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 or earliest event reported) September 8, 1997
MEDIC COMPUTER SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
North Carolina
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(State or other jurisdiction of incorporation)
0-20183 56-1306083
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(Commission file Number) (IRS Employer ID Number)
8601 Six Forks Road, Raleigh, North Carolina 27615
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (919) 847-8102
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Item 5. Other Events.
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On September 5, 1997, the Registrant and Misys, plc, a public limited
company incorporated in England ("Misys"), announced that the two
companies have signed a definitive merger agreement for the acquisition
of Medic by Misys. Under the terms of the definitive merger agreement, Medic
shareholders would receive $35 per share for each share of Medic Common Stock.
The transaction is subject to the following customary conditions: (a) the
approval of the shareholders of each of Medic and Misys; (b) the expiration or
termination of the waiting period applicable to the consummation of the merger
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (c) the
securing or completion of all consents and regulatory filings or approvals
necessary for consummation of the merger; (d) the absence of any temporary
restraining order, preliminary or permanent injunction or other order or
decree issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the merger; (e) the
accuracy of all representations and warranties of the parties at closing;
(f) the performance by the parties of their obligations under the merger
agreement at or prior to closing; (g) the absence of any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
merger, by any governmental entity which, in connection with the grant
of a requisite regulatory approval, imposes a burdensome condition on any
of the parties; and (h) the securing of financing by Misys sufficient to
fund the acquisition. In addition, the merger agreement may be terminated
by Misys in the event Medic's disclosures to be made at closing disclose
matters or conditions that are materially and adversely different from the
condition of Medic as reflected in the disclosures made by Medic to Misys
upon execution of the merger agreement. In the event of a termination of the
merger agreement, Medic may be required to pay termination fees and expenses of
up to $36,000,000 to Misys under certain circumstances.
Although the parties expect to close the proposed acquisition by late
October or November 1997, there can be no assurance that the merger will
occur by such time, or at all.
Contemporaneously with the execution of the Merger Agreement, Medic and
Misys entered into a Stock Option Agreement, pursuant to which Medic granted to
Misys the right to purchase up to that number of shares of Common Stock (the
"Misys Option") which, when added to any shares Misys owns (other than in a
fiduciary capacity) at the time of exercise, would total 19.9% of the
outstanding shares of Common Stock after giving effect to the exercise. The
Stock Option Agreement provides that the Misys Option is subject to any required
regulatory approvals and will become exercisable only upon any event obligating
the Company to pay a termination fee. Upon occurrence of such an event, the
Misys Option will be exercisable by Misys at $35 per share.
As an inducement to Misys to enter into the merger agreement, certain
management shareholders and directors of Medic, owning beneficially an
aggregate of approximately 13.2% of the outstanding Medic Common Stock, entered
into a Shareholders Agreement dated September 4, 1997, pursuant to which such
shareholders agreed to, among other things, vote their shares in favor of the
merger at any meeting of shareholders called to vote thereon. In the event Medic
consummates an acquisition other than the merger, with a price per share greater
than $35, such management shareholders will pay to Misys an amount equal to the
difference between such higher price and $35 multiplied by the number of shares
of Medic Common Stock held by them.
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Item 7. Exhibits
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2.6 Agreement and Plan of Merger dated September 4, 1997 by and among
the Registrant, Misys, plc, Kirsty, Inc. and Decimal Music
Corporation.
10.58 Shareholders Agreement dated September 4, 1997 among Misys, plc,
Kirsty, Inc., Decimal Music Corporation and certain shareholders of
the Registrant.
10.59 Music Stock Option Agreement dated September 4, 1997 by and between
the Registrant and Misys, plc.
SIGNATURE
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 thereunto duly authorized.
MEDIC COMPUTER SYSTEMS, INC.
Date: September 8, 1997 /s/ LUANNE L. ROTH
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Luanne L. Roth
Vice President, Chief Financial
Officer, Secretary and Treasurer
(Principal Financial and
Accounting Officer)
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Exhibit 2.6
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 4, 1997 (this
"Agreement"), among MISYS PLC, a public limited company incorporated under the
laws of England (the "Purchaser"), KIRSTY, INC., a Delaware corporation and
indirect wholly owned subsidiary of the Purchaser (the "US Parent"), DECIMAL
MUSIC CORPORATION, a North Carolina corporation and a direct wholly owned
subsidiary of the US Parent ("Merger Sub"), and MEDIC COMPUTER SYSTEMS, INC., a
North Carolina corporation (the "Company").
RECITALS
WHEREAS, the Boards of Directors of the Purchaser, the US Parent,
Merger Sub and the Company each have determined that it is in the best interests
of their respective companies and shareholders for Merger Sub to be merged into
the Company pursuant to the laws of the State of North Carolina and upon the
terms and subject to the conditions set forth herein.
WHEREAS, concurrently with the execution of this Agreement and as a
condition and inducement to the Purchaser's, the US Parent's and Merger Sub's
willingness to enter into this Agreement, the Purchaser and the Company are
entering into a Stock Option Agreement substantially in the form of Exhibit A
attached hereto (the "Stock Option Agreement"), pursuant to which the Company
has granted to the Purchaser an option to purchase shares of Common Stock.
WHEREAS, concurrently with the execution of this Agreement and as a
condition and inducement to the Purchaser's, the US Parent's and Merger Sub's
willingness to enter into this Agreement, certain shareholders of the Company,
the Purchaser, the US Parent and Merger Sub are entering into a Shareholders
Agreement substantially in the form of Exhibit B attached hereto (the
"Shareholders Agreement"), pursuant to which such shareholders have agreed,
among other things, to vote their shares in favor of the Merger.
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements in connection herewith.
NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto hereby agree as follows:
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ARTICLE 1.
THE MERGER
1.1. The Merger. Subject to the terms and conditions of this
Agreement, at the Effective Time (defined terms used herein not previously
defined having the meanings as hereinafter defined), Merger Sub shall be merged
with and into the Company in accordance with the North Carolina Business
Corporation Act (the "NCBCA") and this Agreement, and the separate corporate
existence of Merger Sub shall thereupon cease (the "Merger"). The Company shall
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation"). The Merger shall have the effects specified in the
NCBCA.
1.2. The Closing. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at the
offices of Debevoise & Plimpton, 875 Third Avenue, New York, New York, at 10:00
a.m., local time, as soon as practicable (but in no event more than one business
day) following the satisfaction (or waiver if permissible) of the conditions set
forth in Article 8 or at such other time, date or place as the Purchaser, Merger
Sub and the Company may agree. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date."
1.3. Effective Time. If all the conditions to the Merger set forth
in Article 8 shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article 9, the parties
hereto shall cause Articles of Merger meeting the requirements of Section
55-11-05 of the NCBCA to be properly executed and filed on the Closing Date in
accordance with such Section and Sections 55-1-20 and 55-1-22 of the NCBCA. The
Merger shall become effective at the time of filing of the Articles of Merger
with the Secretary of State of the State of North Carolina in accordance with
the NCBCA or at such later time which the parties hereto shall have agreed upon
and designated in such filing as the effective time of the Merger (the
"Effective Time").
ARTICLE 2.
ARTICLES OF INCORPORATION AND BYLAWS
OF THE SURVIVING CORPORATION
2.1. Articles of Incorporation. The Articles of Incorporation of
Merger Sub in effect immediately prior to the Effective Time in the form
attached hereto as Exhibit C shall be adopted as the Articles of Incorporation
of the Surviving Corporation, until duly
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amended in accordance with applicable law, except that the name of Merger Sub
as set forth in the Articles of Incorporation shall be changed to Medic Computer
Systems, Inc.
2.2. Bylaws. The Bylaws of Merger Sub in effect immediately prior to
the Effective Time shall be adopted as the Bylaws of the Surviving Corporation,
until duly amended in accordance with applicable law.
ARTICLE 3.
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1. Directors. The directors of the Company immediately prior to
the Effective Time shall be the directors of the Surviving Corporation as of the
Effective Time and shall hold office until their successors are duly appointed
or elected in accordance with applicable law, except that Patrick V. Hampson,
John L. Corse and Thomas C. Nelson shall be replaced by Michael Kevin O'Leary,
John Gilbert Sussens and David Taylor.
3.2. Officers. The officers of the Company immediately prior to the
Effective Time, together with such additions thereto as Merger Sub shall
designate, shall be the officers of the Surviving Corporation as of the
Effective Time and shall hold office until their successors are duly appointed
or elected in accordance with applicable law.
ARTICLE 4.
EFFECT OF THE MERGER ON SECURITIES
OF MERGER SUB AND THE COMPANY
4.1. Merger Sub Stock. At the Effective Time, each share of common
stock, $35 par value per share, of Merger Sub outstanding immediately prior to
the Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock, no par value per share, of
the Surviving Corporation.
4.2. Company Securities.
4.2.1. At the Effective Time, each share of Common Stock, par value
$.01 per share, of the Company (the "Common Stock") issued and outstanding
immediately prior to the Effective Time (other than shares of Common Stock owned
by the Purchaser, the US Parent or Merger Sub or held by the Company or owned or
held by any of their respective Subsidiaries, all of which shall be canceled as
provided in Section 4.2(c), and other than shares of Dissenting Common Stock)
shall, by virtue of the Merger and without
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any action on the part of the holder thereof, be converted into the right to
receive cash in the amount of $35 per share, without interest (the "Merger
Consideration").
4.2.2. As a result of the Merger and without any action on the part
of the holders thereof, at the Effective Time, all shares of Common Stock shall
cease to be outstanding and shall be automatically canceled and retired and
shall cease to exist, and each holder of shares of Common Stock (other than
Merger Sub, the US Parent, the Purchaser, the Company and each of their
respective Subsidiaries) shall thereafter cease to have any rights with respect
to such shares of Common Stock, except the right to receive, without interest,
the Merger Consideration in accordance with Section 4.3 upon the surrender of a
certificate or certificates (a "Certificate") representing such shares of Common
Stock or, with respect to shares of Dissenting Common Stock, payment of the
appraised value of shares of Dissenting Common Stock in accordance with Section
4.5.
4.2.3. Each share of Common Stock issued and owned or held by the
Purchaser, the US Parent, Merger Sub, the Company or any of their respective
Subsidiaries immediately prior to the Effective Time shall, by virtue of the
Merger, cease to be outstanding and shall be automatically canceled and retired
without payment of any consideration therefor.
4.2.4. Each option to purchase shares of Common Stock granted to any
employee or director of the Company or any of its Subsidiaries pursuant to any
of the Company's Amended and Restated Stock Plan, as amended effective November
18, 1992 and the 1996 Employee Stock Purchase Plan (collectively, the "Stock
Option Plans") that, immediately prior to the Effective Time, is outstanding
(each, an "Option" and, collectively, the "Options") shall be canceled in
exchange for the right to receive a cash payment as soon as reasonably
practicable, but in no event more than 30 days, following the Effective Time
equal to the product (such product, the "Option Consideration") of (i) the
excess of (x) the Merger Consideration over (y) the exercise price per share
under such Option multiplied by (ii) the number of shares of Common Stock
covered by such Option, which cash payment shall be reduced by any applicable
withholding taxes. The right of each holder of an Option to receive the Option
Consideration in cancellation of such Option shall be evidenced by, and subject
to such holder's execution of, an agreement, reasonably satisfactory to the
Purchaser, providing that, subject to receipt of the Option Consideration, such
optionholder shall have released the Company, its Subsidiaries, and the
Purchaser and its Subsidiaries and Affiliates from any and all liability in
respect of the Options.. The Company shall use its reasonable efforts to ensure
that such agreement is in the form attached hereto as Exhibit A. The Company
shall use its reasonable efforts to obtain all necessary consents of the holders
of Options to the cancellation of the Options in accordance with this Section
4.2(d).
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4.3. Exchange of Certificates Representing Common Stock
(a) Prior to the Effective Time, the Purchaser and the US Parent
shall appoint a commercial bank or trust company having net capital of not less
than $100,000,000 and which is reasonably satisfactory to the Company, to act as
paying agent hereunder for payment of the Merger Consideration upon surrender of
Certificates (the "Paying Agent"). The Purchaser and the US Parent shall, or
shall cause the Surviving Corporation to, provide the Paying Agent with cash in
amounts necessary to pay for all the shares of Common Stock pursuant to Section
4.2(a) and to make all payments in connection with the Options as to which
payments are due as of the Effective Time pursuant to Section 4.2(d), as and
when such amounts are needed by the Paying Agent.
Such amounts shall hereinafter be referred to as the "Exchange Fund."
(b) Promptly after the Effective Time, the Purchaser and the US
Parent shall cause the Paying Agent to mail to each holder of record of shares
of Common Stock immediately prior to the Effective Time (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk of
loss and title to such Certificates shall pass, only upon delivery of the
Certificates to the Paying Agent and which letter shall be in customary form and
have such other provisions as the Purchaser or the US Parent may reasonably
specify and (ii) instructions for effecting the surrender of such Certificates
in exchange for the Merger Consideration applicable thereto. Upon surrender of a
Certificate to the Paying Agent together with such letter of transmittal, duly
executed and completed in accordance with the instructions thereto, and such
other documents as may reasonably be required by the Paying Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor the amount of
cash into which shares of Common Stock theretofore represented by such
Certificate shall have been converted pursuant to Section 4.2, and the shares
represented by the Certificate so surrendered shall forthwith be canceled. No
interest will be paid or will accrue on the cash payable upon surrender of any
Certificate. In the event of a transfer of ownership of Common Stock which is
not registered in the transfer records of the Company, payment may be made with
respect to such Common Stock to such a transferee if the Certificate
representing such shares of Common Stock is presented to the Paying Agent,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid.
(c) At and after the Effective Time, there shall be no transfers on
the share transfer books of the Company of the shares of Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation, they shall be
canceled and exchanged as provided in this Article 4.
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(d) Any portion of the Exchange Fund (including the proceeds of any
interest and other income received by the Paying Agent in respect of all such
funds) that remains unclaimed by the former shareholders of the Company six
months after the Effective Time shall be delivered to the Surviving Corporation.
Any former shareholders of the Company who have not theretofore complied with
this Article 4 shall thereafter look only to the Surviving Corporation for
payment of any Merger Consideration that may be payable upon surrender of any
Certificates such shareholder holds, as determined pursuant to this Agreement,
without any interest thereon.
(e) None of the Purchaser, the US Parent, the Company, the Surviving
Corporation, the Paying Agent or any other person shall be liable to any former
holder of shares of Common Stock for any amount properly delivered to a public
official pursuant to applicable abandoned property, escheat or similar laws.
(f) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation or the Paying Agent, the posting by such person of a bond in such
reasonable amount as the Surviving Corporation or the Paying Agent may direct as
indemnity against any claim that may be made against it with respect to such
Certificate, the Paying Agent will issue in exchange for such lost, stolen or
destroyed Certificate the Merger Consideration payable in respect thereof
pursuant to this Agreement.
(g) The Paying Agent shall invest the cash in the Exchange Fund on
a daily basis, as instructed by the Purchaser. Any interest and other income
resulting from such investments shall be paid to the Purchaser.
4.4. Adjustment of Merger Consideration. If, subsequent to the date
of this Agreement but prior to the Effective Time, the outstanding shares of
Common Stock shall have been changed into a different number of shares or a
different class as a result of a stock split, reverse stock split, stock
dividend, subdivision, reclassification, split, combination, exchange,
recapitalization or other similar transaction, the Merger Consideration shall be
appropriately adjusted so that the aggregate amount payable pursuant to this
Agreement to effect the Merger shall not have increased as a result of such
adjustment.
4.5. Dissenting Company Shareholders. Notwithstanding any provision
of this Agreement to the contrary, if required by the NCBCA but only to the
extent required thereby, shares of Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by holders of such
shares who have properly exercised dissenters' rights with respect thereto (the
"Dissenting Common Stock") in
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accordance with Article 13 of the NCBCA will not be converted into the right to
receive the Merger Consideration, and holders of such shares of Dissenting
Common Stock will be entitled to receive payment of the "fair" value of such
shares of Dissenting Common Stock determined in accordance with the provisions
of such Article 13 unless and until such holders fail to perfect or effectively
withdraw or lose their rights to appraisal and payment under the NCBCA. If,
after the Effective Time, any such holder fails to perfect or effectively
withdraws or loses such right, such shares of Dissenting Common Stock will
thereupon be treated as if they had been converted into, at the Effective Time,
the right to receive the Merger Consideration, without any interest thereon.
