SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
January 26, 2000
---------------------------------
(Date of earliest event reported)
Interleaf, Inc.
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-14713 04-2729042
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(State or other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
62 Fourth Avenue, Waltham, Massachusetts 02451
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(Address of principal executive offices, including zip code)
(781) 290-0710
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(Registrant's telephone number, including area code)
N/A
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(Former Name or Former Address, If Changed Since Last Report)
Item 5. Other Events.
On January 26, 2000, Interleaf, Inc. (the "Registrant") entered into a
definitive Agreement of Merger and Reorganization (the "Merger Agreement")
with BroadVision, Inc. ("Parent") and Infiniti Acquisition Sub, Inc.
("Acquisition Sub"). Pursuant to the Merger Agreement, Acquisition Sub
will be merged with and into the Registrant, which will survive as a wholly
owned subsidiary of Parent (the "Merger"). The Merger is subject to, among
other things, regulatory approval and approval by the Registrant's
stockholders.
The foregoing description of the Merger and the Merger Agreement is
qualified in its entirety by reference to the Merger Agreement and the
press release of the Registrant dated January 26, 2000, copies of which are
filed herewith as Exhibits 2.1 and 99.1, respectively, and each of such
Exhibits hereby is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits:
2.1 Agreement and Plan of Merger and Reorganization, dated as of January
26, 2000, by and among BroadVision, Inc., Infiniti Acquisition Sub,
Inc. and Interleaf, Inc.
99.1 Press Release by Interleaf, Inc. dated January 26, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: February 1, 2000 INTERLEAF, INC.
By: /s/ Peter J. Rice
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Peter J. Rice
Chief Financial Officer
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
2.1 Agreement and Plan of Merger and Reorganization, dated as of
January 26, 2000, by and among BroadVision, Inc., Infiniti
Acquisition Sub, Inc. and Interleaf, Inc.
99.1 Press Release by Interleaf, Inc. dated January 26, 2000.
EXHIBIT 2.1
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
___________________________
TABLE OF CONTENTS
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
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
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
SECTION 8. TERMINATION.............................................. 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
EXHIBITS
Exhibit A - Certain Definitions
Exhibit B - Form of Articles of Organization of Surviving Corporation
Exhibit C - Form of Noncompetition Agreement
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 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;
(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 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 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 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 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") 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 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 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 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 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
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.
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.
(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 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 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 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 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 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, 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
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.
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.
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.
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).
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 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 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.
(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 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, 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 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.
(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.
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.
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 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 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 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 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 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.
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 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 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 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);
(c) 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;
(d) 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);
(e) 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;
(f) 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 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;
(g) 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
(h) 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 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 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 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
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.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
BROADVISION, INC.
By: /s/ Randall Bolten
----------------------------
Randall Bolten
Chief Financial Officer
INFINITI ACQUISITION SUB, INC.
By: /s/ Scott Neely
---------------------------
Scott Neely
President
INTERLEAF, INC.
By: /s/ Jaime Ellertson
---------------------------
Jaime Ellertson
President and CEO
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.
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.
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, 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 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.
EXHIBIT B
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B)
ARTICLE I
The exact name of the corporation is:
Interleaf, Inc.
ARTICLE II
The purpose of the corporation is to engage in the following
business activities:
To purchase, manufacture, produce, assemble, receive, lease or in any
manner acquire, hold, own, use, operate, install, maintain, service,
repair, process, alter, improve, market, import, export, sell, lease,
assign, transfer and generally to trade an deal in and with communications,
data processing, graphic processing, electronic and other equipment,
devices, apparatus, components, parts and supplies, products, machinery,
systems, goods, wares, merchandise and personal property of every kind,
nature or description, tangible or intangible, used or capable of being
used for any purposes whatsoever; and to engage and participate in any
mercantile, manufacturing or trading business of any kind or character.
To carry on any business or other activity which may be lawfully carried on
by a corporation organized under the Business Corporation Law of the
Commonwealth of Massachusetts, whether or not related to those referred to
in the foregoing paragraph.
Note: If the space provided under any article or item on this form is
insufficient, additions shall be set forth on one side only of separate
81/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions
to more than one article may be made on a single sheet so long as each
article requiring each addition is clearly indicated.
ARTICLE III
State the total number of shares and par value, if any, of each class of
stock which the corporation is authorized to issue.
- -----------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
- -----------------------------------------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
- -----------------------------------------------------------------------------
Common: Common: 100,000 $.01
- -----------------------------------------------------------------------------
Preferred: Preferred 100,000 $.01
- -----------------------------------------------------------------------------
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class,
if shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special
or relative rights or privileges of that class and of each other class of
which shares are outstanding and of each series then established within any
class.
See attached sheets 4A.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
N/A
ARTICLE VI
* Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulating the powers of the corporation, or of
its directors or stockholders, or of any class of stockholders.
