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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported) April 28, 1996
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The Continuum Company, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-10151 74-1609363
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(Commission File Number) (IRS Employer Identification No.)
9500 Arboretum Boulevard, Austin, Texas 78759-6399
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code 512/345-5700
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N/A
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(Former name or former address, if changed since last report.)
Exhibit Index appears on Page 3.
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Item 5. Other Events.
On April 28, 1996, Computer Sciences Corporation, a Nevada
corporation, its wholly owned subsidiary, Continental Acquisition, Inc., a
Delaware corporation, and The Continuum Company, Inc., a Delaware corporation,
executed an Agreement and Plan of Merger (the "Merger Agreement") providing for
the merger of Continental Acquisition, Inc. with and into The Continuum
Company, Inc. (the "Merger"). Pursuant to the Merger, 0.79 of a share of Common
Stock of Computer Sciences Corporation will be exchanged for each outstanding
share of Common Stock of The Continuum Company, Inc. The Merger will require
approval of the shareholders of both companies and is subject to specific
regulatory approvals.
The foregoing description is qualified in its entirety by reference to
the Merger Agreement (with exhibits attached thereto), a conformed copy of
which constitutes Exhibit 2.1 to this report.
Item 7. Financial Statements and Exhibits.
(c) The exhibits listed below are filed as a part of this report.
2.1 -- Agreement and Plan of Merger dated as of April 28, 1996 among
Computer Sciences Corporation, The Continuum Company, Inc. and
Continental Acquisition, Inc.
99.1 -- Joint Press Release, dated April 29, 1996, by Computer
Sciences Corporation and The Continuum Company, Inc.
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 thereunto duly authorized.
THE CONTINUUM COMPANY, INC.
Date: May 1, 1996 By: /s/ JOHN L. WESTERMANN III
-----------------------------------
John L. Westermann III
Vice President and Chief Financial
Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
2.1 Agreement and Plan of Merger dated as of April 28, 1996 among
Computer Sciences Corporation, The Continuum Company, Inc. and
Continental Acquisition, Inc.
99.1 Joint Press Release, dated April 29, 1996, by Computer Sciences
Corporation and The Continuum Company, Inc.
</TABLE>
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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
DATED AS OF APRIL 28, 1996
AMONG
COMPUTER SCIENCES CORPORATION,
THE CONTINUUM COMPANY, INC.
AND
CONTINENTAL ACQUISITION, INC.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE 1 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3. Closing of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.4. Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.5. Certificate of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.6. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.7. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.8. Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.9. No Appraisal Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.10. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.11. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1. Organization and Qualification; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Capitalization of the Company and its Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.3. Authority Relative to this Agreement; Recommendation . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.4. SEC Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.5. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.6. Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.7. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.8. No Undisclosed Liabilities; Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.9. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
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<TABLE>
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SECTION 2.10. Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.11. Employee Benefit Plans; Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.12. Environmental Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.14. Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.15. Intellectual Property; Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.16. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.17. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.18. Tax Treatment; Pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.19. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.20. Certain Business Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.21. Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.22. Opinion of Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.23. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.24. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.25. No Existing Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 2.26. Section 203 of the DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION . . . . . . . . . . . . . . . . . . . 18
SECTION 3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.2. Capitalization of Parent and its Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.3. Authority Relative to this Agreement; Recommendation . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.4. SEC Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.5. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.6. Consents and Approvals; No Violations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
</TABLE>
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<TABLE>
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SECTION 3.7. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.8. No Undisclosed Liabilities; Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.9. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.10. Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.11. Employee Benefit Plans; Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.12. Environmental Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.13. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.14. Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.15. Intellectual Property; Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.16. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.17. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.18. Tax Treatment; Pooling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.19. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.20. Certain Business Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.21. Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.22. Opinion of Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.23. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.24. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.25. No Prior Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 4 COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.1. Conduct of Business of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 4.2. Conduct of Business of Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 4.3. Preparation of S-4 and the Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.4. Other Potential Acquirers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.5. Comfort Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 4.6. Meetings of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.7. Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.8. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.9. Additional Agreements; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.10. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.11. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.12. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.13. Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.14. Affiliates; Pooling; Tax Free Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4.15. Stockholders Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 5 CONDITIONS TO CONSUMMATION OF THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.1. Conditions to Each Party's Obligations to Effect the Merger . . . . . . . . . . . . . . . . . 34
SECTION 5.2. Conditions to the Obligations of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 5.3. Conditions to the Obligations of Parent and Acquisition . . . . . . . . . . . . . . . . . . . 36
ARTICLE 6 TERMINATION; AMENDMENT; WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.2. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.3. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 6.4. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 6.5. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 7 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.1. Nonsurvival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.2. Entire Agreement; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.3. Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
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<TABLE>
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SECTION 7.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.5. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.6. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.7. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.8. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.9. Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.10. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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TABLE OF DEFINED TERMS
<TABLE>
<CAPTION>
Cross Reference
Term in Agreement Page
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<S> <C> <C>
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble . . . . . . . . . . . 1
affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(a) . . . . . . . 40
Articles Amendment . . . . . . . . . . . . . . . . . . . . . . . Section 3.2(a) . . . . . . . 19
business day . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(b) . . . . . . . 40
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(b) . . . . . . . . 3
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.3 . . . . . . . . . . 1
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.3 . . . . . . . . . . 1
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble . . . . . . . . . . . 1
Company Affiliates . . . . . . . . . . . . . . . . . . . . . . . Section 2.19 . . . . . . . . 17
Company Board . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3(a) . . . . . . . . 8
Company Financial Adviser . . . . . . . . . . . . . . . . . . . Section 2.22 . . . . . . . . 18
Company Permits . . . . . . . . . . . . . . . . . . . . . . . . Section 2.10 . . . . . . . . 10
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble . . . . . . . . . . . 1
Company SEC Reports . . . . . . . . . . . . . . . . . . . . . . Section 2.4(a) . . . . . . . . 8
Company Securities . . . . . . . . . . . . . . . . . . . . . . . Section 2.2(a) . . . . . . . . 7
Company Stock Option . . . . . . . . . . . . . . . . . . . . . . Section 1.11(a) . . . . . . . . 5
Company Stock Options . . . . . . . . . . . . . . . . . . . . . Section 1.11(a) . . . . . . . . 5
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1 . . . . . . . . . . 1
DST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.19 . . . . . . . . 17
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2 . . . . . . . . . . 1
Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11(a) . . . . . . . 11
Environmental Claim . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(a) . . . . . . . 13
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(a) . . . . . . . 13
ERISA Affiliate . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11(a) . . . . . . . 11
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11(a) . . . . . . . 11
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2(c) . . . . . . . . 7
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a) . . . . . . . . 3
Exchange Fund . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(a) . . . . . . . . 3
FCPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.20 . . . . . . . . 17
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . Section 2.6 . . . . . . . . . . 9
HOGN Merger Agreement . . . . . . . . . . . . . . . . . . . . . Section 1.11(a) . . . . . . . . 5
HOGN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(a) . . . . . . . . 5
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.6 . . . . . . . . . . 9
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . Section 4.12 . . . . . . . . 33
Indemnified Persons . . . . . . . . . . . . . . . . . . . . . . Section 4.12 . . . . . . . . 33
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11(a) . . . . . . . 11
knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(c) . . . . . . . 40
known . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(c) . . . . . . . 40
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2(b) . . . . . . . . 7
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . Section 2.1(a) . . . . . . . . 6
Material Adverse Effect . . . . . . . . . . . . . . . . . . . . Section 3.1(a) . . . . . . . 18
Merger Certificate . . . . . . . . . . . . . . . . . . . . . . . Section 1.2 . . . . . . . . . . 1
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . Section 1.8(a) . . . . . . . . 2
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.1 . . . . . . . . . . 1
NGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.3(a) . . . . . . . 20
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Notice of Superior Proposal . . . . . . . . . . . . . . . . . . Section 4.4(b) . . . . . . . 29
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10(f) . . . . . . . . 4
Parent Affiliates . . . . . . . . . . . . . . . . . . . . . . . Section 3.19 . . . . . . . . 24
Parent Benefit Plans . . . . . . . . . . . . . . . . . . . . . . Section 3.2(a) . . . . . . . 19
Parent Common Stock . . . . . . . . . . . . . . . . . . . . . . Section 1.8(a) . . . . . . . . 2
Parent Financial Adviser . . . . . . . . . . . . . . . . . . . . Section 3.22 . . . . . . . . 25
Parent Intellectual Rights . . . . . . . . . . . . . . . . . . . Section 3.15(a) . . . . . . . 24
Parent Permits . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.10 . . . . . . . . 22
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble . . . . . . . . . . . 1
Parent SEC Reports . . . . . . . . . . . . . . . . . . . . . . . Section 3.4(a) . . . . . . . 20
Parent Securities . . . . . . . . . . . . . . . . . . . . . . . Section 3.2(a) . . . . . . . 19
person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(e) . . . . . . . 41
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . Section 2.5 . . . . . . . . . . 8
S-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.5 . . . . . . . . . . 8
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.4(a) . . . . . . . . 8
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.4(a) . . . . . . . . 8
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.8(a) . . . . . . . . 2
Stockholders Agreement . . . . . . . . . . . . . . . . . . . . . Section 4.15 . . . . . . . . 34
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(f) . . . . . . . 41
subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.8(f) . . . . . . . 41
Superior Proposal . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4(b) . . . . . . . 30
Surviving Corporation . . . . . . . . . . . . . . . . . . . . . Section 1.1 . . . . . . . . . . 1
Third Party Acquisition . . . . . . . . . . . . . . . . . . . . Section 4.4(b) . . . . . . . 30
Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4(b) . . . . . . . 30
</TABLE>
2
<PAGE> 9
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of April 28, 1996, is among THE CONTINUUM COMPANY, INC., a Delaware corporation
("Company"), COMPUTER SCIENCES CORPORATION, a Nevada corporation ("Parent"),
and CONTINENTAL ACQUISITION, INC., a Delaware corporation and a wholly owned
subsidiary of Parent ("Acquisition").
WHEREAS, the Boards of Directors of the Company, Parent and
Acquisition each have, in light of and subject to the terms and conditions set
forth herein, (i) determined that the Merger (as defined below) is fair to
their respective shareholders and in the best interests of such shareholders
and (ii) approved the Merger in accordance with this Agreement;
WHEREAS, for Federal income tax purposes, it is intended that
the Merger qualify as a reorganization under the provisions of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Merger is intended to be treated as a "pooling of
interests" for financial accounting purposes.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the Company, Parent and Acquisition
hereby agree as follows:
ARTICLE 1
THE MERGER
SECTION 1.1. The Merger. At the Effective Time (as defined
below) and upon the terms and subject to the conditions of this Agreement and
in accordance with the Delaware General Corporation Law (the "DGCL"),
Acquisition shall be merged with and into the Company (the "Merger"). Following
the Merger, the Company shall continue as the surviving corporation (the
"Surviving Corporation") and the separate corporate existence of Acquisition
shall cease. The Merger is intended to qualify as a tax-free reorganization
under Section 368 of the Code.
SECTION 1.2. Effective Time. Subject to the terms and
conditions set forth in this Agreement, a Certificate of Merger (the "Merger
Certificate") shall be duly executed and acknowledged by the Company and
thereafter delivered to the Secretary of State of the State of Delaware for
filing pursuant to the DGCL on the Closing Date (as defined in Section 1.3).
The Merger shall become effective at such time as a properly executed and
certified copy of the Merger Certificate is duly filed by the Secretary of
State of the State of Delaware in accordance with the DGCL or such later time
as Parent and the Company may agree upon and set forth in the Merger
Certificate (the time the Merger becomes effective being referred to herein as
the "Effective Time").
SECTION 1.3. Closing of the Merger. The closing of the Merger
(the "Closing") will take place at a time and on a date to be specified by the
parties, which shall be no later than the second business day after
satisfaction of the latest to occur of the conditions set forth in Article 5
(the "Closing Date"), at the offices of Gibson, Dunn &
<PAGE> 10
Crutcher, 333 South Grand Avenue, Los Angeles, California 90071, unless another
time, date or place is agreed to in writing by the parties hereto.
SECTION 1.4. Effects of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time, all the properties,
rights, privileges, powers and franchises of the Company and Acquisition shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Acquisition shall become the debts, liabilities and duties of the
Surviving Corporation.
SECTION 1.5. Certificate of Incorporation and Bylaws. 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; provided, however, that Article
Fourth of the Certificate of Incorporation of the Company shall be amended in
its entirety to read as follows: "The aggregate number of shares which the
Corporation shall have the authority to issue is one thousand (1,000), $.10 par
value per share, to be designated 'Common Stock'". 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 1.6. Directors. The directors of Acquisition at the
Effective Time shall be the initial directors of the Surviving Corporation,
each to hold office in accordance with the Certificate of Incorporation and
Bylaws of the Surviving Corporation until such director's successor is duly
elected or appointed and qualified.
SECTION 1.7. Officers. The officers of the Company at the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and Bylaws
of the Surviving Corporation until such officer's successor is duly elected or
appointed and qualified.
SECTION 1.8. Conversion of Shares.
(a) At the Effective Time, each share of common stock,
par value $.10 per share, of the Company (individually a "Share" and
collectively, the "Shares") issued and outstanding immediately prior to the
Effective Time (other than (i) Shares held in the Company's treasury or by any
of the Company's subsidiaries (excluding 7,837 Shares held of record by Paxus
Corporation Limited) and (ii) Shares held by Parent, Acquisition or any other
subsidiary of Parent) shall, by virtue of the Merger and without any action on
the part of Acquisition, the Company or the holder thereof, be converted into
and shall become .79 of a fully paid and nonassessable share of common stock,
$1.00 par value per share, of Parent ("Parent Common Stock") (the "Merger
Consideration"). Unless the context otherwise requires, each reference in this
Agreement to shares of Parent Common Stock shall include the associated Rights
(as such term is defined in Section 3.2(a) hereof). Notwithstanding the
foregoing, if between the date of this Agreement and the Effective Time the
outstanding shares of Parent Common Stock or the Shares shall have been changed
into a different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, combination
or exchange of shares, then the exchange ratio contemplated by the Merger shall
be correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares.
(b) At the Effective Time, each outstanding share of the
common stock, par value $0.01 per share, of Acquisition shall be converted into
one share of common stock, par value $.10 per share, of the Surviving
Corporation.
2
<PAGE> 11
(c) At the Effective Time, each Share held in the
treasury of the Company and each Share held by Parent, Acquisition or any
subsidiary of Parent, Acquisition or the Company (excluding 7,837 Shares held
of record by Paxus Corporation Limited) immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of
Acquisition, the Company or the holder thereof, be canceled, retired and cease
to exist and no payment shall be made with respect thereto.
SECTION 1.9. No Appraisal Rights. The holders of Shares and
the holders of shares of Parent Common Stock shall not be entitled to appraisal
rights.
SECTION 1.10. Exchange of Certificates.
(a) As of the Effective Time, Parent shall deposit with
Chemical Mellon Shareholder Services, L.L.C., or such other agent or agents as
may be appointed by Parent and Acquisition (the "Exchange Agent"), for the
benefit of the holders of Shares, for exchange in accordance with this Article
I, through the Exchange Agent: (i) certificates representing the appropriate
number of shares of Parent Common Stock and (ii) cash to be paid in lieu of
fractional shares of Parent Common Stock (such shares of Parent Common Stock
and such cash are hereinafter referred to as the "Exchange Fund") issuable
pursuant to Section 1.8 in exchange for outstanding Shares.
(b) As soon as reasonably practicable after the Effective
Time, the Exchange 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 into the
right to receive shares of Parent Common Stock pursuant to Section 1.8: (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon delivery of
the Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Parent and the Company may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for certificates representing shares of Parent Common Stock. Upon surrender of
a Certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole shares of
Parent Common Stock and, if applicable, a check representing the cash
consideration to which such holder may be entitled on account of a fractional
share of Parent Common Stock, which such holder has the right to receive
pursuant to the provisions of this Article I, and the Certificate so
surrendered shall forthwith be canceled. In the event of a transfer of
ownership of Shares which is not registered in the transfer records of the
Company, a certificate representing the proper number of shares of Parent
Common Stock may be issued to a transferee if the Certificate representing such
Shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 1.10, each Certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon such
surrender the certificate representing shares of Parent Common Stock and cash
in lieu of any fractional shares of Parent Common Stock as contemplated by this
Section 1.10.
(c) No dividends or other distributions declared or made
after the Effective Time with respect to Parent Common Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Parent Common Stock represented
thereby and no cash payment in lieu of fractional shares shall be paid to any
such holder pursuant to Section 1.10(f) until the holder of record of such
Certificate shall surrender such Certificate. Subject to the effect
3
<PAGE> 12
of applicable laws, following surrender of any such Certificate, there shall be
paid to the record holder of the certificates representing whole shares of
Parent Common Stock issued in exchange therefor, without interest, (i) at the
time of such surrender, the amount of any cash payable in lieu of a fractional
share of Parent Common Stock to which such holder is entitled pursuant to
Section 1.10(f) and the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to such
whole shares of Parent Common Stock, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to
surrender payable with respect to such whole shares of Parent Common Stock.
(d) In the event that any Certificate for Shares shall
have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange
therefor, upon the making of an affidavit of that fact by the holder thereof
such shares of Parent Common Stock and cash in lieu of fractional shares, if
any, as may be required pursuant to this Agreement provided, however, that
Parent or its Exchange Agent, may, in its discretion, require the delivery of a
suitable bond or indemnity.
(e) All shares of Parent Common Stock issued upon the
surrender for exchange of Shares in accordance with the terms hereof (including
any cash paid pursuant to Section 1.10(c) or 1.10(f)) shall be deemed to have
been issued in full satisfaction of all rights pertaining to such Shares,
subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by the Company on such
Shares in accordance with the terms of this Agreement or prior to the date
hereof and which remain unpaid at the Effective Time, and there shall be no
further registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation for any reason, they shall be canceled and exchanged as
provided in this Article I.
