TABLE OF CONTENTS
Page
ARTICLE I THE MERGER 2
1.1 The Merger.................................................2
1.2 Effective Time.............................................2
1.3 Effect of the Merger.......................................2
1.4 Consideration to Be Paid; Effect on Capital Stock..........2
1.5 Dissenting Shares..........................................4
1.6 Surrender of Certificates..................................4
1.7 No Further Ownership Rights in Prosys Common Stock.........5
1.8 Lost, Stolen or Destroyed Certificates.....................5
1.9 Earnout Payments...........................................6
1.10 Securities Act Compliance..................................7
1.11 Tax and Accounting Consequences............................8
1.12 Taking of Necessary Action; Further Action.................8
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE TARGET PARTIES..............8
2.1 Organization of Prosys.....................................8
2.2 Prosys Capital Structure...................................8
2.3 Subsidiaries...............................................9
2.4 Authority..................................................9
2.5 Prosys Financial Statements...............................10
2.6 No Undisclosed Liabilities................................10
2.7 No Changes................................................11
2.8 Tax and Other Returns and Reports.........................12
2.9 Restrictions on Business Activities.......................14
2.10 Title to Properties; Absence of Liens and Encumbrances....14
2.11 Intellectual Property.....................................14
2.12 Agreements, Contracts and Commitments.....................16
2.13 Interested Party Transactions.............................17
2.14 Compliance with Laws......................................18
2.15 Litigation................................................18
2.16 Insurance.................................................18
2.17 Minute Books..............................................18
2.18 Environmental Matters.....................................18
2.19 Brokers'and Finders'Fees; Third Party Expenses............18
2.20 Employee Matters and Benefit Plans........................19
2.21 Covenants.................................................22
2.22 Representations Complete..................................22
ARTICLE III REPRESENTATIONS AND WARRANTIES OF BUYER.........................22
3.1 Organization, Standing and Power..........................22
3.2 Authority.................................................22
3.3 Capital Structure.........................................23
3.4 SEC Documents; Actel Financial Statements.................23
3.5 No Material Adverse Change................................24
3.6 Litigation................................................24
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME..............................24
4.1 Conduct of Business of Prosys.............................24
4.2 No Solicitation...........................................26
4.3 Strategic Agreements......................................27
4.4 Employee Hiring...........................................27
ARTICLE V ADDITIONAL AGREEMENTS.............................................27
5.1 Prosys Shareholder Approval...............................27
5.2 Access to Information.....................................27
5.3 Expenses..................................................28
5.4 Public Disclosure.........................................28
5.5 Consents..................................................28
5.6 FIRPTA Compliance.........................................28
5.7 Reasonable Efforts........................................28
5.8 Notification of Certain Matters...........................29
5.9 Tax Treatment.............................................29
5.10 Additional Documents and Further Assurances...............29
5.11 Form S-8..................................................29
5.12 Nasdaq Listing............................................29
5.13 Blue Sky Laws.............................................29
5.14 Indemnification...........................................29
5.15 Prosys Options............................................29
ARTICLE VI CONDITIONS TO THE MERGER.........................................30
6.1 Conditions to Obligations of Each Party to Effect
the Merger.............................................30
6.2 Additional Conditions to Obligations of Prosys............30
6.3 Additional Conditions to the Obligations of Actel.........31
ARTICLE VII SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.....32
7.1 Survival..................................................32
7.2 Indemnification Provisions for Benefit of Actel...........32
7.3 Procedure for Indemnification Claims; Matters Involving
Third Parties..........................................33
7.4 Exclusivity of Contractual Remedy.........................34
7.5 Securityholder Representative.............................34
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER..............................34
8.1 Termination...............................................34
8.2 Effect of Termination.....................................35
8.3 Amendment.................................................36
8.4 Extension; Waiver.........................................36
ARTICLE IX GENERAL PROVISIONS...............................................36
9.1 Notices...................................................36
9.2 Interpretation............................................38
9.3 Counterparts..............................................38
9.4 Entire Agreement; Assignment..............................38
9.5 Severability..............................................38
9.6 Other Remedies............................................38
9.7 Governing Law.............................................39
9.8 Rules of Construction.....................................39
9.9 Specific Performance......................................39
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is made
and entered into as of June 2, 2000 between Actel Corporation, a California
corporation ("Actel"), Prosys Technology, Inc., a California corporation
("Prosys"), and Jung-Cheun "Frank" Lien, Sheng "Jason" Feng, Chung Sun, Eddy
Huang and Nan Horng Yeh (the foregoing individuals collectively the "Officers")
(Prosys and the Officers collectively the "Target Parties") (all of the
foregoing collectively the "Parties").
RECITALS
A. The Boards of Directors of Prosys and Actel believe it is in the
best interests of each company and their respective shareholders that Actel
acquire Prosys through the statutory merger of Prosys with and into Actel (the
"Merger") and, in furtherance thereof, have approved the Merger.
B. Occasioned by and immediately prior to the Merger, pursuant to the
terms and provisions of Article V, Section E(1) of Prosys' Articles of
Incorporation, all shares of outstanding Series A Preferred Stock of Prosys
("Prosys Series A Preferred Stock") shall automatically convert into shares of
Common Stock of Prosys ("Prosys Common Stock") (Prosys Series A Preferred Stock
and Prosys Common Stock collectively "Prosys Capital Stock"), such that
immediately prior to the Effective Time (as defined below) the only outstanding
securities of Prosys shall be shares of Prosys Common Stock and options to
acquire Prosys Common Stock outstanding under Prosys' 1998 Stock Option Plan
(the "Option Plan"), or otherwise (all such options, irrespective of whether and
the extent to which vested or exercisable, collectively the "Prosys Options").
Those persons holding shares of Prosys Common Stock immediately following the
aforementioned automatic conversion of Prosys Series A Preferred Stock and
immediately prior to the Effective Time are referred to as the "Prosys
Shareholders", and those persons holding Prosys Options immediately prior to the
Effective Time are referred to as the "Prosys Optionholders" (the Prosys
Shareholders and the Prosys Optionholders collectively the "Prosys
Securityholders").
C. Pursuant to the Merger, among other things, and subject to the terms
and conditions of this Agreement, all of the issued and outstanding shares of
Prosys Common Stock shall be converted into the right to receive shares of
Common Stock of Actel ("Actel Common Stock") and/or cash, as set forth herein,
and all outstanding options to acquire shares of Prosys Common Stock shall be
assumed by Actel in the manner set forth herein.
D. The issuance of a portion of the shares of Actel Common Stock will
be subject to and conditional upon the achievement of certain performance
milestones subsequent to the Merger, all as set forth in Section 1.9 hereof.
E. Prosys and Actel desire to make certain representations and
warranties and other agreements in connection with the Merger.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of the California General Corporation Law ("California
Law"), Prosys shall be merged with and into Actel, the separate corporate
existence of Prosys shall cease and Actel shall continue as the surviving
corporation.
1.2 Effective Time. Unless this Agreement is earlier terminated pursuant to
Section 8.1, the closing of the Merger (the "Closing") will take place as
promptly as practicable, but no later than five (5) business days, following
satisfaction or waiver of the conditions set forth in Article VI, at the offices
of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California,
unless another place or time is agreed to by Actel and Prosys. The date upon
which the Closing actually occurs is herein referred to as the "Closing Date".
On the Closing Date, the parties hereto shall cause the Merger to be consummated
by (i) filing a Certificate of Merger with the Secretary of State of the State
of California (the "Certificate of Merger"), in accordance with the relevant
provisions of applicable law (the time of acceptance by the Secretary of State
of California of such filing being referred to herein as the "Effective Time").
The parties currently intend that the Closing Date will occur on or prior to
June 2, 2000.
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of California Law. Without
limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of Prosys
shall vest in Actel, and all debts, liabilities and duties of Prosys shall
become the debts, liabilities and duties of Actel.
1.4 Consideration to Be Paid; Effect on Capital Stock. At the Effective
Time, Actel shall transfer $6,900,000 and 220,518 shares of Actel Common Stock
to the Prosys Shareholders in exchange for all of the Prosys Common. Subject to
the terms and conditions of this Agreement, as of the Effective Time, by virtue
of the Merger and without any action on the part of Actel, Prosys or any Prosys
Shareholder, the following shall occur:
(a) Conversion of Prosys Common Stock. Each share of Prosys Common
Stock issued and outstanding immediately prior to the Effective Time (other
than Dissenting Shares (as defined and to the extent provided in Section
1.5(a)) will be canceled and extinguished and be converted automatically
into the right to receive, upon surrender of the certificate representing
such share of Prosys Common Stock in the manner provided in Section 1.6:
(i) 0.0735 shares of Actel Common Stock (the "Common Stock Exchange
Ratio"); (ii) $2.30; and (iii) the right to receive Earnout Payments as
provided in Section 1.9 and as limited by Article VII hereof. Any shares of
Actel Common Stock issued in exchange for shares of Prosys Common Stock
which are subject to a repurchase right in favor of Prosys shall be subject
to an identical repurchase right in favor of Actel.
(b) Stock Options. At the Effective Time, all Prosys Options shall be
assumed by Actel in accordance with provisions described below.
(i) At the Effective Time, each Prosys Option, whether vested or
unvested, shall be, in connection with the Merger, assumed by Actel.
Each Prosys Option so assumed by Actel under this Agreement shall
continue to have, and be subject to, the same terms and conditions set
forth in the Option Plan and/or as provided in the respective option
agreements governing such Prosys Option immediately prior to the
Effective Time, except that: (A) such Prosys Option shall be
exercisable for that number of whole shares of Actel Common Stock
equal to the product of the number of shares of Prosys Common Stock
that were issuable upon exercise of such Prosys Option immediately
prior to the Effective Time multiplied by 0.147 (the "Option Exchange
Ratio"), rounded down to the nearest whole number of shares of Actel
Common Stock; (B) the per share exercise price for the shares of Actel
Common Stock issuable upon exercise of such assumed Prosys Option
shall be equal to the quotient determined by dividing the exercise
price per share of Prosys Common Stock at which such Prosys Option was
exercisable immediately prior to the Effective Time by the Option
Exchange Ratio, rounded up to the nearest whole cent; and (C) each
Prosys Option shall be modified and amended such that (x) such Prosys
Option shall vest on a quarterly basis, and (y) the vesting
commencement date of such Prosys Option shall be the date three months
prior to the vesting commencement date previously set forth in such
Prosys Option prior to the Merger.
(ii) It is the intention of the parties that Prosys Options
assumed by Actel qualify following the Effective Time as incentive
stock options as defined in Section 422 of the Code to the extent
Prosys Options qualified as incentive stock options immediately prior
to the Effective Time.
(iii) Promptly following the Effective Time, Actel will issue to
each holder of an outstanding Prosys Option a document evidencing the
foregoing assumption of such Prosys Option by Actel.
(c) Adjustments to Exchange Ratio. The Common Stock Exchange Ratio
shall be adjusted to reflect fully the effect of any stock split, reverse
split, stock dividend (including any dividend or distribution of securities
convertible into Actel Common Stock or Prosys Common Stock),
reorganization, recapitalization or other like change with respect to Actel
Common Stock or Prosys Common Stock occurring after the date hereof and
prior to the Effective Time.
