SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___________)*
Interleaf, Inc.
----------------
(Name of Issuer)
Common Stock, $0.01 Par Value Per Share
---------------------------------------
(Title of Class of Securities)
458729209
--------------
(CUSIP Number)
Randall Bolten
BroadVision, Inc.
585 Broadway
Redwood City, CA 94063
(650) 261-5100
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
January 26, 2000
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. Seess.240.13d-7(b) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP No. 458729209 SCHEDULE 13D Page 2 of 13
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(1) Names of Reporting Persons.
S.S. or I.R.S. Identification Nos. of Above Persons
BroadVision, Inc.
94-3184303
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(2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of Funds (See Instructions)
OO
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(5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e) [ ]
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(6) Citizenship or Place or Organization
Delaware
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7 SOLE VOTING POWER
2,688,572 (acquisition of such shares is
conditioned upon the occurrence of certain
events specified in that certain Stock
Option Agreement dated January 26, 2000 and
filed as Exhibit 99.3 to this Schedule 13D)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 589,176
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 2,688,572 (acquisition of such shares is
conditioned upon the occurrence of certain
events specified in that certain Stock
Option Agreement dated January 26, 2000 and
filed as Exhibit 99.3 to this Schedule 13D)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
- --------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,277,748
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(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) [ ]
- --------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
19.7%
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(14) Type of Reporting person (See Instructions)
CO
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Neither the filing of this statement on Schedule 13D nor any of its contents
shall be deemed to constitute an admission by BroadVision, Inc. that it is the
beneficial owner of any of the Common Stock referred to herein for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any
other purpose, and such beneficial ownership is expressly disclaimed.
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CUSIP No. 458729209 SCHEDULE 13D Page 3 of 13
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D relates to the Common Stock, $0.01 par value
per share (Interleaf Common Stock"), of Interleaf, Inc., a Massachusetts
corporation ("Interleaf"). The principal executive offices of Interleaf are
located 62 Fourth Avenue, Waltham, Massachusetts 02451.
ITEM 2. IDENTITY AND BACKGROUND
(a) BroadVision, Inc ("BroadVision") develops, markets and supports
application software solutions for one-to-one relationship management across the
extended enterprise.
(b) The address of the principal office and principal business of
BroadVision is 585 Broadway, Redwood City, California 94063.
(c) Set forth in Schedule I to this Schedule 13D is the name and present
principal occupation or employment of each of BroadVision's executive officers
and directors and the name, principal business and address of any corporation or
other organization in which such employment is conducted.
(d) During the past five years, neither BroadVision nor, to BroadVision's
knowledge, any person named in Schedule I to this Schedule 13D, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the past five years, neither BroadVision nor, to BroadVision's
knowledge, any person named in Schedule I to this Schedule 13D, was a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which such person was or is subject to a judgment, decree or
final order enjoining future violations of or prohibiting or mandating activity
subject to federal or state securities laws or finding any violation with
respect to such laws.
(f) Except as set forth on Schedule I hereto, all of the directors and
executive officers of BroadVision named in Schedule I to this Schedule 13D are
citizens of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an Agreement and Plan of Merger and Reorganization dated
January 26, 2000 (the "Reorganization Agreement") among BroadVision, Infiniti
Acquisition Sub, Inc., a Massachusetts corporation and a wholly owned subsidiary
of Parent ("Merger Sub") and Interleaf, and subject to the conditions set forth
therein (including approval by the stockholders of Interleaf), Merger Sub will
be merged with and into Interleaf (the "Merger"), with each share of Interleaf
Common Stock being converted into the right to receive 0.3465 shares of common
stock, par value $.0001 per share, of BroadVision ("BroadVision Common Stock")
(as adjusted for any stock split, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction) (the "Exchange
Ratio"). The description contained in this Item 3 of the transactions
contemplated by the Reorganization Agreement is qualified in its entirety by
reference to the full text of the Reorganization Agreement, a copy of which is
attached to this Schedule 13D as Exhibit 99.1.
To facilitate the consummation of the Merger (as defined in Item 4 below),
certain stockholders of Interleaf have entered into Voting Agreements with
BroadVision as described in Item 4, and Interleaf has entered into the Option
Agreement (as defined in Item 4 below) with BroadVision.
ITEM 4. PURPOSE OF TRANSACTION
(a) - (b) As described in Item 3 above, this statement relates to the
merger of Merger Sub, a wholly-owned subsidiary of BroadVision, with and into
Interleaf in a statutory merger pursuant to the Massachusetts Business
Corporation Law ("Massachusetts Law"). At the effective time of the Merger (the
"Effective Time"),
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CUSIP No. 458729209 SCHEDULE 13D Page 4 of 13
the separate existence of Merger Sub will cease and Interleaf will continue as
the surviving corporation and as a wholly-owned subsidiary of BroadVision
("Surviving Corporation"). The officers and directors of the Surviving
Corporation after the Effective Time shall be as mutually determined by
Interleaf and BroadVision prior to the Effective Time and shall serve as the
officers and directors of the Surviving Corporation until their respective
successors are elected and qualified or duly appointed, as the case may be. The
Articles of Organization of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the Articles of Organization of
Merger Sub as in effect immediately prior to the Effective Time; provided,
however, that at the Effective Time the Articles of Organization of the
Surviving Corporation shall be amended so that the name of the Surviving
Corporation shall be Interleaf, Inc. The Bylaws of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to the Bylaws
of Merger Sub as in effect immediately prior to the Effective Time.
MERGER CONSIDERATION. In connection with the Merger, holders of outstanding
Interleaf Common Stock will receive, in exchange for each share of Interleaf
Common Stock held by them, 0.3465 shares of BroadVision Common Stock (as
adjusted for any stock split, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction) (i.e., the
Exchange Ratio). A warrant to purchase Interleaf Common Stock shall be converted
into the right to receive, upon the exercise thereof, the number of shares of
BroadVision Common Stock that the holder thereof would have received had such
holder exercised the warrant immediately prior to the Effective Time and the
shares of Interleaf Common Stock that would have been held by such holder upon
such exercise were converted into BroadVision Common Stock and the holders of
warrants to purchase Interleaf Series D Preferred Stock, to the extent
outstanding immediately prior to the Effective Time, shall be converted into the
right to receive, upon the exercise thereof, the number of shares of BroadVision
Common Stock that the holder thereof would have received had such holder
exercised such warrants and elected to convert the shares of Series D Preferred
Stock issuable upon such exercise, in each case, immediately prior to the
Effective Time, and the shares of Interleaf Common Stock that would have been
held by such holder upon such exercise and conversion were converted into
BroadVision Common Stock In addition, BroadVision will assume all options
outstanding under Interleaf's 1993 Stock Option Plan, 1993 Director Stock Option
Plan, 1994 Employee Stock Option Plan, 1997 Key Man Stock Option Plan and
Agreement, and 1998 Key Man Stock Option Plan and Agreement. In accordance with
the terms of the Reorganization Agreement, BroadVision and Interleaf will
mutually agree as to the treatment of Interleaf's 1998 Employee Stock Purchase
Plan. If the Merger is consummated, Interleaf Common Stock will be deregistered
under the Exchange Act and delisted from the Nasdaq National Market.
REPRESENTATIONS, WARRANTIES, COVENANTS AND CLOSING CONDITIONS. The
Reorganization Agreement contains customary representations and warranties on
the part of Interleaf and BroadVision, and the consummation of the Merger is
subject to customary closing conditions, including, without limitation, approval
by the stockholders of Interleaf, regulatory approval and the occurrence of no
material adverse effect with respect to a party. The Reorganization Agreement
also contains covenants regarding the activities of Interleaf and BroadVision
prior to the earlier of the Effective Time and the termination of the
Reorganization Agreement. Interleaf has agreed to conduct its business in the
ordinary course and in a commercially reasonable manner. In addition, a number
of corporate actions by Interleaf during the period pending the closing of the
Merger require BroadVision's approval, including borrowings, capital
expenditures and stock option grants above specified minimums. BroadVision has
agreed to conduct its business in the ordinary course and in a commercially
reasonable manner.
TERMINATION OF THE MERGER AGREEMENT. The Reorganization Agreement may be
terminated prior to the Effective Time, whether before or after approval of the
Merger by the stockholders of BroadVision and the stockholders of Interleaf: (i)
by mutual written consent of the Boards of Directors of BroadVision and
Interleaf; (ii) subject to certain exceptions, by either BroadVision or
Interleaf if the Merger shall not have been consummated by July 31, 2000; (iii)
by either BroadVision or Interleaf in connection with certain legal or
governmental actions having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger; (iv) subject to certain limitations, by
BroadVision or Interleaf if the Interleaf Stockholders' Meeting shall have
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CUSIP No. 458729209 SCHEDULE 13D Page 5 of 13
been held and the Reorganization Agreement and the Merger shall not have been
approved by the necessary vote of the Interleaf shareholders; (v) by Interleaf
if (at any time prior to the adoption and approval of the Reorganization
Agreement and approval of the Merger by the Interleaf shareholders) a
"Triggering Event" (as defined in the Reorganization Agreement) shall have
occurred; (vi) subject to certain limitations, by BroadVision or Interleaf if
the BroadVision Stockholders' Meeting shall have been held and the issuance of
BroadVision Common Stock in the Merger shall not have been approved by the
necessary vote of the BroadVision stockholders; (vii) by BroadVision if
Interleaf's representations and warranties in the Reorganization Agreement shall
be or become materially inaccurate or if any of Interleaf's covenants in the
Reorganization Agreement shall have been breached and not cured within the
period required by the Merger Agreement; or (viii) by Interleaf if BroadVision's
representations and warranties in the Reorganization Agreement shall be or
become materially inaccurate or if any of BroadVision's covenants in the
Reorganization Agreement shall have been breached and not cured within the
period required by the Merger Agreement.
The description contained in this Item 4 of the transactions contemplated
by the Reorganization Agreement is qualified in its entirety by reference to the
full text of the Reorganization Agreement, a copy of which is attached to this
Schedule 13D as Exhibit 99.1.
VOTING AGREEMENTS. As an inducement to BroadVision to enter into the
Reorganization Agreement, each of the officers and directors of Interleaf
(individually, a "Interleaf Voting Agreement Stockholder" and, collectively, the
"Interleaf Voting Agreement Stockholders") has entered into a Voting Agreement
dated as of January 26, 2000 (individually, an "Interleaf Voting Agreement" and,
collectively, the "Interleaf Voting Agreements") with BroadVision. The number of
shares of Interleaf Common Stock beneficially owned by each of the Interleaf
Voting Agreement Stockholders is set forth on Schedule II to this Schedule 13D.
The Interleaf Voting Agreement Stockholders, who beneficially own an aggregate
of 589,176 outstanding shares of Interleaf Common Stock (assuming the issuance
of exercisable options as of January 6, 2000 by the Interleaf Voting Agreement
Stockholders) (representing approximately 4.2% of the shares of Interleaf Common
Stock as of January 6, 2000) have agreed that, prior to the Expiration Date,
they will vote their shares of Interleaf Common Stock in favor of: (i) approval
of the Merger; (ii) approval and adoption of the Reorganization Agreement; and
(iii) each of the other actions contemplated by the Reorganization Agreement.
The Interleaf Voting Agreement Stockholders have also delivered to BroadVision
irrevocable proxies with respect to the matters covered by the Interleaf Voting
Agreements. In addition, subject to certain de minimis exceptions, the Interleaf
Voting Agreement Stockholders have agreed not to transfer any securities of
Interleaf owned by them unless and until the proposed transferee of such
Interleaf securities shall have (i) executed a counterpart of the Interleaf
Voting Agreement and an irrevocable proxy and (ii) agreed to hold such Interleaf
securities subject to all of the terms and provisions of the Interleaf Voting
Agreement. BroadVision did not pay any additional consideration to any Interleaf
Voting Agreement Stockholders in connection with the execution and delivery of
the Interleaf Voting Agreements. The description contained in this Item 4 of the
transactions contemplated by the Interleaf Voting Agreements is qualified in its
entirety by reference to the full text of the form of Interleaf Voting
Agreement, a copy of which is attached to this Schedule 13D as Exhibit 99.2.
STOCK OPTION AGREEMENT. Also as an inducement to BroadVision to enter into
the Reorganization Agreement, BroadVision and Interleaf entered into a Stock
Option Agreement dated January 26, 2000 (the "Option Agreement") pursuant to
which Interleaf granted BroadVision the right under certain conditions to
purchase up to 2,688,572 shares of Interleaf Common Stock (the "Option Shares")
at a purchase price equal to the lesser of (a) $52.69, or (b) the Exchange
Ratio, multiplied by the average of the closing sales price of a share of
BroadVision Common Stock as reported on the Nasdaq National Market for the 20
consecutive trading days ending on the second trading day preceding the notice
date. Subject to certain conditions, the option granted in the Option Agreement
may be exercised, in whole or in part, on any one occasion, if an "Exercise
Event" (as defined in the Reorganization Agreement) has occurred. The Option
becomes exercisable for this reason, the Option shall terminate upon the
earliest to occur of: (i) the date on which the Merger becomes effective; (b)
the date on which the Reorganization Agreement is terminated pursuant to Section
8.1 thereof, if an Exercise Event (as defined in Section 4(b) of the Option
Agreement) shall not have occurred on or prior to such date; or (c) the first
anniversary of the date six months after the date on which BroadVision receives
written notice from Interleaf of the occurrence of an Exercise Event (the
"Exercise Event Notice Date"); provided, however, that if an Exercise Event
occurs, and if, by reason of any
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CUSIP No. 458729209 SCHEDULE 13D Page 6 of 13
applicable Legal Requirement, order, judgment, decree or other legal impediment,
the Option cannot be exercised on the first anniversary of the Exercise Event
Notice Date, then the Termination Date shall be extended until the date 30 days
after the date on which such impediment is removed. The rights of BroadVision
and the obligations of Interleaf set forth in Sections 7, 8, 9 and 10 of the
Option Agreement shall not terminate on the Termination Date, but shall survive
beyond the Termination Date as provided in those Sections.
In addition, BroadVision has agreed that in the event receives net proceeds
in connection with any sale or other disposition of the Option or Option Shares
(including, without limitation, any amounts received by BroadVision pursuant to
Sections 7, 8 or 9) which, together with any proceeds received by BroadVision in
connection with any prior such sale or disposition, any dividends or
distributions received by BroadVision on any Option Shares and any amount paid
to BroadVision pursuant to Sections 8.3(b) and 8.3(c) of the Reorganization
Agreement prior thereto or thereafter, are in excess of the Threshold Amount (as
defined herein), then all net proceeds to BroadVision in excess of the Threshold
Amount shall be remitted to the Company promptly following receipt thereof. As
used herein, "Threshold Amount" shall mean the amount equal to the greater of
(i) $35,000,000 or (ii) the product of (A) 200,000 and (B) the average of the
closing sales price of a share of BroadVision Common Stock as reported on the
Nasdaq National Market for the five consecutive trading days ending on the first
trading day preceding the first occurrence of an Exercise Event.
(c) Not applicable.
(d) If the Merger is consummated, Interleaf will become a wholly-owned
subsidiary of BroadVision and BroadVision will subsequently determine the size
and membership of the Board of Directors of Interleaf and the officers of
Interleaf.
(e) None, other than a change in the number of outstanding shares of
Interleaf Common Stock as contemplated by the Reorganization Agreement.
(f) Upon consummation of the Merger, Interleaf will become a wholly-owned
subsidiary of BroadVision.
(g) Upon consummation of the Merger, the Articles of Organization of
Interleaf will be amended and restated in a form satisfactory to BroadVision.
(h) Upon consummation of the Merger, the Interleaf Common Stock will cease
to be quoted on any quotation system or exchange.
(i) Upon consummation of the Merger, the Interleaf Common Stock will become
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act.
(j) Other than as described above, BroadVision currently has no plan or
proposal which relates to, or may result in, any of the matters listed in Items
4(a) -(i) of Schedule 13D (although BroadVision reserves the right to develop
such plans).
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CUSIP No. 458729209 SCHEDULE 13D Page 7 of 13
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) - (b) As a result of the Interleaf Voting Agreements, BroadVision has
shared power to vote an aggregate of 3,277,748 shares of Interleaf Common Stock
(assuming the issuance of exercisable options as of January 6, 2000 subject to
the Interleaf Voting Agreements ) for the limited purposes described in Item 4
above. As a result of the Option Agreement granted to BroadVision, BroadVision
may be deemed to be the beneficial owner of an additional 2,688,572 shares of
Interleaf Common Stock (assuming exercise of the Option as described in Item 4
above). In the aggregate, such shares (representing a total of 3,277,748 shares
of Interleaf Common Stock (assuming the issuance of exercisable options as of
January 6, 2000 by the Interleaf Voting Agreement Stockholders)) would represent
approximately 19.7% of the shares of Interleaf Common Stock outstanding as of
January 6, 2000 after giving effect to the exercise of the Option.
To BroadVision's knowledge, no shares of Interleaf Common Stock are
beneficially owned by any of the persons named in Schedule I, except for such
beneficial ownership, if any, arising solely from the Interleaf Voting
Agreements and the Option Agreement.
Set forth in Schedule III to this Schedule 13D is the name and present
principal occupation or employment of each person with whom BroadVision shares
the power to vote or to direct the vote or to dispose or direct the disposition
of Interleaf Common Stock.
During the past five years, to BroadVision's knowledge, no person named in
Schedule III to this Schedule 13D has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
During the past five years, to BroadVision's knowledge, no person named in
Schedule III to this Schedule 13D was a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction as a result of which
such person was or is subject to a judgment, decree or final order enjoining
future violations of or prohibiting or mandating activity subject to federal or
state securities laws or finding any violation with respect to such laws.
To BroadVision's knowledge, all persons named in Schedule III to this
Scheduled 13D are citizens of the United States.
(c) Neither BroadVision, nor, to BroadVision's knowledge, any person named
in Schedule III, has effected any transaction in Interleaf Common Stock during
the past 60 days, except as disclosed herein.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Other than as described in Item 4 above, to BroadVision's knowledge, there
are no contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 and between such persons and any
person with respect to any securities of Interleaf, including but not limited to
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
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CUSIP No. 458729209 SCHEDULE 13D Page 8 of 13
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
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EXHIBIT NO. DESCRIPTION
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99.1 Agreement and Plan of Merger and Reorganization dated as of
January 26, 2000, by and among BroadVision, Inc., a Delaware
corporation, Infiniti Acquisition Sub, Inc., a Massachusetts
corporation, and Interleaf, Inc., a Delaware corporation (without
exhibits).
99.2 Form of Voting Agreement dated as of January 26, 2000, a
substantially similar version of which has been executed by and
between BroadVision, Inc., a Delaware corporation, and each of
the officers and directors of Interleaf, Inc, a Massachusetts
corporation.
99.3 Stock Option Agreement dated as of January 26, 2000, by and
between BroadVision, Inc., a Delaware corporation, and Interleaf,
Inc., a Massachusetts corporation.
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CUSIP No. 458729209 SCHEDULE 13D Page 9 of 13
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 7, 2000 BROADVISION, INC.
/s/ Randall C. Bolten
----------------------------------------
Randall C. Bolten
Chief Financial Officer and Vice
President Operations
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CUSIP No. 458729209 SCHEDULE 13D Page 10 of 13
SCHEDULE I
EXECUTIVE OFFICERS AND EMPLOYEE DIRECTORS OF BROADVISION
COUNTRY OF
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT CITIZENSHIP
Pehong Chen Chairman of the Board, Chief United States
Executive Officer and President
Randall C. Bolten Chief Financial Officer and Vice United States
President, Operations
Clark W. Catelain Vice President, Engineering United States
Sandra Vaughan Vice President, Marketing United States
All individuals named in the above table are employed at BroadVision, Inc., 585
Broadway, Redwood City 94063.
NON-EMPLOYEE DIRECTORS OF BROADVISION
<TABLE>
<CAPTION>
NAME AND ADDRESS OF
CORPORATION OR OTHER
PRINCIPAL OCCUPATION ORGANIZATION IN COUNTRY OF
NAME OR EMPLOYMENT WHICH EMPLOYED CITIZENSHIP
<S> <C> <C> <C>
David L. Anderson Managing director of Sutter Sutter Hill Ventures United States
Hill Ventures, a venture 755 Page Mill Road, Suite A-200
capital investment firm Palo Alto, CA 94304-1005
Principal of Mayfield Fund, Mayfield Fund United States
Yogen Dalal a venture capital 2800 Sand Hill Road
investment firm Menlo Park, CA 94025
The Procter & Gamble Company United States
Todd A. Garrett Chief Information Officer 1 Procter & Gamble Plaza (11-C)
of Proctor & Gamble Cincinnati, OH 45202
Koh Boon Hwee Executive Chairman of the Wuthelam Holdings PTE Ltd. Singapore
Wuthelam Group of 177 River Valley Road, #04-13
companies, a diversified Liang Court
Singapore company Singapore 179030
Carl Pascarella President and Chief Visa USA United States
Executive Officer of Visa 900 Metro Center Boulevard
USA Foster City, CA 94404
</TABLE>
<PAGE>
CUSIP No. 458729209 SCHEDULE 13D Page 11 of 13
SCHEDULE II
NUMBER OF SHARES OF PERCENTAGE OF OUTSTANDING
INTERLEAF COMMON STOCK SHARES OF INTERLEAF
INTERLEAF VOTING BENEFICIALLY OWNED AS OF COMMON STOCK AS OF
AGREEMENT STOCKHOLDER JANUARY 6, 2000 JANUARY 6, 2000
Jaime W. Ellertson 263,405 1.9
Gary R. Phillips 43,260 .32
Barry L. Briggs 10,532 .78
Robert A. Fisher 26,624 .20
Amanda L. Radice 20,563 .15
Peter J. Rice 56,261 .41
Craig Newfield 29,844 .22
Rory J. Cowan 32,916 .24
Frederick B. Bamber 22,700 .17
David A. Boucher 24,488 .18
John A. Lopiano 18,916 .13
Marcia J. Hooper 10,833 .08
<PAGE>
CUSIP No. 458729209 SCHEDULE 13D Page 12 of 13
SCHEDULE III
INTERLEAF STOCKHOLDER PRINCIPAL OCCUPATION OR EMPLOYMENT
Jaime W. Ellertson President, Chief Executive Officer and Chairman of
the Board of Interleaf, Inc.
Gary R. Phillips Vice President of Sales and e-content Solutions of
Interleaf, Inc.
Barry L. Briggs Chief Technology Officer of Interleaf, Inc.
Robert A. Fisher Vice President of Customer Support of Interleaf,
Inc.
Amanda L. Radice Vice President of Marketing of Interleaf, Inc.
Peter J. Rice Vice President of Finance & Administration, Chief
Financial Officer and Treasurer of Interleaf, Inc.
Craig Newfield Vice President, General Counsel and Clerk of
Interleaf, Inc.
Rory J. Cowan President and Chief Executive Officer of Lionbridge
Technologies, Inc.
Frederick B. Bamber Managing director of Applied Technology Associates
II, LP
David A. Boucher Managing director of Applied Technology Associates
II, LP
John A. Lopiano Retired
Marcia J. Hooper Vice President/Partner of Advent International
Corporation
<PAGE>
CUSIP No. 458729209 SCHEDULE 13D Page 13 of 13
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION PAGE NUMBER
- --------------------------------------------------------------------------------
99.1 Agreement and Plan of Merger and Reorganization
dated as of January 26, 2000, by and among
BroadVision, Inc., a Delaware corporation,
Infiniti Acquisition Sub, Inc., a Massachusetts
corporation, and Interleaf, Inc., a Delaware
corporation (without exhibits).
99.2 Form of Voting Agreement dated as of January 26,
2000, a substantially similar version of which has
been executed by and between BroadVision, Inc., a
Delaware corporation, and each of each of the
officers and directors of Interleaf, Inc, a
Massachusetts corporation.
99.3 Stock Option Agreement dated as of January 26,
2000, by and between BroadVision, Inc., a Delaware
corporation, and Interleaf, Inc., a Massachusetts
corporation.
