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As filed with the Securities and Exchange Commission on January 31, 2000
Registration No. 333-XXXXX
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SYBASE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
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<S> <C> <C>
DELAWARE 7372 94-2951005
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
6475 CHRISTIE AVENUE
EMERYVILLE, CALIFORNIA 94608
(510) 922-3500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DANIEL R. CARL
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SYBASE, INC.
6475 CHRISTIE AVENUE
EMERYVILLE, CALIFORNIA 94608
(510) 922-3500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
DEBRA SUMMERS, ESQ.
WILSON SONSINI GOODRICH & ROSATI
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CA 94304
(415) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement. If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED
TITLE OF EACH CLASS AMOUNT MAXIMUM OFFERING PROPOSED AMOUNT OF
OF SECURITIES TO TO BE PRICE PER MAXIMUM AGGREGATE REGISTRATION
BE REGISTERED REGISTERED(1)(2) SHARE(3) OFFERING PRICE FEE
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Common Stock
$0.001 par value per share 7,381,914 shares $ 21.50 $ 158,711,151 $41,899.75
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(1) Includes 7,098,985 shares of Common Stock to be issued at the closing of
the acquisition of Home Financial Network, Inc. by Sybase, Inc., and
282,929 shares of Common Stock issuable upon exercise of warrants for
Sybase Common Stock issued in connection with that acquisition.
(2) Pursuant to Rule 416 under the Securities Act, this Registration
Statement also relates to a presumably indeterminate number of shares of
Common Stock which are issuable upon stock splits, stock dividends,
recapitalizations or other similar transactions.
(3) Estimated solely for the purpose of computing the registration fee
required by Section 6(b) of the Securities Act and computed as set forth
in Rule 457(c) under the Securities Act based upon the average of the
high and low prices of the Common Stock on January 24, 2000, as reported
on the Nasdaq National Market as required by Rule 457(f).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SELLING STOCKHOLDERS MAY NOT SELL THE SECURITIES COVERED BY THIS PROSPECTUS
UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL SECURITIES AND
IT IS NOT SOLICITING OFFERS TO BUY SECURITIES IN ANY STATE WHERE THE OFFER OR
SALE IS NOT PERMITTED
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PROSPECTUS
SUBJECT TO COMPLETION, JANUARY 24, 2000
7,381,914 SHARES
SYBASE, INC. COMMON STOCK
This Prospectus relates to the public resale of (a) 7,381,914 shares of
our common stock, par value $0.001 ("Common Stock") (i) that were issued to the
selling stockholders identified in this Prospectus (the "Selling Stockholders")
pursuant to the terms of the Agreement and Plan of Reorganization
("Reorganization Agreement"), dated as of November 29, 1999, which we entered
into with Home Financial Networks, Inc., a Delaware corporation, and others, or
(ii) that may be issued in the future, if certain Selling Stockholders exercise
their rights under the warrants ("Warrants") we issued pursuant to the
Reorganization Agreement, and (b) a presently indeterminate number of shares of
our Common Stock which may be issuable upon stock splits, stock dividends,
recapitalizations or other similar transactions, in accordance with Rule 416
under the Securities Act of 1933, as amended (the "Securities Act"). All such
shares are collectively referred to in the Prospectus as the "Registered
Shares."
We will not receive any of the proceeds from the sale of the Registered
Shares by the Selling Stockholders, but we may receive proceeds from the
exercise of the Warrants by those Selling Stockholders who hold Warrants. See
"Use of Proceeds." None of the shares covered by this Prospectus has been
registered prior to the filing of this document.
We have instructed the agent designated to transfer shares pursuant to
the Reorganization Agreement to take all actions necessary for delivery of the
Registered Shares to the Selling Stockholders on or before February 10, 2000.
The Selling Stockholders have not advised us of any specific plans for the
distribution of the Registered Shares. If any Registered Shares are sold, the
price at which they may be resold by the Selling Stockholders, and the
commissions, if any, paid to broker-dealers in connection with any such sales,
are unknown and may vary from transaction to transaction. See "Selling
Stockholders" and "Plan of Distribution." For example:
The Selling Stockholders may offer the Registered Shares in one or more
transactions at any price.
Such offers and sales may be made on the Nasdaq National Market or in
privately negotiated transactions.
The Selling Stockholders may (or may not) effect such transactions by
selling the Registered Shares to or through broker-dealers.
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Broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders or the
purchasers of the Registered Shares.
Broker-dealers may act as agent or buy or sell as a principal, or both,
and the broker-dealer's compensation in connection with the offer and
sale of the Registered Shares might be in excess of customary
commissions.
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The shares of Common Stock covered by this document are listed on the
Nasdaq National Market under the symbol "SYBS." On January 24, 2000, the last
sale price of the Common Stock was $21.50 per share.
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INVESTING IN OUR COMMON STOCK ENTAILS A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 6.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE OFFER OR SALE OF THE SECURITIES OR
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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YOU SHOULD RELY ONLY UPON THE INFORMATION CONTAINED IN THIS DOCUMENT OR
TO WHICH WE HAVE REFERRED YOU IN THIS DOCUMENT. WE HAVE NOT AUTHORIZED ANYONE TO
PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS DOCUMENT MAY ONLY BE USED
WHERE IT IS LEGAL TO SELL THESE SECURITIES. THE INFORMATION IN THIS DOCUMENT MAY
ONLY BE ACCURATE ON THE DATE OF THIS DOCUMENT.
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The Securities and Exchange Commission may take the view that, under
certain circumstances, the Selling Stockholders and any broker-dealers or agents
that participate with the Selling Stockholders in the distribution of the
Registered Shares are "underwriters". Thus, commissions, discounts or
concessions received by any such broker-dealer or agent may be deemed to be
underwriting commissions under the Securities Act.
THE DATE OF THIS PROSPECTUS IS JANUARY 31, 2000
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PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information in this Prospectus concerning Sybase, the Registered Shares, and the
documents incorporated by reference in this Prospectus. Because this is only a
summary, you should carefully read the entire Prospectus before you invest in
our Common Stock, especially the risks described under "Risk Factors."
Unless the context requires otherwise, references in this prospectus to
"we," "us," "our," "Sybase," or "the Company" refer to Sybase, Inc. and its
wholly owned subsidiaries.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and file reports, proxy
and information statements and other information with the Securities and
Exchange Commission (the "Commission"). These reports, proxy and information
statements and other information may be inspected and copied at the public
reference room maintained by the Commission at Room 1024, Judiciary Plaza, 450
Fifth Street, NW, Washington, D.C. 20549, and at the following Regional Offices
of the Commission: New York Regional Office, Seven World Trade Center, Suite
1300, New York, New York 10048 and Chicago Regional Office, Northwest Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please
call the Commission at 1-800-SEC-0330 for further information on additional
public reference rooms, including locations of other regional offices. Copies of
such material may also be obtained by mail at prescribed rates from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, NW,
Washington, D.C. 20549. The Commission maintains an Internet Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The address
of the site is http://www.sec.gov.
Our Common Stock is listed on the Nasdaq National Market, and such
reports, proxy and information statements and other information may be inspected
at the offices of Nasdaq Operations, 1735 K Street, NW, Washington, D.C. 20006.
This Prospectus constitutes a part of a Registration Statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information please read the entire Registration Statement. You may
inspect the Registration Statement at the public reference room maintained by
the Commission at the addresses set forth in the preceding paragraph. Statements
contained herein concerning any document filed as an exhibit are not necessarily
complete and, in each instance, we refer you to the copy of such document filed
as an exhibit to the Registration Statement. Each such statement is qualified in
its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The following documents, which we previously
filed with the Commission (herein "Public Documents") are incorporated by
reference into this Prospectus:
(1) Our Annual Report on Form 10-K for Sybase, Inc., for the fiscal year
ended December 31, 1998;
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(2) Our Quarterly Reports on Form 10-Q for Sybase, Inc., for the quarters
ended March 31, 1999, June 30, 1999 and September 30, 1999;
(3) Our description of our Common Stock contained in its Registration
Statement on Form 8-A filed with the Commission on March 4, 1992; and
(4) All other reports we have filed with the Commission pursuant to
Sections 13(a) or 15(d) of the Exchange Act since December 31, 1998.
All reports and other documents we file pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of this offering are also incorporated by reference into this
Prospectus and are part of this Prospectus from and after the date of filing of
such reports and documents.
Any statement contained in this Registration Statement (or in any other
subsequently filed document incorporated in this Registration Statement) will be
modified or superseded by any later statement contained in a subsequently filed
document made part of this Registration Statement.
Upon written or oral request we will provide without charge to each
person (including any beneficial owner to whom a copy of this Prospectus has
been delivered), a copy of any or all of the foregoing documents (other than the
exhibits to such documents not specifically incorporated by reference into such
documents). Requests for such documents may be submitted in writing to Investor
Relations, Sybase, Inc., 6475 Christie Avenue, Emeryville, California 94608, or
by telephone at (510) 922-3500.
SYBASE, INC.
Sybase, Inc. (together with our consolidated subsidiaries) is one of the
largest global independent software companies in the world. We help businesses
gain competitive advantage by enabling them to manage and deliver applications,
content and data anywhere they are needed. Our software products and
professional consulting services provide a comprehensive platform for delivery
of integrated solutions for enterprise data management, mobile and embedded
computing, data warehousing, and Internet computing environments that businesses
need to be successful. Our software products consist of leading high-performance
enterprise, mobile and embedded database products; middleware products that
provide interoperability, connectivity and data movement; application
development tools and application servers that enable the development and
deployment of applications on the Internet and other computing environments; and
business intelligence products that enable the design and implementation of data
warehouses and data marts. We offer a broad spectrum of products for building
on-line, enterprise-wide applications.
Our customers may use Sybase's advanced software product architecture to
build and deploy applications that can be distributed across heterogeneous
networked computing environments. Our relational database management systems
("RDBMS"), data access and data movement software, and application development
tools have historically been used primarily to address customers' enterprise
data management needs for high performance, on-line transaction processing
("OLTP") systems, such as securities brokerage systems and other
mission-critical applications which need to process and store a large number of
transactions, and for data warehouse and data mart applications, which are
designed to access and analyze corporate data (either routinely or on an ad-hoc
basis) to enable an enterprise to rapidly obtain answers to specific queries
about its business and customers. Sybase customers relying on Sybase's
enterprise data management products include leading companies in banking,
brokerage, insurance, telecommunications and healthcare.
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Sybase's strategy is to leverage its existing strengths in enterprise
data management and enterprise application development to focus on delivering
market-leading computing solutions in three growing markets -- Internet
applications, mobile and embedded computing, and business intelligence.
Our principal executive offices are located at 6475 Christie Avenue,
Fifth Floor, Emeryville, California 94068. Our telephone number at that address
is (510) 922-3500 and our Internet address is www.sybase.com. INFORMATION
CONTAINED ON OUR INTERNET SITE IS NOT PART OF THIS PROSPECTUS.
Our audited and consolidated balance sheets, as of December 31, 1997 and
December 31, 1998, and the related statements of operations, stockholders equity
and cash flows, for each year of the three year period ending on December 31,
1998, are set forth in our Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, (incorporated herein). Our unaudited balance sheets as of
March 31, 1999, June 30, 1999, and September 30, 1999, and the related
statements of operations and cash flows for the quarters ending on said dates
are set forth in our Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999, and September 30, 1999, respectively (which are
incorporated herein by this reference).
FORWARD-LOOKING STATEMENTS
This Prospectus (and the documents incorporated herein by reference)
contains forward-looking statements that involve risks and uncertainties. The
statements contained in this Prospectus that are not purely historical are
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. Any statements about our expectations,
beliefs, objectives, assumptions, estimates, intentions, strategies and future
events or performance are not historical facts and may be forward-looking. These
statements are often (but not always) made through the use of "continuing,"
"ongoing," "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates," and similar words and expressions. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual results may
differ materially from those expressed or forecasted in any such forward-looking
statements. Any forward-looking statements are qualified in their entirety by
reference to the factors discussed throughout this Prospectus. Among the
important factors that could cause actual results to differ materially from
those expressed in them, are:
timely product development;
change in economic conditions of the various markets we serve;
opportunities or acquisitions that we pursue; and
the availability and terms of financing.
Because the risk factors referred to above could cause actual results or
outcomes to differ materially from those expressed in any forward-looking
statements made by us, you should not place undue reliance on any such
forward-looking statements. Further, any forward-looking statement speaks only
as of the date on which it is made, and we undertake no obligation to update any
forward-looking statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it is not
possible for us to predict which will arise. In addition, we cannot assess the
impact of each factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
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RISK FACTORS
This offering involves a high degree of risk. You should carefully
consider the following information about these risks, as well as the other
information contained or incorporated by reference in this Prospectus, before
you decide to buy any of our Common Stock.
The results of past operations as described in our Public Documents are
not necessarily indicative of results for the year ending December 31, 1999 or
any future period.
OUR FUTURE OPERATING RESULTS MAY VARY SUBSTANTIALLY FROM PERIOD TO PERIOD
BECAUSE OF A NUMBER OF FACTORS, MANY OF WHICH ARE BEYOND OUR CONTROL.
If our operating results are below the expectations of public market
analysts or investors, then the market price of our Common Stock could decline.
Some of the factors which may affect our quarterly and annual results, but which
are difficult to control or predict, are:
The Market For Our Stock Is Highly Volatile.
The trading price of our Common Stock has fluctuated widely over the last
five years and may continue to fluctuate in the future. Several factors have
caused, and in the future may cause, the market price of our Common Stock to
change, including among other things:
quarterly variations in our operating and financial results,
announcements by others of technological innovations,
our ability (and the ability of our competitors) to develop new
products or win customer contracts,
changes in prices of our products or our competitors' products and
services,
changes in our product mix,
changes in our revenues and revenue growth rates, as a whole or
for individual geographic areas,
changes in our business units, products or product categories, and
statements or changes in opinions, ratings or earnings estimates
made by brokerage firms and industry analysts relating to us, our
products, the market in which we do business, and/or our
competitors.
In addition, the stock market has from time to time experienced extreme
price and volume fluctuations that have particularly affected the market price
for many high-technology companies and which often have been unrelated to the
operating performance of these companies.
The Timing and Amount of Our Revenues Varies Significantly and Estimation of Our
Revenues Is Difficult.
The timing and amount of our revenues from license fees are subject to a
number of factors that make estimation of revenues and operating results before
the end of a quarter extremely uncertain. We have generally experienced a
seasonal pattern of license fees decline between the fourth quarter and the
succeeding
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first quarter of each fiscal year, contributing to lower total revenues
and operating earnings in the first quarter compared to the prior fourth
quarter.
Historically, we have operated with little or no backlog and, as a
result, license fees revenues in any quarter are dependent on orders booked and
shipping in that quarter. In addition, the timing of closing of large license
agreements increases the risk of quarter-to-quarter fluctuations and the
uncertainty of estimating quarterly operating results. We have experienced a
pattern of recording 50 percent to 70 percent of our quarterly license fee
revenues in the third month of each quarter, with a concentration of such
revenues in the last two weeks of such third month. Our operating expenses are
based on projected annual and quarterly revenue levels and are incurred
approximately ratably throughout each quarter.
Because our operating expenses are relatively fixed in the short term, if
projected revenues are not realized in the expected period, our operating
results for that period would be adversely affected and could result in an
operating loss.
Failure to achieve revenues, earnings, and other operating and financial
results as forecast or anticipated by brokerage firms and industry analysts has
previously resulted in, and in the future could result in, an immediate and
substantial adverse effect on the market price of our stock.
Our Growth Rate Is Subject to Number Of Factors Beyond Our Control.
In the future, we may not achieve rates of growth projected for the
software markets in which we compete, which could have a material adverse effect
on our business, financial condition, and operating results. The factors that
influence our growth rate include the following:
The market for our software products and services is extremely
competitive and characterized by dynamic customer demands, rapid
technological and marketplace changes, and frequent product
enhancements and new product introductions.
To compete successfully against other software providers, our
products and services in each aspect of our business will need to
be competitive with the products and services offered by our
competitors in each line of business.
We may not successfully provide competitive solutions to customers
of our products and services and failure to do so could result in
the loss of existing customers or the inability to attract and
retain new customers.
Our competitors (such as Oracle Corporation, Microsoft
Corporation, Informix Corporation, IBM Corporation, and Computer
Associates, Inc.) and our potential competitors have or may have
significantly greater financial, technical, sales, and marketing
resources, and a larger installed product base than ours.
Many of our competitors offer additional categories of products,
such as applications or operating systems that we do not offer,
which may provide those companies with a competitive advantage in
various circumstances.
New or enhanced products, many of which have been announced and
many of which are continually introduced by existing or future
competitors in the software industry, could increase the
competition faced by our products from time to time and result in
greater price pressure on some of our products (especially to the
extent that market acceptance for personal computer-oriented
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and Windows NT technologies increases at the expense of UNIX-based
systems upon which many of our products are based).
Many products we offer contain components developed by third
parties. If such components prove to be defective or are not
properly supported, market acceptance of our products could be
adversely affected.
Commercial acceptance of our products and services could be
adversely affected by critical or negative statements or reports
by brokerage firms, industry and financial analysts, and industry
periodicals concerning Sybase and our products, business, or
competitors, or by the advertising or marketing efforts of
competitors that could affect customer perception.
Customer perception could be adversely affected by financial
results, particularly revenues and profitability, reported for our
1999 fiscal year or future periods, by reductions in the
applicable market share of our products and by related press
reports.
Our Operating Results May Fluctuate Because of a Number of Factors, Many of
Which Are Beyond Our Control.
Our future results of operations will depend in part on our ability to
enhance existing products and to introduce new products on a timely and
cost-effective basis that meet dynamic customer requirements and ultimately gain
market acceptance. Customer requirements for products can rapidly change as a
result of innovations or changes within the computer hardware and software
industries. For example, the widespread use of the Internet is rapidly giving
rise to new customer requirements as well as new methods and practices of
selling, marketing, and distributing products and services.
During 1998 and 1999 we announced the general availability of a variety
of new products and integrated sets of package applications for
customer-specific customization and data warehouse management. These
announcements were intended to enhance the ability of our partners and direct
sales force to market and sell more complete solutions to customers in a single
package and to improve productivity, revenues and profitability. The associated
elimination of the availability of individual products subsumed within
integrated product sets, however, could have an adverse effect on our other
license fees and service revenue, particularly if such product sets are not well
received in the marketplace.
Our results of operations will also depend increasingly on the ability of
our products to interoperate and perform well with existing and future leading,
industry-standard application software products intended to be used in
connection with relational database management systems (RDBMSs). Failure to meet
existing or future interoperability and performance requirements of certain
independent vendors marketing such applications in a timely manner has in the
past and could in the future adversely affect the market for our products.
Certain leading applications are not interoperable with our RDBMSs, and others
may never be available on our RDBMSs. In addition, we have designed our
application development tools, database design tools, and certain connectivity
products for use with RDBMSs offered by our competitors. Vendors of RDBMSs and
related products supplied by others may become less willing in the future to
provide us with access to products, technical information, and marketing and
sales support. If existing and potential customers, who use RDBMSs and related
products supplied by others, refrain from purchasing our products due to
concerns that the development, quality, and support of our products will
diminish over time, our business, results of operations, and financial condition
could be materially and adversely affected.
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Many customers use our products to build and deploy their own custom
applications. Increased reliance on prepackaged applications and diversion of
internal information technology budgets to rectify Year 2000 compliance issues
has and may in the future continue to have the effect of reducing the internal
development of custom applications overall. Such a reduction has and may in the
future continue to have a material and adverse impact on the market for our
products and our business, results of operations and financial condition.
Delays in the scheduled availability of our products, a lack of or
decrease in market acceptance of new or enhanced products, our failure to
accurately anticipate customer demand or to meet customer performance
requirements or to anticipate competitive products and developments could have a
material adverse effect on our business and financial results. We have
experienced delays in introducing some new products in the past. Unanticipated
delays in product availability schedules could result from various factors
including:
development or testing difficulties,
feature changes,
software errors,
shortages in appropriately skilled software engineers, and
project management problems.
New products or new versions of existing products may, despite testing,
contain undetected errors or bugs that could delay the introduction, or
adversely affect commercial acceptance, of such products or give rise to
warranty or other customer claims, which could, in turn, adversely affect our
financial results.
Our Growth Is In Part Dependent Upon A Robust Internet Industry.
Our ability to derive revenues from Internet products and services will
depend in part upon a robust Internet industry. The Internet may not prove to be
a viable commercial marketplace for our products. Because global commerce and
online exchange of information on the Internet and other similar open wide area
networks are new and evolving, it is difficult to predict with any assurance
whether the Internet will prove to be and remain a viable commercial
marketplace. Moreover, critical issues concerning the commercial use of the
Internet (including security, reliability, cost, ease of use and access, and
quality of service) remain unresolved and may impact the growth of Internet use.
If the Internet does not become a viable commercial marketplace, our business,
operating results and financial condition could be materially and adversely
affected.
Our Revenues Are Susceptible To Fluctuations Based On General Economic
Conditions.
If a general economic downturn or a recession occurs in the United States
or other countries where we have substantial operations, then business
enterprises, including our customers and potential customers, may substantially
and immediately reduce their software budgets. If such an economic downturn
occurs, there can be no assurance that our business, operating results and
financial condition would not be materially and adversely affected.
A Significant Portion Of Our Revenues Are Derived From International Operations.
In the nine months ended September 30, 1999, revenues from international
operations represented 39 percent of our total revenues. In 1998 and 1999, we
closed subsidiaries including Mexico, Thailand, Chile,
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Peru and Venezuela. Our operations and financial results also could be
significantly affected by factors associated with international operations, such
as:
changes in foreign currency exchange rates and uncertainties
relative to regional economic circumstances,
strength of local economies,
political instability in emerging markets,
the introduction of the Euro currency units,
difficulties in staffing and managing foreign operations,
the general volatility of software markets, as well as
other risks associated with international activities.
In addition, there have been several management and organizational
changes within the international operations. For example, during 1998 and 1999,
the country managers for several countries where we operate resigned or were
replaced. International revenues in absolute dollars and as a percentage of
total revenues may fluctuate in part due to the growth and, in some cases, the
relative immaturity or closure of international organizations.
Although the pricing strategy for our international operations takes into
account changes in exchange rates over time, we face exposure to adverse
movements in foreign currency exchange rates. These exposures may change over
time as business practices evolve and could have a material adverse impact on
our financial position and results of operations. Historically, our primary
exposures have related to condoler-denominated sales and expenses in Europe,
Asia Pacific, Australia, and Latin America.
In order to reduce the effect of foreign currency fluctuations, we hedge
our exposure on certain transactional balances that are denominated in foreign
currencies through the use of foreign currency forward exchange contracts. For
the most part, these exposures consist of intercompany amounts owed by our
international subsidiaries to Sybase, Inc., as a result of local sales of
software licenses. The majority of these exposures are denominated in European
and Asia Pacific currencies, primarily the Dutch guilder and the Hong Kong
dollar. These forward exchange contracts are recorded at fair value and are
short-term in nature (primarily thirty days or less). The success of this
activity depends upon our accurate estimation of future transactions denominated
in various currencies. To the extent that these estimates are overstated or
understated during periods of currency volatility, unanticipated currency gains
or losses could affect our stockholder's equity account.
At September 30, 1999, we had forward exchange contracts to exchange
various foreign currencies for U.S. dollars, Euro and Hong Kong dollars in the
amounts of $5.0 million, $8.2 million and $0.9 million, respectively, and to
exchange U.S. dollars and Euro dollars into various foreign currencies in the
amounts of $33.8 million and $11.1 million, respectively. Neither the cost nor
the fair value of these foreign currency forward exchange contracts was material
at September 30, 1999. One major U.S. multinational bank is a counter party to
substantially all of these contracts.
Our Products Cannot Be Completely Free of Errors And Defects.
Complex software products, such as the type licensed by us and our competitors,
generally are not completely free from "bugs" and other error and defects. The
existence of such "bugs" may cause our customers to bring legal claims against
us, notwithstanding standard provisions in our license agreements disclaiming
express and implied warranties against such errors and defects. Moreover, not
all products (or
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<PAGE> 12
modified versions of products) previously licensed by us meet current standards
for Year 2000 compliance, and many of these are still in use by our customers.
Customers using our software which is not Year 2000 compliant could have
received (or in the future may receive) erroneous data or experience other
software failures of which we or our customers are not yet aware. Any legal
claims that our products are not Year 2000 compliant or are otherwise defective
could have a materially adverse impact on our business and results of
operations.
We Have In The Past And May In The Future Acquire Other Businesses And Make
Strategic Investments, Which Will Involve Numerous Risks, Substantial Expense,
Delay, Or Other Operational Or Financial Problems.
We have made, and in the future may make, acquisitions of, or significant
investments in, other software businesses. For example:
On February 2, 1998, we acquired Intellidex Systems, L.L.C.
("Intellidex"), a provider of meta data management technology for deploying and
managing data warehouse environments. Under terms of the acquisition agreement,
we paid $5.0 million in cash for certain assets and assumed certain liabilities
of Intellidex and we are obligated to make contingent payments based on certain
agreed upon performance criteria in an aggregate maximum additional amount over
a three-year period of $9.2 million. We accounted for this transaction as a
purchase and allocated the majority of the initial amount paid to purchased
software and the balance to other intangible assets. The results of operations
of Intellidex have not been material in relation to our other results and are
included in the consolidated results of operations for periods following the
acquisition date.
In February 1999, we acquired Data Warehouse Network ("DWN"), an
Ireland-based, privately held provider of packaged, industry-specific business
intelligence applications. Under terms of the acquisition agreement, we paid
$2.7 million in cash for certain assets and assumed certain liabilities of DWN
and we are obligated to make contingent payments based on certain agreed-upon
performance criteria in an aggregate maximum additional amount over a three-year
period of $5.3 million. We accounted for the transaction as a purchase and
allocated substantially all of the amount paid to purchased software and
intangible assets. The results of operations of DWN have not been material in
relation to our results and are included in the consolidated results of
operations for each period including and following the acquisition date.
In March 1999, we paid $5.3 million for Convertible Secured Promissory
Notes due December 31, 2002 issued by Demica PLC (Demica), a provider of a
wholesale banking application using our technology. The notes bear interest at 8
percent per annum and are convertible into 29.9 percent of the share capital of
Demica. We accounted for this investment under the equity method of accounting.
In January 2000, we acquired Home Financial Network, Inc. ("HFN"),
headquartered in Westport, Connecticut, a financial services company
specializing in the development of customized e-finance Internet sites, pursuant
to the Reorganization Agreement (the "HFN Acquisition"). Under the terms of the
acquisition (the "HFN Acquisition") HFN became our wholly owned subsidiary of
Sybase and, in return for acquisition of all HFN capital stock, we paid or will
pay the former HFN stockholders approximately $25,915,794 in cash and
approximately 7,817,471 shares of our Common Stock (assuming the exercise of all
Warrants and all vested and outstanding HFN options), and we also assumed the
unvested options held by former HFN option holders. We will account for the HFN
Acquisition as a purchase and will allocate a large majority of the purchase
consideration to purchased software and intangible assets (including goodwill).
The results of operations for HFN have not been included in the financial
results of operations reported in our Annual Report on Form 10K nor in any of
our Quarterly Reports on Form 10Q, which are incorporated herein by this
reference.
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<PAGE> 13
In the future, we will also likely acquire other distributors, companies,
products, or technologies. These and any future acquisitions or investments
would be accompanied by the risks commonly encountered with respect to
acquisitions of businesses and there can be no assurance that our prior
acquisitions or any other potential acquisitions will not affect the stability
of revenues generated from customers or have a material adverse effect on our
business, financial condition, and operating results. In connection with the HFN
Acquisition and any other acquisitions, we may incur:
costs, liabilities, or additional expenses that could adversely
affect our results of operations and financial condition,
difficulties of assimilating the operations and personnel of the
acquired businesses,
disruption of our ongoing business,
the inability of management to maximize our financial and
strategic position, through the successful incorporation of
acquired personnel and clients,
an inability to maintain uniform standards, controls, procedures
and policies, and
impairment of relationships with existing and future customers and
other business associates, and revision of our business plans,
which in turn could result in unplanned expenses or a loss of
anticipated benefits from past investments.
In addition, each acquisition accounted for as a purchase can increase
the amount of intangible assets (including, without limitation, goodwill)
recorded as an asset on our financial statements and generally increase the
amount that must be amortized against operating results in the future.
The achievement of the desired benefits of these and future acquisitions
and the successful combination of businesses will depend upon, among other
things:
whether the integration of the acquired businesses is achieved in
an efficient and effective manner,
integration of the companies' related product offerings and
coordination of their sales, marketing, and research and
development efforts, and
the geographic distance between separate organizations.
Our Future Success Depends In Part On The Continued Service Of Our Key Executive
And Technical Personnel And Our Ability To Identify, Hire, And Retain Additional
Personnel.
Our success and ability to achieve future revenue growth and earnings
depends in part on our ability to effectively recruit, retain and in some cases
train qualified officers, directors and other personnel and on our officers and
key personnel to manage growth, costs, and expenses successfully through the
implementation of appropriate management systems and controls. High rates of
turnover, particularly among management, consulting, engineering or sales staff
and failure to effectively implement or maintain appropriate systems and
controls, could materially and adversely affect our product development efforts,
sales of products and services, business and results of operations.
The competition for officers, directors, and personnel is intense in the
software industry and has increased substantially in recent years. We have
recently experienced a high rate of employee turnover and
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<PAGE> 14
there have been a number of recent changes in our Board of Directors, and
in our executive management team. Although no such changes are anticipated at
this time, if in the future there were significant changes in management,
significant increases in employee turnover, or adverse comparisons between our
financial and stock price performance relative to companies with which we
compete for employees, there could be a resulting increase in employee turnover
which could make attraction of quality management and other employees more
difficult.
We Could Be Harmed By Costly Litigation.
Following announcements on January 2, 1998 and January 21, 1998 regarding
our preliminary results of operations for the quarter and year ended December
31, 1997, several class action lawsuits were filed in the United States District
Court, Northern District of California ("Northern California District Court")
against us and against certain of our officers and directors. The complaints are
similar and allege violations of federal and state securities laws and request
unspecified monetary damages. We were served with a consolidated amended class
action complaint on June 11, 1998, which named us, certain of our officers and
directors, our Japanese subsidiary, and our former country manager of Japan, as
defendants. Plaintiffs filed a second amended complaint in November 1999.
Pretrial discovery has not started, other than initial discovery disclosures.
On January 27, 1998, a purported shareholder derivative action was filed
in the Superior Court of the State of California, County of Alameda ("Alameda
County Superior Court"). The complaint alleges that certain of our present and
former officers and/or directors breached fiduciary duties they owed to us in
connection with the underlying circumstances alleged in complaints described
above. Two similar derivative actions were also filed in Alameda County Superior
Court, and the actions have now been consolidated. Pretrial discovery has begun
in the consolidated action. In addition, a similar complaint has been filed in
the Chancery Court in Delaware. The parties have agreed to stay that case in
light of the California action. We are a nominal defendant in these actions and
no damages are sought in them from us.
We believe that the claims alleged against us in all of the actions
described above are without merit, and we intend to defend against the claims
vigorously. In the opinion of management, resolution of this litigation is not
expected to have a material adverse effect on our financial position. However,
depending on the amount and timing, an unfavorable resolution of these matters
could materially affect our future results of operations or cash flows in a
particular period.
Following the announcement, on April 3, 1995, of our preliminary results
for the first fiscal quarter ended March 31, 1995, several class action lawsuits
were filed against us and certain of our officers in the Northern California
District Court. On April 21, 1999, we and all of the other individual defendants
reached an agreement in principle with the plaintiffs to settle the case for
$14,800,000. We must pay $1,500,000 of the amount. Our insurers must pay the
remainder. We paid our share of the settlement to the settlement escrow fund,
and intend to carry out the terms of the settlement agreement. On April 29, 1999
during the time in which the settlement agreement was being formally documented,
the District Court granted summary judgment in favor of us and all the
individual defendants. We did not oppose plaintiffs' successful motion to the
United States Court of Appeals, Ninth Circuit, to vacate the judgment and remand
the case to the District Court for the purpose of holding a hearing to consider
the fairness of the settlement.
We are also a party to various legal disputes and proceedings arising
from the ordinary course of business. In the opinion of management, resolution
of these matters is not expected to have a material adverse effect on our
consolidated financial position. However, depending on the amount and timing, an
unfavorable resolution of some or all of these matters could materially affect
our future results of operations cash flows in a particular period.
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<PAGE> 15
Untimely Closure Of Our Emeryville, California Or Massachusetts Distribution
Facilities Could Adversely Affect Revenues.
Most of the products we ship in North America come from our Emeryville,
California and Massachusetts distribution facilities. Because of the pattern of
recording a high percentage of quarterly revenues within the last week or two
weeks of the quarter, the closure or inoperability of one or more of the
facilities (or a disruption of business operations generally) during such weeks
due to natural calamity or due to a systems or power failure could have a
material adverse effect on our ability to record revenues for such quarter and,
therefore, on the overall results of operations for such quarter.
Revision Of Our Revenue Recognition Accounting Practices To Conform To Future
Accounting Guidelines Could Cause Fluctuations In Our Results Of Operations.
We adopted Statement of Position 97-2, "Software Revenue Recognition"
(SOP 97-2) and Statement of Position 98-4 "Deferral of the Effective Date of a
Provision of SOP 97-2, Software Revenue Recognition" (SOP 98-4) as of January 1,
1998. SOP 97-2 and SOP 98-4 provide guidance for recognizing revenue on software
transactions and supersede Statement of Position 91-1, "Software Revenue
Recognition." The adoption of SOP 97-2 and SOP 98-4 did not have a material
impact on our consolidated financial results. However, full implementation
guidelines for these standards have not been issued. Once the guidelines are
available, we may find it necessary to change our current revenue recognition
accounting practices and such changes could affect our future revenues and
results of operations.
In December 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-9, "Modification of SOP 97-2, Software Revenue
Recognition, with Respect to Certain Transactions" (SOP 98-9). SOP 98-9 amends
SOP 98-4 to extend the deferral of the application of certain passages of SOP 97
provided by SOP 98-4 through fiscal years beginning after March 15, 1999. We do
not expect a material impact from the final adoption of SOP 98-9 on our future
revenues and results of operations.
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" (Statement 133). Statement 133 establishes
methods of accounting for derivative financial instruments and hedging
activities related to those instruments as well as other hedging activities. In
June 1999, the FASB issued Statement No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133," which amended Statement No. 133 by deferring the effective
date to the fiscal year beginning after June 30, 2000. We have not determined
the effect, if any, that adoption will have on our financial position or results
of operations.
Realization Of Our Deferred Tax Asset Is Dependent Upon Generation Of Sufficient
Taxable Income In Future Periods.
At September 30, 1999, we had a net deferred tax asset of $41.1 million.
The deferred tax asset is net of a valuation allowance of $38.1 million.
Realization of our net deferred tax assets is dependent upon the generation of
sufficient taxable income in future years in appropriate tax jurisdictions to
obtain benefit from the reversal of temporary differences and from tax credit
carry-forwards. The amount of deferred tax assets considered realizable is
subject to adjustment in future periods if estimates of future taxable income
are reduced and any such adjustments could have a material adverse impact on our
effective tax rate and results of operations in future periods.
Interest Rate Fluctuations Can Adversely Affect The Performance Of Our
Investment Portfolio.
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<PAGE> 16
We maintain an investment portfolio holding of various issuers, types and
maturities. These securities are generally classified as available for sale, and
consequently, are recorded on the balance sheet at fair value with unrealized
gains or losses reported as a separate component of stockholders' equity, net of
tax, if material. Unrealized gains and losses at September 30, 1999 were not
material. Our cash, cash equivalent and short term cash investment balances of
$275.2 million at September 30, 1999 consisted primarily of short-term money
market instruments with approximately 60 percent having maturity dates of less
than 180 days, and 40 percent having maturities of 180 days to one year. Our
long-term investments of $43.8 million at September 30, 1999 primarily consisted
of commercial paper, bonds and mid-term notes that have maturity dates of more
than one year but less than two years. We do not believe that our exposure to
interest rate risk is material given the short-term nature of our investment
portfolio. However, there can be no assurance that such exposure will not have
an adverse effect on our financial performance.
The Anti-Takeover Provisions Of Our Certificate Of Incorporation And Of The
Delaware General Corporation Law May Delay, Defer, Or Prevent A Change Of
Control.
Our Board of Directors has authorized 200,000 shares of Series A
Participating Preferred Stock. If we become involved in a consolidation, merger,
combination or other transaction, each of the Series A Participating Preferred
shares may be exchanged into 1,000 times the aggregate amount of cash, property
and securities into which each share of our Common Stock is being converted in
such transaction. The rights of the holders of our Common Stock will be subject
to, and may be adversely affected by, the rights of the holders of this or any
other preferred stock that we may issue in the future. Issuance of this
preferred stock could have the effect of delaying, deferring or preventing a
change in control of Sybase. Certain provisions of our Certificate of
Incorporation and of Delaware Law could also have the effect of delaying,
deferring or preventing a change in control of Sybase.
Further, our Certificate of Incorporation and Bylaws contain provisions
that could delay, deter or prevent a merger, tender offer or other business
combination or change in control of Sybase that some or a majority of our
stockholders might consider to be in their best interests, including offers or
attempted takeovers that might otherwise result in such stockholders receiving a
premium over the market price of the Common Stock. Our Certificate of
Incorporation and Bylaws, among other things, (i) restrict the ability of
stockholders to call stockholders meetings by allowing only stockholders
holding, in the aggregate, not less than 10% of the capital stock entitled to
cast votes at such meetings to call such meetings, (ii) preclude stockholders
from raising new business for consideration at stockholders meetings unless the
proponent has provided us with timely notice of the new business, and (iii)
limit business which may be conducted at stockholders meetings to those matters
properly specified in notices delivered to us. Moreover, we have not opted out
of Section 203 of the Delaware General Corporation Law, which prohibits mergers,
sales of material assets and certain self-dealing transactions between a
corporation and a holder of 15% or more of the corporation's outstanding voting
stock for a period of three years following the date the stockholder became a
15% holder, subject to certain qualifications.
Future Issuance Of Additional Shares Of Sybase Capital Stock Could Adversely
Affect The Selling Price Of The Registered Shares.
As of January 20, 2000, Sybase had issued and outstanding warrants
permitting the holders of the warrants to purchase approximately 282,929 shares
of our Common Stock, at a weighted average exercise price of approximately $7.72
per share. These warrants were all issued in connection with the HFN Acquisition
and are the Warrants covered by this Prospectus.
As of January 20, 2000 options to purchase approximately 14,183,365
shares of Sybase Common Stock (10,608,488 of which have not yet vested) at a
weighted average exercise price of approximately
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<PAGE> 17
$9.30 per share had also been issued to employees, directors and consultants
pursuant to our various stock option plans and individual agreements with our
management team and our directors. The outstanding options described above also
include the options we assumed in connection with the HFN Acquisition, which are
exercisable for an aggregate of approximately 1,135,197 shares of Common Stock
(699,786 of which are not yet vested) and a total of approximately $9,404,892 in
cash (payable by Sybase to the option holder at the time of the exercise), at a
weighted average exercise price of approximately $8.28 per share.
In addition, we may also issue additional capital stock, warrants and/or
other securities to raise capital in the future. In order to attract and retain
essential personnel, we may also issue additional securities, including stock
options, in connection with our employee benefit plans. During the terms of the
outstanding options and warrants, the holders thereof are given the opportunity
to benefit from a rise in the market price of our Common Stock.
Sale of a substantial number of shares of Common Stock by us or by any of
our significant stockholders, or the perception that such sales could occur,
could adversely affect the prevailing market price of the Common Stock. In
connection with this Registration Statement, we are registering 7,381,914 shares
of our Common Stock for public resale by the Selling Stockholders. Of these
shares, 282,929 shares are attributable to the shares of Common Stock that may
be issued to the Selling Stockholders upon the exercise of Warrants in the
future. We are also registering for public resale in accordance with Rule 416
under the Securities Act, a presently indeterminate number of additional shares
which may be issued upon stock splits, stock dividends, recapitalizations or
other similar transactions.
The increase in the number of outstanding shares of Common Stock that are
available for sale without restriction due to the registration of the Registered
Shares and the perception that a substantial number of the Registered Shares may
be sold by the Selling Stockholders, or the actual sale of a substantial number
of the Registered Shares by the Selling Stockholders, could adversely affect the
market price of the Common Stock. We cannot predict the effect, if any, that
future sales of Common Stock or the availability of Common Stock for sale may
have on the market price of the Common Stock prevailing from time to time. In
addition, any such sale or such perception could make the sale of our equity
securities in the future at a time and price we deems appropriate more
difficult.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the Registered Shares
by the Selling Stockholders. However, if and when all or a portion of the
Warrants covered by this Registration Statement are exercised, we will receive
the proceeds from the issuance of Registered Shares to the warrant holder, to
the extent that such Warrants are exercised with cash consideration and not
through Warrant conversion. If all Warrants are exercised in full and with cash
consideration, when we issue the 282,929 shares of its Common Stock issuable
pursuant to the Warrants (assuming no change in our current capital structure)
we will receive an aggregate of approximately $2,183,501 in cash. We intend to
use that amount for working capital and other general corporate purposes. See
"Selling Stockholders" and "Plan of Distribution" described below.
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<PAGE> 18
SELLING STOCKHOLDERS
We have agreed to initially register 7,381,914 shares for public resale
by the Selling Stockholders pursuant to this S-3. The Selling Stockholders (i)
acquired the Registered Shares from us in a private placement transactions
pursuant to the Reorganization Agreement and/or (ii) will acquire the Registered
Shares from us by exercising the Warrants we issued pursuant to the
Reorganization Agreement.
Each Selling Stockholder represented to us that it will acquire the
Registered Shares pursuant to the Reorganization Agreement and the Warrants for
investment and with no present intention of distributing such Registered Shares,
except pursuant to this Prospectus or sales exempt from the registration
requirements of the Securities Act. As required by the Shareholder Agreement,
dated as of January 20, 2000 (the "Shareholder Agreement"), we are filing this
Registration Statement, on Form S-3, with the Commission, under the Securities
Act, with respect to the sale of said Registered Shares from time to time on the
Nasdaq National Market or in privately-negotiated transactions and have agreed
to use our best efforts to keep this Registration Statement effective until the
earlier of: (i) the date on which no Sybase Common Stock continues to be
"Registrable Securities," as defined in the Reorganization Agreement, (ii) all
such "Registrable Securities" then outstanding can be sold in a single
three-month period pursuant to Rule 144, or (iii) January 20, 2002.
The number and percentage of Registered Shares beneficially owned by each
Selling Stockholder is set forth below and is based on a total of shares of
Sybase Common Stock outstanding at January 20, 2000, determined in accordance
with Rule 13d-3 of the Exchange Act. The information we have provided is not
necessarily indicative of beneficial ownership for any other purpose. (Under
Rule 13d-3, beneficial ownership includes any shares of Common Stock over which
an individual has sole or shared voting or investment power, and also includes
shares of Common Stock which an individual has the right to acquire within 60
days through the exercise of any stock option or other right). Unless otherwise
indicated in the footnotes, the confirmations we have received indicate that
each person described below has sole voting and investment power (or shares such
power with his or her spouse) with respect to the shares of the Common Stock
shown as beneficially owned by that person.
<TABLE>
<CAPTION>
Shares of Common Stock
Beneficially Owned Shares of Common Stock
Prior Shares of Beneficially Owned After
To the HFN Acquisition Common Stock The HFN Acquisition (2)
------------------------ Offered by this --------------------------
Selling Stockholder Number Percent Prospectus(1) Number Percent
- ------------------------------ ------ ------- --------------- ------ -------
<S> <C> <C> <C> <C> <C>
Wendell W. Whitman, Trustee of -- -- 25,514 25,514 >1%
Anna I. Jacobsen Trust
Schley Family Education Trust -- -- 69,587 69,587 >1%
Wendell W. Whitman, Trustee of -- -- 8,117 8,117 >1%
Laura C. Jacobsen Trust
Arne J. Jacobsen -- -- 3,479 3,479 >1%
Marlene A. Jacobsen -- -- 3,479 3,479 >1%
William S. Comfort -- -- 3,479 3,479 >1%
</TABLE>
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<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C> <C>
Helen Elizabeth Comfort -- -- 3,479 3,479 >1%
William E. Comfort, Transfer on -- -- 3,479 13,916 >1%
death to William E. Comfort
and Julia Carney Comfort,
Trustees (etc.)
William E. Comfort, Custodian -- -- 3,479 (included --
for Julia Carney Comfort, above)
Successor Custodian, for
William Joseph Comfort (etc.)
William E. Comfort, for Rebecca -- -- 3,479 (included --
Comfort above)
William E. comfort for Sarah -- -- 3,479 (included --
Comfort above)
Julia Carney Comfort (TOD) (etc.) -- -- 3,479 3,479 >1%
Christina Feeny and Curtis -- -- 6,958 20,874 >1%
Feeny, Trustees for 1990
Feeny Family Trust
Curtis Feeny, Custodian for Dana -- -- 3,479 (included --
A. Feeny above)
Curtis Feeny, Custodian for -- -- 3,479 (included --
Jennifer A. Feeny above)
Curtis Feeny, Custodian for Eric -- -- 3,479 (included --
C. Feeny above)
Curtis Feeny, Custodian for -- -- 3,479 (included --
Jessie A. Feeny above)
Daniel M. Schley -- -- 1,217,777 1,235,172 1.4%
William L. Schley -- -- 3,479 (included --
above)
Anne L. Schley -- -- 3,479 (included --
above)
Brook S. Schley -- -- 3,479 (included --
above)
Emily Schley -- -- 3,479 (included --
above)
Alec W. Schley -- -- 3,479 (included --
above)
Eric T. Jacobsen 605,989 1,218,936 1.4%
Elizabeth C. Jacobsen 605,989 (same as 1.4%
above)
</TABLE>
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<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C> <C>
Arne J. Jacobsen II -- -- 3,479 (included --
above)
Minnie LaRue Jacobsen -- -- 3,479 (included --
above)
InteliData Technologies -- -- 1,769,786 1,992,465 2.2%
Corporation (including
warrant
shares
below)
Conning Connecticut Insurance -- -- 579,893 579,893 >1%
Fund, LP
Continental Casualty Company -- -- 579,893 579,893 >1%
BVI Limited Partnership -- -- 125,024 125,024 >1%
Chilton Investment Partners, L.P. -- -- 106,932 106,932 >1%
FG-HFN -- -- 66,107 66,107 >1%
FHII
Fleet Venture Resources, Inc. -- -- 231,957 231,957 >1%
Fleet Financial Group
InterMedia Investment Group, Inc. -- -- 12,757 12,757 >1%
(Intermedia Investment Group,
Inc.)
George H. Damman -- -- 23,195 23,195 >1%
Arthur Calcagnini -- -- 23,195 23,195 >1%
Merritt Hallowell -- -- 11,597 11,597 >1%
Michael A. Harrison and Susan G. -- -- 11,597 11,597 >1%
Harrison as Community Property
Michael J. Egan 1996 Gift Trust -- -- 11,597 11,597 >1%
Catherine E. Egan 1996 Gift Trust -- -- 11,597 11,597 >1%
Maureen E. Petracca 1996 Gift -- -- 11,597 11,597 >1%
Trust
Dr. Frank Wood -- -- 11,597 11,597 >1%
Joseph J. Kulhowvick and -- -- 5,799 5,799 >1%
Jacquiline P. Kulhowvick
William Polito -- -- 5,799 5,799 >1%
Maurice Hoben -- -- 5,799 5,799 >1%
Lisa Shufro -- -- 5,799 5,799 >1%
</TABLE>
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<PAGE> 21
<TABLE>
<S> <C> <C> <C> <C> <C>
Alex, Brown & Sons, Inc., cust. -- -- 3,479 3,479 >1%
f/b/o J. William Drake
The Fredericks Investment, LP -- -- 2,899 2,899 >1%
Coleman Family Trust u/a -- -- 1,159 1,159 >1%
11/29/95 (Amended)
Gaurang Desai -- -- 580 580 >1%
Continental Casualty Company -- -- 869,840 869,840
---------
Subtotal 7,098,985
Warrant Shares
InteliData Technologies -- -- 222,679 (included --
Corporation above)
Montgomery Securities -- -- 25,457 25,457 >1%
Speer Associates -- -- 34,793 34,793 >1%
---------
Subtotal 282,929
---------
Total 7,381,914
==========
</TABLE>
(1) Of the total shares of Common Stock listed as owned by the Selling
Stockholders, a total of 532,428 shares of the Registered Shares
(representing approximately 7 1/2% of the number of Registered Shares
listed as beneficially owned by each Selling Stockholders who held HFN
common or preferred stock) are held in an escrow account to secure
indemnification obligations the Selling Stockholders have provided to us
in the Reorganization Agreement. It is expected that these escrowed
Registered Shares (less any escrowed Registered Shares that may be
distributed from the escrow account in satisfaction of the
indemnification claims) will be released from escrow and distributed to
the Selling Stockholders on or about January 20, 2001.