(d) Fractional Shares. No fraction of a share of Actel Common Stock
will be issued, but in lieu thereof, each holder of shares of Prosys Common
Stock who would otherwise be entitled to a fraction of a share of Actel
Common Stock (after aggregating all fractional shares of Actel Common Stock
to be received by such holder) shall be entitled to receive from Actel an
amount of cash (rounded to the nearest whole cent) equal to the product of
(i) such fraction, multiplied by (ii) $31.29 (the "Value Per Actel Share").
1.5 Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary,
any shares of Prosys Common Stock held by a holder who has demanded and
perfected appraisal or dissenters' rights for such shares in accordance
with California Law and who, as of the Effective Time, has not effectively
withdrawn or lost such appraisal or dissenters' rights ("Dissenting
Shareholders"), shall not be converted into or represent a right to receive
Actel Common Stock pursuant to Section 1.6, but the holder thereof shall
only be entitled to such rights as are granted by California Law.
(b) Notwithstanding the provisions of subsection (a), if any holder of
shares of Prosys Common Stock who demands appraisal of such shares under
California Law shall effectively withdraw or lose (through failure to
perfect or otherwise) the right to appraisal, then, as of the later of the
Effective Time and the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right to receive
Actel Common Stock and fractional shares as provided in Section 1.4,
without interest thereon, upon surrender of the certificate representing
such shares.
(c) Prosys shall give Actel (i) prompt notice of any written demands
for appraisal of any shares of Prosys Common Stock, withdrawals of such
demands, and any other instruments served pursuant to California Law and
received by Prosys and (ii) the opportunity to participate in all
negotiations and proceedings with respect to demands for appraisal under
California Law. Prosys shall not, except with the prior written consent of
Actel, voluntarily make any payment with respect to any demands for
appraisal of capital stock of Prosys or offer to settle or settle any such
demands.
1.6 Surrender of Certificates.
(a) Exchange Procedures. Promptly after the Effective Time, Actel
shall cause to be mailed to each holder of record of a stock certificate or
certificates (the "Certificates") which immediately prior to the Effective
Time represented outstanding shares of Prosys Common Stock whose shares
were converted into the right to receive shares of Actel Common Stock
pursuant to Section 1.4(a), (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to Actel
and shall be in such form and have such other provisions as Actel may
reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing
shares of Actel Common Stock. Upon surrender of a Certificate for
cancellation to Actel or to such other agent or agents as may be appointed
by Actel, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions thereto, the holder of
such Certificate shall be entitled to receive in exchange therefor a
certificate representing the number of whole shares of Actel Common Stock,
plus cash in lieu of fractional shares in accordance with Section 1.4, to
which such holder is entitled pursuant to Section 1.4(a)(i), and the dollar
amount specified in Section 1.4(a)(ii), and the Certificate so surrendered
shall forthwith be canceled.
(b) Distributions With Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect
to Actel Common Stock with a record date after the Effective Time will be
paid to the holder of any unsurrendered Certificate with respect to the
shares of Actel Common Stock represented thereby until the holder of record
of such Certificate shall surrender such Certificate. Subject to applicable
law, following surrender of any such Certificate, there shall be paid to
the record holder of the certificates representing whole shares of Actel
Common Stock issued in exchange therefor, without interest, at the time of
such surrender, the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
whole shares of Actel Common Stock.
(c) Transfers of Ownership. If any certificate for shares of Actel
Common Stock is to be issued in a name other than that in which the
certificate surrendered in exchange therefor is registered, it will be a
condition of the issuance thereof (i) that the certificate so surrendered
will be properly endorsed and otherwise in proper form for transfer, (ii)
that the person requesting such exchange will have paid to Actel or any
agent designated by it any transfer or other taxes required by reason of
the issuance of a certificate for shares of Actel Common Stock in any name
other than that of the registered holder of the certificate surrendered, or
established to the satisfaction of Actel or any agent designated by it that
such tax has been paid or is not payable, (iii) that either such transfer
be registered under the Securities Act or the proposed transferor provides
Actel with an opinion of counsel satisfactory to Actel to the effect that
such transfer is exempt from the registration requirements of the
Securities Act, and (iv) the proposed transferee agrees in writing to be
bound by the provisions of the transferor's Investment Representation
Statement.
(d) No Liability. Notwithstanding anything to the contrary in this
Section 1.6, none of Actel or any party hereto shall be liable to a holder
of shares of Prosys Common Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
1.7 No Further Ownership Rights in Prosys Common Stock. All shares of Actel
Common Stock issued upon the surrender for exchange of shares of Prosys Common
Stock in accordance with the terms hereof (including any cash paid in respect
thereof) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of Prosys Common Stock, and there shall be no further
registration of transfers on the records of Actel of shares of Prosys Common
Stock which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to Actel for any reason, they
shall be canceled and exchanged as provided in this Article I.
1.8 Lost, Stolen or Destroyed Certificates. In the event any certificates
evidencing shares of Prosys Common Stock shall have been lost, stolen or
destroyed, Actel shall issue in exchange for such lost, stolen or destroyed
certificates, upon the making of an affidavit of that fact by the holder
thereof, such shares of Actel Common Stock and cash for fractional shares, if
any, as may be required pursuant to Section 1.4; provided, however, that Actel
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificates to deliver a
bond in such sum as it may reasonably direct as indemnity against any claim that
may be made against Actel with respect to the certificates alleged to have been
lost, stolen or destroyed.
1.9 Earnout Payments.
(a) Schedule of Milestones. Promptly following the acheivement of any
of the following milestones within 90 days of the applicable milestone
date, Actel shall pay to the Prosys Securityholders 39,949 shares of Actel
Common Stock (each an "Earnout Payment"):
(i) First Milestone. On or before November 30, 2000: The 0.18um
IP core product will be available with beta status, including a
tapeout of the 4x4 silicon, plus software and methodology support that
has been validated using a suite of test designs.
(ii) Second Milestone. On or before February 28, 2001: The 0.18um
IP core product development is complete, including layout databases
for the 4x2, 2x2 and 2x1 cores, plus working 4x4 silicon and an
associated development board.
(iii) Third Milestone. On or before July 31, 2001: The 0.15um IP
core product will be available with beta status, including a tapeout
of the 8x8 silicon, plus software and methodology support that has
been validated using a suite of test designs.
(iv) Fourth Milestone. On or before November 30, 2001: The 0.15um
IP core product development is complete, including layout databases
for the 8x4, 4x4, and 4x2 cores, plus working 8x8 silicon and an
associated development board.
Actel's obligation to make the Earnout Payments specified
above is subject to the indemnification and offset provisions set
forth in Article VII hereof. Assuming achievement of all the
milestones set forth in this section above, and except to the
extent reduced by operation of such Article VII, the total value
of all Earnout Payments shall equal 159,795 shares of Actel
Common Stock.
(b) Nature of Earnout Payments. All Earnout Payments shall be paid
solely in the form of Actel Common Stock.
(c) Allocation and Mechanics of Payment. The total amount of each
Earnout Payment shall be allocated among the Prosys Securityholders based
on (i) the sum of (A) the total number of shares of Prosys Common held by
such Securityholder immediately prior to the Effective Time, plus (B) the
total number of shares of Prosys Common issuable upon the exercise in full
of all Prosys Options held by such Securityholder immediately prior to the
Effective Time (assuming solely for purposes of such calculation that all
such Options are vested and exercisable in full at such time, irrespective
of whether or not such Options are in fact vested or exercisable at such
time), divided by (ii) 5,000,000; provided, however, that if the employment
of any Prosys Optionholder has been terminated by Actel for "cause," as
defined in the Offer Letter between Actel and such Prosys Optionholder
dated as of even date herewith, prior to a given Earnout Payment Date, then
such Optionholder shall not, solely with respect to any Prosys Options held
by such Securityholder immediately prior to the Effective Time (such
Securityholder shall not be adversely affected by virtue of such
termination with respect to such Securityholder's right to receive a
portion of the Earnout Payment with respect to Prosys Common which such
Securityholder may have held immediately prior to the Effective Time), be
eligible or entitled to receive any portion of the Earnout Payment on such
or any subsequent Earnout Payment Date and any portion of the Earnout
Payment allocated to such Prosys Optionholder shall be re-allocated on a
pro rata basis to the remaining Propsys Securityholders. No fractional
shares of Actel Common Stock will be issued with Earnout Payments, and the
value of such fractional shares will be paid in cash at the rate of $31.29
per whole share of Actel Common Stock.
(d) Conduct of Actel's Business. Nothing in this Agreement shall
affect Actel's ability to operate its business (including the business of
Prosys acquired by Actel pursuant to this Agreement) in a manner that Actel
deems advisable.
1.10 Securities Act Compliance.
(a) Securities Act Exemption. The issuance of the Actel Common Stock
in the Merger, including shares of Actel Common Stock issued pursuant to
the Earnout Payments, shall not be registered under the Securities Act of
1933, as amended (the "Securities Act"), in reliance upon the exemption
contained in Section 4(2) of the Securities Act.
(b) Stock Restrictions. The certificates representing the shares of
Actel Common Stock issued pursuant to this Agreement shall bear a
restrictive legend (and stop transfer orders shall be placed against the
transfer thereof with Actel's transfer agent), which legend shall be
removed in connection with the registration of such shares under the terms
of the Investment Representation Statement (as defined below), stating
substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF
EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO, (ii) IN COMPLIANCE WITH RULE 144 OR (iii) PURSUANT TO AN
OPINION OF COUNSEL ACCEPTABLE TO ACTEL IN ITS DISCRETION THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933."
(c) Investment Representation Statement. The Prosys Shareholders
(other than any shareholders who are eligible to become Dissenting
Shareholders as described in Section 1.5 of this Agreement and who elect
not to enter into such an agreement as described herein) shall duly execute
and deliver to Actel on or before the Closing Date, an agreement in the
form of Exhibit A attached hereto (the "Investment Representation
Statement"), setting forth, among other things, certain restrictions upon
the transferability of Actel Common Stock in compliance with the Securities
Act.
1.11 Tax and Accounting Consequences. It is intended by the parties hereto
that the Merger shall (i) constitute a reorganization within the meaning of
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code") and
(ii) be treated for accounting purposes as a purchase of Prosys by Actel.
1.12 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any such further action is necessary or desirable to carry out
the purposes of this Agreement and to vest Actel with full right, title and
possession to all assets, property, rights, privileges, powers and franchises of
Prosys, the officers and directors of Actel, are hereby fully authorized in the
name of Actel, Prosys or otherwise to take all such lawful action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE TARGET PARTIES
The Target Parties hereby jointly and severally represent and warrant to
Actel, subject to such exceptions as are clearly disclosed in the disclosure
letter supplied by Prosys to Actel (the "Disclosure Schedule") and dated as of
the date hereof, as follows:
2.1 Organization of Prosys. Prosys is a corporation duly organized, validly
existing and in good standing under the laws of the State of California. Prosys
has the corporate power to own its properties and to carry on its business as
now being conducted. Prosys is duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure to
be so qualified would have a material adverse effect on the business, assets
(including intangible assets), financial condition or results of operations (any
such effect hereinafter referred to as a "Material Adverse Effect") of Prosys.