(f) No fractions of a share of Parent Common Stock shall
be issued in the Merger, but in lieu thereof each holder of Shares otherwise
entitled to a fraction of a share of Parent Common Stock shall, upon surrender
of his or her Certificate or Certificates, be entitled to receive an amount of
cash (without interest) determined by multiplying the closing price for Parent
Common Stock as reported on the New York Stock Exchange (the "NYSE") Composite
Transactions on the business day five days prior to the Effective Date by the
fractional share interest to which such holder would otherwise be entitled. The
parties acknowledge that payment of the cash consideration in lieu of issuing
fractional shares was not separately bargained for consideration but merely
represents a mechanical rounding off for purposes of simplifying the corporate
and accounting complexities which would otherwise be caused by the issuance of
fractional shares.
(g) Any portion of the Exchange Fund which remains
undistributed to the shareholders of the Company for six months after the
Effective Time shall be delivered to Parent, upon demand, and any shareholders
of the Company who have not theretofore complied with this Article I shall
thereafter look only to Parent for payment of their claim for Parent Common
Stock, any cash in lieu of fractional shares of Parent Common Stock and any
applicable dividends or distributions with respect to Parent Common Stock, as
the case may be.
(h) Neither Parent nor the Company shall be liable to any
holder of Shares, or Parent Common Stock, as the case may be, for such shares
(or dividends or
4
<PAGE> 13
distributions with respect thereto) or cash from the Exchange Fund delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 1.11. Stock Options.
(a) At the Effective Time, each outstanding option to
purchase Shares (a "Company Stock Option" or collectively, "Company Stock
Options") (i) issued pursuant to the 1983 Incentive Stock Option Plan, the 1992
Stock Option Plan, the 1994 Directors Stock Option Plan, the 1995 Directors'
Stock Option Plan or the 1994 Incentive Stock Plan of the Company or pursuant
to any of the individual nonqualified stock option agreements of the Company
with W. Michael Long, E. Lee Walker, Jean-Michel Renck, Jean-Louis Rossignol,
Jean-Charles Miginiac, Michael H. Anderson, James J. Delamore, Paul Zoukis,
Kevan Howley and Federal Home Life Insurance Company and (ii) issued by Hogan
Systems, Inc. ("HOGN") pursuant to the 1982 Incentive Stock Option Plan, the
1984 Incentive Stock Option Plan, the 1985 Incentive Stock Option Plan, the
1982 Nonstatutory Stock Option Plan, the 1984 Nonstatutory Stock Option Plan or
the 1985 Nonstatutory Stock Option Plan of HOGN (which options have been
assumed by the Company pursuant to Section 4.13 of the Agreement and Plan of
Merger dated as of December 10, 1995, as amended by the First Amendment thereto
dated as of February 7, 1996 (as so amended, the "HOGN Merger Agreement") among
the Company, HOGN and Continuum Acquisition Corporation ("CAC"), pursuant to
which CAC merged with an into HOGN, and HOGN became a wholly-owned subsidiary
of the Company on March 15, 1996 (the "HOGN Merger")), whether vested or
unvested, shall be assumed by Parent. All plans or agreements described above
pursuant to which any Company Stock Option has been issued or may be issued are
referred to collectively as the Company Plans. Each Company Stock Option shall
be deemed to constitute an option to acquire, on the same terms and conditions
as were applicable under such Company Stock Option, the same number of shares
of Parent Common Stock as the holder of such Company Stock Option would have
been entitled to receive pursuant to the Merger had such holder exercised such
option in full immediately prior to the Effective Time, at a price per share
equal to (y) the aggregate exercise price for the shares of Company Common
Stock otherwise purchasable pursuant to such Company Stock Option divided by
(z) the number of full shares of Parent Common Stock deemed purchasable
pursuant to such Company Stock Option; provided, however, that in the case of
any option to which section 421 of the Code applies by reason of its
qualification under section 422 of the Code ("incentive stock options" or
"ISOs"), the option price, the number of shares purchasable pursuant to such
option and the terms and conditions of exercise of such option shall be
determined in order to comply with section 424(a) of the Code. With respect to
any Company Stock Option that provides for the acceleration of vesting in the
event that the Shares achieve certain public trading price thresholds, such
trading price thresholds shall be adjusted by dividing the threshold set forth
in the Company Stock Option by the exchange ratio contemplated by the Merger.
(b) As soon as practicable after the Effective Time,
Parent shall deliver to the holders of Company Stock Options appropriate
notices setting forth such holders' rights pursuant to the respective Company
Plans and the agreements evidencing the grants of such Options shall continue
in effect on the same terms and conditions (subject to the adjustments required
by this Section 1.11 after giving effect to the Merger). Parent shall comply
with the terms of the Company Plans and ensure, to the extent required by, and
subject to the provisions of, such Plans, that Company Stock Options which
qualified as incentive stock options immediately prior to the Effective Time
continue to qualify as incentive stock options of Parent after the Effective
Time.
5
<PAGE> 14
(c) Parent shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of Company Stock Options assumed in accordance with this
Section 1.11. As soon as practicable after the Effective Time, Parent shall
file a registration statement on Form S-8 (or any successor or other
appropriate forms) with respect to the shares of Parent Common Stock subject to
any Company Stock Options held by persons who are or were directors, officers
or employees of the Company or its subsidiaries and shall use its best efforts
to maintain the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or prospectuses
contained therein) for so long as such options remain outstanding. With respect
to those individuals who subsequent to the Merger will be subject to the
reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Parent shall administer Company Plans assumed pursuant to this
Section 1.11 in a manner that complies with Rule 16b-3 promulgated under the
Exchange Act, as it may be amended, to the extent the applicable Company Plan
complied with such rule immediately prior to the Merger.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule previously
delivered by the Company to Parent (the "Company Disclosure Schedule"), the
Company hereby represents and warrants to each of Parent and Acquisition as
follows:
SECTION 2.1. Organization and Qualification; Subsidiaries.
(a) Each of the Company and its subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would not
have a Material Adverse Effect (as defined below) on the Company. When used in
connection with the Company or its subsidiaries, the term "Material Adverse
Effect" means any change or effect (i) that is or is reasonably likely to be
materially adverse to the business, results of operations, condition (financial
or otherwise) or prospects of the Company and its subsidiaries, taken as whole,
other than any change or effect arising out of general economic conditions
unrelated to any business in which the Company and its subsidiaries are
engaged, or (ii) that may impair the ability of the Company to consummate the
transactions contemplated hereby.
(b) The Company has heretofore delivered to Acquisition
or Parent accurate and complete copies of the Certificate of Incorporation and
Bylaws (or similar governing documents), as currently in effect, of the Company
and its subsidiaries. Each of the Company and its subsidiaries is duly
qualified or licensed and in good standing to do business in each jurisdiction
in which the property owned, leased or operated by it or the nature of the
business conducted by it makes such qualification or licensing necessary,
except in such jurisdictions where the failure to be so duly qualified or
licensed and in good standing would not have a Material Adverse Effect on the
Company.
SECTION 2.2. Capitalization of the Company and its
Subsidiaries.
(a) The authorized capital stock of the Company consists
of: 40,000,000 Shares, of which, as of April 25, 1996, 24,240,897 Shares were
issued and outstanding (including 67,918 Shares held in treasury and 7,837
Shares held of record by
6
<PAGE> 15
Paxus Corporation Limited), and 5,000,000 shares of preferred stock, par value
$.01 per share, no shares of which are outstanding. All of the outstanding
Shares have been validly issued, and are fully paid, nonassessable and free of
preemptive rights. As of April 25, 1996, approximately 3,393,884 Shares were
reserved for issuance and issuable upon or otherwise deliverable in connection
with the exercise of outstanding Company Stock Options issued pursuant to the
Company Plans, and 51,526 Shares were reserved for issuance pursuant to the
Employee Stock Purchase Plan (the "ESPP"). Between April 25, 1996 and the date
hereof, no shares of the Company's capital stock have been issued other than
pursuant to Company Stock Options already in existence on such date, and,
between April 25, 1996 and the date hereof, no stock options have been granted.
Except as set forth above, as of the date hereof, there are outstanding (i) no
shares of capital stock or other voting securities of the Company, (ii) no
securities of the Company or its subsidiaries convertible into or exchangeable
for shares of capital stock or voting securities of the Company, (iii) no
options or other rights to acquire from the Company or its subsidiaries, and,
except as described in the Company SEC Reports (as defined below), no
obligations of the Company or its subsidiaries to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company, and (iv) no equity equivalents,
interests in the ownership or earnings of the Company or its subsidiaries or
other similar rights (collectively, "Company Securities"). As of the date
hereof, there are no outstanding obligations of the Company or its subsidiaries
to repurchase, redeem or otherwise acquire any Company Securities. Except for
the agreement referred to in Section 4.14(c) hereof, there are no stockholder
agreements, voting trusts or other agreements or understandings to which the
Company is a party or by which it is bound relating to the voting or
registration of any shares of capital stock of the Company.
(b) Section 2.2(b) of the Company Disclosure Schedule
identifies each subsidiary of the Company as of the date hereof and shows the
jurisdiction of incorporation or organization of each such subsidiary. All of
the outstanding capital stock of the Company's subsidiaries (other than
director's qualifying shares in the case of foreign subsidiaries) is owned by
the Company, directly or indirectly, free and clear of any Lien (as defined
below) or any other limitation or restriction (including any restriction on the
right to vote or sell the same, except as may be provided as a matter of law).
There are no securities of the Company or its subsidiaries convertible into or
exchangeable for, no options or other rights to acquire from the Company or its
subsidiaries, and no other contract, understanding, arrangement or obligation
(whether or not contingent) providing for the issuance or sale, directly or
indirectly, of any capital stock or other ownership interests in, or any other
securities of, any subsidiary of the Company. There are no outstanding
contractual obligations of the Company or its subsidiaries to repurchase,
redeem or otherwise acquire any outstanding shares of capital stock or other
ownership interests in any subsidiary of the Company. For purposes of this
Agreement, "Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, charge, security interest
or encumbrance of any kind in respect of such asset.
(c) The Shares constitute the only class of equity
securities of the Company or its subsidiaries registered or required to be
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
SECTION 2.3. Authority Relative to this Agreement;
Recommendation.
(a) The Company has all necessary corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the
7
<PAGE> 16
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company (the "Company Board") and no other corporate
proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby, except, as
referred to in Section 2.17, the approval and adoption of this Agreement by the
holders of at least two-thirds of the then outstanding Shares. This Agreement
has been duly and validly executed and delivered by the Company and constitutes
a valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms.
(b) The Company Board has resolved to recommend that the
shareholders of the Company approve and adopt this Agreement.
SECTION 2.4. SEC Reports; Financial Statements.
(a) The Company has filed all required forms, reports and
documents with the Securities and Exchange Commission (the "SEC") since March
31, 1992, each of which has complied in all material respects with all
applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, each as in effect on the dates such
forms, reports and documents were filed. The Company has heretofore delivered
or promptly will deliver to Acquisition or Parent, in the form filed with the
SEC (including any amendments thereto but excluding any exhibits), (i) its
Annual Reports on Form 10-K for each of the fiscal years ended March 31, 1993,
1994 and 1995, (ii) all definitive proxy statements relating to the Company's
meetings of shareholders (whether annual or special) held since March 31, 1992
and (iii) all other reports or registration statements filed by the Company
with the SEC since March 31, 1992 (all of the foregoing, collectively, the
"Company SEC Reports"). None of such Company SEC Reports, including, without
limitation, any financial statements or schedules included or incorporated by
reference therein, contained, when filed, any untrue statement of a material
fact or omitted to state a material fact required to be stated or incorporated
by reference therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
audited consolidated financial statements of the Company included in the
Company SEC Reports fairly present, in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
in the notes thereto), the consolidated financial position of the Company and
its consolidated subsidiaries as of the dates thereof and their consolidated
results of operations and changes in financial position for the periods then
ended.
(b) The Company has heretofore made available or promptly
will make available to Acquisition or Parent a complete and correct copy of any
amendments or modifications, which are required to be filed with the SEC but
have not yet been filed with the SEC, to agreements, documents or other
instruments which previously had been filed by the Company with the SEC
pursuant to the Exchange Act.
SECTION 2.5. Information Supplied. None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the
SEC by Parent in connection with the issuance of shares of Parent Common Stock
in the Merger (the "S-4") will, at the time the S-4 is filed with the SEC and
at the time it becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) the proxy statement relating to the meeting of the Company's shareholders
and the meeting of Parent's shareholders to be held in connection with the
Merger (the "Proxy Statement") will, at the date mailed to shareholders of the
Company and at the times of the
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<PAGE> 17
meeting or meetings of shareholders of the Company 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 therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading. The Proxy Statement, insofar as it relates to the meeting
of the Company's shareholders to vote on the Merger, will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
SECTION 2.6. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the filing and
recordation of the Merger Certificate as required by the DGCL, no filing with
or notice to, and no permit, authorization, consent or approval of, any court
or tribunal or administrative, governmental or regulatory body, agency or
authority (a "Governmental Entity") is necessary for the execution and delivery
by the Company of this Agreement or the consummation by the Company of the
transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice would not have a Material Adverse Effect on the Company. Except as
set forth in Section 2.6 of the Company Disclosure Schedule, neither the
execution, delivery and performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the respective
Certificate of Incorporation or Bylaws (or similar governing documents) of the
Company or any of its subsidiaries, (ii) 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
or Lien) 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 respective properties or assets may be bound,
or (iii) violate any order, writ, injunction, decree, law, statute, rule or
regulation applicable to the Company or any of its subsidiaries or any of their
respective properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would not have a Material Adverse Effect
on the Company.
SECTION 2.7. No Default. Except as set forth in Section 2.7 of
the Company Disclosure Schedule, none of the Company or its subsidiaries is in
breach, default or violation (and no event has occurred which with notice or
the lapse of time or both would constitute a breach, default or violation) of
any term, condition or provision of (i) its Certificate of Incorporation or
Bylaws (or similar governing documents), (ii) any note, bond, mortgage,
indenture, lease, license, contract, agreement or other instrument or
obligation to which the Company or any of its subsidiaries is now a party or by
which any of them or any of their respective properties or assets may be bound
or (iii) any order, writ, injunction, decree, law, statute, rule or regulation
applicable to the Company, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on the
Company. Except as set forth in Section 2.7 of the Company Disclosure Schedule,
each note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which the Company or any of its subsidiaries
is now a party or by which any of them or any of their respective properties or
assets may be bound that is material to the Company and its subsidiaries taken
as a whole and that has not expired is in full force and effect and is not
subject to any material default thereunder of which the Company is aware by any
party obligated to the Company or any subsidiary thereunder.
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<PAGE> 18
SECTION 2.8. No Undisclosed Liabilities; Absence of Changes.
Except as and to the extent publicly disclosed by the Company in the Company
SEC Reports, as of December 31, 1995, none of the Company or its subsidiaries
had any liabilities or obligations of any nature, whether or not accrued,
contingent or otherwise, that would be required by generally accepted
accounting principles to be reflected on a consolidated balance sheet of the
Company (including the notes thereto) or which would have a Material Adverse
Effect on the Company. Except as publicly disclosed by the Company, since
December 31, 1995, none of the Company or its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise,
which could reasonably be expected to have, and there have been no events,
changes or effects with respect to the Company or its subsidiaries having or
which reasonably could be expected to have, a Material Adverse Effect on the
Company. Except as and to the extent publicly disclosed by the Company in the
Company's SEC Reports and except as set forth in Section 2.8 of the Company
Disclosure Schedule, since December 31, 1995, there has not been (i) any
material change by the Company in its accounting methods, principles or
practices (other than as required after the date hereof by concurrent changes
in generally accepted accounting principles), (ii) any revaluation by the
Company of any of its assets having a Material Adverse Effect on the Company,
including, without limitation, any write-down of the value of capitalized
software or inventory or write-off of notes or accounts receivable other than
in the ordinary course of business or (iii) except for the HOGN Merger, any
other action or event that would have required the consent of Parent pursuant
to Section 4.1 of this Agreement had such action or event occurred after the
date of this Agreement.
SECTION 2.9. Litigation. Except as publicly disclosed by the
Company in the Company SEC Reports, there is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of the Company, threatened
against the Company or any of its subsidiaries or any of their respective
properties or assets before any Governmental Entity which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
on the Company or could reasonably be expected to prevent or delay the
consummation of the transactions contemplated by this Agreement. Except as
publicly disclosed by the Company in the Company SEC Reports, none of the
Company or its subsidiaries is subject to any outstanding order, writ,
injunction or decree which, insofar as can be reasonably foreseen in the
future, could reasonably be expected to have a Material Adverse Effect on the
Company or could reasonably be expected to prevent or delay the consummation of
the transactions contemplated hereby.
SECTION 2.10. Compliance with Applicable Law. Except as
publicly disclosed by the Company in the Company SEC Reports, the Company and
its subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "Company Permits"), except for failures to
hold such permits, licenses, variances, exemptions, orders and approvals which
would not have a Material Adverse Effect on the Company. Except as publicly
disclosed by the Company in the Company SEC Reports, the Company and its
subsidiaries are in compliance with the terms of the Company Permits, except
where the failure so to comply would not have a Material Adverse Effect on the
Company. Except as publicly disclosed by the Company in the Company SEC
Reports, the businesses of the Company and its subsidiaries are not being
conducted in violation of any law, ordinance or regulation of any Governmental
Entity except that no representation or warranty is made in this Section 2.10
with respect to Environmental Laws (as defined in Section 2.12 below) and
except for violations or possible violations which do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect on the Company. Except as publicly disclosed by the Company in the
Company SEC Reports, no investigation or review by any Governmental Entity with
respect to the Company or its
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subsidiaries is pending or, to the knowledge of the Company, threatened, nor,
to the knowledge of the Company, has any Governmental Entity indicated an
intention to conduct the same, other than, in each case, those which the
Company reasonably believes will not have a Material Adverse Effect on the
Company.
