Agreement and Plan of Merger - ADC Telecommunications Inc. and Centigram Communications Corp.
AGREEMENT
AND PLAN OF MERGER
BY AND AMONG
ADC TELECOMMUNICATIONS, INC.,
POUNDSTONE ACQUISITION CORP.
AND
CENTIGRAM COMMUNICATIONS CORPORATION
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June 9, 2000
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TABLE OF CONTENTS
ARTICLE I THE MERGER..............................................................................................1
1.1. The Merger..............................................................................................1
1.2. Effect of Merger........................................................................................1
1.3. Effective Time..........................................................................................2
1.4. Certificate of Incorporation; Bylaws....................................................................2
1.5. Directors and Officers..................................................................................2
1.6. Taking of Necessary Action; Further Action..............................................................2
1.7. The Closing.............................................................................................2
ARTICLE II CONVERSION OF SECURITIES...............................................................................3
2.1. Conversion of Securities................................................................................3
2.2. Stock Options...........................................................................................5
2.3. Employee Stock Purchase Plan............................................................................7
2.4. Dissenting Shares.......................................................................................7
2.5. Exchange of Certificates................................................................................8
2.6. Escrow for Receivership Shares..........................................................................9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................11
3.1. Organization and Qualification.........................................................................11
3.2. Capital Stock of Subsidiaries..........................................................................12
3.3. Capitalization.........................................................................................12
3.4. Authority Relative to this Agreement...................................................................13
3.5. No Conflict; Required Filings and Consents.............................................................13
3.6. SEC Filings; Financial Statements......................................................................14
3.7. Absence of Changes or Events...........................................................................15
3.8. Absence of Certain Developments........................................................................16
3.9. Litigation.............................................................................................16
3.10. Title to Properties.................................................................................16
3.11. Certain Contracts...................................................................................16
3.12. Compliance with Law.................................................................................17
3.13. Intellectual Property Rights; Year 2000.............................................................18
3.14. Taxes...............................................................................................19
3.15. Employees...........................................................................................21
3.16. Employee Benefit Plans..............................................................................22
3.17. Environmental Matters...............................................................................25
3.18. Insurance...........................................................................................25
3.19. Anti-Bribery Compliance.............................................................................26
3.20. Export Control Laws.................................................................................26
3.21. Finders or Brokers..................................................................................26
3.22. Board Recommendation................................................................................26
3.23. Vote Required.......................................................................................26
3.24. Opinion of Financial Advisor........................................................................26
3.25. State Takeover Statutes; Rights Agreement...........................................................26
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT...............................................27
4.1. Organization and Qualification.........................................................................27
4.2. Authority Relative to this Agreement...................................................................28
4.3. No Conflicts; Required Filings and Consents............................................................28
4.4. Funds..................................................................................................29
ARTICLE V COVENANTS AND AGREEMENTS...............................................................................29
5.1. Conduct of Business of the Company Pending the Merger..................................................29
5.2. Preparation of Proxy Statement.........................................................................32
5.3 Meeting of Stockholders................................................................................32
5.4. Additional Agreements, Cooperation.....................................................................33
5.5. Publicity..............................................................................................33
5.6. No Solicitation........................................................................................34
5.7. Access to Information..................................................................................35
5.8. Notification of Certain Matters........................................................................36
5.9. Resignation of Officers and Directors..................................................................36
5.10. Indemnification.....................................................................................36
5.11. Stockholder Litigation..............................................................................37
5.12. Employee Benefit Plans..............................................................................37
5.13. Determination of Optionholders......................................................................38
5.14. Preparation of Tax Returns..........................................................................39
5.15. SEC Filings; Compliance.............................................................................39
5.16. Rights Agreement....................................................................................39
5.17. Stock Repurchase Plan...............................................................................39
5.18 Release of Receivership Stock.......................................................................39
ARTICLE VI CONDITIONS TO CLOSING.................................................................................40
6.1. Conditions to Each Party's Obligation to Effect the Merger.............................................40
6.2. Conditions to Obligations of Parent....................................................................40
6.3. Conditions to Obligations of the Company...............................................................42
ARTICLE VII TERMINATION..........................................................................................43
7.1. Termination............................................................................................43
7.2. Effect of Termination..................................................................................44
7.3. Fees and Expenses......................................................................................44
ARTICLE VIII MISCELLANEOUS.......................................................................................46
8.1. Nonsurvival of Representations and Warranties..........................................................46
8.2. Waiver.................................................................................................46
8.3. Notices................................................................................................46
8.4. Counterparts...........................................................................................47
8.5. Interpretation.........................................................................................48
8.6. Amendment..............................................................................................48
8.7. No Third Party Beneficiaries...........................................................................48
8.8. Governing Law..........................................................................................48
8.9. Entire Agreement.......................................................................................48
8.10. Validity............................................................................................48
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EXHIBITS
EXHIBITS
A Certificate of Merger
B Escrow Agreement
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated June 9,
2000, is made and entered into by and among ADC Telecommunications, Inc., a
Minnesota corporation ("Parent"), Poundstone Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of Parent ("Merger Sub"), and Centigram
Communications Corporation, a Delaware corporation (the "Company"). Merger Sub
and the Company are sometimes collectively referred to as the "Constituent
Corporations."
WITNESSETH:
WHEREAS, the respective Boards of Directors of Parent, Merger Sub and
the Company have determined that it is advisable and in the best interests of
the respective corporations and their stockholders that Merger Sub be merged
with and into the Company in accordance with the General Corporation Law of the
State of Delaware (the "DGCL") and the terms of this Agreement, pursuant to
which the Company will be the surviving corporation and will be a wholly owned
subsidiary of Parent (the "Merger"); and
WHEREAS, Parent, Merger Sub and the Company desire to make certain
representations, warranties, covenants, and agreements in connection with, and
establish various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements set forth in this Agreement, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. At the Effective Time (as defined in Section 1.3
hereof), subject to the terms and conditions of this Agreement and the
Certificate of Merger (as defined in Section 1.3 hereof), Merger Sub shall be
merged with and into the Company, the separate existence of Merger Sub shall
cease, and the Company shall continue as the surviving corporation. The Company,
in its capacity as the corporation surviving the Merger, is hereinafter
sometimes referred to as the "Surviving Corporation."
1.2. Effect of Merger. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, the Surviving Corporation shall succeed to and possess all the
properties, rights, privileges, immunities, powers, franchises and purposes, and
be subject to all the duties, liabilities, debts, obligations, restrictions and
disabilities, of the Constituent Corporations, all without further act or deed.
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1.3. Effective Time. Subject to the terms and conditions of this
Agreement, the parties hereto will cause a copy of the Certificate of Merger,
attached hereto as Exhibit A (the "Certificate of Merger") to be executed,
delivered and filed with the Secretary of State of the State of Delaware in
accordance with the applicable provisions of the DGCL at the time of the Closing
(as defined in Section 1.7 hereof). The Merger shall become effective upon
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware, or at such later time as may be agreed to by the parties and set forth
in the Certificate of Merger. The time of effectiveness is herein referred to as
the "Effective Time." The day on which the Effective Time shall occur is herein
referred to as the "Effective Date."
1.4. Certificate of Incorporation; Bylaws. From and after the
Effective Time and until further amended in accordance with applicable law, the
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation, as amended as set forth in an exhibit to the Certificate of Merger.
From and after the Effective Time and until further amended in accordance with
law, the Bylaws of Merger Sub as in effect immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation.
1.5. Directors and Officers. From and after the Effective Time, the
directors of the Surviving Corporation shall be the persons who were the
directors of Merger Sub immediately prior to the Effective Time, and the
officers of the Surviving Corporation shall be the persons who were the officers
of Merger Sub immediately prior to the Effective Time. Said directors and
officers of the Surviving Corporation shall hold office for the term specified
in, and subject to the provisions contained in, the Certificate of Incorporation
and the Bylaws of the Surviving Corporation and applicable law. If, at or after
the Effective Time, a vacancy shall exist on the Board of Directors or in any of
the offices of the Surviving Corporation, such vacancy shall be filled in the
manner provided in the Certificate of Incorporation and the Bylaws of the
Surviving Corporation.
1.6. Taking of Necessary Action; Further Action. Parent, Merger Sub
and the Company, respectively, shall each use its best efforts to take all such
action as may be necessary or appropriate to effectuate the Merger under the
DGCL at the time specified in Section 1.3 hereof. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all properties, rights, privileges, immunities,
powers and franchises of either of the Constituent Corporations, the officers of
the Surviving Corporation are fully authorized in the name of each Constituent
Corporation or otherwise to take, and shall take, all such lawful and necessary
action.
1.7. The Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") will take place at the offices of Dorsey &
Whitney LLP, Pillsbury Center South, 220 South Sixth Street, Minneapolis,
Minnesota, within three business days after the date on which the last of the
conditions set forth in Article VI shall have been satisfied or waived, or at
such other place and on such other date as is mutually agreeable to Parent and
the Company (the "Closing Date"). The Closing will be effective as of the
Effective Time.
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ARTICLE II
CONVERSION OF SECURITIES
2.1. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Parent, Merger Sub, the
Company, the holder of any shares of Company Common Stock (defined below) or the
holder of any options, warrants or other rights to acquire or receive shares of
Company Common Stock, the following shall occur:
(a) Conversion of Company Common Stock. At the Effective
Time, each share of common stock, par value $.001 per share, of the Company (the
"Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than any shares of Company Common Stock to be canceled
pursuant to Section 2.1(b) hereof or any Dissenting Shares (as defined in
Section 2.4 hereof)) will be canceled and extinguished and be converted
automatically into the right to receive an amount of cash equal to the Per Share
Amount (as defined in Section 2.1(e)(i) hereof), without interest thereon, plus
the Escrow Per Share Amount (as defined in Section 2.6(d)(i) hereof), with
interest thereon as described in Section 2.6 hereof, upon surrender of the
certificate formerly representing such share.