(2) Assumes that no Sybase Common Stock reported to us as owned by a Selling
Stockholder has been sold between the time of such report (i.e., on or
about January 20, 2000) and the date hereof.
Except as described below, none of the Selling Stockholders in the above
table has had any material relationship with us (or any of our predecessors or
affiliates) within the last three years, other than as an employee or
consultant:
Prior to the HFN Acquisition, the following Selling Stockholders had the
following material relationships with HFN, which has become our wholly owned
subsidiary (under the new name On-Line Financial Services, Inc.):
InteliData Technologies, Inc. entered into a 1998 marketing
referral agreement and its predecessor entered into a 1995
out-sourced services agreement with HFN.
-20-
<PAGE> 22
Continental Casualty Company entered into a 1997 trademark
licensing agreement with HFN.
Following the HFN Acquisition, Selling Shareholders, Daniel M. Schley,
Eric Jacobsen, and Andrew Bangser, will become officers of a wholly owned
subsidiary of Sybase.
PLAN OF DISTRIBUTION
The Selling Stockholders may offer and sell the Registered Shares covered
by this Prospectus from time to time and, in doing so, the Selling Stockholders
will act independently of Sybase in making decisions with respect to the timing,
manner and size of each sale. The Selling Stockholders may sell the Registered
Shares covered by this Prospectus on the Nasdaq National Market, or otherwise,
at prices and under terms then prevailing, at prices related to the then current
market price or at negotiated prices. The Registered Shares may be sold by one
or more of the following means of distribution: (a) block trades in which the
broker-dealer so engaged will attempt to sell Registered Shares as agent, but
may position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker-dealer as principal and resale by such
broker-dealer for its own account pursuant to this Prospectus; (c)
over-the-counter distributions in accordance with the rules of the Nasdaq
National Market; (d) ordinary brokerage transactions and transactions in which
the broker solicits purchasers; and (e) privately negotiated transactions. To
the extent required, this Prospectus may be amended and supplemented from time
to time to describe a specific plan of distribution. In connection with
distributions of the Registered Shares or otherwise, the Selling Stockholders
may enter into hedging transactions with broker-dealers or other financial
institutions. In connection with such transactions, broker-dealers or other
financial institutions may engage in short sales of our Common Stock in the
course of hedging the positions they assume with Selling Stockholders. The
Selling Stockholders may also sell the Registered Shares short and redeliver
them to close out such short positions. The Selling Stockholders may also enter
into option or other transactions with broker-dealers or other financial
institutions which require the delivery to such broker-dealer or other financial
institution of Registered Shares offered hereby, which Registered Shares such
broker-dealer or other financial institution may resell pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). The Selling
Stockholders may also pledge Registered Shares to a broker-dealer or other
financial institution, and, upon a default, such broker-dealer or other
financial institution, may effect sales of the pledged Registered Shares
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). In addition, any Registered Shares that qualify for sale pursuant
to Rule 144 may be sold under Rule 144, rather than pursuant to this Prospectus.
In effecting sales, brokers, dealers or agents engaged by the Selling
Stockholders may arrange for other brokers or dealers to participate. Brokers,
dealers or agents may receive commissions, discounts or concessions from the
Selling Stockholders in amounts to be negotiated before the sale. Such brokers
or dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales, and any such commissions, discounts or concessions may be deemed to be
underwriting discounts or commissions under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the Registered Shares must be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the Registered Shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and there has been compliance thereof.
Notice is hereby given that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to the Selling Stockholders' sales of
Registered Shares in the market and to the associated activities of the Selling
Stockholders and their affiliates. In addition, the Selling Stockholders may
indemnify any broker-dealer
-21-
<PAGE> 23
that participates in transactions involving the sale of the Registered Shares
against certain liabilities, including liabilities arising under the Securities
Act.
We will make copies of this Prospectus available to the Selling
Stockholders and have informed the Selling Stockholders of the need for delivery
of copies of this Prospectus to purchasers at or prior to the time of any sale
of the Registered Shares offered hereby.
At the time a particular offer of Registered Shares is made, if required,
a Prospectus Supplement will be distributed that will set forth the number of
Registered Shares being offered and the terms of the offering, including the
name of any underwriter, dealer or agent, the purchase price paid by any
underwriter, any discount, commission and other item constituting compensation,
any discount, commission or concession allowed or reallowed or paid to any
dealer, and the proposed selling price to the public.
The sale of Registered Shares by the Selling Stockholders is subject to
certain contractual restrictions binding upon the Selling Stockholders. There
can be no assurance that the Selling Stockholders will sell all or any of the
Registered Shares.
We have agreed to indemnify the Selling Stockholders and any person
controlling a Selling Stockholder against certain liabilities, including
liabilities under the Securities Act as set forth in the Shareholder Agreement.
The Selling Stockholders have also agreed to indemnify us and certain persons
related to us against certain liabilities, including liabilities under the
Securities Act, as set forth in the Shareholder Agreement.
We have agreed with certain of the Selling Stockholders to keep the
Registration Statement of which this Prospectus constitutes a part effective
until the earlier of: (i) the date on which no Sybase Common Stock continues to
be "Registrable Securities," as defined in the Reorganization Agreement, (ii)
all such Registrable Securities then outstanding can be sold in a single
three-month period pursuant to Rule 144, or (iii) January 20, 2002.
LEGAL MATTERS
Our legal counsel, Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto will pass upon certain legal matters with respect to the
validity of the Registered Shares offered hereby.
EXPERTS
Ernst & Young LLP, our independent auditors, have audited our
consolidated financial statements and schedules included in our annual report on
Form 10-K for the year ended December 31, 1998, as set forth in their report,
which is incorporated by reference in this Prospectus and Registration
Statement. Our financial statements and schedules are incorporated by reference
in reliance on Ernst & Young LLP's report, given on their authority as experts
in accounting and auditing.
-22-
<PAGE> 24
- --------------------------------------------------------------------------------
No person is authorized in connection with any offering made by this
Prospectus to give any information or to make any representations not contained
in this Prospectus, and, if given or made, such information or representations
should not be relied upon, was not authorized by Sybase, Inc., any Selling
Stockholder or by any other person.
This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy any security other than the shares offered hereby, nor does it
constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby to any person in any jurisdiction in which it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale of or offer to sell the shares made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of Sybase, Inc., since the date hereof or that the information contained
herein is correct as of any time subsequent to the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary 3
Available Information 3
Incorporation of Certain Documents 3
Sybase, Inc. 4
Forward Looking Statements 5
Risk Factors 6
Use of Proceeds 16
Selling Stockholders 17
Plan of Distribution 21
Legal Matters 22
Experts 22
</TABLE>
SYBASE, INC.
7,381,914 SHARES
OF
COMMON STOCK
------------------------
PROSPECTUS
------------------------
January 31, 2000
- --------------------------------------------------------------------------------
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Registrant in connection with the sale and distribution of the Registered
Shares. Selling commissions, brokerage fees, other costs and expenses, and any
applicable transfer taxes and fees and disbursements of counsel for the Selling
Stockholders are payable individually by the Selling Stockholders. All amounts
shown are estimates except the SEC registration fee and the Nasdaq listing fee.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
-----------
<S> <C>
SEC registration fee............................................................... $ 41,900
Legal fees and expenses............................................................ $ 40,000*
Accounting fees and expenses....................................................... $ 25,000*
Nasdaq listing fee................................................................. $ 17,500
----------
Miscellaneous expenses............................................................. $ 8,000*
----------
Total........................................................................... $ 132,400
==========
</TABLE>
- ------------------------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to indemnify its directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Securities
Act"). Article 6 of our Bylaws provide for indemnification of our directors,
officers, employees and other agents to the maximum extent permitted by the
Delaware General Corporation Law. We have also entered into indemnification
Agreements with our officers and directors and we currently maintain director
and officer liability insurance.
Under the Shareholder Agreement, we have agreed to indemnify the Selling
Stockholders and certain of their agents, representatives and affiliates against
certain liabilities, including liabilities under the Securities Act, and the
Selling Stockholders have agreed to indemnify us and our directors and officers,
who have signed this Registration Statement and certain other persons which
control or are related to us against certain liabilities, including liabilities
under the Securities Act.
<PAGE> 26
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 List of Selling Shareholders (included in "Selling Stockholders"
section of Prospectus)
2.1 Agreement and Plan of Reorganization, dated as of November 29,
1999, among Sybase, Inc., Home Financial Network, Inc., and
others.
4.1 Specimen Certificate for shares of Common Stock of Sybase, Inc.*
4.2 Investor Agreement
4.3 Shareholder Agreement (included as Exhibit G to Exhibit 2.1)
4.4 Affiliate Agreement (included Exhibit H to Exhibit 2.1)
4.5 Purchaser Representative Agreement
4.6 Warrant - InteliData Technologies Corporation
4.7 Warrant - Montgomery Securities
4.8 Warrant - Montgomery Securities
4.9 Warrant - Speer & Associates
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, A Professional
Corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included as Signature Section of Prospectus)
</TABLE>
- ----------
* Incorporated by reference to Exhibit 4.1 to our Registration Statement on
Form S-1.
ITEM 17. UNDERTAKINGS.
A. UNDERTAKING PURSUANT TO RULE 415.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs A(l)(i) and A(l)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of
-2-
<PAGE> 27
the Securities Exchange Act of 1934 (the "Exchange Act") that are incorporated
by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment
any of the Registered Securities, which remain, unsold at the termination of
this offering.
B. UNDERTAKING REGARDING FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT
DOCUMENTS BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. UNDERTAKING IN RESPECT OF INDEMNIFICATION.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether our indemnification is against public policy as expressed
in the Securities Act and will be governed by the final adjudication of such
issue.
-3-
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on behalf of Sybase, Inc., by the undersigned, thereunto
duly authorized, in the City of Emeryville, State of California, on January 31,
2000.
SYBASE, INC.
By: /s/ JOHN S. CHEN
---------------------------------------
John S. Chen, Chairman of the Board,
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John S. Chen, Pieter Van der Vorst and
Teresa D. Chuh, jointly and severally, his attorneys-in-fact, each with the
power of substitution, for him in any and all capacities, to sign any amendment
to this Registration Statement on Form S-3 and to file the same, with exhibits
thereto and other documents in connection therewith, with the Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof. Pursuant
to the requirements of the Securities Act of 1933, the following persons have
signed this Registration Statement in the capacities and on the dates indicated
below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- --------------------------------- ----------------
<S> <C> <C>
/s/ JOHN S. CHEN Chairman of the Board (Principal January 31, 2000
- ------------------------------------- Executive Officer), President,
John S. Chen) Chief Executive Officer and
Director
/s/ PIETER VAN DER VORST Vice President and Chief Financial January 31, 2000
- ------------------------------------- Officer (Principal Financial
Pieter Van der Vorst Officer
/s/ MARTIN J. HEALY Vice President and Corporate January 31, 2000
- ------------------------------------- Controller (Principal Accounting
Martin J. Healy Officer)
/s/ RICHARD C. ALBERDING Director January 31, 2000
- -------------------------------------
Richard C. Alberding
/s/ L. WILLIAM KRAUSE Director January 31, 2000
- -------------------------------------
William Krause
/s/ ALAN B. SALISBURY Director January 31, 2000
- -------------------------------------
Alan B. Salisbury
/s/ ROBERT P. WAYMAN Director January 31, 2000
- -------------------------------------
Robert P. Wayman
</TABLE>
-4-
<PAGE> 29
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------- --------------------------------- ----------------
<S> <C> <C>
/s/ LEO J. HINDERY, JR. Director January 31, 2000
- -------------------------------------
Leo J. Hindery, Jr.
/s/ CECILIA CLAUDIO Director January 31, 2000
- -------------------------------------
Cecilia Claudio
</TABLE>
-5-
<PAGE> 30
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 List of Selling Shareholders (included in "Selling Stockholders"
section of Prospectus)
2.1 Agreement and Plan of Reorganization, dated as of November 29,
1999, among Sybase, Inc., Home Financial Network, Inc., and
others.
4.1 Specimen Certificate for shares of Common Stock of Sybase, Inc.*
4.2 Investor Agreement
4.3 Shareholder Agreement (included as Exhibit G to Exhibit 2.1)
4.4 Affiliate Agreement (included Exhibit H to Exhibit 2.1)
4.5 Purchaser Representative Agreement
4.6 Warrant - InteliData Technologies Corporation
4.7 Warrant - Montgomery Securities
4.8 Warrant - Montgomery Securities
4.9 Warrant - Speer & Associates
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, A Professional
Corporation
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included as Signature Section of Prospectus)
</TABLE>
- ----------
* Incorporated by reference to Exhibit 4.1 to our Registration Statement on
Form S-1.
<PAGE> 1
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
SYBASE, INC
ON-LINE FINANCIAL SERVICES, INC.
HOME FINANCIAL NETWORK, INC.
AND
CERTAIN PRINCIPAL SHAREHOLDERS
OF
HOME FINANCIAL NETWORK, INC.
DATED AS OF NOVEMBER 29, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE 1. MERGER.................................................................................................. 2
1.1. Organization of Merger Sub....................................................................... 2
1.2. The Merger....................................................................................... 3
1.3. Articles, Bylaws, and Directors of Surviving Corporation......................................... 10
1.4. Private Placement................................................................................ 11
1.5. Adoption of Agreements and Plans................................................................. 12
1.6. Sybase Right to Purchase Additional Surviving Corporation Preferred Stock........................ 12
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................... 13
2.1. Organization of the Company...................................................................... 13
2.2. Subsidiaries..................................................................................... 13
2.3. Company Capital Structure........................................................................ 13
2.4. Authority........................................................................................ 15
2.5. No Conflict...................................................................................... 15
2.6. Consents......................................................................................... 16
2.7. Company Financial Statements..................................................................... 16
2.8. No Undisclosed Liabilities....................................................................... 17
2.9. No Changes....................................................................................... 17
2.10. Tax Matters...................................................................................... 20
2.11. Restrictions on Business Activities.............................................................. 22
2.12. Title of Properties; Absence of Liens and Encumbrances; Condition of Equipment................... 22
2.13. Intellectual Property............................................................................ 23
2.14. Agreements, Contracts and Commitments............................................................ 27
2.15. Interested Party Transactions.................................................................... 28
2.16. Governmental Authorization....................................................................... 28
2.17. Litigation....................................................................................... 29
2.18. Accounts Receivable/Inventory.................................................................... 29
2.19. Minute Books..................................................................................... 29
2.20. Environmental Matters............................................................................ 30
2.21. Brokers' and Finders' Fees; Third Party Expenses................................................. 30
2.22. Employee Benefit Plans and Compensation.......................................................... 31
2.23. Compliance with Laws............................................................................. 34
2.24. Warranties; Indemnities.......................................................................... 34
2.25. Complete Copies of Materials..................................................................... 34
2.26. Former Employee Contributions to Company Products................................................ 34
2.27. Information Supplied............................................................................. 34
2.28. Representations Complete......................................................................... 35
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SYBASE................................................................ 35
3.1. Organization, Standing and Power................................................................. 35
3.2. Authority........................................................................................ 35
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
3.3. No Conflict...................................................................................... 36
3.4. Governmental Consents............................................................................ 36
3.5. SEC Reports...................................................................................... 36
3.6. Brokers' and Finders' Fees....................................................................... 36
3.7. Issued Shares.................................................................................... 36
3.8. Information Supplied............................................................................. 37
3.9. Representations Complete......................................................................... 37
3.10. Reservation of Sybase Common Stock............................................................... 37
ARTICLE 4. CONDUCT PRIOR TO THE EFFECTIVE TIME..................................................................... 37
4.1. Conduct of Business of the Company............................................................... 37
4.2. No Solicitation.................................................................................. 41
ARTICLE 5. ADDITIONAL AGREEMENTS................................................................................... 42
5.1. Company Shareholder Approval..................................................................... 42
5.2. Access to Information............................................................................ 42
5.3. Confidentiality.................................................................................. 42
5.4. Expenses......................................................................................... 43
5.5. Public Disclosure................................................................................ 43
5.6. Consents......................................................................................... 43
5.7. Deleted.......................................................................................... 43
5.8. Reasonable Efforts............................................................................... 43
5.9. Notification of Certain Matters.................................................................. 44
5.10. Additional Documents and Further Assurances...................................................... 44
5.11. Closing Date Balance Sheet....................................................................... 44
5.12. Vested Option Exercises.......................................................................... 44
ARTICLE 6. CONDITIONS PRECEDENT.................................................................................... 45
6.1. Conditions to Obligations of Each Party.......................................................... 45
6.2. Conditions to the Obligations of Sybase.......................................................... 45
6.3. Conditions to Obligations of the Company and the Principal Shareholders.......................... 48
ARTICLE 7. OF REPRESENTATIONS AND WARRANTIES; INDEMNITY, AND ESCROW................................................ 49
7.1. Survival of Representations, Warranties and Covenants............................................ 49
7.2. Indemnification.................................................................................. 49
7.3. Escrow Arrangements.............................................................................. 50
7.4. Additional Representation and Indemnification by Principal Shareholders.......................... 58
7.5. Indemnification By Sybase........................................................................ 59
ARTICLE 8. TERMINATION, AMENDMENT AND WAIVER....................................................................... 59
8.1. Termination...................................................................................... 59
8.2. Effect of Termination............................................................................ 60
8.3. Amendment........................................................................................ 60
8.4. Extension; Waiver................................................................................ 61
ARTICLE 9. GENERAL PROVISIONS...................................................................................... 61
9.1. Notices.......................................................................................... 61
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
9.2. Interpretation................................................................................... 63
9.3. Counterparts..................................................................................... 63
9.4. Entire Agreement; Assignment..................................................................... 63
9.5. Severability..................................................................................... 63
9.6. Other Remedies................................................................................... 64
9.7. Governing Law.................................................................................... 64
9.8. Rules of Construction............................................................................ 64
9.9. Further Assurances............................................................................... 64
9.10. Survival of Sybase Representations............................................................... 64
ARTICLE 10. DEFINITIONS............................................................................................ 64
10.1. Definitions...................................................................................... 64
</TABLE>
-iii-
<PAGE> 5
EXHIBITS
A. Legal Opinion of Hemenway & Barnes
B. Legal Opinion of Wilson Sonsini Goodrich & Rosati
C. Deleted
D. Deleted
E. Merger Exchange Ratio Formula
F. Form of Voting Agreements
G. Form of Shareholder Agreement
H. Form of Affiliate Agreement
-iv-
<PAGE> 6
SCHEDULES
2.12 Liens To Be Release By the Company At Closing
6.2.O Required Consents
-v-
<PAGE> 7
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made and entered
into as of November 29, 1999 among Sybase, Inc., a Delaware corporation
("Sybase"), On-Line Financial Services, Inc., a corporation to be established as
a wholly-owned subsidiary of Sybase under the laws of Delaware ("Merger Sub"),
Home Financial Network, Inc., a Delaware corporation (the "Company"), and Daniel
M. Schley, a director, officer, affiliate, and shareholder of the Company, and
Eric Jacobsen, a director, officer, affiliate, and shareholder of the Company,
(collectively with Mssrs. Schley and Jacobsen the "Principal Shareholders" and,
individually, as a "Principal Shareholder").
RECITALS
A. Sybase desires to acquire the Company to accelerate the development of
product offerings intended to assist enterprises involved in providing on-line
banking and financial services.
B. The Boards of Directors of Sybase and the Company believe it is in the
best interest of each company and their respective shareholders that the assets
owned by Sybase solely in connection with its Financial Server Product be
combined with the business conducted by the Company and that such combination
will expedite the development of on-line banking and financial services
products. To accomplish this objective, the parties intend that, among other
things, the following shall occur on the terms and conditions set forth in this
Agreement and in the Ancillary Agreements to be entered into concurrently
herewith or pursuant hereto:
1. Sybase will establish Merger Sub, as its wholly-owned subsidiary
under the laws of the State of Delaware, to engage in a reverse triangular
merger of Merger Sub with and into the Company in a tax-free reorganization
governed by Section 368 of the Internal Revenue Code of 1986, as amended (the
"Code"). For accounting purposes, it is intended the Merger will be treated as a
"purchase."
2. In and after such Merger, among other things, all of the
following events and circumstances shall occur in accordance with the terms and
conditions of this Agreement:
(a) The Company will survive the Merger as a wholly-owned
subsidiary of Sybase.
(b) All of the issued and outstanding shares of each class of
the Company Common Stock and Company Preferred Stock shall be converted into a
right to receive cash from Sybase and newly issued shares of Sybase common stock
in the amounts specified herein in accordance with the conversion procedures set
forth in this Agreement.
-1-
<PAGE> 8
(c) The issued and outstanding options and warrants to
purchase Company common stock shall be converted in accordance with the
conversion procedures set forth in this Agreement.
(d) The Company shall make and deliver certain
representations, warranties, agreements, and certificates.
(e) A portion of the cash and shares of Sybase common stock
otherwise issuable in connect with the Merger shall be placed in an escrow
established to secure the indemnity obligations of the Company Shareholders
under Article 7 of this Agreement, if any, that may be asserted in accordance
with the escrow procedures set forth in this Agreement.
(f) The parties shall enter into various ancillary agreements
in connection with the Merger and the other transactions herein contemplated.
C. The Surviving Corporation in the Merger shall operate the combined
business as a separate, independent business unit, which shall be consolidated
for financial accounting purposes with the operating results of Sybase.
D. Concurrently with the execution of this Agreement and as a condition
and inducement to Sybase's willingness to enter into this Agreement, certain
Company shareholders' have executed and delivered to Sybase a voting agreement
(pursuant to which each such shareholder has agreed to vote in favor of the
Merger and the other transactions anticipated by this Agreement and the
Ancillary Agreements) and certain officers and directors of the Company have
entered into employment agreements (pursuant to which each such shareholder has
agreed to be employed by and affiliated with the Surviving Corporation in the
Merger on the terms and conditions therein set forth).
E. The respective Boards of Directors of Sybase and the Company have duly
approved this Agreement, the Merger, and the other transactions anticipated by
this Agreement and the ancillary agreements to be entered into as herein
described.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration, the parties
agree as follows:
ARTICLE 1.
MERGER
1.1. Organization of Merger Sub. As soon as practicable after the date of this
Agreement, Sybase shall form Merger Sub, as a wholly-owned subsidiary of Sybase.
Prior to the Effective Time, Merger Sub will not issue any securities, conduct
any business, have any assets, nor incur any obligations or liabilities, except
as expressly required or contemplated by this Agreement.
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1.2. The Merger
A. Merger of Merger Sub into the Company. Unless this Agreement is earlier
terminated pursuant to Article 8 hereof, at the Effective Time and subject to
and upon the terms and conditions of this Agreement and Delaware Law, the Merger
Sub will be merged with and into the Company (the "Merger"), the separate
corporate existence of Merger Sub shall cease and the Company shall continue as
the surviving corporation and as a wholly-owned subsidiary of Sybase. The
Company, as the surviving corporation after the Merger, is hereinafter sometimes
referred to as the "Surviving Corporation."
B. Effective Time. Unless this Agreement is earlier terminated pursuant to
Article 8 hereof the closing of the Merger will take place on the Scheduled
Closing Date at the offices of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, 650 Page Mill Road, Palo Alto, California, unless another time
and/or place is mutually agreed upon in writing by Sybase and the Company. On
the Scheduled Closing Date, the parties hereto shall cause the Merger to be
consummated by filing a Certificate of Merger (or like instrument) and all other
documents required to be filed in connection therewith, with the Secretary of
State of the State of Delaware, in accordance with the applicable provisions of
Delaware Law.
C. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of Delaware Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, except as otherwise agreed to pursuant to the terms of this Agreement, all
the property, rights, privileges, powers and franchises of the Company and
Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities
and duties of the Company and Merger Sub shall become the debts, liabilities and
duties of the Surviving Corporation.
D. Merger Consideration. Subject to the provisions of Section 7.3, hereof:
1. Maximum Aggregate Merger Consideration. The maximum consideration
to be paid by Sybase with respect to all of the issued and outstanding Company
Capital Stock (excluding unvested Company Options, but including, without
limitation, the Sybase Common Stock and cash to be reserved for issuance upon
exercise or settlement of Company Options and Company Warrants) shall be equal
to the Total Cash Pool and the Total Stock Pool (collectively herein the
"Aggregate Merger Consideration"). No adjustment shall be made in such Aggregate
Merger Consideration to be paid in the Merger as a result of any cash proceeds
received by the Company from the date hereof to the Closing Date pursuant to the
exercise of any Company Options or Company Warrants, or otherwise with respect
to any Company Capital Stock.
2. Distribution of Aggregate Merger Consideration. Subject to the terms
and conditions of this Agreement, as of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any share of the
Company Capital Stock, the following shall occur:
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(a) Conversion of Company Outstanding Stock (Common and
Preferred). Upon surrender of the Company Share Certificate representing such
share of Company Capital Stock in the manner provided in Section 1.2.D(4), each
share of Company Outstanding Stock (including Company Common Stock, Company
Series A Preferred Stock, Company Series B Preferred Stock, and Company Series C
Preferred Stock) as of the Effective Time (other than the Dissenting Shares and
any other shares of Company Outstanding Stock owned by Sybase, owned by Merger
Sub, or held in the treasury of the Company, the Surviving Corporation or their
respective subsidiaries) will be cancelled and extinguished as of the Effective
Time and converted as of such time into the right to receive, in accordance with
the terms and conditions set forth in this Agreement (including without
limitation the escrow provisions set forth in Article 7), that portion of the
Aggregate Merger Consideration, without interest, described below:
i) Stock and Cash. Subject to adjustment as
provided in Subsection 1.2.D(2)(a)(iii) below, for each share of Company
Outstanding Stock, the holder thereof shall be entitled to receive as aforesaid:
(1) that number of shares of Sybase Common Stock equal to Merger Exchange Ratio
plus (2) an amount of cash equal to the Cash Value Per Share of the Company
Outstanding Stock. Subject to adjustment as provided in Subsection
1.2.D(2)(a)(iii) below and notwithstanding the foregoing, (i) the maximum number
of shares of Company Common Stock issuable to all Company Shareholders pursuant
to this subsection shall not exceed the Net Stock Pool, and (ii) no fractional
share of Sybase Common Stock (after aggregating all shares of Company
Outstanding Stock owned by such holder) shall be issued and the aggregate number
of shares of Sybase Common Stock issuable to a particular Company Shareholder
for all of its Company Common Stock and Company Preferred Stock pursuant to this
Section shall be rounded down to the next whole share. The Cash Value Per Share
for any Company Shareholder subject to such "rounding down" shall not be
adjusted to take into account the waiver by Company Shareholder of all rights to
such partial share of Sybase Common Stock resulting from said rounding.
ii) Intentionally omitted.
iii) Adjustment of Composition of Aggregate Merger
Consideration. Notwithstanding anything herein to the contrary, in the event
that (i) the Actual Cash Percentage exceeds the Maximum Cash Percentage, then
(to ensure that the Maximum Cash Percentage is not exceeded for the purposes of
Section 368(a) of the Code), Sybase shall reduce the Actual Cash Percentage to
be an amount equal to 99.9% of the Maximum Cash Percentage, by (i) increasing
the number of shares of Sybase Common Stock to be issued under Subclause
1.2.D(2)(a)(i)(1) above, in exchange for (ii) a concurrent decrease in the cash
to be paid under Subclause 1.2.D(2)(a)(i)(2) above, equal to the amount derived
by multiplying the number of shares of Sybase Common Stock so added under
Subclause 1.2.D(2)(a)(i)(1) times the Sybase Share Value.
iv) Escrowed Shares and Escrowed Cash.
Notwithstanding anything to the contrary in this Section 1.2.D(2), the
Shareholder's Escrowed Shares shall be withheld from the Sybase Common Stock,
and the Shareholder's Escrowed Cash shall be withheld from the cash, otherwise
issuable or payable to each Company Shareholder in the Merger with
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respect to the Company Outstanding Stock pursuant to Subclause
1.2.D(2)(a)(i)(1), above. Such withheld shares shall be deemed to be "Escrowed
Shares" and such withheld cash shall be deemed to be "Escrowed Cash" and shall
be deposited into, held in, and distributed from the Escrow Fund in accordance
with Section 7.3 for the benefit of said Company Shareholder, for distribution
to the Sybase Indemnified Parties and/or said Company Shareholder in accordance
with Article 7.
(b) Conversion of Company Warrants. At the Effective Time,
each of the then outstanding rights to purchase or otherwise acquire a share of
Company Common Stock pursuant to the Company Warrants shall be assumed and
converted into a right (a "Sybase Warrant") to acquire that number of Warrant
Units composed of the shares of Sybase Common Stock and cash as described below:
i) Stipulation of Warrant Unit. Each "Warrant Unit"
shall be equal to that number of shares of Sybase Common Stock equal to the
Merger Exchange Ratio, together with that amount of cash equal to the Cash Value
Per Share.
ii) Warrant Units Issuable Upon Exercise of a
Sybase Warrant. The number of Warrant Units that may be acquired upon exercise
of any Sybase Warrant issued in the Merger shall be equal to the number of the
Company Warrant Shares Per Warrant issuable upon exercise of the Company Warrant
surrendered therefore. No fractional shares of Sybase Common Stock may be issued
upon exercise of a Sybase Warrrant. Accordingly, if the total Warrant Units
issuable or to be issued pursuant to a particular Sybase Warrant would result in
a fractional share of Sybase Common Stock, then the total number of shares of
Sybase Common Stock issuable or issued pursuant to such Sybase Warrant shall be
rounded down to the nearest whole number of shares of Sybase Common Stock.
iii) Exercise Price. The exercise price for each
Warrant Unit payable under each Sybase Warrant shall be equal to the exercise
price per share of Company Common Stock payable upon exercise of said Company
Warrant immediately prior to the Closing Date.
iv) Other Terms. The term, exercisability, and all
terms and conditions of the Company Warrants (other than the number of shares
and the exercise price as aforesaid) will be unchanged by the Merger, except
that all references in said Company Warrant to the Company shall be deemed to
refer to Sybase, as appropriate, and all registration, co-sale, piggy-back, tag
along, rights of first refusal/negotiation, rights on corporate events, and
similar rights and limitations shall be terminated and merged into the rights to
be granted to Sybase Warrant holders under the Stockholder's Agreement to be
entered into by Sybase at the Effective Time in accordance with the terms
hereof).
As soon as practicable following the Closing, Sybase shall issue to each holder
of a Company Warrant, a document evidencing the conversion of such Company
Warrant to a Sybase Warrant, and each former holder of each such Company Warrant
shall acknowledge the receipt of the same in exchange for such holder's Company
Warrant.
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(c) Conversion of Company Options. At the Effective Time, each
of the then outstanding rights to purchase or otherwise acquire a share of
Company Common Stock pursuant to the Company Options shall be assumed and
converted into a right (a "Sybase Option") to acquire that number of Option
Units of the shares of Sybase Common Stock and cash as describe below:
i) Stipulation of Option Unit. Each "Option Unit"
shall be equal to that number of shares of Sybase Common Stock equal to the
Merger Exchange Ratio, together with that amount of cash equal to the Cash Value
Per Share.
ii) Option Units Issuable Upon Exercise of a Sybase
Option. The number of Option Units that may be acquired upon exercise of any
Sybase Option issued in the Merger shall be equal to the number of the Company
Option Shares Per Option issuable upon exercise of the Company Option
surrendered therefore. No fractional shares of Sybase Common Stock may be issued
upon exercise of a Sybase Option. Accordingly, if the total Option Units
issuable or to be issued pursuant to a particular Sybase Warrant would result in
a fractional share of Sybase Common Stock, then the total number of shares of
Sybase Common Stock issuable or issued pursuant to such Sybase Option shall be
rounded down to the nearest whole number of shares of Sybase Common Stock.
iii) Exercise Price. The exercise price for each
Option Unit payable under each Sybase Option shall be equal to the exercise
price per share of Company Common Stock payable upon exercise of said Company
Option exchanged for the Sybase Option immediately prior to the Closing Date.
iv) Other Terms. The term, exercisability, and all
terms and conditions of the Company Option (other than the number of shares and
the exercise price as aforesaid) will be unchanged by the Merger, except that
all reference in said Company Option to the Company shall be deemed to refer to
Sybase, as appropriate.
As soon as practicable following the Closing, Sybase shall issue to each holder
of a Company Option, a document evidencing the conversion of such Company Option
to the aforesaid Sybase Option, and each former holder of each such Company
Option shall acknowledge the receipt of the same in exchange for such holder's
Company Option.
(d) Dissenting Shares. Notwithstanding any other provisions of this
Agreement to the contrary, any shares of Company Capital Stock held by a holder
who has demanded fair value and perfected its appraisal rights for such shares
in accordance with Delaware Law and who, as of the Effective Time, has not
effectively withdrawn or lost such appraisal rights (herein "Dissenting
Shares"), shall not be converted into or represent a right to receive from the
Company the portion of the Aggregate Merger Consideration or other consideration
for Company Capital Stock as set forth in this Section 1.2.D(2) hereof, but the
holder thereof shall only be entitled to such rights as against the Company as
are provided by Delaware Law. Notwithstanding the foregoing, if any holder who
demands fair value and validly seeks appraisal of its Dissenting Shares shall
effectively withdraw or lose (through failure to perfect or otherwise) its
appraisal rights under
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Delaware Law, then, as of the later of the Effective Time and the occurrence of
such event, such holder's shares of Company Capital Stock shall automatically be
converted into and represent only the right to receive its portion of the
Aggregate Merger Consideration that would be distributed with respect to such
Company Capital Stock pursuant to subparts (a) through (c) of this Section,
without interest thereon, upon surrender of the Company Share Certificate
representing such shares in accordance with this Agreement.
The Company shall give Sybase (i) prompt notice of any written demand for
appraisal received by the Company pursuant to the applicable provisions of
Delaware Law, and (ii) the opportunity to participate in all negotiations and
proceedings with respect to such demands. The Company shall pay (and shall
indemnify, defend and hold harmless Sybase, Merger Sub, and the Surviving
Corporation from) any and all sums owing to the holder(s) of the Dissenting
Shares under applicable law, which payments shall only be made upon surrender by
such holders to the Company or the Surviving Corporation of the Company Share
Certificate for the Dissenting Shares, and any and all fees and expenses
(including reasonable attorneys' fees and expenses) incurred by the Company,
Sybase, Merger Sub, or the Surviving Corporation in connection with calculating,
settling or litigating the amount of, or making, any payment with respect to
Dissenting Shares. The Company shall not, except with the prior written consent
of Sybase, make any payment with respect to any such demands or offer to settle
or settle any such demands.
To the extent that the holders of the Dissenting Shares become legally
entitled to a payment in respect of their Dissenting Shares, then that portion
of the Total Stock Pool (the "Dissenter's Shares") and Total Cash Pool (the
"Dissenter's Cash") that would have been distributed in exchange for the
Dissenting Shares pursuant to subparts (a) through (c) of this Section shall
paid to the Company as follows: (A) 92.5% of such Dissenter's Shares and 92.5%
of the Dissenter's Cash shall be delivered to the Company (not the Dissenting
Shareholder), and (B) the remainder of the Dissenter's Cash and Dissenter's
Shares shall be deemed to be Escrowed Cash and Escrowed Shares, shall be held by
the Escrow Agent for satisfaction of claims by Sybase Indemnified Parties
pursuant to Section 7.3, and, at the Escrow Termination Date, so much of such
Dissenter's Shares and Dissenter's Cash as has been escrowed and is not required
to settle claims made in accordance with Section 7.3 prior to the Escrow
Termination Date, shall be paid to the Company. In lieu of any Dissenter's
Shares that are deliverable to the Company pursuant to the foregoing, Sybase may
elect to substitute cash in the amount of the Dissenter's Shares times the
Sybase Share Value.
(e) Treasury Shares. At the Effective Time, each share of Company
Capital Stock, held in the treasury of the Company or any of its subsidiaries,
or otherwise authorized, but unissued, and any outstanding shares of Company
Capital Stock (other than the Company Outstanding Stock) shall, by virtue of the
Merger and without further action on the part of party, be canceled and
extinguished, without any conversion thereof.
(f) Maximum Number of Sybase Shares. Notwithstanding the foregoing,
in no event shall the number of shares of Sybase Common Stock (i) issuable upon
exercise of the Sybase Warrants and Sybase Options issued with respect to the
Company Warrants and the
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Company Vested Options pursuant to Subsections 1.2.D(2)(b) and 1.2.D(2)(c)
hereof exceed the Warrant and Vested Options Pool, (ii) issuable in connection
with the Merger with respect to the Company Outstanding Stock pursuant to
Subsection 1.2.D(2)(a) hereof exceed the Net Stock Pool, (iii) subject to
Subsection 1.2.D(2)(a)(iii), issuable with respect to all Company Capital Stock
(other than the unvested Company Options) exceed the Total Stock Pool, or (iv)
issuable pursuant to Section 1.2.D hereof be increased by the exercise of
appraisal rights by any holder of Dissenting Shares, unless Sybase and the
Company agree in writing, in their discretion, to adjust the Merger Exchange
Ratio to take account thereof.
3. Withholding Taxes. Any amounts payable to a Company Shareholder
pursuant to this Section shall be subject to, and reduced by, the amount of any
required withholding Taxes applicable to said shareholder and all Taxes relating
to said cash payments shall be the sole responsibility of the Company
Shareholders and Sybase shall have no liability therefore. To the extent the
cash payable to such shareholder in the Merger is less than the amount of
applicable withholding Taxes, the shareholder shall pay to Sybase the amount of
such excess withholding tax liability as a condition of its receipt of Sybase
Common Stock to be delivered to said shareholder pursuant to this Section.
4. Surrender of Company Stock Certificates.
(a) Sybase to Provide Aggregate Merger Consideration. At the
Effective Time, Sybase shall make available to the Exchange Agent the Aggregate
Merger Consideration remaining (after deduction and delivery to the Escrow Agent
of that portion of the Aggregate Merger Consideration to be placed in the Escrow
Fund) for disbursement upon surrender and conversion of the Company Capital
Stock in accordance with this Article 1.
(b) Exchange Procedures. On or after the Closing Date, each
Company Shareholder shall surrender the Company Stock Certificates to the
Exchange Agent for cancellation, together with a letter of transmittal in such
form and having such provisions as the Exchange Agent may reasonably request.
Upon surrender of a Company Stock Certificate for cancellation to the Exchange
Agent, together with the required letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, then the holder of
such Company Stock Certificate shall be entitled to receive from the Exchange
Agent in exchange therefor (i) its shares of Company Outstanding Stock the
shares of Sybase Common Stock in the Net Stock Pool distributable to such
Company Shareholder with respect to its shares of Company Outstanding Stock
pursuant to Subclause 1.2.D(2)(a)(i)(1) less said Shareholder's Escrowed Shares,
which are to be placed in the Escrow Fund pursuant to Subsection 1.2.D(2)(a)(iv)
hereof, plus (i) the cash distributable to said Company Shareholder in
accordance with Subclause 1.2.D(2)(a)(i)(2), less said Shareholder's Escrowed
Cash, which is to be placed in the Escrow Fund pursuant to Subsection
1.2.D(2)(a)(iv). Until so surrendered, each outstanding Company Stock
Certificate will be deemed, for all corporate purposes, to evidence only the
right to receive that portion of the Aggregate Merger Consideration in respect
to the Company Capital Stock evidenced by said Company Share Certificate as
provided in this Section 1.2. Delivery of said Aggregate Merger Consideration
shall be made within three (3)
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Business Days after the later of (i) confirmation of filing of the Certificate
of Merger, and (ii) Sybase's receipt of the holder's Company Stock Certificates
pursuant to this Section.
(c) Distributions With Respect To Unexchanged Shares. No
dividends or other distributions declared or made with a record date after the
Effective Time with respect to Sybase Common Stock will be paid with respect to
any Sybase Common Stock represented by an unsurrendered Company Stock
Certificate, until the holder thereof shall surrender such Company Share
Certificate for exchange in accordance with the procedures set forth in this
Section. Subject to applicable law, following surrender of such Company Stock
Certificate, there shall be paid to the record holder of any said Company Share
Certificate representing at least a whole share of Sybase Common Stock, without
interest, at the time of such surrender, the amount of dividends or other
distributions with a record date after the Effective Time theretofore payable
with respect to such whole share(s) of Sybase Common Stock.
(d) Transfers of Ownership. If any payment or distribution is
to be made pursuant to this Section 1.2 hereof to a person, other than the
holder in whose name a Company Stock Certificate surrendered in exchange
therefor is registered, then it will be a condition of the payment and
distribution that the Company Stock Certificate so surrendered will be properly
endorsed and accompanied by all documents required to evidence and effect a
valid transfer and that any applicable stock transfer taxes have been paid.
(e) Payments with Respect to Unexchanged Shares. No interest
shall accrue or be payable with respect to any Aggregate Merger Consideration
paid at or after the Effective Time to any holder of Company Capital Stock.
(f) Lost, Stolen or Destroyed Certificates. In the event any
Company Share Certificates evidencing shares of Company Capital Stock shall have
been lost, stolen or destroyed, the Exchange Agent shall not deliver to the
holder thereof any Sybase Common Stock to be given in exchange for the lost,
stolen or destroyed Company Share Certificate, unless and until the Exchange
Agent has received an affidavit and such other documents and assurances as the
Exchange Agent may reasonably request; provided, however, that at the request of
Sybase, the Exchange Agent may and will require the Company Shareholder who it
determines to be the likely holder of such lost, stolen or destroyed Company
Share Certificates to deliver a bond in such amount as Sybase may reasonably
direct against any claim that may be made against the Surviving Corporation,
Sybase or the Exchange Agent with respect to the Company Share Certificates
alleged to have been lost, stolen or destroyed.
(g) No Further Ownership Rights in Company Common Stock or
Company Preferred Stock. The Sybase Common Stock received in respect of the
surrender for exchange of shares of Company Capital Stock in accordance with the
terms hereof, shall be deemed to be full satisfaction of all rights pertaining
to such shares of Company Common Stock or Company Preferred Stock, and there
shall be no further registration of transfers on the records of the Company or
the Surviving Corporation of shares of Company Common Stock or Company Preferred
Stock which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Company
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Stock Certificates are presented to the Surviving Corporation for any reason,
they shall be canceled and exchanged as provided in this Section.
E. Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of Delaware Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of the Company
and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities and duties of the Company and Merger Sub shall become the debts,
liabilities and duties of the Surviving Corporation.
F. Tax Consequences. It is intended by the parties hereto that the Merger
shall constitute a reorganization within the meaning of Section 368(a) of the
Code.
G. Capital Stock of Merger Sub. At the Effective Time, by virtue of the
Merger and without any action on the part of Sybase, the Company, Merger Sub,
Surviving Corporation or any other person, each share of Merger Sub capital
stock issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of Surviving Corporation Common Stock. Each share
certificate evidencing ownership of any such shares of the Merger Sub common
stock shall thereafter evidence ownership of an equivalent number of shares of
Surviving Corporation Common Stock and shall be contributed by the holder
thereof to Surviving Corporation for no additional consideration.
H. No Liability. Notwithstanding anything to the contrary in this
Article 1 neither the Exchange Agent, Sybase, Merger Sub, the Surviving
Corporation nor any party hereto shall be liable to a holder of shares of
Company Capital Stock for any amount properly paid to a public official pursuant
to any applicable abandoned property, escheat or similar law.
I. Further Assurances. The Principal Shareholders and other Company
Shareholders and the officers and directors of the Company, Merger Sub, and the
Surviving Corporation will take all actions and will sign and deliver any and
all instruments and documents necessary or appropriate to carry out the purposes
of this Agreement and to fully effect and vest the right, title, and possession
of all assets, property, rights, privileges, powers and franchises of the
Company and Merger Sub in the Surviving Corporation, all Aggregate Merger
Consideration in the Company Shareholders, Exchange Agent and Escrow Agent
entitled thereto, and all capital stock of the Surviving Corporation in Sybase.
1.3. Articles, Bylaws, and Directors of Surviving Corporation.
A. Certificate of Incorporation and Bylaws of the Surviving Corporation.
Unless otherwise determined by Sybase prior to the Effective Time, the
certificate of incorporation and bylaws of Merger Sub, as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation and
bylaws of the Surviving Corporation at the Effective Time, until thereafter
amended in accordance with Delaware Law and as provided in such certificate of
incorporation; provided, however, that at the Effective Time, Article I of the
Certificate of Incorporation of the
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Surviving Corporation shall be amended and restated in its entirety to state the
new name for the Surviving Corporation as determined by its Board of Directors.
The Bylaws of the Merger Sub, as in effect immediately prior to the Effective
Time, shall be the Bylaws of the Surviving Corporation until thereafter duly
amended.
B. Initial Directors of the Surviving Corporation. The Board of Directors
of the Surviving Corporation consist of seven members, who are listed below:
John Chen, or such other person as Sybase, in its discretion,
shall designate prior to the Scheduled Closing Date;
One director to be designated by Sybase, in its
discretion, prior to the Scheduled Closing Date;
Daniel Schley, or such other person as the Principal
Shareholders shall designate, in their discretion, prior to the
Scheduled Closing Date;
Eric Jacobsen, or such other person as the Principal
Shareholders shall designate, in their discretion, prior to the
Scheduled Closing Date;
Michon Schenck, or such other person as Sybase shall
designate, in its discretion, who is not an employee, officer, or
director of Sybase and is approved by the Principal Shareholders
(which approval shall not be unreasonably withheld or delayed);
One director to be designated by Sybase, who is not an
employee, officer, or director of as Sybase and is approved by the
Principal Shareholders (which approval shall not be unreasonably
withheld or delayed); and
One director to be designated by the Principal Shareholders,
who is not an employee, officer, or director of the Company or
Sybase and is approved by Sybase (which approval shall not be
unreasonably withheld or delayed.).
Any of the foregoing directors may be reelected in accordance with the
procedures set forth in the Surviving Corporation's Bylaws.
C. Officers of the Surviving Corporation. The initial officers of the
Surviving Corporation shall be determined by the Board of Directors of the
Surviving Corporation and the Management Employment Agreements.
1.4. Private Placement. The Sybase Common Stock to be issued in the Merger to
the Company Shareholders shall be issued in a private placement under Regulation
D, Rule 506 of the Securities Act. As promptly as practicable after the date of
this Agreement, Sybase, with the cooperation of the Company, shall prepare a
private placement memorandum and any other documents required by the
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Securities Act or any applicable Blue Sky Law in connection with the
Transactions herein contemplated (herein the "Solicitation Materials"). The
Solicitation Materials will, in all material respects, comply as to form with
the applicable provisions of the Securities Act and the Exchange Act. Sybase
shall also take any action required to be taken prior to the Effective Time
under any Blue Sky Law applicable to issuance of Sybase Common Stock, Sybase
Options, and Sybase Warrants exercisable therefor pursuant to the Merger. The
Company shall promptly furnish to Sybase all information concerning the Company
Shareholders as may be reasonably required in connection with any action
contemplated by this Section. If for any reason it shall become necessary for
the parties to make any filing with, on to obtain any consent, clearance, permit
or other approval of any Governmental Entity, or to obtain any consent,
clearance, permit or other approval of any other third party, with respect to
Sybase Common Stock in the Merger, they shall cooperate in good faith and use
all reasonable, commercial efforts to complete such filing and to obtain the
effectiveness of such filing as promptly as possible.