================================================================================
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among:
BROADVISION, INC.,
a Delaware corporation;
INFINITI ACQUISITION SUB, INC.,
a Massachusetts corporation; and
INTERLEAF, INC.,
a Massachusetts corporation
---------------------------
Dated as of January 26, 2000
---------------------------
================================================================================
<PAGE>
Section 1. Description of Transaction..........................................1
1.1 Merger of Merger Sub into the Company...............................1
1.2 Effect of the Merger................................................1
1.3 Closing; Effective Time.............................................1
1.4 Articles of Organization and Bylaws; Directors and Officers.........2
1.5 Conversion of Shares................................................2
1.6 Closing of the Company's Transfer Books.............................4
1.7 Exchange of Certificates............................................4
1.8 Dissenting Shares...................................................5
1.9 Tax Consequences....................................................6
1.10 Further Action......................................................6
Section 2. Representations and Warranties of the Company.......................6
2.1 Due Organization; Subsidiaries; Etc.................................6
2.2 Articles of Organization and Bylaws.................................7
2.3 Capitalization, Etc.................................................7
2.4 SEC Filings; Financial Statements...................................8
2.5 Absence of Changes..................................................9
2.6 Title to Assets....................................................10
2.7 Receivables; Customers.............................................11
2.8 Real Property; Equipment; Leasehold................................11
2.9 Proprietary Assets.................................................11
2.10 Contracts..........................................................14
2.11 Sale of Products; Performance of Services..........................15
2.12 Liabilities........................................................15
2.13 Compliance with Legal Requirements.................................15
2.14 Certain Business Practices.........................................16
2.15 Governmental Authorizations........................................16
2.16 Tax Matters........................................................16
2.17 Employee and Labor Matters; Benefit Plans..........................17
2.18 Environmental Matters..............................................20
2.19 Insurance..........................................................21
2.20 Transactions with Affiliates.......................................21
2.21 Legal Proceedings; Orders..........................................21
2.22 Authority; Inapplicability of Anti-takeover Statutes;
Binding Nature of Agreement........................................21
2.23 Inapplicability of Section 2115(b) of California
Corporations Code..................................................22
2.24 Vote Required......................................................22
2.25 Non-Contravention; Consents........................................22
2.26 Fairness Opinion...................................................23
2.27 Financial Advisor..................................................23
2.28 Disclosure.........................................................23
Section 3. Representations and Warranties of Parent and Merger Sub............24
3.1 Due Organization; Subsidiaries.....................................24
3.2 Capitalization.....................................................24
3.3 SEC Filings; Financial Statements..................................24
3.4 Absence of Changes.................................................25
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3.5 Liabilities........................................................25
3.6 Compliance with Legal Requirements.................................25
3.7 Tax Matters........................................................25
3.8 Environmental Matters..............................................26
3.9 Legal Proceedings..................................................26
3.10 Authority; Binding Nature of Agreement.............................26
3.11 No Vote Required...................................................26
3.12 Non-Contravention; Consents........................................26
3.13 Valid Issuance.....................................................27
3.14 Financial Advisor..................................................27
3.15 Disclosure.........................................................27
Section 4. Certain Covenants of the Parties...................................27
4.1 Access and Investigation...........................................27
4.2 Operation of the Company's Business................................29
4.3 No Solicitation....................................................31
4.4 Operation of Parent's Business.....................................33
Section 5. Additional Covenants of the Parties................................34
5.1 Registration Statement; Prospectus/Proxy Statement.................34
5.2 Company Stockholders' Meeting......................................35
5.3 Regulatory Approvals...............................................35
5.4 Stock Options......................................................36
5.5 Employee Benefits..................................................37
5.6 Indemnification of Officers and Directors..........................38
5.7 Additional Agreements..............................................39
5.8 Disclosure.........................................................40
5.9 Tax Matters........................................................40
5.10 Listing and Frankfurt Stock Exchange...............................40
5.11 Resignation of Officers and Directors..............................40
Section 6. Conditions Precedent to Obligations of Parent and Merger Sub.......40
6.1 Accuracy of Representations........................................40
6.2 Performance of Covenants...........................................41
6.3 Effectiveness of Registration Statement............................41
6.4 Stockholder Approval...............................................41
6.5 Consents...........................................................41
6.6 Agreements and Documents...........................................41
6.7 Employees..........................................................42
6.8 No Material Adverse Effect.........................................42
6.9 HSR Act............................................................42
6.10 Frankfurt Stock Exchange...........................................42
6.11 Listing............................................................42
6.12 No Restraints......................................................42
6.13 No Governmental Litigation.........................................42
Section 7. Conditions Precedent to Obligation of the Company..................43
7.1 Accuracy of Representations........................................43
7.2 Performance of Covenants...........................................43
7.3 Effectiveness of Registration Statement............................43
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7.4 Stockholder Approval...............................................43
7.5 Documents..........................................................43
7.6 No Material Adverse Effect.........................................43
7.7 HSR Act............................................................44
7.8 Listing............................................................44
7.9 No Restraints......................................................44
8.1 Termination........................................................44
8.2 Effect of Termination..............................................45
8.3 Expenses; Termination Fees.........................................45
Section 9. Miscellaneous Provisions...........................................47
9.1 Amendment..........................................................47
9.2 Waiver.............................................................47
9.3 No Survival of Representations and Warranties......................47
9.4 Entire Agreement; Counterparts.....................................47
9.5 Applicable Law; Jurisdiction.......................................47
9.6 Attorneys' Fees....................................................48
9.7 Assignability......................................................48
9.8 Notices............................................................48
9.9 Cooperation........................................................49
9.10 Construction.......................................................49
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EXHIBIT 99.1
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") is made
and entered into as of January 26, 2000, by and among: BROADVISION, INC., a
Delaware corporation ("Parent"); INFINITI ACQUISITION SUB, INC., a Massachusetts
corporation and a wholly owned subsidiary of Parent ("Merger Sub"); and
INTERLEAF, INC., a Massachusetts corporation (the "Company"). Certain
capitalized terms used in this Agreement are defined in Exhibit A.
RECITALS
A. Parent, Merger Sub and the Company intend to effect a merger of Merger
Sub into the Company (the "Merger") in accordance with this Agreement and the
Massachusetts Business Corporation Law (the "MBCL"). Upon consummation of the
Merger, Merger Sub will cease to exist, and the Company will become a wholly
owned subsidiary of Parent.
B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). For financial reporting purposes, it is anticipated that
the Merger be accounted for as a purchase.
C. The respective boards of directors of Parent, Merger Sub and the Company
have approved this Agreement and approved the Merger.
D. In order to induce Parent to enter into this Agreement and to consummate
the Merger, concurrently with the execution and delivery of this Agreement the
Company is entering into a stock option agreement with Parent (the "Stock Option
Agreement"), pursuant to which the Company has granted to Parent an option,
exercisable under the circumstances specified therein, to purchase shares of
Company Common Stock.
AGREEMENT
The parties to this Agreement, intending to be legally bound, agree as
follows:
SECTION 1. DESCRIPTION OF TRANSACTION
1.1 Merger of Merger Sub into the Company. Upon the terms and subject
to the conditions set forth in this Agreement, at the Effective Time (as defined
in Section 1.3), Merger Sub shall be merged with and into the Company, and the
separate existence of Merger Sub shall cease. The Company will continue as the
surviving corporation in the Merger (the "Surviving Corporation").
1.2 Effect of the Merger. The Merger shall have the effects set forth
in this Agreement and in the applicable provisions of the MBCL.
1.3 Closing; Effective Time. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Cooley
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Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, California, at 10:00
a.m. on a date to be designated by Parent (the "Closing Date"), which shall be
no later than the fifth business day after the satisfaction or waiver of the
last to be satisfied or waived of the conditions set forth in Sections 6 and 7
(other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the satisfaction or waiver of such conditions). Subject
to the provisions of this Agreement, an articles of merger (the "Articles of
Merger") satisfying the applicable requirements of the MBCL shall be duly
executed by the Company and Merger Sub and, simultaneously with or as soon as
practicable following the Closing, delivered to the Secretary of State of the
Commonwealth of Massachusetts for filing. The Merger shall become effective upon
the latest of: (a) the date and time of the filing of the Articles of Merger
with the Secretary of State of the Commonwealth of Massachusetts, or (b) such
other date and time as may be specified in the Articles of Merger with the
consent of Parent (the "Effective Time").
1.4 Articles of Organization and Bylaws; Directors and Officers.
Unless otherwise determined by Parent prior to the Effective Time:
(a) the Articles of Organization of the Surviving Corporation
shall be amended and restated as of the Effective Time to conform to Exhibit B;
(b) the Bylaws of the Surviving Corporation shall be amended and
restated as of the Effective Time to conform to the Bylaws of Merger Sub as in
effect immediately prior to the Effective Time; and
(c) the directors and officers of the Surviving Corporation
immediately after the Effective Time shall be the respective individuals who are
directors and officers of Merger Sub immediately prior to the Effective Time.
1.5 Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger and without
any further action on the part of Parent, Merger Sub, the Company or any
stockholder of the Company:
(i) any shares of Company Common Stock then held by the
Company or any wholly owned Subsidiary of the Company (or held in the Company's
treasury) shall be canceled and retired and shall cease to exist, and no
consideration shall be delivered in exchange therefor;
(ii) any shares of Company Common Stock then held by Parent,
Merger Sub or any other wholly owned Subsidiary of Parent shall be canceled and
retired and shall cease to exist, and no consideration shall be delivered in
exchange therefor;
(iii) except as provided in clauses "(i)" and "(ii)" above
and subject to Sections 1.5(b), 1.5(c) and 1.5(d), each share of Company Common
Stock then outstanding shall be converted into the right to receive 0.3465 of a
share of Parent Common Stock;
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(iv) each share of the common stock, $0.01 par value per
share, of Merger Sub then outstanding shall be converted into one share of
common stock of the Surviving Corporation; and
(v) (x) the Finpiave Warrant (as defined in Section 2.3(b)),
to the extent outstanding immediately prior to the Effective Time, shall be
converted into the right to receive, upon the exercise thereof, the number of
shares of Parent Common Stock that the holder thereof would have received had
such holder exercised the Finpiave Warrant immediately prior to the Effective
Time and the shares of Company Common Stock that would have been held by such
holder upon such exercise were converted into Parent Common Stock pursuant to
this Section 1.5; and (y) each of the Series D Warrants (as defined in Section
2.3(b)), to the extent outstanding immediately prior to the Effective Time,
shall be converted into the right to receive, upon the exercise thereof, the
number of shares of Parent Common Stock that the holder thereof would have
received had such holder exercised such Series D Warrant and elected to convert
the shares of Series D (as defined in Section 2.3(b)) issuable upon such
exercise, in each case, immediately prior to the Effective Time, and the shares
of Company Common Stock that would have been held by such holder upon such
exercise and conversion were converted into Parent Common Stock pursuant to this
Section 1.5.
The fraction of a share of Parent Common Stock specified in clause "(iii)" of
the preceding sentence (as such fraction may be adjusted in accordance with
Section 1.5(b)) is referred to as the "Exchange Ratio."
(b) If, between the date of this Agreement and the Effective
Time, the outstanding shares of Company Common Stock or Parent Common Stock are
changed into a different number or class of shares by reason of any stock split,
division or subdivision of shares, stock dividend, reverse stock split,
reclassification, recapitalization or other similar transaction, then the
Exchange Ratio shall be appropriately adjusted.
(c) If any shares of Company Common Stock outstanding immediately
prior to the Effective Time are unvested or are subject to a repurchase option,
risk of forfeiture or other condition under any applicable restricted stock
purchase agreement or other agreement with the Company or under which the
Company has any rights, then, unless the terms governing such Company Common
Stock provide that such restriction, repurchase right or risk of forfeiture will
be automatically waived in connection with the transactions contemplated by this
Agreement, the shares of Parent Common Stock issued in exchange for such shares
of Company Common Stock will also be unvested and subject to the same repurchase
option, risk of forfeiture or other condition, and the certificates representing
such shares of Parent Common Stock may accordingly be marked with appropriate
legends.
(d) No fractional shares of Parent Common Stock shall be issued
in connection with the Merger, and no certificates or scrip for any such
fractional shares shall be issued. Any holder of Company Common Stock who would
otherwise be entitled to receive a fraction of a share of Parent Common Stock
(after aggregating all fractional shares of Parent Common Stock issuable to such
holder) shall, in lieu of such fraction of a share and upon surrender of such
holder's Company Stock Certificate(s) (as defined in Section 1.6), be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
determined by
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multiplying such fraction by the closing price of a share of Parent Common Stock
on the Nasdaq National Market on the date the Merger becomes effective.
1.6 Closing of the Company's Transfer Books. At the Effective Time:
(a) all shares of Company Common Stock outstanding immediately prior to the
Effective Time shall automatically be canceled and retired and shall cease to
exist, and all holders of certificates representing shares of Company Common
Stock that were outstanding immediately prior to the Effective Time shall cease
to have any rights as stockholders of the Company; and (b) the stock transfer
books of the Company shall be closed with respect to all shares of Company
Common Stock outstanding immediately prior to the Effective Time. No further
transfer of any such shares of Company Common Stock shall be made on such stock
transfer books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any shares of Company Common Stock (a
"Company Stock Certificate") is presented to the Exchange Agent (as defined in
Section 1.7) or to the Surviving Corporation or Parent, such Company Stock
Certificate shall be canceled and shall be exchanged as provided in Section 1.7.
1.7 Exchange of Certificates.
(a) On or prior to the Closing Date, Parent shall select a
reputable bank or trust company to act as exchange agent in the Merger (the
"Exchange Agent"). Promptly after the Effective Time, Parent shall deposit with
the Exchange Agent (i) certificates representing the shares of Parent Common
Stock issuable pursuant to this Section 1, and (ii) cash sufficient to make
payments in lieu of fractional shares in accordance with Section 1.5(d). The
shares of Parent Common Stock and cash amounts so deposited with the Exchange
Agent, together with any dividends or distributions received by the Exchange
Agent with respect to such shares, are referred to collectively as the "Exchange
Fund."
(b) As soon as reasonably practicable after the Effective Time,
Parent will cause the Exchange Agent will mail to the record holders of Company
Stock Certificates (i) a letter of transmittal in customary form and containing
such provisions as Parent may reasonably specify (including a provision
confirming that delivery of Company Stock Certificates shall be effected, and
risk of loss and title to Company Stock Certificates shall pass, only upon
delivery of such Company Stock Certificates to the Exchange Agent), and (ii)
instructions for use in effecting the surrender of Company Stock Certificates in
exchange for certificates representing Parent Common Stock. Upon surrender of a
Company Stock Certificate to the Exchange Agent for exchange, together with a
duly executed letter of transmittal and such other documents as may be
reasonably required by the Exchange Agent or Parent, (A) the holder of such
Company Stock Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Parent Common Stock that
such holder has the right to receive pursuant to the provisions of Section 1.5
(and cash in lieu of any fractional share of Parent Common Stock), and (B) the
Company Stock Certificate so surrendered shall be canceled. Until surrendered as
contemplated by this Section 1.7(b), each Company Stock Certificate shall be
deemed, from and after the Effective Time, to represent only the right to
receive shares of Parent Common Stock (and cash in lieu of any fractional share
of Parent Common Stock) as contemplated by Section 1. If any Company Stock
Certificate shall have been lost, stolen or destroyed, Parent may, in its
discretion and as a condition precedent to the issuance of any certificate
representing Parent Common Stock, require the owner of such lost, stolen or
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destroyed Company Stock Certificate to provide an appropriate affidavit and to
deliver a bond (in such sum as Parent may reasonably direct) as indemnity
against any claim that may be made against the Exchange Agent, Parent or the
Surviving Corporation with respect to such Company Stock Certificate.
(c) No dividends or other distributions declared or made with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Company Stock Certificate with
respect to the shares of Parent Common Stock that such holder has the right to
receive in the Merger until such holder surrenders such Company Stock
Certificate in accordance with this Section 1.7 (at which time such holder shall
be entitled, subject to the effect of applicable escheat or similar laws, to
receive all such dividends and distributions, without interest).
(d) Any portion of the Exchange Fund that remains undistributed
to holders of Company Stock Certificates as of the first anniversary of the date
on which the Merger becomes effective shall be delivered to Parent upon demand,
and any holders of Company Stock Certificates who have not theretofore
surrendered their Company Stock Certificates in accordance with this Section 1.7
shall thereafter look only to Parent for satisfaction of their claims for Parent
Common Stock, cash in lieu of fractional shares of Parent Common Stock and any
dividends or distributions with respect to Parent Common Stock.
(e) Each of the Exchange Agent, Parent and the Surviving
Corporation shall be entitled to deduct and withhold from any consideration
payable or otherwise deliverable pursuant to this Agreement to any holder or
former holder of Company Common Stock such amounts as may be required to be
deducted or withheld therefrom under the Code or any provision of state, local
or foreign tax law or under any other applicable Legal Requirement. To the
extent such amounts are so deducted or withheld, such amounts shall be treated
for all purposes under this Agreement as having been paid to the Person to whom
such amounts would otherwise have been paid.
(f) Neither Parent nor the Surviving Corporation shall be liable
to any holder or former holder of Company Common Stock or to any other Person
with respect to any shares of Parent Common Stock (or dividends or distributions
with respect thereto), or for any cash amounts, delivered to any public official
pursuant to any applicable abandoned property law, escheat law or similar Legal
Requirement.
1.8 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the
contrary, the shares of any holder of Company Common Stock who has demanded and
perfected appraisal rights for such shares in accordance with the MBCL and who,
as of the Effective Time, has not effectively withdrawn or lost such appraisal
rights (the "Dissenting Shares"), shall not be converted into or represent a
right to receive Parent Common Stock pursuant to Section 1.5, but the holder
thereof shall only be entitled to such rights as are granted by the MBCL.
(b) Notwithstanding the foregoing, if any holder of shares of
Company Common Stock who demands appraisal of such shares under the MBCL shall
effectively
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withdraw the request for appraisal or lose the right to appraisal, then, as of
the later of the Effective Time and the occurrence of such event, such holder's
shares shall automatically be converted into and represent only the right to
receive Parent Common Stock and cash in lieu of fractional shares, without
interest thereon, upon surrender of the Company Stock Certificates representing
such shares.
(c) The Company shall give Parent (i) prompt notice of any
written demands for appraisal of any shares of Company Common Stock, withdrawals
of such demands and any other instruments served pursuant to the MBCL and
received by Company, which relate to any such demand for appraisal and (ii) the
opportunity to participate in all negotiations and proceedings which take place
prior to the Effective Time with respect to demands for appraisal under the
MBCL. Company shall not, except with the prior written consent of Parent or as
may be required by applicable law, voluntarily make any payment with respect to
any demands for appraisal of Company Common Stock or offer to settle or settle
any such demands.
1.9 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.10 Further Action. If, at any time after the Effective Time, any
further action is determined by Parent to be necessary or desirable to carry out
the purposes of this Agreement or to vest the Surviving Corporation with full
right, title and possession of and to all rights and property of Merger Sub and
the Company, the officers and directors of the Surviving Corporation and Parent
shall be fully authorized (in the name of Merger Sub, in the name of the Company
and otherwise) to take such action.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Merger Sub that, except
as set forth in the Company SEC Documents (as defined in Section 2.4) or the
Company Disclosure Schedule:
2.1 Due Organization; Subsidiaries; Etc.
(a) Part 2.1(a)(i) of the Company Disclosure Schedule sets forth
all of the Company's Subsidiaries. Neither the Company nor any of the other
corporations identified in Part 2.1(a)(i) of the Company Disclosure Schedule
owns any capital stock of, or any equity interest of any nature in, any other
Entity. (The Company and each of its Subsidiaries are referred to collectively
in this Agreement as the "Acquired Corporations.") None of the Acquired
Corporations has agreed or is obligated to make, or is bound by any Contract
under which it may become obligated to make, any future investment in or capital
contribution to any other Entity.
(b) Each of the Acquired Corporations is a corporation duly
organized, validly existing and in good standing (in jurisdictions that
recognize such concept) under the laws of the jurisdiction of its incorporation
and has all necessary power and authority: (i) to
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conduct its business in the manner in which its business is currently being
conducted; and (ii) to own and use its assets in the manner in which its assets
are currently owned and used.
(c) Each of the Acquired Corporations is qualified to do business
as a foreign corporation, and is in good standing (in jurisdictions that
recognize such concept), under the laws of all jurisdictions where the nature of
its business requires such qualification.
2.2 Articles of Organization and Bylaws. The Company has delivered or
made available (at the offices of Skadden, Arps, Slate, Meagher & Flom LLP or
Craig Newfield) to Parent accurate and complete copies of the articles of
organization, bylaws and other charter and organizational documents of the
respective Acquired Corporations, including all amendments thereto.
2.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of: (i)
50,000,000 shares of Company Common Stock, of which 13,510,416 shares were
issued and are outstanding as of January 24, 2000; and (ii) 5,000,000 shares of
Preferred Stock, $0.10 par value per share, of which no shares are outstanding.
The Company does not hold any shares of its capital stock in its treasury. All
of the outstanding shares of Company Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. There are no shares of
Company Common Stock held by any of the other Acquired Corporations. None of the
outstanding shares of Company Common Stock is entitled or subject to any
preemptive right, right of participation, right of maintenance or any similar
right granted by the Company. None of the outstanding shares of Company Common
Stock is subject to any right of first refusal in favor of the Company. There is
no Acquired Corporation Contract relating to the voting or registration of, or
restricting any Person from purchasing, selling, pledging or otherwise disposing
of (or granting any option or similar right with respect to), any shares of
Company Common Stock. None of the Acquired Corporations is under any obligation,
or is bound by any Contract pursuant to which it may become obligated, to
repurchase, redeem or otherwise acquire any outstanding shares of Company Common
Stock.
(b) As of the date of this Agreement: (i) 1,717,387 shares of
Company Common Stock are subject to issuance pursuant to stock options granted
and outstanding under the Company's 1993 Stock Option Plan; (ii) 96,917 shares
of Company Common Stock are subject to issuance pursuant to stock options
granted and outstanding under the Company's 1993 Director Stock Option Plan;
(iii) 299,682 shares of Company Common Stock are subject to issuance pursuant to
stock options granted and outstanding under the Company's 1994 Employee Stock
Option Plan; (iv) 241,667 shares of Company Common Stock are subject to issuance
pursuant to stock options granted and outstanding under the Company's 1997 Key
Man Stock Option Plan and Agreement; (v) 75,000 shares of Company Common Stock
are subject to issuance pursuant to stock options granted and outstanding under
the Company's 1998 Key Man Stock Option Plan and Agreement; (vi) 666,667 shares
of Company Common Stock are reserved for future issuance pursuant to the
Company's 1998 Employee Stock Purchase Plan (the "ESPP"); and (vii) 66,667
shares of Company Common Stock are subject to issuance pursuant to a warrant
issued to Finpiave, S.p.A. at an exercise price of $0.01 per share (the
"Finpiave Warrant") and 763 shares of 6% Convertible Preferred Stock of the
Company (the "Series D")
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are subject to issuance pursuant to three warrants issued to certain principals
of Cappello Capital Corporation or their immediate family members at an exercise
price of $1,000 per share (the "Series D Warrants"). (Stock options granted by
the Company (whether pursuant to the Company's stock option plans or otherwise)
are referred to in this Agreement as "Company Options.") Part 2.3(b) of the
Company Disclosure Schedule sets forth the following information with respect to
each Company Option outstanding as of the date of this Agreement: (i) the
particular plan (if any) pursuant to which such Company Option was granted; (ii)
the name of the optionee; (iii) the number of shares of Company Common Stock
subject to such Company Option; (iv) the exercise price of such Company Option;
(v) the date on which such Company Option was granted; and (vi) the extent to
which such Company Option is vested and exercisable as of the date of this
Agreement. The Company has delivered or made available (at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP or Craig Newfield) to Parent accurate
and complete copies of all stock option plans pursuant to which the Company has
outstanding stock options, and the forms of all stock option agreements
evidencing such outstanding options. The Company has delivered to Parent
accurate and complete copies of the Company Warrants.
(c) Except as set forth in Section 2.3(b), there is no: (i)
outstanding subscription, option, call, warrant or right (whether or not
currently exercisable) to acquire any shares of the capital stock or other
securities of any of the Acquired Corporations; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of any of the Acquired
Corporations; (iii) stockholder rights plan (or similar plan commonly referred
to as a "poison pill") or Contract under which any of the Acquired Corporations
is or may become obligated to sell or otherwise issue any shares of its capital
stock or any other securities; or (iv) condition or circumstance that may give
rise to or provide a basis for the assertion of a claim by any Person to the
effect that such Person is entitled to acquire or receive any shares of capital
stock or other securities of any of the Acquired Corporations.
(d) All outstanding shares of Company Common Stock, all
outstanding Company Options and all outstanding shares of capital stock of each
Subsidiary of the Company have been issued and granted in compliance with (i)
all applicable securities laws and other applicable Legal Requirements, and (ii)
all requirements set forth in applicable Contracts.
(e) All of the outstanding shares of capital stock of each of the
Company's Subsidiaries (other than nominee shares of certain foreign
Subsidiaries of the Company held on behalf of the Company) have been duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially and of record by the Company, free and clear of any Encumbrances.
2.4 SEC Filings; Financial Statements.
(a) The Company has delivered or made available to Parent
accurate and complete copies of all registration statements, proxy statements
and other statements, reports, schedules, forms and other documents filed by the
Company with the SEC since March 31, 1998, and all amendments thereto (the
"Company SEC Documents"). All statements, reports, schedules, forms and other
documents required to have been filed by the Company with
8
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the SEC since March 31, 1998 have been so filed on a timely basis. As of the
time it was filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing): (i) each of the
Company SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be); and
(ii) none of the Company SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The financial statements (including any related notes)
contained in the Company SEC Documents: (i) complied as to form in all material
respects with the published rules and regulations of the SEC applicable thereto;
(ii) were prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC, and except that the unaudited
financial statements may not contain footnotes and are subject to normal and
recurring year-end adjustments that will not, individually or in the aggregate,
be material in amount), and (iii) fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as of the respective
dates thereof and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries for the periods covered thereby.