Notwithstanding anything to the contrary contained in this Section 4.5, if
(a) the Merger is rescinded or abandoned or (b) the shareholders of the Company
or the Purchaser revoke the authority to effect the Merger, then the right of
any shareholder of the Company to be paid the fair value of such shareholder's
Dissenting Common Stock pursuant to Article 13 of the NCBCA shall cease. The
Company will give the Purchaser prompt notice of any demands and withdrawals of
such demands received by the Company for appraisals of shares of Dissenting
Common Stock. The Company shall not, except with the prior written consent of
the Purchaser or the US Parent, make any payment with respect to any demands for
appraisal or offer to make payment pursuant to Section 55-13-25 of the NCBCA or
otherwise offer to settle or settle any such demands.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the writing from the Company to the Purchaser,
the US Parent and Merger Sub that is dated the date of this Agreement and that
is identified by the Company as the disclosure letter to this Agreement (the
"Disclosure Letter"), as of the date hereof and as of the Effective Time, the
Company hereby represents and warrants to the Purchaser, the US Parent and
Merger Sub as follows, provided that the Company shall be entitled to update the
Disclosure Letter as of the Effective Time to reflect changes to the conditions
of the Company's business as of the Effective Time:
5.1. Existence; Good Standing; Corporate Authority. Each of the
Company and its Subsidiaries is (a) a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and (b) is duly licensed or qualified to do business as a foreign
corporation and is in good standing under the laws of any other jurisdiction in
which the character of the properties owned or leased by it or in which the
transaction of its business makes such licensure, qualification or good standing
necessary, except where the failure to be so in good standing or to be so
licensed or qualified, individually or in the aggregate, would not have a
material adverse effect on the business, operations, results of operations,
assets, financial condition or prospects of the
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Company and its Subsidiaries taken as a whole (a "Material Adverse Effect").
Each of the Company and its Subsidiaries has the requisite corporate power and
authority to own, operate and lease its properties and carry on its business as
now conducted. The Company has heretofore delivered to the Purchaser true and
correct copies of the Articles of Incorporation and Bylaws of the Company and
the organizational documents of each Subsidiary, in each case as currently in
effect.
5.2. Authorization, Validity and Effect of Agreements. The Company
has the requisite corporate power and authority to execute and deliver this
Agreement, the Stock Option Agreement and, subject to the Company Shareholder
Approval, to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Option Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly and validly authorized by the Board of
Directors, and no other corporate proceedings on the part of the Company (other
than the Company Shareholder Approval) are necessary to authorize this
Agreement, the Stock Option Agreement or to consummate the transactions
contemplated hereby or thereby. This Agreement and the Stock Option Agreement
have been duly and validly executed and delivered by the Company, and (assuming
this Agreement and the Stock Option Agreement constitute valid and binding
obligations of the Purchaser, the US Parent and Merger Sub) constitute the valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
5.3. Compliance with Laws. Neither the Company nor any of its
Subsidiaries is in violation in any material respect or in a manner that would
have a Material Delaying Effect of any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, judgment, ruling or decree ("Laws")
of any federal, state, local or foreign judicial, legislative, executive,
administrative or regulatory body or authority or any court, arbitration, board
or tribunal (each such entity, a "Governmental Entity") applicable to the
Company or any of its Subsidiaries or any of their respective properties or
assets, except for violations which, individually or in the aggregate, would not
prevent or materially delay the consummation of the transactions. No action,
demand, requirement or investigation by any Governmental Entity with respect to
the Company or its Subsidiaries is pending or, to the knowledge of the Company,
threatened, with respect to any of the foregoing. A "Material Delaying Effect"
is an effect that would prevent or materially delay the consummation of the
transactions contemplated hereby.
5.4. Capitalization. The authorized capital stock of the Company
consists of 40,000,000 shares of Common Stock. As of September 3, 1997 (a)
25,783,217 shares of Common Stock were issued and outstanding, (b) Options to
purchase an aggregate of 842,702 shares of Common Stock were outstanding,
842,702 shares of Common Stock were reserved for issuance upon the exercise of
outstanding Options and
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447,596 shares were reserved for future grants under the Stock Option Plans, and
there were no stock appreciation rights or limited stock appreciation rights
outstanding other than those attached to such Options, and (c) no shares of
Common Stock of the Company were held by the Company's Subsidiaries. Except for
the Options and the Stock Option Agreement, the Company has no outstanding
bonds, debentures, notes or other obligations or securities entitling the
holders thereof to vote (or which are convertible into or exercisable for
securities having the right to vote) with the shareholders of the Company on any
matter. All issued and outstanding shares of Common Stock are duly authorized,
validly issued, fully paid, nonassessable and free of preemptive rights. Except
as set forth in this Section 5.4 or in the Disclosure Letter, there are no
preemptive or similar rights on the part of any holders of any class of
securities of the Company, and there are no other shares of capital stock of the
Company, no securities of the Company convertible or exchangeable for shares of
capital stock or voting securities of the Company, and no existing options,
warrants, calls, subscriptions, convertible securities, or other rights,
agreements or commitments which obligate the Company or any of its Subsidiaries
to issue, transfer or sell any shares of capital stock of, or equity interests
in, the Company or any of its Subsidiaries. There are no outstanding obligations
of the Company or any Subsidiary to repurchase, redeem or otherwise acquire any
shares of capital stock of the Company. After the Effective Time, the Surviving
Corporation will have no obligation to issue, transfer or sell any shares of
capital stock of the Company or the Surviving Corporation. There are no voting
trusts or other agreements or understandings to which the Company or any of its
Subsidiaries is a party with respect to the voting of capital stock of the
Company or any of its Subsidiaries.
5.5. Subsidiaries. The Company owns, directly or indirectly through
a Subsidiary, all of the outstanding shares of capital stock (or other ownership
interests having by their terms ordinary voting power to elect directors or
others performing similar functions with respect to such Subsidiary) of each of
the Company's Subsidiaries. All outstanding shares of capital stock of each of
the Company's Subsidiaries are duly authorized, validly issued, fully paid and
nonassessable, and are owned, directly or indirectly, by the Company free and
clear of all liens, pledges, security interests, claims or other encumbrances
("Encumbrances"), except for Permitted Liens. There are no securities of any of
the Company's Subsidiaries convertible or exchangeable for shares of capital
stock or voting securities of such Subsidiary. The Disclosure Letter sets forth
for each Subsidiary of the Company: (i) its name and jurisdiction of
incorporation or organization; (ii) its authorized capital stock or share or
equity capital; (iii) the number of issued and outstanding shares of capital
stock or share or equity capital; and (iv) the holder or holders of such shares.
Except for interests in the Company's Subsidiaries or as set forth in the
Disclosure Letter, neither the Company nor any of its Subsidiaries owns directly
or indirectly any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or other entity.
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5.6. No Violation. Neither the execution and delivery by the
Company of this Agreement or the Stock Option Agreement nor the consummation by
the Company of the transactions contemplated hereby or thereby will: (a)
violate, conflict with or result in a breach of any provisions of the Articles
of Incorporation or Bylaws (or comparable constituent documents) of the Company
or any of its Subsidiaries; (b) violate or conflict in any material respect
with, result in a breach of any material provision of, constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, result in the termination or in a right of termination of,
accelerate the performance required by or benefit obtainable under, result in
the vesting, triggering or acceleration of any material payment or other
material obligations pursuant to, result in the creation of any material
Encumbrance upon any of the properties of the Company or its Subsidiaries under,
or result in there being declared void, voidable, subject to withdrawal, or
without further binding effect, any of the material terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust or any material
license, franchise, Permit, lease, contract, agreement or other material
instrument, commitment or obligation to which the Company or any of its
Subsidiaries is a party, by which the Company or any of its Subsidiaries or any
of their respective properties is bound, or under which the Company or any of
its Subsidiaries or any of their respective properties is entitled to a benefit
(each of the foregoing, to the extent the same have any continuing force or
effect, a "Contract" and collectively, "Contracts"); (c) other than the filings
provided for in Section 1.3, the filings required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 (the "HSR Act"), any filings under the
Securities Exchange Act of 1934 (the "Exchange Act"), or filings in connection
with the maintenance of qualification to do business in other jurisdictions (the
filings disclosed in the Disclosure Letter in response to this clause (c), the
other filings referred to in this clause (c) and Consents required or permitted
to be made or obtained, collectively, the "Regulatory Filings"), require any
consent, approval or authorization of, or declaration, filing or registration
with, any Governmental Entity, except for those consents, approvals,
authorizations, declarations, filings or registrations the failure of which to
obtain or make individually or in the aggregate would not have a Material
Adverse Effect or a Material Delaying Effect; or (d) violate in any material
respect any Laws applicable to the Company, any of its Subsidiaries or any of
their respective assets.
5.7. Company Reports; Undisclosed Liabilities. The Company has made
available to the Purchaser each registration statement, report, proxy statement
or information statement (as defined under the Exchange Act) prepared by it for
filing with the SEC since December 31, 1993, each in the form (including
exhibits and any amendments thereto) filed with the SEC (collectively, the
"Company Reports"). As of their respective dates, the Company Reports (a)
complied as to form in all material respects with the applicable requirements of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(the "Securities Act") and the Exchange Act and (b)
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did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. Each of the consolidated balance sheets of the Company included in
or incorporated by reference into the Company Reports (including the related
notes and schedules) fairly presents the consolidated financial position of the
Company and its consolidated Subsidiaries as of its date, and each of the
consolidated statements of earnings and cash flows of the Company included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents the results of operations, earnings or cash
flows, as the case may be, of the Company and its Subsidiaries for the periods
set forth therein, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except as may be
noted therein. Neither the Company nor any of its Subsidiaries has any
liabilities or obligations, contingent or otherwise, except liabilities and
obligations (i) in the respective amounts reflected on or reserved against in
the Company's consolidated balance sheet of June 30, 1997 included in the
Company Reports (ii) not required by GAAP to be included in the Company's
consolidated balance sheet of June 30, 1997 included in the Company Reports
(other than any such liabilities and obligations which were not reflected or
reserved against because they were contingent at June 30, but which would be
included in such a balance sheet prepared in accordance with GAAP as of the date
hereof) and (iii) liabilities and obligations incurred in the ordinary course of
business since that date which would not be prohibited by this Agreement.
5.8. Litigation. There are no claims, actions, suits, proceedings,
arbitrations, investigations or audits (collectively, "Litigation") by a third
party (including a Governmental Entity) pending or, to the knowledge of the
Company, threatened against the Company (or any Plan) or any of its
Subsidiaries, at law or in equity, other than those which individually or in the
aggregate would not in the good faith judgment of the Company be reasonably
likely to have a Material Adverse Effect or a Material Delaying Effect.
5.9. Absence of Certain Changes. Except as set forth in the
Disclosure Letter, since June 30, 1997, the Company and its Subsidiaries have
conducted their business only in the ordinary course of such business consistent
with past practices, and there has not been (a) any Material Adverse Effect
suffered by the Company or any of its Subsidiaries; (b) any declaration, setting
aside or payment of any dividend or other distribution with respect to the
capital stock of the Company or its Subsidiaries (other than wholly-owned
Subsidiaries) or, except as required by the Company's benefit plans, any
repurchase, redemption or any other acquisition by the Company or its
Subsidiaries of any outstanding shares of capital stock or other securities of,
or other ownership interests in, the Company or its Subsidiaries; (c) any change
in accounting principles, practices or methods; (d) any
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increase or commitment to increase the remuneration (including salary, incentive
compensation or benefits) of any director or employee of or consultant to the
Company or any of its Subsidiaries, whether directly or indirectly (including by
amendment, implementation or the entering into of any employment or employee
benefit or compensation agreement, plan or arrangement), by a material amount
(or, in the case of any executive officer of the Company or any such Subsidiary,
by any amount) other than any changes required by the current terms of any
existing plan or agreement or pursuant to this Agreement; (e) any revaluation by
the Company or any of its Subsidiaries of any of their respective assets, other
than normal recurring adjustments made in the ordinary course of business,
including, without limitation, write-downs of inventory or write-offs of
accounts receivable; or (f) any transaction or commitment made by the Company or
any of its Subsidiaries to buy or sell any assets that are material to the
Company's business.
5.10. Taxes. (a) The Company and each of its Subsidiaries have (or
will have by the Effective Time) timely filed all material Tax Returns required
to be filed by any of them. All such Tax Returns are true, correct and complete
in all material respects. All material Taxes of the Company and its Subsidiaries
which are (i) shown as due on such Returns, (ii) to the Company's knowledge,
otherwise due and payable or (iii) claimed or asserted by any taxing authority
to be due, have been paid, except for those Taxes being contested in good faith
and for which adequate reserves have been established in the most recent
financial statements included in the Company Reports in accordance with
generally accepted accounting principles. The Company and each Subsidiary has
either withheld and paid over to the relevant taxing authority or set aside in
accounts an amount equal to all material Taxes required to have been withheld
and paid in connection with payments to employees, independent contractors,
creditors, shareholders or other third parties.
(b) Except as set forth in the Disclosure Letter, (i) there are no
material Liens for Taxes upon the assets of the Company or any of its
Subsidiaries except Liens for Taxes not yet due; (ii) there are no material
outstanding deficiencies for any Taxes threatened, proposed, asserted or
assessed against the Company or any Subsidiary which are not provided for in the
most recent financial statements included in the Company Reports; (iii) there
are no federal, state, local or foreign audits or other administrative
proceedings or judicial proceedings presently pending with regard to any
material Taxes or Tax Returns required to be filed by or with respect to the
Company or any its Subsidiaries; (iv) the Company has filed a consolidated Tax
Return for federal income tax purposes on behalf of itself and all of its
domestic Subsidiaries as the common parent corporation of an "affiliated group"
(within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as
amended (the "Code")) of which such Subsidiaries are "includible corporations"
in such affiliated group within the meaning of Section 1504(c)(2) of the Code;
(v) to the Company's knowledge, the Internal Revenue Service has completed
examinations of the federal income tax returns filed by or with respect to the
Company (or the statute of
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limitations for the assessment of federal income taxes for such period has
expired) for all periods through and including December 31, 1995; (vi) none of
the Company or any of its Subsidiaries has been a member of an "affiliated
group" (as defined above), or any similar affiliated, combined or consolidated
group for state, local or foreign tax purposes (other than a group the common
parent of which is the Company), or has any liability for the Taxes of any
person (other than the Company or its current Subsidiaries) under Treasury
Regulation Section 1.1502-6 or any similar provision of state, local or foreign
law or as a transferee, successor, by contract or otherwise; and (vii) neither
the Company nor any of its Subsidiaries is a party to any tax sharing, tax
indemnity or other agreement or arrangement with respect to Taxes with any
entity not included in the most recent financial statements included in the
Company Reports.
(c) Neither the Company nor any of its Subsidiaries is a "U.S. real
property holding company" as defined in Section 897 of the Code.
(d) For purposes of this Agreement, (i) "Tax" means any federal,
state, local or foreign income, gross receipts, property, sales, use, license,
excise, franchise, employment, payroll, premium, withholding, alternative or
added minimum, ad valorem, transfer or excise tax, or any other tax, custom,
duty, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest or penalty, imposed by any Governmental
Entity, and (ii) "Tax Return" means any return, report or similar statement
required to be filed with respect to any Tax (including any attached schedules),
including, without limitation, any information return, claim for refund, amended
return or declaration of estimated Tax.
5.11. Employee Benefit Plans. The Disclosure Letter sets forth a
complete and correct list of each "employee benefit plan" (within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) and each other bonus, incentive or deferred compensation, severance,
retention, change in control, fringe benefit, employment or other employee
compensation or benefit agreement, plan or arrangement to which either the
Company or any of its Subsidiaries is a party or is bound or in respect of which
either the Company or any of its Subsidiaries may have any material liability
(collectively, the "Plans"). True and complete copies of each Plan and all
documents related thereto or the funding thereof have been made available to the
Purchaser. Each Plan intended to be qualified under section 401(a) of the Code,
and the trust (if any) forming a part thereof, has received a favorable
determination letter from the Internal Revenue Service or is an adoption of a
prototype or volume submitter plan whose sponsor has received a favorable
determination letter as to its qualification under the Code and to the effect
that each such trust is exempt from taxation under section 501(a) of the Code,
and, to the knowledge of the Company, no event has occurred since the date of
such determination letter that could reasonably be expected to materially and
adversely
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affect such qualification or tax-exempt status. No Plan is subject to section
412 of the Code or section 302 or Title IV of ERISA and no Plan is a
multiemployer plan, within the meaning of section 4001(a)(3) of ERISA. No
material liability has been incurred by, and no event, transaction or condition
has occurred or exists that would result in any material liability of, the
Company or any of its Subsidiaries (either directly or indirectly, including as
a result of an indemnification obligation or any joint and several liability
obligations) under or pursuant to Title I or IV of ERISA or the penalty, excise
tax or joint and several liability provisions of the Code relating to employee
benefit plans. Each of the Plans has been operated and administered in all
respects in compliance with all applicable Laws, except for any failure so to
comply that, individually or together with all other such failures, has not
resulted in, and will not have or result in, a Material Adverse Effect or a
Material Delaying Effect. There are no material pending or, to the knowledge of
the Company, threatened claims by or on behalf of any of the Plans, by any
Governmental Entity, by any current or former employee of the Company or any of
its Subsidiaries (collectively, the "Employees") or otherwise involving any such
Plan or the assets of any Plan (other than routine claims for benefits). All
material contributions, premiums and expenses payable to or in respect of any
Plan or the operation or administration thereof relating to any period on or
prior to the date hereof have been paid, adequately accrued in the audited
consolidated financial statements of the Company included in the most recent
Company Reports or incurred and relate to services rendered after the date of
such audited financial statements in the ordinary course of business consistent
with prior practice and in accordance with the terms of this Agreement. Except
as set forth in the Disclosure Letter, (i) the execution of, and performance of
the transactions contemplated in, this Agreement will not (either alone or upon
the occurrence of any additional or subsequent events) constitute an event under
any Plan that has resulted or may result in any material payment (whether of
severance pay or otherwise), acceleration, forgiveness of indebtedness, vesting,
distribution or increase in any compensation or benefits of any Employee or any
obligation of the Company or any of its Subsidiaries or, to the knowledge of the
Company, of the Purchaser, the US Parent or Merger Sub to fund any compensation
or benefits in respect of any Employee, other than the acceleration of any
unvested Options in accordance with Section 4.2(d) and (ii) no payment or
benefit which has been or may be made by the Company, any of its Subsidiaries,
or to the knowledge of the Company, by the Purchaser, the US Parent or Merger
Sub in respect of any Employee will constitute an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code.