See attached sheets 6A
- --------
* If there are no provisions state "None" Note. The preceding six
(6) articles are considered to be permanent and may ONLY be changed by
filing appropriate Articles of Amendment
ARTICLES VII
The effective date of organization of the corporation shall be the date
approved and filed by the Secretary of the Commonwealth. If a later
effective date is desired, specify such date which shall not be more than
thirty days after the date of filing.
ARTICLE VIII
The information contained in Article VIII is not a permanent part of the
Articles of Organization.
a. The street address (post office boxes are not acceptable) of the
principal office of the corporation in Massachusetts is:
c/o National Registered Agents, Inc., One Federal Street,
27th Floor, Boston, MA 02110
b. The name, residential address and post office address of each director
and officer of the corporation is as follows:
NAME RESIDENTIAL ADDRESS POST-OFFICE ADDRESS
President: Scott Neely 851 Whitehall Lane Same
Redwood City, CA 94061
Treasurer: Tina Correia 18850 Sydney Circle Same
Castro Valley, CA 94546
Clerk: Scott Neely Same as above Same
Directors: Scott Neely Same as above Same
Tine Correia Same as above Same
c. The fiscal year (i.e., tax year) of the corporation shall end on the
last day of the month of: December
d. The name and business address of the resident agent, if any, of the
corporation is: National Registered Agents, Inc., One Federal Street,
27th Floor, Boston, MA 02110
ARTICLE IX
By-Laws of the corporation have been duly adopted and the president,
treasurer, clerk and directors whose names are set forth above, have been
duly elected.
IN WITNESS WHEREOF AND UNDER THE PAINS AND PENALTIES OF PERJURY, I/we, whose
signature(s) appear below as incorporator(s) and whose name(s) and business
or residential address(es) are clearly typed or printed beneath each
signature do hereby associate with the intention of forming this
corporation under the provisions of General Laws, Chapter 156B and do
hereby sign these Articles of Organization as incorporator(s) this day of ,
.
Note: If an existing corporation is acting as incorporator, type in the
exact name of the corporation, the state or other jurisdiction when it was
incorporated, the name of the person signing on behalf of said corporation
and the title he/she holds or other authority by which such action is
taken.
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B)
---------------------------------------------
I hereby certify that, upon examination of these Articles of Organiza tion,
duly submitted to me, it appears that the provisions of the General Laws
relative to the organization of corporations have been complied with, and I
hereby approve said articles; and the filing fee in the amount of $ having
been paid, said articles are deemed to have been filed with me this day of
2000.
Effective date:
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
FILING FEE: One tenth of one percent of the total authorized capital stock,
but not less than $200.00. For the purpose of filing, shares of stock with
a par value less than $1.00, or no par stock, shall be deemed to have a par
value of $1.00 per share.
TO BE FILED IN BY CORPORATION
Photocopy of document to be sent to:
Telephone:
CONTINUATION SHEET 4A
4. The Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the corporation is hereby
authorized, within the limitations and restrictions stated in these
Articles of Organization to determine or alter the rights, preferences,
powers, privileges and the restrictions, qualifications and limitations
granted to or imposed upon any wholly unissued series of Preferred Stock,
and the number of shares constituting any such series and the designation
thereof; and to increase or decrease the number of shares constituting any
such series; and to increase or decrease the number of shares of any series
subsequent to the issue of shares of that series, but not below the number
of shares of such series then outstanding. In case the number of shares of
any series shall be so decreased, the shares then constituting such
decrease shall resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of such series.
The authority of the Board of Directors with respect to each such
series of Preferred Stock shall include, without limitation of the
foregoing, the right to determine and fix:
(1) The distinctive designation of such series and the number of
shares to constitute such series;
(2) The rate at which dividends on the shares of such series shall
be declared and paid, or set aside for payment, whether dividends at the
rate so determined shall be cumulative and whether the shares of such
series shall be entitled to any participating or other dividends in
addition to dividends at the rate so determined, and if so on what terms;
(3) The right, if any, of the corporation to redeem shares of
the particular series and, if redeemable, the price, terms and manner of
such redemption;
(4) The special and relative rights and preferences, if any, and
the amount or amounts per share, which the shares of such series shall be
entitled to receive upon any voluntary or involuntary liquidation,
dissolution or winding up of the corporation;
(5) The terms and conditions, if any, upon which shares of such
series shall be convertible into, or exchangeable for, shares of stock of
any other class or classes, including the price or prices or the rate or
rates of conversion or exchange and the terms of adjustment, if any;
(6) The obligation, if any, of the corporation to retire or
purchase shares of such series pursuant to a sinking fund or fund of a
similar nature or otherwise, and the terms and conditions of such
obligation;
(7) Voting rights, if any;
(8) Limitations, if any, on the issuance of additional shares of
such series or any shares of any other series of Preferred Stock; and
(9) Such other preferences or restrictions or qualifications
thereof as the Board of Directors may deem advisable and not inconsistent
with the law and the provisions of these Articles of Organization.
