "Merger Consideration").
(b) At the Effective Time, each outstanding share of the common stock,
par value $0.001 per share, of Sub shall be converted into one share of common
stock, par value $0.001 per share, of the Surviving Corporation.
(c) At the Effective Time, each share of Company Common Stock held by
Parent, Sub or any subsidiary of Parent, Sub or the Company immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of Sub, the Company or the holder thereof, be canceled, retired and cease
to exist and no payment shall be made with respect thereto.
1.9 Payment for Shares
(a) As of the Effective Time, Chase Mellon Shareholder Services,
L.L.C., or another bank or trust company designated by Parent and reasonably
acceptable to the Company shall act as paying agent (the "Paying Agent") in
effecting the payment of the Merger Consideration for certificates that formerly
represented Shares entitled to payment of the Merger Consideration pursuant to
Section 1.8 hereof. On or before the Effective Time, Parent or Sub shall
deposit, or cause to be deposited, in trust with the Paying Agent, the aggregate
Merger Consideration to which holders of Shares shall be entitled at the
Effective Time pursuant to Section 1.8 hereof.
(b) As soon as reasonably practicable after the Effective Time, the
Paying Agent shall mail to each holder of record of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates") whose Shares were converted into the
right to receive the Merger Consideration pursuant to Section 1.8: (i) a letter
of transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and shall be in such form and have such other
provisions as Parent and the Company may reasonably specify) and
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(ii) instructions for use in effecting the surrender of the Certificates and
receiving the Merger Consideration therefor. Upon surrender of a Certificate for
cancellation to the Paying Agent, the Paying Agent shall pay the holder of such
Certificate the Merger Consideration multiplied by the number of Shares formerly
represented by such Certificate, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Shares which
is not registered in the transfer records of the Company, the appropriate Merger
Consideration for such surrendered Certificate may be paid to a transferee if
the Certificate representing such Shares is presented to the Paying Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 1.9, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the aggregate Merger Consideration relating thereto.
No interest shall be paid or accrued on the Merger Consideration.
(c) Promptly following the date which is one year after the Effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Certificates and other documents in its possession relating to the transactions
described in this Agreement, and the Paying Agent's duties shall terminate.
Thereafter, each holder of a Certificate formerly representing a Share may
surrender such Certificate to the Surviving Corporation and (subject to
applicable abandoned property, escheat and similar laws) receive in
consideration therefor the aggregate Merger Consideration relating thereto,
without any interest or dividends thereon.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of the Surviving Corporation of any Shares which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates formerly representing Shares are presented to the Surviving
Corporation or the Paying Agent, they shall be surrendered and canceled in
return for the payment of the aggregate Merger Consideration relating thereto,
subject to applicable law in the case of Dissenting Shares.
(e) In the event that any Certificate for Shares shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming such certificate to be lost, stolen or destroyed, the Paying Agent
shall pay to such holder in exchange for such lost, stolen, or destroyed
certificate the aggregate Merger Consideration relating thereto, if any, as may
be required pursuant to this Agreement; provided, however, that Parent may, in
its discretion, require the delivery of a suitable bond or indemnity.
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(f) Neither Parent nor the Company shall be liable to any holder of
Shares for Merger Consideration delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
1.10 Dissenting Shares
Notwithstanding anything in this Agreement to the contrary, Shares
outstanding immediately prior to the Effective Time and held by a holder who has
not voted in favor of the Merger or consented thereto in writing and who has
demanded appraisal for such Shares in accordance with Section 262 of the DGCL,
if such Section 262 provides for appraisal rights for such Shares in the Merger
("Dissenting Shares"), shall not be converted into the right to receive the
Merger Consideration as provided in Section 1.8 hereof, unless and until such
holder fails to perfect or withdraws or otherwise loses his right to appraisal
and payment under the DGCL. If, after the Effective Time, any such holder fails
to perfect or withdraws or loses his right to appraisal, such Dissenting Shares
shall thereupon be treated as if they had been converted as of the Effective
Time into the right to receive the Merger Consideration, if any, to which such
holder is entitled, without interest or dividends thereon. The Company shall
give Parent prompt notice of any demands received by the Company for appraisal
of Shares and, prior to the Effective Time, Parent shall have the right to
participate in all negotiations and proceedings with respect to such demands.
Prior to the Effective Time, the Company shall not, except with the prior
written consent of Parent, make any payment with respect to, or settle or offer
to settle, any such demands.
1.11 Stock Options
(a) At the Effective Time, each outstanding option to purchase Company
Common Stock issued pursuant to the Company's 1994 Equity Incentive Plan (the
"Assumed Plan"), whether vested or unvested, shall be assumed by Parent and
shall constitute an option (an "Assumed Option") to acquire, on the same terms
and conditions as were applicable under such option prior to the Effective Time,
the number of shares of Common Stock, no par value, of Parent ("Parent Common
Stock"), rounded down to the nearest whole number, determined by multiplying
.718 by the number of shares of Company Common Stock then subject to purchase
pursuant to such option. The exercise price for such Assumed Options shall be
equal to the aggregate exercise price for the shares of Company Common Stock
then subject to purchase pursuant to such option divided by the number of shares
of Parent Common Stock deemed to be purchasable pursuant to such Assumed Option.
With respect to an option for shares of Company Common Stock to which Section
421 of the Internal Revenue Code of 1986, as amended (the "Code") applies by
reason of its qualification under Section 422 or 423 of the Code (a "qualified
stock option"), in no event shall the terms of any Assumed Option give the
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holder of a qualified stock option additional benefits that he or she did not
have under such qualified stock option. Any references in each Assumed Option
or Assumed Plan to the Company shall be deemed to refer to Parent, where
appropriate, and Parent shall assume the obligations of the Company under the
Assumed Options and the Assumed Plan. Parent shall file as soon as reasonably
practicable following the Closing Date, and maintain the effectiveness of, a
registration statement on Form S-8 with respect to the Parent Common Stock
subject to the Assumed Options for so long as such Assumed Options remain
outstanding. Parent shall use reasonable efforts to take such actions as are
necessary for the conversion of the Assumed Options pursuant to this Section
1.11(b), including the reservation, issuance and listing of shares of Parent
Common Stock as is necessary to effectuate the transactions contemplated by this
Section 1.11(b). Following the Effective Time, Parent will prepare and
distribute to holders of Assumed Options a notice explaining the effect of the
conversion of such holder's unvested options into Assumed Options.
(b) Except as provided herein or as otherwise agreed to by the
parties, (i) the Company shall not take any action (or refrain from taking
action) the effect of which would cause any options to accelerate in connection
with the Merger (which options would not have otherwise accelerated pursuant to
their terms or the terms of any existing employment agreement disclosed to
Parent), (ii) the 1995 Director Stock Option Plan shall terminate as of the
Effective Time and the provisions in any other plan, program or arrangement,
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its subsidiaries (other than the Assumed
Plan) shall be canceled as of the Effective Time and (iii) no holder of options
to purchase Company Common Stock or any participant in any of the Company's
stock option plans or any other plans, programs or arrangements shall have any
right thereunder to acquire any equity securities of the Company, the Surviving
Corporation or any subsidiary thereof, other than with respect to the Assumed
Options. With respect to the options to purchase 100,000 shares of Company
Common Stock that have been granted under the 1995 Director Stock Option Plan as
of the date hereof and the options to purchase an aggregate of 1.2 million
shares of Company Common Stock outside of the Company's stock option plans, on
the Closing Date the Company shall pay to each holder of such options an amount
in respect thereof equal to the product of (A) the excess of $7.50 over the
exercise price thereof and (B) the number of shares of Company Common Stock
subject to such option.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule delivered by the Company to
Parent prior to the execution of this Agreement (the "Company Disclosure
Schedule"), the Company hereby represents and warrants to each of Parent and Sub
as follows:
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2.1 Organization and Qualification
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
(b) The Company has no subsidiaries and does not own, directly or
indirectly, beneficially or of record, any shares of capital stock or other
security of any other entity or any other investment in any other entity.