5.12. Labor and Employment Matters. Except as set forth in the
Disclosure Letter, (a) neither the Company nor any of its Subsidiaries is a
party to, or bound by, any collective bargaining agreement or other contracts or
understanding with a labor union or labor organization; and (b) there is no
material (i) unfair labor practice, labor dispute (other than routine individual
grievances) or labor arbitration proceeding pending or, to
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the knowledge of the Company, threatened against the Company or any of its
Subsidiaries, (ii) activity or proceeding by a labor union or representative
thereof to organize any employees of the Company or any of its Subsidiaries, or
(iii) lockouts, strikes, slowdowns, work stoppages or similar labor activities
or threats thereof by or with respect to any such employees. The Company and its
Subsidiaries each is in compliance in all material respects with all Laws
regarding employment, employment practices, terms and conditions of employment
and wages.
5.13. Brokers and Finders. Except for Smith Barney Inc., no broker,
dealer or financial advisor is entitled to receive from the Company or any of
its Subsidiaries any broker's, finder's or investment banking fee in connection
with this Agreement or the transactions contemplated hereby.
5.14. Opinion of Financial Advisor. The Company has received the
opinion of Smith Barney Inc., to the effect that, as of the date of this
Agreement, the Merger Consideration is fair from a financial point of view to
the holders of Common Stock.
5.15. State Antitakeover Laws. The Company has validly "opted out"
of the provisions of Article 9 of the NCBCA, and those provisions are and will
not conflict with or prevent the performance of this Agreement, the Stock Option
Agreement, the Shareholders Agreement or any of the transactions contemplated
hereby or thereby. Assuming for this purpose that none of the Purchaser, the US
Parent or Merger Sub, individually or in the aggregate, possesses "control
shares" within the meaning of Article 9A of the NCBCA, neither Article 9A of the
NCBA nor, to the Company's knowledge, any other "business combination,"
"moratorium," "control share" or other antitakeover statute or regulation (a)
prohibits or restricts the Company's ability to perform its obligations under
this Agreement, the Stock Option Agreement or its ability to consummate the
transactions contemplated hereby or thereby, (b) would have the effect of
invalidating or voiding this Agreement, the Stock Option Agreement, the
Shareholders Agreement or any material provision thereof, or (c) would subject
the Purchaser, the US Parent or Merger Sub to any material impediment or
condition in connection with the exercise of any of their respective rights
under this Agreement, the Stock Option Agreement, the Shareholders Agreement or
with respect to the Company or the Surviving Corporation.
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5.16. Voting Requirements. The affirmative vote of the holders of a
majority of the voting power of all outstanding shares of Common Stock, voting
as a single class, at the Company Shareholder Meeting (the "Company Shareholder
Approval") to adopt this Agreement is the only vote of the holders of any class
or series of the capital stock of the Company necessary to approve and adopt
this Agreement, the Stock Option Agreement, the Shareholders Agreement and the
transactions contemplated hereby and thereby.
5.17. Material Contracts. The Disclosure Letter sets forth a list as
of the date hereof of all of the following Contracts to the extent not included
as an exhibit to the Company Reports: (a) Contracts for borrowed money or
guarantees thereof other than Contracts entered into in the ordinary course of
business consistent with the past practice of the Company or Contracts between
the Company and any of its wholly owned Subsidiaries or between any of the
Company's wholly owned Subsidiaries, (b) Contracts containing covenants by the
Company or any Subsidiary restricting its ability or the ability of any of the
affiliates of the Company or any of its Subsidiaries to engage in any line of
business, (c) Contracts involving a "strategic alliance" or a "preferred vendor"
relationship, (d) material Contracts with distributors, brokers or sales agents
for the distribution of the products of the Company, (e) Contracts involving or
related to acquisitions, mergers, sales or dispositions, and (f) other Contracts
under which the obligation of the Company and its Subsidiaries is $1,500,000 or
more (all Contracts described in each of the categories (i) through (x) above,
"Material Contracts"). All Material Contracts are, with respect to the Company
and its Subsidiaries, valid and binding, in full force and effect and
enforceable against the Company or its Subsidiaries, as the case may be, in
accordance with their respective terms. To the Company's knowledge, all Material
Contracts are, with respect to the other parties thereto, valid and binding, in
full force in effect and enforceable against such parties in accordance with
their respective terms. There is not under any such Contract, any existing
default, or event, which after notice or lapse of time, or both, would
constitute a default, by the Company or any of its Subsidiaries, or to the
Company's knowledge, any other party, other than any such defaults or events
which, individually or in the aggregate, would not have a Material Adverse
Effect.
5.18. Intellectual Property; Technology. The Disclosure Letter sets
forth a complete and correct list of all material Intellectual Property that
(i) is owned or (ii) is used or held for use, in each case, by the Company or
any Subsidiary in connection with, or that is material to, the business
currently conducted or proposed to be conducted by the Company and its
Subsidiaries (the "Company Intellectual Property"), except that the Disclosure
Letter does not need to set forth inventions, processes, formulae, trade
secrets, know-how or confidential information that are not reduced to tangible
form or that are not susceptible to legal protection by filing or registration
with any Governmental Entity.
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(b) The Company and its Subsidiaries own, or have the valid right
and license to use, and the Surviving Corporation will, immediately after the
Closing, own or have the valid right and license to use, all of the Intellectual
Property material to the conduct of the business of the Company and its
Subsidiaries as currently conducted. The Company and the Subsidiaries own all of
their rights in and to the Company Intellectual Property, free and clear of any
material Liens (except for Permitted Liens).
(c) The conduct of the business of the Company and the Subsidiaries
does not infringe any Intellectual Property or other rights of any Person, and
to the knowledge of the Company, none of the Company Intellectual Property is
being infringed, misappropriated or otherwise used or available for use by any
Person without written authority from the Company, except in each case for any
infringements that, individually or in the aggregate, would not reasonably be
expected to be material.
(d) No claim or demand of any Person has been made or, to the
knowledge of the Company, threatened, nor is there any litigation that is
pending or, to the knowledge of the Company, threatened, that (i) challenges the
rights of the Company in respect of any Company Intellectual Property, (ii)
asserts that the Company is infringing or otherwise in conflict with, or is
required to pay any material royalty, license fee, charge or other material
amount with regard to, any Company Intellectual Property, or (iii) claims that
any default exists under any agreement or arrangement set forth or required to
be disclosed in the Disclosure Letter. None of the Company Intellectual Property
is subject to any material outstanding order, ruling, decree, judgment or
stipulation by or with any court, tribunal, arbitrator or other Governmental
Entity.
(e) The Disclosure Letter sets forth a complete list of Company
Intellectual Property that is owned by the Company and that is registered with,
filed in or issued by, as the case may be, the United States Patent and
Trademark Office, the United States Copyright Office or other filing offices,
domestic or foreign, and such registrations, filings, issuances and other
actions remain in full force and effect.
(f) To the knowledge of the Company, the Company or a Subsidiary has
valid licenses to all copies of all Software that is utilized by it in
connection with the conduct of its business and that it does not own
("Commercial Software"), and the use by the Company or such Subsidiary of such
Commercial Software, including without limitation all modifications and
enhancements thereto (whether created by the Company or by a third party) is in
material compliance with the terms and provisions of such licenses. To the
knowledge of the Company, none of the software marketed or licensed by the
Company to its customers (the "Company Software"), and no use thereof by the
Company or permitted use by its licensees, infringes upon or violates any
patent, copyright, trade secret or other Intellectual Property right of any
person or entity, and no claim or demand with respect to
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any such infringement or violation has been made or, to the best knowledge of
the Company, threatened. To the knowledge of the Company, there are no defects
in the Company Software that would prevent such Software from performing in all
material respects the tasks and functions that it was intended to perform except
those which can be cured without a Material Adverse Effect. True and correct
copies of all material licenses and arrangements (including amendments,
supplements, waivers and other modifications) for any and all Company
Intellectual Property that is not owned by the Company (including but not
limited to any and all material Commercial Software) have been delivered to the
Purchaser. All royalties, license fees, charges and other amounts payable by, on
behalf of, to or for the account of any of the Company or its Subsidiaries in
respect of any Intellectual Property (including but not limited to Software) are
reflected in the financial statements contained in or referenced by the Company
Reports.
(g) "Intellectual Property" means the United States and foreign
trademarks, service marks, trade names, trade dress, copyrights, and similar
rights, including registrations and applications to register or renew the
registration of any of the foregoing, the United States and foreign letters
patent and patent applications, and inventions, processes, designs, formulae,
trade secrets, know-how, confidential information, Software, data and
documentation, and all similar intellectual property rights, tangible
embodiments of any of the foregoing (in any form or medium including electronic
media), and licenses of any of the foregoing.
(h) "Software" means all computer programs, including all source
code and object code versions thereof, in any and all forms and media, whether
recorded on paper, magnetic media or other electronic or non-electronic media,
and all documentation relating thereto, including, but not limited to, user
manuals and training materials.
5.19. Calendar Function. Except as disclosed in the Disclosure
Letter, all Company Software that contains or calls on a calendar function,
including but not limited to any function that is indexed to a computer
processing unit clock, provides specific dates or calculates spans of dates, is
and will be able to record, store, process and provide true and accurate dates
and calculations for dates and spans of dates including and following January 1,
2000, except that the Company makes no representation with respect to Commercial
Software, and except for any inaccuracies that, individually and in the
aggregate, would not be material and adverse.
5.20. Investments. Except as disclosed in the Disclosure Letter and
except with respect to Subsidiaries, the Company does not own any shares of
capital stock or other securities or interest in, any other Person.
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5.21. Health Care Regulations. The company has no material liability
resulting from any failure of the information processing applications of the
Company's healthcare information systems to operate in a manner consistent in
all material respects with all state and local health care regulations and
Medicare and Medicaid laws, rules, regulations, manuals and other conditions of
participation in such programs that are applicable to such information
processing applications. Neither the Company, any of its Subsidiaries nor any of
its executive officers has been subject or is currently subject to any audit
relating to fraudulent Medicare or Medicaid practices.
5.22. Insurance. The Disclosure Letter contains a complete and
correct list and summary description of all insurance policies maintained
(including Directors' and Officers' insurance) by or on behalf of the Company
and its Subsidiaries. The Company has delivered to the Purchaser complete and
correct copies of all such policies together with all riders and amendments
thereto. Such policies are in full force and effect, and all premiums due
thereon have been paid. The Company and its Subsidiaries have complied in all
material respects with the terms and provisions of such policies.
5.23. Product Liability. Except as set forth in the Disclosure
Letter, there are no liabilities of the Company or any of its Subsidiaries,
fixed or contingent, asserted or, to the knowledge of the Company, unasserted,
(a) with respect to any product liability or any similar claim that relates to
any Company Software or other product of the Company or any of its Subsidiaries,
or (b) with respect to any claim for the breach of any express or implied
product warranty or any other similar claim with respect to any Company Software
or other products of the Company or any of its Subsidiaries, other than standard
warranty obligations (to replace, repair or refund) made by the Company or any
of its Subsidiaries in the ordinary course of business to buyers of the
respective Company Software or other products, and except, in each case, where
such liabilities are not, individually or in the aggregate, reasonably likely to
have a Material Adverse Effect.
5.24. Disclosures. This Agreement and the Disclosure Letter, taken
as a whole, do not 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 contained herein, in the light of the circumstances under
which they were made, not misleading.
5.25. European Union Operations. Except as set forth in the
Disclosure Letter, neither the Company nor any of its Subsidiaries has any
operations or assets in the United Kingdom or the European Union or derives any
revenues or income from the United Kingdom or the European Union.
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ARTICLE 6.
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER, THE US PARENT AND MERGER SUB
As of the date hereof and as of the Effective Time, the Purchaser,
the US Parent and Merger Sub hereby jointly and severally represent and warrant
to the Company as follows:
6.1. Existence; Good Standing; Corporate Authority . Each of the
Purchaser, the US Parent and Merger Sub is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation.
6.2. Authorization, Validity and Effect of Agreements. Each of the
Purchaser, the US Parent and Merger Sub has the requisite corporate power and
authority to execute and deliver this Agreement and the Stock Option Agreement
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Stock Option Agreement and the
consummation by the Purchaser, the US Parent and Merger Sub of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
respective Boards of Directors of the Purchaser, the US Parent and Merger Sub,
as applicable, and by the shareholders of Merger Sub, and no other corporate
proceedings on the part of the Purchaser, the US Parent or Merger Sub are
necessary to authorize this Agreement and the Stock Option Agreement or to
consummate the transactions contemplated hereby and thereby other than the
Purchaser Shareholder Approval. This Agreement and the Stock Option Agreement
have been duly and validly executed and delivered by the Purchaser, the US
Parent and Merger Sub, and (assuming this Agreement and the Stock Option
Agreement constitute valid and binding obligations of the Company) constitute
valid and binding obligations of each of the Purchaser, the US Parent and Merger
Sub, enforceable against the Purchaser, the US Parent and Merger Sub in
accordance with their respective terms.
6.3. Voting Requirements. The affirmative vote of the holders of a
majority of the issued ordinary shares of the Purchaser, voting as a single
class, which are voted at the Purchaser Shareholder Meeting (the "Purchaser
Shareholder Approval"), to adopt this Agreement is the only vote of the holders
of any class or series of shares of the Purchaser necessary to approve and adopt
this Agreement, the Stock Option Agreement, the Shareholders Agreement and the
transactions contemplated hereby and thereby.
6.4. Litigation. There is no judgment, decree or order pending or,
to the knowledge of the Purchaser, the US Parent, Merger Sub or any of their
directors or officers, threatened against the Purchaser, the US Parent or Merger
Sub that would have a Material Delaying Effect.
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6.5. No Violation. Neither the execution and delivery of this
Agreement or the Stock Option Agreement by the Purchaser, the US Parent and
Merger Sub nor the consummation by them of the transactions contemplated hereby
and thereby will (a) violate, conflict with or result in any breach of any
provision of the Articles of Incorporation or By-Laws of Merger Sub or the US
Parent or the Memorandum and Articles of Association, in each case as amended,
of the Purchaser; (b) other than the Regulatory Filings, require any consent,
approval or authorization of, or declaration, filing or registration with, any
Governmental Entity, the lack of which individually or in the aggregate would
materially adversely affect the ability of the Purchaser, the US Parent or
Merger Sub to consummate the transactions contemplated hereby or (c) violate any
Laws applicable to the Purchaser, the US Parent or Merger Sub or any of their
respective assets, except for violations which individually or in the aggregate
would not materially adversely affect the ability of the Purchaser, the US
Parent or Merger Sub to consummate the transactions contemplated hereby.
6.6. Financing. The Purchaser and the US Parent will use reasonable
efforts to cause Merger Sub to have funds available to it at the Effective Time
(pursuant to agreements substantially in the forms most recently provided to the
Company) sufficient to consummate the Merger on the terms contemplated hereby.
6.7. Ownership of Shares. Neither the Purchaser, the US Parent,
Merger Sub or any of their respective affiliates is the beneficial owner of any
shares of common stock of the Company, except pursuant to the Shareholders
Agreement and the Stock Option Agreement.
ARTICLE 7.
COVENANTS
7.1. No Solicitation (a) The Company and its Subsidiaries shall, and
shall direct and use reasonable efforts to cause their respective officers,
directors, employees, representatives and agents to, immediately cease any
discussions or negotiations with any parties other than the Purchaser, the US
Parent and Merger Sub that may be ongoing with respect to an Acquisition
Proposal. The Company and its Subsidiaries shall not, and shall not authorize or
permit any of their respective officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it to, directly or indirectly, (i) solicit, initiate
or encourage (including by way of furnishing non-public information), or take
any other action to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, an Acquisition Proposal
or (ii) participate in any discussions or negotiations regarding an Acquisition
Proposal; provided, however, that if, at any time prior to the adoption of this
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Agreement by the holders of Common Stock, the Board of Directors of the Company
determines in good faith, based on the opinion of outside counsel, that failure
to do so would create a significant risk of liability for breach of its
fiduciary duties to the Company's shareholders under applicable law, the
Company, in response to an Acquisition Proposal that (I) was unsolicited or that
did not otherwise result from a breach of this Section 7.1(a), and subject to
compliance with Section 7.1(c), and (II) constitutes a Superior Proposal, may
(x) furnish non-public information with respect to the Company and its
Subsidiaries to the person who made such Acquisition Proposal pursuant to a
customary and reasonable confidentiality agreement and (y) participate in
negotiations regarding such Acquisition Proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any director or officer of the Company or any of its
Subsidiaries or any investment banker, financial advisor, attorney, accountant
or other representative of the Company or any of its Subsidiaries, acting on
behalf of the Company or any of its Subsidiaries, shall be deemed to be a breach
of this Section 7.1(a) by the Company, unless such violation was inadvertent,
provided that, upon learning of such violation, the Company forthwith gives the
Purchaser notice thereof and takes all reasonable action requested by the
Purchaser to cure such violation and to ensure future compliance with this
Agreement. For purposes of this Agreement, "Acquisition Proposal" means any
proposal or offer from any person relating to any direct or indirect acquisition
or purchase of 20% or more of the assets of the Company or any of its
Subsidiaries or 20% or more of any class of outstanding equity securities of the
Company or any of its Subsidiaries, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any of its Subsidiaries or any
merger, consolidation, business combination, sale of substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its Subsidiaries, other than the transactions
contemplated by this Agreement. For purposes of this Agreement, a "Superior
Proposal" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
100% of the voting power of the Common Stock of or all or substantially all the
assets of the Company and its Subsidiaries and otherwise on terms which the
Board of Directors of the Company determines in good faith (based on the written
advice of outside legal counsel of recognized standing and the advice of a
financial advisor of nationally recognized standing (a copy of which written
legal advice and summary of which financial advice shall be provided to the
Purchaser)) to be more favorable to the Company's shareholders than the Merger
and for which financing, to the extent required by the terms of such proposal,
is then committed or which, in the good faith judgment of the Board of Directors
of the Company, is reasonably capable of being obtained by such third party.
