<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 24, 1996
DATALOGIX INTERNATIONAL INC.
(Exact name of registrant as specified in charter)
New York 000-26000 13-3132256
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
100 Summit Lake Drive, Valhalla, New York 10595
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 914-747-2900
Not Applicable
(Former name or former address, if changed from last report)
<PAGE>2
Item 5. Other Events
(a) On September 24, 1996, Datalogix International Inc. (the
"Company") executed an Agreement and Plan of Merger (the "Merger Agreement")
with Oracle Corporation., a Delaware corporation ("Oracle"), pursuant to which
a wholly owned subsidiary of Oracle (the "Acquisition Subsidiary") will be
merged with and into the Company (the "Merger"). Pursuant to the Merger
Agreement, Oracle, which currently owns 13.4 percent of the outstanding shares
of common stock, $.01 par value per share (the "Common Stock"), of the
Company, will purchase all of the remaining issued and outstanding shares,
excluding treasury stock, for $8.00 per share, or an aggregate of
approximately $81 million. Each such share of Common Stock (and associated
preferred stock purchase rights) will be converted into the right to receive
$8.00 per share payable to the holder thereof, without interest. The parties
have agreed that the structure of the Merger may be modified, at the election
of Oracle, such that in lieu of the Acquisition Subsidiary merging with and
into the Company, the Company may merge with and into the Acquisition
Subsidiary, or such other structure provided for in the Merger Agreement as
Oracle may elect. Consummation of the Merger is subject to certain closing
conditions, including shareholder consent and regulatory approval. The
description of the Merger Agreement contained herein is qualified in its
entirety by reference to the Merger Agreement, which is attached hereto as
Exhibit 2.1 and is incorporated herein by reference.
On September 24, 1996, the Company issued a press release relating to
the execution of the Merger Agreement. A copy of the press release is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
(b) On September 24, 1996, the Company and The First National
Bank of Boston (the "Rights Agent") executed Amendment No. 1 ("Amendment
No. 1") to that certain Rights Agreement, dated as of August 27, 1996,
between the Company and the Rights Agent (the "Rights Agreement").
Amendment No. 1 relates to changes in the Rights Agreement required as a
result of the execution of the Merger Agreement and the transactions
contemplated thereby. The description of Amendment No. 1 contained
herein is qualified in its entirety by reference to Amendment No. 1, which
is attached hereto as Exhibit 4.1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of businesses acquired:
None.
(b) Pro Forma financial information:
None.
<PAGE>3
(c) Exhibits:
2.1 Agreement and Plan of Merger, dated as of September
24, 1996, by and among Oracle Corporation, a Delaware
corporation ("Oracle"), Delphi Acquisition
Corporation, a Delaware corporation and a wholly
owned subsidiary of Oracle, and Datalogix
International Inc., a New York corporation.*
4.1 Amendment No. 1 to Rights Agreement, dated as of
September 24, 1996, between Datalogix International
Inc. and The First National Bank of Boston.
99.1 Press Release of Datalogix International Inc., dated
September 24, 1996.
- --------
* The Registrant hereby agrees to furnish supplementally a copy of any
omitted schedules to this Agreement to the Securities and Exchange
Commission upon its request.
<PAGE>4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATALOGIX INTERNATIONAL INC.
/s/ Raymond V. Sozzi
Raymond V. Sozzi
President and Chief
Operating Officer
September 26, 1996
<PAGE>
EXHIBIT INDEX
Exhibit
2.1 Agreement and Plan of Merger, dated as of September 24, 1996, by and
among Oracle Corporation, a Delaware corporation ("Oracle"), Delphi
Acquisition Corporation, a Delaware corporation and a wholly owned
subsidiary of Oracle, and Datalogix International Inc., a New York
corporation.
4.1 Amendment No. 1 to Rights Agreement, dated as of September 24, 1996,
between Datalogix International Inc. and The First National Bank of
Boston.
99.1 Press Release of Datalogix International Inc., dated September 24,
1996.
<PAGE>1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of September 24, 1996,
by and among Oracle Corporation, a Delaware corporation ("Parent"), Delphi
Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of
Parent ("Purchaser"), and Datalogix International Inc., a New York corporation
(the "Company").
RECITALS:
WHEREAS, the Boards of Directors of the Company and Parent
have each determined that it is in the best interests of their respective
stockholders for Parent to acquire the Company upon the terms and subject to the
conditions set forth herein; and
WHEREAS, also in furtherance of such acquisition, the Boards
of Directors of the Company and Parent have each approved and adopted this
Agreement and the Merger (as hereinafter defined) of Purchaser with the Company
in accordance with the New York Business Corporation Law and the Delaware
General Corporation Law, as appropriate, and upon the terms and subject to the
conditions set forth herein; and
WHEREAS, the Board of Directors of the Company has resolved to
recommend approval, authorization and adoption of this Agreement and the Merger
to the holders of shares of the Company's Common Stock, $0.01 par value per
share (the "Shares"), and has determined that the consideration to be paid for
each Share in the Merger is fair to the holders of such Shares;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, the Company, Parent and Purchaser hereby agree as follows:
ARTICLE I
THE MERGER
Section 1.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.2 hereof), the Company and Purchaser
shall consummate a merger (the "Merger") pursuant to which Purchaser shall be
merged with and into the Company in accordance with the relevant provisions of
the New York Business Corporation Law ("NYBCL") and the Delaware General
Corporation Law ("DGCL"), the separate corporate existence of Purchaser (except
as may be continued by operation of law) shall cease, and the Company shall
continue as the surviving corporation in the Merger (the Company, or if Parent
makes the election in Section 1.1(b), Purchaser, is sometimes referred to as the
"Surviving Corporation"; Parent, Purchaser and the
<PAGE>2
Company are referred to as the "Constituent Corporations"). Notwithstanding
the foregoing, at the election of Parent, Parent may substitute any direct or
indirect wholly owned subsidiary of Parent or Purchaser as a Constituent
Corporation. To the extent that Parent exercises its election to substitute a
direct or indirect wholly owned subsidiary of Parent or Purchaser as a
Constituent Corporation, or elects to have the Company merged with and into
Purchaser as provided in Section 1.1(b) below, then the parties hereto shall
promptly enter into an amendment to this Agreement necessary or desirable to
provide for such elections, without any need for approval, authorization or
adoption by the Board of Directors or shareholders of the Company.
(b) Notwithstanding any other provision of this Agreement,
Parent may elect, at any time prior to the Effective Time, that the Company
shall be merged with and into Purchaser.
Section 1.2 Effective Time. As soon as practicable after
satisfaction or waiver of the conditions set forth in Article VI, or at such
other time as the parties shall agree, the parties shall file a certificate of
merger or other appropriate documents (in any such case, the "Certificate of
Merger") executed in accordance with the relevant provisions of the NYBCL and
the DGCL and shall make all other filings or recordings required under the NYBCL
and the DGCL. The Merger shall become effective at the time when the Certificate
of Merger has been duly filed with the Delaware Secretary of State and by the
Department of State of the State of New York, or such time as is agreed upon by
the parties and specified in the Certificate of Merger, and such time is
hereinafter referred to as the "Effective Time."
Section 1.3 Closing. The closing of the Merger (the
"Closing") shall take place (i) at 10:00 a.m., local time, on a date to be
specified by the parties, which shall be no later than the second business day
after satisfaction or waiver of all of the conditions set forth in Article VI
hereof, at the offices of Venture Law Group, A Professional Corporation, 2800
Sand Hill Road, Menlo Park, California 94025, or (ii) at such other time and
place as Purchaser and the Company shall agree (the "Closing Date").
Section 1.4 Directors and Officers of the Surviving
Corporation. The directors and officers of Purchaser at the Effective Time
shall be the initial directors and officers, respectively, of the Surviving
Corporation.
Section 1.5 Certificate of Incorporation. The
certificate of incorporation of the Company in effect at the Effective Time
shall be the certificate of incorporation of the Surviving Corporation until
amended in accordance with applicable law.
Section 1.6 Bylaws. The bylaws of the Company in
effect at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
Section 1.7 Effect of the Merger. At the Effective Time,
the effect of the Merger shall be as provided in the applicable provisions of
<PAGE>3
the NYBCL and DGCL, including, without limitation, Section 906 of the NYBCL.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of
the Company and Purchaser shall vest in the Surviving Corporation, and all
debts, liabilities and duties of the Company and Purchaser shall become the
debts, liabilities and duties of the Surviving Corporation.
Section 1.8 Shareholders' Meeting; Other Company
Matters.
(a) The Company, acting through its Board of
Directors, shall, in accordance with applicable law:
(i) duly call, give notice of, convene and hold a
special meeting of its shareholders (the "Special Meeting") as promptly as
practicable following the date hereof for the purpose of considering and
taking action upon the approval of the Merger and the authorization and
adoption of this Agreement;
(ii) after consultation with Parent and its legal
counsel, exercise its best efforts to prepare and file with the Securities and
Exchange Commission (the "SEC") within 10 days after the date hereof (but in
no event later than 14 days after the date hereof), a preliminary proxy or
information statement relating to the Merger and this Agreement and use
commercially reasonable efforts (x) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement (as hereinafter
defined) and, after consultation with Parent and its counsel, to respond
promptly to any comments made by the SEC with respect to the preliminary proxy
or information statement and cause a definitive proxy or information
statement, including any amendment or supplement thereto (the "Proxy
Statement") to be mailed to its shareholders, provided that no amendment or
supplement to the Proxy Statement will be made by the Company without
consultation with Parent and its counsel and (y) to obtain the necessary
approvals of the Merger and authorization and adoption of this Agreement by
its shareholders;
(iii) prepare and revise the Proxy Statement so that,
at the date mailed to Company shareholders and at the time of the meeting of
Company shareholders to be held in connection with the Merger, the Proxy
Statement will (x) not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
that the statements made therein, in light of the circumstances under which
they are made, not misleading (except that the Company shall not be
responsible under this clause (iii) with respect to statements made therein
based on information supplied by Parent or Purchaser expressly for inclusion
in the Proxy Statement), and (y) comply in all material respects with the
provisions of the Exchange Act and the rules and regulations thereunder; and
(iv) subject to the provisions of Section 5.5, make at
the Special Meeting, and include in the Proxy Statement, the recommendation of
the Board that shareholders of the Company vote in favor of the approval of
the Merger and the authorization and adoption of this Agreement.
<PAGE>4
(b) Parent shall furnish to the Company, and revise, written
information concerning itself and Purchaser expressly for inclusion in the
Proxy Statement, including without limitation information required pursuant to
Rule 13e-3 under the Securities Exchange Act of 1934, as amended ( the
"Exchange Act"). Such Parent-furnished information will not, at both the date
mailed to Company shareholders and at the time of the meeting of Company
shareholders to be held in connection with the Merger, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated in Parent-furnished information or necessary in order to make the
statements made in Parent-furnished information, in light of the circumstances
under which they are made, not misleading.
(c) Parent shall vote, or cause to be voted, all of the
Shares then owned by it, Purchaser, and any of its other subsidiaries in favor
of the approval of the Merger and the authorization and adoption of this
Agreement.
(d) The Company has been advised by each of its executive
officers and each of its Directors that each such person (to the extent such
persons own Shares and will be entitled to vote thereon) intends to vote in
favor of the Merger.
(e) The Company hereby waives the provisions of Sections
3 and 5 of the Purchase Agreement dated September 6, 1994 between the Company
and Parent.
(f) Within five days following the date hereof Parent shall
provide to the Company a draft of the information relating to Parent and
Purchaser required to be included in the Proxy Statement and shall update and
modify such information prior to the tenth day after the date hereof to be
complete and accurate in all material respects.
ARTICLE II
CONVERSION OF SECURITIES
Section 2.1 Conversion of Capital Stock. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holders of any Shares or any shares of capital stock of Purchaser:
(a) Purchaser Capital Stock. Each issued and
outstanding share of capital stock of Purchaser shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation.
(b) Cancellation of Treasury Stock and Purchaser Owned
Stock. All Shares (and the associated Preferred Share Purchase Rights
(collectively, the "Rights") issued pursuant to a Rights Agreement dated as of
August 27, 1996 between the Company and The First National Bank of Boston, as
Rights Agent (the "Rights Agreement")) that are owned by the Company or any
subsidiary of the Company and any Shares (and associated Rights) owned by
Purchaser or any subsidiary of Purchaser shall be canceled and retired and
shall cease to exist and no consideration shall be delivered in exchange
therefor.
<PAGE>5
(c) Exchange of Shares. Each issued and outstanding Share (and
associated Right)(other than Shares (and associated Rights) to be canceled in
accordance with Section 2.1(b) and any dissenting Shares (and associated Rights)
which are held by shareholders exercising appraisal rights pursuant to the NYBCL
("Dissenting Shareholders")) shall be converted into the right to receive $8.00
per Share (and associated Right), payable to the holder thereof, without
interest (the "Merger Consideration"), upon surrender of the certificate
formerly representing such Share in the manner provided in Section 2.2. All such
Shares (and associated Rights), when so converted, shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and each holder of a certificate representing any such Shares (and
associated Rights) shall cease to have any rights with respect thereto, except
the right to receive the Merger Consideration therefor upon the surrender of
such certificate in accordance with Section 2.2, without interest, or, in the
case of Dissenting Shareholders, the right, if any, to receive payment from the
Surviving Corporation of the fair value of such Shares as determined in
accordance with the NYBCL.
Section 2.2 Exchange of Certificates.
(a) Paying Agent. Prior to the Effective Time, Parent shall
designate a bank or trust company to act as agent for the holders of the Shares
in connection with the Merger (the "Paying Agent") to receive the funds to which
holders of the Shares shall become entitled pursuant to Section 2.1(c). Parent
shall, from time to time, make available to the Paying Agent funds in amounts
and at times necessary for the payment of the Merger Consideration in the
amounts and at the times provided herein. All interest earned on such funds
shall be paid to Parent.
(b) Exchange Procedures. As soon as reasonably practicable
after the Effective Time, the Paying Agent shall mail to each holder of record
of a certificate or certificates, which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"), whose Shares were converted
pursuant to Section 2.1(c) into the right to receive the Merger Consideration
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only upon
delivery of the Certificates to the Paying Agent and shall be in such form and
have such other provisions as Parent and the Company may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for payment of the Merger Consideration. Upon surrender of a
Certificate for cancellation to the Paying Agent or to such other agent or
agents as may be appointed by Parent, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each Share formerly represented
by such Certificate and the Certificate so surrendered shall forthwith be
canceled. If payment of the Merger Consideration is to be made to a person other
than the person in whose name the surrendered Certificate is registered, it
shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and that the
person requesting such payment shall have paid any transfer and other taxes
<PAGE>6
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as contemplated by
this Section 2.2, each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive the Merger Consideration
in cash as contemplated by this Section 2.2. The right of any shareholder to
receive the Merger Consideration shall be subject to and reduced by any
applicable withholding obligation.
