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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
Date of Report (Date of earliest event reported):
NOVEMBER 3, 1997
PARAMETRIC TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
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MASSACHUSETTS 0-18059 04-2866152
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
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128 TECHNOLOGY DRIVE, WALTHAM, MASSACHUSETTS 02154
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code:
(617) 398-5000
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ITEM 5. OTHER EVENTS.
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On November 3, 1997, Parametric Technology Corporation ("Parametric") and
Computervision Corporation ("Computervision") entered into an Agreement and Plan
of Reorganization (the "Merger Agreement") pursuant to which a wholly-owned
subsidiary of Parametric will be merged with and into Computervision (the
"Merger"), with Computervision becoming a wholly-owned subsidiary of Parametric.
The form of Merger Agreement is filed as Exhibit 2.1 hereto and is incorporated
herein by reference.
On the effective date of the Merger, each issued and outstanding share of
common stock, $0.01 par value, of Computervision ("Computervision Common
Stock"), other than shares held by Computervision or Parametric, will
automatically be converted into the right to receive 0.0866 shares of common
stock, $0.01 par value, of Parametric ("Parametric Common Stock"). Cash will be
paid in lieu of any fractional shares of Parametric Common Stock otherwise
issuable in the Merger. Outstanding employee and director options to purchase
shares of Computervision Common Stock will be converted to Parametric options at
the same exchange ratio. The Merger is intended to be a tax-free reorganization
and to be accounted for as a pooling of interests.
Completion of the acquisition is subject to certain conditions, including
approval of Computervision's shareholders, clearance by regulatory authorities,
and other customary closing conditions. The Merger Agreement is also subject to
termination in certain circumstances as set forth therein.
In connection with the execution of the Merger Agreement, Computervision
granted Parametric an option to purchase up to 9,558,809 shares of newly issued
Computervision Common Stock at a price of $4.00 per share (the "Option"), which
equals 15% of the outstanding shares of Computervision Common Stock. The form
of stock option agreement (the "Option Agreement") is filed as Exhibit 2.2
hereto and is incorporated herein by reference. The Option is exercisable in
whole or in part if the Merger Agreement becomes terminable in circumstances
involving the acquisition or potential acquisition of Computervision by a party
other than Parametric that entitle Parametric to payment of certain termination
fees under the Merger Agreement.
The foregoing descriptions of the Merger Agreement and the Option Agreement
are qualified in their entirety by reference to the detailed language of the
respective Agreements.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibits:
2.1 Agreement and Plan of Reorganization dated November 3, 1997 by and
among Parametric Technology Corporation, PTC Acquisition Corporation
and Computervision Corporation.
2.2 Stock Option Agreement dated November 3, 1997 by and between
Parametric Technology Corporation and Computervision Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PARAMETRIC TECHNOLOGY CORPORATION
Date: November 4, 1997 By: /s/ Edwin J. Gillis
-----------------------------------------
Edwin J. Gillis
Executive Vice President, Chief Financial
Officer and Treasurer
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EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
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2.1 Agreement and Plan of Reorganization dated November 3, 1997 by and
among Parametric Technology Corporation, PTC Acquisition Corporation
and Computervision Corporation.
2.2 Stock Option Agreement dated November 3, 1997 by and between
Parametric Technology Corporation and Computervision Corporation.
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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
PARAMETRIC TECHNOLOGY CORPORATION
PTC ACQUISITION CORPORATION
AND
COMPUTERVISION CORPORATION
DATED AS OF NOVEMBER 3, 1997
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER......................................................................... 2
1.1. THE MERGER............................................................... 2
1.2. EFFECTIVE TIME; CLOSING.................................................. 2
1.3. EFFECT OF THE MERGER..................................................... 2
1.4. CERTIFICATE OF INCORPORATION; BYLAWS..................................... 3
1.5. DIRECTORS AND OFFICERS................................................... 3
1.6. EFFECT ON CAPITAL STOCK.................................................. 3
1.7. SURRENDER OF CERTIFICATES................................................ 4
1.8. NO FURTHER OWNERSHIP RIGHTS IN COMPUTERVISION COMMON STOCK............... 6
1.9. LOST, STOLEN OR DESTROYED CERTIFICATES................................... 6
1.10. TAX AND ACCOUNTING CONSEQUENCES.......................................... 6
1.11. TAKING OF NECESSARY ACTION; FURTHER ACTION............................... 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPUTERVISION................................... 7
2.1. ORGANIZATION OF COMPUTERVISION........................................... 7
2.2. COMPUTERVISION CAPITAL STRUCTURE......................................... 8
2.3. OBLIGATIONS WITH RESPECT TO CAPITAL STOCK................................ 9
2.4. AUTHORITY................................................................ 9
2.5. SECTION 203 OF DELAWARE LAW NOT APPLICABLE............................... 11
2.6. SEC FILINGS; COMPUTERVISION FINANCIAL STATEMENTS......................... 11
2.7. ABSENCE OF CERTAIN CHANGES OR EVENTS..................................... 12
2.8. TAXES.................................................................... 14
2.9. RESTRICTIONS ON BUSINESS ACTIVITIES...................................... 16
2.10. TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES................... 16
2.11. INTELLECTUAL PROPERTY.................................................... 17
2.12. COMPLIANCE; PERMITS; RESTRICTIONS........................................ 18
2.13. LITIGATION............................................................... 19
2.14. BROKERS' AND FINDERS' FEES............................................... 19
2.15. EMPLOYEE BENEFIT PLANS; EMPLOYMENT MATTERS............................... 19
2.16. EMPLOYEES................................................................ 23
2.17. ENVIRONMENTAL MATTERS.................................................... 24
2.18. AGREEMENTS, CONTRACTS AND COMMITMENTS.................................... 25
2.19. CHANGE OF CONTROL PAYMENTS............................................... 25
2.20. STATEMENTS; PROXY STATEMENT/PROSPECTUS................................... 26
2.21. BOARD APPROVAL........................................................... 26
2.22. FAIRNESS OPINION......................................................... 26
2.23. MINUTE BOOKS............................................................. 26
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARAMETRIC AND MERGER SUB........................ 27
3.1. ORGANIZATION OF PARAMETRIC............................................... 27
3.2. PARAMETRIC CAPITAL STRUCTURE............................................. 27
3.3. AUTHORITY................................................................ 27
3.4. SEC FILINGS; PARAMETRIC FINANCIAL STATEMENTS............................. 29
3.5. LITIGATION............................................................... 30
3.6. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS....................... 30
3.7. INTERIM OPERATIONS OF MERGER SUB......................................... 30
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS..................................... 30
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME................................................ 31
4.1. CONDUCT OF BUSINESS BY COMPUTERVISION AND PARAMETRIC..................... 31
4.2. CERTAIN ACTIONS BY COMPUTERVISION........................................ 31
ARTICLE V
ADDITIONAL AGREEMENTS.............................................................. 33
5.1. PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER FILINGS........ 33
5.2. MEETING OF COMPUTERVISION STOCKHOLDERS................................... 34
5.3. ACCESS TO INFORMATION; CONFIDENTIALITY................................... 34
5.4. NO SOLICITATION.......................................................... 35
5.5. PUBLIC DISCLOSURE........................................................ 37
5.6. LEGAL REQUIREMENTS....................................................... 37
5.7. THIRD PARTY CONSENTS..................................................... 37
5.8. FIRPTA................................................................... 38
5.9. NOTIFICATION OF CERTAIN MATTERS.......................................... 38
5.10. BEST EFFORTS AND FURTHER ASSURANCES...................................... 38
5.11. STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN.............................. 38
5.12. COMPUTERVISION EMPLOYEE PLANS............................................ 39
5.13. PARAMETRIC FORM S-8...................................................... 40
5.14. INDEMNIFICATION.......................................................... 40
5.15. TAX-FREE REORGANIZATION.................................................. 40
5.16. NMS LISTING.............................................................. 41
5.17. COMPUTERVISION AFFILIATE AGREEMENT....................................... 41
ARTICLE VI
CONDITIONS TO THE MERGER........................................................... 41
6.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER............. 41
6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF COMPUTERVISION................... 42
6.3. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARAMETRIC AND MERGER SUB.... 43
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ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER.................................................. 44
7.1. TERMINATION.............................................................. 44
7.2. NOTICE OF TERMINATION; EFFECT OF TERMINATION............................. 46
7.3. FEES AND EXPENSES........................................................ 47
7.4. AMENDMENT................................................................ 49
7.5. EXTENSION; WAIVER........................................................ 49
ARTICLE VIII
GENERAL PROVISIONS................................................................. 49
8.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES........................... 49
8.2. NOTICES.................................................................. 49
8.3. INTERPRETATION; KNOWLEDGE................................................ 50
8.4. COUNTERPARTS............................................................. 50
8.5. ENTIRE AGREEMENT......................................................... 51
8.6. SEVERABILITY............................................................. 51
8.7. OTHER REMEDIES; SPECIFIC PERFORMANCE..................................... 51
8.8. GOVERNING LAW............................................................ 51
8.9. RULES OF CONSTRUCTION.................................................... 51
8.10. ASSIGNMENT............................................................... 51
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INDEX OF EXHIBITS
Exhibit A Computervision Stock Option Agreement
Exhibit B Computervision Stockholder Voting Agreement
Exhibit C Computervision Affiliate Agreement
Exhibit D Form of Opinion of Palmer & Dodge LLP
Exhibit E Form of Opinion of Hale & Dorr LLP
Exhibit F Non-Competition Agreement
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AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") dated as of
November 3, 1997 is by and among Parametric Technology Corporation
("Parametric"), a Massachusetts corporation, PTC Acquisition Corporation
("Merger Sub"), a Delaware corporation and a wholly-owned subsidiary of
Parametric, and Computervision Corporation ("Computervision"), a Delaware
corporation.
RECITALS
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the Massachusetts Business Corporation Law and the Delaware
General Corporation Law ("Delaware Law"), Parametric and Computervision will
enter into a business combination transaction pursuant to which Merger Sub will
merge with and into Computervision (the "Merger").
B. The Board of Directors of Parametric (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Parametric and fair to, and in the best interests of, Parametric and its
stockholders, and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
C. The Board of Directors of Computervision (i) has determined that the
Merger is consistent with and in furtherance of the long-term business strategy
of Computervision and fair to, and in the best interests of, Computervision and
its stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement and (iii) has recommended the
approval of this Agreement by the stockholders of Computervision.
D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parametric's willingness to enter into this Agreement,
Computervision shall execute and deliver a Stock Option Agreement in favor of
Parametric in the form attached hereto as Exhibit A (the "Computervision Stock
---------
Option Agreement").
E. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parametric's willingness to enter into this Agreement, certain
affiliates of Computervision shall each enter into a Voting Agreement in the
form attached hereto as Exhibit B (the "Computervision Voting Agreements").
---------
F. Parametric, Computervision and Merger Sub desire to make certain
representations and warranties and other agreements in connection with the
Merger.
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G. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
THE MERGER
1.1. THE MERGER. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Delaware Law, Merger Sub shall be merged with and into
Computervision, the separate corporate existence of Merger Sub shall cease and
Computervision shall continue as the surviving corporation. Computervision as
the surviving corporation after the Merger is hereinafter sometimes referred to
as the "Surviving Corporation."
1.2. EFFECTIVE TIME; CLOSING. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing a
Certificate of Merger (the "Certificate of Merger") with the Secretary of State
of Delaware in accordance with the relevant provisions of Delaware Law (the time
of such filing (or such later time as may be agreed in writing by the parties
and specified in the Certificate of Merger) being the "Effective Time") as soon
as practicable on the Closing Date (as herein defined). Unless the context
otherwise requires, the term "Agreement" as used herein refers collectively to
this Agreement and the Certificate of Merger. The closing of the Merger (the
"Closing") shall take place at the offices of Palmer & Dodge LLP at a time and
date to be specified by the parties, which shall be no later than the second
business day after the satisfaction or waiver of the conditions set forth in
Article VI, or at such other time, date and location as the parties hereto agree
in writing (the "Closing Date"). At the Closing, (a) Computervision shall
deliver to Parametric the various certificates and instruments required under
Article VI, (b) Parametric and Merger Sub shall deliver to Computervision the
various certificates and instruments required under Article VI, and (c)
Computervision and Merger Sub shall execute and file the Certificate of Merger
with the Secretary of State of Delaware.
1.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of Delaware
Law. Without limiting the generality of the foregoing, and subject thereto, at
the Effective Time all the property, rights, privileges, powers and franchises
of Computervision and Merger Sub shall vest in the Surviving Corporation, and
all debts, liabilities and duties of Computervision and Merger Sub shall become
the debts, liabilities and duties of the Surviving Corporation.
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1.4. CERTIFICATE OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Certificate of Incorporation of Merger
Sub, as in effect immediately prior to the Effective Time, shall be the
Certificate of Incorporation of the Surviving Corporation until thereafter
amended as provided by law and such Certificate of Incorporation; provided,
however, that at the Effective Time the Certificate of Incorporation of the
Surviving Corporation shall be amended so that the name of the Surviving
Corporation shall be "Computervision Corporation."
(b) The Bylaws of Merger Sub, as in effect immediately prior to the
Effective Time, shall be, at the Effective Time, the Bylaws of the Surviving
Corporation until thereafter amended.
1.5. DIRECTORS AND OFFICERS. The directors of Merger Sub immediately prior
to the Effective Time shall be the initial directors of the Surviving
Corporation, to serve until their respective successors are duly elected or
appointed and qualified. The officers of Merger Sub immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, to
serve until their successors are duly elected or appointed or qualified.
1.6. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, Computervision or the
holders of any of the following securities:
(a) Conversion of Computervision Common Stock. Each share of Common
-----------------------------------------
Stock, par value $.01 per share, of Computervision (the "Computervision Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than any shares of Computervision Common Stock to be canceled pursuant to
Section 1.6(b)) will be canceled and extinguished and automatically converted
(subject to Sections 1.6(e) and (f)) into the right to receive 0.0866 (the
"Exchange Ratio") shares of Common Stock, par value $.01 per share, of
Parametric (the "Parametric Common Stock") upon surrender of the certificate
representing such share of Computervision Common Stock in the manner provided in
Section 1.7 (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 1.9).
(b) Cancellation of Certain Shares. Each share of Computervision
------------------------------
Common Stock held in the treasury of Computervision or owned by Merger Sub,
Parametric or any direct or indirect wholly owned subsidiary of Computervision
or of Parametric immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof.
(c) Stock Options. At the Effective Time all options to purchase
-------------
Computervision Common Stock then outstanding under Computervision's 1992 Stock
Option Plan, 1993 Director Stock Option Plan, and 1995 Director Stock Option
Plan (collectively, the "Computervision Stock Option Plans") shall be assumed by
Parametric in accordance with Section 5.11 hereof.
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(d) Capital Stock of Merger Sub. Each share of Common Stock, par
---------------------------
value $.01 per share, of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one validly issued,
fully paid and nonassessable share of Common Stock, par value $.01 per share, of
the Surviving Corporation. Each stock certificate of Merger Sub evidencing
ownership of any such shares shall continue to evidence ownership of such shares
of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be
-----------------------------
adjusted to reflect fully the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities convertible
into Parametric Common Stock or Computervision Common Stock), recapitalization
or other like change without receipt of consideration with respect to Parametric
Common Stock or Computervision Common Stock occurring on or after the date
hereof and prior to the Effective Time. In addition, during the period from the
date of this Agreement and continuing until the earlier of the termination of
the Agreement or the Effective Time, Parametric shall not, without the prior
written consent of Computervision, declare or pay any dividend or distribution
on the Parametric Common Stock (other than ordinary cash dividends) unless prior
thereto either (i) Parametric shall have provided that holders of Computervision
Common Stock, upon the Effective Time, shall receive such dividend or
distribution to the same extent they would have if their shares of
Computervision's Common Stock had been converted into Parametric Common Stock
immediately prior to the record date of any such dividend or distribution or
(ii) Parametric and Computervision shall mutually have agreed upon an adjustment
of the Exchange Ratio to fully reflect the effect of any such dividend or
distribution.
(f) Fractional Shares. No fraction of a share of Parametric Common
-----------------
Stock will be issued by virtue of the Merger, but in lieu thereof each holder of
shares of Computervision Common Stock who would otherwise be entitled to a
fraction of a share of Parametric Common Stock (after aggregating all fractional
shares of Parametric Common Stock to be received by such holder) shall receive
from Parametric an amount of cash (rounded to the nearest whole cent) equal to
the product of (i) such fraction, multiplied by (ii) the average closing price
of a share of Parametric Common Stock for the ten most recent days that
Parametric Common Stock has traded ending on the trading day immediately prior
to the Effective Time, as reported on the Nasdaq National Market.
1.7. SURRENDER OF CERTIFICATES.
(a) Exchange Agent. Parametric shall select a bank or trust company
--------------
reasonably acceptable to Computervision, which may be Parametric's existing
transfer agent, to act as the exchange agent (the "Exchange Agent") in the
Merger.
(b) Parametric to Provide Common Stock. Promptly after the Effective
----------------------------------
Time, Parametric shall make available to the Exchange Agent for exchange in
accordance with this Article I the shares of Parametric Common Stock issuable
pursuant to Section 1.6 in exchange for outstanding shares of Computervision
Common Stock and cash in an amount sufficient for
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payment in lieu of fractional shares pursuant to Section 1.6(f) and any
dividends or distributions to which holders of shares of Computervision Common
Stock may be entitled pursuant to Section 1.6(e) or 1.7(d).
(c) Exchange Procedures. Promptly after the Effective Time,
-------------------
Parametric shall cause the Exchange Agent to mail to each holder of record (as
of the Effective Time) of a certificate or certificates (the "Certificates")
that immediately prior to the Effective Time represented outstanding shares of
Computervision Common Stock whose shares were converted into the right to
receive shares of Parametric Common Stock pursuant to Section 1.6, cash in lieu
of any fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.6(e) or 1.7(d), (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall be in such form and have such other provisions as
Parametric may reasonably specify) and (ii) instructions for effecting the
exchange of the Certificates for certificates representing shares of Parametric
Common Stock, cash in lieu of any fractional shares pursuant to Section 1.6(f)
and any dividends or other distributions pursuant to Section 1.6(e) or 1.7(d).
Upon surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by Parametric, together with such
letter of transmittal duly completed and validly executed in accordance with the
instructions thereto, the holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing the number of whole
shares of Parametric Common Stock, payment in lieu of fractional shares that
such holder has the right to receive pursuant to Section 1.6(f) and any
dividends or distributions payable pursuant to Section 1.6(e) or 1.7(d), and the
Certificate so surrendered shall forthwith be canceled. Until so surrendered,
each outstanding Certificate will be deemed from and after the Effective Time,
for all corporate purposes, subject to Section 1.6(e) or 1.7(d) as to the
payment of dividends, to evidence only the ownership of the number of full
shares of Parametric Common Stock into which such shares of Computervision
Common Stock shall have been so converted and the right to receive an amount in
cash in lieu of the issuance of any fractional shares in accordance with Section
1.6(f) and any dividends or distributions payable pursuant to Section 1.6(e) or
1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No dividends or
------------------------------------------------
other distributions declared or made after the date of this Agreement with
respect to Parametric Common Stock with a record date after the Effective Time
will be paid to the holder of any unsurrendered Certificate with respect to the
shares of Parametric Common Stock represented thereby until the holder of record
of such Certificate shall surrender such Certificate. Subject to applicable
law, following surrender of any such Certificate, there shall be paid to the
record holder thereof certificates representing whole shares of Parametric
Common Stock issued in exchange therefor, without interest, along with the
amount of dividends or other distributions with a record date after the
Effective Time payable with respect to such whole shares of Parametric Common
Stock and cash in lieu of any fractional shares in accordance with Section
1.6(f).
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(e) Transfers of Ownership. If any certificate for shares of
----------------------
Parametric Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof that the Certificate so surrendered will be
properly endorsed, accompanied by any documents required to evidence and effect
such transfer and otherwise in proper form for transfer and that the person
requesting such exchange will have paid to Parametric or any agent designated by
it any applicable transfer taxes required by reason of the issuance of a
certificate for shares of Parametric Common Stock in any name other than that of
the registered holder of the Certificate surrendered, or shall provide evidence
that any applicable transfer taxes have been paid.
(f) No Liability. Notwithstanding anything to the contrary in this
------------
Section 1.7, neither the Exchange Agent, Parametric, the Surviving Corporation
nor any party hereto shall be liable to a holder of shares of Parametric Common
Stock or Computervision Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar law.
1.8. NO FURTHER OWNERSHIP RIGHTS IN COMPUTERVISION COMMON STOCK. All
shares of Parametric Common Stock issued upon the surrender for exchange of
shares of Computervision Common Stock in accordance with the terms hereof
(including any cash paid in respect thereof pursuant to Sections 1.6(f) and
1.7(d)) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Computervision Common Stock, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
shares of Computervision Common Stock that were outstanding immediately prior to
the Effective Time. If after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and exchanged
as provided in this Article I.
1.9. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any Certificates
shall have been lost, stolen or destroyed, the Exchange Agent shall issue in
exchange for such lost, stolen or destroyed Certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of Parametric Common
Stock, cash for fractional shares, if any, as may be required pursuant to
Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.7(d); provided, however, that Parametric may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Certificates to deliver a bond in such sum as it may
reasonably direct as indemnity against any claim that may be made against
Parametric or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
1.10. TAX AND ACCOUNTING CONSEQUENCES. It is intended by the parties
hereto that the Merger shall constitute a reorganization within the meaning of
Section 368 of the Code. The parties hereto 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 Income Tax Regulations. It is also intended by the parties hereto
that the Merger shall be treated as a "pooling for interests" for accounting
purposes.
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1.11. TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after
the Effective Time, any further action is necessary or desirable to carry out
the purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of Computervision and Merger Sub, the officers and directors of
Computervision and Merger Sub are fully authorized in the name of their
respective corporations or otherwise to take, and will take, all such lawful and
necessary action, so long as such action is consistent with this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPUTERVISION
Computervision represents and warrants to Parametric and Merger Sub,
subject to the exceptions specifically disclosed in writing in the disclosure
schedule supplied by Computervision to Parametric (the "Computervision
Disclosure Schedule"), the section numbers and letters of which correspond to
the section and subsection numbers and letters of this Agreement to which they
refer, as follows:
2.1. ORGANIZATION OF COMPUTERVISION. Computervision and each of its
Subsidiaries (as defined below) is a corporation or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, has the requisite corporate
or similar power to own, lease and operate its property and to carry on its
business as now being conducted and as proposed by Computervision to be
conducted, and is duly qualified to do business and in good standing as a
foreign corporation or other legal entity in each jurisdiction in which the
failure to be so qualified would have a Computervision Material Adverse Effect
(as defined below). Computervision has delivered to Parametric a true and
complete list of all of Computervision's Subsidiaries, together with the
jurisdiction of incorporation or organization of each Subsidiary and
Computervision's equity interest therein. Computervision has delivered or made
available a true and correct copy of the Certificate of Incorporation and Bylaws
of Computervision and similar governing instruments of each of its Subsidiaries,
each as amended to date, to Parametric. The term "Computervision Material
Adverse Effect" means, for purposes of this Agreement, any change, event or
effect that is, or that would be, materially adverse to the business, assets
(including intangible assets), financial condition or results of operations of
Computervision or the Surviving Corporation and its Subsidiaries taken as a
whole; provided, however, that, for purposes of Sections 6.3(a) and 7.1(i), the
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following shall not be deemed to constitute a "Computervision Material Adverse
Effect": (i) an adverse change in or effect on the market price of
Computervision Common Stock between the date of this Agreement and the Effective
Time; (ii) a failure of quarterly results of operations for any quarter ending
between the date of this Agreement and the Effective Time to meet generally
analysts' expectations as reflected in the First Call consensus estimate; or
(iii) a reduction in revenues of Computervision other than software maintenance
revenues (as defined in Section 7.1(l) between the date of this Agreement and
the Effective Time and any effect of such reduction on Computervision's
financial condition or gross profit margin. "Subsidiary" means, with respect to
any party, any corporation or other organization, whether
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incorporated or unincorporated, of which (i) such party or any other Subsidiary
of such party is a general partner (excluding partnerships, the general
partnership interests of which held by such party or any Subsidiary of such
party do not have a majority of the voting interest in such partnership) or (ii)
at least 40% of the securities or other interests having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization are
directly or indirectly owned or controlled by such party or by any one or more
of its Subsidiaries, or by such party and one or more of its Subsidiaries.