CONTINUATION SHEET 6A
6. Other lawful provisions, if any, for the conduct and regulation
of the business and affairs of the corporation, for its voluntary
dissolution, or for limiting, defining or regulating the powers of the
corporation, or of its directors or stockholders, or of any class of
stockholders:
(a) The directors may make, amend, or repeal the By-Laws of the
corporation in whole or in part, except with respect to any provision
thereof which by law or these Articles of Organization or the By-Laws
requires action by the stockholders.
(b) Meetings of the stockholders of the corporation may be held
anywhere in the United States.
(c) The corporation shall have the power to be a partner in any
business enterprise which this corporation would have the power to conduct
by itself.
EXHIBIT C
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT is being executed and delivered as
of January 26, 2000 by _______________ (the "Stockholder") in favor of, and
for the benefit of BROADVISION, INC., a Delaware corporation (the "Parent")
and INTERLEAF, INC., a Massachusetts corporation (the "Company"). Certain
capitalized terms used in this Noncompetition Agreement are defined in
Section 19.
RECITALS
A. As a stockholder and employee of the Company, the Stockholder
has obtained extensive and valuable knowledge and confidential information
concerning the businesses of the Company and its subsidiaries. (The Company
and its subsidiaries are referred to collectively herein as the "Acquired
Companies.")
B. Pursuant to an Agreement and Plan of Merger and Reorganization
dated as of January ____, 2000 (the "Reorganization Agreement"), among
Parent, the Company, and Infiniti Acquisition Sub, Inc., a wholly owned
subsidiary of Purchaser ("Merger Sub"), Merger Sub will merge with and into
the Company (the "Merger"). The Reorganization Agreement contemplates that,
upon consummation of the Merger, (i) holders of shares of the common stock
of the Company will receive shares of common stock of Parent ("Parent
Common Stock") in exchange for their shares of common stock of the Company
and (ii) the Company will become a wholly owned subsidiary of Parent. It is
accordingly contemplated that Stockholder will receive shares of Parent
Common Stock in the Merger.
C. In connection with the Merger (and as a condition to the
consummation of the Merger), and to enable Parent to secure more fully the
benefits of acquiring the Acquired Companies as wholly owned subsidiaries,
Parent has required that the Stockholder enter into this Noncompetition
Agreement; and the Stockholder is entering into this Noncompetition
Agreement in order to induce Parent to consummate the acquisitions
contemplated by the Reorganization Agreement.
D. Parent, the Acquired Companies and Parent's other subsidiaries
have conducted and are conducting their respective businesses on a national
basis.
AGREEMENT
In order to induce Parent to consummate the transactions
contemplated by the Reorganization Agreement, and for other good and
valuable consideration, the Stockholder agrees as follows:
1. RESTRICTION ON COMPETITION. The Stockholder agrees that, during
the Noncompetition Period, the Stockholder shall not, and shall not permit
any of his Affiliates to:
(a) engage in Competition in any Restricted Territory; or
(b) be or become an officer, director, stockholder, owner,
co-owner, Affiliate, general or limited partner, promoter,
employee, agent, representative, consultant, advisor,
manager, licensor or sublicensor of, for or to, or
otherwise be or become associated with or acquire or hold
(of record, beneficially or otherwise) any direct or
indirect interest in, any Person that engages in
Competition in any Restricted Territory;
provided, however, that the Stockholder may, without violating this Section
1, own, as a passive investment, shares of capital stock of a publicly-held
corporation that engages in Competition if (i) such shares are actively
traded on an established national securities market in the United States,
(ii) the number of shares of such corporation's capital stock that are
owned beneficially (directly or indirectly) by the Stockholder and the
number of shares of such corporation's capital stock that are owned
beneficially (directly or indirectly) by the Stockholder's Affiliates
collectively represent less than three percent of the total number of
shares of such corporation's capital stock outstanding, and (iii) neither
the Stockholder nor any Affiliate (excluding any Affiliate that is an
individual) of the Stockholder is otherwise associated directly or
indirectly with such corporation or with any Affiliate of such corporation.
Stockholder may not take or permit any of his Affiliates to take any action
indirectly that he or his Affiliates are prohibited by this Agreement from
taking directly.