SECTION 2.11. Employee Benefit Plans; Labor Matters.
(a) Section 2.11(a) of the Company Disclosure Schedule
lists all employee benefit plans (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), and all bonus,
stock option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee benefit plans,
programs or arrangements, and any severance agreements, written or otherwise,
for the benefit of, or relating to, any employee of the Company, any trade or
business (whether or not incorporated) which is a member of a controlled group
including the Company or which is under common control with the Company (an
"ERISA Affiliate") within the meaning of Section 414 of the Code, as well as
each plan with respect to which the Company or an ERISA Affiliate could incur
liability under Section 4069 (if such plan has been or were terminated) or
Section 4212(c) of ERISA (together, the "Employee Plans"), excluding former
agreements under which the Company has no remaining obligations and any of the
foregoing that are required to be maintained by the Company under the laws of
any foreign jurisdiction. The Company has made available to Parent a copy of
(i) the most recent annual report on Form 5500 filed with the Internal Revenue
Service (the "IRS") for each disclosed Employee Plan where such report is
required and (ii) the documents and instruments governing each such Employee
Plan (other than those referred to in Section 4(b)(4) of ERISA).
(b) (i) None of the Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person and none of the
Employee Plans is a "multi-employer plan" as such term is defined in Section
3(37) of ERISA; (ii) neither the Company nor any ERISA Affiliate has incurred
any excise taxes under Chapter 43 of Subtitle A of the Code or Section 5000 of
the Code or any penalties under Section 502(i) or 502(l) of ERISA with respect
to any Employee Plan, which could result in any Material Adverse Effect on the
Company; (iii) all Employee Plans are in compliance in all material respects
with the requirements prescribed by any and all statutes (including ERISA and
the Code), orders, or governmental rules and regulations currently in effect
with respect thereto (including all applicable requirements for notification to
participants or the Department of Labor, IRS or Secretary of the Treasury), and
the Company and each of its subsidiaries have performed all material
obligations required to be performed by them under, are not in any material
respect in default under or violation of, and have no knowledge of any default
or violation by any other party to, any of the Employee Plans; (iv) each
Employee Plan intended to qualify under Section 401(a) of the Code and each
trust intended to qualify under Section 501(a) of the Code is the subject of a
favorable determination letter from the IRS, and nothing has occurred which may
reasonably be expected to impair such determination; (v) all contributions
required to be made to any Employee Plan pursuant to Section 412 of the Code,
or the terms of the Employee Plan or any collective bargaining agreement, have
been made on or before their due dates and a reasonable amount has been accrued
for contributions to each Employee Plan for the current plan years; (vi) with
respect to each Employee Plan, no "reportable event" within the meaning of
Section 4043 of ERISA (excluding any such event for which the thirty (30) day
notice requirement has been waived under the regulations to Section 4043 of
ERISA) nor any event described in Section 4062, 4063 or 4041 of ERISA has
occurred; and (vii) neither the Company nor any ERISA Affiliate has incurred,
nor reasonably expects to incur, any liability under Title IV of ERISA (other
than liability for premium payments to the Pension Benefit Guaranty Corporation
arising in the ordinary course).
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(c) Section 2.11(c) of the Company Disclosure Schedule
sets forth a true and complete list, as of the date of this Agreement, of each
person who holds any Company Stock Options, together with the number of Shares
which are subject to such option, the date of grant of such option, the extent
to which such option is vested (or will become vested within six months from
the date hereof, or as a result of, the Merger), the option price of such
option (to the extent determined as of the date hereof), whether such option is
intended to qualify as an incentive stock option within the meaning of Section
422(b) of the Code, and the expiration date of such option. Section 2.11(c) of
the Company Disclosure Schedule also sets forth the total number of such ISOs
and such nonqualified options. The Company has furnished Parent with complete
copies of the Company Plans pursuant to which the Company Stock Options were
issued. Other than the automatic vesting of Company Stock Options that may
occur without any action on the part of the Company or its officers or
directors, the Company has not taken any action that would result in any
Company Stock Options that are unvested becoming vested in connection with or
as a result of the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
(d) The Company has made available to Parent (i) a
description of the terms of employment and compensation arrangements of all
officers of the Company and a standard form of employment agreement used for
officers of the Company, (ii) copies of all employment agreements with officers
of the Company which contain provisions that differ from the standard terms and
conditions contained in the form of employment agreement provided to Parent;
(iii) copies of all agreements with consultants who are individuals obligating
the Company to make annual cash payments in an amount exceeding $300,000; (iv)
a schedule listing all officers of the Company who have executed a
non-competition agreement with the Company; (v) copies (or descriptions) of all
severance agreements, programs and policies of the Company with or relating to
its employees, except programs and policies required to be maintained by law;
and (vi) copies of all plans, programs, agreements and other arrangements of
the Company with or relating to its employees which contain change in control
provisions.
(e) Except as disclosed in Section 2.11(e) of the Company
Disclosure Schedule, there shall be no payment, accrual of additional benefits,
acceleration of payments, or vesting in any benefit under any Employee Plan or
any agreement or arrangement disclosed under this Section 2.11 solely by reason
of entering into or in connection with the transactions contemplated by this
Agreement.
(f) There are no controversies pending or, to the
knowledge of the Company, threatened, between the Company or any of its
subsidiaries and any of their respective employees, which controversies have or
may reasonably be expected to have a Material Adverse Effect of the Company.
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, except as disclosed in Section
2.11(f) of the Company Disclosure Schedule, nor does the Company know of any
activities or proceedings of any labor union to organize any such employees.
The Company has no knowledge of any strikes, slowdowns, work stoppages,
lockouts or threats thereof, by or with respect to any employees of the Company
or any of its subsidiaries.
SECTION 2.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by the Company in the
Company SEC Reports, (i) each of the Company and its subsidiaries is in
material compliance with all applicable federal, state, local and foreign laws
and regulations relating to pollution or
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protection of human health or the environment (including, without limitation,
ambient air, surface water, ground water, land surface or subsurface strata)
(collectively, "Environmental Laws"), except for non-compliance that would not
have a Material Adverse Effect on the Company, which compliance includes, but
is not limited to, the possession by the Company and its subsidiaries of all
material permits and other governmental authorizations required under
applicable Environmental Laws, and compliance with the terms and conditions
thereof; (ii) none of the Company or its subsidiaries has received written
notice of, or, to the knowledge of the Company, is the subject of, any action,
cause of action, claim, investigation, demand or notice by any person or entity
alleging liability under or non-compliance with any Environmental Law (an
"Environmental Claim") that could reasonably be expected to have a Material
Adverse Effect on the Company; and (iii) to the knowledge of the Company, there
are no circumstances that are reasonably likely to prevent or interfere with
such material compliance in the future.
(b) Except as publicly disclosed by the Company, there
are no Environmental Claims which could reasonably be expected to have a
Material Adverse Effect on the Company that are pending or, to the knowledge of
the Company, threatened against the Company or its subsidiaries or, to the
knowledge of the Company, against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has or may have
retained or assumed either contractually or by operation of law.
SECTION 2.13 Taxes.
(a) Definitions. For purposes of this Agreement:
(i) the term "Tax" (including "Taxes") means (A)
all federal, state, local, foreign and other net income, gross income, gross
receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease,
service, service use, withholding, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall profits, customs, duties or
other taxes, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts with
respect thereto, (B) any liability for payment of amounts described in clause
(A) whether as a result of transferee liability, of being a member of an
affiliated, consolidated, combined or unitary group for any period, or
otherwise through operation of law, and (C) any liability for the payment of
amounts described in clauses (A) or (B) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement
to indemnify any other person; and
(ii) the term "Tax Return" means any return,
declaration, report, statement, information statement and other document
required to be filed with respect to Taxes.
(b) Except as set forth in Section 2.13(b) of the Company
Disclosure Schedule, the Company and its subsidiaries have accurately prepared
and timely filed all Tax Returns they are required to have filed. Such Tax
Returns are accurate and correct in all material respects and do not contain a
disclosure statement under Section 6662 of the Code (or any predecessor
provision or comparable provision of state, local or foreign law).
(c) The Company and its subsidiaries have paid or
adequately provided for all Taxes they are required to have paid or to pay.
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(d) Except as set forth in Section 2.13(d) of the Company
Disclosure Schedule:
(i) no claim has been made by any taxing
authority in any jurisdiction where the Company and its subsidiaries
do not file Tax Returns that any of them is or may be subject to Tax
by that jurisdiction; and
(ii) no current extensions or waivers of statutes
of limitations with respect to the Tax Returns have been given by or
requested from the Company or any of its subsidiaries.
(e) Section 2.13(e) of the Company Disclosure Schedule
sets forth:
(i) the taxable years of the Company and its
subsidiaries as to which the applicable statutes of limitations on the
assessment and collection of Taxes have not expired;
(ii) those years for which examinations by the
taxing authorities have been completed;
(iii) those taxable years for which examinations by
taxing authorities are presently being conducted;
(iv) those years for which notice of pending or
threatened examination or adjustment has been received; and
(v) those years for which required income Tax
Returns have not yet been filed.
(f) Except as set forth in Section 2.13(f) of the Company
Disclosure Schedule, all deficiencies asserted or assessments made against the
Company or any subsidiary as a result of any examinations by any taxing
authority have been fully paid.
(g) Except as set forth in Section 2.13(g) of the Company
Disclosure Schedule, there are no liens for Taxes (other than for current Taxes
not yet due and payable) upon the assets of the Company or any subsidiary.
(h) Except as set forth in Section 2.13(h) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to or bound by any tax indemnity, tax sharing or tax allocation agreement.
(i) Neither the Company nor any of its subsidiaries is a
party to or bound by any closing agreement or offer in compromise with any
taxing authority.
(j) Except to the extent indicated in Section 2.13(j) of
the Company Disclosure Schedule:
(i) neither the Company nor any of its
subsidiaries has been a member of an affiliated group of corporations,
within the meaning of Section 1504 of the Code, or a member of
combined, consolidated or unitary
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<PAGE> 23
group for state, local or foreign Tax purposes (other than the group
the common parent of which is the Company);
(ii) neither the Company nor any of its
subsidiaries has any liability for Taxes of any person (other than the
Company and its subsidiaries) under Treasury Regulations Section
1.1502-6 (or any corresponding provision of state, local or foreign
income Tax law), as transferee or successor, by contract, or
otherwise;
(iii) neither the Company nor any of its
subsidiaries has filed a consent pursuant to the collapsible
corporation provisions of Section 341(f) of the Code (or any
corresponding provision of state, local or foreign income Tax law) or
agreed to have Section 341(f)(2) of the Code (or any corresponding
provision of state, local or foreign income Tax law) apply to any
disposition of any asset owned by any of them;
(iv) neither the Company nor any or its
subsidiaries has made a consent dividend election under Section 565 of
the Code;
(v) neither the Company nor any of its
subsidiaries has been a personal holding company under Section 542 of
the Code; and
(vi) neither the Company nor any of its
subsidiaries has participated in an international boycott within the
meaning of Section 999 of the Code.
(k) Except as set forth in Section 2.13(k) of the Company
Disclosure Schedule, none of the assets of the Company or its subsidiaries is
property that the Company or any of its subsidiaries is required to treat as
being owned by any other person pursuant to the so-called "safe harbor lease"
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended; none of the assets of the Company or its subsidiaries directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code; none of the assets of the Company or its subsidiaries is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
(l) Except as set forth in Section 2.13(l) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries has agreed
to make, or is it required to make, any adjustment under Sections 481(a) or
263A of the Code or any comparable provision of state, local or foreign tax
laws by reason of a change in accounting method or otherwise. Neither the
Company nor any of its subsidiaries has taken action that is not in accordance
with past practice that could defer a liability for Taxes of the Company or any
of its subsidiaries from any taxable period ending on or before the Closing
Date to any taxable period ending after such date.
(m) Except as set forth in Section 2.13(m) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to any agreement, contract, arrangement or plan that has resulted or would
result, separately or in the aggregate, in connection with this Agreement or
any change of control of the Company or any of its subsidiaries, in the payment
of any "excess parachute payments" within the meaning of Section 28OG of the
Code.
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(n) Section 2.13(n) of the Company Disclosure Schedule
sets forth all foreign jurisdictions in which the Company or any subsidiary is
subject to Tax, is engaged in business or has a permanent establishment.
(o) Except as set forth in Section 2.13(o) of the Company
Disclosure Schedule, neither the Company nor any of its subsidiaries is a party
to any joint venture, partnership, or other arrangement or contract that could
be treated as a partnership for federal income tax purposes.
(p) No material election with respect to Taxes of the
Company or its subsidiaries will be made after the date of this Agreement
without the prior written consent of Parent.
(q) None of the income recognized, for federal, state,
local or foreign income tax purposes, by the Company or its subsidiaries during
the period commencing on the date hereof and ending on the Closing Date will be
derived other than in the ordinary course of business.
SECTION 2.14. Title to Property. The Company and each of its
subsidiaries have good and defensible title to all of their properties and
assets, free and clear of all liens, charges and encumbrances except liens for
taxes not yet due and payable and such liens or other imperfections of title,
if any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on the Company; and, to the
Company's knowledge, all leases pursuant to which the Company or any of its
subsidiaries lease from others real or personal property are in good standing,
valid and effective in accordance with their respective terms, and there is
not, to the knowledge of the Company, under any of such leases, any existing
material default or event of default (or event which with notice of lapse of
time, or both, would constitute a material default and in respect of which the
Company or such subsidiary has not taken adequate steps to prevent such a
default from occurring) except where the lack of such good standing, validity
and effectiveness, or the existence of such default or event, would not have a
Material Adverse Effect on the Company.
SECTION 2.15. Intellectual Property; Software.
(a) Each of the Company and its subsidiaries owns, or
possesses adequate licenses or other valid rights to use, all existing United
States and foreign patents, trademarks, trade names, service marks, copyrights,
trade secrets and applications therefor that are material to its business as
currently conducted (the "Company Intellectual Property Rights").
(b) The validity of the Company Intellectual Property
Rights and the title thereto of the Company or any subsidiary, as the case may
be, is not being questioned in any litigation to which the Company or any
subsidiary is a party.
(c) Except as set forth in Section 2.15(c) of the Company
Disclosure Schedule, the conduct of the business of the Company and its
subsidiaries as now conducted does not, to the Company's knowledge, infringe
any valid patents, trademarks, trade names, service marks or copyrights of
others. The consummation of the transactions completed hereby will not result
in the loss or impairment of any Company Intellectual Property Rights.
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(d) Prior to the execution and delivery of this
Agreement, the Company has provided Parent with a list of all material
applications software (other than personal computer software licensed from
third parties) which the Company or any subsidiary owns or has the right to
market or use to provide services to third parties.
(e) Except as set forth in Section 2.15(e) of the Company
Disclosure Schedule, neither the Company nor any subsidiary has licensed (or
otherwise entered into any agreement permitting) any person to use or market
any of its computer software (whether or not copyrighted) other than licenses
to end-users to use (but not market, distribute, sell or transfer) the computer
software.
(f) Each of the Company and its subsidiaries considers
its computer software as trade secrets, and each has taken steps it believes
appropriate to protect and maintain the same as such, except in cases where the
Company has elected to rely on patent or copyright protection in lieu of trade
secret protection.
SECTION 2.16. Insurance. The Company and its subsidiaries
maintain general liability and other business insurance that the Company
believes to be reasonably prudent for its business.
SECTION 2.17. Vote Required. The affirmative vote of the
holders of at least two-thirds of the outstanding Shares is the only vote of
the holders of any class or series of the Company's capital stock necessary to
approve and adopt this Agreement.
SECTION 2.18. Tax Treatment; Pooling. Neither the Company nor,
to the knowledge of the Company, any of its affiliates has taken or agreed to
take action that would prevent the Merger from (a) constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code or
(b) being treated for financial accounting purposes as a pooling of interests
in accordance with generally accepted accounting principles and the published
rules, regulations and interpretations of the SEC (a "Pooling Transaction").
SECTION 2.19. Affiliates. Except for DST Systems, Inc. ("DST")
and the directors and executive officers of the Company, each of whom is listed
in Section 2.19 of the Company Disclosure Schedule, there are no persons who,
to the knowledge of the Company, may be deemed to be affiliates of the Company
under Rule 145 of the Securities Act ("Company Affiliates"). Concurrently with
the execution and delivery of this Agreement, the Company has delivered to
Parent an executed letter agreement, substantially in the form of Exhibit A
hereto, from certain of the Company Affiliates, and will deliver to Parent,
within ten days after the date of this Agreement, an executed letter agreement,
substantially in the form of Exhibit A hereto, from all other Company
Affiliates.
SECTION 2.20. Certain Business Practices. None of the Company,
any of its subsidiaries or any directors, officers, agents or employees of the
Company or any of its subsidiaries has (i) used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties
or campaigns or violated any provision of the Foreign Corrupt Practices Act of
1977, as amended (the "FCPA"), or (iii) made any other unlawful payment.
SECTION 2.21. Insider Interests. No officer or director of the
Company has any interest in any material property, real or personal, tangible
or intangible, including without limitation, any computer software or Company
Intellectual Property Rights, used
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in or pertaining to the business of the Company or any subsidiary, expect for
the ordinary rights of a stockholder or employee stock optionholder.
SECTION 2.22. Opinion of Financial Adviser. Lehman Brothers
Inc. (the "Company Financial Adviser") has delivered to the Company Board its
written opinion, dated the date of this Agreement, to the effect that, as of
such date, the exchange ratio contemplated by the Merger is fair to the holders
of Shares.