2.2. COMPUTERVISION CAPITAL STRUCTURE.
(a) The authorized capital stock of Computervision consists of
100,000,000 shares of Common Stock, par value $0.01 per share, of which there
were 63,725,393 shares issued and outstanding as of October 31, 1997, and no
shares in treasury, and 5,000,000 shares of Preferred Stock, par value $0.01 per
share, of which no shares are issued or outstanding. No shares of
Computervision Common Stock have been issued since that date except pursuant to
the exercise of stock options or warrants listed on the Computervision
Disclosure Schedule. All outstanding shares of Computervision Common Stock are
duly authorized, validly issued, fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Computervision or any agreement or document to which
Computervision is a party or by which it is bound. As of October 31, 1997, (i)
an aggregate of 8,878,380 shares of Computervision Common Stock, net of
exercises, were reserved for issuance to employees, consultants and non-employee
directors pursuant to the Computervision Stock Option Plans, under which options
were outstanding for an aggregate of 7,528,075 shares, (ii) 108,300 shares of
Computervision Common Stock were reserved for issuance upon exercise of the
Common Stock Purchase Warrant(s) dated December 22, 1993 (the "1993 Warrants"),
and (iii) 635,739 shares of Computervision Common Stock were reserved for
issuance upon exercise of the Common Stock Purchase Warrant dated August 14,
1997 (the "1997 Warrant"), which has been rescinded. There are 9,558,809 shares
of Computervision Common Stock reserved for issuance upon exercise of the
Computervision Stock Option Agreement. All shares of Computervision Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
would be duly authorized, validly issued, fully paid and nonassessable.
(b) Computervision has outstanding $48,610,000 principal amount of 8%
Convertible Subordinated Debentures due 2009 ("8% Debentures"), $3,430,000
principal amount of 5 3/4% Convertible Subordinated Debentures due 2012 ("5 3/4%
Debentures"), and $175,000,000 principal amount of 11 3/8% Senior Subordinated
Notes due 1999 ("11 3/8% Debentures" and collectively, "Debentures"). The
Company has paid in full or accrued all amounts now or heretofore due under each
of the Debentures, and has satisfied in full or provided for all of its
liabilities and obligations thereunder that are presently or heretofore were
required to be satisfied or provided for, and is not in default under any of
such Debentures or the respective Indenture(s) with respect to such Debentures
(each, an "Indenture"), nor does any condition exist that with notice or lapse
of time or both would constitute a default under any of
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such Debentures or Indenture(s). None of the Debentures are convertible into or
exercisable for shares of Computervision Common Stock nor any security
convertible into or exercisable for Computervision Common Stock.
2.3. OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. The Computervision
Disclosure Schedule lists (i) each outstanding option to acquire shares of the
Common Stock of Computervision under the Computervision Stock Option Plans as of
the date hereof, the name of the holder of such option, the number of shares
subject to such option, the exercise price of such option, the number of shares
as to which such option will have vested at such date and whether the
exercisability of such option will be accelerated in any way by the transactions
contemplated by this Agreement or for any other reason, and indicates the extent
of acceleration, if any, and (ii) the name(s), address(es), and respective
numbers of shares of Computervision Common Stock issuable upon exercise of the
1993 Warrants and the 1997 Warrant to the holder(s) of such Warrants. As of
October 31, 1997, there were 96 participants in the Computervision Employee
Stock Purchase Plans. The only offerings currently in process under
Computervision's Employee Stock Purchase Plans will terminate no later than
December 31, 1997. Except as set forth in Section 2.2 of the Computervision
Disclosure Schedule, there are no equity securities of any class of
Computervision, or any securities exchangeable or convertible into or
exercisable for such equity securities, issued, reserved for issuance or
outstanding. Except for securities Computervision owns, directly or indirectly
through one or more Subsidiaries, there are no equity securities of any class of
any Subsidiary of Computervision, or any security exchangeable or convertible
into or exercisable for such equity securities, issued, reserved for issuance or
outstanding, except, in the case of certain foreign Subsidiaries, directors'
qualifying shares. Except as set forth in Section 2.2 or the Computervision
Disclosure Schedule, there are no options, warrants, equity securities, calls,
rights (including preemptive rights), commitments or agreements of any character
to which Computervision or any of its Subsidiaries is a party or by which it is
bound obligating Computervision or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition, of any
shares of capital stock of Computervision or any of its Subsidiaries or
obligating Computervision or any of its Subsidiaries to grant, extend,
accelerate the vesting of or enter into any such option, warrant, equity
security, call, right, commitment or agreement. Except as set forth on the
Computervision Disclosure Schedule, there are no registration rights and, to the
knowledge of Computervision, there are no voting trusts, proxies or other
agreements or understandings with respect to any equity security of any class of
Computervision or with respect to any equity security of any class of any of its
Subsidiaries.
2.4. AUTHORITY.
(a) Computervision has all requisite corporate power and authority to
enter into this Agreement and the Computervision Stock Option Agreement and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Computervision Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action
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on the part of Computervision, subject only to the adoption of this Agreement by
Computervision's stockholders and the filing and recording of the Certificate of
Merger pursuant to Delaware Law. Computervision's stockholders may adopt this
Agreement by vote of the holders of a majority of the outstanding shares of the
Computervision Common Stock. This Agreement and the Computervision Stock Option
Agreement have been duly executed and delivered by Computervision. Each of the
Computervision Stock Option Agreement and, assuming the due authorization,
execution and delivery by Parametric and Merger Sub, this Agreement constitute
the valid and binding obligation of Computervision, enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity. The
execution and delivery of this Agreement and the Computervision Stock Option
Agreement by Computervision do not, and the performance of this Agreement and
the Computervision Stock Option Agreement by Computervision will not, (i)
conflict with or violate the Certificate of Incorporation or Bylaws of
Computervision or the equivalent organizational documents of any of its
Subsidiaries, (ii) subject to obtaining the adoption by Computervision's
stockholders of this Agreement as contemplated in Section 5.2 and compliance
with the requirements set forth in Section 2.4(b) below, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Computervision or any of its Subsidiaries or by which its or any of their
respective properties is bound, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or impair the rights of Computervision or any Subsidiary or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or assets of
Computervision or any of its Subsidiaries pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Computervision or any of its Subsidiaries is a
party or by which Computervision or any of its Subsidiaries or its or any of
their respective properties are bound or affected, except, with respect to
clauses (ii) and (iii), for any such conflicts, violations, defaults or other
occurrences that would not have a Computervision Material Adverse Effect. The
Computervision Disclosure Schedule lists all material consents, waivers and
approvals under any of Computervision's or any of its Subsidiaries' agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby, except for those the
absence of which would not have a Computervision Material Adverse Effect.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental or regulatory body or authority or instrumentality
("Governmental Entity") is required by or with respect to Computervision in
connection with the execution and delivery of this Agreement or the
Computervision Stock Option Agreement or the consummation of the transactions
contemplated hereby or thereby, except for (i) the filing of the Certificate of
Merger with the Secretary of State of Delaware, (ii) the filing of the Proxy
Statement (as defined in Section 2.20) with the U.S. Securities and Exchange
Commission ("SEC") in accordance with the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), (iii) the filing of a Current Report
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on Form 8-K with the SEC, (iv) the filing with the United States Department of
Justice and the Federal Trade Commission of such forms as may be required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"), (v) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal and state securities laws
and the laws of any foreign country and (vi) such other consents,
authorizations, filings, approvals and registrations that, if not obtained or
made, would not have a Computervision Material Adverse Effect or a material
adverse effect on the ability of the parties to consummate the Merger.
2.5. SECTION 203 OF DELAWARE LAW NOT APPLICABLE. The Board of Directors of
Computervision has taken all actions so that the restrictions contained in
Section 203 of Delaware Law applicable to a "business combination" (as defined
in Section 203) will not apply to the execution, delivery or performance of this
Agreement or the Computervision Stock Option Agreement or to the consummation of
the Merger or the other transactions contemplated by this Agreement.
2.6. SEC FILINGS; COMPUTERVISION FINANCIAL STATEMENTS.
(a) Computervision has filed all forms, reports and documents required
to be filed with the SEC since January 1, 1996, and has made available to
Parametric such forms, reports and documents in the form filed with the SEC.
All such required forms, reports and documents (including those that
Computervision may file after the date hereof until the Closing) are referred to
herein as the "Computervision SEC Reports." As of their respective dates, the
Computervision SEC Reports (i) were or will be prepared in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities Act") or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Computervision SEC Reports, and (ii) did not or
will not at the time they were or are filed (or if amended or superseded by a
filing prior to the Closing, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances in which they were made, not misleading. None of
Computervision's Subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in Computervision SEC Reports (the
"Computervision Financials"), including any Computervision SEC Reports filed
after the date hereof until the Closing, (x) complied or will comply as to form
in all material respects with the published rules and regulations of the SEC
with respect thereto, (y) was or will be prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q under the Exchange Act) and (z) fairly presented or will fairly
present, in all material respects, the consolidated financial position of
Computervision and its Subsidiaries as at the respective dates thereof and the
consolidated results of its operations and cash flows for the periods indicated,
consistent with
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the books and records of Computervision, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not, or are not expected to be, material in amount. The
balance sheet of Computervision contained in Computervision's SEC Report as of
September 28, 1997 is hereinafter referred to as the "Computervision Balance
Sheet." Except as disclosed in the Computervision Financials or the
Computervision Disclosure Schedule and except for obligations under this
Agreement or the Computervision Stock Option Agreement, neither Computervision
nor any of its Subsidiaries has (i) any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
or in the related notes to the consolidated financial statements prepared in
accordance with GAAP which are, individually or in the aggregate, material to
the business, results of operations or financial condition of Computervision and
its Subsidiaries taken as a whole, except liabilities (x) provided for in the
Computervision Balance Sheet, (y) incurred since the date of the Computervision
Balance Sheet in the ordinary course of business consistent with past practices
or (z) incurred in connection with the transactions contemplated hereby, nor
(ii) any other liabilities reasonably likely to have a Computervision Material
Adverse Effect.
(c) Computervision has previously furnished to Parametric a complete
and correct copy of any amendments or modifications, that have not yet been
filed with the SEC but that are required to be filed, to agreements, documents
or other instruments that previously had been filed by Computervision with the
SEC pursuant to the Securities Act or the Exchange Act.
2.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Computervision Disclosure Schedule, since September 28, 1997, there has not
occurred any Computervision Material Adverse Effect other than as disclosed in
the Computervision SEC Reports filed before the date hereof and there has not
been, occurred or arisen any:
(a) transaction by Computervision or its Subsidiaries except in the
ordinary course of business as conducted on the date of the Computervision
Balance Sheet and consistent with past practices;
(b) amendments or changes to the Certificate of Incorporation or
Bylaws of Computervision;
(c) individual capital expenditure or commitment, or series of related
capital expenditure or commitments, by Computervision or its Subsidiaries
outside the ordinary course of business exceeding $250,000;
(d) destruction of, damage to or loss of any assets material to the
business of Computervision and its Subsidiaries taken as a whole (whether or not
covered by insurance);
(e) material adverse change in a material customer relationship,
including without limitation any cancellation or termination or notice of
cancellation or termination by any material customer of its relationship or a
material portion of its relationship with Computervision or any of its
Subsidiaries or any material decrease or planned decrease in the usage or
purchase
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of the products or services of Computervision or any of its Subsidiaries by any
such customer from that reasonably expected by Computervision at the date of
this Agreement.
(f) labor trouble or claim of wrongful discharge (except for such
claims as would not reasonably be expected to result in potential damages
greater than $250,000) or other unlawful labor practice or action that would
have a Computervision Material Adverse Effect ;
(g) material change in accounting methods or practices (including any
change in depreciation or amortization policies or rates) by Computervision;
(h) material revaluation by Computervision or its Subsidiaries of any
of its assets;
(i) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of Computervision, or any direct
or indirect redemption, purchase or other acquisition by Computervision of any
of its capital stock;
(j) increase in the salary or other compensation payable or to become
payable to any of its (i) officers or directors or (ii) employees or advisors
receiving, after such increase, annualized compensation in excess of $100,000
per year, or the declaration, payment or commitment or obligation of any kind
for the payment of a bonus or other additional salary or compensation to any
such person except as disclosed in the Computervision Disclosure Schedule or
otherwise contemplated by this Agreement and except for increases, payments or
commitments in the ordinary course of business and consistent with past
practices;
(k) sale, lease, license or other disposition of any of the assets or
properties of Computervision or its Subsidiaries, except in the ordinary course
of business;
(l) amendment or termination of any material contract, agreement or
license to which Computervision or any of its Subsidiaries is a party or by
which it is bound except for amendments in the ordinary course of business or
terminations pursuant to the terms of the contract, agreement or license and not
as a result of any breach, and except for amendments or terminations described
in Section 2.7(e);
(m) loan by Computervision or any of its Subsidiaries to any person or
entity, incurring by Computervision or any Subsidiary of any indebtedness
(except for indebtedness in amounts described in Section 2.18(d) of the
Computervision Disclosure Schedule incurred under existing credit lines or
arrangements set forth in Section 2.18(d) of the Computervision Disclosure
Schedule), guaranteeing by Computervision or any Subsidiary of any indebtedness,
issuance or sale of any debt securities of Computervision or any Subsidiary or
guaranteeing of any debt securities of others, except for advances to employees
for travel and business expenses in the ordinary course of business, consistent
with past practices;
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(n) waiver or release of any material right or claim of Computervision
or any of its Subsidiaries, including any write-off or other compromise of any
account receivable of Computervision or any Subsidiary other than in the
ordinary course of business and consistent with past practices;
(o) change in pricing or royalties set or charged by Computervision or
its subsidiaries to its customers or licensees or in pricing or royalties set or
charged by persons who have licensed Intellectual Property to Computervision or
any of its Subsidiaries other than in the ordinary course of business and
consistent with past practices; or
(p) commitment, understanding or agreement by Computervision or any of
its Subsidiaries or any officer or employee thereof to do any of the things
described in the preceding clauses (a) through (o) (other than this Agreement).
2.8. TAXES.
(a) Definition of Taxes. For the purposes of this Agreement, "Tax"
-------------------
or, collectively, "Taxes", means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities in the nature of a tax including taxes based upon or measured by
gross receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.
(b) Tax Returns and Audits. Except as set forth in Schedule 2.8:
----------------------
(i) Computervision and each of its Subsidiaries as of the
Effective Time will have prepared and filed all required federal, state,
local and foreign returns, estimates, information statements and reports
("Returns") then due relating to any and all Taxes concerning or
attributable to Computervision or such Subsidiary or its operations and
such Returns are true and correct in all material respects and have been
completed in all material respects in accordance with applicable law or,
with respect to any Taxes payable, an adequate reserve has been established
on the Computervision Balance Sheet.
(ii) Computervision and each of its Subsidiaries as of the
Effective Time: (A) will have paid or accrued all Taxes set forth on its
Returns, and (B) will have withheld and paid (or will pay at the time
required) with respect to its employees all federal and state income taxes,
FICA, FUTA and other Taxes required to be withheld.
(iii) Neither Computervision nor any of its Subsidiaries is
delinquent in any material respect in the payment of any Tax nor is there
any material Tax deficiency outstanding, proposed or assessed against
Computervision or any of its Subsidiaries, nor
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has Computervision or any Subsidiary executed any waiver of any statute of
limitations on or extending the period for the assessment or collection of
any Tax.
(iv) Other than the audits set forth in the Computervision
Disclosure Schedule, no audit or other examination of any Return of
Computervision is currently in progress, nor has Computervision or any
Subsidiary been notified of any request for such an audit or other
examination.
(v) Computervision and its Subsidiaries did not have, as of
September 28, 1997, any liabilities, whether asserted or unasserted,
contingent or otherwise, for unpaid federal, state, local and foreign Taxes
which have not been accrued or reserved against in accordance with GAAP on
the Computervision Balance Sheet, and neither Computervision nor any of its
Subsidiaries has incurred any such liabilities since such date except in
the ordinary course of business and consistent with past practices.
(vi) Computervision has made available to Parametric copies of
all federal and state income and all state sales and use Tax Returns for
all periods since December 31, 1987.
(vii) There are (and as of immediately following the Effective
Date there will be) no liens, pledges, charges, claims, security interests
or other encumbrances of any sort ("Liens") of a material nature on the
assets of Computervision or any Subsidiary relating to or attributable to
Taxes, except for Liens for Taxes not yet due and payable or that are being
contested in good faith by appropriate proceedings.
(viii) Neither Computervision nor any Subsidiary has received
written or oral notice of any claim relating or attributable to Taxes that,
if adversely determined, would result in any Lien on the assets of
Computervision or any Subsidiary.
(ix) None of Computervision's or its Subsidiaries' assets are
treated as "tax-exempt use property" within the meaning of Section 168(h)
of the Code.
(x) As of the Effective Time, there will not be any contract,
agreement, plan or arrangement, including but not limited to the provisions
of this Agreement, covering any employee or former employee of
Computervision or any of its subsidiaries that, individually or
collectively, could give rise to the payment of any amount that would not
be deductible pursuant to Section 280G of the Code or the limitations in
Sections 162 of the Code.
(xi) Neither Computervision nor any of its Subsidiaries has filed
any consent agreement under Section 341(f) of the Code or agreed to have
Section 341(f)(2) of the Code apply to any disposition of a subsection (f)
asset (as defined in Section 341(f)(4) of the Code) owned by Computervision
or such Subsidiary.
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(xii) Neither Computervision nor any of its Subsidiaries is a
party to a tax sharing or allocation agreement nor does Computervision or
any Subsidiary owe any amount under any such agreement.
(xiii) Neither Computervision nor any of its Subsidiaries is or
has been at any time during the period specified in Section
897(c)(1)(A)(ii) of the Code, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code.
(xiv) For a period of two (2) years following each reported
ownership change, as defined in Section 382(g) of the Code, Computervision
and its Subsidiaries have continued a significant line of their historic
business within the meaning of Treasury Regulation Section 1.368-1(d)(3).
(xv) Neither Computervision nor any Subsidiary has agreed to, or
is required to, make any adjustments under Section 481(c) of the Code by
reason of a change in accounting method or otherwise.
2.9. RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement
(noncompete or otherwise), commitment, judgment, injunction, order or decree to
which Computervision or any of its Subsidiaries is a party or, to the knowledge
of Computervision, otherwise binding upon Computervision or its Subsidiaries,
that has or reasonably could be expected to have the effect of prohibiting or
impairing in a material way any business practice of Computervision or any
Subsidiary, any acquisition of property (tangible or intangible) by
Computervision or its Subsidiaries or the conduct of business by Computervision
and its Subsidiaries. Without limiting the foregoing, neither Computervision
nor any of its Subsidiaries has entered into any agreement under which
Computervision or any Subsidiary is restricted from selling, licensing or
otherwise distributing any of its products to any class of customers, in any
geographic area, during any period of time or in any segment of the market, and
to the best of Computervision's knowledge neither Computervision nor any
Subsidiary has granted any exclusive rights with respect to any of its products
to any other person.
2.10. TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) Neither Computervision nor any of its Subsidiaries own any real
property. Section 2.10(a) of the Computervision Disclosure Schedule lists all
real property leases to which Computervision or any of its Subsidiaries is a
party and each amendment thereto. All such current leases are in full force and
effect, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
(or event which with notice or lapse of time, or both, would constitute a
default) that would give rise to a claim in an amount greater than $250,000.
(b) Computervision and its Subsidiaries have good and valid title to,
or, in the case of leased properties and assets, valid leasehold interests in,
all of their tangible properties
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and assets, real, personal and mixed, used or held for use in their business,
and such properties and assets, as well as all other properties and assets of
Computervision and its Subsidiaries, whether tangible or intangible, are free
and clear of any Liens, except as reflected in Computervision Financials or in
Schedule 2.10(b) and except for liens for taxes not yet due and payable and such
imperfections of title and encumbrances, if any, that are not material in
character, amount or extent, and that do not materially detract from the value,
or materially interfere with the present use, of the property subject thereto or
affected thereby.
2.11. INTELLECTUAL PROPERTY.
(a) Computervision and its Subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
schematics, technology, know-how, computer software programs or applications (in
both source code and object code form), and tangible or intangible proprietary
information or material that are (i) required or reasonably necessary for the
conduct of business of Computervision or its Subsidiaries as currently conducted
or (ii) under development for such business, in either case the absence of
which, individually or in the aggregate, would have a Computervision Material
Adverse Effect (collectively, the "Computervision Intellectual Property
Rights").
(b) The Computervision Disclosure Schedule sets forth a list of all
federal, state and foreign patents, registered copyrights, registered
trademarks, and any applications therefor, and specifies, where applicable, the
jurisdictions in which each such Computervision Intellectual Property Right has
been issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners. The Computervision
Disclosure Schedule sets forth a list of all material licenses, sublicenses and
other agreements to which Computervision or any of its Subsidiaries is a party
and pursuant to which Computervision, any of its Subsidiaries or any other
person is authorized to use or license the use of any (i) Computervision
Intellectual Property Right (excluding licenses granted to customers or
distributors in the ordinary course of business) or trade secret of
Computervision or any Subsidiary and (ii) third party patents, copyrights,
trademarks, and applications for registration thereof, schematics, technology,
know-how, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material that are, are incorporated in, or form a part of any Computervision
Intellectual Property. The execution and delivery of this Agreement by
Computervision, and the consummation of the transactions contemplated hereby,
will neither cause Computervision or any Subsidiary to be in violation or
default under any such license, sublicense or agreement, nor entitle any other
party to any such license, sublicense or agreement to terminate or modify such
license, sublicense or agreement. Except as set forth in the Computervision
Disclosure Schedule, Computervision or a Subsidiary (i) is the sole and
exclusive owner of, with all right, title and interest in and to (free and clear
of any liens or encumbrances), the Computervision Intellectual Property Rights,
or (ii) is a licensee of the Computervision Intellectual Property Rights under
valid and binding license agreements listed in the Computervision Disclosure
Schedule.
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(c) No claims with respect to Computervision Intellectual Property
Rights have been asserted in writing or are, to Computervision's knowledge,
threatened by any person, (i) to the effect that the manufacture, sale,
licensing or use of any of the products of Computervision or its Subsidiaries
infringes on any copyright, patent, trademark, service mark, trade secret or
other proprietary right of any third party, (ii) against the use by
Computervision or any Subsidiary of any trademarks, service marks, trade names,
trade secrets, copyrights, patents, technology, know-how or computer software
programs and applications used in Computervision's or its Subsidiaries' business
as currently conducted or under development for use in such business, or (iii)
challenging the ownership by Computervision or a Subsidiary, or the validity or
effectiveness, of any of Computervision Intellectual Property Rights. All
registered copyrights held by Computervision or any Subsidiary that are material
to the business of Computervision and its Subsidiaries taken as a whole are
valid and subsisting. To Computervision's knowledge, neither Computervision nor
any Subsidiary has infringed, and the business of Computervision and its
Subsidiaries does not infringe, any copyright, patent, trade secret or other
proprietary right of any third party. To Computervision's knowledge, there is
no material unauthorized use, infringement or misappropriation of any of
Computervision Intellectual Property Rights by any third party, including any
employee or former employee of Computervision or any Subsidiary. No
Computervision Intellectual Property Right or product of Computervision or any
of its Subsidiaries is subject to any outstanding decree, order, judgment, or
stipulation restricting in any manner the licensing thereof by Computervision or
its subsidiaries. Substantially all persons who are now, or within the last
five years have been, employees, consultants or contractors of Computervision
and its Subsidiaries have executed proprietary information and confidentiality
agreements substantially in Computervision's standard forms.
2.12. COMPLIANCE; PERMITS; RESTRICTIONS.
(a) Neither Computervision nor any of its Subsidiaries is in conflict
with, or in default or violation of, (i) any law, rule, regulation, order,
judgment or decree applicable to Computervision or any of its Subsidiaries or by
which its or any of their respective properties is bound or affected, or (ii)
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Computervision or
any of its Subsidiaries is a party or by which Computervision or any of its
Subsidiaries or its or any of their respective properties is bound or affected,
except for any conflicts, defaults or violations that would not have a
Computervision Material Adverse Effect.
(b) Computervision and its Subsidiaries hold all consents, permits,
licenses, variances, exemptions, orders and approvals from governmental
authorities that are material to the operation of the business of Computervision
and its Subsidiaries taken as a whole (collectively, the "Computervision
Permits"). Computervision and its Subsidiaries are in compliance with the terms
of Computervision Permits, except where the failure to so comply would not have
a Computervision Material Adverse Effect.
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2.13. LITIGATION. Except as set forth in the Computervision Disclosure
Schedule, there is no action, suit or proceeding of any nature pending or to
Computervision's knowledge threatened against Computervision or any of its
Subsidiaries, or any of their respective properties, officers or directors, in
their respective capacities as such (i) involving Computervision Intellectual
Property Rights or in which injunctive or other equitable relief or damages in
excess of $100,000 are or are reasonably likely to be sought against
Computervision or any Subsidiary or that could otherwise result in a
Computervision Material Adverse Effect or (ii) that in any manner challenges or
seeks to prevent, enjoin, alter or delay any of the transactions contemplated by
this Agreement. Except as set forth in Schedule 2.13, to Computervision's
knowledge, there is no investigation pending or threatened against
Computervision or any of its Subsidiaries, their respective properties or any of
their respective officers or directors by or before any Governmental Entity that
would have a Computervision Material Adverse Effect. Schedule 2.13 sets forth,
with respect to any pending or threatened action, suit, proceeding or
investigation, the forum, the parties thereto, the subject matter thereof and
the amount of damages claimed or other remedy requested. To the knowledge of
Computervision, no Governmental Entity has at any time challenged or questioned
in writing the legal right of Computervision or any Subsidiary to manufacture,
offer or sell any of its products in the present manner or style thereof.
2.14. BROKERS' AND FINDERS' FEES. Except for fees payable to Hambrecht &
Quist LLC and Eugene Freedman disclosed to Parametric, Computervision has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement or any transaction contemplated hereby.