(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to
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the Purchaser or the US Parent, the approval or recommendation by such Board of
Directors or such committee of this Agreement or the Merger unless there is a
Superior Proposal outstanding, (ii) approve or recommend, or propose to approve
or recommend, an Acquisition Proposal that is not a Superior Proposal or (iii)
cause the Company to enter into any letter of intent, agreement in principle,
acquisition agreement or other agreement (an "Acquisition Agreement") with
respect to an Acquisition Proposal that is not a Superior Proposal unless the
Board of Directors of the Company shall have (x) determined in good faith, based
on the opinion of outside counsel, that failure to do so would create a
significant risk of liability for breach of its fiduciary duties to the
Company's shareholders under applicable law, and (y) terminated this Agreement
pursuant to Section 9.1(f).
(c) The Company shall promptly (but in any event within one day)
advise the Purchaser orally and in writing of any Acquisition Proposal or any
inquiry regarding the making of an Acquisition Proposal including any request
for information, the material terms and conditions of such request, Acquisition
Proposal or inquiry and the identity of the person making such request,
Acquisition Proposal or inquiry. The Company will, to the extent reasonably
practicable, keep the Purchaser fully informed of the status and details
(including amendments or proposed amendments) of any such request, Acquisition
Proposal or inquiry.
(d) Nothing contained in this Section 7.1 shall prohibit the
Company from at any time taking and disclosing to its shareholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's shareholders if, in the good faith judgment of
the Board of Directors of the Company, based upon the opinion of outside
counsel, failure so to disclose would create a significant risk of liability for
breach of its fiduciary duties to the Company's shareholders under applicable
law; provided, however, neither the Company nor its Board of Directors nor any
committee thereof shall, except as permitted by Section 7.1(b), withdraw or
modify, or propose to withdraw or modify, its position with respect to the
Merger or this Agreement or approve or recommend, or propose to approve or
recommend, an Acquisition Proposal; provided, further, that the taking of a
position by the Company pursuant to Rule 14e-2(a)(2) or (3) of the Exchange Act
in respect of an Acquisition Proposal shall not be deemed a withdrawal, a
modification or a proposal to do either, of its position with respect to the
Merger for purposes hereof.
7.2. Interim Operations.
(a) From the date of this Agreement to the Effective Time, except as
required pursuant to this Agreement, unless the Purchaser has consented in
writing thereto, the Company shall, and shall cause each of its Subsidiaries to:
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(i) conduct its operations according to its usual, regular
and ordinary course of business consistent with past practice;
(ii) use its reasonable efforts to preserve intact their
business organizations and goodwill, to maintain in effect all existing
qualifications, licenses, Permits, approvals and other authorizations
referred to in Sections 5.1 and 5.18, to keep available the services of
their officers and employees and to maintain satisfactory relationships
with customers, suppliers, distributors, brokers, sales agents and all
other persons having business relationships with them;
(iii) deliver, within 7 business days after the end of each
accounting month, monthly financial accounts prepared internally by the
Company's management, in the same format as heretofore furnished to the
Purchaser, for the Company and its Subsidiaries for and as of the end of
each such month; and
(iv) promptly notify the Purchaser of any Litigation
instituted or threatened against the Company or any of its Subsidiaries
seeking damages in excess of $100,000 or that otherwise could have a
Material Adverse Effect or Material Delaying Effect.
(b) From the date of this Agreement to the Effective Time, unless the
Purchaser has consented in writing thereto, the Company shall not, and shall not
permit any of its Subsidiaries to:
(i) amend its Articles of Incorporation or Bylaws;
(ii) other than with respect to the Stock Option Agreement,
issue, sell, pledge or otherwise dispose of any shares of its capital
stock (other than issuances of Common Stock in respect of any exercise of
Options outstanding on the date hereof or reserved for issuance in the
ordinary course under the 1996 Employee Stock Purchase Plan (not to exceed
the amount disclosed in the Disclosure Letter) and as otherwise disclosed
in the Disclosure Letter) or any of the Subsidiaries, or any securities
convertible into or exchangeable for any such shares, or any rights,
warrants or options to acquire or with respect to any such shares of
capital stock, or convertible or exchangeable securities; or accelerate
any right to convert or exchange or acquire any securities of the Company
or any of its Subsidiaries for any such shares;
(iii) effect any stock split, reverse stock split, stock
dividend, subdivision, reclassification or similar transaction, or
otherwise change its capitalization as it exists on the date hereof;
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(iv) other than with respect to the Stock Option Agreement or
pursuant to this Agreement, grant, confer, award or amend any option,
warrant, convertible security or other right to acquire any shares of its
capital stock or take any action to cause to be exercisable any otherwise
unexercisable option under any stock option plan or restricted stock plan;
(v) declare, set aside or pay any dividend or make any other
distribution or payment with respect to any shares of its capital stock
(other than such payments by a wholly-owned Subsidiary to the Company or
another wholly-owned Subsidiary);
(vi) directly or indirectly redeem, purchase or otherwise
acquire any shares of its capital stock or the capital stock of any of its
Subsidiaries;
(vii) sell, lease, assign, transfer or otherwise dispose of
(by merger or otherwise) any of its property, business or assets
(including, without limitation, any Intellectual Property) except for the
sale of inventory in the ordinary course of business and except for any
sales, leases, assignments, transfers and dispositions which are,
individually and in the aggregate, valued at less than $100,000;
(viii) settle or compromise any pending or threatened
Litigation without the Purchaser's consent (which consent will not be
unreasonably withheld or delayed), other than settlements of Litigation
involving individually less than $100,000 and, in the aggregate, less than
$500,000, provided that the Purchaser is given five days notice of each
such settlement that when aggregated with all other such settlements,
exceeds $100,000 and that Purchaser shall not unreasonably withhold its
consent to settlement of litigation referred to in the Disclosure Letter;
(ix) make any advance, loan, extension of credit or capital
contribution to, or purchase or acquire (by merger or otherwise) any
stock, bonds, notes, debentures or other securities of, or any assets
constituting a business unit of, or make any other investment in, any
person, firm or entity, except (v) advances, loans, extensions of credit,
capital contributions, purchases, acquisitions or investments that are,
individually and in the aggregate, of DE MINIMIS value, (w) extensions of
trade credit and endorsements of negotiable instruments and other
negotiable documents in the ordinary course of business, (x) investments
in cash and cash equivalents, (y) payroll and travel advances in the
ordinary course of business and (z) investments in wholly owned
Subsidiaries;
(x) make any capital expenditures in the aggregate for the
Company and its Subsidiaries in excess of the amounts specified in the
Company's budget for
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capital expenditures, a true and complete copy of which has been delivered
to the Purchaser on or before the date hereof, other than increases over
the budget in amounts that are in the aggregate immaterial, or otherwise
acquire assets having a value, in the aggregate, in excess of $250,000
except in the ordinary course of business;
(xi) incur, assume or create any indebtedness for borrowed
money or the deferred purchase price for property or services or
pursuant to any capital lease or other financing, except indebtedness
incurred in the ordinary course of business for working capital purposes
pursuant to the Company's and its Subsidiaries' existing credit
facilities; or amend in a manner materially adverse to the Company and its
Subsidiaries, any of the Company's or its Subsidiaries' existing credit
facilities;
(xii) assume, guarantee or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the
obligations of any other person except wholly-owned Subsidiaries of the
Company and except for obligations in the ordinary course of business
consistent with the past practice of the Company and its Subsidiaries;
(xiii) make any material Tax election (unless required by
law or unless consistent with prior practice), settle or compromise any
material income tax liability or amend any Tax Return;
(xiv) waive or amend any term or condition of any
confidentiality or "standstill" agreement to which the Company is a party
and which relates to a business combination with the Company or the
purchase of shares or assets of the Company;
(xv) grant or amend any share-related or performance
awards, except that the Company may grant such awards in respect of up to
5,000 shares in the ordinary course of business;
(xvi) except with respect to agreements which are terminable
at will by the Company or any of its Subsidiaries without any material
penalty to the Company or any of its Subsidiaries, enter into or amend any
legally binding employment, severance, consulting or salary continuation
agreements with any officers, directors or employees or grant any
increases in compensation or benefits to employees other than increases to
officers and employees in the ordinary course of business consistent with
the past practice of the Company and its Subsidiaries;
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(xvii) adopt, amend or terminate any employee benefit plan
or arrangement (except as expressly contemplated by this Agreement);
(xviii) except in the ordinary course of business, enter into
(x) any agreements with distributors or sales agents other than agreements
terminable without penalty on less than 30 days' notice, (y) any
agreements to distribute products for others or which restrict the ability
of the Company or its Subsidiaries to compete or (z) any other agreements,
other than agreements relating to product promotions, that would be
material; or amend any of the foregoing agreements as exist on the date
hereof;
(xix) change any accounting principles or practices used by
the Company or its Subsidiaries;
(xx) waive, relinquish, release or terminate any material
right or claim, including any such right or claim under any Material
Contract or permit any rights of material value to use any Intellectual
Property to lapse or be forfeited; or
(xxi) agree in writing or otherwise to take any of the
foregoing actions.
7.3. Shareholder Approvals; Proxy Statement.
(a) The Company shall (i) call a meeting of its shareholders (the
"Company Shareholder Meeting") for the purpose of voting upon the Merger, (ii)
hold the Company Shareholder Meeting as soon as practicable following the date
of this Agreement, and (iii) subject to the provisions of Section 7.1(b),
recommend to its shareholders the approval of the Merger through its Board of
Directors.
(b) The Company will, as soon as practicable following the date of
this Agreement, prepare and file a preliminary Proxy Statement (such proxy
statement, and any amendments or supplements thereto, the "Proxy Statement"),
with the SEC with respect to the Company Shareholder Meeting and will use its
reasonable efforts to respond to any comments of the SEC or its staff and to
cause the Proxy Statement to be cleared by the SEC. The Company will notify the
Purchaser of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Proxy
Statement or for additional information and will supply the Purchaser with
copies of all correspondence between the Company or any of its representatives,
on the one hand, and the SEC or its staff, on the other hand, with respect to
the Proxy Statement or the Merger. The Company shall give the Purchaser and its
counsel (who shall provide any comments thereon as soon as practicable) the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give the Purchaser and its counsel
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<PAGE>
(who shall provide any comments thereon as soon as practicable) the opportunity
to review all amendments and supplements to the Proxy Statement and all
responses to requests for additional information and replies to comments prior
to their being filed with, or sent to, the SEC. Each of the Company and the
Purchaser agrees to use its reasonable efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and requests
by the SEC. As promptly as practicable after the Proxy Statement has been
cleared by the SEC, the Company shall mail the Proxy Statement to the
shareholders of the Company. If at any time prior to the approval of this
Agreement by the Company's shareholders there shall occur any event that should
be set forth in an amendment or supplement to the Proxy Statement, the Company
will prepare and mail to its shareholders such an amendment or supplement.
(c) The Company represents and warrants that the Proxy Statement
will comply as to form in all material respects with the Exchange Act and, at
the respective times filed with the SEC and distributed to shareholders of the
Company, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, that the Company makes no representation or
warranty as to any information included in the Proxy Statement which was
provided by the Purchaser, the US Parent or Merger Sub. The Purchaser represents
and warrants that none of the information supplied by the Purchaser, the US
Parent or Merger Sub for inclusion in the Proxy Statement will, at the
respective times filed with the SEC and distributed to shareholders of the
Company, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company agrees to notify the Purchaser a reasonable
time prior to the filing or distribution of the Proxy Statement of such filing
or distribution.
(d) The Purchaser shall (i) call an extraordinary general meeting of
its ordinary shareholders (the "Purchaser Shareholder Meeting") for the purpose
of, among other things, voting upon the Merger, (ii) hold the Purchaser
Shareholder Meeting as soon as practicable following the date of this Agreement
and (iii) subject to its fiduciary duties under applicable law as advised by
outside counsel, recommend to its shareholders the approval of the merger.
(e) Subject to the fiduciary duties of the Board of Directors as
advised by counsel, the Company shall use its reasonable efforts, consistent
with customary practices in the United States, to obtain the Company Shareholder
Approval.
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(f) Subject to the fiduciary duties of the board of directors of the
Purchaser as advised by outside counsel, the Purchaser shall use its reasonable
efforts, consistent with customary practices in the United Kingdom, to obtain
the Purchaser Shareholder Approval.
(g) The Purchaser agrees, subject to applicable law, to cause all
shares of Common Stock owned by the Purchaser, the US Parent, Merger Sub or any
other subsidiary of the Purchaser to be voted in favor of the approval of the
Merger.
7.4. Filings; Other Action. Subject to the terms and conditions
herein provided, the Company, the Purchaser, the US Parent and Merger Sub shall:
(a) promptly make their respective filings and thereafter make any other
required submissions under the HSR Act with respect to the Merger; (b) cooperate
and consult with one another in (i) determining which Regulatory Filings are
required to be made prior to the Effective Time with, and which consents,
approvals, Permits, authorizations or waivers (collectively, "Consents") are
required or to be obtained prior to the Effective Time from Governmental
Entities or other third parties in connection with the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby;
(ii) preparing all Regulatory Filings and all other filings, submissions and
presentations required or prudent to obtain all Consents, including by providing
to the other party drafts of such material reasonably in advance of the
anticipated filing or submission dates; and (iii) timely making all such
Regulatory Filings and timely seeking all such Consents; efforts to take, or
cause to be taken, all other action and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement. Each of the Purchaser and the
Company shall use its reasonable efforts to contest any proceeding seeking a
preliminary injunction or other legal impediment to, and to resolve any
objections as may be asserted by any Governmental Entity with respect to, the
Merger under the HSR Act; provided that the foregoing shall not require the
Purchaser or the Company to take any action that would be reasonably likely to
result in a Burdensome Condition. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purpose of this
Agreement, the proper officers and directors of the Purchaser and the Surviving
Corporation shall take all such necessary action.
7.5. Access to Information. Until the Closing, upon reasonable
notice, the Company shall, and shall cause its Subsidiaries to, subject to the
compliance with applicable laws and confidentiality obligations to third
parties, (i) give the Purchaser and the US Parent and its authorized
representatives reasonable access during normal business hours to all books,
records, personnel, research and other consultants, offices and other facilities
and properties of the Company and its Subsidiaries and their accountants and
accountants' work papers, (ii) permit the Purchaser and the US Parent to make
such
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copies and inspections thereof as the Purchaser and US Parent may reasonably
request and (iii) furnish the Purchaser and the US Parent with such financial
and operating data and other information with respect to the business and
properties of the Company and its Subsidiaries as the Purchaser and the US
Parent may from time to time reasonably request; provided that no investigation
or information furnished pursuant to this Section 7.5 shall affect any
representations or warranties made by the Company herein or the conditions to
the obligations of the Purchaser and the US Parent to consummate the
transactions contemplated hereby.
7.6. Publicity. The initial press release relating to this
Agreement shall be a joint press release and thereafter the Company and the
Purchaser shall, subject to their respective legal obligations, obtain the prior
consent of the other party (which consent will not be unreasonably withheld or
delayed) before issuing any such press release or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any national securities exchange with respect thereto.
7.7. Further Action. Each party hereto shall, subject to the
fulfillment at or before the Effective Time of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the Merger.
7.8. Insurance; Indemnity.
(a) For a period of six years after the Effective Time, the
Purchaser shall not cancel the Company's existing officers' and directors'
liability insurance policy which has been disclosed to the Purchaser in the
Disclosure Letter (provided that neither the Purchaser, the Company nor any of
their respective affiliates shall be required to make any payment to maintain
such policy except as disclosed in the Disclosure Letter). The Purchaser will
provide substantially the same insurance coverage to the officers and directors
of the Surviving Corporation as shall be provided from time to time to the
directors of the Purchaser.