2.5 Absence of Changes. Between September 30, 1999 and the date of
this Agreement:
(a) there has not been any material adverse change in the
business, financial condition, capitalization, assets, liabilities, operations
or results of operations of the Acquired Corporations taken as a whole, and no
event has occurred or circumstance has arisen that, in combination with any
other events or circumstances, could reasonably be expected to result in any
material adverse change in the business, financial condition, capitalization,
assets, liabilities, operations or results of operations of the Acquired
Corporations taken as a whole;
(b) none of the Acquired Corporations has (i) declared, accrued,
set aside or paid any dividend or made any other distribution in respect of any
shares of capital stock, or (ii) repurchased, redeemed or otherwise reacquired
any shares of capital stock or other securities, other than dividends,
distributions, repurchases, redemptions or other acquisitions between Parent
and/or any of its wholly owned Subsidiaries;
(c) the Company has not amended or waived any of its rights
under, or, except in accordance with their existing terms, permitted the
acceleration of vesting under, (i) any provision of any of the Company's stock
option plans, (ii) any provision of any Contract evidencing any outstanding
Company Option, or (iii) any restricted stock purchase agreement;
(d) there has been no amendment to the certificate of
incorporation, bylaws or other charter or organizational documents of any of the
Acquired Corporations, and, except as permitted pursuant to Section 4.3, none of
the Acquired Corporations has effected or
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been a party to any merger, consolidation, share exchange, business combination,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(e) none of the Acquired Corporations has made any capital
expenditure which, when added to all other capital expenditures made on behalf
of the Acquired Corporations between September 30, 1999 and the date of this
Agreement, exceeds $1,250,000 in the aggregate;
(f) except in the ordinary course of business and consistent with
past practices, none of the Acquired Corporations has (i) entered into or
permitted any of the assets owned or used by it to become bound by any Material
Contract (as defined in Section 2.10), or (ii) amended or terminated, or waived
any material right or remedy under, any Material Contract;
(g) none of the Acquired Corporations has written off as
uncollectible, or established any extraordinary reserve with respect to, any
account receivable or other indebtedness;
(h) none of the Acquired Corporations has made any pledge of any
of its assets or otherwise permitted any of its assets to become subject to any
Encumbrance, except for (i) pledges of immaterial assets made in the ordinary
course of business and consistent with past practices or (ii) any lien for Taxes
not yet due and payable;
(i) none of the Acquired Corporations has (i) lent money to any
Person, or (ii) incurred or guaranteed any indebtedness for borrowed money;
(j) none of the Acquired Corporations has changed any of its
methods of accounting or accounting practices in any material respect;
(k) none of the Acquired Corporations has made any material Tax
election not required to be made by any applicable Legal Requirement;
(l) none of the Acquired Corporations has commenced or settled
any Legal Proceeding;
(m) none of the Acquired Corporations has entered into any
material transaction or taken any other material action that has had, or could
reasonably be expected to have, a Material Adverse Effect on the Acquired
Corporations; and
(n) none of the Acquired Corporations has agreed or committed to
take any of the actions referred to in clauses "(c)" through "(m)" above.
2.6 Title to Assets. The Acquired Corporations own, and have good and
valid title to, all assets purported to be owned by them, including: (a) all
assets reflected on the Unaudited Interim Balance Sheet (except for inventory
sold or otherwise disposed of in the ordinary course of business since the date
of the Unaudited Interim Balance Sheet); and (b) all other assets reflected in
the books and records of the Acquired Corporations as being owned by the
Acquired Corporations. All of said assets are owned by the Acquired Corporations
free and clear of any Encumbrances, except for (i) any lien for Taxes not yet
due and payable, (ii) minor
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liens that have arisen in the ordinary course of business and that do not (in
any case or in the aggregate) materially detract from the value of the assets
subject thereto or materially impair the operations of any of the Acquired
Corporations, and (iii) liens described in the Company Disclosure Schedule.
2.7 Receivables; Customers. All existing accounts receivable of the
Acquired Corporations (including those accounts receivable reflected on the
Unaudited Interim Balance Sheet that have not yet been collected and those
accounts receivable that have arisen since September 30, 1999 and have not yet
been collected) (a) represent valid obligations of customers of the Acquired
Corporations arising from bona fide transactions entered into in the ordinary
course of business, (b) are current and, to the Company's knowledge, will be
collected in full when due, without any counterclaim or set off (net of an
allowance for doubtful accounts not to exceed $966,000 in the aggregate). The
Company has not received any written notice or other written (including
electronic) communication, and has not received any other information,
indicating that any customer or other Person accounting for more than 10% of the
gross revenues received by the Acquired Corporations from the sale of the
Company's BladeRunner and QuickSilver products since the launch of such products
may cease dealing with the Company or may otherwise reduce the volume of
business transacted by such Person with the Company below historical levels.
2.8 Real Property; Equipment; Leasehold. All material items of
equipment and other tangible assets owned by or leased to the Acquired
Corporations are adequate for the uses to which they are being put, are in good
and safe condition and repair (ordinary wear and tear excepted) and are adequate
for the conduct of the business of the Acquired Corporations in the manner in
which such business is currently being conducted.
2.9 Proprietary Assets.
(a) Part 2.9(a)(i) of the Company Disclosure Schedule sets forth,
with respect to each Proprietary Asset owned by the Acquired Corporations and
registered with any Governmental Body or for which an application has been filed
with any Governmental Body, (i) a brief description of such Proprietary Asset,
and (ii) the names of the jurisdictions covered by the applicable registration
or application. Part 2.9(a)(ii) of the Company Disclosure Schedule identifies
and provides a brief description of all other Proprietary Assets owned by the
Acquired Corporations that are material to the business of the Acquired
Corporations. Part 2.9(a)(iii) of the Company Disclosure Schedule identifies and
provides a brief description of, and identifies any ongoing royalty or payment
obligations in excess of $10,000 per quarter with respect to, each Proprietary
Asset that is licensed or otherwise made available to the Acquired Corporations
by any Person and is material to the business of the Acquired Corporations
(except for any Proprietary Asset that is licensed to the Acquired Corporations
under any third party software license generally available to the public or that
was at the time the license was entered into available on substantially similar
terms to companies that are similarly situated), and identifies the Contract
under which such Proprietary Asset is being licensed or otherwise made available
to such Acquired Corporation. The Acquired Corporations have good and valid
title to all of the Acquired Corporation Proprietary Assets owned by the
Acquired Corporations, free and clear of all Encumbrances, except for (i) any
lien for Taxes not yet due and payable, and (ii) minor liens that have arisen in
the ordinary course of business and that do not (individually or in the
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aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of either of the Acquired Corporations. The
Acquired Corporations have a valid right to use, license and otherwise exploit
all Proprietary Assets required to be identified in Part 2.9(a)(iii) of the
Company Disclosure Schedule subject to the terms of any applicable Contracts.
Except as set forth in Part 2.9(a)(iv) of the Company Disclosure Schedule, none
of the Acquired Corporations has developed jointly with any other Person any
Acquired Corporation Proprietary Asset that is material to the business of the
Acquired Corporations with respect to which such other Person has any rights.
There is no Acquired Corporation Contract (with the exception of end user
license agreements in the form previously delivered or made available (at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP or Craig Newfield) by the
Company to Parent) pursuant to which any Person has any right (whether or not
currently exercisable) to use, license or otherwise exploit any Acquired
Corporation Proprietary Asset, other than Acquired Corporation Contracts for the
distribution of products of the Acquired Corporations by distributors, resellers
and channel partners.
(b) The Acquired Corporations have taken reasonable measures and
precautions to protect and maintain the confidentiality, secrecy and value of
all material Acquired Corporation Proprietary Assets (except Acquired
Corporation Proprietary Assets whose value would be unimpaired by disclosure).
Without limiting the generality of the foregoing, (i) all current and former
employees of the Acquired Corporations who are or were involved in, or who have
contributed to, the creation or development of any material Acquired Corporation
Proprietary Asset have executed and delivered to the Acquired Corporations an
agreement (containing no material exceptions to or exclusions from the scope of
its coverage) that is substantially identical to the form of Invention and
Nondisclosure Agreement previously delivered by the Company to Parent, and (ii)
all current and former consultants and independent contractors to the Acquired
Corporations who are or were involved in, or who have contributed to, the
creation or development of any material Acquired Corporation Proprietary Asset
have executed and delivered to the Company an agreement (containing no material
exceptions to or exclusions from the scope of its coverage) that is
substantially identical to one of the two forms of Contractor Agreements
previously delivered to Parent. No current or former employee, officer,
director, stockholder, consultant or independent contractor has any right, claim
or interest in or with respect to any Acquired Corporation Proprietary Asset.
(c) To the knowledge of the Company: (i) all patents, trademark
registrations currently used in the business of the Acquired Corporations,
service mark registrations currently used in the business of the Acquired
Corporations and copyright registrations held by any of the Acquired
Corporations are valid, enforceable and subsisting; (ii) none of the Acquired
Corporation Proprietary Assets and no Proprietary Asset that is currently being
developed by any of the Acquired Corporations (either by itself or with any
other Person) infringes, misappropriates or conflicts with any rights in any
Proprietary Asset owned or used by any other Person; (iii) none of the products
that are or have been designed, created, developed, assembled, manufactured or
sold by any of the Acquired Corporations is infringing, misappropriating or
making any unlawful or unauthorized use of any Proprietary Asset owned or used
by any other Person, and none of such products has at any time infringed,
misappropriated or made any unlawful or unauthorized use of, and none of the
Acquired Corporations has received any notice or other communication (in writing
or otherwise) of any actual, alleged, possible or potential infringement,
misappropriation or unlawful or unauthorized use of, any
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Proprietary Asset owned or used by any other Person; (iv) no other Person is
materially infringing, misappropriating or making any unlawful or unauthorized
use of, and no Proprietary Asset owned or used by any other Person materially
infringes or conflicts with, any Acquired Corporation Proprietary Asset.
(d) The Acquired Corporation Proprietary Assets constitute all
the Proprietary Assets necessary to enable the Acquired Corporations to conduct
their business in the manner in which such business has been and is being
conducted. None of the Acquired Corporations has (i) licensed any of the
material Acquired Corporation Proprietary Assets to any Person on an exclusive
basis, or (ii) entered into any covenant not to compete or Contract limiting its
ability to exploit fully any material Acquired Corporation Proprietary Assets or
to transact business in any market or geographical area or with any Person.
(e) None of the Acquired Corporations has disclosed or delivered
to any Person, or permitted the disclosure or delivery to any escrow agent or
other Person, of any Acquired Corporation Source Code. No event has occurred,
and no circumstance or condition exists, that (with or without notice or lapse
of time) will, or could reasonably be expected to, result in the disclosure or
delivery to any Person of any Acquired Corporation Source Code. Part 2.10(a)(ii)
of the Company Disclosure Schedule identifies each Contract pursuant to which
the Company has deposited or is required to deposit with an escrowholder or any
other Person any Acquired Corporation Source Code, and further describes whether
the execution of this Agreement or the consummation of any of the transactions
contemplated hereby could reasonably be expected to result in the release or
disclosure of any Acquired Corporation Source Code.
(f) To the knowledge of the Company, each computer, computer
program and other item of software (whether installed on a computer or on any
other piece of equipment, including firmware) that is currently used by any of
the Acquired Corporations and material for their internal business operations is
Year 2000 Compliant. To the knowledge of the Company, each computer program and
other item of software that is currently generally offered for sale or otherwise
made available to any Person by any of the Acquired Corporations is Year 2000
Compliant. For purposes of this Section 2.9, a computer, computer program or
other item of software shall be deemed to be "Year 2000 Compliant" only if it
meets the definition of "Year 2000 Compliant" set forth as of the date of this
Agreement on the Company's web page under the heading "Year 2000 Statement."
(g) Except with respect to demonstration or trial copies and
except for security routines intended to restrict the end-user to use within the
scope of such end-user's license, no product, system, program or software module
designed, developed, sold, licensed or otherwise made available by any of the
Acquired Corporations to any Person contains any "back door," "time bomb,"
"Trojan horse," "worm," "drop dead device," "virus" or other software routines
or hardware components designed by or on behalf of any Acquired Corporation to
permit unauthorized access or to disable or erase software, hardware or data
without the consent of the user.
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2.10 Contracts.
(a) Part 2.10 of the Company Disclosure Schedule identifies each
Acquired Corporation Contract that constitutes a "Material Contract." For
purposes of this Agreement, each of the following shall be deemed to constitute
a "Material Contract":
(i) any Contract (A) pursuant to which any of the Acquired
Corporations is or may become obligated to make any severance, termination or
similar payment to any current or former officer or director, or (B) pursuant to
which any of the Acquired Corporations is or may become obligated to make any
bonus or similar payment (other than payments constituting base salary) in
excess of $100,000 to any current or former employee or director;
(ii) any Contract (A) relating to the acquisition, transfer,
development, sharing or license of any Proprietary Asset (except for any
Contract pursuant to which (1) any Proprietary Asset is licensed to the Acquired
Corporations under any third party software license which is or was at the time
the license was entered into generally available to the public or that is or was
at the time the license was entered into available on substantially similar
terms to companies that are similarly situated, or (2) any Proprietary Asset is
licensed by any of the Acquired Corporations to any Person on a non-exclusive
basis), or (B) of the type required to be set forth in Part 2.9 of the Company
Disclosure Schedule;
(iii) any Contract that provides for indemnification of any
officer, director, employee or agent;
(iv) any Contract imposing any restriction on the right or
ability of any Acquired Corporation (A) to compete with any other Person, (B) to
acquire any product or other asset or any services from any other Person, (C) to
develop, sell, supply, distribute, offer, support or service any product or any
technology or other asset to or for any other Person or (D) to perform services
for any other Person;
(v) any Contract relating to any currency hedging;
(vi) any Contract to which any Governmental Body is a party;
(vii) any other Contract, the breach of which by any
Acquired Corporation could reasonably be expected to have a Material Adverse
Effect on the Acquired Corporations.
The Company has delivered or made available (at the offices of Skadden, Arps,
Slate, Meagher & Flom LLP or Craig Newfield) to Parent an accurate and complete
copy of each Acquired Corporation Contract that constitutes a Material Contract.
(b) Each Acquired Corporation Contract that constitutes a
Material Contract is valid and in full force and effect, and is enforceable in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
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(c) None of the Acquired Corporations has violated or breached,
or committed any default under, any Acquired Corporation Contract that
constitutes a Material Contract, except for violations, breaches and defaults
that have not had and would not reasonably be expected to have a Material
Adverse Effect on the Acquired Corporations; and, to the knowledge of the
Company, no other Person has violated or breached, or committed any default
under, any Acquired Corporation Contract that constitutes a Material Contract,
except for violations, breaches and defaults that have not had and would not
reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations. To the knowledge of the Company, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or would reasonably be expected to, (A) result in a violation or breach of
any of the provisions of any Acquired Corporation Contract that constitutes a
Material Contract, (B) give any Person the right to declare a default or
exercise any remedy under any Acquired Corporation Contract that constitutes a
Material Contract, (C) give any Person the right to receive or require a rebate,
chargeback, penalty or change in delivery schedule under any Acquired
Corporation Contract that constitutes a Material Contract, (D) give any Person
the right to accelerate the maturity or performance of any Acquired Corporation
Contract that constitutes a Material Contract, (E) result in the disclosure,
release or delivery of any Acquired Corporation Source Code, or (F) give any
Person the right to cancel, terminate or modify any Acquired Corporation
Contract that constitutes a Material Contract, except in each such case for
defaults, acceleration rights, termination rights and other rights that have not
had and would not reasonably be expected to have a Material Adverse Effect on
the Acquired Corporations. Since September 30, 1999, none of the Acquired
Corporations has received any written notice or other written (including
electronic) communication regarding any actual or possible violation or breach
of, or default under, any Acquired Corporation Contract that constitutes a
Material Contract, except in each such case for defaults, acceleration rights,
termination rights and other rights that have not had and would not reasonably
be expected to have a Material Adverse Effect on the Acquired Corporations.
2.11 Sale of Products; Performance of Services. Since September 30,
1999, no customer or other Person has asserted or threatened in writing
(including an electronic communication) to assert any claim against any of the
Acquired Corporations (a) under or based upon any warranty provided by or on
behalf of any of the Acquired Corporations, or (b) based upon any services
performed by any of the Acquired Corporations.
2.12 Liabilities. None of the Acquired Corporations has any accrued,
contingent or other liabilities of any nature, either matured or unmatured,
except for: (a) liabilities reflected in the Unaudited Interim Balance Sheet or
the notes thereto; (b) normal and recurring current liabilities that have been
incurred by the Acquired Corporations since September 30, 1999 in the ordinary
course of business and consistent with past practices; (c) liabilities arising
out of this Agreement and the transactions contemplated herein; or (d)
liabilities described in Part 2.12 of the Company Disclosure Schedule.
2.13 Compliance with Legal Requirements. Each of the Acquired
Corporations is, and has at all times since January 1, 1998 been, in compliance
with all applicable Legal Requirements, except where the failure to comply with
such Legal Requirements has not had and would not reasonably be expected to have
a Material Adverse Effect on the Acquired Corporations. Since September 30,
1999, none of the Acquired
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Corporations has received any written notice or other written (including
electronic) communication from any Governmental Body or other Person regarding
any actual or possible violation of, or failure to comply with, any Legal
Requirement.
2.14 Certain Business Practices. None of the Acquired Corporations,
and (to the knowledge of the Company) no director, officer, agent or employee of
any of the Acquired Corporations, has (a) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (b) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended, or (c) made any other unlawful payment.
2.15 Governmental Authorizations.
(a) The Acquired Corporations hold all Governmental
Authorizations necessary to enable the Acquired Corporations to conduct their
respective businesses in the manner in which such businesses are currently being
conducted, except where the failure to hold such Governmental Authorizations has
not had and would not reasonably be expected to have a Material Adverse Effect
on the Acquired Corporations. All such Governmental Authorizations are valid and
in full force and effect. Each Acquired Corporation is, and at all times since
January 1, 1998 has been, in substantial compliance with the terms and
requirements of such Governmental Authorizations, except where the failure to be
in compliance with the terms and requirements of such Governmental
Authorizations has not had and would not reasonably be expected to have a
Material Adverse Effect on the Acquired Corporations. Since September 30, 1999,
none of the Acquired Corporations has received any written notice or other
written (including electronic) communication from any Governmental Body
regarding (a) any actual or possible violation of or failure to comply with any
term or requirement of any material Governmental Authorization, or (b) any
actual or possible revocation, withdrawal, suspension, cancellation, termination
or modification of any material Governmental Authorization.
(b) No grant, incentive or subsidy has been provided or made
available to or for the benefit of any of the Acquired Corporations by any U.S.
or foreign Governmental Body or otherwise.
2.16 Tax Matters.
(a) Each of the material Tax Returns required to be filed by or
on behalf of the respective Acquired Corporations with any Governmental Body
with respect to any taxable period ending on or before the Closing Date (the
"Acquired Corporation Returns") (i) has been or will be filed on or before the
applicable due date (including any extensions of such due date), and (ii) has
been, or will be when filed, prepared in all material respects in compliance
with all applicable Legal Requirements. All amounts shown on the Acquired
Corporation Returns to be due on or before the Closing Date have been or will be
paid on or before the Closing Date.
(b) The Unaudited Interim Balance Sheet accrues all actual and
contingent liabilities for Taxes with respect to all periods through September
30, 1999 in
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accordance with generally accepted accounting principles. Each Acquired
Corporation will establish, in the ordinary course of business and consistent
with its past practices, reserves in accordance with generally accepted
accounting principles for the payment of all Taxes for the period from September
30, 1999 through the Closing Date.
(c) No Acquired Corporation Return is currently under examination
or audit by any Governmental Body. No extension or waiver of the limitation
period applicable to any of the Acquired Corporation Returns has been granted
(by the Company or any other Person) that is still in effect, and no such
extension or waiver has been requested from any Acquired Corporation that is
still in effect.
(d) No claim or Legal Proceeding is pending or, to the knowledge
of the Company, has been threatened in writing against or with respect to any
Acquired Corporation in respect of any material Tax. There are no unsatisfied
liabilities for material Taxes (including liabilities for interest, additions to
tax and penalties thereon and related expenses) with respect to any notice of
deficiency or similar document received by any Acquired Corporation with respect
to any material Tax (other than liabilities for Taxes asserted under any such
notice of deficiency or similar document which are being contested in good faith
by the Acquired Corporations and with respect to which reserves in accordance
with generally accepted accounting principles for payment have been established
on the Unaudited Interim Balance Sheet). None of the Acquired Corporations has
been, and none of the Acquired Corporations will be, required to include any
material adjustment in taxable income for any Tax period (or portion thereof)
pursuant to Section 481 or 263A of the Code (or any comparable provision of
state or foreign Tax laws) as a result of transactions or events occurring, or
accounting methods employed, prior to the Closing.
(e) The Company has delivered to Parent all documents relevant to
all agreements, Plans, arrangements or other Contracts covering any employee or
independent contractor or former employee or independent contractor of any of
the Acquired Corporations that, considered individually or considered
collectively with any other such Contracts, will, or could reasonably be
expected to, give rise directly or indirectly to the payment of any amount that
would not be deductible pursuant to Section 280G or Section 162 of the Code (or
any comparable provision under state Tax laws). With respect to the documents
provided pursuant to the preceding sentence, the Company has provided to Parent
the following information: (i) the name of each person who the Company expects
to be a "disqualified individual" within the meaning of Section 280G(c) of the
Code; and (ii) the "base amount" within the meaning of Section 280G(b)(3) of the
Code for each such individual.
(f) None of the Acquired Corporations is, or has ever been, a
party to or bound by any Tax indemnity agreement, Tax sharing agreement, Tax
allocation agreement or similar Contract.
2.17 Employee and Labor Matters; Benefit Plans.
(a) Part 2.17(a) of the Company Disclosure Schedule identifies
each bonus, vacation, deferred compensation, incentive compensation, stock
purchase, stock option, severance pay, termination pay, death and disability
benefits, hospitalization, medical, life or other insurance, flexible benefits,
supplemental unemployment benefits, profit-sharing, pension
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or retirement plan, program or agreement and each other employee benefit plan or
arrangement (collectively, the "Plans") sponsored, maintained, contributed to or
required to be contributed to by any of the Acquired Corporations for the
benefit of any current or former employee of any of the Acquired Corporations.
None of the Acquired Corporations is obligated to make any severance,
termination or similar payment to any current or former employee or director in
excess of six months of such employee's or director's salary.
(b) None of the Acquired Corporations maintains, sponsors or
contributes to, and none of the Acquired Corporations has at any time in the
past maintained, sponsored or contributed to, any employee pension benefit plan
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any similar pension benefit plan under the laws
of any foreign jurisdiction, whether or not excluded from coverage under
specific Titles or Subtitles of ERISA for the benefit of employees or former
employees of any of the Acquired Corporations (a "Pension Plan").
(c) With respect to each Plan, the Company has delivered or made
available (at the offices of Skadden, Arps, Slate, Meagher & Flom LLP or Craig
Newfield) to Parent: (i) an accurate and complete copy of such Plan (including
all amendments thereto); (ii) an accurate and complete copy of the annual
report, if required under ERISA, with respect to such Plan for the last two
years; (iii) an accurate and complete copy of the most recent summary plan
description, together with each summary of material modifications, if required
under ERISA, with respect to such Plan, (iv) if such Plan is funded through a
trust or any third party funding vehicle, an accurate and complete copy of the
trust or other funding agreement (including all amendments thereto) and accurate
and complete copies the most recent financial statements thereof; and (v) an
accurate and complete copy of the most recent determination letter received from
the Internal Revenue Service with respect to such Plan (if such Plan is intended
to be qualified under Section 401(a) of the Code).
(d) None of the Acquired Corporations is or has ever been
required to be treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code, except for
the Acquired Corporations. None of the Acquired Corporations has ever been a
member of an "affiliated service group" within the meaning of Section 414(m) of
the Code. None of the Plans identified in the Company Disclosure Schedule is a
multiemployer plan (within the meaning of Section 3(37) of ERISA) or subject to
Title IV of ERISA. None of the Acquired Corporations has ever made a complete or
partial withdrawal from a multiemployer plan, as such term is defined in Section
3(37) of ERISA, resulting in "withdrawal liability," as such term is defined in
Section 4201 of ERISA (without regard to subsequent reduction or waiver of such
liability under either Section 4207 or 4208 of ERISA).
(e) None of the Acquired Corporations has any binding commitment
to create any Welfare Plan or any Pension Plan, or to modify or change any
existing Welfare Plan or Pension Plan (other than to comply with applicable law)
in a manner that would affect any current or former employee or director of any
of the Acquired Corporations.
(f) No Plan provides death, medical or health benefits (whether
or not insured) with respect to any current or former employee or director of
any of the Acquired
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Corporations after any termination of service of such employee or director
(other than benefit coverage mandated by applicable law, including coverage
provided pursuant to Section 4980B of the Code).
(g) Each of the Plans has been operated and administered in all
material respects in accordance with its terms and with applicable Legal
Requirements, including ERISA, the Code and applicable foreign Legal
Requirements. Part 2.17(g) of the Company Disclosure Schedule lists (i) the
former employees of the Acquired Corporations who, as of the date of this
Agreement, have elected continuation coverage under Section 4980B of the Code
with respect to themselves or their dependents and (ii) the qualified
beneficiaries (within the meaning of Section 4980B(g)(1) of the Code) under the
Plans who, as of the date of this Agreement, have elected continuation coverage
under Section 4980B of the Code.
(h) Each of the Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service, and nothing has occurred that could reasonably be
expected to adversely affect such determination.
(i) Neither the execution, delivery or performance of this
Agreement, nor the consummation of the Merger or any of the other transactions
contemplated by this Agreement, will result in any bonus, golden parachute,
severance or other payment or obligation to any current or former employee or
director of any of the Acquired Corporations (whether or not under any Plan), or
materially increase the benefits payable or provided under any Plan, or result
in any acceleration of the time of payment or vesting of any such benefits.
Without limiting the generality of the foregoing (and except as set forth in
Part 2.17(i) of the Company Disclosure Schedule), the consummation of the Merger
will not result in the acceleration of vesting of any unvested Company Options.
(j) Part 2.17(j) of the Company Disclosure Schedule contains a
list of all salaried employees of each of the Acquired Corporations as of the
date of this Agreement, and correctly reflects, in all material respects, their
salaries, any other compensation payable to them (including compensation payable
pursuant to bonus, deferred compensation or commission arrangements), their
dates of employment and their positions. None of the Acquired Corporations is a
party to any collective bargaining contract or other Contract with a labor union
involving any of its employees. To the extent permitted by Legal Requirements,
all employees of the Acquired Corporations are "at will" employees.