(c) The Company is duly qualified or licensed and in good standing to
do business in each jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification or
licensing necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not have a Material
Adverse Effect (as defined below) on the Company. When used in connection with
the Company, the term "Material Adverse Effect" means any change or effect that,
when taken together with all other adverse changes and effects (i) is or is
reasonably likely to be materially adverse to the properties, business, results
of operations or condition (financial or otherwise) of the Company, or (ii) may
impair the ability of the Company to consummate the transactions contemplated
hereby.
(d) The Company has heretofore delivered to Parent accurate and
complete copies of the certificate of incorporation and by-laws, as currently in
effect, of the Company.
2.2 Capitalization of the Company and its Subsidiaries
(a) The authorized capital stock of the Company consists of 25 million
shares consisting of 2 million shares of preferred stock, $0.001 par value, and
23 million shares of Company Common Stock. No preferred shares and 7,748,382
shares of Company Common Stock are issued and outstanding. All of the issued
and outstanding shares of Company Common Stock have been validly issued, and are
fully paid, nonassessable and free of preemptive rights. The Company has
reserved an aggregate of 2,750,000 shares of Company Common Stock for issuance
in connection with the Company's stock option plans and otherwise. The Company
has reserved an aggregate of 1,300,000 shares of Company Common Stock under the
1994 Equity Incentive Plan, of which 131,781 shares have been issued upon the
exercise of options and an aggregate of 862,504 shares of Company Common Stock
are currently subject to outstanding grants under such plan. The Company has
reserved an aggregate of 250,000 shares of Company Common Stock under the 1995
Directors Plan and options to purchase an aggregate of
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100,000 shares of Company Common Stock have been granted under such plan.
Options to purchase an aggregate of 1.2 million shares have been granted outside
of such plans to Nigel P. Gallop and Robert J Majteles (in the amount of 600,000
shares each). Schedule 2.2 sets forth, for each of option plans and for options
that were granted outside of the plans, the number of option shares currently
vested and exercisable, the number of additional option shares that will vest,
by their existing terms, at various specified dates prior to the Effective Time,
and the numbers of additional options that will become vested immediately prior
to the Merger as a result thereof. The Company has reserved 250,000 shares of
Company Common Stock for issuance under the Company's Employee Stock Purchase
Plan (the "ESPP"). A maximum of 13,000 shares of Company Common Stock will be
issued to participants under the ESPP after the date hereof and prior to the
Effective Time. The ESPP will terminate on or before the Effective Time and,
except as set forth in the preceding sentence, no additional shares of Company
Common Stock will be issued under the ESPP between the date hereof and the
Closing Date. Except as set forth above, there are outstanding (i) no shares of
capital stock or other voting securities of the Company, (ii) no securities of
the Company or its subsidiaries convertible into or exchangeable for shares of
capital stock or voting securities of the Company, (iii) no options or other
rights to acquire from the Company, and no obligations of the Company to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company, and (iv) no
equity equivalents, interests in the ownership or earnings of the Company or its
subsidiaries or other similar rights (including stock appreciation rights)
(collectively, "Company Securities"). There are no outstanding obligations of
the Company to repurchase, redeem or otherwise acquire any Company Securities.
There are no stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party or to which it is bound relating
to the voting of any shares of capital stock of the Company.
(b) The Company Common Stock constitutes the only class of securities
of the Company or its subsidiaries registered or required to be registered under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
2.3 Authority Relative to this Agreement; Consents and Approvals
(a) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of the Company (the "Company Board") and no
other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby
(other than, with respect to the Merger, the approval and adoption of this
Agreement by the holders of a majority of the then outstanding
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shares of Company Common Stock). This Agreement has been duly and validly
executed and delivered by the Company and constitutes a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance with its
terms.
(b) The Company Board has, by unanimous vote of those present, duly
and validly approved, and taken all corporate actions required to be taken by
the Company Board for the consummation of the transactions, including the
Merger, contemplated hereby and resolved to recommend that the stockholders of
the Company approve and adopt this Agreement; provided, however, that such
approval and recommendation may be withdrawn, modified or amended in the event
that the Company Board by majority vote determines in its good faith judgment,
after consultation with and based upon the advice of independent legal counsel,
that it is necessary to do so in order to comply with its fiduciary duties to
stockholders under applicable law. No state takeover statute or similar statute
or regulation applies or purports to apply to the Merger, this Agreement or any
of the transactions contemplated hereby.
2.4 SEC Reports; Financial Statements
(a) The Company has filed all required forms, reports and documents
with the Securities and Exchange Commission (the "SEC") since February 14, 1996,
each of which has complied in all material respects with all applicable
requirements of the Securities Act of 1933, as amended (the "Securities Act")
and the Exchange Act, each as in effect on the dates such forms, reports and
documents were filed. The Company has heretofore delivered to Parent, in the
form filed with the SEC (including any amendments thereto), (i) its Annual
Reports on Form 10-K for each of the fiscal years ended December 31, 1996, 1997
and 1998, (ii) all definitive proxy statements relating to the Company's
meetings of stockholders (whether annual or special) held since February 14,
1996 and (iii) all other reports or registration statements filed by the Company
with the SEC since February 14, 1996 (the "Company SEC Reports"). None of such
forms, reports or documents, including, without limitation, any financial
statements or schedules included or incorporated by reference therein,
contained, when filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the Company SEC Reports complied as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto and fairly
present, in conformity with generally accepted accounting principles applied on
a consistent basis ("GAAP") (except as may be indicated in the notes thereto),
the financial position of the Company as of the dates thereof and its results of
operations and changes in financial position for the periods then ended
(subject, in the case of the unaudited interim financial statements, to normal
year-end adjustments).
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Since December 31, 1998, except as set forth in the Company SEC Reports, there
has not been any change, or any application or request for any change, by the
Company or any of its subsidiaries in accounting principles, methods or policies
for financial accounting or tax purposes.
(b) The Company has heretofore made available to Parent a complete and
correct copy of any material amendments or modifications, which have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Exchange
Act.
2.5 Information Supplied
None of the information with respect to the Company to be included in the
Proxy Statement (as defined in this Section below) will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder. The letters
to stockholders, notices of meeting, preliminary proxy statement, definitive
proxy statement and forms of proxies to be distributed to stockholders in
connection with the Merger, and any schedules to be filed with the SEC in
connection therewith are collectively referred to as the "Proxy Statement."
2.6 Consents and Approvals; No Violations
Except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the Exchange Act, the
filing and recordation of the Certificate of Merger as required by the DGCL, and
the approval of the stockholders of the Company, no filing with or notice to,
and no permit, authorization, consent or approval of, any court or tribunal or
administrative, governmental or regulatory body, agency or authority (a
"Governmental Entity") or any other person or entity is necessary for the
execution and delivery by the Company of this Agreement or the consummation by
the Company of the transactions contemplated hereby. Neither the execution,
delivery and performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the certificate of incorporation or
bylaws of the Company, (ii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration or Lien (as
defined below)) (collectively, a "Default") under any of the terms, conditions
or provisions of any material note, bond, mortgage, indenture, lease, license,
contract, agreement or other instrument or obligation
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to which the Company is a party or by which it or any of its properties or
assets may be bound (collectively, "Agreements") or would result in a Default
under any of the Company's Agreements (whether or not such Agreement is
material) which would have a Material Adverse Effect on the Company, or (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to the Company or any of its properties or assets. For purposes of
this Agreement, "Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
2.7 No Default
The Company is not in default or violation (and no event has occurred which
with notice or the lapse of time or both would constitute a default or
violation) of any term, condition or provision of (i) its certificate of
incorporation or bylaws, or (ii) any order, writ, injunction, decree, law,
statute, rule or regulation applicable to the Company or any of its properties
or assets, except in the case of subsection (ii) for violations, breaches or
defaults that would not have a Material Adverse Effect on the Company.