(c) Transfer Books; No Further Ownership Rights in the Shares.
At the Effective Time, the stock transfer books of the Company shall be closed
and thereafter there shall be no further registration of transfers of the Shares
on the records of the Company. From and after the Effective Time, the holders of
Certificates evidencing ownership of the Shares outstanding immediately prior to
the Effective Time shall cease to have any rights with respect to such Shares,
except as otherwise provided for herein or by applicable law. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this Article II.
(d) Termination of Fund; No Liability. At any time following
twelve months after the Effective Time, the Surviving Corporation shall be
entitled to require the Paying Agent to deliver to it any funds (including any
interest received with respect thereto) which had been made available to the
Paying Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat or other similar laws) only as general
creditors thereof with respect to the Merger Consideration payable upon due
surrender of their Certificates, without any interest thereon. Notwithstanding
the foregoing, none of Parent, the Surviving Corporation or the Paying Agent
shall be liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
Section 2.3 Dissenting Shares. Notwithstanding any other
provision of this Agreement to the contrary, Shares held by a holder who has not
voted such Shares in favor of the authorization, approval and adoption of this
Agreement and the Merger or consented thereto in writing and with respect to
which dissenters' rights shall have been demanded and perfected in accordance
with Sections 623 and 910 of the NYBCL (the "Dissenting Shares") and as of the
Effective Time not withdrawn shall not be converted into the right to receive
cash at or after the Effective Time, but such Shares shall become the right to
receive such consideration as may be determined to be due to holders of
Dissenting Shares pursuant to the laws of the State of New York unless and until
the holder of such Dissenting Shares withdraws his or her demand for such
appraisal or becomes ineligible for such appraisal. If a holder of Dissenting
Shares shall withdraw his or her demand for such appraisal or shall become
ineligible for such appraisal (through failure to perfect or otherwise), then,
as of the Effective Time or the occurrence of such event, whichever last occurs,
such holder's Dissenting Shares shall automatically be converted into and
represent the right to receive the Merger Consideration, without interest, as
provided in Section 2.1(c). The Company shall give Parent (i) prompt notice of
any demands for appraisal of Shares received by the Company and (ii) the
opportunity to participate in and direct all negotiations and proceedings with
<PAGE>7
respect to any such demands. The Company shall not, without the prior written
consent of Parent, make any payment with respect to, or settle, offer to settle
or otherwise negotiate, any such demands.
Section 2.4 Company Stock Plans.
(a) Each outstanding option to purchase Shares issued to
employees, non-employee directors and consultants of the Company pursuant to the
Company's Amended and Restated 1992 Incentive Stock Plan and the 1986 Key
Employees Stock Option Plan of Datalogix Formula Systems, Inc. (collectively,
the "Option Plans") whether vested or unvested (each an "Employee Stock
Option"), shall remain outstanding after the Effective Time and shall be assumed
by Parent. The parties intend that Parent's assumption of the Employee Stock
Options shall be treated as "assuming a stock option in a transaction to which
Section 424(a) applies" within the meaning of Section 424 of the Code (as
defined in Section 3.11 below) and this subsection (a) shall be interpreted and
applied consistent with such intent. Each Employee Stock Option assumed by
Parent shall be exercisable upon the same terms and conditions as under the
applicable Option Plan and option agreement issued thereunder, except that (i)
such option shall be exercisable for that number of shares of common stock of
Parent equal to the product of (x) the number of Shares for which such option
was exercisable and (y) the Merger Consideration divided by the average closing
price of Parent's Common Stock on the NASDAQ National Market for the five
consecutive trading days prior to the Effective Time (the "Conversion Number"),
and (ii) the exercise price of such option shall be equal to the exercise price
of such option as of the date hereof divided by the Conversion Number.
(b) Each outstanding option to purchase Shares issued to a
non-employee director pursuant to the Company's 1995 Director Option Plan (a
"Director Stock Option"), whether vested or unvested, shall remain outstanding
after the Effective Time and shall be assumed by Parent. Each Director Stock
Option assumed by Parent shall be exercisable upon the same terms and conditions
as under the Company's 1995 Director Option Plan and the applicable option
agreement issued thereunder, except that the consideration payable upon exercise
in respect of each Share covered by such option shall be the Merger
Consideration.
(c) As soon as practicable after the Effective Time, Parent
shall deliver to the holders of Employee Stock Options and Director Stock
Options appropriate notices setting forth such holders' rights pursuant to the
Option Plans and the 1995 Director Option Plan and the agreements evidencing the
grants of such Employee Stock Options and Director Stock Options shall continue
in effect on the same terms and conditions (subject to the adjustments required
by this Section 2.4 after giving effect to the Merger).
(d) Parent shall register under the Securities
Act of 1933, as amended (the "Securities Act"), all shares of Parent Common
Stock subject to options that were formerly Employee Stock Options as of the
Effective Time.
<PAGE>8
(e) The Company shall take all actions reasonably necessary
to cause the last day of the "Offering Period" (as such term is used in the
Company's 1995 Employee Stock Purchase Plan (the "1995 ESPP") to be the date
immediately prior to the Closing Date (the "Final Purchase Date"), and apply
on the Final Purchase Date the funds within each participant's withholdings
account on the Final Purchase Date to the purchase on the Final Purchase Date
of whole Shares in accordance with the terms of the 1995 ESPP.
(f) Prior to the Effective Time, the Company
shall take all actions required to cause the exercise price on all options to
purchase Shares that are then outstanding and that have an exercise price in
excess of $8.00 per Share to be changed to become $8.00 per Share.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser as
follows:
Section 3.1 Organization.
(a) Each of the Company and its subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority and any necessary governmental authority to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, and, except as set forth in Section 3.1
of the Company Disclosure Schedule (as defined below), is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned, operated or leased or
the nature of its activities makes such qualification necessary, except for such
failure which, when taken together with all other such failures, would not have
a Material Adverse Effect (as defined below in this Section 3.1) on the Company
and its subsidiaries, taken as a whole. A true and complete list of all the
Company's subsidiaries, together with the jurisdiction of incorporation of each
subsidiary and the percentage of each subsidiary's outstanding capital stock
owned by the Company or another subsidiary, is set forth in Section 3.1 of the
Company Disclosure Schedule delivered to Parent and Purchaser on or before the
date hereof (the "Company Disclosure Schedule"). The Company is not subject to
Section 2115 of the California General Corporation Law.
(b) When used in connection with the Company and its
subsidiaries, the term "Material Adverse Effect" means any individual material
adverse effect, or adverse effects in the aggregate (whether or not related and
whether or not any individual effect is material) which are material, on the
business, operations, properties (including intangible properties), condition
(financial or otherwise), prospects, assets or liabilities of the Company and
its subsidiaries taken as a whole. The term Material Adverse Effect shall
<PAGE>9
include without limitation: (i) any individual adverse effect, or adverse
effects in the aggregate (whether or not related and whether or not any
individual effect is material), which result in liability to the Company or its
subsidiaries, or could reasonably be expected to result in liability to the
Company or its subsidiaries, of in excess of $1,500,000, in the case of any
individual effect, or $2,500,000, in the case of all such adverse effects in the
aggregate, except that with respect to Section 6.3 (a) (for purposes of
determining whether any representations and warranties are true and correct as
if made on and as of the Effective Time) and Sections 6.3 (d), 6.3 (e) and 7.1
(d), such amounts will be $3,000,000, in the case of any individual effect, or
$5,000,000, in the case of all adverse effects in the aggregate; and (ii) any
judgment, injunction, order or decree binding upon the Company or any of its
subsidiaries obligating the Company or any such subsidiary to take or refrain
from taking any action, omit or refrain from omitting to take any action
required to be taken, perform or refrain from performing any activity or conduct
or refrain from conducting any business, in each case which results from
actions, suits or proceedings of the types described in Section 6.3 (d) (i) or
(ii). For the purposes of determining whether a Material Adverse Effect has
occurred or could reasonably be expected to occur there shall be included as
adverse effects, without limitation, any payments made, and the value of any
other consideration provided, or which could reasonably be expected to be made
or provided (i) to pay, discharge or satisfy any actions, suits, proceedings or
claims; (ii) to obtain consents from any third party to the transactions
contemplated hereby; and (iii) to pay, discharge or satisfy any obligation to
indemnify or hold harmless any Indemnified Person (as defined in Section 6.3 (d)
below). Notwithstanding the foregoing, (a) all dollar amounts set forth in this
Section 3.1 (b) are net of (i) amounts of insurance proceeds received by the
Company or its subsidiaries or specifically acknowledged by the insurer in
writing as being payable by the insurer, and (ii) specifically applicable
reserves set forth and provided for in the draft consolidated financial
statements set forth in Section 5.3 of the Company Disclosure Schedule, and (b)
no individual adverse effect shall be included in the calculation of Material
Adverse Effect if the sole impact of such individual adverse effect is a payment
obligation which could not reasonably be expected to result in a liability to
the Company or its subsidiaries of more than $50,000.
Section 3.2 Capitalization.
(a) Capitalization. The authorized capital stock of
the Company consists of 40,000,000 Shares, par value $.01 per Share and
5,000,000 shares of Preferred Stock, par value $0.01 per share. As of
September 19, 1996, (i) 11,711,776 Shares were issued and outstanding, all of
which were validly issued and are fully paid and nonassessable, (ii) 96,116
Shares were held in the treasury of the Company or by subsidiaries of the
Company, (iii) 1,015,038 Shares were reserved for issuance upon exercise of
outstanding options under the Option Plans and the Company's Director Option
Plan, and (iv) 250,000 Shares were reserved for issuance under the 1995 ESPP,
up to 23,000 of which may be issued in the Offering Period that ends on the
<PAGE>10
day prior to the Closing Date. Section 3.2 of the Company Disclosure Schedule
sets forth a true and correct list as of September 20, 1996 of all holders of
options to purchase Shares, the number of such options outstanding as of such
date and the exercise price per option. All of the outstanding Shares have
been duly authorized and validly issued and are fully paid and nonassessable
and free of preemptive rights. Subsequent to September 19, 1996, no Shares
have been issued by the Company except upon the exercise of outstanding
options described in this Section 3.2 (a). Except as set forth in Section
3.1(b) of the Company Disclosure Schedule, each of the outstanding options
described in this Section 3.2 allows the optionee to purchase Shares which
have been authorized to be issued by the Company's Board of Directors and
shareholders under the Option Plans or the 1995 Director Stock Option Plan.
Except as set forth in Section 3.2 of the Company Disclosure Schedule, there
are no other options, warrants or other rights, convertible debt, agreements,
arrangements or commitments of any character obligating the Company or any of
its subsidiaries to issue or sell any shares of capital stock of or other
equity interests in the Company or any of its subsidiaries. The Company is not
obligated to redeem, repurchase or otherwise reacquire any of its capital
stock or other securities. For purposes of this Agreement, "Fully Diluted
Basis" shall mean the sum of (x) all Shares issued and outstanding at any one
time plus (y) all Shares issuable upon the exercise of any outstanding
options, warrants or convertible or exchangeable securities.
(b) Except as set forth in Section 3.2 of the Company
Disclosure Schedule, all of the outstanding shares of the capital stock of each
subsidiary of the Company are beneficially owned by the Company, directly or
indirectly, and all such shares have been duly authorized, validly issued and
are fully paid and nonassessable and are owned by either the Company or one of
its subsidiaries free and clear of all liens, security interests, charges,
claims or encumbrances of any nature whatsoever. There are no existing options,
calls or commitments of any character relating to the issued or unissued capital
stock or other securities of any subsidiary. Except as set forth in Section 3.2
of the Company Disclosure Schedule, the Company does not directly or indirectly
own or have a right to acquire an equity interest in any other corporation,
partnership, joint venture or other business association or entity.
Section 3.3 Authorization; Validity of Agreement;
Company Action. The Company has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby, subject to obtaining shareholder approval as described in the last
sentence of this Section 3.3. The Board of Directors of the Company, at a
meeting duly called and held on September 22, 1996 at which all of the
Directors were present, duly and unanimously approved, authorized and adopted
this Agreement and its execution, delivery and performance and the
transactions contemplated hereby, recommended that the shareholders of the
Company authorize and adopt this Agreement and the transactions contemplated
hereby, including the Merger, and determined that this Agreement and the
transactions contemplated hereby, including the Merger, are fair to and in the
best interests of the shareholders of the Company; provided, however, such
recommendation may be withdrawn, modified or amended to the extent permitted
by Section 5.5 of this Agreement. No other corporate action on the part of the
Company is necessary to authorize the execution and delivery by the Company of
this Agreement and the consummation by it of the transactions contemplated
hereby (except as described in the last sentence of this Section 3.3). This
Agreement has been duly executed and delivered by the Company and, assuming
due and valid authorization, execution and delivery hereof by Parent and
Purchaser, is a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms. The affirmative vote of the
holders of not less than two-thirds (2/3) of the outstanding Shares are the
<PAGE>11
only votes of the holders of any class or series of the Company's capital
stock necessary to approve, adopt and authorize this Agreement and the
transactions contemplated hereby.
Section 3.4 Consents and Approvals; No Violations. Except
for the filings or the consents, authorizations or approvals under the
agreements set forth on Section 3.4 of the Company Disclosure Schedule and the
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Exchange Act, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), state securities or blue sky laws, and the filing and recordation of a
certificate of merger under the NYBCL or the DGCL, neither the execution,
delivery or performance of this Agreement by the Company nor the consummation
by the Company of the transactions contemplated hereby nor compliance by the
Company with any of the provisions hereof will (i) conflict with or result in
any breach of any provision of the certificate of incorporation or the bylaws
of the Company or of any of its subsidiaries, (ii) require any filing with, or
permit, authorization, consent or approval of, any court, arbitration
tribunal, administrative agency or commission or other governmental or other
regulatory authority or agency, domestic or foreign (a "Governmental Entity"),
on the part of the Company or any subsidiary, (iii) require the consent of any
person under, result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
lease, license, contract, agreement or other instrument or obligation to which
the Company or any of its subsidiaries is a party or by which any of them or
any of their properties or assets may be bound, the lack of which consent, or
which violation, breach or default, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on the Company and
its subsidiaries, taken as a whole (the "Specified Agreements"), or (iv)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their properties
or assets.
Section 3.5 SEC Reports and Financial Statements.
