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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
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SOFTWORKS, INC.
(NAME OF SUBJECT COMPANY)
EAGLE MERGER CORP.
EMC CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(TITLE OF CLASS OF SECURITIES)
83404P102
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
PAUL T. DACIER, ESQ.
EMC CORPORATION
35 PARKWOOD DRIVE
HOPKINTON, MASSACHUSETTS 01748
TELEPHONE: (508) 435-1000
FACSIMILE: (508) 497-6915
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPY TO:
MARGARET A. BROWN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
TELEPHONE: (617) 573-4800
FACSIMILE: (617) 573-4822
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* $191,310,000 AMOUNT OF FILING FEE $38,262
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* Estimated for purposes of calculating the amount of the filing fee only. The
filing fee calculation assumes the purchase of all outstanding shares of
common stock, $0.001 par value per share (the "Shares"), of Softworks, Inc. at
a price of $10.00 per Share in cash, without interest (the "Offer Price"). The
filing fee calculation is based on the 17,373,191 Shares outstanding as of
December 20, 1999 and assumes payment by Eagle Merger Corp. of the difference
between the exercise price and the Offer Price of 4,514,000 vested options.
The amount of the filing fee, calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th of
one percent of the aggregate value of the transaction.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11 (a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
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14D-1
CUSIP No. 83404P102
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1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF
ABOVE PERSON (ENTITIES ONLY)
EAGLE MERGER CORP.; IRS ID NO. 04-3494398
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS AF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) or 2(f) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION DELAWARE
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,327,767
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES [ ]
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 42.2%
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10. TYPE OF REPORTING PERSON CO
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</TABLE>
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14D-1
CUSIP No. 83404P102
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1. NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF
ABOVE PERSON (ENTITIES ONLY) EMC CORPORATION; IRS ID NO.
04-2680009
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) or 2(f) [ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION MASSACHUSETTS
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7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,327,767
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8. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES [ ]
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9. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 42.2%
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10. TYPE OF REPORTING PERSON CO
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</TABLE>
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TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by Eagle Merger Corp., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of EMC Corporation, a Massachusetts corporation
("Parent"), to purchase all of the outstanding shares of common stock, par value
$0.001 per share (the "Shares"), of Softworks, Inc., a Delaware corporation (the
"Company"), at $10.00 per Share, net to the seller in cash, without interest,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated December 23, 1999 (the "Offer to Purchase"), a copy of which is attached
hereto as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of
which is attached hereto as Exhibit (a)(2) (which, as amended or supplemented
from time to time, together constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Softworks, Inc. and the address of
its principal executive offices is 5845 Richmond Highway, Suite 400, Alexandria,
Virginia, 22303. The telephone number of the Company at such location is
(703) 317-2424.
(b) The information set forth in the "INTRODUCTION" of the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in "Price Range of the Shares; Dividends on
the Shares" of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Purchaser and Parent. The
information set forth in the "INTRODUCTION" and "Certain Information Concerning
Parent and Purchaser" of the Offer to Purchase is incorporated herein by
reference. The name, business address, present principal occupation or
employment, the material occupations, positions, offices or employments for the
past five years and citizenship of each director and executive officer of Parent
and Purchaser and the name, principal business and address of any corporation or
other organization in which such occupations, positions, offices and employments
are or were carried on are set forth in Schedule I to the Offer to Purchase and
are incorporated herein by reference.
(e)-(f) During the last five years neither Purchaser nor Parent nor, to the
best knowledge of Purchaser and Parent, any of the persons listed in Schedule I
to the Offer to Purchase (i) have been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which any such person was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting activities subject
to, federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b), neither
Purchaser nor Parent nor, to the best knowledge of Purchaser and Parent,
any of the persons listed in Schedule I to the Offer to Purchase have entered
into any transaction with Company, or any of Company's affiliates which are
corporations, since the commencement of Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of Company for (i) the
fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Neither Purchaser nor Parent nor, to the best knowledge of Purchaser
and Parent, any of the persons listed in Schedule I of the Offer to Purchase
have entered into any transaction since the commencement of Company's third full
fiscal year preceding the date of this Statement with the executive officers,
directors or affiliates of Company which are not corporations, in which the
aggregate amount involved in such transaction or in a series of similar
transactions, including all periodic installments in the case of any lease or
other agreement providing for periodic payments or installments, exceeded
$40,000.
4
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(b) The information set forth in the "INTRODUCTION," "Certain Information
Concerning Parent and Purchaser," "Background of the Offer; Purpose of the Offer
and The Merger; the Merger Agreement and Certain Other Agreements" and "Plans
for the Company; Other Matters" of the Offer to Purchase is incorporated herein
by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the "INTRODUCTION" and "Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(e) The information set forth in the "INTRODUCTION," "Background of the
Offer; Purpose of the Offer and the Merger; The Merger Agreement and Certain
Other Agreements" and "Plans for the Company; Other Matters" of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in the "INTRODUCTION" and "Effect of the
Offer on the Market for the Shares; Stock Listing; Exchange Act Registration;
Margin Regulations" of the Offer to Purchase is incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the "INTRODUCTION," "Certain
Information Concerning Parent and Purchaser" and "Background of the Offer;
Purpose of the Offer and the Merger; The Merger Agreement and Certain Other
Agreements" of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "INTRODUCTION," "Source and Amount of
Funds," "Background of the Offer; Purpose of the Offer and the Merger; The
Merger Agreement and Certain Other Agreements," "Plans for the Company; Other
Matters" and "Fees and Expenses" of the Offer to Purchase is incorporated herein
by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Fees and Expenses" of the Offer to Purchase
is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between Purchaser or Parent, or to the best knowledge of Purchaser and Parent,
any of the persons listed in Schedule I of the Offer to Purchase, and the
Company, or any of its executive officers, directors, controlling persons or
subsidiaries.
(b)-(c) The information set forth in the "INTRODUCTION," "Conditions to the
Offer" and "Certain Legal Matters" of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in "Effect of the Offer on the Market for the
Shares; Stock Listing; Exchange Act Registration; Margin Regulations" and
"Certain Legal Matters" of the Offer to Purchase is incorporated herein by
reference.
5
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(e) None.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
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(a)(1) Offer to Purchase dated December 23, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement.
(a)(8) Press release announcing signing of Merger Agreement.
(a)(9) Press release announcing commencement of tender offer.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of December 21, 1999,
by and among Parent, Purchaser and the Company.
(c)(2) Stock Tender Agreement, dated as of December 21, 1999, by
and among Parent, Purchaser, the Major Shareholder and James
Cannavino, Dennis Murray and Charles Feld, or any successor
trustees appointed pursuant to the terms of such agreement,
as trustees.
(c)(3) Stockholders' Stock Tender Agreement, dated as of December
21, 1999, by and among Parent, Purchaser, and James A.
Cannavino, Judy G. Carter, Daniel DelGiorno, Jr., Claude R.
Kinsey, III, Joseph J. Markus, George Aronson, Robert
McLaughlin and Lisa Welch as shareholders.
(c)(4) Bilateral Confidentiality Agreement, dated as of November 1,
1998, as amended January 12, 1999, March 9, 1999, and
December, 1999, between the Company and Parent.
(c)(5) Escrow Agreement, dated as of December 21, 1999, by and
among Parent, Purchaser, the Major Shareholder and State
Street Bank and Trust Company as escrow agent.
(c)(6) Indemnification Agreement, dated as of December 21, 1999 by
and among Parent, Purchaser, and the Major Shareholder.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
6
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SIGNATURE
After due inquiry and to the best of its knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Eagle Merger Corp.
By: /s/ PAUL T. DACIER
-----------------------------------
Name: Paul T. Dacier
Title: Secretary
EMC Corporation
By: /s/ PAUL T. DACIER
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Name: Paul T. Dacier
Title: Vice President and General
Counsel
Dated: December 23, 1999
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INDEX TO EXHIBITS
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EXHIBIT
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(a)(1) Offer to Purchase, dated December 23, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Summary Advertisement.
(a)(8) Press release announcing signing of Merger Agreement.
(a)(9) Press release announcing commencement of tender offer.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of December 21, 1999,
by and among Parent, Purchaser and the Company.
(c)(2) Stock Tender Agreement, dated as of December 21, 1999, by
and among Parent, Purchaser, the Major Shareholder and James
Cannavino, Dennis Murray and Charles Feld, or any successor
trustees appointed pursuant to the terms of such agreement,
as trustees.
(c)(3) Stockholders' Stock Tender Agreement, dated as of December
21, 1999, by and among Parent, Purchaser, and James A.
Cannavino, Judy G. Carter, Daniel DelGiorno, Jr., Claude R.
Kinsey, III, Joseph J. Markus, George Aronson, Robert
McLaughlin and Lisa Welch as shareholders.
(c)(4) Bilateral Confidentiality Agreement, dated as of November 1,
1998, as amended January 12, 1999, March 9, 1999, and
December, 1999, between the Company and Parent.
(c)(5) Escrow Agreement, dated as of December 21, 1999, by and
among Parent, Purchaser, the Major Shareholder and State
Street Bank and Trust Company as escrow agent.
(c)(6) Indemnification Agreement, dated as of December 21, 1999 by
and among Parent, Purchaser, and the Major Shareholder.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
AT
$10.00 NET PER SHARE IN CASH
BY
EAGLE MERGER CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EMC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED. SHARES WHICH ARE
TENDERED PURSUANT TO THE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO THE
EXPIRATION DATE.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF DECEMBER 21, 1999 (THE "MERGER AGREEMENT"), BY AND AMONG EMC CORPORATION
("PARENT"), EAGLE MERGER CORP. ("PURCHASER") AND SOFTWORKS, INC. (THE
"COMPANY"). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER, THE MERGER AGREEMENT AND THE MERGER AND HAS DETERMINED THAT THE TERMS OF
THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF,
THE COMPANY'S STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY PARENT OR
PURCHASER, IF ANY, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE
OFFER. THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS OFFER
TO PURCHASE. SEE SECTION 14.
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IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares (as defined herein) should either (i) complete and sign the
enclosed Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal, mail or deliver it and any other
required documents to the Depositary (as defined herein) and either deliver the
certificates for such Shares to the Depositary or tender such Shares pursuant to
the procedures for book-entry transfer set forth in Section 3 of this Offer to
Purchase or (ii) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder.
Any stockholder whose Shares are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee to tender such Shares.
Any stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, may tender such
Shares by following the procedures for guaranteed delivery set forth in Section
3 of this Offer to Purchase.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone numbers set forth on the back cover of this
Offer to Purchase. Requests for additional copies of this Offer to Purchase, the
Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent. A stockholder also may contact brokers,
dealers, commercial banks or trust companies for assistance concerning the
Offer.
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THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
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THE DATE OF THIS OFFER TO PURCHASE IS DECEMBER 23, 1999.
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TABLE OF CONTENTS
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PAGE
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INTRODUCTION............................................................ 1
THE OFFER............................................................... 3
1. Terms of the Offer.......................................... 3
2. Acceptance for Payment and Payment.......................... 4
3. Procedure for Tendering Shares.............................. 5
4. Withdrawal Rights........................................... 8
5. Certain United States Federal Income Tax Consequences....... 8
6. Price Range of the Shares; Dividends on the Shares.......... 9
7. Effect of the Offer on the Market for the Shares; Stock
Listing; Exchange Act Registration; Margin Regulations...... 10
8. Certain Information Concerning the Company.................. 11
9. Certain Information Concerning Parent and Purchaser......... 12
10. Source and Amount of Funds.................................. 13
11. Background of the Offer; Purpose of the Offer and the
Merger; The Merger Agreement and Certain Other Agreements... 13
12. Plans for the Company; Other Matters........................ 25
13. Dividends and Distributions................................. 27
14. Conditions to the Offer..................................... 27
15. Certain Legal Matters....................................... 29
16. Fees and Expenses........................................... 31
17. Miscellaneous............................................... 31
Schedule I Information Concerning Directors and Executive Officers of
Purchaser and Parent........................................ I-1
</TABLE>
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To the Holders of Common Stock of
Softworks, Inc.:
INTRODUCTION
Eagle Merger Corp., a Delaware corporation ("Purchaser") and a wholly owned
subsidiary of EMC Corporation, a Massachusetts corporation ("Parent"), hereby
offers to purchase all outstanding shares of common stock, par value $0.001 per
share (the "Shares"), of Softworks, Inc., a Delaware corporation (the
"Company"), at a price of $10.00 per Share (the "Offer Price"), net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer").
Tendering stockholders of record who tender Shares directly will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase
of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares
through a bank or broker should check with such institution as to whether they
charge any service fees. Purchaser will not pay such service fees. Purchaser
will pay all fees and expenses of State Street Bank and Trust Company, as
Depositary (the "Depositary"), and D.F. King & Co., Inc., as Information Agent
(the "Information Agent"), incurred in connection with the Offer and in
accordance with the terms of the agreements entered into between Purchaser
and/or Parent and each such person. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "COMPANY BOARD") HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT (AS DEFINED HEREIN) AND THE TRANSACTIONS
CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, AND HAS UNANIMOUSLY
DETERMINED THAT THE OFFER AND THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
SoundView Technology Group, Inc. has delivered to the Company Board its
opinion, dated as of December 20, 1999 (the "SoundView Opinion"), to the effect
that, as of such date and based upon and subject to certain assumptions and
matters stated therein, the Offer Price to be received by the holders of Shares
pursuant to the Offer and the Merger is fair, from a financial point of view, to
such holders. A copy of the SoundView Opinion, which sets forth the assumptions
made, the matters considered and the limitations on the review undertaken, is
attached as an exhibit to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9"), which has been filed by the Company with
the Securities and Exchange Commission (the "Commission") in connection with the
Offer and which is being mailed to holders of Shares herewith. Holders of Shares
are urged to read the SoundView Opinion carefully.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) THAT NUMBER OF SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY
PARENT OR PURCHASER (IF ANY), REPRESENTS A MAJORITY OF THE SHARES OUTSTANDING ON
A FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN THIS
OFFER TO PURCHASE. SEE SECTION 14. As used in this Offer to Purchase, "fully
diluted basis" takes into account the exercise of all outstanding options. The
authorized capital stock of the Company consists of 50,000,000 Shares and
2,000,000 shares of preferred stock. The Company has represented and warranted
to Parent and Purchaser that, as of December 20, 1999, there were (i) 17,373,191
Shares issued and outstanding; (ii) no shares of preferred stock issued and
outstanding; and (iii) an aggregate of 6,064,825 Shares issuable pursuant to the
exercise of outstanding options (the "Company Options"). The Merger Agreement
provides, among other things, that the Company, without Parent's consent, will
not issue any new Shares except pursuant to the exercise of existing stock
options, or issue any options or rights of any kind to acquire shares of capital
stock of the Company. Based on the foregoing and assuming the issuance of
6,064,825 Shares issuable upon exercise of outstanding Options, Purchaser
believes that the Minimum Condition will be satisfied if 11,719,009 Shares are
validly tendered and not withdrawn prior to the Expiration Date.
<PAGE> 4
Parent and Purchaser have entered into a Stock Tender Agreement, dated as
of December 21, 1999 (the "Major Shareholder's Stock Tender Agreement") with
Computer Concepts Corp., a Delaware corporation (the "Major Shareholder"), which
owns 6,145,767 Shares (the "Major Shareholder's Covered Shares") and the
trustees of a Voting Trust Agreement, dated August 3, 1998 (the "Voting Trust
Agreement"), which gives the trustees certain rights with respect to the Major
Shareholder's Covered Shares. The Major Shareholder's Covered Shares represent
approximately 35.4% of the Company's outstanding Shares. Pursuant to the Major
Shareholder's Stock Tender Agreement, the Major Shareholder and the trustees
have agreed to tender the Major Shareholder's Covered Shares pursuant to the
Offer, to grant Parent an option to purchase such Shares under certain
circumstances, and to grant Purchaser an irrevocable proxy with respect to the
voting of such Shares. See Section 11.
Parent and Purchaser have also entered into a Stockholders' Stock Tender
Agreement, dated as of December 21, 1999 (the Individuals' Stock Tender
Agreement"), with eight persons (the "Individuals") who are stockholders of the
Company. The individuals collectively own 1,182,000 Shares which are subject to
the Individual's Stock Tender Agreement (the "Individuals' Covered Shares"). The
Individuals' Covered Shares represent approximately 6.8% of the Company's
outstanding Shares. The terms of the Individuals' Stock Tender Agreement are
substantially the same as the terms of the Major Shareholder's Stock Tender
Agreement. See Section 11.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 21, 1999 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company. Pursuant to the Merger Agreement and subject to the Delaware
General Corporation Law (the "DGCL"), as soon as practicable after the
completion of the Offer and satisfaction or waiver, if permissible, of all
conditions to the Merger, Purchaser will be merged with and into the Company and
the separate corporate existence of Purchaser will thereupon cease. The merger,
as effected pursuant to the immediately preceding sentence, is referred to as
the "Merger," and the Company, as the surviving corporation of the Merger, is
sometimes referred to as the "Surviving Corporation." At the effective time of
the Merger (the "Effective Time"), each Share then outstanding (other than
Shares held by Parent or Purchaser and Shares held by stockholders who properly
perfect their dissenters' rights under the DGCL) will be cancelled and
extinguished and converted into the right to receive $10.00 in cash or any
higher price per Share paid in the Offer (the "Merger Consideration"), without
interest. The Merger Agreement is more fully described in Section 11.
The Merger Agreement provides that, upon the purchase of Shares pursuant to
the Offer and from time to time thereafter, Parent will be entitled to designate
such number of directors, rounded down to the next whole number, on the Company
Board as is equal to the product of the total number of directors on the Company
Board (including the directors designated by Parent) multiplied by a fraction,
the numerator being equal to the number of Shares beneficially owned by Parent
and its subsidiaries and the denominator being equal to the total number of
Shares then outstanding. The Company will use its reasonable best efforts to
cause such persons designated by Parent to be appointed or elected to the
Company Board and to secure resignations of such number of its incumbent
directors as is necessary to enable Parent's designees to be so elected or
appointed.
Consummation of the Merger is conditioned upon, among other things, the
approval and adoption by the requisite vote of stockholders of the Company of
the Merger Agreement, if required by applicable law. See Section 11. Under the
DGCL and pursuant to the Company's Certificate of Incorporation, the affirmative
vote of the holders of a majority of the outstanding Shares is the only vote of
any class or series of the Company's capital stock that would be necessary to
approve the Merger Agreement at a meeting of the Company's stockholders. If
Purchaser purchases a majority of the outstanding Shares in the Offer (which
will be the case if the Minimum Condition is satisfied and the other conditions
to the Offer are satisfied or waived), Purchaser will be able to effect the
Merger without the affirmative vote of any other stockholder. Pursuant to the
Merger Agreement, Parent and Purchaser have agreed to vote the Shares acquired
by them pursuant to the Offer in favor of the Merger. See Section 12.
2
<PAGE> 5
Under Section 253 of the DGCL, if a corporation owns at least 90% of the
outstanding shares of each class of a subsidiary corporation, the corporation
holding such stock may merge such subsidiary into itself, or itself into such
subsidiary, without any action or vote on the part of the board of directors or
the stockholders of such other corporation (a "Short-Form Merger"). In the event
that Purchaser acquires in the aggregate at least 90% of the outstanding Shares
pursuant to the Offer or otherwise, then, at the election of Parent, a Short-
Form Merger could be effected without any further approval of the Company Board
or the stockholders of the Company.
Even if Purchaser does not own at least 90% of the outstanding Shares
following consummation of the Offer, Parent or Purchaser could (a) immediately
prior to the expiration date of the Offer, extend the Offer for a period not to
exceed ten business days, or (b) if Parent and its subsidiaries own at least a
majority of the Shares, exercise an option granted under the Merger Agreement to
purchase from the Company such number of Shares (up to a maximum of 19.9% of the
number of Shares outstanding) as will result in Purchaser owning 90.1% of the
total number of Shares. Parent presently intends to effect a Short-Form Merger,
if permitted to do so under the DGCL, pursuant to which Purchaser will be merged
with and into the Company. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
THE OFFER
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not properly withdrawn in accordance
with Section 4 of this Offer to Purchase. The term "Expiration Date" shall mean
5:00 p.m., New York City time, on Tuesday, January 25, 2000, unless and until
Purchaser, in accordance with the terms of the Merger Agreement, shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by Purchaser, shall expire.
The Offer is conditioned upon the satisfaction of the Minimum Condition and
the other conditions set forth in Section 14. If such conditions are not
satisfied prior to the Expiration Date, Purchaser reserves the right, subject to
the terms of the Merger Agreement and subject to the applicable rules and
regulations of the Commission, to (i) decline to purchase any Shares tendered in
the Offer and terminate the Offer and return all tendered Shares to the
tendering stockholders, (ii) waive any or all conditions to the Offer and, to
the extent permitted by applicable law, purchase all Shares validly tendered and
not withdrawn, (iii) subject to the conditions summarized below, extend the
Offer and, subject to the right of stockholders to withdraw Shares until the
Expiration Date, retain all Shares which have been validly tendered and not
withdrawn during the period or periods for which the Offer is extended or (iv)
subject to the following sentence, modify the terms of the Offer. The Merger
Agreement provides that Purchaser will not reduce the Offer Price, change the
form of consideration to be paid in the Offer, reduce the number of Shares
subject to the Offer, amend any other condition to the Offer in any manner
adverse to the holders of the Shares or impose additional conditions to the
Offer without the written consent of the Company or, except as described below,
extend the Expiration Date of the Offer.
If on the initial scheduled Expiration Date of the Offer, which shall be no
earlier than twenty business days after the date the Offer is commenced, all
conditions to the Offer have not been satisfied or waived, Purchaser may, from
time to time, in its sole discretion, extend the expiration date of the Offer.
In addition, Purchaser may increase the amount it offers to pay per Share in the
Offer (but is not obligated to do so), and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of the Company. If, immediately prior to the Expiration Date of the
Offer (as it may be extended), the Shares tendered and not withdrawn pursuant to
the Offer constitute less than 90% of the
3
<PAGE> 6
outstanding Shares, Purchaser may extend the Offer for a period not to exceed
ten business days, notwithstanding that all conditions to the Offer are
satisfied as of such Expiration Date of the Offer.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by public announcement thereof, the announcement in the
case of an extension to be issued no later than 9:00 a.m., New York City time,
on the next business day after the previously scheduled Expiration Date in
accordance with the public announcement requirements of Rules 14d-4(c), 14d-6(d)
and 14e-1(d) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). As used in this Offer to Purchase, "business day" has the
meaning set forth in Rule 14d-1 under the Exchange Act. Without limiting the
obligation of Purchaser under such Rule or the manner in which Purchaser may
choose to make any public announcement, Purchaser currently intends to make
announcements by issuing a press release to the Dow Jones News Service.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of, or payment
for, Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering stockholders are entitled to withdrawal
rights as described in Section 4. However, the ability of Purchaser to delay the
payment for Shares that Purchaser has accepted for payment is limited by Rule
14e-l(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by, or on behalf of,
holders of securities promptly after the termination or withdrawal of the Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances then existing, including
the relative materiality of the changed terms or information. In a public
release, the Commission has stated that in its view an offer must remain open
for a minimum period of time following a material change in the terms of the
Offer and that waiver of a material condition, such as the Minimum Condition, is
a material change in the terms of the Offer. The release states that an offer
should remain open for a minimum of five business days from the date a material
change is first published, sent or given to security holders and that, if
material changes are made with respect to information not materially less
significant than the offer price and the number of shares being sought, a
minimum of ten business days may be required to allow adequate dissemination and
investor response. The requirement to extend the Offer will not apply to the
extent that the number of business days remaining between the occurrence of the
change and the then-scheduled Expiration Date equals or exceeds the minimum
extension period that would be required because of such amendment. If, prior to
the Expiration Date, Purchaser increases the consideration offered to holders of
Shares pursuant to the Offer, such increased consideration will be paid to all
holders whose Shares are purchased in the Offer whether or not such Shares were
tendered prior to such increase.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal will be
mailed by Purchaser to record holders of Shares and will be furnished by
Purchaser to brokers, dealers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT.
Upon the terms and subject to the conditions to the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and will pay, promptly after
the Expiration Date, for all Shares validly tendered prior to the Expiration
Date and not properly withdrawn in accordance with Section 4.
4
<PAGE> 7
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Shares (or a timely Book-Entry Confirmation (as defined below) with respect
thereto), (ii) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message (as defined in Section 3
below), and (iii) any other documents required by the Letter of Transmittal. The
per Share consideration paid to any holder of Shares pursuant to the Offer will
be the highest per Share consideration paid to any other holder of such Shares
pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to Purchaser and not
withdrawn, if and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance for payment of such Shares. Payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the Offer
Price therefor with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from Purchaser and
transmitting payment to tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID
BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
Purchaser reserves the right, in its sole discretion, to delay acceptance
for payment of, or payment for, Shares in order to comply with any applicable
law. If Purchaser is delayed in its acceptance for payment of, or payment for,
Shares or is unable to accept for payment, or pay for, Shares pursuant to the
Offer for any reason, then, without prejudice to Purchaser's rights under the
Offer (including such rights as are set forth in Sections 1 and 14, but subject
to compliance with Rule 14e-1(c) under the Exchange Act), the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent tendering stockholders are entitled to
exercise, and duly exercise, withdrawal rights as described in Section 4.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates are submitted representing more Shares than are
tendered, certificates evidencing Shares not tendered or not accepted for
purchase will be returned to the tendering stockholder, or such other person as
the tendering stockholder shall specify in the Letter of Transmittal, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer. In the case of Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined below)
pursuant to the procedures set forth in Section 3, such shares will be credited
to such account maintained at the Book-Entry Transfer Facility as the tendering
stockholder shall specify in the Letter of Transmittal, as promptly as
practicable following the expiration, termination or withdrawal of the Offer. If
no such instructions are given with respect to Shares delivered by book-entry
transfer, any such shares not tendered or not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated in the
Letter of Transmittal as the account from which such Shares were delivered.
Purchaser reserves the right to transfer or assign, in whole or in part, to
Parent or to any direct or indirect wholly owned subsidiary of Parent, the right
to purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. For Shares to be validly tendered pursuant to the Offer,
either (i) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature guarantees, or in the
case of a book-entry transfer, an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, and either certificates for tendered Shares must be received by
the Depositary at one of such addresses or such Shares must be delivered
pursuant to the procedures for book-entry transfer set forth below (and a
Book-Entry Confirmation (as defined below)
5
<PAGE> 8
received by the Depositary), in each case prior to the Expiration Date or (ii)
the tendering stockholder must comply with the guaranteed delivery procedures
set forth below.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Shares at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents must be transmitted to, and
received by, the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, or the tendering
stockholder must comply with the guaranteed delivery procedures described below.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY IN ACCORDANCE WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S
PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section, includes any participant in
the Book Entry Transfer Facility's systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) which is a participant in good standing in
the Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution" and, collectively, "Eligible Institutions"). In
all other cases, all signatures on Letters of Transmittal must be guaranteed by
an Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal.
If the certificates for Shares are registered in the name of a person other than
the signer of the Letter of Transmittal, or if payment is to be made, or
certificates for Shares not tendered or not accepted for payment are to be
returned, to a person other than the registered holder of the certificates
surrendered, then the tendered certificates for such Shares must be endorsed or
accompanied by appropriate stock powers, signed exactly as the name or names of
the registered holders or owners appear on the certificates, with the signatures
on the certificates or stock powers guaranteed as aforesaid. See Instruction 5
to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer
6
<PAGE> 9
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date, such
stockholder's tender may be effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser, is received by
the Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for (or a Book-Entry Confirmation with respect
to) such Shares, together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents, are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day" is any day on which the Nasdaq National Market,
operated by the National Association of Securities Dealers, Inc. (the
"NASD"), is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
Upon the acceptance of Shares for payment pursuant to the Offer, the valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
Appointment. By executing the Letter of Transmittal as set forth above
(including delivery through an Agent's Message), the tendering stockholder will
irrevocably appoint designees of Purchaser as such stockholder's
attorneys-in-fact and proxies, in the manner set forth in the Letter of
Transmittal, each with full power of substitution, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by Purchaser, and with respect to any and all other Shares
or other securities or rights issued or issuable in respect of such Shares on or
after December 21, 1999. All such powers of attorney and proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective if, as and when, and only to the extent that, Purchaser
accepts for payment Shares tendered by such stockholder as provided herein. Upon
such appointment, all prior powers of attorney, proxies and consents given by
such stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given by such stockholder and, if given,
will not be deemed effective. The designees of Purchaser will thereby be
empowered to exercise all voting and other rights with respect to such Shares
and other securities or rights, including, without limitation, in respect of any
annual, special or adjourned meeting of the Company's stockholders, actions by
written consent in lieu of any such meeting or otherwise, as they in their sole
discretion deem proper. Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's
acceptance for payment of such Shares, Purchaser must be able to exercise full
voting, consent and other rights with respect to such Shares and other related
securities or rights, including voting at any meeting of stockholders.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by Purchaser, in its sole discretion, which determination
will be final and binding. Purchaser reserves the absolute right to reject any
or all tenders of any Shares determined by it not to be in proper form or the
acceptance for payment of which, or payment for which, may, in the opinion of
Purchaser's counsel, be unlawful. Purchaser also reserves the absolute right, in
its sole discretion, subject to the provisions of the Merger Agreement, to waive
any defect or irregularity in the tender of any Shares of any particular
stockholder, whether or not similar defects or irregularities are waived in the
case of other stockholders. No tender of Shares will be deemed to have been
validly made until all defects or irregularities relating thereto have been
cured or waived. None of Purchaser, Parent, the Depositary, the Information
Agent or any other person will be under any duty to give notification of any
defects or irregularities in tenders or incur any liability for failure to give
any such notification. Subject to the terms of
7
<PAGE> 10
the Merger Agreement, Purchaser's interpretation of the terms and conditions of
the Offer (including the Letter of Transmittal and the instructions thereto)
will be final and binding.
Backup Withholding. Under the "backup withholding" provisions of United
States federal income tax law, the Depositary may be required to withhold 31% of
the amount of any payments of cash pursuant to the Offer. In order to prevent
backup federal income tax withholding with respect to payment to certain
stockholders of the purchase price of Shares purchased pursuant to the Offer,
each such stockholder must provide the Depositary with such stockholder's
correct taxpayer identification number ("TIN") and certify that such stockholder
is not subject to backup withholding by completing the Substitute Form W-9 in
the Letter of Transmittal. Certain stockholders (including, among others, all
corporations and certain foreign individuals and entities) are not subject to
backup withholding. If a stockholder does not provide its correct TIN or fails
to provide the certifications described above, the Internal Revenue Service may
impose a penalty on the stockholder and payment of cash to the stockholder
pursuant to the Offer may be subject to backup withholding. All stockholders
surrendering Shares pursuant to the Offer should complete and sign the
Substitute Form W-9 included in the Letter of Transmittal to provide the
information necessary to avoid backup withholding (unless an applicable
exemption exists and is proved in a manner satisfactory to the Depositary).
Non-corporate foreign stockholders should complete and sign a Form W-8,
Certificate of Foreign Status (a copy of which may be obtained from the
Depositary), in order to avoid backup withholding. See Instruction 10 of the
Letter of Transmittal.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, or as provided by
applicable law, tenders of Shares are irrevocable. Shares tendered pursuant to
the Offer may be withdrawn pursuant to the procedures set forth below at any
time prior to the Expiration Date and, unless theretofore accepted for payment
and paid for by Purchaser pursuant to the Offer, may also be withdrawn at any
time after February 21, 2000.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary, and unless such Shares have been tendered by an Eligible
Institution, the signatures on the notice of withdrawal must be guaranteed by an
Eligible Institution. If Shares have been delivered pursuant to the procedures
for book-entry transfer as set forth in Section 3, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with such
Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 3 any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
which determination will be final and binding. None of Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification.
5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The following is a summary of certain United States federal income tax
consequences of the Offer and the Merger to stockholders of the Company whose
Shares are tendered and accepted for payment pursuant to the Offer or whose
Shares are converted into cash in the Merger. The discussion is for general
information
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<PAGE> 11
only and does not purport to consider all aspects of United States federal
income taxation that might be relevant to stockholders of the Company. The
discussion is based on current provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), existing, proposed and temporary regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all of which are subject to change, possibly with a retroactive effect. The
discussion applies only to stockholders of the Company in whose hands Shares are
capital assets within the meaning of Section 1221 of the Code and may not apply
to Shares received pursuant to the exercise of employee stock options or
otherwise as compensation, or to certain types of stockholders (such as
insurance companies, tax-exempt organizations, financial institutions and
broker-dealers) who may be subject to special rules. This discussion does not
discuss the United States federal income tax consequences to any stockholder of
the Company who, for United States federal income tax purposes, is a
non-resident alien individual, a foreign corporation, a foreign partnership or a
foreign estate or trust, nor does it consider the effect of any foreign, state
or local tax laws.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH STOCKHOLDER SHOULD
CONSULT SUCH STOCKHOLDER'S TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE
RULES DISCUSSED BELOW TO SUCH STOCKHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
BENEFICIAL HOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND
EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for United States federal income tax purposes and possibly
for state and local income tax purposes as well. In general, a stockholder who
sells Shares pursuant to the Offer or receives cash in exchange for Shares
pursuant to the Merger will recognize gain or loss for United States federal
income tax purposes equal to the difference, if any, between the amount of cash
received and the stockholder's adjusted tax basis in the Shares sold pursuant to
the Offer or surrendered for cash pursuant to the Merger. Gain or loss will be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) tendered pursuant to the Offer or surrendered
for cash pursuant to the Merger. Such gain or loss will be long-term capital
gain or loss provided that a stockholder's holding period for such Shares is
more than one year at the time of consummation of the Offer or Merger, as the
case may be. Capital gains recognized by an individual (or an estate or certain
trusts) upon a disposition of a Share that has been held for more than one year
generally will be subject to a maximum United States federal income tax rate of
20% or, in the case of a Share that has been held for one year or less, will be
subject to tax at ordinary income rates. Certain limitations apply to the tax
treatment of a stockholder's capital losses.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.
The Shares are traded through the Nasdaq National Market under the symbol
SWRX. The following table sets forth, for each of the fiscal quarters indicated,
the high and low reported sales price per Share on the Nasdaq National Market.
SOFTWORKS, INC.
<TABLE>
<CAPTION>
HIGH LOW
------ -----
<S> <C> <C>
Year Ended December 31, 1998
Third Quarter (commencing August 7, 1998)................... $ 6.94 $3.13
Fourth Quarter............................................ 7.44 3.50
Year Ending December 31, 1999
First Quarter............................................. 14.88 5.38
Second Quarter............................................ 16.88 9.06
Third Quarter............................................. 13.69 4.50
Fourth Quarter (through December 20, 1999)................ 9.88 3.03
</TABLE>
On December 20, 1999, the last full trading day prior to the public
announcement of the execution of the Merger Agreement by the Company, Parent and
Purchaser, the last reported sales price of the Shares on the Nasdaq National
Market was $9.31 per Share. On December 22, 1999, the last full trading day
prior to
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<PAGE> 12
the commencement of the Offer, the last reported sales price of the Shares on
the Nasdaq National Market was $9.53 per Share. STOCKHOLDERS ARE URGED TO OBTAIN
A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company did not declare or pay any cash dividends during any of the
periods indicated in the above table. Under the terms of the Merger Agreement,
the Company is not permitted to declare, set aside or pay dividends with respect
to the Shares without the prior written consent of Parent.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK LISTING; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS.
Market for the Shares. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which, depending upon the number of
Shares so purchased, could adversely affect the liquidity and market value of
the remaining Shares held by the public. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether it would cause future market prices to be greater or
lesser than the Offer Price.
Nasdaq Quotation. Depending upon the number of Shares purchased pursuant
to the Offer, the Shares may no longer meet the requirements for continued
inclusion in the Nasdaq National Market, which requires that there be at least
750,000 shares publicly held by at least 400 round lot holders, with a market
value of at least $5,000,000. Shares held directly or indirectly by directors,
officers or beneficial owners of more than 10% of the Shares are not considered
as being publicly held for this purpose. If the Nasdaq National Market were to
cease to publish quotations for the Shares, it is possible that the Shares would
continue to trade in the over-the-counter market and that prices or other
quotations would be reported by other sources. The extent of the public market
for such Shares and the availability of such quotations would depend upon such
factors as the number of stockholders and/or the aggregate market value of such
securities remaining at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of registration
under the Exchange Act (as described below) and other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act,
assuming there are no other securities of the Company subject to registration,
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement
pursuant to Section 14(a) in connection with stockholders' meetings and the
related requirement of furnishing an annual report to stockholders, and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions, no longer applicable to the Company. Furthermore, the
ability of "affiliates" of the Company and persons holding "restricted
securities" of the Company to dispose of such securities pursuant to Rule 144 or
Rule 144A promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), may be impaired or eliminated.
Purchaser may seek delisting of the Shares from the Nasdaq National Market
and the termination of the registration of the Shares under the Exchange Act as
soon after the completion of the Offer as the requirements for such delisting
and termination are met. If the Nasdaq National Market listing and the Exchange
Act registration of the Shares are not terminated prior to the Merger, then the
Shares will be delisted from the Nasdaq National Market and the registration of
the Shares under the Exchange Act will be terminated following the consummation
of the Merger.
Margin Regulations. The Shares presently are "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which status has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding stock exchange
listing and market quotations, it is possible that, following the Offer, the
Shares would no longer constitute "margin securities" for the purposes of the
margin
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<PAGE> 13
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. In addition, if registration of the
Shares under the Exchange Act were terminated, the Shares would no longer
constitute "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The information concerning the Company contained in this Offer to
Purchase, including that set forth below under the caption "Selected Financial
Information," has been furnished by Company or has been taken from or based upon
publicly available documents and records on file with the Commission and other
public sources. Neither Parent nor Purchaser assumes responsibility for the
accuracy or completeness of the information concerning Company contained in such
documents and records or for any failure by Company to disclose events which may
have occurred or may affect the significance or accuracy of any such information
but which are unknown to Parent or Purchaser.
The Company develops, markets, licenses and supports a family of enterprise
systems management and maintenance software products for performance, data and
storage management. Its products are designed to optimize system and application
performance, maximize the value of purchased hardware and software, and enhance
the reliability and availability of the data processing environment for
enterprises that employ enterprise servers, UNIX and/or Microsoft (R) Windows NT
(R) computing environments. The Company is a Delaware corporation with its
principal executive office at 5845 Richmond Highway, Suite 400, Alexandria,
Virginia 22303. The telephone number of the Company at that address is (703)
317-2424.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company, derived from the
Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998
and its Quarterly Report on Form 10-Q for the nine month period ended September
30, 1999, each as filed with the Commission pursuant to the Exchange Act.
More comprehensive financial information is included in the reports and in
other documents filed by the Company with the Commission. The following summary
is qualified in its entirety by reference to such reports and all of the
financial information (including any related notes) contained therein. Such
reports may be inspected and copies may be obtained from the Commission in the
manner set forth below.
SOFTWORKS, INC.
SELECTED CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEARS ENDED
----------------------------- ---------------------------
SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1999 1998 1998 1997
------------- ------------- ------------ ------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues...................................... $36,777 $26,897 $43,749 $26,770
Gross Margin................................ 34,529 24,183 39,499 25,135
Net Income (loss)........................... 946 (243) 2,957 786
Net Income (loss) per share................. .06 (.02) .20 .06
BALANCE SHEET DATA:
Cash and Cash Equivalents................... $13,613 $ 6,704 $ 6,003 $ 360
Current Assets.............................. 43,977 27,621 38,380 18,282
Total Assets................................ 67,881 45,995 58,352 35,683
Long Term Debt, net of current portion...... 1,479 1,575 1,401 1,294
Total Stockholders' Equity.................. 28,266 15,476 18,685 6,087
</TABLE>
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports, proxy statements and other information with the
Commission relating to its business, financial condition and other matters.
Information as
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<PAGE> 14
of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interests of such persons in transactions
with the Company is required to be disclosed in proxy statements distributed to
the Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located at
Seven World Trade Center, Suite 1300, New York, NY 10048 and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661. Copies of such
information should be obtainable by mail, upon payment of the Commission's
customary charges, by writing to the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a website at
http://www.sec.gov that contains reports, proxy statements and other information
relating to the Company that have been filed via the EDGAR System.
9. CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.
Parent and Purchaser. Parent is a Massachusetts corporation whose
principal executive offices are located at 35 Parkwood Drive, Hopkinton,
Massachusetts 01748. Its telephone number at that location is (508) 435-1000.
Its principal business is the design, manufacture, marketing and support of a
wide range of hardware, software and service products for the enterprise storage
market.
Purchaser is a newly organized Delaware corporation formed in connection
with the Offer and the Merger and has not carried on any activities other than
in connection with the Offer and the Merger. All of the outstanding capital
stock of Purchaser is owned by Parent. Until immediately prior to the time
Purchaser acquires Shares pursuant to the Offer, it is not anticipated that
Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Merger. Its principal office is
located at 35 Parkwood Drive, Hopkinton, Massachusetts. Purchaser's telephone
number is (508) 435-1000.
For certain information concerning executive officers and directors of
Parent and Purchaser, see Schedule I.
Except as set forth in this Offer to Purchase, neither Purchaser nor Parent
(collectively, the "Acquirors") nor, to the best knowledge of the Acquirors, any
of the persons or entities listed on Schedule I, nor any associate or
majority-owned subsidiary of any of the foregoing, beneficially owns or has a
right to acquire any Shares, and no Acquiror nor, to the best of knowledge of
the Acquirors, any of the persons or entities listed on Schedule I, has effected
any transaction in the Shares during the past sixty days.
Except as set forth in this Offer to Purchase, no Acquiror nor, to the best
knowledge of Acquirors, any of the persons or entities listed on Schedule I, has
any contract, arrangement, understanding or relationship with any other person
with respect to any securities of the Company, including, but not limited to,
any contract, arrangement, understanding or relationship concerning the transfer
or the voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss, or
the giving or withholding of proxies.
Except as set forth in Section 11, no Acquiror or any of their respective
subsidiaries, nor, to the best knowledge of the Acquirors, any of the persons or
entities listed on Schedule I, has had, since January 1, 1996, any business
relationships or transactions with the Company or any of its executive officers,
directors or affiliates that would be required to be reported under the rules of
the Commission. Except as set forth in Section 11, since January 1, 1996 there
have been no contacts, negotiations or transactions between any Acquiror, any of
their respective subsidiaries or, to the best knowledge of the Acquirors, any of
the persons or entities listed on Schedule I, and the Company or its affiliates
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors or a sale or other transfer of
a material amount of assets.
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<PAGE> 15
10. SOURCE AND AMOUNT OF FUNDS.
The Offer is not conditioned upon any financing arrangements. The total
amount of funds required by Purchaser to purchase all of the Shares is estimated
to be approximately $191,310,000 million. Purchaser will obtain all such funds
from Parent in the form of capital contributions and/or loans. Parent will
provide such funds through available cash on hand.
11. BACKGROUND OF THE OFFER; PURPOSE OF THE OFFER AND THE MERGER; THE MERGER
AGREEMENT AND CERTAIN OTHER AGREEMENTS.
Background of the Offer.
In November 1998, Parent began an evaluation of the Company as a potential
acquisition candidate. This evaluation followed an introductory meeting in
October 1998 at which Parent and the Company exchanged high level information on
the respective strategies and products of the two companies.
The companies signed a confidentiality agreement on November 1, 1998. In
November, Michael Cody and Thomas Joyce of the EMC New Business Development
Group met with Judy Carter, President and Chief Executive Officer of the
Company, to discuss Parent's interest in evaluating a potential acquisition.
Parent's primary interest in the Company involved the Company's CenterStage
Storage Resource Management software product. Following this meeting,
representatives of Parent's Engineering and Product Management groups met with
representatives of the Company's technology organization to evaluate the
Company's products and technologies. This meeting resulted in sufficient
interest on the part of both Parent and the Company to proceed to a series of
preliminary business discussions during December 1998 and January 1999 while
Parent's internal technical evaluation proceeded. These discussions stalled,
however, when Parent requested additional detailed technical and architectural
information in order to ensure that the Company's products met Parent's
requirements and could ultimately be integrated with certain of Parent's
products. The Company was averse to disclosing to Parent certain proprietary
information regarding its software architecture, and did not wish to provide
direct access to its key software designers. Attempts to resolve this impasse
continued through March 1999. However, the parties were not successful in
resolving this matter, and discussions regarding an acquisition were
discontinued.
In October 1999, Parent decided to attempt to renew discussions with the
Company about a possible acquisition. A telephone conversation between Michael
Ruettgers, President and Chief Executive Officer of Parent and James Cannavino,
Chairman of the Company, led to a meeting on November 4, 1999. The meeting was
held in Waltham, Massachusetts at the office of Broadview International LLC, a
financial advisor to Parent ("Broadview"). Attending the meeting were Mr. James
Cannavino, Chairman of the Company; Joseph Markus, a consultant to the Company;
several representatives from Broadview including Steve Smith, Senior Managing
Director and Mark Whitcher, Senior Associate; and the following persons from
Parent: David Donatelli, Vice President, New Business Development; John Hartjen,
Manager, New Business Development; Michael Cody, Vice President, Corporate
Development; and Thomas Joyce, Senior Product Marketing Specialist, New Business
Development. The meeting involved a general discussion of Parent's interest in
the possibility of acquiring all of the outstanding common stock of the Company
and a discussion of the Company's business. At the conclusion of the meeting, it
was agreed that the type of information Parent unsuccessfully sought earlier in
the year would be provided, and the parties agreed to proceed with detailed
technical discussions relating to the products and capabilities of the Company.
On November 17, 1999, employees of Parent met with employees of the Company
at its headquarters in Alexandria, Virginia for an in-depth technical review of
the Company's products and technologies. The following day there was a meeting
between representatives of Parent and the Company to discuss Parent's due
diligence information requirements. On November 19, 1999, the Company's Board
was updated as to the status of the meetings with Parent.
On November 24, 1999, Messrs. Cody and Joyce called Judy Carter and
notified her that based on the status of Parent's technical review, it planned
to communicate to the Company its interest in pursuing more detailed discussions
concerning an acquisition of the Company.
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<PAGE> 16
On November 29, 1999, Parent outlined to the Company its potential interest
in acquiring all of the outstanding common stock of the Company at a price in
the range of $8 to $11 per share subject, among other things, to the completion
of due diligence and negotiation of an acceptable acquisition agreement.