SECTION 2.23. Brokers. No broker, finder or investment banker
(other than the Company Financial Adviser, a true and correct copy of whose
engagement agreement has been provided to Acquisition or Parent) 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 or
on behalf of the Company.
Section 2.24. Disclosure. No representation or warranty of the
Company in this Agreement or any certificate, schedule, document or other
instrument furnished or to be furnished to Parent pursuant hereto or in
connection herewith contains, as of the date of such representation, warranty
or instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to make
any statement herein or therein, in light of the circumstances under which such
statement is or will be made, not misleading.
Section 2.25. No Existing Discussions. As of the date hereof,
the Company is not engaged, directly or indirectly, in any discussions or
negotiations with any other party with respect to any Third Party Acquisition
(as defined in Section 4.4).
Section 2.26. Section 203 of the DGCL. The Company Board has
taken all actions so that the restrictions contained in Section 203 of the DGCL
applicable to an "interested stockholder" or a "business combination" (as
defined in Section 203) will not apply to the execution, delivery or
performance of this Agreement or the Stockholder Agreement or the consummation
of the Merger or the other transactions contemplated by this Agreement or the
Stockholder's Agreement (as defined in Section 4.15 hereof).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PARENT AND ACQUISITION
Parent and Acquisition hereby represent and warrant to the
Company as follows:
SECTION 3.1. Organization.
(a) Each of Parent and its subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization and has all requisite power
and authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power and authority would not
have a Material Adverse Effect (as defined below) on Parent. When used in
connection with Parent or Acquisition, the term "Material Adverse Effect" means
any change or effect that is (i) materially adverse to the business, results of
operations, condition (financial or otherwise) or prospects of Parent and its
subsidiaries, taken as a whole, other than any change or effect arising out of
general economic conditions unrelated to any businesses in
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which Parent and its subsidiaries are engaged, or (ii) that may impair the
ability of Parent and/or Acquisition to consummate the transactions
contemplated hereby.
(b) Parent has heretofore delivered to the Company
accurate and complete copies of the Articles of Incorporation and Bylaws, as
currently in effect, of Parent and Acquisition. Each of Parent and its
subsidiaries is duly qualified or licensed and in good standing to do business
in each jurisdiction in which the property owned, leased or operated by it or
the nature of the business conducted by it makes such qualification or
licensing necessary, except in such jurisdictions where the failure to be so
duly qualified or licensed and in good standing would not have a Material
Adverse Effect on Parent.
SECTION 3.2. Capitalization of Parent and its Subsidiaries.
(a) The authorized capital stock of Parent consists of
75,000,000 shares of Parent Common Stock (increasing to 275,000,000 shares
contingent upon the approval of Parent's shareholders of an amendment to
Parent's Articles of Incorporation increasing Parent's authorized capital (the
"Articles Amendment") at the meeting of shareholders of Parent convened for the
purpose of voting on the issuance of shares of Parent Common Stock in the
Merger), of which, as of April 15, 1996, 56,354,755 shares of Parent Common
Stock (including 314,240 shares held in Parent's treasury) were issued and
outstanding (each, together with a preferred stock purchase right (the
"Rights") issued pursuant to the Rights Agreement, amended and restated as of
October 30, 1995, between Parent and Chemical Mellon Shareholder Services,
L.L.C. (the "Rights Agreement")), and 1,000,000 shares of preferred stock,
$1.00 par value per share, none of which are outstanding. All of the
outstanding shares of Parent Common Stock have been validly issued, and are
fully paid, nonassessable and free of preemptive rights. As of April 15, 1996,
4,692,315 shares of Parent Common Stock were reserved for issuance and issuable
upon or otherwise deliverable in connection with the exercise of outstanding
options. Between April 15, 1996 and the date hereof, no shares of Parent's
capital stock have been issued other than pursuant to stock options already in
existence on such date, and, except for grants of stock options to employees,
officers and directors in the ordinary course of business consistent with past
practice. Except as set forth above and except for the Rights, as of the date
hereof, there are outstanding (i) no shares of capital stock or other voting
securities of Parent, (ii) no securities of Parent or its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of Parent, (iii) no options or other rights to acquire from Parent
or its subsidiaries, and no obligations of Parent or its subsidiaries to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Parent, and (iv) no
equity equivalents, interests in the ownership or earnings of Parent or its
subsidiaries or other similar rights (collectively, "Parent Securities"). As of
the date hereof, there are no outstanding obligations of Parent or any of its
subsidiaries to repurchase, redeem or otherwise acquire any Parent Securities.
There are no stockholder agreements, voting trusts or other agreements or
understandings to which Parent is a party or by which it is bound relating to
the voting of any shares of capital stock of Parent.
(b) The Parent Common Stock (including the associated
Rights) constitutes the only class of equity securities of Parent or its
subsidiaries registered or required to be registered under the Exchange Act.
SECTION 3.3. Authority Relative to this Agreement;
Recommendation.
(a) Each of Parent and Acquisition has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions
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contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the boards of directors of Parent and Acquisition and by Parent
as the sole shareholder of Acquisition, and no other corporate proceedings on
the part of Parent or Acquisition are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby, except that, as referred to
in Section 3.17, (i) the approval of Parent's shareholders of the issuance of
Parent Common Stock in the Merger is required pursuant to Rule 312 of the NYSE,
(ii) the approval of Parent's shareholders of the Merger is required pursuant
to the Nevada General Corporation Law (the "NGCL") and (iii) the approval of
Parent's shareholders of the Articles Amendment is required pursuant to the
NGCL and Parent's Articles of Incorporation and Bylaws. This Agreement has been
duly and validly executed and delivered by each of Parent and Acquisition and
constitutes a valid, legal and binding agreement of each of Parent and
Acquisition, enforceable against each of Parent and Acquisition in accordance
with its terms.
(b) The Board of Directors of Parent has resolved to
recommend that the shareholders of Parent approve the issuance of Parent Common
Stock in the Merger and the Articles Amendment.
SECTION 3.4. SEC Reports; Financial Statements.
(a) Parent has filed all required forms, reports and
documents with the SEC since March 31, 1992, each of which has complied in all
material respects with all applicable requirements of the Securities Act and
the Exchange Act, each as in effect on the dates such forms, reports and
documents were filed. Parent has heretofore delivered to the Company, in the
form filed with the SEC (including any amendments thereto but excluding any
exhibits), (i) its Annual Reports on Form 10-K for the fiscal years ended April
2, 1993, April 1, 1994 and March 31, 1995, (ii) all definitive proxy statements
relating to Parent's meetings of shareholders (whether annual or special) held
since March 31, 1992 and (iii) all other reports or registration statements
filed by Parent with the SEC since March 31, 1992 (all of the foregoing,
collectively, the "Parent SEC Reports"). None of such Parent SEC Reports,
including, without limitation, any financial statements or schedules included
or incorporated by reference therein, contained, when filed, any untrue
statement of a material fact or omitted to state a material fact required to be
stated or incorporated by reference therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited consolidated financial statements of Parent
included in the Parent SEC Reports fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of Parent
and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and changes in financial position for the
periods then ended.
(b) Parent has heretofore made available or promptly will
make available to the Company a complete and correct copy of any amendments or
modifications, which are required to be filed with the SEC but have not yet
been filed with the SEC, to agreements, documents or other instruments which
previously had been filed by Parent with the SEC pursuant to the Exchange Act.
SECTION 3.5. Information Supplied. None of the information
supplied or to be supplied by Parent or Acquisition for inclusion or
incorporation by reference to (i) the S-4 will, at the time the S-4 is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
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therein not misleading and (ii) the Proxy Statement will, at the date mailed to
shareholders and at the times of the meeting or meetings of shareholders of
Parent 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
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Proxy Statement,
insofar as it relates to the meeting of Parent's shareholders to vote in the
Merger, will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder, and the S-4 will
comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
SECTION 3.6. Consents and Approvals; No Violations. Except for
filings, permits, authorizations, consents and approvals as may be required
under, and other applicable requirements of, the Securities Act, the Exchange
Act, state securities or blue sky laws, the HSR Act and the rules of the NYSE,
and the filing and recordation of the Articles Amendment and the Merger
Certificate as required by the NGCL and the DGCL, respectively, no filing with
or notice to, and no permit, authorization, consent or approval of, any
Governmental Entity is necessary for the execution and delivery by Parent or
Acquisition of this Agreement or the consummation by Parent or Acquisition of
the transactions contemplated hereby, except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings or give
such notice would not have a Material Adverse Effect on Parent. Neither the
execution, delivery and performance of this Agreement by Parent or Acquisition
nor the consummation by Parent or Acquisition of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
respective Certificate of Incorporation or Bylaws (or similar governing
documents) of Parent or Acquisition or any of Parent's subsidiaries, (ii)
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 or Lien) 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 Parent
or Acquisition or any of Parent's other subsidiaries is a party or by which any
of them or any of their respective properties or assets may be bound or (iii)
violate any order, writ, injunction, decree, law, statute, rule or regulation
applicable to Parent or Acquisition or any of Parent's subsidiaries or any of
their respective properties or assets, except in the case of (ii) or (iii) for
violations, breaches or defaults which would not have a Material Adverse Effect
on Parent.
SECTION 3.7. No Default. None of Parent or any of its
subsidiaries is in breach, default or violation (and no event has occurred
which with notice or the lapse of time or both would constitute a breach,
default or violation) of any term, condition or provision of (i) its Articles
of Incorporation or Bylaws (or similar governing documents), (ii) any note,
bond, mortgage, indenture, lease, license, contract, agreement or other
instrument or obligation to which Parent or any of its subsidiaries is now a
party or by which any of them or any of their respective properties or assets
may be bound or (iii) any order, writ, injunction, decree, law, statute, rule
or regulation applicable to Parent, its subsidiaries or any of their respective
properties or assets, except in the case of (ii) or (iii) for violations,
breaches or defaults that would not have a Material Adverse Effect on Parent.
Each note, bond, mortgage, indenture, lease, license, contract, agreement or
other instrument or obligation to which Parent or any of its subsidiaries is
now a party or by which any of them or any of their respective properties or
assets may be bound that is material to Parent and its subsidiaries taken as a
whole and that has not expired is in full force and effect and is not subject
to any material default thereunder of which Parent is aware by any party
obligated to Parent or any subsidiary thereunder.
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SECTION 3.8. No Undisclosed Liabilities; Absence of Changes.
Except as and to the extent publicly disclosed by Parent in the Parent SEC
Reports, as of December 31, 1995, none of Parent or its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles
to be reflected on a consolidated balance sheet of Parent and its consolidated
subsidiaries (including the notes thereto) or which would have a Material
Adverse Effect on Parent. Except as publicly disclosed by Parent, since
December 31, 1995, none of Parent or its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise,
which could reasonably be expected to have, and there have been no events,
changes or effects with respect to Parent or its subsidiaries having or which
could reasonably be expected to have, a Material Adverse Effect on Parent.
SECTION 3.9. Litigation. Except as publicly disclosed by
Parent in the Parent SEC Reports, there is no suit, claim, action, proceeding
or investigation pending or, to the knowledge of Parent, threatened against
Parent or any of its subsidiaries or any of their respective properties or
assets before any Governmental Entity which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to prevent or delay the consummation of the transactions
contemplated by this Agreement. Except as publicly disclosed by Parent in the
Parent SEC Reports, none of Parent or its subsidiaries is subject to any
outstanding order, writ, injunction or decree which, insofar as can be
reasonably foreseen in the future, could reasonably be expected to have a
Material Adverse Effect on Parent or could reasonably be expected to prevent or
delay the consummation of the transactions contemplated hereby.
SECTION 3.10. Compliance with Applicable Law. Except as
publicly disclosed by Parent in the Parent SEC Reports, Parent and its
subsidiaries hold all permits, licenses, variances, exemptions, orders and
approvals of all Governmental Entities necessary for the lawful conduct of
their respective businesses (the "Parent Permits"), except for failures to hold
such permits, licenses, variances, exemptions, orders and approvals which would
not have a Material Adverse Effect on Parent. Except as publicly disclosed by
Parent in the Parent SEC Reports, Parent and its subsidiaries are in compliance
with the terms of the Parent Permits, except where the failure so to comply
would not have a Material Adverse Effect on Parent. Except as publicly
disclosed by Parent in the Parent SEC Reports, the businesses of Parent and its
subsidiaries are not being conducted in violation of any law, ordinance or
regulation of any Governmental Entity except that no representation or warranty
is made in this Section 3.10 with respect to Environmental Laws and except for
violations or possible violations which do not, and, insofar as reasonably can
be foreseen, in the future will not, have a Material Adverse Effect on Parent.
Except as publicly disclosed by Parent in the Parent SEC Reports, no
investigation or review by any Governmental Entity with respect to Parent or
its subsidiaries is pending or, to the knowledge of Parent, threatened, nor, to
the knowledge of Parent, has any Governmental Entity indicated an intention to
conduct the same, other than, in each case, those which Parent reasonably
believes will not have a Material Adverse Effect on Parent.
SECTION 3.11. Employee Benefit Plans; Labor Matters. With
respect to each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of ERISA), maintained or contributed to by Parent or any of its
subsidiaries, or with respect to which Parent or any of its subsidiaries could
incur liability under Section 4069, 4212(c) or 4204 of ERISA (the "Parent
Benefit Plans"), no event has occurred and, to the knowledge of Parent, there
currently exists no condition or set of circumstances, in connection with which
Parent or
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any of its subsidiaries could be subject to any liability under the terms of
the Parent Benefit Plans, ERISA, the Code or any other applicable law which
would have a Material Adverse Effect on Parent. There is no pending or
threatened labor dispute, strike or work stoppage against Parent or any of its
subsidiaries which may reasonably be expected to have a Material Adverse Effect
on Parent.
SECTION 3.12. Environmental Laws and Regulations.
(a) Except as publicly disclosed by Parent in the Parent
SEC Reports, (i) each of Parent and its subsidiaries is in material compliance
with all Environmental Laws, except for non-compliance that would not have a
Material Adverse Effect on Parent, which compliance includes, but is not
limited to, the possession by Parent and its subsidiaries of all material
permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof; (ii)
none of Parent or its subsidiaries has received written notice of, or, to the
knowledge of Parent, is the subject of, any Environmental Claim that could
reasonably be expected to have a Material Adverse Effect on Parent; and (iii)
to the knowledge of Parent, there are no circumstances that are reasonably
likely to prevent or interfere with such material compliance in the future.
(b) Except as publicly disclosed by Parent, there are no
Environmental Claims which could reasonably be expected to have a Material
Adverse Effect on Parent that are pending or, to the knowledge of Parent,
threatened against Parent or any of its subsidiaries or, to the knowledge of
Parent, against any person or entity whose liability for any Environmental
Claim Parent or its subsidiaries has or may have retained or assumed either
contractually or by operation of law.
SECTION 3.13. Tax Matters. Parent and its subsidiaries have
accurately prepared and duly filed with the appropriate federal, state, local
and foreign taxing authorities all tax returns, information returns and reports
required to be filed with respect to Parent and its subsidiaries and have paid
in full or made adequate provision for the payment of all Taxes.
SECTION 3.14. Title to Property. Parent and each of its
subsidiaries have good and defensible title to all of their properties and
assets, free and clear of all liens, charges and encumbrances except liens for
taxes not yet due and payable and such liens or other imperfections of title,
if any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby or which, individually or in the
aggregate, would not have a Material Adverse Effect on Parent; and, to Parent's
knowledge, all leases pursuant to which Parent or any of its subsidiaries lease
from others real or personal property are in good standing, valid and effective
in accordance with their respective terms, and there is not, to the knowledge
of Parent, under any of such leases, any existing material default or event of
default (or event which with notice or lapse of time, or both, would constitute
a material default and in respect of which the Parent or such subsidiary has
not taken adequate steps to prevent such a default from occurring) except where
the lack of such good standing, validity and effectiveness, or the existence of
such default or event of default would not have a Material Adverse Effect on
Parent.
SECTION 3.15. Intellectual Property; Software.
(a) Each of Parent and its subsidiaries owns, or
possesses adequate licenses or other valid rights to use, all existing United
States and foreign patents, trademarks, trade names, services marks,
copyrights, trade secrets, and applications
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therefor that are material to its business as currently conducted (the "Parent
Intellectual Property Rights").
(b) The validity of the Parent Intellectual Property
Rights and the title thereto of Parent or any subsidiary, as the case may be,
is not being questioned in any litigation to which Parent or any subsidiary is
a party.
(c) The conduct of the business of Parent and its
subsidiaries as now conducted does not, to Parent's knowledge, infringe any
valid patents, trademarks, tradenames, service marks or copyrights of others.
The consummation of the transactions contemplated hereby will not result in the
loss or impairment of any Parent Intellectual Property Rights.
(d) Each of Parent and its subsidiaries considers its
computer software as trade secrets, and each has taken steps it believes
appropriate to protect and maintain the same as such.
SECTION 3.16 Insurance. Parent and its subsidiaries maintain
general liability and other business insurance that Parent believes to be
reasonably prudent for its business.
SECTION 3.17. Vote Required. The vote of the holders of
Parent's capital stock necessary to approve the issuance of the Parent Common
Stock in the Merger is, pursuant to the Rule 312 of the NYSE, the affirmative
vote of the holders of a majority of the outstanding shares of Parent Common
Stock voted on the proposal to so issue the Parent Common Stock, provided that
the total vote cast on such proposal represents over 50% in interest of the
outstanding Parent Common Stock. The vote of the holders of Parent's capital
stock necessary to approve the Merger is, pursuant to the NGCL, the affirmative
vote of the holders of a majority of the outstanding shares of Parent Common
Stock. The vote of the holders of Parent's capital stock necessary to approve
the Articles Amendment is, pursuant to the NGCL and Parent's Articles of
Incorporation and Bylaws, the affirmative vote of the holders of a majority of
the outstanding shares of Parent Common Stock. Parent, as the sole stockholder
of Acquisition, has approved and adopted this Agreement.