(a) The Company has timely filed with the SEC, and has
delivered to Purchaser, true and complete copies of, all forms, reports,
schedules, statements and other documents required to be filed by it since June
1, 1995 under the Securities Act or the Exchange Act (collectively, the "SEC
Documents"). Except as set forth in Section 3.5 of the Company Disclosure
Schedule, the SEC Documents (i) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be,
including without limitation the applicable accounting requirements thereunder
and the published rules and regulations of the SEC with respect thereto, (ii)
when filed did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (iii) taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact required to be
<PAGE>12
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. None of
the Company's subsidiaries is required to file any statements or reports with
the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act.
(b) Except as set forth in Section 3.5 of the Company
Disclosure Schedule, the consolidated financial statements of the Company
included in the SEC Documents have been prepared from, and accord with, the
books and records of the Company and its subsidiaries, have been prepared in
accordance with United States generally accepted accounting principles ("GAAP")
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position and the consolidated results of operations and cash flows (and changes
in financial position, if any) of the Company and its consolidated subsidiaries
as of the respective dates and for the respective periods thereof, except that
the unaudited interim quarterly financial statements were or are subject to
normal and recurring year-end adjustments which were or are not expected to be
material in amount. Except as set forth in Section 3.5 of the Company Disclosure
Schedule, the Company is not aware of any facts or circumstances which would
require the Company to amend or restate any of the SEC Documents, including
without limitation the financial information included therein.
(c) The Company's reserves for product claims and warranty
costs used in preparing the draft consolidated financial statements set forth in
Section 5.3 of the Company Disclosure Schedule are adequate to cover the
Company's and its subsidiaries' existing product claims and warranty costs,
including without limitation the product claims and warranty costs arising out
of the matters described in Section 3.7 of the Company Disclosure Schedule and
the warranties provided by the Comapany and its subsidiaries described in
Section 3.24 (d) of the Company Disclosure Schedule.
Section 3.6 Absence of Certain Changes. Since June
30, 1995, except as contemplated in this Agreement and set forth on Section
3.6 of the Company Disclosure Schedule, there has not been:
(a) any Material Adverse Effect on the Company
and its subsidiaries, taken as a whole;
(b) any strike, picketing, work slowdown or
other labor disturbance;
(c) any material damage, destruction or loss
(whether or not covered by insurance) with respect to any of the material
assets of the Company or any of its subsidiaries;
(d) any redemption or other acquisition of
capital stock by the Company or any of its subsidiaries or any declaration or
payment of any dividend or other distribution in cash, stock or property with
respect to capital stock;
(e) any stock split, reverse stock,
combination, reclassification or other similar action with respect to capital
stock;
<PAGE>13
(f) any entry into any material commitment or
transaction (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business as contemplated by
this Agreement;
(g) any transfer of, or rights granted under,
any licenses, agreements, patents, trademarks, trade names or copyrights other
than nonexclusive end user licenses granted in the ordinary course of business
and consistent with past practice;
(h) any mortgage, pledge, security interest or
imposition of lien or other encumbrance on any material asset of the Company
or any of its subsidiaries; or
(i) any change by the Company in accounting
principles or methods except insofar as may have been required by a change in
generally accepted accounting principles and disclosed in the SEC Documents
and except as set forth in Section 3.5 of the Company Disclosure Schedule.
Except as set forth in Section 3.6 of the Company Disclosure
Schedule, since June 30, 1995 the Company and its subsidiaries have conducted
their business only in the ordinary course and in a manner consistent with
past practice and have not made any material change in the conduct of the
business or operations of the Company and its subsidiaries taken as a whole.
Except as set forth in Section 3.6 of the Company Disclosure Schedule, no
person has or will have the right to receive any severance, bonus, other
payment, increase or change in benefits or vesting of stock options, shares or
other benefits as a result of any of the transactions contemplated by this
Agreement.
Section 3.7 No Undisclosed Liabilities. Except as set
forth in Section 3.7 of the Company Disclosure Schedule, and except as
reflected or reserved against in the consolidated financial statements
contained in the SEC Documents, the Company and its subsidiaries have no
liabilities of any nature (whether accrued, absolute, contingent or
otherwise), except those liabilities incurred in the ordinary course of
business which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
Section 3.8 Litigation. Except as disclosed in the SEC
Documents or in Section 3.8 of the Company Disclosure Schedule, there is no
suit, claim, action, proceeding or investigation pending before any Governmental
Entity or, to the best knowledge of the Company, threatened against the Company
or any of its subsidiaries. Except as disclosed in the SEC Documents or in
Section 3.8 of the Company Disclosure Schedule, neither the Company nor any of
its subsidiaries is subject to any outstanding order, writ, injunction or
decree.
Section 3.9 No Default; Compliance with Applicable Laws.
Except as disclosed in Section 3.9 of the Company Disclosure Schedule, the
business of the Company and each of its subsidiaries is not being conducted in
default or violation of any term, condition or provision of (i) its respective
certificate of incorporation or bylaws, (ii) any Specified Agreement or (iii)
<PAGE>14
any federal, state, local or foreign statute, law, ordinance, rule, regulation,
judgment, decree, order, concession, grant, franchise, permit or license or
other governmental authorization or approval applicable to the Company or any of
its subsidiaries, excluding from the foregoing clauses (ii) and (iii), defaults
or violations which could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole. Except as disclosed in Section 3.9 of the Company Disclosure
Schedule, as of the date of this Agreement, no investigation or review by any
Governmental Entity or other entity with respect to the Company or any of its
subsidiaries is pending or, to the best knowledge of the Company, threatened,
nor has any Governmental Entity or other entity indicated an intention to
conduct the same. Each of the Company and its subsidiaries has in effect all
Federal, state, local and foreign governmental approvals, authorizations,
certificates, filings, franchises, licenses, notices, permits and rights
("Permits") necessary for it to own, lease or operate its properties and assets
and to carry on its business as now conducted, and there has occurred no default
under any such Permit, except for the absence of Permits and for defaults under
Permits which absence or defaults, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company and its
subsidiaries, taken as a whole.
Section 3.10 Intellectual Property.
(a) Except as set forth in Section 3.10
(a) of the Company's Disclosure Schedule, each of the Company and its
subsidiaries owns or has the exclusive right to use, make, sell, license, or
sublicense and bring actions for infringement of all Company Products (as
defined below) and Intellectual Property Rights (as defined below) developed
by or for the Company or any of the Company's subsidiaries or that are used or
currently proposed to be used in the business of the Company or any of the
Company's subsidiaries as currently conducted or proposed to be conducted. All
Company Products and Company Intellectual Property Rights are owned by the
Company and its subsidiaries free and clear of any rights or claims of any
former employees, consultants, officers and directors of the Company or any
subsidiary and former employers of all current and former employees,
consultants, officers and directors of the Company or any subsidiary. The
source codes for the Company Products constitute trade secrets of the Company
that are presently valid and protectable. Except as set forth in Section 3.10
(a) of the Company's Disclosure Schedule, all taxes and fees, including,
without limitation, patent and trademark registration and prosecution fees and
all professional fees in connection therewith pertaining to the Company
Intellectual Property Rights, due and payable on or before the date hereof,
have been paid by the Company.
(b) Each of the Company's and its subsidiaries' current
products and products under development are listed on the Company Disclosure
Schedule (collectively, "Company Products"). Except as set forth in Section
3.10(b) of the Company Disclosure Schedule, no person has a license to use or
the right to acquire a license to use any future version of any Company
Product or any Company Product that is under development, and no agreement to
which the Company or any subsidiary is a party will restrict the Surviving
Corporation or Parent from charging customers for any such new version. No
<PAGE>15
person has any rights under any source code escrow agreement relating to the
Company Products or Company Intellectual Property Rights. Except as set forth
in Section 3.10(b) of the Company Disclosure Schedule, no person other than
the Company and its subsidiaries has had access to or the right of access to
source code for the Company's Products or will have the right to such access
as a result of any of the transactions contemplated by this Agreement.
(c) No person has a right to receive a royalty or similar
payment in respect of any Company Product or any Company Intellectual Property
Rights whether or not pursuant to any contractual arrangements entered into by
the Company or any subsidiary. Except for End-User Licenses and except as set
forth in Section 3.10(c) of the Company Disclosure Schedule, each of the
Company and its subsidiaries has no licenses granted, sold or otherwise
transferred by or to it nor other agreements to which it is a party, relating
in whole or in part to any Company Product or Company Intellectual Property
Rights.
(d) The execution, delivery and performance of this
Agreement and the consummation of the other transactions contemplated hereby
(including without limitation the continued conduct by Parent or Surviving
Corporation after the Effective Time of the Company's and its subsidiaries'
businesses as presently conducted and the incorporation of any Company Product
or Company Intellectual Property Right in any product of Parent or the
Surviving Corporation) will not breach, violate or conflict with any
instrument or agreement and will not cause the forfeiture or termination or
give rise to a right of forfeiture or termination of any such Company Product
or Company Intellectual Property Right or in any way impair the right of
Parent or the Surviving Corporation to use, sell, license or dispose of,
either as part or all of a Company Product or as part or all of a product of
Parent or the Surviving Corporation, or to bring any action for the
infringement of, any such Company Product or Company Intellectual Property
Right or portion thereof.
(e) Neither the development, manufacture, marketing,
license, sale or use of any Company Product violates or will violate any
license or agreement to which the Company or any of its subsidiaries is a
party or infringes any Intellectual Property Right of any other party; there
is no pending or, to the knowledge of the Company, threatened claim or
litigation contesting the validity, ownership or right to use, sell, license
or dispose of any Intellectual Property Right necessary or required for, or
used in, the conduct of the business of the Company or any subsidiary as
presently conducted nor, to the knowledge of the Company, is there any basis
for any such claim, nor has the Company or any subsidiary received any notice
asserting that any such Intellectual Property Right or the proposed use, sale,
license or disposition thereof conflicts or will conflict with the rights of
any other party, nor, to the knowledge of the Company, is there any basis for
any such assertion. To the Company's knowledge, there is no infringement on
the part of any third party of the Company's Intellectual Property Rights.
(f) Each of the Company and its subsidiaries has taken
reasonable and practicable steps (including, without limitation, entering into
confidentiality and non-disclosure agreements with all officers and employees
<PAGE>16
of and consultants to the Company and its subsidiaries with access to or
knowledge of the Company's Intellectual Property Rights, except as set forth
in Section 3.10(f) of the Company Disclosure Schedule) to maintain the
secrecy and confidentiality of, and its proprietary rights in, all
Intellectual Property Rights necessary or required for, or used in, the
conduct of the Company's and its subsidiaries businesses. All employees,
consultants, officers, directors and shareholders of the Company or any
subsidiary that have participated in the development of or have had access to
any material portion of the Company Intellectual Property Rights are parties
to a written agreement ("Proprietary Information and Inventions Agreement"),
under which each such person or entity (i) is obligated to disclose and
transfer to the Company or any subsidiary, without the receipt by such person
of any additional value therefor (other than normal salary or fees for
consulting services), all inventions, developments and discoveries which,
during the period of employment with or performance of services for the
Company or any subsidiary, he makes or conceives of either solely or jointly
with others, and (ii) is obligated to maintain the confidentiality of
proprietary information of the Company and its subsidiaries. To the Company's
knowledge, none of the Company's or any subsidiary's employees, consultants,
officers or directors is obligated under any contract (including licenses,
covenants or commitments of any nature) or other agreement, or subject to any
judgment, decree or order of any Governmental Entity, that would conflict with
their obligation to use their best efforts to promote the interests of the
Company and its subsidiaries in the Company's and its subsidiaries' businesses
or that would conflict with the Company's and its subsidiaries' businesses. It
is currently not necessary nor will it be necessary for the Company or any
subsidiary to utilize in the Company's or any of its subsidiaries' businesses
nor will the Company or any subsidiary utilize in the Company's or any of its
subsidiaries' businesses any inventions of any of such persons or entities (or
people it currently intends to hire) made or owned prior to their employment
by or affiliation with the Company or any subsidiary, nor is it or will it be
necessary to utilize any other assets or rights of any such persons or
entities (or people it currently intends to hire) made or owned prior to their
employment with or engagement by the Company or any subsidiary, in violation
of any Intellectual Property Rights of any such person or entity or any other
limitations or restrictions to which any such person or entity is a party or
to which any of such assets or rights may be subject. To the best of the
Company's knowledge, none of the Company's or any subsidiary's employees,
consultants, officers, directors or shareholders that has had knowledge of or
access to information relating to the Company's or any of its subsidiaries'
businesses has taken, removed or made use of any proprietary documentation,
manuals, products, materials, or any other tangible item from his previous
employer relating to the business as conducted of such previous employer which
has resulted in the Company's or any subsidiary's access to or use of such
proprietary items in the Company's or any of its subsidiaries' businesses, and
the Company and its subsidiaries will not gain access to or make use of any
such proprietary items in the Company's or any of its subsidiaries'
businesses.
(g) Section 3.10 of the Company Disclosure Schedule also
sets forth a complete list of all licenses, sublicenses and other agreements
as to which the Company or any subsidiary is a party and pursuant to which the
<PAGE>17
Company or any subsidiary or any other person is authorized to use, license,
sublicense, sell or distribute any Intellectual Property Right (excluding
End-User Licenses). Neither the Company nor any subsidiary is in violation of
any license, sublicense or agreement described on such list except such
violations as do not materially impair the Company's or any subsidiary's
rights under such license, sublicense or agreement. Section 3.10 of the
Company Disclosure Schedule separately identifies each exclusive arrangement
between the Company or any subsidiary and any third party to use, license,
sublicense, sell or distribute any Company Intellectual Property Right or any
Company Product.
(h) Section 3.10 of the Company Disclosure Schedule
contains a complete and accurate list of all applications, filings and other
formal actions made or taken pursuant to federal, state, local and foreign
laws by the Company or any subsidiary to perfect or protect its interest in
the Company Intellectual Property Rights, including, without limitation, all
patents, patent applications, trademarks, trademark applications and
registrations, service marks, service mark applications and registrations and
copyright applications and registrations. As used herein, the term
"Intellectual Property Rights" means all intellectual property rights,
including, without limitation, domestic and foreign patents, patent
applications, patent rights, trademarks, trademark registrations, trademark
applications, trade names, service marks, service mark applications and
registrations, copyrights, copyright applications and registrations, licenses,
know-how, trade secrets, trade rights, proprietary processes and formulae,
inventions, development tools, designs, plans, specifications, technical
information and other proprietary rights, whether or not registered, and all
documentation and media relating to the above, and the term "Company
Intellectual Property Rights" shall mean Intellectual Property Rights owned by
or granted exclusively or nonexclusively to the Company or any subsidiary.