(b) Cancellation of Company Common Stock Owned by Parent
or Company. At the Effective Time, all shares of Company Common Stock that are
owned by the Company as treasury stock and each share of Company Common Stock
owned by Parent or any direct or indirect wholly owned subsidiary of Parent or
of Company immediately prior to the Effective Time shall be canceled and
extinguished without any conversion thereof; provided, however, if: (i) any of
the 900,000 shares of Company Common Stock designated by the Company as its
treasury stock and currently in accounts in the name of Credit Bancorp Ltd.,
which accounts are under the control of the receiver appointed by the United
States District Court for the Southern District of New York to administer the
estate of Credit Bancorp Ltd. (the "Bancorp Receiver") as of the date hereof
(the "Receivership Stock") has not been returned to the Company or has been
ordered by a court of competent jurisdiction to be returned to the Bancorp
Receiver as of the Effective Time, or (ii) the period during which any party may
legally appeal (the "Appeal Period") the final order of a court having proper
and nonappealable jurisdiction (the "Final Order") approving that certain
Agreement dated June 7, 2000 (the "Settlement Agreement") between the Company
and the Bancorp Receiver remains open or if an appeal of the Final Order has
been filed and remains pending at the Effective Time, such shares of
Receivership Stock shall (x) be included as Diluted Shares (as defined in
Section 2.1(e)(ii) hereof) for purposes of calculating the Per Share Amount, and
(y) (if deemed outstanding) be converted automatically into the right to receive
an amount of cash equal to the Per Share Amount, without interest thereon;
provided, further, that the aggregate Per Share Amount payable with respect to
such shares of Receivership Stock (if deemed outstanding) shall be placed in
escrow and released in accordance with the provisions of Section 2.6 hereof.
(c) Company Stock Option Plans. At the Effective Time,
the Company's 1997 Stock Plan and the 1995 Nonstatutory Stock Option Plan and
the Amended and Restated
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1987 Incentive Stock Option Plan (collectively, the "Company Stock Option
Plans") and all options to purchase Company Common Stock then outstanding under
the Company Stock Option Plans or otherwise shall be assumed by Parent in
accordance with Section 2.2 hereof.
(d) Capital Stock of Merger Sub. At the Effective Time,
each share of common stock, $0.01 par value, of Merger Sub ("Merger Sub Common
Stock") issued and outstanding immediately prior to the Effective Time shall be
converted into and exchanged for one validly issued, fully paid and
nonassessable share of common stock, $0.01 par value, of the Surviving
Corporation, and the Surviving Corporation shall be a wholly owned subsidiary of
Parent. Each stock certificate of Merger Sub evidencing ownership of any such
shares shall continue to evidence ownership of such shares of capital stock of
the Surviving Corporation.
(e) Definitions.
(i) Per Share Amount. The "Per Share Amount" shall be
equal to the quotient (rounded to the second decimal place) of (A)
$200,800,000 (the "Base Purchase Price") plus the aggregate exercise
price of all Company Options (as defined in Section 2.2(a) hereof)
outstanding immediately prior to the Effective Time plus the aggregate
exercise price of all Company Options that are exercised after the date
of this Agreement but prior to the Effective Time and the aggregate
amount received by the Company, if any, pursuant to the automatic
exercise of outstanding purchase options under the ESPP (as defined in
Section 2.3 hereof) immediately prior to the Effective Time pursuant to
Section 2.3 hereof divided by (B) the number of Diluted Shares. If all
shares of Receivership Stock are returned to the Company prior to the
Effective Time, the amount paid by the Company to cause such return,
minus the lesser of (x) $10,000,000 or (y) the amount paid to the
Bancorp Receiver plus the Company's out-of-pocket costs, including the
reasonable fees and expenses of legal counsel and other advisors,
incurred to obtain such return (including the resolution of any appeal
of the Final Order) (the amount referred to in either (x) or (y)
hereinafter referred to as the "Receiver Payment Credit") shall be
deducted from the Base Purchase Price prior to calculation of the Per
Share Amount, subject, however, to the second sentence of Section
2.6(b) hereof.
(ii) Diluted Shares. "Diluted Shares" shall mean that
number equal to the sum of (A) the number of shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time
(regardless of whether such shares are unvested, subject to right of
repurchase, risk of forfeiture or other condition in favor of the
Company at such time) plus (B) the number of shares of Company Common
Stock issuable upon exercise of the Company Options outstanding at the
Effective Time (regardless of whether such Company Options are vested
or exercisable at such time), plus (C) the number of shares of Company
capital stock issuable in connection with any other options, warrants,
calls, rights exchangeable or convertible securities, commitments or
agreements of any character, written or oral, to which the Company is a
party or by which it is bound obligating the Company to issue, deliver,
sell or cause to be issued, delivered or sold any Company capital
stock, and which are outstanding immediately
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prior to the Effective Time, plus (D) if provided for by Section 2.1(b)
hereof, all shares of Receivership Stock.
2.2. Stock Options.
(a) At the Effective Time, each outstanding option to
purchase shares of Company Common Stock under the Company Stock Option Plans or
otherwise (each, a "Company Option"), whether vested or unvested, shall be
assumed by Parent and converted into an option (each, a "Parent Option") to
acquire, on substantially the same terms and conditions, including but not
limited to any performance criteria set forth in the applicable stock option
agreements, as were applicable under such Company Option, the number of whole
shares of common stock, par value $.20 per share, of Parent ("Parent Common
Stock") equal to the number of shares of Company Common Stock that were issuable
upon exercise of such Company Option immediately prior to the Effective Time
multiplied by the Exchange Ratio (as defined in Section 2.2(f)(i) hereof)
(rounded down to the nearest whole number of shares of Parent Common Stock), and
the per share exercise price of the shares of Parent Common Stock issuable upon
exercise of such Parent Option shall be equal to the exercise price per share of
Company Common Stock at which such Company Option was exercisable immediately
prior to the Effective Time divided by the Exchange Ratio (rounded to the
nearest whole cent). The Company shall not, and shall cause any Company Stock
Option Plan administrator (including, for this purpose, the Company's Board of
Directors or a committee thereof) not to, take any action prior to the Effective
Time that will extend the exercise period of any Company Option or cause the
vesting period of any Company Option to accelerate in lieu of assumption or
under any other circumstances, regardless of whether such circumstances are to
occur before or after the Effective Time, or otherwise amend the terms of
outstanding Company Options.
(b) Intentionally omitted.
(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 the Parent Options and to file all documents required
to be filed to cause the shares of Parent Common Stock issuable upon exercise of
the Parent Options to be listed on the Nasdaq National Market. As soon as
practicable after the Effective Time, but no later than five business days after
the Effective Time, Parent shall file a registration statement with the U.S.
Securities and Exchange Commission (the "SEC") on Form S-8 (or any successor
form) or another appropriate form with respect to the Parent Common Stock
subject to such Parent Options, and shall use all commercially reasonable
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 Parent Options remain
outstanding. As soon as practicable after the Effective Time, Parent shall
inform in writing the holders of Company Options of their rights pursuant to the
Company Stock Option Plans and the agreements evidencing the grants of such
Company Options shall continue in effect on substantially the same terms and
conditions (subject to the adjustments required by Section 2.2(a) hereof), after
giving effect to the Merger and the assumption by Parent of the Company Options
as set forth herein.
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(d) In the case of any Company Option to which Section
421 of the Internal Revenue Code of 1986 (the "Code") applies by reason of
Section 422 of the Code ("Incentive Stock Options"), the option exercise price,
the number of shares of Parent Common Stock 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.
(e) Parent will make good faith efforts to ensure, to the
extent permitted by the Code and to the extent required by and subject to the
terms of any such Incentive Stock Options, that Company Options which qualified
as Incentive Stock Options prior to the Closing Date continue to qualify as
Incentive Stock Options of Parent after the Closing. Parent makes no
representation regarding the qualification of such Company Options as Incentive
Stock Options. Parent gives no guarantee or assurances of any particular result
with respect to Taxes (as defined in Section 3.14 hereof) for any holder of
Company Options.
(f) Definitions
(i) Exchange Ratio. The "Exchange Ratio" shall be equal
to the quotient (rounded to the fourth decimal place) of the Per Share
Amount divided by the Average Closing Price.
(ii) Average Closing Price. The "Average Closing Price"
shall be determined by dividing the Total Weighted Trading Price by the
Total Parent Trading Volume.
(iii) Total Weighted Trading Price. The "Total Weighted
Trading Price" shall be the sum of the Weighted Trading Prices for the
period of the ten (10) trading days ending on the close of the third
trading day immediately preceding the Effective Time (the "Measurement
Period").
(iv) Weighted Trading Price. The "Weighted Trading Price"
for any trading day shall be (A) the total trading volume of Parent
Common Stock on the Nasdaq National Market as reported in the U.S.
Midwest edition of the Wall Street Journal for such trading day
multiplied by (B) the closing price of one share of Parent Common Stock
on the Nasdaq National Market as reported in the U.S. Midwest edition
of the Wall Street Journal for such trading day.
(v) Total Parent Trading Volume. The "Total Parent
Trading Volume" shall be the sum of the daily trading volumes of Parent
Common Stock for each trading day during the Measurement Period as
reported in the U.S. Midwest edition of the Wall Street Journal.
2.3. Employee Stock Purchase Plan. The parties acknowledge that the
Company's 1991 Employee Stock Purchase Plan (the "ESPP") shall continue to
operate in accordance with its terms following the execution of this Agreement,
except as provided below. Effective as of ten days prior to the Effective Time,
the Company shall shorten the Offering Period (as defined in the ESPP) then in
progress by setting a New Exercise Date (as defined in the ESPP) one
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business day prior to the Effective Time and shall cause each outstanding
purchase option to be automatically exercised on such New Exercise Date in
accordance with Section 18 of the ESPP, the Company shall cause the ESPP to
terminate, and no purchase rights shall be subsequently granted or exercised
under the ESPP. The Company shall take all actions necessary to ensure that the
ESPP will not be amended or modified in any respect after the date hereof,
except to effect the terms of this Section 2.3.
2.4. Dissenting Shares.
(a) Notwithstanding anything in this Agreement to the
contrary, shares of Company Common Stock that are issued and outstanding
immediately prior to the Effective Time and which are held by stockholders who
have not voted such shares in favor of the Merger, who shall have delivered,
prior to any vote on the Merger, a written demand for appraisal of such shares
in the manner provided in Section 262 of the DGCL and who, as of the Effective
Time, shall not have effectively withdrawn or lost such right to dissenters'
rights ("Dissenting Shares") shall not be converted into or represent a right to
receive the Per Share Amount and the Escrow Per Share Amount pursuant to Section
2.1 hereof, but the holders thereof shall be entitled only to such rights as are
granted by Section 262 of the DGCL. Each holder of Dissenting Shares who becomes
entitled to payment for such shares pursuant to Section 262 of the DGCL shall
receive payment therefor from the Surviving Corporation in accordance with the
DGCL; provided, however, that if any such holder of Dissenting Shares shall have
effectively withdrawn such holder's demand for appraisal of such shares or lost
such holder's right to appraisal and payment of such shares under Section 262 of
the DGCL, such holder or holders (as the case may be) shall forfeit the right to
appraisal of such shares and each such share shall thereupon be deemed to have
been canceled, extinguished and converted, as of the Effective Time, into and
represent the right to receive payment from the Surviving Corporation of the Per
Share Amount and the Escrow Per Share Amount, as provided in Section 2.1 hereof.