SECTION 3.18. Tax Treatment; Pooling. Neither Parent nor, to
the knowledge of Parent, any of its affiliates has taken or agreed to take any
action that would prevent the Merger (a) from constituting a reorganization
qualifying under the provisions of Section 368(a) of the Code or (b) from being
treated as a Pooling Transaction for financial accounting purposes.
SECTION 3.19. Affiliates. Except for the directors and
executive officers of Parent, there are no persons who, to the knowledge of
Parent, may be deemed to be affiliates of Parent under Rule 1-02 of Regulation
S-X of the SEC ("Parent Affiliates"). Concurrently with the execution and
delivery of this Agreement, Parent has delivered to the Company an executed
letter agreement, substantially in the form of Exhibit B hereto, from certain
of the Parent Affiliates, and will deliver to Parent, within ten days after the
date of this Agreement, an executed letter agreement, substantially in the form
of Exhibit B hereto, from all other Parent Affiliates.
SECTION 3.20. Certain Business Practices. None of Parent, any
of its subsidiaries or any directors, officers, agents or employees of Parent
or any of its subsidiaries has (i) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(ii) made any unlawful payment to foreign
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or domestic government officials or employees or to foreign or domestic
political parties or campaigns or violated any provision of the FCPA, or (iii)
made any other unlawful payment.
SECTION 3.21. Insider Interests. No officer or director of the
Parent has any interest in any material property, real or personal, tangible or
intangible, including without limitation, any computer software or Parent
Intellectual Property Rights, used in or pertaining to the business of the
Parent or any subsidiary, except for the ordinary rights of a stockholder or
employee stock optionholder.
SECTION 3.22. Opinion of Financial Adviser. Goldman, Sachs &
Co. (the "Parent Financial Adviser") has delivered to the Board of Directors of
Parent its written opinion, dated as of the date of this Agreement, to the
effect that, as of such date, the exchange ratio contemplated by the Merger is
fair to the holders of shares of Parent Common Stock.
SECTION 3.23. Brokers. No broker, finder or investment banker
(other than the Parent Financial Adviser) 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 or on behalf of
Parent or Acquisition.
SECTION 3.24 Disclosure. No representation or warranty of
Parent in this Agreement or any certificate, schedule, document or other
instrument furnished or to be furnished to the Company pursuant hereto or in
connection herewith contains, as of the date of such representation, warranty
or instrument, or will contain any untrue statement of a material fact or, at
the date thereof, omits or will omit to state a material fact necessary to make
any statement herein or therein, in light of the circumstances under which such
statement is or will be made, not misleading.
SECTION 3.25. No Prior Activities. Except for obligations
incurred in connection with its incorporation or organization or the
negotiation and consummation of this Agreement and the transactions
contemplated hereby, Acquisition has neither incurred any obligation or
liability nor engaged in any business or activity of any type or kind
whatsoever or entered into any agreement or arrangement with any person.
ARTICLE 4
COVENANTS
SECTION 4.1. Conduct of Business of the Company. Except as
contemplated by this Agreement or as described in Section 4.1 of the Company
Disclosure Schedule, during the period from the date hereof to the Effective
Time, the Company will, and will cause each of its subsidiaries to, conduct its
operations in the ordinary course of business consistent with past practice
and, to the extent consistent therewith, with no less diligence and effort than
would be applied in the absence of this Agreement, seek to preserve intact its
current business organizations, keep available the service of its current
officers and employees and preserve its relationships with customers, suppliers
and others having business dealings with it to the end that goodwill and
ongoing businesses shall be unimpaired at the Effective Time. Without limiting
the generality of the foregoing, except as otherwise expressly provided in this
Agreement or as described in Section 4.1 of the Company Disclosure Schedule,
prior to the Effective Time, neither the Company nor any of its subsidiaries
will, without the prior written consent of Parent or Acquisition:
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(a) amend its certificate of incorporation or Bylaws (or
other similar governing instrument);
(b) authorize for issuance, issue, sell, deliver or agree
or commit to issue, sell or deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any other securities (except bank loans)
or equity equivalents (including, without limitation, any stock options or
stock appreciation rights), except for the issuance and sale of Shares pursuant
to options previously granted under the Company Plans;
(c) split, combine or reclassify any shares of its
capital stock, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock, make any other actual, constructive or deemed distribution
in respect of its capital stock or otherwise make any payments to stockholders
in their capacity as such, or redeem or otherwise acquire any of its securities
or any securities of any of subsidiaries;
(d) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries (other than the
Merger);
(e) alter through merger, liquidation, reorganization,
restructuring or any other fashion the corporate structure of ownership of any
subsidiary;
(f) (i) incur or assume any long-term or short-term debt
or issue any debt securities except for borrowings under existing lines of
credit in the ordinary course of business; (ii) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person, except in the ordinary
course of business consistent with past practice and except for obligations of
subsidiaries of the Company incurred in the ordinary course of business; (iii)
make any loans, advances or capital contributions to, or investments in, any
other person (other than to subsidiaries of the Company or customary loans or
advances to employees, in each case in the ordinary course of business
consistent with past practice), (iv) pledge or otherwise encumber shares of
capital stock of the Company or its subsidiaries; or (v) mortgage or pledge any
of its material assets, tangible or intangible, or create or suffer to exist
any material Lien thereupon (other than tax Liens for taxes not yet due);
(g) except as may be required by law, enter into, adopt
or amend or terminate any bonus, profit sharing, compensation, severance,
termination, stock option, stock appreciation right, restricted stock,
performance unit, stock equivalent, stock purchase agreement, pension,
retirement, deferred compensation, employment, severance or other employee
benefit agreement, trust, plan, fund or other arrangement for the benefit or
welfare of any director, officer or employee in any manner, or increase in any
manner the compensation or fringe benefits of any director, officer or employee
or pay any benefit not required by any plan and arrangement as in effect as of
the date hereof (including, without limitation, the granting of stock
appreciation rights or performance units); provided, however, that this
paragraph (g) shall not prevent the Company or its subsidiaries from (i)
entering into employment agreements or severance agreements with new employees
in the ordinary course of business and consistent with past practice or (ii)
increasing annual compensation and/or providing for or amending bonus
arrangements for employees for fiscal 1997 in the ordinary course of year-end
compensation reviews consistent with past practice and paying bonuses to
employees for fiscal 1996 in amounts previously disclosed to Parent (to the
extent that such compensation increases and new or
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amended bonus arrangements do not result in a material increase in benefits or
compensation expense to the Company);
(h) acquire, sell, lease or dispose of any assets in any
single transaction or series of related transactions having a fair market value
in excess of $5 million in the aggregate (other than in connection with
outsourcing agreements entered into with customers of the Company or its
subsidiaries);
(i) except as may be required as a result of a change in
law or in generally accepted accounting principles, change any of the
accounting principles or practices used by it;
(j) revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory or
writing-off notes or accounts receivable other than in the ordinary course of
business;
(k) (i) acquire (by merger, consolidation, or acquisition
of stock or assets) any corporation, partnership or other business organization
or division thereof or any equity interest therein (other than in connection
with outsourcing agreements entered into with customers of the Company or its
subsidiaries); (ii) enter into any contract or agreement other than in the
ordinary course of business consistent with past practice which would be
material to the Company and its subsidiaries taken as a whole; (iii) authorize
any new capital expenditure or expenditures which, individually, is in excess
of $1,000,000 or, in the aggregate, are in excess of $5,000,000; provided, that
none of the foregoing shall limit any capital expenditure required pursuant to
existing customer contracts;
(l) make any tax election or settle or compromise any
income tax liability material to the Company and its subsidiary taken as a
whole;
(m) settle or compromise any pending or threatened suit,
action or claim which (i) relates to the transactions contemplated hereby or
(ii) the settlement or compromise of which could have a Material Adverse Effect
on the Company;
(n) commence any material software development project or
terminate any material software development project that is currently ongoing,
in either case, except pursuant to the terms of existing contracts with
customers or except as contemplated by the Company's project development budget
previously provided to Parent; or
(o) take, or agree in writing or otherwise to take, any
of the actions described in Sections 4.1(a) through 4.1(n) or any action which
would make any of the representations or warranties of the Company contained in
this Agreement untrue or incorrect.
SECTION 4.2. Conduct of Business of Parent. Except as
contemplated by this Agreement, during the period from the date hereof to the
Effective Time, Parent will, and will cause each of its subsidiaries to,
conduct their operations in the ordinary course of business consistent with
past practice and, to the extent consistent therewith, with no less diligence
and effort than would be applied in the absence of this Agreement, seek to
preserve intact its current business organizations, keep available the service
of its current officers and employees and preserve its relationships with
customers, suppliers and others having business dealings with it to the end
that goodwill and ongoing businesses shall be unimpaired at the Effective Time.
Without limiting the generality of the foregoing, except as otherwise expressly
provided in this Agreement, prior to the Effective
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Time, neither Parent nor any of its subsidiaries will, without the prior
written consent of the Company:
(a) knowingly take any action that would result in a
failure to maintain the trading of the Parent Common Stock on the NYSE;
(b) declare, set aside or pay any dividend or other
distribution in respect of its capital stock, except for dividends payable in
Parent Common Stock or dividends by a subsidiary of Parent to Parent or another
subsidiary of Parent;
(c) acquire or agree to acquire, by merging or
consolidating with, by purchasing an equity interest in or the assets of, or by
any other manner, any business or any corporation, partnership or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets of any other entity (other than the purchase of assets from
suppliers, clients or vendors in the ordinary course of business and consistent
with past practice), which, in each case, would materially prevent or delay for
more time than 30 days the consummation of the transactions contemplated by
this Agreement;
(d) adopt or propose to adopt any amendments to its
charter documents, which would have an adverse impact on the consummation of
the transactions contemplated by this Agreement;
(e) issue, sell, deliver or agree or commit to issue,
sell or deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any other securities (except for bank loans and commercial paper) or
amend any of the terms of any such securities or agreements outstanding on the
date hereof or make any public announcement thereof; provided, however, that
(i) any subsidiary may issue securities to Parent or any other subsidiary and
(ii) Parent may (A) issue securities or make a public announcement thereof
having an aggregate market value of up to $150 million or (B) grant stock
options to employees, officers or directors in the ordinary course of business
consistent with past practice and issue securities upon the exercise of
employee, officer or director stock options;
(f) acquire, sell, lease or dispose of any assets that
are material to Parent and its subsidiaries taken as a whole, other than (i) in
the ordinary course of business, (ii) in connection with outsourcing agreements
entered into with customers of Parent or its subsidiaries, (iii) pursuant to
the terms of existing agreements with affiliates or partners of the Company or
(iv) in transactions that are only among Parent and any of its subsidiaries; or
(g) take, or agree in writing or otherwise to take, any
of the actions described in Sections 4.1(a) through 4.1(f) or any action which
would make any of the representations or warranties of Parent contained in this
Agreement untrue or incorrect.
SECTION 4.3. Preparation of S-4 and the Proxy Statement.
Parent and the Company shall promptly prepare and file with the SEC the Proxy
Statement, and Parent shall prepare and file with the SEC the S-4, in which the
Proxy Statement will be included as a prospectus. Each of Parent and the
Company shall use its best efforts to have the S-4 declared effective under the
Securities Act as promptly as practicable after such filing. Parent shall also
take any action (other than qualifying to do business in any jurisdiction in
which it is now not so qualified) required to be taken under any applicable
state securities laws in connection with the issuance of Parent Common Stock in
the
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Merger and upon the exercise of Company Stock Options, and the Company shall
furnish all information concerning the Company and the holders of Shares as may
be reasonably requested in connection with any such action.
SECTION 4.4. Other Potential Acquirers.
(a) The Company, its affiliates and their respective
officers, directors, employees, representatives and agents shall immediately
cease any existing discussions or negotiations, if any, with any parties
conducted heretofore with respect to any Third Party Acquisition (as defined
below). The Company may, directly or indirectly, furnish information and
access, in each case only in response to unsolicited requests therefor, to any
person or group pursuant to confidentiality agreements with terms no less
favorable to the Company than the Confidentiality Agreement dated January 10,
1996 between the Company and Parent is with respect to Parent, and may
participate in discussions and negotiate with such entity or group concerning
any Third Party Acquisition, if (i) such entity or group has submitted a
Superior Proposal (as defined in paragraph (b) below) to the Company Board
relating to any such transaction and (ii) the Company Board by a majority vote
determines in its good faith judgment, after consultation with and based upon
the advice of Vinson & Elkins L.L.P. or other independent legal counsel, that
it is required to do so in order to comply with its fiduciary duties; provided,
however, that the Company shall not, in any event, be entitled to terminate
this Agreement as a result of the occurrence of the events described in clauses
(i) and (ii) of this sentence. The Company Board shall provide a copy of any
such written Superior Proposal and a summary of any such oral Superior Proposal
to Parent or Acquisition immediately after receipt thereof and thereafter keep
Parent and Acquisition promptly advised of any development with respect
thereto. Except as set forth above, neither the Company nor any of its
affiliates shall, nor shall the Company authorize or permit any of its or their
respective officers, directors, employees, representatives or agents to,
directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to, any person or
group (other than Parent and Acquisition, any affiliate or associate of Parent
and Acquisition or any designees of Parent and Acquisition) concerning any
Third Party Acquisition; provided, however, that nothing herein shall prevent
the Company Board from taking, and disclosing to the Company's shareholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to any tender offer.
(b) Except as set forth in this Section 4.4(b), the
Company Board shall not withdraw its recommendation of the transactions
contemplated hereby or approve or recommend, or cause the Company to enter into
any agreement with respect to, any Third Party Acquisition. Notwithstanding the
foregoing, if the Company Board by a majority vote determines in its good faith
judgment, after consultation with and based upon the advice of Vinson & Elkins
L.L.P. or other independent legal counsel, that it is required to do so in
order to comply with its fiduciary duties, the Company Board may withdraw its
recommendation of the transactions contemplated hereby or approve or recommend
a Superior Proposal, but in each case only (i) after providing reasonable
written notice to Parent (a "Notice of Superior Proposal") advising Parent that
the Company Board has received a Superior Proposal, specifying the material
terms and conditions of such Superior Proposal and identifying the person
making such Superior Proposal and, (ii) if Parent does not, within seven
business days of Parent's receipt of the Notice of Superior Proposal, make an
offer which the Company Board by a majority vote determines in its good faith
judgment (based on the written advice of a financial adviser of nationally
recognized reputation) to be as favorable to the Company's shareholders as such
Superior Proposal; provided, however, that the Company shall not be entitled to
enter into any agreement with respect to a Superior Proposal unless and until
this Agreement is
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terminated by its terms pursuant to Section 6.1. For the purposes of this
Agreement, "Third Party Acquisition" means the occurrence of any of the
following events: (i) the acquisition of the Company by merger or otherwise by
any person (which includes a "person" as such term is defined in Section
13(d)(3) of the Exchange Act) other than Parent, Acquisition or any affiliate
thereof (a "Third Party"); (ii) the acquisition by a Third Party of more than
30% of the total assets of the Company and its subsidiaries, taken as a whole;
(iii) the acquisition by a Third Party of 30% or more of the outstanding
Shares; (iv) the adoption by the Company of a plan of liquidation or the
declaration or payment of an extraordinary dividend; (v) the repurchase by the
Company or any of its subsidiaries of more than 20% of the outstanding Shares;
or (vi) the acquisition by the Company or any subsidiary, by merger, purchase
of stock or assets, joint venture or otherwise, of a direct or indirect
ownership interest or investment in any business whose annual revenues, net
income or assets is equal or greater than 40% of the annual revenues, net
income or assets of the Company and its subsidiaries taken as whole. For
purposes of this Agreement, a "Superior Proposal" means any bona fide 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
Company Board by a majority vote determines in its good faith judgment (based
on the written advice of a financial adviser of nationally recognized
reputation) to be more favorable to the Company's shareholders than the Merger.
SECTION 4.5. Comfort Letters.
(a) The Company shall use all reasonable efforts to cause
Ernst & Young LLP to deliver a letter dated as of the date of the Proxy
Statement and the S-4, and addressed to itself and Parent and their respective
Boards of Directors, in form and substance reasonably satisfactory to Parent
and customary in scope and substance for agreed upon procedures letters
delivered by independent public accountants in connection with registration
statements and proxy statements similar to the Proxy Statement and the S-4.
(b) Parent shall use all reasonable efforts to cause
Deloitte & Touche LLP to deliver a letter dated as of the date of the Proxy
Statement and the S-4 and addressed to itself and the Company and their
respective Boards of Directors, in form and substance reasonably satisfactory
to the Company and customary in scope and substance for agreed upon procedures
letters delivered by independent accountants in connection with registration
statements and proxy statements similar to the Proxy Statement and the S-4.
SECTION 4.6. Meetings of Stockholders. Each of Parent and the
Company shall take all action necessary, in accordance with the NGCL and the
DGCL, respectively, and its respective certificate of incorporation and bylaws,
to duly call, give notice of, convene and hold a meeting of its stockholders as
promptly as practicable, in the case of the Company, to consider and vote upon
the adoption and approval of this Agreement and the transactions contemplated
hereby, and, in the case of Parent, to vote upon the issuance of Parent Common
Stock pursuant to the Merger and the Articles Amendment. The stockholder votes
required for the adoption and approval of the transactions contemplated by this
Agreement shall be the vote required by the DGCL and its charter and bylaws, in
the case of the Company, and the NGCL and Rule 312 of the NYSE, in the case of
Parent, and the stockholder vote required for the approval of the Articles
Amendment shall be the vote required by the NGCL and Parent's Articles of
Incorporation and Bylaws. The Company and Acquisition and Parent will, through
their respective Boards of Directors, recommend to their respective
shareholders approval of such matters; provided, however, that, subject to the
provisions of Section 6.3, the
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Company Board may withdraw its recommendation if (i) the Company receives a
Superior Proposal and, (ii) after complying with the provisions of Section
4.4(b), the Company Board by a majority vote determines in its good faith
judgment, after consultation with and based upon the advice of Vinson & Elkins
L.L.P. or other independent legal counsel, that it is required, in order to
comply with its fiduciary duties, to recommend the Superior Proposal; and
provided further, however, that the Company shall not, in any event, be
permitted to terminate this Agreement as a result of the occurrence of the
events described in clauses (i) and (ii) of this sentence. The Company and
Parent shall coordinate and cooperate with respect to the timing of such
meetings and shall use their best efforts to hold such meetings on the same day
and as soon as practicable after the date hereof.