2.15. EMPLOYEE BENEFIT PLANS; EMPLOYMENT MATTERS.
(a) Definitions. With the exception of the definition of "Affiliate"
-----------
set forth in Section 2.15(a)(i) below (which definition shall apply only to this
Section 2.15), for purposes of this Agreement, the following terms shall have
the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity controlled
by or under common control with Computervision within the meaning of
Section 414(b), (c), (m) or (o) of the Code and the regulations thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended;
(iii) "Computervision Employee Plan" shall refer to any plan,
program, policy, practice, contract, agreement or other arrangement
providing for compensation, deferred compensation, incentive compensation,
severance, termination pay, performance awards, stock or stock-related
awards, fringe benefits or other employee benefits or remuneration of any
kind, whether formal or informal, funded or unfunded and whether or not
legally binding, including without limitation, each "employee benefit
plan", within
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the meaning of Section 3(3) of ERISA that is or has been maintained,
contributed to, or required to be contributed to, by Computervision or any
Affiliate for the benefit of any "Employee" (as defined below), and
pursuant to which Computervision or any Affiliate has or may have any
material liability contingent or otherwise;
(iv) "Employee" shall mean any current, former, or retired
employee, officer, or director of Computervision or any Affiliate;
(v) "Employee Agreement" shall refer to each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or similar agreement or contract between Computervision
or any Affiliate and any Employee or consultant;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) that is a "multiemployer plan" as defined in Section 3(37)
of ERISA; and
(viii) "Pension Plan" shall refer to each Computervision
Employee Plan that is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA.
(b) Schedule. The Computervision Disclosure Schedule contains an
--------
accurate and complete list of each Computervision Employee Plan and each
Employee Agreement. Except as may be set forth on the Computervision Disclosure
Schedule, neither Computervision nor any Affiliate has any plan or commitment,
whether legally binding or not, to establish any new Computervision Employee
Plan or Employee Agreement, to modify any Computervision Employee Plan or
Employee Agreement (except to the extent required by law or to conform any such
Computervision Employee Plan or Employee Agreement to the requirements of any
applicable law, in each case as previously disclosed to Parametric in writing,
or as required by this Agreement), or to enter into any Computervision Employee
Plan or Employee Agreement.
(c) Documents. Computervision has provided or made available to
---------
Parametric true and complete copies of (i) all documents comprising each written
Computervision Employee Plan and each Employment Agreement, including all
amendments thereof and any trust agreements, insurance contracts, and other
funding agreements; (ii) the three most recent annual reports (Series 5500 and
all schedules thereto), if any, required under ERISA or the Code in connection
with each Computervision Employee Plan or related trust; (iii) the most recent
actuarial reports prepared for each of the Computervision Employee Plans for
which such report is required or was prepared and the most recent certified
financial statements for each of the Computervision Employee Plans for which
such report is required or was prepared; (iv) the most recent summary plan
description together with the most recent summary of material modifications, if
any, required under ERISA with respect to each Computervision Employee Plan; (v)
all IRS determination letters and rulings relating to Computervision Employee
Plans and copies of all applications and correspondence to or from the IRS or
the Department of Labor
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("DOL") with respect to any Computervision Employee Plan; (vi) all
communications material to any Employee or Employees relating to any
Computervision Employee Plan and any proposed Computervision Employee Plans, in
each case, relating to any amendments, terminations, establishments, increases
or decreases in benefits, acceleration of payments or vesting schedules or other
events which would result in any material liability to Computervision or any
Affiliate; and (vii) all registration statements and prospectuses prepared in
connection with each Computervision Employee Plan.
(d) Employee Plan Compliance. Except as set forth on the
------------------------
Computervision Disclosure Schedule, (i) Computervision and each Affiliate has
performed in all material respects all obligations required to be performed by
it under each Computervision Employee Plan, and each Computervision Employee
Plan has been established and maintained in all material respects in accordance
with its terms and in compliance with all applicable laws, statutes, orders,
rules and regulations, including but not limited to ERISA or the Code; (ii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Section 406 of ERISA, has occurred with respect to any Computervision Employee
Plan for which no exemption exists under Section 4975(c) or (d) of the Code or
Section 408 of ERISA that would have a Computervision Material Adverse Effect;
(iii) there are no actions, suits or claims pending, or, to the knowledge of
Computervision, threatened or anticipated (other than routine claims for
benefits or actions seeking qualified domestic relations orders) against any
Computervision Employee Plan or against the assets of any Computervision
Employee Plan; (iv) each Computervision Employee Plan can be amended, terminated
or otherwise discontinued after the Effective Time in accordance with its terms,
without liability to Computervision, Parent or any of its Affiliates (other than
for ordinary administration expenses typically incurred in a termination event
and benefits accrued through the effective date of such amendment, termination
or discontinuance not materially in excess of those provided for in the
Computervision Financials); (v) there are no inquiries or proceedings pending
or, to the knowledge of Computervision or any affiliates, threatened by the IRS
or DOL with respect to any Computervision Employee Plan; (vi) neither
Computervision nor any Affiliate is subject to any material penalty or tax with
respect to any Computervision Employee Plan under Section 406(i) of ERISA or
Section 4975 through 4980 of the Code; (vii) all contributions, premiums or
other payments due from Computervision or its Affiliates with respect to any
Computervision Employee Plan have been fully paid or adequately provided for on
Computervision's audited financial statements; and (viii) all reports required
by any governmental agency to be filed with respect to each Computervision
Employee Plan since January 1, 1995 have been timely filed except where the
failure to be so timely filed would not have a Computervision Material Adverse
Effect.
(e) Pension Plan Qualification Funding.
----------------------------------
(i) With respect to each Pension Plan which is intended to be
qualified under Section 401(a) of the Code, each such Pension Plan has
received a favorable determination as to its qualification from the IRS and
nothing has occurred, whether by action or failure to act, which would case
the loss of such qualification.
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(ii) The financial statements of Computervision reflect all
employee benefit liabilities of Computervision in a manner satisfying the
requirements of FAS 87 and 88.
(iii) With respect to each Pension Plan that is subject to the
provisions of Title I, Subtitle B, part 3 of ERISA, the funding method used
in connection with such Pension Plan is acceptable under ERISA, and the
actuarial assumptions used in connection with funding such Pension Plan
are, in the aggregate, reasonable. No such Pension Plan has incurred any
"accumulated funding deficiency" (as defined in Section 412 of the Code),
whether or not waived.
(f) Multiemployer Plans. At no time has Computervision or any
-------------------
Affiliate contributed to or been required to contribute to any Multiemployer
Plan.
(g) No Post-Employment Obligations. Except as set forth in the
------------------------------
Computervision Disclosure Schedule, no Computervision Employee Plan provides, or
has any liability to provide, life insurance, medical or other employee benefits
to any Employee upon his or her retirement or termination of employment for any
reason, except for benefits accrued through the date of termination and as may
be required by statute, and neither Computervision or any Affiliate has ever
represented, promised or contracted (whether in oral or written form) to any
Employee (either individually or to Employees as a group) that such Employee(s)
would be provided with life insurance, medical or other employee welfare
benefits upon their retirement or termination of employment, except to the
extent required by statute.
(h) Effect of Transaction.
---------------------
(i) Except as set forth on the Computervision Disclosure
Schedule, the execution of this Agreement and the consummation of the
transactions contemplated hereby will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event
under any Computervision Employee Plan, Employee Agreement, trust or loan
or applicable law that will result in any payment (whether of severance pay
or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution, increase in benefits or obligation to fund benefits with
respect to any Employee.
(ii) Except as set forth on the Computervision Disclosure
Schedule, no payment or benefit that will be made by Computervision or any
Affiliate with respect to any Employee as a result of the transactions
contemplated by this Agreement will be characterized as an "excess
parachute payment" within the meaning of Section 280G(b)(1) of the Code.
(i) Funded Welfare Benefit Plans. Each Computervision Employee Plan
----------------------------
which is maintained in connection with any trust or other arrangement described
in Section 501(c)(9) of the Code or is otherwise funded within the meaning of
Section 419 of the Code has
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received a favorable ruling as to its tax-exempt status and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such tax-exempt status.
(j) Employment Matters. Computervision and each of its Subsidiaries
------------------
(i) is in compliance in all material respects with all applicable foreign,
federal, state and local laws, rules and regulations respecting employment,
employment practices, terms and conditions of employment and wages and hours, in
each case, with respect to Employees; (ii) has withheld all amounts required by
law or by agreement to be withheld from the wages, salaries and other payments
to Employees; (iii) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (iv) is not liable
for any payment to any trust or other fund or to any governmental or
administrative authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Employees (other than
routine payments to be made in the normal course of business and consistent with
past practice).
(k) Labor. No work stoppage or labor strike against Computervision or
-----
any of its Subsidiaries is pending or, to the best knowledge of Computervision,
threatened. Except as set forth in the Computervision Disclosure Schedule,
neither Computervision nor any of its Subsidiaries is involved in or, to the
best knowledge of Computervision, threatened with, any labor dispute, grievance,
or litigation relating to labor, safety or discrimination matters involving any
Employee, including, without limitation, charges of unfair labor practices or
discrimination complaints, that, if adversely determined, would, individually or
in the aggregate, have a Material Adverse Effect on Computervision or the
Surviving Corporation. Neither Computervision nor any of its Subsidiaries has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act that would, individually or in the aggregate, directly or
indirectly have a Material Adverse Effect on Computervision or the Surviving
Corporation. Except as set forth in the Computervision Disclosure Schedule,
neither Computervision nor any of its Subsidiaries is presently, nor has it been
in the past, a party to, or bound by, (i) any collective bargaining agreement or
union contract with respect to Employees and no collective bargaining agreement
is being negotiated by Computervision or any of its Subsidiaries or (ii) any
statutory works council or other agreement, statute, rule or regulation that
mandates employee approval, participation, consultation or consent with regard
to the transactions contemplated hereby.
2.16. EMPLOYEES. To Computervision's knowledge, no employee of
Computervision or any of its Subsidiaries at or above the director level (i) is
in violation of any term of any employment contract, patent disclosure
agreement, non-competition agreement, or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by
Computervision or any of its Subsidiaries because of the nature of the business
conducted or presently proposed to be conducted by Computervision or such
Subsidiary or to the use of trade secrets or proprietary information of others
or (ii) has given notice to Computervision or any Subsidiary, nor is
Computervision otherwise aware, that any such employee intends to terminate his
or her employment with Computervision or any Subsidiary except for terminations
of a nature and number that are consistent with Computervision's prior
experience.
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2.17. ENVIRONMENTAL MATTERS.
(a) Hazardous Material. To Computervision's knowledge, no underground
------------------
storage tanks are present under any property that Computervision or its
Subsidiaries have at any time owned or occupied. No material amount of any
substance that has been designated by any Governmental Entity or by applicable
federal, state or local law to be radioactive, hazardous or otherwise to pose an
unreasonable danger to human health or the environment, including, without
limitation, PCBs, friable asbestos, petroleum, urea-formaldehyde and all
substances listed as hazardous substances pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended, or
defined as a hazardous waste pursuant to the United States Resource Conservation
and Recovery Act of 1976, as amended, and the regulations promulgated pursuant
to said laws, (a "Hazardous Material"), but excluding office, maintenance,
shipping and janitorial supplies, are present as a result of the actions of
Computervision or any of its Subsidiaries, or, to the knowledge of
Computervision, as a result of any actions of any third party or otherwise, in,
on or under any property, including the land and the improvements, ground water
and surface water thereof, that Computervision or any of its Subsidiaries has at
any time owned, operated, occupied or leased. The Computervision Disclosure
Schedule lists all locations that Computervision or any Subsidiary formerly
owned or leased where, to Computervision's knowledge, Hazardous Materials are
present in a volume or concentration that would reasonably be expected to have a
Computervision Material Adverse Effect.
(b) Hazardous Materials Activities. Neither Computervision nor any of
------------------------------
its Subsidiaries has transported, stored, used, manufactured, disposed of,
released or exposed its employees or others to Hazardous Materials in violation
of any law in effect on or before the Closing Date, nor has Computervision or
any of its Subsidiaries disposed of, transported, sold, or manufactured any
product containing a Hazardous Material (collectively "Hazardous Materials
Activities") in violation of any rule, regulation, treaty or statute promulgated
by any Governmental Entity in effect prior to or as of the date hereof to
prohibit, regulate or control Hazardous Materials or any Hazardous Material
Activity which would reasonably be expected to have a Computervision Material
Adverse Effect.
(c) Permits. Computervision and its Subsidiaries currently hold all
-------
environmental approvals, permits, licenses, clearances and consents (the
"Computervision Environmental Permits") necessary for the conduct of
Computervision's and its Subsidiaries' Hazardous Material Activities and other
businesses of Computervision and its Subsidiaries as such activities and
businesses are currently being conducted, except where the failure to so hold
would not have a Computervision Material Adverse Effect.
(d) Environmental Liabilities. No material action, proceeding,
-------------------------
revocation proceeding, amendment procedure, writ, injunction or claim is
pending, or to Computervision's knowledge, threatened concerning any
Computervision Environmental Permit, Hazardous Material in, on or under any
property owned or leased by Computervision or any of its Subsidiaries or any
Hazardous Materials Activity of Computervision or any of its Subsidiaries.
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Computervision is not aware of any fact or circumstance that could involve
Computervision or any of its Subsidiaries in any environmental litigation that
would reasonably be expected to have a Computervision Material Adverse Effect or
impose upon Computervision or any of its Subsidiaries any material environmental
liability.
2.18. AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as identified in the
Computervision Disclosure Schedule or filed as exhibits to the Computervision
SEC Reports, neither Computervision nor any of its Subsidiaries is a party to or
is bound by:
(a) any agreement, contract or commitment containing any covenant
limiting the freedom of Computervision or any of its Subsidiaries to engage in
any line of business or compete with any person;
(b) any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $250,000 and not
cancelable without penalty;
(c) any agreement, contract or commitment currently in force relating
to the disposition or acquisition of assets not in the ordinary course of
business or any ownership interest in any corporation, partnership, joint
venture or other business enterprise (other than Computervision's wholly-owned
subsidiaries);
(d) any mortgages, indentures, loans or credit agreements, security
agreements relating to a material amount of assets or other agreements or
instruments relating to the borrowing of money or extension of credit; or
(e) any other agreement, contract or commitment (excluding real and
personal property leases) which requires annual payments by Computervision or
any of its Subsidiaries under any such agreement, contract or commitment of
$500,000 or more in the aggregate and is not cancelable without penalty within
thirty (30) days.
Neither Computervision nor any of its Subsidiaries, nor to Computervision's
knowledge any other party to a Computervision Contract (as defined below), has
breached, violated or defaulted under, or received notice that it has breached
violated or defaulted under, any of the material terms or conditions of any of
the agreements, contracts or commitments to which Computervision or any
Subsidiary is a party or by which it is bound of the type described in clauses
(a) through (e) above (any such agreement, contract or commitment, a
"Computervision Contract") in such a manner as would permit any other party to
cancel or terminate any such Computervision Contract, or would permit any other
party to seek damages, which would have a Computervision Material Adverse
Effect.
2.19. CHANGE OF CONTROL PAYMENTS. The Computervision Disclosure Schedule
sets forth each plan or agreement pursuant to which any amount may become
payable (whether currently or in the future) to current or former officers and
directors of Computervision as a result of or in connection with the Merger.
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2.20. STATEMENTS; PROXY STATEMENT/PROSPECTUS. The information to be
supplied by Computervision for inclusion in the Registration Statement on Form
S-4 to be filed to register under the Securities Act the Parametric Common Stock
issuable pursuant to Section 1.6 (the "Registration Statement") shall not at the
time the Registration Statement is filed with the SEC and 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 light of the circumstances
under which they were made, not misleading. The information supplied by
Computervision for inclusion in the proxy statement/prospectus to be sent to the
stockholders of Computervision in connection with the meeting of
Computervision's stockholders to consider the adoption of this Agreement and
approval of the Merger (the "Computervision Stockholders' Meeting") (such proxy
statement/prospectus as amended or supplemented is referred to herein as the
"Proxy Statement") shall not, on the date the Proxy Statement is first mailed to
Computervision's stockholders and at the time of the Computervision
Stockholders' Meeting, 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 light of the circumstances under which they
are made, not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier written communication with respect to
the solicitation of proxies for the Computervision Stockholders' Meeting which
has become false or misleading. The Proxy Statement will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder. If at any time prior to the Effective Time, any event
relating to Computervision or any of its affiliates, officers or directors
should be discovered by Computervision which should be set forth in an amendment
to the Registration Statement or a supplement to the Proxy Statement,
Computervision shall promptly inform Parametric. Notwithstanding the foregoing,
Computervision makes no representation or warranty with respect to any
information supplied by Parametric or Merger Sub that is contained in any of the
foregoing documents.
2.21. BOARD APPROVAL. The Board of Directors of Computervision has, as of
the date of this Agreement, determined unanimously (i) that the Merger is fair
to, and in the best interests of Computervision and its stockholders, and (ii)
to recommend that the stockholders of Computervision approve this Agreement.
2.22. FAIRNESS OPINION. Computervision has received an opinion from
Hambrecht & Quist LLC, dated as of the date hereof, to the effect that as of the
date hereof, the consideration to be received by Computervision's stockholders
in the Merger is fair from a financial point of view and will deliver to
Parametric a copy of such written opinion.
2.23. MINUTE BOOKS. The minute books of Computervision made available to
Parametric are the only minute books of Computervision, and the minutes contain
a reasonably accurate record of all actions taken in all meetings of directors
(or committees thereof) and stockholders or all actions by written consent.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARAMETRIC AND MERGER SUB
Parametric and Merger Sub represent and warrant to Computervision, subject
to the exceptions specifically disclosed in the disclosure schedule supplied by
Parametric to Computervision (the "Parametric Disclosure Schedule"), the section
numbers and letters of which correspond to the section and subsection numbers
and letters of this Agreement to which they refer, as follows:
3.1. ORGANIZATION OF PARAMETRIC. Parametric and each of its material
Subsidiaries is a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, has the requisite corporate or similar power to
own, lease and operate its property and to carry on its business as now being
conducted and as proposed to be conducted, and is duly qualified to do business
and in good standing as a foreign corporation or other legal entity in each
jurisdiction in which the failure to be so qualified would have a Parametric
Material Adverse Effect (as defined below). Parametric has delivered or made
available a true and correct copy of the Articles of Organization and Bylaws of
Parametric, each as amended to date, to Computervision. The term "Parametric
Material Adverse Effect" means, for purposes of this Agreement, any change,
event or effect that is, or that would reasonably be expected to be, materially
adverse to the business, assets (including intangible assets), financial
condition or results of operations of Parametric and its Subsidiaries taken as a
whole; provided, however, that neither (i) an adverse change in or effect on the
market price of Parametric Common Stock nor (ii) a failure of quarterly results
of operations to meet generally analysts' expectations as reflected in the First
Call consensus estimate shall be deemed to constitute a "Parametric Material
Adverse Effect."
3.2. PARAMETRIC CAPITAL STRUCTURE. The authorized capital stock of
Parametric consists of 350,000,000 shares of Common Stock, par value $0.01 per
share, of which there were 127,936,236 shares issued and outstanding as of
October 31, 1997 and 5,000,000 shares of Preferred Stock, par value $0.01 per
share, of which no shares are issued or outstanding. The authorized capital
stock of Merger Sub consists of 1,000 shares of Common Stock, par value $0.01
per share, all of which, as of the date hereof, are issued and outstanding and
are held by Parametric. All outstanding shares of Parametric Common Stock are
duly authorized, validly issued, and fully paid and non-assessable and are not
subject to preemptive rights created by statute, the Articles of Organization or
Bylaws of Parametric or any agreement or document to which Parametric is a party
or by which it is bound. All of the shares of Parametric Common Stock to be
issued in the Merger will be, when issued in accordance with this Agreement,
duly authorized, validly issued, fully paid and nonassessable.
3.3. AUTHORITY.
(a) Each of Parametric and Merger Sub has all requisite corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions
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contemplated hereby have been duly authorized by all necessary corporate action
on the part of Parametric and Merger Sub, subject only to the filing and
recording of the Certificate of Merger pursuant to Delaware Law. This Agreement
has been duly executed and delivered by each of Parametric and Merger Sub and,
assuming the due authorization, execution and delivery of this Agreement by
Computervision, this Agreement constitutes the valid and binding obligations of
each of Parametric and Merger Sub, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general principles of equity. The execution and
delivery of this Agreement by each of Parametric and Merger Sub do not, and the
performance of this Agreement by each of Parametric and Merger Sub will not, (i)
conflict with or violate the Articles of Organization or Bylaws of Parametric or
the Certificate of Incorporation or Bylaws of Merger Sub, (ii) subject to
compliance with the requirements set forth in Section 3.3(b) below, conflict
with or violate any law, rule, regulation, order, judgment or decree applicable
to Parametric or any of its Subsidiaries or by which its or any of their
respective properties is bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or impair Parametric's rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of
Parametric or any of its Subsidiaries (including Merger Sub) pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parametric or any of its
Subsidiaries is a party or by which Parametric or any of its Subsidiaries or its
or any of their respective properties are bound or affected, except, with
respect to clauses (ii) and (iii), for any such conflicts, violations, defaults
or other occurrences that would not have a Parametric Material Adverse Effect.
The Parametric Disclosure Schedule lists all material consents, waivers and
approvals under any of Parametric's or any of its Subsidiaries' agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby, except for those the
absence of which would not have a Parametric Material Adverse Effect.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required by or with
respect to Parametric or Merger Sub in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the Registration Statement with the SEC in
accordance with the Securities Act, (ii) the filing of the Certificate of Merger
with the Secretary of State of Delaware, (iii) the filing of a Current Report on
Form 8-K with the SEC, (iv) the filing with the United States Department of
Justice and the Federal Trade Commission of such forms as may be required by the
HSR Act, (v) the listing of the Parametric Common Stock issuable pursuant to
Section 1.6 on the Nasdaq Stock Market, (vi) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and the laws of any foreign country
and (vii) such other consents, authorizations, filings, approvals and
registrations that, if not obtained or made, would not have a Parametric
Material Adverse Effect or a material adverse effect on the ability of
Parametric or Merger Sub to consummate the Merger.
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3.4. SEC FILINGS; PARAMETRIC FINANCIAL STATEMENTS.
(a) Parametric has filed all forms, reports and documents required to
be filed with the SEC since October 1, 1996, and has made available to
Computervision such forms, reports and documents in the form filed with the SEC.
All such required forms, reports and documents (including those that Parametric
may file after the date hereof until the Closing) are referred to herein as the
"Parametric SEC Reports." As of their respective dates, the Parametric SEC
Reports (i) were prepared in accordance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the rules and regulations of
the SEC thereunder applicable to such Parametric SEC Reports, and (ii) did not
at the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
Parametric's subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in Parametric SEC Reports (the
"Parametric Financials"), including any Parametric SEC Reports filed after the
date hereof until the Closing, (x) complied or will comply as to form in all
material respects with the published rules and regulations of the SEC with
respect thereto, (y) was or will be prepared in accordance with GAAP applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto or, in the case of unaudited interim financial statements,
as may be permitted by the SEC on Form 10-Q under the Exchange Act) and (z)
fairly presented or will fairly present, in all material respects, the
consolidated financial position of Parametric and its Subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not, or are not expected to be, material in amount. The balance
sheet of Parametric contained in Parametric SEC Reports as of June 28, 1997 is
hereinafter referred to as the "Parametric Balance Sheet." Except as disclosed
in the Parametric Financials or obligations under this Agreement, neither
Parametric nor any of its Subsidiaries has any liabilities (absolute, accrued,
contingent or otherwise) of a nature required to be disclosed on a balance sheet
or in the related notes to the consolidated financial statements prepared in
accordance with GAAP that are, individually or in the aggregate, material to the
business, results of operations or financial condition of Parametric and its
subsidiaries taken as a whole, except liabilities (i) provided for in the
Parametric Balance Sheet, (ii) incurred since the date of the Parametric Balance
Sheet in the ordinary course of business consistent with past practices, or
(iii) incurred in connection with the transactions contemplated hereby.
(c) Parametric has heretofore furnished to Computervision a complete
and correct copy of any amendments or modifications, that have not yet been
filed with the SEC but that are required to be filed, to agreements, documents
or other instruments that previously had been filed by Parametric with the SEC
pursuant to the Securities Act or the Exchange Act.
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3.5. LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending, or as to which Parametric or any of its
Subsidiaries has received any notice of assertion nor, to Parametric's
knowledge, is there a threatened action, suit, proceeding, claim, arbitration or
investigation against Parametric or any of its Subsidiaries that would have a
Parametric Material Adverse Effect or that in any manner challenges or seeks to
prevent, enjoin, alter or delay any of the transactions contemplated by this
Agreement.