(b) The Company shall give Parent (i) prompt notice of
any written demand for appraisal, any withdrawal of a demand for appraisal and
any other instrument served pursuant to Section 262 of the DGCL received by the
Company and (ii) the opportunity to direct all negotiations and proceedings with
respect to demands for appraisal under such Section 262 of the DGCL. The Company
shall not, except with the prior written consent of Parent, voluntarily make any
payment with respect to any demand for appraisal or offer to settle or settle
any such demand.
2.5. Exchange of Certificates.
(a) Prior to the Effective Time, Parent shall designate a
commercial bank, trust company or other financial institution, which may include
Parent's stock transfer agent, to act as disbursement agent ("Disbursement
Agent") in the Merger.
(b) Promptly after the Effective Time, Parent shall make
available to the Disbursement Agent for exchange in accordance with this Article
II, cash in an amount sufficient to permit payment of the aggregate Per Share
Amount pursuant to Section 2.1 hereof (the
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"Exchange Fund"), except for any amount to be placed in escrow in accordance
with Section 2.6 hereof.
(c) Promptly, and in any event no later than five
business days after the Effective Time, the Parent shall cause to be mailed to
each holder of record of a certificate or certificates which immediately prior
to the Effective Time represented outstanding shares of Company Common Stock
(the "Certificates") (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 proper delivery of the Certificates to the Disbursement Agent,
and shall be in such form and have such other provisions as Parent may
reasonably specify and which shall be reasonably acceptable to the Company) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for the Per Share Amount and the Escrow Per Share Amount. Upon
surrender of a Certificate for cancellation to the Disbursement Agent, together
with such letter of transmittal, duly completed and validly executed, and such
other documents as may be reasonably required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange a check
representing the Per Share Amount in accordance with Section 2.1 hereof and a
right to receive any Escrow Per Share Amount in accordance with Section 2.6
hereof to which such holder is entitled pursuant to Section 2.1, and the
Certificate so surrendered shall forthwith be canceled. Until surrendered as
contemplated by this Section 2.5, each Certificate that, prior to the Effective
Time, represented shares of Company Common Stock will be deemed from and after
the Effective Time, for all corporate purposes, to evidence the right to receive
the Per Share Amount and the Escrow Per Share Amount, if any, multiplied by the
number of shares of Company Common Stock such certificate represented.
Notwithstanding the foregoing, so long as the Settlement Agreement has not been
fully consummated and has not been held void or unenforceable pursuant to a
final, nonappealable judgment of a court of competent jurisdiction, the
Disbursement Agent shall not make any payment of the Per Share Amount and the
Escrow Agent shall not make any payment of the Escrow Per Share Amount to any
person presenting any Certificate evidencing shares of Receivership Stock,
unless a court having proper jurisdiction shall have determined, pursuant to a
final, nonappealable judgment, that such shares of Receivership Stock are
outstanding and held of record by the person making such presentation, in which
case the Escrow Agent shall release to the Disbursement Agent funds sufficient
to pay the Per Share Amount to such person applicable to such shares, provided,
however that, if the person presenting such Certificate is the Bancorp Receiver
and, at the time of such presentation, the Settlement Agreement has not been
held void or unenforceable pursuant to a final, nonappealable judgment of a
court of competent jurisdiction, the terms of the Settlement Agreement shall
govern the disposition of the shares of Receivership Stock represented by such
Certificate.
(d) None of Parent, the Surviving Corporation or the
Disbursement Agent shall be liable to any holder of shares of Company Common
Stock for any amount properly delivered to a public official in compliance with
any abandoned property, escheat or similar law.
(e) At the Effective Time, the stock transfer books of
the Company shall be closed and there shall be no further registration of
transfers of shares of Company Common Stock thereafter on the records of the
Company, except in favor of the Company. From and after the Effective Time, the
holders of certificates representing shares of Company Common Stock
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outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Company Common Stock except as otherwise
provided in this Agreement or by law.
(f) Subject to any applicable escheat or similar laws,
any portion of the Exchange Fund that remains unclaimed by the former
stockholders of the Company for one year after the Effective Time shall be
delivered by the Disbursement Agent to Parent, upon demand of Parent, and any
former stockholders of the Company shall thereafter look only to Parent for
satisfaction of their claim for cash in exchange for their shares of Company
Common Stock pursuant to the terms of Section 2.1 hereof.
(g) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact, in form and substance
acceptable to the Disbursement Agent, by the person claiming such Certificate to
be lost, stolen or destroyed, and complying with such other conditions as the
Disbursement Agent may reasonably impose (including the execution of an
indemnification undertaking or the posting of an indemnity bond or other surety
in favor of the Disbursement Agent and Parent with respect to the Certificate
alleged to be lost, stolen or destroyed), the Disbursement Agent will deliver to
such as may be required pursuant to Section 2.1 hereof.
2.6. Escrow for Receivership Shares.
(a) If (i) any shares of Receivership Stock have not been
returned to the Company or have been ordered by a court of competent
jurisdiction to be returned to the Bancorp Receiver as of the Effective Time or
(ii) the Appeal Period remains open or an appeal of the Final Order has been
filed and remains pending at the Effective Time, Parent shall deposit in an
escrow account with Norwest Bank Minnesota, N.A. (the "Escrow Agent"), the
aggregate Per Share Amount payable with respect to such shares of Receivership
Stock pursuant to Section 2.1(b) hereof (the "Escrow Deposit"), to be held by
the Escrow Agent in accordance with the terms of the escrow agreement attached
hereto as Exhibit B. Any interest earned on the Escrow Deposit shall be paid in
accordance with this Section 2.6, after first deducting any fees of the Escrow
Agent from such interest amount.
(b) At such time as all shares of Receivership Stock are
returned to the Surviving Corporation, the Appeal Period has terminated and all
pending appeals, if any, have been resolved, the amount paid after the Effective
Time by Parent, the Surviving Corporation or an affiliate thereof plus Parent or
the Surviving Corporation's out-of-pocket costs, including the reasonable fees
and expenses of legal counsel and other advisors, incurred to cause such return
(including the resolution of any appeal) shall be deducted from the Escrow
Deposit and, together with the interest earned on such amount while held by the
Escrow Agent, paid to Parent. The parties further agree that if, upon final
resolution of all available methods of appeal by any party, the Settlement
Agreement is found to be void or unenforceable and each of the Bancorp Receiver
and Credit Bancorp Ltd. is unable or unwilling to repay or give full credit to
Parent or the Surviving Corporation for the amount previously paid to the
Bancorp Receiver to obtain the return of the Receivership Stock, then the lesser
of the Receiver Payment Credit and the amount
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not repaid or credited to Parent or the Surviving Corporation shall be deducted
from the Escrow Deposit and paid to Parent. Any portion of the Escrow Deposit
remaining after such payments to Parent (the "Escrow Remainder") shall be
distributed as follows:
(i) Company Stockholders. Each former holder of Company
Common Stock that received the Per Share Amount pursuant to Section
2.1(a) hereof shall be entitled to receive an amount of cash equal to
the Escrow Per Share Amount (as defined in Section 2.6(d)(i) hereof),
with the interest earned thereon while held by the Escrow Agent (the
aggregate amount of cash payable to such former holders of Company
Common Stock is referred to herein as the "Additional Stockholder
Payment").
(ii) Company Optionholders. Each former holder of Company
Options who received Parent Options pursuant to Section 2.2 hereof
shall be notified by Parent that each such Parent Option has been
amended to reflect the following: (A) the number of whole shares of
Parent Common Stock issuable thereunder shall be equal to the number of
shares of Company Common Stock that were issuable upon exercise of such
Company Option immediately prior to the Effective Time multiplied by
the Escrow Exchange Ratio (as defined in Section 2.6(d)(ii) hereof)
(rounded down to the nearest whole number of shares of Parent Common
Stock), and (B) the per share exercise price of the shares of Parent
Common Stock issuable upon exercise of such Parent Option shall be
equal to the exercise price per share of Company Common Stock at which
such Company Option was exercisable immediately prior to the Effective
Time divided by the Escrow Exchange Ratio (rounded to the nearest whole
cent). The cash portion of the Escrow Remainder equal to the difference
between the Escrow Remainder and the Additional Stockholder Payment
shall be released to Parent.
(c) The Escrow Agent shall be entitled to rely on the
letters of transmittal received by the Disbursement Agent for purposes of
distributing the Escrow Per Share Amount and the interest thereon.
(d) Definitions.
(i) Escrow Per Share Amount. The "Escrow Per Share
Amount" shall be equal to the quotient (rounded to the second decimal
place) of (A) the Escrow Remainder divided by (B) the number of Diluted
Shares (excluding the Receivership Stock).
(ii) Escrow Exchange Ratio. The "Escrow Exchange Ratio"
shall be equal to the quotient (rounded to the fourth decimal place) of
(A) the sum of the Per Share Amount plus the Escrow Per Share Amount
divided by (B) the Average Closing Price.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Merger Sub and Parent that the
statements contained in this Article III are true and correct, except as set
forth in the letter delivered by the Company to Merger Sub on the date hereof
(the "Company Disclosure Letter") (which Company Disclosure Letter sets forth
the exceptions to the representations and warranties contained in this Article
III under captions referencing the Sections to which such exceptions apply):
3.1. Organization and Qualification. Each of the Company and its
Subsidiaries (as defined below) is a company (or similar entity with corporate
characteristics including limited liability of stockholders or other owners)
duly organized, validly existing, duly registered and, if applicable, in good
standing under the laws of the jurisdiction of its organization and each such
entity has all requisite corporate (or similar) power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted. Each of the Company and its Subsidiaries is duly qualified or
licensed to carry on its business as it is now being conducted, and is qualified
to conduct business, in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except for failures to be so qualified that would not, individually
or in the aggregate, have, or would not reasonably be expected to have, a
Company Material Adverse Effect (as defined below). Neither the Company nor any
of its Subsidiaries is in violation of any of the provisions of its Certificate
of Incorporation or other applicable charter document (any such document of any
business entity hereinafter referred to as its "Charter Document") or its
Bylaws, or other applicable governing document (any such documents of any
business entity hereinafter referred to as its "Governing Document"). The
Company has made available to Parent accurate and complete copies of the
respective Charter Documents and Governing Documents, as currently in effect, of
each of the Company and its Subsidiaries. As used in this Agreement, the term
"Company Material Adverse Effect" means any change, effect, event or condition
that (i) has a material adverse effect on the assets, business, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole (other than any such change, effect, event or condition that arises from
changes in general economic conditions or conditions affecting the Company's
industry generally, or such changes, effects, events or conditions resulting
from the consummation of the transactions contemplated hereby; provided,
however, that the termination of contracts requiring third party consent or
approval because of the consummation of the transactions contemplated hereby the
loss of which would otherwise have a material adverse effect on the assets,
business, results of operations or financial condition of the Company shall not
be excluded from this definition), or (ii) would prevent or materially delay the
Company's ability to consummate the transactions contemplated hereby. As used in
this Agreement, the term "Subsidiary" when used with respect to any party means
any corporation or other organization, whether incorporated or unincorporated,
of which such party directly or indirectly owns or controls at least a majority
of the securities or other interests having by their terms ordinary voting power
to elect a majority of the board of directors or others performing similar
functions.