During the period from December 1 through December 20, 1999, business,
financial and legal due diligence activities with respect to the Company were
conducted by representatives of Parent. From December 14 through December 20,
1999, representatives of management of Parent and the Company, along with their
respective legal and financial advisors, held meetings and telephone conferences
to discuss and negotiate the terms of the Merger Agreement and the related
agreements.
On December 17, 1999, the Mergers & Acquisitions Committee of the Board of
Directors of Parent held a meeting to consider the transaction. Mr. Donatelli
reviewed the business of the Company and details of the proposed transaction.
Mr. Donatelli was authorized to complete due diligence and to complete
negotiation of appropriate transaction documents.
On December 19 and 20, 1999, the Board of Directors of the Company held
special meetings to consider the proposed transaction. At the meetings, the
Company's management and representatives of its legal advisors, Blau, Kramer,
Wactlar & Lieberman, P.C., discussed the proposed offer by Parent for all of the
outstanding stock of the Company and the Merger Agreement and outlined the
directors' legal duties and responsibilities. At the meeting on December 20,
1999, representatives of SoundView Technology Group presented a summary of its
analyses of the financial aspects of the proposed transaction, including an
analysis of the fairness of the Offer Price, from a financial point of view, to
the stockholders of the Company. At the conclusion of the meeting, the Company
Board unanimously approved the Merger Agreement and determined that the Offer
and the Merger are advisable, fair to, and in the best interests of the
Company's stockholders. They voted unanimously to recommend to the Company's
stockholders that they accept the Offer and tender their shares pursuant to the
Offer.
On December 20, 1999, the Board of Directors of Parent, at a special
meeting, discussed the proposed transaction. Following a review of the business
of the Company and the terms of the proposed Merger Agreement and the Offer to
Purchase the Board of Directors unanimously approved the transaction and
directed management to finalize the Merger Agreement.
Definitive agreements dated as of December 21, 1999, were executed, and on
December 21, 1999, EMC issued a press release announcing its offer to purchase
all of the outstanding shares of the Company for a price of $10.00 per share.
The Offer was commenced on December 23, 1999.
Purpose of the Offer and the Merger. The purpose of the Offer and the
Merger is to enable Parent to acquire control of, and the entire equity interest
in, the Company. The Offer is being made pursuant to the Merger Agreement and is
intended to increase the likelihood that the Merger will be effected. The
purpose of the Merger is to acquire all of the outstanding Shares not purchased
pursuant to the Offer. The transaction is structured as a merger in order to
ensure the acquisition by Parent of all the outstanding Shares.
If the Merger is consummated, Parent's common equity interest in the
Company would increase to 100% and Parent would be entitled to all benefits
resulting from that interest. These benefits include complete management and
control with regard to the future conduct of the Company's business and the
right to any increase in its value. Similarly, Parent will also bear the risk of
any losses incurred in the operation of the Company and any decrease in the
value of the Company.
Stockholders of the Company who sell their Shares in the Offer will cease
to have any equity interest in the Company and any right to participate in its
earnings and any future growth. If the Merger is consummated, non-tendering
stockholders will no longer have an equity interest in the Company and instead
will have only the right to receive the Merger Consideration pursuant to the
Merger Agreement. See Section 12. Similarly, after selling their Shares in the
Offer or the subsequent Merger, stockholders of the Company will not bear the
risk of any decrease in the value of the Company.
The primary benefits of the Offer and the Merger to the stockholders of the
Company are that such stockholders are being afforded an opportunity to sell all
of their Shares for cash at a price which represents a
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<PAGE> 17
premium of approximately 7.4% over the closing market price of the Shares on
December 20, 1999, the last full trading day prior to the initial public
announcement that the Company, Purchaser and Parent executed the Merger
Agreement.
The following is a summary of certain provisions of various agreements.
This summary is not a complete description of the terms and conditions of these
agreements and is qualified in its entirety by reference to the full text of
these agreements filed with the Commission as exhibits to the Schedule 14D-1 and
they are incorporated herein by reference. Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Merger
Agreement. These agreements may be examined, and copies obtained, as set forth
in Section 8 of this Offer to Purchase.
MERGER AGREEMENT.
The Offer. The Merger Agreement provides for the making of the Offer as
provided in this Offer to Purchase.
The Company Board. The Merger Agreement provides that, upon the purchase
of Shares pursuant to the Offer and from time to time thereafter, Parent will be
entitled to designate such number of directors, rounded down to the next whole
number, on the Company Board as is equal to the product of the total number of
directors on the Company Board (including the directors designated by Parent)
multiplied by a fraction, the numerator being equal to the number of Shares
beneficially owned by Parent and its subsidiaries and the denominator being the
total number of Shares then outstanding. The Company will use its reasonable
best efforts to cause such persons designated by Parent to be appointed or
elected to the Company Board and to secure resignations of such number of its
incumbent directors as is necessary to enable Parent's designees to be so
elected or appointed.
The Merger Agreement also provides that in the event that Parent's
designees are elected or appointed to the Company Board, until the Effective
Time, the Company Board shall have at least two directors who were directors of
the Company as of the date of the Merger Agreement and who are not affiliates of
Parent and Purchaser ("Independent Directors"), provided that if the number of
Independent Directors shall be reduced below two for any reason whatsoever, the
remaining Independent Director, if any, shall be entitled to designate a person
to fill such vacancy who shall be deemed to be an Independent Director. If no
Independent Director remains, the other directors shall designate two persons to
fill such vacancies who shall not be stockholders, affiliates or associates of
Parent or Purchaser, and such persons shall be deemed to be Independent
Directors. In the event that Parent's designees constitute a majority of the
directors on the Company Board, the affirmative vote of a majority of the
Independent Directors shall be required after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, to: (i) amend or
terminate the Merger Agreement by the Company; (ii) exercise or waive any of the
Company's rights, benefits or remedies under the Merger Agreement; or (iii) take
any other action under or in connection with the Merger Agreement if such action
materially and adversely affects holders of Shares other than Parent or
Purchaser; provided that if there shall be no such directors, such actions may
be effected by unanimous vote of the entire Company Board.
The Merger. At the Effective Time of the Merger, each Share then
outstanding, other than Shares held by (i) the Company as treasury stock, (ii)
Parent or any of its wholly owned subsidiaries, including Purchaser, and (iii)
stockholders who properly perfect their dissenters' rights under the DGCL, will
be converted into the right to receive the Offer Price, without interest.
Options. The Merger Agreement provides that as of the Effective Time,
holders of options, other than options designated as 1999 Options (as defined in
the Merger Agreement), to purchase shares of the Company's common stock
("General Options") will be entitled to receive a cash amount equal to the
product of (i) the excess, if any, of the Offer Price over the exercise price
per Share of such General Option and (ii) the number of Shares covered by the
holder's General Options. Upon such payment, the General Options will then be
cancelled. All options designated as 1999 Options will automatically convert
into a right to receive Parent common stock (a "Parent Option"). With respect to
any such Parent Option, (i) the number of shares of Parent common stock subject
to such Parent Option will be determined by multiplying the number of
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<PAGE> 18
Shares subject to the 1999 Option by the Option Exchange Ratio (defined below),
rounding any fractional Share down to the nearest whole Share, and (ii) the
exercise price per share of such Parent Option will be determined by dividing
the exercise price per Share applicable to the 1999 Option by the Option
Exchange Ratio, and rounding the exercise price thus determined up to the
nearest whole cent. Except as provided above, the converted or substituted
Parent Options will be subject to the same terms and conditions (including,
without limitation, expiration date, vesting and exercise provisions) as were
applicable to the 1999 Option immediately prior to the Effective Time. The term
"Option Exchange Ratio" means (i) the Merger Consideration divided by (ii) the
average of the closing prices of Parent Common Stock on the NYSE during the
twenty trading days preceding the fifth trading day prior to the date on which
the closing of the Merger occurs.
The Company will take all necessary actions so that all stock option,
incentive or other equity-based plans established by the Company or any
subsidiary of the Company (a "Company Subsidiary") 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 Company Subsidiary shall be deleted and
terminated as of the Effective Time. The Company will use its reasonable best
efforts to obtain the consent of each holder of outstanding General Options and
1999 Options to the treatment of such options specified by the Merger Agreement
to the extent necessary.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and Purchaser with
respect to, among other things:
- corporate organization, good standing and capitalization,
- the authorization, execution, delivery, performance and enforceability of
the Merger Agreement and related matters,
- the absence of conflict with its certificate of incorporation, by-laws,
or any agreements to which the Company is a party,
- filings with the Commission and financial statements,
- no undisclosed liabilities,
- absence of certain changes,
- taxes,
- owned and leased real property, title to assets,
- no existing discussions with any other party regarding an Acquisition
Proposal (as defined below under the heading "No Solicitation") or any
other substantially similar proposal,
- contractual and other obligations,
- employee benefit plans and compensation agreements,
- litigation,
- compliance with legal requirements, and
- receipt of the SoundView Opinion.
In the Merger Agreement, each of Parent and Purchaser has made customary
representations and warranties to the Company with respect to, among other
things:
- corporate organization and good standing,
- the authorization, execution, delivery, performance and enforceability of
the Merger Agreement and related matters,
- consents and approvals,
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<PAGE> 19
- the absence of conflict with their respective certificates of
incorporation, by-laws, or any applicable law, and
- sufficient funds.
The representations and warranties made in the Merger Agreement or any
other document delivered pursuant to the Merger Agreement shall survive the
Effective Time as necessary to effect the terms and provisions of the
Indemnification Agreement (described under the heading "Escrow Agreement and
Indemnification Agreement" below).
Grant of Option to Effect a Short-Form Merger. To facilitate Purchaser
effectuating a Short-Form Merger, the Merger Agreement provides that the Company
grants Purchaser an option to purchase from the Company such number of Shares as
will result in the Purchaser owning 90.1% of the total number of Shares, at a
price per Share equal to the Offer Price (up to a maximum of 19.9% of the
outstanding Shares). This option is exercisable by Parent or any of its
subsidiaries only after the purchase of and payment for Shares pursuant to the
Offer as a result of which Parent and its subsidiaries own beneficially at least
a majority of the then outstanding Shares. The portion of the purchase price
owing upon exercise of such option equal to the product of (i) the number of
Shares purchased pursuant to such option multiplied by (ii) the par value per
Share will be paid to the Company in cash by wire transfer or cashier's check,
and the balance of the purchase price will be paid by delivery to the Company of
a non-interest bearing unsecured demand note from Purchaser. Such option may be
exercised on two day's written notice given by Purchaser to the Company.
Interim Operations of the Company. Except as contemplated by the Merger
Agreement or agreed in writing by Parent, prior to the Effective Time, the
business of the Company and each Company Subsidiary will be conducted according
to its ordinary and usual course of business in substantially the same manner as
conducted prior to entering into the Merger Agreement and shall use its
reasonable best efforts to preserve intact its current business organization,
keep available the services of its current officers and employees, and maintain
existing relationships with franchisees, customers, suppliers, creditors,
business partners and others having business dealings with it, to the end that
the goodwill and ongoing business of each of them shall be unimpaired at the
Effective Time.
Additionally, except as contemplated by the Merger Agreement or agreed in
writing by Parent, prior to the Effective Time neither the Company nor any
Company Subsidiary shall:
(i) directly or indirectly amend its Certificate of Incorporation or
By-Laws or similar organizational documents;
(ii) (A) declare, set aside or pay any dividend or other distribution
payable in cash, stock or property with respect to any shares of any class
or series of its capital stock, (B) redeem, purchase or otherwise acquire
directly or indirectly any shares of any class or series of its capital
stock, or any instrument or security which consists of or includes a right
to acquire such shares; (C) issue, sell, transfer, pledge, dispose of or
encumber any shares of any class or series of its capital stock or
indebtedness having voting rights, or securities convertible or
exchangeable for, or options, warrants, calls, commitments or rights of any
kind to acquire any shares of any class or series of its capital stock
indebtedness having voting rights, other than Shares reserved for issuance
on the date of the Merger Agreement; or (D) split, combine or reclassify
any shares of any class or series of its stock;
(iii) (A) incur or modify any indebtedness or other liability, other
than in the ordinary and usual course of business and consistent with past
practice and not in excess of $50,000; or (B) modify, amend or terminate
any note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation or arrangement to which the Company or any
Company Subsidiary is a party or by which any of them or any of their
properties or assets may be bound, or waive, release or assign any material
rights or claims, except in the ordinary course of business and consistent
with past practice;
(iv) (A) incur or assume any long-term debt, or except in the ordinary
course of business, incur or assume any short-term indebtedness in amounts
not consistent with past practice; (B) modify the terms of any indebtedness
or other liability; (C) assume, guarantee, endorse or otherwise become
liable or
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responsible (whether directly, contingently or otherwise) for the
obligations of any other person or entity; (D) make any loans, advances or
capital contributions to, or investments in, any other person or entity
(other than to or in wholly owned subsidiaries of the Company); or (E)
enter into any material commitment or transaction in the ordinary course of
business not in excess of $1,000,000;
(v) transfer, lease, license, sell, mortgage, pledge, dispose of, or
encumber any assets other than in the ordinary and usual course of business
and consistent with past practice; or
(vi) make any change in the compensation payable or to become payable
to any of its officers, directors, employees, agents or consultants (other
than normal recurring increases in wages to employees who are not officers
or directors or affiliates in the ordinary course of business consistent
with past practice) or to persons providing management services, or enter
into or amend any employment, severance, consulting, termination or other
agreement or employee benefit plan or make any loans to any of its
officers, directors, employees, affiliates, agents or consultants or make
any change in its existing borrowing or lending arrangements for or on
behalf of any of such persons pursuant to an employee benefit plan or
otherwise;
(vii) pay or make any accrual or arrangement for payment of any
pension, retirement allowance or other employee benefit pursuant to any
existing plan, agreement or arrangement to any officer, director, employee
or affiliate or pay or agree to pay or make any accrual or arrangement for
payment to any officers, directors, employees or affiliates of the Company
of any amount relating to unused vacation days, except payments and
accruals made in the ordinary course of business consistent with past
practice; adopt or pay, grant, issue, accelerate or accrue salary or other
payments or benefits pursuant to any pension, profit-sharing, bonus, extra
compensation, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay,
retirement or other employee benefit plan, agreement or arrangement, or any
employment or consulting agreement with or for the benefit of any director,
officer, employee, agent or consultant; or amend in any material respect
any such existing plan, agreement or arrangement in a manner inconsistent
with the foregoing;
(viii) neither the Company nor any Company Subsidiary shall permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Parent, except policies providing
coverage for losses not in excess of $50,000;
(ix) enter into any contract or transaction relating to the purchase
of assets other than in the ordinary course of business consistent with
past practice and in no such case for assets in excess of $50,000;
(x) pay, repurchase, discharge or satisfy any of its 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 and consistent with past practice to any
person or entity who is not an affiliate of the Company, of claims,
liabilities or obligations reflected or reserved against in, or
contemplated by, the financial statements of the Company included in its
filings with the Commission;
(xi) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any Company Subsidiary (other than the
Merger);
(xii) (A) change any of the accounting methods used by it unless
required by GAAP or (B) make any material election relating to taxes,
change any material election relating to taxes already made, change any
material accounting method relating to taxes, change any material
accounting method relating to taxes unless required by GAAP, enter into any
closing agreement relating to taxes, settle any claim or assessment
relating to taxes or consent to any claim or assessment relating to taxes
or any waiver of the statute of limitations for any such claim or
assessment;
(xiii) take, or commit to take, any action that would or is reasonably
likely to result in any of the conditions to the Offer or any of the
conditions to the Merger not being satisfied, or would make any
representation or warranty of the Company contained in the Merger Agreement
inaccurate in any respect
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<PAGE> 21
at, or as of any time prior to, the Effective Time, or that would impair
the ability of the Company, Parent, Purchaser or the holders of Shares to
consummate the Offer or the Merger in accordance with the terms hereof or
materially delay such consummation; and
(xiv) enter into an agreement, contract, commitment or arrangement to
do any of the foregoing, or to authorize, recommend, propose or announce an
intention to do any of the foregoing.
Employee Benefits. As soon as reasonably practicable following the
Effective Time and for a three-year period following the Effective Time, the
Surviving Corporation and its subsidiaries and successors shall provide to
persons who were employees of the Company or a Company Subsidiary immediately
prior to the Effective Time (the "Retained Employees") employee plans and
programs that provide benefits that are no less favorable in the aggregate than
those provided to employees of Parent generally during such time. With respect
to such benefits, service accrued by such Retained Employees during employment
with the Company and its Subsidiaries prior to the Effective Time shall be
recognized for all purposes, except to the extent necessary to prevent
duplication of benefits.
The Company shall take all necessary and appropriate actions to terminate,
prior to the Effective Time, the Softworks Retirement 401(k) Plan.
Stockholders' Meeting. In the event that Purchaser does not acquire 90% of
the outstanding Shares pursuant to the Offer or otherwise, a stockholder vote
will be required to approve the Merger. Pursuant to the Merger Agreement, if
required by applicable law in order to consummate the Merger, the Company will:
(i) duly call, give notice of, convene and hold a special meeting of its
stockholders as soon as practicable following the acceptance for payment and
purchase of Shares by Purchaser pursuant to the Offer for the purpose of
considering and taking action upon the approval of the Merger and the adoption
of the Merger Agreement; (ii) prepare and file with the Commission a proxy or
information statement relating to the Merger; (iii) cause a definitive proxy
(and any amendments thereto) to be mailed to stockholders, (iii) include in the
proxy statement the recommendation of the Company Board that stockholders to
approve the Merger and adopt the Merger Agreement; and (iv) use its reasonable
best efforts to solicit from holders of Shares proxies in favor of the Merger.
Parent has agreed that it will vote, or cause to be voted, all of the
shares of capital stock of Purchaser and all Shares owned by Parent, Purchaser
or any of Parent's other subsidiaries in favor of approval of the Merger and the
adoption of the Merger Agreement.
No Solicitation. The Company has agreed that neither it, its subsidiaries,
or its affiliates will (i) directly or indirectly, encourage, solicit or
facilitate any inquiries or proposals that constitute, or could reasonably be
expected to lead to, any proposal or offer to acquire any part of the stock or
assets of the Company or any Company Subsidiary (an "Acquisition Proposal") or
(ii) participate in or initiate discussions or negotiations concerning, or
provide any information to, any person, entity, or group (other than Parent, any
of its affiliates or representatives) relating to, an Acquisition Proposal. If,
however, at any time prior to the time of acceptance of Shares for payment
pursuant to the Offer, the Company Board determines in good faith, after
consultation with outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to the Company's stockholders under applicable
law, the Company may, in response to a Superior Proposal (defined below) that
was not solicited by it or that did not otherwise result from a breach of the
Company's obligations regarding Acquisition Proposals and subject to providing
prior written notice of its decision to take such action to Parent, furnish
information with respect to the Company and any Company Subsidiary to any person
or entity making a Superior Proposal pursuant to a confidentiality agreement
containing terms no less favorable to the Company than the Confidentiality
Agreement and participate in discussions or negotiations regarding the Superior
Proposal. The Company shall cause the officers, directors, employees,
representatives and agents of the Company, each Company Subsidiary, and each
affiliate of the Company, including, but not limited to, investment bankers,
attorneys and accountants to comply with this non-solicitation provision. The
term "Superior Proposal" means any proposal or offer by a third party to acquire
more than 50% of the combined voting power of the Shares then outstanding, or
all or substantially all of the assets of the Company, which the Company Board
determines in good faith (after receipt of (i) an opinion of a financial advisor
that such proposal is financially superior and (ii) an opinion from independent
legal counsel that failure to provide such
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<PAGE> 22
information or engage in such discussions would be a breach of the Company
Board's fiduciary duties to the Company stockholders under applicable law) to be
more favorable to the Company's stockholders than the Offer and the Merger,
which is not subject to the receipt of any necessary financing or is subject to
financing which, in the good faith judgment of the Company Board, is reasonably
capable of being obtained by the third party.
Neither the Company Board nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent or
Purchaser, the approval or recommendation by the Company Board or any committee
thereof of the Offer, the Merger Agreement or the Merger, (ii) approve or
recommend or propose to approve or recommend, any Acquisition Proposal or (iii)
enter into a letter of intent, agreement in principle, acquisition agreement or
any other agreement with respect to any Acquisition Proposal. Notwithstanding
the foregoing, prior to the time of acceptance for payment of Shares pursuant to
the Offer, in response to a Superior Proposal that was not solicited by the
Company and that did not otherwise result from a breach of the non-solicitation
provision, the Company Board may terminate the Merger Agreement after the
seventh business day following Parent's receipt of written notice from the
Company advising Parent that the Company Board has received a Superior Proposal
that it intends to accept, specifying the material terms and conditions of such
Superior Proposal, identifying the person or entity making such Superior
Proposal, but only if the Company shall have first caused its financial and
legal advisors to negotiate with Parent to make such adjustments in the terms
and conditions of the Merger Agreement as would enable the Company to proceed
with the transactions contemplated in the Merger Agreement on such adjusted
terms. No such termination shall be effective until the Company makes payment to
Parent of funds equal to the Termination Fee (as discussed under the heading
"Termination Fee; Expenses" below).
The Company agrees that as of the date of the Merger Agreement, it, its
subsidiaries and affiliates (and their respective officers, directors,
employees, representatives and agents) shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any person
or entity (other than Parent, Purchaser or their respective representatives)
conducted heretofore with respect to any Acquisition Proposal.
The Company has further agreed to notify Parent immediately after receipt
by the Company (or its advisors) of any Acquisition Proposal or any request for
nonpublic information in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any Company Subsidiary by
any person or entity that informs the Company that it is considering making, or
has made, an Acquisition Proposal. Such notice to Parent shall be made orally
and in writing and shall indicate in reasonable detail the identity of the
offeror and the terms and conditions of such proposal, inquiry or contact. The
Company shall keep Parent informed of all material developments and the status
of any Acquisition Proposal, any negotiations or discussions with respect to any
Acquisition Proposal or any request for nonpublic information in connection with
any Acquisition Proposal or for access to the properties, books or records of
the Company or any Company Subsidiary by any person or entity that is
considering making, or has made, an Acquisition Proposal. The Company shall
provide Parent with copies of all documents received from or delivered or sent
to any person that is considering making or has made an Acquisition Proposal.
Nothing shall prohibit the Company or the Company Board from (i) taking and
disclosing to the Company's stockholders a position with respect to a tender or
exchange offer by a third party pursuant to Rules 14d-9 and 14e-2 promulgated
under the Exchange Act, or (ii) making such disclosure to the Company's
stockholders as, in the good faith judgment of the Company Board, after
receiving advice from outside counsel, is required under applicable law,
provided that the Company may not, except as permitted under the Merger
Agreement, withdraw or modify, or propose to withdraw or modify, its position
with respect to the Offer or the Merger or approve or recommend, or propose to
approve or recommend, any Acquisition Proposal, or enter into any agreement with
respect to any Acquisition Proposal.
Indemnification and Insurance. The Merger Agreement provides that for
three years after the Effective Time, Parent or the Surviving Corporation shall
jointly and severally indemnify, defend and hold harmless each present and
former officer and director of the Company and its subsidiaries, and each person
who becomes an officer or director of the Company or any Company Subsidiary
before the Effective Time, against
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<PAGE> 23
all losses, claims, damages, liabilities, costs, fees and expenses arising out
of acts or omissions occurring at or prior to the Effective Time to the full
extent required under applicable Delaware law, the terms of the Company's
Certificate of Incorporation or By-Laws. Reasonable attorneys fees, judgements,
fines, losses, claims, and settlements (effected with the written consent of
Parent or Surviving Corporation, which consent shall not be unreasonably
withheld) are included. In the event that any claim or assertion is made within
such three year period, rights to indemnification shall continue until
disposition of the claim.
The Merger Agreement further provides that the Surviving Corporation shall
maintain the Company's existing officers' and directors' liability insurance for
a period of not less than three years after the Effective Date. Parent may
substitute policies of substantially equivalent coverage, amounts, and terms.
However, in no event shall the Company be required to pay aggregate premiums for
insurance in excess of 200% of the aggregate paid by the Company in 1999 on an
annualized basis. If the premium for such coverage exceeds such amount, the
Surviving Corporation shall purchase a policy with the greatest coverage
available that does not exceed 200% of the aggregate paid by the Company in 1999
for such insurance.
Conditions to the Merger. The respective obligations of each party to
effect the Merger will be subject to the satisfaction at or prior to the
Effective Time of each of the following conditions, any and all of which may be
waived in whole or in part by the Company, Parent or Purchaser, as the case may
be, to the extent permitted by applicable law: (i) the Merger Agreement shall
have been approved and duly adopted by the requisite vote of the stockholders of
the Company, if required by applicable law, in order to consummate the Merger;
(ii) no statute, rule or regulation shall have been enacted or promulgated by
any governmental authority which restrains, enjoins or otherwise prevents or
prohibits the consummation of the Merger; nor shall there be any preliminary or
permanent injunction or other order of any governmental entity precluding
consummation of the Merger; (iii) the purchase of Shares pursuant to the Offer
shall have occurred; and (iv) any applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), shall have expired or been terminated.
The obligations of Parent and Purchaser to consummate the Merger are
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions, any and all of which may be waived in whole or in part by
Parent and Purchaser, to the extent permitted by applicable law: (i) all actions
regarding settlement and termination of the Company Options shall have been
taken; (ii) representations and warranties set forth by the Company in the
Merger Agreement shall be true in all material respects on the date of the
Merger Agreement and as of the Effective Time; and (iii) the Company shall have
complied in all material respects with its covenants under the Merger Agreement.
Termination. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether before or after
stockholder approval:
(a) by the mutual written consent of Parent and the Company;
(b) by either the Company or Parent if: (i) the Offer shall have
expired without any Shares being purchased, or Purchaser shall not have
accepted for payment any Shares pursuant to the Offer by April 15, 2000;
provided, however, that a party does not have the right to terminate if the
party has been the cause of or resulted in Purchaser's failure to purchase
the Shares, or (ii) any governmental entity issues a final order or takes
any other final action (which both parties took reasonable actions to lift)
which permanently restrains, enjoins, or otherwise prohibits the acceptance
for payment or payment for Shares pursuant to the Offer or the Merger;
(c) by the Company if: (i) Parent, Purchaser or any of their
affiliates have failed to commence the Offer on or prior to five business
days following date of the initial public announcement of the Offer;
provided, however, that the Company may not terminate if the Company is at
such time in material breach of its obligations under the Merger Agreement;
(ii) as permitted under the terms of the Merger Agreement allowing the
Company to terminate in order to accept a Superior Proposal, so long as the
Company complies with all provisions in the Merger Agreement regarding
valid acceptance of a Superior Proposal, including notice provisions and
termination fees; and (iii) if Parent or Purchaser shall have breached in
any material respect any of their respective representations, warranties,
covenant or other
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<PAGE> 24
agreements contained in the Merger Agreement, which breach cannot be or has
not been cured within 15 days after the Company has given written notice,
as applicable;
(d) by Parent if: (i) due to an occurrence, not involving a breach by
Parent or Purchaser of their obligations hereunder, which makes it
impossible to satisfy any of the Conditions of the Offer, Parent,
Purchaser, or any of their affiliates shall have failed to commence the
Offer on or prior to the fifth business day following the date of the
initial public announcement of the Offer; (ii) prior to the purchase of
Shares by Purchaser pursuant to the Offer, the Company Board shall have
withdrawn, modified or changed in a manner adverse to Parent or Purchaser
its approval or recommendation of the Offer, the Merger Agreement or the
Merger or shall have recommended an Acquisition Proposal or shall have
executed an agreement in principle or definitive agreement relating to an
Acquisition Proposal or similar business combination with a person or
entity other than Parent, Purchaser or their affiliates; (iii) prior to the
purchase of Shares pursuant to the Offer, the Company shall have breached
any representation, warranty, covenant or other agreement contained in the
Merger Agreement which would give rise to the failure of the Conditions of
the Offer set forth in sections (f) or (g) of Item 14 below, which breach
cannot be cured within 15 days after the giving of written notice by Parent
to the Company, (iv) if, prior to the purchase of Shares pursuant to the
Offer, the Major Shareholder shall have breached any representation,
warranty, covenant or other agreement contained in the Major Shareholder's
Stock Tender Agreement which would give rise to the failure of the
Conditions of the Offer set forth in section (h) of Item 14 below, which
breach cannot be or has not been cured within 15 days after the giving of
written notice by Parent to the Company, or (v) if prior to the purchase of
Shares pursuant to the Offer, there shall have been entered any injunction
with respect to the performance by the Major Shareholder or the Trustees of
their respective obligations as set forth in the Major Stockholder's Stock
Tender Agreement, which injunction has not been withdrawn or rendered
inapplicable to the obligations of the Major Shareholder or the Trustees
within 15 days of being so entered (provided that Parent may not terminate
the Merger Agreement on this occurrence until after the initial scheduled
Expiration Date of the Offer and if the Minimum Condition is otherwise
satisfied).
In the event of the termination or abandonment by any party pursuant to the
terms of the Merger Agreement, the provisions of the Confidentiality Agreement
will continue in full force and effect and there shall be no liability on the
part of Parent, Purchaser or the Company except (i) for fraud or for breach of
the Merger Agreement prior to such termination or abandonment of the
Transactions and (ii) as described under the heading "Termination Fee; Expenses"
below.
Termination Fee; Expenses. Pursuant to the Merger Agreement, if: (i) the
Company enters into an agreement which accepts or implements another Acquisition
Agreement; (ii) either the Company or Parent terminates or abandons the
transactions pursuant to clause (b)(i) under the heading "Termination" above,
and prior thereto another Acquisition Proposal was publicly announced; (iii) the
Company terminates or abandons the transactions pursuant to clause (c)(ii))
under the heading "Termination" above; (iv) Parent terminates or abandons the
transactions pursuant to clause (d)(ii) under the heading "Termination" above;
or (v) Parent terminates or abandons the transactions pursuant to clause
(d)(iii) under the heading "Termination" above resulting from a breach of the
provisions regarding no solicitation described under the heading "No
Solicitation" above, or the intentional or willful breach of any other
provision; then Company shall pay to Parent a termination fee equal to
$10,572,670 plus an amount equal to Parent's actual and reasonably documented
out-of-pocket fees and expenses incurred by Parent and Purchaser in connection
with the Offer, the Merger, the Merger Agreement and the consummation of the
transactions. If Parent terminates or abandons the transaction pursuant to
clause (d)(iv) under the heading "Termination" above, or if the Offer shall have
expired without the minimum Condition having been satisfied and the Major
Shareholder shall not have satisfied its obligations under the Major
Shareholder's Stock Tender Agreement, then a termination fee of $9,130,942, plus
the expenses described above, shall be paid to Parent. The termination fee and
Parent's good faith estimate of its expenses shall be paid in same day funds
concurrently with the execution of any agreement accepting or implementing
another Acquisition Proposal or any termination or abandonment, whichever shall
first occur, together with delivery of a written acknowledgment by the Company
of its obligation to reimburse Parent for its actual reasonable expenses in
excess of such estimated expense payment.
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<PAGE> 25
Except as specifically provided to the contrary in the Merger Agreement,
all costs and expenses incurred in connection with this the Merger Agreement and
the consummation of the transactions shall be paid by the party incurring such
costs and expenses.
STOCK TENDER AGREEMENTS
The Shares beneficially owned by the Major Shareholder are subject to a
Voting Trust Agreement, dated as of August 3, 1998, as amended, by and among the
Company, the Major Shareholder and James Cannavino, Charles Feld and Dennis
Murray, as trustees (the "Trustees"). The Major Shareholder and the Trustees
have entered into the Major Shareholder's Stock Tender Agreement, dated as of
the date of the Merger Agreement, with Parent and Purchaser. Pursuant to the
Major Shareholder's Stock Tender Agreement, the Major Shareholder and the
Trustees have agreed (i) to tender the Major Shareholder's Covered Shares
promptly after Purchaser commences the Offer, and (ii) to appoint certain
officers of Purchaser as irrevocable proxies (A) to vote all the Major
Shareholder's Covered Shares in favor of the Merger and the Merger Agreement,
and (B) to vote against any action or agreement that is contrary to the Offer,
the Merger or any other Transactions contemplated by the Merger Agreement or the
Major Shareholder's Stock Tender Agreement, or that would materially change the
Company's corporate structure or business. The Major Shareholder's Stock Tender
Agreement also gives Parent an option to acquire all the Major Shareholder's
Covered Shares at a purchase price per share equal to the Offer Price (or such
higher price as may be offered by Purchaser in the Offer), exercisable only if
the Major Shareholder or the Trustees fail to comply with the Major
Shareholder's Stock Tender Agreement or the Merger Agreement, or if the Major
Shareholder or the Trustees withdraw their tender of Shares made pursuant to the
Offer.
Additionally, the Trustees and Major Shareholder have agreed to (i) not
transfer, or enter into any agreement to transfer, the Major Shareholder's
Covered Shares to any other person or entity except pursuant to the Major
Shareholder's Stock Tender Agreement; (ii) not take any action in violation of
any warranty or representation made by the Trustees or Major Shareholders under
the Major Shareholder's Stock Tender Agreement, or that would result in a breach
by the Company of its obligations under the Merger Agreement; (iii) not solicit
another Acquisition Proposal or engage in any negotiations regarding another
Acquisition Proposal, (iv) waive all appraisal or dissenting rights, and (v)
waive claims against the Company, Parent or Purchaser including claims arising
from ownership of Shares, stockholder status, conduct of business, and the
consummation of the transactions contemplated by the Merger Agreement.
The parties to the Major Shareholder's Stock Tender Agreement have each
made certain representations and warranties. The Trustees' representations and
warranties include that they have good and marketable title to the Major
Shareholder's Covered Shares, authority to enter into the transactions, that no
conflicts with other agreements will result. The Major Shareholder's
representations and warranties include that it beneficially owns (but is not the
record holder of) the Major Shareholder's Covered Shares, that it is a duly
organized corporation with the power to perform its obligations, that the Major
Shareholder's Stock Tender Agreement covers all of the Shares owned by the Major
Shareholder (including any options exercised by the Major Shareholder prior to
the Offer), and that no conflicts with other agreements will result. The Parent
and Purchaser's representations and warranties include that each is a duly
organized corporation with the power to perform its obligations.
Parent and Purchaser have also entered into a Stockholders' Stock Tender
Agreement, dated as of December 21, 1999 (the "Individuals' Stock Tender
Agreement"), with James A. Cannavino, Judy G. Carter, Daniel DelGiorno, Jr.,
Claude R. Kinsey, III, Joseph J. Markus, George Aronson, Robert McLaughlin and
Lisa Welch (the "Individuals") as stockholders of the Company who collectively
own 1,182,000 Shares of the common stock of the Company which are subject to the
Individuals' Stock Tender Agreement(the "Individuals' Covered Shares"). The
Individuals' Covered Shares represent approximately 6.8% of the Company's
outstanding Shares. The obligations of the Individuals under the Individual's
Stock Tender Agreement are substantially the same as those of the Major
Shareholder and the Trustees under the Major Shareholder's Stock Tender
Agreement described above.
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<PAGE> 26
ESCROW AGREEMENT AND INDEMNIFICATION AGREEMENT
As a condition and inducement to Parent and Purchaser entering into the
Merger Agreement, (i) an Escrow Agreement (the "Escrow Agreement") was entered
into as of December 21, 1999 by and among Parent, Purchaser, the Major
Shareholder, and State Street Bank and Trust Company, Inc. as escrow agent (the
"Escrow Agent"), and (ii) an Indemnification Agreement (the "Indemnification
Agreement") was entered as of the same date by and among Parent, Purchaser and
the Major Shareholder.
Pursuant to the terms of the two agreements, the Major Shareholder agreed
to indemnify and hold harmless Parent, Purchaser, the Surviving Corporation and
their respective subsidiaries and officers, directors, employees and agents (the
"Indemnified Parties") from and against and in respect of any Loss (defined
below) incurred or sustained by any of them as a result of any breach by the
Company of any of the representations or warranties in the Merger Agreement
relating to the Company's capitalization, filings with the Commission, the
absence of certain changes or events in the Company's business, no undisclosed
liabilities, the absence of litigation, employee benefit plans, options, and
employment agreements, taxes, and intellectual property. Additionally, the Major
Shareholder agreed to provide indemnification regarding its representations and
warranties in the Major Shareholder's Stock Tender Agreement. The Major
Shareholder shall not be required to indemnify any Indemnified Party under the
Escrow Agreement unless the aggregate Losses exceed $100,000, in which case the
parties incurring the indemnification obligations with respect to such Losses
shall be responsible for the entire amount of such Losses. The term "Loss" means
any loss, liability (including tax liability), damage, deficiency, fine,
penalty, cost and expense (including reasonable expenses of investigation,
amounts paid in settlement, interest, court costs, reasonable fees and expenses
of attorneys and accountants and other costs of litigation).
Upon consummation by the Purchaser of the purchase of Shares pursuant to
the Offer, the Major Shareholder will deliver $10 million (the "Escrow Amount")
to the Escrow Agent by wire transfer of immediately available funds. In order to
effect such delivery obligation, the Major Shareholder assigned to the Escrow
Agent a portion of the proceeds payable to the Major Shareholder as a result of
the purchase of the Shares of the Major Shareholder purchased in the Offer equal
to the Escrow Amount.
The Indemnification Agreement terminates two years after the consummation
of the purchase of Shares in the Offer by the Purchaser, and the Escrow
Agreement terminates one year after the consummation of the purchase of Shares
in the Offer by the Purchaser; provided, however, that if prior to such date the
Major Shareholder receives a notice from an Indemnified Party seeking
indemnification, neither agreement will terminate until such outstanding claim
is resolved.
CONFIDENTIALITY AGREEMENT
Parent and the Company executed a Bilateral Confidentiality Agreement (the
"Confidentiality Agreement") dated as of November 1, 1998, as amended January
12, 1999, March 9, 1999 and December, 1999.
The Confidentiality Agreement contains customary provisions pursuant to
which, among other matters, the parties agreed, subject to certain exceptions,
to keep confidential all nonpublic, confidential or proprietary information
concerning the other parties which is furnished to any party in connection with
its evaluation of a possible transaction involving Purchaser and the Company
(the "Confidential Information"), and to use the Confidential Information solely
for the purpose of evaluating a possible transaction involving the Company and
Purchaser. Upon termination, confidential information disclosed under the
Confidentiality Agreement must be returned to the disclosing party or, at the
disclosing party's option, may be destroyed. The Confidentiality Agreement will
remain in effect until November 1, 2000 unless terminated earlier by written
notice of either party. Termination of the Confidentiality Agreement will not
relieve a party of its obligation not to disclose confidential information, as
this obligation will continue for three years after the date of disclosure under
the Confidentiality Agreement.
The January 12, 1999 Amendment provided that Parent would not, until
October 14, 1999, acquire any equity security of the Company or the Major
Shareholder without the written consent of the Company Board. Additionally, if
the acquisition contemplated in the Merger Agreement is not consummated, the
Confidential-
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<PAGE> 27
ity Agreement provides that until December 31, 2000, neither party will directly
solicit employees of the other without prior written consent.
12. PLANS FOR THE COMPANY; OTHER MATTERS.
Plans for the Company. If Purchaser acquires control of the Company,
Parent and Purchaser intend to conduct a detailed review of the Company and its
assets, corporate structure, capitalization, operations, properties, policies,
management and personnel and to consider and determine what, if any, changes
would be desirable in light of the circumstances which then exist. Such changes
could include, among others things, changes in the Company's business, corporate
structure, certificate of incorporation, by-laws, capitalization, management or
dividend policy.
The Merger Agreement provides that, upon the purchase of Shares pursuant to
the Offer and from time to time thereafter, Parent will be entitled to designate
such number of directors, rounded down to the next whole number, on the Company
Board as is equal to the product of the total number of directors on the Company
Board (including the directors designated by Parent) multiplied by a fraction,
the numerator being equal to the number of shares beneficially owned by Parent
and its subsidiaries and the denominator the total number of shares then
outstanding. The Company will use its reasonable best efforts to cause such
persons designated by Parent to be appointed or elected to the Company Board and
to secure resignations of such number of its incumbent directors as is necessary
to enable Parent's designees to be so elected or appointed. The Merger Agreement
also provides that in the event that Parent's designees are elected or appointed
to the Company Board, until the Effective Time, the Company Board shall have at
least two Independent Directors, provided that if the number of Independent
Directors shall be reduced below two for any reason whatsoever, the remaining
Independent Director, if any, shall be entitled to designate a person to fill
such vacancy who shall be deemed to be an Independent Director. In the event
that Parent's designees constitute a majority of the directors on the Company
Board, the affirmative vote of a majority of the Independent Directors shall be
required after the acceptance for payment of Shares pursuant to the Offer and
prior to the Effective Time, to: (i) amend or terminate the Merger Agreement by
the Company; (ii) exercise or waive any of the Company's rights, benefits or
remedies under the Merger Agreement; (iii) take action with respect to the
retention of counsel and other advisors in connection with the transactions
contemplated by the Merger Agreement; or (iv) take any other action under or in
connection with the Merger Agreement if such action materially and adversely
affects holders of Shares other than Parent or Purchaser; provided that if there
shall be no such directors, such actions may be effected by unanimous vote of
the entire Company Board.
The Merger Agreement provides that the directors and officers of Purchaser
at the Effective Time of the Merger will, from and after the Effective Time, be
the initial directors and officers, respectively, of the Surviving Corporation.
Purchaser or an affiliate of Purchaser may, following the consummation or
termination of the Offer, seek to acquire additional Shares through open market
purchases, privately negotiated transactions, a tender offer or exchange offer
or otherwise, upon such terms and at such prices as it shall determine, which
may be more or less than the price to be paid pursuant to the Offer. Purchaser
and its affiliates also reserve the right to dispose of any or all Shares
acquired by them, subject to the terms of the Merger Agreement.
Except as disclosed in this Offer to Purchase, and except as may be
effected in connection with the integration of operations referred to above,
neither Parent nor Purchaser has any present plans or proposals that would
result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation, relocation of operations or sale or transfer of a
material amount of assets, involving the Company or its Subsidiaries, or any
material changes in the Company's capitalization, corporate structure, business
or composition of its management or the Company Board.
Stockholder Approval. Under the DGCL, the approval of the Company Board
and the affirmative vote of the holders of a majority of the outstanding Shares
are required to adopt and approve the Merger Agreement and the transactions
contemplated thereby. The Company has represented in the Merger Agreement that
the execution and delivery of the Merger Agreement by the Company and the
consummation by the Company of the transactions contemplated by the Merger
Agreement have been duly authorized by all
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<PAGE> 28
necessary corporate action on the part of the Company, subject to the approval
of the Merger by the Company's stockholders if required in accordance with the
DGCL. In addition, the Company has represented that the affirmative vote of the
holders of a majority of the outstanding Shares is the only vote of the holders
of any class or series of the Company's capital stock which is necessary to
approve the Merger Agreement and the transactions contemplated thereby,
including the Merger. Therefore, unless the Merger is consummated pursuant to
the Short-Form Merger provisions under the DGCL described below (in which case
no further corporate action by the stockholders of the Company will be required
to complete the Merger), the only remaining required corporate action of the
Company will be the approval of the Merger Agreement and the transactions
contemplated thereby by the affirmative vote of the holders of a majority of the
Shares. The Merger Agreement provides that Parent will vote, or cause to be
voted, all of the Shares then owned by Parent, Purchaser or any of Parent's
other subsidiaries and affiliates in favor of the approval of the Merger and the
adoption of the Merger Agreement. In the event that Parent, Purchaser and
Parent's other subsidiaries and affiliates acquire in the aggregate at least a
majority of the Shares (which would be the case if the Minimum Condition is
satisfied and Purchaser were to accept for payment Shares tendered in the
Offer), they would have the ability to effect the Merger without the affirmative
votes of any other stockholders.
Short-Form Merger. Section 253 of the DGCL provides that, if a corporation
owns at least 90% of the outstanding shares of each class of another
corporation, the corporation holding such stock may merge itself into such
corporation without any action or vote on the part of the board of directors or
the stockholders of such other corporation. In the event that Parent, Purchaser
and any other subsidiaries of Parent acquire in the aggregate at least 90% of
the outstanding Shares, pursuant to the Offer or otherwise, then, at the
election of Parent, a Short-Form Merger could be effected without any approval
of the Company Board or the stockholders of the Company, subject to compliance
with the provisions of Section 253 of the DGCL. Even if Parent and Purchaser do
not own 90% of the outstanding Shares following consummation of the Offer,
Parent and Purchaser could seek to purchase additional shares in the open market
or otherwise in order to reach the 90% threshold and employ a Short-Form Merger.
The per share consideration paid for any Shares so acquired may be greater or
less than that paid in the Offer. Alternatively, Purchaser could exercise an
option granted pursuant to the Merger Agreement to obtain 90.1% of the
outstanding shares. Parent presently intends to effect a Short-Form Merger if
permitted to do so under the DGCL.
Appraisal Rights. Holders of the Shares do not have appraisal rights in
connection with the Offer. However, if the Merger is consummated, holders of the
Shares at the Effective Time will have certain rights pursuant to the provisions
of Section 262 of the DGCL, including the right to dissent and demand appraisal
of, and to receive payment in cash of the fair value of their Shares. Dissenting
stockholders of the Company who comply with the applicable statutory procedures
will be entitled to receive a judicial determination of the fair value of their
Shares (exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash,
together with a fair rate of interest thereon, if any. Any such judicial
determination of the fair value of the Shares could be based upon factors other
than, or in addition to, the price per Share to be paid in the Merger or the
market value of the Shares. The value so determined could be more or less than
the price per Share to be paid in the Merger.
The foregoing summary of the rights of dissenting stockholders under the
DGCL does not purport to be a complete statement of the procedures to be
followed by stockholders desiring to exercise any appraisal rights available
under the DGCL. The preservation and exercise of appraisal rights require strict
adherence to the applicable provisions of the DGCL. If a shareholder withdraws
or loses his right to appraisal, such holder's shares will be automatically
converted into, and represent only the right to receive, Merger Consideration,
without interest.
Rule 13e-3. The Commission has adopted Rule 13e-3 under the Exchange Act
which is applicable to certain "going private" transactions and which may, under
certain circumstances, be applicable to the Merger or another business
combination following the purchase of Shares pursuant to the Offer in which
Purchaser seeks to acquire the remaining Shares not held by it. Purchaser
believes, however, that Rule 13e-3 will not be applicable to the Merger because
it is anticipated that the Merger would be effected within one year following
consummation of the Offer, and in the Merger stockholders would receive the same
price per share as paid in the Offer. If Rule 13e-3 were applicable to the
Merger, it would require, among other things, that certain
26
<PAGE> 29
financial information concerning the Company, and certain information relating
to the fairness of the proposed transaction and the consideration offered to
minority stockholders in such a transaction, be filed with the Commission and
disclosed to minority stockholders prior to consummation of the transaction.