2.8 No Undisclosed Liabilities; Absence of Changes
Except as and to the extent publicly disclosed by the Company in the
Company SEC Reports, as of December 31, 1998, the Company had no liabilities or
obligations of any nature, whether or not accrued, contingent or otherwise, and
whether due or to become due or asserted or unasserted, which would be required
by GAAP to be reflected in, reserved against or otherwise described in the
balance sheet of the Company (including the notes thereto) as of such date or
which could reasonably be expected to have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company in the Company SEC
Reports, since December 31, 1998, the business of the Company has been carried
on only in the ordinary and usual course, the Company has not incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise, and
whether due or to become due or asserted or unasserted which could reasonably be
expected to have, and there have been no events, changes or effects with respect
to the Company having or which could reasonably be expected to have, a Material
Adverse Effect on the Company.
2.9 Litigation
Except as publicly disclosed by the Company in the Company SEC Reports,
there is no suit, claim, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against the Company or any of its
properties or assets which (a) could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company or
(b) as of the date hereof, questions the validity of this
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Agreement or any action to be taken by the Company in connection with the
consummation of the transactions contemplated hereby or could otherwise prevent
or delay the consummation of the transactions contemplated by this Agreement.
Except as publicly disclosed by the Company, the Company is not subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen, could reasonably be expected to have a Material Adverse
Effect on the Company or would prevent or delay the consummation of the
transactions contemplated hereby.
2.10 Compliance with Applicable Law
Except as publicly disclosed by the Company in the Company SEC Reports, the
Company holds all permits, licenses, variances, exemptions, orders and approvals
of all Governmental Entities necessary for the lawful conduct of its business
(the "Company Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which could not reasonably be
expected to have a Material Adverse Effect on the Company. Except as publicly
disclosed by the Company in the Company SEC Reports, the Company is in
compliance with the terms of the Company Permits, except where the failure so to
comply could not reasonably be expected to have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company in the Company SEC
Reports, the business of the Company is not being conducted in violation of any
law, ordinance or regulation of any Governmental Entity except for violations or
possible violations which do not, and, insofar as reasonably can be foreseen,
will not, have a Material Adverse Effect on the Company. Except as publicly
disclosed by the Company in the Company SEC Reports, to the best knowledge of
the Company no investigation or review by any Governmental Entity with respect
to the Company is pending or threatened, nor, to the best knowledge of the
Company, has any Governmental Entity indicated an intention to conduct the same.
2.11 Employee Benefit Plans
(a) The Company Disclosure Schedule contains a list of all top hat or
excess benefit plans for a select group of management or highly compensated
employees, Code Section 401(a) plans, employee bonus plans, Code Section 125
plans, medical, dental, vision, hospitalization and life insurance, tuition
reimbursement, disability plans in excess of state law required benefits, paid
time off and vacation benefits, severance (including change in control
agreements), stock purchase, stock option, stock appreciation rights, fringe
benefit and other employee benefit plans and programs (including, without
limitation, each "employee benefit plan," as defined in section 3(3) of ERISA)
and each employment or consulting contract or agreement which provides for base
annual compensation in excess of $75,000, (i) sponsored, maintained or
contributed to by the Company or any ERISA Affiliate, (ii) covering or
benefiting any current or former
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officer, employee, director or independent contractor of the Company or any
ERISA Affiliate or (iii) with respect to which the Company or any ERISA
Affiliate has any material obligation or liability (individually, an "Employee
Benefit Plan" and, collectively, the "Employee Benefit Plans"). Neither the
Company nor any ERISA Affiliate has any agreement to create any additional
employee benefit plan or program, or to modify or amend any existing Employee
Benefit Plan. For purposes of this Agreement, "ERISA Affiliate" means any
Subsidiary and any other corporation, trade, business or other entity that must
be aggregated with either the Company or any Subsidiary under Section 414(b),
(c), (m) or (o) of the Code. The Company has delivered to Parent true, complete
and accurate copies of all Employee Benefit Plans (including all amendments
thereto and summary plan descriptions thereof).
(b) There has been no amendment, written interpretation or announcement
(whether or not written) by either the Company or any ERISA Affiliate relating
to a change in participation or coverage under any Employee Benefit Plan that,
either alone or together with any other such items or events, could increase the
expense of maintaining such Plan above the level of expense incurred with
respect thereto for the most recent fiscal year included in the Company's or any
ERISA Affiliate's audited financial statements.
(c) With respect to each Employee Benefit Plan (i) such Employee Benefit
Plan and any related trust agreements, insurance contracts or annuity contracts
(or any related trust instruments) are and at all times since inception have
been maintained, administered, operated and funded in accordance with their
terms and in compliance with each applicable provision of ERISA, the Code and
any other applicable laws, including, without limitation, rules promulgated
pursuant thereto or in connection therewith, (ii) each Employee Benefit Plan
that is intended to be "qualified" within the meaning of Section 401(a) of the
Code has been the subject of a favorable determination letter issued by the IRS
and, to the best knowledge of the Company, no circumstances exist that have or
are likely to adversely affect, or result in the revocation of, such
determination, and (iii) no transaction, event or omission has occurred or
failed to occur that could subject the Company or any ERISA Affiliate, directly
or indirectly, to a tax, fine, penalty or related charge under any applicable
law, including, without limitation, Chapter 43 of Subtitle D of the Code and
Section 502(c), 502(i), 502(l) or 4071 of ERISA;
(d) All contributions, premiums and other payments due or required to be
made to (or with respect to) each Employee Benefit Plan under the terms of such
Employee Benefit Plan or under applicable law have been made on or before their
due dates in accordance with the terms of such Employee Benefit Plan or
applicable law, or, if not yet due, have been properly accrued on the financial
statements of the Company. The costs of administering the Employee Benefit
Plans, including, without limitation, fees for the
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trustees and other service providers which are customarily paid by the Company
or any ERISA Affiliate, have been timely paid, or will be timely paid or accrued
on the financial statements of the Company;
(e) Neither the Company nor any ERISA Affiliate sponsors, maintains or
contributes to, or has ever sponsored, maintained or contributed to (or been
obligated to contribute to), (i) any multiemployer plan within the meaning of
Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code, (ii) any
multiple employer plan within the meaning of Section 4063 or 4064 of ERISA or
Section 413(c) of the Code, or (iii) any employee benefit plan, fund, program,
contract or arrangement that is subject to Section 412 of the Code or Section
302 or Title IV of ERISA;
(f) There are no pending or threatened claims, lawsuits or arbitration
asserted or instituted against any Employee Benefit Plans, fiduciaries or any
officers, employees, directors, agents or owners of the Company or any ERISA
Affiliate with respect to such Plan, and the Company has no knowledge of any
facts which would give rise to or could reasonably be expected to give rise to
any such claims, lawsuits or arbitrations. No Employee Benefit Plan is
currently under investigation, audit or review by the IRS, Department of Labor
or any other governmental entity or agency, and the Company has no knowledge of
any facts which could give rise to or could reasonably be expected to give rise
to any such claims, lawsuits or arbitrations;
(g) Neither the execution and delivery of this Agreement or any related
agreement nor the consummation of the transactions contemplated by this
Agreement or any related agreement will (i) entitle any current or former
officer, employee, director, agent or independent contractor of the Company or
any ERISA Affiliate to severance pay, unemployment compensation or any other
payment from the Company, any ERISA Affiliate or any other Person, or otherwise
increase the amount of compensation due to any such individual, (ii) result in
any benefit or right becoming established or increased, or accelerate the time
of payment or vesting of any benefit, under any Employee Benefit Plan, (iii)
require the Company or any ERISA Affiliate to make any contribution to a trust
or other funding arrangement or to increase its contributions to any Employee
Benefit Plan, or (iv) conflict with the terms of any Employee Benefit Plan,
whether or not some other subsequent action or event would be required to
trigger any of the items specified in this paragraph.