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<PAGE> 16
3.2. Capital Stock of Subsidiaries. Neither the Company nor any of
its Subsidiaries owns, controls or holds with the power to vote, directly or
indirectly, of record, beneficially or otherwise, any share capital, capital
stock or any equity or ownership interest in any company, corporation,
partnership, association, joint venture, business, trust or other entity, except
for the Subsidiaries described in the Company SEC Reports (as defined in Section
3.6(a) hereof) or listed in Section 3.2 of the Company Disclosure Letter, and
except for ownership of securities in any publicly traded company held for
investment by the Company or any of its Subsidiaries and comprising less than
five percent of the outstanding stock of such company. Except as set forth in
Section 3.2 of the Company Disclosure Letter, the Company is directly or
indirectly the registered, record and beneficial owner of all of the outstanding
share capital or shares of capital stock (or other ownership interests having by
their terms ordinary voting power to elect a majority of directors or others
performing similar functions with respect to such Subsidiary) of each of its
Subsidiaries, there are no proxies with respect to such shares, and no equity
securities of any of such Subsidiaries are or may be required to be issued by
reason of any options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, share capital or shares of any capital
stock of any such Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which the Company or any such Subsidiary is
bound to issue, transfer or sell any share capital or shares of such capital
stock or securities convertible into or exchangeable for such shares. Other than
as set forth in Section 3.2 of the Company Disclosure Letter, all of such shares
so owned by the Company are validly issued, fully paid and nonassessable and are
owned by it free and clear of any claim, lien, pledge, security interest or
other encumbrance of any kind (collectively "Liens") with respect thereto.
3.3. Capitalization. The authorized capital stock of the Company
consists of 25,000,000 shares of Company Common Stock and 1,000,000 shares of
preferred stock, $.001 par value per share (the "Company Preferred Stock"). As
of the close of business on May 26, 2000 (the "Company Measurement Date"), (a)
6,150,869 shares of Company Common Stock were issued and outstanding, (b) no
shares of Company Preferred Stock were issued and outstanding, (c) the Company
had 1,020,056 shares of Company Common Stock held in its treasury, (d) 3,407,000
shares of Company Common Stock were reserved for issuance under the Company
Stock Option Plans and the ESPP, (e) Company Options to purchase 2,268,975
shares of Company Common Stock in the aggregate had been granted and remained
outstanding under the Company Stock Option Plans or otherwise, (f) no warrants
to purchase shares of Company Common Stock were outstanding and (g) except for
the Company Options, rights to the issuance of 26,227 shares of Company Common
Stock in the aggregate under the ESPP and rights to purchase shares of Series A
Participating Preferred Stock pursuant to the Company Rights Agreement (defined
in Section 3.25 hereof), there were no outstanding Rights (defined below). Since
the Company Measurement Date, no additional shares in the Company have been
issued, except pursuant to the exercise of Company Options outstanding at the
Measurement Date and the ESPP, and no Rights have been granted. Except as
described in the preceding sentence or as set forth in Section 3.3 of the
Company Disclosure Letter, the Company has no outstanding bonds, debentures,
notes or other securities or obligations the holders of which have the right to
vote or which are convertible into or exercisable for securities having the
right to vote on any matter on which any stockholder of the Company has a right
to vote. All issued and outstanding
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shares of Company Common Stock are duly authorized, validly issued, fully paid,
nonassessable and free of preemptive rights. Except as set forth in Section 3.3
of the Company Disclosure Letter, there are not as of the date hereof any
existing options, warrants, stock appreciation rights, stock issuance rights,
calls, subscriptions, convertible securities or other rights which obligate the
Company or any of its Subsidiaries to issue, exchange, transfer or sell any
shares in the capital of the Company or any of its Subsidiaries, other than
rights to purchase shares of Series A Participating Preferred Stock pursuant to
the Company Rights Agreement, Company Common Stock issuable under the Company
Stock Option Plans and the ESPP, or awards granted pursuant thereto
(collectively, "Rights"). As of the date hereof, there are no outstanding
contractual obligations of the Company or any of its Subsidiaries to repurchase,
reprice, redeem or otherwise acquire any shares of the capital of the Company or
any of its Subsidiaries. As of the date hereof, there are no outstanding
contractual obligations of the Company to vote or to dispose of any shares in
the capital of any of its Subsidiaries.
3.4. Authority Relative to this Agreement. The Company has the
requisite corporate power and authority to execute and deliver, and perform its
obligations under, this Agreement and, subject to obtaining the necessary
approval of its stockholders, to consummate the Merger and the other
transactions contemplated hereby under applicable law. The execution and
delivery of this Agreement and the consummation of the Merger and other
transactions contemplated hereby have been duly and validly authorized by the
Board of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Agreement or to consummate the
Merger or other transactions contemplated hereby (other than approval by the
Company's stockholders required by applicable law). This Agreement has been duly
and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery hereof by Parent and Merger Sub,
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except to the extent that its
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of creditors
rights generally or by general equitable principles.
3.5. No Conflict; Required Filings and Consents.
(a) Assuming that all filings, permits, authorizations,
consents and approvals or waivers thereof have been duly made or obtained as
contemplated by Section 3.5(b) hereof, neither the execution and delivery of
this Agreement by the Company nor the consummation of the Merger or other
transactions contemplated hereby nor compliance by the Company with any of the
provisions hereof will (i) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or suspension of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
Lien upon any of the properties or assets of the Company or any of its
Subsidiaries under, any of the terms, conditions or provisions of (x) their
respective Charter Documents or Governing Documents, (y) any note, bond, charge,
lien, pledge, mortgage, indenture or deed of trust to which the Company or any
such Subsidiary is a party or to which they or any of their respective
properties or assets may be subject, or (z) any license, lease, agreement or
other
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<PAGE> 18
instrument or obligation to which the Company or any such Subsidiary is a party
or to which they or any of their respective properties or assets may be subject,
or (ii) violate any judgment, ruling, order, writ, injunction, decree, 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 clauses (i) (y)
and (z) and (ii) above, for such violations, conflicts, breaches, defaults,
terminations, suspensions, accelerations, rights of termination or acceleration
or creations of liens, security interests, charges or encumbrances which would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
(b) No filing or registration with or notification to and
no permit, authorization, consent or approval of any court, commission,
governmental body, regulatory authority, agency or tribunal wherever located (a
"Governmental Entity") is required to be obtained, made or given by the Company
in connection with the execution and delivery of this Agreement or the
consummation by the Company of the Merger or other transactions contemplated
hereby except (i) (A) the filing of the Certificate of Merger as provided in
Section 1.3 hereof, (B) in connection with the applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (C) the filing of the Proxy Statement (as defined in Section 5.2 hereof)
and such reports under Sections 13(a), 13(d), 15(d) or 16(a) with the SEC in
accordance with the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the "Exchange Act"), as may be required
in connection with this Agreement and the transactions contemplated hereby, or
(D) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws and the laws of any country other than the United States, or (ii) where the
failure to obtain any such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
3.6. SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, schedules,
statements and other documents required to be filed by it since January 1, 1997
to the date hereof (collectively, as supplemented and amended since the time of
filing, the "Company SEC Reports") with the SEC. The Company SEC Reports (i)
were prepared in all material respects with all applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), and the Exchange Act, as the case may be and
(ii) did not at the time they were filed contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The representation in
clause (ii) of the preceding sentence does not apply to any misstatement or
omission in any Company SEC Report filed prior to the date of this Agreement
which was superseded by a subsequent Company SEC Report filed prior to the date
of this Agreement. No Subsidiary of the Company is required to file any report,
form or other document with the SEC.
(b) The audited consolidated financial statements and
unaudited consolidated interim financial statements of the Company and its
Subsidiaries included or incorporated by
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reference in such Company SEC Reports (collectively, the "Financial Statements")
have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be otherwise indicated in the notes thereto) and present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Company and its Subsidiaries on a consolidated basis at the
respective dates and for the respective periods indicated (except, in the case
of all such financial statements that are interim financial statements, for
footnotes and normal year-end adjustments).
(c) Neither the Company nor any of its Subsidiaries has
any liabilities or obligations of any nature, whether absolute, accrued,
unmatured, contingent or otherwise whether due or to become due, known or
unknown, or any unsatisfied judgments or any leases of personalty or realty or
unusual or extraordinary commitments that are required to be disclosed under
United States generally accepted accounting principles, except (i) as set forth
in the Company SEC Reports or in Section 3.6(c) of the Company Disclosure
Letter, (ii) the liabilities recorded on the Company's consolidated balance
sheet at January 29, 2000 (the "Balance Sheet") included in the financial
statements referred in Section 3.6(a) hereof and the notes thereto, (iii)
liabilities or obligations incurred since January 29, 2000 (whether or not
incurred in the ordinary course of business and consistent with past practice)
that would not, individually or in the aggregate, reasonably be expected to have
a Company Material Adverse Effect, or (iv) liabilities that would not be
required by United States generally accepted accounting principles to be
disclosed in financial statements or in the notes thereto and that would not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect.