(b) From and after the Effective Time, the Surviving Corporation
shall indemnify and hold harmless, to the fullest extent permitted under
applicable law, each person who is, or has been at any time prior to the date
hereof or who becomes prior to the Effective Time, an officer or director of the
Company or any of its Subsidiaries against all losses, claims, damages,
liabilities, costs or expenses (including attorneys' fees), judgments, fines,
penalties and amounts paid in settlement (collectively, "Losses") in connection
with any Litigation arising out of or pertaining to acts or omissions, or
alleged acts or omissions, by them in their capacities as such, which acts or
omissions occurred prior to the Effective Time. Without limiting the foregoing,
the Company and after the
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Effective Time the Surviving Corporation shall periodically advance expenses as
incurred with respect to the foregoing to the fullest extent permitted under
applicable law provided that the person to whom the expenses are advanced
provides an undertaking to repay such advance if it is ultimately determined
that such person is not entitled to indemnification.
7.9. Employees and Employee Benefit Plans. Through December 31, 1998,
the Purchaser shall cause the Surviving Corporation and its Subsidiaries to
maintain employee compensation policies and benefit plans for their respective
employees that, in the aggregate, are at least as favorable to such employees as
the compensation policies and benefit plans of the Company and its Subsidiaries
as of the date hereof. From and after the Closing, the Purchaser shall cause the
Surviving Corporation to honor all existing employment agreements in accordance
with the terms thereof as in effect on the date hereof or as the same may be
amended with the consent of the employee party thereto and the Purchaser. To the
extent that employees of the Surviving Corporation or its Subsidiaries become
eligible to participate in any employee benefit plan of the Purchaser after the
Effective Time, the Purchaser shall cause the service of such employees with the
Company or its Subsidiaries completed prior to the Effective Time to be
recognized under such employee benefit plan of the Purchaser for all purposes of
vesting and eligibility to participate thereunder.
7.10. Financing. As promptly as practicable after the date hereof,
the Purchaser shall cause Misys (Jersey) Limited ("Jersey Co.") to commence an
offering to shareholders of the Purchaser of convertible unsecured loan stock in
Jersey Co. (the "Rights Offering"), the proceeds of which would, upon
completion, be sufficient, together with the Purchaser's available funds and the
funds available under the Credit Agreement, upon fulfillment of the conditions
precedent to drawdown thereof, to pay the aggregate Merger Consideration, and
Purchaser shall use its reasonable efforts, consistent with customary practices
in the United Kingdom, to complete such Rights Offering and to consummate the
Credit Agreement.
7.11. Legends. Upon receipt of certificates representing Subject
Shares (as defined in the Shareholders Agreement), the Company will either place
the restrictive legend set forth in Section 12 of the Shareholders Agreement on
such certificates and return them promptly to the holder thereof or return new
certificates with such legend to such holders.
7.12. Reasonable Efforts. Subject to the terms and conditions of
this Agreement, the Purchaser, the US Parent, Merger Sub and the Company shall
use, and the Company shall cause its Subsidiaries to use, their reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions
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contemplated by this Agreement, including, without limitation, using their
reasonable efforts to satisfy the conditions contained in Section 8 hereof.
7.13. Certain Notification. At all times until the Effective Time,
each party shall promptly notify the other in writing of the occurrence of any
event that will or may result in the failure to satisfy any of the conditions
specified in Section 8.
ARTICLE 8.
CONDITIONS
8.1. Conditions to Each Party's Obligation to Effect the Merger . The
respective obligations of each party to effect the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction or waiver
at or prior to the Effective Time of the following conditions:
(a) Shareholder Approvals. The Purchaser Shareholder Approval and
the Company Shareholder Approval shall have been obtained.
(b) HSR Act. The waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated.
(c) Other Approvals. Other than the filing provided for by Section
1.3, all Consents and Regulatory Filings which are necessary for the
consummation of the Merger, other than Consents and Regulatory Filings the
failure to obtain or make which would, individually and in the aggregate, be
immaterial to the Surviving Corporation or which would not, individually or in
the aggregate, have a Material Delaying Effect, shall have been filed, occurred
or been obtained (all such Consents, Regulatory Filings and the lapse of all
such waiting periods being referred to as the "Requisite Regulatory Approvals"),
and all such Requisite Regulatory Approvals shall be in full force and effect.
(d) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order or decree
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect;
provided, however, that each of the parties shall have used its reasonable
efforts to appeal as promptly as possible any injunction or other order or
restraint that may be entered. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, which makes the consummation of the Merger illegal.
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8.2. Conditions to Obligations of the Purchaser. The obligations of
the Purchaser, the US Parent and Merger Sub to effect the Merger are subject to
the satisfaction of the following conditions unless waived by the Purchaser, the
US Parent and Merger Sub:
(a) Representations and Warranties. The representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality shall be true and correct, and the representations and warranties
that are not so qualified shall be true and correct in all material respects, in
either case as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except as otherwise
contemplated by this Agreement, and the Purchaser shall have received a
certificate signed on behalf of the Company by its Chairman or Chief Executive
Officer and its Chief Financial Officer or other executive officer performing
duties equivalent to those of a "chief financial officer" to such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement and the Stock Option Agreement at or prior to the
Closing Date, and the Purchaser shall have received a certificate signed on
behalf of the Company by its Chairman or Chief Executive Officer and its Chief
Financial Officer or other executive officer performing duties equivalent to
those of a "chief financial officer" to such effect.
(c) Burdensome Conditions. There shall not be any action taken, or
any statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any Governmental Entity which, in connection with
the grant of a Requisite Regulatory Approval, imposes any requirement upon the
Purchaser, the US Parent, Merger Sub, the Company or the Surviving Corporation
or their respective Subsidiaries to (i) dispose of any asset which is material
to such person, or (ii) materially restrict or curtail the current operations or
activities of such person or any of its affiliates (a "Burdensome Condition").
(d) FIRPTA Certificate. The Purchaser and the US Parent shall have
received such affidavits or certifications in form and substance reasonably
satisfactory to the Purchaser and the US Parent as are necessary to exempt the
Merger from the provisions of section 1445 of the Code.
(e) Financing. The Purchaser, either directly or through one or
more of its Subsidiaries, shall have received or shall have available to it
unconditionally not less than the aggregate Merger Consideration pursuant to the
Rights Offering and the Credit Agreement.
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8.3. Conditions to Obligations of the Company. The obligations of
the Company to effect the Merger are subject to the satisfaction of the
following conditions unless waived by the Company:
(a) Representations and Warranties. The representations and
warranties of the Purchaser, the US Parent and Merger Sub set forth in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations and warranties that are not so qualified shall be true and
correct in all material respects, in either case as of the date of this
Agreement and (except to the extent such representations speak as of an earlier
date) as of the Closing Date as though made on and as of the Closing Date,
except as otherwise contemplated by this Agreement, and the Company shall have
received a certificate signed on behalf of the Purchaser, the US Parent and
Merger Sub by their respective Chairman or Chief Executive Officers and
respective Chief Financial Officers or other executive officers performing
duties equivalent to those of a "chief financial officer" to such effect.
(b) Performance of Obligations of the Purchaser, the US Parent and
Merger Sub. The Purchaser, the US Parent and Merger Sub shall have performed in
all material respects all obligations required to be performed by them under
this Agreement and the Stock Option Agreement at or prior to the Closing Date,
and the Company shall have received a certificate signed on behalf of the
Purchaser, the US Parent and Merger Sub by their respective Chairmen or Chief
Executive Officers and their respective Chief Financial Officers or other
executive officers performing duties equivalent to those of a "chief financial
officer" to such effect.
(c) Deposit of Merger Consideration. The Purchaser and the US
Parent shall have deposited the aggregate Merger Consideration with the Paying
Agent.
ARTICLE 9.
TERMINATION; AMENDMENT; WAIVER
9.1. Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after the Company Shareholder Approval
or the Purchaser Shareholder Approval:
(a) by mutual written consent of the Company, Merger Sub, the US
Parent and the Purchaser;
(b) by either the Company or the Purchaser:
34
<PAGE>
(i) if the Merger shall not have been consummated by
March 1, 1998, provided, that the right to terminate this Agreement
pursuant to this Section 9.1(b)(i) shall not be available to any
party whose failure to perform any of its obligations under this
Agreement results in the failure of the Merger to be consummated by
such time;
(ii) if the Company Shareholder Approval shall not have
been obtained at a Company Shareholder Meeting duly convened therefor
or at any adjournment or postponement thereof;
(iii) if the Purchaser Shareholder Approval shall not have
been obtained at a Purchaser Shareholders Meeting duly convened
therefor or at any adjournment or postponement thereof; or
(iv) if any Governmental Entity shall have issued a judgment,
order, decree, statute, law, ordinance, rule, regulation, temporary
restraining order, preliminary or permanent injunction or other
order, legal restraint or prohibition (collectively, "Restraints") or
taken any other action permanently enjoining, restraining or
otherwise prohibiting the consummation of the Merger and such
Restraint or other action shall have become final and nonappealable;
provided that the party terminating this Agreement has complied with
the provisions of the penultimate sentence of Section 7.4;
(c) by the Purchaser, if the Company shall have breached or failed
to perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
(i) would give rise to the failure of a condition set forth in Section
8.2(a) or (b), and (ii) cannot be or has not been cured within 30 days
after the giving of written notice to the Company of such breach;
(d) by the Purchaser, if the Company, any of its Subsidiaries or
any of their respective directors, employees, representatives or agents
shall take any of the actions proscribed by Section 7.1, subject to the
exceptions therein allowing certain actions to be taken pursuant to the
proviso in the second sentence of Section 7.1(a) or the first sentence of
Section 7.1(b), unless such action was taken by a director, employee,
representative or agent and was inadvertent, provided that, upon learning
of such violation, the Company forthwith gives the Purchaser notice
thereof and takes all reasonable action requested by the Purchaser to cure
such violation and to ensure future compliance with Section 7.1;
(e) by the Company, if the Purchaser (x) shall have breached or
failed to perform any of its representations, warranties, covenants or
other agreements contained in this
35
<PAGE>
Agreement, or (y) on the date of the Company Shareholder Meeting, the
Purchaser shall have failed, either directly or through one or more of its
Subsidiaries, either to have received or to have available to it,
conditional only on the receipt of the Company Shareholder Approval, not
less than the aggregate Merger Consideration, which breach or failure to
perform (i) would give rise to the failure of a condition set forth in
Section 8.3(a), (b) or (c) and (ii) cannot be or has not been cured within
30 days after the giving of written notice to the Purchaser of such
breach, provided that the Company may terminate this Agreement pursuant to
clause (y) of this Section 9.1(e) only if all other conditions set forth
in Sections 8.1 (other than Section 8.1(a)) and 8.2 (other than Section
8.2(e)) have been satisfied or waived;
(f) by the Company in accordance with Section 7.1(b), provided
that it has complied with all provisions thereof, and provided, further
that (i) the Company shall have complied with the provisions of Section
7.1(c) and notified the Purchaser that it intends to terminate this
Agreement in accordance with this Section 9.1(f), and either (y) the
Purchaser shall not have revised the terms of the Merger within five
business days from the date on which such notice is deemed to have been
given to the Purchaser or (z) if within such five business day period the
Purchaser shall have revised such terms, the Board of Directors of the
Company determines in good faith, based on the written advice of outside
legal counsel of recognized standing and the advice of a financial advisor
of nationally recognized reputation, that in the case of a termination due
to clause (i) of Section 7.1(b), a Superior Proposal is still outstanding,
and in the case of a termination due to clause (ii) or (iii) of Section
7.1(b), the applicable Acquisition Proposal is still a Superior Proposal,
and (ii) such termination under this section 9.1(f) shall not be effective
until the Company has made payment to the Purchaser of the Redemption
Costs required to be paid pursuant to Section 10.5(b)(1)(A), and has
deposited with a mutually acceptable escrow agent $36 million (less the
Redemption Costs) for reimbursement of all other Expenses; or
(g) by the Purchaser, if the Disclosure Letter, if any, delivered
by the Company as of the Effective Time discloses matters or conditions
that, individually or in the aggregate, are materially and adversely
different from the condition of the Company and its Subsidiaries reflected
in the Disclosure Letter delivered by the Company upon execution of this
Agreement.
9.2. Effect of Termination . If this Agreement is terminated and the
Merger is abandoned pursuant to Section 9.1 hereof, this Agreement, except for
the provisions of Sections 7.6, 9.2 and 10.5, shall terminate, without any
liability on the part of any party or its directors, officers or shareholders.
Nothing herein shall relieve any party to this Agreement of liability for breach
of this Agreement or prejudice the ability of the non-breaching party to seek
damages from any other party for any breach of this
36
<PAGE>
Agreement, including without limitation, attorneys' fees and the right to pursue
any remedy at law or in equity.
9.3. Amendment. To the extent permitted by applicable law, this
Agreement may be amended by action taken by or on behalf of the Board of
Directors of the Company, Merger Sub, the US Parent and the Purchaser at any
time before the Company Shareholder Approval is obtained but, after any such
shareholder approval, no amendment shall be made which decreases the Merger
Consideration or which adversely affects the rights of the Company's
shareholders hereunder without the approval of such shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of all of
the parties.
9.4. Extension; Waiver. At any time prior to the Effective Time, the
parties hereto, by action taken by or on behalf of the Board of Directors of the
Company and the Purchaser, may (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 contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party or (iii) waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
9.5. Escrow. Immediately upon termination of this Agreement under
any circumstance in which Expenses are to be reimbursed pursuant to Section
10.5(b)(1)(A), the Company shall deposit with a mutually acceptable escrow agent
$36 million for payment of such Expenses. If such termination is at the election
of the Company, it shall not be effective until such deposit is made.
ARTICLE 10.
GENERAL PROVISIONS
10.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time.
10.2. Notices. Any notice required to be given hereunder shall be
sufficient if in writing, and sent by facsimile transmission (with a
confirmatory copy sent by overnight courier), by courier service (with proof of
service), hand delivery or certified or registered mail (return receipt
requested and first-class postage prepaid), addressed as follows:
37
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
If to the Purchaser, the US Parent or Merger Sub: If to the Company:
Misys plc Medic Computer Systems, Inc.
Burleigh House 8601 Six Forks Road
Salford Priors Suite 300
Evesham WORCS Raleigh, North Carolina 27615
WR11 5SH Telephone:
England Facsimile:
Telephone: 011-44-138-687-1373 Attention:
Facsimile: 011-44-138-687-1045
Attention: Ross K. Graham
With a copy to: With a copy to:
Debevoise & Plimpton Wyrick Robbins Yates & Ponton, L.L.P.
875 Third Avenue 4101 Lake Boone Trail - Suite 300
New York, New York 10022 Raleigh, North Carolina 27607
Telephone: (212) 909-6000 Telephone: (919) 781-4000
Facsimile: (212) 909-6836 Facsimile: (919) 781-4865
Attention: Paul H. Wilson, Jr., Esq. Attention: Larry E. Robbins, Esq.
</TABLE>
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
10.3. Assignment; Binding Effect; Third Party Beneficiaries. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties, provided,
that either the Purchaser, the US Parent or Merger Sub (or all of them) may
assign its rights hereunder to an affiliate, but nothing shall relieve the
assignor from its obligations hereunder. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns. Notwithstanding anything
contained in this Agreement to the contrary, except for the provisions of
Section 7.8, nothing in this Agreement, expressed or implied, is intended to
confer on any person other than the parties hereto or their respective heirs,
successors, executors, administrators and assigns any rights, remedies,
obligations or liabilities under or by reason of this Agreement, provided,
however, that Jersey Co. shall be a third party beneficiary with respect to
Section 10.5(b).
38
<PAGE>
10.4. Entire Agreement. This Agreement, the Disclosure Letter, the
Schedules, the Exhibits, the Stock Option Agreement, the Confidentiality
Agreement and any other documents delivered by the parties in connection
herewith constitute the entire agreement among the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto (except that the Confidentiality
Agreement shall not be so superseded).
10.5. Fees and Expenses.
(a) Except as provided in Section 10.5(b), whether or not the
Merger is consummated, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such expenses.
(b)(1)(A) The Company shall pay the Purchaser, its affiliates and
Jersey Co. (I) up to an aggregate amount of $18,000,000 if this Agreement is
terminated pursuant to Section 9.1(g) and (II) up to an aggregate amount of
$36,000,000 if this Agreement is terminated pursuant to Section 9.1(b)(ii),
9.1(c), 9.1(d) or 9.1(f), in each case, with respect to: (i) the interest Jersey
Co. is required to pay to the holders of convertible unsecured loan stock of
Jersey Co. issued pursuant to the Rights Offering on repayment of that stock
(the "Redemption Costs"), and (B) the documented reasonable out-of-pocket
expenses (other than the Redemption Costs) of the Purchaser, its affiliates and
Jersey Co. incurred in connection with or arising out of the Merger, this
Agreement and the transactions contemplated hereby (including, without
limitation, amounts paid or payable to investment bankers, lending banks, fees
and expenses of counsel, accountants and consultants, printing expenses and all
underwriting and related expenses associated with the Rights Offering) (other
than the Redemption Costs)), regardless of when those expenses are incurred
(such expenses listed in clauses (i) and (ii), the "Expenses"). The Company
shall pay to Jersey Co. immediately upon such termination an amount equal to the
Redemption Costs, in same-day funds, and shall promptly reimburse the Purchaser
or Jersey Co. for all Expenses (up to the appropriate maximum amount) incurred
by the Purchaser and its affiliates or Jersey Co., as the case may be.