Prosys has delivered a true and correct copy of its Articles of Incorporation
and Bylaws, each as amended to date, to counsel for Actel.
2.2 Prosys Capital Structure.
(a) Capital Stock. The authorized capital stock of Prosys consists of
5,000,000 shares of authorized Common Stock, of which no shares are issued
and outstanding, and 3,000,000 shares of authorized Preferred Stock. All
3,000,000 shares of the authorized Preferred Stock have been designated as
Series A Preferred Stock, of which 3,000,000 shares are issued and
outstanding. Prosys Series A Preferred Stock is held of record by the
persons, with the addresses of record and in the amounts set forth on
Schedule 2.2(a). All outstanding shares of Prosys Series A Preferred Stock
are duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, the Articles of
Incorporation or Bylaws of Prosys or any agreement to which Prosys is a
party or by which it is bound.
(b) Options. Prosys has reserved 2,000,000 shares of Common Stock for
issuance to employees and consultants pursuant to the Option Plan, of which
2,000,000 shares are subject to outstanding, unexercised options and no
shares remain available for future grant. Schedule 2.2(b) sets forth for
each outstanding Prosys Option the name of the holder of such option, the
number of shares of Common Stock subject to such option, the exercise price
of such option and the vesting schedule for such option, including the
extent vested to date, and whether the vesting of such options will be
accelerated by the transactions contemplated by this Agreement. Except for
Prosys Options described in Schedule 2.2(b), there are no options,
warrants, calls, rights, commitments or agreements of any character,
written or oral, to which Prosys is a party or by which it is bound
obligating Prosys to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of
Prosys Capital Stock. Except for Prosys Options described in Schedule
2.2(b), there are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which Prosys is a party or
by which it is bound obligating Prosys to grant, extend, accelerate the
vesting of, change the price of, otherwise amend or enter into any such
option, warrant, call, right, commitment or agreement. The holders of
Prosys Options and any outstanding warrants have been or will be given, or
shall have properly waived, any required notice prior to the Merger and all
such notice rights will be terminated at or prior to the Effective Time.
2.3 Subsidiaries. Prosys does not have and has never had any subsidiaries
or affiliated companies and does not otherwise own and has never otherwise owned
any shares of capital stock or any interest in, or control, directly or
indirectly, any other corporation, partnership, association, joint venture or
other business entity.
2.4 Authority. Subject only to the requisite approval of the Merger and
this Agreement by Prosys' shareholders, Prosys has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The vote required of Prosys' shareholders to duly approve
the Merger and this Agreement is that number of shares as would constitute a
majority of the outstanding shares of (a) the Common Stock and Preferred Stock,
voting together as a single class, and (b) the Preferred Stock voting separately
as a single class (in each case with each share of Preferred Stock being
entitled to a number of votes equal to the number of whole shares of Common
Stock into which such share of Preferred Stock could be converted on the record
date for the vote). The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Prosys, subject only to the
approval of the Merger by Prosys' shareholders. Prosys' Board of Directors has
unanimously approved the Merger and this Agreement. This Agreement has been duly
executed and delivered by Prosys and, assuming due execution and delivery by
Actel, constitutes the valid and binding obligation of Prosys, enforceable in
accordance with its terms. Except as set forth on Schedule 2.4, subject only to
the approval of the Merger and this Agreement by Prosys' shareholders, the
execution and delivery of this Agreement by Prosys does not, and, as of the
Effective Time, the consummation of the transactions contemplated hereby will
not, conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of any
benefit under (any such event, a "Conflict") (i) any provision of the Articles
of Incorporation or Bylaws of Prosys or (ii) any mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Prosys or its properties or assets. No consent, waiver, approval,
order or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other federal, state, county,
local or foreign governmental authority, instrumentality, agency or commission
("Governmental Entity") or any third party (so as not to trigger any Conflict),
is required by or with respect to Prosys in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) the filing of the Certificate of Merger with the
California Secretary of State, (ii) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and (iii) such other consents,
waivers, authorizations, filings, approvals and registrations which are set
forth on Schedule 2.4.
2.5 Prosys Financial Statements. Schedule 2.5 sets forth Prosys' audited
balance sheet as of December 31, 1999 and the related audited statements of
operations and cash flows for the year then ended (the "Audited Financials") and
Prosys' unaudited balance sheet as of March 31, 2000 (the "Balance Sheet") and
the related unaudited statements of operations and cash flows for the
three-month period then ended (together with the Balance Sheet, the "Unaudited
Financials") (collectively, the Audited Financials and the Unaudited Financials
are referred to as the "Prosys Financials"). Prosys Financials are correct in
all material respects and have been prepared in accordance with generally
accepted accounting principles ("GAAP") applied on a basis consistent throughout
the periods indicated and consistent with each other. The Prosys Financials
present fairly the financial condition and operating results of Prosys as of the
dates and during the periods indicated therein, subject, in the case of the
Unaudited Financials, to normal year-end adjustments, which will not be material
in amount or significance. The Unaudited Financials require no notes which do
not appear in the Audited Financials.
2.6 No Undisclosed Liabilities. Except as set forth in Schedule 2.6, Prosys
does not have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles), which individually or in the aggregate, (i) has not been reflected
in the Balance Sheet, or (ii) has not arisen in the ordinary course of Prosys'
business since March 31, 2000, consistent with past practices. Except as
disclosed in Schedule 2.6, no customer of Prosys has a right of refund or set
off from Prosys which arises other than from the warranty provision of Prosys'
standard form of customer agreement, which Prosys has provided to Actel prior to
the date hereof.
2.7 No Changes. Except as set forth in Schedule 2.7, since March 31, 2000,
there has not been, occurred or arisen any:
(a) transaction by Prosys except in the ordinary course of business as
conducted on that date and consistent with past practices;
(b) amendments or changes to the Articles of Incorporation or Bylaws
of Prosys;
(c) capital expenditure or commitment by Prosys of $25,000 in any
individual case or $75,000 in the aggregate.
(d) destruction of, damage to or loss of any assets, business or
customer of Prosys (whether or not covered by insurance) which resulted or
could reasonably be expected to result in losses to Prosys of more than
$10,000;
(e) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action;
(f) change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by Prosys;
(g) revaluation by Prosys of any of its assets;
(h) declaration, setting aside or payment of a dividend or other
distribution with respect to the capital stock of Prosys, or any direct or
indirect redemption, purchase or other acquisition by Prosys of any of its
capital stock other than pursuant to the exercise of repurchase rights
under stock option agreements;
(i) increase in the salary or other compensation payable or to become
payable by Prosys to any of its officers, directors, employees or advisors,
or the declaration, payment or commitment or obligation of any kind for the
payment, by Prosys, of a bonus or other additional salary or compensation
to any such person except as otherwise contemplated by this Agreement;
(j) sale, lease, license or other disposition of any of the assets or
properties of Prosys, except in the ordinary course of business as
conducted on that date and consistent with past practices;
(k) amendment or termination of any material contract, agreement or
license to which Prosys is a party or by which it is bound;
(l) loan by Prosys to any person or entity, incurring by Prosys of any
indebtedness, guaranteeing by Prosys of any indebtedness, issuance or sale
of any debt securities of Prosys or guaranteeing of any debt securities of
others except for advances to employees for travel and business expenses in
the ordinary course of business, consistent with past practices;
(m) waiver or release of any right or claim of Prosys, including any
write-off or other compromise of any account receivable of Prosys;
(n) commencement or notice or threat of commencement of any lawsuit or
proceeding against or investigation of Prosys or its affairs;
(o) notice of any claim of ownership by a third party of Prosys'
Intellectual Property (as defined in Section 2.11 below) or of infringement
by Prosys of any third party's Intellectual Property rights;
(p) issuance or sale by Prosys of any of its shares of capital stock,
or securities exchangeable, convertible or exercisable therefor, or of any
other of its securities other than the grant of stock options to employees
or consultants or pursuant to the exercise of employee stock options;
(q) change in pricing or royalties set or charged by Prosys to its
customers or licensees or in pricing or royalties set or charged by persons
who have licensed Intellectual Property to Prosys;
(r) event or condition of any character that has, or reasonably could
be expected to be capable of having, a Material Adverse Effect on Prosys;
(s) agreement to enter into a strategic alliance or grant of third
party royalty rights; or
(t) agreement by Prosys or any officer or employees thereof to do any
of the things described in the preceding clauses (a) through (s) (other
than negotiations with Actel and its representatives regarding the
transactions contemplated by this Agreement).
2.8 Tax and Other Returns and Reports.
(a) Definition of Taxes. For the purposes of this Agreement, "Tax" or,
collectively, "Taxes", means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts,
income, profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment, excise
and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any
agreements or arrangements with any other person with respect to such
amounts and including any liability for taxes of a predecessor entity.
(b) Tax Returns and Audits. Except as set forth in Schedule 2.8:
(i) Prosys as of the Effective Time will have prepared and filed
all required federal, state, local and foreign returns, estimates,
information statements and reports ("Returns") relating to any and all
Taxes concerning or attributable to Prosys or its operations and such
Returns will have been completed in accordance with applicable law.
(ii) Prosys as of the Effective Time: (A) will have paid or
accrued all Taxes it is required to pay or accrue and (B) will have
withheld with respect to its employees all federal and state income
taxes, FICA, FUTA and other Taxes required to be withheld.
(iii) Prosys has not been delinquent in the payment of any Tax
nor is there any Tax deficiency outstanding, proposed or assessed
against Prosys, nor has Prosys executed any waiver of any statute of
limitations on or extending the period for the assessment or
collection of any Tax.
(iv) No audit or other examination of any Return of Prosys is
presently in progress, nor has Prosys been notified of any request for
such an audit or other examination.
(v) Prosys does not have any liabilities for unpaid federal,
state, local and foreign Taxes which have not been accrued or reserved
against in accordance with GAAP on the Balance Sheet, whether asserted
or unasserted, contingent or otherwise, and Prosys has no knowledge of
any basis for the assertion of any such liability attributable to
Prosys, its assets or operations.
(vi) Prosys has provided to Actel copies of all federal and state
income and all state sales and use Tax Returns for all periods since
the date of Prosys' incorporation.
(vii) There are (and as of immediately following the Closing
there will be) no liens, pledges, charges, claims, security interests
or other encumbrances of any sort ("Liens") on the assets of Prosys
relating to or attributable to Taxes, other than Liens for Taxes not
yet due and payable.
(viii) None of Prosys' assets are treated as "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
(ix) As of the Effective Time, there will not be any contract,
agreement, plan or arrangement, including but not limited to the
provisions of this Agreement, covering any employee or former employee
of Prosys that, individually or collectively, could give rise to the
payment of any amount that would not be deductible pursuant to Section
280G or 162 of the Code.