Section 3.11 Taxes.
(a) For purposes of this Section 3.11 and
other provisions of this Agreement relating to Taxes, the following
definitions shall apply:
(i) The term "Taxes" shall
mean all taxes, however denominated, including any interest, penalties or
other additions to tax that may become payable in respect thereof, (A) imposed
by any federal, territorial, state, local or foreign government or any agency
or political subdivision of any such government, which taxes shall include,
without limiting the generality of the foregoing, all income or profits taxes
(including but not limited to, federal income taxes and state income taxes),
payroll and employee withholding taxes, unemployment insurance, social
security taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise
taxes, gross receipts taxes, business license taxes, occupation taxes, real
and personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty Corporation premiums and other
governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which are required to be paid, withheld or collected,
(B) any liability for the payment of amounts referred to in (A) as a result of
being a member of any affiliated, consolidated, combined or unitary group, or
(C) any liability for amounts referred to in (A) or (B) as a result of any
obligations to indemnify another person.
<PAGE>18
(ii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.
(iii) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(b) Except as set forth in Section 3.11 of the Company
Disclosure Schedule, and except as could not, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the
Company and its subsidiaries, taken as a whole, (i) all Returns required to be
filed by or on behalf of the Company and each of its subsidiaries have been
duly filed on a timely basis and such Returns are true, complete and correct,
(ii) all Taxes shown to be payable on such Returns or on subsequent
assessments with respect thereto, and all payments of estimated Taxes required
to be made by or on behalf of the Company and each of its subsidiaries under
Section 6655 of the Code or comparable provisions of state, local or foreign
law, have been paid in full on a timely basis or have been accrued on the
Financial Statements, and no other Taxes are payable by the Company or any of
its subsidiaries with respect to items or periods covered by such Returns
(whether or not shown on or reportable on such Returns) or with respect to any
period prior to the date of this Agreement, (iii) the Company and each of its
subsidiaries has withheld and paid over all Taxes required to have been
withheld and paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records with
respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party, (iv) there are no
liens on any of the assets of the Company or any of its subsidiaries with
respect to Taxes, other than liens for Taxes not yet due and payable or for
Taxes that the Company or such subsidiary is contesting in good faith through
appropriate proceedings and for which appropriate reserves have been
established, (v) the amount of the Company's and its subsidiaries' liability
for unpaid Taxes (whether actual or contingent) for all periods through the
date of the Financial Statements does not, in the aggregate, exceed the amount
of the current liability accruals for Taxes reflected on the Financial
Statements, and the Financial Statements properly accrue in accordance with
GAAP all liabilities for Taxes payable after the date of the Financial
Statements attributable to transactions and events occurring prior to such
date, and (vi) no liability for Taxes of the Company or any of its
subsidiaries has been incurred (or prior to Closing will be incurred) since
such date other than in the ordinary course of business.
(c) Except as set forth in Section 3.11(c) of the the
Company Disclosure Schedule, the Company has made available to Purchaser true
and complete copies of (i) relevant portions of income tax audit reports,
statements of deficiencies, closing or other agreements received by or on
behalf of the Company or any of its subsidiaries relating to Taxes, and (ii)
all federal and state income or franchise tax returns and state sales and use
tax Returns for or including the Company or any of its subsidiaries for the
<PAGE>19
periods ending on and after June 30, 1993, June 30, 1994 and June 30, 1995,
excluding from the foregoing such returns with respect to Taxes the nonpayment
of which, individually or in the aggregate, could not reasonably be expected
to cause a Material Adverse Effect. Neither the Company nor any of its
subsidiaries does business in or derives income from any state other than
states for which Returns have been duly filed and made available to Purchaser.
(d) Except as disclosed in Section 3.11 of the Company
Disclosure Schedule, (i) the Returns of or including the Company and its
subsidiaries have never been audited by a government or taxing authority, nor
is any such audit in process, threatened or, to the Company's knowledge,
pending (either in writing or verbally, formally or informally), (ii) no
deficiencies exist or have been asserted (either in writing or verbally,
formally or informally) or are expected to be asserted with respect to Taxes
of the Company or any of its subsidiaries, and neither the Company nor any
such subsidiary has received notice (either in writing or verbally, formally
or informally) nor expects to receive notice that it has not filed a Return or
paid Taxes required to be filed or paid, (iii) neither the Company nor any of
its subsidiaries is a party to any action or proceeding for assessment or
collection of Taxes, nor has such event been asserted or threatened (either in
writing or verbally, formally or informally) against the Company, any of its
subsidiaries, or any of their assets, and (iv) no waiver or extension of any
statute of limitations is in effect with respect to Taxes or Returns of the
Company of its subsidiaries, excluding from the foregoing any such audit,
threat of audit, deficiency, proposed deficiency, action, proceeding for
assessment or collection, waiver or extension with respect to which the amount
in controversy is less than $50,000.
(e) Neither the Company nor any subsidiary has entered into
any compensatory agreements with respect to the performance of services which
payment thereunder would result in a nondeductible expense to the Company or
such subsidiary pursuant to Section 280G of the Code or an excise tax to the
recipient of such payment pursuant to Section 4999 of the Code.
Section 3.12 Certificate of Incorporation and By-Laws.
The Company has heretofore furnished to Purchaser a complete and correct copy
of the certificate of incorporation and the bylaws or equivalent
organizational documents, each as amended to the date hereof, of the Company
and made available to Purchaser such documents with respect to all
subsidiaries. Such certificate of incorporation, bylaws and equivalent
organizational documents are in full force and effect. Neither the Company
nor any of its subsidiaries is in violation of any of the provisions of its
certificate of incorporation or bylaws or equivalent organizational documents.
Section 3.13 Title to Property.
(a) Except as disclosed in Section 3.13 to the Company
Disclosure Schedule, the Company and its subsidiaries have good and marketable
title, or valid leasehold rights in the case of leased property, to all real
property and all personal property purported to be owned or leased by them,
free and clear of all material liens, security interests, claims, encumbrances
<PAGE>20
and charges, excluding (i) immaterial liens for fees, taxes, levies, imposts,
duties or governmental charges of any kind which are not yet delinquent or are
being contested in good faith by appropriate proceedings which suspend the
collection thereof, (ii) immaterial liens for mechanics, materialmen,
laborers, employees, suppliers or other liens arising by operation of law for
sums which are not yet delinquent or are being contested in good faith by
appropriate proceedings, (iii) purchase money liens on office, computer and
related equipment and supplies incurred in the ordinary course of business,
and (iv) liens or defects in title or leasehold rights that, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.
(b) Except as set forth in Section 3.13(b) of the Company
Disclosure Schedule, consummation of the Merger will not result in any breach
of or constitute a default (or an event with which notice or lapse of time or
both would constitute a default) under, or give to others any rights of
termination or cancellation of, or require the consent of others under, any
lease in which the Company or any of its subsidiaries is a lessee, except for
breaches or defaults which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company and
its subsidiaries, taken as a whole.
Section 3.14 Employee Benefit Plans. The Company has
disclosed in Section 3.14 of the Company Disclosure Schedule a list of all
material employee welfare benefit plans (as defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
employee pension benefit plans (as defined in Section 3(2) of ERISA) and all
other bonus, stock option, stock purchase, benefit, profit sharing, savings,
retirement, disability, insurance, incentive, deferred compensation and other
similar fringe or employee benefit plans, programs or arrangements for the
benefit of, or relating to, any employee of, or independent contractor or
consultant to, the Company or any of its subsidiaries (together, the "Employee
Plans"). The Company has made available to Parent true and complete copies of
all Employee Plans, as in effect, together with all amendments thereto which
will become effective at a later date, as well as the latest Internal Revenue
Service determination letters obtained with respect to any Employee Plan
qualified under Section 401(a) or 501(a) of the Code. Also with respect to
each Employee Plan, true and complete copies of the (i) three most recent
annual actuarial valuation report, if any, (ii) three last filed Form 5500
together with Schedule A or B thereto or both, (iii) summary plan description
(as defined in ERISA), if any, and all modifications thereto communicated to
employees, and (iv) three most recent annual and periodic accounting of
<PAGE>21
related plan assets, if any, have been, or will be, made available to
Purchaser and are, or will be, correct in all material respects. All of the
foregoing are legal, valid, binding, in full force and effect and there are no
defaults thereunder, and no rights of the Company or any of the Company's
subsidiaries will be impaired by the execution delivery and performance of
this Agreement or the consummation of the transactions contemplated hereby.
Neither the Company nor any of its subsidiaries nor any of their respective
directors, officers, employees or agents, nor, to the best knowledge of the
Company and its subsidiaries, any "party in interest" or "disqualified
person", as such terms are defined in Section 3 of ERISA and Section 4975 of
the Code has, with respect to any Employee Plan, engaged in or been a party to
any "prohibited transaction", as such term is defined in Section 4975 of the
Code or Section 406 of ERISA, which could result in the imposition of either a
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code, in each case applicable to the Company, any of its
subsidiaries or any Employee Plan. All Employee Plans are in compliance in
all material respects with the currently applicable requirements prescribed by
all statutes, orders, or governmental rules or regulations currently in effect
with respect to such Employee Plans, including, but not limited to, ERISA and
the Code and, to the best knowledge of the Company, there are no pending or
threatened claims, lawsuits or arbitrations (other than routine claims for
benefits) which have been asserted or instituted against the Company, any of
its subsidiaries, any Employee Plan or the assets of any trust for any
Employee Plan. Each Employee Plan which is a group health plan (within the
meaning of Section 5000(b)(i) of the Code) complies with and has been
maintained and operated in accordance with each of the requirements of Section
162(k) of the Code as in effect for years beginning prior to 1989, Section
4980B of the Code for years beginning after December 31, 1988 and Part 6 of
Subtitle B of Title I of ERISA. Each Employee Plan intended to qualify under
Section 401(a) of the Code does so qualify, and the trusts created thereunder
are exempt from tax under the provisions of Section 501(a) of the Code. Each
Employee Plan that has been terminated by the Company or any of its
subsidiaries which was intended to qualify under Section 401(a) of the Code
has received a final determination of such qualification from the Internal
Revenue Service. All contributions or payments required to be made or accrued
before the Effective Time under the terms of any Employee Plan will have been
made or accrued by the Company or by its subsidiaries, as applicable, by the
Effective Time. No Employee Plan subject to Section 412 of the Code has
incurred any "accumulated funding deficiency" (as defined in ERISA), whether
or not waived. Neither the Company nor any of its subsidiaries has incurred or
reasonably expects to incur any liability to the Pension Benefit Guaranty
Corporation with respect to any Employee Plan. Neither the Company nor any of
its subsidiaries has incurred or reasonably expects to incur any withdrawal
liability with respect to any "multiemployer plan" (as defined in Section
3(37) of ERISA). There have been no changes in the operation or interpretation
of any of the Employee Plans since the most recent annual report or actual
report which would have any material effect on the cost of operating or
maintaining such Employee Plans.
Section 3.15 Labor Matters.
(a) Section 3.15(a) to the Company Disclosure
Schedule sets forth a list of all Employees of the Company and its
subsidiaries and their respective position, salaries and other compensation
owed, payable or to be paid to them.
(b) Except as set forth in Section 3.15(b) to the Company
Disclosure Schedule (i) neither the Company nor any of its subsidiaries is a
party to any outstanding employment agreements or contracts with directors,
officers, employees or consultants that are not terminable at will, or that
<PAGE>22
provide for the payment of any bonus or commission; (ii) neither the Company
nor any of its subsidiaries is a party to any agreement, policy or practice
that requires it to pay termination or severance pay to salaried, non-exempt
or hourly employees (other than as required by law); (iii) neither the Company
nor any of its subsidiaries is a party to any collective bargaining agreement
or other labor union contract applicable to persons employed by the Company or
its subsidiaries, nor does the Company or any of its subsidiaries know of any
activities or proceedings of any labor union to organize any such employees.
(c) Except as set forth in Section 3.15(c) to the Company
Disclosure Schedule: (i) the Company and all of its subsidiaries are in
compliance in all material respects with all applicable laws relating to
employment and employment practices, wages, hours, and terms and conditions of
employment; (ii) there is no unfair labor practice charge or complaint pending
before the National Labor Relations Board ("NLRB"); (iii) there is no labor
strike, material slowdown or material work stoppage or lockout actually
pending or, to the Company's knowledge, threatened against or affecting the
Company or any of its subsidiaries, and neither the Company nor any of its
subsidiaries has experienced any strike, material slowdown or material work
stoppage or lockout since June 30, 1995; (iv) there is no representation claim
or petition pending before the NLRB and no question concerning representation
exists relating to the employees of the Company or any of its subsidiaries;
(v) there are no charges with respect to or relating to the Company or any of
its subsidiaries pending before the Equal Employment Opportunity Commission or
any state, local or foreign agency responsible for the prevention of unlawful
employment practices; (vi) neither the Company nor any of its subsidiaries has
formal notice from any Federal, state, local or foreign agency responsible for
the enforcement of labor or employment laws of an intention to conduct an
investigation of the Company or any of its subsidiaries and no such
investigation is in progress.
Section 3.16 Proxy Statement. The Proxy Statement will
comply in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder except that no
representation or warranty is being made by the Company with respect to any
information supplied to the Company by Parent or Purchaser specifically for
inclusion in the Proxy Statement. The Proxy Statement will not, at the time
the Proxy Statement (or any amendment or supplement thereto) is filed with the
SEC or first sent to shareholders, at the time of the Company Shareholders'
Meeting or at the Effective Time, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 3.17 Brokers. No broker, finder or investment
banker (other than Robertson, Stephens & Company) is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by
and on behalf of the Company. The Company has heretofore furnished to
Purchaser true and complete information concerning the financial arrangements
between the Company and Robertson, Stephens & Company pursuant to which such
firm would be entitled to any payment as a result of the transactions
contemplated hereunder.
<PAGE>23
Section 3.18 Environmental Laws.
(a) The operations of the Company and its subsidiaries
comply in all material respects with all applicable federal, state and local
environmental laws, statutes and regulations.
(b) The operations of the Company and its subsidiaries
are not the subject of any judicial or administrative proceeding alleging the
violation of any federal, state or local environmental law, statute or
regulation.
(c) The operations of the Company and its subsidiaries
are not the subject of any federal or state investigation pursuant to which
the Company or any subsidiary has been ordered to respond to a release of any
hazardous or toxic waste or substance into the environment in violation of
law.