2.12 Environmental Laws and Regulations
(a) Except as publicly disclosed by the Company in the Company SEC
Reports, (i) the Company is in compliance with all applicable federal, state and
local laws and regulations relating to pollution or protection of human health
or the environment
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(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) (collectively, "Environmental Laws"), except for
non-compliance that could not reasonably be expected to have a Material Adverse
Effect on the Company, which compliance includes, but is not limited to, the
possession by the Company of all material permits and other governmental
authorizations required under applicable Environmental Laws, and compliance with
the terms and conditions thereof; (ii) the Company has not received written
notice of, and, to the best knowledge of the Company, the Company is not the
subject of, any action, cause of action, claim, investigation, demand or notice
by any person or entity alleging liability under or non-compliance with any
Environmental Law (an "Environmental Claim"); and (iii) to the best knowledge of
the Company, there are no circumstances that are reasonably likely to prevent or
interfere with such material compliance in the future.
(b) Except as publicly disclosed by the Company in the Company SEC
Reports, there are no Environmental Claims that are pending or, to the best
knowledge of the Company, threatened against the Company or, to the best
knowledge of the Company, against any person or entity whose liability for any
Environmental Claim the Company has or may have retained or assumed either
contractually or by operation of law.
2.13 Tax Matters
The Company has accurately prepared in all material respects and duly filed
with the appropriate federal, state, local and foreign taxing authorities all
tax returns, information returns and reports that are, individually and in the
aggregate, material and are required to be filed with respect to the Company and
has paid in full or made adequate provision for the payment of all material
Taxes (as defined below). The Company is not delinquent in the payment of any
material Taxes. As used herein, the term "Taxes" means all federal, state,
local and foreign taxes, including, without limitation, income, profits,
franchise, employment, transfer, withholding, property, excise, sales and use
taxes (including interest penalties thereon and additions thereto).
2.14 Intangible Property
The Company owns or possesses adequate licenses or other valid rights to
use all material patents, patent rights, trademarks, trademark rights, trade
names, trade name rights, copyrights, service marks, trade secrets, applications
for trademarks and for service marks, know-how and other proprietary rights and
information used or held for use in connection with the business of the Company
as currently conducted or as contemplated to be conducted, and the Company is
unaware of any assertion or claim challenging the validity of any of the
foregoing. The conduct of the business of the Company as heretofore and
currently conducted has not and does not conflict in any way
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with any license, trademark, trademark right, trade name, trade name right,
service mark, copyright or, to the Company's best knowledge, any patent or
patent right of any third party. To the best knowledge of the Company, there are
no infringements of any proprietary rights owned by or licensed by or to the
Company.
2.15 Brokers
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission or expense reimbursement in connection with
the transactions contemplated by this Agreement based upon arrangements made by
and on behalf of the Company or any of its affiliates. The Company shall be
responsible for all such fees and expenses, except as otherwise provided in
Section 6.3.
2.16 Material Contracts
(a) The Company has delivered or otherwise made available to Parent
true, correct and complete copies of all contracts and agreements (and all
amendments, modifications and supplements thereto and all side letters to which
the Company is a party affecting the obligations of any party thereunder) to
which the Company is a party or by which any of its properties or assets are
bound that are, material to the business, properties or assets of the Company,
including, without limitation, to the extent any of the following are,
individually or in the aggregate, material to the business, properties or assets
of the Company, all: (i) employment, product design or development, personal
services, consulting, non-competition, severance or indemnification contracts
(including, without limitation, any contract to which the Company is a party
involving employees of the Company); (ii) licensing, publishing, merchandising
or distribution agreements; (iii) contracts granting a right of first refusal or
first negotiation; (iv) partnership or joint venture agreements; (v) agreements
for the acquisition, sale or lease of material properties or assets of the
Company (by merger, purchase or sale of assets or stock or otherwise); (vi)
contracts or agreements with any Governmental Entity; (vii) notes, bonds,
mortgages, indentures and leases; and (viii) all commitments and agreements to
enter into any of the foregoing (collectively, together with any such contracts
entered into in accordance with Section 4.1 hereof, the "Contracts"). The
Company is not a party to or bound by any severance, golden parachute or other
agreement with any employee or consultant pursuant to which such person would be
entitled to receive any additional compensation or an accelerated payment of
compensation as a result of the consummation of the transactions contemplated
hereby.
(b) Each of the Contracts is valid and enforceable in accordance with
its terms, and there is no default under any Contract so listed either by the
Company or, to the knowledge of the Company, by any other party thereto, and no
event has occurred that
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with the lapse of time or the giving of notice or both would constitute a
default thereunder by the Company or, to the knowledge of the Company, any other
party, in any such case in which such default or event could reasonably be
expected to have a Material Adverse Effect on the Company. No party to any such
Contract has given notice to the Company of or made a claim against the Company
with respect to any breach or default thereunder.
(c) No party to any such Contract has given notice to the Company of
or made a claim against the Company with respect to any breach or default
thereunder.
2.17 Disclosure
No representation or warranty by the Company contained in this Agreement
and no statement contained in any certificate delivered by the Company to Sub or
Parent pursuant to this Agreement contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading when taken together in light of the
circumstances in which they were made.
2.18 Termination of Certain Contracts
The Company has terminated its Distributor Agreement and has no other
agreements with ACI Worldwide Inc. (as successor to USSI, Inc., "ACI") (provided
that the Company may continue to distribute 50 licenses of ACI's Trans24
software and appropriate provisions of the Distributor Agreement will continue
to apply to such licenses). On or prior to the closing the Company shall
terminate its agreements with UniKix Technologies. The Company has received a
release and settlement providing for a complete release from any and all claims
now existing or arising in the future against the Company and its affiliates by
ACI (other than with respect to the ongoing licenses and settlement payments)
for an amount payable by the Company as described in the Company Disclosure
Schedule. On or prior to the Closing the Company will have reached an agreement
with UniKix Technologies to provide for software licenses in connection with the
Trans24 software licenses with payments not to exceed the amount provided for in
the Company Disclosure Schedule.
3. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
3.1 Organization
(a) Each of Parent and Sub is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and
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has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its businesses as now being conducted.
(b) Each of Parent and Sub is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the property owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not have
a Material Adverse Effect (as defined below) on Parent. When used in connection
with Parent or Sub, the term "Material Adverse Effect" means any change or
effect that, when taken together with all other adverse changes and effects (i)
is or is reasonably likely to be materially adverse to the properties, business,
results of operations or condition (financial or otherwise) of Parent and its
subsidiaries, taken as a whole, or (ii) may impair the ability of Parent and/or
Sub to consummate the transactions contemplated hereby.