SECTION 4.7. Stock Exchange Listing. Parent shall use all
reasonable efforts to cause the shares of Parent Common Stock to be issued in
the Merger and the shares of Parent Common Stock to be reserved for issuance
upon exercise of Company Stock Options to be approved for listing on the NYSE,
subject to official notice of issuance, prior to the Effective Time.
SECTION 4.8. Access to Information.
(a) Between the date hereof and the Effective Time, the
Company will give Parent and its authorized representatives, and Parent will
give the Company and its authorized representatives, reasonable access to all
employees, plants, offices, warehouses and other facilities and to all books
and records of itself and its subsidiaries, will permit the other party to make
such inspections as such party may reasonably require and will cause its
officers and those of its subsidiaries to furnish the other party with such
financial and operating data and other information with respect to the business
and properties of itself and its subsidiaries as the other party may from time
to time reasonably request.
(b) Between the date hereof and the Effective Time, the
Company shall furnish to Parent, and Parent will furnish to the Company, within
25 business days after the end of each calendar month (commencing with March
1996, and, in the case of March 1996, within 90 days), an unaudited balance
sheet of the party furnishing such information as of the end of the such month
and the related statements of earnings, stockholders' equity (deficit) and,
within 25 business days after the end of each calendar quarter (or, in the case
of the quarter ended March 31, within 90 days), cash flows for the quarter then
ended, each prepared in accordance with generally accepted accounting
principles in conformity with the practices consistently applied by such party
with respect to its monthly financial statements. All the foregoing shall be in
accordance with the books and records of the party furnishing such information
and shall fairly present its financial position (taking into account the
differences between the monthly and quarterly statements prepared by such party
in conformity with its past practices) as of the last day of the period then
ended.
(c) Each of the parties hereto will hold and will cause
its consultants and advisers to hold in confidence all documents and
information furnished to it in connection with the transactions contemplated by
this Agreement pursuant to the terms of (i) that certain Confidentiality
Agreement entered into between the Company and Parent dated January 10, 1996,
(ii) that certain Confidentiality Agreement entered into among the Company,
Parent and HOGN dated January 24, 1996, and (iii) that certain Confidentiality
Agreement entered into among the Company, Parent and HOGN dated February 20,
1996.
SECTION 4.9. Additional Agreements; Reasonable Efforts.
Subject to the terms and conditions herein provided, each of the parties hereto
agrees to use all
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reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation, (i)
cooperating in the preparation and filing of the Proxy Statement and the S-4,
any filings that may be required under the HSR Act, and any amendments to any
thereof; (ii) obtaining consents of all third parties and Governmental Entities
necessary, proper or advisable for the consummation of the transactions
contemplated by this Agreement; (iii) contesting any legal proceeding relating
to the Merger and (iv) the execution of any additional instruments necessary to
consummate the transactions contemplated hereby. Subject to the terms and
conditions of this Agreement, Parent and Acquisition agree to use all
reasonable efforts to cause the Effective Time to occur as soon as practicable
after the shareholder votes with respect to the Merger. In case at any time
after the Effective Time any further action is necessary to carry out the
purposes of this Agreement, the proper officers and directors of each party
hereto shall take all such necessary action.
SECTION 4.10. Employee Benefits. Parent will provide the
employees and retirees of the Company and its subsidiaries for a period ending
on the first anniversary of the Effective Time with employee benefit plans
(other than stock option or other plans involving the potential issuance of
securities of the Company or Parent securities) which, in the aggregate, are
not less favorable than those currently provided by the Company and its
subsidiaries, as the case may be. Parent and the Company agree, and Parent will
cause the Surviving Corporation to agree, (i) that all obligations of the
Company or any subsidiary under any "change of control" or similar provisions
relating to employees contained in any existing contracts and all termination
or severance agreements with executive officers (subject to Section 1.11
hereof) will be honored in accordance with their terms as of the date hereof
and (ii) that the ESPP of the Company will be amended to provide that the
calendar semester for employee participation under the ESPP ordinarily
commencing on July 1, 1996 and ending on December 31, 1996 (the "July 1996
Semester") will, if the Merger occurs, end on the Closing Date, and appropriate
adjustments will be made to the ESPP such that, immediately following the
Effective Time, each of the persons theretofore entitled to acquire Shares
under the ESPP as of the end of the July 1996 Semester will be entitled to
acquire, on the same terms and conditions as were applicable under the ESPP,
the number of shares of Parent Common Stock that such person would have been
entitled to receive pursuant to the Merger had such person acquired the Shares
purchasable under the ESPP for the July 1996 Semester immediately prior to the
Effective Time. Notwithstanding the foregoing, nothing contained herein shall
be construed as requiring Parent or the Surviving Corporation to continue any
specific employee benefit plans or to continue the employment of any specific
person.
SECTION 4.11. Public Announcements. Parent, Acquisition and
the Company, as the case may be, will consult with one another before issuing
any press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, including, without limitation, the
Merger, and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
law or by obligations pursuant to any listing agreement with the NYSE as
determined by Parent, Acquisition or the Company, as the case may be.
SECTION 4.12. Indemnification. After the Effective Time, the
Surviving Corporation shall indemnify and hold harmless (and shall also advance
expenses as incurred to the fullest extent permitted under applicable law to)
each person who is now, or has been prior to the date hereof or who becomes
prior to the Effective Time, an officer
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or director of the Company or any of the Company's subsidiaries (the
"Indemnified Persons") against (i) all losses, claims, damages, costs, expenses
(including without limitation counsel fees and expenses), settlement payments
or liabilities arising out of or in connection with any claim, demand, action,
suit, proceeding or investigation based in whole or in part on, or arising in
whole or in part out of, the fact that such person is or was an officer or
director of the Company or any of the Company subsidiaries, whether or not
pertaining to any matter existing or occurring at or prior to the Effective
Time and whether or not asserted or claimed prior to or at or after the
Effective Time ("Indemnified Liabilities") and (ii) all Indemnified Liabilities
based in whole or in part on, or arising in whole or in part out of, or
pertaining to this Agreement, or the transactions contemplated hereby, in each
case to the fullest extent required or permitted under applicable law or under
the Surviving Corporation's certificate of incorporation or bylaws. The parties
hereto intend, to the extent not prohibited by applicable law, that the
indemnification provided for in this Section 4.12 shall apply without
limitation to negligent acts or omissions by an Indemnified Person. Parent
hereby guarantees the payment and performance of the Surviving Corporation's
obligations in this Section 4.12. Each Indemnified Person is intended to be a
third party beneficiary of this Section 4.12 and may specifically enforce its
terms. This Section 4.12 shall not limit or otherwise adversely affect any
rights any Indemnified Person may have under any agreement with the Company or
under the Company's Certificate of Incorporation or Bylaws.
SECTION 4.13. Notification of Certain Matters. The Company
shall give prompt notice to Parent and Acquisition, and Parent and Acquisition
shall give prompt notice to the Company, of (i) the occurrence or nonoccurrence
of any event the occurrence or nonoccurrence of which would be likely to 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 Acquisition, 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 4.13 shall not cure such breach or
non-compliance or limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
SECTION 4.14. Affiliates; Pooling; Tax Free Reorganization.
(a) The Company shall use all reasonable efforts to
obtain from any Company Affiliate who has not previously executed such letter
agreement and from any person who may be deemed to have become a Company
Affiliate after the date of this Agreement and on or prior to the Effective
Time, a letter agreement substantially in the form of Exhibit A hereto as soon
as practicable.
(b) Parent shall use all reasonable efforts to obtain
from any Parent Affiliate who has not previously executed such letter agreement
and from any person who may be deemed to have become a Parent Affiliate after
the date of this Agreement and on or prior to the Effective Time, a letter
agreement substantially in the form of Exhibit B hereto as soon as practicable.
(c) Parent shall not be required to maintain the
effectiveness of the S-4 for the purpose of resale of shares of Parent Common
Stock by stockholders of the Company who may be affiliates of the Company or
Parent pursuant to Rule 145 under the Securities Act. However, Parent shall
assume, by written instrument delivered to DST on or before the Effective Time
(and subject to the conditions set forth in such written instrument), the
Company's registration obligations under Section 11 of the Agreement dated
September 30, 1993, among the Company, Continuum Acquisition, Inc., and
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Vantage Computer Systems, Inc. with respect to all shares of Parent Common
Stock issued to DST in the Merger.
(d) Each party hereto shall use all reasonable efforts to
cause the Merger to be treated for financial accounting purposes as a Pooling
Transaction, and shall not take, and shall use all reasonable efforts to
prevent any affiliate of such party from taking, any actions which could
prevent the Merger from being treated for financial accounting purposes as a
Pooling Transaction.
(e) The Company and Parent and Acquisition shall execute
and deliver to Vinson & Elkins L.L.P., counsel to the Company, certificates
substantially in the form attached hereto as Exhibits C-1 and C-2,
respectively, at such time or times as reasonably requested by such law firm in
connection with its delivery of an opinion with respect to the transactions
contemplated hereby, and the Company and Parent shall each provide a copy
thereof to the other parties hereto. Prior to the Effective Time, none of the
Company, Parent or Acquisition shall take or cause to be taken any action which
would cause to be untrue (or fail to take or cause not to be taken any action
which would cause to be untrue) any of the representations in Exhibits C-1 or
C-2.
SECTION 4.15. Stockholder's Agreement. Parent has received an
agreement from DST (the "Stockholder's Agreement") whereby DST has agreed to
vote all its Shares in favor of the Merger.
ARTICLE 5
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 5.1. Conditions to Each Party's Obligations to Effect
the Merger. The respective obligations of each party hereto to effect the
Merger are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) this Agreement shall have been approved and adopted
by the requisite vote of the shareholders of the Company, and the Articles
Amendment and the issuance of Parent Common Stock pursuant to the Merger shall
have been approved by the requisite vote of the shareholders of Parent;
(b) no statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
enforced by any United States court or United States governmental authority
which prohibits, restrains, enjoins or restricts the consummation of the
Merger;
(c) any waiting period applicable to the Merger under the
HSR Act shall have terminated or expired, and any other governmental or
regulatory notices or approvals required with respect to the transactions
contemplated hereby shall have been either filed or received;
(d) the S-4 shall have become effective under the
Securities Act and shall not be the subject of any stop order or proceedings
seeking a stop order, and Parent shall have received all state securities laws
or "blue sky" permits and authorizations necessary to issue shares of Parent
Common Stock in exchange for Shares in the Merger; and
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(e) (i) the Company shall have received confirmation in
writing from Ernst & Young LLP that in accordance with generally accepted
accounting principles and applicable published rules and regulations of the
SEC, the Company is eligible to be a party to a merger accounted for as a
Pooling Transaction and that Ernst & Young LLP is not aware of any matters that
prohibit the use of pooling of interests accounting in connection with the
Merger, and such confirmation shall not have been withdrawn or modified in any
material respect, and (ii) Parent shall have received a written opinion from
its certified public accountants stating that the Merger will be accounted for
under generally accepted accounting principles as a Pooling Transaction and
such opinion shall not have been withdrawn or modified in any material respect.
SECTION 5.2. Conditions to the Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction
at or prior to the Effective Time of the following conditions:
(a) the representations of Parent and Acquisition
contained in this Agreement or in any other document delivered pursuant hereto
shall be true and correct (except to the extent that the breach thereof would
not have a Material Adverse Effect on Parent) at and as of the Effective Time
with the same effect as if made at and as of the Effective Time (except to the
extent such representations specifically related to an earlier date, in which
case such representations shall be true and correct as of such earlier date),
and at the Closing Parent and Acquisition shall have delivered to the Company a
certificate to that effect;
(b) each of the covenants and obligations of Parent and
Acquisition to be performed at or before the Effective Time pursuant to the
terms of this Agreement shall have been duly performed in all material respects
at or before the Effective Time and at the Closing Parent and Acquisition shall
have delivered to the Company a certificate to that effect;
(c) the shares of Parent Common Stock issuable to the
Company shareholders pursuant to this Agreement and such other shares required
to be reserved for issuance in connection with the Merger shall have been
authorized for listing on the NYSE upon official notice of issuance;
(d) the Company shall have received the opinion of Vinson
& Elkins L.L.P., counsel to the Company, to the effect that (i) the Merger will
be treated for Federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code; (ii) each of Parent, Acquisition and the
Company will be a party to the reorganization within the meaning of Section
368(b) of the Code; and (iii) no gain or loss for Federal income tax purposes
will be recognized by a shareholder of the Company as a result of the Merger
with respect to Shares converted solely into shares of Parent Common Stock, and
such opinion shall not have been withdrawn or modified in any material respect;
(e) Parent shall have obtained the consent or approval of
each person whose consent or approval shall be required in connection with the
transactions contemplated hereby under any loan or credit agreement, note,
mortgage, indenture, lease or other agreement or instrument, except those for
which failure to obtain such consents and approvals would not, in the
reasonable opinion of the Company, individually or in the aggregate, have a
Material Adverse Effect on Parent; and
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(f) there shall have been no events, changes or effects
with respect to Parent or its subsidiaries having or which could reasonably be
expected to have a Material Adverse Effect on Parent.
SECTION 5.3. Conditions to the Obligations of Parent and
Acquisition. The respective obligations of Parent and Acquisition to effect the
Merger are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) the representations of the Company contained in this
Agreement or in any other document delivered pursuant hereto shall be true and
correct (except to the extent that the breach thereof would not have a Material
Adverse Effect on the Company) at and as of the Effective Time with the same
effect as if made at and as of the Effective Time (except to the extent such
representations specifically related to an earlier date, in which case such
representations shall be true and correct as of such earlier date), and at the
Closing the Company shall have delivered to Parent and Acquisition a
certificate to that effect;
(b) each of the covenants and obligations of the Company
to be performed at or before the Effective Time pursuant to the terms of this
Agreement shall have been duly performed in all material respects at or before
the Effective Time and at the Closing the Company shall have delivered to
Parent and Acquisition a certificate to that effect;
(c) Parent shall have received from each affiliate of the
Company referred to in Sections 2.19 and 4.14 an executed copy of the letter
attached hereto as Exhibit A and shall have received from each affiliate of
Parent referred to in Sections 3.19 and 4.14 an executed copy of the letter
attached hereto as Exhibit B;
(d) the Company shall have obtained the consent or
approval of each person whose consent or approval shall be required in order to
permit the succession by the Surviving Corporation pursuant to the Merger to
any obligation, right or interest of the Company or any subsidiary of the
Company under any loan or credit agreement, note, mortgage, indenture, lease or
other agreement or instrument, except for those for which failure to obtain
such consents and approvals would not, in the reasonable opinion of Parent,
individually or in the aggregate, have a Material Adverse Effect on the
Company; and
(e) there shall have been no events, changes or effects
with respect to the Company or its subsidiaries having or which could
reasonably be expected to have a Material Adverse Effect on the Company.
ARTICLE 6
TERMINATION; AMENDMENT; WAIVER
SECTION 6.1. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after approval and adoption of this Agreement by the Company's
shareholders:
(a) by mutual written consent of Parent, Acquisition and
the Company;
36
<PAGE> 45
(b) by Parent and Acquisition or the Company if (i) any
court of competent jurisdiction in the United States or other United States
Governmental Entity shall have issued a final order, decree or ruling or taken
any other final action restraining, enjoining or otherwise prohibiting the
Merger and such order, decree, ruling or other action is or shall have become
nonappealable or (ii) the Merger has not been consummated by December 31, 1996;
provided that no party may terminate this Agreement pursuant to this clause
(ii) if such party's failure to fulfill any of its obligations under this
Agreement shall have been the reason that the Effective Time shall not have
occurred on or before said date;
(c) by the Company if (i) there shall have been a breach
of any representation or warranty on the part of Parent or Acquisition set
forth in this Agreement, or if any representation or warranty of Parent or
Acquisition shall have become untrue, in either case such that the conditions
set forth in Section 5.2(a) would be incapable of being satisfied by December
31, 1996 (or as otherwise extended), (ii) there shall have been a breach by
Parent or Acquisition of any of their respective covenants or agreements
hereunder having a Material Adverse Effect on Parent or materially adversely
affecting (or materially delaying) the consummation of the Merger, and Parent
or Acquisition, as the case may be, has not cured such breach within twenty
business days after notice by the Company thereof, provided that the Company
has not breached any of its obligations hereunder, (iii) Parent shall have
convened a meeting of its shareholders to vote upon the Articles Amendment and
the issuance of Parent Common Stock in the Merger and shall have failed to
obtain the requisite vote of its shareholders for either such proposal or (iv)
the Company shall have convened a meeting of its shareholders to vote upon the
Merger and shall have failed to obtain the requisite vote of its shareholders;
or
(d) by Parent and Acquisition if (i) there shall have
been a breach of any representation or warranty on the part of the Company set
forth in this Agreement, or if any representation or warranty of the Company
shall have become untrue, in either case such that the conditions set forth in
Section 5.3(a) would be incapable of being satisfied by December 31, 1996 (or
as otherwise extended), (ii) there shall have been a breach by the Company of
its covenants or agreements hereunder having a Material Adverse Effect on the
Company or materially adversely affecting (or materially delaying) the
consummation of the Merger, and the Company has not cured such breach within
twenty business days after notice by Parent or Acquisition thereof, provided
that neither Parent nor Acquisition has breached any of their respective
obligations hereunder, (iii) the Company Board shall have recommended to the
Company's shareholders a Superior Proposal, (iv) the Company Board shall have
withdrawn, modified or changed its approval or recommendation of this Agreement
or the Merger or shall have failed to call, give notice of, convene or hold a
shareholders' meeting to vote upon the Merger, or shall have adopted any
resolution to effect any of the foregoing, (v) Parent shall have convened a
meeting of its shareholders to vote upon the Articles Amendment and the
issuance of Parent Common Stock in the Merger and shall have failed to obtain
the requisite vote of its shareholders for either such proposal or (vi) the
Company shall have convened a meeting of its shareholders to vote upon the
Merger and shall have failed to obtain the requisite vote of its shareholders.