13. DIVIDENDS AND DISTRIBUTIONS.
The Merger Agreement provides that prior to the Effective Date, neither the
Company nor any Company Subsidiary shall (i) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to any shares of any class or series of its capital stock, (ii) redeem, purchase
or otherwise acquire directly or indirectly any shares of any class or series of
its capital stock, or any instrument or security which consists of or includes a
right to acquire such shares; (iii) issue, sell, transfer, pledge, dispose of or
encumber any shares of any class or series of its capital stock or Voting Debt,
or securities convertible or exchangeable for, or options, warrants, calls,
commitments or rights of any kind to acquire any shares of any class or series
of its capital stock or Voting Debt, other than Shares reserved for issuance on
the date hereof pursuant to the exercise of outstanding Company stock options;
or (iv) split, combine or reclassify any shares of any class or series of its
capital stock.
14. CONDITIONS TO THE OFFER.
The Offer is subject to the condition that there shall have been validly
tendered and not withdrawn prior to the expiration of the Offer, such number of
Shares which, when added to the Shares beneficially owned by Parent or
Purchaser, would constitute a majority of the Shares outstanding on a fully
diluted basis.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) Purchaser's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Purchaser's obligation to pay for or return tendered
Shares promptly after termination or withdrawal of the Offer), pay for, and may
delay the acceptance for payment of or, subject to the restriction referred to
above, the payment for, any tendered Shares, and may terminate or amend the
Offer as to any Shares not then paid for, if (i) any applicable waiting period
under the HSR Act has not expired or terminated, (ii) the Minimum Condition has
not been satisfied, or (iii) at any time on or after the date of the Merger
Agreement and before the scheduled expiration date of the Offer, any of the
following events shall occur or shall be determined by Purchaser to have
occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any governmental entity (i) seeking to prohibit or impose any
material limitations on Parent's or Purchaser's ownership or operation (or
that of any of their respective subsidiaries or affiliates) of all or a
material portion of their or the Company's businesses or assets, or to
compel Parent or Purchaser or their respective subsidiaries and affiliates
to dispose of or hold separate any material portion of the business or
assets of the Company or Parent and their respective subsidiaries, in each
case taken as a whole, (ii) challenging the acquisition by Parent or
Purchaser of any Shares under the Offer or pursuant to the Major
Shareholder's Stock Tender Agreement Stockholders' Stock Tender Agreement,
seeking to restrain or prohibit the making or consummation of the Offer or
the Merger or the performance of any of the other transactions contemplated
by the Merger Agreement, the Major Shareholder's Stock Tender Agreement or
the Stockholders' Stock Tender Agreement, or seeking to obtain from the
Company, Parent or Purchaser any damages that are material in relation to
the Company and its subsidiaries, taken as a whole, (iii) seeking to impose
material limitations on the ability of Purchaser, or rendering Purchaser
unable, to accept for payment, pay for or purchase some or all of the
Shares pursuant to the Offer and the Merger, (iv) seeking to impose
material limitations on the ability of Purchaser or Parent effectively to
exercise full rights of ownership of the Shares, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's stockholders, or (v) which otherwise is
reasonably likely to have a material adverse affect on the consolidated
financial condition, businesses or results of operations of the Company and
its subsidiaries, taken as a whole; or
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<PAGE> 30
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity, other than the application to the Offer or the Merger
of applicable waiting periods under the HSR Act, that is reasonably likely
to result, directly or indirectly, in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above; or
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the NYSE or in the Nasdaq
National Market System, for a period in excess of three hours (excluding
suspensions or limitations resulting solely from physical damage or
interference with such exchanges not related to market conditions), (ii) a
declaration of a banking moratorium or any suspension of payments in
respect of banks in the United States (whether or not mandatory), (iii) a
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (iv) any
limitation (whether or not mandatory) by any United States or foreign
governmental authority on the extension of credit by banks or other
financial institutions, (v) any decline in either the Dow Jones Industrial
Average or the Standard & Poor's Index of 500 Industrial Companies by an
amount in excess of 15% measured from the close of business on the date of
the Merger Agreement, or (vi) a change in general financial bank or capital
market conditions which materially or adversely affects the ability of
financial institutions in the United States to extend credit or syndicate
loans or (vii) in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening
thereof; or
(d) there shall have occurred any material adverse change (or any
development that, insofar as reasonably can be foreseen, is reasonably
likely to result in any material adverse change) in the consolidated
financial condition, businesses, results of operations or prospects of the
Company and its subsidiaries, taken as a whole; or
(e) the Company Board or any committee thereof (i) shall have
withdrawn, modified or changed in a manner adverse to Parent or Purchaser
its approval or recommendation of the Offer, the Merger Agreement or the
Merger, (ii) shall have recommended the approval or acceptance of an
Acquisition Proposal from, or similar business combination with, a Person
other than Parent, Purchaser or their affiliates, (iii) shall have executed
an agreement in principle or definitive agreement relating to an
Acquisition Proposal from, or similar business combination with, a Person
other than Parent, Purchaser or their affiliates or (iv) shall have adopted
any resolution to effect any of the foregoing which, in the sole judgment
of Parent in any such case, and regardless of the circumstances (including
any action or inaction by Parent or Purchaser) giving rise to any such
condition, makes it inadvisable to proceed with such acceptance or payment;
or
(f) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct and any such representations and warranties that are not
so qualified shall not be true and correct in any material respect, in each
case as of the date of the Merger Agreement and as of the scheduled
expiration date of the Offer; or
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement; or
(h) (A) any of the representations and warranties of the Major
Shareholder set forth in the Major Shareholder's Stock Tender Agreement
that are qualified as to materiality shall not be true and correct and any
such representations and warranties that are not so qualified shall not be
true and correct in any material respect, in each case as of the date of
the Merger Agreement and as of the scheduled expiration date of the Offer;
or (B) either the Major Shareholder or the Trustees shall have failed to
perform in any material respect any obligation or to comply in any material
respect with any agreement or covenant of the Major Shareholder or the
Trustees to be performed or complied with by them under the Major
Shareholder's Stock Tender Agreement or (c) there shall be any judgment,
order or injunction deemed applicable to certain obligations of Major
Shareholder or the Trustees under the Major Shareholder's Stock Tender
Agreement, which after the initial scheduled Expiration Date of the Offer
has not been
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<PAGE> 31
withdrawn or made inapplicable to the Major Shareholder or the Trustees
within 15 days after being entered;
(i) all consents necessary to the consummation of the Offer or the
Merger including, without limitation, consents from parties to loans,
contracts, leases or other agreements and consents from governmental
agencies, whether federal, state or local shall not have been obtained,
other than consents the failure to obtain which would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; or
(j) the Merger Agreement shall have been terminated in accordance with
its terms;
which in the sole judgment, exercised reasonably, of Parent or Purchaser, in any
such case, and regardless of the circumstances (including any action or inaction
by Parent or Purchaser) giving rise to such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment of or payment for
Shares.
The foregoing conditions are for the sole benefit of Parent and Purchaser,
may be waived by Parent or Purchaser, in whole or in part, at any time and from
time to time in the sole discretion of Parent or Purchaser. The failure by
Parent or Purchaser at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right and each such right shall be deemed an
ongoing right which may be asserted at any time and from time to time.
15. CERTAIN LEGAL MATTERS.
Except as described in this Section 15, based on information provided by
the Company, none of the Company, Purchaser or Parent is aware of any license or
regulatory permit that appears to be material to the business of the Company
that might be adversely affected by Purchaser's acquisition of Shares pursuant
to the Offer and the Merger or of any approval or other action by a domestic or
foreign governmental, administrative or regulatory agency or authority that
would be required prior to the acquisition of the Shares by Purchaser as
contemplated herein. Should any such approval or other action be required,
Purchaser and Parent presently contemplate that such approval or other action
will be sought. While, except as otherwise described in this Offer to Purchase,
Purchaser does not presently intend to delay the acceptance for payment of, or
payment for, Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other action,
if needed, would be obtained or would be obtained without substantial conditions
or that failure to obtain any such approval or other action might not result in
consequences adverse to the Company's business or that certain parts of the
Company's business might not have to be disposed of, or other substantial
conditions complied with, in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse action are taken with respect to the
matters discussed below, Purchaser could decline to accept for payment, or pay
for, any Shares tendered. See Section 14 for certain conditions to the Offer,
including conditions with respect to governmental actions.
State Antitakeover Statutes. A number of states have adopted laws and
regulations that purport to apply to attempts to acquire corporations that are
incorporated in such states, or whose business operations have substantial
economic effects in such states, or which have substantial assets, security
holders, employees, principal executive offices or principal places of business
in such states. In Edgar v. MITE Corp., the Supreme Court of the United States
(the "Supreme Court") invalidated on constitutional grounds the Illinois
Business Takeover statute, which, as a matter of state securities law, made
takeovers of corporations meeting certain requirements more difficult. However,
in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that
the State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining stockholders. The
state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and were
incorporated there.
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<PAGE> 32
Parent and Purchaser do not believe that the antitakeover laws and
regulations of any state will by their terms apply to the Offer and the Merger,
and neither Parent nor Purchaser has attempted to comply with any state
antitakeover statute or regulation. Purchaser reserves the right to challenge
the applicability or validity of any state law purportedly applicable to the
Offer and nothing in this Offer to Purchase or any action taken in connection
with the Offer is intended as a waiver of such right. If it is asserted that any
state antitakeover statute is applicable to the Offer, and an appropriate court
does not determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or to receive
approvals from, the relevant state authorities, and Purchaser might be unable to
accept for payment or pay for Shares tendered pursuant to the Offer or may be
delayed in consummating the Offer. In such case, Purchaser may not be obligated
to accept for payment, or pay for, any Shares tendered pursuant to the Offer.
See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "DOJ") and the Federal Trade Commission (the "FTC")
and certain waiting period requirements have been satisfied.
The waiting period under the HSR Act with respect to the Offer will expire
at 11:59 p.m., New York City time, on the fifteenth day after the date Parent's
form was filed unless early termination of the waiting period is granted.
However, the DOJ or the FTC may extend the waiting period by requesting
additional information or documentary material from Parent or the Company. If
such a request is made, such waiting period will expire at 11:59 p.m., New York
City time, on the tenth day after substantial compliance by Parent with such
request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the DOJ or the FTC raises
substantive issues in connection with a proposed transaction, the parties
frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue. The Purchaser
will not accept for payment Shares tendered pursuant to the Offer unless and
until the waiting period requirements imposed by the HSR Act with respect to the
Offer have been satisfied. See Section 14.
The FTC and the DOJ frequently scrutinize the legality under the Antitrust
Laws (as defined below) of transactions such as Purchaser's acquisition of
Shares pursuant to the Offer and the Merger. At any time before or after
Purchaser's acquisition of Shares, the DOJ or the FTC could take such action
under the Antitrust Laws as it deems necessary or desirable in the public
interest, including seeking to enjoin the acquisition of Shares pursuant to the
Offer or otherwise seeking divestiture of Shares acquired by Purchaser or
divestiture of substantial assets of Parent or its subsidiaries. Private
parties, as well as state governments, may also bring legal action under the
Antitrust Laws under certain circumstances. Based upon an examination of
information provided by the Company relating to the businesses in which Parent
and the Company are engaged, Parent and Purchaser believe that the acquisition
of Shares by Purchaser will not violate the Antitrust Laws. Nevertheless, there
can be no assurance that a challenge to the Offer or other acquisition of Shares
by Purchaser on antitrust grounds will not be made or, if such a challenge is
made, of the result. See Section 14 for certain conditions to the Offer,
including conditions with respect to litigation and certain government actions.
As used in this Offer to Purchase, "Antitrust Laws" shall mean and include
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, and all other Federal and state
statutes, rules, regulations, orders, decrees, administrative and judicial
doctrines, and other laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade.
Federal Reserve Board Regulations. Regulations G, U and X (the "Margin
Regulations") of the Federal Reserve Board restrict the extension or maintenance
of credit for the purpose of buying or carrying margin stock, including the
Shares, if the credit is secured directly or indirectly by margin stock. Such
secured credit may not be extended or maintained in an amount that exceeds the
maximum loan value of all the direct
30
<PAGE> 33
and indirect collateral securing the credit, including margin stock and other
collateral. As described in Section 10 of this Offer to Purchase, the financing
of the Offer will not be directly or indirectly secured by the Shares or other
securities which constitute margin stock. Accordingly, all financing for the
Offer will be in full compliance with the Margin Regulations.
16. FEES AND EXPENSES.
Purchaser has retained D.F. King & Co., Inc. to act as the Information
Agent and State Street Bank and Trust Company to act as the Depositary in
connection with the Offer. The Information Agent may contact holders of Shares
by personal interview, mail, telephone, telex, telegraph and other methods of
electronic communication and may request brokers, dealers, commercial banks,
trust companies and other nominees to forward the Offer materials to beneficial
holders. The Information Agent and the Depositary will each receive reasonable
and customary compensation for their services. Purchaser has also agreed to
reimburse each such firm for certain reasonable out-of-pocket expenses and to
indemnify each such firm against certain liabilities in connection with their
services, including certain liabilities under federal securities laws.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or other person (other than the Information Agent) for making
solicitations or recommendations in connection with the Offer. Brokers, dealers,
banks and trust companies will be reimbursed by Purchaser for customary mailing
and handling expenses incurred by them in forwarding the Offer materials to
their customers.
17. MISCELLANEOUS.
The Offer is being made to all holders of Shares other than the Company.
Purchaser is not aware of any jurisdiction in which the making of the Offer or
the tender of Shares in connection therewith would not be in compliance with the
laws of such jurisdiction. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer shall be deemed to be made on behalf of Purchaser by or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR PURCHASER NOT CONTAINED HEREIN OR IN THE
LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Purchaser and Parent have filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be examined and copies may be obtained at the
same places and in the same manner as set forth in Section 9 of this Offer to
Purchase (except that they will not be available at the regional offices of the
Commission).
EAGLE MERGER CORP.
December 23, 1999
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SCHEDULE I
1. DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER AND PARENT. The following
table sets forth the name and present principal occupation or employment, and
material occupations, positions, offices or employment for the past five years
of the directors and executive officers of Purchaser and Parent. Except as
otherwise noted, each such person is a citizen of the United States. The
business address of each person is c/o EMC Corporation, 35 Parkwood Drive,
Hopkinton, Massachusetts 01748. Unless otherwise indicated, each person has held
his or her present position as set forth below, or has been an executive officer
of Parent for the past five years. Persons who are also directors or officers of
Purchaser are indicated with an asterisk ("*"). Their positions with the
Purchaser took effect in December, 1999.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ------------------------------------------------------
<S> <C>
Michael J. Cronin............................ Mr. Cronin is a director of Parent. Mr. Cronin has
held the position of director since May 1990. He has
been chief executive officer of Cognition Corporation
since September 1987, where he is also the chairman of
the board of directors.
*Paul T. Dacier.............................. Mr. Dacier is a director and the secretary of
Purchaser. He has been vice president and general
counsel of Parent since February 1993.
*David A. Donatelli.......................... Mr. Donatelli is a director and the president of
Purchaser. Mr. Donatelli has been vice president, new
business development of Parent since April 1999. For
the five years prior to that time, he held senior
management positions with Parent.
John R. Egan................................. Since September 1998, Mr. Egan has been an employee of
Parent, providing ongoing services to various
organizations within Parent. Mr. Egan has been a
director of Parent since May 1992. He was executive
vice president, sales and marketing from January 1992
to June 1996. From May 1997 to September 1998, Mr.
Egan was executive vice president, products and
offerings.
Maureen E. Egan.............................. Mrs. Egan has been a director of Parent since March
1993. She is a member of the Hopkinton Technology for
Education Trust.
Richard J. Egan.............................. Mr. Egan has been the chairman of the board since
January 1988 and a director of Parent since 1979. He
is also a director of NSTAR and NetScout Systems, Inc.
</TABLE>
I-1
<PAGE> 35
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING PAST FIVE YEARS
- ---- ------------------------------------------------------
<S> <C>
W. Paul Fitzgerald........................... Mr. Fitzgerald is a director of Parent. Mr. Fitzgerald
has held this position since March 1991. From January
1988 to March 1995, Mr. Fitzgerald was senior vice
president, finance and administration, and chief
financial officer. Mr. Fitzgerald was also treasurer
from October 1991 to March 1995.
Paul E. Noble, Jr. .......................... Mr. Noble is executive vice president, products and
offerings, of Parent. Mr. Noble has held this position
since September 1998. Mr. Noble was vice president and
general manager of OEM operations from June 1992 to
January 1998, and from January 1998 to September 1998
was senior vice president, new business development.
Joseph F. Oliveri............................ Mr. Oliveri has been a director of Parent since March
1993. He is president and chief executive officer of
Interface Electronics Corporation.
*Colin G. Patteson........................... Mr. Patteson is a director and the treasurer of
Purchaser. He has been senior vice president, chief
administrative officer and treasurer of Parent since
February 1997. He was vice president and corporate
controller from February 1993 to April 1995, and vice
president, chief financial officer and treasurer from
April 1995 to February 1997. Mr. Patteson is a citizen
of the United Kingdom.
Michael C. Ruettgers......................... Mr. Ruettgers is president, chief executive officer
and a director of Parent. Mr. Ruettgers has held the
position of president since October 1989, the position
of chief executive officer since January 1992 and the
position of director since May 1992. He is also a
director of PerkinElmer.
William J. Teuber, Jr. ...................... William J. Teuber is vice president and chief
financial officer of Parent. Mr. Teuber has held these
positions since February 1997. He was vice president
and controller from August 1995 to February 1997. From
1988 to August 1995, Mr. Teuber was a partner at
Coopers & Lybrand L.L.P.
Alfred M. Zeien.............................. Mr. Zeien has been a director of Parent since December
1999. He was chairman of the board and chief executive
officer of The Gillette Company from December 1994 to
June 1999. He is a director of The Gillette Company,
Massachusetts Mutual Life Insurance Company, Polaroid
Corporation and Raytheon Company.
</TABLE>
I-2
<PAGE> 36
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or his
broker, dealer, commercial bank, trust company or other nominee to the
Depositary, at the applicable address set forth below:
The Depositary for the Offer is:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<CAPTION>
By Mail: By Hand: By Overnight Courier:
<S> <C> <C>
State Street Bank and Trust Securities Transfer & Reporting State Street Bank and Trust
Company Services, Inc. Company
c/o EquiServe c/o EquiServe c/o EquiServe
Attn: Corporate Actions 100 Williams Street Galleria Attn: Corporate Actions
P.O. Box 9573 New York, New York 10038 40 Campanelli Drive
Boston, Massachusetts 02205 Braintree, Massachusetts 02184
By Facsimile Transmission
(781) 575-4826
For Confirmation Telephone:
(781) 575-4816
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
the other tender offer materials may be directed to the Information Agent at the
address and telephone number set forth below. Stockholders may also contact
their broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 628-8532
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED DECEMBER 23, 1999
OF
EAGLE MERGER CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EMC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT COURIER:
State Street Bank and Trust Securities Transfer & State Street Bank and Trust
Company Reporting Services, Inc. Company
c/o EquiServe c/o EquiServe c/o EquiServe
Attn: Corporate Actions 100 Williams Street Galleria Attn: Corporate Actions
P.O. Box 9573 New York, New York 10038 40 Campanelli Drive
Boston, Massachusetts 02205 Braintree, Massachusetts 02184
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Softworks, Inc.
if certificates for Shares (as such term is defined below) are to be forwarded
herewith or, unless an Agent's Message (as defined in Instruction 2 below) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at a Book-Entry Transfer Facility (as
defined in and pursuant to the procedures set forth in Section 3 of the Offer to
Purchase). Stockholders who deliver Shares by book-entry transfer are referred
to herein as "Book-Entry Stockholders" and other stockholders who deliver shares
are referred to herein as "Certificate Stockholders."
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver either the certificates for, or a Book-Entry Confirmation (as
defined in Section 3 of the Offer to Purchase) with respect to, their Shares and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<PAGE> 2
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN A BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
-------------------------------------------------------------------------
Account Number
-------------------------------------------------------------------------
Transaction Code Number
-------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s)
-------------------------------------------------------------------------
Window Ticket Number (if any)
-------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------------------------------------------------
Name of Institution which Guaranteed Delivery
-----------------------------------------------------------------------
If delivered by Book-Entry Transfer, check box: [ ]
Account Number
-------------------------------------------------------------------------
Transaction Code Number
-------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED BY NUMBER
CERTIFICATE SHARE OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by Share certificates delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Eagle Merger Corp., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of EMC Corporation, a
Massachusetts corporation ("Parent"), the above-described shares of common
stock, par value $0.001 per share (the "Shares"), of Softworks, Inc., a Delaware
corporation (the "Company"), pursuant to Purchaser's offer to purchase all of
the outstanding Shares at a price of $10.00 per Share, net to the seller in
cash, without interest thereon (the "Offer Price") upon the terms and subject to
the conditions set forth in the Offer to Purchase dated December 23, 1999, and
in this Letter of Transmittal (which, together with any amendments or
supplements thereto or hereto, collectively constitute the "Offer"). The
undersigned understands that Purchaser reserves the right to transfer or assign,
in whole at any time, or in part from time to time, to one or more of its
affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer. Receipt of the Offer is hereby
acknowledged.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of December 21, 1999 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of, and payment for, the Shares
tendered herewith in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby (and any and all non-cash dividends, distributions, rights, other Shares
or other securities issued or issuable in respect thereof on or after December
21, 1999 (collectively, "Distributions")) and irrevocably constitutes and
appoints the Depositary the true and lawful Agent and attorney-in-fact of the
undersigned with respect to such Shares (and all Distributions), with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver certificates for such Shares (and any
and all Distributions), or transfer ownership of such Shares (and any and all
Distributions) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of Purchaser, (ii) present such
Shares (and any and all Distributions) for transfer on the books of the Company,
and (iii) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and any and all Distributions), all in accordance with
the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Paul T. Dacier and Colin G. Patteson in their respective capacities as
officers of Purchaser, and any individual who shall thereafter succeed to any
such office of Purchaser, and each of them, the attorneys-in-fact and proxies of
the undersigned, each with full power of substitution, to vote at any annual or
special meeting of the Company's stockholders or any adjournment or postponement
thereof or otherwise in such manner as each such attorney-in-fact and proxy or
his substitute shall in his sole discretion deem proper with respect to, to
execute any written consent concerning any matter as each such attorney-in-fact
and proxy or his substitute shall in his sole discretion deem proper with
respect to, and to otherwise act as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, all of the
Shares (and any and all Distributions) tendered hereby and accepted for payment
by Purchaser. This appointment will be effective if and when, and only to the
extent that, Purchaser accepts such Shares for payment pursuant to the Offer.
This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer. Such acceptance for payment shall, without further
action, revoke any prior powers of attorney and proxies granted by the
undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
3
<PAGE> 4
revocations may be given by the undersigned with respect thereto (and, if given,
will not be deemed effective). Purchaser reserves the right to require that, in
order for Shares or other securities to be deemed validly tendered, immediately
upon Purchaser's acceptance for payment of such Shares, Purchaser must be able
to exercise full voting, consent and other rights with respect to such Shares
(and any and all Distributions), including voting at any meeting of the
Company's stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions, that the undersigned owns the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that the
tender of the tendered Shares complies with Rule 14e-4 under the Exchange Act,
and that when the same are accepted for payment by Purchaser, Purchaser will
acquire good, marketable and unencumbered title thereto and to all
Distributions, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby and all
Distributions. In addition, the undersigned shall remit and transfer promptly to
the Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and, pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to any
one of the procedures described in Section 3 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer (and if
the Offer is extended or amended, the terms or conditions of any such extension
or amendment). Without limiting the foregoing, if the price to be paid in the
Offer is amended in accordance with the terms of the Merger Agreement, the price
to be paid to the undersigned will be the amended price notwithstanding the fact
that a different price is stated in this Letter of Transmittal. The undersigned
recognizes that under certain circumstances set forth in the Offer to Purchase,
Purchaser may not be required to accept for payment any of the Shares tendered
hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or return any
certificates for Shares not tendered or accepted for payment in the name(s) of
the registered holder(s) appearing above under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price of all Shares purchased and/or
return any certificates for Shares not tendered or not accepted for payment (and
any accompanying documents, as appropriate) to the address(es) of the registered
holder(s) appearing above under "Description of Shares Tendered." In the event
that the boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
of all Shares purchased and/or return any certificates evidencing Shares not
tendered or not accepted for payment (and any accompanying documents, as
appropriate) in the name(s) of, and deliver such check and/or return any such
certificates (and any accompanying documents, as appropriate) to, the person(s)
so indicated. Unless otherwise indicated herein in the box entitled "Special
Payment Instructions," please credit any Shares tendered herewith by book-entry
transfer that are not accepted for payment by crediting the account at the
Book-Entry Transfer Facility designated above. The undersigned recognizes that
Purchaser has no obligation, pursuant to the "Special Payment Instructions," to
transfer any Shares from the name of the registered holder thereof if Purchaser
does not accept for payment any of the Shares so tendered.
4
<PAGE> 5
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST, DESTROYED OR STOLEN AND SEE INSTRUCTION 11.
Number of Shares represented by lost, destroyed or stolen
certificates: ____________
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if the check for the purchase price of Shares
accepted for payment is to be issued in the name of someone other than the
undersigned, if certificates for Shares not tendered or not accepted for
payment are to be issued in the name of someone other than the undersigned
or if Shares tendered hereby and delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at the Book-Entry Transfer Facility other than the account
indicated above
Issue check and/or Share certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
Credit Shares delivered by book-entry transfer and not purchased to
the Book-Entry Transfer Facility account.
------------------------------------------------------------
(ACCOUNT NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6, AND 7)
To be completed ONLY if certificates for shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment is to be sent to someone other than the undersigned
or to the undersigned at an address other than that shown under
"Description of Shares Tendered."
Mail check and/or share certificates to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
5
<PAGE> 6
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- ------------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on the
Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm
- --------------------------------------------------------------------------------
Capacity (full title)
- --------------------------------------------------------------------------------
(SEE INSTRUCTION 5)
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
- -------------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name(s)
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Title
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number
- --------------------------------------------------------------------------------
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(each, an "Eligible Institution"). In all other cases, all signatures on this
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARES; GUARANTEED DELIVERY
PROCEDURES. This Letter of Transmittal is to be completed by stockholders of
the Company either if Share certificates are to be forwarded herewith or, unless
an Agent's Message is utilized, if delivery of Shares is to be made by
book-entry transfer pursuant to the procedures set forth herein and in Section 3
of the Offer to Purchase. For a stockholder validly to tender Shares pursuant to
the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees or an Agent's Message (in connection with book-entry transfer) and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either (i)
certificates for tendered Shares must be received by the Depositary at one of
such addresses prior to the Expiration Date or (ii) Shares must be delivered
pursuant to the procedures for book-entry transfer set forth herein and in
Section 3 of the Offer to Purchase and a Book-Entry Confirmation must be
received by the Depositary prior to the Expiration Date or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth herein
and in Section 3 of the Offer to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary prior to the Expiration Date or who cannot comply with the book-
entry transfer procedures on a timely basis may tender their Shares by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedure set forth herein and in Section 3 of the Offer to
Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date and
(iii) the certificates for all tendered Shares, in proper form for transfer (or
a Book-Entry Confirmation with respect to all tendered Shares), together with a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and any other required documents must
be received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day on
which the Nasdaq National Market is open for business.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
THE METHOD OF DELIVERY OF THE SHARES, THIS LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. THE SHARES
WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
7
<PAGE> 8
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the Share
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS. (Not applicable to stockholders who tender by
book-entry transfer). If fewer than all the Shares evidenced by any Share
certificate delivered to the Depositary herewith are to be tendered hereby, fill
in the number of Shares that are to be tendered in the box entitled "Number of
Shares Tendered." In any such case, new certificate(s) for the remainder of the
Shares that were evidenced by the old certificates will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the Expiration Date or the
termination of the Offer. All Shares represented by certificates delivered to
the Depositary will be deemed to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any Share certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share certificates or
separate stock powers are required unless payment or certificates for Shares not
tendered or not accepted for payment are to be issued in the name of a person
other than the registered holder(s). Signatures on any such Share certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the Share certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the Share certificates. Signature(s) on any
such Share certificates or stock powers must be guaranteed by an Eligible
Institution.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction
6, Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder(s) or such other person) payable
on account of the transfer to such other person will be deducted from the
purchase price of such Shares purchased unless evidence satisfactory to
Purchaser of the payment of such taxes, or exemption therefrom, is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Share certificates evidencing the
Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares accepted for payment is to be issued in the name of, and/or
Share certificates for Shares not accepted for payment or not tendered are to be
issued in the name of and/or returned to, a person other than the signer of this
Letter of
8
<PAGE> 9
Transmittal or if a check is to be sent, and/or such certificates are to be
returned, to a person other than the signer of this Letter of Transmittal, or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any stockholder(s) delivering Shares by
book-entry transfer may request that Shares not purchased be credited to such
account maintained at a Book-Entry Transfer Facility as such stockholder(s) may
designate in the box entitled "Special Payment Instructions." If no such
instructions are given, any such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above as
the account from which such Shares were delivered.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address and phone number set forth
below, or from brokers, dealers, commercial banks or trust companies.
9. WAIVER OF CONDITIONS. Subject to the Merger Agreement, Purchaser
reserves the absolute right in its sole discretion to waive, at any time or from
time to time, any of the specified conditions of the Offer, in whole or in part,
in the case of any Shares tendered.
10. SUBSTITUTE FORM W-9. Each tendering stockholder is required to
provide the Depositary with a correct Taxpayer Identification Number ("TIN") on
the Substitute Form W-9 which is provided under "Important Tax Information"
below, and to certify whether such stockholder is subject to backup withholding
of United States federal income tax. If a tendering stockholder has been
notified by the Internal Revenue Service that such stockholder is subject to
backup withholding, such stockholder must cross out item (2) of the
Certification box of the Substitute Form W-9, unless such stockholder has since
been notified by the Internal Revenue Service that such stockholder is no longer
subject to backup withholding. Failure to provide the information on the
Substitute Form W-9 may subject the tendering stockholder to 31% United States
federal income tax withholding on the payment of the purchase price of all
Shares purchased from such stockholder. If the tendering stockholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such stockholder should write "Applied For" in the space provided
for the TIN in Part 1 of the Substitute Form W-9, and sign and date the
Substitute Form W-9.
If "Applied For" is written in Part 1, the Depositary will withhold 31% on
all payments of the purchase price until a TIN is provided to the Depositary.
However, such amounts will be refunded to such stockholder if a TIN is provided
to the Depositary within 60 days.
11. LOST, DESTROYED OR STOLEN SHARE CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the Share certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen Share certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF) TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION
DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR
GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under United States Federal income tax law, a stockholder whose tendered
Shares are accepted for payment is required to provide the Depositary (as payer)
with such stockholder's correct TIN on Substitute Form W-9 below. If such
stockholder is an individual, the TIN is his social security number. If a
tendering stockholder is subject to backup withholding, such stockholder must
cross out item (2) of the Certification box on the Substitute Form W-9. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the
9
<PAGE> 10
Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations, and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that stockholder must submit an Internal Revenue Form W-8,
signed under penalties of perjury, attesting to that individual's exempt status.
A Form W-8 can be obtained from the Depositary. Exempt stockholders, other than
foreign individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form contained herein certifying that the TIN provided on
Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN), and
that (i) such stockholder has not been notified by the Internal Revenue Service
that he is subject to back up withholding as a result of a failure to report all
interest or dividends or (ii) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual owner,
consult the enclosed Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 for additional guidance on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
number or intends to apply for a number in the near future, such stockholder
should write "Applied For" in the space provided for in the TIN in Part 1, and
sign and date the Substitute Form W-9. If "Applied For" is written in Part 1 the
Depositary will withhold 31% on all payments of the purchase price until a TIN
is provided to the Depositary. However, such amounts will be refunded to such
stockholders if a TIN is provided to the Depositary within 60 days.
10
<PAGE> 11
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
PAYER'S NAME:
- -----------------------------------------------------------------------------------------------------------------
----------------------------
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT Social Security Number
FORMW-9 RIGHT AND CERTIFY BY SIGNING AND DATING BELOW (If awaiting TIN write "Applied
DEPARTMENT OF THE For")
TREASURY INTERNAL OR
REVENUE SERVICE ----------------------------
Employer Identification Number
(If awaiting TIN write "Applied
For")
------------------------------------------------------------------------------------
PART 2--CERTIFICATE--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or
I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the Internal Revenue Service
(the "IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends, or (c) the IRS has notified me that I am no
longer subject to back up withholding.
------------------------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been
TAXPAYER IDENTIFICATION notified by the IRS that you are currently subject to backup withholding because of
NUMBER ("TIN") under-reporting interest or dividends on your tax returns. However, if after being
notified by the IRS that you are subject to backup withholding, you receive another
notification from the IRS that you are no longer subject to backup withholding, do
not cross out such item (2). (Also see instructions in the enclosed Guidelines).
SIGNATURE: _____________________________________ DATE: ________________
------------------------------------------------------------------------------------
PART 3--Awaiting TIN [ ]
----------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
THE SUBSTITUTE FORM W-9.
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and
either (1) I have mailed or delivered an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to
mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer
Identification Number to the Depositary by the time of payment, 31% of all reportable payments made to me
thereafter will be withheld, but that such amounts will be refunded to me if I provide a certified
Taxpayer Identification Number to the Depositary within sixty (60) days.
Signature: _________________________________________________________ Date:__________________
- ----------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 12
Questions and requests for assistance or additional copies of the Offer to
Purchase, this Letter of Transmittal and other tender offer materials may be
directed to the Information Agent at its address and telephone number set forth
below:
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT: (212) 269-5550
ALL OTHERS CALL TOLL FREE: (800) 628-8532
12
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
TO
EAGLE MERGER CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EMC CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) if certificates
representing shares of Common Stock, par value $0.001 per share (the "Shares"),
of Softworks, Inc., a Delaware corporation, are not immediately available, if
the procedure for book-entry transfer cannot be completed prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase), or if time
will not permit all required documents to reach the Depositary prior to the
Expiration Date. Such form may be delivered by hand or mailed to the Depositary.
See Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Courier:
State Street Bank and Trust Company Securities Transfer & Reporting State Street Bank and Trust Company
c/o EquiServe Services, Inc. c/o EquiServe
Attn: Corporate Actions c/o EquiServe Attn: Corporate Actions
P.O. Box 9573 100 Williams Street Galleria 40 Campanelli Drive
Boston, Massachusetts 02205 New York, New York 10038 Braintree, Massachusetts 02184
</TABLE>
By Facsimile Transmission
(781) 575-4826
For Confirmation Telephone:
(781) 575-4816
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Eagle Merger Corp., a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of EMC Corporation, a
Massachusetts corporation, upon the terms and subject to the conditions set
forth in Purchaser's Offer to Purchase dated December 23, 1999 (the "Offer to
Purchase") and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, constitute the "Offer"), receipt of which is
hereby acknowledged, the number of shares set forth below of common stock, par
value $0.001 per share (the "Shares"), of Softworks, Inc., a Delaware
corporation, pursuant to the guaranteed delivery procedures set forth in Section
3 of the Offer to Purchase.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------
Number of Shares:------------------------------------
Certificate Nos. (if available):
--------------------------------------------------------
--------------------------------------------------------
Check box if shares will be tendered by book-entry
transfer: [ ]
Account Number:-------------------------------------
Dated:-------------------------------------------------
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------
Name(s) of Record Holder(s):
--------------------------------------------------------
--------------------------------------------------------
(PLEASE PRINT)
Address(es)------------------------------------------
--------------------------------------------------------
--------------------------------------------------------
(ZIP CODE)
Area Code and Tel. No.:
--------------------------------------------------------
--------------------------------------------------------
Signature(s):------------------------------------------
--------------------------------------------------------
- ----------------------------------------------------------------
</TABLE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, guarantees to deliver to the Depositary
either certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company, in each case with
delivery of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message, and any other documents required by the Letter of Transmittal, within
three trading days (as defined in the Offer to Purchase) after the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
<TABLE>
<S> <C>
Name of Firm:---------------------------------------- --------------------------------------------------------
Address:----------------------------------------------- AUTHORIZED SIGNATURE
- -------------------------------------------------------- Name:-------------------------------------------------
(ZIP CODE) PLEASE PRINT
- -------------------------------------------------------- Title:
---------------------------------------------------
Dated:--------------------------------------------------
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD
BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
AT
$10.00 NET PER SHARE
BY
EAGLE MERGER CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EMC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.
December 23, 1999
To: Brokers, Dealers, Commercial Banks, Trust Companies And Other Nominees:
We have been appointed by Eagle Merger Corp., a Delaware corporation
("Purchaser") and a wholly owned subsidiary of EMC Corporation, a Massachusetts
corporation ("Parent"), to act as Information Agent in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par value
$0.001 per share (the "Shares"), of Softworks, Inc., a Delaware corporation (the
"Company"), at $10.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated December 23,
1999 (the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer")
enclosed herewith. Please furnish copies of the enclosed materials to those of
your clients for whose accounts you hold Shares registered in your name or in
the name of your nominee.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the Expiration Date (as defined in the Offer
to Purchase) that number of Shares which, when added to the Shares beneficially
owned by Parent or Purchaser (if any), constitute at least a majority of the
Shares outstanding on a fully diluted basis on the date Shares are accepted for
payment. The Offer is also subject to the other conditions in the Offer to
Purchase. See Section 14 of the Offer to Purchase.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated December 23, 1999;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares and all other required documents cannot be
delivered to the Depositary, or if the procedures for book-entry transfer
cannot be completed, by the Expiration Date (as defined in the Offer to
Purchase);
4. A letter which may be sent to your clients for whose accounts you
hold Shares registered in your name or in the name of your nominee, with
space provided for obtaining such clients' instructions with regard to the
Offer;
<PAGE> 2
5. A letter to stockholders of the Company from Judy Carter,
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 dated December 23,
1999, which has been filed by the Company with the Securities and Exchange
Commission;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. A return envelope addressed to EquiServe, as agent for State
Street Bank and Trust Company (the "Depositary").
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), Purchaser will accept for payment and pay for Shares which are
validly tendered prior to the Expiration Date and not theretofore properly
withdrawn when, as and if Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment pursuant to the
Offer. Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of (i) certificates for such
Shares, or timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company, pursuant to the procedures
described in Section 3 of the Offer to Purchase, (ii) a properly completed and
duly executed Letter of Transmittal (or a properly completed and manually signed
facsimile thereof) or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer and (iii) all other documents required
by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manager and the Information Agent as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. Purchaser will, however, upon request, reimburse brokers, dealers,
commercial banks and trust companies for customary mailing and handling costs
incurred by them in forwarding the enclosed materials to their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of Shares pursuant to the Offer, subject to Instruction 6 of the
Letter of Transmittal.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer of Shares, and any other required documents, should be sent to the
Depositary, and certificates representing the tendered Shares should be
delivered or such Shares should be tendered by book-entry transfer, all in
accordance with the Instructions set forth in the Letter of Transmittal and in
the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed
to, and additional copies of the enclosed materials may be obtained from the
Information Agent at its address and telephone number set forth on the back
cover of the Offer to Purchase.
Very truly yours,
D.F. KING & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF PARENT, PURCHASER, THE COMPANY, THE INFORMATION AGENT, THE
DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY
OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE
STATEMENTS CONTAINED THEREIN.
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
AT
$10.00 NET PER SHARE
BY
EAGLE MERGER CORP.,
A WHOLLY OWNED SUBSIDIARY OF
EMC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.
December 23, 1999
To: Our Clients:
Enclosed for your consideration are the Offer to Purchase dated December 23,
1999 and the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the "Offer") in connection with
the offer by Eagle Merger Corp., a Delaware corporation ("Purchaser") and a
wholly owned subsidiary of EMC Corporation, a Massachusetts corporation
("Parent"), to purchase for cash all outstanding shares of common stock, par
value $0.001 per share (the "Shares"), of Softworks, Inc., a Delaware
corporation (the "Company"). We are the holder of record of Shares held for your
account. A tender of such Shares can be made only by us as the holder of record
and pursuant to your instructions. The enclosed Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer.
Your attention is invited to the following:
1. The offer price is $10.00 per Share, net to you in cash without
interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company, by a unanimous vote of those
present at the meeting, approved the Merger Agreement (as defined in the
Offer to Purchase) and the transactions contemplated thereby, including the
Offer and the Merger (each as defined in the Offer to Purchase), and
determined that the Offer and the Merger are fair to, and in the best
interest of, the Company's stockholders and recommends that the stockholders
accept the Offer and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights expire at 5:00 p.m., New York City
time, on Tuesday, January 25, 2000, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
in the Offer to Purchase) that number of Shares which, when added to the
Shares beneficially owned by Parent or Purchaser (if any), constitute at
least a majority of the Shares outstanding on a fully diluted basis on the
date Shares are accepted for payment. The Offer is also subject to the other
conditions in the Offer to Purchase. See Section 14 of the Offer to
Purchase.
6. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Except as disclosed in the Offer to Purchase, Purchaser is not aware of any
state in which the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. In any jurisdiction in
which the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares will
be tendered unless otherwise specified on the reverse side of this letter. Your
instructions should be forwarded to us in ample time to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
<PAGE> 2
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SOFTWORKS, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated December 23, 1999 and the related Letter of Transmittal
in connection with the Offer by Eagle Merger Corp., a Delaware corporation and a
wholly owned subsidiary of EMC Corporation, a Massachusetts corporation, to
purchase all outstanding shares of common stock, par value $0.001 per share (the
"Shares"), of Softworks, Inc., a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
Number of Shares to be Tendered:*
-----------------------------------
Shares
Dated:
--------------------------------------
--------------------------------------
Signature(s)
--------------------------------------
Print Name(s)
--------------------------------------
--------------------------------------
Address(es)
--------------------------------------
Area Code and Telephone Number
--------------------------------------
Tax ID or Social Security Number
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(2)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(2)
4. Custodian account of a minor The minor(3)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent
minor, or incompetent person person(4)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
a trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
8. Sole proprietorship account The owner(5)
9. A valid trust, estate, or pension The legal entity
trust (do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title)(1)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, school district,
or prison) that receives
agricultural program payments
- ------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the legal trust, estate, or pension trust.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for Social Security Number Card or Form SS-4,
Application for Employer Identification Number at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
Exhibit 99.(a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer is made solely by the Offer to
Purchase dated December 23, 1999 and the related Letter of Transmittal and is
being made to all holders of Shares. Eagle Merger Corp. is not aware of any
state where the making of the Offer is prohibited by administrative or judicial
action pursuant to any valid state statute. If Eagle Merger Corp. becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Eagle Merger Corp. will make a good faith effort to
comply with such statute or seek to have such statute declared inapplicable to
the Offer. If, after such good faith effort, Eagle Merger Corp. cannot comply
with such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any such state. In any
jurisdiction where securities, blue sky or other laws require the Offer to be
made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Eagle Merger Corp. by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Softworks, Inc.
at
$10.00 Net Per Share in Cash
by
Eagle Merger Corp.
a wholly owned subsidiary of
EMC Corporation
Eagle Merger Corp., a Delaware corporation ("Purchaser") and a wholly
owned subsidiary of EMC Corporation, a Massachusetts corporation ("Parent"), is
offering to purchase all outstanding shares of common stock, par value $0.001
per share (the "Shares"), of Softworks, Inc., a Delaware corporation (the
"Company"), at a price of $10.00 per share, net to the seller in cash, without
interest (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated December 23, 1999 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
TUESDAY, JANUARY 25, 2000, UNLESS THE OFFER IS EXTENDED.
<PAGE> 2
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of December 21, 1999 (the "Merger Agreement"), by and among Parent,
Purchaser and the Company. Pursuant to the Merger Agreement and subject to the
Delaware General Corporation Law (the "DGCL"), as soon as practicable after the
completion of the Offer and satisfaction or waiver, if permissible, of all
conditions to the Merger (as defined below). Purchaser will be merged with and
into the Company and the separate corporate existence of Purchaser will
thereupon cease (the "Merger"). The Company, as the surviving corporation of the
Merger, is sometimes herein referred to as the "Surviving Corporation." At the
effective time of the Merger (the "Effective Time"), each Share then outstanding
(other than Shares held by Parent or Purchaser and Shares held by stockholders
who properly perfect their dissenters' rights under the DGCL) will be cancelled
and extinguished and converted into the right to receive $10.00 in cash or any
higher price per Share paid in the Offer (the "Merger Consideration"), without
interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, AND HAS UNANIMOUSLY DETERMINED THAT THE TERMS OF THE OFFER AND
THE MERGER ARE ADVISABLE, FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS AND UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER, THAT NUMBER OF
SHARES WHICH, WHEN ADDED TO THE SHARES BENEFICIALLY OWNED BY PARENT OR
PURCHASER, IF ANY, REPRESENTS AT LEAST A MAJORITY OF THE SHARES OUTSTANDING ON A
FULLY DILUTED BASIS ON THE DATE SHARES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE
OFFER.
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to Purchaser and
not withdrawn, if and when Purchaser gives oral or written notice to State
Street Bank and Trust Company, as Depositary (the "Depositary"), of Purchaser's
acceptance for payment of such Shares. Payment for Shares accepted for payment
pursuant to the Offer will be made by deposit of the purchase price therefor
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from Purchaser and transmitting payment to
tendering stockholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO
BE PAID BY PURCHASER FOR THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
DELAY IN MAKING SUCH PAYMENT.
In all cases, payment for Shares accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or a timely Book-Entry Confirmation (as defined in
Section 3 of the Offer to Purchase) with respect thereto), (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message (as defined in Section 3 of the Offer to Purchase), and (iii)
any other documents required by the Letter of Transmittal.
<PAGE> 3
Except as otherwise provided in Section 4 of the Offer to Purchase,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
(as defined herein) and, unless theretofore accepted for payment by Purchaser
pursuant to the Offer, may also be withdrawn at any time after February 21,
2000. For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary, and unless such Shares have been tendered by an Eligible
Institution, as defined in Section 3 of the Offer to Purchase, the signatures on
the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer as
set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of
Shares may not be rescinded, and any Shares properly withdrawn will thereafter
be deemed not validly tendered for purposes of the Offer. However, withdrawn
Shares may be retendered by again following one of the procedures described in
Section 3 of the Offer to Purchase any time prior to the Expiration Date. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by Purchaser, in its sole discretion, which
determination will be final and binding.