(B) If this Agreement is terminated pursuant to Section
9.1(b)(i) or 9.1(g), and within one year of such termination the Company
consummates an Acquisition Proposal or enters into an Acquisition Agreement with
respect to an Acquisition Proposal that is subsequently consummated, the Company
shall pay the Purchaser, its affiliates and Jersey Co. an amount equal to the
Expenses, up to an aggregate amount equal to the excess of $36,000,000 over any
payment in respect of Expenses previously made by the Company pursuant to
Section 10.5(b)(1)(A). The Company shall pay such amount immediately upon
consummation of such Acquisition Proposal, in same-day funds.
39
<PAGE>
(2) The Purchaser shall pay the Company a fee of $18,000,000 in
same-day funds, if this Agreement is terminated pursuant to Section 9.1(b)(iii)
or 9.1(e), immediately upon such termination.
(3) The Company acknowledges that the agreements contained in this
Section 10.5(b) are an integral part of the transactions contemplated by this
Agreement, and that, without these agreements, the Purchaser and US Parent
would not enter into this Agreement; accordingly, if the Company fails to
promptly pay any amounts owing pursuant to this Section 10.5(b) when due, the
Company shall in addition thereto pay to the Purchaser or Jersey Co., as the
case may be, all costs and expenses (including, pursuant to Section 10.11(b),
fees and disbursements of counsel) incurred in collecting such amounts, together
with interest on such amounts (or any unpaid portion thereof) from the date such
payment was required to be made until the date such payment is received by the
Purchaser at the prime rate of Chase Manhattan Bank, as in effect from time to
time during such period.
10.6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina without
regard to its rules of conflict of laws. Each of the Company, the Purchaser, the
US Parent and Merger Sub hereby irrevocably and unconditionally consents to
submit to the exclusive jurisdiction of the courts of the State of North
Carolina and of the United States of America located in the State of North
Carolina (the "North Carolina Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts), waives
any objection to the laying of venue of any such litigation in the North
Carolina Courts and agrees not to plead or claim in any North Carolina Court
that such litigation brought therein has been brought in an inconvenient forum.
10.7. Headings. Headings of the Articles and Sections of this
Agreement are for the convenience of the parties only, and shall be given no
substantive or interpretive effect whatsoever.
10.8. Interpretation; Certain Definitions. In this Agreement, unless
the context otherwise requires, words describing the singular number shall
include the plural and vice versa, and words denoting any gender shall include
all genders and words denoting natural persons shall include corporations and
partnerships and vice versa. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." As used in this Agreement, the words
"Subsidiary," "affiliate" and "associate" shall have the meanings ascribed
thereto in Rule 12b-2 under the Exchange Act. For purposes of this Agreement,
one party shall be considered "wholly owned" by another party if all of the
shares of its outstanding capital
40
<PAGE>
stock or issued share capital, other than directors' qualifying shares, are
beneficially owned by such other party. As used in this Agreement, the words "to
the knowledge of the Company" shall mean the knowledge of the directors and
officers of the Company, after due inquiry. The following terms shall have the
following meanings ascribed to them:
"Confidentiality Agreement" means the
Confidentiality Agreement dated August 8, 1997 between the Purchaser
and the Company.
"Credit Agreement" means the credit agreement of
even date with this Agreement between the Purchaser as borrower,
certain subsidiaries of the Purchaser, as guarantors, Baring Brothers
Limited (trading as ING Barings) and Lloyds Bank Plc (trading as
Lloyds Bank Capital Markets), as arrangers, Lloyds Bank Plc, as
agent, and the banks and other financial institutions named in the
agreement.
"Lien" means any lien, charge, claim, pledge, security
interest, conditional sale agreement or other title retention
agreement, lease, mortgage, security agreement, right of first
refusal, option, restriction, tenancy, license, covenant, right of
way, easement or other encumbrance (including the filing of, or
agreement to give, any financing statement under the Uniform
Commercial Code or statute or law of any jurisdiction).
"Medicaid" means a health insurance program, created in 1965
as Title XIX of the Social Security Act.
"Medicare" means a federally administered and financed health
insurance program, created in 1965 as Title XVII of the Social
Security Act.
"Permits" means all franchises, approvals, permits
authorizations, licenses, orders, registrations, certificates,
variances, and other similar permits or rights obtained from any
Governmental Entity and all pending applications therefor.
"Permitted Lien" means (a) Liens securing Taxes, assessments,
governmental charges or levies, all of which are not yet due and
payable or as to which adequate reserves have been established that
are included in the most recent consolidated financial statements
included in the Company Reports and that may thereafter be paid
without penalty, (b) mechanics', carriers', workmen's, repairmen's
and other similar Liens incurred in the ordinary course of business
consistent with past practice, or (c) such other liens which,
individually and in the aggregate, do not and would not materially
detract from the value of any of the
41
<PAGE>
property or assets of the Company or its Subsidiaries or materially
interfere with the use thereof.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a firm, a Governmental
Entity, a trust or other entity or organization.
10.9. Investigations. No action taken pursuant to this Agreement,
including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement.
10.10. Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
10.11. Enforcement of Agreement.
(a) 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 its specific terms or was 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 North Carolina Court, this being in addition to any
other remedy to which they are entitled at law or in equity.
(b) The prevailing party in any judicial action shall be
entitled to receive from the other party reimbursement for the prevailing
party's reasonable attorneys' fees and disbursements, and court costs.
10.12. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
42
<PAGE>
DEFINITIONS
Defined Term Section Reference
"Acquisition Agreement" Section 7.1(b)
----------------------
"Acquisition Proposal" Section 7.1(a)
--------------------
"affiliate" Section 10.8
---------
"Agreement" First Paragraph
---------
"associate" Section 10.8
---------
"Burdensome Condition" Section 8.2(c)
--------------------
"Certificate" Section 4.2(b)
-----------
"Closing" Section 1.2
-------
"Closing Date" Section 1.2
------------
"Code" Section 5.10(b)
----
"Commercial Software" Section 5.18(h)
-------------------
"Common Stock" Section 4.2(a)
------------
"Company" First Paragraph
-------
"Company Intellectual Property" Section 5.18(b)
-----------------------------
"Company Reports" Section 5.7
---------------
"Company Software" Section 5.18(f)
----------------
"Company Shareholder Approval" Section 5.16
----------------------------
"Company Shareholder Meeting" Section 7.3(a)
---------------------------
"Confidentiality Agreement" Section 10.8
-------------------------
"Consents" Section 7.4
--------
"Contract" or "Contracts" Section 5.6
-------- ---------
"Credit Agreement" Section 10.8
----------------
"Disclosure Letter" Section 5.5
-----------------
"Dissenting Common Stock" Section 4.5
-----------------------
"Effective Time" Section 1.3
--------------
"Employees" Section 5.11
---------
"Encumbrances" Section 5.5
------------
"ERISA" Section 5.11
-----
"Exchange Act" Section 5.6
------------
"Exchange Fund" Section 4.3(a)
-------------
43
<PAGE>
"Expenses" Section 10.5(b)(1)
--------
"Governmental Entity" Section 5.3
-------------------
"HSR Act" Section 5.6
-------
"Intellectual Property" Section 5.18(g)
---------------------
"Jersey Co." Section 7.10
---------
"Laws" Section 5.3
----
"Lien" Section 10.8
----
"Litigation" Section 5.8
----------
"Losses" Section 7.8(b)
------
"Material Adverse Effect" Section 5.1
-----------------------
"Material Contracts" Section 5.17
------------------
"Material Delaying Effect" Section 5.3
------------------------
"Medicaid" Section 10.8
--------
"Medicare" Section 10.8
--------
"Merger" Section 1.1
------
"Merger Consideration" Section 4.2(a)
--------------------
"Merger Sub" First Paragraph
----------
"NCBCA" Section 1.1
-----
"North Carolina Courts" Section 10.6
---------------------
"Option" or "Options" Section 4.2(d)
------ -------
"Option Consideration" Section 4.2(d)
--------------------
"Paying Agent" Section 4.3(a)
------------
"Permits" Section 10.8
-------
"Permitted Lien" Section 10.8
--------------
"Person" Section 10.8
------
"Plans" Section 5.11
-----
"Proxy Statement" Section 7.3(b)
---------------
"Purchaser" First Paragraph
---------
"Purchaser Shareholder Approval" Section 6.3
------------------------------
"Purchaser Shareholder Meeting" Section 7.3(d)
-----------------------------
"Redemption Costs" Section 10.5(b)(1)
----------------
"Regulatory Filings" Section 5.6
------------------
"Requisite Regulatory Approvals" Section 8.1(c)
------------------------------
"Restraints" Section 9.1(b)(iv)
----------
"Rights Offering" Section 7.10
---------------
44
<PAGE>
"Securities Act" Section 5.7
--------------
"Shareholders Agreement" Recitals
----------------------
"Software" Section 5.18(h)
--------
"Stock Option Agreement" Recitals
----------------------
"Stock Option Plans" Section 4.2(d)
------------------
"Subsidiary" Section 10.8
----------
"Superior Proposal" Section 7.1(a)
-----------------
"Surviving Corporation" Section 1.1
---------------------
"Tax" or "Taxes" Section 5.10(d)
--- -----
"Tax Return" Section 5.10(d)
----------
"US Parent" First Paragraph
---------
45
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement and
caused the same to be duly delivered on their behalf on the day and year first
written above.
MEDIC COMPUTER SYSTEMS, INC.
By: /s/ John P. McConnell
Name:
Title: Chief Executive Officer
MISYS PLC
By: /s/ PSS MacPherson
Name:
Title:
KIRSTY, INC.
By: /s/ Ross Graham
Name:
Title:
DECIMAL MUSIC CORPORATION
By: /s/ Ross Graham
Name:
Title:
<PAGE>
Execution Copy
AGREEMENT AND PLAN OF MERGER
among
MISYS PLC,
KIRSTY, INC.,
DECIMAL MUSIC CORPORATION
and
MEDIC COMPUTER SYSTEMS, INC.
Dated as of September 4, 1997
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
THE MERGER 2
1.1. The Merger 2
1.2. The Closing 2
1.3. Effective Time 2
ARTICLE 2
ARTICLES OF INCORPORATION AND BYLAWSOF THE SURVIVING CORPORATION 2
2.1. Articles of Incorporation 2
2.2. Bylaws 3
ARTICLE 3
DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION 3
3.1. Directors 3
3.2. Officers 3
ARTICLE 4
EFFECT OF THE MERGER ON SECURITIESOF MERGER SUB AND THE COMPANY 3
4.1. Merger Sub Stock 3
4.2. Company Securities 3
4.3. Exchange of Certificates Representing Common Stock 5
4.4. Adjustment of Merger Consideration 6
4.5. Dissenting Company Shareholders 7
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY 7
5.1. Existence; Good Standing; Corporate Authority 8
5.2. Authorization, Validity and Effect of Agreements 8
5.3. Compliance with Laws 8
5.4. Capitalization 9
i
<PAGE>
Page
5.5. Subsidiaries 9
5.6. No Violation 10
5.7. Company Reports; Undisclosed Liabilities 11
5.8. Litigation 12
5.9. Absence of Certain Changes 12
5.10.Taxes 12
5.11.Employee Benefit Plans 14
5.12.Labor and Employment Matters 15
5.13.Brokers and Finders 15
5.14.Opinion of Financial Advisor 15
5.15.State Antitakeover Laws 16
5.16.Voting Requirements 16
5.17.Material Contracts 16
5.18.Intellectual Property; Technology 17
5.19.Calendar Function 19
5.20.Investments 19
5.21.Health Care Regulations 19
5.22.Insurance 19
5.23.Product Liability 20
5.24.Disclosures 20
5.25.European Union Operations 20
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER, THE US PARENT AND MERGER
SUB 20
6.1. Existence; Good Standing; Corporate Authority 20
6.2. Authorization, Validity and Effect of Agreements 20
6.3. Voting Requirements 21
6.4. Litigation 21
6.5. No Violation 21
6.6. Financing 22
6.7. Ownership of Shares 22
ARTICLE 7
COVENANTS 22
7.1. No Solicitation 22
7.2. Interim Operations 24
ii
<PAGE>
7.3. Shareholder Approvals; Proxy Statement 28
7.4. Filings; Other Action 30
7.5. Access to Information 31
7.6. Publicity 31
7.7. Further Action 31
7.8. Insurance; Indemnity 31
7.9. Employees and Employee Benefit Plans 32
7.10.Financing 32
7.11.Legends 33
7.12.Reasonable Efforts 33
7.13.Certain Notification 33
ARTICLE 8
CONDITIONS 33
8.1. Conditions to Each Party's Obligation to Effect the Merger 33
8.2. Conditions to Obligations of the Purchaser. 34
8.3. Conditions to Obligations of the Company 35
ARTICLE 9
TERMINATION; AMENDMENT; WAIVER 36
9.1. Termination 36
9.2. Effect of Termination 38
9.3. Amendment 38
9.4. Extension; Waiver 38
9.5. Escrow 39
ARTICLE 10
GENERAL PROVISIONS 39
10.1.Nonsurvival of Representations and Warranties 39
10.2.Notices 39
10.3.Assignment; Binding Effect; Third Party Beneficiaries 40
10.4.Entire Agreement 40
10.5.Fees and Expenses 40
10.6.Governing Law 42
10.7.Headings 42
10.8.Interpretation; Certain Definitions 42
iii
<PAGE>
10.9.Investigations 44
10.10. Severability 44
10.11. Enforcement of Agreement 44
10.12. Counterparts 44
DEFINITIONS 45
iv
<PAGE>
Exhibit 10.58
Execution Copy
SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT dated as of September 4, 1997, among
MISYS PLC, a public limited company incorporated under the laws of England
("Purchaser"), KIRSTY, INC., a Delaware corporation and indirect wholly owned
subsidiary of Purchaser ("US Parent"), DECIMAL MUSIC CORPORATION, a North
Carolina corporation and direct wholly owned subsidiary of US Parent ("Merger
Sub") and the individuals and other parties listed on Schedule A attached hereto
(each, a "Shareholder" and, collectively, the "Shareholders").
WHEREAS Purchaser, US Parent, Merger Sub and Medic Computer
Systems, Inc., a North Carolina corporation (the "Company"), propose to enter
into an Agreement and Plan of Merger dated as of the date hereof (as the same
may be amended or supplemented, the "Merger Agreement") providing for the merger
of Merger Sub with and into the Company (the "Merger") pursuant to which each
share of common stock, par value $0.01 per share, of the Company (the "Common
Stock") will be converted into the right to receive cash in the amount of $35
per share, without interest (the "Merger Consideration"); and
WHEREAS each Shareholder owns the number of shares of Common
Stock set forth opposite his or its name on Schedule A attached hereto (such
shares of Common Stock, together with any other shares of capital stock of the
Company acquired by such Shareholders after the date hereof and during the term
of this Agreement (including, without limitation through the exercise of any
stock options, warrants or similar instruments), being collectively referred to
herein as the "Subject Shares");
WHEREAS, as an essential condition and inducement to their
willingness to enter into the Merger Agreement, Purchaser, US Parent and Merger
Sub have requested that each Shareholder enter into this Agreement, and each
Shareholder has agreed to do so; and
WHEREAS, capitalized terms used herein without definition
shall have the respective meanings specified therefor in the Merger Agreement.
NOW, THEREFORE, to induce Purchaser, US Parent and Merger Sub
to enter into, and in consideration of their
<PAGE>
entering into, the Merger Agreement, and in consideration of the premises and
the representations, warranties and agreements contained herein, the parties
agree as follows:
1. Representations and Warranties of each Shareholder. Each
Shareholder hereby, severally and not jointly, represents and warrants to
Purchaser, US Parent and Merger Sub as of the date hereof in respect of himself
or itself as follows:
(a) Authority. The Shareholder has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly authorized, executed and delivered by the Shareholder and
constitutes the valid and binding obligation of the Shareholder
enforceable against such Shareholder in accordance with its terms.
Neither the execution and delivery by the Shareholder of this Agreement
nor the consummation by the Shareholder of the transactions
contemplated hereby will violate or conflict in any material respect
with, result in a breach of any material provision of or constitute a
default under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any material license,
franchise, Permit, lease, contract, agreement or other instrument,
commitment or obligation to which the Shareholder is a party or by
which the Shareholder is bound. No trust of which such Shareholder is a
trustee requires the consent of any beneficiary to the execution and
delivery of this Agreement or to the consummation of the transactions
contemplated hereby.
(b) The Subject Shares. The Shareholder is the record and
beneficial owner of, or is trustee of a trust that is the record holder
of, and whose beneficiaries are the beneficial owners of, and has good
and marketable title to, the Subject Shares set forth opposite his or
its name on Schedule A attached hereto, free and clear of any claims,
liens, encumbrances and security interests whatsoever. The Shareholder
does not own, of record or beneficially, any shares of capital stock of
the Company other than the Subject Shares set forth opposite his or its
name on Schedule A attached hereto. The Shareholder has the
2
<PAGE>
sole right to vote such Subject Shares, and none of such Subject Shares
is subject to any voting trust or other agreement, arrangement or
restriction with respect to the voting of such Subject Shares, except
as contemplated by this Agreement.