(x) Prosys has not filed any consent agreement under Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code
apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Prosys.
(xi) Prosys is not a party to a tax sharing or allocation
agreement nor does Prosys owe any amount under any such agreement.
(xii) Prosys has (a) never been a member of an affiliated group
(within the meaning of Code ss.1504(a)) filing a consolidated federal
income Tax Return (other than a group the common parent of which was
Prosys), (b) no liability for the Taxes of any person (other than
Prosys or any of its subsidiaries) under Treas. Reg. ss. 1.1502-6 (or
any similar provision of state, local or foreign law), as a transferee
or successor, by contract, or otherwise and (c) never been a party to
any joint venture, partnership or other agreement that could be
treated as a partnership for Tax purposes.
(xiii) Prosys has not constituted either a "distributing
corporation" or a "controlled corporation" in a distribution of stock
qualifying for tax-free treatment under Section 355 of the Code (x) in
the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or
"Series of related transactions" (within the meaning of Section 355(e)
of the Code) in conjunction with the Merger.
(xiv) Prosys is not, and has not been at any time, a "United
States real property holding corporation" within the meaning of
Section 897(c)(2) of the Code.
2.9 Restrictions on Business Activities. There is no agreement (noncompete
or otherwise), judgment, injunction, order or decree to which Prosys is a party
or otherwise binding upon Prosys which has or reasonably would be expected to
have the effect of prohibiting or impairing any business practice of Prosys, any
acquisition of property (tangible or intangible) by Prosys or the conduct of
business by Prosys. Without limiting the foregoing, Prosys has not entered into
any agreement under which Prosys is restricted from selling, licensing or
otherwise distributing any of its products to any class of customers, in any
geographic area, during any period of time or in any segment of the market.
2.10 Title to Properties; Absence of Liens and Encumbrances.
(a) Prosys owns no real property, nor has it ever owned any real
property. Schedule 2.10(a) sets forth a list of all real property currently
leased by Prosys, the name of the lessor and the date of the lease and each
amendment thereto. All such current leases are in full force and effect,
are valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of
default (or event which with notice or lapse of time, or both, would
constitute a default).
(b) Prosys has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in
its business, free and clear of any Liens (as defined in Section
2.8(b)(vii)), except as reflected in Prosys Financials or in Schedule
2.10(b).
2.11 Intellectual Property.
(a) Prosys owns, or is licensed or otherwise possesses legally
enforceable rights to use, all patents, trademarks, trade names, service
marks, copyrights, mask works, and any applications therefor, schematics,
technology, know-how, computer software programs or applications (in both
source code and object code form), and tangible or intangible proprietary
information or material that are used in the business of Prosys, including
without limitation Prosys' field programmable gate array architecture, as
currently conducted or as proposed to be conducted by Prosys (all of the
foregoing collectively the "Prosys Intellectual Property Rights").
(b) Schedule 2.11(a) sets forth a complete list of all patents,
registered and material unregistered trademarks, registered copyrights,
trade names and service marks, mask works, and any applications therefor,
included in Prosys Intellectual Property Rights, and specifies, where
applicable, the jurisdictions in which each such Prosys Intellectual
Property Right has been issued or registered or in which an application for
such issuance and registration has been filed, including the respective
registration or application numbers and the names of all registered owners.
Schedule 2.11(b) sets forth a complete list of all licenses, sublicenses,
side letters and other agreements to which Prosys is a party and pursuant
to which Prosys or any other person is authorized to use any Prosys
Intellectual Property Right (excluding object code end-user licenses
granted to end-users in the ordinary course of business that permit use of
software products without a right to modify, distribute or sublicense the
same ("End-User Licenses")) or trade secret of Prosys, and includes the
identity of all parties thereto. Except as set forth on Schedules 2.11(a)
or 2.11(b), the execution and delivery of this Agreement by Prosys, and the
consummation of the transactions contemplated hereby, will neither cause
Prosys to be in violation or default under any such license, sublicense or
agreement, nor entitle any other party to any such license, sublicense or
agreement to terminate or modify such license, sublicense or agreement.
Except as set forth in Schedules 2.11(a) or 2.11(b), Prosys is the sole and
exclusive owner or licensee of, with all right, title and interest in and
to (free and clear of any liens or encumbrances), the Prosys Intellectual
Property Rights, and has sole and exclusive rights (and is not
contractually obligated to pay any compensation to any third party in
respect thereof) to the use thereof or the material covered thereby in
connection with the services or products in respect of which Prosys
Intellectual Property Rights are being used.
(c) No claims with respect to Prosys Intellectual Property Rights have
been asserted or are, to Prosys' knowledge, threatened by any person, nor
are there any valid grounds for any bona fide claims (i) to the effect that
the manufacture, sale, licensing or use of any of the products of Prosys
infringes on any copyright, patent, trade mark, service mark, mask work,
trade secret or other proprietary right, (ii) against the use by Prosys of
any trademarks, service marks, trade names, trade secrets, copyrights,
patents, mask works, technology, know-how or computer software programs and
applications used in Prosys' business as currently conducted or as proposed
to be conducted by Prosys, or (iii) challenging the ownership by Prosys,
validity or effectiveness of any of Prosys Intellectual Property Rights.
All registered trademarks, service marks, mask works and copyrights held by
Prosys are valid and subsisting. The business of Prosys as currently
conducted or as proposed to be conducted by Prosys has not and does not
infringe on any proprietary right of any third party. To Prosys' knowledge,
there is no unauthorized use, infringement or misappropriation of any of
Prosys Intellectual Property Rights by any third party, including any
employee or former employee of Prosys. No Prosys Intellectual Property
Right or product of Prosys or any of its subsidiaries is subject to any
outstanding decree, order, judgment, or stipulation restricting in any
manner the licensing thereof by Prosys. Each employee of and consultant to
Prosys has executed a proprietary information and confidentiality agreement
substantially in Prosys' standard forms.
(d) Prosys software products and associated documentation that are
part of the Prosys Intellectual Property Rights are production-level
versions of such software technology; any Prosys software products that are
works in process or beta-level software are identified and disclosed as
such in Schedule 2.11(d).
2.12 Agreements, Contracts and Commitments. Except as set forth on Schedule
2.12(a), Prosys does not have, is not a party to nor is it bound by:
(i) any collective bargaining agreements,
(ii) any agreements or arrangements that contain any severance
pay or post-employment liabilities or obligations,
(iii) any bonus, deferred compensation, sales compensation plan,
pension, profit sharing or retirement plans, or any other employee
benefit plans or arrangements or agreements to change any such plans
whether written or oral,
(iv) any employment or consulting agreement with an employee or
individual consultant, or any consulting or sales agreement under
which a firm or other organization provides services to Prosys,
(v) any agreement or plan, including, without limitation, any
stock option plan, stock appreciation rights plan or stock purchase
plan, any of the benefits of which will be increased, or the vesting
of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of
the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement,
(vi) any fidelity or surety bond or completion bond,
(vii) any lease of personal property having a value individually
in excess of $25,000,
(viii) any agreement of indemnification or guaranty,
(ix) any agreement containing any covenant limiting the freedom
of Prosys to engage in any line of business or to compete with any
person,
(x) any agreement relating to capital expenditures and involving
future payments in excess of $25,000,
(xi) any agreement relating to the disposition or acquisition of
assets or any interest in any business enterprise outside the ordinary
course of Prosys' business,
(xii) any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the
borrowing of money or extension of credit, including guaranties
referred to in clause (viii) hereof,
(xiii) any purchase order or contract for the purchase of raw
materials or services involving $10,000 or more,
(xiv) any construction contracts,
(xv) any distribution, joint marketing or development agreement,
(xvi) any agreement pursuant to which Prosys has granted or may
grant in the future, to any party a source-code license or option or
other right to use or acquire source-code, or (xvii) any other
agreement that involves $25,000 or more or is not cancelable without
penalty within thirty (30) days.
Except for such alleged breaches, violations and defaults, and events that
would constitute a breach, violation or default with the lapse of time, giving
of notice, or both, as are all noted in Schedule 2.12(b), Prosys has not
breached, violated or defaulted under, or received notice that it has breached,
violated or defaulted under, any of the terms or conditions of any agreement,
contract or commitment required to be set forth on Schedule 2.12(a) or Schedule
2.11(b) (any such agreement, contract or commitment, a "Contract"). Each
Contract is in full force and effect and, except as otherwise disclosed in
Schedule 2.12(b), is not subject to any default thereunder of which Prosys has
knowledge by any party obligated to Prosys pursuant thereto.
2.13 Interested Party Transactions. Except as set forth on Schedule 2.13,
to Prosys' knowledge, no officer, director or affiliate (as defined under
Regulation C under the Securities Act of 1933, as amended) of Prosys (nor any
ancestor, sibling, descendant or spouse of any of such persons, or any trust,
partnership or corporation in which any of such persons has or has had an
economic interest), has or has had, directly or indirectly, (i) an economic
interest in any entity which furnished or sold, or furnishes or sells, services
or products that Prosys furnishes or sells, or proposes to furnish or sell, or
(ii) an economic interest in any entity that purchases from or sells or
furnishes to, Prosys, any goods or services or (iii) a beneficial interest in
any contract or agreement set forth in Schedule 2.12(a) or Schedule 2.11(b);
provided, that (x) ownership of no more than one percent (1%) of the outstanding
voting stock of a publicly traded corporation and no more than ten percent (10%)
of the outstanding equity of any other entity shall not be deemed an "economic
interest in any entity" for purposes of this Section 2.13 and (y) this provision
shall only apply if the terms and conditions applicable to the subject
relationship are materially less favorable to Prosys than the terms and
conditions that could be obtained in an arms-length relationship.
2.14 Compliance with Laws. Prosys has complied in all respects with, is not
in violation of, and has not received any notices of violation with respect to,
any foreign, federal, state or local statute, law or regulation.
2.15 Litigation. Except as set forth in Schedule 2.15, there is no action,
suit or proceeding of any nature pending or to Prosys' knowledge threatened
against Prosys, its properties or any of its officers or directors, in their
respective capacities as such. Except as set forth in Schedule 2.15, to Prosys'
knowledge, there is no investigation pending or threatened against Prosys, its
properties or any of its officers or directors by or before any governmental
entity. Schedule 2.15 sets forth, with respect to any such pending or threatened
action, suit, proceeding or investigation, the forum, the parties thereto, the
subject matter thereof and the amount of damages claimed or other remedy
requested. No governmental entity has at any time challenged or questioned the
legal right of Prosys to manufacture, offer or sell any of its products in the
present manner or style thereof.
2.16 Insurance. With respect to the insurance policies and fidelity bonds
covering the assets, business, equipment, properties, operations, employees,
officers and directors of Prosys, there is no claim by Prosys pending under any
of such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters of such policies or bonds. All premiums due and
payable under all such policies and bonds have been paid and Prosys is otherwise
in compliance with the terms of such policies and bonds (or other policies and
bonds providing substantially similar insurance coverage). Prosys has no
knowledge of any threatened termination of, or premium increase with respect to,
any of such policies.