The term "Expiration Date" shall mean 5:00 P.M., New York City time, on
Tuesday, January 25, 2000, unless and until Purchaser, in accordance with the
terms of the Merger Agreement, shall have extended the period of time for which
the Offer is open, in which event the term "Expiration Date" shall mean the
latest time and date at which the Offer, as so extended by Purchaser, shall
expire. Any such extension will be followed as promptly as practicable by a
public announcement thereof no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date of the Offer.
Subject to the terms of the Merger Agreement and the applicable
regulations of the Securities and Exchange Commission, Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares by giving oral or
written notice of such extension to the Depositary. During any such extension,
all Shares previously tendered and not withdrawn will
<PAGE> 4
remain subject to the Offer, subject to the rights of a tendering stockholder to
withdraw such Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares and will be furnished to brokers,
dealers, banks and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the
Information Agent at its address and telephone numbers set forth below. Requests
for copies of the Offer to Purchase, the Letter of Transmittal and other related
materials may be directed to the Information Agent or to brokers, dealers,
commercial banks or trust companies. No fees or commissions will be payable by
Purchaser to any broker, dealer or other person (other than the Information
Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll Free: (800) 628-8532
December 23, 1999
<PAGE> 1
Exhibit (a)(8)
EMC Announces Agreement to Acquire SOFTWORKS, Inc.; Storage Management Software
Company Ranked Among BusinessWeek's 100 Hot Growth Companies Tuesday,
December 21, 1999 09:27 AM
Mail this article to a friend
HOPKINTON, Mass.--(BUSINESS WIRE)--Dec. 21, 1999--EMC Corporation (NYSE:EMC,
news, msgs) and SOFTWORKS, Inc. (NASDAQ:SWRX, news, msgs), announced today a
definitive agreement for EMC to acquire publicly held SOFTWORKS of Alexandria,
Va., in a cash transaction valued at approximately $192 million. SOFTWORKS is a
leading global provider of enterprise data, storage and performance management
software. This acquisition will enable EMC to expand its product offerings in
the rapidly growing market for storage management software.
Under the terms of the agreement, EMC will offer to purchase, through a cash
tender offer, all outstanding shares of SOFTWORKS stock for $10 per share. The
cash tender offer will commence no later than December 28, 1999. This
acquisition has been approved by the board of directors of each company and is
subject to various conditions and regulatory approvals. Certain shareholders of
SOFTWORKS, who, in the aggregate, hold approximately 42% of SOFTWORKS'
outstanding stock, have agreed to tender their shares into the offer. The
acquisition is expected to be completed by the end of the first quarter of 2000.
Mike Ruettgers, EMC President and CEO, said, "As enterprise storage becomes the
central strategic technology investment for companies that depend on information
to run their businesses, EMC's industry-leading software portfolio continues to
grow in importance. Storage management, built around our new EMC ControlCenter
framework, represents the fastest-growing portion of EMC's software business.
SOFTWORKS' products are key enablers for customers in both mainframe and open
systems environments. We believe SOFTWORKS' knowledge and experience will
accelerate EMC's time to market in several new and emerging areas of storage
management software."
Judy Carter, CEO of SOFTWORKS, said, "The combination of SOFTWORKS' outstanding
technology and the depth of EMC's storage offerings and worldwide market
presence will make this a highly complementary and powerful union. We are
excited at the prospect of joining the EMC team at a time when the world is
increasingly recognizing the need for intelligent enterprise storage management.
We believe SOFTWORKS' technology will flourish as part of EMC, as no other
technology
<PAGE> 2
company has the clear vision and track record of successful execution
that EMC brings to bear on customers' information management challenges."
SOFTWORKS was ranked among BusinessWeek's 1999 Hot Growth list of America's 100
fastest-growing small companies. SOFTWORKS' products improve the management,
performance and integrity of critical corporate information across Windows NT,
UNIX, OS/390, and MVS platforms. SOFTWORKS' customers include nearly 90% of the
Fortune 100 and more than half of the Fortune 500. SOFTWORKS is a member of the
FibreAlliance, an open industry consortium developing standards for managing
storage area networks (SANs), and the EMC E-Infostructure Developers Program.
EMC Corporation, based in Hopkinton, Massachusetts, is the world's technology
and market leader in the rapidly growing market for intelligent enterprise
storage systems, software, networks, and services. The company's products store,
retrieve, manage, protect and share information from all major computing
environments, including Unix, Windows NT, Linux and mainframe platforms. The
company has offices worldwide, trades on the New York Stock Exchange under the
symbol EMC, and is a component of the S&P 500 Index. For further information
about EMC and its storage solutions, EMC's corporate web site can be accessed at
http://www.EMC.com.
This release contains "forward-looking statements" as defined under the Federal
Securities Laws. Actual results could differ materially from those projected in
the forward-looking statements as a result of certain risk factors, including
but not limited to: (i) component quality and availability; (ii) delays in the
development of new technology and the transition to new products; (iii)
competitive factors, including but not limited to pricing pressures, in the
computer storage and server markets; (iv) the relative and varying rates of
product price and component cost declines; (v) economic trends in various
geographic markets and fluctuating currency exchange rates; (vi) deterioration
or termination of the agreements with certain of the Company's resellers or
OEMs; (vii) the uneven pattern of quarterly sales; (viii) risks associated with
strategic investments and acquisitions; (ix) Year 2000 issues; and (x) other
one-time events and other important factors disclosed previously and from time
to time in EMC's filings with the U.S. Securities and Exchange Commission.
EMC is a registered trademark and EMC ControlCenter is a trademark of EMC
Corporation. Other trademarks are the property of their respective owners.
2
<PAGE> 3
CONTACT:
EMC Corporation
Mark Fredrickson
(508) 435-1000 (77137)
[email protected]
or
SOFTWORKS, Inc.
Ian Strain
703-317-8799
[email protected]
3
<PAGE> 1
Exhibit 99.(a)(9)
Contact: Mark Fredrickson
(508) 435-1000 (ext. 77137)
FOR IMMEDIATE RELEASE [email protected]
EMC CORPORATION COMMENCES
TENDER OFFER FOR SOFTWORKS, INC.
HOPKINTON, Mass. - December 23, 1999 -- EMC Corporation announced today that it
has commenced a tender offer for all shares of Softworks, Inc., for $10.00 net
per share in cash. The tender offer is pursuant to the previously announced
definitive agreement, which was approved by the boards of directors of both EMC
and Softworks prior to the December 21, 1999, announcement. Softworks' board
also recommended to its shareholders that they accept the offer to tender their
shares. The offer and withdrawal rights will expire at 5:00 p.m. Eastern
Standard Time on January 25, 2000, unless extended.
Following the tender offer, all remaining shares of Softworks will be
converted into the right to receive the same cash price in accordance with the
agreement. The transaction is valued at approximately $192 million.
In conjunction with the agreement, holders of approximately 42% of the
outstanding shares of Softworks common stock have agreed to tender their shares.
The tender offer is conditioned on receipt of a majority of Softworks'
outstanding shares, including the shares referenced above which the holders have
agreed to tender. The tender offer and the other transactions contemplated by
the agreement are also subject to customary conditions, including expiration of
applicable waiting periods under pre-merger notification regulations.
Softworks was ranked among Business Week's 1999 Hot Growth list of
America's 100 fastest-growing companies. Softworks' products improve the
management, performance and integrity of critical corporate information across
Windows NT, UNIX, OS/390, and MVS platforms. Softworks' customers include nearly
90% of the Fortune 100 and more than half of the Fortune 500. Softworks is a
member of the FibreAlliance, an open industry consortium developing standards
for managing storage area networks (SANs), and the EMC E-Infostructure
Developers Program.
-MORE-
<PAGE> 2
EMC COMMENCES TENDER OFFER FOR SOFTWORKS, INC. PAGE 2
EMC Corporation, a Fortune 500 company, based in Hopkinton, Massachusetts,
is the world's technology and market leader in the rapidly growing market for
intelligent enterprise storage systems, software, networks, and services. The
company's products store, retrieve, manage, protect and share information from
all major computing environments, including Unix, Windows NT, Linux and
mainframe platforms. The company has offices worldwide, trades on the New York
Stock Exchange under the symbol EMC, and is a component of the S&P 500 Index.
For further information about EMC and its storage solutions, EMC's corporate web
site can be accessed at http://www.EMC.com.
This release contains "forward-looking statements" as defined under the
Federal Securities Laws. Actual results could differ materially from those
projected in the forward-looking statements as a result of certain risk factors,
including but not limited to: (i) component quality and availability; (ii)
delays in the development of new technology and the transition to new products;
(iii) competitive factors, including but not limited to pricing pressures, in
the computer storage and server markets; (iv) the relative and varying rates of
product price and component cost declines; (v) economic trends in various
geographic markets and fluctuating currency exchange rates; (vi) deterioration
of termination of the agreements with certain of the Company's resellers or
OEMs; (vii) the uneven pattern of quarterly sales; (viii) risks associated with
strategic investments and acquisitions; (ix) Year 2000 issues; and (x) other
one-time events and other important factors disclosed previously and from time
to time in EMC's filings with the U.S. Securities and Exchange Commission.
# # #
EMC is a registered trademark of EMC Corporation. Other trademarks are the
property of their respective owners.
2
<PAGE> 1
Exhibit 99(c)(1)
AGREEMENT AND PLAN OF MERGER
by and among
EMC CORPORATION,
EAGLE MERGER CORP.
and
SOFTWORKS, INC.
dated as of
December 21, 1999
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer...................................................................... 2
Section 1.2 Company Actions................................................................ 3
Section 1.3 Directors...................................................................... 4
Section 1.4 The Merger..................................................................... 6
Section 1.5 Effective Time................................................................. 6
Section 1.6 Closing ...................................................................... 6
Section 1.7 Directors and Officers of the Surviving Corporation............................ 6
Section 1.8 Subsequent Actions............................................................. 7
Section 1.9 Shareholders' Meeting.......................................................... 7
Section 1.10 Merger Without Meeting of Shareholders......................................... 8
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock................................................... 8
Section 2.2 Exchange of Certificates...................................................... 9
Section 2.3 Dissenting Shares............................................................. 11
Section 2.4 Company Stock Options......................................................... 11
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Section 3.1 Organization and Qualification; Subsidiaries.................................. 13
Section 3.2 Certificate of Incorporation and By-Laws...................................... 13
Section 3.3 Capitalization................................................................ 14
Section 3.4 Authority Relative to this Agreement.......................................... 15
Section 3.5 Board Approvals Regarding Transactions; Vote Required......................... 15
Section 3.6 Agreements.................................................................... 16
Section 3.7 No Conflict; Required Filings and Consents.................................... 17
Section 3.8 Compliance; Permits........................................................... 17
Section 3.9 SEC Filings; Financial Statements............................................. 18
Section 3.10 Absence of Certain Changes or Events.......................................... 19
Section 3.11 No Undisclosed Liabilities.................................................... 19
Section 3.12 Absence of Litigation......................................................... 19
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 3.13 Employee Benefit Plans, Options and Employment
Agreements........................................................... 20
Section 3.14 Labor Matters................................................................. 22
Section 3.15 Properties; Encumbrances...................................................... 23
Section 3.16 Taxes......................................................................... 23
Section 3.17 Environmental Matters......................................................... 25
Section 3.18 Intellectual Property......................................................... 26
Section 3.19 Insurance..................................................................... 27
Section 3.20 Restrictions on Business Activities........................................... 28
Section 3.21 Information in Schedule 14D-9................................................. 28
Section 3.22 Information in Proxy Statement................................................ 28
Section 3.23 Interested Party Transactions................................................. 29
Section 3.24 Change in Control Payments.................................................... 29
Section 3.25 Year 2000 Compliance.......................................................... 29
Section 3.26 No Existing Discussions....................................................... 30
Section 3.27 Opinion of Financial Advisor.................................................. 31
Section 3.28 Brokers....................................................................... 31
Section 3.29 Books and Records............................................................. 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Section 4.1 Organization.................................................................. 32
Section 4.2 Authority Relative to this Agreement.......................................... 32
Section 4.3 No Conflict; Required Filings and Consents.................................... 32
Section 4.4 Information in Offer Document................................................. 33
Section 4.5 Information in Proxy Statement................................................ 33
Section 4.6 Sufficient Funds.............................................................. 33
Section 4.7 Purchaser's Operations........................................................ 34
Section 4.8 Brokers or Finders............................................................ 34
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company............................................. 34
Section 5.2 Access; Confidentiality....................................................... 37
Section 5.3 Reasonable Best Efforts....................................................... 38
Section 5.4 Employee Benefits............................................................. 39
Section 5.5 No Solicitation of Competing Transaction...................................... 40
Section 5.6 Transfer of Major Shareholder's Shares........................................ 42
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 5.7 Publicity..................................................................... 42
Section 5.8 Notification of Certain Matters............................................... 42
Section 5.9 Directors' and Officers' Insurance and Indemnification........................ 42
Section 5.10 State Takeover Laws........................................................... 43
Section 5.11 Purchaser Compliance.......................................................... 43
Section 5.12 Delivery of Financial Information............................................. 43
Section 5.13 Grant of Option............................................................... 44
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the Merger.................... 44
Section 6.2 Conditions to Parent's and Purchaser's Obligations to
Effect the Merger.................................................... 45
ARTICLE VII
TERMINATION
Section 7.1 Termination................................................................... 45
Section 7.2 Effect of Termination......................................................... 48
ARTICLE VIII
DEFINITIONS AND INTERPRETATION
Section 8.1 Definitions................................................................... 48
Section 8.2 Interpretation................................................................ 59
ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses............................................................. 61
Section 9.2 Amendment and Modification.................................................... 62
Section 9.3 Survival of Representations and Warranties.................................... 62
Section 9.4 Notices....................................................................... 63
Section 9.5 Counterparts.................................................................. 64
Section 9.6 Entire Agreement; No Third Party Beneficiaries................................ 64
Section 9.7 Severability.................................................................. 64
Section 9.8 Governing Law................................................................. 65
Section 9.9 Enforcement................................................................... 65
Section 9.10 Time of Essence............................................................... 65
Section 9.11 Extension; Waiver............................................................. 65
Section 9.12 Assignment.................................................................... 66
</TABLE>
Annex A
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 21, 1999, by and
among EMC Corporation, a Massachusetts corporation, Eagle Merger Corp., a
Delaware corporation and a wholly owned subsidiary of Parent, and Softworks,
Inc., a Delaware corporation. Certain capitalized terms used in this Agreement
have the meanings ascribed to them in Article VIII on page 48.
WHEREAS, the Board of Directors of each of Parent, Purchaser and the
Company has approved and deems it advisable and in the best interests of its
shareholders to consummate the acquisition of the Company by Parent upon the
terms and subject to the conditions set forth herein; and
WHEREAS, in furtherance thereof, it is proposed that Purchaser make a
cash tender offer to acquire any and all shares of the issued and outstanding
common stock, $.001 par value per share, of the Company for $10.00 per share,
net to the seller in cash; and
WHEREAS, also in furtherance of such acquisition, the Board of
Directors of each of Parent, Purchaser and the Company has approved this
Agreement and the Merger following the Offer in accordance with the DGCL and
upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Company Board of Directors has determined that the
consideration to be paid for each Share in the Offer and the Merger is fair to
the holders of such Shares and has resolved to recommend that the holders of
such Shares accept the Offer and approve this Agreement and each of the
Transactions upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Company, Parent and Purchaser desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and Merger; and
WHEREAS, as a condition and inducement to Parent's and Purchaser's
entering into this Agreement and incurring the obligations set forth herein, the
Trustees and the Major Shareholder, concurrently herewith, are entering into a
Stock Tender Agreement dated as of the date hereof, with Parent and Purchaser,
pursuant to which the Major Shareholder is agreeing, among other things, to
tender the Shares held by the Major Shareholder in the Offer, to grant Parent an
option to purchase such Shares under certain circumstances and to grant
Purchaser a proxy
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with respect to the voting of such Shares, all upon the terms and subject to the
conditions set forth in the Stock Tender Agreement; and
WHEREAS, as a condition and inducement to Parent's and Purchaser's
entering into this Agreement and incurring the obligations set forth herein,
certain shareholders of the Company, concurrently herewith, are entering into a
Stockholders' Stock Tender Agreement dated as of the date hereof, with Parent
and Purchaser, pursuant to which such shareholders are agreeing, among other
things, to tender the Shares held by each of them in the Offer, to grant Parent
an option to purchase such Shares under certain circumstances and to grant
Purchaser a proxy with respect to the voting of such Shares, all upon the terms
and subject to the conditions set forth in the Stockholders' Stock Tender
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein,
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND MERGER
Section 1.1 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 7.1 and none of the events set forth in Annex A shall
have occurred and be existing, as promptly as practicable (but in no event later
than five business days after the public announcement of the execution of this
Agreement), Purchaser shall commence (within the meaning of Rule 14d-2
promulgated under the Exchange Act) a cash tender offer to acquire any and all
Shares at the Offer Price. Subject to the Minimum Condition and subject to the
other conditions set forth in Annex A hereto, Purchaser shall use reasonable
efforts to consummate the Offer in accordance with its terms and to accept for
payment and pay for Shares tendered pursuant to the Offer as soon as Purchaser
is legally permitted to do so under applicable law. The Offer shall be made by
means of the Offer to Purchase and shall be subject to the Minimum Condition and
the other conditions set forth in Annex A hereto and shall reflect, as
appropriate, the other terms set forth in this Agreement. If on the initial
scheduled expiration date of the Offer, which shall be no earlier than twenty
business days after the date the Offer is commenced, all conditions to the
Offer will not have been satisfied or waived, Purchaser may, from time to time,
in its sole discretion, extend the expiration date of the Offer. In addition,
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Purchaser may, but shall not have the obligation to, increase the amount it
offers to pay per Share in the Offer, and the Offer may be extended to the
extent required by law in connection with such increase, in each case without
the consent of the Company. If, immediately prior to the expiration date of the
Offer (as it may be extended), the Shares tendered and not withdrawn pursuant to
the Offer constitute less than 90% of the outstanding Shares, Purchaser may
extend the Offer for a period not to exceed ten business days, notwithstanding
that all conditions to the Offer are satisfied as of such expiration date of the
Offer.
(b) As soon as practicable on the date the Offer is commenced, Parent
and Purchaser shall file with the SEC a tender offer statement on Schedule 14D-1
with respect to the Offer. The Schedule 14D-1 will include, as exhibits, the
Offer to Purchase and a form of letter of transmittal and summary advertisement.
Company and its counsel shall be given the opportunity to review the Schedule
14D-1 before it is filed with the SEC.
(c) Parent and Purchaser will take all steps necessary to cause the
Offer Documents to be filed with the SEC and to be disseminated to holders of
the Shares, in each case as and to the extent required by applicable federal
securities laws. Parent and Purchaser, on the one hand, and the Company, on the
other hand, will promptly correct any information provided by it for use in the
Offer Documents if and to the extent that it shall have become false or
misleading in any material respect, and Purchaser will take all steps necessary
to cause the Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of the Shares, in each case as and to the extent
required by applicable federal securities laws.
Section 1.2 Company Actions.
(a) As soon as practicable on the date the Offer is commenced, the
Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9, which shall, subject to the provisions of Section 5.5(b),
contain the recommendation referred to in clause (iii) of Section 3.5. At the
time the Offer Documents are first mailed to the shareholders of the Company,
the Company shall mail or cause to be mailed to the shareholders of the Company
such Schedule 14D-9 together with such Offer Documents. The Company further
agrees to take all steps necessary to cause the Schedule 14D-9 to be
disseminated to holders of the Shares, as and to the extent required by
applicable federal securities laws. Each of the Company, on the one hand, and
Parent and Purchaser, on the other hand, agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it shall have become false and misleading in any material respect and the
Company further agrees to take all steps necessary to cause the
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Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated
to holders of the Shares, in each case as and to the extent required by
applicable federal securities laws. Parent and its counsel shall be given the
opportunity to review the Schedule 14D-9 before it is filed with the SEC. In
addition, the Company agrees to provide Parent, Purchaser and their counsel with
any comments, whether written or oral, that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the Schedule
14D-9 promptly after the receipt of such comments or other communications.
(b) In connection with the Offer, the Company will promptly furnish or
cause to be furnished to Purchaser mailing labels, security position listings
and any available listing, or computer file containing the names and addresses
of all recordholders of the Shares as of the most recent practicable date, and
shall furnish Purchaser with such additional information (including, but not
limited to, lists of holders of the Shares, updated daily, and their addresses,
mailing labels and lists of security positions) and assistance as Purchaser or
its agents may reasonably request in communicating the Offer to the record and
beneficial holders of the Shares. Except for such steps as are necessary to
disseminate the Offer Documents, Parent and Purchaser shall hold in confidence
the information contained in any of such labels and lists and the additional
information referred to in the preceding sentence, will use such information
only in connection with the Offer, and, if this Agreement is terminated, will
upon request of the Company deliver or cause to be delivered to the Company all
copies of such information then in its possession or the possession of its
agents or representatives.
Section 1.3 Directors.
(a) Upon the purchase of Shares pursuant to the Offer and from time to
time thereafter, subject to compliance with Section 14(f) of the Exchange Act
and Rule 14f-1 promulgated thereunder, Parent shall be entitled to designate
such number of directors of the Company, rounded down to the next whole number,
as is equal to the product of the total number of directors on such Board
(giving effect to the directors designated by Parent pursuant to this sentence)
multiplied by the Board Fraction. In furtherance thereof, the Company shall,
upon request of the Parent, use its reasonable best efforts promptly either to
increase the size of the Company Board of Directors or to secure the
resignations of such number of its incumbent directors, or both, as is necessary
to enable such designees of Parent to be so elected or appointed to the Company
Board of Directors, and the Company shall take all actions available to the
Company to cause such designees of Parent to be so elected or appointed at such
time. At such time, the Company shall, if requested by Parent, also take all
action necessary to cause Persons designated by Parent to constitute the
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same Board Fraction of (i) each committee of the Company Board of Directors,
(ii) each board of directors (or similar body) of each Company Subsidiary of the
Company and (iii) each committee (or similar body) of each such board.
(b) The Company shall promptly take all actions required pursuant to
Section 14(f) of the Exchange Act and Rule 14f-l promulgated thereunder in
order to fulfill its obligations under Section 1.3(a), including mailing to
shareholders the information required by such Section 14(f) and Rule 14f-1 as is
necessary to enable Parent's designees to be elected or appointed to the Company
Board of Directors immediately after the purchase of and payment for any Shares
by Parent or any of its Subsidiaries as a result of which Parent and its
Subsidiaries own beneficially at least a majority of then outstanding Shares.
Parent or Purchaser will supply the Company all information with respect to
either of them and their nominees, officers, directors and Affiliates required
to be disclosed by such Section 14(f) and Rule 14f-1. The provisions of this
Section 1.3 are in addition to and shall not limit any rights which Purchaser,
Parent or any of their Affiliates may have as a holder or beneficial owner of
Shares as a matter of law with respect to the election of directors or
otherwise.
(c) In the event that Parent's designees are elected or appointed to
the Company Board of Directors, until the Effective Time, the Company Board of
Directors shall have at least two directors who are Independent Directors,
provided that, in such event, if the number of Independent Directors shall be
reduced below two for any reason whatsoever, any remaining Independent Directors
(or Independent Director, if there be only one remaining) shall be entitled to
designate Persons to fill such vacancies who shall be deemed to be Independent
Directors for purposes of this Agreement or, if no Independent Director then
remains, the other directors shall designate two Persons to fill such vacancies
who shall not be shareholders, Affiliates or associates of Parent or Purchaser,
and such Persons shall be deemed to be Independent Directors for purposes of
this Agreement. Notwithstanding anything in this Agreement to the contrary, in
the event that Parent's designees constitute a majority of the directors on the
Company Board of Directors, the affirmative vote of a majority of the
Independent Directors shall be required after the acceptance for payment of
Shares pursuant to the Offer and prior to the Effective Time, to (a) amend or
terminate this Agreement by the Company, (b) exercise or waive any of the
Company's rights, benefits or remedies hereunder, or (c) take any other action
under or in connection with this Agreement if such action materially and
adversely affects holders of Shares other than Parent or Purchaser; provided,
that if there shall be no such directors, such actions may be effected by
unanimous vote of the entire Company Board of Directors.
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Section 1.4 The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time, the Company and Purchaser shall consummate a
merger pursuant to which (a) Purchaser shall be merged with and into the Company
and the separate corporate existence of Purchaser shall thereupon cease, (b) the
Company shall be the successor or surviving corporation in the Merger and shall
continue to be governed by the laws of the State of Delaware, and (c) the
separate corporate existence of the Company with all its rights, privileges,
immunities, powers and franchises shall continue unaffected by the Merger,
except as set forth in this Section 1.4. Pursuant to the Merger and effective
immediately following the Merger, (x) the Purchaser Charter, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended as provided
by law and such certificate of incorporation, and (y) the Purchaser By-Laws, as
in effect immediately prior to the Effective Time, shall be the by-laws of the
Surviving Corporation until thereafter amended as provided by law, by such
certificate of incorporation or by such by-laws. The Merger shall have the
effects specified in the DGCL.
Section 1.5 Effective Time. Parent, Purchaser and the Company will
cause a certificate of merger to be executed and filed on the Closing Date (or
on such other date as Parent and the Company may agree) with the Secretary of
State of Delaware as provided in the DGCL. The Merger shall become effective on
the date on which such certificate of merger is duly filed with the Secretary of
State of the State of Delaware or such other time as is agreed upon by the
parties and specified in such certificate of merger.
Section 1.6 Closing. The closing of the Merger shall take place at
10:00 a.m. on a date to be agreed upon by the parties, and if such date is not
agreed upon by the parties, the Closing shall occur on the second business day
after satisfaction or waiver of all of the conditions set forth in Article VI,
at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, One Beacon Street,
Boston, Massachusetts.
Section 1.7 Directors and Officers of the Surviving Corporation. The
directors and officers of Purchaser at the Effective Time shall, from and after
the Effective Time, be the directors and officers, respectively, of the
Surviving Corporation until their successors shall have been duly elected or
appointed or qualified or until their earlier death, resignation or removal in
accordance with the certificate of incorporation and the by-laws of the
Surviving Corporation. If, at the Effective Time, a vacancy shall exist on the
Company Board of Directors or in any office of the Surviving Corporation, such
vacancy may thereafter be filled in the manner provided by law.
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Section 1.8 Subsequent Actions. If at any time after the Effective Time
the Surviving Corporation will consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of the Company or Purchaser acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Agreement, the officers and directors
of the Surviving Corporation shall be authorized to execute and deliver, in the
name and on behalf of either the Company or Purchaser, all such deeds, bills of
sale, instruments of conveyance, assignments and assurances and to take and do,
in the name and on behalf of each of such corporations or otherwise, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out this
Agreement.
Section 1.9 Shareholders' Meeting.
(a) If required by applicable law in order to consummate the Merger,
the Company, acting through the Company Board of Directors, shall, in accordance
with applicable law:
(i) duly call, give notice of, convene and hold a special meeting
of its shareholders as promptly as practicable following the acceptance
for payment and purchase of Shares by Purchaser pursuant to the Offer for
the purpose of considering and taking action upon the approval of the
Merger and the adoption of this Agreement;
(ii) prepare and file with the SEC a preliminary proxy or
information statement relating to the Merger and this Agreement and use
its reasonable best efforts to obtain and 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 or information statement and
cause a definitive proxy or information statement, including any
amendment or supplement thereto to be mailed to its shareholders,
provided that no amendment or supplement to such proxy or information
statement will be made by the Company without consultation with Parent
and its counsel;
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(iii) include in the Proxy Statement the recommendation of the
Company Board of Directors that shareholders of the Company vote in favor
of the approval of the Merger and the approval and adoption of this
Agreement; and
(iv) use its reasonable best efforts to solicit from holders of
Shares proxies in favor of the Merger and take all other action necessary
or, in the reasonable opinion of Parent, advisable to secure any vote or
consent of shareholders required by the Company Charter and the DGCL, or
other applicable law, to effect the Merger.
(b) Parent will provide the Company with the information concerning
Parent and Purchaser required to be included in the Proxy Statement.
(c) Parent shall vote, or cause to be voted, in favor of the approval
of the Merger and the approval and adoption of this Agreement:
(i) all shares of capital stock of Purchaser, and
(ii) all Shares owned by Parent, Purchaser or any of Parent's other
Subsidiaries.
Section 1.10 Merger Without Meeting of Shareholders. Notwithstanding
Section 1.9, in the event that Parent, Purchaser and any other Subsidiaries of
Parent shall acquire in the aggregate a number of the outstanding shares of each
class of capital stock of the Company, pursuant to the Offer or otherwise,
sufficient to enable Purchaser or the Company to cause the Merger to become
effective without a meeting of shareholders of the Company, the parties hereto
shall, at the request of Parent and subject to Article VI, take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of shareholders of the
Company, in accordance with Section 253 of the DGCL.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the Effective Time, by
virtue of the Merger and without any further action on the part of the holders
of any Shares or holders of Purchaser Common Stock:
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(a) Purchaser Common Stock. Each issued and outstanding share of
Purchaser Common Stock shall be converted into and become one fully paid and
nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent-Owned Stock. Each Share
owned by the Company as treasury stock and each Share owned by Parent, Purchaser
or any other wholly owned Subsidiary of Parent (other than shares in trust
accounts, managed accounts, custodial accounts and the like that are
beneficially owned by third parties) shall be cancelled and retired and shall
cease to exist, and no consideration shall be delivered in exchange therefor.
(c) Conversion of Shares. Each issued and outstanding Share (other than
Shares to be cancelled in accordance with Section 2.1(b) and other than any
Dissenting Shares) shall be converted into the right to receive the Offer Price,
payable to the holder thereof, without interest, upon surrender of the
certificate formerly representing such Share in the manner provided in Section
2.2. From and after the Effective Time, all such converted Shares shall no
longer be outstanding and shall be deemed to be cancelled and retired and shall
cease to exist, and each holder of a certificate representing any such Shares
shall cease to have any rights with respect to such shares except the right to
receive the Merger Consideration therefor, without interest, upon the surrender
of such certificate in accordance with Section 2.2 or the right, if any, to
receive payment from the Surviving Corporation of the "fair value" of such
Shares as determined in accordance with Section 262 of the DGCL.
Section 2.2 Exchange of Certificates.
(a) Paying Agent. Parent shall designate a bank or trust company to act
as agent for the holders of the Shares in connection with the Merger to receive
in trust the funds to which holders of the Shares shall become entitled pursuant
to Section 2.1(c). At the Effective Time, Parent or Purchaser shall deposit, or
cause to be deposited, with the Paying Agent for the benefit of holders of
Shares the aggregate consideration to which such holders shall be entitled at
the Effective Time pursuant to Section 2.1(c). Such funds shall be invested as
directed by Parent or the Surviving Corporation pending payment thereof by the
Paying Agent to holders of the Shares. Earnings from such investments shall be
the sole and exclusive property of Purchaser and the Surviving Corporation, and
no part of such earnings shall accrue to the benefit of holders of Shares.
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(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate or Certificates, (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 not inconsistent
with this Agreement as Parent may specify) and (ii) instructions for use in
effecting the surrender of Certificates in exchange for payment of the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor the Merger Consideration for
each Share formerly represented by such Certificate, and the Certificate so
surrendered shall forthwith be cancelled. If payment of the Merger Consideration
is to be made to a Person other than the Person in whose name the surrendered
Certificate is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be otherwise in
proper form for transfer and that the Person requesting such payment shall have
paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered or shall have established to the satisfaction of the
Surviving Corporation that such tax either has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.2, each Certificate shall be
deemed at any time after the Effective Time to represent only the right to
receive the Merger Consideration in cash as contemplated by this Section 2.2.
(c) Transfer Books; No Further Ownership Rights in the Shares. At the
Effective Time, the stock transfer books of the Company shall be closed, and
thereafter there shall be no further registration of transfers of the Shares on
the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such
Shares, except as otherwise provided for herein or by applicable law.
(d) Termination of Fund; No Liability. At any time following one year
after the Effective Time, the Surviving Corporation shall be entitled to require
the Paying Agent to deliver to it any funds (including any earnings received
with respect thereto) that had been made available to the Paying Agent and that
have not been disbursed to holders of Certificates, and thereafter such holders
shall be entitled to look only to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) and only as general creditors
thereof with respect to the Merger Consideration payable upon due surrender of
their Certificates, without any interest
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thereon. Notwithstanding the foregoing, neither the Surviving Corporation nor
the Paying Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
Section 2.3 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary,
Dissenting Shares shall not be converted into or represent a right to receive
cash pursuant to Section 2.1, but the holder thereof shall be entitled to only
such rights as are granted by the DGCL.
(b) Notwithstanding the provisions of Section 2.3(a), if any holder of
Shares who demands appraisal of his Shares under the DGCL effectively with draws
or loses (through failure to perfect or otherwise) his right to appraisal, then
as of the Effective Time or the occurrence of such event, whichever later
occurs, such holder's Shares shall automatically be converted into and represent
only the right to receive the Merger Consideration as provided in Section
2.1(c), without interest, upon surrender of the certificate or certificates
representing such Shares pursuant to Section 2.2.
(c) The Company shall give Parent (i) prompt notice of any written
demands received by the Company for appraisal or payment of the fair value of
any Shares, withdrawals of such demands, and any other instruments served on the
Company pursuant to the DGCL and (ii) the opportunity to direct all negotiations
and proceedings with respect to demands for appraisal under the DGCL. Except
with the prior written consent of Parent, the Company shall not voluntarily make
any payment with respect to any demands for appraisal or settle or offer to
settle any such demands.
Section 2.4 Company Stock Options.
(a) As of the Effective Time, each holder of a Company Option shall
become entitled to receive, as set forth herein, a Cash Amount and/or a Parent
Option in respect of such Company Option. The Cash Amount, if any, payable with
respect to each Company Option shall be payable with respect to each Company
Option issued pursuant to the Company Incentive Plan (other than any such option
which has been designated as a 1999 Option). As of the Effective Time, each
outstanding Company Option issued pursuant to the Company Incentive Plan (other
than any such option which has been designated as a 1999 Option) shall
automatically be cancelled upon payment of the Cash Amount. In addition, as of
the Effec-
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tive Time, each outstanding 1999 Option shall automatically be converted into a
Parent Option, as set forth below. With respect to any such Parent Option, (i)
the number of shares of Parent Common Stock subject to such Parent Option will
be determined by multiplying the number of Shares subject to the 1999 Option by
the Option Exchange Ratio, rounding any fractional share down to the nearest
whole share, and (ii) the exercise price per share of such Parent Option will be
determined by dividing the exercise price per share applicable to the 1999
Option by the Option Exchange Ratio, and rounding the exercise price thus
determined up to the nearest whole cent. Except as provided above, the converted
or substituted Parent Options shall be subject to the same terms and conditions
(including, without limitation, expiration date, vesting and exercise
provisions) as were applicable to the 1999 Option immediately prior to the
Effective Time.
(b) The Company will take all necessary and appropriate actions so that
all stock option, incentive or other equity-based plans established by the
Company or any Company Subsidiary 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
Company or any Company Subsidiary shall be deleted, terminated and of no further
force or effect as of the Effective Time.
(c) If and to the extent necessary or required by the terms of the
plans governing Company Options or pursuant to the terms of any Company Option
granted thereunder, the Company shall use its reasonable best efforts to obtain
the consent of each holder of outstanding Company Options to the foregoing
treatment of such Company Options.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule, the Company represents
and warrants to Parent and Purchaser that all of the statements contained in
this Article III are true and correct as of the date of this Agreement (or, if
made as of a specified date, as of such date), and will be true and correct as
of the Closing Date as though made on the Closing Date. Each exception set forth
in the Disclosure Schedule and each other response to this Agreement set forth
in the Disclosure Schedule is identified by reference to, or has been grouped
under a heading referring to, a specific individual section of this Agreement
and relates only to such section,
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except to the extent that one portion of the Disclosure Schedule specifically
refers to another portion thereof, identifying such other portion by section
reference or similar specific cross reference.
Section 3.1 Organization and Qualification; Subsidiaries. The Company
and each Company Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the requisite corporate power and authority necessary to own, lease and
operate the properties it purports to own, lease or operate and to carry on its
business as it is now being conducted or presently proposed to be conducted. The
Company and each Company Subsidiary is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of the properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed and in good standing that would not
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole. A true, complete and correct list of all of the Company Subsidiaries,
together with the jurisdiction of incorporation of each such Company Subsidiary,
the authorized capitalization of each such Company Subsidiary, and the
percentage of each such Company's Subsidiary's outstanding capital stock owned
by the Company or another Company Subsidiary, is set forth in Section 3.1 of the
Disclosure Schedule. The Company does not directly or indirectly own any equity
or similar interest in, or any interest convertible into or exchangeable or
exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity, excluding
securities in any publicly traded company held for investment by the Company and
comprising less than one percent of the outstanding stock of such company.
Section 3.2 Certificate of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a true, complete and correct copy of the Company
Charter and the Company By-Laws and has made available to Parent true, complete
and correct copies of the Subsidiary Documents. There has been no amendment to
or change in any of the Company Charter or Company By-Laws since the time of
their delivery to Parent by the Company. The Company Charter, Company By-Laws
and Subsidiary Documents are in full force and effect. Neither the Company nor
any Company Subsidiary is in violation of any of the provisions of the Company
Charter, Company By-Laws or Subsidiary Documents, as the case may be.
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Section 3.3 Capitalization.
(a) The authorized capital stock of the Company consists of fifty
million (50,000,000) Shares and two million (2,000,000) shares of Preferred
Stock. As of the close of business on December 20, 1999, (i) 17,373,191 Shares
are issued and outstanding; (ii) no Shares are held in the treasury of the
Company; (iii) no shares of Preferred Stock are issued and outstanding; and (iv)
an aggregate of 6,064,825 Shares are reserved for issuance upon exercise of
Company Options granted pursuant to the Company Stock Option Plan and the
Company Incentive Plan. All the outstanding shares of the Company's capital
stock are, and all Shares reserved for issuance as specified above, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be, duly authorized, validly issued, fully paid
and nonassessable. None of the outstanding shares of the Company's capital stock
have been issued in violation of any federal or state securities laws. The
Company has delivered to Parent a complete and correct list, as of the close of
business on December 20, 1999, of the number of shares of the Company's capital
stock subject to outstanding stock options (and the exercise prices thereof) or
other rights to purchase or receive shares of the Company's capital stock. Since
December 20, 1999, there have been no changes to the authorized capital stock of
the Company or the number of Shares or shares of Preferred Stock outstanding
except for issuances of Shares upon exercise of Company Options outstanding as
of such date and reflected on the list delivered to Parent described in the
preceding sentence. Since December 20, 1999, no options or rights of any kind to
acquire any shares of capital stock of the Company have been issued, granted or
otherwise committed. All of the outstanding shares of capital stock of each
Company Subsidiary are duly authorized, validly issued, fully paid and
nonassessable, and all such shares (other than directors' qualifying shares in
the case of foreign Subsidiaries) are owned by the Company or a Company
Subsidiary free and clear of all Liens. There are no accrued and unpaid
dividends with respect to any outstanding shares of capital stock of the
Company.
(b) Except as described under Section 3.3(a), there are no equity
securities of any class of the Company or any Company Subsidiary or any security
exchangeable into or exercisable for such equity securities, issued, reserved
for issuance or outstanding. Except as described under Section 3.3(a), there are
no options, warrants, calls, rights, commitments or agreements of any character
to which the Company or any Company Subsidiary is a party, or by which the
Company or any Company Subsidiary is bound, obligating the Company or any
Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered
or sold, additional shares of capital stock of the Company or any Company
Subsidiary or obligating the Company or any Company Subsidiary to grant, extend
or accelerate
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the vesting of or enter into any such option, warrant, call, right, commitment
or agreement. There is no Voting Debt of the Company or any Company Subsidiary
issued and outstanding. There are no voting trusts (other than the Voting
Trust), proxies or other similar agreements or understandings with respect to
the shares of capital stock of the Company or any Company Subsidiary. There are
no obligations, contingent or otherwise, of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company or any Company Subsidiary or to provide funds to or make
any investment (in the form of a loan, capital contribution or otherwise) in any
Company Subsidiary or any other entity.
Section 3.4 Authority Relative to this Agreement. Subject only to the
approval of the Company's shareholders described below, the Company has all
necessary corporate power and authority to execute and deliver this Agreement
and each instrument required hereby to be executed and delivered at the Closing
by the Company and to perform its obligations hereunder and to consummate the
Transactions to which it is a party. The execution and delivery of this
Agreement and each instrument required hereby to be executed and delivered at
the Closing by the Company and the consummation by the Company of the Merger and
the Transactions to which it is a party have been duly and validly authorized
by all necessary corporate action on the part of the Company, subject only to
the approval of this Agreement and the Merger by the Company's shareholders
under the DGCL and the Company Charter by the affirmative vote of the holders of
a majority of outstanding Shares. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by Parent and Purchaser, as applicable, constitutes the
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights and by general
equitable principles (regardless of whether enforceability is considered in a
proceeding in equity or at law).
Section 3.5 Board Approvals Regarding Transactions; Vote Required. The
Company Board of Directors, at a meeting duly called and held, has (i)
unanimously determined that each of the Agreement, the Offer and the Merger are
advisable, fair to and in the best interests of the shareholders of the Company,
(ii) approved the Transactions, (iii) resolved to recommend that the
shareholders of the Company accept the Offer, tender their Shares to Purchaser
pursuant to the Offer and approve and adopt this Agreement and the Merger, (iv)
determined to waive any rights the Company may have under any agreement or
otherwise to object to the transfer to Purchaser in the Offer of all Shares held
by the Major Shareholder, and
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<PAGE> 20
(v) consented to the transfer to Purchaser of all such Shares, and none of the
afore said actions by the Company Board of Directors has been amended, rescinded
or modified. The action taken by the Company Board of Directors constitutes
approval of the Merger and the other Transactions by the Company Board of
Directors under (a) the provisions of Section 203 of the DGCL such that Section
203 of the DGCL does not apply to the execution, delivery or performance of this
Agreement, the Stock Tender Agreement or the Stockholders' Stock Tender
Agreement or the consummation of the Merger or the Transactions and (b) Article
Eleventh of the Company Charter such that the affirmative vote of the holders of
a majority of the outstanding Shares is the only vote of the holders of any
class or series of the Company's capital stock necessary to approve this
Agreement and the Merger. No other state takeover statute is applicable to the
Merger or the other Transactions. No vote of any class or series of the
Company's capital stock is necessary to approve any of the Transactions other
than the Merger.
Section 3.6 Agreements.
(a) Section 3.6(a) of the Disclosure Schedule sets forth a list of all
Company Agreements (i) which contain non-competition or similar restrictive
provisions with respect to the Company; (ii) which are material to the Company's
business or operations; (iii) whereby the Company is obligated to make royalty
payments to third parties; (iv) with consultants involved in the development of
any of the Company's Products or services; and (v) with the Major Shareholder or
any of its Affiliates or Associates.
(b) (i) Neither the Company nor any Company Subsidiary has breached, is
in default under, or has received written notice of any breach of or default
under any Material Contract, (ii) to the Company's knowledge, no other party to
any Material Contract has breached or is in default of any of its obligations
thereunder, (iii) each Material Contract is in full force and effect, except in
any such case for breaches, defaults or failures to be in full force and effect
that is not currently having or would not have a material adverse effect on the
Company and the Company Subsidiaries, taken as a whole, and (iv) each Material
Contract is a legal, valid and binding obligation of the Company or Company
Subsidiary and, to the knowledge of the Company, each of the other parties
thereto, and is enforceable in accordance with its terms, except that the
enforcement thereof may be limited by (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) general principles of equity.
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<PAGE> 21
Section 3.7 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and each instrument
required hereby to be executed and delivered by the Company at the Closing does
not, the performance by the Company of this Agreement, and the consummation by
the Company of the Transactions will not, (i) conflict with or violate the
Company Charter or Company By-Laws, (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Company or any Company
Subsidiary or by which any of their respective properties is bound or affected,
or (iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default), or impair the Company's
or any of its Subsidiaries' rights or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the properties or assets of the Company or any Company Subsidiary pursuant to,
any Company Agreement, except in the case of (ii) and (iii) for any such
conflicts, violations, breaches, defaults or other occurrences that would not
have a material adverse effect on the Company and the Company Subsidiaries,
taken as a whole.
(b) The execution and delivery of this Agreement or any instrument
required hereby to be executed and delivered by the Company at the Closing does
not, the performance by the Company of this Agreement, and the consummation by
the Company of the Transactions to which it is a party will not require any
consent, approval, authorization or permit of, or filing with or notification
to, any Governmental Entity, except (i) the filings, consents and approvals as
may be required under the HSR Act, (ii) the filing of the Schedule 14D-9, the
Proxy Statement and any filings required by Rule 14f-1 promulgated under the
Exchange Act with the SEC in accordance with the Exchange Act, (iii) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal and state securities laws
and the laws of any foreign country, (iv) the filing and recordation of
appropriate merger or other documents as required by the DGCL, and (v) such
other consents, approvals, authorizations or permits which, if not obtained or
made, would not have a material adverse effect on the Company and the Company
Subsidiaries, taken as a whole.
Section 3.8 Compliance; Permits.
(a) Neither the Company nor any Company Subsidiary is in conflict with,
or in default or violation of (and has not received any notices of violation
with respect to), any law, rule, regulation, order, judgment or decree
applicable to the Company or any Company Subsidiary or by which any of their
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<PAGE> 22
respective properties is bound or affected, and the Company is not aware of any
such conflict, default or violation thereunder, except in each case for any such
conflicts, defaults or violations that is not currently having or would not have
a material adverse effect on the Company and the Company Subsidiaries, taken as
a whole.
(b) The Company and the Company Subsidiaries hold all Company Permits.
The Company Permits are in full force and effect, have not been violated in any
respect that is currently having or would have a material adverse effect on the
Company and the Company Subsidiaries, taken as a whole and, to the knowledge of
the Company, no suspension, revocation or cancellation thereof has been
threatened and there is no action, proceeding or investigation pending or,
threatened regarding suspension, revocation or cancellation of any Company
Permits, except where the suspension, revocation or cancellation of such Company
Permits would not have a material adverse effect on the Company and the Company
Subsidiaries, taken as a whole.
Section 3.9 SEC Filings; Financial Statements.