3.6. REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. The
information supplied by Parametric for inclusion in the Registration Statement
(as defined in Section 2.4(b)) shall not at the time the Registration Statement
is filed with the SEC and 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 light of the circumstances under which they were made,
not misleading. The information supplied by Parametric for inclusion in the
Proxy Statement to be sent to the stockholders of Computervision in connection
with the Computervision Stockholders' Meeting shall not, on the date the Proxy
Statement is first mailed to Computervision's stockholders, and at the time of
the Computervision Stockholders' Meeting, 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 light of the
circumstances under which they are made, not false or misleading; or omit to
state any material fact necessary to correct any statement in any earlier
written communication with respect to the solicitation of proxies for the
Computervision Stockholders' Meeting which has become false or misleading. The
Registration Statement will comply as to form in all material respects with
applicable provisions of the Securities Act and the rules and regulations
thereunder. If at any time prior to the Effective Time, any event relating to
Parametric or any of its affiliates, officers or directors should be discovered
by Parametric that should be set forth in an amendment to the Registration
Statement or a supplement to the Proxy Statement, Parametric shall promptly
inform Computervision. Notwithstanding the foregoing, Parametric makes no
representation or warranty with respect to any information supplied by
Computervision that is contained in any of the foregoing documents.
3.7. INTERIM OPERATIONS OF MERGER SUB. Merger Sub was formed solely
for the purpose of engaging in the transactions contemplated by this Agreement,
has engaged in no other business activities and has conducted its operations
only as contemplated by this Agreement.
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Since June 28, 1997 to
the date of this Agreement, there has not occurred any Parametric Material
Adverse Effect, nor (i) any amendment to Parametric's Articles of Organization
or Bylaws, (ii) any material change in accounting methods or practices by
Parametric, (iii) any material revaluation by Parametric or any of its
Subsidiaries of any of its assets, or (iv) any declaration, setting aside, or
payment of a dividend or other distribution with respect to the Parametric
Common Stock, or direct or indirect redemption, purchase or other acquisition by
Parametric of any of its capital stock (other than pursuant to Parametric's
previously announced stock repurchase program or in connection with the
exercises of stock options).
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ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1. CONDUCT OF BUSINESS BY COMPUTERVISION AND PARAMETRIC. During
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement pursuant to its terms or the Effective Time,
Computervision (which for the purposes of this Article IV shall include
Computervision and each of its Subsidiaries) and Parametric (which for the
purposes of this Article IV shall include Parametric and each of its material
Subsidiaries) agree, except (i) in the case of Computervision as provided in
Article IV of the Computervision Disclosure Schedule and in the case of
Parametric as provided in Article IV of the Parametric Disclosure Schedule, (ii)
as otherwise contemplated by this Agreement, or (iii) to the extent that the
other party shall otherwise consent in writing, to carry on its business
diligently and in accordance with good commercial practice and to carry on its
business in the usual, regular and ordinary course, in substantially the same
manner as heretofore conducted and use its commercially reasonable efforts
consistent with past practices and policies to preserve intact its present
business organization, keep available the services of its present officers and
employees and preserve its relationships with customers, suppliers,
distributors, licensors, licensees, and others with which it has business
dealings.
4.2. CERTAIN ACTIONS BY COMPUTERVISION. In addition, notwithstanding
Section 4.1 above, without the prior written consent of Parametric,
Computervision shall not do any of the following, nor shall Computervision
permit its Subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant or director stock plans or authorize cash
payments in exchange for any options granted under any of such plans;
(b) Enter into any material partnership arrangements, joint
development agreements or strategic alliances, agreements to create standards or
agreements with "Standards" bodies;
(c) Grant any severance or termination pay to any officer or employee
except payments in amounts consistent with policies and past practices or
pursuant to written agreements outstanding, or policies existing, on the date
hereof and as previously disclosed in writing to Parametric, or adopt any new
severance plan;
(d) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to the Computervision
Intellectual Property Rights, or enter into grants to future patent rights, in
each case other than in the ordinary course of business;
(e) Declare or pay any dividends on or make any other distributions
(whether in cash, stock or property) in respect of any capital stock or split,
combine or reclassify any
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capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for any capital stock;
(f) Repurchase or otherwise acquire, directly or indirectly, any
shares of capital stock except pursuant to rights of repurchase of any such
shares under any employee, consultant or director stock plan;
(g) Issue, deliver, sell, authorize or propose the issuance, delivery
or sale of, any shares of capital stock or any securities convertible into
shares of capital stock, or subscriptions, rights, warrants or options to
acquire any shares of capital stock or any securities convertible into shares of
capital stock, or enter into other agreements or commitments of any character
obligating it to issue any such shares or convertible securities, other than (i)
the grant of options ("New Options") to purchase up to 200,000 shares of
Computervision Common Stock on terms consistent with Computervision's policies
and past practices; provided that no single individual shall receive more than
one grant of New Options and no such grant shall be for more than 5,000 shares,
and (ii) the issuance of shares of Computervision Common Stock pursuant to (A)
the exercise of stock options therefor outstanding as of the date of this
Agreement and disclosed on the Computervision Disclosure Schedule, (B) the New
Options, (C) the Computervision Employee Stock Purchase Plans, consistent with
the terms thereof, and (D) the 1993 Warrant(s);
(h) Cause, permit or propose any amendments to its Certificate of
Incorporation or Bylaws (or similar governing instruments of any Subsidiaries
other than with respect to the Subsidiaries, amendments necessary to conform to
actions taken in the ordinary course of business);
(i) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any equity interest in or a material portion of the assets of, or
by any other manner, any business or any corporation, partnership interest,
association or other business organization or division thereof, or otherwise
acquire or agree to acquire any material amount of assets;
(j) Sell, lease, license (except as permitted by Section 4.2(d)),
encumber or otherwise dispose of any properties or assets that are material,
individually or in the aggregate, to the business of Computervision;
(k) Incur any indebtedness for borrowed money (other than ordinary
course trade payables or pursuant to existing credit facilities identified in
Section 4.2(k) of Computervision's Disclosure Schedule in accordance with their
existing terms in the ordinary course of business) or guarantee any such
indebtedness or issue or sell any debt securities or warrants or rights to
acquire debt securities of Computervision or guarantee any debt securities of
others;
(l) Adopt or amend any employee benefit or stock purchase or option
plan, or enter into any employment contract, pay any special bonus or special
remuneration to any
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director or employee (including without limitation pursuant to the 1997
Management Incentive Plan), or increase the salaries or wage rates of (i) its
officers or (ii) other than in the ordinary course of business, its employees
whose annualized compensation following such increase would exceed $100,000;
provided that Computervision may base payments under the Management Retention
Agreements upon the average of the bonuses paid in 1995 and 1996;
(m) Pay, discharge or satisfy any claim, liability or obligation
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
payment, discharge or satisfaction in the ordinary course of business;
(n) Make any grant of exclusive rights to any third party or grant any
site license to any customer, except for site licenses granted in the ordinary
course of business for not more than 500 seats and having a contract value of
not more than $4,000,000;
(o) Make any individual capital expenditure or commitment, or series
of related capital expenditures or commitments, outside the ordinary course of
business exceeding $250,000;
(p) Commence any legal action outside the ordinary course of business
that could expose Computervision or the Surviving Corporation or any of its
Subsidiaries directly or indirectly to any material liability as a result of any
counterclaim or cross-claim or otherwise; or
(q) Agree in writing or otherwise to take any of the actions described
in this Section 4.2.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1. PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT; OTHER FILINGS.
As promptly as practicable after the execution of this Agreement and with
reasonable efforts to do so within five business days thereafter, Computervision
will prepare and file with the SEC the Proxy Statement and Parametric will
prepare and file with the SEC the Registration Statement in which the Proxy
Statement will be included as a prospectus. Each of Computervision and
Parametric will respond to any comments of the SEC and will use its best efforts
to have the Registration Statement declared effective under the Securities Act
as promptly as practicable after such filing. Computervision will cause the
Proxy Statement to be mailed to its stockholders at the earliest practicable
time. As promptly as practicable after the date of this Agreement,
Computervision and Parametric will prepare and file any other filings required
under the Exchange Act, the Securities Act or any other Federal, foreign or Blue
Sky laws relating to the Merger and the transactions contemplated by this
Agreement (the "Other Filings"). Each party will notify the other party promptly
upon the receipt of any comments from the SEC or its staff and of any request by
the SEC or its staff or any other government officials for amendments or
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supplements to the Registration Statement, the Proxy Statement or any Other
Filing or for additional information and will supply the other party with copies
of all correspondence between such party or any of its representatives, on the
one hand, and the SEC, or its staff or any other government officials, on the
other hand, with respect to the Registration Statement, the Proxy Statement, the
Merger or any Other Filing. Whenever any event occurs that is required to be
set forth in an amendment or supplement to the Proxy Statement, the Registration
Statement or any Other Filing, Computervision or Parametric, as the case may be,
will promptly inform the other party of such occurrence and cooperate in filing
with the SEC or its staff or any other government officials, and/or mailing to
stockholders of Computervision, such amendment or supplement. The Proxy
Statement will also include the recommendations of the Board of Directors of
Computervision in favor of approval of this Agreement (except that the Board of
Directors of Computervision may withdraw, modify or refrain from making such
recommendation to the extent that the Board determines in good faith on the
advice of outside legal counsel that the Board's fiduciary duties under
applicable law require it to do so).
5.2. MEETING OF COMPUTERVISION STOCKHOLDERS. Promptly after the date
hereof, Computervision will take all action necessary in accordance with
Delaware Law and its Certificate of Incorporation and Bylaws to convene the
Computervision Stockholders' Meeting to be held as promptly as practicable, and
in any event within 45 days after the declaration of effectiveness of the
Registration Statement, for the purpose of voting upon this Agreement. Unless
otherwise required by the fiduciary duties of the Computervision Board of
Directors, Computervision will use its best efforts to solicit from its
stockholders proxies in favor of the approval of this Agreement and the Merger,
and will take all other action necessary or advisable to secure the vote or
consent of its stockholders required by Delaware Law to obtain such approvals.
5.3. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Each party will afford the other party and its accountants,
counsel and other representatives reasonable access during normal business hours
to the properties, books, records and personnel of the other party during the
period prior to the Effective Time to obtain all information concerning the
business, including the status of product development efforts, properties,
results of operations and personnel of such party, as the other party may
reasonably request. No information or knowledge obtained in any investigation
pursuant to this Section 5.3 will affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the parties to consummate the Merger.
(b) The parties acknowledge that Computervision and Parametric have
previously executed a Confidentiality and Evaluation Agreement, dated October
24, 1997 (the "Confidentiality Agreement"), which Confidentiality Agreement will
continue in full force and effect in accordance with its terms, except as is
necessary to comply with the terms of this Agreement.
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5.4. NO SOLICITATION.
(a) From and after the date of this Agreement until the earlier of the
Effective Time or termination of this Agreement pursuant to its terms,
Computervision and its Subsidiaries will not, and will instruct their respective
directors, officers, employees, representatives, investment bankers, agents and
affiliates not to, directly or indirectly, (i) solicit or knowingly encourage
submission of, any proposals or offers by any person, entity or group (other
than Parametric and its affiliates, agents and representatives), or (ii)
participate in any discussions or negotiations with, or disclose any non-public
information concerning Computervision or any of its Subsidiaries to, or afford
any access to the properties, books or records of Computervision or any of its
Subsidiaries to, or otherwise assist or facilitate, or enter into any agreement
or understanding with, any person, entity or group (other than Parametric and
its affiliates, agents and representatives), in connection with any Acquisition
Proposal with respect to Computervision. For the purposes of this Agreement, an
"Acquisition Proposal" means (x) any proposal or offer (other than one with or
relating to Parametric or an affiliate thereof) relating to (i) any merger,
consolidation, sale of substantial assets of Computervision or similar
transactions involving Computervision or any Subsidiary (other than sales of
assets or inventory in the ordinary course of business or permitted under the
terms of this Agreement), (ii) sale of 10% or more of the outstanding shares of
capital stock of Computervision (including without limitation by way of a tender
offer or an exchange offer), or (iii) the acquisition by any person of
beneficial ownership or a right to acquire beneficial ownership of, or the
formation of any "group" (as defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) that beneficially owns, or has the right
to acquire beneficial ownership of, 10% or more of the then outstanding shares
of capital stock of Computervision (except for acquisitions for passive
investment purposes only in circumstances where the person or group qualifies
for and files a Schedule 13G with respect thereto); or (y) any public
announcement of a proposal, plan or intention to do any of the foregoing or any
agreement to engage in any of the foregoing. Computervision will immediately
cease any and all existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing.
Computervision will orally and in writing in reasonable detail (i) notify
Parametric as promptly as practicable (and in any event within one business day)
if any inquiry or proposal is made or any information or access is requested in
writing in connection with an Acquisition Proposal or potential Acquisition
Proposal and (ii) as promptly as practicable (and in any event within one
business day) notify Parametric of the applicable terms and conditions of any
such Acquisition Proposal (including the identity of the person making such
Acquisition Proposal) and of any modification thereof or any proposed agreement.
Computervision shall promptly furnish to Parametric copies of any written
communications or documents received with respect to the foregoing and promptly
and fully inform Parametric in writing of the nature and status of any
discussions or negotiations regarding the foregoing. In addition, subject to
the other provisions of this Section 5.4, from and after the date of this
Agreement until the earlier of the Effective Time and termination of this
Agreement pursuant to its terms, Computervision and its Subsidiaries will not,
and will instruct their respective directors, officers, employees,
representatives, investment bankers, agents and affiliates not to, directly or
indirectly, make or authorize any public statement, recommendation or
solicitation in support of any Acquisition Proposal made by any person,
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entity or group (other than Parametric); provided, however, that nothing herein
shall prohibit Computervision's Board of Directors from taking and disclosing to
Computervision's stockholders a position with respect to a tender offer pursuant
to Rules 14d-9 and 14e-2 promulgated under the Exchange Act.
(b) Notwithstanding the provisions of paragraph (a) above, prior to
the approval of this Agreement by the stockholders of Computervision at the
Computervision Stockholders' Meeting, Computervision may, to the extent the
Board of Directors of Computervision determines, in good faith, based upon the
advice of outside legal counsel, that the Board's fiduciary duties under
applicable law require it to do so, participate in discussions or negotiations
with, and, subject to the requirements of paragraph (c) below, furnish
information to any person, entity or group after such person, entity or group
has delivered to Computervision in writing an unsolicited bona fide Acquisition
Proposal that the Board of Directors of Computervision in its good faith
reasonable judgment determines, based on the advice of its independent financial
advisors, would result in a transaction more favorable to the stockholders of
Computervision from a financial point of view than the Merger and for which
financing, to the extent required, is then committed or which, in the good faith
reasonable judgment of the Board of Directors of Computervision (based upon the
advice of independent financial advisors), is reasonably capable of being
financed by such person, entity or group and which is likely to be consummated
(a "Computervision Superior Proposal"). In addition, notwithstanding the
provisions of paragraph (a) above, in connection with a possible Acquisition
Proposal, Computervision may refer any third party to this Section 5.4 or make a
copy of this Section 5.4 available to a third party. In the event
Computervision receives a Computervision Superior Proposal, nothing contained in
this Agreement (but subject to the terms hereof) will prevent the Board of
Directors of Computervision from approving such Computervision Superior
Proposal, or recommending such Computervision Superior Proposal to
Computervision's stockholders, if the Board determines in good faith, based on
the advice of its outside legal counsel, that such action is required by its
fiduciary duties under applicable law; in such case, the Board of Directors of
Computervision may withdraw, modify or refrain from making its recommendation
concerning the approval of this Agreement; provided, however, that
Computervision shall not accept or recommend to its stockholders, or enter into
any agreement concerning, a Computervision Superior Proposal for a period of not
less than 48 hours after Parametric's receipt of a copy of such Computervision
Superior Proposal and any proposed agreement related thereto (or a description
of the applicable terms and conditions thereof, if not in writing).
(c) Notwithstanding anything to the contrary in this Section 5.4,
Computervision will not provide any non-public information to a third party
unless: (i) Computervision provides such non-public information pursuant to a
nondisclosure agreement with terms regarding the protection of confidential
information at least as restrictive as such terms in the Confidentiality
Agreement; and (ii) such non-public information has previously been delivered or
made available to Parametric.
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5.5. PUBLIC DISCLOSURE. Parametric and Computervision will consult
with each other before issuing any press release or otherwise making any public
statement with respect to the Merger, this Agreement or an Acquisition Proposal
and will not issue any such press release or make any such public statement
prior to such consultation, except as may be required by law or any listing
agreement with a national securities exchange or the Nasdaq National Market.
5.6. LEGAL REQUIREMENTS.
(a) Each of Parametric, Merger Sub and Computervision will take all
reasonable actions necessary or desirable to comply promptly with all legal
requirements that may be imposed on them with respect to the consummation of the
transactions contemplated by this Agreement (including furnishing all
information required in connection with approvals of or filings with any
Governmental Entity, and prompt resolution of any litigation prompted hereby)
and will promptly cooperate with and furnish information to any party hereto
necessary in connection with any such requirements imposed upon any of them or
their respective Subsidiaries in connection with the consummation of the
transactions contemplated by this Agreement. Parametric will use its
commercially reasonable efforts to take such steps as may be necessary to comply
with the securities and blue sky laws of all jurisdictions which are applicable
to the issuance of Parametric Common Stock pursuant hereto. Computervision will
use its commercially reasonable efforts to assist Parametric as may be necessary
to comply with the securities and blue sky laws of all jurisdictions that are
applicable in connection with the issuance of Parametric Common Stock pursuant
hereto.
(b) As soon as practicable, and in any event within five business
days, after execution of this Agreement, each of Parametric and Computervision
shall file with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the Department of Justice (the "Antitrust Division") a premerger
notification form and any supplemental information (other than privileged
information) which may be requested in connection therewith pursuant to the HSR
Act, which fillings and supplemental information will comply in all material
respects with the requirements of the HSR Act. Each of Parametric and
Computervision shall cooperate fully with the other in connection with the
preparation of such filings and shall use best efforts to respond to any
requests for supplemental information from the FTC or the Antitrust Division and
to obtain early termination of any waiting period applicable to the Merger under
the HSR Act without any materially burdensome conditions or any divestiture.
Filing fees required to be paid in connection with the premerger notification
pursuant to the HSR Act shall be borne and paid by Parametric.
5.7. THIRD PARTY CONSENTS. As soon as practicable following the date
hereof, each of Computervision and Parametric will use its commercially
reasonable efforts to obtain all material consents, waivers and approvals under
any of its or its Subsidiaries' agreements, contracts, licenses or leases
required to be obtained in connection with the consummation of the transactions
contemplated hereby.
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5.8. FIRPTA. At or prior to the Closing, Computervision, if requested by
Parametric, shall deliver to the IRS a notice that the Computervision Common
Stock is not a "U.S. Real Property Interest" as defined and in accordance with
the requirements of Treasury Regulation Section 1.897-2(h)(2).
5.9. NOTIFICATION OF CERTAIN MATTERS. Parametric and Merger Sub will
give prompt notice to Computervision, and Computervision will give prompt notice
to Parametric, of the occurrence, or failure to occur, of any event, which
occurrence or failure to occur would be reasonably likely to cause (a) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date of this Agreement
to the Effective Time, or (b) any material failure of Parametric and Merger Sub
or Computervision, as the case may be, or of any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement. Notwithstanding the
above, the delivery of any notice pursuant to this section will not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice or the conditions to such party's obligation to consummate the Merger.
5.10. BEST EFFORTS AND FURTHER ASSURANCES. Subject to the respective
rights and obligations of Parametric and Computervision under this Agreement,
each of the parties to this Agreement will use its best efforts to effectuate
the Merger and the other transactions contemplated hereby and to fulfill and
cause to be fulfilled the conditions to closing under this Agreement. Each
party hereto, at the reasonable request of another party hereto, will execute
and deliver such other instruments and do and perform such other acts and things
as may be necessary or desirable for effecting completely the consummation of
the transactions contemplated hereby. Notwithstanding the foregoing, nothing in
this Agreement shall require Parametric to agree to any materially burdensome
condition or any divestiture in order to obtain any clearance for the Merger
under the HSR Act.
5.11. STOCK OPTIONS; EMPLOYEE STOCK PURCHASE PLAN.
(a) At the Effective Time, each outstanding option to purchase shares
of Computervision Common Stock (each a "Computervision Stock Option") under the
Computervision Stock Option Plans, whether or not exercisable, will be assumed
by Parametric. Each Computervision Stock Option so assumed by Parametric under
this Agreement will continue to have, and be subject to, the same terms and
conditions set forth in the applicable Computervision Stock Option Plan
immediately prior to the Effective Time (including, without limitation, any
repurchase rights), except that (i) each Computervision Stock Option will be
exercisable (or will become exercisable in accordance with its terms) for that
number of whole shares of Parametric Common Stock equal to the product of the
number of shares of Computervision Common Stock that were issuable upon exercise
of such Computervision Stock Option immediately prior to the Effective Time
multiplied by the Exchange Ratio, rounded down to the nearest whole number of
shares of Parametric Common Stock, and (ii) the per share exercise price for the
shares of Parametric Common Stock issuable upon exercise of such assumed
Computervision Stock Option will be equal to the quotient determined by dividing
the
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exercise price per share of Computervision Common Stock at which such
Computervision Stock Option was exercisable immediately prior to the Effective
Time by the Exchange Ratio, rounded up to the nearest whole cent. After the
Effective Time, Parametric will issue to each holder of an outstanding
Computervision Stock Option a notice describing the foregoing assumption of such
Computervision Stock Option by Parametric.
(b) It is the intention of the parties that Computervision Stock
Options assumed by Parametric qualify following the Effective Time as incentive
stock options as defined in Section 422 of the Code to the extent Computervision
Stock Options qualified as incentive stock options immediately prior to the
Effective Time; and that notwithstanding anything contained in Section 1.6(c) or
Section 5.11 hereof, or any other provision of this Agreement, the exercise
price, the number of shares purchasable and the terms and conditions applicable
to any Computervision Stock Options shall be determined so as to comply with
Sections 422 and 424 of the Code and the regulations promulgated thereunder.
(c) The Board of Directors of Computervision shall, prior to or as of
the Effective Time, take appropriate action to approve the deemed cancellation
of the Computervision Stock Options for purposes of Section 16(b) of the
Exchange Act. The Board of Directors of Parametric shall, prior to or as of the
Effective Time, take appropriate action to approve the deemed grant of options
to purchase Parametric Common Stock under the Computervision Stock Options (as
converted pursuant to this Section 5.11) for purposes of Section 16(b) of the
Exchange Act.
(d) Parametric will reserve sufficient shares of Parametric Common
Stock for issuance under Section 5.11(a) and under Section 1.6(c) hereof.
(e) Computervision shall not commence any offering under its Employee
Stock Purchase Plans after the date hereof.
5.12. COMPUTERVISION EMPLOYEE PLANS.
(a) From and after the Effective Time, and subject to applicable law,
Parametric shall either continue Computervision's welfare benefit plans and
qualified pension plans as in effect at the Effective Time or provide to
employees who were employees of Computervision at the Effective Time welfare
benefits provided to similarly situated employees of Parametric. From and after
the Effective Time, employees who were employees of Computervision at the
Effective Time shall, to the extent permitted by the terms of the plan and
applicable law, receive credit for service with Computervision (or other service
credited under Computervision's plans) for purposes of eligibility and vesting
levels, but not for the accrual of benefits, under the Parametric welfare
benefit and 401(k) Plans, and all preexisting conditions to which any such
employees are subject shall be waived, and credit toward deductibles shall be
carried over, under Parametric's welfare benefit plans to the extent permitted
under the applicable plans. Nothing in this Agreement shall be interpreted as
preventing Parametric from
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amending, modifying or terminating any Computervision or Parametric Employee
Plan in accordance with its terms.
(b) Parametric agrees that during the six-month period beginning as of
the Effective Time, it will provide severance pay benefits to Computervision
employees who continue in employment with Parametric or the Surviving
Corporation after the Effective Time which are the same as the severance pay
benefits which would have been provided to such employees under the
Computervision U.S. Separation Notification Policy, as effective August 19, 1991
and as amended January 18, 1994 (the "Notification Policy"), provided that
Parametric may require as a condition of the payment of such benefits the
execution of a general release and such nonsolicitation covenants as Parametric
requires of its own employees.
5.13. PARAMETRIC FORM S-8. Parametric agrees to file a registration
statement on Form S-8 for the shares of Parametric Common Stock issuable with
respect to the assumed Computervision Stock Options no later than ten (10)
business days after the Closing Date and shall keep such registration statement
effective for so long as any such Options remain outstanding.
5.14. INDEMNIFICATION.
(a) From and after the Effective Time, the Surviving Corporation will
fulfill and honor in all respects the indemnification obligations of
Computervision pursuant to the provisions of the Certificate of Incorporation
and the Bylaws of Computervision as in effect immediately prior to the Effective
Time. The Certificate of Incorporation and Bylaws of the Surviving Corporation
will contain the provisions with respect to indemnification and elimination of
liability for monetary damages set forth in the Certificate of Incorporation and
Bylaws of Computervision, which provisions will not be amended, repealed or
otherwise modified in any manner that would adversely affect the rights
thereunder of individuals who, at the Effective Time, were directors or officers
of Computervision, unless such modification is required by law.