2.17 Minute Books. The minute books of Prosys made available to counsel for
Actel are the only minute books of Prosys and contain a reasonably accurate
summary of all meetings of directors (or committees thereof) and shareholders or
actions by written consent since the time of incorporation of Prosys.
2.18 Environmental Matters. Prosys (i) is in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), (ii)
has received all permits, licenses or other approvals required under applicable
Environmental Laws to conduct its business and (iii) is in compliance with all
terms and conditions of any such permit, license or approval. There are no costs
or liabilities (including any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) other than as disclosed in the
Financial Statements.
2.19 Brokers' and Finders' Fees; Third Party Expenses. Except as set forth
on Schedule 2.19, Prosys has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby. Schedule 2.19 sets forth the principal terms and conditions
of any agreement, written or oral, with respect to such fees. Schedule 2.19 sets
forth Prosys' current reasonable estimate of all Third Party Expenses (as
defined in Section 5.3) expected to be incurred by Prosys in connection with the
negotiation and effectuation of the terms and conditions of this Agreement and
the transactions contemplated hereby.
2.20 Employee Matters and Benefit Plans.
(a) Definitions. With the exception of the definition of "Affiliate"
set forth in Section 2.20(a)(i) below (such definition shall only apply to
this Section 2.20), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "Affiliate" shall mean any other person or entity under
common control with Prosys within the meaning of Section 414(b), (c),
(m) or (o) of the Code and the regulations thereunder;
(ii) "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended;
(iii) "Prosys Employee Plan" shall refer to any plan, program,
policy, practice, contract, agreement or other arrangement providing
for compensation, severance, termination pay, performance awards,
stock or stock-related awards, fringe benefits or other employee
benefits or remuneration of any kind, whether formal or informal,
funded or unfunded, including without limitation, each "employee
benefit plan", within the meaning of Section 3(3) of ERISA which is or
has been maintained, contributed to, or required to be contributed to,
by Prosys or any Affiliate for the benefit of any "Employee" (as
defined below), and pursuant to which Prosys or any Affiliate has or
may have any liability contingent or otherwise;
(iv) "Employee" shall mean any current, former, or retired
employee, officer, or director of Prosys or any Affiliate;
(v) "Employee Agreement" shall refer to each management,
employment, severance, consulting, relocation, repatriation,
expatriation, visa, work permit or similar agreement or contract
between Prosys or any Affiliate and any Employee or consultant;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "Multiemployer Plan" shall mean any "Pension Plan" (as
defined below) which is a "multiemployer plan", as defined in Section
3(37) of ERISA; and
(viii) "Pension Plan" shall refer to each Prosys Employee Plan
which is an "employee pension benefit plan", within the meaning of
Section 3(2) of ERISA.
(b) Schedule. Schedule 2.20(b) contains an accurate and complete list
of each Prosys Employee Plan and each Employee Agreement, together with a
schedule of all liabilities, whether or not accrued, under each such Prosys
Employee Plan or Employee Agreement. Prosys does not have any stated plan
or commitment to establish any new Prosys Employee Plan or Employee
Agreement, to modify any Prosys Employee Plan or Employee Agreement (except
to the extent required by law or to conform any such Prosys Employee Plan
or Employee Agreement to the requirements of any applicable law, in each
case as previously disclosed to Actel in writing, or as required by this
Agreement), or to enter into any Prosys Employee Plan or Employee
Agreement.
(c) Documents. Prosys has provided to Actel (i) correct and complete
copies of all documents embodying or relating to each Prosys Employee Plan
and each Employee Agreement including all amendments thereto and written
interpretations thereof; (ii) the most recent annual actuarial valuations,
if any, prepared for each Prosys Employee Plan; (iii) the three most recent
annual reports (Series 5500 and all schedules thereto), if any, required
under ERISA or the Code in connection with each Prosys Employee Plan or
related trust; (iv) if Prosys Employee Plan is funded, the most recent
annual and periodic accounting of Prosys Employee Plan assets; (v) the most
recent summary plan description together with the most recent summary of
material modifications, if any, required under ERISA with respect to each
Prosys Employee Plan; (vi) all IRS determination letters and rulings
relating to Prosys Employee Plans and copies of all applications and
correspondence to or from the IRS or the Department of Labor ("DOL") with
respect to any Prosys Employee Plan; (vii) all communications material to
any Employee or Employees relating to any Prosys Employee Plan and any
proposed Prosys Employee Plans, in each case, relating to any amendments,
terminations, establishments, increases or decreases in benefits,
acceleration of payments or vesting schedules or other events which would
result in any liability to Prosys; and (viii) all registration statements
and prospectuses prepared in connection with each Prosys Employee Plan.
(d) Employee Plan Compliance. Except as set forth on Schedule 2.20(d),
(i) Prosys has performed in all material respects all obligations required
to be performed by it under each Prosys Employee Plan and each Prosys
Employee Plan has been established and maintained in all material respects
in accordance with its terms and in compliance with all applicable laws,
statutes, orders, rules and regulations, including but not limited to ERISA
or the Code; (ii) no "prohibited transaction", within the meaning of
Section 4975 of the Code or Section 406 of ERISA, has occurred with respect
to any Prosys Employee Plan; (iii) there are no actions, suits or claims
pending, or, to the knowledge of Prosys, threatened or anticipated (other
than routine claims for benefits) against any Prosys Employee Plan or
against the assets of any Prosys Employee Plan; and (iv) each Prosys
Employee Plan can be amended, terminated or otherwise discontinued after
the Effective Time in accordance with its terms, without liability to
Prosys, Actel or any of its Affiliates (other than ordinary administration
expenses typically incurred in a termination event); (v) there are no
inquiries or proceedings pending or, to the knowledge of Prosys or any
affiliates, threatened by the IRS or DOL with respect to any Prosys
Employee Plan; and (vi) neither Prosys nor any Affiliate is subject to any
penalty or tax with respect to any Prosys Employee Plan under Section
402(i) of ERISA or Section 4975 through 4980 of the Code.
(e) Pension Plans. The Prosys does not now, nor has it ever,
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA,
Title IV of ERISA or Section 412 of the Code.
(f) Multiemployer Plans. At no time has Prosys contributed to or been
requested to contribute to any Multiemployer Plan.
(g) No Post-Employment Obligations. Except as set forth in Schedule
2.20(g), no Prosys Employee Plan provides, or has any liability to provide,
life insurance, medical or other employee benefits to any Employee upon his
or her retirement or termination of employment for any reason, except as
may be required by statute, and Prosys has never represented, promised or
contracted (whether in oral or written form) to any Employee (either
individually or to Employees as a group) that such Employee(s) would be
provided with life insurance, medical or other employee welfare benefits
upon their retirement or termination of employment, except to the extent
required by statute.
(h) Effect of Transaction.
(i) Except as provided in Section 1.6 of this Agreement or as set
forth on Schedule 2.20(h)(i), the execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either
alone or upon the occurrence of any additional or subsequent events)
constitute an event under any Prosys Employee Plan, Employee
Agreement, trust or loan that will or may result in any payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any Employee.
(ii) Except as set forth on Schedule 2.20(h)(ii), no payment or
benefit which will or may be made by Prosys or Actel or any of their
respective affiliates with respect to any Employee will be
characterized as an "excess parachute payment", within the meaning of
Section 280G(b)(1) of the Code.
(i) Employment Matters. Prosys (i) is in compliance with all
applicable foreign, federal, state and local laws, rules and regulations
respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Employees;
(ii) has withheld all amounts required by law or by agreement to be
withheld from the wages, salaries and other payments to Employees; (iii) is
not liable for any arrears of wages, commissions, bonuses or any other type
of compensation or any taxes or any penalty for failure to comply with any
of the foregoing; (iv) is not liable for any payment to any trust or other
fund or to any governmental or administrative authority, with respect to
unemployment compensation benefits, social security or other benefits or
obligations for Employees (other than routine payments to be made in the
normal course of business and consistent with past practice) and (v) is not
liable for nor has been threatened with any claim for discrimination or
sexual harassment.
(j) Labor. No work stoppage or labor strike against Prosys is pending
or, to the best knowledge of Prosys, threatened. Except as set forth in
Schedule 2.20(j), Prosys is not involved in or, to the knowledge of Prosys,
threatened with, any labor dispute, grievance, or litigation relating to
labor, safety or discrimination matters involving any Employee, including,
without limitation, charges of unfair labor practices or discrimination
complaints, which, if adversely determined, would, individually or in the
aggregate, result in liability to Prosys. Neither Prosys nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning
of the National Labor Relations Act which would, individually or in the
aggregate, directly or indirectly result in a liability to Prosys. Except
as set forth in Schedule 2.20(j), Prosys is not presently, nor has it been
in the past, a party to, or bound by, any collective bargaining agreement
or union contract with respect to Employees and no collective bargaining
agreement is being negotiated by Prosys.
2.21 Covenants. At the Effective Time, Prosys will have complied with all
of its covenants contained in this Agreement, including those covenants
contained in Section 4 hereto.
2.22 Representations Complete. None of the representations or warranties
made by Prosys (as modified by Disclosure Schedule), nor any statement made in
any Schedule or certificate furnished by Prosys pursuant to this Agreement, or
furnished in or in connection with documents mailed or delivered to the
shareholders of Prosys in connection with soliciting their consent to this
Agreement and the Merger, contains or will contain at the Effective Time, any
untrue statement of a material fact, or omits or will omit at the Effective Time
to state any material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Actel represents and warrants to Prosys as follows:
3.1 Organization, Standing and Power. Actel is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California. Actel has the corporate power to own its properties and to carry on
its business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the ability of Actel to consummate the
transactions contemplated hereby. Actel is not in violation of the provisions of
its Articles of Incorporation or Bylaws.
3.2 Authority. Actel has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Actel. This Agreement has been duly executed and
delivered by Actel and, assuming due execution and delivery by Prosys,
constitutes the valid and binding obligations of Actel, enforceable in
accordance with its terms. The execution and delivery of this Agreement by Actel
does not, and, as of the Effective Time, the consummation of the transactions
contemplated hereby will not, conflict with, or result in any violation of, or
default under (with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of any material benefit under (i) any provision of the Certificate of
Incorporation or Bylaws of Actel or (ii) any material mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Actel or its properties or assets which could reasonably be
expected to have a Material Adverse Effect on Actel.
3.3 Capital Structure.
(a) The authorized stock of Actel consists of 55,000,000 shares of
Common Stock, of which 23,028,365 shares were issued and outstanding as of
March 31, 2000, and 5,000,000 shares of Preferred Stock, none of which is
issued or outstanding. All such shares have been duly authorized, and all
such issued and outstanding shares have been validly issued, are fully paid
and nonassessable and are free of any liens or encumbrances other than any
liens or encumbrances created by or imposed upon the holders thereof.
(b) The shares of Actel Common Stock to be issued pursuant to the
Merger will be duly authorized, validly issued, fully paid and
non-assessable.