3.7. Absence of Changes or Events. Except as set forth in Section
3.7 of the Company Disclosure Letter or in the Company SEC Reports, since
January 29, 2000 through the date of this Agreement, the Company and its
Subsidiaries have not incurred any liability or obligation that has resulted or
would reasonably be expected to result in a Company Material Adverse Effect, and
there has not been any change in the business, financial condition or results of
operations of the Company or any of its Subsidiaries which has had, or would
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, and the Company and its Subsidiaries have conducted
their respective businesses in the ordinary course consistent with their past
practices.
3.8. Absence of Certain Developments. Except as disclosed in the
Company SEC Reports or as set forth in Section 3.8 of the Company Disclosure
Letter, since January 29, 2000, the Company has not taken any of the actions set
forth in Section 5.1 hereof.
3.9. Litigation. Except as disclosed in the Company SEC Reports or
as set forth in Section 3.9 of the Company Disclosure Letter, there is no (a)
claim, action, suit or proceeding pending or, to the Knowledge of the Company or
any of its Subsidiaries, threatened against or relating to the Company or any of
its Subsidiaries before any Governmental Entity, or (b) outstanding judgment,
order, writ, injunction or decree (collectively, "Orders"), or application,
request or motion therefor, of any Governmental Entity in a proceeding to which
the Company, any Subsidiary of the Company or any of their respective assets was
or is a party
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except actions, suits, proceedings or Orders that, individually or in the
aggregate, has not had or would not reasonably be expected to have a Company
Material Adverse Effect, and neither the Company nor any Subsidiary is in
default in any material respect with respect to any such Order.
3.10. Title to Properties. Neither the Company nor any of its
Subsidiaries owns any real property. The Company has heretofore made available
to Parent correct and complete copies of all leases, subleases and other
agreements (collectively, the "Real Property Leases") under which the Company or
any of its Subsidiaries uses or occupies or has the right to use or occupy, now
or in the future, any real property or facility (the "Leased Real Property"),
including without limitation all modifications, amendments and supplements
thereto. Except in each case where the failure would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect or
except as otherwise set forth in Section 3.10 of the Company Disclosure Letter,
(i) the Company or one of its Subsidiaries has a valid leasehold interest in
each parcel of Leased Real Property free and clear of all Liens except liens of
record and each Real Property Lease is in full force and effect, (ii) all rent
and other sums and charges due and payable by the Company or its Subsidiaries as
tenants thereunder are current in all material respects, (iii) no termination
event or condition or uncured default of a material nature on the part of the
Company or any such Subsidiary or, to the Knowledge of the Company or any such
Subsidiary, the landlord, exists under any Real Property Lease, (iv) the Company
or one of its Subsidiaries is in actual possession of each Leased Real Property
and is entitled to quiet enjoyment thereof in accordance with the terms of the
applicable Real Property Lease and applicable law, and (v) the Company and its
Subsidiaries own outright all of the property (except for leased property or
assets for which it has a valid and enforceable right to use) which is reflected
on the Balance Sheet, except for property since sold or otherwise disposed of in
the ordinary course of business and consistent with past practice and except for
liens of record. The plant, property and equipment of the Company and its
Subsidiaries that are used in the operations of their businesses are in good
operating condition and repair, subject to ordinary wear and tear, and, subject
to normal maintenance, are available for use.
3.11. Certain Contracts. Neither the Company nor any of its
Subsidiaries has breached, or received in writing any claim or notice that it
has breached, any of the terms or conditions of (i) any agreement, contract or
commitment required to be filed as an exhibit to the Company SEC Reports
(including any agreements, contracts or commitments entered into since January
29, 2000 that will be required to be filed by the Company with the SEC in any
report), (ii) any agreements, contracts or commitments with manufacturers,
suppliers, sales representatives, distributors, OEM strategic partners or
customers of the Company pursuant to which the Company recognized revenues or
payments in excess of $500,000 for the twelve-month period ended October 30,
1999, or (iii) any agreements, contracts or commitments containing covenants
that limit the ability of the Company or any of its Subsidiaries to compete in
any line of business or with any Person (as defined in Section 8.5 hereof), or
that include any exclusivity provision or involve any restriction on the
geographic area in which the Company or any of its Subsidiaries may carry on its
business (collectively, "Company Material Contracts"), in such a manner as,
individually or in the aggregate, has had or would reasonably be expected to
have a Company Material Adverse Effect. Section 3.11 of the Company Disclosure
Letter lists each Company Material Contract described in clauses (ii) and (iii)
of the preceding sentence. Each Company
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Material Contract that has not expired by its terms is in full force and effect
and is the legal, valid and binding obligation of the Company and/or its
Subsidiaries, enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity), except where the
failure of such Company Material Contract to be in full force and effect or to
be legal, valid, binding or enforceable against the Company and/or its
Subsidiaries has not had and would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. Except as set
forth in Section 3.11 of the Company Disclosure Letter, no consent, approval,
waiver or authorization of, or notice to any Person is needed in order that each
such Company Material Contract shall continue in full force and effect in
accordance with its terms without penalty, acceleration or rights of early
termination by reason of the consummation of the Merger and the other
transactions contemplated by this Agreement.
3.12. Compliance with Law. Except as disclosed in Section 3.12 of
the Company Disclosure Letter, all activities of the Company and its
Subsidiaries have been, and are currently being, conducted in compliance in all
material respects with all applicable United States federal, state, provincial
and local and other foreign laws, ordinances, regulations, interpretations,
judgments, decrees, injunctions, permits, licenses, certificates, governmental
requirements, Orders and other similar items of any court or other Governmental
Entity or any nongovernmental self-regulatory agency, and no notice has been
received by the Company or any Subsidiary of any claims filed against the
Company or any Subsidiary alleging a violation of any such laws, regulations or
other requirements which would be required to be disclosed in any Company SEC
Report or any New SEC Report (as defined in Section 5.15 hereof). The Company
Stock Option Plans and the ESPP have been duly authorized, approved and operated
in compliance in all material respects with all applicable securities, corporate
and other laws of each jurisdiction in which participants of such plans are
located. The Company and its Subsidiaries have all permits, licenses and
franchises from Governmental Entities required to conduct their businesses as
now being conducted (including, but not limited to, permits issued under or
pursuant to the Communications Act or the rules or regulations of the Federal
Communications Commission), except for such permits, licenses and franchises the
absence of which has not had and would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
3.13. Intellectual Property Rights; Year 2000.
(a) The Company and its Subsidiaries own, or are validly
licensed or otherwise possess legally enforceable and, except for limitations
arising under a license or similar agreement governing the Company's or a
Subsidiary's rights therein, unencumbered rights to use, all patents,
trademarks, trade names, service marks, domain names and copyrights, any
applications for and registrations of such patents, trademarks, trade names,
service marks, domain names and copyrights, and all database rights, net lists,
processes, formulae, methods, schematics, technology, know-how, computer
software programs or applications and tangible or intangible proprietary
information or material that are necessary to conduct the business of the
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Company and its Subsidiaries as currently conducted, or necessary with respect
to the production, marketing and/or sale of products currently under development
by the Company, except for such rights the absence of which would not be
reasonably expected to have a Company Material Adverse Effect (the "Company
Intellectual Property Rights"). The Company and its Subsidiaries have taken all
action reasonably necessary to protect the Company Intellectual Property Rights
which is customary in the industry, including without limitation, use of
reasonable secrecy measures to protect the trade secrets included in the Company
Intellectual Property Rights.
(b) The execution and delivery of this Agreement and
consummation of the transactions contemplated hereby will not result in the
breach of, or create on behalf of any third party the right to terminate or
modify, any license, sublicense or other agreement relating to the Company
Intellectual Property Rights, or any material licenses, sublicenses or other
agreements as to which the Company or any of its Subsidiaries is a party and
pursuant to which the Company or any of its Subsidiaries is authorized to use
any third party patents, trademarks, copyrights or trade secrets ("Company Third
Party Intellectual Property Rights"), including software that is used in the
manufacture of, incorporated in, or forms a part of any product sold by or
expected to be sold by the Company or any of its Subsidiaries, the breach of
which would, individually or in the aggregate, be reasonably likely to have a
Company Material Adverse Effect. The Company Disclosure Letter, under the
caption referencing this Section 3.13, lists all royalties, license fees,
sublicense fees or similar obligations involving aggregate annual payments by
the Company or any Subsidiary in excess of $25,000 for any Company Third Party
Intellectual Property Rights that are used in the manufacture of, incorporated
in, or forms a part of any product sold by or expected to be sold by the Company
or any of its Subsidiaries.
(c) All patents, registered trademarks, service marks,
domain names and copyrights which are held by the Company or any of its
Subsidiaries, the loss or invalidity of which would reasonably be expected to
cause a Company Material Adverse Effect, are valid and subsisting. The Company
(i) has not, since January 1, 1997, been sued in any suit, action or proceeding,
or received in writing any claim or notice, which involves a claim of
infringement or misappropriation of any patents, trademarks, service marks,
domain names, copyrights or violation of any trade secret or other proprietary
right of any third party (nor are there any suits, actions or proceedings that
arose prior to such date that remain outstanding and unresolved); and (ii) has
no Knowledge that the manufacturing, marketing, licensing or sale of its
products or services infringe upon, misappropriate or otherwise come into
conflict with any patent, trademark, service mark, copyright, trade secret or
other proprietary right of any third party, which infringement, misappropriation
or conflict in the cases of clause (i) and (ii) would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. To
the Knowledge of the Company, no other Person has interfered with, infringed
upon, or otherwise come into conflict with any Company Intellectual Property
Rights or other proprietary information of the Company or any of its
Subsidiaries which has or would, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(d) Each employee, agent, consultant or contractor who
has materially contributed to or participated in the creation or development of
any copyrightable, patentable or
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trade secret material on behalf of the Company, any of its Subsidiaries or any
predecessor in interest thereto either: (i) is a party to an agreement under
which the Company or such Subsidiary is deemed to be the original owner/author
of all property rights therein; or (ii) has executed an assignment or an
agreement to assign in favor of the Company, such Subsidiary or such predecessor
in interest, as applicable, all right, title and interest in such material.