SECTION 6.2. Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to Section 6.1, this
Agreement shall forthwith become void and have no effect, without any liability
on the part of any party hereto or its affiliates, directors, officers or
shareholders, other than the provisions of this Section 6.2 and Sections 4.8(c)
and 6.3 hereof. Nothing contained in this Section 6.2 shall relieve any party
from liability for any breach of this Agreement.
37
<PAGE> 46
SECTION 6.3. Fees and Expenses.
(a) In the event that this Agreement shall be terminated
pursuant to:
(i) Sections 6.1(d)(iii) or (iv);
(ii) Sections 6.1(d)(i) or (ii) and, within twelve
months thereafter, the Company enters into an agreement with
respect to a Third Party Acquisition, or a Third Party
Acquisition occurs, involving any party (or any affiliate
thereof) (x) with whom the Company (or its agents) had
negotiations with a view to a Third Party Acquisition, (y) to
whom the Company (or its agents) furnished information with a
view to a Third Party Acquisition or (z) who had submitted a
proposal or expressed an interest in a Third Party
Acquisition, in the case of each of clauses (x), (y) and (z)
after the date hereof and prior to such termination; or
(iii) Sections 6.1(c)(iv) or 6.1(d)(vi) and, at the
time of the Company shareholders' meeting at which the Company
failed to obtain the requisite vote, as applicable, there
shall be outstanding an offer by a Third Party to consummate,
or there shall have been under consideration by the Company or
there shall have been publicly announced a plan or proposal
with respect to, a Third Party Acquisition;
Parent and Acquisition would suffer direct and substantial damages, which
damages cannot be determined with reasonable certainty. To compensate Parent
and Acquisition for such damages, the Company shall pay to Parent the amount of
$45 million as liquidated damages immediately upon such a termination. It is
specifically agreed that the amount to be paid pursuant to this Section 6.3(a)
represents liquidated damages and not a penalty.
(b) Upon the termination of this Agreement pursuant to
Sections 6.1(c)(iv) or 6.1(d)(i), (ii), (iii), (iv) or (vi) (other than a
termination requiring the Company to pay liquidated damages as contemplated by
Section 6.3(a) hereof), the Company shall reimburse Parent, Acquisition and
their affiliates (not later than ten business days after submission of
statements therefor) for all actual documented out-of-pocket fees and expenses,
not to exceed $2,000,000, actually and reasonably incurred by any of them or on
their behalf in connection with the Merger and the consummation of all
transactions contemplated by this Agreement (including, without limitation,
fees payable to investment bankers, counsel to any of the foregoing, and
accountants).
(c) Upon the termination of this Agreement pursuant to
Sections 6.1(c)(i), (ii) or (iii) or Section 6.1(d)(v), Parent shall reimburse
the Company and its affiliates (not later than ten business days after
submission of statements therefor) for all actual documented out-of-pocket fees
and expenses, not to exceed $2,000,000, actually and reasonably incurred by any
of them or on their behalf in connection with the Merger and the consummation
of all transactions contemplated by this Agreement (including, without
limitation, fees payable to investment bankers, counsel to any of the
foregoing, and accountants).
(d) Except as specifically provided in this Section 6.3,
each party shall bear its own expenses in connection with this Agreement and
the transactions contemplated hereby.
38
<PAGE> 47
SECTION 6.4. Amendment. This Agreement may be amended by
action taken by the Company, Parent and Acquisition at any time before or after
approval of the Merger by the shareholders of the Company (if required by
applicable law) but, after any such approval, no amendment shall be made which
requires the approval of such shareholders under applicable law without such
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of the parties hereto.
SECTION 6.5. Extension; Waiver. At any time prior to the
Effective Time, each party hereto may (i) extend the time for the performance
of any of the obligations or other acts of the other party, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
herein or in any document, certificate or writing delivered pursuant hereto or
(iii) waive compliance by the other party with any of the agreements or
conditions contained herein. Any agreement on the part of any party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such
rights.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1. Nonsurvival of Representations and Warranties.
The representations and warranties made herein shall not survive beyond the
Effective Time or a termination of this Agreement. This Section 7.1 shall not
limit any covenant or agreement of the parties hereto which by its terms
requires performance after the Effective Time.
SECTION 7.2. Entire Agreement; Assignment. This Agreement (a)
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all other prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) shall not be assigned by operation of law or
otherwise; provided, however, that Acquisition may assign any or all of its
rights and obligations under this Agreement to any subsidiary of Parent, but no
such assignment shall relieve Acquisition of its obligations hereunder if such
assignee does not perform such obligations.
SECTION 7.3. Validity. If any provision of this Agreement, or
the application thereof to any person or circumstance, is held invalid or
unenforceable, the remainder of this Agreement, and the application of such
provision to other persons or circumstances, shall not be affected thereby, and
to such end, the provisions of this Agreement are agreed to be severable.
SECTION 7.4. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to each other party as follows:
if to Parent or Acquisition: Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Attention: Hayward D. Fisk, Esq.
and W. Brinson Weeks
39
<PAGE> 48
with a copy to: Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071
Attention: Ronald S. Beard, Esq.
if to the Company to: The Continuum Company, Inc.
9500 Arboretum Boulevard
Austin, Texas 78759-6399
Telecopy: (512) 338-7730
Attention: Jack Dennison, Esq.
with a copy to: Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin
Houston, Texas 77002-6760
Telecopy: (713) 758-2346
Attention: C. Michael Harrington,
Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
SECTION 7.5. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
regard to the principles of conflicts of law thereof.
SECTION 7.6. Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
SECTION 7.7. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and except as provided in Sections 1.11,
4.10, 4.12 and 7.2, nothing in this Agreement, express or implied, is intended
to or shall confer upon any other person any rights, benefits or remedies of
any nature whatsoever under or by reason of this Agreement.
SECTION 7.8. Certain Definitions. For the purposes of this
Agreement, the term:
(a) "affiliate" means (except as otherwise provided in
Sections 2.19, 3.19 and 4.14) a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person;
(b) "business day" means any day other than a day on
which the NYSE is closed;
(c) "capital stock" means common stock, preferred stock,
partnership interests, limited liability company interests or other ownership
interests entitling the holder thereof to vote with respect to matters
involving the issuer thereof;
(d) "knowledge" or "known" means, with respect to any
matter in question, if an executive officer of the Company or Parent, as the
case may be, has actual knowledge of such matter;
40
<PAGE> 49
(e) "person" means an individual, corporation,
partnership, limited liability company, association, trust, unincorporated
organization or other legal entity; and
(f) "subsidiary" or "subsidiaries" of the Company,
Parent, the Surviving Corporation or any other person, means any corporation,
partnership, limited liability company, association, trust, unincorporated
association or other legal entity of which the Company, Parent, the Surviving
Corporation or any such other person, as the case may be (either alone or
through or together with any other subsidiary), owns, directly or indirectly,
50% or more of the capital stock, the holders of which are generally entitled
to vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
SECTION 7.9. Personal Liability. This Agreement shall not
create or be deemed to create or permit any personal liability or obligation on
the part of any direct or indirect stockholder of the Company or Parent or any
officer, director, employee, agent, representative or investor of any party
hereto.
SECTION 7.10. Specific Performance. The parties hereby
acknowledge and agree that the failure of any party to perform its agreements
and covenants hereunder, including its failure to take all actions as are
necessary on its part to the consummation of the Merger, will cause irreparable
injury to the other parties for which damages, even if available, will not be
an adequate remedy. Accordingly, each party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel performance
of such party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder; provided, however, that, if
a party hereto is entitled to receive any payment or reimbursement of expenses
pursuant to Sections 6.3(a), (b) or (c), it shall not be entitled to specific
performance to compel the consummation of the Merger.
SECTION 7.11. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
41
<PAGE> 50
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed on its behalf as of the day and year first above
written.
COMPUTER SCIENCES CORPORATION
By: /s/ Van B. Honeycutt
---------------------------------
Name: Van B. Honeycutt
-------------------------------
Title: President
------------------------------
THE CONTINUUM COMPANY, INC.
By: /s/ W. Michael Long
---------------------------------
Name: W. Michael Long
-------------------------------
Title: President and Chief Executive
Officer
------------------------------
CONTINENTAL ACQUISITION, INC.
By: /s/ Van B. Honeycutt
---------------------------------
Name: Van B. Honeycutt
-------------------------------
Title: President
------------------------------
42
<PAGE> 51
EXHIBIT A
April __, 1996
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Dear Sirs:
Reference is made to the provisions of the Agreement and Plan
of Merger, dated as of April 28, 1996 (together with any amendments thereto,
the "Merger Agreement"), among The Continuum Company, a Delaware corporation
(the "Company"), Computer Sciences Corporation, a Nevada corporation
("Parent"), and Continental Acquisition, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent ("Merger Sub"), pursuant to which Merger Sub
will be merged with and into the Company, with the Company continuing as the
surviving corporation (the "Merger"). This letter constitutes the undertakings
of the undersigned contemplated by the Merger Agreement.
I understand that I may be deemed to be an "affiliate" of the
Company, as such term is defined for purposes of Rule 145 ("Rule 145")
promulgated under the Securities Act of 1933, as amended (the "Securities
Act"), and that the transferability of the shares of common stock, par value
$1.00 per share, of Parent (the "Parent Shares") which I will receive upon the
consummation of the Merger in exchange for my shares of common stock of the
Company (the "Company Shares"), or upon exercise of certain options I hold to
purchase shares of common stock of the Company is restricted. Nothing herein
shall be construed as an admission that I am an affiliate.
I hereby represent, warrant and covenant to Parent that:
(a) I will not transfer, sell or otherwise dispose of any
of the Parent Shares except (i) pursuant to an effective registration statement
under the Securities Act, or (ii) as permitted by, and in accordance with, Rule
145, if applicable, or another applicable exemption under the Securities Act;
and
(b) I will not (i) transfer, sell or otherwise dispose of
any Company Shares prior to the Effective Time (as defined in the Merger
Agreement) or (ii) sell or otherwise reduce my risk (within the meaning of the
Securities and Exchange Commission's Financial Reporting Release No. 1.,
"Codification of Financial Reporting Policies," Section 201.01 [47 F.R. 21028]
(May 17, 1982) with respect to any Parent Shares until after such time (the
"Delivery Time") as financial results reflecting at least 30 days of
post-merger combined operations of Parent and the Company have been published
by Parent, except as permitted by Staff Accounting Bulletin No. 76 issued by
the Securities and Exchange Commission; and
(c) I shall execute and deliver to Vinson & Elkins,
L.L.P., counsel to the Company, and to the Company a certificate in such form
as and at such time or times as may be reasonably requested by such law firm or
the Company, as the case may be, in connection with such law firm's delivery of
a tax opinion with respect to the transactions contemplated by the Merger
Agreement and shall provide a copy thereof to Parent.
<PAGE> 52
I have not taken and will not take or agree to take any action
that would prevent the Merger from qualifying, or being accounted for, as a
pooling-of-interests.
I further understand that, in order to make more effective the
provisions of the foregoing paragraph, Parent may delay delivery to me of
certificates in respect of the Parent Shares until the Delivery Time.
I hereby acknowledge that, except as otherwise provided in the
Merger Agreement, Parent is under no obligation to register the sale, transfer,
pledge or other disposition of the Parent Shares or to take any other action
necessary for the purpose of making an exemption from registration available.
I understand that Parent will issue stop transfer instructions
to its transfer agents with respect to the Parent Shares and that a restrictive
legend will be placed on the certificates delivered to me evidencing the Parent
Shares in substantially the following form:
"This certificate and the shares represented hereby have been
issued pursuant to a transaction governed by Rule 145 ("Rule
145") promulgated under the Securities Act of 1933, as amended
(the "Securities Act"), and may not be sold or otherwise
disposed of unless registered under the Securities Act
pursuant to a Registration Statement in effect at the time or
unless the proposed sale or disposition can be made in
compliance with Rule 145 or without registration in reliance
on another exemption therefrom. Reference is made to that
certain letter agreement, dated April 28, 1996, between the
Holder and the Issuer, a copy of which is on file in the
principal office of the Issuer which contains further
restrictions on the transferability of this certificate and
the shares represented hereby."
The term Parent Shares as used in this letter shall mean and
include not only the common stock of Parent as presently constituted, but also
any other stock which may be issued in exchange for, in lieu of, or in addition
to, all or any part of such Parent Shares.
I hereby acknowledge that the receipt of this letter by Parent
is an inducement and a condition to Parent's obligation to consummate the
Merger under the Merger Agreement and that I understand the requirements of
this letter and the limitations imposed upon the transfer, sale or other
disposition of the Company Shares and the Parent Shares.
Very truly yours,
[AFFILIATE]
2
<PAGE> 53
EXHIBIT B
April __, 1996
Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
Dear Sirs:
Reference is made to the provisions of the Agreement and Plan
of Merger, dated as of April 28, 1996 (together with any amendments thereto,
the "Merger Agreement"), among The Continuum Company, Inc., a Delaware
corporation (the "Company"), Computer Sciences Corporation, Inc., a Nevada
corporation ("Parent"), and Continental Acquisition, Inc., a Delaware
corporation and a wholly-owned subsidiary of Parent ("Merger Sub"), pursuant to
which Merger Sub will be merged with and into the Company, with the Company
continuing as the surviving corporation (the "Merger"). This letter constitutes
the undertakings of the undersigned contemplated by the Merger Agreement.
I hereby represent, warrant and covenant to the Parent that I
will not sell or otherwise reduce my risk (within the meaning of the Securities
and Exchange Commission's Financial Reporting Release No. 1., "Codification of
Financial Reporting Policies," Section 201.01 [47 F.R. 21028] (May 17, 1982)
with respect to any shares of common stock, par value $1.00 per share, of
Parent owned by me (the "Parent Shares") until after such time as financial
results reflecting at least 30 days of post-Merger combined operations of
Parent and the Company have been published by Parent, except as permitted by
Staff Accounting Bulletin No. 76 issued by the Securities and Exchange
Commission.
I have not taken and will not take or agree to take any action
that would prevent the Merger from qualifying, or being accounted for, as a
pooling-of-interests.
I understand that Parent shall not be bound by any attempted
sale of any Parent Shares, and will issue stop transfer instructions to its
transfer agent with respect to the Parent Shares.
The term Parent Shares as used in this letter shall mean and
include not only the common stock of Parent as presently constituted, but also
any other stock which may be issued in exchange for, in lieu of, or in addition
to, all or any part of such Parent Shares.
<PAGE> 54
I hereby acknowledge that the receipt of this letter by Parent
is an inducement and a condition to Parent's obligation to consummate the
Merger under the Merger Agreement and that I understand the requirements of
this letter and the limitations imposed upon the transfer, sale or other
disposition of Parent Shares.
Very truly yours,
Affiliate
2
<PAGE> 55
EXHIBIT C-1
[FORM OF OFFICER'S CERTIFICATE REGARDING CERTAIN TAX
MATTERS TO BE EXECUTED BY THE COMPANY]
__________________, 1996
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Gentlemen:
This letter is being delivered to you pursuant to Section 4.14
of the Agreement and Plan of Merger (the "Agreement"), dated as of April 28,
1996, among The Continuum Company, Inc., a Delaware corporation (the
"Company"), Computer Sciences Corporation, a Nevada corporation ("Parent"), and
Continental Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Acquisition Sub"). Unless otherwise indicated,
capitalized terms not defined herein have the meaning set forth in the
Agreement.
After due inquiry and investigation regarding the meaning of
and factual support for the following representations, the undersigned hereby
certifies and represents that, assuming the Merger were to occur on the date
hereof, the following facts are true:
1. Pursuant to the Merger, Acquisition Sub will merge
with and into the Company, and the Company will acquire all of the assets and
liabilities of Acquisition Sub. Specifically, the assets transferred to the
Company pursuant to the Merger will represent at least ninety percent (90%) of
the fair market value of the net assets and at least seventy percent (70%) of
the fair market value of the gross assets held by Acquisition Sub immediately
prior to the Merger. In addition, at least ninety percent (90%) of the fair
market value of the net assets and at least seventy percent (70%) of the fair
market value of the gross assets held by the Company immediately prior to the
Merger will continue to be held by the Company immediately after the Merger.