1.5. Adoption of Agreements and Plans. Effective as of the Closing, the
following agreements and plans shall be adopted:
1. Sybase shall adopt the Shareholders' Agreement;
2. Sybase shall adopt the Management Employment Agreements;
3. Sybase and the Surviving Corporation shall use best efforts to
adopt the following agreements prior to the Closing (but without any
obligation to complete said adoption by the Closing):
(a) The Reseller Agreement;
(b) The Intellectual Property Assignment and Transfer
Agreement; and
(c) The Sybase License Agreement.
4. After consummation of the Merger and the Sybase Transaction, the
Surviving Corporation shall adopt an employee stock option plan on
terms acceptable to the Sybase and the Surviving Corporation Board
of Directors appointed as of the Closing and reserve from the
authorized Surviving Corporation Common Stock a sufficient number of
shares of Surviving Corporation Common Stock for issuance pursuant
to said option plan.
1.6. Sybase Right to Purchase Additional Surviving Corporation Preferred Stock.
Sybase shall have the right to purchase, and the Board of Directors of the
Surviving Corporation may request that Sybase purchase, up to Twenty-Five
Million Dollars ($25,000,000) of additional shares of the Surviving
Corporation's preferred stock at an exercise price and on terms and conditions
reasonably acceptable to Sybase and the Board of Directors of the Surviving
Corporation. The proceeds received by the Surviving Corporation upon purchase of
such preferred stock by Sybase shall be
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used by the Surviving Corporation for working capital purposes. At the Closing,
Sybase shall place Twenty-Five Million Dollars ($25,000,000) in a segregated
cash management account, managed by Sybase, for the purpose of funding any
preferred stock purchase pursuant to this Section.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Sybase, subject to such
exceptions as are specifically disclosed in the disclosure letter (referencing
the appropriate section and paragraph numbers) supplied by the Company to Sybase
(the "Company Disclosure Letter") and dated as of the date hereof, that on the
date hereof and as of the Effective Time as though made at the Effective Time as
follows; provided, that the representations and warranties made as of a
specified date will be true and correct as of such date:
2.1. Organization of the Company. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Company has the corporate power to own its properties and to carry on its
business as now being conducted. The Company is duly qualified or licensed to do
business and in good standing as a foreign corporation in each jurisdiction in
which it conducts business. The Company has delivered to Sybase a true and
correct copy of its certificate of incorporation and bylaws, each as amended and
in force and effect on the date hereof. Section 2.1 of the Company Disclosure
Letter lists the current directors and officers of the Company. The operations
now being conducted by the Company are not now and have never been conducted by
the Company under any other name.
2.2. Subsidiaries. Except as set forth in Section 2.2 of the Company Disclosure
Letter, the Company does not have, and has never had, any subsidiaries and does
not otherwise own, and has not otherwise owned, any shares in the capital of or
any interests in, or controlled, directly or indirectly, any corporation,
partnership, association, joint venture or other business entity.
2.3. Company Capital Structure.
A. Capital Stock. The Company has no capital stock authorized, issued, or
outstanding, except as follows: (i) 27,000,000 shares of Company Common Stock
have been authorized, of which 8,086,526 shares are issued and outstanding as of
the date hereof, (ii) 5,000,000 shares of Company Series A Preferred Stock have
been authorized, all of which are issued and outstanding as of the date hereof,
(iii) 7,515,807 shares of Company Series B Preferred Stock have been authorized,
of which 4,816,667 shares are issued and outstanding as of the date hereof, (iv)
2,500,000 shares of Company Series C Preferred Stock have been authorized, all
of which are issued and outstanding as of the date hereof, (v) the Company
Warrants listed in Section 2.3.C. of the Company Disclosure Letter, (vi) the
Company Options listed in Section 2.3.C of the Disclosure Letter, and (vii) any
Additional Employee Options issued in the Ordinary Course of the Company's
Business after the date hereof, which Additional Employee Options do not violate
Section 4.1 hereof. Assuming the same total capitalization as on the date
hereof, the total number of shares of Company Capital Stock outstanding as of
immediately prior to the Effective Time (assuming the conversion, exercise or
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exchange of all securities convertible into, or exercisable or exchangeable for,
shares of Company Common Stock, and the exercise of all Company Options and
Company Warrants) will be as set forth in Section 2.3.A.(i) of the Company
Disclosure Letter. All outstanding shares of Company Capital Stock are and as of
the Closing will be duly authorized, validly issued, fully paid and
non-assessable and, except as described in Section 2.3.A(ii) of the Company
Disclosure Letter, not subject to preemptive rights created by statute, the
certificate of incorporation or bylaws of the Company, or any agreement to which
the Company is a party or by which it is bound, and have been, and as of the
Closing will continue to be issued in compliance with federal and state
securities laws.
B. Stock Plans. Except for the Option Plans, listed in Section 2.3.B(i) of
the Company Disclosure Letter, the Company has never adopted or maintained any
stock option plan or other plan providing for equity compensation of any person.
The Company has reserved 3,500,000 shares of Company Common Stock for issuance
to employees and directors of, and consultants to, the Company upon the exercise
of options granted under the Option Plans, of which (i) 3,070,000 shares are
issuable, as of the date hereof, upon the exercise of outstanding, unexercised
options granted under the Option Plans, and (ii) no shares have been issued, as
of the date hereof, upon the exercise of options granted under the Option Plans.
Section 2.3.B.(ii) of the Company Disclosure Letter sets forth a list of all of
the outstanding Company Options as of November 29, 1999, and, for each
outstanding Company Option, the name of the holder of such option, the domicile
address of such holder, the number of shares of Company Common Stock issuable
upon the exercise of such option, the exercise price of such option, the vesting
schedule for such option, including the extent vested to date and whether the
vesting of such option will be accelerated by the transactions contemplated by
this Agreement, and whether such option is intended to qualify as an incentive
stock option as defined in Section 422 of the Code. Except for the Additional
Employee Options issued in the Ordinary Course of the Company's Business after
the date hereof which do not constitute a breach of Section 4.1 of this
Agreement, there are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which the Company is a party or
by which it is bound obligating the Company to issue, deliver, sell, repurchase
or redeem, or cause to be issued, delivered, sold, repurchased or redeemed, any
shares of the capital stock of the Company or obligating the Company to grant,
extend, accelerate the vesting of, change the price of, otherwise amend or enter
into any such option, warrant, call, right, commitment or agreement and prior to
the Closing, the Company shall not issue any Company Options, Company Warrants,
calls, rights, commitments or agreements obligating the Company to issue,
deliver, sell, repurchase, or redeem any Company Capital Stock or debt for
borrowed money convertible to Company Capital Stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or other
similar rights with respect to the Company. Except as contemplated hereby, and
except as set forth in Section 2.3.B(iii) of the Company Disclosure Letter,
there are no voting trusts, proxies, or other agreements or understandings with
respect to the voting stock of the Company.
C. Identification of Capital Stock Holders. Section 2.3.C of the
Disclosure Letter is a complete and accurate list of each holder of any Company
Capital Stock, and accurately specifies the legal name, domicile, and the amount
and class of Company Capital Stock held by said holder. No
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<PAGE> 21
more than thirty-five (35) of the holders of the Company Common Stock and/or
Company Preferred Stock are and, at the Effective Time, will be unaccredited
investors within the meaning of Section (a) of Regulation D, Rule 501 of the
Securities Act. At the Effective Time, each holder of either Company Capital
Stock who is not an accredited investor within the meaning of said section will
be either (i) represented by a duly authorized "purchaser representative," as
defined in Section (h), of Regulation D, Rule 501 of the Securities Act, or (ii)
a holder only of a Company Option, and not of any other Company Capital Stock,
who is not required to be represented by a purchaser representative in order to
insure the application of the private placement exemption set forth in
Regulation D, Rule 501 of the Securities Act to the issuance of Sybase capital
stock in the Merger.
2.4. Authority. The Company has all requisite power and authority to enter into
this Agreement and any Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and any Ancillary Agreements to which the Company is
a party and the consummation of the Transactions have been duly authorized by
all necessary corporate action on the part of the Company, and no further action
is required on the part of the Company to authorize the Agreement and any
Ancillary Agreements to which it is a party and the Transactions, subject only
to the approval of this Agreement by the Company Shareholders. This Agreement
and the Merger have been unanimously approved by the Board of Directors of the
Company. This Agreement and each of the Ancillary Agreements to which the
Company is a party has been duly executed and delivered by the Company, and
assuming the due authorization, execution and delivery by the other parties
hereto and thereto, constitute the valid and binding obligations of the Company
enforceable against it in accordance with their respective terms, except as such
enforceability may be subject to the laws of general application relating to
bankruptcy, insolvency and the relief of debtors and rules of law governing
specific performance, injunctive relief or other equitable remedies.
2.5. No Conflict. Except as set forth in Section 2.5 of the Company Disclosure
Letter, the execution and delivery by the Company of this Agreement and any
Ancillary Agreement to which the Company is a party, and the consummation of the
Transactions, will not conflict with or result in any violation of or default
under (with or without notice or lapse of time, or both) or give rise to a right
of termination, cancellation, modification or acceleration of any obligation or
loss of any benefit under (any such event, a "Conflict") (i) any provision of
the certificate of incorporation or bylaws of the Company or any of its
subsidiaries, (ii) any mortgage, indenture, lease, contract, covenant or other
agreement, instrument or commitment, permit, concession, franchise or license
(each a "Contract" and collectively the "Contracts") to which the Company or any
of its subsidiaries or any of their properties or assets (including intangible
assets), or to which any of the Principal Shareholders, is subject, or (iii) any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its subsidiaries or any of their properties (tangible
and intangible) or assets, or applicable to any of the Principal Shareholders.
The Company and each of its subsidiaries are in compliance with and have not
breached, violated or defaulted under, or received notice that either has
breached, violated or defaulted under, any of the terms or conditions of any
Contract, nor is the Company or any Principal Shareholder aware of any event
that would
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<PAGE> 22
constitute such a breach, violation or default with the lapse of time, giving of
notice or both. Each Contract is in full force and effect and the Company is not
subject to any default thereunder, nor to the Knowledge of the Company and the
Principal Shareholders is any party obligated to the Company or any of its
subsidiaries pursuant to any such Contract subject to any default thereunder.
The consents, waivers and approvals described in Section 2.5 of the Company
Disclosure Letter are all of the consents, waivers, and approvals of parties to
any Contract (other than the Company and its subsidiaries) required thereunder
(i) in connection with the Merger and the Transactions, (ii) for any such
Contract to remain in full force and effect without limitation, modification or
alteration after the Effective Time, to permit the Surviving Corporation or its
subsidiaries to exercise all of its rights under the Contracts, without the
payment of any additional amounts or consideration (other than ongoing fees,
royalties or payments which the Company or any of its subsidiaries, as the case
may be, would otherwise be required to pay pursuant to the terms of such
Contracts had the transactions contemplated by this Agreement not occurred.)
2.6. Consents. Except as set forth in Section 2.6 of the Company Disclosure
Schedule no consent, waiver, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity or any third
party, including a party to any agreement with the Company or any of its
subsidiaries (so as not to trigger any Conflict), is required by or with respect
to the Company or any of its subsidiaries in connection with the execution and
delivery of this Agreement and any Ancillary Agreement to which the Company, any
of its subsidiaries is a party or the consummation of the transactions
contemplated hereby and thereby, except for (i) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable federal securities laws, Blue Sky Laws of the
State(s) where the Company Shareholders are domiciled, and the HSR Act, and (ii)
the filing of the Certificate of Merger with the Secretary of State for the
State of Delaware.
2.7. Company Financial Statements. Section 2.7 of the Company Disclosure Letter
sets forth (i) the Company's audited balance sheets as of December 31, 1996,
December 31, 1997 and as of December 31, 1998 and the related audited statements
of income, cash flow and shareholders' equity for the twelve (12) month periods
ended December 31, 1997 and December 31, 1998, respectively (collectively, the
"Year-End Financials"), and (ii) the Company's unaudited balance sheet as of
September 30, 1999, and the related unaudited statements of income, cash flow
and shareholders' equity for the calendar quarters ending on June 1999 and
September 1999 (the "Interim Financials"). The Year-End Financials and the
Interim Financials are correct in all material respects and have been prepared
in accordance with GAAP consistently applied on a basis consistent throughout
the periods indicated (except that the Interim Financials do not contain
footnotes and other presentation items that may be required by GAAP). The
Year-End Financials and Interim Financials present fairly the financial
condition, operating results and cash flows of the Company and its subsidiaries
as of the dates and during the periods indicated therein, subject in the case of
the Interim Financials to normal year-end adjustments, which are not material in
amount or significance in any individual case or in the aggregate.
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<PAGE> 23
2.8. No Undisclosed Liabilities. Except as set forth in Section 2.8 of the
Company Disclosure Letter, neither the Company nor any of its subsidiaries has
any liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or other (whether or not required to be reflected in financial
statements in accordance with GAAP), which individually or in the aggregate (i)
has not been reflected in the Current Balance Sheet, or (ii) has not arisen in
the ordinary course of business consistent with past practices since the Current
Balance Sheet Date or arising out of other transactions approved by Sybase
pursuant to Section 4.1 of this Agreement.
2.9. No Changes. Except as set forth in Section 2.9 of the Company Disclosure
Letter, since the Current Balance Sheet Date, there has not been, occurred or
arisen any:
(A) transaction by the Company or any of its subsidiaries except
in the Ordinary Course of the Company's Business;
(B) amendments or changes to the certificate of incorporation or
bylaws of the Company or any of its subsidiaries;
(C) capital expenditure or commitment by the Company or any of its
subsidiaries exceeding, prior to the date hereof, $50,000
individually or $100,000 in the aggregate, and after the date
hereof, which does not constitute a breach of Section 4.1.
(D) payment, discharge or satisfaction, in any amount in excess of
$50,000 in any one case, or $100,000 in the aggregate, of any
Liability (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than payment, discharge or
satisfaction in the Ordinary Course of the Company's Business,
Liabilities reflected or reserved against in the Current
Balance Sheet and Liabilities incurred after the date hereof
which does not constitute a breach of Section 4.1;
(E) destruction of, damage to or loss of any material assets,
material business or material customer of the Company or any
of its subsidiaries (whether or not covered by insurance);
(F) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action;
(G) change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by
the Company or any of its subsidiaries other than as required
by GAAP;
(H) change in any material election in respect of Taxes (as
defined below), adoption or change in any accounting method in
respect of Taxes, agreement
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<PAGE> 24
or settlement of any claim or assessment in respect of Taxes,
or extension or waiver of the limitation period applicable to
any claim or assessment in respect of Taxes;
(I) revaluation by the Company or any of its subsidiaries of any
of their respective assets;
(J) declaration, setting aside or payment of a dividend or other
distribution (whether in cash, stock or property) in respect
of any Company Capital Stock or any capital stock of any
subsidiary of the Company, or any split, combination or
reclassification in respect of any shares of Company Capital
Stock or any shares of the capital stock of any subsidiary of
the Company, or any issuance or authorization of any issuance
of any other securities in respect of, in lieu of or in
substitution for shares of Company Capital Stock or shares of
the capital stock of any subsidiary of the Company, or any
direct or indirect repurchase, redemption, or other
acquisition by the Company of any shares of Company Capital
Stock or by any subsidiary of the Company of the capital stock
of such subsidiary (or options, warrants or other rights
convertible into, exercisable or exchangeable therefor),
except in accordance with the agreements evidencing Company
Options and Company Warrants and except for Additional
Employee Options issued after the date hereof which do not
constitute a breach of Section 4.1 of this Agreement;
(K) except for adjustments in the Ordinary Course of the Company's
Business for employees (other than the officers or directors
of the Company) which do not constitute a breach of
Section 4.1 of this Agreement after the date hereof, increase
in the salary or other compensation payable or to become
payable by the Company or any of its subsidiaries to any of
its officers or directors, or in the wage schedule for any
other employees or advisors of the Company or any of its
subsidiaries, or the declaration, payment or commitment or
obligation of any kind for the payment, by the Company or any
of its subsidiaries, of a severance payment, termination
payment, bonus or other additional salary or compensation to
any such person;
(L) other than the Contracts identified in Section 2.9(L) of the
Company Disclosure Letter and Contracts entered into in the
Ordinary Course of the Company's Business after the date
hereof which do not constitute a breach of Section 4.1 of this
Agreement, enter into any agreement, contract, covenant,
instrument, lease, license or commitment to which the Company
or any of its subsidiaries is a party or by which it or any of
its assets (including intangible assets) are bound or any
termination, extension, amendment or modification the terms of
any agreement, contract, covenant, instrument, lease, license
or
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<PAGE> 25
commitment to which the Company or any of its subsidiaries is
a party or by which they or any of their assets are bound;
(M) sale, lease, license or other disposition of any of the
material assets or material properties of the Company or any
of its subsidiaries or any creation of any security interest
in such material assets or material properties;
(N) loan by the Company or any of its subsidiaries to any person
or entity (other than test account loans given in reasonable
amount in the Ordinary Course of the Company's Business and
loans entered into after the date hereof in accordance with
Section 4.1.N of this Agreement), incurring by the Company or
any of its subsidiaries of any indebtedness, guaranteeing by
the Company or any of its subsidiaries of any indebtedness,
issuance or sale of any debt securities of the Company or any
of its subsidiaries or guaranteeing of any debt securities of
others except for advances to employees for travel and
business expenses in the Ordinary Course of the Company's
Business;
(O) waiver or release of any right or claim of the Company or any
of its subsidiaries, including any write-off or other
compromise of any account receivable of the Company or any of
its subsidiaries;
(P) the commencement, settlement, notice or, to the Knowledge of
the Company, or any of its subsidiaries, threat of any lawsuit
or proceeding or other investigation against the Company or
any of its subsidiaries or its affairs, or any reasonable
basis for any of the foregoing;
(Q) notice of any claim or potential claim of ownership by any
person other than the Company of the Company Intellectual
Property or of infringement by the Company or any of its
subsidiaries of any other person's Intellectual Property;
(R) issuance or sale, or contract to issue or sell, by the Company
or any of its subsidiaries of any shares of Company Capital
Stock or any of its subsidiaries' capital stock or securities
convertible into, or exercisable or exchangeable for, shares
of Company Capital Stock or any of its subsidiaries' capital
stock, or any securities, warrants, options or rights to
purchase any of the foregoing, except for issuances of Company
Capital Stock upon exercise of the Company Options and Company
Warrants described in Section 2.3.B of the Company Disclosure
Schedule and issuances of Additional Employee Options in the
Ordinary Course of the Company's Business which are not in
breach of Section 4.1 hereof.
(S) Except for a transaction entered into after the date hereof in
the Ordinary Course of the Company's Business which does not
violate Section 4.1 hereof, the sale or license of any Company
Intellectual Property or entering into of
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any agreement with respect to the Company Intellectual
Property with any person or entity or with respect to the
Intellectual Property of any person or entity, or the purchase
or license of any Intellectual Property or entering into of
any agreement with respect to the Intellectual Property of any
person or entity, the entering into of an agreement with
respect to the development of any Intellectual Property with a
third party, or a modification of the pricing or royalties
inconsistent from those currently offered to the Company's
customers;
(T) agreement or modification to agreement pursuant to which any
other party was granted marketing, distribution, development
or similar rights of any type or scope with respect to any
products or technology of the Company or any of its
subsidiaries except in the Ordinary Course of the Company's
Business;
(U) any event or condition of any character that has had or is
reasonably likely to have a Material Adverse Effect on the
Company or any of its subsidiaries; or
(V) agreement by the Company or any of its subsidiaries (or any
officer or employees on behalf of, and binding upon, the
Company or any of its subsidiaries) to do any of the things
described in the preceding clauses (a) through (u) of this
Section (other than negotiations with Sybase and its
representatives regarding the Transactions contemplated by
this Agreement).
2.10. Tax Matters.
A. Tax Returns and Audits.
1. As of the Effective Time, except as set forth in Section 2.10 of
the Company Disclosure Letter each of the Company and its subsidiaries will have
prepared and timely filed all required federal, state, local and foreign
returns, estimates, information statements and reports ("Returns") relating to
any and all Taxes concerning or attributable to the Company or any of its
subsidiaries or their operations, and such Returns are true and correct and have
been completed in accordance with applicable law.
2. As of the Effective Time, each of the Company and its
subsidiaries (A) will have paid all Taxes it is required to pay and will have
withheld with respect to its employees all federal and state income taxes, FICA
and FUTA amounts, and other Taxes required to be withheld, and (B) will have
accrued on the Current Balance Sheet all Taxes attributable to the periods
preceding the Current Balance Sheet and will not have incurred any liability for
Taxes for the period commencing after the date of the Current Balance Sheet and
ending immediately prior to the Effective Time, other than in the Ordinary
Course of the Company's Business.
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<PAGE> 27
3. The Company or any of its subsidiaries has not been delinquent in
the payment of any Tax, nor is there any Tax deficiency outstanding, assessed or
proposed against the Company or any of its subsidiaries, nor has the Company or
any of its subsidiaries executed any waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
4. No audit or other examination of any Return of the Company or any
of its subsidiaries is presently in progress, nor has the Company or any of its
subsidiaries been notified of any request for such an audit or other
examination.
5. Neither the Company nor any of its subsidiaries has any
liabilities for unpaid federal, state, local and foreign Taxes which have not
been accrued or reserved on the Current Balance Sheet, whether asserted or
unasserted, contingent or otherwise, and the Company has not incurred any
liability for Taxes since the date of the Current Balance Sheet other than in
the Ordinary Course of the Company Business.
6. The Company has made available to Sybase or its legal counsel,
copies of all foreign, federal, state and local income and all state and local
sales and use Returns for the Company or any of its subsidiaries filed for all
periods since its inception.
7. There are no Liens on the assets of the Company or any of its
subsidiaries relating to or attributable to Taxes other than Liens for Taxes not
yet due and payable.
8. No adjustment relating to any Return filed by the Company or any
of its subsidiaries has been proposed formally or, to the Knowledge of the
Company and the Principal Shareholders, informally by any tax authority to the
Company or any of its subsidiaries or any representative thereof.
B. Miscellaneous.
1. The Company does not have Knowledge of any basis for the
assertion of any claim relating or attributable to Taxes which, if adversely
determined, would result in any Lien on the assets of the Company or any of its
subsidiaries.
2. None of the Company's or any of its subsidiaries' assets is
treated as "tax-exempt use property," within the meaning of Section 168(h) of
the Code.
3. Neither the Company nor any of its subsidiaries has filed any
consent agreement under Section 341(f) of the Code or agreed to have Section
341(f)(4) 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.
4. Neither the Company nor any of its subsidiaries is a party to any
tax sharing, indemnification, or allocation agreement nor does the Company owe
any amount under any such agreement.
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<PAGE> 28
5. Each of the Company's and its subsidiaries tax basis in its
assets for purposes of determining its future amortization, depreciation and
other federal income Tax deductions is accurately reflected on the Company's and
its subsidiaries' tax books and records.
6. Neither the Company nor any of its subsidiaries has been, at any
time, a "United States Real Property Holding Corporation" within the meaning of
Section 897(c)(2) of the Code.
C. Executive Compensation Tax. There is no contract, agreement, plan or
arrangement to which the Company or any of its subsidiaries is a party,
including, without limitation, the provisions of this Agreement, covering any
employee or former employee of the Company, which, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to Sections 280G, 404 or 162(m) of the Code.
2.11. Restrictions on Business Activities. Except as set forth in Section 2.11
of the Company Disclosure Letter, there is no agreement (non-compete or
otherwise), commitment, judgment, injunction, order or decree to which the
Company or any of its subsidiaries is a party or otherwise binding upon the
Company or any of its subsidiaries, which has or may reasonably be expected to
have the effect of prohibiting or impairing any business practice of the
Company, the Surviving Corporation, or any of their respective subsidiaries, any
acquisition of property (tangible or intangible) by the Company, the Surviving
Corporation or any of their respective subsidiaries, the conduct of business by
the Company, the Surviving Corporation, or any of their respective subsidiaries
or otherwise limiting the freedom of the Company, the Surviving Corporation, or
any of their respective subsidiaries to engage in any line of business or to
compete with any person. Without limiting the generality of the foregoing,
neither the Company nor any of its subsidiaries has entered into any agreement
under which the Company, the Surviving Corporation, or any of their respective
subsidiaries is or will be restricted from selling, licensing or otherwise
distributing any of its technology or products to or providing services to,
customers or potential customers or any class of customers, in any geographic
area, during any period of time or in any segment of the market.
2.12. Title of Properties; Absence of Liens and Encumbrances; Condition of
Equipment.
A. Real Property. Neither the Company nor any of its subsidiaries owns any
real property nor has either ever owned any real property. Section 2.12.A of the
Company Disclosure Letter sets forth a list of all real property currently
leased by the Company or any of its subsidiaries, the name of the lessor, the
date of the lease and each amendment thereto and, with respect to any current
lease, the aggregate annual rental payable under any such lease. All such
current leases are in full force and effect, are valid and effective in
accordance with their respective terms, and there is not, under any of such
leases, any existing default or event of default (or event which with notice or
lapse of time, or both, would constitute a default).
B. Title. Except as set forth in Section 2.12.B, of the Company Disclosure
Letter, the Company and each of its subsidiaries have good and valid title to,
or, in the case of leased properties and assets, valid leasehold interests in,
all of its tangible properties and assets, real, personal and mixed, used or
held for use in its business, free and clear of any Liens, except (i) as
reflected in the
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<PAGE> 29
Current Balance Sheet, (ii) Liens for Taxes not yet due and payable, and (iii)
such imperfections of title and encumbrances, if any, which do not detract from
the value or interfere with the present use of the property subject thereto or
affected thereby.
C. Equipment. Section 2.12.C of the Company Disclosure Letter lists all
material items of furniture, fixtures, equipment and other tangible property
owned or leased by the Company or any of its subsidiaries. Except for property
acquired or leased after the date hereof in accordance with Section 4.1 of this
Agreement, the property identified in Section 2.12.C of the Company Disclosure
Letter and the leased real property identified in Section 2.12.C of the Company
Disclosure Letter is (i) all of the real and tangible personal property required
for the conduct of the business of the Company and its subsidiaries as currently
conducted, and (ii) in good operating condition, regularly and properly
maintained, subject to normal wear and tear.
2.13. Intellectual Property.
A. Except for Intellectual Property Rights obtained after the date hereof
without breach of Section 4.1 of this Agreement, Section 2.13.A of the Company
Disclosure Letter lists all Company Registered Intellectual Property Rights and
said Section lists any proceedings or actions before any court, tribunal
(including the PTO or equivalent authority anywhere in the world) related to any
of the Company Registered Intellectual Property Rights or Company Intellectual
Property as of the date hereof.
B. Each item of Company Intellectual Property, including without
limitation all Company Registered Intellectual Property Rights listed in Section
2.13.A of the Company Disclosure Letter, is free and clear of any Liens. Except
as set forth in Section 2.13.B of the Company Disclosure Schedule the Company is
the exclusive owner or exclusive licensee of all Company Intellectual Property.
All Company Intellectual Property will be fully transferable, alienable, or
licensable by Surviving Corporation and/or Sybase, without restriction and
without payment of any kind to any third party. Neither the Company nor the
Principal Shareholders has any Knowledge of any facts or circumstances that
would render any Company Intellectual Property invalid or unenforceable. Without
limiting the foregoing, the Company does not have any Knowledge of any
information, materials, facts, or circumstances, including, without limitation,
any information or fact that would constitute prior art, that would render any
of the Company Registered Intellectual Property Rights invalid or unenforceable,
or would adversely effect any pending application for any Company Registered
Intellectual Property Right and the Company has not misrepresented, or failed to
disclose, or has any Knowledge of any misrepresentation or failure to disclose,
any fact or circumstances in any application for any Company Registered
Intellectual Property Right that would constitute fraud or a misrepresentation
with respect to such application or that would otherwise affect the validity or
enforceability of any Company Registered Intellectual Property Right.
C. Except as set forth in Section 2.13.C of the Company Disclosure Letter,
in each case in which either the Company or any of its subsidiaries has acquired
any Intellectual Property from any person (other than an employee whose work
product is deemed "work for hire" within the meaning of the Copyright Law of
1976, as amended, or any property and confidential information, trade
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secrets or know how of a third party, which the Company has had access to
pursuant to a non-disclosure or confidentiality agreement) the Company or its
subsidiary, as the case may be, has obtained a valid and enforceable assignment
sufficient to irrevocably transfer all rights in such Intellectual Property and
the associated Intellectual Property Rights (including the right to seek past
and future damages with respect thereto) to the Company or its subsidiary, as
the case may be.
D. Neither the Company nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license of or exclusive right to use, or
authorized the retention of any exclusive rights to use or joint ownership of,
any Intellectual Property or Intellectual Property Rights that is or was Company
Intellectual Property, to any other person.
E. Except as set forth in Section 2.13.E of the Company Disclosure Letter,
the Company Intellectual Property constitutes all the Intellectual Property and
Intellectual Property Rights used in and/or necessary to the conduct of the
business of the Company or any of its subsidiaries as it currently is conducted
or planned to be conducted, including, without limitation, the design,
development, manufacture, use, import and sale of products, technology and
services (including products, technology or services currently under
development).
F. As of the date hereof, other than (i) "shrink-wrap" and similar widely
available commercial end-user licenses and (ii) other licenses and related
agreements with respect thereto of the Company Intellectual Property which have
been granted to end-users pursuant to written agreements that have been entered
into in the Ordinary Course of the Company's Business, and that do not
materially differ in substance from the Company's standard form(s) of end-user
license including attachments (that is or are included in Section 2.13.F of the
Company Disclosure Letter), and (ii) agreements entered into after the date
hereof that are permitted under Section 4.1, Section 2.13.F of the Company
Disclosure Letter lists all contracts, licenses and agreements to which the
Company or any of its subsidiaries is a party (X) with respect to any Company
Intellectual Property, or (Y) wherein or whereby the Company or any of its
subsidiaries has agreed to, or has assumed, any obligation or duty to warrant,
indemnify, reimburse, hold harmless, guaranty, or otherwise assume or incur any
Liability, or provide a right of recission with respect to the infringement or
misappropriation by the Company or any of its subsidiaries of Intellectual
Property Rights of any person. No person who has licensed Intellectual Property
or Intellectual Property Rights to the Company or any of its subsidiaries has
ownership rights or license rights to improvements made by the Company or any of
its subsidiaries in such Intellectual Property which has been licensed to the
Company or any of its subsidiaries.
G. Except as set forth in Section 2.13.G of the Company Disclosure Letter,
the operation of the business of the Company or any of its subsidiaries as it
currently is conducted, or currently planned to be conducted by the Surviving
Corporation or any of its subsidiaries in the six month period after the
Closing, by the Company or any of its subsidiaries, including but not limited to
the design, development, use, import, manufacture and sale of the products,
technology or services (including products, technology or services currently
under development) of the Company or any of its subsidiaries does not and to the
Knowledge of the Company is not reasonably likely to infringe or
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<PAGE> 31
misappropriate the Intellectual Property Rights of any person, violate the
rights of any person (including rights to privacy or publicity), or constitute
unfair competition or trade practices under the laws of any jurisdiction, and
neither the Company nor any of its subsidiaries has received notice from any
person claiming that such operation or any act, product, technology or service
(including products, technology or services currently under development) of the
Company or any of its subsidiaries infringes or misappropriates the Intellectual
Property Rights of any person or constitutes unfair competition or trade
practices under the laws of any jurisdiction (nor is the Company or any of its
subsidiaries aware of any basis therefor).
H. Each Company Registered Intellectual Property Right is valid and
subsisting, and all necessary registration, maintenance and renewal fees in
connection with such Company Registered Intellectual Property Right have been
paid and all necessary documents and certificates in connection with such
Company Registered Intellectual Property Right have been filed with the relevant
patent, copyright, trademark or other authorities in the United States or
foreign jurisdictions, as the case may be, for the purposes of maintaining such
Company Registered Intellectual Property Right. There are no actions that must
be taken by the Company or any of its subsidiaries within sixty (60) days of the
Closing Date (including the payment of any registration, maintenance or renewal
fees or the filing of any documents, applications or certificates) for the
purposes of maintaining, perfecting or preserving or renewing any Registered
Intellectual Property Rights. In each case in which either the Company or any of
its subsidiaries has acquired any Registered Intellectual Property Rights from
any person, the Company or any of its subsidiaries, as the case may be, has
obtained a valid and enforceable assignment sufficient to irrevocably transfer
all rights in such Intellectual Property and the associated Intellectual
Property Rights (including the right to seek past and future damages with
respect thereto) to the Company or any of its subsidiaries, as the case may be,
and, to the maximum extent provided for by, and in accordance with, applicable
laws and regulations, the Company has recorded each such assignment with the
relevant governmental authorities, including the PTO, the U.S. Copyright Office,
or their respective equivalents in any relevant foreign jurisdiction, as the
case may be.
I. There are no contracts, licenses or agreements between the Company or
any of its subsidiaries and any other person with respect to Company
Intellectual Property under which there is any dispute known to the Company
regarding the scope of such agreement, or performance under such agreement,
including with respect to any payments to be made or received by the Company or
any of its subsidiaries thereunder.
J. Except as set forth in Section 2.13.J of the Company Disclosure Letter,
to the Knowledge of the Company, no person is infringing or misappropriating any
Company Intellectual Property.
K. Each of the Company and its subsidiaries has taken all reasonable steps
that are required to protect the Company's rights in confidential information
and trade secrets of the Company or any of its subsidiaries or provided by any
other person to the Company or any of its subsidiaries. Without limiting the
foregoing, each of the Company and its subsidiaries has, and enforces, a policy
requiring each employee, consultant and contractor to execute proprietary
information,
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confidentiality and assignment agreements substantially in the Company's
standard forms, and all current and former employees, consultants and
contractors of the Company or any of its subsidiaries have executed such an
agreement in substantially the Company's standard form.
L. All employees of the Company have entered into a valid and binding
written agreement with the Company sufficient to vest title in the Company of
all Intellectual Property, including all accompanying Intellectual Property
Rights, created by such employee in the scope of his or her employment with the
Company.
M. No Company Intellectual Property or Intellectual Property Rights of the
Company or any of its subsidiaries is subject to any proceeding or outstanding
decree, order, judgment or settlement agreement or stipulation that restricts in
any manner the use, transfer or licensing thereof by the Company or any of its
subsidiaries or may affect the validity, use or enforceability of such Company
Intellectual Property.
N. To the Knowledge of the Company, no (i) product, technology, service or
publication of the Company or any of its subsidiaries, (ii) material published
or distributed by the Company or any of its subsidiaries, or (iii) conduct or
statement of Company or any of its subsidiaries, constitutes obscene material, a
defamatory statement or material, false advertising or otherwise violates any
law or regulation.
O. Neither the Merger or the participation by the Company and its
subsidiaries in the Transactions contemplated by this Agreement (including,
without limitation, the assignment to the Surviving Corporation or its
subsidiaries, by operation of law or otherwise, of any contracts or agreements
to which the Company or any of its subsidiaries is a party), will result in (i)
the granting by Surviving Corporation, or any of its subsidiaries to any third
party of any right to or with respect to any Company Intellectual Property, the
Surviving Corporation Intellectual Property, or any of their subsidiaries'
Intellectual Property; (ii) the Surviving Corporation or any of its subsidiaries
being bound by, or subject to, any non-compete or other restriction on the
operation or scope of their respective businesses (other than those contracts
identified in Section 2.13.O of the Company Disclosure Letter), or (iii) the
Surviving Corporation or any of its subsidiaries being obligated to pay any
royalties or other amounts to any third party in excess of those amount
currently payable by the Company or any of its subsidiaries under the terms of
any contract identified in Section 2.14 of the Company Disclosure Letter.
P. All of the Company's and its subsidiaries' products (including products
currently under development) (i) will record, store, process, calculate and
present calendar dates falling on and after (and if applicable, spans of time
including) January 1, 2000, and will manipulate date information in the same
manner, and with the same functionality, data integrity and performance, as the
products record, store, process, calculate and present calendar dates on or
before December 31, 1999, or calculate any information dependent on or relating
to such dates (collectively, "Year 2000 Compliant"), and (ii) will lose no
functionality with respect to the introduction of records containing dates
falling on or after January 1, 2000, provided the information received from
products (other than the products of the Company or any of its Subsidiaries) is
accurate and has been correctly
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processed by such third party products. To the Knowledge of the Company, all of
the Information Technology of the Company is Year 2000 Compliant, and will not
cause an interruption in the ongoing operations of the Company's business on or
after January 1, 2000.
2.14. Agreements, Contracts and Commitments. Except as set forth in
Section 2.14 of the Company Disclosure Letter, neither the Company nor any of
its subsidiaries is a party to nor are any of them bound by:
A. any employment or consulting agreement, contract or commitment (other
than those entered into after the date hereof in accordance with
Section 4.1 of this Agreement) with an employee or individual
consultant or salesperson or consulting or sales agreement, contract or
commitment with a firm or other organization;
B. any agreement or plan, including, without limitation, any stock option
plan, stock appreciation rights plan or stock purchase plan, any of the
benefits of which will be increased, or the vesting of benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement;
C. any fidelity or surety bond or completion bond (other than those
entered into after the date hereof in accordance with Section 4.1 of
this Agreement);
D. any lease of personal property having a value or requiring lease
payment, other than those entered into prior to the date hereof under
which the total consideration paid or payable by the Company or any of
its subsidiaries is not more than $25,000 individually or $100,000 in
the aggregate and other than those entered into after the date hereof
in accordance with Section 4.1 of this Agreement;
E. any agreement, contract or commitment relating to capital expenditures,
other than those entered into prior to the date hereof involving
payments not in excess of $25,000 individually or $100,000 in the
aggregate and those entered into after the date hereof in accordance
with Section 4.1 of this Agreement
F. any agreement, contract or commitment relating to the disposition or
acquisition of assets or any interest in any business enterprise
outside the Ordinary Course of the Company's Business;
G. any mortgages, indentures, guarantees, loans (other than test account
loans given in reasonable amounts in the Ordinary Course of the
Company's Business) or credit agreements, security agreements or other
agreements or instruments relating to the borrowing of money or
extension of credit;
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<PAGE> 34
H. any purchase order or contract for the acquisition of property,
services, materials requiring payments by the Company or any of its
subsidiaries, other than those entered into prior to the date hereof
not exceeding $25,000 individually or $100,000 in the aggregate and
those entered into after the date hereof in accordance with Section
4.1.A;
I. other than those entered into after the date hereof in accordance with
Section 4.1.A of this Agreement, any construction contracts;
J. other than those entered into after the date hereof in accordance with
Section 4.1.E or 4.1.S of this Agreement, any dealer, distribution,
joint marketing or development agreement;
K. other than those entered into after the date hereof in accordance with
Section 4.1.E or 4.1.S of this Agreement, any sales representative,
original equipment manufacturer, value added, remarketer, reseller or
independent software vendor or other agreement for use or distribution
of the Company's or any of its subsidiaries' products, technology or
services; or
L. any other agreement, contract or commitment that requires any payment
or creates a Liability other than those entered into prior to the date
hereof involving payments and/or Liabilities not exceeding $25,000
individually and $100,000 in the aggregate, and other than those
entered into after the date hereof in accordance with Section 4.1.A of
this Agreement.
2.15. Interested Party Transactions. Except as set forth in Section 2.15 of the
Company Disclosure Letter, no officer, director or, to the Knowledge of the
Company and the Principal Shareholders, shareholder of the Company or any of its
subsidiaries (nor any direct ancestor, sibling, descendant or spouse of any of
such persons, or any trust, partnership or corporation in which any of such
persons has or has had an interest), has or has had, directly or indirectly, (i)
an interest in any entity which furnished or sold, or furnishes or sells,
services, products or technology that the Company or any of its subsidiaries
furnishes or sells, or proposes to furnish or sell, or (ii) any interest in any
entity that purchases from or sells or furnishes to the Company or any of its
subsidiaries, any goods or services, or (iii) a beneficial interest in any
Contract to which the Company or any of its subsidiaries is a party; provided,
however, that ownership of no more than five percent (5%) of the outstanding
voting stock of a publicly traded corporation shall not be deemed to be an
"interest in any entity" for purposes of this Section.
2.16. Governmental Authorization. Each consent, license, permit, grant or other
authorization (i) pursuant to which the Company or any of its subsidiaries
currently operates or holds any interest in any of its properties, or (ii) that
is legally required for the operation of the Company's business as currently
conducted (collectively, "Company Authorizations") has been issued or granted to
the Company or any of its subsidiaries. The Company Authorizations are in full
force and effect and constitute all Company Authorizations required to permit
the Company and each of its subsidiaries to operate or conduct its business or
hold any interest in its properties or assets.
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<PAGE> 35
2.17. Litigation. Except as set forth in Section 2.17 of the Company
Disclosure Letter, there is no action, suit, claim or proceeding of any nature
pending, or to the Knowledge of the Company or any of the Principal Shareholders
threatened, against the Company or any of its subsidiaries, its properties
(tangible or intangible) or any of its officers or directors, nor to the
Knowledge of the Company and the Principal Shareholders is there any reasonable
basis therefor. There is no investigation or other proceeding pending or to the
Knowledge of the Company or any of the Principal Shareholders threatened,
against the Company, any of its subsidiaries, any of their properties (tangible
or intangible) or any of their officers or directors by or before any
Governmental Entity, nor to the Knowledge of the Company or any of the Principal
Shareholders is there any reasonable basis therefor. No Governmental Entity has
at any time challenged or questioned the legal right of the Company or any of
its subsidiaries to conduct its operations as presently or previously conducted.
2.18. Accounts Receivable/Inventory.
A. The Company has made available to Sybase a list of all accounts
receivable of the Company or any of its subsidiaries as of September 30, 1999,
together with a range of days elapsed since invoice.
B. All of the Company's and any of its subsidiaries' accounts receivable
arose in the Ordinary Course of the Company's Business, are carried at values
determined in accordance with GAAP consistently applied, and are collectible
except to the extent of reserves therefor set forth in the Current Balance Sheet
or, for receivables arising subsequent to the Current Balance Sheet Date as
reflected on the books and records of the Company and its subsidiaries, prepared
in accordance with GAAP. No person has any Lien on any of the Company's or any
of its subsidiaries' accounts receivable and no request or agreement for
deduction or discount has been made with respect to any of the Company's or any
of its subsidiaries' accounts receivable.
C. Any and all of the inventories of the Company or any of its
subsidiaries reflected on the Interim Financials and the Company's and any of
its subsidiaries' books and records were purchased, acquired or produced in the
Ordinary Course of the Company's Business and in a manner consistent with the
Company's or any of its subsidiaries' regular inventory practices and are set
forth on the Company's and its subsidiaries' books and records in accordance
with the practices and principles of the Company consistent with the method of
treating said items in prior periods. None of the inventory of the Company or
any of its subsidiaries reflected on the Interim Financials or on the Company's
and its subsidiaries' books and records (in either case net of the reserve
therefor) is obsolete, defective or in excess of the needs of the business of
the Company reasonably anticipated for the normal operation of the business
consistent with past practices and outstanding customer contracts. The
presentation of inventory on the Year-End Financials and/or the Interim
Financials conforms to GAAP and such inventory is stated at the lower of cost
(determined using the first-in, first-out method) or net realizable value.
2.19. Minute Books. The minutes of the Company and its subsidiaries made
available to counsel for Sybase are the only minutes of the Company and its
subsidiaries and contain accurate summaries
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of all meetings of the Board of Directors (or committees thereof) of the Company
and its subsidiaries and their shareholders or actions by written consent since
the time of incorporation of the Company or any of its subsidiaries, as the case
may be.
2.20. Environmental Matters.
A. Hazardous Material. Neither the Company nor any of its subsidiaries
has: (i) operated any underground storage tanks at any property that the Company
or any of its subsidiaries has at any time owned, operated, occupied or leased,
or (ii) illegally released any amount of any Hazardous Material other than
office and janitorial supplies properly and safely maintained in accordance with
applicable Legal Requirements. No Hazardous Materials are present in, on or
under any property, including the land and the improvements, ground water and
surface water thereof, that the Company or any of its subsidiaries has at any
time owned, operated, occupied or leased for which the Company has incurred, or
will or is reasonably likely to incur, any Liability.
B. Hazardous Materials Activities. Neither the Company nor any of its
subsidiaries has transported, stored, used, manufactured, disposed of, released
or exposed its employees or others to, or sold, Hazardous Materials in violation
of any Legal Requirement in effect on or before the Effective Time, nor has the
Company or any of its subsidiaries disposed of, transported, sold, or
manufactured any product containing a Hazardous Material (any or all of the
foregoing being (collectively referred to herein as "Hazardous Materials
Activities") in violation of any rule, regulation, treaty or statute promulgated
by any Governmental Entity in effect prior to or as of the date hereof to
prohibit, regulate or control Hazardous Materials or any Hazardous Material
Activity.
C. Permits. Each of the Company and its subsidiaries currently holds all
Environmental Permits necessary for the conduct of the Company's or any of its
subsidiaries' Hazardous Material Activities.
D. Environmental Liabilities. No action, proceeding, revocation
proceeding, amendment procedure, writ, injunction or claim is pending, or to the
Knowledge of the Company and the Principal Shareholders threatened, concerning
any Environmental Permit, Hazardous Material or any Hazardous Materials Activity
of the Company or any of its subsidiaries. Neither the Company nor any Principal
Shareholder has any Knowledge of any fact or circumstance, which could involve
the Company or any of its subsidiaries in any environmental litigation or impose
upon the Company or any of its subsidiaries any environmental liability.
2.21. Brokers' and Finders' Fees; Third Party Expenses. Neither the Company nor
any of its subsidiaries has incurred, nor will they incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with the Agreement or any transaction
contemplated hereby. Section 2.21 of the Company Disclosure Letter sets forth
the principal terms and conditions of any agreement, written or oral, with
respect to such fees. Section 2.21 of the Company Disclosure Letter also sets
forth the Company's current reasonable estimate of all Third Party Expenses
expected to be incurred by the Company or any of its
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subsidiaries in connection with the negotiation and effectuation of the terms
and conditions of this Agreement and the transactions contemplated hereby.
2.22. Employee Benefit Plans and Compensation.
A. Schedule. Section 2.22.A of the Company Disclosure Letter contains an
accurate and complete list of each Company Employee Plan and each employee
agreement under each Company Employee Plan or Employee Agreement. Neither the
Company nor any of its subsidiaries has any plan or commitment to establish any
new Company Employee Plan or Employee Agreement, to modify any Company Employee
Plan or Employee Agreement (except to the extent required by law or to conform
any such Company Employee Plan or Employee Agreement to the requirements of any
applicable law, in each case as previously disclosed to Sybase in writing, or as
required by this Agreement), or to enter into any Company Employee Plan or
Employee Agreement.
B. Documents. The Company has made available to Sybase (i) correct and complete
copies of all documents embodying each Company Employee Plan and each Employee
Agreement including, without limitation, all amendments thereto and all related
trust documents, (ii) the three (3) most recent annual reports (Form Series 5500
and all schedules and financial statements attached thereto), if any, required
under ERISA or the Code in connection with each Company Employee Plan, (iii) if
the Company Employee Plan is funded, the most recent annual and periodic
accounting of Company Employee Plan assets, (iv) the most recent summary plan
description together with the summary(ies) of material modifications thereto, if
any, required under ERISA with respect to each Company Employee Plan, (v) all
material written agreements and contracts relating to each Company Employee
Plan, including, without limitation, administrative service agreements and group
insurance contracts, (vi) all communications material to any Employee or
Employees relating to any Company Employee Plan and any proposed Company
Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any liability to the
Company or any of its subsidiaries, (vii) all correspondence to or from any
governmental agency relating to any Company Employee Plan, (viii) all COBRA
forms and related notices, (ix) all policies pertaining to fiduciary liability
insurance covering the fiduciaries for each Company Employee Plan, (x) all
discrimination tests for each Company Employee Plan for the most recent plan
year, and (xi) all registration statements, annual reports (Form 11-K and all
attachments thereto) and prospectuses prepared in connection with each Company
Employee Plan.