(a) The Company has timely filed and made available to Parent all
Company SEC Documents. The Company SEC Documents (i) at the time filed, complied
in all material respects with the applicable requirements of the Securities Act
and the Exchange Act, as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Company SEC Documents or necessary in order to make the statements in such
Company SEC Documents, in light of the circumstances under which they were made,
not misleading. No Company Subsidiary is required to file any forms, reports,
schedules, statements or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes), contained in the Company SEC Documents, including any
Company SEC Documents filed after the date of this Agreement until the Closing,
complied, as of its respective date, in all material respects with all
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, was prepared in accordance with GAAP (except as
may be indicated in the notes thereto) applied on a consistent basis throughout
the periods involved and fairly presented the consolidated financial position of
the Company and its Subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the periods indicated, except that
the unaudited interim financial
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<PAGE> 23
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
Section 3.10 Absence of Certain Changes or Events. Since the Balance
Sheet Date, the Company has conducted its business in the ordinary course
consistent with past practice and, since such date, there has not occurred: (i)
any change, development, event or other circumstance, situation or state of
affairs that has had or may reasonably be expected to have a material adverse
effect on the Company and the Company Subsidiaries, taken as a whole; (ii) any
damage to, destruction or loss of any asset of the Company or any Company
Subsidiary (whether or not covered by insurance) that could reasonably be
expected to have a material adverse effect on the Company and the Company
Subsidiaries, taken as a whole; (iii) any material change by the Company in its
accounting methods, principles or practices; (iv) any material revaluation by
the Company of 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 consistent with past practice; (v) any sale of a
material amount of assets (tangible or intangible) of the Company; or (vi) any
other action or event that would have required the consent of Parent pursuant to
Section 5.1 had such action or event occurred after the date of this Agreement.
Section 3.11 No Undisclosed Liabilities. Except as disclosed in the
Company SEC Documents, neither the Company nor any Company Subsidiary has any
liabilities (absolute, accrued, contingent or otherwise), except liabilities (a)
adequately provided for in the Balance Sheet, (b) incurred in the ordinary
course of business consistent with past practice and not required under GAAP to
be reflected in the Balance Sheet, (c) incurred since the Balance Sheet Date in
the ordinary course of business consistent with past practice, (d) incurred in
connection with this Agreement or (e) which would not have a material adverse
effect on the Company and the Company Subsidiaries, taken as a whole.
Section 3.12 Absence of Litigation. There are no claims, actions,
suits, proceedings or investigations (i) pending against the Company or any
Company Subsidiary or any properties or assets of the Company or any Company
Subsidiary or (ii) to the knowledge of the Company, threatened against the
Company or any Company Subsidiary, or any properties or assets of the Company or
any Company Subsidiary, which may be reasonably expected to have a material
adverse effect on the Company and the Company Subsidiaries, taken as a whole. To
the knowledge of the Company, there are no claims, actions, suits, proceedings
or investigations against the Major Shareholder that relate to the business,
properties or
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assets of the Company or any Company Subsidiary or that could result in any
liability to the Company or any Company Subsidiary.
Section 3.13 Employee Benefit Plans, Options and Employment Agreements.
(a) Section 3.13(a) of the Disclosure Schedule lists all employee
benefit plans of the Company, the Company Subsidiaries or any ERISA Affiliate,
whether or not incorporated, that together with the Company would be deemed a
single employer within the meaning of Section 4001(b) of ERISA, including,
without limitation, any employment agreements or any pension, retirement,
profit-sharing, bonus, stock option, incentive, deferred compensation,
severance, termination pay, welfare or other similar plan, contract, agreement,
arrangement or practice in which one or more employees (including, without
limitation, former employees or beneficiaries of employees or former employees)
of the Company or a Company Subsidiary participates or is eligible to
participate. For these purposes, such Plans shall include, without limitation,
any employee benefit plan (as such term is described in Section 3(3) of ERISA,
or any plan, practice or arrangement that constitutes a "fringe benefit" plan,
vacation plan or policy, sick leave program, medical, disability or life
insurance plan (including, without limitation, those employment or other
agreements that contain "golden parachute" provisions). Neither the Company nor
any Company Subsidiary has established or maintains any plan, program or
arrangement to provide post-retirement medical benefits to any employee, former
employee or beneficiary of any employee or former employee, other than coverage
mandated by applicable law. Each Plan has been administered in material
compliance with its terms and is in compliance with ERISA and the regulations
promulgated thereunder (to the extent applicable), as well as with all other
applicable federal, state and local statutes and regulations.
(b) Each Qualified Plan has been determined by the IRS to be so
qualified and the Company is not aware of any fact or circumstance which could
adversely effect such qualified status. All reports and other documents required
by law or contract to be filed with any Governmental Entity or distributed to
plan participants or beneficiaries have been timely filed or distributed. Copies
of the Plans and any amendments or trusts related thereto, Form 5500 (including
financial audits and schedules thereto as required by law) for the immediately
preceding three years, summary plan descriptions, and the most recent
determination letters or determination letter requests have been made available
to Parent. Neither the Company nor any Company Subsidiary nor any Plan has
engaged in any transaction prohibited under the provisions of Section 4975 of
the Code or Section 406 of ERISA. No Plan has incurred an accumulated funding
deficiency, as defined in
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Section 412(a) of the Code and Section 302 of ERISA, and neither the Company nor
any Company Subsidiary has incurred any resulting liability for excise tax under
Sections 4975 or 4976 of the Code or penalty pursuant to Sections 409 or 502(i)
of ERISA due to the IRS or the PBGC. There has been no termination, partial
termination or discontinuance of contributions to any Qualified Plan without
notice to and approval by the IRS. No Title IV Plan is or has been maintained by
the Company or any ERISA Affiliate. There have been no "reportable events" (as
such phrase is defined in Section 4043 of ERISA) with respect to any Qualified
Plan. The Company and its ERISA Affiliates do not have and never have had any
obligation to contribute to or other liability with respect to any
"multi-employer plan" (as such term is defined in Section 4001(a)(3) of ERISA).
(c) Section 3.13(c) of the Disclosure Schedule sets forth a true,
complete and correct list of (i) all employment or consulting agreements with
employees of the Company or any Company Subsidiary obligating the Company or any
Company Subsidiary to make annual cash payments in an amount exceeding $100,000;
(ii) all employees of the Company or any Company Subsidiary who have executed a
non-competition agreement with the Company or any of its Subsidiaries; (iii) all
Severance Agreements, programs and policies of the Company or any Company
Subsidiary with or relating to its employees; and (iv) all plans, programs,
agreements and other arrangements of the Company or any Company Subsidiary with
or relating to its respective employees which contain change in control
provisions. True, complete and correct copies of each of the foregoing
agreements have been made available to Parent.
(d) No liability under Title IV or Section 302 of ERISA has been
incurred by the Company or any ERISA Affiliate that has not been satisfied in
full, and no condition exists that presents a material risk to the Company or
any ERISA Affiliate of incurring any such liability, other than liability for
premiums due the PBGC (which premiums have been paid when due).
(e) All contributions required to be made with respect to any Plan on
or prior to the Effective Time have been timely made or are reflected on the
Balance Sheet. There are no pending or, to the Company's knowledge, threatened
or anticipated claims by or on behalf of any Plan, by any employee or
beneficiary covered under any such Plan, or otherwise involving any such Plan
(other than routine claims for benefits).
(f) The consummation of the Merger or the other Transactions will not,
either alone or in combination with another event, (i) entitle any current or
former employee or officer of the Company or any Company Subsidiary to sever-
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ance pay, unemployment compensation or any other payment, except as expressly
provided in this Agreement, or (ii) accelerate the time of payment or vesting,
or increase the amount of compensation due any such employee or officer.
(g) There is no contract, agreement, plan or arrangement, including
but not limited to the provisions of this Agreement, covering any employee or
former employee of the Company or any Company Subsidiary that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to Sections 280G or 162(m) of the Code.
Section 3.14 Labor Matters.
(a) The Company and its Subsidiaries are in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment and wages and hours, and are not engaged in any unfair
labor practices;
(b) There are no controversies pending or, to the knowledge of the
Company or any of its Subsidiaries, threatened, between the Company or any of
its Subsidiaries and any of their respective employees, consultants or
independent contractors, which controversies have had or may reasonably be
expected to have a material adverse effect on the Company and the Company
Subsidiaries, taken as a whole;
(c) Neither the Company nor any Company Subsidiary is a party to any
collective bargaining agreement or other labor union contract applicable to
Persons employed by the Company or any Company Subsidiary, nor does the Company
or any Company Subsidiary know of any activities or proceedings of any labor
union to organize any such employees;
(d) The Company has no knowledge of any labor disputes, strikes,
slowdowns, work stoppages, lockouts, or threats thereof, by or with respect to
any employees of, or consultants or independent contractors to, the Company; and
(e) There are no labor disputes, strikes, slowdowns, work stop pages,
lockouts, or threats thereof, by or with respect to any employees of, or
consultants or independent contractors to, any Company Subsidiary, except such
disputes, strikes, slowdowns, work stoppages, lockouts, or threats thereof that
would not have a material adverse effect on the Company and the Company
Subsidiaries taken as a whole.
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Section 3.15 Properties; Encumbrances. The Company and each Company
Subsidiary has good, valid and marketable title to, or a valid leasehold
interest in, all the properties and assets that it purports to own or lease
(real, personal and mixed, tangible and intangible), including, without
limitation, all the properties and assets reflected in the Balance Sheet (except
for personal property sold since the Balance Sheet Date in the ordinary course
of business consistent with past practice), except as would not have a material
adverse effect on the Company and the Company Subsidiaries, taken as a whole.
All properties and assets reflected in the Balance Sheet are free and clear of
all Liens, except for Liens reflected on the Balance Sheet and Liens for current
taxes not yet due and other Liens that do not materially detract from the value
or impair the use of the property or assets subject thereto.
Section 3.16 Taxes.
(a) The Company and each Company Subsidiary has filed with the
appropriate taxing authorities all Tax Returns required to be filed by them,
except where the failure to file such Tax Returns would not have a material
adverse effect on the Company and the Company Subsidiaries, taken as a whole.
All Taxes due and owing by the Company and the Company Subsidiaries have been
paid or adequately reserved for, except to the extent any failure to pay or
reserve would not have a material adverse effect on the Company and the Company
Subsidiaries, taken as a whole, or except to the extent such Taxes are being
contested in good faith by appropriate proceedings (to the extent that any such
proceedings are required). There are no Tax Liens on any assets of the Company
or any Company Subsidiary other than Liens relating to Taxes not yet due and
payable. Neither the Company nor any Company Subsidiary has granted any waiver
of any statute of limitations with respect to, or any extension of a period for
the assessment of, any Tax. The accruals and reserves for Taxes (including
deferred taxes) reflected in the Balance Sheet are in all material respects
adequate to cover all Taxes accruable through the date thereof (including
interest and penalties, if any, thereon and Taxes being contested) in accordance
with GAAP applied on a consistent basis with the Balance Sheet.
(b) Neither the Company nor any Company Subsidiary is, or has been, a
United States real property holding corporation (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code.
(c) The Company and each Company Subsidiary has withheld with respect
to its employees all federal and state Taxes required to be withheld, except to
the extent any failure to withhold would not have a material adverse effect
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on the Company and the Company Subsidiaries, taken as a whole. Neither the
Company nor any Company Subsidiary has been delinquent in the payment of any
Tax, except to the extent any failure to pay such Tax would not have a material
adverse effect on the Company and the Company Subsidiaries, taken as a whole.
Neither the Company nor any Company Subsidiary has received any written notice
of any Tax deficiency outstanding, proposed or assessed against the Company or
any Company Subsidiary. Neither the Company nor any of its Subsidiaries has
received any written notice of any audit examination, deficiency, refund
litigation, proposed adjustment or matter in controversy with respect to any Tax
Return of the Company or any of its Subsidiaries. Neither the Company nor any
Company Subsidiary has filed any consent agreement under Section 341(f) of the
Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of
a subsection (f) asset (as defined in Section 341(f)(4) of the Code) owned by
the Company. Neither the Company nor any Company Subsidiary is a party to or
bound by any tax indemnity, tax sharing or tax allocation agreements. Except for
the group of which the Company and its Subsidiaries are now currently members,
neither the Company nor any of its Subsidiaries has ever been a member of an
affiliated group of corporations within the meaning of Section 1504 of the Code,
or any similar affiliated, consolidated, combined, unitary or similar group for
tax purposes under state, local or foreign law, or has any liability for Taxes
of any Person (other than the Company and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 or any similar provision of state, local or foreign
law as a transferee or successor, by contract or otherwise. Neither the Company
nor any Company Subsidiary has or will have any liability for Taxes for any
taxable period or portion thereof ending on or before the Closing Date
(including any liability for Taxes of the Major Shareholder or any past or
present Subsidiary of the Major Shareholder under Treasury Regulation Section
1.1502-6 or any similar provision of state, local or foreign law), other than
Taxes of the Company or any Company Subsidiary for the taxable periods beginning
on or after January 1, 1999 and ending on or before the Closing Date to the
extent that such Taxes will be included in accordance with GAAP in the reserve
for Taxes reflected in the financial statements of the Company and the Company
Subsidiaries which include such periods. Neither the Company nor any Company
Subsidiary has agreed to make nor is it required to make any material adjustment
under Section 481(a) of the Code by reason of a change in accounting method or
otherwise. Neither the Company nor any Company Subsidiary has constituted either
a "distributing corporation" or a "controlled corporation" (within the meaning
of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for
tax-free treatment under Section 355(a) of the Code, either (i) in the two years
prior to the date of this Agreement or (ii) in a distribution which could
otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the Offer
or the Merger.
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(d) As soon as practicable after the public announcement of the
execution of this Agreement, the Company will provide Parent with written
schedules of (i) the taxable years of the Company for which the statute of
limitations with respect to Taxes have not expired, (ii) with respect to Taxes,
those years for which examinations have been completed, those years for which
examinations are presently being conducted, those years for which examinations
have not yet been initiated and those years for which required Tax Returns have
not yet been filed, (iii) all elections with respect to Taxes affecting the
Company as of the date hereof, (iv) the Company's basis in each Company
Subsidiary, (v) the earnings and profits (including any adjustment required by
Section 1503(e) of the Code) for each Company Subsidiary, and (vi) the foreign
countries in which the Company or its Subsidiaries has or has had a permanent
establishment, as defined in any applicable Tax treaty or convention between the
United States and such foreign country.
Section 3.17 Environmental Matters.
(a) The Company and each Company Subsidiary is in full compliance with
all applicable Environmental Laws except where the failure to be in compliance
with such Environmental Laws would not have a material adverse effect on the
Company and its Subsidiaries taken as a whole; neither the Company nor any of
its Subsidiaries has received any communication from a Governmental Entity,
citizens group, employee or other Person that alleges that the Company or any
Company Subsidiary is not in such full compliance; and there are no
circumstances that may prevent or interfere with such full compliance in the
future, except where the failure to be in full compliance would not have a
material adverse effect on the Company and its Subsidiaries taken as a whole.
(b) There is no Environmental Claim pending against the Company or any
of its Subsidiaries or, to the Company's knowledge, threatened against any
Person whose liability for any Environmental Claim the Company or any Company
Subsidiary has or may have retained or assumed either contractually or by
operation of law.
(c) To the knowledge of the Company, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including
the Release, emission, discharge or disposal of any Materials of Environmental
Concern, that could reasonably be expected to constitute the basis for an
Environmental Claim against the Company or any Company Subsidiary or against
any Person whose liability for any Environmental Claim the Company or any
Company
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Subsidiary has or may have retained or assumed either contractually or by
operation of law.
(d) The Company and its Subsidiaries have delivered or otherwise made
available for inspection to Parent true, complete and correct copies of any
reports, studies, analyses, tests or monitoring possessed by the Company or its
Subsidiaries pertaining to Materials of Environmental Concern in, on, beneath or
adjacent to any property currently or formerly owned, operated or leased by the
Company or its Subsidiaries or regarding the Company's or its Subsidiaries'
compliance with applicable Environmental Laws.
Section 3.18 Intellectual Property.
(a) The Company or its Subsidiaries owns, or is licensed or otherwise
possesses legally enforceable rights to use, all Company Intellectual Property
Rights. Set forth in Section 3.18(a) of the Disclosure Schedule is a list of (i)
all Company-owned patent applications and issued patents, trademark applications
and registrations, material unregistered trademarks and registered copyrights
and (ii) all Intellectual Property of third parties used in or with the
Company's Products or services.
(b) Either the Company or one of its Subsidiaries is the sole and
exclusive owner of all right, title and interest in and to (free and clear of
any Liens), or is the exclusive or non-exclusive licensee of, the Company
Intellectual Property Rights, and, in the case of Company Intellectual Property
Rights owned by the Company or any Company Subsidiary, has sole and exclusive
rights (and is not contractually obligated to pay any compensation to any third
party in respect thereof) to the use thereof and the material covered thereby.
Major Shareholder has no rights in or to any of the Company Intellectual
Property Rights. No claims with respect to the Company Intellectual Property
Rights have been asserted or are, to the Company's knowledge, threatened by any
Person (i) to the effect that the manufacture, sale, licensing or use of any of
the Products or services of the Company or any Company Subsidiary as now
manufactured, sold or licensed or used or proposed for manufacture, use, sale or
licensing by the Company or any Company Subsidiary infringes on any intellectual
property or other proprietary rights of any third party, (ii) against the use by
the Company or any Company Subsidiary of any Trademarks, Trade Secrets,
Copyrights, Patents, technology, or know-how or applications used in the
business of the Company and its Subsidiaries as currently conducted or as
presently proposed to be conducted, or (iii) challenging the ownership or use by
the Company or any Company Subsidiary or the validity of any of the Company
Intellectual Property Rights. All Patents, Trademarks and Copyrights held by the
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Company and its Subsidiaries and used in the business of the Company or its
Subsidiaries as currently conducted or as presently proposed to be conducted are
valid, subsisting, in full force and effect, and have not expired or been
cancelled or abandoned. To the knowledge of the Company, there is no
unauthorized use, infringement or misappropriation of any of the Company
Intellectual Property Rights by any third party, including any employee or
former employee of the Company or any Company Subsidiary. No Company
Intellectual Property Right or Product or service of the Company or any Company
Subsidiary is subject to any outstanding decree, order, judgment or stipulation
restricting in any manner the use, sale or licensing thereof by the Company or
any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has
entered into any agreement under which the Company or its Subsidiaries is
restricted from using or licensing any Company Intellectual Property Rights or
selling or otherwise distributing any of its Products or services.
(c) The consummation of the Transactions to which the Company is a
party will not result in any loss or impairment of the Company's, or any Company
Subsidiary's ownership of or right to use any of the material Company
Intellectual Property Rights, nor require the consent of any Governmental Entity
or third party with respect to any of the material Company Intellectual Property
Rights.
(d) All personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the conception and
development of any part of the Company Intellectual Property Rights on behalf
of the Company have executed nondisclosure agreements that adequately protect
the Company's proprietary interests in the Company Intellectual Property Rights
and either (i) have been a party to a "work-for-hire" arrangement or agreements
with the Company to the extent permitted by applicable national and state law
that has accorded the Company full, effective, exclusive and original ownership
of all tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company effective and exclusive ownership of all tangible
and intangible property thereby arising. No current or former partner, director,
officer, or employee of the Company (or any predecessor in interest) will, after
giving effect to the transactions contemplated herein, own or retain any rights
in or to any of the Company Intellectual Property Rights.
Section 3.19 Insurance. All fire and casualty, general liability,
business interruption, product liability, sprinkler and water damage insurance
policies and other forms of insurance maintained by the Company or any Company
Subsidiary are with reputable insurance carriers, provide adequate coverage for
all normal risks incident to the business of the Company and its Subsidiaries
and their
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respective properties and assets and are in character and amount and with such
deductibles and retained amounts as generally carried by Persons engaged in
similar businesses and subject to the same or similar perils or hazards.
Section 3.20 Restrictions on Business Activities. Except for this
Agreement, to the Company's knowledge, there is no agreement, judgement,
injunction, order or decree binding upon the Company or any Company Subsidiary
which has or could reasonably be expected to have the effect of prohibiting or
impairing any business practice of the Company or any Company Subsidiary,
acquisition of property by the Company or any Company Subsidiary or the conduct
of business by the Company or any Company Subsidiary as currently conducted or
as proposed to be conducted by the Company.
Section 3.21 Information in Schedule 14D-9. The information supplied
by the Company expressly for inclusion in the Offer Documents and the Schedule
14D-9 will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading. The Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws and, on the
date filed with the SEC and on the date first published or sent or given to the
Company's shareholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to statements made therein
based on information furnished by Parent, Purchaser or Major Shareholder for
inclusion in the Schedule 14D-9.
Section 3.22 Information in Proxy Statement. The Proxy Statement, if
any, will not, at the date mailed to Company shareholders and at the time of the
meeting of Company shareholders to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they are made, not
misleading, except that no representation is made by the Company with respect to
statements made therein based on information furnished by Parent, Purchaser or
Major Shareholder for inclusion in the Proxy Statement. The Proxy Statement will
comply in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
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Section 3.23 Interested Party Transactions. Since the date of the
Company's proxy statement dated June 25, 1999, no event has occurred that would
be required to be reported as a Certain Relationship or Related Transaction,
pursuant to Item 404 of Regulation S-K promulgated by the SEC.
Section 3.24 Change in Control Payments. Neither the Company nor any
Company Subsidiary has any plans, programs or agreements to which they are
parties, or to which they are subject, pursuant to which payments (or
acceleration of benefits) may be required upon, or may become payable directly
or indirectly as a result of, a change of control of the Company.
Section 3.25 Year 2000 Compliance.
(a) All of (i) the internal information technology systems used in
the business or operations of the Company and its Subsidiaries, including,
without limitation, computer hardware systems, software, applications, firmware,
equipment containing embedded microchips and other embedded systems, and (ii)
the software, hardware, firmware and other technology that constitute part of
the Products and services manufactured, marketed, licensed or sold by the
Company or any Company Subsidiary to third parties are Year 2000 Compliant and
will not be adversely affected with respect to functionality, interoperability,
connectivity, performance, reliability or volume capacity (including without
limitation the processing, storage, recall and reporting of data) by the passage
of any date, including without limitation the year change from December 31, 1999
to January 1, 2000, except where the failure to be Year 2000 Compliant or
adversely affected with respect to functionality, interoperability,
connectivity, performance, reliability or volume capacity by the passage of any
date would not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. To the Company's knowledge, Company software,
hardware, firmware and other technology that constitute part of the Products or
services manufactured, marketed, licensed or sold by the Company or any Company
Subsidiary to third parties as used in conjunction with third party software,
hardware, firmware and other technology are Year 2000 Compliant, unless
non-compliance arises solely from said third-party software, hardware, firmware
and other technology.
(b) To the Company's knowledge, all third-party systems used in
connection with the business, Products, services or operations of the Company or
any Company Subsidiary, including, without limitation, any system belonging to
any of the Company's or its Subsidiaries' vendors, co-venturers, service
providers or customers are Year 2000 Compliant. The Company and its Subsidiaries
have received satisfactory written assurances and warranties from all of their
respective
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vendors, co-venturers, service providers and customers that are material to the
ongoing operation of the business of the Company and its Subsidiaries that past
and future Products, software, equipment, components or systems provided by such
parties are (or in the case of future Products, will be) Year 2000 Compliant.
(c) The Company has conducted "year 2000" audits with respect to (i)
each of the internal information technology systems used in the business,
Products, services and operations of the Company and its Subsidiaries, including
without limitation computer hardware systems, software, applications, firmware,
equipment containing embedded microchips and other embedded systems, and (ii)
all of the software, applications, hardware, firmware and other technology which
constitute part of the Products and services manufactured, marketed, performed
or sold by the Company or any of its Subsidiaries or licensed by the Company or
any of its Subsidiaries to third parties. The Company has obtained "year 2000"
certifications with respect to all material third-party systems used in
connection with the business or operations of the Company and its Subsidiaries,
including without limitation systems belonging to the vendors, co-venturers,
service providers and customers of the Company of any or its Subsidiaries. At
the request of Parent, the Company shall make available to Parent true, complete
and correct copies of all "year 2000" audits, certifications, reports and other
similar documents that have been prepared or performed by or on behalf of the
Company or any third party with respect to the systems, business, operations,
Products or services of the Company or any of its Subsidiaries.
(d) Neither the Company nor any Company Subsidiary has provided any
representation, warranty or guarantee for any Product sold or licensed, or
service provided, by the Company or its Subsidiaries to the effect that such
Product or service (i) complies with or accounts for the fact of the year change
from December 31, 1999 to January 1, 2000, (ii) will not be adversely affected
with respect to functionality, interoperability, connectivity, performance,
reliability or volume capacity (including without limitation the processing
storage, recall and reporting of data) by the passage of any date, including
without limitation the year change from December 31, 1999 to January 1, 2000 or
(iii) is otherwise Year 2000 Compliant.
Section 3.26 No Existing Discussions. As of the date hereof, the
Company is not engaged, directly or indirectly, in any discussions or
negotiations with any other party with respect to an Acquisition Proposal or any
other substantially similar proposal.
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Section 3.27 Opinion of Financial Advisor. The financial advisor of
the Company, SoundView Technology Group, Inc., has delivered to the Company an
opinion dated December 20, 1999 to the effect that as of the date of this
Agreement, the consideration to be received in the Merger by the Company's
shareholders is fair, from a financial point of view, to the shareholders of the
Company. The Company has provided a complete and correct copy of such opinion to
Parent. The Company has received the consent of such financial advisor to the
inclusion of its opinion in the Schedule 14D-9.
Section 3.28 Brokers. No broker, finder or investment banker (other
than SoundView Technology Group, Inc., whose brokerage, finder's or other fee
will be paid by the Company) is entitled to any brokerage, finder's or other fee
or commission in connection with any of the Transactions based upon arrangements
made by or on behalf of the Company or any Company Subsidiary. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and SoundView Technology Group, Inc. pursuant to which such
firm would be entitled to any payment relating to the transactions contemplated
hereunder.
Section 3.29 Books and Records. The books of account, minute books,
stock record books and other records of the Company and its Subsidiaries are
complete and correct in all material aspects and have been maintained in
accordance with sound business practices and the requirements of Section
13(b)(2) of the Exchange Act, including an adequate system of internal controls.
The minute books of the Company and, to the knowledge of the Company, the minute
books of each of its Subsidiaries contain accurate and complete records of all
meetings held of, and corporate action taken by, the shareholders of the Company
or its Subsidiaries, as the case may be, the Company Board of Directors and
committees of the Company Board of Directors, the board of directors of each
Company Subsidiary and any committees thereof, as the case may be, and no
meeting of any of such shareholders, the Company Board of Directors or
committees of the Company Board of Directors or, to the knowledge of the
Company, the board of directors of any Company Subsidiary or any committees
thereof, has been held for which minutes have not been prepared and are not
contained in such minute books.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company that:
Section 4.1 Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority necessary to own, lease and operate the properties it purports to
own, lease or operate and to carry on its business as it is now being conducted
or presently proposed to be conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority,
would not have a material adverse effect on Parent and its Subsidiaries.
Section 4.2 Authority Relative to this Agreement. Each of Parent and
Purchaser has all necessary corporate power and authority to execute and deliver
this Agreement and each instrument required hereby to be executed and delivered
at the Closing by Parent and Purchaser and to perform its obligations hereunder
and to consummate the Transactions. The execution and delivery of this Agreement
and each instrument required hereby to be executed and delivered at the Closing
by Parent and Purchaser and the consummation by Parent and Purchaser of the
Merger and the Transactions have been duly and validly authorized by all
necessary corporate action on the part of Parent and Purchaser. This Agreement
has been duly and validly executed and delivered by Parent and Purchaser and,
assuming the due authorization, execution and delivery by the Company,
constitutes the legal, valid and binding obligation of each of Parent and
Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and by general equitable principles (regardless of
whether enforceability is considered in a proceeding in equity or at law).
Section 4.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and each instrument
required hereby to be executed and delivered at Closing by Parent and Purchaser
do not, and the performance by Parent and Purchaser of this Agreement, and the
consummation by Parent and Purchaser of the Transactions will not, (i)
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conflict with or violate the Parent Charter, the Parent By-Laws, the Purchaser
Charter or the Purchaser By-Laws or (ii) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Parent or Purchaser by which
any of their respective properties is bound or affected, except in the case of
(ii) for any such conflicts, violations, breaches, defaults or other occurrences
that would not have a material adverse effect on Parent and its Subsidiaries,
taken as a whole.
(b) The execution and delivery of this Agreement or any instrument
required hereby to be executed and delivered by Parent and Purchaser at the
Closing does not, and the performance of this Agreement by Parent and Purchaser
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Entity, except (i) the filing of the
pre-merger notification report under the HSR Act, (ii) the filing of the
Schedule 14D-1 and the Offer Documents with the SEC, (iii) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal and state securities laws and the laws
of any foreign country, (iv) the filing and recordation of appropriate merger or
other documents as required by the DGCL and (v) such other consents, approvals,
authorizations or permits which, if not obtained or made, would not have a
material adverse effect on Parent and its Subsidiaries, taken as a whole.
Section 4.4 Information in Offer Document. The Schedule 14D-1 and
the Offer Documents will comply in all material respects with the provisions of
applicable federal securities laws and, on the date filed with the SEC and on
the date first published or sent or given to the Company's shareholders, shall
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading, except that no representation is made by Parent or
Purchaser with respect to information furnished by the Company expressly for
inclusion in the Offer Documents.
Section 4.5 Information in Proxy Statement. None of the information
furnished by Parent or Purchaser expressly for inclusion in the Proxy Statement
will, at the date mailed to shareholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they are made, not misleading.
Section 4.6 Sufficient Funds. Parent has available sufficient funds
to purchase all of the Shares outstanding on a fully diluted basis at the Offer
Price and to pay all fees and expenses related to the Transactions.
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Section 4.7 Purchaser's Operations. Purchaser was formed solely for
the purpose of engaging in the Transactions and has not engaged in any business
activities or conducted any operations other than in connection with the
Transactions.
Section 4.8 Brokers or Finders. No broker, finder or investment
banker (other than Broadview International LLC, whose brokerage, finder's or
other fee will be paid by Parent) 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 or on behalf of Parent.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company covenants
and agrees that prior to the Effective Time, except (i) as expressly
contemplated by this Agreement, (ii) as set forth in Section 5.1 of the
Disclosure Schedule, or (iii) as agreed in writing by Parent, after the date
hereof:
(a) the business of the Company and each Company Subsidiary shall be
conducted only in the usual, regular and ordinary course and substantially in
the same manner as heretofore conducted, and each of the Company and its
Subsidiaries shall use its reasonable best efforts to preserve its business
organization intact, keep available the services of its current officers and
employees and maintain its existing relations with franchisees, customers,
suppliers, creditors, business partners and others having business dealings with
it, to the end that the goodwill and ongoing business of each of them shall be
unimpaired at the Effective Time;
(b) neither the Company nor any Company Subsidiary shall: (i) amend
its certificate of incorporation or by-laws or similar organizational documents,
(ii) issue, sell, transfer, pledge, dispose of or encumber any shares of any
class or series of its capital stock or Voting Debt, or securities convertible
into or exchangeable for, or options, warrants, calls, commitments or rights of
any kind to acquire, any shares of any class or series of its capital stock or
any Voting Debt, other than Shares reserved for issuance on the date hereof
pursuant to the exercise of Company Options outstanding on the date hereof,
(iii) declare, set aside or pay any dividend or other distribution payable in
cash, stock or property with respect to any shares of any class or series of its
capital stock; (iv) split, combine or reclassify any
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shares of any class or series of its stock; or (v) redeem, purchase or otherwise
acquire directly or indirectly any shares of any class or series of its capital
stock, or any instrument or security which consists of or includes a right to
acquire such shares;
(c) neither the Company nor any Company Subsidiary shall (i) incur
or modify any indebtedness or other liability, other than in the ordinary and
usual course of business and consistent with past practice and in any event not
in excess of $50,000; or (ii) modify, amend or terminate any Company Agreement
or waive, release or assign any material rights or claims, except in the
ordinary course of business and consistent with past practice;
(d) neither the Company nor any Company Subsidiary shall: (i) incur
or assume any long-term debt, or except in the ordinary course of business,
incur or assume any short-term indebtedness in amounts not consistent with past
practice; (ii) modify the terms of any indebtedness or other liability; (iii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person;
(iv) make any loans, advances or capital contributions to, or investments in,
any other Person (other than to or in wholly owned Subsidiaries of the Company);
or (v) enter into any material commitment or transaction (including, but not
limited to, any capital expenditure or purchase, sale or lease of assets or real
estate), except in the case of (v) in the ordinary course of business and in any
event not in excess of $1,000,000;
(e) neither the Company nor any Company Subsidiary shall transfer,
lease, license, sell, mortgage, pledge, dispose of, or encumber any assets other
than in the ordinary and usual course of business and consistent with past
practice; or
(f) except as otherwise specifically provided in this Agreement,
make any change in the compensation payable or to become payable to any of its
officers, directors, employees, agents or consultants (other than normal
recurring increases in wages to employees who are not officers or directors or
Affiliates in the ordinary course of business consistent with past practice) or
to Persons providing management services, or enter into or amend any employment,
severance, consulting, termination or other agreement or employee benefit plan
or make any loans to any of its officers, directors, employees, Affiliates,
agents or consultants or make any change in its existing borrowing or lending
arrangements for or on behalf of any of such Persons pursuant to an employee
benefit plan or otherwise;
(g) except as otherwise specifically contemplated by this Agreement,
pay or make any accrual or arrangement for payment of any pension, retire-
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ment allowance or other employee benefit pursuant to any existing plan,
agreement or arrangement to any officer, director, employee or Affiliate or pay
or agree to pay or make any accrual or arrangement for payment to any officers,
directors, employees or Affiliates of the Company of any amount relating to
unused vacation days, except payments and accruals made in the ordinary course
of business consistent with past practice; adopt or pay, grant, issue,
accelerate or accrue salary or other payments or benefits pursuant to any
pension, profit-sharing, bonus, extra compensation, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right, group
insurance, severance pay, retirement or other employee benefit plan, agreement
or arrangement, or any employment or consulting agreement with or for the
benefit of any director, officer, employee, agent or consultant, whether past or
present; or amend in any material respect any such existing plan, agreement or
arrangement in a manner inconsistent with the foregoing;
(h) neither the Company nor any Company Subsidiary shall permit any
insurance policy naming it as a beneficiary or a loss payable payee to be
cancelled or terminated without notice to Parent, except policies providing
coverage for losses not in excess of $50,000;
(i) neither the Company nor any Company Subsidiary shall enter into
any contract or transaction relating to the purchase of assets other than in the
ordinary course of business consistent with past practice and in no such case
for assets in excess of $50,000;
(j) neither the Company nor any Company Subsidiary shall pay,
repurchase, discharge or satisfy any of its 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 and
consistent with past practice to any Person who is not an Affiliate of the
Company, of claims, liabilities or obligations reflected or reserved against in,
or contemplated by, the Financial Statements;
(k) neither the Company nor any Company Subsidiary will adopt a plan
of complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
Company Subsidiary (other than the Merger);
(l) neither the Company nor any Company Subsidiary will (i) change
any of the accounting methods used by it unless required by GAAP or (ii) make
any material election relating to Taxes, change any material election relating
to Taxes already made, adopt any material accounting method relating to Taxes,
change
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any material accounting method relating to Taxes unless required by GAAP, enter
into any closing agreement relating to Taxes, settle any claim or assessment
relating to Taxes or consent to any claim or assessment relating to Taxes or any
waiver of the statute of limitations for any such claim or assessment;
(m) neither the Company nor any Company Subsidiary will take, or
agree to commit to take, any action that would or is reasonably likely to result
in any of the conditions to the Offer set forth in Annex A or any of the
conditions to the Merger set forth in Article VI not being satisfied, or would
make any representation or warranty of the Company contained herein inaccurate
in any respect at, or as of any time prior to, the Effective Time, or that would
impair the ability of the Company, Parent, Purchaser or the holders of Shares
to consummate the Offer or the Merger in accordance with the terms hereof or
materially delay such consummation; and
(n) neither the Company nor any Company Subsidiary will enter into
an agreement, contract, commitment or arrangement to do any of the foregoing, or
to authorize, recommend, propose or announce an intention to do any of the
foregoing.
Section 5.2 Access; Confidentiality. The Company shall (and shall
cause each Company Subsidiary to) afford to the officers, employees,
accountants, counsel, financing sources and other representatives of Parent,
full access upon prior notice during normal business hours throughout the period
prior to the Appointment Date to all its properties, books, contracts,
commitments and records and, during such period, the Company shall (and shall
cause each Company Subsidiary to) furnish promptly to Parent (a) a copy of each
report, schedule, registration statement and other document filed or received by
it during such period pursuant to the requirements of federal securities laws
and (b) all other information concerning its business, properties and personnel
as Parent may reasonably request. After the Appointment Date, the Company shall
provide Parent and such Persons as Parent shall designate with all such
information, at any time as Parent shall request. Until the Appointment Date,
unless otherwise required by law or in order to comply with disclosure
requirements applicable to the Offer Documents or the Proxy Statement, each
party agrees that it (and its Subsidiaries and its and their respective
representatives) shall hold in confidence all non-public information acquired
in accordance with the provisions of the Confidentiality Agreement.
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Section 5.3 Reasonable Best Efforts.
(a) Prior to the Closing, upon the terms and subject to the
conditions of this Agreement, Parent, Purchaser and the Company agree to use
their respective reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
advisable (subject to any applicable laws) to consummate and make effective the
Merger and the other Transactions as promptly as practicable including, but not
limited to, (i) the preparation and filing of all forms, registrations and
notices required to be filed to consummate the Merger and the other Transactions
and the taking of such actions as are necessary to obtain any requisite
approvals, consents, orders, exemptions or waivers by any third party or
Governmental Entity, and (ii) the satisfaction of the other parties' conditions
to Closing. In addition, no party hereto shall take any action after the date
hereof that would reasonably be expected to materially delay the obtaining of,
or result in not obtaining, any permission, approval or consent from any
Governmental Entity necessary to be obtained prior to Closing. Notwithstanding
the foregoing, or any other covenant herein contained, in connection with the
receipt of any necessary approvals under the HSR Act, neither the Company nor
any Company Subsidiary shall be entitled to divest or hold separate or otherwise
take or commit to take any action that limits Parent's or Purchaser's freedom of
action with respect of, or their ability to retain, the Company or any Company
Subsidiary or any material portions thereof or any of the businesses, product
lines, properties or assets of the Company or any Company Subsidiary, without
Parent's prior written consent.
(b) Prior to the Closing, each party shall promptly consult with the
other parties hereto with respect to, provide any necessary information with
respect to, and provide the other parties (or their respective counsel) with
copies of, all filings made by such party with any Governmental Entity or any
other information supplied by such party to a Governmental Entity in connection
with this Agreement, the Merger and the other Transactions. Each party hereto
shall promptly inform the other of any communication from any Governmental
Entity regarding any of the Transactions. If any party hereto or Affiliate
thereof receives a request for additional information or documentary material
from any such Governmental Entity with respect to any of the Transactions, then
such party shall endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after consultation with the other parties, an
appropriate response in compliance with such request. To the extent that
transfers, amendments or modifications of permits (including environmental
permits) are required as a result of the execution of this Agreement or
consummation of any of the Transactions, the Company shall use its reasonable
best efforts to effect such transfers, amendments or modifications.
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(c) The Company and Parent shall file as soon as practicable
notifications under the HSR Act and respond as promptly as practicable to any
inquiries received from the United States Federal Trade Commission and the
Antitrust Division of the United States Department of Justice for additional
information or documentation and respond as promptly as practicable to all
inquiries and requests received from any State Attorney General or other
Governmental Entity in connection with antitrust matters. Concurrently with the
filing of notifications under the HSR Act or as soon thereafter as practicable,
the Company and Parent shall each request early termination of the HSR Act
waiting period.
(d) Notwithstanding the foregoing, nothing in this Agreement shall
be deemed to require Parent, Purchaser or the Company to commence any litigation
against any entity in order to facilitate the consummation of any of the
Transactions or to defend against any litigation brought by any Governmental
Entity seeking to prevent the consummation of any of the Transactions.
(e) Subject to compliance with applicable law, from the date hereof
until the Effective Time, the Company shall confer on a regular and frequent
basis with one or more representatives of the Parent to report operational
matters that are material and the general status of ongoing operations.
Section 5.4 Employee Benefits. (a) Parent and Purchaser agree that,
as soon as reasonably practicable following the Effective Time and for a
three-year period following the Effective Time, the Surviving Corporation and
its Subsidiaries and successors shall provide to the Retained Employees employee
plans and programs that provide benefits that are no less favorable in the
aggregate than those provided to employees of Parent generally during such time.
Except as otherwise provided in Section 5.4(c) hereof, until such time as the
Retained Employees are provided with employee plans and programs in accordance
with the preceding sentence, Parent shall cause the Surviving Corporation and
its Subsidiaries to provide the Retained Employees with the employee plans and
programs provided to such employees on the date hereof. With respect to such
benefits, service accrued by such Retained Employees during employment with the
Company and its Subsidiaries prior to the Effective Time shall be recognized for
all purposes, except to the extent necessary to prevent duplication of benefits.
(b) The Company and each Company Subsidiary shall take all necessary
and appropriate actions so that, as of the Effective Time, (i) only employees
of the Company and Company Subsidiaries participate in any Plan (including any
necessary action so that no current or former employee of Major Shareholder
shall participate in any Plan following the Effective Time (except to the extent
any
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such employee of Major Shareholder is employed by the Company or a Company
Subsidiary as of the Effective Time)) and (ii) any cost-sharing, employee
pooling or other agreement or arrangement involving any Plan and any current or
former employee of Major Shareholder is terminated. The Company agrees to inform
Parent with respect to the details of any action required by the preceding
sentence and to consult with Parent with respect to such actions prior to their
consummation.
(c) The Company shall take all necessary and appropriate actions to
terminate, prior to the Effective Time, the Softworks Retirement 401(k) Plan.
Section 5.5 No Solicitation of Competing Transaction.
(a) Neither the Company nor any Company Subsidiary or Affiliate of
the Company shall (and the Company shall cause the officers, directors,
employees, representatives and agents of the Company, each Company Subsidiary
and each Affiliate of the Company, including, but not limited to, investment
bankers, attorneys and accountants, not to), (i) directly or indirectly,
encourage, solicit or facilitate any inquiries or proposals that constitute, or
could reasonably be expected to lead to, an Acquisition Proposal or (ii)
participate in or initiate discussions or negotiations concerning, or provide
any information to, any Person or group (other than Parent, any of its
Affiliates or representatives) relating to, an Acquisition Proposal; provided,
however, that if, at any time prior to the time of acceptance of Shares for
payment pursuant to the Offer, the Company Board of Directors determines in good
faith, after consultation with outside counsel, that it is necessary to do so in
order to comply with its fiduciary duties to the Company's shareholders under
applicable law, the Company may, in response to a Superior Proposal that was not
solicited by it or that did not otherwise result from a breach of this Section
5.5(a), and subject to providing prior written notice of its decision to take
such action to Parent and compliance with Section 5.5(c), (x) furnish
information with respect to the Company and any Company Subsidiary to any Person
making a Superior Proposal pursuant to a confidentiality agreement containing
terms no less favorable to the Company than the Confidentiality Agreement and
(y) participate in discussions or negotiations regarding the Superior Proposal.
(b) Except as set forth below in this subsection (b), neither the
Company Board of Directors nor any committee thereof shall (i) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent or
Purchaser, the approval or recommendation by the Company Board of Directors or
any committee thereof of the Offer, this Agreement or the Merger, (ii) approve
or recommend or propose to approve or recommend, any Acquisition Proposal or
(iii) enter into a letter of intent, agreement in principle, acquisition
agreement or any
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other agreement with respect to any Acquisition Proposal. Notwithstanding the
foregoing, prior to the time of acceptance for payment of Shares pursuant to the
Offer, in response to a Superior Proposal that was not solicited by the Company
and that did not otherwise result from a breach of Section 5.5(a), the Company
Board of Directors may (subject to this sentence and the provisions of Section
7.1) terminate this Agreement but only after the seventh business day following
Parent's receipt of written notice from the Company advising Parent that the
Company Board of Directors has received a Superior Proposal that it intends to
accept, specifying the material terms and conditions of such Superior Proposal,
identifying the Person making such Superior Proposal, but only if the Company
shall have first caused its financial and legal advisors to negotiate with
Parent to make such adjustments in the terms and conditions of this Agreement as
would enable the Company to proceed with the transactions contemplated herein on
such adjusted terms; provided, however, that no such termination shall be
effective until the Company makes payment to Parent of funds as required by
Section 9.1(b).
(c) The Company agrees that as of the date hereof, it, its
Subsidiaries and Affiliates (and their respective officers, directors,
employees, representatives and agents) shall immediately cease and cause to be
terminated any existing activities, discussions or negotiations with any Person
(other than Parent, Purchaser or their respective representatives) conducted
heretofore with respect to any Acquisition Proposal. The Company shall notify
Parent immediately after receipt by the Company (or its advisors) of any
Acquisition Proposal or any request for nonpublic information in connection with
an Acquisition Proposal or for access to the properties, books or records of the
Company or any Company Subsidiary by any Person that informs the Company that it
is considering making, or has made, an Acquisition Proposal. Such notice to
Parent shall be made orally and in writing and shall indicate in reasonable
detail the identity of the offeror and the terms and conditions of such
proposal, inquiry or contact. The Company shall keep Parent informed of all
material developments and the status of any Acquisition Proposal, any
negotiations or discussions with respect to any Acquisition Proposal or any
request for nonpublic information in connection with any Acquisition Proposal or
for access to the properties, books or records of the Company or any Company
Subsidiary by any Person that is considering making, or has made, an Acquisition
Proposal. The Company shall provide Parent with copies of all documents received
from or delivered or sent to any Person that is considering making or has made
an Acquisition Proposal.
(d) Nothing contained in this Section 5.5 or any other provision
hereof shall prohibit the Company or the Company Board of Directors from (i)
taking and disclosing to the Company's shareholders a position with respect to a
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tender or exchange offer by a third party pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act, or (ii) making such disclosure to the
Company's shareholders as, in the good faith judgment of the Company Board of
Directors, after receiving advice from outside counsel, is required under
applicable law, provided that the Company may not, except as permitted by
Section 5.5(b), withdraw or modify, or propose to withdraw or modify, its
position with respect to the Offer or the Merger or approve or recommend, or
propose to approve or recommend, any Acquisition Proposal, or enter into any
agreement with respect to any Acquisition Proposal.
Section 5.6 Transfer of Major Shareholder's Shares. The Company
hereby waives any rights the Company may have under any agreement or otherwise
to object to the transfer to Purchaser or Parent of any or all Shares held by
the Major Shareholder and hereby covenants not to consent to the transfer of any
Shares held by the Major Shareholder to any other Person unless (i) the Company
will have obtained the specific, prior written consent of Parent with respect to
any such transfer or (ii) this Agreement will have been terminated pursuant to
Article VII.