(e) The Company and its Subsidiaries have experienced no
material disruption or interruption of their business or operations as a result
of or related to any of their information systems, data processing and other
hardware, software and other systems, facilities, programs and procedures used
or sold by the Company or any of its Subsidiaries (collectively, "Information
Systems") failing to be Y2K Compliant. "Y2K Compliant" means, with respect to
any Information System, that such Information System (i) handles date
information involving any and all dates before, during and/or after January 1,
2000, including accepting input, providing output and performing date
calculations in whole or in part; (ii) operates accurately without interruption
on and in respect of any and all dates before, during and/or after January 1,
2000 and without any change in performance; (iii) responds to and processes
two-digit year input without creating any ambiguity as to the century; and (iv)
stores and provides date input information without creating any ambiguity as to
the century, in each case without utilizing bridges, gateways and the like while
still preserving the level of functionality, usability, reliability, efficiency,
performance and accessibility of such data and associated programs as existed
prior to any modification to such Information System and its constituent
elements to make the same Y2K Compliant.
3.14. Taxes.
(a) "Tax" or "Taxes" shall mean all United States
federal, state, provincial, local or foreign taxes and any other applicable
duties, levies, fees, charges and assessments that are in the nature of a tax,
including income, gross receipts, property, sales, use, license, excise,
franchise, ad valorem, value-added, transfer, social security payments, and
health taxes and any deductibles relating to wages, salaries and benefits and
payments to subcontractors for any jurisdiction in which the Company or any of
its Subsidiaries does business (to the extent required under applicable Tax
law), together with all interest, penalties and additions imposed with respect
to such amounts.
(b) Except as set forth in Section 3.14 of the Company
Disclosure Letter or as could not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect:
(i) the Company and its Subsidiaries have
prepared and timely filed with the appropriate governmental agencies
all franchise, income and all other material Tax returns and reports
required to be filed on or before the Effective Time (collectively
"Returns"), taking into account any extension of time to file granted
to or obtained on behalf of the Company and/or its Subsidiaries;
(ii) all Taxes of the Company and its
Subsidiaries shown on such Returns or otherwise known by the Company to
be due or payable for any period ending
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<PAGE> 24
on, ending on and including, or ending prior to the Effective Time,
have been timely paid in full to the proper authorities, other than
such Taxes as are being contested in good faith by appropriate
proceedings or which are adequately reserved for in accordance with
generally accepted accounting principles and reflected, in a manner
consistent with past practice, on the Company's books as an accrued Tax
liability, either current or deferred;
(iii) all deficiencies resulting from Tax
examinations of income, sales and franchise and all other material
Returns filed by the Company and its Subsidiaries in any jurisdiction
in which such Returns are required to be so filed have either been paid
or are being contested in good faith by appropriate proceedings;
(iv) no deficiency has been asserted against the
Company or any of its Subsidiaries which has not been satisfied or
otherwise resolved, and no examination of the Company or any of its
Subsidiaries is pending or, to the Knowledge of the Company, threatened
for any material amount of Tax by any taxing authority;
(v) no extension of the period for assessment or
collection of any material Tax is currently in effect and no extension
of time within which to file any material Return has been requested,
which Return has not since been filed;
(vi) all Returns filed by the Company and its
Subsidiaries are correct and complete or adequate reserves have been
established with respect to any additional Taxes that may be due (or
may become due) as a result of such Returns not being correct or
complete;
(vii) to the Knowledge of the Company, no Tax
liens have been filed with respect to any Taxes;
(viii) neither the Company nor any of its
Subsidiaries have made, and none will make, any voluntary adjustment by
reason of a change in their accounting methods for any pre-Merger
period;
(ix) the Company and its Subsidiaries have made
timely payments of the Taxes required to be deducted and withheld from
the wages paid to their employees;
(x) the Company and its Subsidiaries are not
parties to any Tax sharing or Tax matters agreement;
(xi) to the Knowledge of the Company, neither the
Company nor any of its Subsidiaries is liable to suffer any recapture,
clawback or withdrawal of any relief or exemption from Tax howsoever
arising (including the entering into and the consummation of the
Merger), and whether by virtue of any act or omission by the Company or
any of its Subsidiaries or by any other person or persons; and
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(xii) to the Knowledge of the Company, neither the
Company nor any of its Subsidiaries is liable to be assessed for or
made accountable for any Tax for which any other person or persons may
be liable to be assessed or made accountable whether by virtue of the
entering into or the consummation of the Merger or by virtue of any act
or acts done by or which may be done by or any circumstance or
circumstances involving or which may involve any other person or
persons.
(c) The Company and its Subsidiaries are not parties to
any agreement, contract, or arrangement that would, as a result of the
transactions contemplated hereby, result, separately or in the aggregate, in (i)
the payment of any "excess parachute payments" within the meaning of Section
280G of the Code by reason of the Merger or (ii) the payment of any form of
compensation or reimbursement for any Tax incurred by any Person arising under
Section 280G of the Code.
3.15. Employees. Neither the Company nor any of its Subsidiaries is
a party to any collective bargaining agreement, arrangement or labor contract
with a labor union or labor organization, whether formal or otherwise. The
Company Disclosure Letter, under the caption referencing this Section 3.15,
lists all employment, severance and change of control agreements (or any other
agreements that may result in the acceleration of the exercisability of
outstanding options) of the Company or its Subsidiaries. Each of the Company and
its Subsidiaries is in compliance in all material respects with all applicable
laws (including, without limitation, all applicable extension orders) respecting
employment and employment practices, terms and conditions of employment, equal
opportunity, anti-discrimination laws, and wages and hours. There is no labor
strike, slowdown or stoppage pending (or, to the Knowledge of the Company or any
of its Subsidiaries, any unfair labor practice complaints, labor disturbances or
other controversies respecting employment which are pending or threatened which,
if they actually occurred, would materially disrupt the operations of the
Company or its Subsidiaries) against the Company or any of its Subsidiaries.
3.16. Employee Benefit Plans.
(a) "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended, and "Plan" means every plan, fund, contract, program
and arrangement (whether written or not) which is maintained or contributed to
by the Company for the benefit of present or former United States employees or
with respect to which the Company otherwise has current or potential liability,
including, but not limited to, Plans which have been terminated but with respect
to which the Company has current or potential liability. "Plan" includes any
arrangement intended to provide: (i) medical, surgical, health care,
hospitalization, dental, vision, workers' compensation, life insurance, death,
disability, legal services, severance, sickness, accident, or cafeteria plan
benefits (whether or not defined in Section 3(1) of ERISA), (ii) pension, profit
sharing, stock bonus, retirement, supplemental retirement or deferred
compensation benefits (whether or not tax qualified and whether or not defined
in Section 3(2) of ERISA), (iii) bonus, incentive compensation, stock option,
stock appreciation right, phantom stock or stock purchase benefits, change in
control benefits or (iv) salary continuation, unemployment, supplemental
unemployment, termination pay, vacation or holiday benefits (whether or not
defined in Section
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<PAGE> 26
3(3) of ERISA). The Company Disclosure Letter, under the caption referencing
this Section 3.16(a), sets forth all Plans by name and brief description
identifying: (i) the type of Plan, including a specific reference to any Plan
which provides benefits (or increased benefits or vesting) as a result of a
change in control of the Company, (ii) the funding arrangements for the Plan,
(iii) the sponsorship of the Plan and (iv) the participating employers in the
Plan.
(b) To the extent required (either as a matter of law or
to obtain the intended tax treatment and tax benefits), all Plans comply with
all material requirements of ERISA and the Code. With respect to the Plans,
except as set forth in Section 3.16 of the Company Disclosure Letter (i) all
required contributions which are due have been made and any accrual required by
generally accepted accounting principles has been made on the books and records
of the Company for all future contribution obligations; (ii) there are no
actions, suits or claims pending, other than routine uncontested claims for
benefits; and (iii) there have been no prohibited transactions (as defined in
Section 406 of ERISA or Section 4975 of the Code) except for such items which
have not or would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect. Except as otherwise disclosed in the
Company Disclosure Letter under the caption referencing this Section 3.16(b),
all benefits under the Plans (other than Code Section 125 cafeteria plans) are
payable either through a fully-funded trust or an insurance contract and no
welfare benefit Plan (as defined in Section 3(1) of ERISA) is self-funded.
Except as otherwise disclosed in the Company Disclosure Letter under the caption
referencing this Section 3.16(b), no qualified retirement plans sponsored by the
Company are invested in stock of the Company.
(c) Parent has received true and complete copies of (i)
all Plan documents, including related trust agreements or funding arrangements;
(ii) the most recent determination letter, if any, received by the Company from
the Internal Revenue Service (the "IRS") regarding the Plans, the termination of
any Plan, and any amendment to any Plan made subsequent to any Plan amendments
covered by any such determination letter; (iii) the most recent financial
statements for the Plans, if any; (iv) the most recently prepared actuarial
valuation reports, if any; (v) current summary plan descriptions; (vi) annual
returns/reports on Form 5500 and summary annual reports for the most recent plan
year, and (vii) any filings (other than Forms 5500) with the IRS or the
Department of Labor ("DOL") within the last five years preceding the date of
this Agreement with respect to the Plans. To the Knowledge of the Company,
nothing has occurred that could materially adversely affect the qualification of
the Plans and their related trusts.
(d) Except as set forth in Section 3.16 of the Company
Disclosure Letter, the Company does not maintain or contribute to (and has never
contributed to) any multi-employer plan, as defined in Section 3(37) of ERISA.
The Company has no actual or potential liabilities under Title IV of ERISA,
including under Section 4201 of ERISA for any complete or partial withdrawal
from a multi-employer plan.
(e) The Company has no actual or potential liability for
death, or medical or dental benefits after separation from employment, other
than (i) death benefits under the Plans (whether or not subject to ERISA) set
forth in Section 3.16 of the Company Disclosure Letter and (ii) health care
continuation benefits described in Section 4980B of the Code.
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<PAGE> 27
(f) Neither the Company nor any of its directors,
officers, employees or other "fiduciaries", as such term is defined in Section
3(21) of ERISA, has committed any breach of fiduciary responsibility imposed by
ERISA or any other applicable law with respect to the Plans which would subject
the Company, Parent or any of their respective directors, officers or employees
to any liability under ERISA or any applicable law except for such breaches
which have not or would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
(g) Except as set forth in Section 3.16 of the Company
Disclosure Letter, there are no other trades or businesses, whether or not
incorporated, which, together with the Company, would be deemed to be a "single
employer" within the meaning of Code Sections 414(b), (c) or (m).
(h) Except with respect to Taxes on benefits paid or
provided, no Tax has been waived or excused, has been paid or is owed by any
person (including, but not limited to, any Plan, any Plan fiduciary or the
Company) with respect to the operations of, or any transactions with respect to,
any Plan. No action has been taken by the Company, nor has there been any
failure by the Company to take any action, nor is any action or failure to take
action contemplated by the Company (including all actions contemplated under
this Agreement), that would subject the Company, Parent or any of their
respective directors, officers or employees to any liability or Tax imposed by
the IRS or DOL in connection with any Plan. No reserve for any Taxes has been
established with respect to any Plan by the Company nor has any advice been
given to the Company with respect to the need to establish such a reserve.