C. Employee Plan Compliance. Each of the Company and its subsidiaries has
performed all obligations required to be performed by it under, is not in
default or violation of, and has no Knowledge of any default or violation by any
other party to each Company Employee Plan, and each Company Employee Plan has
been established and maintained in accordance with its terms and in compliance
with all applicable laws, statutes, orders, rules and regulations, including but
not limited to ERISA or the Code. Each Company Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code has either received a favorable determination,
opinion, notification or advisory letter from the IRS with respect to each
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such Plan as to its qualified status under the Code, including all amendments to
the Code effected by the Tax Reform Act of 1986 and subsequent legislation, or
has remaining a period of time under applicable Treasury regulations or IRS
pronouncements in which to apply for such a letter and make any amendments
necessary to obtain a favorable determination as to the qualified status of each
such Company Employee Plan. No "prohibited transaction," within the meaning of
Section 4975 of the Code or Sections 406 and 407 of ERISA, and not otherwise
exempt under Section 408 of ERISA, has occurred with respect to any Company
Employee Plan. There are no actions, suits or claims pending, or to the
Knowledge of the Company and the Principal Shareholders threatened or reasonably
anticipated (other than routine claims for benefits) against any Company
Employee Plan or against the assets of any Company Employee Plan. Each Company
Employee Plan can be amended, terminated or otherwise discontinued after the
Effective Time in accordance with its terms, without liability to Sybase, the
Company or any Affiliate (other than ordinary administration expenses). There
are no audits, inquiries, or proceedings pending or to the Knowledge of the
Company and the Principal Shareholders or any Affiliates, threatened by the IRS
or DOL with respect to any Company Employee Plan. Neither the Company nor any
Affiliate is subject to any penalty or tax with respect to any Company Employee
Plan under Section 502(i) of ERISA or Sections 4975 through 4980 of the Code.
D. No Pension Plans. Neither the Company nor any of its subsidiaries nor
any other Affiliate has ever maintained, established, sponsored, participated
in, or contributed to, any (i) Pension Plans subject to Title IV of ERISA, or
(ii) "multiemployer plan" within the meaning of Section (3)(37) of ERISA.
E. No Post-Employment Obligations. No Company Employee Plan provides, or
reflects or represents any liability to provide, retiree life insurance, retiree
health or other retiree employee welfare benefits to any person for any reason,
except as may be required by COBRA or other applicable statute, and neither the
Company nor any of its subsidiaries has ever represented, promised or contracted
(whether in oral or written form) to any Employee (either individually or to
Employees as a group) or any other person that such Employee(s) or other person
would be provided with retiree life insurance, retiree health or other retiree
employee welfare benefit, except to the extent required by statute.
F. Health Care Compliance. Neither the Company nor any of its subsidiaries
or any other Affiliate has, prior to the Effective Time and in any material
respect, violated any of the health care continuation requirements of COBRA, the
requirements of FMLA, the requirements of the Health Insurance Portability and
Accountability Act of 1996, the requirements of the Women's Health and Cancer
Rights Act, the requirements of the Newborns' and Mothers' Health Protection Act
of 1996, or any amendment to each such Act, or any similar provisions of state
law applicable to its Employees.
G. Effect of Transaction. The execution of this Agreement and the
consummation of the Transactions will not (either alone or upon the occurrence
of any additional or subsequent events) constitute an event under any Company
Employee Plan, Employee Agreement, trust or loan that will
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or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any Employee, except as
expressly required by this Agreement.
H. Employment Matters. Except as set forth in Section 2.22.H of the
Company Disclosure Letter, each of the Company and its subsidiaries: (i) is in
compliance with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Employees, (ii)
has withheld and reported all amounts required by law or by agreement to be
withheld and reported with respect to wages, salaries and other payments to
Employees, (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing, and (iv) is not liable
for any payment to any trust or other fund governed by or maintained by or on
behalf of any governmental authority, with respect to unemployment compensation
benefits, social security or other benefits or obligations for Employees (other
than routine payments to be made in the normal course of business and consistent
with past practice). There are no pending or to the Knowledge of the Company and
the Principal Shareholders threatened, or reasonably anticipated claims or
actions against the Company or any of its subsidiaries under any worker's
compensation policy or long-term disability policy.
I. Labor. No work stoppage or labor strike against the Company or any of
its subsidiaries is pending or to the Knowledge of the Company and the Principal
Shareholders threatened, or reasonably anticipated. The Company does not know of
any activities or proceedings of any labor union to organize any Employees.
There are no actions, suits, claims, labor disputes or grievances pending or to
the Knowledge of the Company and the Principal Shareholders threatened, or
reasonably anticipated relating to any labor, safety or discrimination matters
involving any Employee, including, without limitation, charges of unfair labor
practices or discrimination complaints. Neither the Company nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act. Neither the Company nor any of its subsidiaries is
presently, nor have they been in the past, a party to, or bound by, any
collective bargaining agreement or union contract with respect to Employees and
no collective bargaining agreement is being negotiated by the Company or any of
its subsidiaries.
J. No Interference or Conflict. Except as set forth in Section 2.22.J of
the Company Disclosure Letter, to the Knowledge of the Company and the Principal
Shareholders, no shareholder, officer, employee or consultant of the Company or
any of its subsidiaries is obligated under any contract or agreement subject to
any judgment, decree or order of any court or administrative agency that would
interfere with such person's efforts to promote the interests of the Company or
any of its subsidiaries or that would interfere with the Company's or any of its
subsidiaries' business. Except as set forth in Section 2.22 J of the Company
Disclosure Letter neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's or any of its subsidiaries' business as presently
conducted nor any activity of such officers, directors, employees or consultants
in connection with the carrying on of the Company's or any of its subsidiaries'
business as presently conducted, will to the Knowledge of the Company and the
Principal Shareholders conflict with or result in a breach of
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the terms, conditions or provisions of, or constitute a default under, any
contract or agreement under which any of such officers, directors, employees or
consultants is now bound.
K. Insurance. Section 2.22.K of the Company Disclosure Letter lists all
insurance policies and fidelity bonds covering the assets, business, equipment,
properties, operations, employees, officers, and directors of the Company or any
Affiliate. There is no claim by the Company or any Affiliate pending under any
of such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. All premiums due and
payable under all such policies and bonds have been paid, and the Company and
its Affiliates are otherwise in material compliance with the terms of such
policies and bonds (or other policies and bonds providing substantially similar
insurance coverage). Neither the Company nor any of the Principal Shareholders
has any Knowledge of threatened termination of, or premium increase with respect
to, any of such policies.
2.23. Compliance with Laws. Except as set forth in Section 2.23 of the Company
Disclosure Letter, each of the Company and its subsidiaries has complied with,
is not in violation of, and has not received any notices of violation with
respect to, any Legal Requirement.
2.24. Warranties; Indemnities. Except for the warranties and indemnities
contained in those contracts and agreements set forth in Section 2.24 of the
Company Disclosure Letter, warranties given by the Company in connection with
the sale or licensing of the Company's products in the Ordinary Course of the
Company's Business which have not been breached, nor subject to any demand by a
customer, warranties implied by law, and warranties given in agreements entered
into after the date hereof which do not violate Section 4.1 of this Agreement,
neither the Company nor any of its subsidiaries has given any warranties or
indemnities relating to products or technology sold or services rendered by the
Company or any of its subsidiaries.
2.25. Complete Copies of Materials. The Company has delivered or made available
true and complete copies of each document (or summaries of the same) that has
been requested by Sybase or its counsel.
2.26. Former Employee Contributions to Company Products. No person who at any
time performed services for the Company in any capacity, including as an
employee or consultant, and who no longer has an employment or consulting
relationship with the Company, (other than those persons who have assigned all
of their right, title, and interest in Intellectual Property to the Company) has
contributed ten (10%) or more of the total man-hours expended on the design,
development and implementation of the computer hardware or software components
(including designing the architecture, conceptualizing the product or writing
software code, whether object or source) of either of the Company's current
products.
2.27. Information Supplied. The information supplied (or to be supplied by) by
the Company for inclusion or incorporation by reference in the Solicitation
Materials will not, at the time the information is supplied and, after giving
effect to any supplement or amendment to the Solicitation Materials, contain any
untrue statement of a material fact, or omit to state any material fact required
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to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not materially misleading; and the
Company shall promptly notify the other parties if any information they
respectively previously provided becomes false or misleading in any respect or
if it becomes aware of any facts material to the preparation, distribution, and
use of the Solicitation Materials and shall cooperate in the preparation and
distribution of any supplement or amendment of the Solicitation Materials as a
consequence of such information.
2.28. Representations Complete. Neither any of the representations or warranties
made by the Company (as modified by the Company Disclosure Letter) in this
Agreement, nor any statements made in any exhibit, schedule or certificate
furnished by or on behalf of the Company pursuant to this Agreement contains or
will contain at the Effective Time, any untrue statement of a material fact, or
omits or will omit at the Effective Time to state any material fact necessary in
order to make the statements contained herein or therein, in the light of the
circumstances under which made, not misleading.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF SYBASE
Sybase hereby represents and warrants to the Company Shareholders that,
subject to such exceptions as are specifically disclosed in the disclosure
letter (referencing the appropriate section and paragraph numbers) supplied by
Sybase to the Company Shareholders (the "Sybase Disclosure Letter") and dated as
of the date hereof, on the date hereof and as of the Effective Time as though
made at the Effective Time as follows:
3.1. Organization, Standing and Power. Sybase is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Sybase has the corporate power to own its properties and to carry on its
business as now being conducted and is duly qualified or licensed to do business
and is in good standing in each jurisdiction in which the failure to be so
qualified or licensed would have a Material Adverse Effect on Sybase (a "Sybase
Material Adverse Effect"). At the Closing, Merger Sub will be a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and a wholly-owned subsidiary of Sybase.
3.2. Authority. Sybase has all requisite corporate power and authority to enter
this Agreement and any Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and any Ancillary Agreements to which it is a party
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary corporate action on the part of Sybase.
This Agreement and any Ancillary Agreements to which Sybase is a party have been
duly executed and delivered by Sybase and constitute the valid and binding
obligations of Sybase, enforceable in accordance with their terms, except as
such enforceability may be limited by principles of public policy and subject to
the laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive
relief or other equitable remedies. At the Closing, Merger Sub will have all
requisite corporate power and authority to enter into any Ancillary Agreements
to which it is a party and to consummate the Merger and the
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transactions contemplated by such Ancillary Agreements. At the Closing, the
Merger and the execution and delivery of the Ancillary Agreements to which
Merger Sub is a party will have been duly authorized by all necessary corporate
action on the part of Merger Sub.
3.3. No Conflict. The execution and delivery by Sybase of this Agreement and any
Ancillary Agreement to which it is a party, and its consummation of the
Transactions will not conflict with or result in any violation of or default
under (with or without notice or lapse of time, or both) or give rise to a
Conflict under (i) any provision of the certificate of incorporation or bylaws
of Sybase, or (ii) any judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Sybase or any assets hereafter contributed by Sybase to
the Surviving Corporation.
3.4. Governmental Consents. No consent, waiver, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity, or any
third party is required by or with respect to Sybase in connection with the
execution and delivery of this Agreement and any Ancillary Agreements to which
Sybase is a party or the consummation of the transactions contemplated hereby
and thereby, except for (i) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable securities laws and the HSR Act, (ii) such consents, waivers,
approvals, orders, authorizations, registrations, declarations and filings
which, if not obtained or made, would not have a Sybase Material Adverse Effect,
and (iii) the filing of the Merger Agreement with the Secretary of State of the
State of Delaware.
3.5. SEC Reports. Sybase has furnished to the Company and the Principal
Shareholders prior to the date hereof (or the Company and the Principal
Shareholders can obtain from the internet) copies of its Annual Report on Form
10-K for the fiscal year ended December 31, 1998 (the "Form 10-K"), and its
Quarterly Reports on Form 10-Q for the fiscal quarters ending March 31, 1999,
June 30, 1999, and September 30, 1999 (collectively with the Form 10-K referred
to herein as the "SEC Documents"). Each of the SEC Documents did not as of the
date thereof (or if amended or superseded by a filing after 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 necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. Since September 30, 1999 no Sybase Material Adverse Effect
has occurred.
3.6. Brokers' and Finders' Fees. Sybase has not incurred, nor will it incur,
directly or indirectly, any liability for brokerage or finders' fees or agents'
commissions or any similar charges in connection with this Agreement or any
transaction contemplated hereby.
3.7. Issued Shares. The shares of Sybase Common Stock to be issued in the
Merger, when issued, (i) will be duly authorized, validly issued, fully paid and
nonassessable shares of Sybase Common Stock, (ii) will be free and clear of all
Liens, restrictions, claims, other than restrictions under applicable securities
laws and restrictions set forth in this Agreement and the Ancillary Agreements,
and (iii) will not be subject to any preemptive rights or rights of first
refusal or similar rights. The Sybase Common Stock to be issued upon exercise of
Company Options and Company
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Warranties assumed or converted under Section 1.2 of this Agreement will be
issued in accordance with all material respects with applicable Federal and
State securities laws applicable to Sybase.
3.8. Information Supplied. The information supplied (or to be supplied by) by
Sybase for inclusion or incorporation by reference in the Solicitation Materials
will not, at the time the information is supplied and, after giving effect to
any supplement or amendment to the Solicitation Materials, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not materially misleading; and Sybase
shall promptly notify the other parties if any information it previously
provided becomes false or misleading in any respect or if it becomes aware of
any facts material to the preparation, distribution, and use of the Solicitation
Materials and shall cooperate in the preparation and distribution of any
supplement or amendment of the Solicitation Materials as a consequence of such
information.
3.9. Representations Complete. Neither any of the representations or warranties
made by the Sybase (as modified by the Sybase Disclosure Letter) in this
Agreement, nor any statements made in any exhibit, schedule or certificate
furnished by Sybase pursuant to this Agreement contains or will contain at the
Effective Time, any untrue statement of a material fact, or omits or will omit
at the Effective Time to state any material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which made, not misleading.
3.10. Reservation of Sybase Common Stock. Upon the Closing, Sybase shall
authorize and reserve for issuance that number of shares of Sybase Common Stock
(but not exceeding the Warrants and Vested Option Shares times the Merger
Exchange Ratio) to be issued upon exercise of the Sybase Options and Sybase
Warrants to be issued pursuant to Subsections 1.2.D.2.(b) and (c) of this
Agreement.
ARTICLE 4.
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. Conduct of Business of the Company. Except to the extent that the Chief
Executive Officer, Chief Financial Officer or General Counsel of Sybase shall
otherwise consent in writing or by electronic mail, during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement in accordance with Article 8 or the Effective Time, the Company
agrees, (and each Principal Shareholder agrees to use its reasonable best
efforts to cause the Company and its subsidiaries), to carry on the business of
the Company's and its subsidiaries' in the usual, regular and ordinary course in
substantially the same manner as conducted prior to the Current Balance Sheet
Date, to pay the debts and Taxes of the Company and its subsidiaries when due,
to pay or perform all other obligations of the Company and its subsidiaries when
due, and, to use its reasonable best efforts, consistent with their past
business practices and policies, to preserve intact the Company's and each of
its subsidiaries' present business organizations, keep available the services of
the Company's and each of its subsidiaries' present officers and key employees,
and preserve the Company's and each of its subsidiaries' relationships with
customers, suppliers, distributors, licensors, licensees, and others having
business dealings with it, all with the goal of
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preserving unimpaired the Company's and each of its subsidiaries' goodwill and
ongoing businesses at the Effective Time. Sybase shall use all reasonable
efforts to respond to requests for consent pursuant to this Section within five
(5) days following delivery of the request. The Company shall promptly notify
Sybase of any emergency or of any event or occurrence not in the Ordinary Course
of the Company's Business and of any emergency or of any material event
involving the Company or any of its subsidiaries. Except as expressly
contemplated by this Agreement, without the prior written or email consent of
Sybase, the Company shall not, and shall not permit any of its subsidiaries to:
A. voluntarily incur any liability nor enter into any contract,
commitment, or agreement, or transaction, whether matured or
contingent, which could require the Company or any subsidiary to
make any expenditure or to incur costs not in the Ordinary Course of
the Company's Business, exceeding $100,000 individually or $250,000
in the aggregate;
B. voluntarily enter into any commitment or transaction of the type
described in Section 2.14 hereof nor, make any purchases, or enter
into any Contract to purchase, any inventory, other than in the
Ordinary Course of the Company's Business;
C. except for the granting of non-exclusive licenses of object code
relating to the licensing of the Company's products, which are being
shipped on the date hereof, and which are entered into in the
Ordinary Course of the Company's Business, (i) sell, license or
transfer to any person or entity any rights to any Company
Intellectual Property or products or enter into any agreement with
respect to any Company Intellectual Property with any person or
entity or with respect to any Intellectual Property of any person or
entity, or (ii) enter into any agreement with respect to the
development of any Intellectual Property with a third party;
D. license any Intellectual Property or enter into any agreement with
respect to the Intellectual Property of any person or entity, except
in the Ordinary Course of the Company's Business and for pricing
consistent with the pricing offered to other customers prior to the
date hereof;
E. enter into or amend any Contract pursuant to which any other party
is granted marketing, distribution, development or similar rights of
any type or scope with respect to any products or Company
Intellectual Property, except in the Ordinary Course of the
Company's Business;
F. amend or otherwise modify (or agree to do so), except in the
Ordinary Course of the Company's Business, or violate the terms of,
any of the Contracts set forth or described in the Company
Disclosure Letter or any other material contract, agreement, or
transaction of the Company or any of its subsidiaries;
G. commence or settle any litigation;
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H. declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any
Company Capital Stock, or split, combine or reclassify any Company
Capital Stock or any capital stock of any of its subsidiaries, issue
or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of Company Capital Stock or
the capital stock of any of its subsidiaries, or repurchase, redeem
or otherwise acquire, directly or indirectly, any shares of Company
Capital Stock or the capital stock (or options, warrants or other
rights exercisable therefor) of any of its subsidiaries, except in
accordance with the Company Option Plans prior to the close of
business on the third (3rd) Business Day preceding the Closing Date;
I. issue, grant, deliver or sell or authorize or propose the issuance,
grant, delivery or sale of, or purchase or propose the purchase of,
any shares of Company Capital Stock or capital stock of any of any
of its subsidiaries or any securities convertible into, or
subscriptions, rights, warrants or options to acquire, or other
agreements or commitments of any character obligating it to issue or
purchase any such shares or other convertible securities, except for
issuances prior to the close of business on the third (3rd) Business
Day preceding the Closing Date of Company Common Stock upon the
exercise of Company Options or exercise of Company Warrants and of
Additional Employee Options;
J. cause or permit any amendments to its certificate of incorporation,
bylaws or other organizational documents of the Company or any of
its subsidiaries;
K. acquire or agree to acquire by merging or consolidating with, or by
purchasing any assets or equity securities of, or by any other
manner, any business or any corporation, partnership, association or
other business organization or division thereof, or otherwise
acquire or agree to acquire any assets other than in the Ordinary
Course of the Company's Business, which are material, individually
or in the aggregate, to the Company's or any of its subsidiaries'
business;
L. sell, lease, license property (other than Intellectual Property) or
otherwise dispose of any of its properties or assets, except
properties or assets which are not Intellectual Property and
obsolete and worn out properties or assets disposed of in the
Ordinary Course of the Company's Business;
M. incur any indebtedness or guarantee, or issue or sell any debt
securities or guarantee any debt securities of others;
N. except for loans to attract prospective employees in the Ordinary
Course of the Company's Business totaling not more than $250,000 in
the aggregate and test account loans given in reasonable amounts in
the Ordinary Course of the Company's Business, grant any loans to
others or purchase debt securities of others or amend the terms of
any outstanding loan agreement;
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O. grant any severance or termination pay (i) to any director or
officer, or (ii) to any other employee except for employment
termination payments to employees (other than officers of directors
of the Company or its subsidiaries) in the Ordinary Course of the
Company's Business and except payments made pursuant to standard
written agreements outstanding on the date hereof and disclosed in
the Company Disclosure Letter;
P. adopt or amend any employee benefit plan, or enter into any
employment contract, pay or agree to pay any special bonus or
special remuneration to any director or employee, or increase the
salaries or wage rates of its employees, except agreements to
attract prospective employees or to retain existing employees (other
than the officers or directors of the Company or its subsidiaries)
and except payments made pursuant to standard written agreements in
place on the date hereof and disclosed in the Company Disclosure
Letter;
Q. revalue 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 the Company's Business;
R. pay, discharge or satisfy, in an amount in excess of $100,000 in any
one case, or $250,000 in the aggregate, any Liability (absolute,
accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the Ordinary Course
of the Company's Business of Liabilities reflected or reserved
against in the Current Balance Sheet;
S. make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, enter into any
closing agreement, settle any claim or assessment in respect of
Taxes, or consent to any extension or waiver of the limitation
period applicable to any claim or assessment in respect of Taxes;
T. enter into any strategic alliance or joint marketing arrangement or
agreement other than in the Ordinary Course of the Company's
Business;
U. take any action to accelerate the vesting schedule of any of the
outstanding Company Options, Company Warrants or Company Capital
Stock;
V. hire, other than in the Ordinary Course of the Company's Business,
terminate any employees other than for cause, or encourage any
employees to resign from the Company;
W. take, or agree in writing or otherwise to take, any of the actions
described in any of the above subparts of this Section, or any other
action that would prevent the Company or any of the Principal
Shareholders from performing or cause the
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Company or any of the Principal Shareholders not to perform, their
respective covenants hereunder; or
X. take any action that would be reasonably likely to interfere with
the offering of Sybase Common Stock in the Merger in accordance with
Regulation D, Rule 506 of the Securities and Exchange Act or
otherwise prohibit the transaction from being exempt from
registration under Section 4(2) of the Securities Act.
4.2. No Solicitation. Until the earlier of (i) the Effective Time, or (ii) the
date of termination of this Agreement pursuant to the provisions of Section 8.1
hereof, neither the Company nor the Principal Shareholders shall (nor shall the
Company or the Principal Shareholders permit, as applicable, any of the
Company's officers, directors, employees, shareholders, agents, representatives
or affiliates to), directly or indirectly, take any of the following actions
with any party other than Sybase and its designees: (a) solicit, encourage,
initiate or participate in any inquiry, negotiations or discussions, or enter
into any agreement, with respect to any offer or proposal to acquire all, or any
material part of the Company's or any of its subsidiaries' business, properties
or technologies, or any material amount of the Company Capital Stock or capital
stock of any subsidiary of the Company (whether or not outstanding), whether by
merger, purchase of assets, tender offer or otherwise, or effect any such
transaction, (b) disclose any information not customarily disclosed to any
person concerning the Company's or any of its subsidiaries' business,
technologies or properties, or afford to any person or entity access to its
properties, technologies, books or records, not customarily afforded such
access, (c) assist or cooperate with any person to make any proposal to purchase
all or any material part of the Company Capital Stock, any capital stock of any
subsidiary of the Company or assets of either the Company or any of its
subsidiaries, other than inventory in the Ordinary Course of the Company's
Business, or (d) enter into any agreement with any person providing for the
acquisition of the Company or any of its subsidiaries, whether by merger,
purchase of assets, tender offer or otherwise. In the event that the Company,
any Principal Shareholder or any of the Company's affiliates shall receive,
prior to the Effective Time or the termination of this Agreement, any offer,
proposal, or request, directly or indirectly, of the type referenced in clause
(a) or (c) above, or any request for disclosure or access pursuant to clause (b)
above, the Company or such Principal Shareholder, as applicable, shall
immediately notify Sybase thereof, including information as to the identity of
the offeror or the party making any such offer or proposal and the specific
terms of such offer or proposal, as the case may be, and such other information
related thereto as Sybase may reasonably request. The parties hereto agree that
irreparable damage would occur in the event that the provisions of this Section
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed by the parties hereto that Sybase shall be
entitled to seek an injunction or injunctions to prevent breaches of the
provisions of this Section and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which Sybase may be entitled at law or
in equity.
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ARTICLE 5.
ADDITIONAL AGREEMENTS
5.1. Company Shareholder Approval. The Company shall promptly submit this
Agreement and the transactions contemplated hereby to its Company Shareholders
for approval and adoption as provided by Delaware Law, and the certificate of
incorporation and bylaws of the Company. The Company shall use its reasonable
best efforts (which shall not include a requirement it provide any special
monetary consideration to any Company Shareholder not provided by this Agreement
or the Ancillary Agreements) to obtain the consent of its Company Shareholders
sufficient to approve this Agreement, the Ancillary Agreements, the Merger, and
the Transactions and to enable the Closing to occur as promptly as practicable.
The Solicitation Materials to be submitted to the Company Shareholders in
connection with the solicitation of their approval of the Merger and this
Agreement shall be subject to review and approval by Sybase and shall include
information regarding the Company, the terms of the Merger and this Agreement
and the unanimous recommendation of the Board of Directors of the Company in
favor of the Merger and this Agreement by an affirmative by each director
attending the Company's duly convened and conducted Board of Directors meeting
or by a written consent of each director not attending such meeting. The Company
shall promptly submit for approval by the Company Shareholders by the requisite
vote any payments of cash or stock contemplated by this Agreement that may be
deemed to constitute "parachute payments" pursuant to Section 280G of the Code,
such that all such payments resulting from the transactions contemplated hereby
shall not be deemed to be "parachute payments" pursuant to Section 280G of the
Code or shall be exempt from such treatment under such Section 280G.
5.2. Access to Information. The Company shall afford Sybase and its accountants,
counsel and other representatives, reasonable access during the period prior to
the Effective Time to (i) all of the Company's and each of its subsidiaries'
properties, books, contracts, commitments and records, including the Company's
source code, (ii) all other information concerning the business, properties and
personnel (subject to restrictions imposed by applicable law) of the Company or
any of its subsidiaries as Sybase may reasonably request, and (iii) all
employees of the Company or any of its subsidiaries as identified by Sybase. The
Company agrees to provide to Sybase and its accountants, counsel and other
representative's copies of internal financial statements (including Tax returns
and supporting documentation) promptly upon request. No information or knowledge
obtained in any investigation pursuant to this Section shall affect or be deemed
to modify any representation or warranty contained herein or the conditions to
the obligations of the parties to consummate the Merger and Transactions in
accordance with the terms and provisions hereof.
5.3. Confidentiality. Each of the parties hereto hereby agrees that the
information obtained in any investigation pursuant to Section 5.2 hereof, or
pursuant to the negotiation and execution of this Agreement or the effectuation
of the transactions contemplated hereby, shall be governed by the terms of the
Confidential Disclosure Agreement between the Company and Sybase.
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5.4. Expenses. If the Closing does not occur, all fees and expenses incurred in
connection with the Merger including, without limitation, all legal, accounting,
financial advisory, consulting and all other fees and expenses of third parties
("Third Party Expenses") incurred by a party hereto in connection with the
negotiation and effectuation of the terms and conditions of this Agreement and
the transactions contemplated hereby or thereby, shall be the obligation of the
respective party incurring such fees and expenses. If the Closing does occur,
all Third Party Expenses of the Company, Sybase, Merger Sub, and the Surviving
Corporation shall be paid by the Surviving Corporation.
5.5. Public Disclosure. Neither party shall issue any statement or communication
to any third party (other than their respective agents) regarding the subject
matter of this Agreement or the transactions contemplated hereby, including, if
applicable, the termination of this Agreement and the reasons therefor, without
the consent of the other party, which consent shall not be unreasonably
withheld, except that this restriction shall be subject to Sybase's obligation
to comply with applicable securities laws.
5.6. Consents. The Company and Sybase shall each use commercially reasonable
efforts to obtain the consents, waivers and approvals under any of the Contracts
to which the Company or any of its subsidiaries is a party deemed appropriate or
necessary by any party in connection with the Merger, including all consents,
waivers and approvals set forth in the Company Disclosure Letter and/or the
Sybase Disclosure Letter, so as to preserve all rights of, and benefits to, the
Company or any of its subsidiaries thereunder from and after the Effective Time.
5.7. Deleted.
5.8. Reasonable Efforts. Subject to the terms and conditions provided in this
Agreement, each of the parties hereto shall use commercially reasonable efforts
to take promptly, or cause to be taken, all actions, and to do promptly, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated hereby, to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings and to remove any injunctions
or other impediments or delays, legal or otherwise, in order to consummate and
make effective the transactions contemplated by this Agreement for the purpose
of securing to the parties hereto the benefits contemplated by this Agreement;
provided, however, that Sybase shall not be required to agree to any divestiture
by Sybase or the Company or any of Sybase's subsidiaries or affiliates of shares
of capital stock or of any business, assets or property of Sybase or its
subsidiaries or affiliates or of the Company, its affiliates, or the imposition
of any material limitation on the ability of any of them to conduct their
businesses or to own or exercise control of such assets, properties and stock.
As soon as may be reasonably practicable, each of the Company and Sybase shall
file with the United States Federal Trade Commission (the "FTC") and the
Antitrust Division of the DOJ the Notification and Report Forms relating to the
transactions contemplated herein as required by the HSR Act, as well as
comparable pre-merger notification forms required by the merger notification or
control laws and regulations of any applicable jurisdiction, as agreed to by the
parties. The Company and Sybase each shall promptly (a) supply
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the other with any information which may be required in order to effectuate such
filings and (b) supply any additional information which reasonably may be
required by the FTC, the DOJ or the competition or merger control authorities of
any other jurisdiction and which the parties may reasonably deem appropriate.
5.9. Notification of Certain Matters. The Company or any of the Principal
Shareholders, as the case may be, shall give prompt notice to Sybase, and Sybase
shall give prompt notice to the Company, of: (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of that is likely
to cause any representation or warranty of the Company or any Principal
Shareholder, respectively and as the case may be, contained in this Agreement to
be untrue or inaccurate at or prior to the Effective Time, and (ii) any failure
of the Company or any Principal Shareholder, as the case may be, 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 shall not (a) limit or otherwise affect any remedies available to
the party receiving such notice or (b) constitute an acknowledgment or admission
of a breach of this Agreement. However, no disclosure by the Company or the
Principal Shareholders pursuant to this Section shall be deemed to amend or
supplement the Company Disclosure Letter or prevent or cure any
misrepresentations, breach of warranty or breach of covenant.
5.10. Additional Documents and Further Assurances. Each party hereto, shall
execute the Ancillary Agreements to which it is as a party and, at the request
of another party hereto, shall execute and deliver such other agreements and
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of the Merger and the
Transactions contemplated hereby.
5.11. Closing Date Balance Sheet. The Company shall prepare and deliver, at
least three (3) Business Days prior to the Closing Date, an estimated balance
sheet of the Company, dated as of the Closing Date, that has been prepared in
accordance with GAAP (except that such balance sheet need not contain the
footnotes required by GAAP) consistently applied on a basis consistent with the
most recent regularly prepared financial statements of the Company, and that
presents fairly the financial condition of the Company and its subsidiaries as
of the Closing Date.
5.12. Vested Option Exercises. The Company may allow option holders to exercise
vested options to purchase Company Common Stock only pursuant to and in
accordance with the terms of the applicable Company Option Plan; provided,
however, that it is understood and agreed that the Company shall not allow any
option exercises (whether pursuant to promissory notes or otherwise) to take
place unless the option holder at issue shall have elected to exercise such
options and shall have completed and returned to the Company all paperwork
necessary for such exercise no later than one week prior to the Closing Date.
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ARTICLE 6.
CONDITIONS PRECEDENT
6.1. Conditions to Obligations of Each Party. The respective obligations of the
Company, the Principal Shareholders, and Sybase to effect the Merger and the
Transactions at the Effective Time shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions:
A. No Order; HSR Act. No Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
that is in effect and which has the effect of making the Merger or such
Transactions illegal or otherwise prohibiting consummation of the Merger or such
Transactions. All waiting periods under the HSR Act relating to the transactions
contemplated hereby shall have expired or been terminated.
B. No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger or such Transactions shall be in effect, nor shall
any proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending.
C. Securities Issuance. All filings, approvals, and consent of any
applicable Governmental Entity with respect to the issuance of Sybase Common
Stock to Company Shareholders in the Merger (including, if applicable, a
"fairness hearing" in the State of California) shall have been made and
obtained, and any applicable waiting period with respect thereto has lapsed,
other than filings required to be made after the Closing with respect to the
Merger under applicable federal and state securities laws.
D. Appraisal Rights. The time period for assertion by the Company
Shareholders of any appraisal rights they may have under Delaware Law has lapsed
and provision has been made for payment from the Escrow Fund, concurrently with
the Merger, of the consideration owing with respect to any Dissenting Shares.
E. Surviving Corporation Board of Directors. The seven member Board of
Directors of the Surviving Corporation shall have been appointed in accordance
with this Agreement.
F. Formation of Merger Sub. Merger Sub shall be validly domiciled in the
State of Delaware.
6.2. Conditions to the Obligations of Sybase. The obligation of Sybase to effect
the Merger shall be subject to the satisfaction at or prior to the Effective
Time of each of the following conditions, any of which may be waived, in
writing, exclusively by Sybase:
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A. Representations and Warranties. The representations and warranties of
the Company in this Agreement and the representations by the Principal
Shareholders pursuant to Section 7.4 of this Agreement (other than the
representations and warranties of the Company as of a specified date, which will
be true and correct as of such date) shall be true and correct on the date they
were made and shall be true and correct on and as of the Closing Date as though
such representations and warranties were made on and as of such time, except
where any inaccuracies or breaches in any such representations and warranties
has not, individually or in the aggregate, had and are not, individually or in
the aggregate, reasonably likely to have a Material Adverse Effect on the
Company.
B. Covenants. The Company and the Principal Shareholders shall have
performed and complied in all material respects with all covenants and
obligations under this Agreement required to be performed and complied with by
such parties as of the Closing.
C. Governmental Approval. Approvals from any Governmental Authority
reasonably deemed appropriate or necessary by Sybase for the consummation of the
Merger and the Transactions by the Company and the Company Shareholders shall
have been timely obtained.
D. Litigation. There shall be no action, suit, claim or proceeding of any
nature pending, or overtly threatened, against Sybase, the Company, any
subsidiary of the Company or Sybase, or their respective properties or any of
their respective officers or directors, arising out of, or in any way connected
with this Agreement, the Ancillary Agreements, the Merger or the Transactions
contemplated by this Agreement and the Ancillary Agreements.
E. Termination of Agreements. The Company shall have terminated or
modified each of those agreements in Section 6.2.E of the Company Disclosure
Letter in the manner identified in said Section.
F. Release of Liens. Sybase shall have received from the Company a duly
and validly executed copy of all agreements, instruments, certificates and other
documents, in form and substance reasonably satisfactory to Sybase, that are
necessary or appropriate to evidence the release of all Liens set forth in
Schedule 2.12. to this Agreement or otherwise encumbering the assets of the
Company, other than the Permitted Liens.
G. Resignation of Directors. Sybase shall have received a written
resignation from each of the directors of the Company, or any of its
subsidiaries effective as of the Effective Time.
H. Legal Opinion. Sybase shall have received a legal opinion from Hemenway
& Barnes, legal counsel to the Company as to the matters described on attached
Exhibit A, subject to assumptions and qualifications customary for such opinions
or otherwise reasonably acceptable to Sybase.
I. No Material Adverse Change. There shall not have occurred any event or
condition of any character that has had or is reasonably likely to have a
Material Adverse Effect on the Company since the date of this Agreement.
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J. Management Employment Agreements. Each of the Key Employees shall have
duly executed and delivered concurrently herewith a Management Employment
Agreement in form acceptable to Sybase and the Key Employee thereto and all of
such Management Employment Agreements shall be in full force and effect and
assumed by the Surviving Corporation as of the Closing. Each of the Key
Employees shall have executed and delivered to the Surviving Corporation a
Management Employment Agreement acceptable to Sybase and the Key Employee
thereto, and all of such Management Employment Agreements shall be in full force
and effect and assumed by the Surviving Corporation as of the Closing.
K. Company Shareholder Approval. The Company Shareholders holding (i) more
than fifty percent (50%) of the Company Capital Stock (assuming a 1 for 1
conversion of Company Preferred Stock to Company Common Stock), and (ii) a
sufficient number of shares of Company Capital Stock as required under the
Company's Certificate of Incorporation and Delaware Law, shall have approved
this Agreement, the Merger and the Transactions contemplated hereby and thereby
and the Company shall be duly authorized to consummate the Merger upon
satisfaction of the conditions specified in Section 6.3. The Company
Shareholders shall have approved by the requisite vote any payments of cash or
stock contemplated by this Agreement that may be deemed to constitute "parachute
payments" pursuant to Section 280G of the Code, such that all such payments,
sales and purchases resulting from the transactions contemplated hereby shall
not be deemed to be "parachute payments" pursuant to Section 280G of the Code or
shall be exempt from such treatment under such Section 280G.
L. Certificate of the Company and the Principal Shareholders. Sybase shall
have received a certificate, validly executed by the Chief Executive Officer of
the Company, in such capacity, to the effect that, as of the Closing:
1. all representations and warranties made by the Company in this
Agreement (other than the representations and warranties of the Company as of a
specified date, which will be true and correct as of such date) are true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of such time, except where any inaccuracies or
breaches in any such representations and warranties has not, individually or in
the aggregate, had and are not, individually or in the aggregate, reasonably
likely to have a Material Adverse Effect;
2. all covenants and obligations under this Agreement to be
performed by the Company or the Principal Shareholders on or before the Closing
have been so performed in all material respects;
3. the conditions to the obligations of Sybase set forth in this
Section 6.2 have been satisfied (unless otherwise waived in accordance with the
terms hereof).
4. Such other matters as Sybase or its counsel may reasonably
request.
M. Certificate of Secretary of Company. Sybase shall have received a
certificate, validly executed by the Secretary of the Company, certifying as to
(i) the terms and effectiveness the
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certificate of incorporation and the bylaws of the Company, and (ii) the valid
adoption of resolutions of the Board of Directors of the Company and the Company
Shareholders approving this Agreement and the consummation of the transactions
contemplated hereby, and (iii) such other matters as Sybase or its counsel shall
reasonably request.
N. Certificate of Good Standing. Sybase shall have received certificates
of good standing from (i) the Secretary of State of the State of Delaware, and
(ii) the taxing authority of the State of Delaware, each dated within a
reasonable period prior to the Closing.
O. Third Party Consents. All consents, waivers, approvals, and assignments
listed as "Required Consents" in Schedule 6.2.O to this Agreement, shall have
been obtained from the third party listed in said schedule or such terms as the
Company and Sybase shall approve, which approval shall not be unreasonably
withheld or delayed.
P. Private Placement. Each holder of Company Capital Stock, who is not an
accredited investor pursuant to Section (a) of Regulation D, Rule 501, is and
has been represented at all pertinent times, by a duly authorized Purchaser
Representative, within the meaning of Section (h) of Regulation D, Rule 501 of
the Securities Act, for the purposes of subpart (b)(2)(i) of Regulation D, Rule
506 of the Securities Act, the number of "purchasers" of Sybase Common Stock in
the Merger will not exceed thirty-five (35), and, the offering of Sybase Common
Stock in the Merger will be exempt from registration under Regulation D, Rule
506 of the Securities Act.
Q. Affiliate Agreements. Each recipient of Sybase Common Stock or any
warrant or option convertible into Sybase Common Stock upon the exercise thereof
shall have duly executed and delivered an Affiliate Agreement to Sybase.
6.3. Conditions to Obligations of the Company and the Principal Shareholders.
The obligations of the Company and each of the Principal Shareholders to
consummate and effect this Agreement and the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Effective Time of each
of the following conditions, any of which may be waived, in writing, exclusively
by the Company:
A. Representations & Warranties. The representations and warranties of
Sybase in this Agreement (other than the representations and warranties of
Sybase as of a specified date, which will be true and correct as of such date)
shall be true and correct on and as of the Closing Date as though such
representations and warranties were made on and as of such time, except where
any inaccuracies or breaches in any such representations and warranties have
not, individually or in the aggregate, had and are not, individually or in the
aggregate, reasonably likely to have a Sybase Material Adverse Effect.
B. Covenants. Sybase and Merger Sub shall have performed and complied in
all material respects with all covenants and obligations of this Agreement and
the Ancillary Agreements required to be performed and complied with by it
immediately prior to and for the Closing.
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C. Certificate of Sybase. Company shall have received a certificate
executed on behalf of Sybase by an executive officer of Sybase to the effect
that, as of the Closing:
1. all representations and warranties made by Sybase in this
Agreement (other than the representations and warranties of Sybase as of a
specified date, which will be true and correct as of such date) are true and
correct on and as of the Closing Date as though such representations and
warranties were made on and as of such time, except where any inaccuracies or
breaches in any such representations and warranties has not, individually or in
the aggregate, had and are not, individually or in the aggregate, reasonably
likely to have a Sybase Material Adverse Effect; and
2. all covenants and obligations under this Agreement to be
performed by Sybase on or before the Closing have been so performed in all
material respects.
3. Such other matters as Sybase or its counsel may reasonably
request.
D. Legal Opinion. The Company shall have received a legal opinion from
Wilson Sonsini Goodrich & Rosati as to the matters described in Exhibit B,
subject to the assumptions and qualification customary for such opinions or
otherwise acceptable to the Company.
E. No Material Adverse Change. There shall not have occurred any Sybase
Material Adverse Effect since September 30, 1999.
ARTICLE 7.
OF REPRESENTATIONS AND WARRANTIES;
INDEMNITY, AND ESCROW
7.1. Survival of Representations, Warranties and Covenants. The representations
and warranties of the Company contained in this Agreement, or in any certificate
or other instrument delivered pursuant to this Agreement, shall terminate on the
first anniversary of the Closing Date (the "Escrow Termination Date"). The
representations and warranties of Sybase contained in Article 3, and the
obligations of Sybase under Articles 1 and 7 of this Agreement shall terminate
on the first anniversary of the Closing Date (other than obligations under this
Article 7 that continue thereafter), and all other representations, warranties,
covenants and obligations of Sybase under this Agreement (other than those which
by their terms survive the Closing Date) shall terminate at the Closing and no
claim or action may be brought against Sybase thereunder after the Closing.
7.2. Indemnification. The Company Shareholders upon, and in consideration of its
receipt of Sybase Common Stock in, the Merger, jointly and severally as to
clauses (i) and (ii) below but only severally as to clause (iii) below, agree,
to indemnify and hold harmless Sybase, Surviving Corporation, and each of their
respective officers, directors, shareholders, subsidiaries, affiliates,
successors, and assigns (the "Sybase Indemnified Parties"), from and against all
Losses and Liabilities, together with reasonable attorneys' fees and expenses of
investigation and defense incurred in connection with any efforts to collect
such Losses and Liabilities hereunder, net of any
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insurance recoveries or payments from third parties relating to such Loss or
Liability, resulting from, relating to or constituting:
(i) any misrepresentation, breach, or inaccuracy of a representation or
warranty of the Company contained in this Agreement,
(ii) any failure by the Company to perform or comply with any of its
covenants under any Transaction Document to be performed prior to
the Closing,
(iii) the failure of the Company Shareholder to have good, valid and
marketable title to the Company Capital Stock surrendered by it in
the Merger, the failure of any Company Shareholder to surrender any
share of Company Capital Stock in the Merger as required pursuant to
this Agreement provided that only the Company Shareholder in
violation of this clause (iii) shall be liable under this clause
(iii); and/or
(iv) any other claim by a shareholder or former shareholder of the
Company, or any other person or entity, seeking to assert, or based
upon: (a) ownership or rights to ownership of any shares of the
Company Capital Stock, (b) any rights of a shareholder (other than
the right to receive the Sybase Common Stock pursuant to this
Agreement in the Merger or appraisal rights under the applicable
provisions of the Delaware General Corporation Law), including any
option, preemptive rights or rights to notice or to vote; (c) any
rights under the Certificate of Incorporation or Bylaws of the
Company; or (d) any claim that his/her/its capital stock in the
Company was wrongfully purchased by the Surviving Corporation or
Sybase pursuant to this Agreement.
Notwithstanding anything to the contrary in this Article or elsewhere in this
Agreement, (A) the maximum amount the Sybase Indemnified Parties may recover
from the Company Shareholders pursuant to Sections 7.2(i), (ii) and (iv) of this
Agreement, and the sole and exclusive source of recovery for the obligations of
said Company Shareholders pursuant to said Sections 7.2(i), (ii) and (iv) with
respect to this Agreement, shall be limited to the Escrow Fund described in
Section 7.3; (B) the Company Shareholders shall not have any right of
contribution from Sybase, the Company, or the Surviving Corporation with respect
to any Loss or Liability claimed by an Sybase Indemnified Party pursuant to this
Section 7.2 after the Effective Time; and (C) nothing set forth in this Section
7.2 or in Section 7.3 will limit the liability of the Principal Shareholders
under Section 7.4.
7.3. Escrow Arrangements.
A. Escrow Fund. Within three days after the Closing, without any act of
the Company Shareholders, the Escrowed Cash (including without limitation all
Shareholder's Escrowed Cash for all Company Shareholders), Escrowed Shares
(including without limitation all Shareholder's Escrowed Shares for all Company
Shareholders), and any other Aggregate Merger Consideration to be deemed to be
and shall be placed into an "Escrow Fund" on account of the rights associated
with Dissenting Shares pursuant to Section 1.2.D(2)(d), above, shall be
deposited with Escrow Agent
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into, and shall constitute, an Escrow Fund to compensate the Sybase Indemnified
Parties, or any of them, for any sums due the Sybase Indemnified Parties
pursuant to Section 7.2.
B. Appointment of Escrow Agent. The Company, Sybase, the Principal
Shareholders, the Surviving Corporation and the Shareholder Representative each
hereby appoints the Escrow Agent as the escrow agent under this Agreement. By
execution of this Agreement and/or a separate escrow agreement, the Escrow Agent
hereby accepts this appointment. The terms of the escrow shall be those set
forth in the agreement executed by the Escrow Agent.
C. Terms of Escrow. The Escrow Fund and the Escrow Agent will be governed
by the terms set forth herein and in any escrow agreement executed to implement
the terms of this Section 7.3 by the appointed escrow agent, Sybase and the
Company prior to the Effective Time, provided the terms thereof are not
materially inconsistent with the terms of this Article 7. The Escrow Agent may
execute this Agreement following the date hereof and prior to the Closing, and
such later execution, if so executed after the date hereof, shall not affect the
binding nature of this Agreement as of the date hereof between the other
signatories hereto.
D. Consent of Company Shareholders. The Principal Shareholders and the
other Company Shareholders will be deemed, by virtue of their approval of the
Merger and, in the case of the Principal Shareholders, their execution of this
Agreement, to have consented to: (i) the obligations of the Company Shareholders
under Section 7.2, (ii) the establishment of the Escrow Fund to secure such
obligations, (iii) the appointment of the Shareholder Representative as their
representative for purposes of their obligations hereunder and as
attorney-in-fact and agents for and on behalf of each of them, (iv) the taking
by the Shareholder Representative of any and all action(s) and the making of any
and all decision(s) required or permitted to be taken or made by them under this
Escrow Agreement, and (v) all of the other terms, conditions and limitation to
be binding upon them pursuant to the terms of this Article 7.
E. Escrow Period; Distribution upon Termination of Escrow Period. Subject
to the following requirements, the Escrow Fund shall be in existence immediately
following the Effective Time and shall terminate at 5:00 p.m., PST, on the date
that is the Escrow Termination Date (the "Escrow Period"); provided, however,
that the Escrow Period shall not terminate with respect to any of the Escrow
Fund which, in the reasonable judgment of Sybase, subject to the objection of
the Company Shareholder Representative and the subsequent arbitration of the
matter in the manner provided in Section 7.3.E(8) hereof, is necessary to
satisfy any then pending and unsatisfied claims specified in any Officer's
Certificate delivered to the Escrow Agent on or before the tenth (10th) calendar
day following the Escrow Termination Date. As soon as each such claim has been
resolved, the Escrow Agent shall deliver to the Company Shareholders the
remaining cash and Escrow Shares in the Escrow Fund, if any, that are not
required to satisfy the remaining claims (the "Remaining Escrow Funds"). The
Remaining Escrow Fund shall be delivered to the Company Shareholders in
proportion to their respective Pro Rata Portions of the Escrow Fund. The
distribution of each Company Shareholder's Pro Rata Portion of the Remaining
Escrow Fund that is Sybase Common Stock shall be made by delivery of a stock
certificate issued in the name of the
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Company Shareholder or in such other name as the Company Shareholder shall
notify the Escrow Holder in writing at least thirty (30) days prior to the
Escrow Termination Date.