(k) Part 2.17(k) of the Company Disclosure Schedule identifies
each employee of any of the Acquired Corporations who is not fully available to
perform work because of disability or other leave.
(l) Each of the Acquired Corporations is in compliance in all
material respects with all applicable Legal Requirements and Contracts relating
to employment, employment practices, wages, bonuses and terms and conditions of
employment, including employee compensation matters.
(m) Each of the Acquired Corporations has good labor relations,
and none of the Acquired Corporations has any knowledge of any facts indicating
that (i) the
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consummation of the Merger or any of the other transactions contemplated by this
Agreement will have a material adverse effect on the labor relations of any of
the Acquired Corporations, or (ii) any of the employees of any of the Acquired
Corporations intends to terminate his or her employment with the Acquired
Corporation with which such employee is employeed.
(n) With respect to any Plan maintained for employees of the
Acquired Corporations who are based outside of the United States (each a
"Foreign Plan"), if applicable: (i) the fair market value of the assets of each
funded Foreign Plan, the liability of each insurer for any Foreign Plan funded
through insurance, or the book reserve established for any unfunded Foreign
Plan, together with any accrued contributions, is sufficient to procure or
provide for all accrued benefit obligations under each such Foreign Plan
according to the actuarial assumptions and valuations most recently used to
determine employer contributions or the accruals of employer benefit
obligations; and (ii) the consummation of the transactions contemplated by this
Agreement will not by itself create or otherwise result in any material
liability with respect to any Foreign Plan.
2.18 Environmental Matters. Each of the Acquired Corporations (a) is
in compliance in all material respects with all applicable Environmental Laws,
and (b) possesses all permits and other Governmental Authorizations required
under applicable Environmental Laws, and is in compliance with the terms and
conditions thereof. None of the Acquired Corporations has received any written
notice or other written (including electronic) communication, whether from a
Governmental Body, citizens group, Employee or otherwise, that alleges that any
of the Acquired Corporations is not in compliance with any Environmental Law,
and, to the knowledge of the Company, there are no circumstances that may
prevent or interfere with the compliance by any of the Acquired Corporations
with any Environmental Law in the future. To the knowledge of the Company, (i)
all property that is leased to, controlled by or used by any of the Acquired
Corporations, and all surface water, groundwater and soil associated with or
adjacent to such property, is free of any material environmental contamination
of any nature, (ii) none of the property leased to, controlled by or used by any
of the Acquired Corporations contains any underground storage tanks, asbestos,
equipment using PCBs, underground injection wells, and (iii) none of the
property leased to, controlled by or used by any of the Acquired Corporations
contains any septic tanks in which process wastewater or any Materials of
Environmental Concern have been disposed of. To the knowledge of the Company, no
Acquired Corporation has ever sent or transported, or arranged to send or
transport, any Materials of Environmental Concern to a site that, pursuant to
any applicable Environmental Law, (1) has been placed on the "National
Priorities List" of hazardous waste sites or any similar state list, (2) is
otherwise designated or identified as a potential site for remediation, cleanup,
closure or other environmental remedial activity, or (3) is subject to a Legal
Requirement to take "removal" or "remedial" action as detailed in any applicable
Environmental Law or to make payment for the cost of cleaning up any site. (For
purposes of this Section 2.18 and Section 3.9: (A) "Environmental Law" means any
federal, state, local or foreign Legal Requirement relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata), including any law or
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern; and (B) "Materials of
Environmental Concern" include chemicals, pollutants, contaminants, wastes,
toxic substances,
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petroleum and petroleum products and any other substance that is now or
hereafter regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.)
2.19 Insurance. All material insurance policies and all material self
insurance programs and arrangements relating to the business, assets and
operations of the Acquired Corporations are in full force and effect and, when
taken together, provide adequate insurance coverage for the business, assets and
operations of the Acquired Corporations for all risks normally insured against
by a Person carrying on the same businesses as the Acquired Corporations.
2.20 Transactions with Affiliates. Between the date of the Company's
last proxy statement filed with the SEC and the date of this Agreement, no event
has occurred that would be required to be reported by the Company pursuant to
Item 404 of Regulation S-K promulgated by the SEC. Part 2.20 of the Company
Disclosure Schedule identifies each Person who is (or who may be deemed to be)
an "affiliate" (as that term is used in Rule 145 under the Securities Act) of
the Company as of the date of this Agreement.
2.21 Legal Proceedings; Orders.
(a) There is no pending Legal Proceeding, and (to the knowledge
of the Company) no Person has threatened to commence any Legal Proceeding: (i)
that involves any of the Acquired Corporations or any of the assets owned or
used by any of the Acquired Corporations; or (ii) that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the Merger or any of the other transactions contemplated by this
Agreement. To the knowledge of the Company, no event has occurred, and no claim,
dispute or other condition or circumstance exists that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.
(b) There is no material order, writ, injunction, judgment or
decree to which any of the Acquired Corporations, or any of the assets owned or
used by any of the Acquired Corporations, is subject. To the knowledge of the
Company, no officer or key employee of any of the Acquired Corporations is
subject to any order, writ, injunction, judgment or decree that prohibits such
officer or other employee from engaging in or continuing any conduct, activity
or practice relating to the business of any of the Acquired Corporations.
2.22 Authority; Inapplicability of Anti-takeover Statutes; Binding
Nature of Agreement. The Company has the right, power and authority to enter
into and to perform its obligations under this Agreement and under the Stock
Option Agreement. The board of directors of the Company (at a meeting duly
called and held) has (a) unanimously determined that the Merger is advisable and
fair and in the best interests of the Company and its stockholders, (b)
unanimously authorized and approved the execution, delivery and performance of
this Agreement and the Stock Option Agreement by the Company and unanimously
approved the Merger, (c) unanimously recommended the approval of this Agreement
by the holders of Company Common Stock and directed that this Agreement and the
Merger be submitted for consideration by the Company's stockholders at the
Company Stockholders' Meeting (as defined in Section 5.2), and (d) to the extent
necessary, adopted a resolution having the effect of causing the Company not to
be subject to any state takeover law or similar Legal Requirement that might
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otherwise apply to the Merger, this Agreement or any of the other transactions
contemplated by this Agreement. This Agreement and the Stock Option Agreement
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to (i) laws of
general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
2.23 Inapplicability of Section 2115(b) of California Corporations
Code. The Company is not subject to Section 2115(b) of the California
Corporations Code.
2.24 Vote Required. The affirmative vote of the holders of 66 2/3% of
the shares of Company Common Stock outstanding on the record date for the
Company Stockholders' Meeting (the "Required Company Stockholder Vote") is the
only vote of the holders of any class or series of the Company's capital stock
necessary to adopt this Agreement and approve the Merger and the other
transactions contemplated by this Agreement.
2.25 Non-Contravention; Consents. Neither (1) the execution, delivery
or performance of this Agreement or the Stock Option Agreement, nor (2) the
consummation by the Company of the Merger or any of the other transactions
contemplated by this Agreement or the Stock Option Agreement, will directly or
indirectly (with or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of any of
the provisions of the articles or certificate of incorporation, bylaws or other
charter or organizational documents of any of the Acquired Corporations;
(b) contravene, conflict with or result in a violation of, or
give any Governmental Body the right to challenge the Merger or any of the other
transactions contemplated by this Agreement or to exercise any remedy or obtain
any relief under, any Legal Requirement or any order, writ, injunction, judgment
or decree to which any of the Acquired Corporations, or any of the assets owned
or used by any of the Acquired Corporations, is subject;
(c) contravene, conflict with or result in a violation of any of
the terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by any of the Acquired Corporations;
(d) contravene, conflict with or result in a violation or breach
of, or result in a default under, any provision of any Acquired Corporation
Contract that constitutes a Material Contract;
(e) result in the imposition or creation of any Encumbrance upon
or with respect to any asset owned or used by any of the Acquired Corporations
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of any of the Acquired Corporations); or
(f) result in, or increase the likelihood of, the disclosure or
delivery to any escrowholder or other Person of any Acquired Corporation Source
Code, or the transfer of any material asset of any of the Acquired Corporations
to any Person.
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Except as may be required by the Exchange Act, the MBCL, the HSR Act, any
foreign antitrust law or regulation and the NASD Bylaws (as they relate to the
Form S-4 Registration Statement and the Prospectus/Proxy Statement), none of the
Acquired Corporations was, is or will be required to make any filing with or
give any notice to, or to obtain any Consent from, any Person in connection with
(x) the execution, delivery or performance of this Agreement or the Stock Option
Agreement by the Company, or (y) the consummation by the Company of the Merger
or any of the other transactions contemplated by this Agreement or the Stock
Option Agreement.
2.26 Fairness Opinion. The Company's board of directors has received
the written opinion of Broadview International LLC, financial advisor to the
Company, dated the date of this Agreement, to the effect that the Exchange Ratio
is fair to the stockholders of the Company from a financial point of view. The
Company has furnished an accurate and complete copy of said written opinion to
Parent.
2.27 Financial Advisor. Except for Broadview International LLC, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the Merger or any of the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of any of the Acquired Corporations. The total of all fees,
commissions and other amounts that have been paid by the Company to Broadview
International LLC and all fees, commissions and other amounts that may become
payable to Broadview International LLC by the Company if the Merger is
consummated will not exceed $7,500,000 plus expenses. The Company has furnished
to Parent accurate and complete copies of all agreements under which any such
fees, commissions or other amounts have been paid to may become payable and all
indemnification and other agreements related to the engagement of Broadview
International LLC.
2.28 Disclosure. None of the information supplied or to be supplied by
or on behalf of the Company for inclusion or incorporation by reference in the
Form S-4 Registration Statement will, at the time the Form S-4 Registration
Statement is filed with the SEC or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information supplied or to be supplied by or
on behalf of the Company for inclusion or incorporation by reference in the
Prospectus/Proxy Statement will, at the time the Prospectus/Proxy Statement is
mailed to the stockholders of the Company or at the time of the Company
Stockholders' Meeting (or any adjournment or postponement thereof), contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub represent and warrant to the Company as follows:
3.1 Due Organization; Subsidiaries. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts. Each of
Parent and Merger Sub has all necessary power and authority: (a) to conduct its
business in the manner in which its business is currently being conducted; and
(b) to own and use its assets in the manner in which its assets are currently
owned and used.
3.2 Capitalization. The authorized capital stock of Parent consists of
500,000,000 shares of Parent Common Stock and 10,000,000 shares of Preferred
Stock, $.0.0001 par value. As of January 24, 2000, approximately 81,806,017
shares of Parent Common Stock were issued and outstanding. As of the date of
this Agreement, no shares of preferred stock of Parent are outstanding. All of
the outstanding shares of Parent Common Stock have been duly authorized and
validly issued, and are fully paid and nonassessable. As of the date of this
Agreement, 18,651,484 shares of Parent Common Stock are reserved for future
issuance pursuant to outstanding stock options.
3.3 SEC Filings; Financial Statements.
(a) Parent has delivered or made available to the Company
accurate and complete copies (excluding copies of exhibits) of each report,
registration statement and definitive proxy statement filed by Parent with the
SEC since January 1, 1998 (the "Parent SEC Documents"). All statements, reports,
schedules, forms and other documents required to have been filed by Parent with
the SEC since January 1, 1998 have been so filed on a timely basis. As of the
time it was filed with the SEC (or, if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing): (i) each of the
Parent SEC Documents complied in all material respects with the applicable
requirements of the Securities Act or the Exchange Act (as the case may be); and
(ii) none of the Parent SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The consolidated financial statements contained in the Parent
SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered (except as may be indicated in
the notes to such financial statements and, in the case of unaudited statements,
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to normal and recurring
year-end audit adjustments which will not, individually or in the aggregate, be
material in amount); and (iii) fairly present the consolidated financial
position of Parent and its consolidated subsidiaries as of the respective dates
thereof and the consolidated results of operations of Parent and its
consolidated subsidiaries for the periods covered thereby.
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3.4 Absence of Changes. Between September 30, 1999 and the date of
this Agreement, there has not been any material adverse change in the business,
financial condition, capitalization, assets, liabilities, operations or results
of operations of Parent, and no event has occurred or circumstance has arisen
that, in combination with any other events or circumstances, could reasonably be
expected to result in any material adverse change in the business, financial
condition, capitalization, assets, liabilities, operations or results of
operations of Parent.
3.5 Liabilities. Parent does not have any accrued, contingent or other
liabilities of any nature, either matured or unmatured, except for: (a)
liabilities reflected in the Unaudited Parent Interim Balance Sheet or the notes
thereto; (b) normal and recurring current liabilities that have been incurred by
Parent since September 30, 1999 in the ordinary course of business and
consistent with past practices; or (c) liabilities arising out of this Agreement
and the transactions contemplated herein.
3.6 Compliance with Legal Requirements. Parent is, and has at all
times since January 1, 1998 been, in compliance with all applicable Legal
Requirements, except where the failure to comply with such Legal Requirements
has not had and would not reasonably be expected to have a Material Adverse
Effect on Parent. Since September 30, 1999, Parent has not received any written
notice or other written (including electronic) communication from any
Governmental Body or other Person regarding any actual or possible violation of,
or failure to comply with, any Legal Requirement.
3.7 Tax Matters.
(a) Each of the material Tax Returns required to be filed by or
on behalf of Parent with any Governmental Body with respect to any taxable
period ending on or before the Closing Date (the "Parent Returns") (i) has been
or will be filed on or before the applicable due date (including any extensions
of such due date), and (ii) has been, or will be when filed, prepared in all
material respects in compliance with all applicable Legal Requirements. All
amounts shown on the Parent Returns to be due on or before the Closing Date have
been or will be paid on or before the Closing Date.
(b) The Unaudited Parent Interim Balance Sheet accrues all actual
and contingent liabilities for Taxes with respect to all periods through
September 30, 1999 in accordance with generally accepted accounting principles.
(c) No claim or Legal Proceeding is pending or, to the knowledge
of Parent, has been threatened in writing against or with respect to Parent in
respect of any material Tax. There are no unsatisfied liabilities for material
Taxes (including liabilities for interest, additions to tax and penalties
thereon and related expenses) with respect to any notice of deficiency or
similar document received by Parent with respect to any material Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by Parent and with respect to
which reserves in accordance with generally accepted accounting principles for
payment have been established on the Unaudited Parent Interim Balance Sheet).
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3.8 Environmental Matters. Parent (a) is in compliance in all material
respects with all applicable Environmental Laws, and (b) possesses all permits
and other Governmental Authorizations required under applicable Environmental
Laws, and is in compliance with the terms and conditions thereof. Parent has not
received any written notice or other written (including electronic)
communication, whether from a Governmental Body, citizens group, Employee or
otherwise, that alleges that Parent is not in compliance with any Environmental
Law, and, to the knowledge of Parent, there are no circumstances that may
prevent or interfere with the compliance by Parent with any Environmental Law in
the future. To the knowledge of Parent, (i) all property that is leased to,
controlled by or used by Parent, and all surface water, groundwater and soil
associated with or adjacent to such property, is free of any material
environmental contamination of any nature, (ii) none of the property leased to,
controlled by or used by Parent contains any underground storage tanks,
asbestos, equipment using PCBs, underground injection wells, and (iii) none of
the property leased to, controlled by or used by Parent contains any septic
tanks in which process wastewater or any Materials of Environmental Concern have
been disposed of. To the knowledge of Parent, Parent has not ever sent or
transported, or arranged to send or transport, any Materials of Environmental
Concern to a site that, pursuant to any applicable Environmental Law, (1) has
been placed on the "National Priorities List" of hazardous waste sites or any
similar state list, (2) is otherwise designated or identified as a potential
site for remediation, cleanup, closure or other environmental remedial activity,
or (3) is subject to a Legal Requirement to take "removal" or "remedial" action
as detailed in any applicable Environmental Law or to make payment for the cost
of cleaning up any site.
3.9 Legal Proceedings. There is no pending Legal Proceeding, and (to
the knowledge of Parent) no Person has threatened to commence any Legal
Proceeding: (a) that involves Parent or any of the assets owned or used by
Parent; or (b) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, the Merger or any of the
other transactions contemplated by this Agreement. To the knowledge of Parent,
no event has occurred, and no claim, dispute or other condition or circumstance
exists that could reasonably be expected to, give rise to or serve as a basis
for the commencement of any such Legal Proceeding.
3.10 Authority; Binding Nature of Agreement. Parent and Merger Sub
have the right, power and authority to perform their obligations under this
Agreement and the Stock Option Agreement; and the execution, delivery and
performance by Parent and Merger Sub of this Agreement and the Stock Option
Agreement have been duly authorized by all necessary action on the part of
Parent and Merger Sub and their respective boards of directors. This and the
Stock Option Agreement constitute the legal, valid and binding obligations of
Parent and Merger Sub, enforceable against them in accordance with its terms,
subject to (a) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (b) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.11 No Vote Required. No vote of the holders of Parent Common Stock
is required to authorize the Merger.
3.12 Non-Contravention; Consents. Neither the execution and delivery
of this Agreement by Parent and Merger Sub nor the consummation by Parent and
Merger Sub of
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the Merger will (a) conflict with or result in any breach of any provision of
the certificate of incorporation or bylaws of Parent or Merger Sub, (b) result
in a default by Parent or Merger Sub under any Contract to which Parent or
Merger Sub is a party, except for any default that has not had and will not have
a Material Adverse Effect on Parent, or (c) result in a violation by Parent or
Merger Sub of any order, writ, injunction, judgment or decree to which Parent or
Merger Sub is subject, except for any violation that has not had and will not
have a Material Adverse Effect on Parent. Except as may be required by the
Securities Act, the Exchange Act, state securities or "blue sky" laws, the MBCL,
the HSR Act, any foreign antitrust law or regulation, the NASD Bylaws (as they
relate to the S-4 Registration Statement and the Prospectus/Proxy Statement) and
the Frankfurt Stock Exchange, Parent is not and will not be required to make any
filing with or give any notice to, or to obtain any Consent from, any Person in
connection with the execution, delivery or performance of this Agreement or the
consummation of the Merger.
3.13 Valid Issuance. The Parent Common Stock to be issued in the
Merger will, when issued in accordance with the provisions of this Agreement, be
validly issued, fully paid and nonassessable.
3.14 Financial Advisor. Except for Goldman Sachs & Co., no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger or any of the other transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent.
3.15 Disclosure. None of the information to be supplied by or on
behalf of Parent for inclusion in the Form S-4 Registration Statement will, at
the time the Form S-4 Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. None of the information to be supplied by or on behalf of
Parent for inclusion in the Prospectus/Proxy Statement will, at the time the
Prospectus/Proxy Statement is mailed to the stockholders of the Company or at
the time of the Company Stockholders' Meeting (or any adjournment or
postponement thereof), contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which
they are made, not misleading. The Prospectus/Proxy Statement will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations promulgated by the SEC thereunder, except that no
representation or warranty is made by Parent with respect to statements made or
incorporated by reference therein based on information supplied by the Company
for inclusion or incorporation by reference in the Prospectus/Proxy Statement.
SECTION 4. CERTAIN COVENANTS OF THE PARTIES
4.1 Access and Investigation. During the period from the date of this
Agreement through the Effective Time (the "Pre-Closing Period"), the Company
shall, and shall cause the respective Representatives of the Acquired
Corporations to: (a) provide Parent and Parent's Representatives with reasonable
access to the Acquired Corporations' Representatives, personnel and assets and
to all existing books, records, Tax Returns, work papers and other documents and
information relating to the Acquired Corporations; and (b) provide Parent and
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Parent's Representatives with such copies of the existing books, records, Tax
Returns, work papers and other documents and information relating to the
Acquired Corporations, and with such additional financial, operating and other
data and information regarding the Acquired Corporations, as Parent may
reasonably request. Parent shall coordinate all requests for access or copies
with the Company's Chief Financial Officer or General Counsel or Company
personnel designated by them. Without limiting the generality of the foregoing,
during the Pre-Closing Period, the Company shall promptly provide Parent with
copies of:
(i) all unaudited monthly financial statements regularly
prepared by the Company as of the date of this Agreement;
(ii) any written materials or communications sent by or on
behalf of the Company to its stockholders;
(iii) any material notice, document or other communication
sent by or on behalf of any of the Acquired Corporations to any party to any
Acquired Corporation Contract that constitutes a Material Contract or sent to
any of the Acquired Corporations by any party to any Acquired Corporation
Contract that constitutes a Material Contract (other than any communication that
relates solely to routine commercial transactions between the Company and the
other party to any such Acquired Corporation Contract and that is of the type
sent in the ordinary course of business and consistent with past practices); and
(iv) any material notice, report or other document received
by any of the Acquired Corporations from any Governmental Body.
4.2 Operation of the Company's Business.
(a) During the Pre-Closing Period: (i) the Company shall ensure
that each of the Acquired Corporations conducts its business and operations in
the ordinary course and in accordance with past practices and; (ii) the Company
shall use all commercially reasonable efforts to ensure that each of the
Acquired Corporations preserves intact its current business organization, keeps
available the services of its current officers and employees and maintains its
relations and goodwill with all suppliers, customers, landlords, creditors,
licensors, licensees, employees and other Persons having business relationships
with the respective Acquired Corporations; (iii) the Company shall provide all
notices, assurances and support required by any Acquired Corporation Contract
relating to any Proprietary Asset in order to ensure that no condition under
such Acquired Corporation Contract occurs that could result in, or could
increase the likelihood of, (A) any transfer or disclosure by any Acquired
Corporation of any Acquired Corporation Source Code, or (B) a release from any
escrow of any Acquired Corporation Source Code that has been deposited or is
required to be deposited in escrow under the terms of such Acquired Corporation
Contract; and (iv) the Company shall promptly notify Parent of (A) any notice or
other communication from any Person alleging that the Consent of such Person is
or may be required in connection with the transactions contemplated by this
Agreement, and (B) any Legal Proceeding commenced, or, to its knowledge
threatened against, relating to or involving or otherwise affecting any of the
Acquired Corporations that relates to the consummation of the transactions
contemplated by this Agreement.
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(b) During the Pre-Closing Period, the Company shall not (without
the prior written consent of Parent), and shall not permit any of the other
Acquired Corporations to:
(i) declare, accrue, set aside or pay any dividend or make
any other distribution in respect of any shares of capital stock, or repurchase,
redeem or otherwise reacquire any shares of capital stock or other securities
other than dividends, distributions, repurchases, redemptions or other
acquisitions between Parent and/or any of its wholly owned Subsidiaries;
(ii) sell, issue, grant or authorize the issuance or grant
of (A) any capital stock or other security, (B) any option, call, warrant or
right to acquire any capital stock or other security, or (C) any instrument
convertible into or exchangeable for any capital stock or other security (except
that (1) the Company may issue shares of Company Common Stock (x) upon the valid
exercise of Company Options outstanding as of the date of this Agreement, (y)
pursuant to the ESPP and (z) pursuant to the Company Warrants (or upon
conversion of the securities issuable pursuant thereto), and (2) the Company
may, in the ordinary course of business and consistent with past practices,
grant to employees of the Company options (having an exercise price equal to the
fair market value of the Company Common Stock covered by such options determined
as of the time of the grant of such options) under its stock option plans to
purchase no more than a total of 250,000 shares of Company Common Stock);
(iii) amend or waive any of its rights under, or, except in
accordance with their existing terms, accelerate the vesting under, any
provision of any of the Company's stock option plans, any provision of any
agreement evidencing any outstanding stock option or any restricted stock
purchase agreement, or otherwise modify any of the terms of any outstanding
option, warrant or other security or any related Contract;
(iv) amend or permit the adoption of any amendment to its
certificate of incorporation or bylaws or other charter or organizational
documents, or effect or become a party to any merger, consolidation, share
exchange, business combination, recapitalization, reclassification of shares,
stock split, reverse stock split, consolidation of shares or similar
transaction, except as permitted pursuant to Section 4.3;
(v) form any Subsidiary or acquire any equity interest or
other interest in any other Entity;
(vi) make any capital expenditure (except that the Acquired
Corporations may make capital expenditures that, when added to all other capital
expenditures made on behalf of the Acquired Corporations during the Pre-Closing
Period, do not exceed $1,000,000 in the aggregate);
(vii) enter into or become bound by, or permit any of the
assets owned or used by it to become bound by, any Material Contract other than
in the ordinary course of business and in accordance with past practices, or
amend or terminate, or waive or exercise any material right or remedy under, any
Material Contract;
(viii) acquire, lease or license any right or other asset
from any other Person or sell or otherwise dispose of, or lease or license, any
right or other asset to any
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other Person (except in each case for rights or assets acquired, leased,
licensed or disposed of by the Company in the ordinary course of business and
consistent with past practices), or waive or relinquish any material right;
(ix) lend money to any Person, or incur or guarantee any
indebtedness (except that the Company may make routine borrowings in the
ordinary course of business and in accordance with past practices under its
credit facilities with BankBoston, NA, dated July 10, 1997, Barclays Bank, PLC,
dated April 1, 1997 and Toronto-Dominion Bank, dated March 18, 1999);
(x) establish, adopt or amend (except to the extent required
by any applicable Legal Requirement) any employee benefit plan, pay any bonus or
make any profit-sharing or similar payment to, or increase the amount of the
wages, salary, commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors, officers or employees (except
that the Company may make routine, reasonable salary increases in connection
with the Company's customary employee review process and may pay customary
bonuses consistent with past practices payable in accordance with existing bonus
plans referred to in Part 2.17(a) of the Company Disclosure Schedule);
(xi) hire any employee at the level of director or above or
with an annual base salary in excess of $125,000, or promote any employee except
in order to fill a position vacated after the date of this Agreement;
(xii) change any of its pricing policies, product return
policies, product maintenance polices, service policies, product modification or
upgrade policies, personnel policies or other business policies, other than
changes that do not and could not reasonably be excepted to have a material
adverse effect on the revenues or results of operations of the Acquired
Corporations, or any of its methods of accounting or accounting practices in any
respect;
(xiii) make any material Tax election not required to be
made by any applicable Legal Requirement;
(xiv) commence or settle any Legal Proceeding, except
settlement of any Legal Proceeding set forth in Items 1-3, 5 and 6 of Part 2.21
of the Company Disclosure Schedule; or
(xv) agree or commit to take any of the actions described in
clauses "(i)" through "(xiv)" of this Section 4.2(b).