(b) For a period of six (6) years after the Effective Time, Parametric
shall cause the Surviving Corporation to maintain (to the extent available in
the market) in effect a directors' and officers' liability insurance policy
covering those persons who are currently covered by Computervision's directors'
and officers' liability insurance policy (a copy of which has been heretofore
delivered to Parametric) with coverage in amount and scope at least as favorable
as Computervision's existing coverage (which coverage may be an endorsement
extending the period in which claims may be made under such existing policy);
provided that in no event shall Parametric or the Surviving Corporation be
required to expend under this Section 5.14(b) more than an aggregate of 125% of
the current annual premium expended by Computervision to provide such coverage.
5.15. TAX-FREE REORGANIZATION. Parametric and Computervision will
each use its best efforts to cause the Merger to be treated as a reorganization
within the meaning of Section 368 of the Code. Parametric and Computervision
will each make available to the other party and
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their respective legal counsel copies of all Returns requested by the other
party. Parametric and Computervision will make such responsible representations
as requested by legal counsel for the purpose of rendering the opinions
contemplated by Section 6.1(d).
5.16. NMS LISTING. Parametric shall use its best efforts to cause
the shares of Parametric Common Stock to be issued in the Merger to be approved
for quotation on the Nasdaq National Market, subject to official notice of
issuance if applicable prior to the Effective Time.
5.17. COMPUTERVISION AFFILIATE AGREEMENT. Set forth on Section 5.17
of the Computervision Disclosure Schedule is a list of those persons who may be
deemed to be, in Computervision's reasonable judgment, affiliates of
Computervision within the meaning of Rule 145 promulgated under the Securities
Act (each a "Computervision Affiliate"). Computervision will provide Parametric
with such information and documents as Parametric reasonably requests for
purposes of reviewing such list. Computervision will use its best efforts to
deliver or cause to be delivered to Parametric promptly after the date hereof
from each Computervision Affiliate an executed affiliate agreement in
substantially the form attached hereto as Exhibit C (the "Computervision
---------
Affiliate Agreement"), each of which will be in full force and effect as of the
Effective Time. Parametric will be entitled to place appropriate legends on the
certificates evidencing any Parametric Common Stock to be received by an
Computervision Affiliate pursuant to the terms of this Agreement, and to issue
appropriate stop transfer instructions to the transfer agent for the Parametric
Common Stock, consistent with the terms of the Computervision Affiliate
Agreement.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1. CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Stockholder Approval. This Agreement shall have been approved and
--------------------
adopted by the requisite vote under Delaware Law by the stockholders of
Computervision.
(b) Registration Statement Effective. The SEC shall have declared the
--------------------------------
Registration Statement effective. No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose, and no similar proceeding in respect of the Proxy
Statement, shall have been initiated or threatened in writing by the SEC.
(c) No Order. No Governmental Entity shall have enacted, issued,
--------
promulgated, enforced or entered any statute, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or permanent)
which is in effect and
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which has the effect of making the Merger illegal or otherwise prohibiting
consummation of the Merger.
(d) Tax Opinions. Parametric and Computervision shall each have
------------
receive substantially identical written opinions from their counsel, Palmer &
Dodge LLP and Hale and Dorr LLP, respectively, in form and substance reasonably
satisfactory to them, to the effect that the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code; provided that
if the respective counsel to Parametric or Computervision does not render such
opinion, this condition shall nonetheless be deemed satisfied with respect to
such party if counsel to the other party renders such opinion to such party.
(e) HSR and Similar Compliance. The waiting period applicable to the
--------------------------
consummation of Merger under the HSR Act shall have expired or been terminated
by the reviewing agency and any similar government requirements have been
satisfied or complied with.
6.2. ADDITIONAL CONDITIONS TO OBLIGATIONS OF COMPUTERVISION. The
obligations of Computervision to consummate and effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of each of the
following conditions, any of which may be waived, in writing, exclusively by
Computervision:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Parametric and Merger Sub contained in this Agreement shall be
true and correct on and as of the Effective Time (without regard to any updates
to the Parametric Disclosure Schedules, unless otherwise agreed by
Computervision), except for changes contemplated by this Agreement and except
for those representations and warranties that address matters only as of a
particular date (which shall remain true and correct as of such particular
date), with the same force and effect as if made on and as of the Effective
Time, except, in all such cases, where the failure to be so true and correct
would not have a Parametric Material Adverse Effect (provided that any
determination with regard to a Material Adverse Effect on Parametric shall be
made without regard to any knowledge or materiality qualification or particular
dollar threshold in any particular representation); and Computervision shall
have received a certificate to such effect signed on behalf of Parametric by the
Chief Executive Officer or Chief Operating Officer of Parametric;
(b) Agreements and Covenants. Parametric and Merger Sub shall have
------------------------
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them on or prior
to the Effective Time, and Computervision shall have received a certificate to
such effect signed on behalf of Parametric by the Chief Executive Officer or
Chief Operating Officer of Parametric;
(c) Legal Opinion. Computervision shall have received a legal opinion
-------------
from Palmer & Dodge LLP, counsel to Parametric, in form reasonably satisfactory
to Hale & Dorr LLP, counsel to Computervision, as to the matters set forth in
Exhibit D hereto; and
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(d) Nasdaq Listing. The shares of Parametric Common Stock issuable to
--------------
stockholders of Computervision pursuant to this Agreement and such other shares
required to be reserved for issuance in connection with the Merger shall have
been authorized for quotation on the Nasdaq National Market.
6.3. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF PARAMETRIC AND MERGER
SUB. The obligations of Parametric and Merger Sub to consummate and effect the
Merger shall be subject to the satisfaction at or prior to the Effective Time of
each of the following conditions, any of which may be waived, in writing,
exclusively by Parametric:
(a) Representations and Warranties. The representations and
------------------------------
warranties of Computervision contained in this Agreement shall be true and
correct on and as of the Effective Time (without regard to any updates to the
Computervision Disclosure Schedules, unless otherwise agreed by Parametric),
except for changes contemplated by this Agreement and except for those
representations and warranties that address matters only as of a particular date
(which shall remain true and correct as of such particular date), with the same
force and effect as if made on and as of the Effective Time, except, in all such
cases, where the failure to be so true and correct would not have a
Computervision Material Adverse Effect (provided that any determination with
regard to a Material Adverse Effect on Computervision shall be made without
regard to any knowledge or materiality qualification or particular dollar
threshold in any particular representation); and Parametric and Merger Sub shall
have received a certificate to such effect signed on behalf of Computervision by
the Chief Executive Officer or Chief Operating Officer of Computervision;
(b) Agreements and Covenants. Computervision shall have performed or
------------------------
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and the Parametric shall have received a certificate to such
effect signed on behalf of Computervision by the Chief Executive Officer or
Chief Operating Officer of Computervision;
(c) Legal Opinion. Parametric shall have received a legal opinion
-------------
from Hale and Dorr LLP, counsel to Computervision, in form reasonably
satisfactory to Palmer & Dodge LLP, counsel to Parametric, as to the matters set
forth in Exhibit E hereto.
---------
(d) Voting Agreement. Each of the individuals and entities listed on
----------------
Section 5.17 of the Computervision Disclosure Schedule shall have entered into a
Voting Agreement with Parametric in the form attached hereto as Exhibit B, and
---------
such agreements shall be in full force and effect;
(e) Accounting Treatment. Parametric shall have received a letter
--------------------
from Coopers & Lybrand L.L.P. addressed to Parametric and a copy of a letter
from Arthur Andersen LLP addressed to Computervision to the effect that the
Merger will qualify for pooling of interests accounting treatment.
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(f) Affiliate Agreements. Except as set forth thereon, each of the
--------------------
individuals and entities listed on Section 5.17 of the Computervision Disclosure
Schedule shall have entered into an Affiliate Agreement, and such Agreements are
in full force and effect;
(g) Non-Competition Agreements. Each of the individuals listed on
--------------------------
Schedule 6.3(g) shall have entered into a Non-Competition Agreement with
Parametric or Merger Sub in the form attached hereto as Exhibit F, and such
---------
agreements shall be in full force and effect.
(h) Customer Agreements. Each customer of Computervision or a
-------------------
Subsidiary listed on Section 6.3(h) of the Computervision Disclosure Schedule
shall have granted any consent, approval, or waiver required under each
agreement between such customer and Computervision or such Subsidiary such that
neither the Merger nor the relationship between Parametric and the Surviving
Corporation after the Effective Time shall constitute a default under, give such
customer or any other party the right to terminate, or result in any penalty
under, any such customer agreement.
(i) Settlement Order. The Order of the Delaware Chancery Court
----------------
approving the settlement of the Dieter class action lawsuit shall be final and
------
not subject to appeal.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.1. TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time of the Merger, whether before or after approval of the
Merger by the stockholders of Computervision:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parametric and Computervision;
(b) by either Computervision or Parametric if the Merger shall not
have been consummated by February 28, 1998 (which date may be extended at the
written request of either Computervision or Parametric to March 31, 1998 to the
extent necessary to satisfy the condition set forth in Section 6.1(b) or Section
6.1(e)); provided, however, that the right to terminate this Agreement under
this Section 7.1(b) shall not be available to any party whose action or failure
to act has been a principal cause of or resulted in the failure of the Merger to
occur on or before such date if such action or failure to act constitutes a
breach of this Agreement;
(c) by either Computervision or Parametric if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued an order, decree or ruling or taken any other action (an
"Order"), in any case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger, which order, decree or ruling is final and
nonappealable;
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(d) by either Computervision or Parametric if the required approval of
the stockholders of Computervision contemplated by this Agreement shall not have
been obtained by reason of the failure to obtain the required vote upon a vote
taken at a meeting of stockholders duly convened therefor or at any adjournment
thereof (provided that the right to terminate this Agreement under this Section
7.1(d) shall not be available to Computervision where the failure to obtain
stockholder approval of Computervision shall have been caused by the action or
failure to act of Computervision in breach of this Agreement);
(e) by either Computervision or Parametric, if Computervision shall
have accepted a Computervision Superior Proposal or if the Computervision Board
of Directors recommends a Computervision Superior Proposal to the stockholders
of Computervision as permitted by Section 5.4(b);
(f) by Parametric, if the Board of Directors of Computervision shall
have (i) failed to convene the Computervision Stockholders' Meeting, as required
by Section 5.2, (ii) failed to recommend approval of this Agreement and the
Merger in the Proxy Statement or withheld, withdrawn or modified in a manner
adverse to Parametric such recommendation in favor the Merger, (iii) after
receipt of an Acquisition Proposal, if requested in writing by Parametric, shall
have failed to reconfirm its recommendation of approval of this Agreement and
the Merger within ten (10) business days following receipt of such request, or
(iv) recommended approval of or a tender of shares of Computervision Common
Stock in an Alternative Transaction (as defined in Section 7.3(e));
(g) by Computervision, upon a breach of any representation, warranty,
covenant or agreement on the part of Parametric set forth in this Agreement, if
(i) as a result of such breach the conditions set forth in Section 6.2(a) or
Section 6.2(b) would not be satisfied as of the time of such breach and (ii)
such breach shall not have been cured by Parametric within ten (10) business
days following receipt by Parametric of written notice of such breach from
Computervision;
(h) by Parametric, upon a breach of any representation, warranty,
covenant or agreement on the part of Computervision set forth in this Agreement,
if (i) as a result of such breach the conditions set forth in Section 6.3(a) or
Section 6.3(b) would not be satisfied as of the time of such breach and (ii)
such breach shall not have been cured by Computervision within ten (10) business
days following receipt by Computervision of written notice of such breach from
Parametric;
(i) by Parametric, if there shall have occurred any event or condition
that constitutes a Computervision Material Adverse Effect since the date of this
Agreement which condition or event shall not have been ameliorated such that it
is no longer a Computervision Material Adverse Effect within ten (10) business
days following receipt by Computervision of notice from Parametric;
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(j) by Computervision, if there shall have occurred any event or
condition that constitutes a Parametric Material Adverse Effect since the date
of this Agreement, which condition or event shall not have been ameliorated such
that it is no longer a Parametric Material Adverse Effect within ten (10)
business days following receipt by Parametric of notice from Computervision;
(k) by Parametric, in the event that it receives written notice from
either Coopers & Lybrand L.L.P., Arthur Andersen LLP, or the SEC that, in the
opinion of the entity giving such notice, the Merger will not qualify for
pooling of interests accounting treatment;
(l) by Parametric, in the event that (i) Computervision's software
maintenance revenue (which shall mean the aggregate of monthly license fees, on-
site support revenue and extended support service revenue) for its fiscal
quarter ending December 31, 1997, determined in accordance with GAAP on a basis
consistent with past practice, does not equal at least $18.25 million or it
appears reasonably likely that such revenue for that period will not equal at
least such amount or (ii) there are fewer than 55,000 CADDS and Medusa seats
licensed to Computervision customers under active maintenance in accordance with
past practice; or
(m) by Parametric, in the event that any one of the customers of
Computervision and its Subsidiaries listed in Item A of Section 7.1(m) of the
Computervision Disclosure Schedule or any three of the customers listed in Item
B of that Section cancels or terminates or gives notice of cancellation or
termination of its relationship or a material portion of its relationship with
Computervision or its Subsidiaries or there is any material decrease or planned
decrease in the usage or purchase of the products or services of Computervision
or any of its Subsidiaries by any such customer from that reasonably expected by
Computervision at the date of this Agreement of such a nature that it
demonstrates a material deterioration in the ongoing relationship of
Computervision and its Subsidiaries with that customer.
7.2. NOTICE OF TERMINATION; EFFECT OF TERMINATION.
(a) Subject to Sections 7.2(b) and (c), any termination of this
Agreement under Section 7.1 above will be effective immediately upon the
delivery of written notice of the terminating party to the other parties hereto.
In the event of the termination of this Agreement as provided in Section 7.1,
this Agreement shall be of no further force or effect, except (i) as set forth
in this Section 7.2, Section 7.3 and Article 8 (Miscellaneous), each of which
shall survive the termination of this Agreement, and (ii) nothing herein shall
relieve any party from liability for any willful breach of this Agreement. No
termination of this Agreement shall affect the obligations of the parties
contained in the Confidentiality Agreement, all of which obligations shall
survive termination of this Agreement in accordance with their terms.
(b) Any termination of this Agreement by Computervision pursuant to
Sections 7.1(d) or 7.1(e) hereof shall be of no force or effect unless prior to
such termination Computervision shall have paid to Parametric the amount payable
pursuant to Sections 7.3(b) and 7.3(c).
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7.3. FEES AND EXPENSES.
(a) Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated; provided, however, that Parametric and Computervision
shall share equally all fees and expenses, other than attorneys' and accountants
fees and expenses, incurred in relation to the printing and filing of the Proxy
Statement (including any preliminary materials related thereto) and the
Registration Statement (including financial statements and exhibits) and any
amendments or supplements thereto. Notwithstanding the foregoing, in order to
induce Parametric to enter into this Agreement and to reimburse Parametric for
its costs and expenses and loss of other opportunities related to negotiating
and entering into this Agreement and investigating the desirability of and
seeking to consummate the transactions contemplated by this Agreement,
Computervision agrees to make cash payments to Parametric in the circumstances,
and in the amounts, set forth in Sections 7.3(b) and (c).
(b) Computervision shall pay Parametric a termination fee of $800,000
upon the earlier to occur of the following events:
(i) the termination of this Agreement by Parametric pursuant to
Section 7.1(d) (other than in the circumstances set forth in Section
7.3(d)(ii)); or
(ii) the termination of this Agreement by Parametric pursuant to
Section 7.1(h) after a non-willful material breach by Computervision of
this Agreement.
(c) Computervision shall pay Parametric a termination fee of
$3,000,000 in the event of a termination of this Agreement by Parametric
pursuant to Section 7.1(f) (other than in the circumstances set forth in Section
7.3(d)(iii)).
(d) Computervision shall pay Parametric a termination fee of
$15,000,000 upon the earliest to occur of the following events:
(i) the termination of this Agreement pursuant to Section 7.1(e);
or
(ii) the termination of this Agreement pursuant to Section 7.1(d)
as a result of the failure to receive the requisite vote for approval of
this Agreement and the Merger by the stockholders of Computervision at the
Computervision Stockholders' Meeting if, at the time of such failure,
(A) there shall have been announced or commenced an
Alternative Transaction (as defined in Section 7.3(f)) and
Computervision shall have either (x) executed an agreement to engage
in the same or (y) the Computervision Board of Directors shall not
have recommended against such Alternative Transaction affirmatively
or, if the Computervision Board of Directors
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has recommended against such Alternative Transaction, the
Computervision Board of Directors shall have withdrawn such
recommendation against such Alternative Transaction or modified such
recommendation in a manner adverse to Parametric, or
(B) there shall have been announced an Alternative
Transaction with a Third Party (as defined in Section 7.3(f)) and (x)
Computervision shall have engaged in, or entered into an agreement to
engage in, an Alternative Transaction with such Third Party or any
affiliate thereof within twelve months after the date of the
Computervision Stockholders Meeting or (y) the Computervision Board of
Directors shall have recommended an Alternative Transaction (as
defined in Section 7.3(f)) with the Third Party proposing such
Alternative Transaction or any affiliate thereof within twelve months
after the date of the Computervision Stockholders Meeting; or
(iii) the termination of this Agreement pursuant to Section
7.1(f) if before such termination or within twelve months thereafter
Computervision shall have entered into an agreement to engage in or shall
have engaged in an Alternative Transaction; or
(iv) the termination of this Agreement by Parametric pursuant to
Section 7.1(h) after a willful breach by Computervision of this Agreement.
(e) The expenses and fees, if applicable, payable pursuant to Section
7.3(b), 7.3(c) or 7.3(d) shall be paid within one business day after the first
to occur of the events described in Section 7.3(b)(i) or (ii), 7.3(c) or
7.3(d)(i), (ii), (iii) or (iv); provided that, (i) despite the foregoing
provision, if Computervision is obligated to pay a termination fee to Parametric
pursuant to Section 7.3(d)(ii)(B) or 7.3(d)(iii), then the fees payable by
Computervision to Parametric pursuant to Section 7.3(d)(ii) or 7.3(d)(iii) shall
be paid within one business day after the occurrence of the transaction or
recommendation occurring or continuing after the Computervision Stockholders
Meeting which gives rise to the rights to receive the termination fee and (ii)
in no event shall Computervision be required to pay any expenses or termination
fees to Parametric if, immediately prior to the termination of this Agreement,
Parametric was in breach of any of its material obligations under this
Agreement.
(f) As used in this Agreement, "Alternative Transaction" means either
(i) a transaction pursuant to which any person (or group of persons) other than
Parametric or its Affiliates (a "Third Party"), acquires more than 10% of the
outstanding shares of Computervision Common Stock, pursuant to a tender offer or
exchange offer of otherwise, (ii) a merger or other business combination
involving Computervision pursuant to which any Third Party acquires more than
10% of the outstanding equity securities of Computervision or the entity
surviving such merger or business combination, (iii) any other transaction
pursuant to which any Third Party acquires control of assets (including for this
purpose the outstanding equity securities of Subsidiaries of Computervision, and
the entity surviving any merger or
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business combination including any of them) of Computervision having a fair
market value (as determined by the Board of Directors of Computervision in good
faith) equal to more than 10% of the fair market value of all the assets of
Computervision immediately prior to such transaction ("Material Assets"), or
(iv) any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing.
7.4. AMENDMENT. Subject to applicable law, this Agreement may be amended
by the parties hereto at any time by execution of an instrument in writing
signed on behalf of each of the parties hereto.
7.5. EXTENSION; WAIVER. At any time prior to the Effective Time any party
hereto may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties made to such
party contained herein or in any document delivered pursuant hereto and (iii)
waive compliance with any of the agreements or conditions for the benefit of
such party contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
ARTICLE VIII
GENERAL PROVISIONS
8.1. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Computervision, Parametric and Merger Sub contained in this
Agreement shall terminate at the Effective Time, and only the covenants that by
their terms survive the Effective Time shall survive the Effective Time.
8.2. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or sent via telecopy (receipt confirmed) to the parties at the
following addresses or telecopy numbers (or at such other address or telecopy
numbers for a party as shall be specified by like notice):
(a) if to Parametric or Merger Sub, to:
Parametric Technology Corporation
128 Technology Drive
Waltham, MA 02154
Attention: Chairman and Chief Executive Officer
Telephone: (617) 398-5000
Facsimile: (617) 398-5662
with a copy at the same address to the attention of Corporate Counsel,
and with a copy to:
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Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attention: Stanley Keller
Telephone: (617) 573-0100
Facsimile: (617) 227-4420
(b) if to Computervision, to:
Computervision Corporation
100 Crosby Drive
Bedford, MA 01730-1480
Attention: President
Telephone: (617) 275-1800
Facsimile: (800) 743-1755
with a copy at the same address to the attention of the General
Counsel, and with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attention: Paul P. Brountas
Telephone: (617) 526-6000
facsimile: (617) 526-5000
8.3. INTERPRETATION; KNOWLEDGE. When a reference is made in this Agreement
to Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when used
herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. When reference is made herein to "the
business of" an entity, such reference shall be deemed to include the business
of all direct and indirect subsidiaries of such entity. Reference to the
Subsidiaries of an entity shall be deemed to include all direct and indirect
subsidiaries of such entity. References to the "knowledge of Computervision,"
or any similar expression shall mean the actual knowledge of any executive
officer of Computervision.
8.4. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
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<PAGE>
8.5. ENTIRE AGREEMENT. This Agreement and the documents and instruments
and other agreements among the parties hereto as contemplated by or referred to
herein, including the Computervision Schedules and the Parametric Schedules (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
it being understood that the Confidentiality Agreement shall continue in full
force and effect until the Closing and shall survive any termination of this
Agreement; and (b) are not intended to confer upon any other person any rights
or remedies hereunder, except as set forth herein.
8.6. SEVERABILITY. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
8.7. OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as otherwise provided
herein, any and all remedies herein expressly conferred upon a party will be
deemed cumulative with and not exclusive of any other remedy conferred hereby,
or by law or equity upon such party, and the exercise by a party of any one
remedy will not preclude the exercise of any other remedy. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity.
8.8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
thereof, except that the Delaware General Corporation Law shall, to the extent
applicable, govern the procedures to be taken hereunder to effect the Merger.
8.9. RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
8.10. ASSIGNMENT. No party may assign either this Agreement or any of its
rights, interests, or obligations hereunder without the prior written approval
of the of the other parties.
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<PAGE>
IN WITNESS WHEREOF, Parametric, Merger Sub, and Computervision have caused
this Agreement to be signed by themselves or their duly authorized respective
officers, all as of the date first written above.
PARAMETRIC TECHNOLOGY CORPORATION
By: /s/ Edwin J. Gillis
------------------------------------
Edwin J. Gillis
COMPUTERVISION CORPORATION
By: /s/ Anthony N. Fiore, Jr.
------------------------------------
Anthony N. Fiore, Jr.
PTC ACQUISITION CORPORATION
By: /s/ Edwin J. Gillis
------------------------------------
Edwin J. Gillis
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<PAGE>
EXHIBIT A
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of November 3, 1997 (the "Agreement")
is entered into by and between Parametric Technology Corporation ("Parametric"),
a Massachusetts corporation, and Computervision Corporation ("Computervision"),
a Delaware corporation. Concurrently with the execution and delivery of this
Agreement, Computervision, Parametric and PTC Acquisition Corporation ("Merger
Sub"), a Delaware corporation and a wholly owned subsidiary of Parametric, are
entering into an Agreement and Plan of Reorganization (the "Acquisition
Agreement"), which provides that, among other things, upon the terms and subject
to the conditions thereof, Merger Sub will be merged with and into
Computervision (the "Merger") with Computervision continuing as the surviving
corporation and as a wholly owned subsidiary of Parametric. Capitalized terms
used herein but not defined herein shall have the meanings set forth in the
Acquisition Agreement. As a condition and inducement to Parametric's
willingness to enter into the Acquisition Agreement, Parametric has required
that Computervision agree, and Computervision has so agreed, to grant to
Parametric an option to acquire shares of Computervision's Common Stock upon the
terms and subject to the conditions set forth herein.
Accordingly, in consideration of the foregoing and of the mutual covenants
and agreements set forth herein and in the Acquisition Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option.
---------------
Computervision hereby grants to Parametric an irrevocable option (the
"Option") to acquire up to 9,558,809 shares (the "Option Shares") of the Common
Stock, par value $.01 per share, of Computervision ("Computervision Shares")
(being 15% of the number of Computervision Shares outstanding as of the date
hereof) in the manner set forth below at a price of $4.00 per Computervision
Share (the "Exercise Price"), payable in cash. The number of Computervision
Shares that may be purchased upon exercise of this Option and the Exercise Price
are subject to adjustment as provided in Section 9. Notwithstanding the
foregoing, in no event shall the number of Computervision Shares for which the
Option is exercisable exceed 15% of the number of issued and outstanding
Computervision Shares.