1. Escrow Procedures of Escrow Fund. The Escrow Fund shall be held
in the name of the Escrow Agent. The Escrow Agent shall hold and safeguard the
Escrow Fund during the Escrow Period, shall treat such fund as a trust fund in
accordance with the terms of this Agreement and not as the property of Sybase
and shall hold and dispose of the Escrow Fund only in accordance with the terms
hereof. The Escrow Agent shall acknowledge in writing the receipt of any shares
of Sybase Common Stock or other property placed in the Escrow Fund, shall
provide at least ten (10) Business Days prior written notice to the Shareholder
Representative and to Sybase prior to any disbursement of the Escrow Fund, or
any portion thereof or interest therein, to any person.
2. Value of Shares In Escrow Fund. Each share of Sybase Common Stock
or other security in the Escrow Fund, which is publicly traded on a nationally
recognized exchange or NASDAQ, shall be valued at the average of the midpoint
between the closing bid and ask prices for each of such share on each of the
five consecutive trading days ending on the third trading day immediately prior
to the date the payment is to be made on account of such claim by the Escrow
Holder. Any other securities or non-cash property in the Escrow Fund shall be
valued at its fair market value in an arms-length transaction, as determined by
the written agreement of the Shareholder Representative and Sybase, which
agreement shall not be unreasonably withheld or delayed.
3. Dividends, Splits, etc. Any securities or other property
distributed in respect of or in exchange for any of the securities in the Escrow
Fund, whether by way of stock dividends, stock splits or otherwise, shall be
issued in the name of the Escrow Agent, or its nominee, and shall be delivered
to the Escrow Agent, who shall hold such securities and property in the Escrow
Fund. Such securities shall be added to and become part of the Escrow Fund for
the purposes hereof and shall be disbursed to the party entitled thereto in
accordance with this Section 7.3.
4. Claims for Indemnification Against the Escrow Fund. Upon receipt
by the Escrow Agent at any time on or before the tenth (10th) day following the
last day of the Escrow Period of an Officer's Certificate (as defined below)
and, subject to the provisions of this Section, the Escrow Agent shall deliver
to Sybase out of the Escrow Fund, as promptly as practicable, Escrowed Cash or
the Escrowed Shares of Sybase Common Stock having a value (as provided above)
equal to the Losses and Liabilities specified in the Officer's Certificate;
provided, however that no partial shares shall be distributed and the amount of
shares to be distributed shall be rounded up to the nearest number of shares, if
no further Escrowed Cash is held in the Escrow Fund and the amount of Loss or
Liability to be reimbursed is less than one-half of the value of one share, and
shall be rounded down to the next lower number of shares, if the amount of the
Loss or Liability to be reimbursed is at least one-half of the value of one
share (as determined above). Notwithstanding the foregoing, Sybase may not
receive any Escrowed Shares or Escrowed Cash from the Escrow Fund, unless and
until one or more Officer's Certificates identifying Losses and/or Liabilities
in excess of the Basket Amount has or have been delivered to the Escrow Agent as
provided above, in which
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case Sybase shall be entitled to recover all sums payable under Section 7.2 with
respect to such Losses or Liabilities, including, without limitation, the Basket
Amount. Escrowed Cash and Escrowed Shares shall be applied to Losses and
Liabilities as permitted under this Agreement as follows: The Escrowed Cash
shall be first applied and, only when Escrowed Cash is reduced to zero shall
Escrowed Stock be applied to the Losses and Liabilities as permitted under this
Agreement.
5. Objections to Claims. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such certificate shall be
delivered by certified mail to the Company Shareholder Representative by Sybase,
and for a period of thirty (30) days after such delivery, the Escrow Agent shall
make no delivery to Sybase from the Escrow Fund pursuant to this Section 7.3 for
a period of thirty (30) days. After the expiration of such thirty (30) day
period, the Escrow Agent shall make delivery from the Escrow Fund in accordance
with Section 7.3.F(4) hereof; provided, however, that no such delivery may be
made if the Company Shareholder Representative shall object in a written
statement to the claim made in the Officer's Certificate, and such statement
shall have been delivered to the Escrow Agent prior to the expiration of such
thirty (30) day period (a "Notice of Objection").
6. Voting Shares. The Shareholder Representative shall have the
right, in his/her sole discretion, on behalf of the Company Shareholders, to
direct the Escrow Agent in writing to exercise the voting rights pertaining to
the Escrow Shares, and the Escrow Agent shall comply with any such instructions
In the absence of such instructions, the Escrow Agent shall not vote any of the
Escrow Shares. The Shareholder Representative shall have no obligation to
solicit consents or proxies form the Company Shareholders for the purposes of
any vote.
7. Transferability. The respective interests of the Company
Shareholders in the Escrow Shares, or any portion thereof or interests therein,
shall not be assignable or otherwise transferable, and any such attempted
assignment or transfer shall be void.
8. Resolution of Conflicts; Arbitration.
(a) In case the Company Shareholder Representative shall
object in writing to any claim or claims made in any Officer's Certificate
within thirty (30) days after delivery of such Officer's Certificate or if the
Shareholder Representative and Sybase are unable to agree upon the value of
property in the Escrow Fund (other than publicly traded securities) within ten
(10) days following the demand by either party upon the other for an agreement,
then the Company Shareholder Representative and Sybase shall attempt in good
faith to resolve such dispute. If the Company Shareholder Representative and
Sybase should so agree, a memorandum setting forth such agreement shall be
prepared and signed by Sybase and the Company Shareholder Representative and
furnished to the Escrow Agent. The Escrow Agent shall be entitled to rely on any
such memorandum and to make distributions from the Escrow Fund in accordance
with the terms thereof.
(b) If no such agreement can be reached after good faith
negotiation, either Sybase or the Company Shareholder Representative may demand
arbitration of the matter, unless the amount is at issue in pending litigation
with a third party, in which event arbitration shall not be
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commenced until such amount is ascertained or both parties agree to arbitration,
and in either such event the matter shall be settled by arbitration conducted by
one arbitrator mutually agreeable to Sybase and the Company Shareholder
Representative. In the event that within forty-five (45) days after submission
of any dispute to arbitration, Sybase and the Company Shareholder Representative
cannot mutually agree on one arbitrator, Sybase and the Company Shareholder
Representative shall each select one arbitrator, and the two arbitrators so
selected shall select a third arbitrator. The arbitrator or arbitrators, as the
case may be, shall set a limited time period and establish procedures designed
to reduce the cost and time for discovery while allowing the parties an
opportunity, adequate in the sole judgment of the arbitrator or majority of the
three arbitrators, as the case may be, to discover relevant information from the
opposing parties about the subject matter of the dispute. The arbitrator or a
majority of the three arbitrators, as the case may be, shall rule upon motions
to compel or limit discovery and shall have the authority to impose sanctions,
including attorneys' fees and costs, to the extent as a competent court of law
or equity, should the arbitrators or a majority of the three arbitrators, as the
case may be, determine that discovery was sought without substantial
justification or that discovery was refused or objected to without substantial
justification. The decision of the arbitrator or a majority of the three
arbitrators, as the case may be, as to the validity and amount of any claim in
such Officer's Certificate shall be binding and conclusive upon the parties to
this Agreement. Such decision shall be written and shall be supported by written
findings of fact and conclusions, which shall set forth the award, judgment,
decree or order awarded by the arbitrator(s).
(c) Judgment upon any award rendered by the arbitrator(s) may
be entered in any court having jurisdiction. Any such arbitration shall be held
in the State of California, under the rules then in effect of the American
Arbitration Association. The arbitrator(s) shall determine how all expenses
relating to the arbitration shall be paid, including without limitation, the
respective expenses of each party, the fees of each arbitrator and the
administrative fee of the American Arbitration Association.
9. Third Party Claims. In the event Sybase becomes aware of a
third-party claim that Sybase reasonably believes may result in a demand against
the Escrow Fund, Sybase shall notify the Company Shareholder Representative of
such claim, and the Company Shareholder Representative shall be entitled on
behalf of the Company Shareholders, at its expense, to participate in, but not
to determine or conduct, the defense of such claim. Sybase shall have the right
in its sole discretion to conduct the defense of and settle any such claim;
provided, however, that except with the consent of the Company Shareholder
Representative, no settlement of any such claim with third-party claimants shall
be determinative of the amount recoverable by the Sybase Indemnified Party with
respect to such matter. In the event that the Company Shareholder Representative
has consented to any such settlement, the Company Shareholders shall have no
power or authority to object under any provision of this Article 7 to the amount
of any claim by Sybase against the Escrow Fund with respect to such settlement.
In the event an all cash settlement offer is made by a third party, but refused
by Sybase, the amount of such offer shall constitute the maximum amount of such
Sybase claim against the Escrow Fund that would have been released had the
settlement been accepted by Sybase.
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F. Escrow Agent
1. Duties.
(a) The Escrow Agent shall be obligated only for the
performance of such duties as are specifically set forth herein, and as set
forth in any additional written escrow instructions that the Escrow Agent may
receive after the date of this Agreement that are signed by an officer of Sybase
and the Company Shareholder Representative, and may rely and shall be protected
in relying or refraining from acting on any instrument reasonably believed to be
genuine and to have been signed or presented by the proper party or parties. The
Escrow Agent shall not be liable for any act done or omitted hereunder as Escrow
Agent while acting in good faith and in the exercise of reasonable judgment, and
any act done or omitted pursuant to the advice of legal counsel shall be
conclusive evidence of such good faith.
(b) The Escrow Agent is hereby expressly authorized to
disregard any and all warnings given by any of the parties hereto or by any
other person, excepting only orders or process of courts of law, and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree of any court, the Escrow Agent shall not be liable to any of the
parties hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.
(c) The Escrow Agent shall not be liable in any respect on
account of the identity, authority, or rights of the parties executing,
delivering, or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(d) The Escrow Agent shall not be liable for the expiration of
any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(e) In performing any duties under this Agreement, the Escrow
Agent shall not be liable to any party for damages, losses, or expenses, except
for negligence or willful misconduct on the part of the Escrow Agent. The Escrow
Agent shall not incur any such liability for (A) any act or failure to act made
or omitted in good faith, or (B) any action taken or omitted in reliance upon
any instrument, including any written statement of affidavit provided for in
this Agreement that the Escrow Agent shall in good faith believe to be genuine,
nor will the Escrow Agent be liable or responsible for forgeries, fraud,
impersonations, or determining the scope of any representative's authority. In
addition, the Escrow Agent may consult with legal counsel in connection with
performing the Escrow Agent's duties under this Agreement and shall be fully
protected in any act taken, suffered, or permitted by him/her in good faith in
accordance with the advice of counsel. The Escrow Agent is not responsible for
determining and verifying the authority of any person acting or purporting to
act on behalf of any party to this Agreement.
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(f) If any controversy arises between the parties to this
Agreement, or with any other party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required to
determine the controversy or to take any action regarding it. The Escrow Agent
may hold all documents and the Escrow Fund and may wait for settlement of any
such controversy by final appropriate legal proceedings or other means as, in
the Escrow Agent's discretion, may be required, despite what may be set forth
elsewhere in this Agreement. In such event, the Escrow Agent will not be liable
for damages. Furthermore, the Escrow Agent may, at its option, file an action of
interpleader requiring the parties to answer and litigate any claims and rights
among themselves. The Escrow Agent is authorized to deposit with the clerk of
the court all documents and the Escrow Fund, except all costs, expenses, charges
and reasonable attorney fees incurred by the Escrow Agent due to the
interpleader action and that the parties jointly and severally agree to pay.
Upon initiating such action, the Escrow Agent shall be fully released and
discharged of and from all obligations and liability imposed by the terms of
this Agreement.
(g) Sybase, on the one hand, and the Company Shareholders, on
the other hand shall jointly and severally agree to indemnify and hold Escrow
Agent harmless against any and all losses, claims, damages, liabilities, and
expenses, including reasonable costs of investigation, counsel fees, including
allocated costs of in-house counsel and disbursements that may be imposed on
Escrow Agent or incurred by Escrow Agent in connection with the performance of
its duties under this Agreement, including but not limited to any litigation
arising from this Agreement or involving its subject matter, other than those
arising out of the negligence or willful misconduct of the Escrow Agent. If
Sybase or any Company Shareholder should become liable to the Escrow Agent
pursuant to the foregoing, the Company Shareholders and Sybase agree that, to
provide for just and equitable contribution to their joint liability, Sybase
shall bear 50% of such liability, and each of the Company Shareholders, jointly
and severally, shall bear the remaining 50% of such liability, and further to
provide for just and equitable contribution of the Company Shareholder's joint
liability for such 50% share, each such Company Shareholder shall contribute,
vis-a-vis the other Company Shareholders, its Prorata Portion of such 50% share.
(h) The Escrow Agent may resign at any time upon giving at
least thirty (30) days written notice to the Sybase and the Company Shareholder
Representative; provided, however, that no such resignation shall become
effective until the appointment of a successor escrow agent, which shall be
accomplished as follows: Sybase and the Company Shareholder Representative shall
use their best efforts to mutually agree on a successor escrow agent within
thirty (30) days after receiving such notice. If the parties fail to agree upon
a successor escrow agent within such time, the Escrow Agent shall have the right
to appoint a successor escrow agent authorized to do business in the State of
Delaware and which is a national bank with no then current lending or banking
relationship with Sybase or any of its officers, directors or Affiliates. The
successor escrow agent shall execute and deliver an instrument accepting such
appointment and it shall, without further acts, be vested with all the estates,
properties, rights, powers, and duties of the predecessor escrow agent as if
originally named as escrow agent. Upon appointment of a successor escrow agent,
the Escrow Agent shall be discharged from any further duties and liability under
this Agreement.
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2. Fees. All fees of the Escrow Agent for performance of its duties
hereunder shall be paid fifty percent (50%) by Sybase and fifty percent (50%)
from the Escrowed Cash (before said cash is actually placed in the Escrow Fund),
except as ordered by the arbitrators under Section 7.3.E.(8) hereof, in
accordance with the standard fee schedule of the Escrow Agent. It is understood
that the fees and usual charges agreed upon for services of the Escrow Agent
shall be considered compensation for ordinary services as contemplated by this
Agreement. In the event that the conditions of this Agreement are not promptly
fulfilled, or if the Escrow Agent renders any service not provided for in this
Agreement, or if the parties request a substantial modification of its terms, or
if any controversy arises, or if the Escrow Agent is made a party to, or
intervenes in, any litigation pertaining to the Escrow Fund or its subject
matter, the Escrow Agent shall be reasonably compensated for such extraordinary
services and reimbursed for all costs, attorney's fees, including allocated
costs of in-house counsel, and expenses occasioned by such default, delay,
controversy or litigation.
3. Consequential Damages. In no event shall the Escrow Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Escrow Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
4. Successor Escrow Agents. Any corporation into which the Escrow
Agent in its individual capacity may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Escrow Agreement without further act.
G. Company Shareholder Representative.
1. Appointment. Each of the Company Shareholders hereby appoints the
Company Shareholder Representative, as its agent and attorney-in-fact, and the
Company Shareholder Representative for and on behalf of the Company
Shareholders, to give and receive notices and communications, to authorize
disbursements to Sybase from the Escrow Fund in satisfaction of claims by
Sybase, to object to such payments, to agree to, negotiate, enter into
settlements and compromises of, and demand arbitration and comply with orders of
courts and awards of arbitrators with respect to such claims, and to take all
other actions that are either (i) necessary or appropriate in the judgment of
the Company Shareholder Representative for the accomplishment of the foregoing
or (ii) specifically mandated by the terms of the Transaction Documents. With
the written consent of holder of at least two thirds of the right, title and
interest in the Escrow Fund, such agency may be changed by the Company
Shareholders from time to time upon not less than thirty (30) days prior written
notice to Sybase; provided, however, that the Company Shareholder Representative
may not be removed unless holders of a two-thirds interest of the Escrow Fund
agree to the identity of the substituted agent. Any vacancy in the position of
Company Shareholder Representative may be filled by the holders of a majority in
interest of the Escrow Fund. No bond shall be required of the
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Company Shareholder Representative, and subject to Section 7.3.E(8), the Company
Shareholder Representative shall not receive compensation for its services.
Notices or communications to or from the Company Shareholder Representative
shall constitute notice to or from the Company Shareholders.
2. Limitation on Liability. The Company Shareholder Representative
shall not be liable for any act done or omitted hereunder as the Company
Shareholder Representative while acting in good faith and in the exercise of
reasonable judgment. The Company Shareholders on whose behalf the Escrow Fund
was contributed to the Escrow Fund shall indemnify the Company Shareholder
Representative and hold the Company Shareholder Representative harmless against
any loss, liability or expense incurred without negligence or bad faith on the
part of the Company Shareholder Representative and arising out of or in
connection with the acceptance or administration of the Company Shareholder
Representative's duties hereunder, including the reasonable fees and expenses of
any legal counsel retained by the Company Shareholder Representative. After all
sums payable under Section 7.2 with respect to the Losses and Liabilities
identified in Officer's Certificates delivered to the Escrow Agent and the
Company Shareholder Representative prior to the Escrow Termination Date have
been satisfied, or reserved against, the Company Shareholder Representative,
with the consent of the majority in interest in the Escrow Fund, may recover
from the Escrow Fund at the end of the Escrow Period payments not yet paid for
any expenses incurred in connection with the Company Shareholder
Representative's representation hereby.
3. Binding Effect of Actions. A decision, act, consent or
instruction of the Company Shareholder Representative, including but not limited
to an amendment, extension or waiver of this Agreement pursuant to Sections 8.3
and/or 8.4 hereof, shall constitute a decision of the Company Shareholders and
shall be final, binding and conclusive upon the Company Shareholders; and the
Escrow Agent and Sybase may rely upon any such decision, act, consent or
instruction of the Company Shareholder Representative as being the decision,
act, consent or instruction of the Company Shareholders. The Escrow Agent and
Sybase are hereby relieved from any liability to any person for any acts done by
them in accordance with such decision, act, consent, or instruction of the
Company Shareholder Representative.
4. Fees. Subject to Sybase's prior claims for indemnification
against the Escrow Fund, the Company Shareholder Representative shall be
entitled to receive payment for its reasonable and documented expenses
therefrom, prior to any disbursement of Sybase Common Stock from the Escrow Fund
to the Company Shareholders.
7.4. Additional Representation and Indemnification by Principal Shareholders.
Subject to the limitations set forth below, each of the Principal Shareholders
hereby warrant and represent to Sybase that the representations by or on behalf
of the Company set forth in Article 2 of this Agreement, and any information
provided by said Principal Shareholder concerning said Principal Shareholder for
inclusion in the Solicitation Materials (after giving effect to any supplement
or amendment to such Solicitation Materials concerning such matters requested by
the Principal Shareholder in writing), do not contain, and as of the Effective
Time will not contain, any untrue
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statement of a material fact, nor omit (nor as of the Effective Time will omit),
to state any material fact necessary in order to make the statements contained
herein or therein, in light of the circumstances under which made, not
misleading. As the sole exclusive remedy for a breach of the foregoing
representation and warranty, each of the Principal Shareholders by execution of
this Agreement, jointly and severally, agree to indemnify and hold harmless each
of the Sybase Indemnified Parties from and against all Losses and Liabilities,
together with reasonable attorneys' fees and expenses of investigation and
defense incurred in connection with any efforts to collect such Losses and
Liabilities hereunder (net of any insurance recoveries, the Escrow Fund, and
payments from third parties received by Sybase to compensate for such Losses or
Liabilities), resulting from or in connection with any breach of the foregoing
representation and warranty; provided such breach by the Principal Shareholders
was "material" and was made with "scienter" as such terms are defined for
purposes of Rule 10b-5 of the Securities Exchange Act, such that a Principal
Shareholder would liable therefore under said Rule 10b-5, if such breach had
been made in connection with a purchase and sale of Company or Surviving
Corporation securities to Sybase. The foregoing representation and the right to
indemnification for any inaccuracy thereof shall terminate on the Escrow
Termination Date, provided, however, that the such date will be extended for the
purposes of this Section, with respect to any claim specified in any officer's
certificate describing such claim delivered to the Principal Shareholders on or
before the tenth (10th) calendar day following the Escrow Termination Date. In
no event shall the Principal Shareholders have any right of contribution from
the Company, Sybase or the Surviving Corporation with respect to any Loss or
Liability claimed by a Sybase Indemnified Party pursuant to this Section.
7.5. Indemnification By Sybase. Sybase shall indemnify and hold the Company
Shareholder (the "Company Indemnified Parties"), harmless against all Losses and
Liabilities, together with reasonable attorneys' fees and expenses of
investigation and defense incurred in connection with any efforts to collect
such Losses and Liabilities hereunder, but net of any insurance payments or
recoveries previously received from third party insurers relating to such Loss
or Liability, incurred or suffered by the Company Indemnified Parties, or any of
them, to the extent resulting from, relating to, or constituting: (i) any breach
or inaccuracy of a representation or warranty of Sybase contained in this
Agreement or any Ancillary Agreement, or (ii) any failure by Sybase to perform
or comply with any covenant binding upon Sybase under the terms of this
Agreement.
ARTICLE 8.
TERMINATION, AMENDMENT AND WAIVER
8.1. Termination. Except as provided in Section 8.2 hereof, the
Transaction Documents may be terminated and the Merger abandoned at any time
prior to the Closing:
A. by mutual agreement of the Company, the Principal Shareholders and
Sybase;
B. by Sybase or the Company if the Closing Date shall not have occurred on
or before February 29, 2000; provided, however, that the right to terminate this
Agreement under this Section shall not be available to any party whose action or
failure to act has been a principal cause of or resulted in the failure of the
Merger and the other Transaction to be consummated concurrently
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therewith on or before the Effective Time to occur on or before such date and
such action or failure to act constitutes breach of this Agreement;
C. by Sybase, or the Company, if: (i) there shall be a final
non-appealable order of a federal or state court in effect preventing
consummation of the Merger or the Transactions to be consummated concurrently
with the Merger, or (ii) there shall be any statute, rule, regulation or order
enacted, promulgated or issued or deemed applicable to the Closing by any
Governmental Entity that would make consummation of the Closing illegal;
D. by Sybase, if there shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to the
Merger or the Transaction to be consummated concurrently therewith by any
Governmental Entity, which would: (i) prohibit Sybase's ownership of any portion
of Surviving Corporation's Capital Stock, or (ii) compel Sybase to dispose of or
hold separate all or a material portion of the Surviving Corporation Capital
Stock or any other stock, business or assets of Sybase or any of its
subsidiaries, as a result of the Merger;
E. by Sybase, if it is not in material breach of its obligations under
this Agreement and there has been a breach of any representation, warranty,
covenant or agreement of the Company or the Company Shareholders contained in
this Agreement or any Ancillary Agreement, such that the conditions set forth in
Section 6.2 would not be satisfied, and such breach has not been cured within
ten (10) calendar days after written notice thereof to the Company; provided,
however, that no cure period shall be required for a breach which by its nature
cannot be cured; or
F. by the Company, if neither the Company nor the Company Shareholders is
in material breach of their respective obligations under this Agreement and
there has been a breach of any representation, warranty, covenant or agreement
contained in this Agreement or any Ancillary Agreement, such that the conditions
set forth in Section 6.3 would not be satisfied, and such breach has not been
cured within ten (10) calendar days after written notice thereof to Sybase;
provided, however, that no cure period shall be provided for a breach which by
its nature cannot be cured.
8.2. Effect of Termination. In the event of termination of this Agreement as
provided in Section 8.1 hereof, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of any party hereto, or
their respective officers, directors or shareholders, if applicable; provided,
however, that each party hereto shall remain liable for any breaches of this
Agreement prior to its termination; and provided further, however, that, the
provisions of Article 7 hereof shall remain in full force and effect and survive
any termination of this Agreement pursuant to the terms of this Article.
8.3. Amendment. This Agreement may be amended by the parties hereto at any time
by execution of an instrument in writing signed on behalf of each of the parties
hereto prior to the Closing Date or after the Closing Date by Sybase and the
Company Shareholder Representative. For purposes of this Section, the Company
Shareholders agree that any amendment of this Agreement signed by the Company
Shareholder Representative shall be binding upon and effective against the
Company Shareholders whether or not they have signed such amendment.
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8.4. Extension; Waiver. At any time prior to the Closing, Sybase, on the one
hand, and the Company and the Company Shareholder Representative, on the other
hand, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations of the other party hereto, (ii) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (iii) waive compliance
with any of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. For purposes of this Section, the Company Shareholders
agree that any extension or waiver signed by the Company Shareholder
Representative shall be binding upon and effective against all Company
Shareholders whether or not they have signed such extension or waiver.
ARTICLE 9.
GENERAL PROVISIONS
9.1. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial messenger or
courier service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice); provided, however, that notices sent by
mail will not be deemed given until received:
A. if to Sybase, to:
Sybase, Inc.
6475 Christie Avenue
Emeryville, California 94603
Attention: General Counsel
Telephone No.: 510-922-3500
Facsimile No.: 510-922-4558
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, California 94304
Attention: Debra Summers Esq.
Telephone No.: (650) 493-9300
Facsimile No.: (650) 493-6811
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B. if to the Company, to:
Home Financial Network, Inc.
55 Greens Farms Road
Westport, Connecticut 06880
Attention: Chief Executive Officer
Telephone No.: 203-341-7400
Facsimile No.: 203-341-7442
with a copy to:
Hemenway & Barnes
60 State Street
Boston, MA 02109-1899
Attn: Frederic J. Marx, Esq.
Telephone No.: 617-227-7940
Facsimile No.: 617-227-0781
C. if to the Principal Shareholders, to:
Daniel M. Schley
4 Devon Road
Westport Connecticut 06880
Telephone No.: 203-254-7375
Facsimile No.: 203-341-7442
And
Eric Jacobsen
4764 Sage Brush Road
Park City, Utah 84098
Telephone No.: 435-658-3765
Facsimile No.: 801-765-0763
With copy in each case to:
Hemenway & Barnes
60 State Street
Boston, MA 02109-1899
Attn: Frederic J. Marx, Esq.
Telephone No.: 617-227-7940
Facsimile No.: 617-227-0781
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D. if to Company Shareholder Representative:
Daniel M. Schley
4 Devon Road
Westport Connecticut 06880
Telephone No.: 203-254-7375
Facsimile No.: 203-341-7442
With copy to:
Hemenway & Barnes
60 State Street
Boston, MA 02109-1899
Attn: Frederic J. Marx, Esq.
Telephone No.: 617-227-7940
Facsimile No.: 617-227-0781
9.2. Interpretation. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.3. Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the parties
and delivered to the other party, it being understood that all parties need not
sign the same counterpart.
9.4. Entire Agreement; Assignment. This Agreement, the Exhibits hereto, the
Company Disclosure Letter, the Sybase Disclosure Letter, the Confidential
Disclosure Agreement, and the documents and instruments and other agreements
among the parties hereto referenced herein: (i) constitute the entire agreement
among the parties with respect to the subject matter hereof and supersede all
prior agreements and understandings both written and oral, among the parties
with respect to the subject matter hereof, (ii) are not intended to confer upon
any other person any rights or remedies hereunder, and (iii) shall not be
assigned by operation of law or otherwise, except that Sybase may assign its
rights and delegate its obligations hereunder to its affiliates as long as
Sybase remains ultimately liable for all of Sybase's obligations hereunder.
9.5. Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such
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provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.6. Other Remedies. Except as otherwise provided herein, any and all remedies
herein expressly conferred upon a party will be deemed cumulative with and not
exclusive of any other remedy conferred hereby, or by law or equity upon such
party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
9.7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto irrevocably consents to the exclusive jurisdiction
and venue of any court within the State of Delaware, in connection with any
matter based upon or arising out of this Agreement or the matters contemplated
herein, agrees that process may be served upon them in any manner authorized by
the laws of the State of Delaware for such persons and waives and covenants not
to assert or plead any objection which they might otherwise have to such
jurisdiction, venue and such process.
9.8. Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefor, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.9. Further Assurances. If at any time after the Effective Time, any further
action is necessary or desirable to carry out the purposes of this Agreement and
to the Surviving Corporation with full right, title and possession to the
assets, property, rights, privileges, powers and franchises of the Company, then
the officers and directors of Sybase and the Surviving Corporation are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such action as may be lawful and necessary.
9.10. Survival of Sybase Representations. The representations and warranties of
Sybase set forth in Article 3 of this Agreement, shall terminate as of the first
anniversary of the Closing Date and thereupon shall be of no further force and
effect and neither the Company, the Surviving Corporation, nor any Company
Shareholder shall have any cause of action based thereon (all such actions being
hereby waived).
ARTICLE 10.
DEFINITIONS
10.1. Definitions. As used in this Agreement the following terms shall have the
following meanings:
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Actual Cash Percentage means the aggregate cash to be paid under Subclause
1.2.D.2.(a)(i)(2) divided by the product derived by multiplying the number of
shares of Sybase Common Stock to be issued under Subclause 1.2.D(2)(a)(i)(1) by
the Sybase Tax Value, in all cases prior to any reduction for shares of Sybase
Common Stock and cash to be set aside into the Escrow Fund.
Additional Employee Options means options for up to not more than 125,000
shares of the Company's Common Stock per month, averaged over period commencing
on the date hereof and ending on the Closing Date, at an exercise price of not
less than the fair market value of such options on the date of the grant.
Affiliate means, with respect to any person or entity, any officer,
director, shareholder, or other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such
other person or entity.
Affiliate Agreements are those agreements to be signed by each Company
Shareholder receiving Sybase Common Stock in connection with the Merger or upon
exercise of any Sybase warrant or option issue in connection with the Merger
substantially in the form of attached Exhibit H.
Aggregate Merger Consideration is defined in Section 1.2.D.(1).
Ancillary Agreements are the Voting Agreements, the Certificate of Merger,
the Shareholder Agreement, the Management Employment Agreements, and the
Affiliate Agreements.
Basket Amount means Two Hundred Fifty Thousand Dollars ($250,000).
Blue Sky Law means the Legal Requirements relating to registration and
qualification of securities under the applicable securities laws of the states
of the United States.
Business Day is any day federally chartered banks are allowed to open for
business in New York City, New York.
Cash Value Per Share is 19.25% of the Company Share Value.
Certificate of Merger means a certificate of merger complying with the
requirements of Delaware Law concerning mergers of corporation incorporated in
Delaware.
Closing is the consummation of all actions and the execution, delivery,
and filing of all documents to be performed, executed, delivered and filed on or
before the Effective Time under the terms of this Agreement or an Ancillary
Agreement.
Closing Date means the date upon which the Merger is effective.
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COBRA shall mean Title X of the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.
Code is defined in Recital B.2.
Company Authorization is defined in Section 2.16.
Company Capital Stock means the Company Common Stock, the Company
Preferred Stock, the Company Options, and the Company Warrants.
Company Common Stock means the shares of the common stock of the Company,
which are validly issued and outstanding on the relevant date.
Company Disclosure Letter is defined in the preamble of Article 2.
Company Employee Plan shall mean any plan, program, policy, practice,
contract, agreement or other material arrangement providing for compensation,
severance, termination pay, deferred compensation, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether written, unwritten or otherwise, funded or unfounded,
including without limitation, each "employee benefit plan," within the meaning
of Section 3(3) of ERISA that is or has been maintained, contributed to, or
required to be contributed to, by the Company or any Affiliate for the benefit
of any Employee, or with respect to which the Company or any Affiliate has or
may have any liability or obligation.
Company Intellectual Property shall mean any and all Intellectual Property
and Intellectual Property Rights (including, without limitation, the Company
Registered Intellectual Property Rights) that are owned (in whole or in part) by
or exclusively licensed to the Company or any of its Subsidiaries.
Company Option Plans are those plans described on attached Section
2.3.B(i) of the Company Disclosure Letter.
Company Options means the outstanding options (without regard to vesting)
to purchase Company Common Stock, which are validly issued and outstanding at
the Effective Time and granted under the Company Option Plans.
Company Option Shares means the aggregate amount of shares of Company
Common Stock or Company Preferred Stock (assuming for this purpose that one
share of Company Common Stock is equivalent to one share of any class of Company
Preferred Stock) that would be issuable if all Company Option outstanding at the
close of business on the third (3rd) Business Day immediately prior to the
Effective Time actually been exercised at such time (without regard to whether
such Options are then vested or exercisable).
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Company Option Shares Per Option means, for any particular Company Option,
the number of shares of Company Common Stock that would be issuable if said
Company Option is fully exercised.
Company Outstanding Stock shall mean the number of shares of Company
Common Stock and Company Preferred Stock outstanding at the close of business on
the third (3rd) Business Day immediately prior to the Effective Time,
considering for this purpose that one share of Company Preferred Stock is
equivalent to one share of Company Common Stock.
Company Preferred Stock means the Company Series A Preferred Stock, the
Company Series B Preferred Stock, and the Company Series C Preferred Stock.
Company Registered Intellectual Property Rights means any and all
Registered Intellectual Property Rights owned by, filed in the name of, or
applied for, by the Company or its subsidiaries.
Company Series A Preferred Stock means the shares of Series A Convertible
Preferred Stock of the Company established pursuant to Section 4 of the Amended
and Restated Certificate of Incorporation of the Company, on or about March 31,
1997, which are validly issued and outstanding on the relevant date.
Company Series B Preferred Stock means the shares of Series B Convertible
Preferred Stock of the Company established pursuant to Section 4 of the Amended
and Restated Certificate of Incorporation of the Company, on or about March 31,
1997, which are validly issued and outstanding on the relevant date.
Company Series C Preferred Stock means the shares of Series C Convertible
Preferred Stock of the Company established pursuant to Section 4 of the Amended
and Restated Certificate of Incorporation of the Company, on or about March 31,
1997, which are validly issued and outstanding on the relevant date.
Company Share Value means the amount derived by dividing (1) the sum of
One Hundred Thirty Million Dollars ($130,000,000) plus the Company Warrant
Exercise Proceeds plus the Company Vested Option Exercise Proceeds by (2) the
sum of the Company Outstanding Stock plus the Company Vested Options Shares plus
the Company Warrant Shares.
Company Shareholder means each holder of any Company Capital Stock
immediately prior to the Effective Time.
Company Shareholder Representative shall be Dan Schley, or such other
person as the Principal Shareholders may appoint with the consent of Sybase.
Company Stock Certificates are the certificates held by the Company
Shareholders representing their shares of Company Common Stock and/or Company
Preferred Stock.
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Company Vested Option Exercise Proceeds means the aggregate amount of cash
that would be received upon exercise of the Company Options outstanding at the
close of business on the third (3rd) Business Day immediately prior to the
Effective Time, which are vested and exercisable as of said time, if said
Company Options had actually been exercised at such time.
Company Vested Option Shares means the aggregated number of shares of
Company Common Stock that would be issuable if all Company Option outstanding at
the close of business on the third (3rd) Business Day immediately prior to the
Effective Time, which are vested and exercisable as of said time, had actually
been fully exercised at such time.
Company Warrants means the warrants for Company Capital Stock listed on
Section 2.3.C of the Disclosure Letter.
Company Warrant Exercise Proceeds means the aggregate amount of cash that
would be received upon exercise of the Company Warrants outstanding at the close
of business on the third (3rd) Business Day immediately prior to the Effective
Time, if all of said Company Warrants had actually been exercised at such time.
Company Warrant Shares means the aggregate number of shares of Company
Common Stock that would be issuable, if all Company Warrants outstanding at the
close of business on the third (3rd) Business Day immediately prior to the
Effective Time had actually been fully exercised at such time (without regard to
whether such warrants were actually exercisable at such time).
Company Warrant Shares Per Warrant means, for any particular Company
Warrant, the number of shares of Company Common Stock that would be issuable if
said Company Warrant is fully exercised.
Confidential Disclosure Agreement is that certain Confidentiality and
Non-Disclosure Agreement, dated as of June 28, 1999, between the Company and
Sybase.
Conflict is defined in Section 2.5.
Contract is defined in Section 2.5.
Current Balance Sheet means the balance sheet of the Company included in
its Year-End Interim Financial Statements.
Current Balance Sheet Date is September 30, 1999.
Delaware Law means the General Corporations Law of the State of Delaware.
Designated Employees are those employees listed in attached Schedule
10.1.5 hereto.
Dissenting Shares is defined in Section 1.2.D(2)(d).
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DOJ is the United States Department of Justice.
DOL shall mean the United States Department of Labor.
Effective Time is the date and time the Merger Documents are accepted for
recording by the Secretary of State of the State of Delaware, or such other date
and time for the effectiveness of the transactions herein contemplated as the
Company and Sybase may agree upon in their discretion in writing.
Employee shall mean any current or former employee, consultant, or
director of the Company or any Affiliate.
Employee Agreement shall mean each management, employment, severance,
consulting, relocation, repatriation, expatriation, visas, work permit, or other
agreement, or contract between the Company or any Affiliate and any Employee.
Employee Shareholder shall mean any employee of the Company that owns
Company Capital Stock at the Effective Time.
Environmental Permits means all approvals, permits, licenses, clearance
and consents required by any Governmental Authority.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as
amended.
ERISA Affiliate shall mean any other person or entity under common control
with the Company within the meaning of Section 414(b), (c), (m) or (o) of the
Code, and the regulations issued thereunder.
Escrow Agent means U.S. Trust, or such other agent as may be appointed by
the mutual consent of Sybase and the Company prior to the Effective Time, or in
accordance with the procedures set forth in this Agreement after the Effective
Time.
Escrow Agreement means an Escrow Agreement between the Company Shareholder
Representative on behalf of the Company Shareholders, Sybase, and the Escrow
Agent in form approved to the parties thereto with the approval of the Company
and Sybase, which approval shall not be unreasonably withheld or delayed
provided the requested change is consistent with Section 7.3 of this Agreement.
Escrow Fund is defined in Section 7.3.A, hereof.
Escrow Period is defined in Section 7.3.E.
Escrow Termination Date is defined in Section 7.1.
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Escrowed Cash is the total amount of Shareholder's Escrowed Cash which is
to be placed in the Escrow Fund under Subsection 1.2 D(2)(a)(iv) hereof.
Escrowed Shares are the aggregate amount of the Shareholder Escrowed
Shares to be places in the Escrow Fund under Subsection 1.2D(2)(a)(iv) hereof.
Exchange Act shall mean the Securities Exchange Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
Exchange Agent shall be Equi Serv or such other agent or agents as may be
appointed by the mutual agreement of Sybase and the Company prior to the
Scheduled Closing Date.
Excluded Liabilities is defined in Section 1.4.B(2).
FICA is the Federal Unemployment Contributions Act, as amended.
Financial Server Product means the Sybase "Financial Server" products,
including without limitation, the RDP and STP versions thereof as more
particularly described in attached Schedule 10.1.
FMLA shall mean the Family Medical Leave Act of 1993, as amended.
FTC is the United States Federal Trade Commission.
FUTA is the Federal Unemployment Act, as amended.
Governmental Entity means court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission.
Hazardous Material means any material or substance that has been
designated by any Governmental Entity or by applicable federal, state or local
law to be radioactive, toxic, hazardous or otherwise a danger to health or the
environment, including, without limitation, PCBs, asbestos, petroleum, and
urea-formaldehyde and all substances listed as hazardous substances pursuant to
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, or defined as a hazardous waste pursuant to the United States
Resource Conservation and Recovery Act of 1976, as amended, and the regulations
promulgated pursuant to said laws or otherwise a danger to health or the
environment.
Hazardous Materials Activities is defined in Section 2.20.B.
HSR Act is the Hart-Scott-Rodino Act of 1976, as amended.
Information Technology shall mean and include all software, hardware,
firmware, telecommunications systems, network systems, embedded systems and
other systems, components and/or services (other than general utility services
including gas, electric, telephone and postal) that
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are owned or used by the Company or any of its subsidiaries in the conduct of
its business, or purchased by the Company or any of its subsidiaries from third
party suppliers.
Intellectual Property shall mean any or all of the following (i) works of
authorship including, without limitation, computer programs, source code and
executable code, whether embodied in software, firmware or otherwise,
documentation, designs, files, records, data and mask works, (ii) inventions
(whether or not patentable), improvements, and technology, (iii) proprietary and
confidential information, trade secrets and know how, (iv) databases, data
compilations and collections and technical data, (v) logos, trade names, trade
dress, trademarks and service marks, (vi) domain names, web addresses and sites,
(vii) tools, methods and processes, and (viii) all instantiations of the
foregoing in any form and embodied in any media.
Intellectual Property Rights shall mean worldwide common law and statutory
rights associated with (i) patents and patent applications, (ii) copyrights,
copyrights registrations and copyrights applications and "moral" rights, (iii)
the protection of trade and industrial secrets and confidential information,
(iv) other proprietary rights relating to intangible intellectual property, (v)
trademarks, trade names and service marks, (vi) analogous rights to those set
forth above, and (vii) divisions, continuations, renewals, reissuances and
extensions of the foregoing (as applicable).
Interim Financials is defined in Section 2.7.
IRS shall mean the United States Internal Revenue Service.
Key Employees are Daniel M. Schley and Eric Jacobsen.
Knowledge means, with respect to any entity, the facts and circumstances
that are known, or should reasonably be deduced from other facts and
circumstances known, to the officers, directors, and managers of the Entity
(including, without limitation, the Principal Shareholders in the case of the
Company).
Legal Requirement means the laws, statutes, rules, ordinances,
regulations, permits, approvals, requirements, and obligations to any
Governmental Entity or arising under any legally binding contract, covenant,
condition or restriction.
Liabilities or Liability means (or when used with reference to a single
item described below, Liability means) any and all debts, liabilities and
obligations (whether pecuniary or not, including without limitation obligations
to perform or forbear from performing acts or services), fines or penalties,
whether accrued or fixed, absolute or contingent, matured or unmatured,
determined or determinable, known or unknown, including without limitation those
arising under any law, action or governmental order, liabilities for Taxes and
those arising under any contract, agreement, arrangement, commitment or
undertaking of any kind whatsoever (whether written or oral, express or
implied).
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Liens means any lien, claim, transfer restriction, deed of trust,
mortgage, security interest, or encumbrance.
Loss means and includes any and all Liabilities, losses, damages, claims,
expenses, costs, fines, fees, penalties, obligations, or injuries (including,
without limitation, those resulting from any and all claims, actions, suits,
demands, assessments, investigations, judgments, orders, awards, arbitrations,
settlements or other proceedings), together with all attorneys' fees, experts'
fees, court costs, arbitration costs, filing fees, and other costs and expenses
relating thereto and interest accrued on each of the foregoing amounts from the
date the same was incurred at the lower of (i) the prime rate charged from time
to time by the Bank of America, NT&SA, or (ii) the highest rate of interest
permitted under applicable law.
Management Employment Agreements are those agreements executed
concurrently herewith by the Key Employees, as the same may be amended prior to
the Effective Time with the mutual written consent of Sybase and the individual
executing same.
Material Adverse Effect is a fact or circumstance which has had or is
reasonably likely to have a material adverse effect on the business assets
(including intangible assets), conditions (financial or otherwise), results of
operations and capitalization of the referenced entity and its subsidiaries,
taken as a whole.
Maximum Cash Percentage means the lesser of (i) 19.25%, or (ii) the
maximum percentage of cash that may be paid by Sybase in consideration of the
Company Capital Stock in the Merger in order to qualify for treatment of the
Merger as a tax-free reorganization under Section 368(a) of the Code.
Merger is defined in Section 1.2.A.
Merger Exchange Ratio means a fraction the numerator of which is 80.75% of
the Company Share Value and the denominator of which is the Sybase Share Value,
as more particularly demonstrated in the example attached hereto as Exhibit E.
Net Stock Pool means that number of shares of Sybase Common Stock equal to
(a) the Total Stock Pool, as adjusted in accordance with Subsection
1.2.A(2)(a)(iii), minus (b) the Warrant and Vested Option Pool.
Notice of Objection is defined in Section 7.3.E(5).
Officer's Certificate means a certificate signed by any officer of Sybase
or the Company Shareholder Representative, as the case may be: (i) stating that
Sybase or the Company Shareholders, as the case may be, have paid, incurred or
properly accrued or reasonably anticipates that it will have to pay, incur or
accrue Losses or Liabilities, and (ii) specifying in reasonable detail the
individual items of Losses or Liabilities included in the amount so stated, the
date each such item was paid, incurred or properly accrued, or the basis for
such anticipated liability, and the nature of
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the misrepresentation, breach of warranty or covenant to which such item is
related, or, with respect to Losses and Liabilities determined in accordance
with the terms of Section 7.3.E(8), stating that such matters have been so
adjudicated and including a copy of the Adjusted Balance Sheet
Option Plans are those Option Plans of the Company described in Section
2.3 of the Disclosure Letter, as the same are amended as of the date of this
Agreement or amended after the date of this Agreement with the prior written or
electronic mail consent of Sybase.
Option Unit is defined in Section 1.2.D(2)(c)(i).
Ordinary Course of the Company's Business shall mean the conduct of the
business of the Company and its subsidiaries in the usual, regular, and ordinary
course as conducted prior to the Current Balance Sheet Date.
Ordinary Course of Sybase's Business shall mean the conduct of by Sybase
of its business involving the Financial Server Product in the usual, regular,
and ordinary course, as currently conducted.
PBGC shall mean the United States Pension Benefit Guaranty Corporation.
Pension Plan shall mean each Company Employee Plan, that is an "employee
pension benefit plan," within the meaning of Section 3(2) of ERISA.
Permitted Liens means Liens for taxes not yet due and payable, Liens to
secure Liabilities disclosed on the Current Balance Sheet, and non-monetary
Liens which do not adversely affect the use of the encumbered property for the
Conduct of the Company's Business or the Conduct of Sybase's Business, as the
case may be.
Prorata Portion of Escrow Fund means, for any Company Shareholder and any
Shareholder's Escrowed Shares in the Escrow Fund, a fraction, the numerator of
which is the initial number of Shareholder's Escrowed Shares for such Company
Shareholder and the denominator of which is the total number of Escrowed Shares
initially placed in the Escrow Fund by all Company Shareholders and, with
respect to such Company Shareholder and any Shareholder's Escrowed Cash, a
fraction, the numerator of which is the initial amount of Shareholder's Escrowed
Cash for such Company Shareholder and the denominator of which is the amount of
Escrowed Cash initially placed in the Escrow Fund by all Company Shareholders.
PTO is the United States Patent and Trademark Office.
Registered Intellectual Property Rights shall mean all United States,
international and foreign: (i) patents, including applications therefor; (ii)
registered trademarks, applications to register trademarks, including
intent-to-use applications, or other registrations or applications related to
trademarks; (iii) copyrighted works registrations and applications to register
Copyrights; (iv) mask work registrations and applications to register mask
works; and (v) any other Intellectual Property
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that is the subject of an application, certificate, filing, registration or
other document issued by, filed with, or recorded by, any state, government or
other public or private legal authority (including without limitation, the PTO
or any foreign equivalent) at any time.
Remaining Escrow Fund is defined in Sections 7.3.E.
Reseller Agreement is an agreement in the form mutually approved by Sybase
and a majority of the Surviving Corporation Board of Directors.
Returns is defined in Section 2.10.A(1).
Scheduled Closing Date is (i) December 31, 1999, if the conditions set
forth in Article 6 have been satisfied or waived by said date, or (ii) if such
conditions have not be satisfied or waived, then the first date immediately
following satisfaction or waiver of such conditions that is a month-end closing
date for Sybase's financial accounting or such earlier date following
satisfaction or waiver of said conditions as Sybase shall select.
SEC means the Securities Exchange Commission of the United States.
Securities Act shall mean the Securities Act of 1934, as amended and the
rules and regulations promulgated by the SEC thereunder.
Shareholder Agreement is an agreement in the form of attached Exhibit G,
as the same may be amended with the written agreement of Sybase and the Board of
Directors of the Company prior to the Closing, which shall be executed by each
of the Company Shareholders who will receive Sybase Common Stock, or a warrant
to acquire Sybase Common Stock, in connection with the Merger.
Shareholder's Escrowed Cash, for any Company Shareholder, means (a) 7.5%
times (b) the total amount of cash to be distributed to said Shareholder with
respect to all of its Company Outstanding Stock pursuant to Subclause
1.2.D(2)(a)(i)(2) hereof.