3.4 SEC Documents; Actel Financial Statements. Actel has furnished or made
available to Prosys true and complete copies of Actel's Annual Report on Form
10-K for the fiscal year ended December 31, 1999 and Actel's proxy statement in
connection with its Annual Meeting of Shareholders to be held on May 19, 2000,
and of all other reports or registration statements filed by Actel with the U.S.
Securities and Exchange Commission (the "SEC") under the Securities Exchange Act
of 1934 (the "Exchange Act") on or after January 1, 2000, all in the form so
filed (all of the foregoing being collectively referred to as the "SEC
Documents"). As of their respective filing dates, the SEC Documents complied in
all material respects with the requirements of the Exchange Act, and none of the
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading, except to the extent corrected by a subsequently filed document
with the SEC. The financial statements of Actel, including the notes thereto,
included in the SEC Documents (the "Actel Financial Statements") comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles
consistently applied (except as may be indicated in the notes thereto) and
present fairly the consolidated financial position of Actel at the dates thereof
and of its operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal audit adjustments). There has been no
change in Actel accounting policies except as described in the notes to the
Actel Financial Statements.
3.5 No Material Adverse Change. Since the date of the balance sheet
included in Actel's most recently filed report on Form 10-Q or Form 10-K, Actel
has conducted its business in the ordinary course and there has not occurred:
(a) any material adverse change in the financial condition, liabilities, assets
or business of Actel; (b) any amendment or change in the Articles of
Incorporation or Bylaws of Actel; or (c) any damage to, destruction or loss of
any assets of Actel, (whether or not covered by insurance) that materially and
adversely affects the financial condition or business of Actel.
3.6 Litigation. There is no action, suit, proceeding, claim, arbitration or
investigation pending, or as to which Actel has received any notice of assertion
against Actel which in any manner challenges or seeks, or reasonably could be
expected, to prevent, enjoin, alter or materially delay any of the transactions
contemplated by this Agreement.
ARTICLE IV
CONDUCT PRIOR TO THE EFFECTIVE TIME
4.1 Conduct of Business of Prosys. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
and the Effective Time, Prosys agrees (except to the extent that Actel shall
otherwise consent in writing) to carry on its business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, to pay
its debts and Taxes when due, to pay or perform other obligations when due, and,
to the extent consistent with such business, to use all reasonable efforts
consistent with past practice and policies to preserve intact its present
business organization, keep available the services of its present officers and
key employees and preserve their relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it,
all with the goal of preserving unimpaired its goodwill and ongoing businesses
at the Effective Time. Prosys shall promptly notify Actel of any materially
negative event related to Prosys or its business. Except as expressly
contemplated by this Agreement or disclosed in Schedule 4.1, Prosys shall not,
without the prior written consent of Actel:
(a) Enter into any commitment or transaction not in the ordinary
course of business.
(b) Transfer to any person or entity any rights to Prosys Intellectual
Property Rights (other than pursuant to End-User Licenses in the ordinary
course of business);
(c) Enter into or amend any agreements pursuant to which any other
party is granted marketing, distribution or similar rights of any type or
scope or any third party royalty rights with respect to any products of
Prosys;
(d) Amend or otherwise modify (or agree to do so), except in the
ordinary course of business, or violate the terms of, any of the agreements
set forth or described in the Disclosure Schedule;
(e) Commence any litigation or any dispute resolution process;
(f) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock or property) in respect of any of its
capital stock, or split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of capital stock of Prosys, or
repurchase, redeem or otherwise acquire, directly or indirectly, any shares
of its capital stock (or options, warrants or other rights exercisable
therefor) other than pursuant to the exercise of repurchase rights
contained in stock option agreements;
(g) Except for the issuance of shares of Prosys Common Stock upon
exercise or conversion of presently outstanding Prosys Options or Prosys
Series A Preferred Stock, or the grant of stock options to new employees
with Actel's prior approval, issue, grant, deliver or sell or authorize or
propose the issuance, grant, delivery or sale of, or purchase or propose
the purchase of, any shares of its capital stock or securities convertible
into, or subscriptions, rights, warrants or options to acquire, or other
agreements or commitments of any character obligating it to issue any such
shares or other convertible securities;
(h) Cause or permit any amendments to its Articles of Incorporation or
Bylaws;
(i) Acquire or agree to acquire by merging or consolidating with, or
by purchasing any assets or equity securities of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire
any assets in an amount in excess of $25,000 in the case of a single
transaction or in excess of $50,000 in the aggregate in any 30-day period;
(j) Sell, lease, license or otherwise dispose of any of its properties
or assets, except in the ordinary course of business;
(k) Incur any indebtedness for borrowed money other than from Actel or
guarantee any such indebtedness or issue or sell any debt securities of
Prosys or guarantee any debt securities of others;
(l) Grant any severance or termination pay (i) to any director or
officer or (ii) to any other employee except payments made pursuant to
standard written agreements outstanding on the date hereof;
(m) Subject to the provisions of Section 4.5 below, adopt or amend any
employee benefit plan, or enter into any employment contract, extend
employment offers, pay or agree to pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage
rates of its employees, except as consistent with the ordinary course of
Prosys consistent with past practice (provided that the price per share of
any equity participation in Prosys shall be agreed in advance by Actel);
(n) Revalue any of its assets, including without limitation writing
down the value of inventory or writing off notes or accounts receivable
other than in the ordinary course of business;
(o) Pay, discharge or satisfy, in an amount in excess of $25,000 (in
any one case) or $50,000 (in the aggregate), any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the
ordinary course of business of liabilities reflected or reserved against in
Prosys Financial Statements (or the notes thereto) or that arose in the
ordinary course of business subsequent to March 31, 2000 or expenses
consistent with the provisions of this Agreement incurred in connection
with any transaction contemplated hereby;
(p) Make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent
to any extension or waiver of the limitation period applicable to any claim
or assessment in respect of Taxes;
(q) Enter into or modify any new or existing agreements for the lease
or purchase of real property; or
(r) Take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1(a) through (q) above, or any other action that
would prevent Prosys from performing or cause Prosys not to perform its
covenants hereunder.
4.2 No Solicitation. Until the earlier of the Effective Time or the date of
termination of this Agreement pursuant to the provisions of Section 8.1 hereof,
Prosys will not (nor will Prosys permit any of Prosys' officers, directors,
agents, representatives or affiliates to) directly or indirectly, take any of
the following actions with any party other than Actel and its designees: (a)
solicit, conduct discussions with or engage in negotiations with any person,
relating to the possible acquisition of Prosys or any of its subsidiaries
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its or their capital stock or assets, (b)
provide information with respect to it to any person, other than Actel, relating
to the possible acquisition of Prosys (whether by way of merger, purchase of
capital stock, purchase of assets or otherwise) or any material portion of its
or their capital stock or assets, (c) enter into an agreement with any person,
other than Actel, providing for the acquisition of Prosys (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its or their capital stock or assets or (d) make or
authorize any statement, recommendation or solicitation in support of any
possible acquisition of Prosys or any of its subsidiaries (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its or their capital stock or assets by any person, other
than by Actel. In addition to the foregoing, if Prosys receives prior to the
Effective Time or the termination of this Agreement any offer or proposal
relating to any of the above, Prosys shall promptly notify Actel thereof,
including information as to the identity of the offeror or the party making any
such offer or proposal and the specific terms of such offer or proposal, as the
case may be, and such other information related thereto as Actel may reasonably
request.
4.3 Strategic Agreements. Prosys agrees that it will not enter into any
strategic alliance, joint development or joint marketing agreement during the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement and the Effective Time unless it has first
consulted with Actel's Vice President of Strategic Marketing.
4.4 Employee Hiring. As soon as practicable after the date of this
Agreement, the Chief Executive Officers of Actel and Prosys (or their
representatives) will agree upon the guidelines within which Prosys will proceed
with recruitment, compensation and equity participation of new and existing
employees. The parties currently contemplate that all employees of Prosys will
be offered employment with Actel. All such employees of Prosys will be required
to execute Actel's standard forms of offer letters and non-disclosure agreements
prior to becoming employees of Actel.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Prosys Shareholder Approval. As promptly as practicable after the
execution of this Agreement, Prosys shall submit this Agreement and the
transactions contemplated hereby to its shareholders for approval and adoption
as provided by California Law and its Articles of Incorporation and Bylaws.
Prosys shall use its best efforts to solicit and obtain the consent of its
shareholders sufficient to approve the Merger and this Agreement and to enable
the Closing to occur as promptly as practicable. The materials submitted to
Prosys' shareholders shall be subject to review and approval by Actel and
include information regarding Prosys, the terms of the Merger and this Agreement
and the unanimous recommendation of the Board of Directors of Prosys in favor of
the Merger and this Agreement provided, however, that such recommendation need
not be included, or may be withdrawn, to the extent that the Board of Directors
of Prosys deems it necessary to do so in the exercise of its fiduciary
obligations to the holders of Prosys' Capital Stock after being so advised by
counsel.
5.2 Access to Information. Subject to any applicable contractual
confidentiality obligations (which Prosys shall use its best efforts to cause to
be waived) Prosys shall afford Actel and its accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Effective Time to (a) all of its properties, books,
contracts, agreements and records, and (b) all other information concerning the
business, properties and personnel (subject to restrictions imposed by
applicable law) of it as Actel may reasonably request. No information or
knowledge obtained in any investigation pursuant to this Section 5.2 shall
affect or be deemed to modify any representation or warranty contained herein or
the conditions to the obligations of the parties to consummate the Merger.
5.3 Expenses. Whether or not the Merger is consummated, all fees and
expenses incurred in connection with the Merger including, without limitation,
all legal, accounting, financial advisory, consulting and all other fees and
expenses of third parties incurred by a party in connection with the negotiation
and effectuation of the terms and conditions of this Agreement and the
transactions contemplated hereby ("Third Party Expenses"), shall be the
obligation of the respective party incurring such fees and expenses. Prosys
agrees that Actel may submit a Claim (as defined in Article VII) for the amount,
if any, by which Prosys' Third Party Expenses exceed $25,000.
5.4 Public Disclosure. Unless otherwise required by law (including, without
limitation, securities laws) or, as to Actel, by the rules and regulations of
the Nasdaq National Market, prior to the Effective Time, Actel and Prosys shall
consult with each other before making any disclosure (whether or not in response
to an inquiry) of the subject matter of this Agreement or the transactions
contemplated hereby, and no public announcement or press release regarding the
subject matter of this Agreement or the transactions contemplated thereby shall
be made by any party hereto unless approved by Actel and Prosys prior to
release, provided that such approval shall not be unreasonably withheld.
5.5 Consents. Prosys shall obtain all consents, waivers and approvals under
any of the Contracts as may be required in connection with the Merger (all of
such consents, waivers and approvals are set forth in the Disclosure Schedule)
so as to preserve all material rights of, and benefits to, Prosys thereunder.
5.6 FIRPTA Compliance. On the Closing Date, Prosys shall deliver to Actel a
properly executed statement in a form reasonably acceptable to Actel for
purposes of satisfying Actel's obligations under Treasury Regulation Section
1.1445-2(c)(3).