(c) Parent has heretofore delivered to the Company accurate and
complete copies of the articles of incorporation and by-laws of Parent as
currently in effect.
3.2 Authority Relative to this Agreement
Each of Parent and Sub has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the boards of directors of Parent and Sub and by Parent as the
sole stockholder of Sub, and no other corporate proceedings on the part of
Parent or Sub are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of Parent and Sub and constitutes a valid, legal
and binding agreement of each of Parent and Sub, enforceable against each of
Parent and Sub in accordance with its terms.
3.3 Information Supplied
None of the information with respect to Parent or Sub to be supplied by
Parent or Sub in writing specifically for inclusion in the Proxy Statement will
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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3.4 Consents and Approvals; No Violations
Except for filings, permits, authorizations, consents and approvals as may
be required under, and other applicable requirements of, the Exchange Act, and
the filing and recordation of the Certificate of Merger as required by the DGCL,
no filing with or notice to, and no permit, authorization, consent or approval
of, any Governmental Entity or any other person or entity is necessary for the
execution and delivery by Parent or Sub of this Agreement or the consummation by
Parent or Sub of the transactions contemplated hereby. Neither the execution,
delivery and performance of this Agreement by Parent or Sub nor the consummation
by Parent or Sub of the transactions contemplated hereby will (i) conflict with
or result in any breach of any provision of the respective certificate of
incorporation or bylaws of Parent or Sub, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, amendment, cancellation or
acceleration or Lien) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or Sub is a party or by which any of
them or any of their respective properties or assets may be bound, or (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to Parent or Sub or any of Parent's subsidiaries or any of their
respective properties or assets.
3.5 Litigation
Except as publicly disclosed by Parent in reports filed by Parent with the
SEC (the "Parent SEC Reports"), there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of Parent or Sub, threatened against
Parent or Sub or any of their respective properties or assets which as of the
date hereof, questions the validity of this Agreement or any action to be taken
by Parent in connection with the consummation of the transactions contemplated
hereby or could otherwise prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as publicly disclosed by Parent in
Parent's SEC Reports, neither Parent nor Sub is subject to any outstanding
order, writ, injunction or decree which, insofar as can be reasonably foreseen,
could reasonably be expected to have a Material Adverse Effect on Parent or
would prevent or delay the consummation of the transactions contemplated hereby.
3.6 Brokers
No broker, finder or investment banker is entitled to any brokerage,
finder's or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by and on behalf of
Parent or Sub or any of
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their affiliates, except for fees that may be payable to placement agents or
lenders in connection with any debt financing obtained by Parent or Sub.
3.7 Financing
Parent or Sub has received commitments or highly confident letters from
financially responsible third parties to obtain, and will have at the time of
acceptance for payment and purchase of Shares at the Effective Time, the funds
necessary to consummate the Merger and to pay the Merger Consideration and
related fees and expenses.
4. COVENANTS
4.1 Conduct of Business of the Company
Except as contemplated by this Agreement, during the period from the date
hereof to the Effective Time, the Company will, and will cause each of its
subsidiaries to, conduct its operations in the ordinary course of business
consistent with past practice and, to the extent consistent therewith, with no
less diligence and effort than would be applied in the absence of this
Agreement, seek to preserve intact its current business organizations, seek to
keep available the service of its current officers and employees and seek to
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that goodwill and ongoing businesses shall be
unimpaired at the Effective Time. Without limiting the generality of the
foregoing, and except as otherwise expressly provided in this Agreement, prior
to the Effective Time, neither the Company nor any of its subsidiaries will,
without the prior written consent of Parent:
(a) amend its certificate of incorporation or bylaws;
(b) authorize for issuance, issue, sell, deliver or agree or commit to
issue, sell or deliver (whether through the issuance or granting of options,
warrants, commitments, subscriptions, rights to purchase or otherwise) any stock
of any class or any other securities or equity equivalents (including, without
limitation, any stock options or stock appreciation rights), except for the
issuance of up to 2,162,504 shares of Company Common Stock pursuant to the
exercise of currently granted stock options under the Company's stock option
plans and existing option agreements;
(c) split, combine or reclassify any shares of its capital stock,
declare, set aside or pay any dividend or other distribution (whether in cash,
stock or property or any combination thereof) in respect of its capital stock,
make any other actual, constructive or deemed distribution in respect of any
shares of its capital stock or
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otherwise make any payments to stockholders in their capacity as such, or redeem
or otherwise acquire any of its securities or any securities of any of its
subsidiaries;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company or any of its subsidiaries (other than the Merger);
(e) alter through merger, liquidation, reorganization, restructuring
or in any other fashion the corporate structure or ownership of any subsidiary
(other than the Merger);
(f) (i) incur or assume any long-term or short-term debt or issue any
debt securities; (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations of
any other person; (iii) make any loans, advances or capital contributions to, or
investments in, any other person; (iv) pledge or otherwise encumber shares of
capital stock of the Company or its subsidiaries; or (v) mortgage or pledge any
of its material assets, tangible or intangible, or create or suffer to exist any
material Lien thereupon;
(g) except as may be required by law or as contemplated by this
Agreement, enter into, adopt or amend or terminate any Employee Benefit Plan (as
defined in Section 2.11), or increase the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any Employee
Benefit Plan as in effect as of the date hereof (including, without limitation,
the granting of stock appreciation rights or performance units);
(h) acquire, sell, lease or dispose of any assets outside the ordinary
course of business or any assets which in the aggregate are material to the
Company and its subsidiaries taken as a whole, enter into any commitment or
transaction outside the ordinary course of business or grant any exclusive
distribution rights, except as contemplated by Section 2.18 hereof;
(i) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
principles or practices used by it;
(j) revalue in any material respect any of its assets, including,
without limitation, writing down the value of inventory or writing-off notes or
accounts receivable other than in the ordinary course of business or as required
by GAAP;
(k) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or
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any equity interest therein; (ii) enter into any contract or agreement, other
than in the ordinary course of business or as contemplated in Section 2.18 or
amend in any material respect any of the Contracts or the agreements referred to
in Section 2.16; (iii) authorize any new capital expenditure or expenditures
other than up to an aggregate of $150,000, provided such expenditures are in
accordance with the Company's capital budget previously provided to Parent; or
(iv) enter into or amend any contract, agreement, commitment or arrangement
providing for the taking of any action that would be prohibited hereunder;
(l) make or revoke any tax election or settle or compromise any tax
liability material to the Company and its subsidiaries taken as a whole or
change (or make a request to any taxing authority to change) any material aspect
of its method of accounting for tax purposes;
(m) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected or reserved against in, or
contemplated by, the financial statements (or the notes thereto) of the Company
or incurred in the ordinary course of business consistent with past practice,
except as contemplated by Section 2.18 hereof;
(n) settle or compromise any pending or threatened suit, action or
claim relating to the transactions contemplated hereby, except as contemplated
by Section 2.18 hereof; or
(o) take (other than to Parent in seeking its consent to the taking
of any such action), propose to take, or agree in writing or otherwise to take,
any of the actions described in Sections 4.1(a) through 4.1(n) or any action
which would make any of the representations or warranties of the Company
contained in this Agreement untrue or incorrect in any material respect.