Shareholder's Escrowed Shares, for any Company Shareholder, means (a) 7.5%
times (b) the total number of shares of Sybase Common Stock to be distributed to
said Shareholder with respect to all of its Company Outstanding Stock pursuant
to Subclause 1.2.D(2)(a)(i)(1) hereof, rounded up to the nearest whole share.
Solicitation Materials is defined in Section 1.5.
Surviving Corporation is defined in Section 1.2.A.
Surviving Corporation Common Stock means the shares of common stock of the
Surviving Corporation established pursuant to the Certificate of Incorporation
of the Surviving Corporation.
Sybase Common Stock shall mean shares of the common stock of Sybase.
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Sybase Disclosure Letter is defined in the preamble of Article 3.
Sybase Indemnified Parties is defined in Section 7.2.
Sybase License Agreement is an agreement in the form mutually approved by
Sybase and a majority of the Surviving Corporation Board of Directors.
Sybase Material Adverse Effect is defined in Section 3.1.
Sybase Share Value is equal to $13.90625
Sybase Tax Value means the value of one share of Sybase Common Stock as of
the Effective Time or the purposes of, and as measured in accordance with,
Section 368(a) of the Code.
Taxes means (i) any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts,
(ii) any liability for the payment of any amounts of the type described in
clause (i) of this definition as a result of being a member of an affiliated,
consolidated, combined or unitary group for any period, and (iii) any liability
for the payment of any amounts of the type described in clauses (i) or (ii) of
this definition as a result of any express or implied obligation to indemnify
any other person or as a result of any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.
Third Party Expenses are defined in Section 5.4.
Total Cash Pool is $25,915,794, subject to any adjustment required by
Subsection 1.2.D(2)(a)(iii) hereof.
Total Stock Pool is 7,817,471 shares of Sybase Common Stock, subject to
any adjustment required by Subsection 1.2.D(2)(a)(iii) hereof.
Transaction Documents are this Agreement and the Ancillary Agreements.
Transactions shall mean the Merger and the other transactions anticipated
to be performed on or before the Effective Time pursuant to this Agreement
and/or any Ancillary Agreements.
Voting Agreements are those agreements in the form of attached Exhibit F,
executed concurrently herewith by the Principal Shareholders, Elizabeth
Jacobsen, and the holders of a majority in interest of each class of Company
Capital Stock.
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Warrant and Vested Option Pool means that aggregate number of shares of
Sybase Common Stock equal to (i) the Merger Exchange Ratio, times (ii) the sum
of the Company Warrant Shares plus the Company Vested Option Shares.
Warrant Unit is defined in Subsection 1.2.D(2)(b)(i).
Year 2000 Compliant is defined in Section 2.13.P.
Year-End Financials is defined in Section 2.7.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, Sybase, the Company, the Principal Shareholders,
have caused this Agreement to be signed, and the Escrow Agent and the Company
Shareholder Representative have acknowledged and agreed to perform the
obligations on their part to be performed pursuant to this Agreement, all as of
the date first written above.
"SYBASE" "COMPANY"
SYBASE, HOME FINANCIAL NETWORK, INC.,
a Delaware corporation a Delaware corporation
By: /s/ John S. Chen By: /s/ Daniel M. Schley
------------------------------------ -----------------------------
Name: John S. Chen Name: Daniel M. Schley
------------------------------------ -----------------------------
Its: Chairman, President, CEO Its: Chairman & CEO
------------------------------------ -----------------------------
By: /s/ Daniel R. Carl By: /s/ Eric T. Jacobsen
------------------------------------ -----------------------------
Name: Daniel R. Carl Name: Eric T. Jacobsen
------------------------------------ -----------------------------
Its: Vice Pres., General Counsel & Sec. Its: President & COO
------------------------------------ -----------------------------
"PRINCIPAL SHAREHOLDERS"
/s/ Daniel M. Schley
- ------------------------------------------
Daniel M. Schley, individually
/s/ Eric Jacobsen
- ------------------------------------------
Eric Jacobsen, individually
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ACKNOWLEDGED AND AGREED:
"COMPANY SHAREHOLDER REPRESENTATIVE"
/s/ Daniel M. Schley
- ------------------------------------------
Daniel M. Schley
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<PAGE> 85
EXHIBIT A
TO AGREEMENT & PLAN OF REORGANIZATION
OPINIONS OF COUNSEL FOR COMPANY AND PRINCIPAL SHAREHOLDERS
1. The Company is a corporation duly organized, validly existing and in
corporate and tax good standing under the laws of the jurisdiction of its
incorporations, and has the corporate power and authority to own, operate and
lease its properties and carry on its business as now conducted. The Company has
represented to us that the only states in which it maintains assets or employees
are _____________, ______________, ____________ and _______________ and it is
our opinion that the Company is duly qualified to do business and is in good
standing as a foreign corporation in each of the aforesaid jurisdictions.
2. The authorized, issued and outstanding capitalization of the Company
immediately prior to the Closing of the Merger consists only of the following:
[Insert all common and preferred stock, warrants, and options]
3. All outstanding shares of the Company's Capital Stock are duly
authorized, validly issued, fully paid and non-assessable and, except as set
forth in Section ____ of the Company Disclosure Letter, are not subject to
preemptive rights created by statute, the Certificate of Incorporation or Bylaws
of the Company or any agreement to which the Company is a party or by which it
is bound. We did not act as counsel for those issuances.
4. To our knowledge, the Company Capital Stock is held of record by the
persons and in the amounts set forth on Sections _____ of the Company Disclosure
Letter, [except that].
5. Except for the Company Options and Company Warrants and those matters
described in Section ____ of the Company Disclosure Letter, there are to our
knowledge, no options, warrants, calls, rights, commitments or agreements of any
character, written or oral, to which the Company is a party or by which it is
bound, obligating the Company to issue, deliver, sell, repurchase or redeem, or
cause to be issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company and, except as expressly contemplated by the
Agreement or as set forth in the Company Disclosure Letter, there are to our
knowledge no rights, commitments or agreements of any character, written or
oral, to which the Company is a party or by which it is bound obligating the
Company to grant, extend, accelerate the vesting of, change the price of,
<PAGE> 86
otherwise amend or enter into any such option, warrant, call, right, commitment
or agreement.
6. The Company has reserved ______ shares of Common Stock for issuance
to employees and consultants pursuant to [ Stock Option Plan ], of which
________ shares are subject to outstanding, unexercised option ("Company
Options") and _______ shares remain available for future grant.
7. The Company has reserved ________ shares of Common Stock for issuance
upon exercise of the Company Warrants.
8. To our knowledge, neither the Company nor any of its subsidiaries
holds any shares of the Company Capital Stock in its treasury.
9. Pursuant to the terms of the Certificate of Incorporation of the
Company, except as set forth in Exhibit [appraisal rights], the holders of the
Company's outstanding Capital Stock have duly elected to receive in the Merger,
for their shares of Capital Stock, the consideration described in Section 1.2.D
of the Reorganization Agreement.
10. The consideration to be received by the holders of Company Options
and Company Warrants pursuant to Section 1.2.D of the Reorganization Agreement,
upon exercise of the Sybase Options and Warrants, is the same kind and amount
such holders would have received, if they had exercised their Company Options
and Company Warrants prior to the Effective Time.
11. The Company has delivered to each holder of the Company Capital
Stock all notices and information concerning the Merger required by the
Company's Certificate of Incorporation or By-Laws, or by applicable corporate
and securities laws and, [except as described on attached Exhibit [appraisal
rights], all holders of the Company's Capital Stock have waived any appraisal,
dissenters, and similar rights with respect to the Merger and, as of the
Effective Time, all such rights will have terminated.
12. The Company has no subsidiaries other than [ insert name ], which is
incorporated in [ state/country ] and, to our knowledge, the Company has never
had any other subsidiaries or affiliated companies and does not otherwise own
and has never otherwise owned any shares of capital stock or any interest in, or
controlled, directly or indirectly, any other corporation, partnership,
association, joint venture or other business entity.
13. The Company has taken all requisite corporate action to approve and
adopt the Reorganization Agreement, the Ancillary Agreements, the Certificate of
Merger and [the other documents to which it is a party related thereto]
(collectively the "Transaction Documents") and to approve and to authorize the
carrying out of the transactions contemplated thereby.
<PAGE> 87
14. The Company has full corporate power and authority to execute,
deliver and perform its obligations under the Transaction Documents and the
Transaction Documents have been duly executed and delivered by the Company and
constitute legal, valid, binding, and enforceable obligations of the Company.
15. The Merger shall be legally effective and binding upon the Company
under Delaware law upon the filing of the Certificate of Merger.
16. The execution, delivery and performance of the Transaction Documents
by the Company and the carrying out of the transactions contemplated thereby
will not be in conflict with or constitute a breach, violation or default (or
upon the failure to give notice or the lapse of time, or both, result in any
conflict with or breach, violation or default) under the Company's Certificate
of Incorporation or its By-Laws, or to our knowledge under any statute, rule,
regulation, judgment, decree, order, governmental permit or license applicable
to the Company, or to our knowledge under any agreement, lease, indenture or
instrument listed in the Company Disclosure Letter and to which the Company is a
party or by which the Company or its assets or property is subject.
Based on the responses to [questionnaires of Company Shareholders in the
form of attached hereto as Exhibit ____], no more than thirty five (35) of the
holders of the Company Common Stock and/or Company Preferred Stock are at the
Effective Time unaccredited investors within the meaning of Section (a) of
Regulation D, Rule 501 of the Securities Act, and (b) each holder of either
Company Capital Stock, who is not an accredited investor within the meaning of
Section (a) of Regulation D, Rule 501 of the Securities Act has been represented
by a duly authorized "purchaser representative," as defined in Section (h), of
Regulation D, Rule 501 of the Securities Act. We have no knowledge that such
responses are untrue.
17. We do not represent the Company or any of its officers, directors,
employees or shareholders in, and we have no knowledge of, any suit, action or
legal, administrative, arbitration or other proceeding or governmental
investigation pending or, to our knowledge, threatened to which the Company or
its assets or properties is a party, except as described in Exhibit ____.
18. There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court of any regulatory authority or
other governmental body (either foreign or domestic) required for the
consummation of the Company of the transactions contemplated by the Transaction
Documents that has not been obtained, except for (i) such consents, approvals,
orders, authorizations, registrations or qualifications as may be required under
state securities or Blue Sky laws in connection with the offer and issuance of
Sybase Common Stock pursuant to the Merger, (ii) acceptance for filing of the
Certificate of Merger, and (iii) [other].
19. The Reorganization Agreement, the [Employment Agreements], and [the
other documents to which a Principal Shareholder is a party related thereto]
(collectively the "Principal Shareholder Transaction Documents") have been duly
executed and
<PAGE> 88
delivered by each Principal Shareholder and constitute the legal, valid,
binding, and enforceable obligations of said Principal Shareholder.
20. To our knowledge, the execution, delivery and performance of the
Principal Shareholder Transaction Documents by the Principal Shareholders and
the carrying out of the transactions contemplated thereby will not be in
conflict with or constitute a breach, violation or default (or upon the failure
to give notice or the lapse of time, or both, result in any conflict with or
breach, violation or default) under any statute, rule, regulation, judgment,
decree, order, governmental permit or license applicable to the Principal
Shareholders.
21. We do not represent the Principal Shareholders in, and we have no
knowledge of, any suit, action or legal, administrative, arbitration or other
proceeding or governmental investigation pending or, to our knowledge,
threatened to which the Principal Shareholders is a party which seeks to
prohibit, restrain or enjoin the transactions contemplated by the Principal
Shareholder Transaction Documents, except as described in Exhibit ____.
22. There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court of any regulatory authority or
other governmental body (either foreign or domestic) required for the
consummation by the Principal Shareholders of the transactions contemplated by
the Principal Shareholder Transaction Documents that has not been obtained,
except for (i) such consents, approvals, orders, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky laws in
connection with the offer and issuance of Sybase Common Stock pursuant to the
Merger, and (ii) [other].
<PAGE> 89
EXHIBIT B
TO AGREEMENT & PLAN OF REORGANIZATION
LEGAL OPINIONS BY COUNSEL FOR SYBASE
1. Sybase is a corporation validly existing and in good standing under the
laws of the State of California and has the corporate power and authority to
own, operate and lease its properties and carry on its business as now
conducted.
2. Merger Sub is a corporation validly existing and in good standing under
the laws of the State of Delaware; all of the outstanding shares of capital
stock of Merger Sub is validly issued, fully paid, non-assessable, and
registered in the name of Sybase.
3. Each of Sybase and Merger Sub has taken all requisite corporate action
to approve and adopt the Reorganization Agreement, the Ancillary Agreements, and
[the other documents] to which it is a party related thereto] (collectively the
"Transaction Documents"), and has full corporate power and authority to execute,
deliver, and perform its obligations under the Transaction Documents.
4. Merger Sub has taken all requisite corporate action to approve and
adopt the Certificate of Merger and the [assignment and assumption of Employment
Agreements] (collectively the "Merger Sub Documents"), and has full corporate
power and authority to execute, deliver, and perform its obligations thereunder.
5. The Transaction Documents have been duly executed and delivered by each
of Sybase and Merger Sub and constitute the legal, valid, binding, and
enforceable obligations of each of Sybase and Merger Sub.
6. The Merger Sub Documents have been duly executed and delivered by
Merger Sub and constitutes the legal, valid, binding, and enforceable obligation
of Merger Sub.
7. The Merger shall be legally effective and binding upon Merger Sub under
the Delaware law upon the filing of the Certificate of Merger.
8. The shares of Sybase Common Stock, the Sybase Warrants and the Sybase
Options to be delivered in exchange for shares of Company Capital Stock will,
when issued as contemplated by the Reorganization Agreement be validly issued,
fully paid and non-assessable.
9. Based on the responses to [questionnaires attached hereto as Exhibit
], the shares of Sybase Common Stock, the Sybase Warrants and the Sybase
Options to be issued and delivered to holders of the Company Capital Stock in
the Merger, when issued
<PAGE> 90
in accordance with the Reorganization Agreement, will be exempt from
registration under Section 5 of the Securities Act of 1933, as amended (the
"Securities Act") on the bases of the exemptions therefrom pursuant to
___________________ of the Securities Act and the administrative and judicial
interpretations thereunder.
10. The execution, delivery and performance of the Transaction Documents
by Sybase and Merger Sub, the execution and delivery of the Merger Sub Documents
by Merger Sub, and the carrying out of the transactions contemplated thereby to
be carried out by Sybase and Merger Sub will not be in conflict with or
constitute a breach, violation, or default (or upon the failure to give notice
or the lapse of time, or both, result in any conflict with or breach, violation
or default) under the Certificate of Incorporation of Sybase or Merger Sub, nor
their By-Laws, or to our knowledge, any statute, rule or regulation, judgment,
decree, order, governmental permit or license applicable to Sybase or Merger Sub
which would have a material adverse effect on the ability of Sybase and Merger
Sub to carry out their obligations under the Transaction Documents and the
Merger Sub Documents.
11. We do not represent Sybase or Merger Sub in, and we have no knowledge
of, any suit, action or legal, administrative, arbitration or other proceeding
or governmental investigation pending or, to our knowledge, threatened to which
the Sybase or Merger Sub is a party which seeks to prohibit, restrain or enjoin
the transactions contemplated by the Transaction Documents or the Merger Sub
Documents, except as described in Exhibit ____.
12. There is no consent, approval, authorization, order, registration,
qualification or filing of or with any court or any regulatory authority or
other governmental body (either foreign or domestic) required by the
consummation by Sybase or Merger Sub of the transactions contemplated by the
Transaction Documents and the Merger Sub Documents that has not been obtained,
except for (i) acceptance for filing of the Certificate of Merger, (ii) the
filing of a Notice on Form D with the Securities and Exchange commission within
15 days following the Closing, and (iii) such consents, approvals, orders,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the offer and sale of Sybase
Common Stock, Sybase Warrants, and/or Sybase Options pursuant to the Merger.
<PAGE> 91
EXHIBIT C
Deleted
<PAGE> 92
EXHIBIT D
Deleted
<PAGE> 93
EXHIBIT E TO AGREEMENT PLAN OF REORGANIZATION - AGGREGATE
MERGER CONSIDERATION EXAMPLE
<TABLE>
<CAPTION>
DEFINITION CALCULATION RESULT
---------- ----------- ------------
1. Assumptions
<S> <C> <C>
Aggregate Merger Consideration $130,000,000
Shady Lane Share Value $ 13.90625
Company Outstanding Stock 20,403,193
Company Warrant Shares 813,167
Company Warrant Exercise Proceeds $ 2,183,501
Company Vested Option Shares 1,201,750
Company Vested Option Exercise Proceeds $ 2,444,000
2. The Treasury Method takes into account that the
proceeds to SL realized in the exercise of warrants
and vested options accrue to the benefit of Company
shareholders, warrant and option holders via merger
consideration.
Gross Consideration Aggregate Merger Consideration $130,000,000
plus: Company Warrant Exercise Proceeds $ 2,183,501
plus: Company Vested Option Exercise Proceeds $ 2,444,000
------------
Gross Consideration $134,627,501
Total Cash Pool Gross Consideration $134,627,501
times: Cash Percentage 19.25%
------------
Total Cash Pool $ 25,915,794
Total Stock Pool Gross Consideration $134,627,501
less: Total Cash Pool $ 25,915,794
------------
$108,711,707
divided by: Shady Lane Share Value $ 13.90625
------------
Total Stock Pool 7,817,471
3. Consideration "per share"
Effective Company Share Price Gross Consideration $134,627,501
divided by: all company shares, warrants and
vested options....
Company Outstanding Stock 20,403,193
Company Warrant Shares 813,167
Company Vested Option Shares 1,201,750
------------
All company shares, warrants,
vested options 22,418,110
Effective Company Share Price $ 6.005
Cash per Company Share Effective Company Share Price $ 6.005
times: Cash Percentage 19.25%
------------
Cash per Company Share $ 1.156
Merger Exchange Ratio Effective Company Share Price $ 6.005
less: Cash per Company Share $ 1.156
------------
$ 4.849
divided by: Shady Lane Share Price $ 13.90625
------------
Merger Exchange Ratio 0.3487
</TABLE>
<PAGE> 94
EXHIBIT E TO AGREEMENT PLAN OF REORGANIZATION - AGGREGATE
MERGER CONSIDERATION EXAMPLE
<TABLE>
<CAPTION>
4. Other Pool Definitions
<S> <C> <C>
Warrant and Vested Option Pool Company Warrants 813,167
Company Vested Options 1,201,750
------------
Total 2,014,917
times: Merger Exchange Ratio 0.3487
Warrant and Vested Option Pool 702,626
Net Share Pool Total Stock Pool 7,817,471
less: Warrant and Vested Option Pool 702,626
------------
Net Share Pool 7,114,845
EACH COMMON AND PREFERRED SHARE AGGREGATE VALUE
CONVERTS TO: AT SL SHARE PRICE
A number of shares of SL stock equal 7,114,845 a. Company Outstanding Shares, times $ 98,940,809
to the Merger Exchange Ratio b. Adjusted Merger Exchange Ratio
Cash equal to Cash per Company Share $1.156 a. Company Outstanding Shares, times $ 23,586,509
b. Cash per Company Share
------------
Gross/Net Shareholder Consideration $122,527,318
------------
EACH WARRANT CONVERTS TO:
A number of shares of SL stock equal 283,561 a. Company Warrant Shares, times $ 3,943,275
to the Merger Exchange Ratio b. Adjusted Merger Exchange Ratio
Cash equal to Cash per Company Share $1.156 a. Company Warrant Shares, times $ 940,038
b. Cash per Company Share
------------
Gross Warrant Consideration $ 4,883,313
------------
less: Company Warrant Exercise Proceeds $ (2,183,501)
-----------
Net Warrant Holder Consideration $ 2,699,812
------------
EACH VESTED OPTION CONVERTS TO:
A number of shares of SL stock equal 419,065 a. Company Vested Option Shares, times $ 5,827,623
to the Merger Exchange Ratio b. Adjusted Merger Exchange Ratio
Cash equal to Cash per Company Share $1.156 a. Company Vested Option Shares, times $ 1,389,248
b. Cash per Company Share ------------
Gross Vested Option Consideration $ 7,216,871
------------
less: Company Vested Option Exercise Proceeds $ (2,444,000)
------------
Net Vested Option Holder Consideration $ 4,772,871
------------
- ---------------------------------------------------------------------------------------------------------------------------
Aggregate Merger Consideration $130,000,000
===========================================================================================================================
ESCROW CALCULATION
Shares to Shareholders 533,613
Shares reserved for Warrant Holders 21,267
----------
Total Shares 554,880
Cash to Shareholders $1,768,988
Cash reserved for Warrant Holders $ 70,503
----------
Total Cash $1,839,491
</TABLE>
<PAGE> 95
EXHIBIT F
TO AGREEMENT & PLAN OF REORGANIZATION
VOTING AGREEMENT
This Voting Agreement (this "Voting Agreement") is made and entered into
as of _______________ (the "Effective Date") between Sybase, Inc., a Delaware
corporation ("Sybase"), and the undersigned shareholder (the "Shareholder") of
Home Financial Network, Inc., a Delaware corporation (the "Company" or
"Surviving Corporation").
RECITALS
A. This Voting Agreement is entered into pursuant to that certain
Agreement and Plan of Reorganization dated as of November 29, 1999, as such may
be amended (the "Reorganization Agreement"), entered into by and among Sybase,
the Company, On-Line Financial Services, Inc., a Delaware corporation ("Merger
Sub") which will survive the Merger under the Reorganization Agreement, and
certain principal shareholders of the Company. The Reorganization Agreement
provides for (i) the formation of Merger Sub, as a wholly-owned subsidiary of
Sybase, and the statutory merger of the Merger Sub with and into the Company
(the "Merger"); and (ii) the conversion of all capital stock of the Company
(including without limitation all options, warrants, debt and other securities
convertible, exchangeable or convertible into Company capital stock) as capital
stock and options and warrants to acquire Sybase Capital Stock, in consideration
for issuance to Sybase of the capital stock of the surviving corporation in the
Merger, all as more fully described, defined, and specified in the
Reorganization Agreement, a copy of which is attached to this Voting Agreement.
Capitalized terms used herein and not defined herein shall have the meanings
that such terms have in the Reorganization Agreement.
B. As a condition to the willingness of the parties to enter into the
Reorganization Agreement, each of them have required that the undersigned
Shareholder agree, and in order to induce the parties to the Reorganization
Agreement the undersigned Shareholder has agreed, to enter into this Voting
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. VOTING OF COMPANY SECURITIES.
A. Definitions. Attachment 1 hereto sets forth all shares of capital
stock and any other securities of The Company owned by Shareholder, including
all securities of the Company as to which Shareholder has sole or shared voting
or investment power, and all rights, options and warrants to acquire shares of
capital stock or other securities of the Company granted to or held by
Shareholder (such shares of the Company capital stock, other securities of the
Company and rights, options and warrants to acquire shares of the Company
capital stock and other securities of the Company are hereinafter collectively
referred to as "Company Stock"). As used herein, the term "New Company
Securities" means, collectively, any and all shares of Company capital stock,
other securities of Company, and rights, options and warrants to acquire shares
of Company capital stock and other securities of the Company, that Shareholder
may purchase or otherwise acquire any
-1-
<PAGE> 96
interest in (whether of record or beneficially), on and after the Effective Date
of this Voting Agreement and prior to the Expiration Date (as defined below).
All New Company Securities will be subject to the terms of this Voting Agreement
to the same extent and in the same manner as if they were Company Stock. The
Company Stock and the New Company Securities shall be collectively referred to
herein as the "Company Securities". As used herein, the term "Expiration Date"
means the earliest to occur of (i) the closing, consummation and effectiveness
of the Merger and other transactions to be consummated on or before the
Effective Time under the Reorganization Agreement, or (ii) such time as the
Reorganization Agreement is terminated in accordance with its terms.
B. Voting Agreement. Shareholder hereby agrees with Sybase, Merger
Sub, the Surviving Corporation, the Company and the principal shareholders of
the Company who are parties to the Reorganization Agreement, that, prior to the
Expiration Date, at any meeting of the shareholders of Company however called,
and in any written action by consent of shareholders of Company, unless
otherwise directed in writing by Sybase, Shareholder shall vote the Company
Securities:
(1) in favor of the Merger and the other transactions anticipated
by the Reorganization Agreement, the execution and delivery by the Company of
the Reorganization Agreement and the adoption and approval of the terms thereof
and in favor of each of the other actions contemplated by the Reorganization
Agreement and any action required in furtherance hereof and thereof; and
(2) against the following actions (other than those actions that
relate to the Merger and the transactions contemplated by the Reorganization
Agreement): (A) any merger, consolidation or other business combination
involving the Company or any subsidiary of the Company with any party other than
Merger Sub, Sybase, or any of their respective affiliates; (B) any sale, lease
or transfer of more than any significant part of the assets of the Company or
any subsidiary of the Company to any party other than Sybase, Merger Sub, the
Surviving Corporation, or any of their respective affiliates; (D) any change in
a majority of the board of directors of the Company, Merger Sub, and the
Surviving Corporation (E) any material change in the capitalization of the
Company or the Company's corporate structure other than as set forth in the
Reorganization Agreement; or (F) any other action which is intended, or could
reasonably be expected to, impede, interfere with, delay, postpone, discourage
or adversely affect the Merger or any of the other transactions contemplated by
the Reorganization Agreement or this Voting Agreement.
C. No Agreements. Prior to the Expiration Date, Shareholder shall
not enter into any agreement or understanding with any person to vote or give
instructions in any manner inconsistent with this Agreement.
D. Proxy; Further Assurances.
(1) To the fullest extent permitted by law, Shareholder, for
itself and its successors and assigns hereby appoints the Board of Directors of
the Company as its sole and exclusive proxy and attorney-in-fact, with full
power of substitution and resubstitution, to vote and to exercise all voting,
consent, and similar and related rights, including without limitation execution
-2-
<PAGE> 97
and delivery of written consents (herein "Voting Rights"), with respect to the
shares of the Company's capital stock which are identified on attached
Attachment 1 or which the Shareholder may otherwise now or hereafter directly or
beneficially own or be entitled to vote ("Shareholder's Shares") in accordance
with the terms of this Section. The attorney-in-fact and proxy are hereby
empowered until the earlier to occur of (a) such date and time as the
Reorganization Agreement shall have been validly terminated pursuant to Article
8 thereof, or (b) such date and time as the Merger shall become effective in
accordance with the terms and provisions of the Reorganization Agreement (the
"Expiration Date") to exercise such Voting Rights of the Shareholder's Shares at
every annual, special or adjourned meeting of shareholders of the Company and in
every written consent in lieu of such meeting, to the fullest extent Shareholder
would be entitled to do, in favor of: approval of the Merger, the execution and
delivery by the Company of the Reorganization Agreement, the adoption and
approval of the terms thereof, and the other actions contemplated by the
Reorganization Agreement or required in furtherance hereof and thereof. The
Shareholder hereby retains, and the attorney-in-fact and proxy may not, exercise
the Voting Rights of the Shareholder's Shares on any matter, other than as set
forth in this Section. In furtherance hereof, Shareholder hereby revokes any and
all prior proxies given by the Shareholder with respect to Shareholder's Shares
and agrees not to grant any subsequent proxies with respect to the Shareholder's
Shares or take any other action inconsistent with the rights herein granted to
the attorney-in-fact and proxy. This proxy is irrevocable (to the fullest extent
permitted by law), is coupled with an interest and binding upon the successors
and assigns of the Shareholder's Shares, and is granted in consideration of
Sybase's entering into the Reorganization Agreement.
(2) Shareholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in
Frederic J. Marx, Esq. of Hemenway & Barnes, 60 State Street, Boston,
Massachusetts 02109, (617) 557-9717, the power to carry out and give effect to
the provisions of this Voting Agreement.
2. NO SOLICITATION. Shareholder covenants and agrees with Sybase, the
Company and the Surviving Corporation that, during the period commencing on the
date of this Voting Agreement and ending on the Expiration Date, Shareholder
shall not, directly or indirectly, (i) solicit or initiate discussions or engage
in negotiations with any person, or take any action intended, designed or
reasonably likely to facilitate the efforts of any person relating to the
possible acquisition of the Company (whether by way of merger, purchase of its
capital stock, purchase of assets or otherwise) or any material portion of its
capital stock or assets ("Acquisition Proposal"), (ii) furnish any nonpublic
information regarding the Company to any person in connection with or in
response to an Acquisition Proposal or potential Acquisition Proposal; (iii)
engage in discussions with any person with respect to any Acquisition Proposal;
(iv) approve, endorse or recommend any Acquisition Proposal in Shareholder's
capacity as a shareholder; or (v) enter into any letter of intent or other
similar document or any contract contemplating or otherwise relating to any
Acquisition Proposal. Shareholder shall immediately cease any existing
discussions or other communications with any persons other than Sybase and
Merger Sub that relate to any Acquisition Proposal.
3. OBLIGATIONS AS A DIRECTOR AN/OR OFFICER OF HOME FINANCIAL NETWORK,
INC. If at any time prior to the Expiration Date Shareholder or a representative
of Shareholder is a member of the Board of Directors of the Surviving
Corporation ("Director") or an officer of the Surviving Corporation, nothing in
this Agreement shall limit or restrict the Director or
-3-
<PAGE> 98
officer in acting in his capacity as a Director or officer, as the case may be,
of the Company and in the exercise of his fiduciary duties and responsibilities
in such capacity, it being agreed and understood that this Agreement shall apply
to the Shareholder solely in his or its capacity as a shareholder (or as the
general partner of a partnership which is a shareholder) and shall not apply to
the Director's or officer's actions, judgments or decisions as a Director or
officer of the Company.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAREHOLDER.
A. Representations, Warranties and Covenants of Shareholder.
Shareholder represents, warrants and covenants as follows:
(1) Authority. Shareholder has full power and authority to enter
into, execute, deliver, and perform Shareholder's obligations under this Voting
Agreement and to make the representations, warranties and covenants herein
contained.
(2) Company Securities Owned. All the Company Stock owned by
Shareholder is, and at all times until and through the Expiration Date all the
Company Securities owned by Shareholder will be, free and clear of any rights of
first refusal, co-sale rights, security interests, liens, pledges, claims,
options, charges or other encumbrances, other than as disclosed in Section
______ of the Company Disclosure Letter to the Reorganization Agreement.
(3) Transfer Restrictions on Company Securities. Shareholder
agrees with Sybase and Merger Sub not to sell, transfer, encumber or dispose of,
or offer to sell, transfer, encumber, or dispose of any Company Securities until
the Expiration Date.
(4) Further Assurances. Shareholder agrees to execute and
deliver any additional documents reasonably necessary or desirable, in the
opinion of Sybase or Merger Sub, to carry out the purposes and intent of this
Voting Agreement.
5. MISCELLANEOUS.
A. Termination. This Voting Agreement shall be terminated and shall
be of no further force and effect upon the Expiration Date.
B. Counterparts. This Voting Agreement may be executed in any number
of counterparts, each of which will be an original as regards any party whose
signature appears thereon, and all of which together will constitute one and the
same instrument. This Voting Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all parties reflected hereon as signatories.
C. Assignment; Binding Upon Successors and Assigns. Neither party
hereto may assign any of its rights or obligations hereunder without the prior
written consent of the other party hereto. This Voting Agreement will be binding
upon the inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
-4-
<PAGE> 99
D. Waiver and Amendment. The waiver by a party of any breach hereof
or default in the performance hereof will not be deemed to constitute a waiver
of any other default or any succeeding breach or default. This Voting Agreement
may be amended by the parties hereto upon the execution and delivery of a
written agreement executed by the parties hereto.
E. Governing Law. The internal laws of the State of [Delaware]
(irrespective of its choice of law principles) will govern the validity of this
Voting agreement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto. Any litigation or
other dispute resolution proceeding among the parties relating to this Voting
Agreement will take place in Alameda County, California. The parties consent to
the personal jurisdiction of and the venue in the state and federal courts
within such county or counties.
F. Severability. If any term, provision, covenant or restriction of
this Voting Agreement (or of the Reorganization Agreement) is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Voting Agreement (or
of the Reorganization Agreement, as the case may be) will remain in full force
and effect and will in no way be affected, impaired or invalidated. The parties
further agree to replace such invalid or unenforceable term with a valid and
enforceable provision that will achieve, to the greatest extent possible, the
economic, business and other purposes of the invalid or unenforceable provision.
G. Construction of Agreement. This Voting Agreement has been
negotiated by the respective parties hereto and their attorneys and the language
hereof will not be construed for or against either party. A reference to a
Section will mean a Section in this Voting Agreement unless otherwise explicitly
set forth. The titles and headings herein are for reference purposes only and
will not in any manner limit the construction of this Voting Agreement which
will be considered as a whole.
H. Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Sybase, Merger Sub, Surviving Corporation, the Company and the
principal shareholders of the Company who are parties to the Reorganization
Agreement will be irreparably harmed, and that there will be no adequate remedy
at law for a violation of any of the covenants or agreements of Shareholder set
forth herein. Therefore it is agreed that, in addition to any other remedies
that may be available to said parties upon any such violation, each of them
shall have the right to enforce such covenants and agreements by specific
performance, injunctive relief or by any other means available to them at law or
in equity.
-5-
<PAGE> 100
IN WITNESS WHEREOF, the undersigned Shareholder has executed this
Agreement intending to be bound thereby as of the date stated below.
------------------------------------
------------------------------------
[printed name]
Date: ______________________________
-6-
<PAGE> 101
ATTACHMENT 1
SECURITIES HELD BY SHAREHOLDER
<TABLE>
<CAPTION>
Held in the
Certificate No. No. of Shares Class Name of Nature of Interest
- --------------- ------------- ----- ----------- ------------------
<S> <C> <C> <C> <C>
</TABLE>
-7-
<PAGE> 102
EXHIBIT G
TO AGREEMENT & PLAN OF REORGANIZATION
SHAREHOLDER AGREEMENT
This Shareholder Agreement (this "Agreement") is made and entered into to
be effective as of ____________________, 19__ (the "Effective Date"), by and
among Sybase, Inc., a Delaware corporation (the "Sybase"), and the warrant
holders and shareholders of Sybase identified on attached Exhibit A (each a
"Shareholder" and collectively the "Shareholders").
RECITALS
A. Pursuant to that certain Agreement and Plan of Reorganization,
dated as of November 29, 1999, among Sybase, On-Line Financial Services, Inc., a
corporation to be formed under the laws of Delaware, Home Financial Network,
Inc., a Delaware corporation, and certain of the Shareholders (herein the
"Reorganization Agreement"), the Shareholders have elected to exchange their
holdings of Broadway capital stock in return for that number of shares of Sybase
Common Stock and warrants for Sybase Common Stock specified for such holder on
attached Exhibit A, provided each Shareholder agrees in writing to the terms and
conditions set forth in this Agreement.
B. The Board of Directors of Sybase has determined that it is in
the best interest of Sybase that the rights and obligations of the Shareholders
described in this Agreement be granted to and assumed by the Shareholders.
C. In consideration for the rights herein granted, each
Shareholder is willing to grant the rights, and is willing to incur, the
obligations set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS: Capitalized terms in this Agreement shall have the
meaning ascribed to such terms in the Reorganization Agreement, except that the
following terms shall have the following meanings:
A. Business Days means a day federally chartered banks are open
for business in New York City, New York.
B. Effective Date is defined in the Preamble.
C. Form S-3 means a Form S-3 registration statement under the
Securities Act as then in effect or the successor thereto.
D. Indemnified Party is defined in Section 7.C.
<PAGE> 103
E. Public Offering means an offering of Sybase Common Stock on an
S-1 OR S-4 registration statement (or their successors) pursuant to the
Securities Act.
F. Registrable Securities means any and all shares of the Sybase
Common Stock issued to the Shareholders in connection with the Merger under the
Reorganization Agreement, any Sybase Common Stock issued to the Shareholders
upon exercise of any warrant issued by Sybase in connection with the Merger
pursuant to the Reorganization Agreement, and any Sybase Common Stock issued as
a dividend or other distribution with respect to, or in exchange for or in
replacement of, any of the said shares of Sybase Common Stock; provided,
however, that "Registrable Shares" shall not include any such shares of Sybase
Common Stock which a Shareholder elects to be registered in an offering pursuant
to Section 3, which are permitted at the election of the Shareholder to be
registered pursuant to Section 3, but are not required to be sold in connection
with such offering (whether or not the Shareholder elects to so register) or
which are permitted at the election of the Shareholder to be exchanged for
registered shares of Sybase Common Stock pursuant to Section 3 (whether or not
the Shareholder elects to so exchange such shares of unregistered Common Stock
for registered shares of Sybase Common Stock).
G. Registrable Securities Holder means any holder of record of
Registrable Securities that have not been sold pursuant to Rule 144 promulgated
under the Securities Act and any permitted assignee of record of such
Registrable Securities to whom rights under Section 6 of this Agreement have
been duly assigned in accordance with Section 7 of this Agreement.
H. Registrable Securities Holder Indemnified Party is defined in
Section 7.B.
I. Registration, Registered, and Register refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement.
J. Registration Expenses means all expenses incurred in
connection with a Registration hereunder, including, without limitation all
registration and filing fees, printing expenses, custody fees, fees and
disbursement of counsel for Sybase, "blue sky" fees and expenses, the expense of
any special audits incident to or required by any such Registration.
K. Securities Act means the Securities Act of 1933, as amended.
L. Securities Exchange Act means the Securities Exchange Act of
1934, as amended.
M. Selling Expenses, with respect to any Registration pursuant to
this Agreement, means all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and all fees and disbursements
of any counsel for the Registrable Securities Holders.
N. Shareholder and Shareholders are defined in the Preamble of
this Agreement.
O. Sybase is defined in the Preamble.
<PAGE> 104
2. S-3 REGISTRATION RIGHTS.
A. Duty to file S-3. As promptly as reasonably and commercially
possible after the Closing Date and in no event later than January 14, 2000, or
such later date as is consented to by the Shareholder Representative as defined
under the Reorganization Agreement, Sybase shall cause to be filed with the SEC
a registration statement on Form S-3 (and, to the extent applicable any related
qualification or compliance under and State "blue sky" law with respect to all
or any portion of the Registrable Securities) and shall use its reasonable best
efforts to effect such registration and all such qualifications and compliances
as are reasonably required to permit or facilitate the sale and distribution of
all the Registrable Securities as promptly as reasonably and commercially
possible after the Closing Date. Notwithstanding the foregoing, Sybase shall not
be obligated to effect any such registration, qualification or compliance
pursuant to this Section:
(i) on Form S-3, if Form S-3 (or its successor form), is not
available for such offering by the demanding Registrable Securities
Holders (but in such event the Sybase shall cause to be filed and
become effective a Form S-4 or other appropriate registration
statement in accordance with the Securities Act); or
(ii) under any "blue sky" law in any particular jurisdiction
(other than Delaware and Connecticut, Utah, and Missouri) where it
is not otherwise required to qualify to do business, if such
registration, qualification or compliance in said jurisdiction would
require Sybase to qualify to do business in such jurisdiction; or
(iii) under any "blue sky" law in any particular jurisdiction,
if such registration, qualification, or compliance in said
jurisdiction would require Sybase to execute a general consent to
service of process, which it would not otherwise be required to
execute.
B. Expenses. Sybase shall pay all Registration Expenses of a
registration statement pursuant to this Section 2, and the Registrable
Securities Holders selling Registrable Securities pursuant to the Form S-3
registration statement shall pay all Selling Expenses, incurred in connection
with any registration pursuant to this Section 2.
C. Deferral. Notwithstanding the foregoing, if Sybase shall
furnish to Registrable Securities Holders a certificate signed by the Chief
Executive Officer of Sybase stating that in the good faith judgment of the Board
of Sybase, it would be materially detrimental to Sybase and its stockholders for
such registration statement to be filed within the time allowed by this Section,
then Sybase shall have the right to defer such filing for a period of not more
than one hundred eighty (180) days to permit sale of the Registrable Securities,
so long as the directors and senior officers of Sybase are similarly prohibited
from selling their Sybase shares during such period; provided further, that in
such event the period of time that Sybase is obligated to maintain the
effectiveness of any registration statement under this Section shall be
similarly extended by the amount of such additional time allowed for the filing
and effectiveness of the registration of the
<PAGE> 105
Registrable Securities and any such deferral shall count as a suspension for the
purposes of Section 8 below.
D. Maintenance. Sybase shall maintain the effectiveness of any
Form S-3 registration statement filed under this Section until the earlier of:
(i) the date on which no Sybase Common Stock continues to be "Registrable
Securities" for the purposes of this Agreement, (ii) all Registrable Securities
then outstanding can be sold in a single three-month period pursuant to Rule 144
or (iii) the second anniversary of the Date of this Agreement. Upon demand by a
Registrable Securities Holder in connection with a proposed sale of Registrable
Securities, Sybase shall provide to the Registrable Securities Holder a legal
opinion that the Form S-3 is effective and that no further registrations of the
Registrable Securities are required in connection with a sale of the Registrable
Securities.
E. Termination of Sybase's Obligations. Sybase shall have no
obligation pursuant to this Section 6.A to maintain the effectiveness of any
Form S-3 registration beyond the second annual anniversary of the Effective Date
of this Agreement.
3. PIGGYBACK REGISTRATION RIGHTS.
A. Notification and Rights. Sybase shall notify all Registrable
Securities Holders in writing at least twenty (20) days prior to filing of a
registration statement for any S-1 or S-4 registration statement under the
Securities Act for purposes of effecting a Public Offering of Sybase Common
Stock (excluding registration statements relating to any employee benefit plan,
any merger, other corporate reorganization or other business combination), and
will afford each such Registrable Securities Holder an opportunity to include in
any offering of Sybase Common Stock pursuant to such registration statement all
or any part of the Registrable Securities which are Sybase Common Stock then
held by such Registrable Securities Holder. In addition, at its election, Sybase
may also offer to exchange Sybase Common Stock issued pursuant to any such
registration statement for any or all of the Registrable Shares held by a
Registrable Securities Holder. Each Registrable Securities Holder desiring to
include all or any part of such Registrable Securities in any offering pursuant
to such registration statement or to exchange its Registrable Securities for
registered Sybase Common Stock offered by Sybase in its discretion in exchange
for such Registrable Securities in connection with any such registration
statement shall, within fifteen (15) days after receipt of the above-described
notice from Sybase, so notify Sybase in writing, and in such notice shall inform
Sybase of the number of the Registrable Securities which are Sybase Common Stock
that such Registrable Securities Holder wishes to include in the registration
statement and/or to exchange. If a Registrable Securities Holder decides not to
include any of its Registrable Securities which are Sybase Common Stock in any
offering pursuant to any registration statement thereafter filed by Sybase and
to decline to accept any offer to exchange its Registrable Securities for
registered Sybase Common Stock issued pursuant to such registration statement,
such Registrable Securities Holder shall be deemed to have waived its rights
under this Section 3 with respect to said Registrable Securities which could
have been included in said offering or exchange for registered shares of Sybase
Common Stock. Notwithstanding the foregoing, the piggy-back rights granted
herein shall not apply to issuances, sales and exchanges (a) by and for employee
benefit plans, in connection with any merger, consolidation, corporate
reorganization, or business combination affecting Sybase, (b) by a third party
stockholder (i.e., any holder other than Sybase or its subsidiaries), or (c) if
a Form S-3
<PAGE> 106
registration with respect to such Registrable Securities is then in effect, that
amount of the Registrable Securities that would be included in the piggy-back
offering that may also be sold under said Form S-3.
The foregoing rights shall not benefit any Registrable Securities Holder
with respect to its Registrable Securities which are Sybase warrants unless and
until Sybase Common Stock is issued to such holder following valid exercises of
the Warrant.
B. Expenses. All Registration Expenses and Selling Expenses
incurred in connection with a registration pursuant to this Section shall be
borne by Sybase.
C. Termination of Sybase's Obligations. Sybase's obligations
under this Section 3.C shall terminate on the second anniversary of the
Effective Date.
4. UNDERWRITING.
A. In general. If Sybase has elected an underwriting for a
piggyback registration pursuant to Section 3, Sybase and the Registrable
Securities Holders shall reasonably cooperate to fulfill the requirements for
such underwriting. In this regard, if Sybase gives notice under Section 3 of the
registration to Registrable Securities Holders, then Sybase shall also advise
the Registrable Securities Holders whether the offering is to be underwritten
and, if so, the right of any such Registrable Securities Holder's Registrable
Securities to be included in such a registration shall be conditioned upon such
Registrable Securities Holder's participation in such underwriting and the
inclusion of such Registrable Securities Holder's Registrable Securities in the
underwriting to the extent provided herein. All Registrable Securities Holders
proposing to distribute their Registrable Securities through such underwriting
shall enter into an underwriting agreement in customary form with the managing
underwriter or underwriters selected for such underwriting (including, as
appropriate, a market stand-off agreement of up to one hundred eighty (180)
days, if required by such underwriters); provided, however, that it shall not be
considered customary to require any of the Registrable Securities Holders to
provide representations and warranties regarding Sybase or indemnification of
the underwriters for material misstatements or omissions in the registration
statement or prospectus for such offering made by anyone other than the
Registrable Securities Holder giving the indemnity.
B. Exclusions from Underwriting. Notwithstanding any other
provision of this Agreement, if the managing underwriter(s) determine(s) in good
faith that marketing factors require a limitation of the number of shares of
Sybase Common Stock to be underwritten in any underwritten Public Offering, then
the managing underwriter(s) may exclude such shares of Registrable Securities
that have elected to participate in the offering as the underwriter determines
to be advisable. If the Registrable Securities to be included in any
underwriting are so reduced, then the number of shares of Registrable Securities
that will be included in the underwriting for each Registrable Securities Holder
shall be equal to the number of shares of Registrable Securities that the holder
elected to be included in the underwriting, times a fraction, the numerator of
which shall be the number of Registrable Securities that will be permitted to be
included in the underwriting and the denominator shall be the aggregate number
of Registrable Securities initially elected to be included in the underwriting.
For any Registrable Securities Holder that is a partnership or limited liability
<PAGE> 107
company, the Registrable Securities Holder and the partner/member and each
retired partner/member of such Registrable Securities Holder, or the estates and
family members of any such partner/member and retired partner/member and any
trusts for the benefit of any of the foregoing persons, shall be deemed to be a
single Registrable Securities Holder, and any reduction pursuant to the
foregoing with respect to a Registrable Securities Holder shall be based upon
the aggregate amount of shares of Registrable Securities carrying registration
rights owned by all entities and individuals included in such Registrable
Securities Holder, as defined in this sentence, notwithstanding any provision of
law or other contract binding upon such partners/members to the contrary.
C. Limitation. Notwithstanding the foregoing, in no event shall
the rights granted to the Registrable Securities Holders hereunder reduce in any
way the amount of shares of the amount of any Sybase securities, other than
Common Stock, to be included in any Public Offering nor adversely effect in any
manner or reduce the right of any other holder of Sybase securities to require
Sybase to register any of its securities or to include its securities in any
Public Offering.
5. OBLIGATIONS OF SYBASE. Whenever required to effect the registration
of any Registrable Securities under this Agreement, Sybase shall, as
expeditiously as reasonably possible:
A. Registration Statement. Promptly and diligently prepare and
file with the SEC a registration statement on the appropriate form with respect
to such Registrable Securities and use commercially reasonable efforts to cause
such registration statement to become effective. All registered Registrable
Securities shall be duly listed by Sybase with NASDAQ or another recognized
national securities exchange for trading thereon.
B. Amendments and Supplements. Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement.
C. Prospectuses. Furnish to the Registrable Securities Holders
such number of copies of a prospectus (including a preliminary prospectus) in
conformity with the requirements of the Securities Act and such other documents
as they may reasonably request, in order to facilitate the disposition of the
Registrable Securities owned by them that are included in such registration.
D. Blue Sky. To the extent applicable, register and qualify the
securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as shall be reasonably requested by the
Registrable Securities Holders, provided that Sybase shall not be required, in
connection therewith or as a condition thereto to, qualify to do business or to
file a general consent to service of process in any such states or jurisdictions
in which Sybase is not otherwise required to qualify nor provide consent to
service in order to carry on its business.