2. Exercise of Option.
------------------
(a) The Option may only be exercised by Parametric, in whole or in
part, at any time or from time to time, after the Acquisition Agreement becomes
terminable under circumstances which would entitle Parametric to a payment under
Section 7.3(d) of the Acquisition Agreement upon its termination, regardless of
whether the Acquisition Agreement is terminated pursuant to such provisions or
whether an Alternative Transaction is
<PAGE>
consummated (any of the events specified in this sentence being referred to
herein as an "Exercise Event"). Computervision shall notify Parametric promptly
in writing of the occurrence of any Exercise Event, it being understood that the
giving of such notice by Computervision shall not be a condition to the right of
Parametric to exercise the Option. In the event Parametric wishes to exercise
the Option, Parametric shall deliver to Computervision a written notice (an
"Exercise Notice") specifying the total number of Option Shares it wishes to
acquire. Each closing of a purchase of Option Shares (a "Closing") shall occur
on a date and at a time designated by Parametric in an Exercise Notice delivered
at least two business days prior to the date of such Closing, which Closing
shall be held at the offices of counsel to Parametric. Upon the giving by
Parametric to Computervision of the Exercise Notice and the tender of the
applicable aggregate Exercise Price and provided that the conditions to
Computervision's obligation to issue the Option Shares to Parametric hereunder
set forth in Section 3 have been satisfied or waived, Parametric shall be deemed
to be the holder of record of the Option Shares issuable upon such exercise,
notwithstanding that the stock transfer book of Computervision shall then be
closed or that certificates representing such Option Shares shall not then be
actually delivered to Parametric.
(b) The Option shall terminate upon the earliest to occur of (i) the
Effective Date, (ii) 180 days following the termination of the Acquisition
Agreement pursuant to Article VII thereof, if an Exercise Event shall have
occurred on or prior to the date of such termination, and (iii) the date on
which the Acquisition Agreement is terminated pursuant to Article VII thereof if
an Exercise Event shall not have occurred on or prior to such date; provided,
however, with respect to the preceding clause (ii) of this sentence, that (x) if
the Option cannot be exercised by reason of any applicable government order or
because the waiting period related to the issuance of the Option Shares under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), if applicable, shall not have expired or been terminated, then the Option
shall not terminate until the tenth business day after such impediment to
exercise shall have been removed or shall have become final and not subject to
appeal and (y) if Sections 7.3(d)(ii) or (iii) of the Acquisition Agreement are
applicable, the Option shall not terminate until 30 days after the event
entitling Parametric to a payment thereunder.
3. Conditions to Closing.
---------------------
The obligation of Computervision to issue the Option Shares to
Parametric hereunder is subject to the conditions that (i) any waiting period
under the HSR Act applicable to the issuance of the Option Shares hereunder
shall have expired or been terminated; (ii) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any Federal,
state or local administrative agency or commission or other Federal, state or
local governmental authority or instrumentality, if any, required in connection
with the issuance of the Option Shares hereunder shall have been obtained or
made, as the case may be; and (iii) no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such issuance shall be in effect.
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<PAGE>
4. Closing.
-------
At any Closing, (i) Computervision shall deliver to Parametric a
single certificate in definitive form representing the number of Option Shares
designated by Parametric in its Exercise Notice, such certificate to be
registered in the name of Parametric and to bear the legend set forth in Section
10 hereof, and (ii) Parametric shall pay to Computervision the aggregate
purchase price for the Computervision Shares so designated and being purchased
by wire transfer of immediately available funds or by delivery of a certified
check or bank check. At any Closing at which Parametric is exercising the
Option in part, Parametric shall present and surrender this Agreement to
Computervision, and Computervision shall deliver to Parametric an executed new
agreement with the same terms as this Agreement evidencing the right to purchase
the balance of the Computervision Shares constituting the Option Shares
purchasable hereunder. Computervision shall pay all expenses, and any and all
Federal, state and local transfer or issuance taxes, and other similar charges
that may be payable in connection with the preparation, issue and delivery of
stock certificates under this Section 4.
5. Representations and Warranties of Computervision.
------------------------------------------------
Computervision represents and warrants to Parametric that (i)
Computervision is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder; (ii) the execution and delivery of this Agreement by Computervision
and consummation by Computervision of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Computervision and no other corporate proceedings on the part of Computervision
are necessary to authorize this Agreement or any of the transactions
contemplated hereby; (iii) this Agreement has been duly executed and delivered
by Computervision and constitutes a legal, valid and binding obligation of
Computervision and, assuming this Agreement constitutes a legal, valid and
binding obligation of Parametric, is enforceable against Computervision in
accordance with its terms; (iv) except for any filings as may be required under
the HSR Act, Computervision has taken all necessary corporate and other action
to authorize and reserve for issuance and to permit it to issue upon exercise of
the Option, and at all times from the date hereof until the termination of the
Option will have reserved for issuance, a sufficient number of unissued
Computervision Shares for Parametric to exercise the Option in full and will
take all necessary corporate or other action to authorize and reserve for
issuance all additional Computervision Shares or other securities which may be
issuable pursuant to Section 9 upon exercise of the Option, all of which, upon
their issuance and delivery in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable and free of any preemptive
right; (v) upon delivery of the Option Shares and any other securities to
Parametric upon exercise of the Option or upon becoming deemed the holder of
record of the Option Shares and any other securities delivered to Parametric
upon exercise of the Option, Parametric will acquire such Option Shares or other
securities free and clear of all material claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever, excluding those imposed
by Parametric; (vi) the execution and delivery of this Agreement by
Computervision does not, and the performance of this Agreement by Computervision
will not, (A) violate the Certificate of Incorporation or
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<PAGE>
By-Laws of Computervision, (B) conflict with or violate any law, ordinance or
regulation or any order, judgment, injunction, decree or other requirement of
any court, arbitrator, governmental or regulatory body applicable to
Computervision or any of its Subsidiaries or by which they or any of their
property is bound or (C) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of Computervision or any of its Subsidiaries pursuant to,
any contract or agreement to which Computervision or any of its Subsidiaries is
a party or by which Computervision or any of its Subsidiaries or any of their
property is bound, except, in the case of clauses (B) and (C) above, for
violations, conflicts, breaches, defaults, rights of termination, amendment,
acceleration or cancellation, liens or encumbrances which would not,
individually or in the aggregate, have a Computervision Material Adverse Effect;
(vii) the execution and delivery of this Agreement by Computervision does not,
and the performance of this Agreement by Computervision will not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any Governmental Entity except pursuant to the HSR Act, if applicable; and
(viii) none of Computervision, any of its affiliates or anyone acting on its or
their behalf, has issued, sold or offered any security of Computervision to any
person under circumstances that would cause the issuance and sale of the Option
Shares, as contemplated by this Agreement, to be subject to the registration
requirements of the Securities Act, as in effect on the date hereof, and,
assuming the representations and warranties of Parametric contained in clause
(iv) of Section are true and correct, the issuance, sale and delivery of the
Option Shares hereunder would be exempt from the registration and prospectus
delivery requirements of the Securities Act, as in effect on the date hereof
(and Computervision shall not take any action which would cause the issuance,
sale and delivery of the Option Shares hereunder not to be exempt from such
requirements).
6. Representations and Warranties of Parametric.
--------------------------------------------
Parametric represents and warrants to Computervision that (i)
Parametric is a corporation duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder; (ii) the execution and delivery of this Agreement by
Parametric and the consummation by Parametric of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Parametric and no other corporate proceedings on the part of Parametric are
necessary to authorize this Agreement or any of the transactions contemplated
hereby; (iii) this Agreement has been duly executed and delivered by Parametric
and constitutes a legal, valid and binding obligation of Parametric and,
assuming this Agreement constitutes a legal, valid and binding obligation of
Computervision, is enforceable against Parametric in accordance with its terms;
and (iv) any Computervision Shares acquired upon exercise of the Option will not
be acquired by Parametric with a view to the public distribution thereof and
Parametric will not sell or otherwise dispose of such shares in violation of
applicable law or this Agreement.
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<PAGE>
7. Certain Rights.
--------------
(a) Put. At the request of Parametric at any time during the period
---
during which the Option is exercisable pursuant to Section 2 (the "Purchase
Period"), Computervision (or any successor entity thereof) shall, subject to the
limitation set forth in Section 10, purchase from Parametric (x) all or any
portion of the Option at the price set forth in subparagraph (i) below or (y)
all or any portion of the Option Shares, if any, acquired by Parametric pursuant
to the Option, at the following price:
(i) The purchase price of the Option shall be the difference
between the "Market/Offer Price" (as defined below) for Computervision
Shares as of the date Parametric gives notice of its intent to exercise its
rights under this Section 7 and the Exercise Price, multiplied by the
number of Option Shares purchasable pursuant to the Option (or portion
thereof with respect to which Parametric is exercising its rights under
this Section 7), but only if the Market/Offer Price is greater than the
Exercise Price. For purposes of this subparagraph (i), "Market/Offer
Price" shall mean, as of any date, the higher of (x) the highest price per
share offered as of such date pursuant to any Acquisition Transaction which
would have entitled Parametric to a payment under Section 7.3(c) of the
Acquisition Agreement and which was initiated prior to such date and not
terminated or withdrawn as of such date and (y) the Fair Market Value (as
defined below) of the Computervision Shares as of such date. For purposes
of this Agreement, the "Fair Market Value" of the Computervision Shares
shall mean the average closing sale price of Computervision Shares on the
New York Stock Exchange during the five (5) trading days ending on the
trading day immediately preceding the date Parametric gives notice of its
intent to exercise its rights under this Section 7.
(ii) The purchase price of the Option Shares shall be the sum of
(x) the Exercise Price paid by Parametric for Option Shares acquired
pursuant to the Option plus (y) the difference between the Fair Market
Value for Computervision Shares and such Exercise Price (but only if the
Fair Market Value is greater than the Exercise Price) multiplied by the
number of Computervision Shares so purchased.
(b) Payment and Redelivery of Shares. In the event Parametric
--------------------------------
exercises its rights under Section 7(a), Computervision shall, within ten
business days after Parametric delivers notice pursuant to Section 7(a) (which
notice may be delivered prior to consummation of the exercise of the Option),
pay the required amount to Parametric in immediately available funds and
Parametric shall surrender to Computervision the Option or the certificates
evidencing the Computervision Shares purchased by Parametric pursuant thereto,
and Parametric shall represent and warrant that it owns such Computervision
Shares and that such Computervision Shares are then free and clear of all
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever.
(c) Repurchase Price Reduced at Parametric's Option. In the event the
-----------------------------------------------
repurchase price specified in Section 7(a) would subject the purchase of the
Option or the Option Shares purchased by Parametric pursuant to the Option to a
vote of the shareholders of Computervision pursuant to applicable law or
Computervision's Certificate of
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<PAGE>
Incorporation then Parametric may, at its election, reduce the repurchase price
to an amount which would permit such repurchase without the necessity for such a
shareholder vote.
8. Registration Rights.
-------------------
(a) Following the termination of the Acquisition Agreement, Parametric
may by written notice (a "Registration Notice") to Computervision request
Computervision to register under the Securities Act all or any part of the
shares acquired by Parametric pursuant to this Agreement (the "Registrable
Securities") in order to permit the sale or other disposition of such shares
pursuant to a bona fide firm commitment underwritten public offering.
(b) Computervision shall use its best efforts to effect, as promptly
as practicable, the registration under the Securities Act of the Registrable
Securities; provided, however, that (i) Parametric shall not be entitled to more
than an aggregate of two effective registration statements hereunder and (ii)
Computervision will not be required to file any such registration statement
during any period of time (not to exceed 40 days after a Registration Notice in
the case of clause (A) below or 90 days after a Registration Notice in the case
of clauses (B) and (C) below) when (A) Computervision is in possession of
material non-public information which it reasonably believes would be
detrimental to be disclosed at such time and, in the written opinion of counsel
to Computervision, such information would have to be disclosed if a registration
statement were filed at that time; (B) Computervision is required under the
Securities Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available for
inclusion in such registration statement; or (C) Computervision determines, in
its reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving Computervision.
If consummation of the sale of any Registrable Securities pursuant to a
registration hereunder does not occur within 180 days after the filing with the
SEC of the initial registration statement therefor, the provisions of this
Section 8 shall again be applicable to any proposed registration, it being
understood that Parametric shall be entitled to no more than an aggregate of two
effective registration statements hereunder. Computervision shall use all
reasonable efforts to cause any Registrable Securities registered pursuant to
this Section 8 to be qualified for sale under the securities or blue sky laws of
such jurisdictions as Parametric may reasonably request and shall continue such
registration or qualification in effect in such jurisdictions; provided,
however, that Computervision shall not be required to qualify to do business in,
or consent to general service of process in, any jurisdiction by reason of this
provision.
(c) The registration rights set forth in this Section 8 are subject to
the condition that Parametric shall provide Computervision with such information
with respect to Parametric's Registrable Securities, the plan for distribution
thereof, and such other information with respect to Parametric as is necessary
to enable Computervision to include in a registration statement all material
facts required to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 8 shall be effected at
Computervision's expense, except for underwriting discounts and commissions and
the fees
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and expenses of counsel to Parametric, and Computervision shall provide to the
underwriters such documentation (including certificates, opinions of counsel and
"comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the parties agree (i) to indemnify each
other and the underwriters in the customary manner, (ii) to enter into an
underwriting agreement in form and substance customary for transactions of this
type with the underwriters participating in such offering, and (iii) to take all
further actions which shall be reasonably necessary to effect such registration
and sale (including if the managing underwriter deems it necessary,
participating in road show presentations).
9. Adjustment Upon Changes in Capitalization.
-----------------------------------------
In the event of any change in the Computervision Shares by reason of
stock dividends, split-ups, mergers (other than the Merger), recapitalizations,
combinations, exchanges of shares and the like, the type and number of shares or
securities subject to the Option, and the Exercise Price, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Parametric shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Parametric
would have received in respect of the Computervision Shares if the Option had
been exercised immediately prior to such event or the record date therefor, as
applicable.
10. Profit Limitation.
-----------------
(a) Notwithstanding any other provision of this Agreement, in no event
shall Parametric's Total Profit (as hereinafter defined) exceed $18 million and,
if it otherwise would exceed such amount, Parametric, at its sole election,
shall either (a) deliver to Computervision for cancellation Option Shares
previously purchased by Parametric, (b) pay cash to Computervision or (c)
undertake any combination thereof, so that Parametric's Total Profit shall not
exceed $18 million after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the Option
may not be exercised for a number of Option Shares as would, as of the date of
the Exercise Notice, result in a Notional Total Profit (as hereinafter defined)
of more than $18 million and, if exercise of the Option otherwise would exceed
such amount, Parametric, at its discretion, may increase the Exercise Price for
the number of Computervision Shares set forth in the Exercise Notice so that the
Notional Total Profit shall not exceed $18 million.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Parametric pursuant to Sections 7.3(c) and (d) of the Acquisition Agreement,
(ii) the amount of cash received by Parametric pursuant to the exercise of the
put right with respect to the Option under Section 7(a)(i) and (iii) (x) the net
cash amounts received by Parametric pursuant to the sale of Option Shares (or
any other securities into which such Option Shares are converted or exchanged)
to Computervision or any unaffiliated party, less (y) Parametric's purchase
price for such Option Shares.
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<PAGE>
(d) As used herein, the term "Notional Total Profit" with respect to
any number of Option Shares as to which Parametric may propose to exercise the
Option shall be the Total Profit determined as of the date of the Exercise
Notice assuming that the Option was exercised on such date for such number of
Option Shares and assuming that such Option Shares, together with all other
Computervision Shares held by Parametric and its affiliates as of such date,
were sold for cash at the closing market price for the Computervision Shares as
of the close of business on the preceding trading day (less customary brokerage
commissions).
(e) Notwithstanding the foregoing, the Option may not be exercised if
Parametric is in breach in any material respect of any of its covenants or
agreements contained in the Acquisition Agreement.
11. Restrictive Legends.
-------------------
Each certificate representing Option Shares issued to Parametric
hereunder shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF NOVEMBER 3,
1997, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
12. Listing and HSR filing.
----------------------
Computervision, upon the request of Parametric, shall promptly file an
application to list the Computervision Shares to be acquired upon exercise of
the Option for quotation on the New York Stock Exchange and shall use its best
efforts to obtain approval of such listing as soon as practicable. Promptly
after the date such a filing is permitted to be made, each of the parties hereto
shall file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice all required premerger notification and
report forms and other documents and exhibits required to be filed under the HSR
Act, if any, to permit the acquisition of the Computervision Shares subject to
the Option at the earliest possible date.
13. Effect.
------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Certificates representing shares sold in a
-8-
<PAGE>
registered public offering pursuant to Section 8 shall not be required to bear
the legend set forth in Section 11.
14. Specific Performance.
--------------------
The parties recognize and agree that if for any reason any of the
provisions of this Agreement are not performed in accordance with their specific
terms or are otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be brought
in equity to enforce the provisions of the Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
15. Entire Agreement.
----------------
This Agreement and the Acquisition Agreement (including the appendices
and exhibits thereto) constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
16. Further Assurances.
------------------
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
constitute the transactions contemplated hereby.
17. Validity.
--------
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith and shall execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
18. Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):
-9-
<PAGE>
(a) if to Parametric, to:
Parametric Technology Corporation
128 Technology Drive
Waltham, MA 02154
Attention: Chairman and Chief Executive Officer
Telephone No.: (617) 398-5000
Telecopy No.: (617) 398-5662
with a copy at the same address to the attention of the General
Counsel, and
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attn: Stanley Keller, Esq.
Telephone No.: (617) 573-0100
Telecopy No.: (617) 227-4420
(b) if to Computervision, to:
Computervision Corporation
100 Crosby Drive
Bedford, MA 01730-1480
Attention: President
Telephone No.: (617) 275-1800
Telecopy No.: (617) 743-1755
with a copy at the same address to the attention of the General
Counsel, and
with a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Paul P. Brountas, Esq.
Telephone No.: (617) 526-6000
Telecopy No.: (617) 526-5000
19. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts applicable to agreements made and
to be performed entirely within such state.
-10-
<PAGE>
20. Counterparts.
------------
This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original, but both of which, taken together, shall
constitute one and the same instrument.
21. Expenses.
--------
Except as otherwise expressly provided herein or in the Acquisition
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
22. Amendments; Waiver.
------------------
This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.
23. Assignment.
----------
Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the Option
created hereunder to any other person, without the express written consent of
the other party, except that Parametric may (a) assign any of its rights
hereunder to any affiliate and (b) assign its registration rights under Section
8 to any subsequent holder of Option Shares other than a holder who acquired
such shares in a sale that was either registered under the Securities Act or
pursuant to SEC Rule 144 under the Securities Act.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
PARAMETRIC TECHNOLOGY CORPORATION
By: _____________________________
Name:
Title:
COMPUTERVISION CORPORATION
By: _____________________________
Name:
Title:
[Signature Page to Stock Option Agreement]
-12-
<PAGE>
EXHIBIT B
STOCKHOLDER VOTING AGREEMENT
This Stockholder Voting Agreement (the "Agreement") dated as of November 3,
1997 is by and between Parametric Technology Corporation ("Parametric"), a
Massachusetts corporation, and the undersigned stockholder ("Stockholder") of
Computervision Corporation (the "Company"), a Delaware corporation.
RECITALS
A. Concurrently with the execution of this Agreement, Parametric, the
Company and PTC Acquisition Corporation ("Merger Sub"), a Delaware corporation
and a wholly owned subsidiary of the Company, have entered into an Agreement and
Plan of Reorganization (the "Acquisition Agreement") which provides for a merger
of Merger Sub with and into the Company (the "Merger"). Pursuant to the Merger,
shares of Common Stock of the Company will be converted into the right to
receive shares of Common Stock of Parametric on the basis set forth in the
Acquisition Agreement.
B. The Stockholder is the record holder and beneficial owner (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of such number of shares of the outstanding capital stock of
the Company as is indicated on the final page of this Agreement (the "Shares").
C. Parametric desires the Stockholder to agree, and the Stockholder is
willing to agree, (i) not to transfer or otherwise dispose of any of the Shares,
or any other shares of capital stock of the Company acquired hereafter and prior
to the Expiration Date (as defined in Section 1 below) (together with the
Shares, the "Subject Shares"), except as otherwise permitted hereby, and (ii) to
vote the Subject Shares so as to facilitate consummation of the Merger.
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
1. Agreement to Retain Shares. Stockholder agrees not to transfer
--------------------------
(except as may be specifically required by court order), sell, exchange, pledge
or otherwise dispose of or encumber any of the Subject Shares, or to make any
offer or agreement relating thereto, at any time prior to the Expiration Date.
As used herein, the term "Expiration Date" shall mean the earlier to occur of
such date and time as (i) the Merger shall become effective in accordance with
the provisions of the Acquisition Agreement and (ii) the Acquisition Agreement
shall be terminated pursuant to Section 7.1 thereof.
2. Agreement to Vote Subject Shares. At every meeting of the
--------------------------------
stockholders of the Company called with respect to any of the following, and at
every adjournment thereof, and on every action or approval by written consent of
the stockholders of the Company with respect to
<PAGE>
any of the following, Stockholder shall vote the Subject Shares: (i) in favor of
approval of the Acquisition Agreement and the Merger and any matter that could
reasonably be expected to facilitate the Merger; and (ii) against approval of
any proposal made in opposition to or competition with consummation of the
Merger and against any merger, consolidation, sale of assets, reorganization or
recapitalization, with any party other than with Parametric and its affiliates,
and against any liquidation or winding up of the Company (each of the foregoing
is hereinafter referred to as an "Opposing Proposal"). Stockholder agrees not to
take any actions contrary to Stockholder's obligations under this Agreement.
3. Irrevocable Proxy. Concurrently with the execution of this Agreement,
-----------------
Stockholder agrees to deliver to Parametric a proxy in the form attached hereto
as Exhibit I (the "Proxy"), which shall be irrevocable to the extent provided in
Section 212 of the Delaware General Corporation Law, with respect to the total
number of shares of capital stock of the Company beneficially owned (as such
term is defined in Rule 13d-3 under the Exchange Act) by Stockholder set forth
therein.
4. Representations, Warranties and Covenants of the Stockholder.
------------------------------------------------------------
Stockholder hereby represents, warrants and covenants to Parametric as follows:
4.1 Ownership of Shares. Stockholder (i) is and will be at the time
-------------------
of the action of the stockholders of the Company on the Merger the beneficial
owner of the Shares and the Subject Shares, which at the date hereof and at all
times up until the Expiration Date will be free and clear of any liens, claims,
options, charges or other encumbrances; (ii) does not beneficially own any
shares of capital stock of the Company other than the Shares (excluding shares
as to which Stockholder currently disclaims beneficial ownership in accordance
with applicable law); and (iii) has full power and authority to make, enter into
and carry out the terms of this Agreement and the Proxy.
4.2 No Proxy Solicitations. Stockholder will not, and will not
----------------------
permit any entity under Stockholder's control to: (i) solicit proxies or become
a "participant" in a "solicitation" (as such terms are defined in Regulation 14A
under the Exchange Act) with respect to an Opposing Proposal or otherwise
encourage or assist any party in taking or planning any action that would
compete with, restrain or otherwise serve to interfere with or inhibit the
timely consummation of the Merger in accordance with the terms of the
Acquisition Agreement; (ii) initiate a stockholders' vote or action by consent
of stockholders of the Company with respect to an Opposing Proposal; or (iii)
become a member of a "group" (as such term is used in Section 13(d) of the
Exchange Act) with respect to any voting securities of the Company that takes
any action in support of an Opposing Proposal.
5. No Limitation on Discretion as Director. This Agreement is intended
---------------------------------------
solely to apply to the exercise by Stockholder in his or her individual capacity
of rights attaching to ownership of the Subject Shares, and nothing herein shall
be deemed to apply to, or to limit in any manner the discretion of Stockholder
with respect to, any action which may be taken or omitted by him or her acting
in his or her fiduciary capacity as a director of the Company.
-2-
<PAGE>
6. Additional Documents. Stockholder hereby covenants and agrees to
--------------------
execute and deliver any additional documents necessary or desirable, in the
reasonable opinion of Parametric or Stockholder, as the case may be, to carry
out the intent of this Agreement.
7. Consent and Waiver. Stockholder hereby gives any consents or waivers
------------------
that are reasonably required for the consummation of the Merger under the terms
of any agreements to which Stockholder is a party or pursuant to any rights
Stockholder may have.
8. Termination. This Agreement shall terminate and shall have no further
-----------
force or effect as of the Expiration Date.
9. Miscellaneous.
-------------
9.1 Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, then the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
9.2 Binding Effect and Assignment. This Agreement and all of the
-----------------------------
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but, except as
otherwise specifically provided herein, neither this Agreement nor any of the
rights, interests or obligations of the parties hereto may be assigned by either
party without prior written consent of the other.
9.3 Amendments and Modification. This Agreement may not be modified,
---------------------------
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
9.4 Specific Performance; Injunctive Relief. The parties hereto
---------------------------------------
acknowledge that Parametric will be irreparably harmed and that there will be no
adequate remedy at law for a violation of any of the covenants or agreements of
Stockholder set forth herein. Therefore, it is agreed that, in addition to any
other remedies that may be available to Parametric upon any such violation,
Parametric shall have the right to enforce such covenants and agreements by
specific performance, injunctive relief or by any other means available to
Parametric at law or in equity.