4.2 Preparation of Proxy Statement and Stockholders' Meeting
(a) In order to consummate the Merger, the Company, acting through
the Board, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as practicable for
the purpose of considering and taking action upon this Agreement;
(ii) prepare and file with the SEC a preliminary proxy statement
relating to the Merger and this Agreement and use its reasonable efforts (x) to
obtain and
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furnish the information required to be included by the SEC in the Proxy
Statement and, after consultation with Parent, to respond promptly to any
comments made by the SEC with respect to the preliminary Proxy Statement and
cause a definitive Proxy Statement to be mailed to its stockholders and (y) to
obtain the necessary approvals of the Merger and this Agreement by its
stockholders; and
(iii) subject to the fiduciary obligations of the Board under
applicable law as advised by outside counsel, include in the Proxy Statement the
recommendation of the Board that stockholders of the Company vote in favor of
the approval of the Merger and the adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to be voted, all of the
Shares then owned by it, Sub or any of its other subsidiaries in favor of the
approval of the Merger and the adoption of this Agreement.
4.3 No Solicitation
(a) The Company, its affiliates and their respective officers,
directors, employees, representatives and agents shall immediately cease any
existing discussions or negotiations, if any, with any parties conducted
heretofore with respect to any acquisition of all or any material portion of the
assets of, or any equity interest in, the Company or its subsidiaries or any
business combination with the Company or its subsidiaries. The Company may,
directly or indirectly, furnish information and access, in each case only in
response to unsolicited requests therefor, to any corporation, partnership,
person or other entity or group pursuant to confidentiality agreements, and may
participate in discussions and negotiate with such entity or group concerning
any merger, sale of assets, sale of shares of capital stock or similar
transaction involving the Company or any subsidiary or division of the Company,
if such entity or group has submitted a proposal to the Company (whether or not
in writing) relating to any such transaction and the Company Board by a majority
vote determines in its good faith judgment, after consultation with and based
upon the advice of independent legal counsel, that it is necessary to do so to
comply with its fiduciary duties to stockholders under applicable law. The
Company Board shall provide a copy of any such written proposal and a summary of
any oral proposal to Parent within 24 hours after receipt thereof and thereafter
keep Parent promptly advised of any material development with respect thereto.
Except as set forth above, neither the Company nor any of its affiliates shall,
nor shall the Company authorize or permit any of its or their respective
officers, directors, employees, representatives or agents to directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and Sub, any affiliate or
associate of Parent and Sub or any designees of Parent and Sub) concerning any
merger, sale of assets, sale of shares of
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capital stock or similar transaction involving the Company or any subsidiary or
division of the Company; provided, however, that nothing herein shall prevent
the Company Board from taking, and disclosing to the Company's stockholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer; provided, further, that nothing herein
shall prevent the Company Board from making such disclosure to the Company's
stockholders as, in the good faith judgment of the Company Board, after
consultation with and based upon the advice of independent legal counsel, is
necessary to comply with its fiduciary duties to stockholders under applicable
law.
(b) Except as set forth in this Section 4.3, the Company Board shall
not approve or recommend, or cause the Company to enter into any agreement with
respect to any Third Party Transaction (as defined in Section 6.1(d)).
Notwithstanding the foregoing, if the Board of Directors of the Company, after
consultation with and based upon the advice of independent legal counsel,
determines in good faith that it is necessary to do so in order to comply with
its fiduciary duties to stockholders under applicable law, the Company Board may
approve or recommend a Superior Proposal (as defined below) or cause the Company
to enter into an agreement with respect to a Superior Proposal, but in each case
only (i) after providing reasonable written notice to Parent (a "Notice of
Superior Proposal") advising Parent that the Company Board has received a
Superior Proposal, specifying the material terms and conditions of such Superior
Proposal and identifying the person making such Superior Proposal and (ii) if
Parent does not make within five days of Parent's receipt of the Notice of
Superior Proposal, an offer which the Company Board, after consultation with its
financial advisors, determines is superior to such Superior Proposal. For
purposes of this Agreement, a "Superior Proposal" means any bona fide proposal
to acquire, directly or indirectly, for consideration consisting of cash and/or
securities, more than 50% of the shares of Company Common Stock then outstanding
or all or substantially all the assets of the Company and otherwise on terms
which the Company Board determines in its good faith judgment (based on the
written advice of a financial advisor of nationally recognized reputation) to be
more favorable to the Company's stockholders than the Merger.
4.4 Access to Information
(a) Between the date hereof and the Effective Time, the Company will
give to Parent or Sub and their authorized representatives reasonable access to
all employees, plants, offices, warehouses and other facilities and to all books
and records of its and its subsidiaries, will permit such inspections as may
reasonably be required and will cause their officers and those of their
subsidiaries to furnish such financial and operating data and other information
with respect to their business, properties and personnel as may from time to
time be reasonably requested, provided that no
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investigation pursuant to this Section 4.4(a) shall affect or be deemed to
modify any of the representations or warranties made in this Agreement.
(b) Between the date hereof and the Effective Time, the Company shall
furnish to Parent (i) within five business days after the delivery thereof to
management, such monthly financial statements and data as are regularly prepared
for distribution to management and (ii) at the earliest time they are available,
such quarterly and annual financial statements as are prepared for its SEC
filings, which (in the case of this clause (ii)) shall be in accordance with
their books and records.
(c) Parent and Sub will hold and will cause their consultants and
advisors to hold in confidence all documents and information received in
connection with the transactions contemplated by this Agreement.
4.5 Additional Agreements; Reasonable Best Efforts
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things reasonably necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, (i) cooperation in the preparation and filing of the Proxy
Statement; (ii) the taking of all action reasonably necessary, proper or
advisable to secure any necessary consents under existing contracts of the
Company and its subsidiaries or amend the agreements relating thereto to the
extent required by such agreements; (iii) contesting any legal proceeding
relating to the Merger; and (iv) the execution of any additional instruments,
including the Certificate of Merger, necessary to consummate the transactions
contemplated hereby; provided, however, that the Company may postpone a
previously-scheduled meeting of Company stockholders in the event that the
Company Board by majority vote determines in its good faith judgment, after
consultation with and based upon the advice of independent legal counsel, that
it is necessary to do so in order to comply with its fiduciary duties to
stockholders under applicable law and, at the time of such determination, the
Company has received a bona fide proposal to effect an alternate sale that is a
Superior Proposal and that has not been withdrawn. In case at any time after
the Effective Time any further action is necessary to carry out the purposes of
this Agreement, the proper officers and directors of each party hereto shall
take all such necessary action.
4.6 Consents
Parent, Sub and the Company each will use all reasonable efforts to obtain
consents of all third parties and Governmental Entities necessary, proper or
advisable for the consummation of the transactions contemplated by this
Agreement.
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4.7 Public Announcements
Each of Parent, Sub and the Company will consult with one another before
issuing any press release or otherwise making any public statements with respect
to the transactions contemplated by this Agreement, including, without
limitation, the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as may be required by
applicable law or by obligations pursuant to any listing agreement with the
Nasdaq Stock Market, as determined by Parent, Sub or the Company, as the case
may be.
4.8 Notification of Certain Matters
The Company shall give prompt notice to Parent and Sub, and Parent and Sub
shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence
of any event the occurrence or nonoccurrence of which would be likely to cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Effective Time, (ii) any
material failure of the Company, Parent or Sub, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder, (iii) any notice of, or other communication relating
to, a default or event which, with notice or lapse of time or both, would become
a default, received by the Company or any of its subsidiaries subsequent to the
date of this Agreement and prior to the Effective Time, under any contract or
agreement material to the financial condition, properties, businesses or results
of operations of it and its subsidiaries taken as a whole to which it or any of
its subsidiaries is a party or is subject, (iv) any notice or other
communication from any third party alleging that the consent of such third party
is or may be required in connection with the transactions contemplated by this
Agreement, or (v) any material adverse change in the Company's financial
condition, properties, business, results of operations or prospects, other than
changes resulting from general economic conditions; provided, however, that the
delivery of any notice pursuant to this Section 4.8 shall not cure such breach
or non-compliance or limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
4.9 Release of Liens
Prior to the Closing, the Company shall have all Liens relating to its loan
agreement and security agreement with Silicon Valley Bank terminated and
released.