2. NO HIRING OR SOLICITATION OF EMPLOYEES. The Stockholder agrees
that, during the Noncompetition Period, the Stockholder shall not, and
shall not knowingly permit any of his Affiliates to: (a) hire any Specified
Employee, or (b) directly or indirectly, personally or through others,
encourage, induce, attempt to induce, solicit or attempt to solicit (on the
Stockholder's own behalf or on behalf of any other Person) any Specified
Employee to leave his or her employment with Parent, any of the Acquired
Companies or any of Parent's other subsidiaries. (For purposes of this
Section 2, "Specified Employee" shall mean any individual who (i) is or was
an employee of any of the Acquired Companies on the date of this
Noncompetition Agreement or during the 180-day period ending on the date of
this Noncompetition Agreement, and (ii) remains or becomes an employee of
Parent, any of the Acquired Companies or any of Parent's other subsidiaries
on the date of this Noncompetition Agreement or at any time during the
180-day period thereafter.)
3. CONFIDENTIALITY. The Stockholder agrees that he shall hold all
Confidential Information in strict confidence and shall not at any time
(whether during or after the Noncompetition Period): (a) reveal, report,
publish, disclose or transfer any Confidential Information to any Person
(other than Parent or any Affiliate of Parent), except in the performance
of his obligations as an employee of Parent or an Affiliate or Parent; (b)
use any Confidential Information for any purpose, except in the performance
of his obligations as an employee of Parent or an Affiliate of Parent; or
(c) use any Confidential Information for the benefit of any Person (other
than Parent or any Affiliate of Parent). Notwithstanding the above, the
Stockholder shall not be in violation of this Section 3 with regard to a
disclosure that was in response to a valid order by a court or other
governmental body, provided that the Stockholder provides Parent with prior
written notice of such disclosure in order to permit Parent to seek
confidential treatment of such information.
4. REPRESENTATIONS AND WARRANTIES. The Stockholder represents and
warrants, to and for the benefit of Parent and the Company, that: (a) he
has full power and capacity to execute and deliver, and to perform all of
his obligations under, this Noncompetition Agreement; and (b) neither the
execution and delivery of this Noncompetition Agreement nor the performance
of this Noncompetition Agreement will result directly or indirectly in a
violation or breach of (i) any agreement or obligation by which the
Stockholder or any of his Affiliates is or may be bound, or (ii) any law,
rule or regulation. The Stockholder's representations and warranties shall
survive for the Noncompetition Period; provided, however that nothing
herein shall relieve the Stockholder from any liability or obligation
arising from any breach of a representation or warranty during the
Noncompetition Period.
5. SPECIFIC PERFORMANCE. The Stockholder agrees that, in the event
of any breach or threatened breach by the Stockholder of any covenant or
obligation contained in this Noncompetition Agreement, each of Parent and
the Company 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.
6. NON-EXCLUSIVITY. The rights and remedies of Parent and the
Company under this Noncompetition Agreement are not exclusive of or limited
by any other rights or remedies which they 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 and the Company under this Noncompetition Agreement,
and the obligations and liabilities of the Stockholder under this
Noncompetition Agreement, are in addition to their respective rights,
remedies, obligations and liabilities under the law of unfair competition,
under laws relating to misappropriation of trade secrets, under other laws
and common law requirements and under all applicable rules and regulations.
Nothing in this Noncompetition Agreement shall limit any of the
Stockholder's obligations, or the rights or remedies of Parent or the
Company under the Reorganization Agreement; and nothing in the
Reorganization Agreement shall limit any of the Stockholder's obligations,
or any of the rights or remedies of Parent or the Company under this
Noncompetition Agreement. No breach on the part of Parent, the Company or
any other party of any covenant or obligation contained in the
Reorganization Agreement or any other agreement shall limit or otherwise
affect any right or remedy of Parent, the Company or any of the other
Indeminitees under this Noncompetition Agreement.
7. SEVERABILITY. If any provision of this Noncompetition 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 Noncompetition Agreement. Each provision of this
Noncompetition Agreement is separable from every other provision of this
Noncompetition Agreement, and each part of each provision of this
Noncompetition Agreement is separable from every other part of such
provision.
8. GOVERNING LAW; VENUE.
(a) This Noncompetition Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of
Massachusetts (without giving effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this
Noncompetition Agreement or the enforcement of any provision of this
Noncompetition Agreement 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;
(ii) agrees that service of any process, summons, notice or
document by U.S. mail addressed to him at the address set forth on
the signature page of this Noncompetition Agreement 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 the 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 Noncompetition Agreement or
the subject matter of this Noncompetition Agreement may not be
enforced in or by such court.
Nothing contained in this Section 9 shall be deemed to limit or
otherwise affect the right of Parent or the Company to commence any legal
proceeding or otherwise proceed against the Stockholder in any other forum
or jurisdiction.
(c) THE STOCKHOLDER IRREVOCABLY WAIVES THE RIGHT TO A JURY TRIAL
IN CONNECTION WITH ANY LEGAL PROCEEDING RELATING TO THIS NONCOMPETITION
AGREEMENT OR THE ENFORCEMENT OF ANY PROVISION OF THIS NONCOMPETITION
AGREEMENT.