9.5 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and sufficient if delivered in
person, by cable, telegram or facsimile, or sent by mail (registered or
certified mail, postage prepaid, return receipt requested) or overnight courier
(prepaid) to the respective parties as follows:
-3-
<PAGE>
(a) If to Parametric, to:
Parametric Technology Corporation
128 Technology Drive
Waltham, Massachusetts 02154
Attention: Chairman and Chief Executive Officer
Telephone No: (617) 398-5000
Telecopy No.: (617) 398-5662
with a copy at the same address to the attention of
Corporate Counsel, and
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attn: Stanley Keller
Telephone No.: (617) 573-0100
Telecopy No.: (617) 227-4420
(b) if to the Stockholder:
To the address for notice set forth on the
last page hereof.
with a copy to: Hale and Dorr
60 State Street
Boston, Massachusetts 02109
Attn: Paul P. Brountas, Esq.
Telephone No.: (617) 526-6000
Telecopy No.: (617) 526-5000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
9.6 Governing Law. This Agreement shall be governed by, and construed and
-------------
enforced in accordance with, the internal laws of the State of Delaware.
9.7 Entire Agreement. This Agreement contains the entire understanding of
----------------
the parties in respect of the subject matter hereof, and supersedes all prior
negotiations and understandings between the parties with respect to such subject
matter.
9.8 Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one and the same agreement.
9.9 Effect of Headings. The section headings herein are for convenience
------------------
only and shall not affect the construction of interpretation of this Agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Stockholder Voting
Agreement to be duly executed on the date and year first above written.
PARAMETRIC TECHNOLOGY CORPORATION
By:______________________________
Title:___________________________
STOCKHOLDER:
By:______________________________
Stockholder's Address for Notice:
_________________________________
_________________________________
_________________________________
Shares beneficially owned:
_______________ shares of Common Stock
Shares subject to outstanding options:
_______________ shares of Common Stock
[Signature Page to Stockholder Voting Agreement]
-5-
<PAGE>
EXHIBIT I
IRREVOCABLE PROXY
The undersigned stockholder of Computervision Corporation (the "Company"),
a Delaware corporation, hereby irrevocably (to the extent provided in Section
212 of the Delaware General Corporation Law) appoints Steven C. Walske and C.
Richard Harrison, and each of them individually, as the sole and exclusive
attorneys and proxies of the undersigned, with full power of substitution and
resubstitution, to the full extent of the undersigned's right, subject to the
following paragraphs, with respect to the shares of capital stock of the Company
beneficially owned by the undersigned, which shares are listed on the final page
of this Proxy (the "Shares"), and any and all other shares or securities issued
or issuable in respect thereof on or after the date hereof, until such time as
the Agreement and Plan of Reorganization dated as of November 3, 1997 (the
"Acquisition Agreement") among Parametric Technology Corporation ("Parametric"),
a Massachusetts corporation, the Company and PTC Acquisition Corporation, a
Delaware corporation and a wholly-owned subsidiary of Parametric ("Merger Sub"),
shall be terminated in accordance with its terms or the Merger (as defined in
the Acquisition Agreement) is effective. Upon the execution hereof, all prior
proxies given by the undersigned with respect to the Shares and any and all
other shares or securities issued or issuable in respect thereof on or after the
date hereof are hereby revoked and no subsequent proxies will be given.
This proxy is irrevocable (to the extent provided in Section 212 of the
Delaware General Corporation Law), is granted pursuant to the Stockholder Voting
Agreement dated as of November 3, 1997 between Parametric and the undersigned
stockholder (the "Voting Agreement"), and is granted in consideration of
Parametric entering into the Acquisition Agreement. The attorneys and proxies
named above will be empowered at any time prior to termination of the
Acquisition Agreement to exercise all voting rights (including, without
limitation, the power to execute and deliver written consents with respect to
the Shares) of the undersigned, solely to the extent set forth as follows: at
every annual, special or adjourned meeting of stockholders of the Company, and
in every written consent in lieu of such a meeting, or otherwise, in favor of
approval of the Acquisition Agreement and the Merger and any matter that could
reasonably be expected to facilitate the Merger, and against any proposal made
in opposition to or competition with the consummation of the Merger and against
any merger, consolidation, sale of assets, reorganization or recapitalization of
the Company with any party other than Parametric and its affiliates and against
any liquidation or winding up of the Company.
The attorneys and proxies named above may only exercise this proxy to vote
the Shares subject hereto at any time prior to termination of the Acquisition
Agreement at every annual, special or adjourned meeting of the stockholders of
the Company and in every written consent in lieu of such meeting, in favor of
approval of the Acquisition Agreement and the Merger and any matter that could
reasonably be expected to facilitate the Merger, and against any merger,
consolidation, sale of assets, reorganization or recapitalization of the Company
with any party other than Parametric and its affiliates, and against any
liquidation or winding up of the
<PAGE>
Company, and may not exercise this proxy on any other matter. The undersigned
stockholder may vote the Shares on all other matters.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
This Proxy is irrevocable.
Dated: ___________________, 1997 Signature of Stockholder:
__________________________________
Print Name of Stockholder:
__________________________________
Shares beneficially owned:
___________ shares of Common Stock
-2-
<PAGE>
EXHIBIT C
AFFILIATE AGREEMENT
This Affiliate Agreement (the "Agreement") dated as of November 3, 1997 is
between PARAMETRIC TECHNOLOGY CORPORATION ("Parametric"), a Massachusetts
corporation, and the undersigned affiliate ("Affiliate") of COMPUTERVISION
CORPORATION (the "Company"), a Delaware corporation.
RECITALS
A. Parametric, the Company and PTC Acquisition Corporation ("Merger
Sub"), a Delaware corporation and wholly-owned subsidiary of Parametric, have
entered into an Agreement and Plan of Reorganization dated as of November 3,
1997 (the "Acquisition Agreement") pursuant to which Merger Sub will merge with
and into the Company ("Merger"), and the Company will become a subsidiary of
Parametric. Pursuant to the Merger, shares of Common Stock of the Company (the
"Company Shares"), including any shares owned by Affiliate, will be converted
into the right to receive shares of Common Stock of Parametric (the "Parametric
Shares").
B. Parametric and the Company intend that the Merger constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986 as amended (the "Code"). It is a condition to effectiveness of the
Merger under the Acquisition Agreement that legal counsel for each of Parametric
and the Company will have delivered written opinions to such effect, and in
connection therewith such legal counsel require certain representations of
Affiliate.
C. Affiliate has been advised that he may be deemed to be an "affiliate"
of the Company, as the term "affiliate" is used for purposes of paragraphs (c)
and (d) of Rule 145 of the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Securities Act"), although
nothing contained herein shall be construed as an admission by Affiliate that he
is in fact an affiliate of Company;
D. It is a condition to Parametric's obligations under the Acquisition
Agreement that the Merger qualify for pooling of interests accounting treatment,
and to achieve such treatment certain representations and agreements of
Affiliate are required; and
E. The execution and delivery of this Agreement by Affiliate is a
material inducement to Parametric to enter into the Acquisition Agreement.
<PAGE>
NOW, THEREFORE, intending to be legally bound, the parties hereby agree as
follows:
1. Securities Act Compliance.
-------------------------
(a) Affiliate has been advised that if he is an "affiliate" of the Company
at the time the Acquisition Agreement was submitted for approval of the
shareholders of the Company and a distribution by the undersigned of the
Parametric Shares has not been registered under the Securities Act, Rule 145
under the Securities Act will restrict his sales of Parametric Shares received
in the Merger. Affiliate agrees that he will not sell or otherwise dispose of
any Parametric Shares except pursuant to Rule 145(d) under the Securities Act,
an effective registration statement under the Securities Act or an exemption
from the registration requirements under the Securities Act, provided that
Affiliate may make bona fide gifts or distributions (including, if Affiliate is
a partnership, to its partners) without consideration or transfers by operation
of law, so long as any donee or transferee agrees not to sell, transfer or
otherwise dispose of Parametric Shares except as provided herein.
(b) Affiliate acknowledges that Parametric is under no obligation to
register the sale, transfer or other disposition by Affiliate of the Parametric
Shares or to take any action necessary in order to make an exemption from
registration available.
2. Pooling of Interests
--------------------
(a) Affiliate agrees that he will not engage, and represents that he has
not engaged, in any sale, exchange, transfer, distribution, pledge, disposition
or any other transaction, including a transaction that reduces the risk of loss
by short sale, hedging or otherwise, that would result in a reduction in the
risk of ownership (any such transaction, a "Sale") with respect to any of the
Company Shares owned by Affiliate during the 30 days prior to the effective date
of the Merger.
(b) Affiliate agrees that he will not engage in any Sale of the Parametric
Shares until after such time as financial results covering at least 30 days of
combined operations of Parametric and the Company after the effective date of
the Merger have been published by Parametric, in the form of a quarterly
earnings report, a registration statement filed with the Commission, a report on
Form 10-K, 10-Q or 8-K or any other public filing or announcement.
3. Tax Effects of the Merger. Affiliate represents, warrants and
-------------------------
covenants as follows:
i. Affiliate is the beneficial owner of Company Shares (including
shares issuable upon exercise of stock options) and did not acquire any such
shares in contemplation of the Merger;
ii. Affiliate has not engaged in a Sale of any Company Shares in
contemplation of the Merger, and Affiliate has no current plan or intention (a
"Plan") to engage in a Sale of any Company Shares in contemplation of (and not
in) the Merger;
-2-
<PAGE>
iii. Affiliate has no Plan to engage in a Sale of any of the
Parametric Shares (on a fully diluted basis, giving effect to all options) to be
received by Affiliate in the Merger;
iv. Affiliate has not entered into any discussions or negotiations
with regard to the possible sale of any Company Shares or any Parametric Shares
to be received by Affiliate in the Merger;
v. If Affiliate is a partnership, then the term "Sale" as used in
paragraph iii above shall not be deemed to include any distribution to its
partners, provided that if any recipient of any such distribution will receive
Parametric Shares having a fair market value of 1% or more of the fair market
value of all the Company Shares presently outstanding, Affiliate is not aware of
any Plan on the part of such recipient to engage in a Sale of any of the
Parametric Shares (on a fully diluted basis, giving effect to all options) to be
received by such recipient in such distribution;
vi. Affiliate is not aware of, or participating in, any Plan on the
part of the stockholders of the Company to engage in one or more Sales of the
Parametric Shares to be received in the Merger such that the aggregate fair
market value, as of the Effective Time of the Merger, of the Parametric Shares
subject to such Sales would exceed 50% of the aggregate fair market value of all
Company Shares outstanding immediately prior to the Merger; and
vii. Affiliate does not intend to take a position on any tax return
that is inconsistent with the treatment of the Merger as a reorganization within
the meaning of Section 368(a) of the Code.
4. Legends.
-------
(a) Affiliate understands that there will be placed on the certificates
representing Parametric Shares to be received by Affiliate in the Merger, and,
except as provided in paragraph (b) below, any certificates delivered in
substitution or exchange therefor, a legend stating in substance:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER CONTAINED IN AN AGREEMENT WITH THE ISSUER DATED NOVEMBER 3, 1997,
INCLUDING WITHOUT LIMITATION A RESTRICTION THAT THESE SHARES MAY ONLY BE
TRANSFERRED IN ACCORDANCE WITH RULE 145(D) UNDER THE SECURITIES ACT OF 1933
(THE "ACT") OR AN EFFECTIVE REGISTRATION STATEMENT OR EXEMPTION FROM
REGISTRATION UNDER THE ACT. THE ISSUER WILL FURNISH A COPY OF SUCH
AGREEMENT TO THE HOLDER UPON WRITTEN REQUEST AND WITHOUT CHARGE.
(b) The legend referred to in paragraph (a) above shall be terminated or
removed if Affiliate shall have delivered to Parametric a copy of a letter from
the staff of the SEC, an opinion of counsel in form and substance satisfactory
to Parametric or other evidence satisfactory to Parametric, to the effect that
such instructions and legend are not required for the purposes
-3-
<PAGE>
of the Act and, in the case of Section 3 above, counsel for Parametric shall
have determined that such instructions are no longer necessary for purposes of
such paragraph.
5. Miscellaneous.
-------------
(a) For the convenience of the parties hereto, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same document.
(b) This Agreement shall be enforceable by, and shall inure to the
benefit of and be binding upon, the parties hereto and their respective
successors and assigns. As used herein, the term "successors and assigns" shall
mean, where the context so permits, heirs, executors, administrators, trustees
and successor trustees, and personal and other representatives.
(c) This Agreement shall be governed by and construed, interpreted and
enforced in accordance with the internal laws of the Commonwealth of
Massachusetts.
(d) If a court of competent jurisdiction determines that any provision
of this Agreement is not enforceable or enforceable only if limited in time or
scope, this Agreement shall continue in full force and effect with such
provision stricken or so limited.
(e) Affiliate has carefully read this Agreement, including the
limitations upon the disposition of the Parametric Shares received by Affiliate
contained herein, and has obtained such advice regarding execution of this
Agreement as he deemed necessary.
(f) This Agreement shall not be modified or amended, or any right
hereunder waived or any obligation excused, except by a written agreement signed
by both parties.
(g) The acknowledgements and representations set forth herein shall be
accurate and complete at all times from the date hereof through the date on
which the Merger is consummated, unless Affiliate notifies Parametric and the
Company to the contrary, in writing, prior to such date.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth on the first page of this Agreement.
PARAMETRIC TECHNOLOGY CORPORATION
By: ______________________________
Title: ___________________________
AFFILIATE
By: _______________________________
Name of Affiliate: ________________
Name of Signatory (if different from name of
Affiliate): _______________________
Title of Signatory
(if applicable): __________________
Company shares beneficially owned:
_______________ shares of Common Stock
Company shares subject to outstanding options:
_______________ shares of Common Stock
[Signature Page to Affiliate Agreement]
-5-
<PAGE>
EXHIBIT D
MATTERS TO BE COVERED BY
OPINION OF PALMER & DODGE LLP
1. The Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, with the
corporate power and authority to enter into and perform the Acquisition
Agreement.
2. Merger Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the corporate power
and authority to enter into and perform the Acquisition Agreement.
3. The execution and delivery of the Acquisition Agreement and the
consummation of the Merger have been duly authorized by all necessary corporate
action on the part of the Buyer and Merger Sub. The Buyer and Merger Sub have
duly executed and delivered the Acquisition Agreement, and the Acquisition
Agreement constitutes the valid and binding obligation of the Buyer and Merger
Sub, enforceable against each in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general applicability relating to or affecting creditors' rights
and to general principles of equity.
4. The shares of Buyer Common Stock to be issued in the Merger have been
duly authorized by all necessary corporate action on the part of the Buyer and,
when issued in the Merger pursuant to the terms thereof, such shares will be
validly issued, fully paid and nonassessable. Such shares of Buyer Common Stock
have been authorized for quotation on the Nasdaq National Market.
5. Except for (a) the filing of the Certificate of Merger with the
Secretary of State of Delaware and (b) such filings, notices, permits, consents
and approvals as have been made, given or obtained, the execution, delivery and
performance of the Acquisition Agreement by the Buyer and consummation of the
Merger will not: (i) violate any provision of the Articles of Organization or
Bylaws of the Buyer or the Certificate of Incorporation or Bylaws of Merger Sub,
(ii) violate any law or regulation or any order, judgment or decree that, to our
knowledge, is applicable to Buyer or any of its Subsidiaries, (iii) result in
any breach of or a default (or an event that with notice or lapse of time or
both would become a default) under, or impair the rights of the Buyer or any of
its Subsidiaries or alter the rights or obligations of any third party under, or
result in the creation of any lien or encumbrance on the properties or assets of
the Buyer or any of its Subsidiaries, or give to others any rights of
termination, amendment, acceleration or cancellation of, under any instrument,
contract or other agreement included as an exhibit to Buyer's Annual Report on
Form 10-K for the year ended September 30, 1996, or to any report filed with the
SEC subsequent thereto, to which the Buyer or any of its Subsidiaries is a party
or to which the Buyer or any of its Subsidiaries or its or any of their
respective properties is bound or affected, or (iv) require
<PAGE>
any consent, approval, order or authorization of, or any registration,
declaration or filing with any Governmental Entity, excluding from the foregoing
clauses (ii), (iii) and (iv) any exceptions to the foregoing that, in the
aggregate, would not have a Parametric Material Adverse Effect or a material
adverse effect on the ability of the Buyer or Merger Sub to consummate the
Merger.
6. To our knowledge, and except as disclosed on the Parametric
Disclosure Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation pending or threatened against the Buyer or any of its Subsidiaries
that would have a Parametric Material Adverse Effect or that challenges or seeks
to prevent, enjoin, alter or delay the Merger.
7. Upon the filing of the Certificate of Merger, the Merger will become
effective in accordance with the Delaware General Corporation Law.
8. The Registration Statement referred to in Section 5.1 of the
Acquisition Agreement has become effective under the Securities Act and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened by the SEC.
-2-
<PAGE>
EXHIBIT E
MATTERS TO BE COVERED BY
OPINION OF HALE AND DORR LLP
1. The Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the requisite
corporate power and authority to enter into and perform the Acquisition
Agreement.
2. The Seller is authorized to issue 100,000,000 shares of Common Stock,
of which _____________ shares are issued and outstanding, and 5,000,000 shares
of Preferred Stock, none of which are issued or outstanding. All of the issued
and outstanding shares of the Seller's capital stock are duly authorized and are
validly issued, fully paid, nonassessable and free of preemptive rights under
any statute, the Certificate of Incorporation or the By-laws.
3. The execution and delivery of the Acquisition Agreement and the
consummation of the Merger have been duly authorized by all necessary corporate
action on the part of the Seller. The Seller has duly executed and delivered
the Acquisition Agreement, and the Acquisition Agreement constitutes the valid
and binding obligation of the Seller, enforceable against the Seller in
accordance with its terms.
4. Except for (a) the filing of the Certificate of Merger with the
Secretary of State of Delaware and (b) such filings, notices, permits, consents
and approvals as have been made, given or obtained, the execution, delivery and
performance of the Acquisition Agreement by the Seller and consummation of the
Merger will not: (i) violate any provision of the Certificate of Incorporation
or Bylaws of the Seller, (ii) violate any law or regulation or any order,
judgment or decree that, to our knowledge, is applicable to the Seller or any of
its Subsidiaries, (iii) result in any breach of or a default (or an event that
with notice or lapse of time or both would become a default) under, or impair
the rights of the Seller or any of its Subsidiaries or alter the rights or
obligations of any third party under, result in the creation of any lien or
encumbrance on the properties or assets of the Seller or any of its
Subsidiaries, or give to others any rights of termination, amendment,
acceleration or cancellation of, any instrument, contract or other agreement
included as an exhibit to Seller's Annual Report on Form 10-K for the year ended
December 31, 1996, or to any report filed with the SEC subsequent thereto, to
which the Seller or any of its Subsidiaries is a party or to which the Seller or
any of its Subsidiaries or its or any of their respective properties is bound or
affected, (iv) require any consent, approval, order or authorization of, or any
registration, declaration or filing with any Governmental Entity, excluding from
the foregoing clauses (ii), (iii) and (iv) any exceptions to the foregoing that,
in the aggregate, would not have a Computervision Material Adverse Effect, or a
material adverse effect on the ability of the Seller to consummate the Merger.
5. To our knowledge, and except as disclosed on the Computervision
Disclosure Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation pending or
<PAGE>
threatened against the Seller or any of its Subsidiaries that would have a
Computervision Material Adverse Effect or that challenges or seeks to prevent,
enjoin, alter or delay the Merger.
6. Upon the filing of the Certificate of Merger, the Merger will become
effective and will be binding upon all holders of shares of Seller Stock in
accordance with the Delaware General Corporation Statute. No stockholder of
Computervision is entitled to dissenters' appraisal rights under the Delaware
General Corporation Statute in respect of the Merger.
-2-
<PAGE>
EXHIBIT F
NON-COMPETITION AGREEMENT
This Agreement dated as of _________________ __, 199_ is entered into by
and between PARAMETRIC TECHNOLOGY CORPORATION ("Parametric"), a Massachusetts
corporation, COMPUTERVISION CORPORATION ("Computervision"), a Delaware
corporation, and _________________ ("Employee").
RECITALS
A. Pursuant to the Plan and Agreement of Reorganization (the "Acquisition
Agreement") dated as of November 3, 1997, by and between Parametric,
Computervision and PTC Acquisition Corporation ("Merger Sub"), Merger Sub will
merge with and into Computervision (the "Merger"). Pursuant to the Merger,
shares of Common Stock of Computervision will be converted into the right to
receive shares of Common Stock of Parametric on the basis described in the
Acquisition Agreement.
B. Employee has served as ___________ of Computervision and has gained
substantial knowledge and expertise in connection with Computervision's
products, organization and customers;
C. Parametric and Employee acknowledge that it would be seriously
detrimental to Parametric if Employee would compete with Parametric or
Computervision following consummation of the Merger;
D. Computervision is engaged in the development, production, distribution
and selling of computer-aided design software (the "Business");
E. It is a condition to the obligation of Parametric to consummate the
Merger that Employee enter into this Agreement; and
F. As inducement to Parametric to consummate the Merger, and in
consideration of the issuance of shares of Common Stock of Parametric to
stockholders of Computervision in the Merger as provided in the Acquisition
Agreement, Employee desires to agree with Parametric as further provided herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
<PAGE>
1. Non-Competition.
---------------
(a) The parties understand and agree that this Agreement is entered
into in connection with the Merger. The parties further understand and agree
that Employee is a key employee of Computervision, and that the Merger is
contingent upon Employee entering into this Agreement, including this non-
competition provision. In addition, the parties understand that prior to the
Merger, Computervision was engaged in the Business in each of the fifty states
of the United States and Canada, Europe, Japan and other Pacific Rim countries.
The parties further understand that Parametric is currently engaged in business
in each of the fifty states of the United States and Canada, Europe, Japan and
other Pacific Rim countries. (The United States and the regions set forth above
shall hereafter be referred to as the "Geographic Scope of the Business.")
Computervision and Parametric have informed Employee that following the Merger
they will continue conducting such business in all parts of the Geographic Scope
of the Business. The parties expressly acknowledge and agree that the non-
competition provisions contained in this Agreement are permissible and
enforceable pursuant to the provisions of applicable law.
(b) During the period commencing on the effective date of the Merger
(the "Effective Date") and ending one year after the Effective Date, Employee
shall not, directly or indirectly, either as an individual or as an employee,
agent, consultant, advisor, independent contractor, general partner, officer,
director, shareholder, investor, lender, or in any other capacity whatsoever, of
any person, firm, corporation, partnership or other entity or in any other
capacity:
(i) participate or engage in the design, development,
manufacture, production, marketing, sale or servicing of any product, or
the provision of any service, that competes with the "Enterprise Products
or Services" (for purposes hereof, "Enterprise Products or Services" shall
be defined as the products produced, marketed, sold, serviced or under
development, or services provided, either (A) by Computervision as part of
the Business at any time prior to the Effective Date, or (B) by
Computervision or Parametric, related to the Business at any time from the
Effective Date through the date when Employee ceases to be employed by
Computervision or Parametric); or
(ii) induce or attempt to induce any person who at the time of
such inducement is an employee of Computervision or Parametric to perform
work or services for any other person or entity other than Computervision
or Parametric.
Notwithstanding the foregoing, Employee may own, directly or indirectly, solely
as a passive investment, up to one percent (1%) of any class of "publicly
traded securities" of any person or entity which owns a competitive Business.
For the purposes of this Section 1, the term "publicly traded securities" shall
mean securities that are traded on a national securities exchange or listed on
the Nasdaq National Market. Notwithstanding the foregoing, Employee will not be
prohibited from competing with Parametric in any part of Parametric's Geographic
Scope of the Business, if Parametric, or any entity obtaining title to its good
will or shares, ceases to carry on a like Business therein. This exception to
Employee's covenant not to compete only applies to the country in which the
Business is no longer carried on and does not affect the enforceability of this
Section 1 in the countries in which the Business is continued.
-2-
<PAGE>
2. Discontinuance of Benefits. In the event that Parametric
--------------------------
determines that Employee has failed to comply with any of the conditions of this
Agreement, Parametric shall have the right to discontinue any or all remaining
benefits payable to Employee under any retention or other severance plan or
agreements. Such discontinuance of benefits shall be in addition to and shall
not limit any and all other rights and remedies that Parametric may have against
Employee.
3. Right to Injunction. Employee further understands and agrees
-------------------
that the restrictions contained in this Agreement are necessary for the
protection of the business and goodwill of Computervision, Parametric, and the
Business (the "Protected Interests") and are considered by Employee to be
reasonable for such purpose. Employee agrees that any breach of this Agreement
will cause substantial and irrevocable damage to the Protected Interests with
respect to which the remedy at law for damages will be inadequate. Therefore,
in the event of breach or anticipatory breach of the covenants set forth in this
Agreement by Employee, Employee and Parametric agree that Parametric shall be
entitled to the following particular forms of relief, in addition to any other
remedies otherwise available to it at law or equity: (i) injunctions, both
preliminary and permanent, enjoining or restraining such breach or anticipatory
breach and Employee hereby consents to the issuance thereof forthwith and
without bond by any court of competent jurisdiction; and (ii) recovery of all
reasonable sums expended and costs, including reasonable attorneys fees,
incurred by Parametric to enforce the covenants set forth in this Agreement.