4.10 Company 401(k) Plan
If requested in writing by Parent, on or prior to the Closing Date, the
Company will adopt a resolution that terminates its 401(k) Employee Retirement
Plan and cause to
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be filed with the IRS an application for a determination that the termination of
the plan does not adversely affect the qualified status of the plan under
Section 401(a) of the Code. The Company shall provide Parent with a copy of such
resolution and determination letter application prior to the Closing Date.
4.11 Parent 401(k) Plan
Parent will make such amendments to its 401(k) Plan to provide that the
Company's employees may commence participation in the Parent's 401(k) Plan,
effective upon or within a reasonable period following the Closing Date pursuant
to the terms of the plan.
5. CONDITIONS TO CONSUMMATION OF THE MERGER
5.1 Conditions to Each Party's Obligations to Effect the Merger
The respective obligations of each party hereto to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) this Agreement shall have been approved and adopted by the
requisite vote of the stockholders of the Company;
(b) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States court or United States governmental authority which prohibits,
restrains, enjoins or restricts the consummation of the Merger; and
(c) any other governmental or regulatory notices or approvals required
with respect to the transactions contemplated hereby shall have been either
filed or received.
5.2 Conditions to the Obligations of the Company
The obligation of the Company to effect the Merger is subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) the representations of Parent and Sub contained in this Agreement
or in any other document delivered pursuant hereto shall be true and correct in
all material respects at and as of the Effective Time with the same effect as if
made at and as of the Effective Time, and at the Closing Parent and Sub shall
have delivered to the Company a certificate to that effect signed by the chief
executive officer of each of Parent and Sub; and
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(b) each of the obligations of Parent and Sub to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time and
at the Closing Parent and Sub shall have delivered to the Company a certificate
to that effect signed by the chief executive officer of each of Parent and Sub.
5.3 Conditions to the Obligations of Parent and Sub
The respective obligations of Parent and Sub to effect the Merger are
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) the representations of the Company contained in this Agreement or
in any other document delivered pursuant hereto shall be true and correct in all
material respects at and as of the Effective Time with the same effect as if
made at and as of the Effective Time, and at the Closing the Company shall have
delivered to Parent and Sub a certificate to that effect signed by the chief
executive officer of the Company;
(b) each of the obligations of the Company to be performed at or
before the Effective Time pursuant to the terms of this Agreement shall have
been duly performed in all material respects at or before the Effective Time and
at the Closing the Company shall have delivered to Parent and Sub a certificate
to that effect signed by the chief executive officer of the Company;
(c) the Company shall have obtained the consent or approval of each
person whose consent or approval shall be required in order to permit the
succession by the Surviving Corporation pursuant to the Merger to any
obligation, right or interest of the Company or any subsidiary of the Company
under any loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except for those for which failure to obtain such
consents and approvals would not, individually or in the aggregate, have a
Material Adverse Effect on the Company;
(d) there shall have been no events, changes or effects with respect
to the Company or its subsidiaries having or which could reasonably be expected
to have, a Material Adverse Effect on the Company; and
(e) each employee of the Company and its subsidiaries shall have
entered into a Proprietary Rights and Confidentiality Agreement, in the form
attached hereto as Exhibit A.
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6. TERMINATION; AMENDMENT; WAIVER
6.1 Termination
This Agreement may be terminated and the Merger may be abandoned at any
time prior to the Effective Time:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by Parent and Sub or the Company if (i) any court of competent
jurisdiction in the United States or other United States governmental authority
shall have issued a final order, decree or ruling or taken any other final
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action is or shall have become nonappealable or
(ii) the Merger has not been consummated by August 31, 1999; provided that no
party may terminate this Agreement pursuant to this clause (ii) if such party's
failure to fulfill any of its obligations under this Agreement shall have been
the reason that the Effective Time shall not have occurred on or before said
date;
(c) by the Company if (i) there shall have been a breach of any
representation or warranty on the part of Parent or Sub set forth in this
Agreement, or if any representation or warranty of Parent or Sub shall have
become untrue, in either case such that the conditions set forth in Section
5.2(a) would be incapable of being satisfied by August 31, 1999 (or as otherwise
extended), (ii) there shall have been a breach by Parent or Sub of any of their
respective covenants or agreements hereunder materially adversely affecting (or
materially delaying) the consummation of the Merger, and Parent or Sub, as the
case may be, has not cured such breach by August 31, 1999 (or as otherwise
extended), (iii) the Company enters into a definitive agreement relating to a
Superior Proposal in accordance with Section 4.3(b) (provided that such
termination shall not be effective until payment of the amount required under
Section 6.3(a)), (iv) the Company shall have convened one or more meetings of
its stockholders to vote upon the Merger and shall have failed to obtain the
requisite vote of its stockholders prior to August 31, 1999, or (v) the Company
Board by a majority vote determines in its good faith judgment, after
consultation with and based upon the advice of independent legal counsel, that
it is necessary to do so to comply with its fiduciary duties to stockholders,
provided that such termination under this clause (v) shall not be effective
unless at the time of such determination the Company has received a bona fide
proposal to effect a Third Party Transaction (as defined below) that is a
Superior Proposal and that has not been withdrawn as of the time of such
termination (provided that such termination shall not be effective until payment
of the amount required under Section 6.3(a)); or
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(d) by Parent and Sub if (i) there shall have been a breach of any
representation or warranty on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have become
untrue, in either case such that the conditions set forth in Section 5.3(a)
would be incapable of being satisfied by August 31, 1999 (or as otherwise
extended), (ii) there shall have been a breach by the Company of its covenants
or agreements hereunder having a Material Adverse Effect on the Company or
materially adversely affecting (or materially delaying) the consummation of the
Merger, and the Company has not cured such breach by August 31 1999 (or as
otherwise extended), (iii) the Company Board shall have withdrawn, modified or
changed its approval or recommendation of this Agreement or the Merger, shall
have recommended to the Company's stockholders a Third Party Transaction or
shall have failed to call, give notice of, convene or hold a stockholders'
meeting to vote upon the Merger, or shall have adopted any resolution to effect
any of the foregoing, or (iv) the Company shall have convened a meeting of its
stockholders to vote upon the Merger and shall have failed to obtain the
requisite vote of its stockholders by August 31, 1999 (or as otherwise
extended).
"Third Party Transaction" means the occurrence of any of the following
events (i) the acquisition of the Company by merger or otherwise by any person
(which includes a "person" as such term is defined in Section 13(d)(3) of the
Exchange Act) or entity other than Parent, Sub or any affiliate thereof (a
"Third Party"); (ii) the acquisition by a Third Party of more than 30% of the
total assets of the Company and its subsidiaries, taken as a whole; or (iii) the
acquisition by a Third Party of 30% or more of the outstanding shares of Company
Common Stock.
6.2 Effect of Termination
In the event of the termination and abandonment of this Agreement pursuant
to Section 6.1, this Agreement shall forthwith become void and have no effect,
without any liability on the part of any party hereto or its affiliates,
directors, officers or stockholders, other than the provisions of this Section
6.2 and Sections 4.4(c), 6.3, 7.5, 7.7, 7.9 and 7.11 hereof. Nothing contained
in this Section 6.2 shall relieve any party from liability for any breach of
this Agreement.