5.7 Reasonable Efforts. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use its reasonable efforts to
take promptly, or cause to be taken, all actions, and to do promptly, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated
hereby to obtain all necessary waivers, consents and approvals and to effect all
necessary registrations and filings and to remove any injunctions or other
impediments or delays, legal or otherwise, in order to consummate and make
effective the transactions contemplated by this Agreement for the purpose of
securing to the parties hereto the benefits contemplated by this Agreement;
provided that Actel shall not be required to agree to any divestiture by Actel
or Prosys or any of Actel's subsidiaries or affiliates of shares of capital
stock or of any business, assets or property of Actel or its subsidiaries or
affiliates or Prosys or its affiliates, or the imposition of any material
limitation on the ability of any of them to conduct their businesses or to own
or exercise control of such assets, properties and stock.
5.8 Notification of Certain Matters. Prosys shall give prompt notice to
Actel, and Actel shall give prompt notice to Prosys, of (i) the occurrence or
nonoccurrence of any event, the occurrence or nonoccurrence of which is likely
to cause any representation or warranty of Prosys or Actel, respectively,
contained in this Agreement to be untrue or inaccurate in any material respect
at or prior to the Effective Time except as contemplated by this Agreement
(including the Disclosure Schedule) and (ii) any failure of Prosys or Actel, as
the case may be, to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section 5.8
shall not limit or otherwise affect any remedies available to the party
receiving such notice.
5.9 Tax Treatment. Neither Actel nor Prosys shall take any action which
reasonably would be expected to jeopardize the tax-free nature of the
reorganization hereunder.
5.10 Additional Documents and Further Assurances. Each party hereto, at the
request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
5.11 Form S-8. Actel shall file a registration statement on Form S-8 for
the shares of Actel Common Stock issuable with respect to assumed Prosys Options
as soon as practicable after the Effective Date.
5.12 Nasdaq Listing. Actel shall authorize for listing on the Nasdaq
National Market the shares of Actel Common Stock issuable, and those required to
be reserved for issuance, in connection with the Merger, upon official notice of
issuance.
5.13 Blue Sky Laws. Actel shall take such steps as may be necessary to
comply with the securities and blue sky laws of all jurisdictions which are
applicable to the issuance of the Actel Common Stock pursuant hereto. Prosys
shall use its best efforts to assist Actel as may be necessary to comply with
the securities and blue sky laws of all jurisdictions which are applicable in
connection with the issuance of Actel Common Stock pursuant hereto.
5.14 Indemnification. Actel shall indemnify the persons who are currently
officers and directors of Prosys substantially in accordance with the Bylaws of
Prosys as they are currently in effect for action or inaction by such person
prior to the Merger.
5.15 Prosys Options
Upon the involuntary termination by Actel of the employment of Jung-Cheun
Lien, Sheng Feng, Chung Sun, Eddy Haung, Tong Liu, David Xiong, Yaun-chung Hsu,
Naihui Liao, Chih-Ping Lin (individually the "Employee") other than for cause,
Actel agrees to vest in full all Prosys Options held by such persons which have
been assumed by Actel in the Merger. As used herein, "cause" shall mean (i)
theft, embezzlement or fraud by the Employee or the Employee's involvement in
any other scheme or conspiracy pursuant to which the Company has lost assets to
the Employee or to others calculated by the Employee to receive such assets,
(ii) incapacity on the job by reason of the use of alcohol or drugs, (iii)
commission of a felony or a crime involving moral turpitude, (iv) gross
insubordination, (v) unexplained and continuous absences from work, (vi)
substantial breach by the Employee of any of the provisions of this Agreement
which is not cured within 30 business days after the Company sends written
notice thereof to the Employee specifying the nature of such breach, or (vii)
material violation by the Employee of any of the Company's substantive policies
and procedures which is not cured within a reasonable period of time given the
circumstance of the violation.
ARTICLE VI
CONDITIONS TO THE MERGER
6.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to this Agreement to effect the Merger
shall be subject to the satisfaction at or prior to the Closing of the following
conditions:
(a) Shareholder Approval. This Agreement and the Merger shall have
been approved and adopted by the shareholders of Prosys by the requisite
vote under applicable law and Prosys' Articles of Incorporation.
(b) No Injunctions or Restraints; Illegality. No temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Merger shall be in effect.
(c) Tax Opinion. Actel shall have received substantially identical
written opinions from their counsel, Wilson Sonsini Goodrich & Rosati,
Professional Corporation in form and substance reasonably satisfactory to
Actel, to the effect that the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Code.
6.2 Additional Conditions to Obligations of Prosys. The obligations of
Prosys to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions, any of which may be waived, in writing,
exclusively by Prosys:
(a) Representations and Warranties. The representations and warranties
of Actel contained in this Agreement shall be true and correct and as of
the Closing, except for changes contemplated by this Agreement and except
for those representations and warranties which address matters only as of a
particular date (which shall remain true and correct as of such date), with
the same force and effect as if made on and as of the Effective Time,
except, in all such cases, for such breaches, inaccuracies or omissions of
such representations and warranties which neither have had nor reasonably
would be expected to have a Material Adverse Effect on Actel; and Prosys
shall have received a certificate to such effect signed on behalf of Actel
by a duly authorized officer of Actel.
(b) Agreements and Covenants. Actel shall have performed or complied
(which performance or compliance shall be subject to Actel's ability to
cure as provided in Section 8.1(e) below) in all material respects with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, and Prosys shall
have received a certificate to such effect signed on behalf of Actel by a
duly authorized officer of Actel.
(c) Legal Opinion. Prosys shall have received a legal opinion from
Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to
Actel, in substantially the form attached hereto as Exhibit B.
(d) Material Adverse Change. There shall not have occurred any
material adverse change in the business, assets (including intangible
assets), financial condition or results of operations of Actel since March
31, 2000. For purposes of this condition, a reduction in the trading price
of Actel's Common Stock, whether occurring at any time or from time to
time, as reported by Nasdaq or any other automated quotation system or
exchange shall not constitute a material adverse change.
6.3 Additional Conditions to the Obligations of Actel. The obligations of
Actel to consummate the Merger and the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of
each of the following conditions, any of which may be waived, in writing,
exclusively by Actel:
(a) Representations and Warranties. The representations and warranties
of Prosys contained in this Agreement shall be true and correct on and as
of the Effective Time, except for changes contemplated by this Agreement
(including the Disclosure Schedule) and except for those representations
and warranties which address matters only as of a particular date (which
shall remain true and correct as of such date), with the same force and
effect as if made on and as of the Effective Time, except, in all such
cases, for such breaches, inaccuracies or omissions of such representations
and warranties which neither have had nor reasonably would be expected to
have a Material Adverse Effect on Prosys or Actel; and Actel shall have
received a certificate to such effect signed on behalf of Prosys by a duly
authorized officer of Prosys;
(b) Agreements and Covenants. Prosys shall have performed or complied
(which performance or compliance shall be subject to Prosys' ability to
cure as provided in Section 8.1(d) below) in all material respects with all
agreements and covenants required by this Agreement to be performed or
complied with by it on or prior to the Effective Time, and Actel shall have
received a certificate to such effect signed on behalf of Prosys by a duly
authorized officer of Prosys;
(c) Third Party Consents. Actel shall have been furnished with
evidence satisfactory to it that Prosys has obtained the consents,
approvals and waivers set forth in Schedule 2.4.
(d) Legal Opinion. Actel shall have received a legal opinion from
Pacific Law Group, legal counsel to Prosys, in substantially the form
attached hereto as Exhibit C.
(e) Material Adverse Change. There shall not have occurred any
material adverse change in the business, assets (including intangible
assets) financial condition or results of operations of Prosys since March
31, 2000.
(f) Due Diligence. Actel shall have completed and be satisfied in its
discretion with the results of all technical, legal and accounting reviews
of Prosys' business and shall have successfully verified data furnished to
Actel to Prosys.
(g) Conversion of Preferred Stock. All shares of the Prosys Series A
Preferred Stock shall have converted into Prosys Common Stock in accordance
with Prosys' Articles of Incorporation.
(h) Employment Agreement. Jung-Cheun "Frank" Lien, Sheng Feng and Eddy
Huang shall each have executed and delivered to Actel an employment
agreement in form and substance acceptable to Actel and all of the
employment agreements shall be in full force and effect.
(i) Dissenters' Rights. No Prosys shareholder shall have exercised,
nor shall any such shareholder have any continuing right to exercise,
appraisal, dissenters' or similar rights under applicable law with respect
to their shares by virtue of the Merger.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 Survival. All of the representations and warranties of the Target
Parties contained in Article II shall survive the Closing (even if Actel knew or
had reason to know of any misrepresentation or breach of warranty at the time of
Closing) and continue in full force and effect for a period of sixteen (16)
months following the Closing (the "Survival Termination Date"). The covenants
and agreements in this Agreement shall survive except to the extent they are
specifically limited by their terms.
7.2 Indemnification Provisions for Benefit of Actel. In the event that the
Target Parties breach, or there is any inaccuracy in, any of their
representations, warranties, agreements or covenants contained herein, provided
that Actel makes a written claim for indemnification in the manner provided for
in this Article VII on or prior to the Survival Termination Date, then, subject
to Section 7.4 below, the Officers (the "Indemnifying Persons") agree (and the
right of all other Prosys Securityholders to receive Earnout Payments shall
likewise be wholly subject to and conditional upon the offset provisions of this
Article as if they had all similarly contractually agreed), jointly and
severally, to indemnify, defend and hold harmless Actel from and against the
entirety of any and all actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in
settlement, liabilities, obligations, taxes, liens, losses, expenses, and fees,
including court costs and reasonable attorneys' fees and expenses ("Adverse
Consequences") Actel may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to, in the nature of,
or caused by the breach or inaccuracy.
7.3 Procedure for Indemnification Claims; Matters Involving Third Parties.
(a) In the event that Actel makes a claim against the Indemnifying
Persons for indemnification under Section 7.2(a) (a "Claim"), it shall
notify the Securityholder Representative in writing as to the existence and
amount of the Claim and the grounds for the Claim (the "Claim Notice"). If
the Indemnifying Persons with respect to such Claim dispute the existence
or the amount of such Claim, the Securityholder Representative shall notify
Actel in writing (with reasonable specificity) within thirty (30) days
following the Securityholder Representative's receipt of the Claim Notice
(the "Response Notice"). Upon such an exchange of written notification, the
parties will negotiate in good faith for up to thirty (30) days or such
other period of time as the parties mutually agree in an effort to resolve
their differences with respect to such Claim. Following delivery of a Claim
Notice, and during any negotiation period, Actel may, pending resolution of
the matter, reduce the portions of the Earnout Payments otherwise payable
to the Prosys Securityholders pursuant to Section 1.9 by the amount of the
Claim. If no Response Notice is received by Actel within thirty (30) days
of the Securityholder Representative's receipt of the Claim Notice, then
the Indemnified Party shall be entitled to reduce the portions of the
Earnout Payments otherwise payable to the Prosys Securityholders pursuant
to Section 1.9 by the amount of the Claim, and no Indemnified Person nor
other Securityholder shall have any further right to challenge such
reduction. If a Response Notice has been timely sent to Actel but the
parties have not resolved their differences with the aforementioned thirty
(30) day negotiation period, and Actel has reduced an Earnout Payment
pursuant to a Claim Notice, and the Indemnifying Persons wish to challenge
the amount of such reduction, the Indemnifying Persons may only make such a
challenge pursuant to arbitration in accordance with the rules of the
American Arbitration Association, and the exclusive venue for any such
arbitration shall be in Santa Clara County, California.