(d) Each of the Company and its subsidiaries has not
filed any notice under federal or state law indicating past or present
treatment, storage or disposal requiring a Part B permit or designation of
"interim status" as defined under 40 C.F.R. Parts 260-270 or any state
equivalent of a hazardous or toxic waste or substance as defined therein or
reporting a spill or release of a hazardous or toxic waste or substance into
the environment except in accordance with applicable law.
(e) Each of the Company and its subsidiaries has not
released, as defined in the Comprehensive Environmental Response Compensation
and Liability Act (42 U.S.C.ss.9601 et seq.), any hazardous substance as
defined therein into the environment, except where such release could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole;
(f) None of the operations of the Company or any
subsidiary involve the generation, transportation, treatment or disposal as
defined under 40 C.F.R. Parts 260-270 or any state equivalent of hazardous
waste as defined therein requiring a Part B permit or designation of "interim
status".
(g) No underground storage tanks are on the premises
of the Company or any subsidiary.
(h) No lien in favor of any governmental authority for
(i) any liability under federal or state environmental laws or regulations, or
(ii) damages arising from or costs incurred by such governmental authority in
response to a release of a hazardous or toxic waste or substance into the
environment has been filed or attached to the premises currently owned or
leased by the Company or any subsidiary.
(i) All material permits necessary for the continued
conduct of the business of the Company and its subsidiaries for the
transportation, transfer, recycling, storage, use, treatment, manufacture,
investigation or removal of any hazardous or toxic waste or substance have
<PAGE>24
been obtained by the Company or any subsidiary. All such permits are valid and
in full force and effect. Each of the Company and the its subsidiaries has
complied in all material respects with all covenants and conditions of any
permits and no circumstances exist which could cause any permit to be revoked,
modified or rendered non-renewable upon the payment of the permit fee or, to
the best of the Company's knowledge, which could impose upon the Company, any
of the Company's subsidiaries or the Surviving Corporation the obligation to
obtain any additional permits for such activities, absent a change in
operations.
(j) Neither the Company nor any subsidiary has exposed
any persons in a material manner to, nor received notice of any claim of
injury due to exposure of any person to, hazardous or toxic wastes or
substances manufactured, stored, used, distributed, disposed of, released or
controlled by the Company or any subsidiary.
(k) No hazardous or toxic wastes or substances are
present on any property which has been owned, leased or occupied by the
Company or any subsidiary, for the conduct of its business which could
reasonably be expected to result in a Material Adverse Effect on the Company
and its subsidiaries taken as a whole.
(l) No claim, complaint, or administrative proceeding
has been brought and is currently pending against the Company or any
subsidiary relating to any liability of the Company or any subsidiary existing
or threatened with respect to the release of hazardous or toxic wastes or
substances or as to the investigation or remediation of hazardous or toxic
wastes or substances.
As used herein "federal, state and local environmental laws,
statutes or regulations" means any and all applicable laws, rules,
regulations, orders, treaties, statutes and codes promulgated by any local,
state, federal or international governmental authority or agency which has
jurisdiction over the environment and any portion of the current operations of
the Company and its subsidiaries, and which prohibits, regulates or controls
any hazardous material or the transportation, storage, transfer, recycling,
use, treatment, manufacture, investigation, removal, remediation, release,
sale or distribution of hazardous materials including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. ss.9601 et seq.), the Hazardous Material Transportation Act (49 U.S.C.
ss.1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
ss.6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.1251
et seq.), the Clean Air Act (42 U.S.C. ss.7401 et seq.), the Toxic Substances
Control Act, as amended (15 U.S.C. ss.2601 et seq.), as these laws have been
amended or supplemented to date and any analogous state or local statutes and
the regulations promulgated to date pursuant thereto.
As used herein, "hazardous or toxic waste or substance"
means those substances which are regulated by or form the basis of liability
under any federal, state and local environmental laws, statutes or regulations
because they are radioactive, toxic or hazardous, including, without
limitation: (a) asbestos, (b) oil and petroleum products, (c) explosives, (d)
<PAGE>25
radioactive substances, pollutants or wastes, (e) urea formaldehyde-containing
building materials, (f) polychlorinated biphenyls, (g) radon gas, and (h)
ultra-hazardous or toxic substances, pollutants or wastes.
Section 3.19 Disclosure. The Company has provided or made
available to Parent copies of all documents and information requested by
Parent pursuant to Parent's diligence request lists dated (or provided
pursuant to cover letters dated) September 12, 13 and 20, 1996, to the extent
the items on such lists are applicable to the Company or any of its
subsidiaries. Except as described in Section 3.19 of the Company Disclosure
Schedule, the Company has made available to Parent true and correct copies of
the Company's Certificate of Incorporation, bylaws and all minutes of meetings
or actions by written consent of the Board of Directors (including without
limitation all committees thereof) and shareholders of the Company and its
subsidiaries, which minutes and actions by written consent reflect all actions
taken by the Board of Directors (including without limitation all committees
thereof ) and shareholders of the Company and its subsidiaries. To the extent
Section 3.19 of the Company Disclosure Schedules lists minutes not made
available to Parent, Section 3.19 of the Company Disclosure Schedule sets
forth all actions taken at such meetings and all material matters discussed at
such meetings.
Section 3.20 Insurance. Section 3.20 to the Company
Disclosure Schedule sets forth a true and complete list of all insurance
policies in force at the date hereof, with respect to the assets, properties
or operations of each of the Company and its subsidiaries, together with a
summary description of the premiums currently paid thereon, the hazards
insured against and the dollar amount of coverage (indicating deductibles, if
any). True and complete copies of all such insurance policies will be made
available to Purchaser by the Company. Such policies will not be terminated as
a result of the Merger and will be effective as policies of the Surviving
Corporation, subject to payment of applicable premiums. Such policies also are
in full force and effect with reputable insurers in such amounts and insure
against such losses and risks (including product liability) as are adequate to
protect the properties and businesses of each of the Company and its
subsidiaries. All such insurance is of like character and amount as is carried
by like businesses similarly situated.
Section 3.21 Rights Agreement. The Company has provided
Parent with a complete and correct copy of the Rights Agreement. The amendment
to the Rights Agreement attached hereto as Section 3.21 of the Company
Disclosure Schedule has been duly authorized by the Board of Directors of the
Company and has been duly executed by the Company, and, accordingly, the
execution of this Agreement, the announcement or making of the Offer, the
acquisition of Shares pursuant to the Merger and the other transactions
contemplated by this Agreement will not cause the Rights to become exercisable
or result in either Parent or Purchaser or any of their affiliates to become
an "Acquiring Person" (as defined in the Rights Agreement) or the occurrence
of a "Distribution Date", a "Section 11(a)(ii) Event", or a "Section 13 Event"
(as such terms are defined in the Rights Agreement).
Section 3.22 State Takeover Statutes. The Board of Directors
of the Company has approved the Merger and this Agreement (and the
transactions contemplated hereby), and such approval is sufficient to render
inapplicable to the Merger, this Agreement and the transactions contemplated
hereby Section 912 of the NYBCL. No other "business combination," "fair
<PAGE>26
price," "moratorium," "control share acquisition," or other anti-takeover
statute or similar statute or regulations, applies or purports to apply to the
Offer, the Merger, this Agreement or any of the transactions contemplated
hereby.
Section 3.23 Contracts and Commitments.
(a) Except as disclosed in Section 3.23 of the
Company Disclosure Schedule, neither the Company nor any of its subsidiaries
is a party or subject to:
(i) any plan, contract or arrangement which requires
aggregate payments by the Company or any of its subsidiaries in excess of
$50,000, written or oral, providing for bonuses, pensions, deferred
compensation, severance pay or benefits, retirement payments, profit-sharing,
or the like;
(ii) any joint marketing, joint development or joint
venture contract or arrangement or any other agreement which has involved or
is expected to involve a sharing of profits with other persons;
(iii) any existing OEM agreement, distribution
agreement, volume purchase agreement, or other similar agreement in which the
annual amount involved in 1995 exceeded or is expected to exceed in 1996
$50,000 in aggregate amount or pursuant to which the Company or any of its
subsidiaries has granted or received most favored customer provisions or
exclusive marketing rights related to any product, group of products or
territory;
(v) any lease for real or personal property in which
the amount of payments which the Company or any of its subsidiaries is
required to make on an annual basis exceeds $25,000;
(vi) any agreement, contract, mortgage, indenture,
lease, instrument, license, franchise, permit, concession, arrangement,
commitment or authorization which may be, by its terms, terminated or breached
by reason of the execution of this Agreement, the Merger, or the consummation
of the transactions contemplated hereby or thereby;
(vii) except for trade indebtedness incurred in the
ordinary course of business, any instrument evidencing or related in any way
to indebtedness in excess of $50,000 incurred in the acquisition of companies
or other entities or indebtedness in excess of $50,000 for borrowed money by
way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, indemnification or otherwise;
(viii) any license agreement, either as licensor or
licensee (excluding nonexclusive object code software licenses granted to
end-users in the ordinary course of business that permit use of software
products by a limited number of users without a right to modify, distribute or
sublicense the same ("End-User Licenses"));
(ix) any contract containing covenants purporting to
limit the Company's freedom or that of any of its subsidiaries to compete in
any line of business or in any geographic area or with any third party;
<PAGE>27
(x) any agreement, contract or commitment relating to
capital expenditures and involving future obligations in excess of $50,000; or
(xi) any other agreement, contract or commitment which
is material to the Company and its subsidiaries taken as a whole.
(b) Except as disclosed in Section 3.23 (b) of the Company
Disclosure Schedule, each agreement, contract, mortgage, indenture, plan,
lease, instrument, permit, concession, franchise, arrangement, license and
commitment listed in Section 3.23 of the Company Disclosure Schedule is valid
and binding on the Company or its subsidiaries, as applicable and assuming due
and valid authorization, execution and delivery by all counter parties, and is
in full force and effect, and neither the Company nor any of its subsidiaries,
nor to the knowledge of the Company, any other party thereto, has breached any
material provision of, or is in material default under the terms of, any such
agreement, contract, mortgage, indenture, plan, lease, instrument, permit,
concession, franchise, arrangement, license or commitment.
(c) There is no agreement, judgment, injunction, order or
decree binding upon the Company or any of its subsidiaries which has or could
reasonably be expected to have the effect of prohibiting or materially
impairing any material current business practice of the Company or its
subsidiaries, any acquisition of material property by the Company or its
subsidiaries or the conduct of business by the Company or its subsidiaries as
currently conducted or as proposed to be conducted by the Company or its
subsidiaries.
(d) Each agreement or arrangement under which the Company or
any of its subsidiaries will incur legal, accounting or financial advisor
expenses as a result of the transactions contemplated by this Agreement, and
the maximum liability of the Company or any such subsidiary under each such
agreement or arrangement, is described in Section 3.23 of the Company
Disclosure Schedule.
Section 3.24 Support Agreements.
(a) As part of Section 3.24 of the Company Disclosure
Schedule, the Company has provided to Parent a list, which is complete in all
materials respects, of all customers that are parties to agreements or other
arrangements pursuant to which the Company is obligated to provide support
services with respect to the Company Products (such agreements, as
supplemented below, are referred to collectively as the "License Agreements").
Except as set forth in Section 3.24 of the Company Disclosure Schedule, none
of the License Agreements contains terms that, individually or in the
aggregate with the other License Agreements, could reasonably be expected to
cause a Material Adverse Effect. The versions of the Company Products
currently supported by the Company or any of its subsidiaries are set forth in
Section 3.24 of the Company Disclosure Schedule.
(b) Except as set forth in Section 3.24(b) of
the Company Disclosure Schedule, neither the Company nor any of its
<PAGE>28
subsidiaries has granted any third party the right to furnish support or
maintenance services with respect to any Company Products to any other third
party.
(c) Except as set forth in Section 3.24(c) of the Company
Disclosure Schedule, no agreement for support or maintenance of the Company
Products by the Company obligates the Company or any of its subsidiaries, and
no agreement would obligate Parent after the Closing Date, to provide any
change in functionality or other alteration in the performance of the Company
Products or to provide new products or technology. Except as set forth in
Section 3.24(c) of the Company Disclosure Schedule, no agreement pursuant to
which the Company or any of its subsidiaries has licensed the use of the
Company Products to any third party obligates the Company or any of its
subsidiaries to provide any change in functionality or other alteration in the
performance of the Company Products or to provide new products or technology.
(d) Except as set forth in Section 3.24 of the
Company Disclosure Schedule, each of the Company and its subsidiaries has not
provided any warranties, express or implied, with respect to the Company
Products. Each of the Company and its subsidiaries is in compliance in all
material respects with all warranties described in Section 3.24 of the Company
Disclosure Schedule.
Section 3.25 Interests of Officers and Directors. To the
best of the Company's knowledge, no officer or director of the Company has
had, either directly or indirectly, a material interest in: (i) any person or
entity which purchases from or sells, licenses or furnishes to the Company or
any of its subsidiaries any goods, property, technology or intellectual or
other property rights or services; (ii) any contract or agreement to which the
Company or any of its subsidiaries is a party or by which it may be bound or
affected; or (iii) any property, real or personal, tangible or intangible,
used in or pertaining to its business or that of its subsidiaries, including
any interest in the Company Intellectual Property Rights.
Section 3.26 Restrictions on Business Activities. Except as
set forth in Section 3.26 of the Company Disclosure Schedule, there is no
material agreement, judgment, injunction, order or decree binding upon the
Company or any of its subsidiaries which has or could reasonably be expected to
have the effect of prohibiting or materially impairing any business practice of
the Company or any of its subsidiaries, any acquisition of property by the
Company or any of its subsidiaries or the conduct of business by the Company or
any of its subsidiaries.
Section 3.27 Questionable Payments. Neither the Company nor
any of its subsidiaries nor to its knowledge any director, officer, agent or
other employee of the Company or any of its subsidiaries has: (i) made any
payments or provided services or other favors in the United States of America or
in any foreign country in order to obtain preferential treatment or
consideration by any Governmental Entity with respect to any aspect of the
business of the Company or any of its subsidiaries; or (ii) made any political
<PAGE>29
contributions which would not be lawful under the laws of the United States or
the foreign country in which such payments were made. Neither the Company nor
any of its Subsidiaries nor to its knowledge any director, officer, agent or
other employee of the Company or any of its subsidiaries has been the subject of
any inquiry or investigation by any Governmental Entity in connection with
payments or benefits or other favors to or for the benefit of any governmental
or armed services official, agent, representative or employee with respect to
any aspect of the business of the Company or its subsidiaries or with respect to
any political contribution.