(c) During the Pre-Closing Period, the Company shall promptly
notify Parent in writing of: (i) the discovery by the Company of any event,
condition, fact or circumstance that occurred or existed on or prior to the date
of this Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by the Company in this Agreement; (ii) any
event, condition, fact or circumstance that occurs, arises or exists after the
date of this Agreement and that would cause or constitute a material inaccuracy
in any representation or warranty made by the Company in this Agreement if (A)
such representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event,
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condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement; (iii) any material breach of any covenant or obligation of the
Company in this Agreement or the Stock Option Agreement; and (iv) any event,
condition, fact or circumstance that would make the timely satisfaction of any
of the conditions set forth in Section 6 or Section 7 impossible or unlikely or
that has had or could reasonably be expected to have a Material Adverse Effect
on the Acquired Corporations. Without limiting the generality of the foregoing,
the Company shall promptly advise Parent in writing of any Legal Proceeding or
material claim threatened, commenced or asserted against or with respect to any
of the Acquired Corporations. No notification given to Parent pursuant to this
Section 4.2(c) shall limit or otherwise affect any of the representations,
warranties, covenants or obligations of the Company contained in this Agreement.
4.3 No Solicitation.
(a) The Company shall not directly or indirectly, and shall not
authorize or permit any of the other Acquired Corporations or any Representative
of any of the Acquired Corporations directly or indirectly to, (i) solicit,
initiate, encourage, induce or facilitate the making, submission or announcement
of any Acquisition Proposal or take any action that could reasonably be expected
to lead to an Acquisition Proposal, (ii) furnish any information regarding any
of the Acquired Corporations to any Person in connection with or in response to
an Acquisition Proposal or an inquiry or indication of interest that could lead
to an Acquisition Proposal, (iii) engage in discussions or negotiations with any
Person with respect to any Acquisition Proposal, (iv) approve, endorse or
recommend any Acquisition Proposal or (v) enter into any letter of intent or
similar document or any Contract contemplating or otherwise relating to any
Acquisition Transaction; provided, however, that, at any time prior to the
approval of this Agreement by the Required Company Stockholder Vote, this
Section 4.3(a) shall not prohibit the Company from:
(A) furnishing nonpublic information regarding the Acquired
Corporations to, or entering into discussions with, any Person in response to an
unsolicited, bona fide written Acquisition Proposal that is submitted to the
Company by such Person after the date of this Agreement (and not withdrawn) if
(1) neither the Company nor any Representative of any of the Acquired
Corporations shall have violated any of the restrictions set forth in this
Section 4.3, (2) the Company's board of directors determines in good faith,
after having taken into account the advice of its outside legal counsel, that
such action is required in order for such board of directors to comply with its
fiduciary obligations to the Company's stockholders under applicable law, (3) at
least two business days prior to furnishing any such nonpublic information to,
or entering into discussions with, such Person, the Company gives Parent written
notice of the identity of such Person and of the Company's intention to furnish
nonpublic information to, or enter into discussions with, such Person, and the
Company receives from such Person an executed confidentiality agreement
containing customary
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limitations on the use and disclosure of all nonpublic written and oral
information furnished to such Person by or on behalf of the Company, and (4) at
least two business days prior to furnishing any such nonpublic information to
such Person, the Company furnishes such nonpublic information to Parent (to the
extent such nonpublic information has not been previously delivered or made
available (at the offices of Skadden, Arps, Slate, Meagher & Flom LLP or Craig
Newfield) by the Company to Parent); or
(B) approving, endorsing or recommending, or entering into
any letter of intent or similar document or any Contract contemplating or
otherwise relating to, a Superior Offer if (1) neither the Company nor any
Representative of any of the Acquired Corporations shall have violated any of
the restrictions set forth in this Section 4.3, (2) the Company provides Parent
with written notice at least five business days prior to any meeting of the
Company's board of directors at which such board of directors will consider
whether an Acquisition Proposal constitutes a Superior Offer, (3) the Company's
board of directors makes the determination necessary for such Acquisition
Proposal to constitute a Superior Offer, (4) the Company does not enter into any
letter of intent or similar document or any Contract contemplating or otherwise
relating to, such Superior Offer at any time within two business days after
Parent receives written notice from the Company confirming that the Company's
board of directors has determined that such Acquisition Proposal constitutes a
Superior Offer, and (5) simultaneously with the execution of any such letter of
intent, Contract or other document, the Company makes the payments called for by
Sections 8.3(a) and 8.3(b).
Without limiting the generality of the foregoing, the Company acknowledges and
agrees that any violation of any of the restrictions set forth in the preceding
sentence by any Representative of any of the Acquired Corporations, whether or
not such Representative is purporting to act on behalf of any of the Acquired
Corporations, shall be deemed to constitute a breach of this Section 4.3 by the
Company.
(b) The Company shall promptly (and in no event later than 24
hours after receipt of any Acquisition Proposal or any inquiry, indication of
interest or request for nonpublic information that could lead or relate to an
Acquisition Proposal) advise Parent orally and in writing of any Acquisition
Proposal or any inquiry, indication of interest or request for nonpublic
information that could lead or relate to an Acquisition Proposal (including the
identity of the Person making or submitting such Acquisition Proposal, inquiry,
indication of interest or request, information on any previous communication
between such Person and the Company leading to such Acquisition Proposal,
inquiry, indication of interest or request, and the terms thereof) that is made
or submitted by any Person during the Pre-Closing Period. The Company shall keep
Parent fully informed with respect to the status of any such Acquisition
Proposal, inquiry, indication of interest or request and any modification or
proposed modification thereto.
(c) The Company shall immediately cease and cause to be
terminated any existing discussions with any Person that relate to any
Acquisition Proposal.
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(d) The Company agrees not to release or permit the release of
any Person from, or to waive or permit the waiver of any provision of, any
confidentiality, "standstill" or similar agreement to which any of the Acquired
Corporations is a party, and will use its best efforts to enforce or cause to be
enforced each such agreement at the request of Parent. The Company also will
promptly request each Person that has executed, within 12 months prior to the
date of this Agreement, a confidentiality agreement in connection with its
consideration of a possible Acquisition Transaction or equity investment to
return all confidential information heretofore furnished to such Person by or on
behalf of any of the Acquired Corporations.
(e) Nothing contained in this Section 4.3 or in Section 5.2 shall
prohibit the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or 14e-2(a) promulgated under the Exchange Act;
provided that, except in compliance with Sections 4.3(a)(B) and 5.2(c), the
Company shall not approve or recommend, or propose to approve or recommend, an
Acquisition Proposal or withdraw or modify, or propose to withdraw or modify,
the Company Board Recommendation.
4.4 Operation of Parent's Business.
(a) During the Pre-Closing Period: (i) Parent shall conduct its
business and operations in the ordinary course and in accordance with past
practices and; (ii) Parent shall use all commercially reasonable efforts to
preserve intact its current business organization, keeps available the services
of its current officers and employees and maintains its relations and goodwill
with all suppliers, customers, landlords, creditors, licensors, licensees,
employees and other Persons having business relationships with it.
(b) During the Pre-Closing Period, Parent shall promptly notify
the Company in writing of: (i) the discovery by Parent of any event, condition,
fact or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes a material inaccuracy in any
representation or warranty made by Parent in this Agreement; (ii) any event,
condition, fact or circumstance that occurs, arises or exists after the date of
this Agreement and that would cause or constitute a material inaccuracy in any
representation or warranty made by Parent in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement; (iii) any material breach of any
covenant or obligation of Parent in this Agreement; and (iv) any event,
condition, fact or circumstance that would make the timely satisfaction of any
of the conditions set forth in Section 6 or Section 7 impossible or unlikely or
that has had or could reasonably be expected to have a Material Adverse Effect
on Parent. Without limiting the generality of the foregoing, Parent shall
promptly advise the Company in writing of any Legal Proceeding or material claim
threatened, commenced or asserted against or with respect to Parent. No
notification given to the Company pursuant to this Section 4.4(b) shall limit or
otherwise affect any of the representations, warranties, covenants or
obligations of Parent contained in this Agreement.
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SECTION 5. ADDITIONAL COVENANTS OF THE PARTIES
5.1 Registration Statement; Prospectus/Proxy Statement.
(a) As promptly as practicable after the date of this Agreement,
Parent and the Company shall prepare and cause to be filed with the SEC the
Prospectus/Proxy Statement and Parent shall prepare and cause to be filed with
the SEC the Form S-4 Registration Statement, in which the Prospectus/Proxy
Statement will be included as a prospectus. Each of Parent and the Company shall
use all reasonable efforts to cause the Form S-4 Registration Statement and the
Prospectus/Proxy Statement to comply with the rules and regulations promulgated
by the SEC, to respond promptly to any comments of the SEC or its staff and to
have the Form S-4 Registration Statement declared effective under the Securities
Act as promptly as practicable after it is filed with the SEC. The Company will
use all reasonable efforts to cause the Prospectus/Proxy Statement to be mailed
to the Company's stockholders as promptly as practicable after the Form S-4
Registration Statement is declared effective under the Securities Act. The
Company shall promptly furnish to Parent all information concerning the Acquired
Corporations and the Company's stockholders that may be required or reasonably
requested in connection with any action contemplated by this Section 5.1. If any
event relating to any of the Acquired Corporations occurs, or if the Company
becomes aware of any information, that should be disclosed in an amendment or
supplement to the Form S-4 Registration Statement or the Prospectus/Proxy
Statement, then the Company shall promptly inform Parent thereof and shall
cooperate with Parent in filing such amendment or supplement with the SEC and,
if appropriate, in mailing such amendment or supplement to the stockholders of
the Company. If any event relating to Parent occurs, or if Parent becomes aware
of any information, that should be disclosed in an amendment or supplement to
the Form S-4 Registration Statement or the Prospectus/Proxy Statement, then
Parent shall promptly inform the Company thereof and shall file such amendment
or supplement with the SEC and, if appropriate, cooperate with the Company in
mailing such amendment or supplement to the stockholders of the Company.
(b) Prior to the Effective Time, Parent shall use reasonable
efforts to obtain all regulatory approvals needed to ensure that the Parent
Common Stock to be issued in the Merger will be registered or qualified under
the securities law of every jurisdiction of the United States in which any
registered holder of Company Common Stock has an address of record on the record
date for determining the stockholders entitled to notice of and to vote at the
Company Stockholders' Meeting; provided, however, that Parent shall not be
required (i) to qualify to do business as a foreign corporation in any
jurisdiction in which it is not now qualified or (ii) to file a general consent
to service of process in any jurisdiction.
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5.2 Company Stockholders' Meeting.
(a) The Company shall take all action necessary under all
applicable Legal Requirements to call, give notice of and hold a meeting of the
holders of Company Common Stock to vote on the approval of this Agreement (the
"Company Stockholders' Meeting"). The Company Stockholders' Meeting shall be
held (on a date selected by the Company in consultation with Parent) as promptly
as practicable (and in any event within 45 days, so long as such Form S-4
Registration Statement remains in effect and not subject to any stop order
during such 45-day period) after the Form S-4 Registration Statement is declared
effective under the Securities Act. The Company shall ensure that all proxies
solicited in connection with the Company Stockholders' Meeting are solicited in
compliance with all applicable Legal Requirements.
(b) Subject to Section 5.2(c): (i) the Proxy Statement shall
include a statement to the effect that the board of directors of the Company
recommends that the Company's stockholders vote to adopt this Agreement at the
Company Stockholders' Meeting (the recommendation of the Company's board of
directors that the Company's stockholders vote to adopt this Agreement being
referred to as the "Company Board Recommendation"); and (ii) the Company Board
Recommendation shall not be withdrawn or modified in a manner adverse to Parent,
and no resolution by the board of directors of the Company or any committee
thereof to withdraw or modify the Company Board Recommendation in a manner
adverse to Parent shall be adopted or proposed.
(c) Notwithstanding anything to the contrary contained in Section
5.2(b), the Company Board Recommendation may be withdrawn or modified in a
manner adverse to Parent if (1) the Company's board of directors has determined
in compliance with the requirements set forth in Section 4.3(a)(B) to accept an
Acquisition Proposal that constitutes a Superior Offer, (2) the Company's board
of directors determines in good faith, after having taken into account the
advice of its outside legal counsel, that the withdrawal or modification of the
Company Board Recommendation is required in order for such board of directors to
comply with its fiduciary obligations to the Company's stockholders under
applicable law, (3) the Company Board Recommendation is not withdrawn or
modified in a manner adverse to Parent at any time within two business days
after Parent receives written notice from the Company confirming that the
Company's board of directors has determined to accept such Superior Offer, and
(4) simultaneously with the withdrawal or modification of the Company Board
Recommendation, the Company makes the payments called for by Sections 8.3(a) and
8.3(b).
5.3 Regulatory Approvals. Each party shall use all reasonable efforts
to file, as soon as practicable after the date of this Agreement, all notices,
reports and other documents required to be filed by such party with any
Governmental Body with respect to the Merger and the other transactions
contemplated by this Agreement, and to submit promptly any additional
information requested by any such Governmental Body. Without limiting the
generality of the foregoing, the Company and Parent shall, promptly after the
date of this Agreement, prepare and file the notifications required under the
HSR Act and any applicable foreign antitrust laws or regulations in connection
with the Merger. The Company and Parent shall respond as promptly as practicable
to (i) any inquiries or requests received from the Federal Trade Commission or
the Department of Justice for additional information or documentation and (ii)
any inquiries or
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requests received from any state attorney general, foreign antitrust authority
or other Governmental Body in connection with antitrust or related matters. Each
of the Company and Parent shall (1) give the other party prompt notice of the
commencement or threat of commencement of any Legal Proceeding by or before any
Governmental Body with respect to the Merger or any of the other transactions
contemplated by this Agreement, (2) keep the other party informed as to the
status of any such Legal Proceeding or threat, and (3) promptly inform the other
party of any communication to or from the Federal Trade Commission, the
Department of Justice or any other Governmental Body regarding the Merger.
Except as may be prohibited by any Governmental Body or by any Legal
Requirement, the Company and Parent will consult and cooperate with one another,
and will consider in good faith the views of one another, in connection with any
analysis, appearance, presentation, memorandum, brief, argument, opinion or
proposal made or submitted in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law. In addition, except as may be prohibited by any Governmental Body or
by any Legal Requirement, in connection with any Legal Proceeding under or
relating to the HSR Act or any other foreign, federal or state antitrust or fair
trade law or any other similar Legal Proceeding, each of the Company and Parent
will permit authorized Representatives of the other party to be present at each
meeting or conference relating to any such Legal Proceeding and to have access
to and be consulted in connection with any document, opinion or proposal made or
submitted to any Governmental Body in connection with any such Legal Proceeding.
5.4 Stock Options.
(a) At the Effective Time, all rights with respect to Company
Common Stock under each Company Option then outstanding shall be converted into
and become rights with respect to Parent Common Stock, and Parent shall assume
each such Company Option in accordance with the terms (as in effect as of the
date of this Agreement) of the stock option plan under which it was issued and
the terms of the stock option agreement by which it is evidenced as set forth
herein. From and after the Effective Time, (i) each Company Option assumed by
Parent may be exercised solely for shares of Parent Common Stock, (ii) the
number of shares of Parent Common Stock subject to each such Company Option
shall be equal to the number of shares of Company Common Stock subject to such
Company Option immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounding down to the nearest whole share, (iii) the per share
exercise price under each such Company Option shall be adjusted by dividing the
per share exercise price under such Company Option by the Exchange Ratio and
rounding up to the nearest cent and (iv) any restriction on the exercise of any
such Company Option shall continue in full force and effect and the term,
exercisability, vesting schedule and other provisions of such Company Option
shall otherwise remain unchanged, except to the extent that any restriction on
exercise, term, exercisability, vesting schedule and other provisions of such
Company Option are automatically waived in connection with the transactions
contemplated by this Agreement; provided, however, that each Company Option
assumed by Parent in accordance with this Section 5.4(a) shall, in accordance
with its terms, be subject to further adjustment as appropriate to reflect any
stock split, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction subsequent to the Effective Time.
Parent shall file with the SEC, no later than 30 days after the date on which
the Merger becomes effective, a registration statement on Form S-8 relating to
the shares of Parent Common Stock issuable with respect to the Company Options
assumed by Parent in accordance
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with this Section 5.4(a). Notwithstanding any of the foregoing to the contrary,
in lieu of assuming outstanding Company Options, Parent may, at its election,
cause such outstanding Company Options to be replaced by issuing replacement
stock options in substitution therefor (each, a "Substitute Option"). Each
Substitute Option shall (i) be exercisable solely for shares of Parent Common
Stock, (ii) cover a number of shares of Parent Common Stock equal to the number
of shares of Company Common Stock covered by the Company Option for which it is
substituted, multiplied by the Exchange Ratio, rounded down to the nearest whole
share, (iii) have a per share exercise price equal to the per share exercise
price of the Company Option for which it is substituted, divided by the Exchange
Ratio, rounded up to the nearest whole cent and (iv) have substantially
identical terms as the Company Option for which it is substituted including,
without limitation, any restriction on the exercise of any such Company Option,
the term, exercisability, vesting schedule and other provisions of such Company
Option, except to the extent that any restriction on exercise, term,
exercisability, vesting schedule and other provisions of such Company Option are
automatically waived in connection with the transactions contemplated by this
Agreement; provided, however, that each Substituted Option shall be subject to
further adjustment as appropriate to reflect any stock split, stock dividend,
reverse stock split, reclassification, recapitalization or other similar
transaction subsequent to the Effective Time.
(b) All actions taken by the Company and Parent pursuant to
Sections 5.4(a) and (b) above with respect to Company Options that are incentive
stock options within the meaning of Section 422 of the Code shall not adversely
affect the tax status of such Company Options.
(c) Prior to the Effective Time, the Company shall take all
action that may be necessary (under the plans pursuant to which Company Options
are outstanding and otherwise) to effectuate the provisions of this Section 5.4
and to ensure that, from and after the Effective Time, holders of Company
Options have no rights with respect thereto other than those specifically
provided in this Section 5.4.
5.5 Employee Benefits. Parent agrees that all employees of the
Acquired Corporations who are employed by Parent, the Surviving Corporation or
any Subsidiary of the Surviving Corporation immediately after the Effective Time
("Continuing Employees") shall be eligible to continue to participate in the
Surviving Corporation's health and/or welfare benefit plans in accordance with
the terms of such plans, which plans shall provide benefits not materially less
favorable in the aggregate to those provided to such employees immediately prior
to the Effective Time; provided, however, that (a) nothing in this Section 5.5
or elsewhere in this Agreement shall limit the right of Parent or the Surviving
Corporation to amend or terminate any such health and/or welfare benefit plan at
any time, and (b) if Parent or the Surviving Corporation terminates any such
health and/or welfare benefit plan, then, subject to any appropriate transition
period, the Continuing Employees shall be eligible to participate in Parent's
health, vacation and other non-equity based employee benefit plans, to
substantially the same extent as similarly situated employees of Parent. Nothing
in this Section 5.5 or elsewhere in this Agreement shall be construed to create
a right in any employee to employment with Parent, the Surviving Corporation or
any other Subsidiary of the Surviving Corporation and, subject to any other
binding agreement between an employee and Parent, the Surviving Corporation or
any Subsidiary of the Surviving Corporation, the employment of each Continuing
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Employee shall be "at will" employment. The Company agrees to take (or cause to
be taken) all actions necessary or appropriate to terminate, effective
immediately prior to the Effective Time, any employee benefit plan sponsored by
any of the Acquired Corporations (or in which any of the Acquired Corporations
participate) that contains a cash or deferred arrangement intended to qualify
under section 401(k) of the Code. To the extent permitted by Legal Requirements,
following the Effective Time, Continuing Employees shall be eligible to
participate in any employee benefit plan sponsored by the Parent that contains a
cash or deferred arrangement intended to qualify under section 401(k) of the
Code to the same extent as other similarly situated employees of Parent.
Following the Effective Time, with respect to each plan in which any Continuing
Employee participates, for purposes of determining eligibility to participate,
vesting, and entitlement to benefits, including for severance benefits and
vacation entitlement (but not for accrual of pension benefits), service with the
Acquired Corporations (or predecessor employers to the extent the Acquired
Corporations provided past service credit) shall be treated as service with
Parent, the Surviving Corporation or any affiliate of either; provided, however,
that such service shall not be recognized to the extent that such recognition
would result in a duplication of benefits. To the extent permitted by the
applicable insurance carrier, such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. To the extent permitted by
the applicable insurance carrier, each such plan shall waive pre-existing
condition limitations to the same extent waived under the applicable plan of the
Acquired Corporation. To the extent permitted by the applicable insurance
carrier, Continuing Employees shall be given credit under the applicable plan of
Parent, the Surviving Corporation or any affiliate of either for amounts paid
under a corresponding benefit plan during the same period for purposes of
applying deductibles, copayments and out-of-pocket maximums as though such
amounts had been paid in accordance with the terms and conditions of the
successor or replacement plan.
5.6 Indemnification of Officers and Directors.
(a) All rights to indemnification existing in favor of any Person
who is now, or had been at any time prior to the date of this Agreement or who
becomes prior to the Effective Time, a director and officer of the Company (the
"Indemnified Persons") for acts and omissions occurring prior to the Effective
Time, as provided in the Company's bylaws (as in effect as of the date of this
Agreement) and as provided in the indemnification agreements between the Company
and said Indemnified Persons (as in effect as of the date of this Agreement) in
the forms disclosed by the Company to Parent prior to the date of this
Agreement, shall survive the Merger and shall be observed by the Surviving
Corporation to the fullest extent available under Massachusetts law for a period
of six years from the Effective Time. Parent hereby guarantees the observance of
such rights to indemnification by the Surviving Corporation.
(b) From the Effective Time until the third anniversary of the
Effective Time, the Surviving Corporation shall maintain in effect, for the
benefit of the Indemnified Persons with respect to acts or omissions occurring
prior to the Effective Time, the existing policy of directors' and officers'
liability insurance maintained by the Company as of the date of this Agreement
in the form disclosed by the Company to Parent prior to the date of this
Agreement (the "Existing Policy"); provided, however, that (i) the Surviving
Corporation may substitute for the Existing Policy a policy or policies of
comparable coverage, and (ii) the
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Surviving Corporation shall not be required to pay annual premiums for the
Existing Policy (or for any substitute policies) in excess of $300,000 in the
aggregate. In the event any future annual premiums for the Existing Policy (or
any substitute policies) exceeds $300,000 in the aggregate, the Surviving
Corporation shall be entitled to reduce the amount of coverage of the Existing
Policy (or any substitute policies) to the amount of coverage that can be
obtained for an annual premium equal to $300,000.
(c) This Section 5.6 shall survive the consummation of the Merger
and is intended to benefit and may be enforced by the Indemnified Persons and
shall be binding on all successors and assigns of Parent and Surviving
Corporation.
5.7 Additional Agreements.
(a) Subject to Section 5.7(b), Parent and the Company shall use
all reasonable efforts to take, or cause to be taken, all actions necessary to
consummate the Merger and make effective the other transactions contemplated by
this Agreement. Without limiting the generality of the foregoing, but subject to
Section 5.7(b), each party to this Agreement (i) shall make all filings (if any)
and give all notices (if any) required to be made and given by such party in
connection with the Merger and the other transactions contemplated by this
Agreement, (ii) shall use all reasonable efforts to obtain each Consent (if any)
required to be obtained (pursuant to any applicable Legal Requirement or
Contract, or otherwise) by such party in connection with the Merger or any of
the other transactions contemplated by this Agreement, and (iii) shall use all
reasonable efforts to lift any restraint, injunction or other legal bar to the
Merger. The Company shall promptly deliver to Parent a copy of each such filing
made, each such notice given and each such Consent obtained by the Company
during the Pre-Closing Period.
(b) Notwithstanding anything to the contrary contained in this
Agreement, Parent shall not have any obligation under this Agreement: (i) to
dispose of or transfer or cause any of its Subsidiaries to dispose of or
transfer any assets, or to commit to cause any of the Acquired Corporations to
dispose of any assets; (ii) to discontinue or cause any of its Subsidiaries to
discontinue offering any product or service, or to commit to cause any of the
Acquired Corporations to discontinue offering any product or service; (iii) to
license or otherwise make available, or cause any of its Subsidiaries to license
or otherwise make available, to any Person, any technology, software or other
Proprietary Asset, or to commit to cause any of the Acquired Corporations to
license or otherwise make available to any Person any technology, software or
other Proprietary Asset; (iv) to hold separate or cause any of its Subsidiaries
to hold separate any assets or operations (either before or after the Closing
Date), or to commit to cause any of the Acquired Corporations to hold separate
any assets or operations; or (v) to make or cause any of its Subsidiaries to
make any commitment (to any Governmental Body or otherwise) regarding its future
operations or the future operations of any of the Acquired Corporations.
5.8 Disclosure. Parent and the Company shall consult with each other
before issuing any press release or otherwise making any public statement with
respect to the Merger or any of the other transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, the Company shall
not, and shall not permit any of its Representative to, make any disclosure
regarding the Merger or any of the other transactions contemplated by this
Agreement unless (a) Parent shall have approved such disclosure or (b) the
Company shall
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reasonably determine after consultation with outside legal counsel that such
disclosure is required by applicable law.