9. WAIVER. No failure on the part of Parent or the Company to
exercise any power, right, privilege or remedy under this Noncompetition
Agreement, and no delay on the part of Parent or the Company in exercising
any power, right, privilege or remedy under this Noncompetition 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. Neither Parent nor the Company shall be deemed
to have waived any its claim arising out of this Noncompetition Agreement,
or any of its power, right, privilege or remedy under this Noncompetition
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 Parent or the Company; and any such waiver shall not
be applicable or have any effect except in the specific instance in which
it is given.
10. SUCCESSORS AND ASSIGNS. Each of Parent and the Company may
freely assign any or all of its rights under this Noncompetition Agreement,
at any time, in whole or in part, to any Affiliate or in connection with
the sale of all or substantially all of the business of the Acquired
Companies to a third party (whether by means of a sale of assets, sale of
stock, merger, consolidation or otherwise) without obtaining the consent or
approval of the Stockholder or of any other Person. This Noncompetition
Agreement shall be binding upon the Stockholder and his heirs, executors,
estate, personal representatives, successors and assigns, and shall inure
to the benefit of Parent and the Company and their permitted assigns.
11. FURTHER ASSURANCES. The Stockholder shall (at the
Stockholder's sole expense) execute and/or cause to be delivered to Parent
and the Company such instruments and other documents, and shall (at the
Stockholder's sole expense) take such other actions, as Parent or the
Company may reasonably request at any time (whether during or after the
Noncompetition Period) for the purpose of carrying out or evidencing any of
the provisions of this Noncompetition Agreement.
12. ATTORNEYS' FEES. If any legal action or other legal proceeding
relating to this Noncompetition Agreement or the enforcement of any
provision of this Noncompetition Agreement is brought against the
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).
13. CAPTIONS. The captions contained in this Noncompetition
Agreement are for convenience of reference only, shall not be deemed to be
a part of this Noncompetition Agreement and shall not be referred to in
connection with the construction or interpretation of this Noncompetition
Agreement.
14. CONSTRUCTION. Whenever required by the context, the singular
number shall include the plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; and the neuter gender shall
include the masculine and feminine genders. 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 Noncompetition
Agreement. Neither the drafting history nor the negotiating history of this
Noncompetition Agreement shall be used or referred to in connection with
the construction or interpretation of this Noncompetition Agreement. As
used in this Noncompetition Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, and
shall be deemed to be followed by the words "without limitation." Except as
otherwise indicated in this Noncompetition Agreement, all references in
this Noncompetition Agreement to "Sections" are intended to refer to
Sections of this Noncompetition Agreement.
15. SURVIVAL OF OBLIGATIONS. The obligations of the Stockholder
under this Noncompetition Agreement (other than under Sections 3 and 12)
shall expire upon the expiration of the Noncompetition Period. The
expiration of the Noncompetition Period shall not operate to relieve the
Stockholder of any obligation or liability arising from any prior breach by
the Stockholder of any provision of this Noncompetition Agreement. The
obligations of the Stockholder under Sections 3 and 12 shall survive the
expiration of the Noncompetition Period.
16. OBLIGATIONS ABSOLUTE. The Stockholder's obligations under this
Noncompetition Agreement are absolute and shall not be terminated or
otherwise limited by virtue of any breach (on the part of Parent, the
Company or any other Person) of any provision of the Reorganization
Agreement or any other agreement, or by virtue of any failure to perform or
other breach of any obligation of Parent, the Company or any other Person.
17. AMENDMENT. This Noncompetition Agreement may not be amended,
modified, altered or supplemented other than by means of a written
instrument duly executed and delivered on behalf of the Stockholder, Parent
(or any successor to Parent) and the Company (or any successor to the
Company).
18. DEFINED TERMS. For purposes of this Noncompetition Agreement:
(a) "Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with
such specified Person; provided, however, that in no event shall an
individual be deemed to be under control by an entity.
(b) "Competing Product" means any: (i) any end-to-end XML-based
content management product for e-commerce; (ii) product, equipment, device
or system that has been designed, developed, manufactured, assembled,
promoted, sold, supplied, distributed, resold, installed, supported,
maintained, repaired, refurbished, licensed, sublicensed, financed, leased
or subleased by or on behalf of any of the Acquired Companies under the
names BladeRunner, QuickSilver, Information Manager, BR Web and X-WAP (and
any versions and releases thereto); (iii) product, equipment, device or
system that is designed, developed, manufactured, assembled, promoted,
sold, supplied, distributed, resold, installed, supported, maintained,
repaired, refurbished, licensed, sublicensed, financed, leased or subleased
by or on behalf of Parent, any of the Acquired Companies or any of Parent's
other subsidiaries at any time during the Noncompetition Period; or (iv)
product, equipment, device or system that is substantially the same as,
incorporates, is a material component or part of, is based upon, is
functionally similar to or competes in any material respect with any
product, equipment, device or system of the type referred to in clause
"(i)", clause "(ii)" or clause "(iii)" of this sentence, but excluding in
all circumstances the software products of third party vendors that are
embedded or incorporated into any of the foregoing.