Section 3.28 Opinion of Financial Advisor. Robertson,
Stephens & Company (the "Financial Advisor") has rendered to the Board of
Directors of the Company a written opinion dated as of September 23, 1996, a
copy of which has been provided to Purchaser, to the effect that the
consideration to be received by the shareholders of the Company pursuant to
the Merger is fair to such shareholders from a financial point of view. Such
opinion was delivered orally to the Company's Board of Directors not later
than the time that consummation of the transactions contemplated hereby was
authorized, approved and adopted by the Company's Board of Directors, and was
delivered in writing to the Company's Board of Directors prior to the
execution of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser represent and warrant to the Company as
follows:
Section 4.1 Organization. Each of Parent and Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and has the requisite corporate power and
authority and any necessary governmental approvals to own, operate or lease the
properties that it purports to own, operate or lease and to carry on its
business as it is now being conducted, except for such failure which, when taken
together with all other such failures, could not reasonably be expected to have
a Material Adverse Effect (as defined below) on Parent and Purchaser. When used
in connection with Purchaser and Parent, the term "Material Adverse Effect"
means any material adverse effect on the business, operations, properties
(including tangible properties), condition (financial or otherwise), assets or
liabilities of Parent and Purchaser taken as a whole.
Section 4.2 Authorization; Validity of Agreement; Necessary
Action. Each of Parent and Purchaser has full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by Parent and
Purchaser of this Agreement, and the consummation of the Merger and of the
transactions contemplated hereby, have been duly authorized by the Boards of
Directors of Parent and Purchaser and by Parent as the sole shareholder of
Purchaser and no other corporate or shareholder action on the part of Parent and
Purchaser is necessary to authorize the execution and delivery by Parent and
Purchaser of this Agreement and the consummation of the transactions
<PAGE>30
contemplated hereby. This Agreement has been duly executed and delivered by
Parent and Purchaser, as the case may be, and, assuming due and valid
authorization, execution and delivery hereof by the Company, and is a valid and
binding obligation of each of Parent and Purchaser, as the case may be,
enforceable against each of them in accordance with its respective terms.
Section 4.3 Consents and Approvals; No Violations. Except
for the filings set forth on Section 4.3 of the Purchaser Disclosure Schedule
delivered to the Company on or before the date hereof (the "Purchaser Disclosure
Schedule") and the filings, permits, authorizations, consents and approvals as
may be required under, and other applicable requirements of, the HSR Act,
foreign laws governing competition or antitrust matters, state securities or
blue sky laws, and the NYBCL or the DGCL, neither the execution, delivery or
performance of this Agreement by Parent or Purchaser nor the consummation by
Parent or Purchaser of the transactions contemplated hereby nor compliance by
Parent or Purchaser with any of the provisions hereof will (i) conflict with or
result in any breach of any provision of the Certificate of Incorporation or the
bylaws of Parent or Purchaser, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity on the part of
Parent or Purchaser, (iii) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, amendment, cancellation or acceleration) under, any of
the terms, conditions or provisions of any agreement to which Parent or
Purchaser is a party, or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Parent or Purchaser, any of its
subsidiaries or any of their properties or assets, excluding from the foregoing
clauses (ii), (iii) and (iv) such violations, breaches, rights of termination,
amendment, cancellation or acceleration or defaults which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Parent and Purchaser, taken as a whole, and which will not
materially impair the ability of Parent or Purchaser to consummate the
transactions contemplated hereby.
Section 4.4 Financing Arrangements. At the Effective Time,
Parent will have and will make available to Purchaser all funds necessary to
satisfy all of Purchaser's and Parent's obligations under this Agreement and
in connection with the transactions contemplated hereby, including without
limitation, the obligations to purchase all outstanding Shares pursuant to the
Merger.
Section 4.5 No Prior Activities. Except for obligations
or liabilities incurred in connection with its incorporation or organization
or the negotiation and consummation of this Agreement and the transactions
contemplated hereby (including any financing), Purchaser has not incurred any
obligations or liabilities, and has not engaged in any business or activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person or entity. Purchaser is a wholly owned subsidiary of Parent.
Section 4.6 Brokers. No broker, finder or investment
banker is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of Parent or Purchaser.
Section 4.7 Offer Documents. None of the information
supplied in writing by Parent or Purchaser (the "Purchaser Information") for
inclusion in the Proxy Statement, or in any amendments thereof or supplements
<PAGE>31
thereto, will on the date the Proxy Statement is first mailed to shareholders
contain any statement which, at such time and in light of the circumstances
under which it will be made, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make
the statements therein not false or misleading. Parent and Purchaser will
timely file with the SEC a Schedule 13e-3 relating to the transactions
contemplated hereby, and such Schedule 13e-3 will comply in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder. Notwithstanding the foregoing, Parent and Purchaser
do not make any representation or warranty with respect to any information
that is supplied by the Company or its accountants, counsel or other
authorized representatives for use in the Proxy Statement or the Schedule
13e-3.
Section 4.8. Litigation. There are no claims, actions,
suits, proceedings or investigations pending or, to the best knowledge of
Parent or Purchaser, threatened against Parent or any of its subsidiaries, or
any properties or rights of Parent or any of its subsidiaries, before any
court, administrative, governmental or regulatory authority or body, domestic
or foreign, which would prevent or delay the performance of this Agreement.
ARTICLE V
COVENANTS
Section 5.1 Interim Operations of the Company. The Company
covenants and agrees that, except (i) as expressly contemplated by this
Agreement, (ii) as set forth in Section 5.1 of the Company Disclosure Schedule
or (iii) as agreed in writing by Purchaser, after the execution and delivery of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Effective Time:
(a) the business of the Company and its subsidiaries shall be
conducted only in the ordinary and usual course and, to the extent consistent
therewith, each of the Company and its subsidiaries shall use its reasonable
commercial efforts to preserve its business organization intact and maintain its
existing relations with customers, suppliers, employees, creditors and business
partners;
(b) the Company shall not, directly or indirectly, amend
its or any of its subsidiaries' certificate of incorporation or bylaws or
similar organizational documents;
(c) the Company shall not, and it shall not permit its
subsidiaries to: (i)(A) declare, set aside or pay any dividend or other
distribution payable in cash, stock or property with respect to the Company's
capital stock or that of its subsidiaries, or (B) redeem, purchase or otherwise
acquire directly or indirectly any of the Company's capital stock (or options,
<PAGE>32
warrants, calls, commitments or rights of any kind to acquire any shares of
capital stock) or that of its subsidiaries; (ii) issue, sell, pledge, dispose of
or encumber any additional shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock of any class of the Company or its
subsidiaries, other than Shares issued upon the exercise of Options outstanding
on the date hereof in accordance with the Option Plans as in effect on the date
hereof; or (iii) split, combine or reclassify the outstanding capital stock of
the Company or of its subsidiaries;
(d) the Company shall not, and it shall not permit its
subsidiaries to, acquire or agree to acquire, or dispose of or agree to
dispose of, any material assets, either by purchase, merger, consolidation,
sale of shares in any of its subsidiaries or otherwise;
(e) the Company shall not, and it shall not permit its
subsidiaries to, transfer, lease, license, sell, mortgage, pledge, dispose of,
or encumber any of the Company Intellectual Property or any material assets,
other than pursuant to grants of nonexclusive End-User Licenses in the ordinary
course of business consistent with past practice;
(f) neither the Company nor its subsidiaries shall: (i) grant
any increase in the compensation payable or to become payable by the Company or
any of its subsidiaries to any of its officers, directors or key employees,
other than regularly scheduled pay increases of not more than 10% per annum; or
(ii)(A) adopt any new, or (B) except as contemplated by Section 2.4, amend or
otherwise increase, or accelerate the payment or vesting of the amounts payable
or to become payable under any existing, bonus, incentive compensation, deferred
compensation, severance, profit sharing, stock option, stock purchase,
insurance, pension, retirement or other employee benefit plan, agreement or
arrangement; or (iii) enter into or modify or amend any employment or severance
agreement with or, except in accordance with the existing policies of the
Company set forth in Section 5.1 of the Company Disclosure Schedule or as
required by applicable law, grant any severance or termination pay to any
officer, director or employee of the Company or any of its subsidiaries; or (iv)
enter into any collective bargaining agreement;
(g) neither the Company nor any of its subsidiaries shall
materially modify, amend or, without Parent's prior written consent, which
consent shall not be withheld unreasonably, terminate any of its material
contracts or waive, release or assign any material rights or claims;
(h) neither the Company nor any of its subsidiaries shall: (i)
incur or assume any indebtedness in amounts not consistent with past practice;
(ii) materially modify any indebtedness or other liability; (iii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person, other than
immaterial amounts in the ordinary course of business consistent with past
practice and other than for any subsidiary; (iv) make any loans, advances or
capital contributions to, or investments in, any other person (other than to
wholly owned subsidiaries of the Company or customary advances to employees in
accordance with past practice); or (v) enter into any material commitment or
transaction;
(i) neither the Company nor any of its subsidiaries shall
change any of the accounting methods, practices or policies used by it unless
required by GAAP;
<PAGE>33
(j) the Company shall not, and it shall not permit its
subsidiaries to, make or agree to make any new capital expenditures in excess
of $100,000 in the aggregate;
(k) the Company shall not, and it shall not permit its
subsidiaries to, make any material tax election (unless required by law) or
settle or compromise any material income tax liability;
(l) the Company shall not, and it shall not permit its
subsidiaries to (i) waive the benefits of, or agree to modify in any material
manner, any confidentiality, standstill or similar agreement to which the
Company or any of its subsidiaries is a party, or (ii) pay, discharge or satisfy
any actions, suits, proceedings or claims, other than the payment, discharge or
satisfaction, in each case in complete satisfaction, and with a complete
release, of such matter with respect to all parties to such matter, of actions,
suits, proceedings or claims that do not result in or create, individually or in
the aggregate, a Material Adverse Effect; provided, however, that if the Company
determines to make any such payment, discharge or satisfaction, prior to
committing to make any such payment, discharge or satisfaction the Company shall
give Parent advance written notice of such determination specifying the amount
to be paid and any other terms and conditions thereof, and if Parent, within 15
days of such notice, shall instruct the Company not to make or commit to make
such payment, discharge or satisfaction, then the Company shall not make or
commit to make such payment, discharge or satisfaction; provided, further,
however, that, if Parent provides any such instructions, and the proposed
resolution of such matter does not or would not by itself result in a Material
Adverse Effect, and is in complete satisfaction, and includes a full release, of
such matter, with respect to all parties to such matter, without any payment or
other obligation of Parent or Purchaser, for purposes of Section 6.3(d), such
matter shall not be considered a threatened, or instituted and continuing,
action, suit or proceeding, and for purposes of Sections 6.3(a) and (e) any
adverse effect against the Company in any such matter shall not be considered or
aggregated in determining whether a Material Adverse Effect has occurred;
provided, further, however, that, any such proposed payment, discharge or
satisfaction shall be considered or aggregated in determining whether a Material
Adverse Effect has occurred;
(m) the Company shall not, and it shall not permit its
subsidiaries to, commence a lawsuit other than (i) for the routine collection of
bills or (ii) in such cases where the Company in good faith determines that the
failure to commence suit would result in a material impairment of a valuable
aspect of the Company's business, provided that the Company consults with Parent
prior to filing such suit;
(n) the Company shall not, and it shall not permit its
subsidiaries to, make any payment or incur any liability or obligation for the
purpose of obtaining any consent from any third party to the transactions
contemplated hereby, other than any payment, obligation or liability that does
not create, individually or in the aggregate, a Material Adverse Effect; and
<PAGE>34
(o) neither the Company nor any of its subsidiaries will
enter into an agreement, contract, commitment or arrangement to do any of the
foregoing, or to authorize, recommend, propose or announce an intention to do
any of the foregoing.
Section 5.2 Access; Confidentiality. The Company shall (and
shall cause each of its subsidiaries to) (a) afford to the officers, employees,
accountants, counsel, and other representatives of Parent, reasonable access to
and the right to inspect and observe, during normal business hours during the
period prior to the Effective Time, all its personnel, accountants,
representatives, properties, books, contracts, insurance policies, commitments
and records, offices, plants and other facilities, (b) make available promptly
to Parent (i) a copy of each report, schedule, registration statement and other
document filed or received by it during such period pursuant to the requirements
of federal securities laws and (ii) all other information concerning its
business, properties and personnel (including, without limitation, insurance
policies) as Parent may reasonably request. Parent will treat any such
information in accordance with the provisions of a letter agreement dated
September 13, 1996 between the Company and Parent (the "Confidentiality
Agreement"). No investigation conducted by Parent shall impact any
representation or warranty given by the Company to Parent hereunder.
Section 5.3 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto shall use all reasonable
commercial efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations, or to remove any injunctions or other impediments or delays, legal
or otherwise, to consummate and make effective the Merger and the other
transactions contemplated by this Agreement. The Company also agrees to timely
file all SEC Documents, including without limitation its Annual Report on Form
10-K for the fiscal year ended June 30, 1996, which Form 10-K shall include
consolidated financial statements that (a) are prepared from, and accord with,
the books and records of the Company and its subsidiaries, have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position and
the consolidated results of operations and cash flows (and changes in financial
position, if any) of the Company and its consolidated subsidiaries as of the
respective dates and for the respective periods thereof, and (b) are consistent
in all material respects with the draft consolidated financial statements (and
related notes thereto) set forth in Section 5.3 of the Company Disclosure
Schedule. The Company also will pay all premiums or other payments required to
be made with respect to the insurance policies set forth in Section 3.20 of the
Company Disclosure Schedule, and shall renew any such policy if any such policy
will otherwise terminate prior to the Effective Time.
Section 5.4 Consents and Approvals; HSR Act.
(a) Each of the Company, Parent and Purchaser will take all
reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to this Agreement and the transactions
contemplated hereby (which actions shall include, without limitation, furnishing
<PAGE>35
all information required under the HSR Act and in connection with approvals of
or filings with any other Governmental Entity) and will promptly cooperate with
and furnish information to eachother in connection with any such requirements
imposed upon any of them or any of their subsidiaries in connection with this
Agreement and the transactions contemplated hereby. Each of the Company, Parent
and Purchaser will, and will cause its subsidiaries to, take all reasonable
actions necessary to obtain (and will cooperate with each other in obtaining)
any consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Purchaser, the Company or any of their subsidiaries
in connection with the Merger or the taking of any action contemplated thereby
or by this Agreement. Each party shall promptly inform the other party of any
communication with, and any proposed understanding, undertaking, or agreement
with, any Governmental Entity regarding any such filings or any such
transaction. Neither party shall participate in any meeting with any
Governmental Entity in respect of any such filings, investigation, or other
inquiry without giving the other party notice of the meeting and, to the extent
permitted by such Governmental Entity, the opportunity to attend and
participate. Notwithstanding the foregoing, it is expressly understood and
agreed that Parent, Purchaser and the Company shall have no obligation to
litigate or contest any administrative or judicial action or proceeding or any
Order beyond January 31, 1997.