5.9 Tax Matters. At or prior to the filing of the Form S-4
Registration Statement, the Company, Merger Sub and Parent shall execute and
deliver to Cooley Godward LLP and to Skadden, Arps, Slate, Meagher & Flom LLP
tax representation letters in forms reasonably requested by the respective
counsels. Parent, Merger Sub and the Company shall each confirm to Cooley
Godward LLP and to Skadden, Arps, Slate, Meagher & Flom LLP the accuracy and
completeness as of the Effective Time of the tax representation letters
delivered pursuant to the immediately preceding sentence. Parent and the Company
shall use all reasonable efforts prior to and following the Effective Time to
cause the Merger to qualify as a tax free reorganization under Section 368(a)(1)
of the Code. Following delivery of the tax representation letters pursuant to
the first sentence of this Section 5.9, each of Parent and the Company shall use
its reasonable efforts to cause Cooley Godward LLP and Skadden, Arps, Slate,
Meagher & Flom LLP, respectively, to deliver to it a tax opinion satisfying the
requirements of Item 601 of Regulation S-K promulgated under the Securities Act.
In rendering such opinions, each of such counsel shall be entitled to rely on
the tax representation letters referred to in this Section 5.9.
5.10 Listing and Frankfurt Stock Exchange. Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock being issued in
the Merger to be approved for listing (subject to notice of issuance) on the
Nasdaq National Market and to obtain the requisite approval for the consummation
of the Merger by the Frankfurt Stock Exchange.
5.11 Resignation of Officers and Directors. The Company shall use all
reasonable efforts to obtain and deliver to Parent on or prior to the Closing
the resignation of each officer and director of each of the Acquired
Corporations to the extent requested by Parent.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB
The obligations of Parent and Merger Sub to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
6.1 Accuracy of Representations. The representations and warranties of
the Company contained in this Agreement shall be accurate in all respects as of
the date of this Agreement and as of the Closing Date as if made on and as of
the Closing Date; provided, however, that (a) this condition shall be deemed
satisfied unless all inaccuracies in such representations and warranties
(considered collectively) are deemed to have a Material Adverse Effect on the
Acquired Corporations and (b) for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the Company
Disclosure Schedule made or purported to have been made after the date of this
Agreement shall be disregarded.
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6.2 Performance of Covenants. Each covenant or obligation that the
Company is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all material respects.
6.3 Effectiveness of Registration Statement. The Form S-4 Registration
Statement shall have become effective in accordance with the provisions of the
Securities Act, and no stop order shall have been issued, and no proceeding for
that purpose shall have been initiated or be threatened, by the SEC with respect
to the Form S-4 Registration Statement.
6.4 Stockholder Approval . This Agreement shall have been duly adopted
by the Required Company Stockholder Vote.
6.5 Consents. All Consents required to be obtained in connection with
the Merger and the other transactions contemplated by this Agreement shall have
been obtained and shall be in full force and effect, except for such Consents
the failure of which to obtain (both individually and in the aggregate) could
not reasonably be expected to have a Material Adverse Effect on the Acquired
Corporations.
6.6 Agreements and Documents. Parent and the Company shall have
received the following agreements and documents, each of which shall be in full
force and effect:
(a) Noncompetition Agreements in the form of Exhibit C, executed
by the individuals listed on Schedule 6.7(a);
(b) a legal opinion of Cooley Godward LLP dated as of the Closing
Date and addressed to Parent, substantially to the effect that, on the basis of
facts, representations and assumptions set forth in such opinion, which are
consistent with the state of facts existing as of the Effective Time, for
federal income tax purposes the Merger will constitute a reorganization within
the meaning of Section 368 of the Code (it being understood that (i) in
rendering such opinion, Cooley Godward LLP may rely upon the tax representation
letters referred to in Section 5.9, and (ii) if Cooley Godward LLP does not
render such opinion or withdraws or modifies such opinion, this condition shall
nonetheless be deemed to be satisfied if Skadden, Arps, Slate, Meagher & Flom
LLP renders such opinion);
(c) a certificate executed on behalf of the Company by its Chief
Executive Officer confirming that the conditions set forth in Sections 6.1, 6.2,
6.4, 6.5, and 6.13 have been duly satisfied and that, to his knowledge, the
conditions set forth in Sections 6.7 and 6.8 have been duly satisfied; and
(d) the written resignations of all officers and directors of
each of the Acquired Corporations requested by Parent, effective as of the
Effective Time.
6.7 Employees. Unless Parent shall have expressed an intention not to
continue a particular individual's employment, none of the individuals
identified on Schedule 6.7(a) shall have ceased to be employed by the Company,
or shall have expressed an intention to Parent to terminate his employment with
the Company; and not more than 40% of the individuals identified on Schedule
6.7(b) shall have ceased to be employed by the Company, or
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shall have expressed an intention to Parent to terminate his or her employment
with the Company.
6.8 No Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred or arisen any event, violation, inaccuracy,
circumstance or other matter that is deemed to have a Material Adverse Effect on
the Acquired Corporations.
6.9 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and any Consent
required under any applicable foreign antitrust law or regulation shall have
been obtained.
6.10 Frankfurt Stock Exchange. The requisite approval for the
consummation of the Merger by the Frankfurt Stock Exchange shall have been
obtained.
6.11 Listing. The shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing (subject to notice of issuance) on
the Nasdaq National Market.
6.12 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
6.13 No Governmental Litigation. There shall not be pending any Legal
Proceeding in which a Governmental Body is a party or is otherwise involved: (a)
challenging or seeking to restrain or prohibit the consummation of the Merger or
any of the other transactions contemplated by this Agreement; (b) relating to
the Merger and seeking to obtain from Parent or any of its Subsidiaries, any
damages or other relief that may be material to Parent; (c) seeking to prohibit
or limit in any material respect Parent's ability to vote, receive dividends
with respect to or otherwise exercise ownership rights with respect to the stock
of the Surviving Corporation; (d) which would materially and adversely affect
the right of Parent, the Surviving Corporation or any Subsidiary of Parent to
own the assets or operate the business of the Acquired Corporations; or (e)
seeking to compel Parent or the Company, or any Subsidiary of Parent or the
Company, to dispose of or hold separate any material assets, as a result of the
Merger or any of the other transactions contemplated by this Agreement.
SECTION 7. CONDITIONS PRECEDENT TO OBLIGATION OF THE COMPANY
The obligation of the Company to effect the Merger and otherwise consummate
the transactions contemplated by this Agreement are subject to the satisfaction,
at or prior to the Closing, of the following conditions:
7.1 Accuracy of Representations. The representations and warranties of
Parent and Merger Sub contained in this Agreement shall be accurate in all
respects as of the date of this Agreement and as of the Closing Date as if made
on and as of the Closing Date, provided, however, that this condition shall be
deemed satisfied unless all inaccuracies in such
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representations and warranties (considered collectively) are deemed to have a
Material Adverse Effect on Parent.
7.2 Performance of Covenants. All of the covenants and obligations
that Parent and Merger Sub are required to comply with or to perform at or prior
to the Closing shall have been complied with and performed in all material
respects.
7.3 Effectiveness of Registration Statement. The Form S-4 Registration
Statement shall have become effective in accordance with the provisions of the
Securities Act, and no stop order shall have been issued, and no proceeding for
that purpose shall have been initiated or be threatened, by the SEC with respect
to the Form S-4 Registration Statement.
7.4 Stockholder Approval. This Agreement shall have been duly adopted
by the Required Company Stockholder Vote.
7.5 Documents. The Company shall have received the following
documents:
(a) a legal opinion of Skadden, Arps, Slate, Meagher & Flom LLP,
dated as of the Closing Date and addressed to the Company, substantially to the
effect that, on the basis of facts, representations and assumptions set forth in
such opinion, which are consistent with the state of facts existing as of the
Effective Time, for federal income tax purposes the Merger will constitute a
reorganization within the meaning of Section 368 of the Code (it being
understood that, in rendering such opinion, (i) Skadden, Arps, Slate, Meagher &
Flom LLP may rely upon the tax representation letters referred to in Section
5.9, and (ii) if Skadden, Arps, Slate, Meagher & Flom LLP does not render such
opinion or withdraws or modifies such opinion, this condition shall nonetheless
be deemed to be satisfied if Cooley Godward LLP renders such opinion); and
(b) a certificate executed on behalf of Parent by an executive
officer of Parent, confirming that conditions set forth in Sections 7.1, 7.2 and
7.3 have been duly satisfied and that, to his knowledge, the condition set forth
in Section 7.6 has been duly satisfied.
7.6 No Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred or arisen any event, violation, inaccuracy,
circumstance or other matter that is deemed to have a Material Adverse Effect on
Parent.
7.7 HSR Act. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated and any Consent
required under any applicable foreign antitrust law or regulation shall have
been obtained.
7.8 Listing. The shares of Parent Common Stock to be issued in the
Merger shall have been approved for listing (subject to notice of issuance) on
the Nasdaq National Market.
7.9 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger by
the Company shall have been issued by any court of competent jurisdiction and
remain in effect, and there shall not be
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any Legal Requirement enacted or deemed applicable to the Merger that makes
consummation of the Merger by the Company illegal.
SECTION 8. TERMINATION
8.1 Termination. This Agreement may be terminated prior to the
Effective Time (whether before or after the adoption of this Agreement by the
Required Company Stockholder Vote):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Merger shall not have
been consummated by July 31, 2000 (unless the failure to consummate the
Merger is attributable to a failure on the part of the party seeking to
terminate this Agreement to perform any material obligation required to be
performed by such party at or prior to the Effective Time);
by either Parent or the Company if a court of competent
jurisdiction or other Governmental Body shall have issued a final and
nonappealable order, decree or ruling, or shall have taken any other
action, having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger;
by either Parent or the Company if (i) the Company Stockholders'
Meeting (including any adjournments and postponements thereof) shall have
been held and completed and the Company's stockholders shall have taken a
final vote on a proposal to adopt this Agreement, and (ii) this Agreement
shall not have been adopted at such meeting by the Required Company
Stockholder Vote (and shall not have been adopted at any adjournment or
postponement thereof); provided, however, that (A) a party shall not be
permitted to terminate this Agreement pursuant to this Section 8.1(d) if
the failure to obtain such stockholder approval is attributable to a
failure on the part of such party to perform any material obligation
required to be performed by such party at or prior to the Effective Time,
and (B) the Company shall not be permitted to terminate this Agreement
pursuant to this Section 8.1(d) unless the Company shall have made the
payment required to be made to Parent pursuant to Section 8.3(a) and shall
have paid to Parent any fee required to be paid to Parent prior to such
termination pursuant to Section 8.3(c);
by Parent (at any time prior to the adoption of this Agreement by
the Required Company Stockholder Vote) if a Triggering Event shall have
occurred;
by Parent if (i) any of the Company's representations and
warranties contained in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date), such
that the condition set forth in Section 6.1 would not be satisfied, or (ii)
any of the Company's covenants contained in this Agreement shall have been
breached such that the condition set forth in Section 6.2 would not be
satisfied; provided, however, that if an inaccuracy in the Company's
representations and warranties
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or a breach of a covenant by the Company is curable by the Company and the
Company is continuing to exercise all reasonable efforts to cure such
inaccuracy or breach, then Parent may not terminate this Agreement under
this Section 8.1(f) on account of such inaccuracy or breach;
by the Company if (i) any of Parent's representations and
warranties contained in this Agreement shall be inaccurate as of the date
of this Agreement, or shall have become inaccurate as of a date subsequent
to the date of this Agreement (as if made on such subsequent date), such
that the condition set forth in Section 7.1 would not be satisfied, or (ii)
if any of Parent's covenants contained in this Agreement shall have been
breached such that the condition set forth in Section 7.2 would not be
satisfied; provided, however, that if an inaccuracy in Parent's
representations and warranties or a breach of a covenant by Parent is
curable by Parent and Parent is continuing to exercise all reasonable
efforts to cure such inaccuracy or breach, then the Company may not
terminate this Agreement under this Section 8.1(g) on account of such
inaccuracy or breach; or
by the Company if the board of directors of the Company shall
have approved a Superior Offer in compliance with Section 4.3(a)(B),
including having made the payments called for by Sections 8.3(a) and
8.3(b).
8.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, this Agreement shall be of no further
force or effect; provided, however, that (a) this Section 8.2, Section 8.3 and
Section 9 (and the Confidentiality Agreement) shall survive the termination of
this Agreement and shall remain in full force and effect, and (b) except as set
forth in Section 8.3(d), the termination of this Agreement shall not relieve any
party from any liability for any breach of any representation, warranty or
covenant contained in this Agreement.
8.3 Expenses; Termination Fees.
(a) Except as set forth in this Section 8.3, all fees and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Merger is consummated; provided, however, that (i)
Parent and the Company shall share equally all fees and expenses, other than
attorneys' fees, incurred in connection with (A) the filing, printing and
mailing of the Form S-4 Registration Statement and the Prospectus/Proxy
Statement and any amendments or supplements thereto and (B) the filing by the
parties hereto of the premerger notification and report forms relating to the
Merger under the HSR Act and the filing of any notice or other document under
any applicable foreign antitrust law or regulation; and (ii) if this Agreement
is terminated by Parent or the Company pursuant to Section 8.1(d) or by Parent
pursuant to Section 8.1(e) or if Section 4.3(a)(B) or Section 5.2(c) so
requires, then the Company shall make a nonrefundable cash payment to Parent (in
addition to any fee that may be payable pursuant to Section 8.3(b) or 8.3(c)),
at the time specified in the next sentence or in Section 4.3(a)(B) or Section
5.2(c) as applicable, in an amount equal to the aggregate amount of all fees and
expenses (including all attorneys' fees, accountants' fees, financial advisory
fees and filing fees) that have been paid or that may become payable by or on
behalf of Parent in connection with the
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preparation and negotiation of this Agreement and the Stock Option Agreement and
otherwise in connection with the Merger in an aggregate amount not to exceed
$2,000,000. In the case of termination of this Agreement by the Company pursuant
to Section 8.1(d), the nonrefundable payment referred to in clause "(ii)" of the
proviso to the first sentence of this Section 8.3(a) shall be made by the
Company prior to such termination; and in the case of termination of this
Agreement by Parent pursuant to Section 8.1(d) or 8.1(e), the nonrefundable
payment referred to clause "(ii)" of the proviso to the first sentence of this
Section 8.3(a) shall be made by the Company within two business days after such
termination.
(b) If this Agreement is terminated by Parent pursuant to Section
8.1(e) or if Section 4.3(a)(B) or Section 5.2(c) so requires, then the Company
shall pay to Parent, within two business days after such termination or at the
time specified in Section 4.3(a)(B) or Section 5.2(c) as applicable, a
nonrefundable cash fee in the amount of $30,000,000. Any fee required to be paid
pursuant to this Section 8.3(b) shall be in addition to any payment required to
be made pursuant to Section 8.3(a).
(c) If this Agreement is terminated by Parent or the Company
pursuant to Section 8.1(d) and at the time of the Company Stockholders' Meeting
an Acquisition Proposal disclosed, announced, commenced, submitted or made prior
thereto shall remain outstanding (each such Acquisition Proposal a "Competing
Proposal"), then the Company shall pay to Parent, at the time specified in the
next sentence, a nonrefundable cash fee in the amount of $10,000,000. In the
case of termination of this Agreement by the Company pursuant to Section 8.1(d),
the fee referred to in the preceding sentence shall be paid by the Company prior
to such termination, and in the case of termination of this Agreement by Parent
pursuant to Section 8.1(d), the fee referred to in the preceding sentence shall
be paid by the Company within two business days after such termination. Any fee
required to be paid pursuant to this Section 8.3(c) shall be in addition to any
payment required to be made pursuant to Section 8.3(a). Immediately upon the
earlier of entering into a definitive agreement with respect to or consummation
of, at any time within six months after the termination of this Agreement, any
transaction contemplated by any Competing Proposal, the Company shall pay to
Parent an additional nonrefundable cash fee in the amount of $20,000,000. Any
fee required to be paid pursuant to this Section 8.3(c) shall be in addition to
any payment required to be made pursuant to Section 8.3(a).
(d) If this Agreement is terminated pursuant to Section 8.1(g)
because of a breach by Parent of any representation, warranty or covenant,
Parent shall pay to the Company, within two business days after such
termination, a cash fee in the amount of $30,000,000 as liquidated damages and
as the sole and exclusive remedy to the Company as a result of such breach.
Parent and the Company agree that it would be extremely difficult or
impracticable to determine the Company's actual damages in the event of such
breach and that the cash fee required to be paid pursuant to this Section 8.3(d)
is a reasonable estimate of the Company's damages and not a penalty.
SECTION 9. MISCELLANEOUS PROVISIONS
9.1 Amendment. This Agreement may be amended with the approval of the
respective boards of directors of the Company and Parent at any time (whether
before or after the approval of this Agreement by the stockholders of the
Company); provided, however, that after
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any such approval of this Agreement by the Company's stockholders, no amendment
shall be made which by law requires further approval of the stockholders of the
Company without the further approval of such stockholders. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
9.2 Waiver.
(a) No failure on the part of any party to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
party 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.
(b) No party shall 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 such party; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
9.3 No Survival of Representations and Warranties. None of the
representations and warranties contained in this Agreement or in any certificate
delivered pursuant to this Agreement shall survive the Merger.
9.4 Entire Agreement; Counterparts. This Agreement and the Stock
Option Agreement constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among or between any of
the parties with respect to the subject matter hereof and thereof; provided,
however, that the Confidentiality Agreement shall not be superseded and shall
remain in full force and effect. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument
9.5 Applicable Law; Jurisdiction. The Merger shall be governed by the
MBCL and 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. In any action
between any of the parties arising out of or relating to this Agreement or any
of the transactions contemplated by this Agreement: (a) each of the parties
irrevocably and unconditionally consents and submits to the exclusive
jurisdiction and venue of the state and federal courts located in the State of
Delaware; (b) if any such action is commenced in a state court, then, subject to
applicable law, no party shall object to the removal of such action to any
federal court located in such state; (c) each of the parties irrevocably waives
the right to trial by jury; and (d) each of the parties irrevocably consents to
service of process by first class certified mail, return receipt requested,
postage prepaid, to the address at which such party is to receive notice in
accordance with Section 9.8.
9.6 Attorneys' Fees. In any action at law or suit in equity to enforce
this Agreement or the rights of any of the parties hereunder, the prevailing
party in such action or suit
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shall be entitled to receive a reasonable sum for its attorneys' fees and all
other reasonable costs and expenses incurred in such action or suit.
9.7 Assignability. This Agreement shall be binding upon, and shall be
enforceable by and inure solely to the benefit of, the parties hereto and their
respective successors and assigns; provided, however, that neither this
Agreement nor any of the rights hereunder may be assigned by the Company or
Parent without the prior written consent of the other party, and any attempted
assignment of this Agreement or any of such rights by the Company or Parent
without such consent shall be void and of no effect. Except as set forth in
Section 5.6(c), nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person (other than the parties hereto) any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
9.8 Notices. Any notice or other communication required or permitted
to be delivered to any party under this Agreement shall be in writing and shall
be deemed properly delivered, given and received (a) when delivered by hand, or
(b) two business days after sent by registered mail or, by courier or express
delivery service or by facsimile to the address or facsimile telephone number
set forth beneath the name of such party below (or to such other address or
facsimile telephone number as such party shall have specified in a written
notice given to the other parties hereto):
if to Parent or Merger Sub:
BroadVision, Inc.
585 Broadway
Redwood City, CA 94063
Attention: Scott Neely, Esq.
Facsimile: (650) 261-5900
With a copy to:
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
Attention: Kenneth L. Guernsey, Esq.
Facsimile: (415) 951-3699
if to the Company:
Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02154
Attention: Craig Newfield, Esq.
Facsimile: (781) 768-1145
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With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
Facsimile: (617) 573-4822
9.9 Cooperation. The Company agrees to cooperate fully with Parent and
to execute and deliver such further documents, certificates, agreements and
instruments and to take such other actions as may be reasonably requested by
Parent to evidence or reflect the transactions contemplated by this Agreement
and to carry out the intent and purposes of this Agreement.
9.10 Construction.
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this
Agreement to "Sections," "Exhibits" and "Schedules" are intended to refer to
Sections of this Agreement and Exhibits or Schedules to this Agreement.
(e) The bold-faced headings 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
BROADVISION, INC.
By: /s/ Randall C. Bolten
---------------------------------
Title: Vice President, Finance
and Chief Financial Officer
---------------------------------
INFINITI ACQUISITION SUB, INC.
By: /s/ Scott C. Neely
---------------------------------
Title: President
---------------------------------
INTERLEAF, INC.
By: /s/ Jaime Ellertson
---------------------------------
Title: President and CEO
---------------------------------
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Acquired Corporation Contract. "Acquired Corporation Contract" shall mean
any Contract: (a) to which any of the Acquired Corporations is a party or an
assignee of a party or (b) by which any of the Acquired Corporations or any
asset of any of the Acquired Corporations is or may become bound or under which
any of the Acquired Corporations has, or may become subject to, any obligation.
Acquired Corporation Proprietary Asset. "Acquired Corporation Proprietary
Asset" shall mean any Proprietary Asset owned by or licensed to any of the
Acquired Corporations or otherwise used by any of the Acquired Corporations.
Acquired Corporation Source Code. "Acquired Corporation Source Code" shall
mean any source code, or any portion, aspect or segment of any source code,
relating to any Acquired Corporation Proprietary Asset.
Acquisition Proposal. "Acquisition Proposal" shall mean any offer,
proposal, inquiry or indication of interest (other than an offer, proposal,
inquiry or indication of interest by Parent) contemplating or otherwise relating
to any Acquisition Transaction.
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction or series of transactions involving:
(a) any merger, consolidation, share exchange, business combination,
issuance of securities, acquisition of securities, recapitalization, tender
offer, exchange offer or other similar transaction (i) in which any of the
Acquired Corporations is a constituent corporation, (ii) in which a Person
or "group" (as defined in the Exchange Act and the rules promulgated
thereunder) of Persons directly or indirectly acquires beneficial or record
ownership of securities representing more than 15% of the outstanding
securities of any class of voting securities of any of the Acquired
Corporations, or (iii) in which any of the Acquired Corporations issues
securities representing more than 15% of the outstanding securities of any
class of voting securities of any of the Acquired Corporations;
(b) any sale, lease, exchange, transfer, license, acquisition or
disposition of any business or businesses or assets that constitute or
account for 15% or more of the consolidated net revenues, net income or
assets of any of the Acquired Corporations; or
(c) any liquidation or dissolution of any of the Acquired
Corporations.
Agreement. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached, as it may be amended from
time to time.
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Company Common Stock. "Company Common Stock" shall mean the Common Stock,
$0.01 par value per share, of the Company.
Company Disclosure Schedule. "Company Disclosure Schedule" shall mean the
disclosure schedule that has been prepared by the Company and that has been
delivered by the Company to Parent on the date of the Agreement and signed by
the President of the Company.
Company Warrants. "Company Warrants" shall mean the Finpiave Warrant and
the Series D Warrants.
Confidentiality Agreement. "Confidentiality Agreement" shall mean the
confidentiality agreement, dated as of December 14, 2000, by and between Parent
and the Company.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, option, warranty,
purchase order, license, sublicense, insurance policy, benefit plan or legally
binding commitment or undertaking of any nature.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any company
limited by shares, limited liability company or joint stock company), firm,
society or other enterprise, association, organization or entity.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Form S-4 Registration Statement. "Form S-4 Registration Statement" shall
mean the registration statement on Form S-4 to be filed with the SEC by Parent
in connection with issuance of Parent Common Stock in the Merger, as said
registration statement may be amended prior to the time it is declared effective
by the SEC.
Governmental Authorization. "Governmental Authorization" shall mean any
permit, license, certificate, franchise, permission, variance, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement.
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Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body (or under the
authority of the Nasdaq National Market).
Material Adverse Effect. An event, violation, inaccuracy, circumstance or
other matter will be deemed to have a "Material Adverse Effect" on the Acquired
Corporations if such event, violation, inaccuracy, circumstance or other matter
individually, or in the aggregate with all other events or circumstances
(considered together with all other matters that would constitute exceptions to
the representations and warranties of the Company set forth in the Agreement;
provided, however, that, for purposes of determining whether such matters
constitute exceptions to the representations and warranties, all "Material
Adverse Effect" or other materiality qualifications, or any similar
qualifications, in such representations and warranties shall be disregarded),
had or could reasonably be expected to have a material adverse effect on (i) the
business, financial condition, capitalization, assets, liabilities, operations
or results of operations of the Acquired Corporations taken as a whole, or (ii)
the ability of the Company to consummate the Merger or any of the other
transactions contemplated by the Agreement or the Stock Option Agreement or to
perform any of its obligations under the Agreement or the Stock Option
Agreement. An event, violation, inaccuracy, circumstance or other matter will be
deemed to have a "Material Adverse Effect" on Parent if such event, violation,
inaccuracy, circumstance or other matter individually, or in the aggregate with
all other events or circumstances (considered together with all other matters
that would constitute exceptions to the representations and warranties of Parent
set forth in the Agreement; provided, however, that, for purposes of determining
whether such matters constitute exceptions to the representations and
warranties, all "Material Adverse Effect" or other materiality qualifications,
or any similar qualifications, in such representations and warranties shall be
disregarded), had or would reasonably be expected to have a material adverse
effect on (i) the business, financial condition, capitalization, assets,
liabilities, operations or results of operations of Parent and its Subsidiaries
taken as a whole or (ii) the ability of Parent to consummate the Merger or any
of the other transactions contemplated by the Agreement or to perform any of its
obligations under the Agreement; provided, however,
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that a decline in Parent's stock price, in and of itself, shall not be deemed to
have a Material Adverse Effect on Parent. For purposes of determining whether
there has been a Material Adverse Effect, any change, effect, event or
occurrence relating to (i) this Agreement or the transactions contemplated
hereby or the announcement thereof (including, without limitation, any employee
attrition, any cancellation, reduction or delay in orders by customers or any
cancellation, reduction or delay in shipments by suppliers resulting therefrom),
(ii) the economy or securities markets of the United States or any other region
in general, (iii) the software industry in general, and not specifically related
to any of the Acquired Corporations or Parent and its Subsidiaries or (iv) the
failure, in and of itself, to meet the predictions of equity analysts, shall be
disregarded.