(c) "Competing Service" means any: (i) service that has been
provided, performed or offered by or on behalf of any of the Acquired
Companies (or any predecessor of any of the Acquired Companies) at any time
on or prior to the date of this Noncompetition Agreement with respect to
any Competing Product; (ii) service that is provided, performed or offered
by Parent, any of the Acquired Companies or any of Parent's other
subsidiaries at any time during the Noncompetition Period; (iii) service
that facilitates, supports or otherwise relates to the design, development,
manufacture, assembly, promotion, sale, supply, distribution, resale,
installation, support, maintenance, repair, refurbishment, licensing,
sublicensing, financing, leasing or subleasing of any Competing Product; or
(iv) service that is substantially the same as, is based upon or competes
in any material respect with any service referred to in clause "(i)",
clause "(ii)", clause "(iii)" or clause "(iv)" of this sentence.
(d) A Person shall be deemed to be engaged in "Competition" if:
(i) such Person or any of such Person's Affiliates is engaged directly or
indirectly in the design, development, manufacture, assembly, promotion,
sale, supply, distribution, resale, installation, support, maintenance,
repair, refurbishment, licensing, sublicensing, financing, leasing or
subleasing of any Competing Product; or (ii) such Person or any of such
Person's Affiliates is engaged directly or indirectly in providing,
performing or offering any Competing Service.
(e) "Confidential Information" means any non-public information
(whether or not in written form and whether or not expressly designated as
confidential) relating directly or indirectly to Parent, any of the
Acquired Companies or any of Parent's other subsidiaries or relating
directly or indirectly to the business, operations, financial affairs,
performance, assets, technology, processes, products, contracts, customers,
licensees, sublicensees, suppliers, personnel, consultants or plans of
Parent, any of the Acquired Companies or any of Parent's other subsidiaries
(including any such information consisting of or otherwise relating to
trade secrets, know-how, technology, inventions, prototypes, designs,
drawings, sketches, processes, license or sublicense arrangements,
formulae, proposals, research and development activities, customer lists or
preferences, pricing lists, referral sources, marketing or sales techniques
or plans, operations manuals, service manuals, financial information,
projections, lists of consultants, lists of suppliers or lists of
distributors); provided, however, that "Confidential Information" shall not
be deemed to include information of the Company that becomes publicly known
and in the public domain through no fault of the Stockholder.
(f) "Noncompetition Period" shall mean the period commencing on
the date of this Noncompetition Agreement and ending on the later of (i)
the second anniversary of the effective date of the Merger or (ii) the
first anniversary of the termination of the Stockholder's employment with
Parent or an Affiliate of Parent.
(g) "Person" means any: (i) individual; (ii) corporation, general
partnership, limited partnership, limited liability partnership, trust,
company (including any limited liability company or joint stock company) or
other organization or entity; or (iii) governmental body or authority.
(h) "Restricted Territory" means each county or similar political
subdivision of each State of the United States of America (including each
of the counties in the State of California), and each State, territory or
possession of the United States of America, and any foreign jurisdictions
into which Parent and any of the Acquired Companies currently sell products
or services.
IN WITNESS WHEREOF, the Stockholder has duly executed and
delivered this Noncompetition Agreement as of the date first above written.
[NAME OF STOCKHOLDER]
Address:
Telephone No.:( ) Facsimile:( )
Exhibit 99.1
BROADVISION IN AGREEMENT TO ACQUIRE
INTERLEAF, THE E-CONTENT COMPANY
Highly Innovative XML-based e-Content Tools, Combined with
Strength in e-Business Applications, Will Enable BroadVision
to Make XML Revolution Mainstream
WALTHAM, MA - JANUARY 26, 2000 - Interleaf, Inc. (Nasdaq: LEAF), the
leading provider of XML-based e-content(TM) solutions, today announced that
it has entered into a definitive agreement providing for the acquisition of
Interleaf by BroadVision, the leader in personalized e-business
applications. Key to the acquisition is the e-Content Company, a division
of Interleaf and leader in XML-based content management tools. This
separate Interleaf business unit is dedicated to the development, marketing
and sale of XML-based content management tools which enable the design,
creation and management of dynamic and intelligent content for web and
wireless applications. The e-Content Company comprises nearly 70 percent of
Interleaf's approximately 400 employees and has been the most significant
area of growth and investment within Interleaf over the past two years.