(i) There are no (i) legal, administrative or other
proceedings or governmental investigations or audits, or (ii) complaints to or
by any Governmental Entity, which are pending, anticipated or, to the Knowledge
of the Company, threatened, against any Plan or its assets, or against any Plan
fiduciary or administrator, or against the Company or its officers or employees
with respect to any Plan.
(j) There are no leased employees, as defined in Section
414(n) of the Code, providing services to the Company, that must be taken into
account with respect to the requirements under Section 414(n)(3) of the Code.
(k) Except as set forth in Section 3.16 of the Company
Disclosure Letter, each Plan may be terminated directly or indirectly by the
Company, in its sole discretion, at any time before or after the Effective Date
in accordance with its terms, without causing the Parent or the Company to incur
any liability to any person, entity or government agency for any conduct,
practice or omission of the Company which occurred prior to the Effective Date,
except for liabilities to, and the rights of, the employees thereunder accrued
prior to the Effective Date, or if later, the time of termination, and except
for continuation rights required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or other applicable law.
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(l) "Foreign Plan" means every plan, fund, contract
program and arrangement (whether written or not) which is maintained or
contributed to by the Company or an affiliate for the benefit of present or
former employees working outside of the United States or with respect to which
the Company or an affiliate otherwise has current or potential liability for
such current or former employees that is not subject to the laws of the United
States. Foreign Plan may include plans that also benefit United States employees
and include any arrangement intended to provide: (i) medical, surgical, health
care, hospitalization, dental, vision, workers compensation, life insurance,
death, disability, legal services, severance, sickness, or accident benefits;
(ii) pension, profit sharing, retirement, supplemental retirement or deferred
compensation benefits; (iii) bonus, incentive compensation, stock option, stock
appreciation rights, phantom stock or stock purchase benefits, change in control
benefits; or (iv) salary continuation, unemployment, supplemental unemployment,
termination pay, vacation or holiday benefits. Section 3.16 of the Company
Disclosure Letter sets forth all Foreign Plans by name and provides a brief
description for each plan. Except as described in Section 3.16 of the Company
Disclosure Letter, no condition, agreement or plan provision limits the right of
the Company or an affiliate to amend, cut back or terminate any Foreign Plan,
nor will the transaction contemplated by this Agreement limit the right of the
Company or an affiliate or the Parent to amend, cut back or terminate any
Foreign Plan and none of the benefits under a Foreign Plan have been materially
augmented. Either as a matter of law or to obtain the intended tax treatment and
tax benefits, the Foreign Plans have at all times complied with and been duly
administered in accordance with all applicable laws and regulations and
requirements having force of law and in accordance with their terms except for
such matters which have not or would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. There are not
in respect of any Foreign Plan or the benefits thereunder any actions, suits or
claims pending or, to the Knowledge of the Company, threatened other than
routine claims for benefits. Neither the Company nor any of its affiliates have
received any notice or directive that it has not complied with all material
provisions of the Foreign Plans applicable to it and has no Knowledge of any
reason why the tax exempt (or favored) status, if any of the Foreign Plans might
be withdrawn.
3.17. Environmental Matters.
(a) The Company and its Subsidiaries (i) have been in
compliance and are presently complying with all applicable health, safety and
Environmental Laws (defined below), and (ii) have obtained all material permits,
licenses and authorizations which are required under all applicable health,
safety and Environmental Laws and are in compliance in all material respects
with such permits, licenses and authorizations, except in each case for such
failure to comply or to obtain permits, licenses or authorizations that would
not, individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. To the Knowledge of the Company, (i) none of the Leased
Real Property (including without limitation soils and surface and ground waters)
are contaminated with any Hazardous Materials in quantities which require
investigation or remediation under Environmental Laws, (ii) neither the Company
nor any of its Subsidiaries is liable for any off-site contamination, and (iii)
there is no environmental matter which could reasonably be expected to expose
the Company or any of its Subsidiaries to a claim to clean-up any Hazardous
Materials or otherwise to remedy any pollution
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or damage at any of the properties utilized in the Company's business under any
Environmental Laws.
(b) For purposes of this Agreement, the term (i)
"Environmental Laws" means all applicable United States federal, state,
provincial, local and other foreign laws, rules, regulations, codes, ordinances,
orders, decrees, directives, permits, licenses and judgments relating to
pollution, contamination or protection of the environment (including, without
limitation, all applicable United States federal, state, provincial, local and
other foreign laws, rules, regulations, codes, ordinances, orders, decrees,
directives, permits, licenses and judgments relating to Hazardous Materials in
effect as of the date of this Agreement), and (ii) "Hazardous Materials" means
any dangerous, toxic or hazardous pollutant, contaminant, chemical, waste,
material or substance as defined in or governed by any United States federal,
state, provincial, local or other foreign law, statute, code, ordinance,
regulation, rule or other requirement relating to such substance or otherwise
relating to the environment or human health or safety, including without
limitation any waste, material, substance, pollutant or contaminant that might
cause any injury to human health or safety or to the environment or might
subject the Company or any of its Subsidiaries to any imposition of costs or
liability under any Environmental Law.
3.18. Insurance. The Company has made available to Parent copies of
all material policies of insurance and bonds in force on the date hereof
covering the businesses, properties and assets of the Company and its
Subsidiaries, and all such policies are currently in effect and all premiums
with respect thereto have been duly paid to date. Except as disclosed in Section
3.18 of the Company Disclosure Letter, there are no claims outstanding under any
insurance policy which could, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect and, to the Knowledge of the
Company or any of its Subsidiaries, neither the Company nor any of its
Subsidiaries has failed to give any notice or to present any such claim with
respect to its business under any such policy in due and timely fashion which
could, individually or in the aggregate, reasonably be expected to have a
Company Material Adverse Effect.
3.19. Anti-Bribery Compliance. Neither the Company nor any of its
Subsidiaries (nor any person representing the Company or any of its
Subsidiaries) has at any time during the last five years (a) made any payment in
violation of the Foreign Corrupt Practices Act, the OECD Convention or similar
laws of other countries where the Company engages in business, or (b) made any
payment to any foreign, federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or permitted by the OECD Convention, the laws of the United
States or any jurisdiction thereof or the laws of the countries in which such
payments were made and received.
3.20. Export Control Laws. The Company has conducted its export
transactions in accordance in all material respects with applicable provisions
of United States export control laws and regulations, including but not limited
to the Export Administration Act and implementing Export Administration
Regulations.
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3.21. Finders or Brokers. Except for First Analysis Securities
Corporation, none of the Company, the Subsidiaries of the Company, the Board of
Directors of the Company (the "Company Board") or any member of the Company
Board has employed any agent, investment banker, broker, finder or intermediary
in connection with the transactions contemplated hereby who might be entitled to
a fee or any commission in connection with the Merger or the other transactions
contemplated hereby.
3.22. Board Recommendation. The Company Board has, at a meeting of
such Company Board duly held on June 8, 2000, approved and adopted this
Agreement, the Merger and the other transactions contemplated hereby, declared
the advisability of the Merger and recommended that the stockholders of the
Company approve the Merger and the other transactions contemplated hereby, and
has not as of the date hereof rescinded or modified in any respect any of such
actions.
3.23. Vote Required. The affirmative vote of the holders of a
majority of the shares of Company Common Stock outstanding on the record date
set for the Company Stockholders Meeting (as defined in Section 5.2 hereof) is
the only vote of the holders of any of the Company's capital stock necessary to
approve this Agreement and the transactions contemplated hereby.
3.24. Opinion of Financial Advisor. The Company has received the
opinion of First Analysis Securities Corporation dated the date of the meeting
of the Company Board referenced in Section 3.22 above, to the effect that, as of
such date, the Per Share Amount is fair, from a financial point of view, to the
holders of Company Common Stock.
3.25. State Takeover Statutes; Rights Agreement. The Company Board
has taken all actions so that the restrictions contained in Section 203 of the
DGCL applicable to a "business combination" (as defined in Section 203 of the
DGCL) will not apply to the execution, delivery of performance of this Agreement
or the consummation of the Merger or the other transactions contemplated by this
Agreement. The Company has taken all actions and completed all amendments, if
any, necessary or appropriate so that (a) the Preferred Shares Rights Agreement,
dated as of October 20, 1992, as amended, between the Company and The First
National Bank of Boston (the "Company Rights Agreement"), is inapplicable to the
transactions contemplated by this Agreement, and (b) the execution of this
Agreement and the consummation of the transactions contemplated hereby or
thereby, do not and will not (i) result in Parent being an "Acquiring Person"
(as such term is defined in the Company Rights Agreement), (ii) result in the
ability of any person to exercise any Rights under the Company Rights Agreement,
(iii) enable or require the "Rights" (as such term is defined in the Company
Rights Agreement) to separate from the shares of Company Common Stock to which
they are attached or to be triggered or become exercisable, or (iv) otherwise
result in the occurrence of a "Distribution Date" or "Shares Acquisition Date"
(as such terms are defined in the Company Rights Agreement).
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERGER SUB AND PARENT
Merger Sub and Parent represent and warrant to the Company that the
statements contained in this Article IV are true and correct:
4.1. Organization and Qualification. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota, with the corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Merger Sub is a
corporation validly existing and in good standing under the laws of the State of
Delaware. Each of Merger Sub and Parent is duly qualified or licensed to carry
on its business as it is now being conducted, and is qualified to conduct
business, in each jurisdiction where the character of its properties owned or
leased or the nature of its activities makes such qualification necessary,
except for failures to be so qualified that would not, individually or in the
aggregate, have, or would not reasonably be expected to have, a Parent Material
Adverse Effect (as defined below). Neither Parent nor Merger Sub is in violation
of any of the provisions of its Charter Document or its Governing Document. As
used in this Agreement, the term "Parent Material Adverse Effect" means any
change, effect, event or condition that (i) has a material adverse effect on the
assets, business, results of operations or financial condition of Parent and its
Subsidiaries, taken as a whole (other than any such change, effect, event or
condition that arises from changes in general economic conditions or conditions
affecting Parent's industry generally, or such changes, effects, events or
conditions resulting from the consummation of the transactions contemplated
hereby; provided, however, that the termination of contracts requiring third
party consent or approval because of the consummation of the transactions
contemplated hereby the loss of which would otherwise have a material adverse
effect on the assets, business, results of operations or financial condition of
Parent shall not be excluded from this definition) or (ii) would prevent or
materially delay Merger Sub's or Parent's ability to consummate the transactions
contemplated hereby.