2. Representation and Warranty of Purchaser, US Parent and
Merger Sub. Purchaser, US Parent and Merger Sub each hereby represents and
warrants to each Shareholder that it has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly and validly authorized, executed and
delivered by each of Purchaser, US Parent and Merger Sub and constitutes the
valid and binding obligation of each of Purchaser, US Parent and Merger Sub
enforceable against each of Purchaser, US Parent and Merger Sub in accordance
with its terms. Neither the execution and delivery by each of Purchaser, US
Parent and Merger Sub of this Agreement nor the consummation by each of
Purchaser, US Parent and Merger Sub of the transactions contemplated hereby
will: (a) violate or conflict in any material respect with, result in a breach
of any material provision of, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, result in
the termination or in a right of termination of, accelerate the performance
required by or benefit obtainable under, result in the vesting, triggering or
acceleration of any payment or other obligations pursuant to, or result in there
being declared void, voidable, subject to withdrawal, or without further binding
effect, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust or any material license, franchise, Permit, lease,
contract, agreement or other instrument, commitment or obligation to which each
of Purchaser, US Parent and Merger Sub is a party, by which each of Purchaser,
US Parent and Merger Sub or any of its properties is bound, or under which each
of Purchaser, US Parent and Merger Sub or any of its properties is entitled to a
benefit; (b) other than the filings required under the HSR Act or any Exchange
Act filings, require any consent, approval or authorization of, or declaration,
filing or registration with, any Governmental Entity; or (c) violate in any
material respect any Laws applicable to each of Purchaser, US Parent and Merger
Sub.
3
<PAGE>
3. Covenants of Each Shareholder. Until the termination of
this Agreement in accordance with Section 7, each Shareholder severally and not
jointly agrees as follows:
(a) At any meeting of Shareholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval (including by written consent) with respect to the
Merger and the Merger Agreement is sought, the Shareholder shall vote
(or cause to be voted) the Subject Shares in favor of the Merger, the
adoption by the Company of the Merger Agreement and the approval of the
terms thereof and each of the other transactions contemplated by the
Merger Agreement. Any vote cast in accordance with this Section 3(a) or
in accordance with Section 3(b) shall be cast in such manner as will
insure that such vote is duly counted for purposes of determining
whether a quorum is present and for purposes of determining the result
of such vote.
(b) At any meeting of Shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholder's vote, consent or other approval is sought, the
Shareholder shall vote (or cause to be voted) the Subject Shares
against (i) any Acquisition Proposal as such term is defined in Section
7.1(a) of the Merger Agreement or (ii) any amendment of the Company's
certificate of incorporation or by-laws or other proposal or
transaction involving the Company, which amendment or other proposal or
transaction would be reasonably likely to impede, frustrate, prevent or
nullify the Merger, the Merger Agreement or any of the other
transactions contemplated by the Merger Agreement or change in any
manner the voting rights of Company Common Stock. The Shareholder
further agrees not to enter into any agreement inconsistent with the
foregoing.
(c) The Shareholder shall not, prior to the earliest of (i)
the Effective Time and (ii) the termination of the Merger Agreement in
accordance with its terms, (x) sell, transfer, give, pledge, assign or
otherwise dispose of (including by gift) (collectively,
4
<PAGE>
"Transfer"), consent to any Transfer of, any or all of such Subject
Shares or any interest therein or enter into any contract, option or
other arrangement (including any profit sharing arrangement) with
respect to the Transfer of, the Subject Shares to any person other than
pursuant to the terms of the Merger or (y) enter into any voting
arrangement, whether by proxy, voting agreement or otherwise, in
connection with, directly or indirectly, any Acquisition Proposal and
agrees not to commit or agree to take any of the foregoing actions,
provided that at any time following the record date for the Company's
shareholders meeting to be called to approve the Merger, the
Shareholders collectively may transfer up to 200,000 certificated
Subject Shares (of which such Shareholder is the record holder) by
gift, provided, further, that such transferred shares shall remain
Subject Shares for purposes of Sections 3(a) and 3(b) and such
transferring Shareholder shall not transfer, or enter into any other
agreement with respect to, the votes attached to such transferred
Subject Shares.
(d) Subject to the terms of Section 9, during the term of this
Agreement, the Shareholder shall not, nor shall it permit any
investment banker or attorney retained by, or any other adviser or
representative of, such Shareholder to, directly or indirectly (i)
solicit, initiate or encourage (including by way of furnishing
non-public information), or take any other action to facilitate, any
inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, an Acquisition Proposal or (ii)
participate in any discussions or negotiations regarding an Acquisition
Proposal, provided, that it is understood that this Section 3(d) will
not be deemed to have been violated if in response to an unsolicited
inquiry, the Shareholder states that he is subject to the provisions of
this Agreement, provided further that this Section 3(d) shall not be
deemed to have been violated as a result of any actions taken, or
permitted to be taken by such Shareholder in his capacity as an officer
or director of the Company. Without limiting the foregoing, it is
understood that any violation of the restrictions set forth in the
preceding sentence by an investment banker or attorney retained by, or
other adviser or representative of, such Shareholder, whether
5
<PAGE>
or not such person is purporting to act on behalf of such Shareholder,
shall be deemed to be a violation of this Section 3(d) by such
Shareholder.
(e) Until after the Merger is consummated or the Merger
Agreement is terminated, the Shareholder shall use reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other parties in doing, all
things necessary, proper or advisable to consummate and make effective,
in the most expeditious manner practicable, the Merger and the other
transactions contemplated by the Merger Agreement.
(f) Such Shareholder, and any beneficiary of a revocable trust
for which such Shareholder serves as trustee, shall not take any action
to revoke or terminate such trust or take any other action which would
restrict, limit or frustrate in any way the transactions contemplated
by this Agreement. Each such beneficiary hereby acknowledges and agrees
to be bound by the terms of this Agreement applicable to it.
(g) (i) If the Merger Agreement shall have been terminated
under circumstances where Purchaser or any affiliate of Purchaser is
entitled, or may become entitled, to receive Expenses, and within one
year of such termination (x) the Company enters into an Acquisition
Agreement with respect to an Acquisition Proposal that is subsequently
consummated or (y) an Acquisition Proposal is consummated, each
Shareholder shall pay to Purchaser on demand, at the time such
Acquisition Proposal is consummated, an amount equal to all profit of
such Shareholder, determined in accordance with Section 3(g)(ii), from
the consummation of any such Acquisition Proposal.
(ii) For purposes of this Section 3(g), the profit of any
Shareholder from any Acquisition Proposal shall equal (x) the aggregate
consideration that would have been received by such Shareholder pursuant to such
Acquisition Proposal if such Shareholder held the same number of Subject Shares
at the consummation of such Acquisition Proposal as he held at the time the
Merger Agreement was terminated (including any consideration that would have
been received in respect of any unexercised stock
6
<PAGE>
options or warrants or similar instruments held at the time the Merger Agreement
was terminated), valuing any noncash consideration (including any residual
interest in the Company) at its fair market value on the date of such
consummation less (y) the fair market value of the aggregate consideration that
would have been issuable or payable to such Shareholder (assuming all stock
options, warrants or similar instruments held by such Shareholder were
exercised) if he had received the Merger Consideration pursuant to the Merger
Agreement as originally executed (without giving effect to any increase in such
Merger Consideration).
(iii) For purposes of this Section 3(g), the fair market value
of any noncash consideration consisting of:
(x) securities listed on a national
securities exchange or traded on the NASDAQ/NMS shall
be equal to the average closing price per share of
such security as reported on such exchange or
NASDAQ/NMS for the twenty trading days prior to the
date of determination; and
(y) consideration which is other than cash
or securities of the form specified in clause (A) of
this Section 3(g)(iii) shall be determined by a
nationally recognized independent investment banking
firm mutually agreed upon by the parties within 10
business days of the event requiring selection of
such banking firm, provided, however, that if the
parties are unable to agree within two business days
after the date of such event as to the investment
banking firm, then the parties shall each select one
firm, and those firms shall select a third investment
banking firm, which third firm shall make such
determination, provided further, that the fees and
expenses of such investment banking firm shall be
borne by Purchaser. The determination of the
investment banking firm shall be binding upon the
parties.
(iv) Any payment of profit under this Section 3(g) shall (x)
if paid in cash, be paid by wire transfer of same day funds to an account
designated by Purchaser and (y) if paid through a transfer of securities (with
the method
7
<PAGE>
and timing of such transfer to be mutually agreed), be paid as soon as
practicable through delivery of such securities, suitably endorsed for transfer,
provided that the Shareholder shall be required to pay cash under this Section
3(g) to the extent cash is actually received by such Shareholder under
circumstances giving rise to the obligation of such Shareholder to make payment
to Purchaser under Section 3(g)(i).
4. Further Assurances. Each Shareholder will, from time to
time, execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as Purchaser may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement.
5. Certain Events. Each Shareholder agrees that this Agreement
and the obligations hereunder shall attach to such Shareholder's Subject Shares
and shall be binding upon any person or entity to which legal or beneficial
ownership of such Subject Shares shall pass, whether by operation of law or
otherwise, including without limitation such Shareholder's heirs, guardians,
administrators or successors but excepting donees of Subject Shares transferred
pursuant to, and in accordance with, the terms of Section 3(c). In the event of
any stock split, stock dividend, merger, reorganization, recapitalization or
other change in the capital structure of the Company affecting the Company
Common Stock, or the acquisition of additional shares of Company Common Stock or
other voting securities of the Company by any Shareholder, the number of Subject
Shares listed in Schedule A beside the name of such Shareholder shall be
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Company Common Stock or other voting
securities of the Company issued to or acquired by such Shareholder.
6. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Merger Sub,
US Parent or Purchaser (or all of them) may assign, as contemplated by Section
10.3 of the Merger Agreement, in its sole discretion, any and all of its rights,
interests and obligations hereunder to any affiliate, provided that Merger Sub,
US Parent or Purchaser will remain liable for its
8
<PAGE>
obligations hereunder in the event of any assignment pursuant to this Section 6.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
7. Termination. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate upon the date upon which the Merger
Agreement is terminated in accordance with its terms, provided that if the
Merger Agreement has terminated under circumstances under which Expenses have
become or could become payable, Sections 3(g), 4 (as it relates to the other
sections of this Agreement that survive such termination), 5, 6, 7, 8, 10 and 11
shall survive until such time as Purchaser could no longer be entitled to
receive a payment pursuant to Section 3(g).
8. General Provisions.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given if hand delivered or sent
by overnight courier (providing proof of delivery) to Purchaser, US
Parent or Merger Sub in accordance with Section 10.2 of the Merger
Agreement and to the Shareholders at their respective addresses set
forth on Schedule A attached hereto (or at such other address for a
party as shall be specified by like notice).
(c) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Wherever the words
"include", "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
(d) 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
9
<PAGE>
effective when one or more of the counterparts have been signed by
each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina
regardless of the laws that might otherwise govern under applicable
principles of conflicts of law thereof.
(g) Voidability. If prior to the execution hereof, the Board
of Directors of the Company shall not have duly and validly authorized
and approved this Agreement, the Merger Agreement and the transactions
contemplated hereby and thereby, so that the execution and delivery
hereof by Purchaser, US Parent or Merger Sub would trigger the
provisions of the North Carolina Shareholder Protection Act or the
North Carolina Control Share Acquisition Act, then this Agreement shall
be void and unenforceable until such time as such authorization and
approval shall have been duly and validly obtained.
9. Shareholder Capacity. No person executing this Agreement
who is or becomes during the term hereof a director or officer of the Company
makes any agreement or understanding herein in his capacity as such director or
officer. Each Shareholder signs solely in his capacity as the record holder and
beneficial owner of, or the trustee of a trust whose beneficiaries are the
beneficial owners of, such Shareholder's Subject Shares and nothing herein
(including, without limitation, the provisions of Section 3(d)) shall limit or
affect any actions taken by a Shareholder in his capacity as an officer or
director of the Company.
10
<PAGE>
10. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of North Carolina or in a North Carolina state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (a) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
North Carolina or any North Carolina state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (b) agrees
that such party will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court, (c) agrees that such
party will not bring any action relating to this Agreement or the transactions
contemplated hereby in any court other than a Federal court sitting in the state
of North Carolina or a North Carolina state court and (d) waives any right to
trial by jury with respect to any claim or proceeding related to or arising out
of this Agreement or any of the transactions contemplated hereby.
11. Public Announcements. Each Shareholder will consult with
Purchaser before issuing, and provide Purchaser with the opportunity to review
and comment upon, any press release or other public statements with respect to
the transactions contemplated by this Agreement and the Merger Agreement, and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law, court process
or by obligations pursuant to any listing agreement with any national securities
exchange (including, but not limited to, NASDAQ).
12. Legends. Each Shareholder will, promptly after executing
and delivering this Agreement, deliver to the Company (or its transfer agent, if
so directed by the Company) the certificates representing the Subject Shares,
which certificates (or replacements thereof) shall be returned to such
Shareholder in accordance with Section 7.11
11
<PAGE>
of the Merger Agreement with the following restrictive legend placed thereon:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A SHAREHOLDERS AGREEMENT DATED AS OF SEPTEMBER 4, 1997, AND,
PURSUANT TO THE TERMS THEREOF, MAY NOT BE SOLD, TRANSFERRED,
GIVEN, PLEDGED, ASSIGNED OR OTHERWISE DISPOSED OF, AND ARE
SUBJECT TO FURTHER RESTRICTIONS REGARDING, AMONG OTHER THINGS,
VOTING RIGHTS AND CERTAIN INDIRECT TRANSFERS AS SET FORTH IN
SUCH SHAREHOLDERS AGREEMENT"
12
<PAGE>
IN WITNESS WHEREOF, Purchaser, US Parent, the Merger Sub and
the Shareholders have caused this Agreement to be duly executed and delivered as
of the date first written above.
MISYS PLC
By: \s\ PSS MacPherson
Name:
Title:
KIRSTY, INC.
By: \s\ Ross Graham
Name:
Title:
DECIMAL MUSIC CORPORATION
By: \s\ Ross Graham
Name:
Title:
\s\ John P. McConnell
JOHN P. McCONNELL
\s\ Alan W. Winchester
ALAN W. WINCHESTER
\s\ Thomas K. Skelton, Jr.
THOMAS K. SKELTON JR.
\s\ David Bond
DAVID BOND
\s\ Eric Sellers
ERIC SELLERS
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
\s\ Luanne L. Roth \s\ Robert C. Roth
LUANNE L. ROTH ROBERT C. ROTH
\s\ George Michael Anthony \s\ Joann H. Anthony
GEORGE MICHAEL ANTHONY JOANN H. ANTHONY
\s\ Kenneth B. Howard \s\ Martha B. Howard
KENNETH B. HOWARD MARTHA B. HOWARD
\s\ John Corse
JOHN CORSE
\s\ Patrick V. Hampson
PATRICK V. HAMPSON
\s\ Patrick John Hampson, Jr.
PATRICK JOHN HAMPSON JR.
\s\ Debi Hampson
DEBI HAMPSON
\s\ Thomas C. Nelson Wakefield Group Limited Partnership
THOMAS C. NELSON By: \s\ Thomas C. Nelson, General Partner
By: Thomas C. Nelson, President
<PAGE>
SCHEDULE A
------------------- ---------------
Number of Shares
of Company Number of
Common Stock Shareholder
Name of Owned of Record Options
Shareholder
------------------- ---------------
John P. McConnell 1,746,661
Alan W. Winchester 38,500 63,500
Thomas K. Skelton Jr. 14,148 28,000
David Bond 38,180 6,000
Eric Sellers 109,750
Luanne L. Roth 134,466 2,000
G. Michael Anthony 10,470 3,000
Kenneth B. Howard 627,210
John Corse 10,000 4,000
Patrick V. Hampson 8,003 4,000
Patrick John Hampson Jr. 8
Debi Hampson 158
Thomas Nelson 564,930 4,000
<PAGE>
</TABLE>
Exhibit 10.59
Execution Copy
MUSIC STOCK OPTION AGREEMENT
MUSIC STOCK OPTION AGREEMENT, dated as of
September 4, 1997 (the "Agreement"), by and between MEDIC COMPUTER SYSTEMS,
INC., a North Carolina corporation (the "Company"), and MISYS PLC, a public
limited company incorporated under the laws of England ("Purchaser").
RECITALS
WHEREAS, the Company, Purchaser, Kirsty, Inc, an indirect
wholly owned subsidiary of Purchaser and Decimal Music Corporation, a North
Carolina corporation and indirect wholly owned subsidiary of Purchaser ("Merger
Sub") have entered into an Agreement and Plan of Merger, dated as of the date
hereof (the "Merger Agreement"), providing for, among other things, the merger
of the Company with and into Merger Sub with the Company as the surviving
corporation in the Merger; and
WHEREAS, as an essential condition and inducement to
Purchaser's willingness to enter into the Merger Agreement, Purchaser has
requested that the Company agree, and the Company has agreed, to enter into this
Agreement and grant Purchaser the Option; and
WHEREAS, capitalized terms used herein without definition
shall have the respective meanings specified therefor in the Merger Agreement;
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein the Company and Purchaser agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, the Company hereby grants to Purchaser an irrevocable option (the
"Option") to purchase up to 1,828,346 (as adjusted as set forth herein) shares
(the "Option Shares") of common stock, par value $0.01 per share ("Company
Common Stock"), of the Company at a purchase price of $35 per Option Share (the
"Purchase Price").