(b) If any third party shall notify Actel with respect to any matter
(a "Third Party Claim") which may give rise to a Claim against any
Indemnifying Person under this Article VII, Actel shall promptly notify the
Securityholder Representative thereof in writing; provided, however, that
no delay on the part of Actel in notifying the Securityholder
Representative shall relieve any Indemnifying Person or the Prosys
Securityholders from any obligation hereunder unless (and then solely to
the extent) that they are thereby materially prejudiced.
(c) Actel may defend against, and consent to the entry of any judgment
or enter into any settlement with respect to, the Third Party Claim in any
manner Actel reasonably may deem appropriate (and Actel need not consult
with, or obtain any consent from, the Securityholder Representative or any
Indemnifying Person in connection therewith), and the Indemnifying Persons
will remain responsible for any Adverse Consequences Actel may suffer
resulting from, arising out of, relating to, in the nature of, or caused by
the Third Party Claim to the fullest extent provided in this Article VII.
Notwithstanding the foregoing sentence, counsel for any Indemnifying Person
shall be permitted to monitor Actel's defense of a Third Party Claim for
the purpose of advising the Indemnifying Person of the status and progress
of the defense. Any such activity shall be at the sole expense of the
Indemnifying Person.
7.4 Exclusivity of Contractual Remedy. Actel's sole contractual recourse
following the Closing for any breach by the Target Parties of any
representation, warranty, agreement or covenant contained herein, shall be the
recovery of indemnification payments under this Article VII by set-off to the
portions of the Earnout Payments payable to the Prosys Securityholders. For the
purpose of settlement of an indemnification claim or of calculating the number
of shares of Actel Common Stock to be excluded from an Earnout Payment, the
value of each share of Actel Common Stock shall be the Value Per Actel Share.
This provision shall not in any way limit Actel's recourse for fraud or
intentional misrepresentation.
7.5 Securityholder Representative. The Prosys Securityholders hereby
appoint Jung-Cheun "Frank" Lien as their agent and representative (the
"Securityholder Representative") for the purposes of: (i) representing, acting
for and binding each of them for all purposes of this Agreement, including
without limitation, the negotiation of Earnout milestones and payments and the
settlement of any controversies or disagreements between Actel and the Prosys
Securityholders hereunder; (ii) receiving or giving any notices to or from the
Prosys Securityholders hereunder; and (iii) communicating with Actel or Prosys
as to any matters relating to this Agreement. In the event Jung-Cheun "Frank"
Lien becomes unable, unwilling or unavailable to serve as the Shareholders'
Representative, the holders of a majority of the voting power of Prosys
immediately prior to Closing shall appoint a successor Securityholder
Representative. Actel shall be entitled to presumptively rely without further
inquiry upon all acts of, and communications from, the Securityholder
Representative as being the authorized actions and communications of the
Securityholder Representative as approved by the Prosys Securityholders. Each
Prosys Shareholder and Officer hereby further agrees that he/she will indemnify
and hold harmless the Securityholder Representative for any and all actions
taken by the Securityholder Representative under this Agreement.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. Except as provided in Section 8.2 below, this Agreement
may be terminated and the Merger abandoned at any time prior to the Effective
Time:
(a) by mutual written consent of Prosys and Actel;
(b) by Actel if (i) the Closing has not occurred within one week of
the date of execution and delivery of this Agreement (provided that the
right to terminate this Agreement under this clause 8.1(b)(i) shall not be
available if and to the extent that a willful failure by Actel to fulfill
any obligation hereunder has been the cause of, or resulted in, the failure
of the Closing to occur on or before such date); and by either Actel or
Prosys if either (ii) there shall be a final nonappealable order of a
federal or state court in effect preventing consummation of the Merger or
(iii) there shall be any statute, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the Merger by any
governmental entity that would make consummation of the Merger illegal;
(c) by Actel if there shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated or issued or deemed applicable to
the Merger, by any Governmental Entity, which would: (i) prohibit Actel's
or Prosys' ownership or operation of any portion of the business of Prosys
or (ii) compel Actel or Prosys to dispose of or hold separate, as a result
of the Merger, any portion of the business or assets of Prosys or Actel; in
either case, the unavailability of which assets or business would have a
Material Adverse Effect on Actel or would reasonably be expected to have a
Material Adverse Effect on Actel's ability to realize the benefits expected
from the Merger.
(d) by Actel if it is not in material breach of its obligations under
this Agreement and there has been a breach of any representation, warranty,
covenant or agreement contained in this Agreement on the part of Prosys and
as a result of such breach the conditions set forth in Section 6.3(a) or
6.3(b), as the case may be, would not then be satisfied; provided, however,
that if such breach is curable by Prosys within thirty (30) days through
the exercise of its reasonable best efforts, then for so long as Prosys
continues to exercise such reasonable best efforts Actel may not terminate
this Agreement under this Section 8.1(d) unless such breach is not cured
within thirty (30) days (but no cure period shall be required for a breach
which by its nature cannot be cured);
(e) by Prosys if it is not in material breach of its obligations under
this Agreement and there has been a breach of any representation, warranty,
covenant or agreement contained in this Agreement on the part of Actel and
as a result of such breach the conditions set forth in Section 6.2(a) or
6.2(b), as the case may be, would not then be satisfied; provided, however,
that if such breach is curable by Actel within thirty (30) days through the
exercise of its reasonable best efforts, then for so long as Actel
continues to exercise such reasonable best efforts Prosys may not terminate
this Agreement under this Section 8.1(e) unless such breach is not cured
within thirty (30) days (but no cure period shall be required for a breach
which by its nature cannot be cured).
Where action is taken to terminate this Agreement pursuant to this Section
8.1, it shall be sufficient for such action to be authorized by the Board of
Directors of the party taking such action.
8.2 Effect of Termination. In the event of termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Actel or Prosys, or their
respective officers, directors or shareholders under this Agreement, except to
the extent that such termination results from the willful and intentional breach
by any party hereto of any of its representations, warranties, or covenants set
forth in this Agreement, in which case the non-breaching party shall be entitled
to receive from the breaching party all of its Third Party Expenses and any
expenses incurred in connection with any dispute arising from such willful
breach. Notwithstanding the foregoing, the provisions of Section 5.3 and Article
VIII of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.
8.3 Amendment. Except as is otherwise required by applicable law after the
shareholders of Prosys approve this Agreement, this Agreement may be amended by
the parties hereto at any time by execution of an instrument in writing signed
on behalf of each of the parties hereto; provided, however, that Actel may in
its sole discretion amend this Agreement to provide for the formation of a newly
formed subsidiary and to consummate the merger contemplated hereby through the
merger of that subsidiary into Prosys.
8.4 Extension; Waiver. At any time prior to the Effective Time, Actel, on
the one hand, and Prosys, on the other, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations of the other party
hereto, (ii) waive any inaccuracies in the representations and warranties made
to such party contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
9.1 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the addresses set forth below or to such other address as the party
to whom notice is to be given may have furnished to the other parties hereto in
writing in accordance herewith. Any such notice or communication shall be deemed
to have been delivered and received (A) in the case of personal delivery or
delivery by telecopier, on the date of such delivery, (B) in the case of a
nationally recognized overnight courier, on the next business day after the date
when sent and (C) in the case of mailing, on the third business day following
that on which the piece of mail containing such communication is posted:
(a) if to Actel, to:
Actel Corporation
955 E. Arques Avenue
Sunnyvale, CA 94086
Attn: David L. Van De Hey
Telephone No.: (408) 739-1010
Facsimile No.: (408) 739-1540
Email: [email protected]
with a copy to:
Wilson Sonsini Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, California 94304
Attn: Henry P. Massey Jr., Esq.
Telephone No.: (650) 493-9300
Facsimile No.: (650) 493-6811
Email: [email protected]
(b) if to Prosys, to:
Prosys Technology, Inc.
2372 Qume Drive, Suite A
San Jose, CA 95131
Attn: Frank Lien
Telephone No.: (408) 894-7076
Facsimile No.: (408) 894-0990
Email: [email protected]
with a copy to:
Pacific Law Group
2 North Second Street, Suite 290
San Jose, CA 95113
Attn: C.P. Chang
Telephone No.: (408) 288-8585
Facsimile No.: (408) 288-8386
Email: [email protected]
(c) if to the Securityholder Representative:
Frank Lien
c/o Prosys Technology, Inc.
2372 Qume Drive, Suite A
San Jose, CA 95131
Attn: Frank Lien
Telephone No.: (408) 894-7076
Facsimile No.: (408) 894-0990
Email: [email protected]
9.2 Interpretation. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The word "agreement" when used herein shall be deemed in each case
to mean any contract, commitment or other agreement, whether oral or written,
that is legally binding. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.4 Entire Agreement; Assignment. This Agreement, the schedules and
Exhibits hereto, and the documents and instruments and other agreements among
the parties hereto referenced herein: (a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; (b) are not intended to confer upon any
other person any rights or remedies hereunder; and (c) shall not be assigned by
operation of law or otherwise except as otherwise specifically provided, except
that Actel may assign their respective rights and delegate their respective
obligations hereunder to their respective affiliates.
9.5 Severability. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
9.6 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
9.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
Each of the parties hereto agrees that process may be served upon them in any
manner authorized by the laws of the State of California for such persons and
waives and covenants not to assert or plead any objection which they might
otherwise have to such jurisdiction and such process.
9.8 Rules of Construction. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
9.9 Specific Performance. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
<PAGE>
IN WITNESS WHEREOF, Actel, Prosys and the Officers (solely as to Articles
II, VII, VIII and IX) have caused this Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
ACTEL CORPORATION PROSYS TECHNOLOGY, INC.
By ..................................... By ...................................
John C. East Jung-Cheun "Frank" Lien
President and Chief Executive President and Chief Executive
Officer Officer
OFFICERS:
........................................
Jung-Cheun "Frank" Lien
........................................
Sheng "Jason" Feng
........................................
Chung Sun
........................................
Eddy Huang
........................................
Nan Horng Yeh
[Signature Page for Agreement and Plan of Reorganization]
<PAGE>
IN WITNESS WHEREOF, each of the Prosys Shareholders (solely as to Section
7.5 of this Agreement) have caused this Agreement to be signed by their duly
authorized respective officers, all as of the date first written above.
Leading Enterprises Limited
By: ........................................
Name:
Title:
Koppel Limited
By: ........................................
Name:
Title:
Tai Yuen Venture Capital
By: ........................................
Name:
Title:
[Signature Page for Agreement and Plan of Reorganization]