Section 5.7 Publicity. Parent and the Company shall consult with
each other before issuing any press release or making any public statement with
respect to this Agreement, the Offer, the Merger or any other Transaction and
shall not issue any such press release or make any such public statement without
the prior written consent of the other party, which shall not be unreasonably
withheld or delayed; provided, however, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by law or the rules and
regulations of a national securities exchange if it has used all reasonable
efforts to consult with the other party prior thereto.
Section 5.8 Notification of Certain Matters. The Company shall give
prompt notice to Parent, of (i) the occurrence or non-occurrence of any event
the occurrence or non-occurrence of which would 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, and (ii) any material failure of the
Company, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.8 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 5.9 Directors' and Officers' Insurance and Indemnification.
(a) For three years after the Effective Time, Parent and the Surviving
Corporation
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shall jointly and severally indemnify, defend and hold harmless each Indemnified
Party against all losses, claims, damages, liabilities, costs, fees and
expenses, including reasonable fees and disbursements of counsel and judgments,
fines, losses, claims, liabilities and amounts paid in settlement (provided that
any such settlement is effected with the written consent of the Parent or the
Surviving Corporation, which consent shall not be unreasonably withheld) arising
out of actions or omissions occurring at or prior to the Effective Time to the
full extent required under applicable Delaware law, the terms of the Company
Charter or the Company By-Laws, as in effect at the date hereof; provided, that,
in the event any claim or claims are asserted or made within such three-year
period, all rights to indemnification in respect of any such claim or claims
shall continue until disposition of any and all such claims.
(b) Parent or the Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance for a period of not less
than three years after the Effective Date; provided, that Parent may substitute
therefor policies of substantially equivalent coverage and amounts containing
terms no less favorable to the former directors or officers of the Company to
which such insurance applies; provided, further, that in no event shall the
Company be required to pay aggregate premiums for insurance under this Section
5.9(b) in excess of 200% of the aggregate premiums paid by the Company in 1999
on an annualized basis for such purpose; and provided, further, that if the
Parent or the Surviving Corporation is unable to obtain the amount of insurance
required by this Section 5.9(b) for such aggregate premium, Parent or the
Surviving Corporation shall obtain as much insurance as can be obtained for an
annual premium not in excess of 200% of the aggregate premiums paid by the
Company in 1999 on an annualized basis for such purpose.
Section 5.10 State Takeover Laws. Notwithstanding any other
provision in this Agreement, in no event shall the Section 203 Approval be
withdrawn, revoked or modified by the Company Board of Directors. If any state
takeover statute other than Section 203 of the DGCL becomes or is deemed to
become applicable to the Agreement, the Offer, the acquisition of Shares
pursuant to the Offer or the Merger or the other Transactions, the Company shall
take all action necessary to render such statute inapplicable to all of the
foregoing.
Section 5.11 Purchaser Compliance. Parent shall cause Purchaser to
comply with all of its obligations under or related to this Agreement.
Section 5.12 Delivery of Financial Information. The Company shall,
at the request of Parent, promptly prepare and deliver to Parent an unaudited
consolidated balance sheet of the Company, as of a date specified by Parent,
together with
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unaudited consolidated statements of (i) income and (ii) cash flows of the
Company for such period specified by Parent, each of which shall fairly present
in all material respects the financial position of the Company as of such date
and for the period then ended.
Section 5.13 Grant of Option. To the extent permitted by law, rule
or regulation without shareholder approval, the Company hereby grants to
Purchaser an option to purchase from the Company such number of Shares as will
result in the Purchaser owning 90.1% of the total number of Shares, at a price
per Share equal to the Offer Price. Such option shall be exercisable by Parent
or any of its Subsidiaries only after the purchase of and payment for Shares
pursuant to the Offer as a result of which Parent and its Subsidiaries own
beneficially at least a majority of the then outstanding Shares. That portion of
the purchase price owing upon exercise of such option which equals the product
of (a) the number of Shares purchased pursuant to such option multiplied by (b)
the par value per Share shall be paid to the Company in cash by wire transfer or
cashier's check, and the balance of the purchase price shall be paid by delivery
to the Company of a non-interest bearing unsecured demand note of Purchaser.
Such option may be exercised on two day's written notice given by Purchaser to
the Company.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligation of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company, Parent or Purchaser, as the case may be, to the extent permitted by
applicable law:
(a) Shareholder Approval. This Agreement shall have been approved
and adopted by the requisite vote of the holders of the Shares, if required by
applicable law, in order to consummate the Merger;
(b) Statutes; Court Orders; Injunctions. No statute, rule or
regulation shall have been enacted or promulgated by any Governmental Entity
which restrains, enjoins or otherwise prevents or prohibits the consummation of
the Merger; and there shall not be any preliminary or permanent injunction or
other order of any federal, state or foreign court or any federal, state or
foreign governmen-
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tal authority or regulatory agency, body or court in effect precluding
consummation of the Merger;
(c) Purchase of Shares in Offer. Parent, Purchaser or their
Affiliates shall have purchased Shares pursuant to the Offer; and
(d) HSR Approval. Any applicable waiting periods under the HSR Act
shall have expired or been terminated.
Section 6.2 Conditions to Parent's and Purchaser's Obligations to
Effect the Merger. The obligations of Parent and Purchaser to consummate the
Merger shall be subject to the satisfaction on or prior to the Closing Date of
each of the following conditions, any and all of which may be waived in whole or
in part by the Parent and Purchaser, to the extent permitted by applicable law.
(a) Compliance with Obligations. All actions contemplated by
Section 2.4 shall have been taken;
(b) Representations and Warranties. The representations and
warranties of the Company set forth in Article III shall be true in all material
respects on the date of this Agreement and as of the Effective Time; and
(c) Covenants. The Company shall have complied in all material
respects with its obligations under the terms of this Agreement.
ARTICLE VII
TERMINATION
Section 7.1 Termination. This Agreement may be terminated or
abandoned at any time prior to the Effective Time, whether before or after
shareholder approval thereof:
(a) Subject to Section 1.3(c), by the mutual written consent of
Parent and the Company;
(b) By either of the Company or Parent:
(i) if (x) the Offer shall have expired without any Shares
being purchased pursuant thereto or (y) Purchaser shall not have accepted
for
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payment any Shares pursuant to the Offer by April 15, 2000; provided,
however, that the right to terminate this Agreement under this Section
7.1(b)(i) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of Purchaser to purchase the Shares pursuant to the Offer on or
prior to such date; or
(ii) if any Governmental Entity shall have issued an order,
decree or ruling or taken any other action (which order, decree, ruling or
other action the parties hereto shall use their reasonable efforts to
lift), which permanently restrains, enjoins or otherwise prohibits the
acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree, ruling or other action shall have
become final and non-appealable.
(c) By the Company:
(i) if Parent, Purchaser or any of their Affiliates shall have
failed to commence the Offer on or prior to five business days following
the date of the initial public announcement of the Offer; provided, that
the Company may not terminate this Agreement pursuant to this Section
7.1(c)(i) if the Company is at such time in material breach of its
obligations under this Agreement;
(ii) as permitted by Section 5.5(b), provided the Company has
complied with all provisions thereof, including the notice provisions
therein, and provided further that the termination described in this
Section 7.1(c)(ii) shall not be effective unless and until the Company
makes payment to Parent of funds as required by Section 9.1(b);
(iii) if Parent or Purchaser shall have breached in any
material respect any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach
cannot be or has not been cured within 15 days after the giving of written
notice by the Company to Parent or Purchaser, as applicable.
(d) By Parent:
(i) if, due to an occurrence, not involving a breach by Parent
or Purchaser of their obligations hereunder, which makes it impossible to
satisfy any of the conditions set forth in Annex A hereto, Parent, Pur-
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chaser, or any of their Affiliates shall have failed to commence the Offer
on or prior to the fifth business day following the date of the initial
public announcement of the Offer;
(ii) if, prior to the purchase of Shares by Purchaser pursuant
to the Offer, the Company Board of Directors shall have withdrawn,
modified or changed in a manner adverse to Parent or Purchaser its
approval or recommendation of the Offer, this Agreement or the Merger or
shall have recommended an Acquisition Proposal or shall have executed an
agreement in principle or definitive agreement relating to an Acquisition
Proposal or similar business combination with a Person other than Parent,
Purchaser or their Affiliates;
(iii) if, prior to the purchase of Shares pursuant to the
Offer, the Company shall have breached any representation, warranty,
covenant or other agreement contained in this Agreement which would give
rise to the failure of a condition set forth in paragraph (f) or (g) of
Annex A hereto, which breach cannot be or has not been cured within 15
days after the giving of written notice by Parent to the Company; or
(iv) if, prior to the purchase of Shares pursuant to the
Offer, Major Shareholder shall have breached any representation, warranty,
covenant or other agreement contained in the Stock Tender Agreement which
would give rise to the failure of a condition set forth in paragraph (h)
of Annex A hereto, which breach cannot be or has not been cured within 15
days after the giving of written notice by Parent to the Company; or
(v) if, prior to the purchase of Shares pursuant to the Offer,
there shall have been entered any injunction with respect to the
performance by Major Shareholder or the Trustees of their respective
obligations set forth in the Stock Tender Agreement relating to the
tendering of the Shares beneficially owned by the Major Shareholder in the
Offer, the granting of an option to Parent to purchase the Shares
beneficially owned by the Major Shareholder or the granting of a proxy
with respect to, or the agreement to vote, the Shares beneficially owned
by the Major Shareholder, which judgment, order or injunction has not been
withdrawn or rendered inapplicable to the obligations of the Major
Shareholder or the Trustees under the Stock Tender Agreement within 15
days of being so enacted, entered, enforced, promulgated or deemed
applicable; provided, however, that Parent shall not be entitled to
terminate this Agreement pursuant to this Section
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7.1(b)(v) until after the initial scheduled expiration date of the Offer
and if the Minimum Condition is otherwise satisfied as of such date.
Section 7.2 Effect of Termination. In the event of the termination
or abandonment of the Transactions by any party hereto pursuant to the terms of
this Agreement, written notice thereof shall forthwith be given to the other
party or parties specifying the provision hereof pursuant to which such
termination or abandonment of the Transactions is made, and there shall be no
liability on the part of Parent, Purchaser or the Company except (A) for fraud
or for breach of this Agreement prior to such termination or abandonment of the
Transactions, (B) as set forth in Section 9.1 and (C) that the provisions of the
Confidentiality Agreement will continue in full force and effect.
ARTICLE VIII
DEFINITIONS AND INTERPRETATION
Section 8.1 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context clearly requires
otherwise:
"Acquisition Proposal" shall mean any proposal or offer to acquire,
directly or indirectly, any part of the business or properties of the Company or
any Company Subsidiary or any capital stock of the Company or any Company
Subsidiary, whether by sale of assets, tender offer, exchange offer, merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transactions involving the Company or any Company Subsidiary,
division or operating or principal business unit of the Company.
"1999 Option" shall mean (i) a Company Option issued pursuant to the
Company's 1999 Stock Option Plan and (ii) a Company Option issued pursuant to
the Company Incentive Plan with respect to which accelerated vesting upon a
change in control of the Company has been waived.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Agreement" or "this Agreement" shall mean this Agreement and Plan
of Merger, together with the Exhibits and Appendices hereto and the Disclosure
Schedule.
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"Appointment Date" shall mean the time the persons designated by
Purchaser have been elected to, and shall constitute a majority of, the Company
Board of Directors pursuant to Section 1.3.
"Associate" shall have the meaning set forth in Rule 12b-2 of the
Exchange Act.
"Balance Sheet" shall mean the most recent audited balance sheet of
the Company and its consolidated Subsidiaries included in the Financial
Statements.
"Balance Sheet Date" shall mean the date of the Balance Sheet.
"Board Fraction" shall mean a fraction, the numerator of which shall
be the number of Shares that Parent and its Subsidiaries beneficially own at the
time of calculation of the Board Fraction, and the denominator of which shall be
the total number of Shares then outstanding.
"Cash Amount" shall mean the product of (i) the excess, if any, of
the Merger Consideration over the exercise price per Share of such Company
Option and (ii) the number of Shares subject to such Company Option.
"Certificate" shall mean a certificate that immediately prior to the
Effective Time represented Shares which were converted pursuant to Section 2.1
into the right to receive the Merger Consideration.
"Closing" shall mean the closing referred to in Section 1.6.
"Closing Date" shall mean the date on which the Closing occurs.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Company" shall mean Softworks, Inc., a Delaware corporation.
"Company Agreement" shall mean any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation or
arrangement, whether written or oral, to which the Company or any Company
Subsidiary is a party or by which any of them or any of their properties or
assets may be bound.
"Company Board of Directors" shall mean the board of directors of
the Company.
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"Company By-Laws" shall mean the By-Laws, as amended to date, of
the Company.
"Company Charter" shall mean the Certificate of Incorporation, as
amended to date, of the Company.
"Company Intellectual Property Rights" shall mean all Intellectual
Property that is currently used in the business of the Company or any Company
Subsidiary or that is necessary to conduct the business of the Company and its
Subsidiaries as presently conducted or as currently proposed to be conducted.
"Company Incentive Plan" shall mean the Softworks, Inc. 1998 Long-
Term Incentive Plan, as amended.
"Company Option" shall mean an option to purchase Shares that has
been granted by the Company and is outstanding at the Effective Time.
"Company Permits" shall mean all permits, licenses, easements,
variances, exemptions, consents, certificates, authorizations, registrations,
orders and other approvals from Governmental Entities that are material to the
operation of the business of the Company and each Company Subsidiary, taken as a
whole, as it is now being conducted.
"Company SEC Documents" shall mean each form, report, schedule,
statement and other document required to be filed by the Company since May 28,
1998 under the Exchange Act or the Securities Act, including any amendment to
such document, whether or not such amendment is required to be so filed.
"Company Stock Option Plan" shall mean the Softworks, Inc. 1999
Stock Option Plan, as amended.
"Company Subsidiary" shall mean each Person that is a Subsidiary of
the Company.
"Company's knowledge" or "knowledge of the Company" shall mean the
knowledge that the directors and officers of the Company and its Subsidiaries
and the employees of the Company and its Subsidiaries having responsibility for
the particular subject matter at issue have or would possess after reasonable
investigation and inquiry.
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"Confidentiality Agreement" shall mean the Bilateral Confidentiality
Agreement dated November 1, 1998, as amended January 12, 1999, March 9, 1999 and
December, 1999, between the Company and Parent.
"Copyrights" shall mean U.S. and foreign registered and unregistered
copyrights (including, but not limited to, those in computer software and
databases), rights of publicity and all registrations and applications to
register the same.
"DGCL" shall mean the General Corporation Law of the State of
Delaware, as amended from time to time.
"Disclosure Schedule" shall mean the disclosure schedule of even
date herewith prepared and signed by the Company and delivered to Parent and
Purchaser simultaneously with the execution hereof.
"Dissenting Shares" shall mean any Shares as to which the holder
thereof has demanded appraisal with respect to the Merger in accordance with
Section 262 of the DGCL and as of the Effective Time has neither effectively
withdrawn nor lost his right to such appraisal.
"Effective Time" shall mean the date on which the certificate of
merger referred to in Section 1.5 is duly filed with the Secretary of State of
the State of Delaware or such other time as is agreed upon by the parties and
specified in such certificate of merger.
"Environmental Claim" shall mean any claim, action, investigation or
notice by any Person alleging potential liability for investigatory, cleanup or
governmental response costs, or natural resources or property damages, or
personal injuries, attorney's fees or penalties relating to (i) the presence, or
Release into the environment, of any Materials of Environmental Concern at any
location owned or operated by the Company or any Company Subsidiary, now or in
the past, or (ii) any violation, or alleged violation, of any Environmental
Law.
"Environmental Law" shall mean each federal, state, local and
foreign law and regulation relating to pollution, protection or preservation of
human health or the environment including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata, and natural
resources, and including, without limitation, each law and regulation relating
to emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the generation, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the
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preservation of the environment or mitigation of adverse effects thereon and
each law and regulation with regard to record keeping, notification, disclosure
and reporting requirements respecting Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any trade or business, whether or not
incorporated, that together with the Company would be deemed a "single employer"
within the meaning of Section 4001(b) of ERISA.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Financial Statements" shall mean the financial statements of the
Company included in the Company SEC Documents.
"GAAP" shall mean United States generally accepted accounting
principles.
"Governmental Entity" shall mean a court, arbitral tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, whether domestic or foreign.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Indemnification Agreement" shall mean the Indemnification Agree-
ment, dated December 21, 1999, by and among Parent, Purchaser and Major Share
holder.
"Indemnified Party" shall mean each present and former officer and
director of the Company and its Subsidiaries, and each person who becomes an
officer or director of the Company or any of its Subsidiaries prior to the
Effective Time.
"Independent Directors" shall mean directors of the Company who are
directors on the date hereof and who are not Affiliates of Parent or Purchaser.
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"Intellectual Property" shall mean all of the following: Trademarks,
Patents, Copyrights, Trade Secrets and Licenses.
"IRS" shall mean the Internal Revenue Service.
"Licenses" shall mean all licenses and agreements pursuant to which
the Company has acquired rights in or to any Trademarks, Trade Secrets, Patents
or Copyrights, or licenses and agreements pursuant to which the Company has
licensed or transferred the right to use any of the foregoing.
"Liens" shall mean security interests, liens, claims, pledges,
agreements, limitations in voting rights, charges or other encumbrances of any
nature whatsoever.
"Major Shareholder" shall mean Computer Concepts Corp., a Delaware
corporation.
"Material Contract" shall mean any agreements, contracts or other
instruments required to be disclosed in Section 3.6(a) of the Disclosure
Schedule.
"Materials of Environmental Concern" shall mean pollutants,
contaminants, toxic or hazardous substances, materials and wastes, petroleum and
petroleum products, asbestos and asbestos-containing materials, polychlorinated
biphenyls, radon and lead or lead-based paints and materials.
"Merger" shall mean the merger of Purchaser with and into the
Company referred to in Section 1.4.
"Merger Consideration" shall mean an amount of cash equal to the
Offer Price, which amount shall not include interest, regardless of when paid.
"Minimum Condition" shall mean the condition that, pursuant to the
Offer, there shall have been validly tendered and not withdrawn prior to the
expiration of the Offer, not less than that number of Shares which, together
with the Shares owned by Parent and Purchaser on the date hereof, constitutes at
least a majority of the Shares outstanding on a fully diluted basis (after
giving effect to the conversion or exercise of all outstanding options, warrants
and other rights and securities exercisable or convertible into Shares, whether
or not exercised or converted at the time of determination).
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"Minimum Termination Fee" shall mean the sum of $9,130,942 in
U.S. currency.
"NYSE" shall mean the New York Stock Exchange.
"Offer" shall mean the cash tender offer to be made by Purchaser
pursuant to Section 1.1 to acquire any and all issued and outstanding Shares at
the Offer Price.
"Offer Documents" shall mean the Offer to Purchase and a form of
letter of transmittal and summary advertisement filed as exhibits to the
Schedule 14D-1, together with any amendments and supplements thereto.
"Offer Price" shall mean $10.00 per Share net to the seller in cash,
or such increased amount, if any, as Purchaser may offer to pay as contemplated
by Section 1.1(a) and Section 5.5(b).
"Offer to Purchase" shall mean the offer to purchase included in the
Schedule 14D-1 filed with the SEC pursuant to Section 1.1(b).
"Option Exchange Ratio" shall mean (x) the Merger Consideration
divided by (y) the average of the closing prices of Parent Common Stock on the
NYSE during the twenty trading days preceding the fifth trading day prior to the
Closing Date.
"Parent" shall mean EMC Corporation, a Massachusetts corporation.
"Parent By-Laws" shall mean the Amended and Restated By-Laws of
Parent, as amended to date.
"Parent Charter" shall mean the Restated Articles of Organization,
as amended to date, of Parent.
"Parent Common Stock" shall mean shares of common stock, par value
$.01 per share, of Parent.
"Parent Option" shall mean an option to purchase shares of Parent
Common Stock.
"Patents" shall mean issued U.S. and foreign patents and pending
patent applications, patent disclosures, and any and all divisions,
continuations,
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continuations-in-part, reissues, reexaminations, and extension thereof, any
counterparts claiming priority therefrom, utility models, patents of
importation/confirmation, certificates of invention and like statutory rights.
"Paying Agent" shall mean the bank or trust company designated by
Parent to act as agent for the holders of the Shares pursuant to Section 2.2(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Person" shall mean a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Entity or other entity
or organization.
"Plans" shall mean a plan, program, agreement, arrangement or
program required to be included in the Disclosure Schedule pursuant to Section
3.13(a).
"Preferred Stock" shall mean the preferred stock, par value $.001
per share, of the Company.
"Product" shall mean any product designed, manufactured, shipped,
sold, marketed, distributed and/or otherwise introduced into the stream of
commerce by or on behalf of the Company or any Company Subsidiary, including,
without limitation, any product sold in the United States by the Company or any
Company Subsidiary as the distributor, agent, or pursuant to any other
contractual relationship with a non-U.S. manufacturer.
"Proxy Statement" shall mean the proxy statement to be filed, if
necessary, by the Company with the SEC pursuant to Section 1.9(a)(ii), together
with all amendments and supplements thereto and including the exhibits thereto.
"Purchaser" shall mean Eagle Merger Corp., a Delaware corporation
that is a wholly owned subsidiary of Parent.
"Purchaser By-Laws" shall mean the By-Laws of Purchaser, as
amended to date.
"Purchaser Charter" shall mean the Certificate of Incorporation of
Purchaser, as amended to date.
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"Purchaser Common Stock" shall mean common stock, par value $.01 per
share, of Purchaser.
"Qualified Plan" shall mean a Plan that is intended to qualify under
Section 401(a) of the Code.
"Release" shall mean any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or migration
into the indoor or outdoor environment (including, without limitation, ambient
air, surface water, groundwater and surface or subsurface strata) or into or out
of any property, including the movement of Materials of Environmental Concern
through or in the air, soil, surface water, groundwater or property.
"Retained Employees" shall mean those Persons who were employees of
the Company or any Company Subsidiary immediately prior to the Effective Time.
"Schedule 14D-l" shall mean the Schedule 14D-1 filed by Purchaser
with the SEC pursuant to Section 1.1(b), together with all amendments and
supplements thereto and including the exhibits thereto.
"Schedule 14D-9" shall mean the Solicitation/Recommendation
Statement on Schedule 14D-9 filed by the Company with the SEC pursuant to
Section 1.2(a), together with all amendments and supplements thereto and
including the exhibits thereto.
"SEC" shall mean the United States Securities and Exchange Com-
mission.
"Section 203 Approval" shall mean the action taken by the Company
Board of Directors referred to in Section 3.5 causing Section 203 of the DGCL
not to apply to this Agreement or the other Transactions.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Severance Agreements" shall mean employment and severance
agreements and arrangements, as amended through the date hereof, with respect to
employees and former employees of the Company.
"Shares" shall mean shares of common stock, par value $.001, issued
by the Company.
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"Stock Tender Agreement" shall mean the Stock Tender Agreement,
dated as of the date hereof, among Parent, Purchaser, the Major Shareholder and
the Trustees, pursuant to which the Trustees have agreed, among other things, to
tender in the Offer the Shares owned by the Major Shareholder and held in the
Voting Trust and to grant Parent an option to purchase such Shares and to grant
Purchaser a proxy with respect to the voting of such Shares upon the terms and
subject to the conditions set forth therein.
"Stockholders' Stock Tender Agreement" shall mean the Stockholders'
Stock Tender Agreement, dated as of the date hereof, among Parent, Purchaser and
each of James A. Cannavino, Judy G. Carter, Daniel DelGiorno, Jr., Joseph J.
Markus, Robert McLaughlin, Lisa Welch, Claude R. Kinsey, III and George Aronson,
pursuant to which each such individual has agreed, among other things, to tender
in the Offer the Shares owned by such individual and to grant Parent an option
to purchase such Shares and to grant Purchaser a proxy with respect to the
voting of such Shares upon the terms and subject to the conditions set forth
therein.
"Subsidiary" shall mean, with respect to any party, any corporation
or other organization, whether incorporated or unincorporated, of which (a) at
least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries or (b) such party or any other Subsidiary of such party is a
general partner (excluding any such partnership where such party or any
Subsidiary of such party does not have a majority of the voting interest in such
partnership).
"Subsidiary Documents" shall mean the charter and by-laws (or
equivalent organizational documents), as amended to date, of each Company
Subsidiary.
"Superior Proposal" shall mean any proposal or offer made by a third
party to acquire, directly or indirectly, including pursuant to a sale of
assets, tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction,
for consideration consisting of cash and/or securities, more than 50% of the
combined voting power 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 of Directors determines in its good faith judgment (after
receipt of (i) an opinion of a financial advisor of nationally recognized
reputation that the such proposal is superior, from a financial
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point of view, to the Offer and the Merger, and (ii) an opinion from independent
legal counsel to the Company that the failure to provide such information or
access or to engage in such discussions or negotiations would cause the Company
Board of Directors to violate its fiduciary duties to the Company's shareholders
under applicable law), to be more favorable to the Company's stockholders than
the Offer and Merger and which is not subject to the receipt of any necessary
financing or which, in the good faith judgment of the Company Board of
Directors, is reasonably capable of being obtained by such third party.
"Surviving Corporation" shall mean the successor or surviving
corporation in the Merger.
"Tax" or "Taxes" shall mean all taxes, charges, fees, duties,
levies, tariffs, imposts, penalties or other assessments of any kind imposed by
any federal, state, local or foreign governmental authority, including, but not
limited to, income, gross receipts, excise, profits, ad valorem, net worth,
value added, service, special assessments, workers' compensation, utility,
severance, production, excise, stamp, occupation, premiums, windfall profits,
real or personal property, sales, gain, use, license, custom duty, unemployment,
capital stock, transfer, franchise, payroll, withholding, social security,
minimum estimated, and other taxes, and shall include interest, penalties or
additions attributable thereto.
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Termination Fee" shall mean the sum of $10,572,670.00 in U.S.
currency.
"Title IV Plan" shall mean a Plan that is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code.
"Trademarks" shall mean U.S. and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names and
all registrations and applications to register the same.
"Trade Secrets" shall mean all categories of trade secrets as
defined in the Uniform Trade Secrets Act including, but not limited to, business
information, technology, know-how or applications.
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"Transactions" shall mean the transactions provided for or
contemplated by this Agreement, the Stock Tender Agreement and the Stockholders'
Stock Tender Agreement, including but not limited to the Offer and the Merger.
"Trustees" shall mean James Cannavino, Dennis Murray and Charles
Feld, solely in their capacities as trustees under the Voting Trust Agreement.
"Voting Debt" shall mean indebtedness having general voting rights
and debt convertible into securities having such rights.
"Voting Trust" shall mean the voting trust created pursuant and
subject to the terms and conditions of the Voting Trust Agreement.
"Voting Trust Agreement" shall mean the Voting Trust Agreement,
dated as of August 3, 1998, between the Company, the Major Shareholder and the
Trustees.
"Year 2000 Compliant" shall mean that the applicable system,
Product, service or item: (i) will accurately receive, record, store, provide,
recognize, recall and process all date and time data from, during, into and
between the years 1999, 2000 and 2001, and all years pertinent thereafter; (ii)
will accurately perform all date-dependent calculations and operations
(including without limitation, mathematical operations, sorting, comparing and
reporting) from, during, into and between the years 1999, 2000 and 2001, and all
pertinent years thereafter; and (iii) will not malfunction, cease to function or
provide invalid or incorrect results as a result of (A) the change of years from
1999 to 2000 or from 2000 to 2001, (B) date data, including date data which
represents or references different centuries, different dates during 1999, 2000
and 2001, or more than one century or (C) the occurrence of any particular date;
in each case without human intervention, provided, in each case, that all
software, applications, hardware and other systems used in conjunction with such
system or item that are not owned or licensed by the Company or any Company
Subsidiary correctly exchange date data with or provide data to such system or
item.
Section 8.2 Interpretation.
(a) When a reference is made in this Agreement to a section or
article, such reference shall be to a section or article of this Agreement
unless otherwise clearly indicated to the contrary.
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(b) Whenever the words "include", "includes" or "including" are used
in this Agreement they shall be deemed to be followed by the words "without
limitation."
(c) The words "hereof", "herein" and "herewith" and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and article,
section, paragraph, exhibit and schedule references are to the articles,
sections, paragraphs, exhibits and schedules of this Agreement unless otherwise
specified.
(d) The plural of any defined term shall have a meaning correlative
to such defined term, and words denoting any gender shall include all genders.
Where a word or phrase is defined herein, each of its other grammatical forms
shall have a corresponding meaning.
(e) A reference to any party to this Agreement or any other
agreement or document shall include such party's successors and permitted
assigns.
(f) A reference to any legislation or to any provision of any
legislation shall include any modification or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued thereunder or pursuant thereto.
(g) As used in this Agreement, any reference to any event, change or
effect being material or having a material adverse effect on or with respect to
any entity (or group of entities taken as a whole) means such event, change or
effect is materially adverse to (i) the consolidated financial condition,
businesses or results of operations of such entity as a whole (or, if used with
respect thereto, of such group of entities taken as a whole) or (ii) the ability
of such entity (or group) to consummate the Transactions.
(h) The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Fees and Expenses. (a) Except as specifically provided
to the contrary in this Agreement, including Section 9.1(b), all reasonable
costs and expenses incurred in connection with this Agreement and the
consummation of the Transactions shall be paid by the party incurring such costs
and expenses.
(b) If
(i) the Company shall enter into an agreement which accepts or
implements another Acquisition Proposal;
(ii) either the Company or Parent terminates or abandons the
Transactions pursuant to Section 7.1(b)(i) and prior thereto there shall
have been publicly announced another Acquisition Proposal;
(iii) the Company shall terminate or abandon the Transactions
pursuant to Section 7.1(c)(ii);
(iv) Parent shall terminate or abandon the Transactions
pursuant to Section 7.1(d)(ii); or
(v) Parent shall terminate or abandon the Transactions
pursuant to Section 7.1(d)(iii) as a result of a breach of the provisions
of Section 5.5 hereof or the intentional or willful breach of any other
provision hereof (it being understood that such right of termination or
abandonment is subject to the time period afforded the Company to cure
such breach pursuant to Section 7.1(d)(iii));
then the Company shall pay to Parent an amount equal to the Termination Fee plus
an amount equal to Parent's actual and reasonably documented out-of-pocket fees
and expenses incurred by Parent and Purchaser in connection with the Offer, the
Merger, this Agreement and the consummation of the Transactions. The Termination
Fee and Parent's good faith estimate of its expenses shall be paid in same day
funds concurrently with the execution of an agreement referred to in subsection
(i) above or any termination or abandonment referred to in subsections (ii),
(iii) or (iv) above, whichever shall first occur, together with delivery of a
written acknowledgment by the Company of its obligation to reimburse Parent for
its actual expenses in excess of such estimated expense payment.
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(c) If
(i) Parent shall terminate or abandon the Transactions
pursuant to Section 7.1(d)(iv); or
(ii) the Offer shall have expired without the Minimum
Condition having been satisfied, and the Major Shareholder shall, for any
reason, not have fully satisfied its obligations under the Stock Tender
Agree ment to (i) tender the Shares subject to the Stock Tender Agreement
in the Offer, (ii) grant the option to Parent to purchase the Shares
subject to the Stock Tender Agreement and consummate any sale upon
exercise of such option or (iii) grant the proxy with respect to, or vote,
the Shares subject to the Stock Tender Agreement as set forth therein;
then the Company shall pay to Parent an amount equal to the Minimum Termination
Fee plus an amount equal to Parent's actual and reasonably documented
out-of-pocket fees and expenses incurred by Parent and Purchaser in connection
with the Offer, the Merger, this Agreement and the consummation of the
Transactions. The Minimum Termination Fee and Parent's good faith estimate of
its expenses shall be paid in same day funds concurrently with the execution of
an agreement referred to in subsection (i) above or any termination or
abandonment referred to in subsections (ii), (iii) or (iv) above, whichever
shall first occur, together with delivery of a written acknowledgment by the
Company of its obligation to reimburse Parent for its actual expenses in excess
of such estimated expense payment.
Section 9.2 Amendment and Modification. Subject to applicable law
and Section 1.3, this Agreement may be amended, modified and supplemented in any
and all respects, whether before or after any vote of the shareholders of the
Company contemplated hereby, by written agreement of the parties hereto, by
action taken by their respective Boards of Directors (which in the case of the
Company shall include approvals as contemplated in Section 1.3(c)), at any time
prior to the Closing Date with respect to any of the terms contained herein;
provided, however, that after the approval of this Agreement by the shareholders
of the Company, no such amendment, modification or supplement shall reduce the
amount or change the form of the Merger Consideration.
Section 9.3 Survival of Representations and Warranties. The
representations and warranties in this Agreement or in any schedule, instrument
or other document delivered pursuant to this Agreement shall survive the
Effective
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Time as necessary to effect the terms and provisions of the Indemnification
Agree ment.
Section 9.4 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) if to Parent or Purchaser, to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Vice President, Corporate Development
Telephone No.: (508) 435-1000
Telecopy No.: (508) 435-8900
with a copy to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Office of the General Counsel
Telephone No.: (508) 435-1000
Telecopy No.: (508) 497-6915
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telephone No.: (617) 573-4800
Telecopy No.: (617) 573-4822
and
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(b) if to the Company, to:
Softworks, Inc.
5845 Richmond Highway, Suite 400
Alexandria, Virginia 22303
Attention: Judy G. Carter, President
Telephone No.: (703) 317-2424
Telecopy No.: (703) 317-1631
with a copy to:
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
Attention: David H. Lieberman, Esq.
Telephone No.: (516) 822-4820
Telecopy No.: (516) 822-4824
Section 9.5 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the parties and delivered to the other parties.
Section 9.6 Entire Agreement; No Third Party Beneficiaries. This
Agreement, the Indemnification Agreement and the Confidentiality Agreement
(including the documents and the instruments referred to herein and therein):
(a) constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof, and (b) except as provided in Sections 2.4
and 5.9 are not intended to confer upon any Person other than the parties hereto
and thereto any rights or remedies hereunder.
Section 9.7 Severability. Any term or provision of this Agreement
that is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction. If the final judgment of a
court of competent jurisdiction or other authority declares that any term or
provision hereof is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to reduce the scope,
duration, area or applicability of the term or provision, to delete
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specific words or phrases, or to replace any invalid, void or unenforceable term
or provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
Section 9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without giving
effect to the principles of conflicts of law thereof.
Section 9.9 Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the Commonwealth of Massachusetts or in Massachusetts state court,
this being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (a) consents to submit itself
to the personal jurisdiction of any Federal court located in the Commonwealth of
Massachusetts or any Massachusetts state court in the event any dispute arises
out of this Agreement or any of the Transactions contemplated by this Agreement,
(b) agrees that it will not attempt to deny or defeat such personal jurisdiction
by motion or other request for leave from any such court and (c) agrees that it
will not bring any action relating to this Agree ment or any of the Transactions
contemplated by this Agreement in any court other than a Federal or state court
sitting in the Commonwealth of Massachusetts.
Section 9.10 Time of Essence. Each of the parties hereto hereby
agrees that, with regard to all dates and time periods set forth or referred to
in this Agreement, time is of the essence.
Section 9.11 Extension; Waiver. At any time prior to the Effective
Time, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 9.2, waive compliance by the other parties with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party 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 any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
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Section 9.12 Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written content of the other parties, except that Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any direct or indirect wholly owned Subsidiary of Parent.
Subject to the preceding sentence, this Agree ment will be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
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IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused
this Agreement to be executed under seal by their respective officers thereunto
duly authorized as of the date first written above.
EMC CORPORATION
By /s/ Michael C. Ruettgers
__________________________________
Name: Michael C. Ruettgers
Title: President/CEO
EAGLE MERGER CORP.
By /s/ Paul T. Dacier
__________________________________
Name: Paul T. Dacier
Title: Secretary
SOFTWORKS, INC.
By /s/ Judy G. Carter
__________________________________
Name: Judy G. Carter
Title: President & CEO
<PAGE> 72
Annex A
Certain Conditions of the Offer. Notwithstanding any other
provisions of the Offer, and in addition to (and not in limitation of)
Purchaser's rights to extend and amend the Offer at any time in its sole
discretion (subject to the provisions of the Agreement), Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Shares promptly after
termination or withdrawal of the Offer), pay for, and may delay the acceptance
for payment of or, subject to the restriction referred to above, the payment
for, any tendered Shares, and may terminate or amend the Offer as to any Shares
not then paid for, if (i) any applicable waiting period under the HSR Act has
not expired or terminated, (ii) the Minimum Condition has not been satisfied, or
(iii) at any time on or after the date of the Agreement and before the scheduled
expiration date of the Offer, any of the following events shall occur or shall
be determined by Purchaser to have occurred:
(a) there shall be threatened or pending any suit, action or
proceeding by any Governmental Entity (i) seeking to prohibit or impose any
material limitations on Parent's or Purchaser's ownership or operation (or that
of any of their respective Subsidiaries or Affiliates) of all or a material
portion of their or the Company's businesses or assets, or to compel Parent or
Purchaser or their respective Subsidiaries and Affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and their respective Subsidiaries, in each case taken as a whole, (ii)
challenging the acquisition by Parent or Purchaser of any Shares under the Offer
or pursuant to the Stock Tender Agree ment or the Stockholders' Stock Tender
Agreement, seeking to restrain or prohibit the making or consummation of the
Offer or the Merger or the performance of any of the other transactions
contemplated by this Agreement, the Stock Tender Agreement or the Stockholders'
Stock Tender Agreement, or seeking to obtain from the Company, Parent or
Purchaser any damages that are material in relation to the Company and its
Subsidiaries, taken as a whole, (iii) seeking to impose material limitations on
the ability of Purchaser, or rendering Purchaser unable, to accept for payment,
pay for or purchase some or all of the Shares pursuant to the Offer and the
Merger, (iv) seeking to impose material limitations on the ability of Purchaser
or Parent effectively to exercise full rights of ownership of the Shares,
including, without limitation, the right to vote the Shares purchased by it on
all matters properly presented to the Company's shareholders, or (v) which
otherwise is reasonably likely to have a material adverse affect on the
consolidated financial condition, businesses or results of operations of the
Company and its Subsidiaries, taken as a whole; or
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(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to the
Offer or the Merger, or any other action shall be taken by any Governmental
Entity, other than the application to the Offer or the Merger of applicable
waiting periods under the HSR Act, that is reasonably likely to result, directly
or indirectly, in any of the consequences referred to in clauses (i) through (v)
of paragraph (a) above; or
(c) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the NYSE or in the NASDAQ
National Market System, for a period in excess of three hours (excluding
suspensions or limitations resulting solely from physical damage or interference
with such exchanges not related to market conditions), (ii) a declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory), (iii) a commencement of a war, armed
hostilities or other international or national calamity directly or indirectly
involving the United States, (iv) any limitation (whether or not mandatory) by
any United States or foreign governmental authority on the extension of credit
by banks or other financial institutions, (v) any decline in either the Dow
Jones Industrial Average or the Standard & Poor's Index of 500 Industrial
Companies by an amount in excess of 15% measured from the close of business on
the date of this Agreement, or (vi) a change in general financial bank or
capital market conditions which materially or adversely affects the ability of
financial institutions in the United States to extend credit or syndicate loans
or (vii) in the case of any of the foregoing existing at the time of the
commencement of the Offer, a material acceleration or worsening thereof; or
(d) there shall have occurred any material adverse change (or any
development that, insofar as reasonably can be foreseen, is reasonably likely to
result in any material adverse change) in the consolidated financial condition,
businesses, results of operations or prospects of the Company and its
Subsidiaries, taken as a whole; or
(e) the Company Board of Directors or any committee thereof (i)
shall have withdrawn, modified or changed in a manner adverse to Parent or Pur-
chaser its approval or recommendation of the Offer, this Agreement or the
Merger, (ii) shall have recommended the approval or acceptance of an Acquisition
Proposal from, or similar business combination with, a Person other than Parent,
Purchaser or their Affiliates, (iii) shall have executed an agreement in
principle or definitive agreement relating to an Acquisition Proposal from, or
similar business combination with, a Person other than Parent, Purchaser or
their Affiliates or (iv) shall have adopted any resolution to effect any of the
foregoing which, in the sole judgment of Parent in any such case, and regardless
of the circumstances (including any action or
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inaction by Parent or Purchaser) giving rise to any such condition, makes it
inadvisable to proceed with such acceptance or payment; or
(f) any of the representations and warranties of the Company set
forth in this Agreement that are qualified as to materiality shall not be true
and correct and any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each case as
of the date of this Agree ment and as of the scheduled expiration date of the
Offer; or
(g) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this Agree
ment; or
(h) (A) any of the representations and warranties of the Major
Shareholder set forth in the Stock Tender Agreement that are qualified as to
materiality shall not be true and correct and any such representations and
warranties that are not so qualified shall not be true and correct in any
material respect, in each case as of the date of this Agreement and as of the
scheduled expiration date of the Offer; (B) either the Major Shareholder or the
Trustees shall have failed to perform in any material respect any obligation or
to comply in any material respect with any agreement or covenant of the Major
Shareholder or the Trustees to be performed or complied with by them under the
Stock Tender Agreement; or (C) there shall be any judgment, order or injunction
enacted, entered, enforced, promulgated or deemed applicable to the respective
obligations of the Major Shareholder or the Trustees under the Stock Tender
Agreement, relating to the tendering of the Shares beneficially owned by the
Major Shareholder in the Offer, the granting of an option to Parent to purchase
the Shares beneficially owned by Major Shareholder and the granting of a proxy
with respect to, and the agreement to vote, the Shares beneficially owned by
the Major Shareholder, which judgments, order or injunction, after the initial
scheduled expiration date of the Offer, has not been withdrawn or rendered
inapplicable to the obligations of the Major Shareholder or the Trustees under
the Stock Tender Agreement within 15 days of being so enacted, entered,
enforced, promulgated or deemed applicable.
(i) all consents necessary to the consummation of the Offer or the
Merger including, without limitation, consents from parties to loans, contracts,
leases or other agreements and consents from governmental agencies, whether
federal, state or local shall not have been obtained, other than consents the
failure to obtain which would not have a material adverse effect on the Company
and its Subsidiaries, taken as a whole; or
A-3
<PAGE> 75
(j) this Agreement shall have been terminated in accordance with its
terms;
which in the sole judgment, exercised reasonably, of Parent or Purchaser, in any
such case, and regardless of the circumstances (including any action or inaction
by Parent or Purchaser) giving rise to such condition, makes it inadvisable to
proceed with the Offer and/or with such acceptance for payment of or payment for
Shares.
The foregoing conditions are for the sole benefit of Parent and
Purchaser, may be waived by Parent or Purchaser, in whole or in part, at any
time and from time to time in the sole discretion of Parent or Purchaser. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
A-4
<PAGE> 1
Exhibit 99.(C)(2)
STOCK TENDER AGREEMENT
STOCK TENDER AGREEMENT, dated as of December 21, 1999, by and
among EMC Corporation, a Massachusetts corporation ("Parent"), Eagle Merger
Corp., a Delaware corporation and a wholly-owned subsidiary of Parent
("Purchaser"), Computer Concepts Corp., a Delaware corporation (the "Major
Shareholder"), and James Cannavino, Dennis Murray and Charles Feld, solely in
their capacities as trustees under the Voting Trust Agreement (as defined
below), or any successor trustees appointed pursuant to the terms of such
Agreement (each, a "Trustee" and collectively, the "Trustees").
W I T N E S S E T H :
WHEREAS, the Major Shareholder Beneficially Owns 6,145,767
shares of the common stock, $.001 par value per share (the "Common Stock"), of
Softworks, Inc., a Delaware corporation (the "Company"); and
WHEREAS, the Major Shareholder entered into a Voting Trust
Agreement, dated as of August 3, 1998, by and among Daniel DelGiorno, Jr., James
Cannavino and Robert Devine, as trustees, the Company and Major Shareholder (the
"Voting Trust Agreement") and deposited into the voting trust created pursuant
and subject to the terms and conditions of the Voting Trust Agreement (the
"Voting Trust"), and assigned and transferred to the Trustees, the shares of
Common Stock owned by the Major Shareholder (the shares of Common Stock
Beneficially Owned by the Major Shareholder, together with any shares of Common
Stock acquired by the Major Shareholder after the date hereof and prior to the
consummation or termination of the Offer (as hereinafter defined), upon exercise
of options or otherwise, and subject to the Voting Trust are referred to herein
as the "Shares"); and
WHEREAS, the Voting Trust Agreement provides, among other
things, that the Trustees will have certain rights relating to the sale and
voting of the Shares; and
WHEREAS, simultaneously with the execution of this Agreement,
Parent, Purchaser and the Company are entering into an Agreement and Plan of
Merger (as amended from time to time, the "Merger Agreement")
<PAGE> 2
pursuant to which, among other things, Purchaser is agreeing to promptly
commence a cash tender offer (as such tender offer may hereafter be amended from
time to time, the "Offer") to purchase all of the issued and outstanding shares
of Common Stock; and
WHEREAS, as an inducement and a condition to their willingness
to enter into the Merger Agreement and incur the obligations set forth therein,
including the Offer and the subsequent merger of the Purchaser with and into the
Company as contemplated thereby (the "Merger"), Parent and Purchaser have
requested that the Trustees and the Major Shareholder agree, and the Trustees
and the Major Shareholder have agreed, to tender the Shares at any time during
the term of this Agreement pursuant to the Offer, to vote all the Shares in
favor of the Merger, and to grant to Parent an option to acquire all the Shares
under certain circumstances, all on the terms and conditions contained in this
Agreement; and
WHEREAS, the Major Shareholder desires that the Trustees
undertake, pursuant to the Voting Trust, all of the actions set forth herein and
intends and hereby directs the Trustees to take all such actions.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises, representations, warranties, covenants and agreements set forth
herein and the promises, representations, warranties, covenants and agreements
of Parent and Purchaser in the Merger Agreement, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Certain Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context clearly requires otherwise:
"Beneficially Own" or "Beneficial Ownership" shall mean, with
respect to any securities, having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
2
<PAGE> 3
"Option Expiration Date" shall mean the date 15 business days
after the termination of the Merger Agreement in accordance with Article VII
thereof.
"Person" shall mean a natural person, corporation,
partnership, joint venture, association, trust, limited liability company,
business trust, joint stock company, unincorporated organization or other
entity.