(b) Notwithstanding anything to the contrary in this
Agreement, including without limitation Section 5.4(a), as a result of filings
made with Governmental Entities pursuant to this Agreement, neither Parent nor
any of its subsidiaries, nor the Company, shall be required to divest any of
their respective businesses, product lines or assets, or agree to any other
limitation with respect to its business.
(c) In connection with any action, suit or proceeding of the
types described in Section 6.3(d), Parent, Purchaser and the Company agree to
consult with each other in formulating strategies, including without limitation
the retention of counsel in situations involving multiple defendants, and in
taking any other action material to the outcome of any such action, suit or
proceeding.
Section 5.5 No Solicitation.
(a) The Company and its officers, directors, employees,
representatives and agents shall immediately and as of the date hereof cease any
discussions or negotiations with any parties that may be ongoing with respect to
a Takeover Proposal (as hereinafter defined). The Company shall not authorize or
permit any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its subsidiaries to (i) solicit, initiate or encourage (including by
way of furnishing information), or take any other action to facilitate, any
inquiries or the making of any proposal which constitutes, or may reasonably be
expected to lead to, any Takeover Proposal or (ii) participate in any
discussions or negotiations regarding any Takeover Proposal; provided, however,
that, if at any time prior to the Effective Time, the Board of Directors of the
<PAGE>36
Company determines in good faith, based on the written opinion of its legal
counsel as to legal matters, that it is necessary to do so in order to comply
with its fiduciary duties to the Company's shareholders under applicable law,
the Company may, in response to an unsolicited Takeover Proposal, and subject to
compliance with Section 5.5(c), (x) furnish information with respect to the
Company to any person pursuant to a confidentiality agreement and (y)
participate in negotiations regarding such Takeover Proposal. Without limiting
the foregoing, it is understood that any violation of the restrictions set forth
in the preceding sentence by any director or executive officer of the Company or
any of its subsidiaries or any investment banker, financial advisor, attorney,
accountant or other representative of the Company or any of its subsidiaries
shall be deemed to be a breach of this Section 5.5(a) by the Company. For
purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal or
offer from any person relating to any direct or indirect acquisition or purchase
of a substantial amount of assets of the Company or any of its subsidiaries or
of over 20% of any class of equity securities of the Company or any of its
subsidiaries, any tender offer or exchange offer that if consummated would
result in any person beneficially owning 20% or more of any class of equity
securities of the Company or any of its subsidiaries, or any merger,
consolidation, business combination, sale of substantially all the assets,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of its subsidiaries, other than the transactions contemplated by
this Agreement.
(b) Except as set forth in this Section 5.5, neither the Board
of Directors of the Company nor any committee thereof shall (x) withdraw or
modify, or propose to withdraw or modify, in a manner adverse to Parent, the
approval or recommendation by such Board of Directors or such committee of this
Agreement or the Merger, (y) approve or recommend, or propose to approve or
recommend, any Takeover Proposal or (z) cause the Company to enter into any
agreement with respect to any Takeover Proposal. Notwithstanding the foregoing,
in the event that prior to the Effective Time the Board of Directors of the
Company determines in good faith, based on the written opinion of its legal
counsel as to legal matters, that it is necessary to do so in order to comply
with its fiduciary duties to the Company's shareholders under applicable law,
the Board of Directors of the Company may withdraw or modify its approval or
recommendation of this Agreement and the Merger, approve or recommend a Superior
Proposal (as defined below) or cause the Company to enter into an agreement with
respect to a Superior Proposal, but in each case only at a time that is after
the second business day following Parent's receipt of written notice (a "Notice
of Superior Proposal") advising Parent that the Board of Directors of the
Company has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal. For purposes of this Agreement, a "Superior Proposal" means
any bona fide Takeover Proposal to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than 50% of the Shares
then outstanding or all or substantially all the assets of the Company and
otherwise on terms which the Board of Directors of the Company determines in its
good faith judgment (based on the advice of a financial advisor of nationally
recognized reputation) to be more favorable to the Company's shareholders than
the Merger.
<PAGE>37
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 5.5, the Company shall immediately advise
Parent orally and in writing of any request for information or of any Takeover
Proposal, or any inquiry with respect to or which could lead to any Takeover
Proposal, the material terms and conditions of such request, Takeover Proposal
or inquiry and the identity of the person making such request, Takeover Proposal
or inquiry.
Section 5.6 Publicity. Each party's initial press
release with respect to the execution of this Agreement has been previously
approved by the other parties. Following such initial press releases, so long
as this Agreement is in effect, neither the Company, Parent nor any of their
respective affiliates shall issue or cause the publication of any press
release or other public announcement with respect to the Merger, this
Agreement or the other transactions between the parties contemplated hereby
without the prior consultation of the other party, except as may be required
by law or by any listing agreement with a national securities exchange or
trading market.
Section 5.7 Notification of Certain Matters. The Company
shall give prompt notice to Parent and Purchaser, and Parent and Purchaser
shall give prompt notice to the Company, of (i) the occurrence or
non-occurrence of any event the occurrence or non-occurrence of which would
cause any representation or warranty contained in this Agreement to be untrue
or inaccurate in any material respect at or prior to the Effective Time and
(ii) any material failure of the Company, Parent or Purchaser, as the case may
be, to comply with or satisfy 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 5.7 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice. The Company also shall give prompt notice to Parent, and Parent or
Purchaser shall give prompt notice to the Company, of:
(i) any notice or other communication from any person
alleging that the consent of such person is or may be required in connection
with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any
Governmental Entity in connection with the transactions contemplated by this
Agreement;
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge, threatened against,
relating to or involving or otherwise affecting it or any of its subsidiaries
or which relate to the consummation of the transactions contemplated by this
Agreement; and
(iv) any occurrence of any event having, or which
could reasonably be expected to have, a Material Adverse Effect on the Company
and its subsidiaries taken as a whole.
Section 5.8 Rights Agreement. Except as otherwise provided
in Section 3.23, the Company shall not redeem the Rights or amend or terminate
the Rights Agreement prior to the earlier to occur of the Effective Time or
the termination of this Agreement, unless required to do so by a court of
competent jurisdiction.
<PAGE>38
Section 5.9 Fair Price Structure. If any "business
combination," "fair price," "control share acquisition" or "moratorium"
statute or other similar statute or regulation or any state "blue sky" or
securities law statute shall become applicable to the transactions
contemplated hereby, the Company and the Board of Directors of the Company
shall, to the extent consistent with applicable law and their fiduciary
duties, grant such approvals and take such actions as are reasonably necessary
so that the transactions contemplated hereby thereby may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of such statute or regulations on the transactions
contemplated hereby.
Section 5.10 Indemnification. Notwithstanding Section 8.7
hereof, Parent agrees that all rights to indemnification existing in favor of
directors, officers or employees of the Company as provided in the Company's
Certificate of Incorporation, By-Laws or the indemnification agreements listed
in Section 5.10 of the Company Disclosure Schedule, with respect to matters
occurring through the Effective Time, shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time. Effective upon the Effective Time, to the fullest extent
permitted by law Parent hereby guarantees the Company's and the Surviving
Corporation's performance of the Company's and the Surviving Corporation's
obligations described in the prior sentence for a period of six years after
the Effective Time. If Parent, the Surviving Corporation or any of either of
its successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provision shall be made so that the successors and assigns of Parent and the
Surviving Corporation assume the obligations set forth in this Section 5.10.
Section 5.11 Benefit Plans and Other Employee
Arrangements. For a period of at least one year after the Effective Time,
Parent shall either (i) maintain or cause the Company (or its successors or
assigns) to maintain the Company's Employee Plans at benefit levels not
materially less favorable than those in effect on the date of this Agreement
or (ii) provide or cause the Company (or its successors or assigns) to provide
benefits to employees of the Company and its subsidiaries that are not
materially less favorable to such employees than those provided under Parent
benefit plans (as they may be amended from time to time) to similarly situated
employees of Parent. With respect to any Parent benefit plan which is an
"employee benefit plan" as defined in Section 3(3) of ERISA, solely for
purposes of determining eligibility to participate, vesting, and entitlement
to benefits but not for purposes of accrual of pension benefits, service with
the Company or any Company subsidiary shall be treated as service with Parent,
provided, however, that such service shall not be recognized to the extent
that such recognition would result in a duplication of benefits (or is not
otherwise recognized for such purposes or permitted under the Parent Benefit
<PAGE>39
Plans). Nothing in this paragraph provides any employee with a right to
continuing employment or with any right to participate in any Parent benefit
plan under which participation by an employee is within the discretion of
Parent, such as any Parent benefit plan which provides for the grant of
options to purchase capital stock.
Section 5.12 Warrant. The Company agrees to use its
best efforts to cause the warrant referenced in Section 3.2(a) of the Company
Disclosure Schedule to be exercised or terminated prior to the Effective Time.
Parent agrees to provide reasonable assistance to the Company in connection
with the Company's obligations under this Section 5.12.
ARTICLE VI
CONDITIONS
Section 6.1 Conditions to Each Party's Obligation to Effect
the Merger. The respective obligation of each party to effect the Merger shall
be subject to the satisfaction on or prior to the Effective Time of each of the
following conditions, any and all of which may be waived in whole or in part by
the Company, Parent or Purchaser, as the case may be, to the extent permitted by
applicable law:
(a) Shareholder Approval. This Agreement shall have
been approved and adopted by the requisite vote of the shareholders of the
Company, if required by applicable law or the Certificate of Incorporation of
the Company, in order to consummate the Merger;
(b) Statutes. No statute, rule, order, decree or
regulation shall have been enacted or promulgated by any Governmental Entity
which prohibits the consummation of the Merger;
(c) Injunctions. There shall be no order or injunction
of a court or other governmental authority of competent jurisdiction in effect
precluding, restraining, enjoining or prohibiting consummation of the Merger;
and
(d) HSR Act. Any applicable waiting period under the
HSR Act relating to the Merger shall have expired or been terminated.
Section 6.2 Additional Conditions to Obligations of
the Company. The obligation of the Company to effect the Merger is also
subject to the fulfillment of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Parent and Purchaser contained in this Agreement shall be true
and correct on the date hereof and shall also be true and correct on and as of
the Effective Time, with the same force and effect as if made on and as of the
<PAGE>40
Effective Time, unless the failure of such representations and warranties to
be true and correct could not reasonably be expected to cause, individually or
in the aggregate, a Material Adverse Effect on Parent; and
(b) Agreements, Conditions and Covenants. Parent and
Purchaser shall have performed or complied in all material respects with all
agreements, conditions and covenants required by this Agreement to be
performed or complied with by them on or before the Effective Time.
Section 6.3 Additional Conditions to Obligations of
Parent and Purchaser. The obligations of Parent and Purchaser to effect the
Merger are also subject to the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and
correct on the date hereof and shall also be true and correct on and as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time, unless the failure of such representations and warranties to
be true and correct as of such dates could not reasonably be expected to
cause, individually or in the aggregate, a Material Adverse Effect (as applied
to such dates) on the Company and its subsidiaries, taken as a whole;
(b) Agreements, Conditions and Covenants. The Company shall
have performed or complied in all material respects with all agreements,
conditions and covenants required by this Agreement to be performed or
complied with by it on or before the Effective Time;
(c) Dissenting Shares. The aggregate number of Shares held
by Dissenting Shareholders shall not be equal to or exceed ten percent of the
outstanding Shares immediately prior to the Effective Time;
(d) No Litigation. After the date hereof there shall not be
threatened, or instituted and continuing, any action, suit or proceeding
against the Company, Parent, Purchaser or any Indemnified Person (as defined
below), by any Governmental Entity or any other person or persons, (i)
directly or indirectly relating to the Merger or any other transactions
contemplated by this Agreement; (ii) who is or was a shareholder or
shareholders of the Company, whether on behalf of such shareholder or
shareholders, or in a derivative action on behalf of the Company; or (iii)
which individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole;
"Indemnified Person" shall mean any director, officer, employee, consultant or
other person that the Company is obligated to indemnify or hold harmless,
whether under any law, rule, regulation, the Company's certificate of
incorporation or bylaws, any agreement or otherwise;
(e) No Adverse Change. No event or events shall have
occurred which have caused or could reasonably be expected to cause a Material
Adverse Effect on the Company and its subsidiaries, taken as a whole; and
(f) Opinion. Parent shall have received an opinion dated as
of the Closing Date from Willkie Farr & Gallagher, counsel to the Company,
substantially in the form attached hereto as Exhibit 6.3(f); provided,
<PAGE>41
however, that if such counsel is unable to provide the opinion set forth in
paragraph 6(ii) of such opinion then, in lieu of the delivery of such opinion
in paragraph 6(ii), the written consent of the third parties to the agreements
referred to in paragraph 6(ii) of such opinion to the assignment of such
agreements to the Surviving Corporation and the continuation of such
agreements after the Merger without modification, in such form as is
reasonably acceptable to Parent, shall have been obtained.
ARTICLE VII
TERMINATION AND AMENDMENT
Section 7.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
approval of the terms of this Agreement by the shareholders of the Company:
(a) by mutual written consent of the Boards of Directors of
Parent and the Company;
(b) by either Parent or the Company if any Governmental
Entity shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the acceptance for
payment of, or payment for, Shares pursuant to the Merger and such order,
decree or ruling or other action shall have become final and nonappealable;
(c) by either Parent or the Company, if the Merger shall not
have been consummated by January 31, 1997; provided, however, that such date
shall be February 28, 1997 if the sole condition in Article VI that has not
been met or waived is Section 6.3 (d); provided, further, however, that the
right to terminate this Agreement pursuant to this Section 7.1(c) shall not be
available to any party whose failure (or the failure of the affiliates of
which) to perform any of its obligations under this Agreement has been the
cause of, or resulted in, the failure of the Merger to occur on or before such
date;
(d) by Parent or Purchaser, in the event of a breach by the
Company of any representation, warranty, covenant or other agreement contained
in this Agreement which cannot be or has not been cured within 15 days after
the giving of written notice to the Company and which, individually or in the
aggregate, has had or could reasonably be expected to have, a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole;
(e) by Parent or Purchaser, if the Company's Board of
Directors shall have withdrawn, modified or amended in any respect its
recommendation of the Merger Agreement or the Merger or shall have approved or
recommended a Takeover Proposal, or shall have entered into an agreement with
a third party with respect to any Takeover Proposal, or the Board of Directors
of the Company or any committee thereof shall have resolved to take any of the
foregoing actions;
<PAGE>42
(f) by the Company, in connection with entering into an
agreement for a Takeover Proposal in accordance with Section 5.5, provided it
has complied with all provisions thereof, including the notice provisions
therein, and that it makes simultaneous payment of the Expenses and the
Termination Fee; or
(g) by the Company, if Purchaser or Parent shall have
breached in any material respect any of their respective representations,
warranties, covenants or other agreements contained in this Agreement, which
failure to perform is incapable of being cured or has not been cured within 15
days after the giving of written notice to Parent or Purchaser, as applicable.