Parent Common Stock. "Parent Common Stock" shall mean the Common Stock,
$0.0001 par value per share, of Parent.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service mark (whether
registered or unregistered), service mark application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, source code, algorithm, invention, design,
blueprint, engineering drawing, proprietary product, technology, proprietary
right or other intellectual property right or intangible asset; or (b) right to
use or exploit any of the foregoing.
Prospectus/Proxy Statement. "Prospectus/Proxy Statement" shall mean the
proxy statement to be sent to the Company's stockholders in connection with the
Company Stockholders' Meeting.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.
Subsidiary. An entity shall be deemed to be a "Subsidiary" of another
Person if such Person directly or indirectly owns or purports to own,
beneficially or of record, (a) an amount of voting securities of other interests
in such Entity that is sufficient to enable such Person to elect at leased a
majority of the members of such Entity's board of directors or other governing
body, or (b) at least 50% of the outstanding equity or financial interests or
such Entity.
Superior Offer. "Superior Offer" shall mean an unsolicited, bona fide
written offer made by a third party to acquire all of the outstanding shares of
Company Common Stock on terms that the board of directors of the Company
determines, in its reasonable judgment, based upon advice of an independent
financial advisor of nationally recognized reputation, to be more favorable to
the Company's stockholders than the terms of the Merger; provided, however, that
any such offer shall not be deemed to be a "Superior Offer" if any financing
required to
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consummate the transaction contemplated by such offer is not committed and is
not reasonably capable of being obtained by such third party.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
Triggering Event. A "Triggering Event" shall be deemed to have occurred if:
(i) any of the Acquired Corporations or any Representative of any of the
Acquired Corporations violates any of the requirements or restrictions set forth
in Section 4.3 or Section 5.2; (ii) the Company's board of directors approves,
endorses or recommends any Acquisition Proposal; (iii) the Company enters into
any letter of intent or similar document or any Contract contemplating or
otherwise relating to any Acquisition Proposal; (iv) the Company's board of
directors fails to reaffirm the Company Board Recommendation, or fails to
reaffirm its determination that the Merger is in the best interests of the
Company's stockholders, within eight business days after Parent requests in
writing that such recommendation or determination be reaffirmed; or (v) an
Acquisition Proposal is publicly announced, and the Company fails to issue a
press release announcing its opposition to such Acquisition Proposal within
eight business days after such Acquisition Proposal is announced.
Unaudited Parent Interim Balance Sheet. "Unaudited Parent Interim Balance
Sheet" shall mean the unaudited consolidated balance sheet of Parent and its
consolidated subsidiaries as of September 30, 1999 included in Parent's Report
on Form 10-Q for the fiscal quarter ended September 30, 1999, as filed with the
SEC prior to the date of this Agreement.
Unaudited Interim Balance Sheet. "Unaudited Interim Balance Sheet" shall
mean the unaudited consolidated balance sheet of the Company and its
consolidated subsidiaries as of September 30, 1999 included in the Company's
Report on Form 10-Q for the fiscal quarter ended September 30, 1999, as filed
with the SEC prior to the date of this Agreement.
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EXHIBITS
Exhibit A - Certain Definitions
Exhibit B - Form of Articles of Organization of Surviving Corporation
Exhibit C - Form of Noncompetition Agreement
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EXHIBIT 99.2
VOTING AGREEMENT
THIS VOTING AGREEMENT is entered into as of January 26, 2000, by and
between BROADVISION, INC., a Delaware corporation ("Parent"), and __________
("Stockholder").
RECITALS
A. Parent, Infiniti Acquisition Sub, Inc., a Massachusetts corporation
and a wholly owned subsidiary of Parent ("Merger Sub"), and Interleaf, Inc., a
Massachusetts corporation (the "Company"), are entering into an Agreement and
Plan of Merger and Reorganization of even date herewith (the "Reorganization
Agreement") which provides (subject to the conditions set forth therein) for the
merger of Merger Sub into the Company (the "Merger").
B. In order to induce Parent and Merger Sub to enter into the
Reorganization Agreement, Stockholder is entering into this Voting Agreement.
C. Stockholder is entering into this agreement solely in his capacity
as an individual and not in his capacity as an officer, director or agent of the
Company.
AGREEMENT
The parties to this Voting Agreement, intending to be legally bound, agree
as follows:
SECTION 1. CERTAIN DEFINITIONS
For purposes of this Voting Agreement:
(a) "Company Common Stock" shall mean the common stock, par value
$0.01 per share, of the Company.
(b) "Expiration Date" shall mean the earlier of (i) the date upon
which the Reorganization Agreement is validly terminated, or (ii) the date upon
which the Merger becomes effective.
(c) Stockholder shall be deemed to "Own" or to have acquired
"Ownership" of a security if Stockholder: (i) is the record owner of such
security; or (ii) is the "beneficial owner" (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such security.
(d) "Person" shall mean any (i) individual, (ii) corporation, limited
liability company, partnership or other entity, or (iii) governmental authority.
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(e) "Subject Securities" shall mean: (i) all securities of the Company
(including all shares of Company Common Stock and all options, warrants and
other rights to acquire shares of Company Common Stock) Owned by Stockholder as
of the date of this Agreement; and (ii) all additional securities of the Company
(including all additional shares of Company Common Stock and all additional
options, warrants and other rights to acquire shares of Company Common Stock) of
which Stockholder acquires Ownership during the period from the date of this
Agreement through the Expiration Date.
(f) A Person shall be deemed to have a effected a "Transfer" of a
security if such Person directly or indirectly: (i) sells, pledges, encumbers,
grants an option with respect to, transfers or disposes of such security or any
interest in such security; or (ii) enters into an agreement or commitment
contemplating the possible sale of, pledge of, encumbrance of, grant of an
option with respect to, transfer of or disposition of such security or any
interest therein.
SECTION 2. TRANSFER OF SUBJECT SECURITIES
2.1 Transferee of Subject Securities to be Bound by this Agreement.
Stockholder agrees that, during the period from the date of this Voting
Agreement through the Expiration Date, Stockholder shall not cause or permit any
Transfer of any of the Subject Securities to be effected unless (a) each Person
to which any of such Subject Securities, or any interest in any of such Subject
Securities, is or may be transferred shall have: (i) executed a counterpart of
this Voting Agreement and a proxy in the form attached hereto as Exhibit A (with
such modifications as Parent may reasonably request); and (ii) agreed to hold
such Subject Securities (or interest in such Subject Securities) subject to all
of the terms and provisions of this Voting Agreement or (b) the Subject
Securities are sold directly into the public market to an unknown purchaser
through a brokers' transaction.
2.2 Transfer of Voting Rights. Stockholder agrees that, during the period
from the date of this Voting Agreement through the Expiration Date, Stockholder
shall ensure that: (a) none of the Subject Securities is deposited into a voting
trust; and (b) no proxy is granted, and no voting agreement or similar agreement
is entered into, with respect to any of the Subject Securities.
SECTION 3. VOTING OF SHARES
3.1 Voting Agreement. Stockholder agrees that, during the period from the
date of this Voting Agreement through the Expiration Date:
(a) at any meeting of stockholders of the Company, however called,
Stockholder shall (unless otherwise directed in writing by Parent) cause
all outstanding shares of Company Common Stock that are Owned by
Stockholder as of the record date fixed for such meeting to be voted in
favor of the approval and adoption of the Reorganization Agreement and the
approval of the Merger, and in favor of each of the other actions
contemplated by the Reorganization Agreement; and
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(b) in the event written consents are solicited or otherwise sought
from stockholders of the Company with respect to the approval or adoption
of the Reorganization Agreement, with respect to the approval of the Merger
or with respect to any of the other actions contemplated by the
Reorganization Agreement, Stockholder shall (unless otherwise directed in
writing by Parent) cause to be executed, with respect to all outstanding
shares of Company Common Stock that are Owned by Stockholder as of the
record date fixed for the consent to the proposed action, a written consent
or written consents to such proposed action.
3.2 Proxy; Further Assurances.
(a) Contemporaneously with the execution of this Voting Agreement: (i)
Stockholder shall deliver to Parent a proxy in the form attached to this Voting
Agreement as Exhibit A, which shall be irrevocable to the fullest extent
permitted by law, with respect to the shares referred to therein (the "Proxy");
and (ii) Stockholder shall cause to be delivered to Parent an additional proxy
(in the form attached hereto as Exhibit A) executed on behalf of the record
owner of any outstanding shares of Company Common Stock that are owned
beneficially (within the meaning of Rule 13d-3 under the Securities Exchange Act
of 1934), but not of record, by Stockholder.
(b) Stockholder shall, at his own expense, perform such further acts
and execute such further documents and instruments as may reasonably be required
to vest in Parent the power to carry out and give effect to the provisions of
this Voting Agreement.
SECTION 4. WAIVER OF APPRAISAL RIGHTS
Stockholder hereby irrevocably and unconditionally waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal, any
dissenters' rights and any similar rights relating to the Merger or any related
transaction that Stockholder or any other Person may have by virtue of the
ownership of any outstanding shares of Company Common Stock Owned by
Stockholder.
SECTION 5. NO SOLICITATION
Stockholder agrees that, during the period from the date of this Voting
Agreement through the Expiration Date, Stockholder, in his capacity as a
Stockholder, shall not, directly or indirectly, and Stockholder shall ensure
that his Representatives (as defined in the Reorganization Agreement) do not,
directly or indirectly, engage in any actions prohibited of the Company or its
Representatives by Section 4.3 of the Reorganization Agreement.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
Stockholder hereby represents and warrants to Parent as follows:
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6.1 Authorization, etc. Stockholder has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Voting
Agreement and the Proxy and to perform his obligations hereunder and thereunder.
This Voting Agreement and the Proxy have been duly executed and delivered by
Stockholder and constitute legal, valid and binding obligations of Stockholder,
enforceable against Stockholder in accordance with their terms, subject to (i)
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
6.2 No Conflicts or Consents
(a) The execution and delivery of this Voting Agreement and the Proxy
by Stockholder do not, and the performance of this Voting Agreement and the
Proxy by Stockholder will not: (i) conflict with or violate any law, rule,
regulation, order, decree or judgment applicable to Stockholder or by which
Stockholder or any of his properties is or may be bound or affected; or (ii)
result in or constitute (with or without notice or lapse of time) any breach of
or default under, or give to any other Person (with or without notice or lapse
of time) any right of termination, amendment, acceleration or cancellation of,
or result (with or without notice or lapse of time) in the creation of any
encumbrance or restriction on any of the Subject Securities pursuant to, any
contract to which Stockholder is a party or by which Stockholder or any of his
or her affiliates or properties is or may be bound or affected.
(b) The execution and delivery of this Voting Agreement and the Proxy
by Stockholder do not, and the performance of this Voting Agreement and the
Proxy by Stockholder will not, require any consent or approval of any Person.
6.3 Title to Securities. As of the date of this Voting Agreement: (a)
Stockholder holds of record (free and clear of any encumbrances or restrictions)
the number of outstanding shares of Company Common Stock set forth under the
heading "Shares Held of Record" on the signature page hereof; (b) Stockholder
holds (free and clear of any encumbrances or restrictions) the options, warrants
and other rights to acquire shares of Company Common Stock set forth under the
heading "Options and Other Rights" on the signature page hereof; (c) Stockholder
Owns the additional securities of the Company set forth under the heading
"Additional Securities Beneficially Owned" on the signature page hereof; and (d)
Stockholder does not directly or indirectly Own any shares of capital stock or
other securities of the Company, or any option, warrant or other right to
acquire (by purchase, conversion or otherwise) any shares of capital stock or
other securities of the Company, other than the shares and options, warrants and
other rights set forth on the signature page hereof.
6.4 Accuracy of Representations. The representations and warranties
contained in this Voting Agreement are accurate in all respects as of the date
of this Voting Agreement, will be accurate in all respects at all times through
the Expiration Date and will be accurate in all respects as of the date of the
consummation of the Merger as if made on that date.
SECTION 7. ADDITIONAL COVENANTS OF STOCKHOLDER
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7.1 Further Assurances. From time to time and without additional
consideration, Stockholder shall (at Stockholder's sole expense) execute and
deliver, or cause to be executed and delivered, such additional transfers,
assignments, endorsements, proxies, consents and other instruments, and shall
(at Stockholder's sole expense) take such further actions, as Parent may request
for the purpose of carrying out and furthering the intent of this Voting
Agreement.
7.2 Legend. Immediately after the execution of this Voting Agreement (and
from time to time upon the acquisition by Stockholder of Ownership of any shares
of Company Common Stock prior to the Expiration Date), Stockholder shall ensure
that each certificate evidencing any outstanding shares of Company Common Stock
or other securities of the Company Owned by Stockholder bears a legend in the
following form:
THE SECURITY OR SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT IN COMPLIANCE WITH
THE TERMS AND PROVISIONS OF THE VOTING AGREEMENT DATED AS OF JANUARY 26,
2000, BETWEEN THE ISSUER AND BROADVISION, INC., AS IT MAY BE AMENDED, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER.
SECTION 8. MISCELLANEOUS
8.1 Survival of Representations, Warranties and Agreements. All
representations, warranties, covenants and agreements made by Stockholder in
this Voting Agreement shall expire upon the last to occur of (i) the
consummation of the Merger, (ii) any termination of the Reorganization
Agreement, and (iii) the Expiration Date; provided, however, that such
expiration shall not operate to relieve Stockholder of any liability or
obligation arising from any breach by Stockholder prior to such expiration.
8.2 Expenses. All costs and expenses incurred in connection with the
transactions contemplated by this Voting Agreement shall be paid by the party
incurring such costs and expenses.
8.3 Notices. Any notice or other communication required or permitted to be
delivered to either party under this Voting 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) to
the address or facsimile telephone number set forth beneath the name of such
party below (or to such other address or facsimile telephone number as such
party shall have specified in a written notice given to the other party):
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if to Stockholder:
at the address set forth below Stockholder's signature on the
signature page hereof
if to Parent:
BroadVision, Inc.
585 Broadway
Redwood City, CA 94063
Attention: Scott Neely, Esq.
Facsimile: (650) 261-5900
With a copy to:
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
Attention: Kenneth L. Guernsey, Esq.
Facsimile: (415) 951-3699
8.4 Severability. If any provision of this Voting Agreement or any part of
any such provision is held under any circumstances to be invalid or
unenforceable in any jurisdiction, then (a) such provision or part thereof
shall, with respect to such circumstances and in such jurisdiction, be deemed
amended to conform to applicable laws so as to be valid and enforceable to the
fullest possible extent, (b) the invalidity or unenforceability of such
provision or part thereof under such circumstances and in such jurisdiction
shall not affect the validity or enforceability of such provision or part
thereof under any other circumstances or in any other jurisdiction, and (c) the
invalidity or unenforceability of such provision or part thereof shall not
affect the validity or enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Voting Agreement. Each
provision of this Voting Agreement is separable from every other provision of
this Voting Agreement, and each part of each provision of this Voting Agreement
is separable from every other part of such provision.
8.5 Entire Agreement. This Voting Agreement, the Proxy and any other
documents delivered by the parties in connection herewith constitute the entire
agreement between the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements and understandings between the
parties with respect thereto. No addition to or modification of any provision of
this Voting Agreement shall be binding upon either party unless made in writing
and signed by both parties.
8.6 Assignment; Binding Effect. Except as provided herein, neither this
Voting Agreement nor any of the interests or obligations hereunder may be
assigned or delegated by Stockholder and any attempted or purported assignment
or delegation of any of such interests or obligations shall be void. Subject to
the preceding sentence, this Voting Agreement shall be binding upon Stockholder
and his heirs, estate, executors, personal representatives, successors and
assigns, and shall inure to the benefit of Parent and its successors and
assigns. Without
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limiting any of the restrictions set forth in Section 2 or elsewhere in this
Voting Agreement, this Voting Agreement shall be binding upon any Person to whom
any Subject Securities are transferred. Nothing in this Voting Agreement is
intended to confer on any Person (other than Parent and its successors and
assigns) any rights or remedies of any nature.
8.7 Specific Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Voting Agreement or the
Proxy was not performed in accordance with its specific terms or was otherwise
breached. Stockholder agrees that, in the event of any breach or threatened
breach by Stockholder of any covenant or obligation contained in this Voting
Agreement or in the Proxy, Parent shall be entitled (in addition to any other
remedy that may be available to it, including monetary damages) to seek and
obtain (a) a decree or order of specific performance to enforce the observance
and performance of such covenant or obligation, and (b) an injunction
restraining such breach or threatened breach. Stockholder further agrees that
neither Parent nor any other Person shall be required to obtain, furnish or post
any bond or similar instrument in connection with or as a condition to obtaining
any remedy referred to in this Section 8.8, and Stockholder irrevocably waives
any right he may have to require the obtaining, furnishing or posting of any
such bond or similar instrument.
8.8 Non-Exclusivity. The rights and remedies of Parent under this Voting
Agreement are not exclusive of or limited by any other rights or remedies that
it may have, whether at law, in equity, by contract or otherwise, all of which
shall be cumulative (and not alternative). Without limiting the generality of
the foregoing, the rights and remedies of Parent under this Voting Agreement,
and the obligations and liabilities of Stockholder under this Voting Agreement,
are in addition to their respective rights, remedies, obligations and
liabilities under common law requirements and under all applicable statutes,
rules and regulations. Nothing in this Voting Agreement shall limit any of
Stockholder's obligations, or the rights or remedies of Parent, under any
Affiliate Agreement between Parent and Stockholder; and nothing in any such
Affiliate Agreement shall limit any of Stockholder's obligations, or any of the
rights or remedies of Parent, under this Voting Agreement.
8.9 Governing Law; Venue.
(a) This Voting Agreement and the Proxy 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).
(b) Any legal action or other legal proceeding relating to this Voting
Agreement or the Proxy or the enforcement of any provision of this Voting
Agreement or the Proxy may be brought or otherwise commenced in any state or
federal court located in the County of San Francisco, California. Stockholder:
(i) expressly and irrevocably consents and submits to the
jurisdiction of each state and federal court located in the County of San
Francisco, California (and each appellate court located in the State of
California), in connection with any such legal proceeding;
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(ii) agrees that service of any process, summons, notice or
document by U.S. mail addressed to him at the address set forth in Section 8.4
shall constitute effective service of such process, summons, notice or document
for purposes of any such legal proceeding;
(iii) agrees that each state and federal court located in the
County of San Francisco, California, shall be deemed to be a convenient forum;
and
(iv) agrees not to assert (by way of motion, as a defense or
otherwise), in any such legal proceeding commenced in any state or federal court
located in the County of San Francisco, California, any claim that Stockholder
is not subject personally to the jurisdiction of such court, that such legal
proceeding has been brought in an inconvenient forum, that the venue of such
proceeding is improper or that this Voting Agreement or the subject matter of
this Voting Agreement may not be enforced in or by such court.
Nothing contained in this Section 8.9 shall be deemed to limit or otherwise
affect the right of Parent to commence any legal proceeding or otherwise proceed
against Stockholder in any other forum or jurisdiction.
(c) STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL IN
CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS VOTING AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.
8.10 Counterparts. This Voting Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the same
instrument.
8.11 Captions. The captions contained in this Voting Agreement are for
convenience of reference only, shall not be deemed to be a part of this Voting
Agreement and shall not be referred to in connection with the construction or
interpretation of this Voting Agreement.
8.12 Attorneys' Fees. If any legal action or other legal proceeding
relating to this Voting Agreement or the enforcement of any provision of this
Voting Agreement is brought against Stockholder, 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).
8.13 Waiver; Termination. No failure on the part of Parent to exercise any
power, right, privilege or remedy under this Voting Agreement, and no delay on
the part of Parent in exercising any power, right, privilege or remedy under
this Voting 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. Parent shall not be deemed to have waived any
claim available to Parent arising out of this Voting Agreement, or any power,
right, privilege or remedy of Parent under this Voting Agreement, unless the
waiver of such claim, power, right, privilege
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or remedy is expressly set forth in a written instrument duly executed and
delivered on behalf of Parent; and any such waiver shall not be applicable or
have any effect except in the specific instance in which it is given. If the
Reorganization Agreement is terminated, this Voting Agreement shall thereupon
terminate.
8.14 Construction.
(a) For purposes of this Voting Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include masculine and feminine genders.
(b) The parties agree that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party shall not be applied
in the construction or interpretation of this Voting Agreement.
(c) As used in this Voting Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(d) Except as otherwise indicated, all references in this Voting
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Voting Agreement and Exhibits to this Voting Agreement.
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IN WITNESS WHEREOF, Parent and Stockholder have caused this Voting
Agreement to be executed as of the date first written above.
BROADVISION, INC.
By:
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Name:
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Title:
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STOCKHOLDER
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Name:
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Title:
---------------------------------
Address:
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Facsimile:
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Additional Securities
Shares Held of Record Options and Other Rights Beneficially Owned
- --------------------- ------------------------ ------------------
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EXHIBIT A
FORM OF IRREVOCABLE PROXY
The undersigned stockholder of INTERLEAF, INC., a Massachusetts corporation
(the "Company"), hereby irrevocably (to the fullest extent permitted by law)
appoints and constitutes Randall Bolten, Scott Neely and BROADVISION, INC., a
Delaware corporation ("Parent"), and each of them, the attorneys and proxies of
the undersigned with full power of substitution and resubstitution, to the full
extent of the undersigned's rights with respect to (i) the outstanding shares of
capital stock of the Company owned of record by the undersigned as of the date
of this proxy, which shares are specified on the final page of this proxy, and
(ii) any and all other shares of capital stock of the Company which the
undersigned may acquire on or after the date hereof. (The shares of the capital
stock of the Company referred to in clauses "(i)" and "(ii)" of the immediately
preceding sentence are collectively referred to as the "Shares.") Upon the
execution hereof, all prior proxies given by the undersigned with respect to any
of the Shares are hereby revoked, and the undersigned agrees that no subsequent
proxies will be given with respect to any of the Shares.
This proxy is irrevocable, is coupled with an interest and is granted in
connection with the Voting Agreement, dated as of the date hereof, between
Parent and the undersigned (the "Voting Agreement"), and is granted in
consideration of Parent entering into the Agreement and Plan of Merger and
Reorganization, dated as of the date hereof, among Parent, Infiniti Acquisition
Sub, Inc. and the Company (the "Reorganization Agreement").
The attorneys and proxies named above will be empowered, and may exercise
this proxy, to vote the Shares at any time until the earlier to occur of the
valid termination of the Reorganization Agreement or the effective time of the
merger contemplated thereby (the "Merger") at any meeting of the stockholders of
the Company, however called, or in connection with any solicitation of written
consents from stockholders of the Company, in favor of the approval and adoption
of the Reorganization Agreement and the approval of the Merger, and in favor of
each of the other actions contemplated by the Reorganization Agreement.
The undersigned may vote the Shares on all other matters.
This proxy shall be binding upon the heirs, estate, executors, personal
representatives, successors and assigns of the undersigned (including any
transferee of any of the Shares).
If any provision of this proxy or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (b) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (c) the invalidity or unenforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
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proxy. Each provision of this proxy is separable from every other provision of
this proxy, and each part of each provision of this proxy is separable from
every other part of such provision.
This proxy shall terminate upon the earlier of the valid termination of the
Reorganization Agreement or the effective time of the Merger.
Dated: ________, 2000.
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Name
Number of shares of common stock of the
Company owned of record as of the date
of this proxy:
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12
EXHIBIT 99.3
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Option Agreement") is entered into as of
January 26, 2000, by and between INTERLEAF, INC., a Massachusetts corporation
(the "Company"), and BROADVISION, INC., a Delaware corporation (the "Grantee").
RECITALS
A. The Grantee, Infiniti Acquisition Sub, Inc., a Massachusetts corporation
and a wholly owned subsidiary of the Grantee ("Merger Sub"), and the Company are
entering into an Agreement and Plan of Merger and Reorganization of even date
herewith (as amended from time to time, the "Reorganization Agreement") which
provides (subject to the conditions set forth therein) for the merger of Merger
Sub into the Company (the "Merger").
B. In order to induce the Grantee to enter into the Reorganization
Agreement, the Company has agreed to enter into this Option Agreement.
AGREEMENT
The parties to this Option Agreement, intending to be legally bound, agree
as follows:
1. Certain Definitions. Capitalized terms used but not defined in this
Option Agreement shall have the meanings assigned to such terms in the
Reorganization Agreement.
2. Grant of Option. The Company hereby grants to the Grantee an irrevocable
option (the "Option") to purchase, out of the authorized but unissued Company
Common Stock, a number of shares of Company Common Stock equal to up to 19.9% of
the number of shares of Company Common Stock outstanding as of the date hereof
(the shares of Company Common Stock purchasable pursuant to the Option, as
adjusted as set forth herein, being referred to as the "Option Shares"), at a
price per Option Share equal to the Exercise Price. For purposes of this Option
Agreement, the applicable "Exercise Price" shall be equal to the lesser of (a)
$52.69, or (b) the Exchange Ratio, multiplied by the average of the closing
sales price of a share of Parent Common Stock as reported on the Nasdaq National
Market for the 20 consecutive trading days ending on the second trading day
preceding the Notice Date (as defined in Section 4(c)).