"Transfer" shall mean, with respect to a security, the sale,
transfer, pledge, hypothecation, encumbrance, assignment or disposition of such
security or the Beneficial Ownership thereof, the offer to make such a sale,
transfer or other disposition, and the entering into of any option, agreement,
arrangement or understanding, whether or not in writing, to effect any of the
foregoing. As a verb, "Transfer" shall have a correlative meaning.
"Voting Period" shall mean the period from the date hereof
until the termination of this Agreement in accordance with its terms.
2. Restrictions. Neither the Trustees nor the Major Shareholder shall,
until the termination of this Agreement in accordance with its terms, directly
or indirectly, (a) except as provided in Section 3 hereof, Transfer the Shares
to any Person, grant any proxies or powers of attorney or enter into a voting
agreement, understanding or arrangement with respect to the Shares, or (b) take
any action that would make any representation or warranty of the Trustees or the
Major Shareholder herein untrue or incorrect or would result in a breach by the
Trustees or the Major Shareholder of any of its respective obligations under
this Agreement or a breach by the Company of its obligations under the Merger
Agreement.
3. Tender of Shares. The Trustees and the Major Shareholder hereby
agree to validly tender or cause to be validly tendered, pursuant to and in
accordance with the terms of the Offer, promptly after Purchaser commences the
Offer (but in no event later than five business days after the date of such
commencement or,
3
<PAGE> 4
with respect to shares of Common Stock acquired by the Major Shareholder and
deposited in the Voting Trust after the date of this Agreement upon exercise of
options or otherwise, no later than five business days after the date of such
acquisition), all of the Shares and to not withdraw such Shares unless the
Merger Agreement shall be validly terminated in accordance with Article VII
thereof.
4. No Solicitation of Competing Transaction. Neither the Trustees nor
the Major Shareholder shall (and each of them shall cause its respective
representatives and agents not to), directly or indirectly, (a) initiate,
solicit or encourage, or take any action to facilitate the making of, any offer
or proposal which constitutes or is reasonably likely to lead to any Acquisition
Proposal (as defined in the Merger Agreement) or any inquiry with respect
thereto, or (b) in the event of an unsolicited Acquisition Proposal, engage in
negotiations or discussions with, or provide any information or data to, any
Person (other than Parent, Purchaser or any of their respective representatives
or agents) relating to any Acquisition Proposal.
5. Voting of Shares; Proxy. (a) During the Voting Period, at any
meeting (whether annual or special and whether or not an adjourned or postponed
meeting) of the Company's stockholders, however called, or in connection with
any written consent of the Company's stockholders, the Major Shareholder and the
Trustees shall vote (or cause to be voted) all of the Shares: (i) in favor of
the Merger, the execution and delivery by the Company of the Merger Agreement
and the approval and adoption of the Merger and each of the other actions
contemplated by the Merger Agreement and this Agreement and any actions required
in furtherance thereof and hereof, provided that to the extent that such actions
require the payment of filing or registration fees on the part of the Trustees
or Major Shareholder in excess of $10,000, Parent shall reimburse the Trustees
or Major Shareholder, as the case may be, for any such excess; (ii) against any
action or agreement that would (A) result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the
4
<PAGE> 5
Company under the Merger Agreement or of the Trustees or the Major Shareholder
under this Agreement or (B) impede, interfere with, delay, postpone, or
adversely affect the Offer, the Merger or any other transaction contemplated by
the Merger Agreement or this Agreement; and (iii) except as otherwise agreed to
in writing in advance by Parent, against the following actions (other than the
Offer, the Merger and any other transaction contemplated by the Merger Agreement
and this Agreement): (A) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or any
of its Subsidiaries (as defined in the Merger Agreement) (including any
transaction contemplated by an Acquisition Proposal); (B) any sale, lease or
transfer of a material amount of the assets or business of the Company or its
Subsidiaries, or any reorganization, restructuring, recapitalization, special
dividend, dissolution, liquidation or winding up of the Company or its
Subsidiaries; (C) any material change in the present capitalization of the
Company or its Subsidiaries or any amendment of the Certificate of Incorporation
of the Company; (D) any other material change in the Company's corporate
structure or business; and (E) any other action that is intended or could
reasonably be expected to impede, interfere with, delay, postpone, discourage or
materially adversely affect the Offer, the Merger, any other transaction
contemplated by the Merger Agreement or this Agreement or the contemplated
economic benefits of any of the foregoing. The Trustees shall not enter into any
agreement, arrangement or understanding with any Person the effect of which
would be inconsistent or violative of the provisions and agreements contained in
this Section 5.
(b) IRREVOCABLE PROXY. THE MAJOR SHAREHOLDER AND EACH TRUSTEE HEREBY
SEVERALLY APPOINTS PAUL T. DACIER AND DAVID DONATELLI IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF PURCHASER, AND ANY INDIVIDUAL WHO SHALL HEREAFTER
SUCCEED TO ANY SUCH OFFICE OF PURCHASER, AND ANY OTHER DESIGNEE OF PURCHASER,
EACH OF THEM INDIVIDUALLY, THE MAJOR SHAREHOLDER'S AND THE TRUSTEE'S, AS
APPROPRIATE, IRREVOCABLE (UNTIL THE TERMINATION OF THE VOTING PERIOD) PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES AS
INDICATED
5
<PAGE> 6
IN SECTION 5(A) ABOVE. EACH OF THE MAJOR SHAREHOLDER AND EACH TRUSTEE INTENDS
THIS PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION OF THE VOTING PERIOD) AND
COUPLED WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE SUCH
OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY THE TRUSTEE WITH RESPECT TO THE
SHARES.
6. Waiver of Appraisal or Dissenting Rights. The Trustees and the Major
Shareholder hereby waive any rights of appraisal or rights to dissent from the
Merger under the General Corporation Law of the State of Delaware.
7. Waiver of Claims. Each of the Trustees and the Major Shareholder
hereby waives and relinquishes any claims, actions, recourse or other rights of
any nature which the Trustees or the Major Shareholder may have against the
Company, Parent or Purchaser which arises out of or relates to the Major
Shareholder's ownership of the Shares, its status as a stockholder of the
Company, the conduct of the business of the Company or the Major Shareholder or
the authorization, execution and delivery of the Merger Agreement or this
Agreement or the consummation of the transactions contemplated thereby or
hereby; provided, however, that the provisions of this Section 7 shall not
extend to the obligations of Parent and Purchaser pursuant to this Agreement.
8. Option. (a) The Major Shareholder and the Trustees hereby
irrevocably grant Parent an option (the "Option"), exercisable only upon the
events and subject to the conditions set forth herein, but in no event earlier
than January 1, 2000, to purchase any or all of the Shares at a purchase price
per share equal to $10.00 (or such higher per share price as may be offered by
Purchaser in the Offer).
(b) Subject to the conditions to the Offer and Purchaser's obligation
to purchase tendered Common Stock, each as set forth in the Merger Agreement,
and the termination provisions of Section 12, and provided that theretofore
Purchaser shall have commenced the
6
<PAGE> 7
Offer, Parent may exercise the Option in whole or in part at any time prior to
the Option Expiration Date if (x) the Major Shareholder or the Trustees fail to
comply with any of their obligations under this Agreement, or the Major
Shareholder or the Trustees withdraw the tender of the Shares (but the Option
shall not limit any other right or remedy available to Parent or Purchaser
against the Major Shareholder or the Trustees for breach of this Agreement) or
(y) the Offer is not consummated because of the failure to satisfy any of the
conditions to the Offer set forth in the Merger Agreement (other than as a
result of any action or inaction of the Parent or Purchaser that constitutes a
breach of the Merger Agreement).
Upon the occurrence of any of such circumstances, Parent shall
be entitled to exercise the Option and purchase the Shares, and the Trustees and
the Major Shareholder shall sell the Shares to Parent. Parent shall exercise the
Option by delivering written notice of such exercise to the Trustees (the
"Notice"), specifying the number of Shares to be purchased and the date, time
and place for the closing of such purchase, which date shall not be less than
three business days nor more than five business days from the date the Trustees
receive the Notice and in no event shall such date be later than the Option
Expiration Date. The closing of the purchase of Shares pursuant to this Section
7(b) (the "Closing") shall take place on the date, at the time and at the place
specified in such Notice; provided, that if at such date any of the conditions
to the Offer and Purchaser's obligation to purchase tendered Common Stock shall
not have been satisfied (or waived), Parent may postpone the Closing until a
date within five business days after such conditions are satisfied (but not
later than the Option Expiration Date). Upon the request of Parent, the Trustees
and the Major Shareholder shall promptly take, or cause to be taken, all action
required to effect all necessary filings by the Trustees and the Major
Shareholder under the HSR Act (as defined in the Merger Agreement) and shall
cooperate with Parent with respect to the filing obligations of Parent and
Purchaser, in each case as may be required in connection with the Closing.
7
<PAGE> 8
(c) At the Closing, the Trustees and the Major Shareholder will deliver
to Parent (i) a certificate, dated the date of the Closing, certifying that the
representation and warranty of the Trustees in Section 10(a) is true and correct
as of the date of the Closing; (ii) a certificate, dated the date of the
Closing, signed by an officer of the Major Shareholder certifying that the
representation and warranty of the Major Shareholder in Section 11(a) is true
and correct as of the date of the Closing; and (iii) in accordance with Parent's
instructions, the certificates representing the Shares and being purchased
pursuant to Section 7(a), duly endorsed or accompanied by stock powers duly
executed in blank. At such Closing, Parent shall deliver to the Major
Shareholder, by bank wire transfer of immediately available funds, an amount
equal to the number of Shares being purchased from the Major Shareholder as
specified in the Notice multiplied by $10.00 (or such higher per share price as
may be offered by Purchaser in the Offer).
(d) In the event of the exercise by Parent of the Option and the
subsequent sale by Parent of any or all of the Shares within 60 days of the
Closing (provided, however, that in the event of the commencement of any tender
offer by any third party, unaffiliated with Major Shareholder, for any and all
shares of the Common Stock outstanding (a "Third Party Tender Offer") during
such 60 day period, such 60 day period shall be extended to the earlier of (x)
60 days from the commencement of the Third Party Tender Offer or (y) 120 days
from the Closing) in connection with or pursuant to any Acquisition Proposal (a
"Subsequent Sale"), Parent shall pay Major Shareholder, within two business days
of the Subsequent Sale, an amount equal to the product of (A) 30% of the
difference between (x) the proceeds per Share received by Parent from the
Subsequent Sale and (y) the Offer Price or such higher price per Share as shall
be paid to the Major Shareholder by Purchaser, as adjusted for splits,
combinations and the like, multiplied by (B) the number of Shares sold pursuant
to the Subsequent Sale.
(e) Parent and Purchaser shall be solely responsible for any
obligations either of them have
8
<PAGE> 9
pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended, or
the rules and regulations thereunder.
9. No Purchase. Purchaser and Parent may allow the Offer to expire
without accepting for payment or paying for any Shares, on the terms and
conditions set forth in the Offer to Purchase (as defined in the Merger
Agreement), and may allow the Option to expire without exercising the Option and
purchasing all or any Shares pursuant to such exercise. If all Shares validly
tendered and not withdrawn are not accepted for payment and paid for in
accordance with the terms of the Offer to Purchase or pursuant to the exercise
of the Option, they shall be returned to the Trustees, whereupon they shall
continue to be held by the Trustees subject to the terms and conditions of this
Agreement.
10. Representations and Warranties of the Trustees. Each Trustee
represents and warrants to Parent and Purchaser as follows:
(a) The Trustees have, in trust, good and marketable record title
to the Shares, free and clear of any claims, security
interests, liens and encumbrances, and the transfer of such
portion of the Shares hereunder will pass to Purchaser (or to
Parent pursuant to the exercise of the Option) good and
marketable record title to such portion of the Shares, free
and clear of any claims, security interests, liens and
encumbrances whatsoever.
(b) James Cannavino, Dennis Murray and Charles Feld are the only
lawful and duly appointed trustees of the Voting Trust and
have the full power, authority and legal right to enter into
this Agreement and to carry out the transactions contemplated
hereby.
(c) This Agreement constitutes the legal, valid and binding
agreement of the Trustee, enforceable in accordance with its
terms (except as enforceability may be limited by bankruptcy,
insolvency, moratorium or other
9
<PAGE> 10
similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies).
(d) This Agreement and the execution and delivery hereof by the
Trustee does not, and the consummation of the transactions
contemplated hereby will not, (i) conflict with or result in
any violation of the Voting Trust Agreement, or (ii) violate
any order, writ, injunction, decree, statute, rule or
regulation applicable to the Trustee.
(e) Any information furnished by Major Shareholder for inclusion
in the Schedule 14D-1, the Schedule 14D-9 and the Proxy
Statement (as each such term is defined in the Merger
Agreement) will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to
make any such statement made by the Major Shareholder, in the
light of the circumstances under which it is made, not
misleading.
11. Representations and Warranties of the Major Shareholder. The Major
Shareholder represents and warrants to Parent and Purchaser as follows:
(a) The Major Shareholder Beneficially Owns, but is not the record
holder of, the Shares, free and clear of any claims, security
interests, liens and encumbrances, other than the Voting
Trust, and the transfer of such portion of the Shares
hereunder will pass to Purchaser (or to Parent pursuant to the
exercise of the Option) Beneficial Ownership to such portion
of the Shares free and clear of any claims, security
interests, liens and encumbrances whatsoever.
(b) Major Shareholder is a corporation duly organized and validly
existing under the laws of its jurisdiction of incorporation,
and is in good standing under the laws of its jurisdiction of
incorporation. Major Shareholder has the corporate power and
10
<PAGE> 11
authority to execute and deliver this Agreement and perform
its obligations hereunder. The execution and delivery by Major
Shareholder of this Agreement and the performance by Major
Shareholder of its obligations hereunder have been duly and
validly authorized by the Board of Directors of Major
Shareholder and no other corporate proceedings on the part of
Major Shareholder is necessary to authorize the execution,
delivery or performance of this Agreement or the consummation
of the transactions contemplated hereby.
(c) This Agreement constitutes the legal, valid and binding
agreement of the Major Shareholder enforceable in accordance
with its terms (except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles
governing the availability of equitable remedies).
(d) This Agreement covers all of the shares of Common Stock owned
by the Major Shareholder and its affiliates except for options
to purchase shares of Common Stock which were granted by the
Company to the Major Shareholder (provided, however, that any
Shares acquired by the Major Shareholder upon exercise of any
such options after the date hereof and prior to the
consummation or termination of the Offer are covered by this
Agreement). As of the date hereof, the Major Shareholder
Beneficially Owns 6,145,767 shares of the Company's Common
Stock and all such shares are subject to the Voting Trust.
(e) This Agreement and the execution and delivery hereof by the
Major Shareholder does not, and the consummation of the
transactions contemplated hereby will not, (i) conflict with
or result in any violation of the Voting Trust Agreement, (ii)
result in a violation of or breach of, or constitute (with or
without
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<PAGE> 12
due notice or lapse of time or both) a default (or give rise
to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other
instruments or obligations to which the Major Shareholder is a
party or by which any of their property or assets may be
bound, or (iii) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Major
Shareholder or any of its properties or assets.
(f) To the knowledge of the Major Shareholder, the representations
and warranties made by the Company in the Merger Agreement are
true and correct in all material respects as of the date
hereof, and, to the knowledge of the Major Shareholder, there
is no condition or state of facts which could cause the
Company to breach any of such representations and warranties
during the period from the date hereof until the earlier of
(x) the consummation of the Merger or (y) the termination of
the Merger Agreement in accordance with its terms.
12. Representations and Warranties of Parent and Purchaser.
Parent and Purchaser hereby represent and warrant to Major
Shareholder and the Trustees as follows:
(a) Each of Parent and Purchaser is a corporation duly organized
and validly existing under the laws of its jurisdiction of
incorporation, and each of them is in good standing under the
laws of its jurisdiction of incorporation. Parent and
Purchaser have all necessary corporate power and authority to
execute and deliver this Agreement and perform their
respective obligations hereunder. The execution and delivery
by Parent and Purchaser of this Agreement and the performance
by Parent and Purchaser of their respective obligations
hereunder have been duly and
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<PAGE> 13
validly authorized by the Board of Directors of each of Parent
and Purchaser and no other corporate proceedings on the part
of Parent or Purchaser are necessary to authorize the
execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby.
(b) This Agreement has been duly and validly executed and
delivered by Parent and Purchaser and constitutes a valid and
binding Agreement of each of Parent and Purchaser, enforceable
against each of them in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting creditors' rights
generally or by the principles governing the availability of
equitable remedies).
13. Termination. This Agreement shall terminate on the earlier of (i)
the purchase by Purchaser of the Shares pursuant to the Offer or (ii) the Option
Expiration Date. The provisions of Sections 7, 10 and 11 hereof shall survive
the termination of this Agreement.
14. Specific Performance. The parties hereto acknowledge and agree that
if any of the provisions of this Agreement were not performed by the Trustees or
the Major Shareholder, as the case may be, in accordance with their specific
terms or were otherwise breached, Parent would not have an adequate remedy at
law and would be irreparably harmed and that the damages therefor would be
difficult to determine. It is accordingly agreed that Parent shall be entitled
to injunctive relief to prevent breaches of this Agreement by the Trustees and
the Major Shareholder and to specifically enforce the terms and provisions
hereof in any court of the United States located in the Commonwealth of
Massachusetts or in Massachusetts state court, this being in addition to any
other remedy to which they are entitled at law or in equity.
15. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to
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<PAGE> 14
have been duly given if hand delivered in person or by next-day courier,
transmitted by facsimile or mailed by registered or certified mail, postage
prepaid, return receipt requested, as follows:
(a) If to Parent, to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Vice President,
Corporate Development
Telephone No.: (508) 435-1000
Facsimile No.: (508) 435-8900
with a copy to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Office of the General Counsel
Telephone No.: (508) 435-1000
Facsimile No.: (508) 497-6915
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telephone No: (617) 573-4800
Facsimile No: (617) 573-4822
(b) If to the Trustees, to:
c/o Softworks, Inc.
803 Windsor Drive SE
Redmond, Washington 98053
Attention: James A. Cannavino
Telephone No.: (425) 427-8985
Facsimile No.: (425) 837-1083
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<PAGE> 15
4437 Livingston Avenue
Dallas, Texas 75205
Attention: Charles Feld
Telephone No.: (214) 522-3140
Facsimile No.: (972) 791-3951
Marist College
3399 North Road
Poughkeepsie, New York 12601
Attention: Dr. Dennis Murray
Telephone No.: (914) 575-3600
Facsimile No.: (914) 575-3337
with a copy to:
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
Attention: David H. Lieberman, Esq.
Telephone No.: (516) 822-4820
Facsimile No.: (516) 822-4824
(c) If to the Major Shareholder, to:
Computer Concepts Corp.
80 Orville Drive
Bohemia, New York 11716
Attention: Daniel DelGiorno, Jr., President
Telephone No.: (516) 244-1500
Facsimile No.: (516) 244-1468
with a copy to:
Beckman, Millman & Sanders LLP
116 John Street
New York, New York 10038
Attention: Michael Beckman, Esq.
Telephone No.: (212) 406-4700
Facsimile No.: (212) 406-3750
or to such other address as the person to whom notice is given may have
previously furnished to the other parties in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
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<PAGE> 16
16. Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto (whether
by operation of law or otherwise) without the prior written consent of the other
parties, except that Purchaser may assign, in its sole discretion, any or all of
its rights, interests and obligations hereunder to Parent or to any direct or
indirect wholly owned Subsidiary of Parent. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
17. Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
18. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
regard to its conflicts of law rules. Each of the parties hereto (a) consents to
submit itself to the personal jurisdiction of any Federal court located in the
Commonwealth of Massachusetts or any Massachusetts state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court
and (c) agrees that it will not bring any action relating to this Agreement or
any of the transactions contemplated by this Agreement in any court other than a
Federal or state court sitting in the Commonwealth of Massachusetts.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
20. Effect of Headings. The headings herein are for reference purposes
only and shall not in any way affect the meaning or interpretation hereof.
16
<PAGE> 17
21. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and supersedes all prior agreements and understandings,
oral or written, among the parties hereto with respect to the subject matter
hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
17
<PAGE> 18
IN WITNESS WHEREOF, this Agreement has been duly executed under
seal and delivered by the parties hereto on the date first above written.
EMC CORPORATION
By /s/ Michael J. Cody
---------------------------------
Name: Michael J. Cody
Title: Vice President, Corporate
Development
EAGLE MERGER CORP.
By /s/ Paul T. Dacier
---------------------------------
Name: Paul T. Dacier
Title: Secretary
COMPUTER CONCEPTS CORP.
By /s/ Daniel DelGiorno
---------------------------------
Name: Daniel DelGiorno
Title: Chairman
TRUSTEES:
/s/ James Cannavino
---------------------------------
James Cannavino, as trustee under
the Voting Trust Agreement, dated
as of August 3, 1998
/s/ Dennis Murray
---------------------------------
Dennis Murray, as trustee under
the Voting Trust Agreement, dated
as of August 3, 1998
/s/ Charles Feld
---------------------------------
Charles Feld, as trustee under
the Voting Trust Agreement, dated
as of August 3, 1998
<PAGE> 1
Exhibit 99.(c)(3)
STOCKHOLDERS' STOCK TENDER AGREEMENT
STOCKHOLDERS' STOCK TENDER AGREEMENT, dated as of December 21, 1999,
by and among EMC Corporation, a Massachusetts corporation ("Parent"), Eagle
Merger Corp., a Delaware corporation and a wholly-owned subsidiary of Parent
("Purchaser"), and each of James A. Cannavino, Judy G. Carter, Daniel DelGiorno,
Jr., Claude R. Kinsey, III, Joseph J. Markus, George Aronson, Robert McLaughlin
and Lisa Welch (each a "Shareholder and collectively, the "Shareholders").
W I T N E S S E T H :
WHEREAS, each Shareholder Beneficially Owns that number of shares of
the common stock, $.001 par value per share (the "Common Stock"), of Softworks,
Inc., a Delaware corporation (the "Company"), set forth opposite such
Shareholder's name on Appendix A hereto; and
WHEREAS, simultaneously with the execution of this Agreement, Parent,
Purchaser and the Company are entering into an Agreement and Plan of Merger (as
amended from time to time, the "Merger Agreement") pursuant to which, among
other things, Purchaser is agreeing to promptly commence a cash tender offer (as
such tender offer may hereafter be amended from time to time, the "Offer") to
purchase all of the issued and outstanding shares of Common Stock; and
WHEREAS, as an inducement and a condition to their willingness to
enter into the Merger Agreement and incur the obligations set forth therein,
including the Offer and the subsequent merger of the Purchaser with and into the
Company as contemplated thereby (the "Merger"), Parent and Purchaser have
requested that the Shareholders agree, and each Shareholder has agreed, to
tender that number of shares of Common Stock Beneficially Owned by such
Shareholder and set forth opposite such Shareholder's name on Appendix B hereto
(such shares of Common Stock, together with any shares of Common Stock acquired
by the Shareholders after the date hereof and prior to the consummation or
termination of the Offer (as hereinafter defined), upon exercise of options or
otherwise being referred to herein as the "Shares") by such Shareholder at any
time during the term of this Agreement pursuant to the Offer, to vote all of
such Shareholder's Shares in favor of the Merger,
<PAGE> 2
and to grant to Parent an option to acquire all of such Shareholder's Shares
under certain circumstances, all on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements set forth herein
and the promises, representations, warranties, covenants and agreements of
Parent and Purchaser in the Merger Agreement, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Certain Definitions. For purposes of this Agreement, except as otherwise
expressly provided or unless the context clearly requires otherwise:
"Beneficially Own" or "Beneficial Ownership" shall mean, with respect
to any securities, having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended), including pursuant to any agreement, arrangement or understanding,
whether or not in writing.
"Option Expiration Date" shall mean the date 15 business days after
the termination of the Merger Agreement in accordance with Article VII thereof.
"Person" shall mean a natural person, corporation, partnership, joint
venture, association, trust, limited liability company, business trust, joint
stock company, unincorporated organization or other entity.
"Transfer" shall mean, with respect to a security, the sale, transfer,
pledge, hypothecation, encumbrance, assignment or disposition of such security
or the Beneficial Ownership thereof, the offer to make such a sale, transfer or
other disposition, and the entering into of any option, agreement, arrangement
or understanding, whether or not in writing, to effect any of the foregoing. As
a verb, "Transfer" shall have a correlative meaning.
"Voting Period" shall mean the period from the date hereof until the
termination of this Agreement in accordance with its terms.
2
<PAGE> 3
2. Restrictions. Until the termination of this Agreement in accordance with
its terms, each of the Shareholders agrees not to, directly or indirectly, (a)
except as provided in Section 3 hereof, Transfer any of such Shareholder's
Shares to any Person, grant any proxies or powers of attorney or enter into a
voting agreement, understanding or arrangement with respect to such
Shareholder's Shares, or (b) take any action that would make any representation
or warranty of the Shareholder herein untrue or incorrect or would result in a
breach by the Shareholder of any of its obligations under this Agreement or a
breach by the Company of its obligations under the Merger Agreement.
3. Tender of Shares. Each Shareholder hereby agrees to validly tender or
cause to be validly tendered, pursuant to and in accordance with the terms of
the Offer, promptly after Purchaser commences the Offer (but in no event later
than five business days after the date of such commencement or, with respect to
shares of Common Stock acquired by such Shareholder after the date of this
Agreement upon exercise of options or otherwise, no later than five business
days after the date of such acquisition), all of such Shareholder's Shares and
to not withdraw such Shares unless the Merger Agreement shall be validly
terminated in accordance with Article VII thereof.
4. No Solicitation of Competing Transaction. Each Shareholder agrees not to
(and shall cause its respective representatives and agents not to), directly or
indirectly, (a) initiate, solicit or encourage, or take any action to facilitate
the making of, any offer or proposal which constitutes or is reasonably likely
to lead to any Acquisition Proposal (as defined in the Merger Agreement) or any
inquiry with respect thereto, or (b) in the event of an unsolicited Acquisition
Proposal, engage in negotiations or discussions with, or provide any information
or data to, any Person (other than Parent, Purchaser or any of their respective
representatives or agents) relating to any Acquisition Proposal; provided,
however, that the provisions of this Section 4 shall not restrict such
Shareholder in his or her capacity as a director or executive officer of the
Company from taking actions by or on behalf of the Company that are permitted to
be taken by or on behalf
3
<PAGE> 4
of the Company in accordance with the provisions of Section 5.5 of the Merger
Agreement.
5. Voting of Shares; Proxy. (a) During the Voting Period, at any meeting
(whether annual or special and whether or not an adjourned or postponed meeting)
of the Company's stockholders, however called, or in connection with any written
consent of the Company's stockholders, each Shareholder shall vote (or cause to
be voted) all of such Shareholder's Shares: (i) in favor of the Merger, the
execution and delivery by the Company of the Merger Agreement and the approval
and adoption of the Merger and each of the other actions contemplated by the
Merger Agreement and this Agreement and any actions required in furtherance
thereof and hereof, provided that to the extent that such actions require the
payment of filing or registration fees on the part of any Shareholder in excess
of $1,000, Parent shall reimburse the Shareholder incurring such expense for any
such excess; (ii) against any action or agreement that would (A) result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or the Shareholders under
this Agreement or (B) impede, interfere with, delay, postpone, or adversely
affect the Offer, the Merger or any other transaction contemplated by the Merger
Agreement or this Agreement; and (iii) except as otherwise agreed to in writing
in advance by Parent, against the following actions (other than the Offer, the
Merger and any other transaction contemplated by the Merger Agreement and this
Agreement): (A) any extraordinary corporate transaction, such as a merger,
consolidation or other business combination involving the Company or any of its
Subsidiaries (as defined in the Merger Agreement) (including any transaction
contemplated by an Acquisition Proposal); (B) any sale, lease or transfer of a
material amount of the assets or business of the Company or its Subsidiaries, or
any reorganization, restructuring, recapitalization, special dividend,
dissolution, liquidation or winding up of the Company or its Subsidiaries; (C)
any material change in the present capitalization of the Company or its
Subsidiaries or any amendment of the Certificate of Incorporation of the
Company; (D) any other material change in the Company's corporate structure or
business; and (E) any other action that is intended or could reasonably be
expected to impede, interfere with, delay, postpone, discourage
4
<PAGE> 5
or materially adversely affect the Offer, the Merger, any other transaction
contemplated by the Merger Agreement or this Agreement or the contemplated
economic benefits of any of the foregoing. No Shareholder shall enter into any
agreement, arrangement or understanding with any Person the effect of which
would be inconsistent or violative of the provisions and agreements contained in
this Section 5.
(b) IRREVOCABLE PROXY. EACH SHAREHOLDER HEREBY APPOINTS PAUL T. DACIER AND
DAVID DONATELLI IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OF PURCHASER, AND ANY
INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY SUCH OFFICE OF PURCHASER, AND ANY
OTHER DESIGNEE OF PURCHASER, EACH OF THEM INDIVIDUALLY, THE SHAREHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION OF THE VOTING PERIOD) PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES OF SUCH
SHAREHOLDER AS INDICATED IN SECTION 5(A) ABOVE. EACH SHAREHOLDER INTENDS THIS
PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION OF THE VOTING PERIOD) AND COUPLED
WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND
HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY THE SHAREHOLDER WITH RESPECT TO
THE SHARES OF SUCH SHAREHOLDER.
6. Waiver of Appraisal or Dissenting Rights. Each Shareholder hereby waives
any rights of appraisal or rights to dissent from the Merger under the General
Corporation Law of the State of Delaware.
7. Waiver of Claims. Each Shareholder hereby waives and relinquishes any
claims, actions, recourse or other rights of any nature which the Shareholder
may have against the Company, Parent or Purchaser which arises out of or relates
to such Shareholder's ownership of the Shares, its status as a stockholder of
the Company, the conduct of the business of the Company or the authorization,
execution and delivery of the Merger Agreement or this Agreement or the
consummation of the transactions contemplated thereby or hereby; provided,
however, that the provisions of this Section 7 shall not extend to the
obligations of Parent and Purchaser pursuant to this Agreement.
8. Option. (a) Each Shareholder hereby irrevocably grants Parent an option
(the "Option"),
5
<PAGE> 6
exercisable only upon the events and subject to the conditions set forth herein,
but in no event earlier than January 1, 2000, to purchase any or all of such
Shareholder's Shares at a purchase price per share equal to $10.00 (or such
higher per share price as may be offered by Purchaser in the Offer).
(b) Subject to the conditions to the Offer and Purchaser's obligation to
purchase tendered Common Stock, each as set forth in the Merger Agreement, and
the termination provisions of Section 12, and provided that theretofore
Purchaser shall have commenced the Offer, Parent may exercise the Option in
whole or in part at any time prior to the Option Expiration Date if (x) the
Shareholder fails to comply with any of its obligations under this Agreement, or
the Shareholder withdraws the tender of the Shares (but the Option shall not
limit any other right or remedy available to Parent or Purchaser against such
Shareholder for breach of this Agreement) or (y) the Offer is not consummated
because of the failure to satisfy any of the conditions to the Offer set forth
in the Merger Agreement (other than as a result of any action or inaction of the
Parent or Purchaser that constitutes a breach of the Merger Agreement).
Upon the occurrence of any of such circumstances, Parent shall be
entitled to exercise the Option and purchase such Shareholder's Shares, and the
Shareholder shall sell such Shares to Parent. Parent shall exercise the Option
by delivering written notice of such exercise to the Shareholder (the "Notice"),
specifying the number of Shares to be purchased and the date, time and place for
the closing of such purchase, which date shall not be less than three business
days nor more than five business days from the date the Shareholder received the
Notice and in no event shall such date be later than the Option Expiration Date.
The closing of the purchase of Shares pursuant to this Section 7(b) (the
"Closing") shall take place on the date, at the time and at the place specified
in such Notice; provided, that if at such date any of the conditions to the
Offer and Purchaser's obligation to purchase tendered Common Stock shall not
have been satisfied (or waived), Parent may postpone the Closing until a date
within five business days after such conditions are satisfied (but not later
than the Option Expiration Date). Upon the request of Parent, each
6
<PAGE> 7
Shareholder shall promptly take, or cause to be taken, all action required to
effect all necessary filings by such Shareholder under the HSR Act (as defined
in the Merger Agreement) and shall cooperate with Parent with respect to the
filing obligations of Parent and Purchaser, in each case as may be required in
connection with the Closing.
(c) At the Closing, each Shareholder will deliver to Parent (i) a
certificate, dated the date of the Closing, certifying that the representation
and warranty of such Shareholder in Section 10(a) is true and correct as of the
date of the Closing; and (ii) in accordance with Parent's instructions, the
certificates representing the Shares and being purchased pursuant to Section
7(a), duly endorsed or accompanied by stock powers duly executed in blank. At
such Closing, Parent shall deliver to each Shareholder, by bank wire transfer of
immediately available funds, an amount equal to the number of such Shareholder's
Shares being purchased as specified in the Notice multiplied by $10 (or such
higher per share price as may be offered by Purchaser in the Offer).
(d) In the event of the exercise by Parent of the Option granted by any
Shareholder pursuant to this Section 8 and the subsequent sale by Parent of any
or all of the Shares purchased upon the exercise of such Option within 60 days
of the Closing (provided, however, that in the event of the commencement of any
tender offer by any third party, unaffiliated with Major Shareholder, for any
and all shares of the Common Stock outstanding (a "Third Party Tender Offer")
during such 60 day period, such 60 day period shall be extended to the earlier
of (x) 60 days from the commencement of the Third Party Tender Offer or (y) 120
days from the Closing) in connection with or pursuant to any Acquisition
Proposal (a "Subsequent Sale"), Parent shall pay such Shareholder, within two
business days of the Subsequent Sale, an amount equal to (A) 30% of the
difference between (x) the proceeds per Share received by Parent from the
Subsequent Sale and (y) the Offer Price or such higher price per Share as shall
be paid to such Shareholder by Purchaser upon the exercise of the Option, as
adjusted for splits, combinations and the like, multiplied by (B) the number of
Shares purchased by Purchaser upon the exercise of the Option and sold pursuant
to the Subsequent Sale.
7
<PAGE> 8
(e) Parent and Purchaser shall be solely responsible for any obligations
either of them have pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended, or the rules and regulations thereunder.
9. No Purchase. Purchaser and Parent may allow the Offer to expire without
accepting for payment or paying for any Shares, on the terms and conditions set
forth in the Offer to Purchase (as defined in the Merger Agreement), and may
allow the Option to expire without exercising the Option and purchasing all or
any Shares pursuant to such exercise. If all Shares validly tendered and not
withdrawn are not accepted for payment and paid for in accordance with the terms
of the Offer to Purchase or pursuant to the exercise of the Option, they shall
be returned to the Shareholders, whereupon they shall continue to be held by the
Shareholders subject to the terms and conditions of this Agreement.
10. Representations and Warranties of the Shareholders. Each Shareholder
represents and warrants to Parent and Purchaser as follows:
(a) Such Shareholder is the record holder of the
Shares and Beneficially Owns the Shares, free
and clear of any claims, security interests,
liens and encumbrances and the transfer of
such portion of the Shares hereunder will pass
to Purchaser (or to Parent pursuant to the
exercise of the Option) good and marketable
record title and Beneficial Ownership to such
portion of the Shares free and clear of any
claims, security interests, liens and
encumbrances whatsoever.
(b) Such Shareholder has the legal power,
authority and capacity to execute and deliver
this Agreement and perform its obligations
hereunder. The execution and delivery by such
Shareholder of this Agreement and the
performance by such Shareholder of its
obligations hereunder have been duly and
validly authorized and no further actions or
proceedings on the part of such Shareholder
are necessary to authorize the execution,
delivery or performance of this Agreement or
8
<PAGE> 9
the consummation of the transactions contemplated hereby.
(c) This Agreement constitutes the legal, valid and binding agreement of
such Shareholder enforceable in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies).
(d) This Agreement covers all of such Shareholder's Shares except for
options to purchase shares of Common Stock which were granted by the
Company to the Shareholder (provided, however, that any shares of
Common Stock acquired by such Shareholder upon exercise of any such
options after the date hereof and prior to the consummation or
termination of the Offer are covered by this Agreement). As of the
date hereof, such Shareholder Beneficially Owns the number of shares
of the Company's Common Stock set forth on Appendix A hereto.
(e) This Agreement and the execution and delivery hereof by the
Shareholder does not, and the consummation of the transactions
contemplated hereby will not, (i) result in a violation of 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,
cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement
or other instruments or obligations to which such Shareholder is a
party or by which any of its property or assets may be bound, or (ii)
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to such Shareholder or any of its properties or
assets.
(f) To the knowledge of such Shareholder, without having made any
investigation or inquiry with respect thereto, the representations and
warranties made by the Company in the Merger
9
<PAGE> 10
Agreement are true and correct in all material respects as of the date
hereof, and, to the knowledge of such Shareholder, without having made
any investigation or inquiry with respect thereto, there is no
condition or state of facts which could cause the Company to breach
any of such representations and warranties during the period from the
date hereof until the earlier of (x) the consummation of the Merger or
(y) the termination of the Merger Agreement in accordance with its
terms.
11. Representations and Warranties of Parent and Purchaser. Parent and
Purchaser hereby represent and warrant to each Shareholder as follows:
(a) Each of Parent and Purchaser is a corporation duly organized and
validly existing under the laws of its jurisdiction of incorporation,
and each of them is in good standing under the laws of its
jurisdiction of incorporation. Parent and Purchaser have all necessary
corporate power and authority to execute and deliver this Agreement
and perform their respective obligations hereunder. The execution and
delivery by Parent and Purchaser of this Agreement and the performance
by Parent and Purchaser of their respective obligations hereunder have
been duly and validly authorized by the Board of Directors of each of
Parent and Purchaser and no other corporate proceedings on the part of
Parent or Purchaser are necessary to authorize the execution, delivery
or performance of this Agreement or the consummation of the
transactions contemplated hereby.
(b) This Agreement has been duly and validly executed and delivered by
Parent and Purchaser and constitutes a valid and binding Agreement of
each of Parent and Purchaser, enforceable against each of them in
accordance with its terms (except as enforceability may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting
creditors' rights generally or by the principles governing the
availability of equitable remedies).
10
<PAGE> 11
12. Termination. This Agreement shall terminate on the earlier of (i) the
purchase by Purchaser of the Shares pursuant to the Offer or (ii) the Option
Expiration Date. The provisions of Sections 7, 10 and 11 hereof shall survive
the termination of this Agreement.
13. Specific Performance. The parties hereto acknowledge and agree that if
any of the provisions of this Agreement were not performed by the Shareholders,
as the case may be, in accordance with their specific terms or were otherwise
breached, Parent would not have an adequate remedy at law and would be
irreparably harmed and that the damages therefor would be difficult to
determine. It is accordingly agreed that Parent shall be entitled to injunctive
relief to prevent breaches of this Agreement by any Shareholder and to
specifically enforce the terms and provisions hereof in any court of the United
States located in the Commonwealth of Massachusetts or in Massachusetts state
court, this being in addition to any other remedy to which they are entitled at
law or in equity.
14. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if hand delivered in person
or by next-day courier, transmitted by facsimile or mailed by registered or
certified mail, postage prepaid, return receipt requested, as follows:
(a) If to Parent, to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Vice President,
Corporate Development
Telephone No.: (508) 435-1000
Facsimile No.: (508) 435-8900
with a copy to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Office of the General Counsel
Telephone No.: (508) 435-1000
Facsimile No.: (508) 435-6915
11
<PAGE> 12
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telephone No: (617) 573-4800
Facsimile No: (617) 573-4822
(b) If to the Shareholders, to the respective addresses set forth on
Schedule A hereto.
or to such other address as the person to whom notice is given may have
previously furnished to the other parties in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
15. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties, except that Purchaser may assign, in its sole discretion, any or all of
its rights, interests and obligations hereunder to Parent or to any direct or
indirect wholly owned Subsidiary of Parent. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
16. Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
17. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard to
its conflicts of law rules. Each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any Federal court located in the
Commonwealth of Massachusetts or any Massachusetts state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated by
this Agreement, (b) agrees that it will not attempt to deny or defeat such
personal jurisdiction by motion or
12
<PAGE> 13
other request for leave from any such court and (c) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal or state court
sitting in the Commonwealth of Massachusetts.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement.
19. Effect of Headings. The headings herein are for reference purposes only
and shall not in any way affect the meaning or interpretation hereof.
20. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto and supersedes all prior agreements and understandings, oral
or written, among the parties hereto with respect to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
13
<PAGE> 14
IN WITNESS WHEREOF, this Agreement has been duly executed under seal and
delivered by the parties hereto on the date first above written.
EMC CORPORATION
By /s/ Michael J. Cody
________________________________________
Name: Michael J. Cody
Title: Vice President, Corporate
Development
EAGLE MERGER CORP.
By /s/ Paul T. Dacier
________________________________________
Name: Paul T. Dacier
Title: Secretary
SHAREHOLDERS:
/s/ James A. Cannavino
________________________________________
James A. Cannavino
/s/ Judy G. Carter
________________________________________
Judy G. Carter
/s/ Daniel DelGiorno
________________________________________
Daniel DelGiorno, Jr.
/s/ Claude R. Kinsey, III
________________________________________
Claude R. Kinsey, III
/s/ Joseph J. Markus
________________________________________
Joseph J. Markus
<PAGE> 15
/s/ George Aronson
________________________________________
George Aronson
/s/ Robert McLaughlin
________________________________________
Robert McLaughlin
/s/ Lisa Welch
________________________________________
Lisa Welch
15
<PAGE> 16
APPENDIX A
<TABLE>
<CAPTION>
Total Shares of
the Company's
Common Stock
Beneficially
Name Owned
---- -----
<S> <C>
George Aronson 126,000
80 Orville Drive
Bohemia, NY 11716
(516) 244-1500
James A. Cannavino 200,000
803 Windsor Drive
Redmond, WA 98053
(425) 427-8985
Judy G. Carter 100,000
11115 Sweetwood Lane
Oakton, VA 22124
(703) 317-2424
Daniel DelGiorno, Jr. 612,000
80 Orville Drive
Bohemia, NY 11716
(516) 244-1500
Claude R. Kinsey, III 100,000
109 Swan Creek Road
FT Washington, MD 20744
(703) 317-2424
Joseph J. Markus 50,000
1775 York Avenue, Apt. 35B
New York, NY 10128
(212) 722-4690
Robert McLaughlin 66,000
13651 Union Village Circle
Clifton, VA 20124
(703) 317-2424
Lisa Welch 66,000
6152 Cobbs Road
Alexandria, VA 22310
(703) 317-2424
</TABLE>
<PAGE> 17
APPENDIX B
<TABLE>
<CAPTION>
Shares of the
Company's Common
Stock Subject to
Stock Tender
Name Agreement
---- ---------
<S> <C>
George Aronson 100,000
James A. Cannavino 200,000
Judy G. Carter 100,000
Daniel DelGiorno, Jr. 500,000
Claude R. Kinsey, III 100,000
Joseph J. Markus 50,000
Robert McLaughlin 66,000
Lisa Welch 66,000
</TABLE>
<PAGE> 1
Exhibit (c)(4)
CONFIDENTIALITY AGREEMENT
THIS AGREEMENT ("Agreement") is hereby entered into between Softworks, Inc. and
EMC Corporation, as of this date last below written and on the following terms
and conditions:
WHEREAS, the parties believe that they would mutually benefit by sharing with
each other certain Confidential Information (as defined herein) and believe it
is in their mutual interest to ensure that all such Confidential Information
will be safeguarded and carefully protected by the recipient.
NOW THEREFORE, for consideration the adequacy of which is hereby acknowledged
and intending to be legally bound, the parties hereby agree as follows:
1. ACKNOWLEDGMENT OF CONFIDENTIALITY. Each party hereby acknowledges that it has
been or may be exposed to confidential and proprietary information of the other
party including, without limitation, the following specific information,
together with some or all of the following categories of material:
(a) Product development or other Technical Information, including
functional and technical specifications, designs, drawings, analysis, research,
processes, computer programs, source code, methods, ideas "know how" and the
like;
(b) Business Information, including sales and marketing research,
materials, plans, accounting customer and financial information, personnel
records and the like, and
(c) Other Valuable Information designated by the owner as confidential
expressly or by the circumstances in which it is provided (collectively,
"Confidential Information").
Confidential Information shall mean information or materials provided by one
party to the other party which are in tangible form and labeled "confidential",
or, if disclosed orally, are identified as being confidential at the time of
disclosure and are followed up within two (2) weeks in a tangible form that is
appropriately labeled. Confidential Information does not include (i) information
already known or independently developed by the recipient, (ii) information in
the public domain through no wrongful act of the recipient, or (ii) information
received by the recipient from a third party who was free to disclose it.
<PAGE> 2
2. COVENANT NOT TO DISCLOSE. Each party hereby agrees that it shall not use,
commercialize or disclose any Confidential Information to any person or entity,
except to its own employees having a "need to know" (and who are themselves
bound by similar nondisclosure restrictions), and to such other recipients as
the other party may approve in writing; provided, that all such recipients shall
have first executed a confidentiality agreement. Each party shall use at least
the same degree of care in safeguarding the Confidential Information as it uses
in safeguarding its own confidential information, but no less than reasonable
care.
3. PROPRIETARY RIGHTS LEGEND. Recipient shall not alter or remove from any
Confidential Information any proprietary rights legend, copyright notice,
trademark or trade secret legend, or any other mark identifying the material as
Confidential Information.
4. REMEDIES FOR BREACH OF CONFIDENTIALITY. Each party hereby acknowledges that
the violations by it of the restrictions imposed hereunder would cause
irreparable harm to the other party and that remedies at law would be inadequate
to redress any actual or threatened violation of this Agreement. Each party
agrees that, in addition to other relief, the foregoing restrictions may be
enforced by temporary or permanent injunctive relief.
5. TERM, TERMINATION. The effective date of this Agreement shall be the date of
the latter signature below. However, termination of this Agreement shall not
relieve a party of its obligations under Section 2 of this Agreement, which
shall continue for a period of three (3) years from the date of the disclosure
under this Agreement. Upon termination, Confidential Information disclosed under
this Agreement shall be returned to the disclosing party or, at disclosing
party's option, may be destroyed.
6. TITLE, OWNERSHIP, LIABILITY. Any right, title and interest in ad to the
Confidential Information shall remain with the respective owners. Nothing in
this Agreement shall be construed as granting any type of license with respect
to any Confidential Information, nor as constituting any representation or
warranty against infringement of any patent or other propriety right.
7. CHOICE OF LAW, FORUM. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW, AND ANY ACTION ARISING OUT OF OR
PERTAINING TO THIS AGREEMENT SHALL BE INITIATED AND
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<PAGE> 3
MAINTAINED IN A COURT OF COMPETENT JURISDICTION IN SUCH STATE.