For the purpose of determining the percentage of the Company's and Acquisition
Sub's net and gross assets held by the Company immediately following the
Merger, the following assets will be treated as property held by Acquisition
Sub or the Company, as the case may be, immediately prior but not subsequent to
the Merger: (i) assets used by the Company or Acquisition Sub (other than
assets transferred from Parent to Acquisition Sub for such purpose) to pay
expenses or liabilities incurred in connection with the Merger and (ii) assets
used to make distributions, redemptions or other payments in respect of stock
of the Company (except for regular, normal distributions) or in respect of
rights to acquire such stock (including payments treated as such for tax
purposes) that are made in contemplation of the Merger or that are related
thereto;
2. Other than in the ordinary course of business or
pursuant to its obligations under the Agreement, the Company has not disposed
of any of its assets (including any distribution of assets with respect to, or
in redemption of, stock) since commencement of negotiations with Parent
regarding the Merger;
3. The Company's principal reasons for participating in
the Merger are bona fide business purposes unrelated to taxes;
<PAGE> 56
4. The Company has no outstanding warrants, options,
convertible securities or any other type of right to acquire the Company stock
(or any other equity interest in the Company) or to vote (or restrict or
otherwise control the vote of) shares of stock of the Company which, if
exercised, would affect Parent's acquisition and retention of Control of the
Company;
5. In the Merger, shares of stock of the Company
representing "Control" of the Company will be exchanged solely for shares of
voting stock of Parent. For purposes of this paragraph, shares of the stock of
Company exchanged in the Merger for cash and other property (including, without
limitation, cash paid to shareholders of the Company in lieu of fractional
shares of Parent voting stock) will be treated as shares of stock of the
Company outstanding on the date of the Merger but not exchanged for shares of
voting stock of Parent. As used in this letter, "Control" shall consist of
direct ownership of shares of stock possessing at least eighty percent (80%) of
the total combined voting power of shares of all classes of stock entitled to
vote and at least eighty percent (80%) of the total number of shares of all
other classes of stock of the corporation. For purposes of determining Control,
a person shall not be considered to own shares of voting stock if rights to
vote such shares (or to restrict or otherwise control the voting of such
shares) are held by a third party (including a voting trust) other than an
agent of such person;
6. The payment of cash in lieu of fractional shares of
Parent stock is solely for the purpose of avoiding the expense and
inconvenience to Parent of issuing fractional shares and does not represent
separately bargained for consideration. The total cash consideration that will
be paid in the Merger to the Company shareholders in lieu of fractional shares
of Parent stock will not exceed one (1) percent of the total consideration that
will be issued in the Merger to the Company shareholders in exchange for their
Shares;
7. The Company has no plan or intention to issue
additional shares of stock after the Merger, or take any other action, that
would result in Parent losing Control of the Company;
8. The Company has no plan or intention to sell or
otherwise dispose of any of its assets or of any of the assets acquired from
Acquisition Sub in the Merger except for dispositions made in the ordinary
course of business or payment of expenses incurred by the Company pursuant to
the Merger and except for transfers described in both Section 368(a)(2)(C) of
the Code and Treasury Regulation Section 1.368-2(j)(4);
9. Following the Merger, the Company will continue its
historic business or use a significant portion of its historic business assets
in a business;
10. In the Merger, Acquisition Sub will have no
liabilities assumed by the Company and will not transfer to the Company any
assets subject to liabilities, except to the extent incurred in connection with
the transactions contemplated by the Agreement;
11. The fair market value of the Company's assets will,
at the Effective Time of the Merger, exceed the aggregate liabilities of the
Company plus the amount of liabilities, if any, to which such assets are
subject;
12. The Company is not an "investment company" within the
meaning of Sections 368(a)(2)(F)(iii) and (iv) of the Code;
13. The Company is not under the jurisdiction of a court
in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code;
2
<PAGE> 57
14. There is no plan or intention ("Plan) on the part of
the shareholders of the Company who own five percent or more of the Company
stock and, after due inquiry with its officers and directors, the Company has
no knowledge of, and believes that there does not exist, any Plan on the part
of the remaining shareholders of the Company to engage in a sale, exchange,
transfer, distribution (including, without limitation, a distribution by a
corporation to its stockholders), pledge, disposition or any other transaction
which results in a reduction in the risk of ownership or a direct or indirect
disposition (a "Sale") of shares of Parent stock received in the Merger that
would reduce ownership by shareholders of the Company of Parent stock to a
number of shares having a value as of the effective time of the Merger of less
than fifty percent (50%) of the aggregate fair market value, immediately prior
to the Merger, of all outstanding shares of the Company stock. For purposes of
this paragraph, shares of the Company stock (i) with respect to which a
shareholder of the Company receives consideration in the Merger other than
shares of Parent stock (including, without limitation, cash received in lieu of
fractional shares of Parent stock) and/or (ii) with respect to which a Sale
occurs prior to and in contemplation of the Merger, shall be considered
outstanding shares of stock of the Company exchanged for shares of Parent stock
in the Merger and then disposed of pursuant to a Plan;
15. The fair market value of the shares of Parent stock
received by each shareholder of the Company will be approximately equal to the
fair market value of the shares of stock of the Company surrendered in exchange
therefor and the aggregate consideration received by shareholders of the
Company in exchange for their shares of stock of the Company will be
approximately equal to the fair market value of all of the outstanding shares
of stock of the Company immediately prior to the Merger;
16. Acquisition Sub, Parent, the Company and the
shareholders of the Company will each pay separately its or their own expenses
relating to the Merger;
17. There is no intercorporate indebtedness existing
between Parent and the Company or between Acquisition Sub and the Company that
was issued, acquired, or will be settled at a discount as a result of the
Merger;
18. The terms of the Agreement are the product of arm's
length negotiations;
19. None of the compensation received by any
shareholder-employees of the Company will be separate consideration for, or
allocable to, any of their shares of stock of the Company; none of the shares
of Parent stock received by any shareholder-employees of the Company will be
separate consideration for, or allocable to, any employment agreement or any
covenants not to compete; and the compensation paid to any
shareholder-employees of the Company will be for services actually rendered and
will be commensurate with amounts paid to third parties bargaining at arm's
length for similar services;
20. To the best knowledge of the Company, during the past
five (5) years, none of the outstanding shares of capital stock of the Company,
including the right to acquire or vote any such shares, have directly or
indirectly been owned by Parent.;
21. Factual statements contained in the S-4 with respect
to the Company and its subsidiaries are true, correct and complete in all
material respects;
22. The Company is authorized to make all of the
representations set forth herein; and
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<PAGE> 58
23. The Agreement represents the full and complete
agreement among Parent, Acquisition Sub and the Company regarding the Merger,
and there are no other written or oral agreements regarding the Merger.
It is understood that (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreement (including all schedules and exhibits thereto) and documents related
thereto, and (ii) your opinions will be subject to certain limitations and
qualifications including that they may not be relied upon if any such
representations are not accurate in all material respects.
Notwithstanding anything herein to the contrary, the
undersigned makes no representations regarding any actions or conduct of the
Company pursuant to Parent's exercise of control over the Company after the
Merger. It is understood that your opinions will not address any tax
consequence of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.
Very truly yours,
THE CONTINUUM COMPANY, INC.
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
4
<PAGE> 59
EXHIBIT C-2
[FORM OF OFFICER'S CERTIFICATE REGARDING CERTAIN TAX MATTERS
TO BE EXECUTED BY PARENT AND ACQUISITION SUB]
__________________, 1996
Vinson & Elkins L.L.P.
2300 First City Tower
1001 Fannin Street
Houston, Texas 77002-6760
Gentlemen:
This letter is being delivered to you pursuant to Section 4.14
of the Agreement and Plan of Merger (the "Agreement"), dated as of April 28,
1996, among The Continuum Company, Inc., a Delaware corporation (the
"Company"), Computer Sciences Corporation, a Nevada corporation ("Parent"), and
Continental Acquisition, Inc., a Delaware corporation and a wholly owned
subsidiary of Parent ("Acquisition Sub"). Unless otherwise indicated,
capitalized terms not defined herein have the meanings set forth in the
Agreement.
After due inquiry and investigation regarding the meaning of
and factual support for the following representations, the undersigned hereby
certify and represent that, assuming the Merger were to occur on the date
hereof, the following facts are true:
1. Pursuant to the Merger, Acquisition Sub will merge
with and into the Company, and the Company will acquire all of the assets and
liabilities of Acquisition Sub. Specifically, the assets transferred to the
Company pursuant to the Merger will represent at least ninety percent (90%) of
the fair market value of the net assets and at least seventy percent (70%) of
the fair market value of the gross assets held by Acquisition Sub immediately
prior to the Merger. In addition, at least ninety percent (90%) of the fair
market value of the net assets and at least seventy percent (70%) of the fair
market value of the gross assets held by the Company immediately prior to the
Merger will continue to be held by the Company immediately after the Merger.
For the purpose of determining the percentage of the Company's and Acquisition
Sub's net and gross assets held by the Company immediately following the
Merger, the following assets will be treated as property held by Acquisition
Sub or the Company, as the case may be, immediately prior but not subsequent to
the Merger: (i) assets used by the Company or Acquisition Sub (other than
assets transferred from Parent to Acquisition Sub for such purpose) to pay
expenses or liabilities incurred in connection with the Merger and (ii) assets
used to make distributions, redemptions or other payments in respect of stock
of the Company (except for regular, normal distributions) or in respect of
rights to acquire such stock (including payments treated as such for tax
purposes) that are made in contemplation of the Merger or that are related
thereto;
2. Acquisition Sub was formed solely for the purpose of
consummating the transactions contemplated by the Agreement and at no time will
Acquisition Sub conduct any business activities or other operations, or dispose
of any of its assets, other than pursuant to its obligations under the
Agreement;
<PAGE> 60
3. Parent's principal reasons for participating in the
Merger are bona fide business purposes not related to taxes;
4. Prior to the Merger, Parent will be in "Control" of
Acquisition Sub. As used in this letter, "Control" shall consist of direct
ownership of shares of stock possessing at least eighty percent (80%) of the
total combined voting power of all classes of stock entitled to vote and at
least eighty percent (80%) of the total number of shares of all other classes
of stock of the corporation. For purposes of determining Control, a person
shall not be considered to own shares of voting stock if rights to vote such
shares (or to restrict or otherwise control the voting of such shares) are held
by a third party (including a voting trust) other than an agent of such person;
5. In the Merger, shares of stock of the Company
representing Control of the Company will be exchanged solely for shares of
voting stock of Parent. For purposes of this paragraph, shares of stock of the
Company exchanged in the Merger for cash and other property (including, without
limitation, cash paid to shareholders of the Company in lieu of fractional
shares of Parent voting stock) will be treated as shares of stock of the
Company outstanding on the date of the Merger but not exchanged for shares of
voting stock of Parent;
6. The payment of cash in lieu of fractional shares of
Parent stock is solely for the purpose of avoiding the expense and
inconvenience to Parent of issuing fractional shares and does not represent
separately bargained for consideration. The total cash consideration that will
be paid in the Merger to the Company shareholders in lieu of fractional shares
of Parent stock will not exceed one (1) percent of the total consideration that
will be issued in the Merger to the Company shareholders in exchange for their
Shares;
7. Parent has no plan or intention to cause the Company
to issue additional shares of stock after the Merger, or take any other action,
that would result in Parent losing Control of the Company;
8. Parent has no plan or intention to reacquire any of
its stock issued pursuant to the Merger;
9. Parent has no plan or intention to liquidate the
Company; to merge the company with or into another corporation, including
Parent or its affiliates; to sell, distribute or otherwise dispose of the stock
of the Company; or to cause the Company to sell or otherwise dispose of any of
its assets or of any assets acquired from Acquisition Sub, except for
dispositions made in the ordinary course of business or payment of expenses
incurred by the Company pursuant to the Merger and except for transfers
described in both Section 368(a)(2)(C) of the Code and Treasury Regulation
Section 1.368-2(j)(4);
10. In the Merger, Acquisition Sub will have no
liabilities assumed by the Company and will not transfer to the Company any
assets subject to liabilities, except to the extent incurred in connection with
the transactions contemplated by the Agreement;
11. Following the Merger, the Company will continue its
historic business or use a significant portion of its historic business assets
in a business;
12. During the past five (5) years, none of the
outstanding shares of capital stock of the Company, including the right to
acquire or vote any such shares, have directly or indirectly been owned by
Parent;
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<PAGE> 61
13. Neither Parent nor Acquisition Sub is an "investment
company" within the meaning of Sections 368(a)(2)(F)(iii) and (iv) of the Code;
14. The fair market value of the Parent stock received by
each stockholder of the Company will be approximately equal to the fair market
value of the stock of the Company surrendered in exchange therefor, and the
aggregate consideration received by shareholders of the Company in exchange for
their stock of the Company will be approximately equal to the fair market value
of all of the outstanding shares of stock of the Company immediately prior to
the Merger;
15. Acquisition Sub, Parent, the Company and the
shareholders of the Company will each pay separately its or their own expenses
relating to the Merger;
16. There is no intercorporate indebtedness existing
between Parent and the Company or between Acquisition Sub and the Company that
was issued, acquired or will be settled at a discount as a result of the
Merger;
17. The terms of the Agreement are the product of
arm's-length negotiations;
18. None of the compensation received by any
shareholder-employee of the Company will be separate consideration for, or
allocable to, any of their shares of stock of the Company; none of the shares
of Parent stock received by any shareholder-employee of the Company will be
separate consideration for, or allocable to, any employment agreement or any
covenants not to compete; and the compensation paid to any shareholder-employee
of the Company will be for services actually rendered and will be commensurate
with amounts paid to third parties bargaining at arm's-length for similar
services;
19. Factual statements contained in the S-4 with respect
to Parent and its subsidiaries are true, correct and complete in all material
respects;
20. Parent and Acquisition Sub are authorized to make all
of the representations set forth herein; and
21. The Agreement represents the full and complete
agreement among Parent, Acquisition Sub and the Company regarding the Merger,
and there are no other written or oral agreements regarding the Merger.
It is understood that (i) your opinions will be based on the
completeness and accuracy of and compliance with, representations set forth
herein and on the statements contained in the Agreement (including all
schedules and exhibits thereto) and documents related thereto, and (ii) your
opinions will be subject to certain limitations and qualifications, including
that they may not be relied upon if any such representations are not accurate
in all material respect.
3
<PAGE> 62
It is understood that your opinions will not address any tax
consequences of the Merger or any action taken in connection therewith except
as expressly set forth in such opinions.
Very truly yours,
Computer Sciences Corporation,
a Nevada corporation
By:
---------------------------------
Title:
------------------------------
Continental Acquisition, Inc.,
a Delaware corporation
By:
---------------------------------
Title:
------------------------------
4
<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
MOVED ON BUSINESS WIRE AND
PR NEWSWIRE APRIL 29, 1996
CSC TO MERGE WITH CONTINUUM IN SHARE
EXCHANGE VALUED AT $1.5 BILLION
EL SEGUNDO, CA and AUSTIN, TX, April 29 -- Computer Sciences
Corporation (NYSE:CSC) and The Continuum Company, Inc. (NYSE:CNU) announced
today they have signed a definitive agreement for CSC to merge with Continuum
in a share exchange to be accounted for as a pooling-of-interests. Shareholders
of CNU will receive 0.79 of a share of CSC for each share of CNU. The
agreement, which has been unanimously approved by the boards of directors of
both companies, will add a leading insurance and banking industry software and
services company to CSC's wide range of commercial activities.
CNU had pro forma revenues of approximately $490 million for the
twelve months ended December 31, 1995, reflecting the March 1996 acquisition of
Hogan Systems. Hogan Systems is a banking industry software and services
company.
For the purposes of the combination (which is expected to be tax-free
to CNU shareholders), CNU had approximately 24.2 million shares outstanding as
of April 25, 1996. On the basis of 0.79 shares of CSC for each share of CNU,
shareholders of CNU would receive approximately 19.1 million shares of CSC
stock for a total consideration of approximately $1.5 billion based on CSC's
closing price on Friday, April 26, of $78 1/8. CSC also will assume all of
CNU's outstanding options at the same exchange ratio.
The transaction requires the approval of the shareholders of both CSC
and CNU, as well as customary regulatory approvals. The companies said that DST
Systems, Inc., a Continuum shareholder owning approximately 23% of the company,
has agreed to vote its shares in favor of the transaction.
Van B. Honeycutt, CSC's president and chief executive officer, said:
"This strategic business combination is a compelling fit of markets,
technologies, services and products. The addition of Continuum will greatly
enhance our increasing focus on the financial services marketplace, where we
see enormous potential for information technology services in the
<PAGE> 2
CSC and Continuum - Page 2 April 29, 1996
insurance, banking and other financial services sectors. Continuum catapults us
into a strong position in financial services and continues the shift of our
business toward the commercial sector."
W. Michael Long, chief executive officer of Continuum, said:
"As the lines that differentiate insurance, banking, securities and
mutual funds blur, we firmly believe that technology is the key to enabling
financial services providers to effectively deliver the full range of products
and services their customers expect. CSC is the ideal merger partner for
Continuum. By teaming with CSC, we gain the critical mass to better capitalize
on the significant marketplace potential and to pursue even larger and more
attractive opportunities to propel our growth. Our combined capabilities will
allow us to realize the potential faster than we could have individually."
Under the terms of the agreement, Continuum will retain its name and
its Austin headquarters and become a subsidiary of CSC. Continuum's management
team will remain with the company, with Long continuing to serve as chief
executive officer reporting to Honeycutt.
CSC and CNU said they expect to schedule shareholder meetings this
summer to vote on the proposed transaction. CSC also will ask its shareholders
to increase the number of authorized shares of common stock from 75 million to
275 million. CSC had 56.0 million shares outstanding at the close of its fiscal
year ended March 29, 1996.
CNU is an international consulting and computer services firm
headquartered in Austin, Texas, with offices in 17 countries serving the needs
of the global financial services industry for computer software and services.
Continuum has approximately 4,200 employees worldwide, serving the needs of
more than 850 financial institutions located in more than 40 countries.
Computer Sciences Corporation had $4.1 billion in annual revenues for
the 12 months ended Dec. 29, 1995. The company is headquartered in El Segundo,
California, and has 34,000 employees in 575 offices worldwide. CSC provides
clients with a wide range of professional services including management
consulting; business reengineering information systems consulting and
integration; and outsourcing.