6.3 Fees and Expenses
(a) In the event that this Agreement shall be terminated pursuant to
Section 6.1(d)(i) through 6.1(d)(iv) or Section 6.1(c)(iii), (iv), or (v) Parent
and Sub would suffer direct and substantial damages, which damages cannot be
determined with reasonable certainty. To compensate Parent and Sub for such
damages, the Company shall pay to Parent the amount of $5.0 million as a
termination fee on the date of such
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termination. It is specifically agreed that the amount to be paid pursuant to
this Section 6.3(a) represents a negotiated termination fee and is not a
penalty.
(b) In the event that this Agreement shall be terminated pursuant to
Section 6.1(c)(i) or (ii), the Company would suffer direct and substantial
damages, which damages cannot be determined with reasonable certainty. To
compensate the Company for such damages, Parent shall pay to the Company the
amount of $5.0 million as a termination fee on the date of such termination. It
is specifically agreed that the amount to be paid pursuant to this Section
6.3(b) represents a negotiated termination fee and is not a penalty.
(c) Upon the termination of this Agreement pursuant to Sections
6.1(c)(iii), (iv) or (v) or 6.1(d)(i) through (iv), the Company shall reimburse
Parent, Sub and their affiliates (not later than ten business days after
submission of statements therefor) for all actual documented out-of-pocket fees
and expenses, not to exceed $250,000, actually and reasonably incurred by any of
them or on their behalf in connection with the Merger and the consummation of
all transactions contemplated by this Agreement (including, without limitation,
fees payable to counsel to any of the foregoing, and accountants). If Parent or
Sub shall submit a request for reimbursement hereunder, Parent or Sub will
provide the Company in due course with invoices or other reasonable evidence of
such expenses upon request. The Company shall in any event pay the amount
requested (not to exceed $250,000) within ten business days of such request,
subject to the Company's right to demand a return of any portion as to which
invoices are not received in due course.
(d) Upon the termination of this Agreement pursuant to Sections
6.1(c)(i) or (ii), Parent shall reimburse the Company and their affiliates (not
later than ten business days after submission of statements therefor) for all
actual documented out-of-pocket fees and expenses, not to exceed $250,000,
actually and reasonably incurred by any of them or on their behalf in connection
with the Merger and the consummation of all transactions contemplated by this
Agreement (including, without limitation, fees payable to counsel to any of the
foregoing, and accountants). If the Company shall submit a request for
reimbursement hereunder, the Company will provide Parent in due course with
invoices or other reasonable evidence of such expenses upon request. Parent
shall in any event pay the amount requested (not to exceed $250,000) within ten
business days of such request, subject to Parent's right to demand a return of
any portion as to which invoices are not received in due course.
(e) Except as specifically provided in this Section 6.3, each party
shall bear its own expenses in connection with this Agreement and the
transactions
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contemplated hereby. The cost of printing the Proxy Statement shall be paid by
the Company.
6.4 Amendment
This Agreement may be amended by action taken by the Company, Parent and
Sub at any time before or after approval of the Merger by the stockholders of
the Company (if required by applicable law) but, after any such approval, no
amendment shall be made which requires the approval of such stockholders under
applicable law without such approval. This Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.
6.5 Extension; Waiver
At any time prior to the Effective Time, each party hereto (for these
purposes, Parent and Sub shall together be deemed one party and the Company
shall be deemed the other party) may (i) extend the time for the performance of
any of the obligations or other acts of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document, certificate or writing delivered pursuant hereto or
(iii) waive compliance by the other party with any of the agreements or
conditions contained herein. Any agreement on the part of either party hereto
to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. The failure of either
party hereto to assert any of its rights hereunder shall not constitute a waiver
of such rights.
7. MISCELLANEOUS
7.1 Nonsurvival of Representations and Warranties
The representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement.
7.2 Entire Agreement; Assignment
This Agreement (a) constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (b) shall not be assigned by operation
of law or otherwise; provided, however, that Sub may assign any or all of its
rights and obligations under this Agreement to any subsidiary of Parent, but no
such assignment shall relieve Sub of its obligations hereunder if such assignee
does not perform such obligations.
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7.3 Validity
If any provision of this Agreement, or the application thereof to any
person or circumstance, is held invalid or unenforceable, the remainder of this
Agreement, and the application of such provision to other persons or
circumstances, shall not be affected thereby, and to such end, the provisions of
this Agreement are agreed to be severable.
7.4 Notices
All notices, requests, claims, demands and other communications hereunder
shall be in writing and shall be given (and shall be deemed to have been duly
given upon receipt) by delivery in person, by cable, telegram, facsimile or
telex, or by registered or certified mail (postage prepaid, return receipt
requested), to the other party as follows:
if to Parent or Sub:
CFI ProServices, Inc.
Suite 200
400 S.W. Sixth Avenue
Portland, OR 97204
Fax: (503) 274-7280
Attn: President
with a copy to:
Perkins Coie LLP
Suite 1500
1211 S.W. Fifth Avenue
Portland, OR 97204
Fax: (503) 727-2222
Attn: Roy W. Tucker
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and a copy to:
Farleigh, Wada & Witt, P.C.
Suite 600
121 S.W. Morrison
Portland, OR 97204
Fax: (503) 228-1741
Attn: F. Scott Farleigh
if to the Company to:
Ultradata Corporation
5000 Franklin Drive
Pleasanton, CA 94588
Fax: (925) 224-9879
Attn: Chief Financial Officer
with a copy to:
Fenwick & West LLP
100 The Embarcadero, Suite 300
San Francisco, CA 94105
Fax: (415) 281-1350
Attn: Robert B. Dellenbach
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
7.5 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to the principles of conflicts of
law thereof.
7.6 Descriptive Headings
The descriptive headings herein are inserted for convenience of reference
only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
7.7 Parties in Interest
This Agreement shall be binding upon and inure solely to the benefit of
each party hereto and its successors and permitted assigns, and nothing in this
Agreement, express or
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implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
7.8 Severability
If any term or other provision of this Agreement is invalid, illegal or
unenforceable, all other provisions of this Agreement shall remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party.
7.9 Specific Performance
The parties hereto acknowledge that irreparable damage would result if this
Agreement were not specifically enforced, and they therefore consent that the
rights and obligations of the parties under this Agreement may be enforced by a
decree of specific performance issued by a court of competent jurisdiction.
Such remedy shall, however, not be exclusive and shall be in addition to any
other remedies, including arbitration, which any party may have under this
Agreement or otherwise.
7.10 Subsidiaries
The term "subsidiary" shall mean, when used with reference to any entity,
any entity more than fifty percent (50%) of the outstanding voting securities or
interests (including membership interests) of which are owned directly or
indirectly by such former entity.
7.11 Brokers
Except as otherwise provided in Section 6.3, the Company agrees to
indemnify and hold harmless Parent and Sub, and Parent and Sub agree to
indemnify and hold harmless the Company, from and against any and all liability
to which Parent and Sub, on the one hand, or the Company, on the other hand, may
be subjected by reason of any brokers, finders or similar fees or expenses with
respect to the transactions contemplated by this Agreement to the extent such
similar fees and expenses are attributable to any action undertaken by or on
behalf of the Company, or Parent or Sub, as the case may be.
7.12 Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one and the
same agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be duly executed on its behalf as of the day and year first above written.
ULTRADATA CORPORATION
By: /s/ Robert J. Majteles
----------------------
Name: Robert J. Majteles
Title: President & CEO
CFI PROSERVICES, INC.
By: /s/ Matt Chapman
----------------
Name: Matt Chapman
Title: Chairman & CEO
UFO ACQUISITION CO.
By: /s/ Robert Channess
-------------------
Name: Robert Channess
Title: President
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