Under the terms of the agreement each outstanding share of Interleaf common
stock will be exchanged for .3465 shares of BroadVision common stock, and
all outstanding options and warrants to purchase Interleaf common stock
will be assumed by BroadVision. Based on basic shares outstanding as of
January 25, 2000 and both companies' closing price as of that date, the
transaction represents approximately a 40% premium over Interleaf's current
value. On a fully diluted basis, BroadVision would issue approximately 5.6
million shares of its common stock, having a value of approximately $877
million based on BroadVision's closing stock price on January 25, 2000.
The transaction is intended to be tax-free to the Interleaf shareholders
and will be accounted for as a purchase transaction. The transaction, which
has been unanimously approved by both the Interleaf and BroadVision Boards
of Directors, is subject to certain customary closing conditions, including
approval by Interleaf's stockholders, Hart-Scott-Rodino antitrust clearance
and other regulatory approvals. The companies expect to close the
transaction by May 31, 2000.
"Through the acquisition of Interleaf, a leader in the development of
XML-based e-content management tools, BroadVision will be able to quickly
expand our leadership in delivering personalized e-business solutions for
web and wireless applications," said Dr. Pehong Chen, President, CEO and
Chairman of the Board for BroadVision. "With our combined customer base of
more than 2,500 blue-chip companies, both firms have the proven ability to
meet e-business demands for a fast time to market, easier integration with
content sources and back-end systems, and high performance and scalability.
We look forward to leveraging the strengths of both companies to provide
increased benefits for customers and shareholders."
"At Interleaf, we have spent the past three years repositioning the
company around new XML technology and the delivery of content to wireless
devices," said Jaime Ellertson, President, CEO and Chairman of the Board
for Interleaf. "This past year we have successfully penetrated the
e-business marketplace by delivering state-of-the-art XML-based e-content
management tools. We believe strongly that these tools and our initiative
into the wireless market make us a unique fit with BroadVision's strength
in web applications and with their strategic objectives. Both companies see
XML-based content proving itself to be of particular importance for the
fast growing business-to-business e-commerce market. Therefore, the
combination of our e-content management tools integrated with BroadVision's
e-business applications make a powerful end-to-end solution for the B2B
market while further extending these applications to the emerging wireless
market."
BENEFITS OF ACQUISITION FOR CUSTOMERS
The combination of the suite of BroadVision One-To-One(TM) personalized
e-business applications and Interleaf's XML-based e-content management
tools will create one of the most comprehensive, end-to-end offerings for
companies needing rich content and transactional data to drive e-business
over the Web and to wireless devices. GartnerGroup estimates that by 2003,
80 percent of application-to-application traffic passing over public
networks will be in XML ("Reality Check: XML Today" by Dr. Rita Knox,
GartnerGroup, October 1999).
Specific benefits of the combined products will include:
o LESS TIME AND LOWER COST FOR E-CONTENT MANAGEMENT. The integrated
offering combines Interleaf's XML-based e-content management tools and
BroadVision's real-time instant publishing tools to shorten time to
production for content. This lowers the total cost of ownership for
companies by enabling publishers to more easily create, publish,
manage and re-purpose transactional content. Additionally, the
integrated offering is differentiated by its support for the
publication of XML-based documents from Microsoft(R) Office
applications, greatly expanding general business users' ability to
publish Web and wireless content.
o AUTOMATE B2B E-COMMERCE THROUGH INTELLIGENT CONTENT. The integrated
offering will enable the automation of B2B e-commerce by enabling
companies to improve their operations via the use of intelligent
content. Intelligent content is personalized, reusable and dynamically
assembled in real time to increase collaboration and communication
among commerce partners. Unlike static content, intelligent content
automates interactions and transactions among participants, creating a
highly productive information value chain.
o EXPANDED E-BUSINESS REACH. The integration of Interleaf's X-WAP
(wireless application protocol) technology will enable BroadVision
customers to deploy e-business applications that enable access to
dynamic content from mobile and other wireless devices, such as
digital cellular telephones, pagers, personal digital assistants and
e-books. End-users will be able to access in real time personalized
product information, inventory, price, and catalog data and to execute
orders from Web sites and wireless devices via BroadVision's ability
to deliver "e-business anywhere, anytime." The Yankee Group has
estimated that wireless subscribers accessing the Internet will grow
from 669 million in 1999 to 1.26 billion by 2005 (The Yankee Group,
November, 1999). Therefore, BroadVision believes the integration of
Interleaf's X-WAP technology will be a significant benefit for
companies implementing e-business applications capable of providing
dynamic, personalized content to the growing number of users of
wireless devices.
THE BROADVISION AND INTERLEAF FIT
The two companies share a vision for enabling e-business through a common
commitment to an XML backbone. Interleaf, a thought and industry leader for
XML-based e-content management tools, brings people, tools and technologies
that are complementary to BroadVision's offerings. For example, Interleaf's
employees represent one of the world's largest XML talent pools. And,
Interleaf's technology leadership in XML and X-WAP are technologies that
supplement those of BroadVision. Additionally, Interleaf has a large
worldwide base of more than 2,000 customers who are potential users of
BroadVision's e-business applications.