E. Underwriting. In the event of any underwritten public
offering, enter into and perform its obligations under an underwriting agreement
in usual and customary form (including customary indemnification of the
underwriters by Sybase) with the managing underwriter(s) of such
<PAGE> 108
offering. Each Registrable Securities Holder participating in such underwriting
shall also enter into and perform its obligations under such agreement as
otherwise required by this Agreement.
F. Notification. Notify each Registrable Securities Holder
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing. Upon receipt of any such notice, the Registrable Securities
Holders will suspend their use of the statement and Sybase shall promptly, and
in all events within forty-five (45) days, amend the statement to meet the
aforesaid standard of care.
G. Opinion and Comfort Letter. Furnish, at the request of any
Registrable Securities Holder as reasonably appropriate, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, or, if such securities are not
being sold through underwriters, on the date that the registration statement
with respect to such securities becomes effective, (i) an opinion, dated as of
such date, of the counsel representing Sybase for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Registrable Securities Holders requesting registration, and (ii)
a "comfort" letter (or if the offering is not underwritten, an "agreed upon
procedures" letter), dated as of such date, from the independent certified
public accountants of Sybase, in the form and with the substance as is
customarily given by independent certified public accountants in a comparable
public offering and reasonably satisfactory to a majority in interest of the
Registrable Securities Holders requesting registration, in both cases addressed
to the underwriters, if any, and to the Registrable Securities Holders
requesting registration of Registrable Securities.
6. SHAREHOLDER DUTY TO PROVIDE INFORMATION. It shall be a condition
precedent to the obligations of Sybase to take any action pursuant to this
Agreement that the selling Registrable Securities Holders shall furnish to
Sybase such information regarding themselves, the Registrable Securities held by
them, and the intended method of disposition of such securities as shall be
required to timely effect the registration of their Registrable Securities.
7. INDEMNIFICATIONS. In the event any Registrable Securities are
included in a registration statement under this Agreement, then:
A. By Sybase. To the extent permitted by law, Sybase will
indemnify and hold harmless the Registrable Securities Holder, the partners,
officers, stockholders, employees, representatives and directors of each
Registrable Securities Holder, any underwriter (as determined in the Securities
Act) for such Registrable Securities Holder and each person, if any, who
controls such Registrable Securities Holder or such underwriter within the
meaning of the Securities Act or the Securities Exchange Act (herein each a
"Sybase Indemnified Party"), against any losses, claims, damages, or Liabilities
(joint or several) to which they may become subject under the Securities Act,
the Securities Exchange Act, or other federal or state law, insofar as such
losses, claims, damages, or
<PAGE> 109
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or
in any amendments or supplements thereto;
(ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make
the statements therein not misleading, or
(iii) any violation or alleged violation by Sybase of the
Securities Act, the Exchange Act, any federal or state securities
law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any federal or state securities law in
connection with the offering covered by such registration statement;
and Sybase will reimburse each such Sybase Indemnified Party for any legal or
other expenses reasonably incurred by it, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action, if such settlement is effected without the consent of
Sybase (which consent shall not be unreasonably withheld), nor shall Sybase be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished for use in
connection with such registration by such Sybase Indemnified Party.
B. By Selling Registrable Securities Holders. To the extent
permitted by law, each selling Registrable Securities Holder ("Indemnifying
Registrable Securities Holder") will indemnify and hold harmless Sybase, each of
its directors, each of its officers who have signed the registration statement,
each person, if any, who controls Sybase within the meaning of the Securities
Act, any underwriter, any other Registrable Securities Holder selling securities
under such registration statement, any of such other Registrable Securities
Holder's partners, officers, stockholders, employees, representatives and
directors, and any person who controls such other Registrable Securities Holder
within the meaning of the Securities Act or the Exchange Act (herein each a
"Registrable Securities Holder Indemnified Party"), against any losses, claims,
damages or liabilities (joint or several) to which the Registrable Securities
Holder Indemnified Party may become subject under the Securities Act, the
Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by such Indemnifying Registrable Securities Holder for use
in connection with such registration; and each such Indemnifying Registrable
Securities Holder will reimburse any legal or other expenses reasonably incurred
by Sybase or any other Registrable Securities Holder Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
liability or action. Notwithstanding the
<PAGE> 110
foregoing, (1) the indemnity agreement contained in this subsection shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Indemnifying
Registrable Securities Holder, which consent shall not be unreasonably withheld,
and (2) the total amounts payable in indemnity by an Indemnifying Registrable
Securities Holder under this subsection or otherwise in respect of any and all
Violations shall not exceed in the aggregate the net proceeds received by such
Indemnifying Registrable Securities Holder in the registered offering out of
which such Violations arise.
C. Notice. Promptly after receipt by a Sybase Indemnified Party
or a Registrable Securities Holder Indemnified Party (each an "Indemnified
Party") of notice of the commencement of any action (including any governmental
action subject to indemnification hereunder), such Indemnified Party will, if a
claim in respect thereof is to be made against any indemnifying party under this
section, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an Indemnified
Party shall have the right to retain its own counsel, with the fees and expenses
to be paid by the indemnifying party, to the extent that representation of such
Indemnified Party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential conflict of interests between such
Indemnified Party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of liability under this Section, except to the
extent the indemnifying party is prejudiced as a result thereof.
D. Defect Eliminated in Final Prospectus. The foregoing indemnity
agreements of Sybase and Indemnifying Registrable Securities Holders are subject
to the condition that, insofar as they relate to any Violation made in a
prospectus but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration statement in question becomes effective or in
any amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (a "final
prospectus"), such indemnity agreement shall not inure to the benefit of any
Indemnified Party, if a copy of said final prospectus was timely furnished to
such Indemnified Party and was not furnished by the Indemnified Party to a
person asserting the loss, liability, claim or damage at or prior to the time
such action is required by the Securities Act.
E. Contribution. In order to provide for just and equitable
contribution to joint liability under the Securities Act in any case in which
either (A) any Registrable Securities Holder exercising rights under this
Agreement, or any controlling person of any such Registrable Securities Holder,
makes a claim for indemnification pursuant to this Section 7.A, but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such
case, notwithstanding the fact that Section 7.A provides for indemnification in
such case, or (B) contribution under the Securities Act may be required on the
part of any such selling Registrable Securities Holder or any such controlling
person in circumstances for which indemnification is provided under Section 7.B;
then, and in each such case, Sybase and such Registrable Securities Holder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that such
<PAGE> 111
Registrable Securities Holder is responsible for the portion represented by the
percentage that the public offering price of its Registrable Securities offered
by and sold under the registration statement bears to the public offering price
of all securities offered by and sold under such registration statement, and
Sybase and other selling Registrable Securities Holders are responsible for the
remaining portion; provided, however, that, in any such case, upon the request
of any Registrable Securities Holder, a court of competent jurisdiction may
nevertheless equitably adjust the amount that would otherwise be contributed by
a particular Registrable Securities Holder or by Sybase hereunder as appropriate
to reflect the relative fault of Sybase, on the one hand, and any or all of the
Registrable Securities Holders, on the other, as well as, to take into account
other relevant equitable considerations. The relative fault of Sybase, on the
one hand, and of any or all of the Registrable Securities Holders, on the other,
shall be determined by reference to, among other things, whether any untrue or
alleged untrue statement of a material fact of omission or alleged omission to
state a material fact relates to information supplied by Sybase, on the one
hand, or by the Registrable Securities Holders, on the other, and each such
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such statement of omission. However, notwithstanding the
foregoing, in no event shall (A) any Registrable Securities Holder be required
to contribute any amount in excess of the public offering price of all such
Registrable Securities sold by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.
F. Survival. The obligations of Sybase and the Registrable
Securities Holders under this Section 7 shall survive until the third
anniversary of the completion of any offering of Registrable Securities in a
registration statement, regardless of the expiration of any statutes of
limitation or extensions of such statutes.
8. SUSPENSION PROVISIONS. Notwithstanding anything to the contrary in
this Agreement, Sybase shall not be required to take any action with respect to
the registration or the declaration of effectiveness of the registration
statement following written notice to the Registrable Securities Holders from
Sybase (a "Suspension Notice") of the existence of any state of facts or the
happening of any event (including pending negotiations relating to, or the
consummation of, a transaction, or the occurrence of any event that Sybase
believes, in good faith, requires additional disclosure of material, non-public
information by Sybase in the registration statement) with regard to which Sybase
believes it has a bona fide business purpose for preserving confidentiality or
that renders Sybase unable to comply with the published rules and regulations of
the SEC promulgated under the Securities Act or the Securities Exchange Act, as
in effect at any relevant time (the "Rules and Regulations") the failure to
disclose of which would result in (i) the registration statement, any amendment
or post-effective amendment thereto, or any document incorporated therein by
reference containing an untrue statement of a material fact or omitting to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) the prospectus issued under the
registration statement, any prospectus supplement, or any document incorporated
therein by reference including an untrue statement of material fact or omitting
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that (W) Sybase shall not exercise its rights under this
Section 8 and under Section 2.C more than twice, in the aggregate, in any 12
month period (X) during any 12 month period the sum of such suspensions under
this Section 8 plus number of days
<PAGE> 112
during such 12 month period that Sybase deferred a registration under Section
2.C above shall not exceed one hundred eighty (180) days, (Y) Sybase shall use
its best efforts to remedy, as promptly as practicable, the circumstances that
gave rise to the Suspension Notice and, thereupon, shall deliver to the
Registrable Securities Holders notification that the Suspension Notice is no
longer in effect, and (Z) such Suspension Notice shall be effective only so long
as the directors and senior officers of Sybase are similarly prohibited from
selling their Sybase shares during such period. Upon receipt of a Suspension
Notice from Sybase, all time limits set forth in Sections 2.D and 2.E shall
automatically be extended by an amount of time equal to the amount of time the
Suspension Notice is in effect, the Registrable Securities Holders will
forthwith discontinue disposition of all such shares of Sybase Common Stock
pursuant to the registration statement until Sybase notifies the Registrable
Securities Holders that the Suspension Notice is no longer in effect (which
Sybase shall promptly deliver) and until receipt from Sybase of copies of any
prospectus supplements or amendments prepared by or on behalf of Sybase (which
Sybase shall promptly prepare). If so directed by Sybase in such Suspension
Notice, the Registrable Securities Holders will deliver to Sybase all copies in
their possession of the prospectus covering such shares of Sybase Common Stock
current at the time of receipt of any Suspension Notice.
9. ASSIGNMENT AND AMENDMENT. Notwithstanding anything herein to the
contrary, the rights of a Shareholder under this Agreement may be assigned only
together with the assignment of the Registrable Security to which the right
relates; provided, however that no party shall be deemed to have assigned, or to
have become an assignee of, any Registrable Security or any right hereunder,
unless and until the holder of the Registrable Security being assigned shall
have delivered to Sybase (or its nominee), and the Sybase (or its nominee) shall
have received, written notice in such form as Sybase (or its nominee) shall
reasonably require stating the name and address of the assignee and the number
of shares of Registrable Securities so assigned, and surrendering for assignment
the share certificate(s) representing such shares. Any Registrable Securities
assigned, or attempted to be assigned, to any party shall at all times be
subject to all the terms and conditions of this Agreement. Except as aforesaid,
the rights and obligations of the parties hereto shall be binding upon and shall
inure to the benefit of the parties and their successors and assigns.
10. AMENDMENT OF RIGHTS. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of Sybase and holders of two thirds of the Registrable Securities which
are shares of Sybase Common Stock outstanding at the time in question. Any
amendment or waiver effected in accordance with this Section shall be binding
upon Sybase, each Shareholder, and each permitted successor or assignee of a
Shareholder or of Sybase.
11. MISCELLANEOUS.
A. Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.
B. Governing Law. This Agreement will be governed by and
construed under the internal laws of the State of Delaware, without reference to
principles of conflict of laws or choice of laws.
<PAGE> 113
C. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
D. Headings. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules will, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
E. Notices. Any notice required or permitted under this Agreement
shall be given in writing, shall be effective when received, and shall in any
event be deemed received and effectively given upon personal delivery to the
party to be notified or three (3) Business Days after deposit with the United
States Post Office, by registered or certified mail, postage prepaid, or one (1)
Business Day after deposit with a nationally recognized courier service, such as
Federal Express, for next business day delivery under circumstances in which
such service guarantees next business day delivery, or one (1) Business Day
after facsimile with copy delivered by registered or certified mail, in any
case, postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof or at such other address
as the Shareholder or Sybase may designate by giving at least ten (10) Business
Days advance written notice pursuant to this Section.
F. Severability. If any provision of this Agreement is held to be
unenforceable under applicable law, such provision will be excluded from this
Agreement and the balance of the Agreement will be interpreted as if such
provision was so excluded and will be enforceable in accordance with its terms.
G. Entire Agreement. This Agreement, together with the
Reorganization Agreement and all exhibits and schedules hereto and thereto
constitutes the entire agreement and understanding of the parties with respect
to the subject matter hereof and supersedes any and all prior negotiations,
correspondence, agreements, understandings, duties or obligations between the
parties with respect to the subject matter hereof.
H. Further Assurances. From and after the date of this Agreement
upon the request of Sybase or a Shareholder benefited hereby, Sybase, the Sybase
and any other Shareholder burdened hereby will execute and deliver such
instruments, documents or other writings, and take such other actions, as may be
reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
I. Meaning of Include and Including. Whenever in this Agreement
the word "include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.
J. Fees, Costs and Expenses. Except as herein expressly provided
to the contrary, all fees, costs and expenses (including attorneys' fees and
expenses) incurred by either party hereto in connection with the preparation,
negotiation and execution of this Agreement and the
<PAGE> 114
consummation of the transactions contemplated hereby and thereby (including the
costs associated with any filings with, or compliance with any of the
requirements of, any governmental authorities), shall be the sole and exclusive
responsibility of such party.
[Signatures on Next Page]
<PAGE> 115
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
"SYBASE"
Sybase, Inc., a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
Date Signed: ________________________
Address: ____________________________
____________________________
Telephone No: _______________________
Facsimile No: _______________________
Copy to: ____________________________
____________________________
____________________________
<PAGE> 116
HOLDERS OF
SYBASE COMMON STOCK
____________________________________, ____________________________________,
a _____________________________ and a a _____________________________ and a
Shareholder of Sybase Shareholder of Sybase
By: _________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ______________________________ Title: ______________________________
Date Signed: ________________________ Date Signed: ________________________
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
Telephone No: _______________________ Telephone No: _______________________
Facsimile No: _______________________ Facsimile No: _______________________
Copy to: ____________________________ Copy to: ____________________________
____________________________ ____________________________
____________________________ ____________________________
____________________________________, ____________________________________,
a _____________________________ and a a _____________________________ and a
Shareholder of Sybase Shareholder of Sybase
By: _________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ______________________________ Title: ______________________________
Date Signed: ________________________ Date Signed: ________________________
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
Telephone No: _______________________ Telephone No: _______________________
Facsimile No: _______________________ Facsimile No: _______________________
Copy to: ____________________________ Copy to: ____________________________
____________________________ ____________________________
____________________________ ____________________________
[REPEAT AS NEEDED]
<PAGE> 117
HOLDERS OF
SYBASE WARRANTS
____________________________________, ____________________________________,
a _____________________________ and a a _____________________________ and a
Shareholder of Sybase Shareholder of Sybase
By: _________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ______________________________ Title: ______________________________
Date Signed: ________________________ Date Signed: ________________________
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
Telephone No: _______________________ Telephone No: _______________________
Facsimile No: _______________________ Facsimile No: _______________________
Copy to: ____________________________ Copy to: ____________________________
____________________________ ____________________________
____________________________ ____________________________
____________________________________, ____________________________________,
a _____________________________ and a a _____________________________ and a
Shareholder of Sybase Shareholder of Sybase
By: _________________________________ By: _________________________________
Name: _______________________________ Name: _______________________________
Title: ______________________________ Title: ______________________________
Date Signed: ________________________ Date Signed: ________________________
Address: ____________________________ Address: ____________________________
____________________________ ____________________________
Telephone No: _______________________ Telephone No: _______________________
Facsimile No: _______________________ Facsimile No: _______________________
Copy to: ____________________________ Copy to: ____________________________
____________________________ ____________________________
____________________________ ____________________________
[REPEAT AS NEEDED]
<PAGE> 118
EXHIBIT H
TO AGREEMENT & PLAN OF REORGANIZATION
AFFILIATE AGREEMENT
This _________________________ AFFILIATE AGREEMENT ("Agreement") is
dated __________________, _____ and is entered into by the undersigned
Shareholder ("Shareholder") of Home Financial Network, Inc., a Delaware
corporation (the "Company"), for the benefit of Sybase, Inc., a Delaware
corporation ("Sybase"), whose address for notices is ___________________________
and facsimile number is _____________________.
RECITALS
A. Sybase, the Company, and others propose to enter into an Agreement
and Plan of Reorganization ("Merger Agreement") pursuant to which a subsidiary
of Sybase will merge into the Company ("Merger"), and the Company will survive
and become a subsidiary of Sybase.
B. Pursuant to the Merger, at the Effective Time the outstanding shares
of the Company's Capital Stock, including shares owned by Shareholder, will be
converted into the right to receive shares of Sybase Capital Stock.
C. Shareholder has been advised that Shareholder may be deemed to be an
"affiliate" of Sybase, as the term "affiliate" is used for purposes of
paragraphs (c) and (d) of Rule 145 of the Rules and Regulations of the
Securities and Exchange Commission (the "Commission").
NOW, THEREFORE, intending to be legally bound, the parties hereby agree
as follows:
1. Compliance with Rule 145 and the Act
(a) Shareholder has been advised that (i) the issuance of shares
of Sybase Capital Stock in connection with the Merger is expected to be exempt
from registration under the Securities Act of 1933 as amended (the "Act") by
virtue of Section 4(2) of the Act and as such will be deemed "restricted
securities" within the meaning of Rule 144 promulgated thereunder and resale of
such shares will be subject to restrictions including those set forth in Rule
145 of the Act, unless otherwise transferred pursuant to an effective
registration statement under the Act or an appropriate exemption from
registration, (ii) Shareholder may be deemed to be an affiliate of the Sybase,
(iii) no sale, transfer or other disposition by Shareholder of Sybase Capital
Stock will be registered under the Act. Shareholder accordingly agrees not to
sell, transfer or otherwise dispose of Sybase Capital Stock issued to
Shareholder in the Merger, unless (i) such sale, transfer or other disposition
is made in conformity with the requirements of Rule 145(d) promulgated under the
Act, or (ii) Shareholder delivers to Sybase a written opinion of counsel,
reasonably acceptable to Sybase in form and substance acceptable to Sybase, that
such sale, transfer or other disposition is otherwise exempt from registration
under the Act.
<PAGE> 119
(b) Sybase will give stop transfer instructions to its transfer
agent with respect to the Sybase Capital Stock received by Shareholder pursuant
to the Merger and there will be placed on the certificates representing such
Sybase Capital Stock, or any substitutions therefor, a legend stating in
substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE
ISSUED IN A TRANSACTION TO WHICH RULE 145 APPLIES AND
MAY ONLY BE TRANSFERRED IN CONFORMITY WITH RULE 145(D)
OR IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL,
ACCEPTABLE TO THE ISSUER IN FORM AND SUBSTANCE, THAT
SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933."
The legend set forth above shall be removed (by delivery of a substitute
certificate without such legend) and Sybase shall so instruct its transfer
agent, if Shareholder delivers to Sybase (i) satisfactory written evidence that
the shares have been sold in compliance with Rule 145 (in which case, the
substitute certificate will be issued in the name of the transferee), or (ii) an
opinion of counsel, in form and substance reasonably satisfactory to Sybase, to
the effect that public sale of the shares by the holder thereof is no longer
subject to Rule 145.
2. Continuity of Interest. Shareholder has no current plan or intent to
sell, exchange, transfer, or dispose directly or indirectly (collectively,
"Sales") of any of the shares of Sybase Capital Stock to be received by the
undersigned in the Merger. Further, Shareholder is not aware of, or
participating in, any plan or intent on the part of the Sybase's shareholders (a
"Plan") to engage in Sales of Sybase Capital Stock to be issued in the Merger
such that the aggregate fair market value, as of the Effective Time of the
Merger, of the shares subject to such Sales would exceed fifty percent (50%) of
the aggregate fair market value of all shares of Sybase Capital Stock
immediately prior to the Merger (the "Outstanding Capital Stock"). Sales of
Sybase Capital Stock shall be considered to have occurred pursuant to a Plan if,
among other things, such sales occur in a transaction that is in contemplation
of, or related to, the Merger or the Reorganization Agreement (a "Related
Transaction"). In addition, shares of Sybase Capital Stock (i) with respect to
which dissenter's rights are exercised, and (ii) with respect to which
pre-Merger Sales occur in a Related Transaction, shall be considered to be
shares of Outstanding Capital Stock that are exchanged for shares of Sybase
Capital Stock which are disposed of pursuant to a Plan. Shareholder understands
that the representations, warranties and covenants set forth herein will be
relied upon by Sybase, the shareholders of Sybase, and Sybase's counsel and
independent auditors. Shareholder has held the number of shares of [Broadway]
capital stock shown on the signature page hereof at all times since the date
such Shareholder acquired such shares.
3. Specific Performance. Shareholder agrees that irreparable damages
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 Sybase shall be entitled to injunctive relief to
prevent breaches of the provisions of this Agreement, and to enforce
specifically the terms and provisions hereof, in addition to any other remedy to
which Sybase may be entitled at law or in equity.
-2-
<PAGE> 120
4. Miscellaneous.
(a) Definitions. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Merger Agreement.
(b) Notices. Any notice or other communication required or
permitted to be delivered to Sybase or Shareholder under this Agreement shall be
in writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile), if to the Shareholder to the addresses and/or telecopier
numbers set forth below its name at the end of this Agreement and, if to Sybase,
to the address and/or telecopier number set forth in the Preamble. A party's
address for notices may be changed only by delivery of at least seven (7) days'
prior written notice to the other party in accordance with this Section.
(c) Severability. In the event that any provision of this
Agreement, or the application of any such provision to any person, entity or set
of circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons, entities or circumstances other than
those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue to
be valid and enforceable to the fullest extent permitted by law.
(d) Governing Law. This Agreement shall be construed in
accordance with, and governed in all respects by, the laws of the state of
[Delaware] (without giving effect to principles of conflicts of laws).
(e) Waiver. No failure on the part of Sybase to exercise any
power, right, privilege or remedy under this Agreement, and no delay on the part
of Sybase in exercising any power, right privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. Sybase shall not be deemed to have waived any claim
arising out of this Agreement, or any power, right, privilege or remedy under
this Agreement, unless the waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of Sybase; and any such waiver shall not be applicable or
have any effect except in the specific instance in which it is given.
(f) Captions. The captions contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement, and shall not be referred to in connection with the construction or
interpretation of this Agreement.
(g) Further Assurances. Shareholder shall execute and/or cause
to be delivered to Sybase such instruments and other documents and shall take
such other actions as Sybase may reasonably request to effectuate the intent and
purposes of this Agreement.
(h) Entire Agreement. This Agreement, the Merger Agreement and
the other agreements referred to in the Merger Agreement set forth the entire
understanding of Shareholder
-3-
<PAGE> 121
and Sybase relating to the subject matter hereof and thereof and supersede all
prior agreements and understandings between Shareholder and Sybase relating to
the subject matter hereof and thereof.
(i) Amendments. This Agreement may not be amended, modified,
altered, or supplemented other than by means of a written instrument duly
executed and delivered on behalf of Sybase and the Shareholder.
(j) Binding Nature. This Agreement will be binding upon
Shareholder and Shareholder's representatives, executors, administrators,
estate, heirs, successors and assigns, and shall inure to the benefit of Sybase
and its successors and assigns.
(k) Attorneys' Fees and Expenses. If any legal action or other
legal proceeding relating to the enforcement of any provision of this Agreement
is brought against Shareholder, the prevailing party shall be entitled to
recover reasonable attorneys' fees, costs and disbursements (in addition to any
other relief to which the prevailing party may be entitled).
(l) Termination. This Agreement shall terminate and be of no
force or effect if the Merger Agreement is validly terminated in accordance with
its terms without the Merger having occurred. The representations, warranties,
covenants, and other provisions contained in this Agreement shall survive the
Merger.
[Signature(s) on next page]
-4-
<PAGE> 122
"SHAREHOLDER"
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Address for Notices
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Facsimile:
------------------------
-5-
<PAGE> 1
EXHIBIT 4.2
INVESTOR AGREEMENT
THIS INVESTOR AGREEMENT ("Agreement") is entered into as of the 7th day of
December, 1999 between Sybase, Inc., a Delaware corporation (the "Acquiror"),
and the undersigned shareholder (the "Shareholder") of Home Financial Network,
Inc., a Delaware corporation (the "Company").
RECITALS
A. The Company and Acquiror have entered into an Agreement and Plan of
Reorganization, dated as of November 29, 1999 (the "Reorganization Agreement"),
pursuant to which the Company will be merged with and into a wholly owned
subsidiary of Acquiror (the "Merger").
B. Upon the consummation of the Merger and in connection therewith, the
undersigned Shareholder will become the owner of shares of Common Stock of
Acquiror (the "Acquiror Common Stock").
C. The parties to the Reorganization Agreement intend to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code") and intend to cause the Merger to qualify as a
"reorganization" under the provisions of Section 368(a) of the Code.
D. Pursuant to the Reorganization Agreement, an Escrow Agreement (the
"Escrow Agreement") shall be entered into between the Acquiror and an a
representative of the former shareholders of the Company (the "Shareholders'
Representative").
E. Concurrent with the execution of the Reorganization Agreement and as an
inducement to Acquiror to enter into the Reorganization Agreement, certain of
the affiliates of the Company who are shareholders, officers or directors have
on November 29, 1999 entered into an agreement, to, among other things, vote the
shares of the Company's capital stock owned by such persons to approve the
Merger and against any competing proposals.
F. The undersigned Shareholder understands and acknowledges that the
Company, Acquiror and their respective shareholders, as well as legal counsel to
the Company and Acquiror, are entitled to rely on (x) the truth and accuracy of
the undersigned Shareholder's representations contained herein and (y) the
undersigned Shareholder's performance of the obligations set forth herein.
G. Any terms used in this Agreement and not otherwise defined, shall have
the meaning assigned to such terms in the Reorganization Agreement.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants set forth in the Reorganization Agreement
and in this Agreement, it is hereby agreed as follows:
1. Share Ownership and Agreement to Retain Shares.
1.1 Transfer and Encumbrance.
(a) Shareholder is the beneficial owner of that number of
shares of the Company Capital Stock (collectively, the "Shares") set forth on
the signature page hereto and, except as otherwise set forth on the signature
page hereto, (A) has held such Shares at all times since the date set forth on
such signature page, and (B) did not acquire any Shares of the Company Capital
Stock in contemplation of the Merger. The Shares constitute the Shareholder's
entire interest in the Company Outstanding Stock. No other person or entity not
a signatory to this Agreement has a beneficial interest in or a right to acquire
such Shares or any portion of such Shares (except, with respect to shareholders
which are partnerships, partners of such shareholders). The Shares are and will
be at all times up until the Expiration Date (as defined below) free and clear
of any liens, claims, options, charges or other encumbrances.
(b) Shareholder agrees not to transfer (except as may be
specifically required by court order or by operation of law), sell, exchange,
pledge or otherwise dispose of or encumber the Shares or any New Shares (as
defined below), or to make any offer or agreement relating thereto, at any time
prior to the Expiration Date.
(c) As used herein, the term "Expiration Date" shall mean the
earlier to occur of (i) the Effective Time of the Merger or (ii) the termination
of the Reorganization Agreement.
1.2 New Shares. Shareholder agrees that any shares of capital stock
of the Company that Shareholder purchases or with respect to which Shareholder
otherwise acquires beneficial ownership after the date of this Agreement and
prior to the Expiration Date ("New Shares") shall be subject to the terms and
conditions of this Agreement to the same extent as if they constituted Shares.
2. Representations, Warranties and Covenants of Shareholder. Shareholder
hereby represents, warrants and covenants to Acquiror as follows:
(a) Purchase Entirely for Own Account. The Acquiror Common
Stock being acquired by such Shareholder pursuant to the Merger will be acquired
for investment for such Shareholder's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and such
Shareholder has no present intention of selling, granting any participation in,
or otherwise distributing the same. By executing this Agreement, Shareholder
further represents that such Shareholder does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
such Acquiror Common Stock.
2
<PAGE> 3
(b) Investment Experience. Such Shareholder has substantial
experience evaluating and investing in securities of companies and acknowledges
that it has the capacity to protect its own interests in connection therewith,
can bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Acquiror Common Stock. If other than
an individual, such Shareholder also represents it has not been organized for
the purpose of acquiring the Acquiror Common Stock.
(c) Accredited Investor/Suitability Questionnaire. Such
Shareholder (i) is and at the Closing will be an "accredited investor" within
the meaning of Rule 501 of Regulation D as promulgated by the Securities and
Exchange Commission (the "SEC") and as presently in effect or (ii) has delivered
an Investor Questionnaire to Acquiror describing Shareholder's ability to
evaluate an investment in Acquiror Common Stock or (iii) has appointed a
"purchaser representative" as defined in SEC Rule 501 of Regulation D to
evaluate Shareholder's investment in Acquiror Common Stock by delivering a
Purchaser Representative Agreement to Acquiror.
(d) Restricted Securities. Such Shareholder understands that
the shares of Acquiror Common Stock are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from the
Acquiror in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), only in certain limited circumstances. In this connection, such
Shareholder represents that it is familiar with SEC Rule 145, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.
(e) Further Limitations on Disposition. The Shareholder agrees
not to offer, sell, exchange, transfer, pledge or otherwise dispose of any of
the Acquiror Common Stock unless at that time either:
(i) such transaction is permitted pursuant to the
provisions of Rule 145 under the Securities Act;
(ii) counsel representing the undersigned Shareholder,
satisfactory to Acquiror, shall have advised Acquiror in a written opinion
letter satisfactory to Acquiror and Acquiror's counsel, and upon which Acquiror
and its counsel may rely, that no registration under the Securities Act is
required in connection with the proposed sale, transfer or other disposition;
(iii) a registration statement under the Securities Act
(a "Registration Statement") covering the Acquiror Common Stock proposed to be
sold, transferred or otherwise disposed of, describing the manner and terms of
the proposed sale, transfer or other disposition, and containing a current
prospectus, is filed with the SEC and made effective under the Securities Act;
or
(iv) an authorized representative of the SEC shall have
rendered written advice to the undersigned Shareholder (sought by the
undersigned Shareholder or counsel to the undersigned Shareholder, with a copy
thereof and of all other related communications delivered
3
<PAGE> 4
to Acquiror) to the effect that the SEC will take no action, or that the staff
of the SEC will not recommend that the SEC take action, with respect to the
proposed offer, sale, exchange, transfer, pledge or other disposition if
consummated.
(f) All certificates representing shares of Acquiror Common
Stock deliverable to a Shareholder pursuant to the Reorganization Agreement and
in connection with the Merger and any certificates subsequently issued with
respect thereto or in substitution therefor shall bear a legend that such shares
of Acquiror Common Stock may only be sold or disposed of in accordance with (i)
the provisions of Rule 145 under the Securities Act, (ii) pursuant to an
effective Registration Statement or (iii) pursuant to an exemption provided by
the Securities Act, Acquiror, at its discretion, may cause stop transfer orders
to be placed with its transfer agent with respect to the certificates for such
Acquiror Common Stock but not as to the certificates for any part of the
Acquiror Common Stock as to which said legend is no longer appropriate.
(g) The undersigned Shareholder will observe and comply with
the Securities Act and the General Rules and Regulations thereunder, as now in
effect and as from time to time amended and including those hereafter enacted or
promulgated, in connection with any offer, sale, exchange, transfer, pledge or
other disposition of the Acquiror Common Stock or any part thereof.
(h) Shareholder understands that pursuant to the
Reorganization Agreement, Acquiror and Shareholder's Representative shall enter
into the Escrow Agreement and that Shareholder shall be bound by the provisions
of the Escrow Agreement and as such, Shareholder agrees to appoint Shareholder's
Representative prior to the Closing and further agrees to be bound by the terms
of the Escrow Agreement.
3. Consent and Waiver. Except for Shareholder's rights under the
Reorganization Agreement, Shareholder hereby gives any consents or waivers in
its individual capacity that are required for the consummation of the Merger
under the terms of any agreement to which Shareholder is a party or pursuant to
any rights Shareholder may have.
4. Termination. This Agreement shall terminate and shall have no further
force or effect as of the Expiration Date.
5. Confidentiality. Except as otherwise provided in the Reorganization
Agreement, Shareholder agrees (i) to hold any information regarding this
Agreement and the Merger in strict confidence, and (ii) not to divulge any such
information to any third person, until such time as the Merger has been publicly
disclosed by Acquiror.
6. Miscellaneous.
6.1 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
4
<PAGE> 5
6.2 Binding Effect and Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
of the parties without the prior written consent of the other. This Agreement is
intended to bind Shareholder as a shareholder of the Company only with respect
to the specific matters set forth herein.
6.3 Amendment and Modification. This Agreement may not be modified,
amended, altered or supplemented except by the execution and delivery of a
written agreement executed by the parties hereto.
6.4 Specific Performance; Injunctive Relief. The parties hereto
acknowledge that Acquiror will have no adequate remedy at law for a violation of
any of the covenants or agreements of Shareholder set forth herein. Therefore,
it is agreed that, in addition to any other remedies that may be available to
Acquiror upon any such violation, Acquiror shall have the right to enforce such
covenants and agreements by specific performance, injunctive relief or by any
other means available to Acquiror at law or in equity and the Shareholder hereby
waives any and all defenses which could exist in its favor in connection with
such enforcement.
6.5 Notices. All notices, requests, demands or other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given if delivered by hand
or mailed by registered or certified mail, postage prepaid, as follows:
(a) If to the Shareholder, at the address set forth in the
Company's records.
(b) If to Acquiror:
Sybase, Inc.
6475 Christie Avenue
Emeryville, CA 94603
Attention: General Counsel
Telephone No.: 510-922-3500
Facsimile No.: 510-022-4558
with a copy to:
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
Attention: Debra Summers, Esq.
Telephone No.: 650-493-9300
Facsimile No.: 650-493-6811
5
<PAGE> 6
(c) If to the Company, to:
Home Financial Network, Inc.
55 Green Farms Road
Westport, CT 06880
Attention: Chief Executive Officer
Telephone No.: 203-341-7400
Facsimile No.: 203-341-7442
with a copy to:
Hemenway & Barnes
60 State Street
Boston, MA 02109-1899
Attention: Frederic J. Marx, Esq.
Telephone No.: 617-557-9717
Facsimile No.: 617-227-0781
or to such other address as any party hereto or any party may designate for
him/her/itself by notice given as herein provided.
6.6 Governing Law. This Agreement shall be governed by, construed
and enforced in accordance with the laws of the State of California.
6.7 Entire Agreement. This Agreement and the Proxy contain the
entire understanding of the parties in respect of the subject matter hereof, and
supersede all prior negotiations and understandings between the parties with
respect to such subject matter.
6.8 Counterpart. This Agreement may be executed in several
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.
6.9 Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
<PAGE> 7
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS ON SHARE CERTIFICATES.
INDIVIDUAL
Dated:
-------------------- -----------------------------------------
(Signature)
-----------------------------------------
(Type or print Name as it appears on your
Stock Certificate(s))
CORPORATION, PARTNERSHIP OR TRUST
Dated:
-------------------- -----------------------------------------
(Name of Entity)
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Please date, sign and return this Agreement promptly in the enclosed
Federal Express envelope provided.
[STICKER]
[Signature Page To Investor Agreement]
<PAGE> 1
EXHIBIT 4.5
PURCHASER REPRESENTATIVE AGREEMENT
ACKNOWLEDGMENT AND AGREEMENT, dated for reference purposes as of December
7th, 1999, between Volpe Brown Whelan & Company, LLC (the "Representative") and
the investor named on the signature page to this Agreement (the "Investor").
RECITALS
A. In connection with the proposed merger of Home Financial Network, Inc.
("Company") and Sybase, Inc. (the "Acquiror"), the Acquiror is offering (the
"Offering") shares of its Common Stock ("Common Stock") to each of the
shareholders, warrant holders, and optionees of Company, including the Investor,
pursuant to an Information Statement dated December 7, 1999.
B. In order to facilitate the Offering, Representative has agreed to act
as "purchaser representative" (as such term is defined in Rule 501(h) of the
Rules and Regulations promulgated under the Securities Act of 1933, as amended)
for the Investor in connection with the Offering.
AGREEMENT
NOW, THEREFOR, in consideration of the promises set forth below and for
other good and valuable consideration, the parties thereto hereby acknowledge
and agree as follows:
1. The Investor acknowledges and confirms that Representative has been
retained by Company on the Investor's behalf to act as the Investor's purchaser
representative in connection with evaluating the merits and risks of the
Offering.
2. Representative and its affiliates hereby confirm that they have such
knowledge and experience in financial and business matters that they are capable
of evaluating the merits and risks of an investment in the Common Stock of the
Acquiror by the Investor.
3. Representative represents that neither it nor any of its affiliates
has, is expected to have, or, at any time during the previous two years has had,
any material relationship with the Acquiror or any of its affiliates and that
neither it nor any of its affiliates or employees is (i) an affiliate, director,
officer, or other employee of the Acquiror, or (ii) the beneficial owner of ten
percent (10%) or more of any class of the equity securities of the Acquiror or
ten percent (10%) or more of the equity interest of the Acquiror.
4. This Agreement embodies the entire agreement of the parties hereto with
respect to the subject matter hereof, and supersedes any and all other
agreements or arrangements, whether written or oral, which the parties hereto
may have had with respect to the subject matter hereof. This Agreement may not
be changed or terminated orally but only by an agreement in writing signed by
each of the parties hereto.
<PAGE> 2
5. This Agreement may be executed in any number of counterparts, which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
REPRESENTATIVE
VOLPE BROWN WHELAN & COMPANY, LLC
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
INVESTOR
INDIVIDUAL
----------------------------------------
(Signature)
----------------------------------------
(Type or print Name as it appears on
your Stock Certificate(s))
CORPORATION, PARTNERSHIP OR TRUST
----------------------------------------
(Name of Entity)
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
[Signature page to Purchaser Representative Agreement]
<PAGE> 1
EXHIBIT 4.6
FORM OF WARRANT - INTELIDATA TECHNOLOGY CORPORATION
Warrant Certificate No.: HFN 1 Right to Purchase
640,000 Warrant Units
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR WHICH MAY BE ISSUED UPON
EXERCISE OF THE RIGHTS HEREIN GRANTED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR WITH ANY STATE SECURITIES COMMISSION, AND
MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO
THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND OTHER APPLICABLE STATE LAWS AND
RULES.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE ENTITLED TO CERTAIN RIGHTS AND
THE HOLDER HEREOF IS SUBJECT TO CERTAIN OBLIGATIONS SPECIFIED IN A CERTAIN
SHAREHOLDER AGREEMENT BETWEEN SYBASE, INC. AND THE ORIGINAL HOLDER OF THESE
SECURITIES, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE PRINCIPAL OFFICE
OF SYBASE, INC.
WARRANT
TO PURCHASE COMMON STOCK OF
SYBASE, INC.
VOID AFTER MARCH 31, 2005
This Warrant certifies that InteliData Technologies Corporation or
registered assigns (the "Holder"), is entitled to subscribe for and purchase
from Sybase, Inc., a Delaware corporation ("Sybase"), all or any part of 640,000
"Warrant Units" (as hereinafter defined) at a purchase price equal to $3.00 per
Warrant Unit (the "Exercise Price"), subject to adjustment as set forth herein.
The term "Warrant Unit" means $1.153448 in cash and 0.34794 shares of duly
authorized, validly issued, fully paid and nonassessable shares of the common
stock, $0.001 par value, of Sybase, (the common stock, including any stock into
which it may be changed, reclassified, or converted, is herein referred to as
the "Sybase Common Stock"). The Warrant may be exercised, in whole or in part,
at any time, and from time to time, from the date hereof and ending at 5:00
p.m., Eastern Daylight Time, on March 31, 2005.
This Warrant is issued in consideration of surrender by the Holder of that
certain Common Stock Warrant, issued as of March 31, 1997 by Home Financial
Network, Inc., a Delaware
<PAGE> 2
corporation ("HFN") in connection with the merger of HFN with On-Line Financial
Services, Inc., a Delaware corporation "Merger Sub") a wholly owned subsidiary
of Sybase pursuant to the terms of that certain Agreement and Plan of
Reorganization, dated as of November 29, 1999, by and among Sybase, HFN, Merger
Sub, and certain principal shareholders of HFN and a shareholder representative
designated therein.
This Warrant and any shares of Sybase Common Stock issued upon exercise of
this Warrant shall become subject to the terms of the Shareholder Agreement, a
copy of which is attached hereto as Exhibit A (the "Shareholder Agreement").
This Warrant is subject to the following provisions, terms and conditions:
SECTION 1. EXERCISE OF WARRANT.
To exercise this Warrant in whole or in part, the Holder shall deliver to
Sybase at its principal office, (a) a written notice, in substantially the form
of the Subscription Notice appearing at the end of this Warrant, of the Holder's
election to exercise this Warrant which notice shall specify the number of
Warrant Units to be purchased, (b) cash or a certified check payable to Sybase
in an amount equal to the aggregate purchase price of the number of Warrant
Units being purchased, and (c) this Warrant. Sybase shall as promptly as
practicable, and in any event within 15 days thereafter, execute and deliver or
cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of Warrant Units
specified in such notice. The stock certificate or certificates of Sybase Common
Stock delivered in connection therewith shall be issued in the name of the
Holder or such other name as shall be designated in such notice. Such
certificate or certificates shall be deemed to have been issued and the Holder
or any other person so designated to be named therein shall be deemed for all
purposes to have become a holder of record of such shares as of the date such
notice is received by Sybase as aforesaid. If this Warrant shall have been
exercised only in part, Sybase shall, at the time of delivery of said
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the remaining Warrant Units called for by this
Warrant, which new Warrant shall in all other respects be identical to this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant and the same returned to the Holder. Sybase shall pay all expenses,
taxes and other charges payable in connection with the preparation, issue and
delivery of such stock certificates, except that, in case such stock
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all stock transfer taxes that are payable upon
the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of delivering the notice of exercise mentioned above.
<PAGE> 3
SECTION 2. TRANSFER, DIVISION AND COMBINATION.
All shares of Sybase Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and nonassessable and, if the Sybase Common
Stock is then listed on a national securities exchange or quoted on an automated
quotation system, shall be duly listed or quoted thereon.
Sybase agrees to maintain at its principal office, books for the
registration and transfer of this Warrant, and, subject to the provisions of
Section 3 hereof, this Warrant and all rights hereunder are transferable, in
whole or in part, on such books at such office, upon surrender of this Warrant
at such office, together with a written assignment of this Warrant duly executed
by the Holder or his agent or attorney and funds sufficient to pay any stock
transfer taxes payable upon the making of such transfer. Upon such surrender and
payment, Sybase shall execute and deliver a new Warrant in the name of the
assignee and this Warrant shall promptly be canceled. If and when this Warrant
is assigned in blank, Sybase may (but shall not be obliged to) treat the bearer
hereof as the absolute owner of this Warrant for all purposes, and Sybase shall
not be affected by any notice to the contrary. A Warrant may be exercised by a
new holder for the purchase of Warrant Units without having a new Warrant
issued.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at Sybase's principal office, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or his agent or attorney. Subject to compliance with the
preceding paragraph as to any transfer that may be involved in such division or
combination, Sybase shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
SECTION 3. RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS AND SYBASE
COMMON STOCK.
This Warrant shall be exercisable (a) only under circumstances such that
the issuance of Sybase Common Stock issuable upon such exercise is exempt from
the requirements of registration under the Securities Act of 1933, as amended
(or any similar statute then in effect) (the "1933 Act") and any applicable
state securities law or (b) upon registration of such Sybase Common Stock in
compliance therewith. This Warrant shall be transferable only upon satisfaction
of any restrictions on transfer contained in the Additional Agreements and
either (a) only under circumstances such that the transfer is exempt from the
requirements of registration under the 1933 Act and any applicable state
securities law or (b) upon registration (for resale or otherwise) of such
Warrant in compliance therewith. By acceptance hereof, the Holder (for resale or
otherwise) agrees to comply with such legislation.
As long as this Warrant is not registered under the 1933 Act, before any
transfer or attempted transfer of all of this Warrant or such Sybase Common
Stock, the Holder shall give Sybase written notice of its intention so to do
describing briefly the manner of any such proposed transfer. Promptly after
receiving such written notice, Sybase shall present copies thereof to Company
counsel and to any special counsel designated by the Holder. If, in the opinion
of counsel for Sybase and counsel, if any, for the Holder, the proposed transfer
may be effected without registration under
<PAGE> 4
the 1933 Act and any applicable state securities law of any such securities,
Sybase, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the securities proposed to be transferred may be transferred in
accordance with the terms of such notice. Sybase shall not be required to effect
any such transfer before the receipt of such favorable opinion or opinions or
the effectiveness of registration.
SECTION 4. CERTAIN COVENANTS.
Sybase covenants and agrees that it will at all times reserve and set
apart and have, free from preemptive rights, a number of shares of authorized
but unissued Sybase Common Stock, or other stock or securities deliverable
pursuant to this Warrant, sufficient to enable it at any time to fulfill all its
obligations hereunder.
SECTION 5. NOTICES.
In the event Sybase provides written notice to the holders of its Common
Stock of
(a) Sybase proposes to declare, pay or set aside for payment any
dividend or other distribution with respect to the Sybase Common Stock or any
other class of securities of Sybase or purchase, redeem or otherwise acquire for
value any shares of Sybase Common Stock or any other class of securities of
Sybase,
(b) Sybase proposes to grant to the holders of its Sybase Common
Stock generally any rights or options,
(c) Sybase proposes to effect any capital reorganization or
reclassification of capital stock of Sybase,
(d) Sybase proposes to consolidate with, or merge into, any other
corporation or to transfer its property as an entirety or substantially as an
entirety, or
(e) Sybase proposes to effect the liquidation, dissolution or
winding up of Sybase,
then and in each such event Sybase will mail to the Holder hereof any such
notice delivered to the holders of its Common Stock, at the time and in the
manner such notice was provided to the holders of Sybase Common Stock.
Any other notice or other document required or permitted to be given or
delivered to the holder of record of the Warrant shall be delivered by
facsimile, reliable courier or first-class mail postage prepaid to such holder
at the last address shown on the books of Sybase maintained for the registry and
transfer of the Warrant. Any notice or other document required or permitted to
be given or delivered to holders of record of Sybase Common Stock issued
pursuant to the Warrant shall be delivered by facsimile, reliable courier or
first-class mail postage prepaid to each such holder at such holder's address as
the same appears on the stock records of Sybase. Any notice or other document
required or permitted to be given or delivered to Sybase shall be delivered by
facsimile, reliable courier or first-class mail postage prepaid to the principal
office of Sybase, or such other address as
<PAGE> 5
shall have been furnished by Sybase in writing to the holder of record of such
Warrant and the holders of record of such Sybase Common Stock.
SECTION 6. LIMITATION OF LIABILITY; NOT STOCKHOLDERS.
No provision of this Warrant shall be construed as conferring upon the
Holder the right to vote or to consent or to receive dividends or to receive
notice as a stockholder in respect of meetings of stockholders for the election
of directors of Sybase or any other matter whatsoever as stockholders of Sybase.
No provision hereof, in the absence of affirmative action by the Holder to
purchase Warrant Units, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of Holder for the
purchase price or as a stockholder of Sybase, whether such liability is asserted
by Sybase, creditors of Sybase or others.
SECTION 7. LOSS, DESTRUCTION, ETC. OF WARRANT.
Upon receipt of evidence satisfactory to Sybase of the loss, theft,
mutilation or destruction of the Warrant, and in the case of any such loss,
theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to Sybase, or in the event of such
mutilation upon surrender and cancellation of the Warrant, Sybase will make and
deliver a new Warrant, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Warrant. Any Warrant issued under the provisions of this Section 7 in
lieu of any Warrant alleged to be lost, destroyed or stolen, or of any mutilated
Warrant, shall constitute an original contractual obligation on the part of
Sybase.