Section 7.2 Effect of Termination. In the event of a
termination of this Agreement by either the Company or Parent as provided in
Section 7.1, this Agreement shall forthwith become void and there shall be no
liability or obligation on the part of Parent, Purchaser or the Company or
their respective officers or directors, except with respect to Sections
1.8(e), 3.17, 4.6, 5.2, 8.1, this Section 7.2 and Article VIII; provided,
however, that nothing herein ( including without limitation the provisions of
Section 8.1) shall relieve any party for liability for any breach hereof.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Fees and Expenses.
(a) Except as provided below in this Section 8.1, all fees and
expenses incurred in connection with the Merger, this Agreement and the
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.
(b) The Company shall pay, or cause to be paid, in same day
funds to Parent the sum of (x) the lesser of the amount of Parent's Expenses (as
hereinafter defined) or $1,000,000, and (y) $3,000,000 (the "Termination Fee")
upon demand if (i) Parent or Purchaser terminates this Agreement under Section
7.1(e); (ii) the Company terminates this Agreement pursuant to Section 7.1(f);
or (iii) prior to any termination of this Agreement (other than pursuant to
Section 7.1 (a), (b) or (g) or by the Company pursuant to Section 7.1 (c)), the
Company breaches the provisions of Section 5.5 of this Agreement or a Takeover
Proposal shall have been made and within 12 months of such termination a
transaction constituting a Takeover Proposal is consummated or the Company
enters into an agreement with respect to, approves or recommends or takes any
action to facilitate such Takeover Proposal. "Expenses" shall mean documented
out-of-pocket fees and expenses incurred or paid by or on behalf of Parent or
Purchaser in connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement, including all fees and expenses of
counsel, commercial banks, investment banking firms, accountants, experts and
consultants to Parent.
<PAGE>43
Section 8.2 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects, whether before or after any vote of the shareholders of the Company
contemplated hereby, by written agreement of the parties hereto, at any time
prior to the Closing Date with respect to any of the terms contained herein;
provided, however, that after the approval of this Agreement by the shareholders
of the Company, no such amendment, modification or supplement shall reduce the
amount or change the form of the Merger Consideration.
Section 8.3 Nonsurvival of Representations and
Warranties. None of the representations and warranties in this Agreement or
in any schedule, instrument or other document delivered pursuant to this
Agreement shall survive the Effective Time, except for remedies that may be
available for fraud.
Section 8.4 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed given upon
receipt, and shall be given to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
(a) if to Parent or Purchaser, to:
Oracle Corporation
500 Oracle Parkway
Redwood City, CA 94065
Telephone No.: (415) 506-5100
Telecopy No.: (415) 506-7114
Attention: Thomas Theodores, Vice President, Legal and
Assistant Secretary
with copies to:
Venture Law Group
A Professional Corporation
2800 Sand Hill Road
Menlo Park, CA 94025
Attention: Donald M. Keller, Jr., Esq.
Telephone No.: (415) 854-4488
Telecopy No.: (415) 854-1121
<PAGE>44
(b) if to the Company, to:
Datalogix International, Inc.
100 Summit Lake Drive
Valhalla, NY 10595
Attention: Raymond Sozzi
Telephone No.: (914) 773-8615
Telecopy No.: (914) 747-4553
with copies to:
Willkie Farr & Gallagher
One Citicorp Center
153 53rd Street
New York, NY 10022-4677
Attention: Christopher E. Manno, Esq.
Telephone No.: (212) 821-8288
Telecopy No.: (212) 821-8111
Section 8.5 Interpretation. When a reference is made in
this Agreement to Sections, such reference hall be to a Section of this
Agreement unless otherwise indicated. Whenever the words "include", "includes"
or "including" are used in this Agreement they shall be deemed to be followed
by the words "without limitation". As used in this Agreement, the term
"affiliate(s)" shall have the meaning set forth in Rule 12b-2 of the Exchange
Act. As used in this Agreement, a "subsidiary" of any entity shall mean all
corporations or other entities in which such entity owns a majority of the
issued and outstanding capital stock or equity or similar interests.
Section 8.6 Counterparts. This Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement and shall become effective when two or more counterparts
have been signed by each of the parties and delivered to the other parties.
Section 8.7 Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement and the Confidentiality Agreement (including
the documents and the instruments referred to herein and therein): (a)
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, and (b) other than the provisions of Sections 5.10 and
5.11 hereof, nothing expressed or implied in this Agreement is intended or will
be construed to confer upon or give to any person, firm or corporation other
than the parties hereto any rights or remedies under or by reason of this
Agreement or any transaction contemplated hereby.
Section 8.8 Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
<PAGE>45
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 8.9 Governing Law. This Agreement and the legal
relations between the parties hereto will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
choice of law principles thereof; provided, however, that the law governing the
fiduciary duties of each party hereto and their respective boards of directors
and the law governing any other matters of internal corporate governance of any
of Parent, Purchaser or the Company shall be the law of their respective
jurisdictions of incorporation.
Section 8.10 Assignment. Neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties, except that Purchaser may assign, in its
sole discretion, any or all of its rights, interests and obligations hereunder
to Parent or to any direct or indirect wholly owned subsidiary of Parent.
Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their respective successors
and assigns.
<PAGE>46
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be signed by their respective officers thereunto duly
authorized as of the date first written above.
ORACLE CORPORATION
By: /s/ David J. Roux
Name: David J. Roux
Title: Executive Vice President
DELPHI ACQUISITION CORPORATION
By: /s/ David J. Roux
Name: David J. Roux
Title: Executive Vice President
DATALOGIX INTERNATIONAL, INC.
By: /s/ Raymond V. Sozzi
Name: Raymond V. Sozzi
Title: President and Chief
Operating Officer
<PAGE>1
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT dated as of September 24, 1996 (this
"Amendment") is made between DATALOGIX INTERNATIONAL INC., a New York
corporation (the "Company"), and THE FIRST NATIONAL BANK OF BOSTON, a national
banking association (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent are parties to a Rights Agreement dated
as of August 27, 1996 (the "Rights Agreement").
B. Oracle Corporation, a Delaware corporation ("Parent"), Delphi
Acquisition Corporation. a Delaware corporation ("MergerSub"), and the Company
are entering into an Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which MergerSub will merge with and into the Company (the "Merger").
The Board of Directors of the Company has authorized and approved the Merger
Agreement and the Merger.
C. Pursuant to Section 26 of the Rights Agreement, the Board of Directors
of the Company has determined that an amendment to the Rights Agreement as set
forth herein is necessary and desirable to reflect the foregoing and the Company
and the Rights Agent desire to evidence such amendment in writing.
IN WITNESS WHEREOF, the parties hereto agree as follows:
1. Amendment of Section 1(a). Section 1(a) of the Rights Agreement is
amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary,
neither Parent nor MergerSub shall be deemed to be an Acquiring Person
solely by virtue of the announcement or occurrence of (i) the execution
of the Merger Agreement, (ii) the Merger (as such term is defined in
the Merger Agreement), (iii) the issuance to Purchaser of the Company's
Common Stock upon consumation of the Merger, or (iv) the consummation
of any and all other transactions contemplated by the Merger
Agreement."
2. Amendment of Section 1(n). Section 1(n) of the Rights Agreement is
amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary, a
Distribution Date shall not be deemed to have occurred solely as the
result of the announcement or occurrence of (i) the execution of the
Merger Agreement, (ii) the Merger, (iii) the issuance to Purchaser of
the Company's Common Stock upon consumation of the Merger, or (iv) the
consummation of any and all other transactions contemplated by the
Merger Agreement."
<PAGE>2
3. Amendment of Section 1(t). Section 1(t) of the Rights Agreement is
amended and restated to read as follows:
"(t)(i) `Final Expiration Date' shall have the meaning set forth in Section
7(a) of this Agreement.
(t)(ii) `Merger Agreement' shall mean the Agreement and Plan of Merger
dated as of September 24, 1996 among Parent, MergerSub and the Company, as
amended from time to time."
(t)(iii) `MergerSub' shall mean Delphi Acquisition Corporation., a Delaware
corporation, which is a wholly owned subsidiary of Parent, or any other
subsidiary of Parent that is substituted for MergerSub pursuant to the Merger
Agreement."
4 Amendment of Section 1(u). Section 1(u) of the Rights Agreement is
amended and restated to read as follows:
"(u)(i) `Original Rights' shall have the meaning set forth in Section
(1)(f)(i) of this Agreement.
(u)(ii) `Parent' shall mean Oracle Corporation, a Delaware corporation."
5. Amendment of Section 1(gg). Section 1(gg) of the Rights Agreement is
amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary, the
announcement or occurrence of (i) the execution of the Merger
Agreement, (ii) the Merger, (iii) the issuance to Purchaser of the
Company's Common Stock upon consumation of the Merger, or (iv) the
consummation of any and all other transactions contemplated by the
Merger Agreement, shall not be deemed to be a Section 11(a)(ii) Event
and shall not cause the Rights to be adjusted or exercisable under this
Agreement."
6. Amendment of Section 1(ii). Section 1(ii) of the Rights Agreement is
amended to add the following sentence at the end thereof:
"Notwithstanding anything in this Rights Agreement to the contrary, the
announcement or occurrence of (i) the execution of the Merger
Agreement, (ii) the Merger, (iii) the issuance to Purchaser of the
Company's Common Stock upon consumation of the Merger, or (iv) the
consummation of any and all other transactions contemplated by the
Merger Agreement, shall not be deemed to be a Section 13 Event, and
shall not cause the Rights to be adjusted or exercisable under this
Agreement."
<PAGE>3
7. Effectiveness. This Amendment shall be deemed effective as of September
24, 1995 as if executed on such date. Except as amended hereby, the Rights
Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
8. Miscellaneous. This Amendment shall be deemed to be a contract made
under the laws of the State of New York and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state. This Amendment
may be executed in any number of counterparts, each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. If any provision, covenant
or restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, illegal or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
[REMAINDER OF PAGE LEFT BLANK]
<PAGE>4
IN WITNESS WHEREOF the undersigned have executed this Agreement as of the
date first above written.
Attest: DATALOGIX INTERNATIONAL INC.
/s/ Joseph Grispo By /s/ Raymond V. Sozzi
Name: Joseph Grispo Name: Raymond V. Sozzi
Title: General Manager Title: President and
Chief Operating
Officer
Attest: THE FIRST NATIONAL BANK OF BOSTON
/s/ Paul L. Eori By /s/ Colleen Shea
Name: Paul L. Eori Name: Colleen Shea
Title: Senior Account Manager Title: Administration
Manager
<PAGE>1
DATALOGIX INTERNATIONAL INC.
100 Summit Lake Drive, Valhalla, NY 10595
Tel: 914-773-8000 Fax: 914-773-8001
1-800-4-PROCESS
NEWS RELEASE
Contact: John Cingari Kevin McGuirk
Datalogix Corp Oracle Corporation
914-773-8569 415/506-4176
Catherine Buan
Oracle Investor Relations
415/506-4184
DATALOGIX AGREES TO ACQUISITION BY ORACLE,
EXPANDS ORACLE'S APPLICATION SOLUTIONS
FOR PROCESS MANUFACTURING INDUSTRIES
Cash Merger Valued at $94 Million
Valhalla, NY, September 24, 1996. Datalogix and Oracle Corporation today
announced the signing of a definitive agreement in which Oracle will acquire
Datalogix, a leading provider of client/server software solutions for process
manufacturing. The acquisition will be structured as a cash merger valued at
$94 million. Oracle currently owns 13.4% of the outstanding shares of
Datalogix and will purchase all of the remaining shares for $81 million, or $8
per share. Oracle will account for the deal as a purchase transaction. The
transaction will close following receipt of the necessary approvals from
Datalogix' shareholders and regulatory authorities. Oracle intends to maintain
a development and operations facility in the Valhalla, New York area, to
facilitate a smooth transition for Datalogix employees.
<PAGE>2
Datalogix' process manufacturing applications include the Global Enterprise
Manufacturing Management System (GEMMS) and Computer Integrated Manufacturing
for Process (CIMPRO) product lines. Oracle has distributed and supported the
GEMMS process manufacturing software as Oracle GEMMS since September 1994.
Today, Oracle GEMMS is integrated with Oracle Applications, the second largest
selling suite of client/server business applications for the enterprise, with
over 30 modules ranging from financials, human resources, manufacturing,
distribution and sales force automation.
"Datalogix has a solid reputation as an industry-leading vendor for process
manufacturing solutions. This acquisition helps us extend the best-in-class
manufacturing and supply chain management functionality we offer our
customers. The expertise we're acquiring will also help us provide specific
vertical industry solutions for key industries such as consumer packaged
goods", said Raymond J. Lane, Oracle's president and COO.
"We are delighted to become an integral part of the Oracle Applications
solution," said Raymond V. Sozzi, Datalogix' president and COO. "Our close
relationship with Oracle over the past two years has allowed us to offer a
world class level of products, service and support to process manufacturing
customers worldwide. We believe this is a great opportunity for our customers
and employees."
<PAGE>3
Datalogix is a leading focused provider of open, client/server software
solutions for managing the manufacturing, logistics, and financial operations
of process companies worldwide. Datalogix' products are used by over 1,000
installations and 18,000 users that manufacture consumer packaged goods (food,
beverages, health and beauty aids) and industrial products (chemical,
pharmaceutical, and petroleum). Datalogix' solutions are installed in more
than 30 countries at process manufacturers such as B.F. Goodrich, Fresh Mark,
Heinz Pet Products, Hyclone Laboratories, Land O'Lakes, Platres Lafarge and
Sherwin Williams.
Additional information on Datalogix can be found on the Datalogix World Wide
Web page at www.datalogix.com.
###
Trademarks
Datalogix, GEMMS and CIMPRO are registered trademarks of
Datalogix International Inc.
Oracle and Oracle Financials are registered trademarks of
Oracle Corporation.