KEY TECHNOLOGIES
BroadVision intends to fully integrate Interleaf's next generation content
management tools based on XML into BroadVision's full suite of e-business
applications. Interleaf's key technologies include:
o BLADERUNNER(TM). A scalable, comprehensive XML-based content
management tool that enables companies to create, manage, and publish
structured e-business content that is targeted, timely, personalized,
intelligent and medium-aware. With XML as its technology backbone and
Microsoft(R) Office(TM) integration used for content creation,
companies using BladeRunner are able to apply intelligence, structure
and style to content for e-business applications.
o X-WAP TECHNOLOGY. Interleaf's XML wireless application technology,
currently under development, will transform XML into HTML, WML, PDF,
ASCII and raw text business content for delivery to wireless devices,
such as digital cellular telephones, pagers, personal digital
assistants and e-books.
o QUICKSILVER(TM). A full-featured high-end authoring and publishing
product with an extension to enable the generation of XML-based
content. QuickSilver enables users to manage XML and non-XML-based
content in one integrated system.
The acquisition creates a combined entity with a compelling record of
business and technology achievements:
o Depth and breadth of expertise, provided by over nine years in the
e-content management and e-business applications markets;
o Over 1,100 employees dedicated to e-content and e-business
applications;
o A combined customer base of thousands of international blue chip and
"dot.com" customers to guide the company's integration of existing and
development of new e-business solutions; and,
o The proven ability to meet customers' e-business needs for return on
investment, quick time-to-market, and high performance, scalable
solutions.
ABOUT BROADVISION
BroadVision, Inc. is the leading worldwide supplier of personalized
e-business applications. BroadVision's end-to-end solutions enable
companies and governments to rapidly deploy and cost-effectively operate
secure, scalable, intelligent, and flexible e-business applications for
e-commerce, financial services and knowledge management. The company's
entire product line has experienced strong growth and increasing acceptance
by Global 2000 businesses, governments and pure-play "e-startups."
ABOUT INTERLEAF
Interleaf, Inc. provides enterprise-wide software solutions for content
management and high-end publishing. These solutions provide Global 2000
customers with a distinct competitive advantage by enabling them to deploy
e-business applications that improve operating efficiency and customer
satisfaction, while driving revenue and profitability.
Interleaf's software products make it easy for companies to assemble,
manage, retrieve, distribute and publish business-critical information
across the corporate enterprise and beyond. Key customers include Alcatel,
DeutschBank, Fidelity, IDC, Intel, Lockheed Martin, MacMillan, Motorola,
Shared Medical Systems, Tektronix and Toyota.
While the announced transaction is pending and following its consummation,
the value of Interleaf's common stock will be dependent on or directly
related to the value of BroadVision's common stock, which depends on
factors relating to BroadVision's business and financial performance, which
in turn are beyond Interleaf's control. Reference is made to BroadVision's
SEC filings for additional information concerning BroadVision and its
business, financial performance and operations.
This press release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Interleaf's actual results could differ
materially from those set forth in the forward-looking statements. Certain
factors that might cause such a difference include, among other things, the
following:
o The transaction described above is contingent and may not actually
occur as described or at all, and the failure of the transaction to
close could have a material adverse impact on the value of Interleaf's
common stock;
o Interleaf and BroadVision may experience difficulties realizing the
described benefits from the business combination, including without
limitation difficulties in integrating the Interleaf and BroadVision
products, technologies, cultures, information systems, business
practices and policies; Interleaf may experience difficulties in
marketing the BroadVision products into Interleaf's customer base, and
BroadVision may experience difficulties in marketing the Interleaf
products into BroadVision's customer base;
o The announcement and consummation of the transaction may cause
confusion in the marketplace and disruption to Interleaf's and
BroadVision's businesses, including without limitation difficulties in
retaining Interleaf's current employees through the transition,
integrating them into BroadVision's operations and retaining them over
the long-term; difficulties in retaining Interleaf's significant
customers at historic purchasing levels; and delays in the
consummation of sales currently pending;
Such differences may also be caused by those factors discussed in the
section entitled "Risk Factors" on pages 13-15 of the Company's Annual
Report on Form 10-K dated June 29, 1998.
####
Interleaf(R) , BladeRunner(TM), e-content(TM), X-WAP(TM) and
QuickSilver(TM) are either registered trademarks or trademarks of
Interleaf, Inc. Microsoft(R) Word is a trademark of Microsoft Corporation.
BroadVision(R) is a registered trademark and BroadVision One-To-One(TM) is
a trademark of BroadVision Inc. in the United States and other countries.