8. GENERAL PROVISIONS. This document constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all other
communications, whether written or oral. This Agreement is expressly limited to
its terms and my be modified or amended only by a writing signed by an
authorized representative of the party against whom enforcement is sought.
Neither this Agreement nor any rights or obligations hereunder may be
transferred or assigned without the other party's prior written consent and any
attempts to the contrary shall be void. Any provision hereof found by a court of
competent jurisdiction to be illegal or unenforceable shall be automatically
conformed to the minimum requirements of law and all other provisions shall
remain in full force and effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, their successors, legal representative and
permitted assigns. Waiver of any provision hereof in one instance shall not
preclude enforcement thereof on future occasions. Heading are for reference
purposes only and have no substantive effect.
IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto have
caused this Agreement to be executed by their duly authorized representatives.
Softworks, Inc. EMC Corporation
By: /s/ Lisa G. Welch By: /s/ Michael Cody
------------------------------- ---------------------------------------
Name: Lisa G. Welch Name: Michael Cody
----------------------------- --------------------------------------
Title: Vice President, Technology Title: Vice President, Business Development
---------------------------- ------------------------------------
Date: 11/1/1998 Date: 11/1/1998
----------------------------- --------------------------------------
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<PAGE> 4
AMENDMENT TO CONFIDENTIALITY AGREEMENT
This Agreement is made as of January 12, 1999 by and between EMC
Corporation, a Massachusetts corporation with is principal place of business at
171 South Street, Hopkinton, Massachusetts ("EMC") and Softworks, Inc., a
Delaware_ corporation with its principal place of business at 5845 Richmond
Highway, Alexandria, Virginia, ("Softworks").
Whereas, EMC and Softworks now desire to amend certain provisions of
the Confidentiality Agreement, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, EMC and Softworks hereby
agree as follows:
I. The Confidentiality Agreement is hereby amended by adding the
following provision:
1. EMC will not, until October 14, 1999, without the prior
written consent of the Board of Directors of Softworks, acquire any equity
security of Softworks or Computer Concepts Corporation, a Delaware corporation
with its principal place of business at 80 Orville Drive, Bohemia, NY.
II. All other terms and provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment by their duly authorized representatives.
EMC CORPORATION SOFTWORKS, INC.
By: /s/ Michael J. Cody By: /s/ Judy G. Carter
--------------------------------------- ----------------------------------
Its: Vice President, Corporate Development Its: President and Ceo
-------------------------------------- ----------------------------------
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<PAGE> 5
AMENDMENT NO. 2 TO CONFIDENTIALITY AGREEMENT
This Agreement is made as of March 9, 1999 by and between EMC
Corporation, a Massachusetts corporation with is principal place of business at
171 South Street, Hopkinton, Massachusetts ("EMC") and Softworks, a Delaware
corporation with its principal place of business at 5845 Richmond Highway,
Alexandria, Virginia, ("Softworks").
Whereas, EMC and Softworks have entered into a Bilateral
Confidentiality Agreement dated as of October 15, 1998, as amended on January
12, 1999 (the "Confidentiality Agreement").
Whereas, EMC and Softworks now desire to further amend certain
provisions of the Confidentiality Agreement, all on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, EMC and Softworks hereby
agree as follows:
I. The Confidentiality Agreement is hereby amended by adding the
following provision:
1. In the event that the potential merger or acquisition
contemplated by this Agreement as of this date (the "Transaction") is not
consummated, for a period of one year from the date of this Amendment,
(a) without prior written consent of Softworks, EMC will not directly solicit
for employment any employee of Softworks, and (b) without prior written consent
of EMC, Softworks will not directly solicit for employment any employee of EMC.
II. All other terms and provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Amendment by their duly authorized representatives.
EMC CORPORATION SOFTWORKS, INC.
By: /s/ Michael J. Cody By: Judy G. Carter
---------------------------------------- -----------------------------
Its: Vice President, Corporate Development Its: President and CEO
--------------------------------------- -----------------------------
5
<PAGE> 6
AMENDMENT NO. 3 TO CONFIDENTIALITY AGREEMENT
This Agreement is made as of this December, 1999 by and between EMC
Corporation, a Massachusetts corporation with is principal place of business at
171 South Street, Hopkinton, Massachusetts ("EMC") and Softworks, a Delaware
corporation with its principal place of business at 5845 Richmond Highway,
Alexandria, Virginia ("SOFTWORKS").
Whereas, EMC and SOFTWORKS have entered into a Bilateral
Confidentiality Agreement dated as of November 1, 1998, as amended by an
Amendment dates as of January 12, 1999 and Amendment No. 2 dated as of March 9,
1999 (the "Confidentiality Agreement").
WHEREAS, EMC and SOFTWORKS now desire to amend certain provisions of
the Confidentiality Agreement, all on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, EMC and SOFTWORKS hereby
agree as follows:
I. The Confidentiality Agreement is hereby amended by adding the
following provision:
1. Amendment No. 2 is modified to read: "In the event that the
potential merger or acquisition contemplated by this Agreement as of this date
(the "Transaction") is not consummated, for a period terminating on December 31,
2000, (a) without written prior consent of SOFTWORKS, EMC will not directly
solicit for employment any employee of SOFTWORKS, and (b) without the prior
written consent of EMC, SOFTWORKS will not directly solicit for employment any
employees of EMC.
2. Paragraph 5 is hereby modified to read: "TERM, TERMINATION.
The effective date of this Agreement shall be November 1, 1999. The term of this
Agreement shall be two (2) years from the effective date unless terminated
earlier by written notice of either party. However, termination of this
Agreement shall not relieve a party of its obligations under Section 2 of this
Agreement, which shall continue for a period of three (3) years from the date of
disclosure under this Agreement. Upon termination, Confidential Information
disclosed under this agreement
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<PAGE> 7
shall be returned to the disclosing party or, at disclosing party's option, may
be destroyed.
II. All other terms and provisions of the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment by their duly authorized representatives.
EMC CORPORATION SOFTWORKS, INC.
By: /s/ Michael J. Cody By: /s/ Judy G. Carter
--------------------------------------- -------------------------------
Its: Vice President, Corporate Development Its: President and Ceo
-------------------------------------- ------------------------------
7
<PAGE> 1
Exhibit 99(c)(5)
ESCROW AGREEMENT
This Escrow Agreement (the "Escrow Agreement") is entered into
as of December 21, 1999 by and among EMC Corporation, a Massachusetts
corporation ("Parent"), Eagle Merger Corp., a Delaware corporation and a wholly
owned subsidiary of Parent (the "Purchaser"),Computer Concepts Corp., a Delaware
corporation (the "Major Shareholder"), and State Street Bank and Trust Company,
Inc., a Massachusetts trust company, as escrow agent (the "Escrow Agent").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed in Section 1 hereof.
WHEREAS, Parent, Purchaser and Softworks, Inc., a Delaware
corporation (the "Company"), are parties to an Agreement and Plan of Merger
dated as of December 21, 1999 (the "Merger Agreement") which provides that,
among other things, upon the terms and subject to the conditions thereof,
Purchaser will be merged with and into the Company (the "Merger"), with the
Company continuing as the surviving corporation (in such capacity, the
"Surviving Entity"); and
WHEREAS, Parent, Purchaser, the Major Shareholder and James
Cannavino, Dennis Murray and Charles Feld, as trustees (the "Trustees") under
the Voting Trust Agreement, are parties to a Stock Tender Agreement dated as of
December 21, 1999 (the "Stock Tender Agreement") which provides that, among
other things, the Major Shareholder and the Trustees will take such actions as
may be necessary to tender the Shares held by the Major Shareholder pursuant to
the Offer, grant Parent an option to purchase such Shares under certain
circumstances and grant Purchaser a proxy with respect to the voting of such
Shares, all upon the terms and subject to the conditions set forth in the Stock
Tender Agreement; and
WHEREAS, as a condition and inducement to Parent and Purchaser
entering into the Merger Agreement, Parent and Purchaser have requested that the
Major Shareholder agree, and the Major Shareholder has agreed, to provide
indemnification to Parent, Purchaser and the Surviving Entity, as set forth in
the Indemnification Agreement dated as of the date hereof by and among Parent,
Purchaser and the Major Shareholder (the "Indemnification Agreement"); and
WHEREAS, Parent, Purchaser and the Major Shareholder desire
that a portion of the consideration received by the Major Shareholder in
consideration of the purchase of the Shares held by the Major Shareholder
pursuant to the Offer be deposited into escrow, upon the terms and subject to
the conditions set forth below in order to secure the indemnification
obligations set forth in the Indemnification Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the foregoing and the
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Parent, Purchaser, the
Major Shareholder and the Escrow Agent hereby agree as follows:
1. Certain Definitions. For purposes of this Escrow Agreement,
except as otherwise expressly provided or unless the context clearly requires
otherwise:
(a) "Closing" shall mean the consummation of the
purchase by Purchaser of Shares in the Offer.
(b) "Escrow Amount" shall mean $10 million.
(c) "Escrow Release Date" shall mean close of
business (Eastern United States time) on the date 12 months after the date upon
which the Closing occurred.
(d) "Interested Parties" shall mean Parent,
Purchaser, the Surviving Entity and their respective Subsidiaries and officers,
directors, employees and agents.
(e) "Loss" or "Losses" shall mean any loss, liability
(including any liability for Taxes), damage, deficiency, fine, penalty, cost and
expense (including reasonable expenses of investigation, amounts paid in
settlement, interest, court costs, reasonable fees and expenses of attorneys and
accountants and other costs of litigation).
(f) "Offer" shall mean the cash tender offer to be
made by Purchaser pursuant to Section 1.1 of the Merger Agreement to acquire any
and all issued and outstanding Shares at $10 per Share net to the seller in
cash, or such increased amount, if any, as the Purchaser may offer to pay as
contemplated by Section 1.1(a) and Section 5.5(b) of the Merger Agreement.
(g) "Shares" shall mean the shares of common stock,
par value $.001 per share, of the Company.
(h) "Subsidiary" shall mean, with respect to any
party, any corporation or other organization, whether incorporated or
unincorporated, of which (a) at least a majority of the securities or other
interests having by their terms ordinary voting power to elect a majority of the
Board of Directors or others per-
2
<PAGE> 3
forming similar functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such party or by any one or
more of its Subsidiaries, or (b) such party or any other Subsidiary of such
party is a general partner (excluding any such partnership where such party or
any Subsidiary of such party does not have a majority of the voting interest in
such partnership).
(i) "Tax" or "Taxes" shall mean all taxes, charges,
fees, duties, levies, tariffs, imposts, penalties or other assessments of any
kind imposed by any federal, state, local or foreign governmental authority,
including, but not limited to, income, gross receipts, excise, profits, ad
valorem, net worth, value added, service, special assessments, workers'
compensation, utility, severance, production, excise, stamp, occupation,
premiums, windfall profits, real or personal property, sales, gain, use,
license, custom duty, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, minimum estimated, and other taxes, and shall
include interest, penalties or additions attributable thereto; provided that
"Tax" or "Taxes" as used herein shall not include (i) any amounts arising as a
result of the filing of any amended tax return filed by the Company unless such
amendment is required by applicable law, rule or regulation or (ii) as a result
of the negligence of Parent or the Purchaser.
(j) "Voting Trust Agreement" shall mean the Voting
Trust Agreement, dated as of August 3, 1998, between the Company, the Major
Share holder and the Trustees.
2. Escrow Funds.
(a) At the Closing, the Major Shareholder shall
deposit the Escrow Amount with the Escrow Agent by wire transfer of immediately
available funds. In satisfaction of the obligation in the preceding sentence,
the Major Share holder hereby irrevocably authorizes the Purchaser to deliver to
the Escrow Agent a portion of the proceeds payable to the Major Shareholder from
the purchase of the Shares of the Major Shareholder in the Offer equal to the
Escrow Amount. The Escrow Agent agrees to hold and administer the Escrow Amount,
together with any investment income earned thereon pursuant to the terms hereof
(such deposit amount together with such income, if any, collectively, the
"Escrow Funds") subject to the terms of this Escrow Agreement.
3. Investment of Escrow Funds; Interest
(a) The Escrow Agent shall invest the Escrow Funds
at, and pursuant to, the written direction of Parent and Major Shareholder, or
if no such
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<PAGE> 4
direction shall be given, to the extent possible, in United States Treasury
bills having a remaining maturity of 90 days or less and repurchase obligations
secured by such United States Treasury bills, with any remainder being deposited
and maintained in a money market deposit account with the Escrow Agent until
disbursement of all of the Escrow Funds in accordance with this Escrow
Agreement. The Escrow Agent is authorized to liquidate in accordance with its
customary procedures any portion of the Escrow Funds consisting of investments
to provide for payments required to be made therefrom under this Escrow
Agreement. Any income earned or accrued with respect to the Escrow Amount shall
be taxable solely to the Major Shareholder, and the parties shall follow the
procedures set forth in Section 3(b) hereof with respect thereto. The Escrow
Agent shall have no liability for any investment losses, including any losses on
any investment required to be liquidated prior to maturity in order to make a
payment required hereunder.
(b) All interest or other amounts earned on the
Escrow Amount shall be added to the, and shall then be considered, Escrow Funds
and shall be considered the currently reportable income, for all tax purposes,
of the Major Shareholder.
(c) The Escrow Agent shall provide the Major Share
holder with such information as may be required by the Major Shareholder in
connection with the filings and notices to be made by the Major Shareholder.
4. Claims on Escrow Funds.
(a) At any time on or prior to the Escrow Release
Date (as defined in Section 1(c)), Parent, Purchaser or the Surviving Entity
("the Indemnified Party") may assert an indemnification claim pursuant to the
Indemnification Agreement (an "Indemnification Claim"), by sending written
notice to the Escrow Agent, with a copy to the Major Shareholder ("Notice of
Claim"). The Notice of Claim shall state the basis for the Indemnification Claim
and the estimated amount claimed (the "Claimed Amount"). Upon receipt, on or
before the Escrow Release Date, by the Escrow Agent and the Major Shareholder,
of a Notice of Claim from an Indemnified Party that such Indemnified Party is
asserting an Indemnification Claim, the Escrow Agent shall retain, set aside and
continue to hold the Escrow Funds, or such lesser portion of the Escrow Funds
having a value equal to the Claimed Amount, in escrow hereunder subject to the
further provisions hereof.
(b) Within 15 Business Days (as hereinafter defined)
after the receipt of a Notice of Claim by the Escrow Agent, the Major
Shareholder shall provide to Parent and the Surviving Entity, with a copy to the
Escrow Agent, a
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<PAGE> 5
written response (a "Response Notice") in which the Major Shareholder shall: (i)
agree that the full Claimed Amount specified in such Notice of Claim shall be
released to Parent from the Escrow Funds, (ii) agree that part, but not all, of
the Claimed Amount specified in such Notice of Claim (the "Agreed Amount") may
be released to Parent from the Escrow Funds and contest the release to Parent of
the balance of such Claimed Amount or (iii) contest the release to Parent of any
part of the Claimed Amount specified in such Notice of Claim from the Escrow
Funds. If no Response Notice is received by the Escrow Agent by 5:00 p.m.
(Eastern United States time) on the last Business Day of such 15 Business Day
period, the Major Shareholder shall be deemed to have agreed that all of the
Claimed Amount shall be released to Parent from the Escrow Funds. As used
herein, "Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(c) If the Major Shareholder in any Response Notice
agrees (or is deemed to have agreed) that the entire Claimed Amount specified in
such Notice of Claim may be released to Parent from the Escrow Funds, the Escrow
Agent shall promptly thereafter pay to Parent the Escrow Funds having an
aggregate value equal to the Claimed Amount (or such lesser value of Escrow
Funds as are held in escrow hereunder at such time).
(d) If the Major Shareholder in any Response Notice
agrees that part, but not all, of the Claimed Amount specified in the related
Notice of Claim may be released to Parent from the Escrow Funds, the Escrow
Agent shall promptly thereafter, following the receipt of the Response Notice by
the Escrow Agent, pay to Parent the Escrow Funds having an aggregate value equal
to the Agreed Amount (or such lesser amount of the Escrow Funds as are held in
escrow hereunder at such time).
(e) If the Major Shareholder in any Response Notice
contests the release of all or part of the Claimed Amount specified in the
related Notice of Claim (the "Contested Amount"), the matter shall be resolved
or settled either by mutual agreement of Parent and the Major Shareholder, by
arbitration if Parent and the Major Shareholder mutually agree thereto or by a
final order, decree or judgment of a court of competent jurisdiction in the
United States of America (which order, decree or judgment shall have become
final by expiration of the applicable appeal period without appeal having been
perfected or by definitive resolution of the dispute by the highest court to
which an appeal may be made), all costs and expenses of which shall be borne by
the losing party in any such proceeding (with costs and expenses to be assessed
and assigned by the arbitrator in the
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<PAGE> 6
event of an arbitration in which there is no losing party). Notwithstanding any
provision of this Escrow Agreement or the Merger Agreement to the contrary,
after delivery of any Response Notice which contests the Claimed Amount
specified in the related Notice of Claim, the Escrow Agent, pursuant to this
Section 4, shall continue to hold Escrow Funds having a value equal to the
Contested Amount (up to the amount of Escrow Funds then held in escrow
hereunder), notwithstanding the occurrence of the Escrow Release Date, until (i)
receipt by the Escrow Agent of a copy of a settlement agreement executed by
Parent and the Major Shareholder setting forth written instructions to the
Escrow Agent as to the release of the Escrow Funds, if any, that shall be made
with respect to the Contested Amount, (ii) receipt by the Escrow Agent of a
final order, decree or judgment of a court of competent jurisdiction in the
United States of America as described above or (iii) receipt by the Escrow Agent
of a copy of a final arbitration decision, setting forth written instructions
to the Escrow Agent as to the release of the Escrow Funds, if any, that shall be
made with respect to the Contested Amount. Upon the mutual direction of the
parties or upon receipt of such order, decree, judgment or decision, the Escrow
Agent shall promptly thereafter release those Escrow Funds from escrow (to the
extent that any portion of the Escrow Funds is then held in escrow hereunder) in
accordance with such agreement, order, decree, judgment or instructions. The
Escrow Agent shall be under no duty whatsoever to institute or defend any
proceedings which might in its judgment involve expense or liability unless it
shall have been furnished with indemnity from Parent and the Major Shareholder
acceptable to it. The Escrow Agent shall have the right to interplead the
parties to any dispute in any court of competent jurisdiction and request that
such court determine the respective rights of the parties with respect to this
Escrow Agreement, and upon doing so, the Escrow Agent shall be released from any
obligations or liability as a consequence of such claims or demands.
(f) Within three Business Days after the Escrow
Release Date, the Escrow Agent shall release to the Major Shareholder an amount
equal to the amount, if any, by which the Escrow Funds then exceeds the
aggregate Claimed Amount in respect of all Indemnification Claims theretofore
asserted by the Indemnified Party and not theretofore finally resolved,
including any Contested Claims ("Outstanding Claims"). Under no circumstances
should the terms of this Escrow Agreement require the Escrow Agent to release or
distribute escrowed funds or property (or take similar action, such as making a
draw on an underlying letter of credit) sooner than two Business Days after the
Escrow Agent has received the requisite notices or paperwork in good form, or
passage of the applicable claims period or release date, as the case may be.
5. Duties of Escrow Agent.
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(a) The Escrow Agent shall not be under any duty to
give the Escrow Funds held by it hereunder any greater degree of care than it
gives its own similar property and shall not be required to invest any funds
held hereunder except as directed in this Escrow Agreement.
(b) The Escrow Agent shall not be liable to anyone
for any action taken or omitted to be taken by it hereunder, except for its own
gross negligence or willful misconduct, and except with respect to claims based
upon such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the Interested Parties hereto shall jointly and
severally indemnify and hold harmless the Escrow Agent from and against any and
all losses, liabilities, claims, actions, damages and expenses, including
reasonable attorneys' fees and disbursements, arising out of and in connection
with this Escrow Agreement. Without limiting the foregoing, the Escrow Agent
shall in no event be liable in connection with its investment or reinvestment of
the Escrow Funds held by it hereunder in good faith, in accordance with the
terms hereof, including without limitation any liability for any delays (not
resulting from its gross negligence or willful misconduct) in the investment or
reinvestment of the Escrow Funds, or any loss of interest incident to any such
delays. The foregoing indemnification and agreement to hold harmless shall
survive the termination of this Escrow Agreement.
(c) The Escrow Agent shall be entitled to rely upon
any order, judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder reasonably believed by the Escrow Agent to be
authentic, correct and properly and validly served without being required to
determine the authenticity or the correctness of any fact stated therein or the
propriety or validity of the service thereof. The Escrow Agent may act in
reliance upon any instrument or signature reasonably believed by it to be
genuine and may assume that the person purporting to give notice or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(d) The Escrow Agent may act pursuant to the advice
of counsel with respect to any matter relating to this Escrow Agreement and
shall not be liable for any action taken or omitted by it in accordance with
such advice, except that the Escrow Agent shall be liable for any actions or
omissions which result from the Escrow Agent's gross negligence or willful
misconduct.
Each Interested Party and the Major Shareholder acknowledges
and agrees that the Escrow Agent (i) shall not be responsible for any of the
agreements referred to or described herein (including without limitation the
Indemnification Agreement) or for determining or compelling compliance
therewith, and shall not
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otherwise be bound thereby, and (ii) shall be obligated only for the performance
of such duties as are expressly and specifically set forth in this Escrow
Agreement on its part to be performed, each of which are ministerial (and shall
not be construed to be fiduciary) in nature, and no implied duties or
obligations of any kind shall be read into this Escrow Agreement against or on
the part of the Escrow Agent.
In no event shall the Escrow Agent be liable for indirect,
punitive, special or consequential damage or loss (including but not limited to
lost profits) whatsoever, even if the Escrow Agent has been informed of the
likelihood of such loss or damage and regardless of the form of action.
The Escrow Agent shall have no more or less responsibility or
liability on account of any action or omission of any book-entry depository,
securities intermediary or other subescrow agent employed by the Escrow Agent
than any such book-entry depository, securities intermediary or other subescrow
agent has to the Escrow Agent, except to the extent that such action or omission
of any book-entry depository, negligence, bad faith or wilful misconduct in
breach of this Escrow Agreement.
(e) The Escrow Agent does not have any interest in
the Escrow Funds deposited hereunder other than as escrow agent hereunder. Any
payments from or release of the Escrow Funds shall be subject to withholding if
required under any applicable law.
(f) The Escrow Agent may at any time resign as Escrow
Agent hereunder by giving thirty days' prior written notice of resignation to
Parent and Major Shareholder. Prior to the effective date of the resignation as
specified in such notice, Parent will issue to the Escrow Agent a written
instruction authorizing redelivery of the Escrow Funds to a bank or trust
company that it selects as successor to the Escrow Agent hereunder subject to
the consent of Major Shareholder (which consent shall not be unreasonably
withheld or delayed). If, however, Parent shall fail to name such a successor
escrow agent within twenty days after the notice of resignation from the Escrow
Agent, the Major Shareholder shall be entitled to name such successor escrow
agent. If no successor escrow agent is named by Parent or Major Shareholder, the
Escrow Agent may apply to a court of competent jurisdiction for appointment of
a successor escrow agent.
(g) In the event of any disagreement between the
Major Shareholder and Parent relating to this Escrow Agreement, including
without limitation with respect to the disposition of the Escrow Funds, or in
the event that the Escrow Agent is in doubt as to what action it should take
hereunder, the Escrow
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Agent shall be entitled to retain the Escrow Funds until the Escrow Agent shall
have received (i) a copy of the final arbitration decision directing in writing
delivery of the Escrow Funds, (ii) a written agreement executed by the Major
Shareholder and Parent, directing delivery of the Escrow Funds or (iii) a final
order, decree or judgment of a court of competent jurisdiction in the United
States of America directing delivery of the Escrow Funds, and in any such event
the Escrow Agent shall disburse the Escrow Funds in accordance with such
decision, agreement, order, decree or judgment.
(h) Each of the Interested Parties agrees, jointly
and severally (i) to pay or reimburse the Escrow Agent for its attorney's fees
and expenses incurred in connection with the preparation of this Escrow
Agreement and (ii) to pay the Escrow Agent's compensation for its normal
services hereunder in accordance with the attached fee schedule, which may be
subject to change hereafter on an annual basis.
Each of the Interested Parties agrees, jointly and severally,
to reimburse the Escrow Agent on demand for all costs and expenses incurred in
connection with the administration of this Escrow Agreement or the escrow
created hereby or the performance or observance of its duties hereunder which
are in excess of its compensation for normal services hereunder, including
without limitation, payment of any legal fees and expenses incurred by the
Escrow Agent in connection with resolution of any claim by any party hereunder.
6. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
sent by facsimile (if confirmed) or mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, as specified below):
(a) if to Parent, Purchaser or the Surviving Entity, to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Vice President, Corporate Development
Telephone No.: (508) 435-1000
Facsimile No.: (508) 495-8900
with a copy to:
9
<PAGE> 10
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Office of the General Counsel
Telephone No.: (508) 435-1000
Facsimile No.: (508) 497-6915
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telephone No.: (617) 573-4800
Facsimile No.: (617) 573-4822
(b) If to the Major Shareholder:
Computer Concepts Corp.
80 Orville Drive
Bohemia, New York 11716
Attention: Daniel DelGiorno, Jr., President
Telephone No.: (516) 244-1500
Facsimile No.: (516) 244-1468
With a copy to:
Beckman, Millman & Sanders LLP
116 John Street
New York, New York 10038
Attention: Michael Beckman, Esq.
Telephone No.: (212) 406-4700
Facsimile No.: (212) 406-3750
(c) If to the Escrow Agent:
State Street Bank and Trust Company, Inc.
2 Avenue de Lafayette
Boston, Massachusetts 02111
Attention: Corporate Trust, 6th Floor
Telephone No.: (617) 662-1806
10
<PAGE> 11
Facsimile No.: (617) 662-1463
The address of a party for the purposes of this Section 6 may be changed by
giving written notice to the other parties hereto of such change in the manner
provided herein for giving notice. Unless and until such written notice is
received, the addresses as provided herein shall be deemed to continue in effect
for all purposes hereunder.
7. Wiring Instructions. Any funds to be paid to or by the
Escrow Agent hereunder shall be sent by wire transfer pursuant to the following
instructions (or by such method of payment and pursuant to such instruction as
may have been given in advance and in writing to or by the Escrow Agent, as the
case may be, in accordance with Section 6 hereof):
If to Parent/Purchaser/Surviving Entity:
Bank: BankBoston Corporation
ABA#: 011 000 0390
A/C#: 270-42122
Attn: Amy Beninato
Ref: EMC/Softworks Escrow
If to Major Shareholder:
Bank: European American Bank
ABA#: 021001486
A/C#: 024-04775-5
Attn: Computer Concepts Money Market
Ref: EMC/Softworks Escrow
If to the Escrow Agent:
Bank: State Street Bank and Trust Company, Inc.
ABA#: 0110 0002 8
A/C#: 9903-990-1
Attn: Corporate Trust Department
Ref: EMC/Softworks Escrow
8. Entire Agreement; Binding Effect. This Escrow Agreement and
the agreements, documents and other instruments referred to herein (a) consti
tute the entire agreement, and supersede all other agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by any party (by operation
of law or otherwise) without the prior written consent of the other parties.
11
<PAGE> 12
9. Applicable Law. This Escrow Agreement shall be governed by
and be construed in accordance with the laws of the State of Delaware, without
giving effect to the principles thereof relating to conflicts of law. The
parties hereby consent to the jurisdiction of Massachusetts state and federal
courts over all matters relating to this Escrow Agreement.
10. Parties in Interest. This Escrow Agreement shall be
binding upon and inure solely to the benefit of each party hereto and their
respective successors and permitted assigns, and nothing in this Escrow
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this Escrow
Agreement.
11. Counterparts. This Escrow Agreement may be executed in any
number of counterparts and by the parties hereto on separate counterparts, each
of which, when so executed and delivered, shall be deemed an original, but all
of which together shall constitute one and the same instrument.
12. Interpretation. The section and other headings contained
in this Escrow Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Escrow Agreement. Whenever the
words "include," "includes" or "including" are used in this Escrow Agreement,
they shall be deemed to be followed by the words "without limitation." Unless
otherwise indicated herein or the context otherwise requires, the masculine
pronoun shall include the feminine and neuter, and the singular shall include
the plural. The word "or" shall not be deemed exclusive.
13. Severability. In case any term, provision, covenant or
restriction of this Escrow Agreement is held to be invalid, illegal or
unenforceable by a competent court in any jurisdiction, the validity, legality
and enforceability of the remaining terms, provisions, covenants or
restrictions, or of such term, provision, covenant or restriction in any other
jurisdiction, shall not in any way be affected or impaired thereby.
14. Amendment and Waiver. No amendment of any provision of
this Escrow Agreement shall in any event be effective, unless the same shall be
in writing and signed by the parties hereto. Any failure of any party to comply
with any obligation, agreement or condition hereunder may only be waived in
writing by the other party, but such waiver shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. No failure by any
party to take any action against any breach of this Escrow Agreement or default
by the other party shall constitute a
12
<PAGE> 13
waiver of such party's right to enforce any provision hereof or to take any such
action.
15. Termination. This Escrow Agreement shall terminate upon
the Escrow Release Date, if no Indemnification Claim is outstanding, or if such
a claim is outstanding, the first date after the Escrow Release Date on which no
Indemnification Claim remains outstanding. Upon termination of the Escrow
Agreement, the Escrow Agent shall pay to the Major Shareholder, any amounts
remaining in the Escrow Funds.
16. Tax Related Terms.
(a) Tax Reporting. The Interested Parties agree that,
for tax reporting purposes, all interest or other income earned from the
investment of the Escrow Funds in any tax year shall (i) to the extent such
interest or other income is distributed by the Escrow Agent to any person or
entity pursuant to the terms of this Escrow Agreement during such tax year, be
allocated to such person or entity, and (ii) otherwise shall be allocated to the
Major Shareholder.
(b) Certification of Taxpayer Identification Number.
The Interested Parties hereto agree to provide the Escrow Agent with a certified
tax identification number by signing and returning a Form W-9 (or Form W-8, in
case of non-U.S. persons) to the Escrow Agent prior to the date on which any
income earned on the investment of the Escrow Funds is credited to the Escrow
Funds. The Interested Parties understand that, in the event their tax
identification numbers are not certified to the Escrow Agent, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Funds.
(c) Tax Indemnification. Each of the Interested
Parties agree, jointly and severally, (i) to assume any and all obligations
imposed now or hereafter by any applicable tax law with respect to any payment
or distribution of the Escrow Funds or performance of other activities under
this Escrow Agreement, (ii) to instruct the Escrow Agent in writing with respect
to the Escrow Agent's responsibility for withholding and other taxes,
assessments or other governmental charges, and to instruct the Escrow Agent with
respect to any certifications and governmental reporting that may be required
under any laws or regulations that may be applicable in connection with its
acting as Escrow Agent under this Escrow Agreement, and (iii) to indemnify and
hold the Escrow Agent harmless from any liability or obligation on account of
taxes, assessments, additions for late payment, interest, penalties, expenses
and other governmental charges that may be assessed or asserted against the
13
<PAGE> 14
Escrow Agent in connection with or relating to any payment made or other
activities performed under the terms of this Escrow Agreement, including without
limitation any liability for the withholding or deduction of (or the failure to
withhold or deduct) the same, in connection with this Escrow Agreement,
including costs and expense (including reasonable legal fees and expenses),
interest and penalties. The foregoing indemnification and agreement to hold
harmless shall survive the termination of this Escrow Agreement.
17. Force Majeure.
The Escrow Agent shall not be responsible for delays or
failures in performance resulting from acts beyond its control. Such acts shall
include but not be limited to acts of God, strikes, lockouts, riots, acts of
war, epidemics, governmental regulations superimposed after the fact, fire,
communication line failures, computer viruses, power failures, earthquakes or
other disasters.
18. Reproduction of Documents. This Escrow Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, and (b) certificates and
other information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties have executed and delivered
this Escrow Agreement as of the date first written above.
EMC CORPORATION
By: /s/ Michael J. Cody
---------------------
Name: Michael J. Cody
Title: Vice President,
Corporate Development
EAGLE MERGER CORP.
By: /s/ Paul T. Dacier
---------------------
Name: Paul T. Dacier
Title: Secretary
COMPUTER CONCEPTS CORP.
By: /s/ Daniel DelGiorno
----------------------
Name: Daniel DelGiorno
Title: Chairman
STATE STREET BANK AND
TRUST COMPANY, INC. AS ESCROW
By: /s/
----------------------
Name:
Title: Vice President
15
<PAGE> 1
Exhibit 99.(c)(6)
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is entered into
as of December 21, 1999 by and among EMC Corporation, a Massachusetts
corporation ("Parent"), Eagle Merger Corp., a Delaware corporation and a wholly
owned subsidiary of Parent (the "Purchaser"), and Computer Concepts Corp., a
Delaware corporation (the "Major Shareholder"). Capitalized terms used and not
otherwise defined herein shall have the respective meanings ascribed in Section
1 hereof.
WHEREAS, Parent, Purchaser and Softworks, Inc., a Delaware
corporation (the "Company"), are parties to an Agreement and Plan of Merger
dated as of December 21, 1999 (the "Merger Agreement") which provides that,
among other things, upon the terms and subject to the conditions thereof,
Purchaser will be merged with and into the Company, with the Company continuing
as the surviving corporation (in such capacity, the "Surviving Entity"); and
WHEREAS, Parent, Purchaser, the Major Shareholder and James
Cannavino, Dennis Murray and Charles Feld, as trustees (the "Trustees") under
the Voting Trust Agreement, are parties to a Stock Tender Agreement dated as of
December 21, 1999 (the "Stock Tender Agreement") which provides that, among
other things, the Major Shareholder and the Trustees will take such actions as
may be necessary to tender the Shares held by the Major Shareholder pursuant to
the Offer, grant Parent an option to purchase such Shares under certain
circumstances and grant Purchaser a proxy with respect to the voting of such
Shares, all upon the terms and subject to the conditions set forth in the Stock
Tender Agreement; and
WHEREAS, Parent, Purchaser, the Company, the Major Shareholder
and State Street Bank and Trust Company, Inc., a Massachusetts trust company, as
escrow agent (the "Escrow Agent"), are entering into an Escrow Agreement dated
as of December 21, 1999 (the "Escrow Agreement") which provides that, among
other things, a portion of the consideration received by the Major Shareholder
in consideration of the purchase of the Shares held by the Major Shareholder
pursuant to the Offer be deposited into escrow, upon the terms and subject to
the conditions set forth in the Escrow Agreement; and
<PAGE> 2
WHEREAS, as a condition and inducement to Parent and Purchaser
entering into the Merger Agreement, Parent and Purchaser have requested that the
Major Shareholder agree, and the Major Shareholder has agreed, to provide
indemnification to Parent, Purchaser and the Surviving Entity, upon the terms
and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing and the
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Parent, Purchaser and
the Major Shareholder hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context clearly requires otherwise:
(a) "Closing" shall mean the consummation of the purchase by
Purchaser of Shares in the Offer.
(b) "Escrow Amount" shall mean $10 million.
(c) "Governmental Entity" shall mean a court, arbitral
tribunal, administrative agency or commission or other governmental or other
regulatory authority or agency, whether domestic or foreign.
(d) "Loss" or "Losses" shall mean any loss, liability
(including any liability for Taxes), damage, deficiency, fine, penalty, cost and
expense (including reasonable expenses of investigation, amounts paid in
settlement, interest, court costs, reasonable fees and expenses of attorneys and
accountants and other costs of litigation).
(e) "Offer" shall mean the cash tender offer to be made by
Purchaser pursuant to Section 1.1 of the Merger Agreement to acquire any and all
issued and outstanding Shares at $10.00 per Share net to the seller in cash, or
such increased amount, if any, as the Purchaser may offer to pay as contemplated
by Section 1.1(a) and Section 5.5(b) of the Merger Agreement.
(f) "Person" shall mean a natural person, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Entity or other
entity or organization.
2
<PAGE> 3
(g) "Shares" shall mean the shares of common stock, par
value $.001 per share, of the Company.
(h) "Subsidiary" shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated, of
which (a) at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or (b) such party or any other Subsidiary
of such party is a general partner (excluding any such partnership where such
party or any Subsidiary of such party does not have a majority of the voting
interest in such partnership).
(i) "Tax" or "Taxes" shall mean all taxes, charges, fees,
duties, levies, tariffs, imposts, penalties or other assessments of any kind
imposed by any federal, state, local or foreign governmental authority,
including, but not limited to, income, gross receipts, excise, profits, ad
valorem, net worth, value added, service, special assessments, workers'
compensation, utility, severance, production, excise, stamp, occupation,
premiums, windfall profits, real or personal property, sales, gain, use,
license, custom duty, unemployment, capital stock, transfer, franchise,
payroll, withholding, social security, minimum estimated, and other taxes, and
shall include interest, penalties or additions attributable thereto; provided
that "Tax" or "Taxes" as used herein shall not include (i) any amounts arising
as a result of the filing of any amended tax return filed by the Company unless
such amendment is required by applicable law, rule or regulation or (ii) as a
result of the negligence of Parent or Purchaser.
(j) "Voting Trust Agreement" shall mean the Voting Trust
Agreement, dated as of August 3, 1998, between the Company, the Major Share-
holder and the Trustees.
2. Indemnification.
(a) (i) The Major Shareholder shall indemnify and hold
harmless Parent, Purchaser, the Surviving Entity and their respective
Subsidiaries and officers, directors, employees and agents (the "Indemnified
Parties") from and against and in respect of any Loss incurred or sustained by
any of them as a result of any breach (A) by the Company of any of the
representations or warranties relating to the Company contained in Sections 3.3,
3.9, 3.10, 3.11, 3.12, 3.13, 3.16 and 3.18
3
<PAGE> 4
of the Merger Agreement and (B) by the Major Shareholder of any of the
representations and warranties relating to the Major Shareholder contained in
Section 11 of the Stock Tender Agreement. The Major Shareholder shall not be
required to indemnify any Indemnified Party under this Section 2(a) unless and
until the aggregate Losses with respect to which the Indemnified Parties are
entitled to indemnification hereunder exceed $100,000, in which case the
parties incurring the indemnification obligations with respect to such Losses
shall be responsible for the entire amount of such Losses. In no event shall any
Indemnified Party be entitled to indemnification for any Losses incurred by such
Indemnified Party to the extent that such Indemnified Party has already actually
received payment for such Losses pursuant to this Section 2(a). No investigation
made by Parent or Purchaser or any other Person shall affect any representation
or warranty of the Company or the Major Shareholder contained in the Merger
Agreement or the Stock Tender Agreement.
(b) To secure the indemnification obligations described in
Section 2(a) hereof, the Escrow Amount will be deposited into escrow with the
Escrow Agent in accordance with Section 2 of the Escrow Agreement. The Escrow
Amount will be subject to delivery to Parent upon the terms and subject to the
conditions set forth within the Escrow Agreement.
3. Procedure for Indemnification.
(a) An Indemnified Party shall give prompt written notice (a
"Claim Notice") to the Escrow Agent, with a copy to the Major Shareholder, of
any claim or event known to it which does, or in its reasonable judgment may,
give rise to a claim for indemnification hereunder (an "Indemnifiable Claim") by
the Indemnified Party against the Major Shareholder; provided that the failure
of any Indemnified Party to give Claim Notice as provided in this Section 3(a)
shall not relieve the Major Shareholder of its obligations under this Agreement,
except to the extent that such failure has materially and adversely affected the
rights of the Major Shareholder. A Claim Notice shall specify the basis for and
estimated amount of such Indemnifiable Claim. In the case of any claim for
indemnification hereunder arising out of a claim, action, suit or proceeding
brought by any Person who is not a party to this Agreement (a "Third-Party
Claim"), the Indemnified Party shall also give the Major Shareholder copies of
any written claims, process or legal pleadings with respect to such Third-Party
Claim promptly after such documents are received by the Indemnified Party.
4
<PAGE> 5
(b) The Indemnified Party shall be entitled to control the
defense of any Third-Party Claim; provided, however, that the Major Shareholder
may elect, at its own cost and expense, to participate in any Third-Party Claim;
provided further, however, that the Major Shareholder shall not take any action
with respect to such Third-Party Claim before consulting with, and receiving the
consent of, each Indemnified Party involved. The Major Shareholder shall
reasonably cooperate in the compromise of, or defense against, such Third-Party
Claim. The Major Shareholder shall pay its own costs and expenses incurred in
connection with such cooperation. The Indemnified Party shall not consent to
entry of any judgement or enter into any settlement without the prior written
consent of the Major Share holder (which consent shall not be unreasonably
withheld).
(c) If the Indemnified Party elects not to compromise or
defend against a Third-Party Claim, the Major Shareholder shall pay, compromise
or defend such Third-Party Claim at the Major Shareholder's own cost and
expense. Major Shareholder shall, within ten days (or sooner, if the nature of
such Third-Party Claim so requires), notify the Indemnified Party of its intent
to pay, compromise or defend such Third-Party Claim, and such Indemnified Party
shall reasonably cooperate in the compromise of, or defense against, such
Third-Party Claim. The Major Shareholder shall pay the Indemnified Party's costs
and expenses incurred in connection with such cooperation. The Major Shareholder
shall not consent to entry of any judgment or enter into any settlement without
the prior written consent of each related Indemnified Party (which consent shall
not be unreasonably withheld), unless such judgment or settlement provides
solely for money damages or other money payments for which such Indemnified
Party is entitled to indemnification hereunder and includes as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect of such Third-Party Claim. After
notice from the Major Shareholder to an Indemnified Party of its election to
assume the defense of a Third-Party Claim, the Major Shareholder shall not be
liable to such Indemnified Party under Sections 2 or 3 hereof for any legal
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof; provided that such Indemnified Party shall have the right to
employ one counsel of its choice to represent such Indemnified Party if, in such
Indemnified Party's reasonable judgment, a conflict of interest between such
Indemnified Party and the Major Shareholder exists in respect of such claim, or
if there is a reasonable likelihood that a Third-Party Claim may have a material
adverse effect on an Indemnified Party, and in that event the reasonable fees
and expenses of such separate counsel shall be paid by the Major Shareholder.
5
<PAGE> 6
(d) If the amount of any Losses shall, at any time
subsequent to payment pursuant to this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, less any expenses
incurred in connection therewith, shall promptly be repaid by the Indemnified
Party to the Major Shareholder.
4. Notices. All notices, requests and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
sent by facsimile (if confirmed) or mailed by registered or certified mail
(postage prepaid, return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, as specified below):
(a) if to Parent, Purchaser or the Surviving Entity, to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Vice President, Corporate Development
Telephone No.: (508) 435-1000
Facsimile No.: (508) 435-8900
with a copy to:
EMC Corporation
35 Parkwood Drive
Hopkinton, Massachusetts 01748
Attention: Office of the General Counsel
Telephone No.: (508) 435-1000
Facsimile No.: (508) 497-6915
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street, 31st Floor
Boston, Massachusetts 02108
Attention: Margaret A. Brown, Esq.
Telephone No.: (617) 573-4800
Facsimile No.: (617) 573-4822
6
<PAGE> 7
(b) If to the Major Shareholder:
Computer Concepts Corp.
80 Orville Drive
Bohemia, New York 11716
Attention: Daniel DelGiorno, Jr., President
Telephone No.: (516) 244-1500
Facsimile No.: (516) 244-1468
With a copy to:
Beckman, Millman & Sanders LLP
116 John Street
New York, New York 10038
Attention: Michael Beckman, Esq.
Telephone No.: (212) 406-4700
Facsimile No.: (212) 406-3750
(c) If to the Escrow Agent:
State Street Bank and Trust Company, Inc.
2 Avenue de Lafayatte
Boston, Massachusetts 02111
Attention: Corporate Trust, 6th Floor
Telephone No.: (617) 662-1806
Facsimile No.: (617) 662-1463
The address of a party for the purposes of this Section 4 may be changed by
giving written notice to the other parties hereto of such change in the manner
provided herein for giving notice. Unless and until such written notice is
received, the addresses as provided herein shall be deemed to continue in effect
for all purposes hereunder.
5. Entire Agreement; Binding Effect. This Agreement and the
agreements, documents and other instruments referred to herein (a) constitute
the entire agreement, and supersede all other agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof and (b) shall not be assigned by any party (by operation of law or
otherwise) without the prior written consent of the other parties.
7
<PAGE> 8
6. Applicable Law. This Agreement shall be governed by and be
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles thereof relating to conflicts of law.
7. Consent to Jurisdiction. Each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any Federal court
located in the Commonwealth of Massachusetts or any Massachusetts state court in
the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than a Federal or state court sitting in the Commonwealth of
Massachusetts.
8. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and their respective successors
and permitted assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
9. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts, each of which,
when so executed and delivered, shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10. Interpretation. The section and other headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." Unless otherwise indicated herein or
the context otherwise requires, the masculine pronoun shall include the feminine
and neuter, and the singular shall include the plural. The word "or" shall not
be deemed exclusive.
11. Severability. In case any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal or unenforceable
by a competent court in any jurisdiction, the validity, legality and
enforceability of the remaining terms, provisions, covenants or restrictions, or
of such term, provision, covenant or
8
<PAGE> 9
restriction in any other jurisdiction, shall not in any way be affected or
impaired thereby.
12. Amendment and Waiver. No amendment of any provision of this
Agreement shall in any event be effective, unless the same shall be in writing
and signed by the parties hereto. Any failure of any party to comply with any
obligation, agreement or condition hereunder may only be waived in writing by
the other party, but such waiver shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. No failure by any party to
take any action against any breach of this Agreement or default by the other
party shall constitute a waiver of such party's right to enforce any provision
hereof or to take any such action.
13. Termination. This Agreement shall terminate two years after
the date upon which the Closing occurred; provided, however, that if prior to
such date, the Major Shareholder or the Escrow Agent shall have received a Claim
Notice in accordance with Section 3(a) hereof, this Agreement shall not
terminate until such outstanding Indemnifiable Claim has been finally resolved.
9
<PAGE> 10
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement under seal as of the date first written above.
EMC CORPORATION
By: /s/ Michael J. Cody
---------------------------------------------
Name: Michael J. Cody
Title: Vice President, Corporate Development
EAGLE MERGER CORP.
By: /s/ Paul T. Dacier
---------------------------------------------
Name: Paul T. Dacier
Title: Secretary
COMPUTER CONCEPTS CORP.
By: /s/ Daniel DelGiorno
---------------------------------------------
Name: Daniel DelGiorno
Title: Chairman
10