SECTION 8. EXERCISE OF WARRANT.
This Warrant shall be exercisable at any time during the period commencing
on the date hereof and ending on March 31, 2005.
For all purposes of this Section 8 and this Warrant, unless the context
otherwise requires, the following terms have the following respective meanings:
SECTION 9. INVESTMENT INTENT.
Unless a current registration statement under the Securities Act of 1933,
as amended, shall be in effect with respect to the securities to be issued upon
exercise of this Warrant, the Holder thereof, by accepting this Warrant,
covenants and agrees that, at the time of exercise hereof, and at the time of
any proposed transfer of securities acquired upon exercise hereof, such Holder
will deliver to Sybase a written statement that the securities acquired by the
Holder upon exercise hereof are for the own account of the Holder for investment
and are not acquired with a view to, or for sale in connection with, any
distribution thereof (or any portion thereof) and with no present intention (at
any such time) of offering and distributing such securities (or any portion
thereof).
SECTION 10. NO RIGHTS OR LIABILITY AS A STOCKHOLDER.
This Warrant does not entitle the Holder hereof to any voting rights or
other rights as a stockholder of Sybase. No provisions hereof, in the absence of
affirmative action by the Holder
<PAGE> 6
hereof to purchase Sybase Common Stock, and no enumeration herein of the rights
or privileges of the Holder hereof shall give rise to any liability of such
Holder as a stockholder of Sybase. Notwithstanding the foregoing, Sybase will
transmit to the Warrant holder such information, documents and reports as are
generally distributed to the Holders of any class or series of the securities of
Sybase concurrently with the distribution thereof to the stockholders.
SECTION 11. DEFINITIONS.
"SYBASE COMMON STOCK": (i) Sybase's presently authorized Sybase Common
Stock as such class exists on the date of this Warrant; (ii) securities issued
upon exercise of this Warrant; and (iii) stock of Sybase of any class thereafter
authorized that ranks, or is entitled to a participation, as to assets or
dividends, substantially on a parity with Sybase Common Stock.
"SYBASE": Sybase, Inc., a Delaware corporation, and any other corporation
assuming Sybase's obligations with respect to this Warrant pursuant to this
Section 11.
SECTION 12. REMEDIES.
Sybase stipulates that the remedies at law of the Holder of this Warrant
in the event of any default or threatened default by Sybase in the performance
of or compliance with any of the terms of this Warrant are not and will not be
adequate and that, without limiting any other remedy available at law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which the Holder might otherwise have.
SECTION 13. COVENANTS TO BIND SUCCESSOR AND ASSIGNS.
The terms of this Warrant shall bind the successors and permitted assigns
of the Holder and Sybase.
SECTION 14. GOVERNING LAW.
This Warrant shall be governed by the laws of the State of Delaware
without regard to its conflict of laws principles or rules.
[Signature on Next Page]
<PAGE> 7
IN WITNESS WHEREOF, Sybase has caused this Warrant to be signed in its
name by its duly authorized officer.
Dated: January 20, 2000
SYBASE, INC.,
a Delaware corporation
By:
--------------------------------
Name:
--------------------------------
Its:
--------------------------------
<PAGE> 8
EXHIBIT
[Attach Shareholder Agreement Which Is Exhibit to Reorganization Agreement]
<PAGE> 9
EXHIBIT 4.6
FORM OF WARRANT - INTELIDATA TECHNOLOGY CORPORATION
Warrant Certificate No.: HFN 1 Right to Purchase
640,000 Warrant Units
SUBSCRIPTION NOTICE
THE UNDERSIGNED, THE HOLDER, HEREBY ELECTS TO EXERCISE PURCHASE RIGHTS
REPRESENTED BY SUCH WARRANT FOR, AND TO PURCHASE THEREUNDER, ________ WARRANT
UNITS COVERED BY SUCH WARRANT AND HEREWITH MAKES PAYMENT IN FULL THEREFOR OF
$_________ IN CASH OR CERTIFIED CHECK AND REQUESTS THAT CERTIFICATES FOR SUCH
SHARES (AND ANY SECURITIES OR PROPERTY DELIVERABLE UPON SUCH EXERCISE) BE ISSUED
IN THE NAME OF AND DELIVERED TO _________________________________ WHOSE ADDRESS
IS ________________________________________________________________________.
The undersigned agrees that, in the absence of an effective registration
statement with respect to Sybase Common Stock issued upon this exercise, the
undersigned is acquiring such Sybase Common Stock for investment and not with a
view to distribution thereof and that the certificate or certificates
representing such Sybase Common Stock may bear a legend substantially as
follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR WITH ANY STATE SECURITIES COMMISSION, AND
MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933
AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO THE
TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF THE
SECURITIES ACT OF 1933 AND OTHER APPLICABLE STATE LAWS AND RULES."
Holder, by his acceptance and delivery of shares of Sybase Common Stock or
other securities upon exercise of this Warrant shall be deemed to have
represented and warranted that such shares of Sybase Common Stock or other
securities will be taken for his own account for investment and not with a view
to resale or distribution, except in compliance with applicable law.
Neither this Warrant nor any shares of Sybase Common Stock constituting
the Warrant Units to be purchased pursuant to this Warrant have been registered
under the Securities Act of 1933 (the "Securities Act"). Therefore, unless this
Warrant or any shares of Sybase Common Stock to be purchased pursuant to this
Warrant have been registered under the Securities Act, Sybase may require, as a
condition of allowing the transfer or exchange of this Warrant or such shares,
that the holder or transferee of this Warrant or such shares, as the case may
be, furnish to Sybase an opinion of counsel reasonably acceptable to Sybase to
the effect that such transfer or exchange may be made without registration under
the Securities Act of 1933. The certificates evidencing the Sybase Common Stock
issued upon the exercise of the Warrant shall bear the legends set forth at the
beginning of this Warrant.
<PAGE> 10
SECTION 2. TRANSFER, DIVISION AND COMBINATION.
All shares of Sybase Common Stock issued upon the exercise of this Warrant
shall be validly issued, fully paid and nonassessable and, if the Sybase Common
Stock is then listed on a national securities exchange or quoted on an automated
quotation system, shall be duly listed or quoted thereon.
Sybase agrees to maintain at its principal office, books for the
registration and transfer of this Warrant, and, subject to the provisions of
Section 3 hereof, this Warrant and all rights hereunder are transferable, in
whole or in part, on such books at such office, upon surrender of this Warrant
at such office, together with a written assignment of this Warrant duly executed
by the Holder or his agent or attorney and funds sufficient to pay any stock
transfer taxes payable upon the making of such transfer. Upon such surrender and
payment, Sybase shall execute and deliver a new Warrant in the name of the
assignee and this Warrant shall promptly be canceled. If and when this Warrant
is assigned in blank, Sybase may (but shall not be obliged to) treat the bearer
hereof as the absolute owner of this Warrant for all purposes, and Sybase shall
not be affected by any notice to the contrary. A Warrant may be exercised by a
new holder for the purchase of Warrant Units without having a new Warrant
issued.
This Warrant may be divided or combined with other Warrants upon
presentation hereof at Sybase's principal office, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or his agent or attorney. Subject to compliance with the
preceding paragraph as to any transfer that may be involved in such division or
combination, Sybase shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.
SECTION 3. RESTRICTIONS ON EXERCISE AND TRANSFER OF WARRANTS AND
SYBASE COMMON STOCK
This Warrant shall be exercisable (a) only under circumstances such that
the issuance of Sybase Common Stock issuable upon such exercise is exempt from
the requirements of registration under the Securities Act of 1933, as amended
(or any similar statute then in effect) (the "1933 Act") and any applicable
state securities law or (b) upon registration of such Sybase Common Stock in
compliance therewith. This Warrant shall be transferable only upon satisfaction
of any restrictions on transfer contained in the Additional Agreements and
either (a) only under circumstances such that the transfer is exempt from the
requirements of registration under the 1933 Act and any applicable state
securities law or (b) upon registration (for resale or otherwise) of such
Warrant in compliance therewith. By acceptance hereof, the Holder (for resale or
otherwise) agrees to comply with such legislation.
As long as this Warrant is not registered under the 1933 Act, before any
transfer or attempted transfer of all of this Warrant or such Sybase Common
Stock, the Holder shall give Sybase written notice of its intention so to do
describing briefly the manner of any such proposed transfer. Promptly after
receiving such written notice, Sybase shall present copies thereof to Company
counsel and to any special counsel designated by the Holder. If, in the opinion
of counsel for Sybase and counsel, if any, for the Holder, the proposed transfer
may be effected without registration under
<PAGE> 11
corporation ("HFN") in connection with the merger of HFN with On-Line Financial
Services, Inc., a Delaware corporation ("Merger Sub") a wholly owned subsidiary
of Sybase pursuant to the terms of that certain Agreement and Plan of
Reorganization, dated as of November 29, 1999, by and among Sybase, HFN, Merger
Sub, and certain principal shareholders of HFN and a shareholder representative
designated therein.
This Warrant and any shares of Sybase Common Stock issued upon exercise
of this Warrant shall become subject to the terms of the Shareholder Agreement,
a copy of which is attached hereto as Exhibit A (the "Shareholder Agreement").
This Warrant is subject to the following provisions, terms and
conditions:
Section 1. Exercise of Warrant.
To exercise this Warrant in whole or in part, the Holder shall deliver
to Sybase at its principal office, (a) a written notice, in substantially the
form of the Subscription Notice appearing at the end of this Warrant, of the
Holder's election to exercise this Warrant which notice shall specify the number
of Warrant Units to be purchased, (b) cash or a certified check payable to
Sybase in an amount equal to the aggregate purchase price of the number of
Warrant Units being purchased, and (c) this Warrant. Sybase shall as promptly as
practicable, and in any event within 15 days thereafter, execute and deliver or
cause to be executed and delivered, in accordance with such notice, a
certificate or certificates representing the aggregate number of Warrant Units
specified in such notice. The stock certificate or certificates of Sybase Common
Stock delivered in connection therewith shall be issued in the name of the
Holder or such other name as shall be designated in such notice. Such
certificate or certificates shall be deemed to have been issued and the Holder
or any other person so designated to be named therein shall be deemed for all
purposes to have become a holder of record of such shares as of the date such
notice is received by Sybase as aforesaid. If this Warrant shall have been
exercised only in part, Sybase shall, at the time of delivery of said
certificate or certificates, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the remaining Warrant Units called for by this
Warrant, which new Warrant shall in all other respects be identical to this
Warrant, or, at the request of the Holder, appropriate notation may be made on
this Warrant and the same returned to the Holder. Sybase shall pay all expenses,
taxes and other charges payable in connection with the preparation, issue and
delivery of such stock certificates, except that, in case such stock
certificates shall be registered in a name or names other than the name of the
Holder, funds sufficient to pay all stock transfer taxes that are payable upon
the issuance of such stock certificate or certificates shall be paid by the
Holder at the time of delivering the notice of exercise mentioned above.
<PAGE> 12
Dated:
----------------------------- --------------------------------------
Signature guaranteed:
<PAGE> 13
EXHIBIT 4.6
FORM OF WARRANT - INTELIDATA TECHNOLOGY CORPORATION
Warrant Certificate No.: HFN 1 Right to Purchase
640,000 Warrant Units
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________ the rights represented by the foregoing Warrant
and appoints ________________________ attorney to transfer said rights on the
books of said corporation, with full power of substitution in the premises.
Dated:
----------------------------- --------------------------------------
Signature guaranteed:
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatever.
<PAGE> 1
EXHIBIT 4.7
FORM OF WARRANT - MONTGOMERY SECURITIES
Warrant Certificate No.: HFN 3
Right to Purchase
16,667 Warrant Units
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR WHICH MAY BE ISSUED UPON
EXERCISE OF THE RIGHTS HEREIN GRANTED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR WITH ANY STATE SECURITIES COMMISSION, AND
MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO
THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND OTHER APPLICABLE STATE LAWS AND
RULES.
THE RIGHTS EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
SPECIFIED IN A CERTAIN INVESTOR AGREEMENT BETWEEN SYBASE AND THE ORIGINAL HOLDER
OF THESE SECURITIES, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE
PRINCIPAL OFFICE OF SYBASE.
SYBASE, INC.
COMMON STOCK PURCHASE WARRANT
VOID AFTER MAY 9, 2002
SYBASE, INC., a Delaware corporation (the "Sybase"), hereby certifies
that, for value received, MONTGOMERY SECURITIES, or assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from Sybase at any
time or from time to time before 5:00 p.m. Pacific time, on March 31, 2002 (the
"Expiration Date"), 16,667 "Warrant Units" as hereinafter defined at the
purchase price per Warrant Unit equal to $3.00 and otherwise in accordance with
the terms hereof.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Sybase" includes any corporation which shall succeed to or
assume the obligations of Sybase hereunder.
(b) The term "Warrant Unit" means $ 1.153448 in cash and 0.34794 shares of
Sybase Common Stock.
(b) The term "Sybase Common Stock" shall mean duly authorized, validly issued,
fully paid and nonassessable shares of the Common Stock, $ 0.001 par
value, of Sybase, and any other
<PAGE> 2
securities or property of Sybase or of any other person (corporate or
otherwise) which the Holder of this Warrant at any time shall be entitled
to receive on the exercise hereof, in lieu of or on account of Sybase
Common Stock, or which at any time shall be issuable in exchange for or in
replacement of Sybase Common Stock.
1. Initial Exercise Date; Expiration. This Warrant may be exercised at
any time or from time to time. It shall expire at 5:00 p.m., Pacific
Time, on March 31, 2002.
2. Exercise of Warrant; Partial Exercise.
This Warrant may be exercised in full or in part by the Holder
hereof by surrender of this Warrant, with the form of subscription
attached hereto duly executed by such Holder, to Sybase at its
principal office, accompanied by payment, in cash or by certified or
official bank check payable to the order of Sybase, of the purchase
price of the shares of the Warrant Units to be purchased hereunder,
the cancellation by the Holder of indebtedness of Sybase to the
Holder in an amount equal to such purchase price, or any combination
thereof. For any partial exercise hereof, the Holder shall designate
in the subscription the number of Warrant Units that it wishes to
purchase. On any such partial exercise, Sybase at its expense shall
forthwith issue and deliver to the Holder hereof a new warrant of
like tenor, in the name of the Holder hereof, which shall be
exercisable for such number of Warrant Units represented by this
Warrant which have not been purchased upon such exercise. No
fractional shares of Sybase Common Stock shall be issued upon
exercise of this Warrant and any fractional share shall be rounded
down to the next whole share of Sybase Common Stock without any
adjustment in the cash consideration included in the Warrant Unit.
3. When Exercise Effective. The exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of
business on the business day on which this Warrant is surrendered to
Sybase as provided in Section 2, and at such time the person in
whose name any certificate for shares of Sybase Common Stock shall
be issuable upon such exercise, as provided in Section 4, shall be
deemed to be the record holder of such Sybase Common Stock for all
purposes.
4. Delivery on Exercise. As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within five
business days thereafter, Sybase at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued
in the name of and delivered to the Holder hereof, or as such Holder
may direct, the Warrant Units (including the cash portion of the
Warrant Unit and a certificate or certificates for the number of
fully paid and nonassessable full shares of Sybase Common Stock
constituting the stock portion of the Warrant Unit) to which such
Holder shall be entitled on such exercise.
5. No Dilution or Impairment. Sybase will not, by amendment of its
Certificate of Incorporation avoid the observance or performance of
any of the terms of this Warrant, but will at all times in good
faith assist in the carrying out of all the terms hereof.
<PAGE> 3
6. Notices of Record Date. In the event Sybase provides written notice
to the holders of its Common Stock of
(a) any taking by Sybase of a record of the Holders of any
class of securities for the purpose of determining the Holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right,
or
(b) any capital reorganization of Sybase, any
reclassification or recapitalization of the capital stock of
Sybase, or any transfer of all or substantially all the assets
of Sybase to or consolidation or merger of Sybase with or into
any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Sybase, or
(d) any proposed issue or grant by Sybase of any shares of
stock of any class or any other securities, or any right or
option to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities,
then and in each such event Sybase will mail to the Holder hereof
any such notice delivered to the holders of its Common Stock, at the
time and in the manner such notice was provided to the holders of
Sybase Common Stock.
7. Exchange of Warrants. On surrender for exchange of this Warrant,
properly endorsed, to Sybase, Sybase at its expense will issue and
deliver to or on the order of the Holder thereof a new Warrant of
like tenor, in the name of such Holder or as such Holder may direct,
calling in the aggregate on the face thereof for the number of
Warrant Units called for on the face of the Warrant so surrendered.
8. Replacement of Warrants. On receipt by Sybase of evidence reasonably
satisfactory to Sybase of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to Sybase or, in the case
of any such mutilation, on surrender and cancellation of such
Warrant, Sybase at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
9. Investment Intent. Unless a current registration statement under the
Securities Act of 1933, as amended, shall be in effect with respect
to the securities to be issued upon exercise of this Warrant, the
Holder thereof, by accepting this Warrant, covenants and agrees
that, at the time of exercise hereof, and at the time of any
proposed transfer of securities acquired upon exercise hereof, such
Holder will deliver to Sybase a written statement that the
securities acquired by the Holder upon exercise hereof are for the
own account of the Holder for investment and are not acquired with a
view to, or for sale in connection with, any distribution thereof
(or any portion thereof) and with no
<PAGE> 4
present intention (at any such time) of offering and distributing
such securities (or any portion thereof).
10. Transfer. Subject to the transfer conditions referred to in the
legend endorsed hereon, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder
hereof upon surrender of this Warrant with a properly executed
assignment (in the form annexed hereto) at the principal office of
Sybase. Upon any partial transfer, Sybase will at its expense issue
and deliver to the Holder hereof a new Warrant of like tenor, in the
name of the Holder hereof, which shall be exercisable for such
number of Warrant Units which were not so transferred.
11. No Rights or Liability as a Stockholder. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a
stockholder of Sybase. No provisions hereof, in the absence of
affirmative action by the Holder hereof to purchase Sybase Common
Stock, and no enumeration herein of the rights or privileges of the
Holder hereof shall give rise to any liability of such Holder as a
stockholder of Sybase. Notwithstanding the foregoing, Sybase will
transmit to the Warrant holder such information, documents and
reports as are generally distributed to the Holders of any class or
series of the securities of Sybase concurrently with the
distribution thereof to the stockholders.
12. Damages. Sybase recognizes and agrees that the Holder hereof will
not have an adequate remedy if Sybase fails to comply with the terms
of this Warrant and that damages will not be readily ascertainable,
and Sybase expressly agrees that, in the event of such failure, it
shall not oppose an application by the Holder of this Warrant or any
other person entitled to the benefits of this Warrant requiring
specific performance of any and all provisions hereof or enjoining
Sybase from continuing to commit any such breach of the terms
hereof.
13. Registration Rights. Sybase covenants and agrees as follows:
13.1 Grant of Rights. Sybase hereby grants to the initial Holder of
this Warrant the rights set forth in the Shareholder Agreement,
executed by Sybase and the Holder concurrently with the issuance of
this Warrant (the "Shareholder Agreement"). Each of Sybase and the
Holder severally covenants and agrees that it shall comply with each
of the covenants and agreements contained in the Shareholder
Agreement, which covenants and agreements are expressly incorporated
herein by reference as though stated herein in full.
13.2 No Conflicting Agreements. Sybase represents and warrants to
the Holder that Sybase is not a party to any agreement that
conflicts in any manner with the Holder's rights to cause Sybase to
register Registrable Securities pursuant to the Shareholder
Agreement. Sybase covenants and agrees that it shall not, without
the prior written consent of the holders of two thirds of the
outstanding Registrable Securities, amend, modify or restate the
Shareholder Agreement, if, without the written consent of the
Holder, the Holder would be adversely affected by the
<PAGE> 5
amendment in a different manner than other holders of "Registrable
Securities" (as defined in the Shareholder Agreement) similarly
situated.
13.3 Rights and Obligations Survive Exercise and Expiration of
Warrant. The rights and obligations of Sybase and the Holder set
forth in this Section 13 and in the Shareholder Agreement shall
survive the exercise and expiration of this Warrant.
14. Notices. All notices referred to in this Warrant shall be in writing
and shall be delivered personally or by certified or registered
mail, return receipt requested, postage prepaid and will be deemed
to have been given when so delivered or mailed (i) to Sybase, at its
principal executive offices and (ii) to the Holder of this Warrant,
at such Holder's address as it appears in the records of Sybase
(unless otherwise indicated by such Holder).
15. Payment of Taxes. All shares of Sybase Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and
nonassessable, and Sybase shall pay all taxes and other governmental
charges that may be imposed upon Sybase in respect to the issue or
delivery thereof. The foregoing shall not make Sybase liable for any
net income taxes levied upon the Holder with respect to the
issuance, exercise, sale, exchange, or other transfer of this
Warrant or the sale, exchange, or other transfer of the Sybase
Common Stock or other property to be issued upon exercise or
surrender by the Holder of this Warrant.
16. Legends On Shares Issued. The Sybase Common Stock issued upon
exercise of the rights granted herein shall bear the legends set
forth at the beginning of this Warrant, unless and until such
legends are removed in accordance with the Shareholder Agreement.
17. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. This Warrant shall be
governed by and construed and enforced in accordance with the
internal laws of the State of California (without reference to any
principles of the conflicts of laws). The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.
<PAGE> 6
IN WITNESS WHEREOF, Sybase has caused this Warrant to be signed in its
name by its duly authorized officers.
Dated: January 20, 2000
SYBASE, INC., a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
[Signature Page - Montgomery Warrant]
<PAGE> 7
Warrant Certificate No.: HFN 3
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO _______________________________
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _______________(1) Warrant Units consisting of $__________
of cash in the aggregate and ____ shares of Common Stock of Sybase, Inc. in the
aggregate, and herewith makes payment of $______________ therefor, and requests
that such cash and the certificates for such shares be issued in the name of,
and delivered to __________________________________________________ whose
address is _______________________________________________________.
_____________________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the Warrant)
_____________________________________
_____________________________________
(Address)
Dated:
_____________________________, 200_
- --------------
(1) Insert here the number of Warrant Units as to which the Warrant is
being exercised.
<PAGE> 8
Warrant Certificate No.: HFN 3
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________the right represented by the within Warrant to purchase
shares of Common Stock of Sybase, Inc. to which the within Warrant relates, and
appoints ___________________________________Attorney to transfer such right on
the books of ____________________________________________ with full power of
substitution in the premises.
_____________________________________
(Signature must conform in all
respects to name of Holder as
specified on the face of the Warrant)
_____________________________________
_____________________________________
(Address)
Dated:
_____________________________, 2000
<PAGE> 9
EXHIBIT TO WARRANT
[Attach Shareholder Agreement which is Exhibit to Reorganization Agreement]
<PAGE> 1
EXHIBIT 4.8
FORM OF WARRANT - MONTGOMERY SECURITIES
Warrant Certificate No.: HFN 3 Right to Purchase
16,667 Warrant Units
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR WHICH MAY BE ISSUED UPON
EXERCISE OF THE RIGHTS HEREIN GRANTED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR WITH ANY STATE SECURITIES COMMISSION, AND
MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO
THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND OTHER APPLICABLE STATE LAWS AND
RULES.
THE RIGHTS EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
SPECIFIED IN A CERTAIN INVESTOR AGREEMENT BETWEEN SYBASE AND THE ORIGINAL HOLDER
OF THESE SECURITIES, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE
PRINCIPAL OFFICE OF SYBASE.
SYBASE, INC.
COMMON STOCK PURCHASE WARRANT
VOID AFTER MARCH 31, 2002
SYBASE, INC., a Delaware corporation (the "Sybase"), hereby certifies
that, for value received, MONTGOMERY SECURITIES, or assigns (the "Holder"), is
entitled, subject to the terms set forth below, to purchase from Sybase at any
time or from time to time before 5:00 p.m. Pacific time, on March 31, 2002 (the
"Expiration Date"), 56,500 "Warrant Units" as hereinafter defined at the
purchase price per Warrant Unit equal to $3.00 and otherwise in accordance with
the terms hereof.
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Sybase" includes any corporation which shall succeed to or
assume the obligations of Sybase hereunder.
(b) The term "Warrant Unit" means $1.153448 in cash and 0.34794 shares of
Sybase Common Stock.
<PAGE> 2
(b) The term "Sybase Common Stock" shall mean duly authorized, validly issued,
fully paid and nonassessable shares of the Common Stock, $ 0.001 par
value, of Sybase, and any other securities or property of Sybase or of any
other person (corporate or otherwise) which the Holder of this Warrant at
any time shall be entitled to receive on the exercise hereof, in lieu of
or on account of Sybase Common Stock, or which at any time shall be
issuable in exchange for or in replacement of Sybase Common Stock.
1. Initial Exercise Date; Expiration. This Warrant may be exercised at
any time or from time to time. It shall expire at 5:00 p.m., Pacific
Time, on March 31, 2002.
2. Exercise of Warrant; Partial Exercise.
This Warrant may be exercised in full or in part by the Holder
hereof by surrender of this Warrant, with the form of subscription
attached hereto duly executed by such Holder, to Sybase at its
principal office, accompanied by payment, in cash or by certified or
official bank check payable to the order of Sybase, of the purchase
price of the shares of the Warrant Units to be purchased hereunder,
the cancellation by the Holder of indebtedness of Sybase to the
Holder in an amount equal to such purchase price, or any combination
thereof. For any partial exercise hereof, the Holder shall designate
in the subscription the number of Warrant Units that it wishes to
purchase. On any such partial exercise, Sybase at its expense shall
forthwith issue and deliver to the Holder hereof a new warrant of
like tenor, in the name of the Holder hereof, which shall be
exercisable for such number of Warrant Units represented by this
Warrant which have not been purchased upon such exercise. No
fractional shares of Sybase Common Stock shall be issued upon
exercise of this Warrant and any fractional share shall be rounded
down to the next whole share of Sybase Common Stock without any
adjustment in the cash consideration included in the Warrant Unit.
3. When Exercise Effective. The exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of
business on the business day on which this Warrant is surrendered to
Sybase as provided in Section 2, and at such time the person in
whose name any certificate for shares of Sybase Common Stock shall
be issuable upon such exercise, as provided in Section 4, shall be
deemed to be the record holder of such Sybase Common Stock for all
purposes.
4. Delivery on Exercise. As soon as practicable after the exercise of
this Warrant in full or in part, and in any event within five
business days thereafter, Sybase at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued
in the name of and delivered to the Holder hereof, or as such Holder
may direct, the Warrant Units (including the cash portion of the
Warrant Unit and a certificate or certificates for the number of
fully paid and nonassessable full shares of Sybase Common Stock
constituting the stock portion of the Warrant Unit) to which such
Holder shall be entitled on such exercise.
5. No Dilution or Impairment. Sybase will not, by amendment of its
Certificate of Incorporation avoid the observance or performance of
any of the terms of this
<PAGE> 3
Warrant, but will at all times in good faith assist in the carrying
out of all the terms hereof.
6. Notices of Record Date. In the event Sybase provides written notice
to the holders of its Common Stock of
(a) any taking by Sybase of a record of the Holders of any
class of securities for the purpose of determining the Holders
thereof who are entitled to receive any dividend or other
distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right,
or
(b) any capital reorganization of Sybase, any reclassification
or recapitalization of the capital stock of Sybase, or any
transfer of all or substantially all the assets of Sybase to
or consolidation or merger of Sybase with or into any other
person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Sybase, or
(d) any proposed issue or grant by Sybase of any shares of
stock of any class or any other securities, or any right or
option to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities,
then and in each such event Sybase will mail to the Holder hereof
any such notice delivered to the holders of its Common Stock, at the
time and in the manner such notice was provided to the holders of
Sybase Common Stock.
7. Exchange of Warrants. On surrender for exchange of this Warrant,
properly endorsed, to Sybase, Sybase at its expense will issue and
deliver to or on the order of the Holder thereof a new Warrant of
like tenor, in the name of such Holder or as such Holder may direct,
calling in the aggregate on the face thereof for the number of
Warrant Units called for on the face of the Warrant so surrendered.
8. Replacement of Warrants. On receipt by Sybase of evidence reasonably
satisfactory to Sybase of the loss, theft, destruction or mutilation
of this Warrant and, in the case of any such loss, theft or
destruction of this Warrant, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to Sybase or, in the case
of any such mutilation, on surrender and cancellation of such
Warrant, Sybase at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.
9. Investment Intent. Unless a current registration statement under the
Securities Act of 1933, as amended, shall be in effect with respect
to the securities to be issued upon exercise of this Warrant, the
Holder thereof, by accepting this Warrant, covenants and agrees
that, at the time of exercise hereof, and at the time of any
proposed transfer of securities acquired upon exercise hereof, such
Holder will deliver to Sybase a written statement that the
securities acquired by the Holder upon exercise hereof are for the
<PAGE> 4
own account of the Holder for investment and are not acquired with a
view to, or for sale in connection with, any distribution thereof
(or any portion thereof) and with no present intention (at any such
time) of offering and distributing such securities (or any portion
thereof).
10. Transfer. Subject to the transfer conditions referred to in the
legend endorsed hereon, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the Holder
hereof upon surrender of this Warrant with a properly executed
assignment (in the form annexed hereto) at the principal office of
Sybase. Upon any partial transfer, Sybase will at its expense issue
and deliver to the Holder hereof a new Warrant of like tenor, in the
name of the Holder hereof, which shall be exercisable for such
number of Warrant Units which were not so transferred.
11. No Rights or Liability as a Stockholder. This Warrant does not
entitle the Holder hereof to any voting rights or other rights as a
stockholder of Sybase. No provisions hereof, in the absence of
affirmative action by the Holder hereof to purchase Sybase Common
Stock, and no enumeration herein of the rights or privileges of the
Holder hereof shall give rise to any liability of such Holder as a
stockholder of Sybase. Notwithstanding the foregoing, Sybase will
transmit to the Warrant holder such information, documents and
reports as are generally distributed to the Holders of any class or
series of the securities of Sybase concurrently with the
distribution thereof to the stockholders.
12. Damages. Sybase recognizes and agrees that the Holder hereof will
not have an adequate remedy if Sybase fails to comply with the terms
of this Warrant and that damages will not be readily ascertainable,
and Sybase expressly agrees that, in the event of such failure, it
shall not oppose an application by the Holder of this Warrant or any
other person entitled to the benefits of this Warrant requiring
specific performance of any and all provisions hereof or enjoining
Sybase from continuing to commit any such breach of the terms
hereof.
13. Registration Rights. Sybase covenants and agrees as follows:
13.1 Grant of Rights. Sybase hereby grants to the initial Holder of
this Warrant the rights set forth in the Shareholder Agreement,
executed by Sybase and the Holder concurrently with the issuance of
this Warrant (the "Shareholder Agreement"). Each of Sybase and the
Holder severally covenants and agrees that it shall comply with each
of the covenants and agreements contained in the Shareholder
Agreement, which covenants and agreements are expressly incorporated
herein by reference as though stated herein in full.
13.2 No Conflicting Agreements. Sybase represents and warrants to
the Holder that Sybase is not a party to any agreement that
conflicts in any manner with the Holder's rights to cause Sybase to
register Registrable Securities pursuant to the Shareholder
Agreement. Sybase covenants and agrees that it shall not, without
the prior written consent of the holders of two thirds of the
outstanding Registrable
<PAGE> 5
Securities, amend, modify or restate the Shareholder Agreement, if,
without the written consent of the Holder, the Holder would be
adversely affected by the amendment in a different manner than other
holders of "Registrable Securities" (as defined in the Shareholder
Agreement) similarly situated.
13.3 Rights and Obligations Survive Exercise and Expiration of
Warrant. The rights and obligations of Sybase and the Holder set
forth in this Section 13 and in the Shareholder Agreement shall
survive the exercise and expiration of this Warrant.
14. Notices. All notices referred to in this Warrant shall be in writing
and shall be delivered personally or by certified or registered
mail, return receipt requested, postage prepaid and will be deemed
to have been given when so delivered or mailed (i) to Sybase, at its
principal executive offices and (ii) to the Holder of this Warrant,
at such Holder's address as it appears in the records of Sybase
(unless otherwise indicated by such Holder).
15. Payment of Taxes. All shares of Sybase Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and
nonassessable, and Sybase shall pay all taxes and other governmental
charges that may be imposed upon Sybase in respect to the issue or
delivery thereof. The foregoing shall not make Sybase liable for any
net income taxes levied upon the Holder with respect to the
issuance, exercise, sale, exchange, or other transfer of this
Warrant or the sale, exchange, or other transfer of the Sybase
Common Stock or other property to be issued upon exercise or
surrender by the Holder of this Warrant.
16. Legends On Shares Issued. The Sybase Common Stock issued upon
exercise of the rights granted herein shall bear the legends set
forth at the beginning of this Warrant, unless and until such
legends are removed in accordance with the Shareholder Agreement.
17. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change,
waiver, discharge or termination is sought. This Warrant shall be
governed by and construed and enforced in accordance with the
internal laws of the State of California (without reference to any
principles of the conflicts of laws). The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.
<PAGE> 6
IN WITNESS WHEREOF, Sybase has caused this Warrant to be signed in its
name by its duly authorized officers.
Dated: January 20, 2000
SYBASE, INC., a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Signature Page - Montgomery Warrant]
<PAGE> 7
Warrant Certificate No.: HFN 3
FORM OF SUBSCRIPTION
(To be signed only on exercise of Warrant)
TO ____________________________
The undersigned, the Holder of the within Warrant, hereby irrevocably
elects to exercise the purchase right represented by such Warrant for, and to
purchase thereunder, _______________(1) Warrant Units consisting of $__________
of cash in the aggregate and ____ shares of Common Stock of Sybase, Inc. in the
aggregate, and herewith makes payment of $______________ therefor, and requests
that such cash and the certificates for such shares be issued in the name of,
and delivered to __________________________________________________ whose
address is ______________________________________________________.
_______________________________________
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
_______________________________________
_______________________________________
(Address)
Dated:
___________________________________, 200_
- --------
(1) Insert here the number of Warrant Units as to which the Warrant is
being exercised.
<PAGE> 8
Warrant Certificate No.: HFN 3
FORM OF ASSIGNMENT
For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________the right represented by the within Warrant to purchase
shares of Common Stock of Sybase, Inc. to which the within Warrant relates, and
appoints ___________________________________Attorney to transfer such right on
the books of ____________________________________________ with full power of
substitution in the premises.
---------------------------------------
(Signature must conform in all respects
to name of Holder as specified on the
face of the Warrant)
---------------------------------------
---------------------------------------
(Address)
Dated:
, 2000
- -----------------------------------
<PAGE> 9
EXHIBIT TO WARRANT
[Attach Shareholder Agreement which is Exhibit to Reorganization Agreement]
<PAGE> 1
EXHIBIT 4.9
Warrant Certificate No.: HFN 2 Right to Purchase
100,000 Warrant Units
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR WHICH MAY BE ISSUED UPON
EXERCISE OF THE RIGHTS HEREIN GRANTED HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR WITH ANY STATE SECURITIES COMMISSION, AND
MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE ABSENCE OF A
REGISTRATION STATEMENT WHICH IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY PRIOR TO
THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT VIOLATION OF
THE SECURITIES ACT OF 1933, AS AMENDED, AND OTHER APPLICABLE STATE LAWS AND
RULES.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE ENTITLED TO CERTAIN RIGHTS AND
THE HOLDER HEREOF IS SUBJECT TO CERTAIN OBLIGATIONS SPECIFIED IN A CERTAIN
SHAREHOLDER AGREEMENT BETWEEN SYBASE, INC. AND THE ORIGINAL HOLDER OF THESE
SECURITIES, A COPY OF WHICH IS AVAILABLE FOR EXAMINATION AT THE PRINCIPAL OFFICE
OF SYBASE, INC.
SYBASE, INC.
COMMON STOCK PURCHASE WARRANT
VOID AFTER APRIL 1, 2003
SYBASE, INC., a Delaware corporation ("Sybase"), hereby certifies that,
for value received, Speer & Associates, Inc., having an address at 8215 Roswell
Road, Building 1100, Atlanta, Georgia 30350 or assigns (the "Investor"), is
entitled, subject to the terms set forth below, to purchase from Sybase at any
time from the date hereof until 5:00 P.M., Eastern time, on April 1, 2003 (the
"Expiration Date") 100,000 "Warrant Units" (as hereinafter defined) at a
purchase price of [$3.00 / MER] per Warrant Unit (the "Purchase Price"). The
term "Warrant Unit" means $1.153448 in cash and 0.34794 shares of duly
authorized, validly issued, fully paid and nonassessable shares of the Common
Stock, $0.001 par value, of Sybase.
This Warrant is issued in consideration of the surrender by the Investor
of its Warrant to purchase the Common Stock of Home Financial Network, Inc., a
Delaware corporation ("HFN") in connection with the merger of On-Line Financial
Services, Inc., a wholly owned subsidiary of Sybase into HFN ("Merger Sub")
pursuant to the terms of that certain Agreement and Plan of Reorganization,
dated as of November 29, 1999, by and among Sybase, HFN, Merger Sub, and certain
principal shareholders of HFN and a shareholder representative designated
therein (the "Reorganization Agreement") and the ancillary agreements referenced
therein, including without limitation, the Shareholder Agreement executed
concurrently herewith by the holder.
<PAGE> 2
As used herein, the following terms, unless the context otherwise
requires, have the following respective meanings:
(a) The term "Sybase" shall include Sybase, Inc. and any
corporation which shall succeed or assume the obligations of Sybase hereunder.
(b) The term "Sybase Common Stock" includes (a) the Sybase Common
Stock, $.001 par value per share, as authorized on the date hereof, (b) any
other capital stock of any class or classes (however designated) of Sybase,
authorized on or after such date, the holders of which shall have the right,
without limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and (c) any other securities
into which or for which any of the securities described in (a) or (b) may be
converted or exchanged pursuant to a plan of recapitalization, reorganization,
merger, sale of assets or otherwise.
1. EXERCISE OF WARRANT. On or prior to the Expiration Date, this
Warrant may be exercised in full or in part by the holder hereof by surrender of
this Warrant, with the form of subscription at the end hereof duly executed by
such holder, to Sybase at its principal office, accompanied by payment in the
amount obtained by multiplying the number of Warrant Units for which this
Warrant is being exercised by the Purchase Price then in effect, which payment
shall be in the form of cash, certified or official bank check payable to the
order of Sybase.
2. DELIVERY OF STOCK CERTIFICATES ON EXERCISE. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
15 days thereafter, Sybase at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the holder hereof, or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, the number of Warrant Units (including
the cash and certificates for Sybase Common Stock) to which such holder shall be
entitled on such exercise, together with any other stock or other securities and
property (including cash, where applicable) to which such holder is entitled
upon such exercise pursuant to Section 1 or otherwise. No fractional shares
shall be issued upon exercise of this Warrant and any fractional share shall be
rounded down to the next whole share without any adjustment in the cash
consideration included in the Warrant Unit.
3. NO IMPAIRMENT. Sybase will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the holder of this Warrant.
Without limiting the generality of the foregoing, Sybase (a) will not increase
the par value of any shares of Sybase Common Stock receivable on the exercise of
the Warrant above the amount payable therefor on such exercise, and (b) will
take all such action as may be necessary or appropriate in order that Sybase may
validly and legally issue fully paid and nonassessable shares of Sybase Common
Stock on the exercise of this Warrant from time to time outstanding.
<PAGE> 3
4. NOTICES OF RECORD DATE. Notwithstanding Section 9 hereof, in the
event Sybase provides notice to the holders of its Common Stock of
(a) any taking by Sybase of a record of the holders of any class
of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, or
(b) any capital reorganization of Sybase, any reclassification or
recapitalization of the capital stock of Sybase, or any transfer of all or
substantially all the assets of Sybase to or consolidation or merger of Sybase
with or into any other person, or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of Sybase,
then and in each such event Sybase will promptly mail or cause to be mailed to
the holder of this Warrant any such notice delivered to the holders of its
Common Stock, at the time and in the manner such notice was provided to the
holders of Sybase Common Stock.
5. RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT. Sybase will at
all times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrant, all shares of Sybase Common Stock from time to time
issuable on the exercise of the Warrant.
6. EXCHANGE OF WARRANT. On surrender for exchange of this Warrant,
properly endorsed, to Sybase, Sybase at its expense will issue and deliver to or
on the order of the holder thereof a new Warrant or Warrants of like tenor, in
the name of such holder or as such holder (on payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face or
faces thereof for the number of Warrant Units for which the Warrant or Warrants
may still be exercised and the amount of cash and number of shares of Sybase
Common Stock constituting such Warrant Unit.
7. REPLACEMENT OF WARRANT. On receipt of evidence reasonably
satisfactory to Sybase of the loss, theft, destruction or mutilation of this
Warrant and, in the case of any such loss, theft or destruction of this Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to Sybase or, in the case of any such mutilation, on surrender
and cancellation of such Warrant, Sybase at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.
8. WARRANT AGENT. Sybase may, by written notice to each holder of a
Warrant, appoint an agent for the purpose of issuing the Sybase Common Stock on
the exercise of the Warrant pursuant to Section 1, exchanging this Warrant
pursuant to Section 6, and replacing this Warrant pursuant to Section 7, or any
of the foregoing, and thereafter any such issuance, exchange or replacement, as
the case may be, shall be made at such office by such agent.
9. NEGOTIABILITY; RESTRICTIONS ON TRANSFER; WARRANT HOLDER NOT DEEMED
STOCKHOLDER. This Warrant is issued upon the following terms, to all of which
each holder or owner hereof by the taking hereof consents and agrees:
<PAGE> 4
(a) No holder of this Warrant shall, as such, be entitled to vote
or to receive dividends or to be deemed the holder of any class of security that
may at any time be issuable upon exercise of the Warrant for any purpose
whatsoever, nor shall anything contained herein be construed to confer upon such
holder, as such, any of the rights of a stockholder of Sybase or any right to
vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issue or reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger or
conveyance or otherwise), or to receive notice of meetings, or to receive
dividends or subscription rights, until such holder shall have exercised the
Warrant and been issued shares of Sybase Common Stock in accordance with the
provisions hereof.
(b) Neither this Warrant nor any shares of Sybase Common Stock to
be purchased pursuant to this Warrant have been registered under the Securities
Act of 1933 (the "Securities Act"). Therefore, unless this Warrant or any shares
of Sybase Common Stock to be purchased pursuant to this Warrant have been
registered under the Securities Act, Sybase may require, as a condition of
allowing the transfer or exchange of this Warrant or such shares, that the
holder or transferee of this Warrant or such shares, as the case may be, furnish
to Sybase an opinion of counsel reasonably acceptable to Sybase to the effect
that such transfer or exchange may be made without registration under the
Securities Act of 1933. The certificates evidencing the Sybase Common Stock
issued upon the exercise of the Warrant shall bear the legends set forth at the
beginning of this Warrant.
(c) Neither his warrant nor any shares of Sybase Common Stock to
be purchased pursuant to this Warrant may be transferred or assigned without the
prior written consent of Sybase.
(d) Holder acknowledges and agrees that all shares of Sybase
Common Stock issuable upon exercise of this Warrant shall be subject to the
Shareholder's Agreement and the Investor Agreement, executed by the holder
concurrently herewith.
10. INVESTMENT INTENT. Unless a current registration statement under the
Securities Act of 1933, as amended, shall be in effect with respect to the
securities to be issued upon exercise of this Warrant, the Holder thereof, by
accepting this Warrant, covenants and agrees that, at the time of exercise
hereof, and at the time of any proposed transfer of securities acquired upon
exercise hereof, such Holder will deliver to Sybase a written statement that the
securities acquired by the Holder upon exercise hereof are for the own account
of the Holder for investment and are not acquired with a view to, or for sale in
connection with, any distribution thereof (or any portion thereof) and with no
present intention (at any such time) of offering and distributing such
securities (or any portion thereof).
11. NO RIGHTS OR LIABILITY AS A STOCKHOLDER. This warrant does not
entitle the Holder hereof to any voting rights or other rights as a stockholder
of Sybase. No provisions hereof, in the absence of affirmative action by the
Holder hereof to purchase Sybase Common Stock, and no enumeration herein of the
rights or privileges of the Holder hereof shall give rise to any liability of
such Holder as a stockholder of Sybase. Notwithstanding the foregoing, Sybase
will transmit to the Warrant holder such information, documents and reports as
are generally distributed to the Holders of any class or series of the
securities of Sybase concurrently with the distribution thereof to the
stockholders.
<PAGE> 5
12. FURTHER ASSURANCES. Sybase undertakes generally to execute all such
agreements and other instruments and to do all such other acts as are necessary
or appropriate to give full effect to the terms, conditions and provisions of
this Warrant and make it binding on Sybase.
13. NOTICES. All notices and other communications from Sybase to the
holder of this Warrant shall be mailed by overnight courier or by first class
registered or certified mail, postage prepaid, at such address as may have been
furnished to Sybase in writing by such holder or, until any such holder
furnishes to Sybase an address, then to, and at the address of, the last holder
of this Warrant who has so furnished an address to Sybase.
14. MISCELLANEOUS. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware. The headings in this Warrant are
for purposes of reference only, and shall not limit or otherwise affect any of
the terms hereof. The invalidity or unenforceability of any provision thereof
shall in no way affect the validity or enforceability of any other provision.
15. EXPIRATION. The right to exercise this Warrant shall expire at 5:00
P.M., Eastern Time, on April 1, 2003.
Dated: _____________, 2000 SYBASE, INC., a Delaware corporation
By: _________________________________
Name: _______________________________
Title: ______________________________
<PAGE> 6
Warrant Certificate No.: HFN 2 Right to Purchase
100,000 Warrant Units
FORM OF SUBSCRIPTION
(TO BE SIGNED ONLY ON EXERCISE OF WARRANT)
TO SYBASE, INC.
The undersigned, the holder of the within Warrant, hereby irrevocably
elects to exercise this Warrant for, and to purchase thereunder, ________
Warrant Units consisting of cash in the amount of $__________ in the aggregate
and ________ shares of Sybase Common Stock in the aggregate, and herewith makes
payment of $________ therefor, and requests that such cash and the certificates
for such shares be issued in the name of, and delivered to ____________________,
whose address is ____________________.
Dated: ____________________________________
(Signature must conform to name of
holder as specified on the face of
the Warrant)
____________________________________
(Address)
<PAGE> 7
Warrant Certificate No.: HFN 2
FORM OF ASSIGNMENT
(TO BE SIGNED ONLY ON TRANSFER OF WARRANT)
For value received, the undersigned hereby sells, assigns, and transfers
unto ____________________ the right represented by the within Warrant to
purchase ________ Warrant Units to which the within Warrant relates, and
appoints ____________________ Attorney to transfer such right on the books of
Sybase, Inc. with full power of substitution in the premises.
Dated: ____________________________________
(Signature must conform to name of
holder as specified on the face of
the Warrant)
____________________________________
(Address)
Signed in the presence of: ____________________________________
-2-
<PAGE> 8
EXHIBIT TO SPEER WARRANT
[Attach Shareholder Agreement Exhibit to Reorganization Agreement]
-3-
<PAGE> 1
EXHIBIT 5.1
CONSENT OF WILSON SONSINI GOODRICH & ROSATI PC, LEGAL COUNSEL
Sybase, Inc.
6475 Christie Avenue
Emeryville, CA 94608
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-3 to be filed by
you with the Commission on or about January 31, 2000 (the "Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended, of 7,381,914 shares of your Common Stock to be sold by certain
of your stockholders (the "Registered Shares"). As your counsel, we have
examined the proceedings taken and are familiar with the proceedings proposed to
be taken by you in connection with the sale of the Shares by the Selling
Stockholders in the manner set forth in the Registration Statement in the
section entitled "Plan of Distribution."
It is our opinion that the Registered Shares to be sold in the manner
referred to in the Registration Statement are legally and validly issued,
fully-paid and non-assessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including any Prospectus constituting a part hereof, and
any amendments thereto.
Very truly yours,
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
-7-
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Board of Directors
Sybase, Inc.
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Sybase, Inc. for
the registration of 7,381,914 shares of its common stock and to the
incorporation by reference therein of our report dated January 21, 1999, with
respect to the consolidated financial statements and schedule of Sybase, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
Walnut Creek, California Ernst & Young LLP
January 28, 2000
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