3. Term. The Option shall terminate on the earliest of the following dates
(the "Termination Date"): (a) the date on which the Merger becomes effective;
(b) the date on which the Reorganization Agreement is terminated pursuant to
Section 8.1 thereof, if an Exercise Event (as defined in Section 4(b)) shall not
have occurred on or prior to such date; or (c) the date six months after the
date on which the Grantee receives written notice from the Company of the
occurrence of an Exercise Event (the "Exercise Event Notice Date"); provided,
however, that if an Exercise Event occurs, and if, by reason of any applicable
Legal Requirement, order, judgment, decree or other legal impediment, the Option
cannot be exercised on the six month anniversary of the Exercise Event Notice
Date, then the Termination Date shall be extended until the date 30 days after
the date on which such impediment is removed. The rights of the Grantee
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and the obligations of the Company set forth in Sections 7, 8, 9 and 10 shall
not terminate on the Termination Date, but shall survive beyond the Termination
Date as provided in those Sections.
4. Exercise of Option.
(a) The Grantee may exercise the Option, in whole or in part, at any
time and from time to time on or before the Termination Date following the
occurrence of an Exercise Event. If the Grantee exercises the Option with
respect to any Option Shares prior to the Termination Date, then,
notwithstanding anything to the contrary contained in this Option Agreement, the
Grantee shall be entitled to purchase such Option Shares in accordance with the
terms of this Option Agreement after the Termination Date.
(b) For purposes of this Option Agreement, an "Exercise Event" shall
be deemed to have occurred if:
(i) either the Grantee or the Company shall have the right to
terminate the Reorganization Agreement pursuant to Section 8.1(d) thereof and at
the time of the Company's Stockholders' Meeting an Acquisition Proposal
disclosed, announced, commenced, submitted or made prior thereto shall remain
outstanding; or
(ii) the Grantee shall have the right to terminate the
Reorganization Agreement pursuant to Section 8.1(e) thereof.
(c) To exercise the Option with respect to any Option Shares, the
Grantee shall deliver to the Company a written notice (an "Exercise Notice")
specifying: (i) the number of Option Shares the Grantee will purchase; (ii) the
place at which such Option Shares are to be purchased; and (iii) the date on
which such Option Shares are to be purchased, which shall not be sooner than
three business days nor later than 20 business days after the date of delivery
of such Exercise Notice to the Company. (The date of delivery of such Exercise
Notice to the Company is referred to as the applicable "Notice Date," and the
Option shall be deemed to have been validly exercised on such Notice Date with
respect to the Option Shares referred to in such Exercise Notice.) The closing
of the purchase of such Option Shares (the applicable "Closing") shall take
place at the place specified in such Exercise Notice and on the date specified
in such Exercise Notice (the applicable "Closing Date"); provided, however,
that: (A) if such purchase cannot be consummated on such Closing Date by reason
of any applicable Legal Requirement, order, judgment, decree or other legal
impediment, then the Grantee may extend the Closing Date to a date not more than
20 business days after the date on which such impediment is removed; and (B) if
prior notification to or approval of any Governmental Body is required, or if
any waiting period must expire or be terminated, in connection with such
purchase, then (1) the Company shall promptly cause to be filed any required
notice or application required to be filed by the Company and shall use all
reasonable efforts to cause such notice or application to be processed as
expeditiously as possible, (2) the Company shall cooperate with the Grantee in
the filing of any such notice or application required to be filed by the Grantee
and in the obtaining of any such approval required to be obtained by the
Grantee, and (3) the Grantee may extend the Closing Date to a date not more than
20 business days after the latest date on which any required notification has
been made, any required approval has been obtained or any required waiting
period has expired or been terminated.
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(d) If the Grantee receives net proceeds in connection with any sale
or other disposition of the Option or Option Shares (including, without
limitation, any amounts received by the Grantee pursuant to Sections 7, 8 or 9)
which, together with any proceeds received by the Grantee in connection with any
prior such sale or disposition, any dividends or distributions received by the
Grantee on any Option Shares and any amount paid to the Grantee pursuant to
Sections 8.3(b) and 8.3(c) of the Reorganization Agreement prior thereto or
thereafter, are in excess of the Threshold Amount (as defined herein), then all
net proceeds to the Grantee in excess of the Threshold Amount shall be remitted
to the Company promptly following receipt thereof. As used herein, "Threshold
Amount" shall mean the amount equal to the greater of (i) $35,000,000 or (ii)
the product of (A) 200,000 and (B) the average of the closing sales price of a
share of Parent Common Stock as reported on the Nasdaq National Market for the
five consecutive trading days ending on the first trading day preceding the
first occurrence of an Exercise Event.
5. Payment and Delivery of Certificate.
(a) On each Closing Date, the Grantee shall pay to the Company by wire
in immediately available funds an amount equal to the applicable Exercise Price
multiplied by the number of Option Shares to be purchased by the Grantee from
the Company on such Closing Date.
(b) At each Closing, simultaneously with the delivery of the available
funds referred to in Section 5(a), the Company shall deliver to the Grantee a
certificate representing the Option Shares being purchased at such Closing. The
Company represents, warrants and covenants that such Option Shares will be duly
authorized, validly issued, fully paid, nonassessable and free and clear of all
Encumbrances, except as may be specifically provided in this Option Agreement.
(c) The certificate representing the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend that shall read
substantially as follows:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER SAID ACT OR UNLESS AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS AVAILABLE.
If at any time the Grantee delivers to the Company evidence (in the form of a
copy of a letter from the staff of the SEC or an opinion of counsel reasonably
satisfactory to the Company, or in some other form) that the legend referred to
above is not required for purposes of the Securities Act, then the Company shall
promptly replace such certificate with a certificate that does not include such
legend.
6. Adjustment Upon Changes in Capitalization, Etc.
(a) If the outstanding shares of Company Common Stock are changed into
a different number or class of shares or securities by reason of any stock
split, division or
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subdivision of shares, stock dividend, reverse stock split, reclassification,
recapitalization or other similar transaction, then the number or class of
shares or other securities subject to the Option, the applicable Exercise Price,
the Designated Price (as defined in Section 7(c)) and the other numbers and
dollar amounts referred to in this Option Agreement shall be adjusted
appropriately, and the Company shall ensure that proper provision is made in the
agreements and other documents governing such transaction so that the Grantee
shall receive upon exercise of the Option the same number and class of
outstanding shares or other securities that the Grantee would have received in
respect of the Company Common Stock if the Option had been exercised immediately
prior to such transaction or event or the record date for determining the
stockholders entitled to participate in such transaction or event, as
applicable.
(b) If any additional shares of Company Common Stock are issued after
the date of this Option Agreement (other than pursuant to a transaction or event
described in Section 6(a)), then the number of shares of Company Common Stock
then remaining subject to the Option shall be increased to the number by which
(i) 19.9% of the number of shares of the Company Common Stock outstanding after
the issuance of such additional shares exceeds (ii) the sum of (A) the number of
Option Shares purchasable under the Option immediately prior to the issuance of
such additional shares and (B) the number of shares of Company Common Stock
issued upon the exercise of the Option prior to the issuance of such additional
shares.
(c) If the Company shall enter into an agreement (i) to consolidate,
exchange shares or merge with any Person, other than the Grantee or one of the
Grantee's Subsidiaries, or (ii) to sell, lease or otherwise transfer all or
substantially all of its assets to any Person, other than the Grantee or one of
the Grantee's Subsidiaries, then the Company shall ensure that proper provision
is made in the agreements and other documents governing such transaction so that
the Option shall, upon the consummation of such transaction, become exercisable
for the stock, securities, cash or other property that would have been received
by the Grantee if the Grantee had exercised the Option immediately prior to such
transaction or the record date for determining the stockholders entitled to
participate in such transaction, as appropriate.
(d) The provisions of Sections 7, 8, 9 and 10 shall apply (with
appropriate adjustments) to any securities for which the Option becomes
exercisable pursuant to this Section 6.
7. Repurchase at the Request of the Grantee.
(a) If, at any time during the period commencing upon the occurrence
of the first Exercise Event and ending on the date six months after the Exercise
Event Notice Date, the Grantee delivers to the Company a notice stating that the
Grantee is exercising its rights under this Section 7, then the Company shall
repurchase from the Grantee (i) that portion of the Option that then remains
unexercised, (ii) all of the shares of Company Common Stock beneficially owned
by the Grantee that were previously purchased by the Grantee upon exercise of
the Option, and (iii) the Grantee's right to receive all Option Shares with
respect to which the Option was previously exercised but which have not yet been
issued and delivered to the Grantee. (The date on which the Grantee delivers
such notice to the Company is referred to as the "Grantee Request Date.") Such
repurchase shall be at an aggregate price (the "Grantee Repurchase
Consideration") equal to the sum of:
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(i) the aggregate number of Option Shares with respect to which
the Option has been exercised on or prior to the Grantee Request Date and which
are beneficially owned by the Grantee, multiplied by the Designated Price;
(ii) the aggregate number of Option Shares with respect to which
the Option has been exercised on or prior to the Request Date but which have
not, as of the Grantee Request Date been issued and delivered to the Grantee,
multiplied by the Designated Price; and
(iii) the number of Option Shares with respect to which the
Option has not been exercised on or prior to the Grantee Request Date multiplied
by the amount (if any) by which the Designated Price exceeds the applicable
Exercise Price.
(b) If the Grantee exercises its rights under this Section 7, then the
Company shall, within three business days after the Grantee Request Date, pay
the Grantee Repurchase Consideration to the Grantee in immediately available
funds, and the Grantee shall thereupon surrender to the Company the certificate
or certificates evidencing the shares of Company Common Stock repurchased by the
Company pursuant to this Section 7.
(c) For purposes of this Option Agreement, the "Designated Price"
means the highest of (i) the highest purchase price per share paid after the
date of this Option Agreement and on or prior to the applicable Request Date
pursuant to any tender or exchange offer made for shares of Company Common
Stock, (ii) the highest price per share paid or to be paid by any Person for
shares of Company Common Stock pursuant to any agreement contemplating a merger
or other business combination transaction involving the Company that was entered
into after the date of this Option Agreement and on or prior to the applicable
Request Date, (iii) the highest bid price per share of Company Common Stock as
quoted on the Nasdaq National Market (or if Company Common Stock is not quoted
on the Nasdaq National Market, the highest bid price per share of Company Common
Stock as quoted on any other market comprising a part of the Nasdaq Stock Market
or, if the shares of Company Common Stock are not quoted thereon, on the
principal trading market (as defined in Regulation M under the Exchange Act) on
which such shares are traded as reported by a recognized source) during the
90-day period ending on the applicable Request Date, or (iv) the highest
Exercise Price paid or payable for any Option Shares. If any portion of the
consideration paid or to be paid pursuant to clause "(i)" or "(ii)" of the
preceding sentence is in a form other than cash, then the value of the non-cash
portion of such consideration shall be determined in good faith by an
independent investment banking firm mutually acceptable to the Company and the
Grantee, and such firm's determination of such value shall be final and
conclusive for all purposes under this Option Agreement.
(d) The Company hereby undertakes to use reasonable efforts to obtain
all required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish any repurchase contemplated by
this Section 7. Nonetheless, to the extent that the Company is prohibited under
any applicable Legal Requirement from repurchasing the Option or the Option
Shares in full, the Company shall immediately so notify the Grantee and
thereafter deliver or cause to be delivered, from time to time, to the Grantee
the portion of the Grantee Repurchase Consideration that is required to be
delivered pursuant hereto and that it is no longer prohibited from delivering,
within three business days after the date which the Company is no longer so
prohibited, provided, however, that if the Company at any time after delivery to
it of a notice of repurchase pursuant to Section 7(a) is prohibited under any
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applicable Legal Requirement from delivering to the Grantee the Grantee
Repurchase Consideration, the Grantee may revoke its notice of repurchase either
in whole or in part whereupon, in the case of revocation in part, the Company
shall promptly (i) deliver to the Grantee that portion of the Grantee Repurchase
Consideration that the Company is not prohibited from delivering after taking
into account any such revocation and (ii) deliver, as appropriate, to the
Grantee, either (A) a new agreement evidencing the right of the Grantee to
purchase that number of shares of Company Common Stock equal to the number of
shares of Company Common Stock purchasable immediately prior to the delivery of
the notice of repurchase less the number of shares of Company Common Stock
covered by the portion of the Option repurchased and/or (B) a certificate for
the number of Option Shares covered by the revocation.
(e) In connection with any repurchase by the Company of any portion of
the Option or shares of Company Common Stock pursuant to this Section 7, the
Grantee will be required to represent and warrant to the Company that the
Grantee has good and valid title to such portion of the Option or shares of
Company Common Stock, free and clear of all adverse claims, immediately prior to
the consummation of such repurchase.
8. Repurchase at the Request of the Company.
(a) If the Grantee has acquired Option Shares pursuant to the exercise
of the Option, then, at any time during the period beginning six months from the
Exercise Event Notice Date and ending 12 months from the Exercise Event Notice
Date (the "Purchase Period"), the Company may require the Grantee, upon delivery
to the Grantee of a notice stating that the Company is exercising its rights
under this Section 8, to sell to the Company all, but not less than all, of the
Option Shares held by the Grantee. (The date on which the Company delivers such
notice to the Grantee is referred to as the "Company Request Date.") Such
repurchase shall be at an aggregate price (the "Company Repurchase
Consideration") equal to the sum of the aggregate number of Option Shares held
by the Grantee multiplied by the Designated Price.
(b) The closing of any repurchase of Option Shares pursuant to this
Section 8 shall take place on the date designated by the Company in the notice
delivered pursuant to Section 8(a), which date shall be no more than 20 and no
less than three business days from the Company Request Date. On the closing
date, the Company shall pay the Company Repurchase Consideration to the Grantee
in immediately available funds, and the Grantee shall thereupon surrender to the
Company the certificate or certificates evidencing the shares of Company Common
Stock repurchased by the Company pursuant to this Section 8.
9. First Refusal.
(a) If the Grantee desires to sell, assign, transfer or otherwise
dispose of all or any of the shares of Company Common Stock or other securities
acquired by it pursuant to the exercise of the Option, it will give the Company
written notice of the proposed transaction (the "Offeror's Notice"), identifying
the proposed transferee, the proposed purchase price and the terms of such
proposed transaction. For 10 business days following receipt of such notice, the
Company shall have the option to elect by written notice to purchase all, but
not less than all, of the shares specified in Offeror's Notice at the price and
upon the terms set forth in such notice.
(b) The closing of any repurchase of shares of Option Shares pursuant
to this Section 9 shall take place within 10 business days of the Company's
election to purchase such
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shares. On the closing date, the Company shall pay the purchase price to the
Grantee in immediately available funds, and the Grantee shall thereupon
surrender to the Company the certificate or certificates evidencing the shares
of Company Common Stock repurchased by the Company pursuant to this Section 9.
(c) If the Company does not elect to purchase the shares of Company
Common Stock or other securities designated in the Offeror's Notice, the Grantee
may, within 60 days from the date of the Offeror's Notice sell such shares of
Company Common Stock or other securities to the proposed transferee at no less
than the price specified and on terms not more favorable than those set forth in
the Offeror's Notice, provided, however, that the provisions of this Section
9(c) will not limit the rights the Grantee may otherwise have if the Company has
elected to purchase such shares of Company Common Stock or other securities and
wrongfully refuses to complete such purchase.
(d) The requirements of this Section 9 will not apply to (i) any sale,
assignment, transfer or disposition to an affiliate of the Grantee; provided
that such affiliate agrees to be bound by the terms hereof or (ii) any sale,
assignment, transfer or disposition as a result of which the proposed transferee
would own beneficially not more than 2% of the outstanding voting power of the
Company.
10. Registration Rights.
(a) The Company shall, if requested by the Grantee at any time and
from time to time within two years after the first exercise of the Option (the
"Registration Period"), as expeditiously as practicable, prepare, file and cause
to be declared effective up to two registration statements under the Securities
Act (including, at the sole discretion of the Company, a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision),
if registration under the Securities Act is (in the Grantee's good faith
judgment) necessary or desirable in order to permit the offering, sale and
delivery, in accordance with the intended method of sale or other disposition
stated by the Grantee, of any or all shares of Company Common Stock or other
securities that have been acquired or are issuable upon exercise of the Option.
No other securities may be included in any such registration statement, without
the Grantee's prior written consent. The Company shall use all reasonable
efforts to cause each such registration statement to become effective, to obtain
all consents or waivers of other parties that are required therefor and to keep
such registration statement effective for such period as may be as reasonably
necessary to effect such sale or other disposition. In addition, the Company
shall use all reasonable efforts to register such shares or other securities
under any applicable state securities laws. The obligations of the Company
hereunder to file a registration statement and to maintain its effectiveness may
be suspended for one or more periods of time not exceeding 90 days in the
aggregate if the Board of Directors of the Company shall have determined in good
faith that the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of material nonpublic information and
that the disclosure thereof would materially and adversely affect the Company.
For purposes of determining whether two requests have been made under this
Section 10, only requests relating to a registration statement that has become
effective under the Securities Act and that remained effective for a period
ending on the earlier of 180 days after becoming effective or until the Grantee
had disposed of all shares covered thereby shall be counted.
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(b) The expenses associated with the preparation and filing of any
registration statement pursuant to this Section 10 and any sale covered thereby
(including any fees related to blue sky qualifications and filing fees in
respect of the National Association of Securities Dealers, Inc.) shall be borne
and paid by, and shall be for the sole account of, the Company (except for
underwriting discounts or commissions or brokers' fees in respect to shares to
be sold by the Grantee and the fees and disbursement of the Grantee's counsel).
(c) The Grantee shall provide all information reasonably requested by
the Company for inclusion in any registration statement to be filed hereunder.
If during the Registration Period the Company shall propose to register under
the Securities Act the offering, sale and delivery of Company Common Stock by
the Company for cash pursuant to a firm commitment underwriting, it shall
(without limiting the Company's other obligations under this Section 10) allow
the Grantee the right to participate in such registration provided that the
Grantee participates in the underwriting; provided, however, that, if the
managing underwriter of such offering advises the Company in writing that in its
opinion the number of shares of Company Common Stock requested to be included in
such registration exceeds the number that can be sold in such offering, the
Company shall, after fully including therein all securities to be sold by the
Company, include the shares requested to be included therein by the Grantee pro
rata (based on the number of shares intended to be included therein) with the
shares intended to be included therein by Persons other than the Company. In
connection with any offering, sale and delivery of Company Common Stock pursuant
to a registration effected pursuant to this Section 10, the Company and the
Grantee shall provide each other and each underwriter of the offering with
customary representations, warranties and covenants, including covenants of
indemnification and contribution.
11. Listing. If, at the time of the occurrence of an Exercise Event, the
Company Common Stock (or any other class of securities subject to the Option) is
quoted on the Nasdaq National Market or quoted or listed on any other market or
exchange, then the Company, upon the occurrence of such Exercise Event, shall
promptly file an application to quote on the Nasdaq National Market and quote or
list on any such other market or exchange the shares of the Company Common Stock
(or other securities subject to the Option) and shall use its best efforts to
cause such application to be approved as promptly as practicable.
12. Replacement of Agreement. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Option Agreement and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Option Agreement, if mutilated, the Company will execute and deliver to the
Grantee a new Option Agreement of like tenor and date.
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13. Miscellaneous.
(a) Waiver. No failure on the part of any party to exercise any power,
right, privilege or remedy under this Option Agreement, and no delay on the part
of any party in exercising any power, right, privilege or remedy under this
Option 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. No party shall be deemed to have waived any
claim arising out of this Option Agreement, or any power, right, privilege or
remedy under this Option 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 such party; and any such waiver shall not be
applicable or have any effect except in the specific instance in which it is
given.
(b) Notices. Any notice or other communication required or permitted
to be delivered to any party under this Option Agreement shall be in writing and
shall be deemed properly delivered, given and received (a) when delivered by
hand or (b) two business days after being sent by registered mail or by courier
or express delivery service or by facsimile to the address or facsimile
telephone number, respectively, set forth beneath the name of such party below
(or to such other address or facsimile telephone number, respectively, as such
party shall have specified in a written notice given to the other party hereto):
if to the Company, to it at:
Interleaf, Inc.
62 Fourth Avenue
Waltham, MA 02154
Attention: Craig Newfield, Esq.
Facsimile: (781) 768-1145
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Beacon Street
Boston, MA 02108
Attention: David T. Brewster, Esq.
Facsimile: (617) 573-4862
if to the Grantee, to it at:
BroadVision, Inc.
585 Broadway
Redwood City, CA 94063
Attention: Scott Neely, Esq.
Facsimile: (650) 261-5900
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with a copy to:
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
Attention: Kenneth L. Guernsey, Esq.
Facsimile: (415) 951-3699
(c) Entire Agreement; Counterparts. This Option Agreement and the
agreements referred to herein constitute the entire agreement and supersede all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof and thereof. This Option Agreement may
be executed in two counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same instrument.
(d) Binding Effect; Benefit; Assignment. This Option Agreement shall
be binding upon, and shall be enforceable by and inure solely to the benefit of,
the parties hereto and their respective successors and assigns; provided,
however, that neither this Option Agreement nor any of the rights, interest or
obligations hereunder may be assigned by either party without the prior written
consent of the other party, and any attempted assignment of this Option
Agreement or any of such rights, interest or obligations without such consent
shall be void and of no effect. Nothing in this Option Agreement, express or
implied, is intended to or shall confer upon any Person (other than the parties
hereto and any permitted successors and assigns) any right, benefit or remedy of
any nature under or by reason of this Option Agreement.
(e) Amendment and Modification. This Option Agreement may be amended
with the approval of the respective boards of directors of the Company and the
Grantee at any time. This Option Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
(f) Further Actions. The Company agrees to cooperate fully with the
Grantee and to execute and deliver such further documents, certificates,
agreements and instruments and to take such other actions as may be reasonably
requested by the Grantee to evidence or reflect the transactions contemplated by
this Option Agreement and to carry out the intent and purposes of this Option
Agreement.
(g) Headings. The bold-faced headings contained in this Option
Agreement are for convenience of reference only, shall not be deemed to be a
part of this Option Agreement and shall not be referred to in connection with
the construction or interpretation of this Option Agreement.
(h) Applicable Law; Jurisdiction. This Option 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. In any action between any of the
parties arising out of or relating to this Option Agreement or any of the
transactions contemplated by this Option Agreement: (a) each of the parties
irrevocably and unconditionally consents and submits to the jurisdiction and
venue of the state and federal courts located in the State of Delaware; (b) each
of the parties irrevocably waives the right to trial by jury; and (c) each of
the parties irrevocably consents to service of process by first class certified
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mail, return receipt requested, postage prepaid, to the address at which such
party is to receive notice in accordance with Section 12(b).
(i) Severability. If any term, provision, covenant or restriction
contained in this Option Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions
contained in this Option Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
(j) Specific Performance. The Company agrees that (i) in the event of
any breach or threatened breach by the Company of any covenant, obligation or
other provision set forth in this Option Agreement, the Grantee may be entitled
(in addition to any other remedy that may be available to it) to (A) a decree or
order of specific performance or mandamus to enforce the observance and
performance of such covenant, obligation or other provision, or (B) an
injunction restraining such breach or threatened breach, and (ii) neither the
Grantee nor any other Person shall be required to provide any bond or other
security in connection with any such decree, order or injunction or in
connection with any related action or proceeding.
(k) Attorneys' Fees. In any action at law or suit in equity to enforce
this Option Agreement or the rights of any of the parties hereunder, the
prevailing party in such action or suit shall be entitled to receive a
reasonable sum for its attorneys' fees and all other reasonable costs and
expenses incurred in such action or suit.
(l) Non-Exclusivity. The rights and remedies of the Company and the
Grantee under this Option Agreement are not exclusive of or limited by any other
rights or remedies which either of them may have, whether at law, in equity, by
contract or otherwise, all of which shall be cumulative (and not alternative).
Without limiting the generality of the foregoing, the rights and remedies of the
Company and the Grantee under this Option Agreement, and the obligations and
liabilities of the Company and the Grantee under this Option Agreement, are in
addition to their respective rights, remedies, obligations and liabilities under
all applicable Legal Requirements and under the Reorganization Agreement. The
covenants and obligations of the Company set forth in this Option Agreement
shall be construed as independent of any other agreement or arrangement between
the Company, on the one hand, and the Grantee, on the other. The existence of
any claim or cause of action by the Company against the Grantee shall not
constitute a defense to the enforcement of any of such covenants or obligations
against the Company.
(m) Construction.
(i) For purposes of this Agreement, whenever the context
requires: the singular number shall include the plural, and vice versa; the
masculine gender shall include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
(ii) The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.
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<PAGE>
(iii) As used in this Agreement, the words "include" and
"including" and variations thereof, shall not be deemed to be terms of
limitation, but rather shall be deemed to be followed by the words "without
limitation."
(iv) Unless otherwise specified, references in this Agreement to
"Sections" are intended to refer to Sections of this Agreement.
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IN WITNESS WHEREOF, the Company and the Grantee have caused this Option
Agreement to be executed as of the date first written above.
INTERLEAF, INC.
By: /s/ Jaime Ellertson
------------------------------------
Name: Jaime Ellertson
----------------------------------
Title: President and CEO
---------------------------------
BROADVISION, INC.
By: /s/ Randall C. Bolten
------------------------------------
Name: Randall C. Bolten
----------------------------------
Title: Vice President, Finance
and Chief Financial Officer
---------------------------------
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