2. Exercise of Option. (a) Purchaser may exercise the Option,
in whole but not in part, at any time after the earlier of (i) the announcement
of an Acquisition Proposal and (ii) termination of the Merger Agreement
<PAGE>
pursuant to Section 9.1(b)(i), 9.1(b)(ii), 9.1(c), 9.1(d), 9.1(f) or 9.1(g) of
the Merger Agreement. If the Merger Agreement is terminated pursuant to Section
9.1(b)(i) or 9.1(g), Purchaser may not exercise the Option unless and until the
Company enters into an Acquisition Agreement or the Company consummates an
Acquisition Proposal. Except as provided in the last sentence of this Section
2(a), the Option shall terminate and be of no further force and effect on the
first anniversary of any termination of the Merger Agreement described in clause
(ii), provided that the Option may not be exercised at any time that Purchaser
is in material default of the Merger Agreement and, provided further, that the
Company shall not be obligated to issue Option Shares upon exercise of the
Option in the absence of any required governmental or regulatory waiver, consent
or approval necessary for the Company to issue the Option Shares or for
Purchaser to exercise the Option or prior to the termination of any waiting
period required by law, or for so long as any injunction or other order, decree
or ruling issued by any court of competent jurisdiction is in effect that
prohibits the sale or delivery of the Option Shares, provided, that the Company
shall take such reasonable actions as are requested by Purchaser to obtain any
such required waiver, consent or approval, or to lift or comply with, as the
case may be, any such injunction, order, decree or rule and the period of time
for exercise of the Option shall be extended for such period of time, if any,
reasonably necessary to permit such impediment to the exercise of the Option to
be overcome. Notwithstanding the termination of the Option, Purchaser shall be
entitled to purchase the Option Shares to the extent that it has exercised the
Option in accordance with the terms hereof prior to the termination of the
Option, and the termination of the Option shall not affect any rights hereunder
which by their terms do not terminate or expire prior to or as of such
termination.
(b) If Purchaser wishes to exercise the Option, it shall send
to the Company a written notice (the date of which being herein referred to as
the "Notice Date") to that effect specifying a date not earlier than three
business days nor later than 20 business days from the Notice Date for the
closing of such purchase (the "Option Closing Date"), provided that (i) if the
closing of the purchase and sale pursuant to the Option (the "Option Closing")
may not be consummated by reason of any applicable judgment, decree, order, law
or regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation expires
2
<PAGE>
or terminates and (ii) without limiting the foregoing, if prior notification to
or approval of any regulatory authority is required in connection with such
purchase, Purchaser and the Company shall promptly file the required notice or
application for approval and shall cooperate in the expeditious filing of such
notice or application, and the period of time that otherwise would run pursuant
to this sentence shall run instead from the date on which, as the case may be,
(A) any required notification period expires or terminates or (B) any required
approval has been obtained, and in either event, any requisite waiting period
expires or terminates. The place of the Option Closing shall be at the offices
of Debevoise & Plimpton, 875 Third Avenue, New York, New York, and the time of
the Option Closing shall be 10:00 a.m. New York City time on the Option Closing
Date.
3. Payment and Delivery of Certificates. (a) At the Option
Closing, Purchaser shall pay to the Company in immediately available funds by
wire transfer to a bank account designated in writing by the Company an amount
equal to the Purchase Price multiplied by the number of Option Shares.
(b) Certificates for the Option Shares delivered at the Option
Closing shall have typed or printed thereon a restrictive legend which shall
read substantially as follows:
"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
MAY ALSO BE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER AS
SET FORTH IN THE STOCK OPTION AGREEMENT, DATED AS OF SEPTEMBER
4, A COPY OF WHICH MAY BE OBTAINED FROM THE SECRETARY OF MEDIC
COMPUTER SYSTEMS, INC. AT ITS PRINCIPAL EXECUTIVE OFFICES."
It is understood and agreed that the reference to restrictions arising under the
Securities Act in the above legend shall be removed by delivery of substitute
certificate(s) without such reference upon the sale of the Option Shares
pursuant to the registration rights set forth in Section 8 hereof.
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4. Representations and Warranties of the Company. The Company
hereby represents and warrants to Purchaser as follows:
(a) Due Authorization; No Violation. The Company's
representations and warranties set forth in Sections 5.2 and 5.6 of the Merger
Agreement are incorporated herein by reference.
(b) Authorized Stock. The Company's representations and
warranties set forth in Section 5.4 of the Merger Agreement are incorporated
herein by reference. Without limiting the generality or effect of the foregoing,
the Company has taken all necessary corporate and other action to authorize and
reserve and to permit it to issue, and, at all times from the date hereof until
the obligation to deliver Option Shares upon the exercise of the Option
terminates, shall have reserved for issuance, upon exercise of the Option,
shares of Company Common Stock necessary for Purchaser to exercise the Option,
and the Company shall take all necessary corporate action to authorize and
reserve for issuance all additional shares of Company Common Stock or other
securities which may be issued pursuant to Section 6 upon exercise of the
Option. The shares of Company Common Stock to be issued upon due exercise of the
Option, including all additional shares of Company Common Stock or other
securities which may be issuable upon exercise of the Option or any substitute
Option pursuant to Section 6, upon issuance pursuant hereto, shall be duly and
validly issued, fully paid and nonassessable, and shall be delivered free and
clear of all liens, claims, charges and encumbrances of any kind or nature
whatsoever, including without limitation any preemptive rights of any
shareholder of the Company.
(c) State Takeover Statutes. Assuming that Purchaser, together
with its affiliates, does not have voting power with respect to such number of
shares of the Company capital stock as would represent, together with the Option
Shares, 20% or more of the votes that all the Company shareholders would be
entitled to cast in an election of directors as of the date of exercise of the
Option, Sections 9 and 9A of the North Carolina Business Corporation Law will be
inoperative with respect to the transactions contemplated hereby.
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5. Representations and Warranties of Purchaser. Purchaser
hereby represents and warrants to the Company that:
(a) Due Authorization; No Violation. Purchaser's
representations and warranties set forth in Sections 6.2 and 6.4 of the Merger
Agreement are incorporated herein by reference.
(b) Purchase Not for Distribution. Any Option Shares or other
securities acquired by Purchaser upon exercise of the Option shall not be
transferred or otherwise disposed of except in a transaction registered, or
exempt from registration, under the Securities Act.
6. Adjustment upon Changes in Capitalization, Etc. (a) In the
event of any change in Company Common Stock by reason of a stock dividend,
split-up, merger, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of shares or securities subject to the Option
and the Purchase Price therefor shall be adjusted appropriately, and proper
provision shall be made in the agreements governing such transaction, so that
Purchaser shall receive upon exercise of the Option the number and class of
shares or other securities or property that Purchaser would have received in
respect of Company Common Stock if the Option had been exercised immediately
prior to such event or the record date therefor, as applicable. Subject to
Section 1, and without limiting the parties' relative rights and obligations
under the Merger Agreement, if any additional shares of Company Common Stock are
issued after the date of this Agreement (other than pursuant to an event
described in the first sentence of this Section 6(a)), the number of shares of
Company Common Stock subject to the Option shall be adjusted so that, after such
issuance, when added to the number of shares of Company Common Stock subject to
the Shareholders Agreement dated as of the date hereof among Purchaser, Merger
Sub and the shareholders named therein, the number of shares of Company Common
Stock subject to the Option shall equal 19.9% of the number of shares of Company
Common Stock then issued and outstanding, without giving effect to any shares
subject to or issued pursuant to the Option.
(b) Without limiting the parties' relative rights and
obligations under the Merger Agreement, if the Company enters into an agreement
(i) to consolidate with or merge into any person, other than Purchaser or one of
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its subsidiaries, and the Company shall not be the continuing or surviving
corporation in such consolidation or merger, (ii) to permit any person, other
than Purchaser or one of its subsidiaries, to merge into the Company and the
Company shall be the continuing or surviving corporation, but in connection with
such merger, the shares of Company Common Stock outstanding immediately prior to
the consummation of such merger shall be changed into or exchanged for stock or
other securities of the Company or any other person or cash or any other
property, or the shares of Company Common Stock outstanding immediately prior to
the consummation of such merger shall, after such merger, represent less than
50% of the outstanding voting securities of the merged company, or (iii) to sell
or otherwise transfer all or substantially all of its assets to any person,
other than Purchaser or one of its subsidiaries, then, and in each such case,
the agreement governing such transaction shall make proper provision so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
with identical terms appropriately adjusted to acquire the number and class of
shares or other securities or property that Purchaser would have received in
respect of Company Common Stock if the Option had been exercised immediately
prior to such consolidation, merger, sale, or transfer, or the record date
therefor, as applicable.
7. Right of First Offer. In the event that Purchaser has
exercised the Option and elects to sell any Option Shares or request
registration of such Option Shares pursuant to Section 8, then, subject to the
last sentence of this Section 7, Purchaser shall give written notice of such
sale or request (the "Sell Notice") to the Company no later than 5:30 p.m.,
North Carolina time, at least ten (10) days prior to the NASDAQ trading day on
which Purchaser intends to effect such sale or make such request. The Sell
Notice shall identify the number of Option Shares Purchaser intends to sell and
the price of the Company Common Stock at which Purchaser intends to execute such
sale, or, in the case of a request for registration, the trading price of the
Company Common Stock as of the date of the Sell Notice (the "Target Price").
Each Sell Notice shall specify only one Target Price, but Purchaser may deliver
separate Sell Notices with respect to intended sales at separate Target Prices
(it being understood that the Company may exercise its rights under this Section
7 with respect to one or more
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Sell Notices without exercising its rights with respect to all such Sell
Notices). The Company, in its sole discretion, may elect to purchase from
Purchaser all of the Option Shares specified in a Sell Notice (or, if the number
of Shares specified in the Sell Notice is more than 100,000, a specified portion
of such Option Shares (but not less than 100,000)) at a price per share equal to
the Target Price, by notifying Purchaser that the Company shall do so (subject
to the condition described below), such notice (the "Buy Notice") to be given
(in writing by facsimile or orally with written confirmation by facsimile)
within eight days following the date on which the Sell Notice is delivered to
the Company. If the Company has not given the Buy Notice by such time or has
given a Buy Notice with respect to some but not all of the Option Shares
specified in the Sell Notice, Purchaser may (i) at any time, sell, at a price or
prices not less than 90% of the Target Price, or request registration of, some
or all of the Option Shares that are specified in the Sell Notice and not
subject to the Buy Notice, if any, or (ii) give one or more new Sell Notices in
accordance with the time periods and other terms of this Section 7 with respect
to some or all of the Option Shares that are not subject to the Buy Notice, if
any. If the Company provides the Buy Notice in compliance with this Section 7,
then Purchaser shall sell to the Company, and the Company shall purchase from
Purchaser, that number of Option Shares specified in the Buy Notice at a price
per share equal to the Target Price (or such other price as to which the parties
may agree) (the day on which such condition is met being referred to herein as
the "Trade Date"). The closing of such purchase and sale shall be at the
corporate offices of the Company in North Carolina at 10:00 a.m. on the third
business day following the Trade Date. At such closing (i) Purchaser will
deliver to the Company certificates representing the Option Shares specified in
the Buy Notice, free and clear of any encumbrances, with appropriate stock
powers attached, properly signed, with any necessary documentary or transfer tax
stamps duly affixed and cancelled; and (2) the Company will deliver to Purchaser
a check in the amount of (i) the number of Option Shares specified in the Buy
Notice multiplied by (ii) the Target Price (or such other price as to which the
parties may agree). Purchaser shall not be required to comply with this Section
7 with respect to a proposed sale on any trading day if, in the good faith
judgment of Purchaser, there is occurring on such trading day an
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extraordinary movement in the trading price of the Company Common Stock.
8. Registration Rights. Subject to the terms of Section 7, the
Company shall, if requested by Purchaser at any time and from time to time
within two years after the Option Closing Date, as expeditiously as possible
prepare and file up to two registration statements under the Securities Act if
such registration is necessary in order to permit the sale or other disposition
of any or all of the Option Shares in accordance with the intended method of
sale or other disposition stated by Purchaser, including a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision;
and the Company shall use its best efforts to qualify such securities under the
applicable state securities laws. The Company agrees to use reasonable efforts
to cause, and to cause any underwriters of any sale or other disposition, to
cause, any sale or other disposition pursuant to such registration statement to
be effected on a widely distributed basis. The Company shall use reasonable
efforts to cause each such registration statement to become effective, to obtain
all consents or waivers of other parties which are required therefor, and to
keep such registration statement effective for such period not in excess of 180
calendar days from the day such registration statement first becomes effective
as may be reasonably necessary to effect such sale or other disposition. The
obligations of the Company hereunder to file a registration statement and to
maintain its effectiveness may be suspended for one or more periods of time not
exceeding 60 calendar days in the aggregate with respect to any registration
statement if the Board of Directors of the Company shall have determined that
the filing of such registration statement or the maintenance of its
effectiveness would require disclosure of nonpublic information that would
materially and adversely affect the Company. Any registration statement prepared
and filed under this Section 8, and any sale covered thereby, shall be at the
Company's expense except for underwriting discounts or commissions, brokers'
fees and the fees and disbursements of Purchaser's counsel related thereto.
Purchaser shall provide all information reasonably requested by the Company for
inclusion in any registration statement to be filed hereunder. If, during the
time periods referred to in the first sentence of this Section 8, the Company
effects a registration under the Securities Act of the Company's securities for
its
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own account or for any other of its shareholders (other than on Form S-4 or
Form S-8, or any successor form), it shall allow Purchaser the right to
participate in such registration, and such participation shall not affect the
obligation of the Company to effect demand registration statements for Purchaser
under this Section 8, provided that, if the managing underwriters of such
offering advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company shall include the securities
requested to be included therein by Purchaser PRO RATA with the securities
intended to be included therein by any other shareholders of the Company. In
connection with any registration pursuant to this Section 8, the Company and
Purchaser shall provide each other and any underwriter of the offering with
customary representations, warranties, covenants, indemnification, and
contribution in connection with such registration.
9. Listing. If Company Common Stock or any other securities to
be acquired upon exercise of the Option are then listed on NASDAQ (or any other
national securities exchange or national securities quotation system), the
Company, upon the request of Purchaser, shall promptly file an application to
list the shares of Company Common Stock or other securities to be acquired upon
exercise of the Option on NASDAQ (and any such other national securities
exchange or national securities quotation system), and shall use reasonable
efforts to obtain approval of such listing as promptly as practicable.
10. Miscellaneous.
(a) Amendments. This Agreement may not be amended except by an
instrument in writing signed by each of the parties hereto.
(b) Notice. All notices and other communications hereunder
shall be in writing and shall be deemed given if hand delivered or sent by
overnight courier (providing proof of delivery) to the parties hereto in
accordance with Section 10.2 of the Merger Agreement.
(c) Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement unless
otherwise indicated.
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The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.
Wherever the words "include", "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) 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 of the counterparts have been signed
by each of the parties and delivered to the other party, it being understood
that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(f) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina regardless
of the laws that might otherwise govern under applicable principles of conflicts
of law thereof.
(g) Voidability. If prior to the execution hereof, the Board
of Directors of the Company shall not have duly and validly authorized and
approved this Agreement, the Merger Agreement and the transactions contemplated
hereby and thereby, so that the execution and delivery hereof by Purchaser would
trigger the provisions of the North Carolina Shareholder Protection Act or the
North Carolina Control Share Acquisition Act, then this Agreement shall be void
and unenforceable until such time as such authorization and approval shall have
been duly and validly obtained.
(h) Expenses. Except as otherwise provided in the Merger
Agreement, or in Section 8 hereof, each of the parties hereto shall bear and pay
all costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
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11. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of North Carolina or in a North Carolina state court, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
North Carolina or any North Carolina state court in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that such party will not bring any action relating to this Agreement or
the transactions contemplated hereby in any court other than a Federal court
sitting in the state of North Carolina or a North Carolina state court and (iv)
waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
12. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Purchaser
may assign, as contemplated by Section 10.3 of the Merger Agreement, in its sole
discretion, any and all of its rights, interests and obligations hereunder to
any affiliate, provided that Purchaser will remain liable for its obligations
hereunder in the event of any assignment pursuant to this Section 12. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
13. Further Assurances. In the event of any exercise of the
Option by Purchaser, the Company and Purchaser shall execute and deliver all
other actions and instruments and take all other actions that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
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IN WITNESS WHEREOF, MEDIC COMPUTER SYSTEMS, INC. and MISYS PLC
have caused this Agreement to be signed by their respective officers thereunto
duly authorized as of the day and year first written above.
MEDIC COMPUTER SYSTEMS, INC.
By: \s\ John P. McConnell
Name:
Title: President & CEO
MISYS PLC
By: \s\ PSS MacPherson
Name:
Title:
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