4. Supersession. To the extent that any of the provisions of this
------------
Agreement conflict with the provisions of any prior non-competition clause or
agreement between Employee and Computervision, the provisions of this Agreement
shall control.
5. Savings Clause. If any restriction set forth in Section 1 above
--------------
is held to be unreasonable or unenforceable, then Employee agrees, and hereby
submits, to the reduction and limitation of such prohibition to such area or
period as shall be deemed reasonable.
6. Successors and Assigns. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of Parametric and its successors and assigns. This
Agreement shall be binding upon Employee and shall inure to his benefit and to
the benefit of his heirs, executors, administrators and legal representatives,
but shall not be assignable by Employee.
7. Amendment. This Agreement may be amended or altered only in a
---------
writing signed by the Chief Executive Officer or the Chief Operating Officer of
Parametric and Employee.
8. Applicable Law; Severability. This Agreement shall be construed
----------------------------
and interpreted in accordance with the laws of the Commonwealth of Massachusetts
without regard to conflicts of laws principles. The covenants contained in this
Agreement constitute a series of separate covenants, one for each applicable
State in the United States and the District of Columbia, and one for each
applicable foreign country. If in any judicial proceeding a court shall hold
unenforceable any of the separate covenants deemed included herein, then such
unenforceable covenant or covenants shall be deemed eliminated from the
provisions of this Agreement for the purpose of such proceeding to the extent
necessary to permit the remaining
-3-
<PAGE>
separate covenants to be enforced in such proceeding. Employee and Parametric
further agree that the covenants in this Agreement shall each be construed as a
separate agreement independent of any other provisions of this Agreement, and
the existence of any claim or cause of action by Employee against Parametric
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Parametric of any of the covenants of this
Agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the date first written above.
COMPUTERVISION CORPORATION PARAMETRIC TECHNOLOGY CORPORATION
By: _________________________________ By: ___________________________________
Print Name: _________________________ Print Name: ___________________________
Its: ________________________________ Its: __________________________________
EMPLOYEE
_____________________________________
Name
[Signature Page to Non-Competition Agreement]
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<PAGE>
EXHIBIT 2.2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT dated as of November 3, 1997 (the "Agreement")
is entered into by and between Parametric Technology Corporation ("Parametric"),
a Massachusetts corporation, and Computervision Corporation ("Computervision"),
a Delaware corporation. Concurrently with the execution and delivery of this
Agreement, Computervision, Parametric and PTC Acquisition Corporation ("Merger
Sub"), a Delaware corporation and a wholly owned subsidiary of Parametric, are
entering into an Agreement and Plan of Reorganization (the "Acquisition
Agreement"), which provides that, among other things, upon the terms and subject
to the conditions thereof, Merger Sub will be merged with and into
Computervision (the "Merger") with Computervision continuing as the surviving
corporation and as a wholly owned subsidiary of Parametric. Capitalized terms
used herein but not defined herein shall have the meanings set forth in the
Acquisition Agreement. As a condition and inducement to Parametric's
willingness to enter into the Acquisition Agreement, Parametric has required
that Computervision agree, and Computervision has so agreed, to grant to
Parametric an option to acquire shares of Computervision's Common Stock upon the
terms and subject to the conditions set forth herein.
Accordingly, in consideration of the foregoing and of the mutual covenants
and agreements set forth herein and in the Acquisition Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant of Option.
---------------
Computervision hereby grants to Parametric an irrevocable option (the
"Option") to acquire up to 9,558,809 shares (the "Option Shares") of the Common
Stock, par value $.01 per share, of Computervision ("Computervision Shares")
(being 15% of the number of Computervision Shares outstanding as of the date
hereof) in the manner set forth below at a price of $4.00 per Computervision
Share (the "Exercise Price"), payable in cash. The number of Computervision
Shares that may be purchased upon exercise of this Option and the Exercise Price
are subject to adjustment as provided in Section 9. Notwithstanding the
foregoing, in no event shall the number of Computervision Shares for which the
Option is exercisable exceed 15% of the number of issued and outstanding
Computervision Shares.
2. Exercise of Option.
------------------
(a) The Option may only be exercised by Parametric, in whole or in
part, at any time or from time to time, after the Acquisition Agreement becomes
terminable under circumstances which would entitle Parametric to a payment under
Section 7.3(d) of the Acquisition Agreement upon its termination, regardless of
whether the Acquisition Agreement is terminated pursuant to such provisions or
whether an Alternative Transaction is
<PAGE>
consummated (any of the events specified in this sentence being referred to
herein as an "Exercise Event"). Computervision shall notify Parametric promptly
in writing of the occurrence of any Exercise Event, it being understood that the
giving of such notice by Computervision shall not be a condition to the right of
Parametric to exercise the Option. In the event Parametric wishes to exercise
the Option, Parametric shall deliver to Computervision a written notice (an
"Exercise Notice") specifying the total number of Option Shares it wishes to
acquire. Each closing of a purchase of Option Shares (a "Closing") shall occur
on a date and at a time designated by Parametric in an Exercise Notice delivered
at least two business days prior to the date of such Closing, which Closing
shall be held at the offices of counsel to Parametric. Upon the giving by
Parametric to Computervision of the Exercise Notice and the tender of the
applicable aggregate Exercise Price and provided that the conditions to
Computervision's obligation to issue the Option Shares to Parametric hereunder
set forth in Section 3 have been satisfied or waived, Parametric shall be deemed
to be the holder of record of the Option Shares issuable upon such exercise,
notwithstanding that the stock transfer book of Computervision shall then be
closed or that certificates representing such Option Shares shall not then be
actually delivered to Parametric.
(b) The Option shall terminate upon the earliest to occur of (i) the
Effective Date, (ii) 180 days following the termination of the Acquisition
Agreement pursuant to Article VII thereof, if an Exercise Event shall have
occurred on or prior to the date of such termination, and (iii) the date on
which the Acquisition Agreement is terminated pursuant to Article VII thereof if
an Exercise Event shall not have occurred on or prior to such date; provided,
however, with respect to the preceding clause (ii) of this sentence, that (x) if
the Option cannot be exercised by reason of any applicable government order or
because the waiting period related to the issuance of the Option Shares under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), if applicable, shall not have expired or been terminated, then the Option
shall not terminate until the tenth business day after such impediment to
exercise shall have been removed or shall have become final and not subject to
appeal and (y) if Sections 7.3(d)(ii) or (iii) of the Acquisition Agreement are
applicable, the Option shall not terminate until 30 days after the event
entitling Parametric to a payment thereunder.
3. Conditions to Closing.
---------------------
The obligation of Computervision to issue the Option Shares to
Parametric hereunder is subject to the conditions that (i) any waiting period
under the HSR Act applicable to the issuance of the Option Shares hereunder
shall have expired or been terminated; (ii) all consents, approvals, orders or
authorizations of, or registrations, declarations or filings with, any Federal,
state or local administrative agency or commission or other Federal, state or
local governmental authority or instrumentality, if any, required in connection
with the issuance of the Option Shares hereunder shall have been obtained or
made, as the case may be; and (iii) no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such issuance shall be in effect.
-2-
<PAGE>
4. Closing.
-------
At any Closing, (i) Computervision shall deliver to Parametric a single
certificate in definitive form representing the number of Option Shares
designated by Parametric in its Exercise Notice, such certificate to be
registered in the name of Parametric and to bear the legend set forth in Section
10 hereof, and (ii) Parametric shall pay to Computervision the aggregate
purchase price for the Computervision Shares so designated and being purchased
by wire transfer of immediately available funds or by delivery of a certified
check or bank check. At any Closing at which Parametric is exercising the
Option in part, Parametric shall present and surrender this Agreement to
Computervision, and Computervision shall deliver to Parametric an executed new
agreement with the same terms as this Agreement evidencing the right to purchase
the balance of the Computervision Shares constituting the Option Shares
purchasable hereunder. Computervision shall pay all expenses, and any and all
Federal, state and local transfer or issuance taxes, and other similar charges
that may be payable in connection with the preparation, issue and delivery of
stock certificates under this Section 4.
5. Representations and Warranties of Computervision.
------------------------------------------------
Computervision represents and warrants to Parametric that (i)
Computervision is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder; (ii) the execution and delivery of this Agreement by Computervision
and consummation by Computervision of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of
Computervision and no other corporate proceedings on the part of Computervision
are necessary to authorize this Agreement or any of the transactions
contemplated hereby; (iii) this Agreement has been duly executed and delivered
by Computervision and constitutes a legal, valid and binding obligation of
Computervision and, assuming this Agreement constitutes a legal, valid and
binding obligation of Parametric, is enforceable against Computervision in
accordance with its terms; (iv) except for any filings as may be required under
the HSR Act, Computervision has taken all necessary corporate and other action
to authorize and reserve for issuance and to permit it to issue upon exercise of
the Option, and at all times from the date hereof until the termination of the
Option will have reserved for issuance, a sufficient number of unissued
Computervision Shares for Parametric to exercise the Option in full and will
take all necessary corporate or other action to authorize and reserve for
issuance all additional Computervision Shares or other securities which may be
issuable pursuant to Section 9 upon exercise of the Option, all of which, upon
their issuance and delivery in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable and free of any preemptive
right; (v) upon delivery of the Option Shares and any other securities to
Parametric upon exercise of the Option or upon becoming deemed the holder of
record of the Option Shares and any other securities delivered to Parametric
upon exercise of the Option, Parametric will acquire such Option Shares or other
securities free and clear of all material claims, liens, charges, encumbrances
and security interests of any kind or nature whatsoever, excluding those imposed
by Parametric; (vi) the execution and delivery of this Agreement by
Computervision does not, and the performance of this Agreement by Computervision
will not, (A) violate the Certificate of Incorporation or
-3-
<PAGE>
By-Laws of Computervision, (B) conflict with or violate any law, ordinance or
regulation or any order, judgment, injunction, decree or other requirement of
any court, arbitrator, governmental or regulatory body applicable to
Computervision or any of its Subsidiaries or by which they or any of their
property is bound or (C) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give rise to any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of Computervision or any of its Subsidiaries pursuant to,
any contract or agreement to which Computervision or any of its Subsidiaries is
a party or by which Computervision or any of its Subsidiaries or any of their
property is bound, except, in the case of clauses (B) and (C) above, for
violations, conflicts, breaches, defaults, rights of termination, amendment,
acceleration or cancellation, liens or encumbrances which would not,
individually or in the aggregate, have a Computervision Material Adverse Effect;
(vii) the execution and delivery of this Agreement by Computervision does not,
and the performance of this Agreement by Computervision will not, require any
consent, approval, authorization or permit of, or filing with, or notification
to, any Governmental Entity except pursuant to the HSR Act, if applicable; and
(viii) none of Computervision, any of its affiliates or anyone acting on its or
their behalf, has issued, sold or offered any security of Computervision to any
person under circumstances that would cause the issuance and sale of the Option
Shares, as contemplated by this Agreement, to be subject to the registration
requirements of the Securities Act, as in effect on the date hereof, and,
assuming the representations and warranties of Parametric contained in clause
(iv) of Section are true and correct, the issuance, sale and delivery of the
Option Shares hereunder would be exempt from the registration and prospectus
delivery requirements of the Securities Act, as in effect on the date hereof
(and Computervision shall not take any action which would cause the issuance,
sale and delivery of the Option Shares hereunder not to be exempt from such
requirements).
6. Representations and Warranties of Parametric.
--------------------------------------------
Parametric represents and warrants to Computervision that (i)
Parametric is a corporation duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
corporate power and authority to enter into this Agreement and to carry out its
obligations hereunder; (ii) the execution and delivery of this Agreement by
Parametric and the consummation by Parametric of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Parametric and no other corporate proceedings on the part of Parametric are
necessary to authorize this Agreement or any of the transactions contemplated
hereby; (iii) this Agreement has been duly executed and delivered by Parametric
and constitutes a legal, valid and binding obligation of Parametric and,
assuming this Agreement constitutes a legal, valid and binding obligation of
Computervision, is enforceable against Parametric in accordance with its terms;
and (iv) any Computervision Shares acquired upon exercise of the Option will not
be acquired by Parametric with a view to the public distribution thereof and
Parametric will not sell or otherwise dispose of such shares in violation of
applicable law or this Agreement.
-4-
<PAGE>
7. Certain Rights.
--------------
(a) Put. At the request of Parametric at any time during the period
---
during which the Option is exercisable pursuant to Section 2 (the "Purchase
Period"), Computervision (or any successor entity thereof) shall, subject to the
limitation set forth in Section 10, purchase from Parametric (x) all or any
portion of the Option at the price set forth in subparagraph (i) below or (y)
all or any portion of the Option Shares, if any, acquired by Parametric pursuant
to the Option, at the following price:
(i) The purchase price of the Option shall be the difference
between the "Market/Offer Price" (as defined below) for Computervision
Shares as of the date Parametric gives notice of its intent to exercise its
rights under this Section 7 and the Exercise Price, multiplied by the
number of Option Shares purchasable pursuant to the Option (or portion
thereof with respect to which Parametric is exercising its rights under
this Section 7), but only if the Market/Offer Price is greater than the
Exercise Price. For purposes of this subparagraph (i), "Market/Offer
Price" shall mean, as of any date, the higher of (x) the highest price per
share offered as of such date pursuant to any Acquisition Transaction which
would have entitled Parametric to a payment under Section 7.3(c) of the
Acquisition Agreement and which was initiated prior to such date and not
terminated or withdrawn as of such date and (y) the Fair Market Value (as
defined below) of the Computervision Shares as of such date. For purposes
of this Agreement, the "Fair Market Value" of the Computervision Shares
shall mean the average closing sale price of Computervision Shares on the
New York Stock Exchange during the five (5) trading days ending on the
trading day immediately preceding the date Parametric gives notice of its
intent to exercise its rights under this Section 7.
(ii) The purchase price of the Option Shares shall be the sum of
(x) the Exercise Price paid by Parametric for Option Shares acquired
pursuant to the Option plus (y) the difference between the Fair Market
Value for Computervision Shares and such Exercise Price (but only if the
Fair Market Value is greater than the Exercise Price) multiplied by the
number of Computervision Shares so purchased.
(b) Payment and Redelivery of Shares. In the event Parametric
--------------------------------
exercises its rights under Section 7(a), Computervision shall, within ten
business days after Parametric delivers notice pursuant to Section 7(a) (which
notice may be delivered prior to consummation of the exercise of the Option),
pay the required amount to Parametric in immediately available funds and
Parametric shall surrender to Computervision the Option or the certificates
evidencing the Computervision Shares purchased by Parametric pursuant thereto,
and Parametric shall represent and warrant that it owns such Computervision
Shares and that such Computervision Shares are then free and clear of all
claims, liens, charges, encumbrances and security interests of any kind or
nature whatsoever.
(c) Repurchase Price Reduced at Parametric's Option. In the event the
-----------------------------------------------
repurchase price specified in Section 7(a) would subject the purchase of the
Option or the Option Shares purchased by Parametric pursuant to the Option to a
vote of the shareholders of Computervision pursuant to applicable law or
Computervision's Certificate of
-5-
<PAGE>
Incorporation then Parametric may, at its election, reduce the repurchase price
to an amount which would permit such repurchase without the necessity for such a
shareholder vote.
8. Registration Rights.
-------------------
(a) Following the termination of the Acquisition Agreement, Parametric
may by written notice (a "Registration Notice") to Computervision request
Computervision to register under the Securities Act all or any part of the
shares acquired by Parametric pursuant to this Agreement (the "Registrable
Securities") in order to permit the sale or other disposition of such shares
pursuant to a bona fide firm commitment underwritten public offering.
(b) Computervision shall use its best efforts to effect, as promptly
as practicable, the registration under the Securities Act of the Registrable
Securities; provided, however, that (i) Parametric shall not be entitled to more
than an aggregate of two effective registration statements hereunder and (ii)
Computervision will not be required to file any such registration statement
during any period of time (not to exceed 40 days after a Registration Notice in
the case of clause (A) below or 90 days after a Registration Notice in the case
of clauses (B) and (C) below) when (A) Computervision is in possession of
material non-public information which it reasonably believes would be
detrimental to be disclosed at such time and, in the written opinion of counsel
to Computervision, such information would have to be disclosed if a registration
statement were filed at that time; (B) Computervision is required under the
Securities Act to include audited financial statements for any period in such
registration statement and such financial statements are not yet available for
inclusion in such registration statement; or (C) Computervision determines, in
its reasonable judgment, that such registration would interfere with any
financing, acquisition or other material transaction involving Computervision.
If consummation of the sale of any Registrable Securities pursuant to a
registration hereunder does not occur within 180 days after the filing with the
SEC of the initial registration statement therefor, the provisions of this
Section 8 shall again be applicable to any proposed registration, it being
understood that Parametric shall be entitled to no more than an aggregate of two
effective registration statements hereunder. Computervision shall use all
reasonable efforts to cause any Registrable Securities registered pursuant to
this Section 8 to be qualified for sale under the securities or blue sky laws of
such jurisdictions as Parametric may reasonably request and shall continue such
registration or qualification in effect in such jurisdictions; provided,
however, that Computervision shall not be required to qualify to do business in,
or consent to general service of process in, any jurisdiction by reason of this
provision.
(c) The registration rights set forth in this Section 8 are subject to
the condition that Parametric shall provide Computervision with such information
with respect to Parametric's Registrable Securities, the plan for distribution
thereof, and such other information with respect to Parametric as is necessary
to enable Computervision to include in a registration statement all material
facts required to be disclosed with respect to a registration thereunder.
(d) A registration effected under this Section 8 shall be effected at
Computervision's expense, except for underwriting discounts and commissions and
the fees
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and expenses of counsel to Parametric, and Computervision shall provide to the
underwriters such documentation (including certificates, opinions of counsel and
"comfort" letters from auditors) as are customary in connection with
underwritten public offerings and as such underwriters may reasonably require.
In connection with any registration, the parties agree (i) to indemnify each
other and the underwriters in the customary manner, (ii) to enter into an
underwriting agreement in form and substance customary for transactions of this
type with the underwriters participating in such offering, and (iii) to take all
further actions which shall be reasonably necessary to effect such registration
and sale (including if the managing underwriter deems it necessary,
participating in road show presentations).
9. Adjustment Upon Changes in Capitalization.
-----------------------------------------
In the event of any change in the Computervision Shares by reason of
stock dividends, split-ups, mergers (other than the Merger), recapitalizations,
combinations, exchanges of shares and the like, the type and number of shares or
securities subject to the Option, and the Exercise Price, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Parametric shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Parametric
would have received in respect of the Computervision Shares if the Option had
been exercised immediately prior to such event or the record date therefor, as
applicable.
10. Profit Limitation.
-----------------
(a) Notwithstanding any other provision of this Agreement, in no event
shall Parametric's Total Profit (as hereinafter defined) exceed $18 million and,
if it otherwise would exceed such amount, Parametric, at its sole election,
shall either (a) deliver to Computervision for cancellation Option Shares
previously purchased by Parametric, (b) pay cash to Computervision or (c)
undertake any combination thereof, so that Parametric's Total Profit shall not
exceed $18 million after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, the Option
may not be exercised for a number of Option Shares as would, as of the date of
the Exercise Notice, result in a Notional Total Profit (as hereinafter defined)
of more than $18 million and, if exercise of the Option otherwise would exceed
such amount, Parametric, at its discretion, may increase the Exercise Price for
the number of Computervision Shares set forth in the Exercise Notice so that the
Notional Total Profit shall not exceed $18 million.
(c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Parametric pursuant to Sections 7.3(c) and (d) of the Acquisition Agreement,
(ii) the amount of cash received by Parametric pursuant to the exercise of the
put right with respect to the Option under Section 7(a)(i) and (iii) (x) the net
cash amounts received by Parametric pursuant to the sale of Option Shares (or
any other securities into which such Option Shares are converted or exchanged)
to Computervision or any unaffiliated party, less (y) Parametric's purchase
price for such Option Shares.
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(d) As used herein, the term "Notional Total Profit" with respect to
any number of Option Shares as to which Parametric may propose to exercise the
Option shall be the Total Profit determined as of the date of the Exercise
Notice assuming that the Option was exercised on such date for such number of
Option Shares and assuming that such Option Shares, together with all other
Computervision Shares held by Parametric and its affiliates as of such date,
were sold for cash at the closing market price for the Computervision Shares as
of the close of business on the preceding trading day (less customary brokerage
commissions).
(e) Notwithstanding the foregoing, the Option may not be exercised if
Parametric is in breach in any material respect of any of its covenants or
agreements contained in the Acquisition Agreement.
11. Restrictive Legends.
-------------------
Each certificate representing Option Shares issued to Parametric
hereunder shall include a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER AS SET FORTH IN THE STOCK OPTION AGREEMENT DATED AS OF NOVEMBER 3,
1997, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
12. Listing and HSR filing.
----------------------
Computervision, upon the request of Parametric, shall promptly file an
application to list the Computervision Shares to be acquired upon exercise of
the Option for quotation on the New York Stock Exchange and shall use its best
efforts to obtain approval of such listing as soon as practicable. Promptly
after the date such a filing is permitted to be made, each of the parties hereto
shall file with the Federal Trade Commission and the Antitrust Division of the
United States Department of Justice all required premerger notification and
report forms and other documents and exhibits required to be filed under the HSR
Act, if any, to permit the acquisition of the Computervision Shares subject to
the Option at the earliest possible date.
13. Effect.
------
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Nothing
contained in this Agreement, express or implied, is intended to confer upon any
person other than the parties hereto and their respective successors and
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Certificates representing shares sold in a
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registered public offering pursuant to Section 8 shall not be required to bear
the legend set forth in Section 11.
14. Specific Performance.
--------------------
The parties recognize and agree that if for any reason any of the
provisions of this Agreement are not performed in accordance with their specific
terms or are otherwise breached, immediate and irreparable harm or injury would
be caused for which money damages would not be an adequate remedy. Accordingly,
each party agrees that in addition to other remedies the other party shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement. In the event that any action shall be brought
in equity to enforce the provisions of the Agreement, neither party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
15. Entire Agreement.
----------------
This Agreement and the Acquisition Agreement (including the appendices
and exhibits thereto) constitute the entire agreement between the parties with
respect to the subject matter hereof and supersede all other prior agreements
and understandings, both written and oral, between the parties with respect to
the subject matter hereof.
16. Further Assurances.
------------------
Each party will execute and deliver all such further documents and
instruments and take all such further action as may be necessary in order to
constitute the transactions contemplated hereby.
17. Validity.
--------
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect. In the event any
Governmental Entity of competent jurisdiction holds any provision of this
Agreement to be null, void or unenforceable, the parties hereto shall negotiate
in good faith and shall execute and deliver an amendment to this Agreement in
order, as nearly as possible, to effectuate, to the extent permitted by law, the
intent of the parties hereto with respect to such provision.
18. Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or by commercial delivery service,
or sent via telecopy (receipt confirmed) to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy numbers for
a party as shall be specified by like notice):
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(a) if to Parametric, to:
Parametric Technology Corporation
128 Technology Drive
Waltham, MA 02154
Attention: Chairman and Chief Executive Officer
Telephone No.: (617) 398-5000
Telecopy No.: (617) 398-5662
with a copy at the same address to the attention of the General
Counsel, and
with a copy to: Palmer & Dodge LLP
One Beacon Street
Boston, MA 02108
Attn: Stanley Keller, Esq.
Telephone No.: (617) 573-0100
Telecopy No.: (617) 227-4420
(b) if to Computervision, to:
Computervision Corporation
100 Crosby Drive
Bedford, MA 01730-1480
Attention: President
Telephone No.: (617) 275-1800
Telecopy No.: (617) 743-1755
with a copy at the same address to the attention of the General
Counsel, and
with a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Paul P. Brountas, Esq.
Telephone No.: (617) 526-6000
Telecopy No.: (617) 526-5000
19. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts applicable to agreements made and
to be performed entirely within such state.
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20. Counterparts.
------------
This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original, but both of which, taken together, shall
constitute one and the same instrument.
21. Expenses.
--------
Except as otherwise expressly provided herein or in the Acquisition
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses.
22. Amendments; Waiver.
------------------
This Agreement may be amended by the parties hereto and the terms and
conditions hereof may be waived only by an instrument in writing signed on
behalf of each of the parties hereto, or, in the case of a waiver, by an
instrument signed on behalf of the party waiving compliance.
23. Assignment.
----------
Neither of the parties hereto may sell, transfer, assign or otherwise
dispose of any of its rights or obligations under this Agreement or the Option
created hereunder to any other person, without the express written consent of
the other party, except that Parametric may (a) assign any of its rights
hereunder to any affiliate and (b) assign its registration rights under Section
8 to any subsequent holder of Option Shares other than a holder who acquired
such shares in a sale that was either registered under the Securities Act or
pursuant to SEC Rule 144 under the Securities Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers as of the date first above
written.
PARAMETRIC TECHNOLOGY CORPORATION
By: /s/ Edwin J. Gillis
-------------------
Name: Edwin J. Gillis
Title: Executive Vice President, Chief Financial
Officer and Treasurer
COMPUTERVISION CORPORATION
By: /s/ Anthony N. Fiore, Jr.
-------------------------
Name: Anthony N. Fiore, Jr.
Title: Vice President of Business Operations, General
Counsel
[Signature Page to Stock Option Agreement]
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