4.2. Authority Relative to this Agreement. Each of Parent and
Merger Sub has the requisite corporate power and authority to execute and
deliver, and to perform its obligations under, this Agreement under applicable
law. The execution and delivery by Parent and Merger Sub of this Agreement, and
the consummation of the Merger and the transactions contemplated hereby, have
been duly and validly authorized by all necessary corporate action on the part
of Parent and Merger Sub. This Agreement has been duly and validly executed and
delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery of this Agreement by the Company, is a valid and binding
obligation of Parent and Merger Sub, enforceable against them in accordance with
its terms, except to the extent that its enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting the enforcement of creditors rights generally or by general equitable
principles. The Parent Options and the shares of Parent Common Stock to be
issued upon exercise thereof: (i) have been duly authorized, and, when such
shares of Parent Common Stock are issued in accordance with the terms of the
Merger and this Agreement (or the applicable option agreements), such shares
will be validly issued, fully paid and nonassessable and will not be
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subject to preemptive rights, (ii) will, when issued in accordance with the
terms of the Merger and this Agreement (or the applicable option agreements), be
registered under the Securities Act, and registered or exempt from registration
under applicable United States "Blue Sky" laws and (iii) will, when issued in
accordance with the terms of the Merger and this Agreement (or the applicable
option agreements), be listed on the Nasdaq National Market.
4.3. No Conflicts; Required Filings and Consents.
(a) Neither the execution, delivery or performance of
this Agreement by Merger Sub or Parent, nor the consummation of the transactions
contemplated hereby, nor compliance by Merger Sub or Parent with any provision
hereof will (i) conflict with or result in a breach of any provision of the
Charter Documents or Governing Documents of Merger Sub or Parent, (ii) cause a
default or give rise to any right of termination, cancellation or acceleration
or loss of a material benefit under, or result in the creation of any lien,
charge or other encumbrance upon any of the properties of Merger Sub or Parent
under any of the terms, conditions or provisions of any note, bond, mortgage or
indenture, or any other material instrument, obligation or agreement to which
Merger Sub or Parent is a party or by which its properties or assets may be
bound or (iii) violate any law applicable to Merger Sub or Parent or binding
upon any of its properties, except for, in the case of clauses (ii) and (iii),
such defaults or violations which would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect.
(b) No filing or registration with or notification to and
no permit, authorization, consent or approval of any Governmental Entity is
required to be obtained, made or given by Merger Sub or Parent in connection
with the execution and delivery of this Agreement or the consummation by Merger
Sub of the Merger or other transactions contemplated hereby except (i) (A) in
connection with the applicable requirements of the HSR Act or (B) such consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the laws of any
country other than the United States, or (ii) where the failure to obtain any
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
4.4. Funds. At the Closing, Parent will have the funds necessary to
consummate the Merger and pay the aggregate Per Share Amount in accordance with
the terms of this Agreement.
ARTICLE V
COVENANTS AND AGREEMENTS
5.1. Conduct of Business of the Company Pending the Merger. Except
as contemplated by this Agreement or as expressly agreed to in writing by
Parent, during the period from the date of this Agreement to the earlier of (i)
the termination of this Agreement or (ii) the Effective Time, each of the
Company and its Subsidiaries will conduct their respective operations according
to its ordinary course of business consistent with past practice, and will use
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commercially reasonable efforts consistent with past practice and policies to
preserve intact its business organization, to keep available the services of its
officers and employees and to maintain satisfactory relationships with
suppliers, distributors, customers and others having business relationships with
it and will take no action which would adversely affect the ability of the
parties to consummate the transactions contemplated by this Agreement, or the
timing thereof. Without limiting the generality of the foregoing, and except as
otherwise expressly provided in this Agreement, prior to the Effective Time, the
Company will not nor will it permit any of its Subsidiaries to, without the
prior written consent of Parent:
(a) amend any of its Charter Documents or Governing
Documents;
(b) authorize for issuance, issue, sell, deliver, grant
any options, warrants, stock appreciation rights, or stock issuance rights for,
or otherwise agree or commit to issue, sell, deliver, pledge, dispose of or
otherwise encumber any shares of any class of its share capital or any
securities convertible into shares of any class of its share capital, except (i)
pursuant to and in accordance with the terms of Company Options outstanding on
the Company Measurement Date or granted pursuant to clause (iii) below, (ii)
pursuant to the ESPP (to the extent shares of Company Common Stock have been
paid for with payroll deductions), or (iii) the grant of Company Options as set
forth in Section 5.1(b) of the Company Disclosure Letter or consistent with past
practices to new employees (or, subject to the prior written consent of Parent,
which consent shall not be unreasonably withheld, to existing employees in
connection with regularly scheduled performance reviews), which Company Options
will represent the right to acquire no more than 5,000 shares of Company Common
Stock per employee, and no more than 50,000 shares of Company Common Stock in
the aggregate;
(c) subdivide, cancel, consolidate or reclassify any
shares of its share capital, issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its share
capital, declare, set aside or pay any dividend or other distribution (whether
in cash, shares or property or any combination thereof) in respect of its share
capital or purchase, redeem or otherwise acquire any shares of its own share
capital (other than the Receivership Shares) or of any of its Subsidiaries,
except as otherwise expressly provided in this Agreement;
(d) (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 consistent with past practice; (ii)
assume, guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the material obligations of any other
person (other than Subsidiaries of the Company); or (iii) make any material
loans, advances or capital contributions to, or investments in, any other person
(other than to Subsidiaries of the Company);
(e) except as otherwise expressly contemplated by this
Agreement or as set forth in Section 5.1(e) of the Company Disclosure Letter,
(i) increase in any manner the compensation of (A) any employee who is not an
officer of the Company or any Subsidiary (a "NonExecutive Employee"), except in
the ordinary course of business consistent with past practice or (B) any of its
directors or officers, except in the ordinary course of business,
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consistent with past practice, after consultation with Parent, (ii) pay or agree
to pay any pension, retirement allowance or other employee benefit not required,
or enter into, amend or agree to enter into or amend any agreement or
arrangement with any such director or officer or employee, whether past or
present, relating to any such pension, retirement allowance or other employee
benefit, except as required to comply with law or under currently existing
agreements, plans or arrangements or with respect to NonExecutive Employees, in
the ordinary course of business consistent with past practice; (iii) grant any
rights to receive any severance or termination pay to, or enter into or amend
any employment or severance agreement with, any employee or any of its directors
or officers, except as required by applicable law or with respect to severance
or termination pay to NonExecutive Employees in the ordinary course of business,
consistent with past practices; or (iv) except as may be required to comply with
applicable law, become obligated (other than pursuant to any new or renewed
collective bargaining agreement) under any new pension plan, welfare plan,
multiemployer plan, employee benefit plan, benefit arrangement, or similar plan
or arrangement, which was not in existence on the date hereof, including any
bonus, incentive, deferred compensation, share purchase, share option, share
appreciation right, group insurance, severance pay, retirement or other benefit
plan, agreement or arrangement, or employment or consulting agreement with or
for the benefit of any person, or amend any of such plans or any of such
agreements in existence on the date hereof; provided, however, that this clause
(iv) shall not prohibit the Company from renewing any such plan, agreement or
arrangement already in existence on terms no more favorable to the parties to
such plan, agreement or arrangement;
(f) except as otherwise expressly contemplated by this
Agreement, enter into, amend in any material respect or terminate any Company
Material Contracts other than in the ordinary course of business consistent with
past practice;
(g) sell, lease, license, mortgage or dispose of any of
its properties or assets, other than (i) transactions in the ordinary course of
business consistent with past practice, and (ii) sales of assets, for the fair
market value thereof, which sales do not individually or in the aggregate exceed
$1,000,000 and, in the case of both clauses (i) and (ii), except as may be
required or contemplated by this Agreement;
(h) except as otherwise contemplated by the Merger,
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
business or any corporation, limited liability company, partnership, association
or other business organization or division thereof or otherwise acquire or agree
to acquire any assets, other than the acquisition of assets that are in the
ordinary course of business consistent with past practice and not material to
the Company and its Subsidiaries taken as a whole;
(i) alter (through merger, liquidation, reorganization,
restructuring or in any fashion) the corporate structure or ownership of the
Company or any Subsidiary;
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(j) authorize or commit to make any material capital
expenditures not reflected in the budget previously provided in writing by the
Company to Parent without the prior written consent of Parent, which consent
shall not be unreasonably withheld;
(k) make any change in the accounting methods or
accounting practices followed by the Company, except as required by generally
accepted accounting principles or applicable law;
(l) make any election under United States federal, state,
provincial, local or foreign Tax law which would, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect;
(m) settle any action, suit, claim, investigation or
proceeding (legal, administrative or arbitrative) requiring a payment by the
Company or its Subsidiaries in excess of $250,000 (other than in connection with
obtaining the return or release of the Receivership Shares) without the consent
of Parent, which consent shall not be unreasonably withheld or delayed;
(n) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than in connection with obtaining the return or release of the
Receivership Shares or the payment, discharge or satisfaction, in the ordinary
course of business consistent with past practice or in accordance with their
terms, of claims, liabilities or obligations reflected or reserved against in,
or contemplated by, the most recent financial statements (or the notes thereto)
of the Company included in the Company SEC Reports or incurred in the ordinary
course of business consistent with past practice; or
(o) authorize, recommend, propose, agree or announce an
intention to do any of the foregoing or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
5.2. Preparation of Proxy Statement. As promptly as practicable and
no later than 10 days after the date hereof, the Company shall prepare and file
with the SEC the proxy statement to be sent to the stockholders of the Company
in connection with the meeting of the Company's stockholders to consider the
Merger (the "Company Stockholders Meeting") (such proxy statement as amended or
supplemented is referred to herein as the "Proxy Statement"). The Proxy
Statement will, when prepared pursuant to this Section 5.2 and mailed to the
Company's stockholders, comply in all material respects with the applicable
requirements of the Exchange Act. The information supplied by each of Parent and
the Company for inclusion in the Proxy Statement shall not, on the date the
Proxy Statement is first mailed to Company's stockholders, at the time of the
Company Stockholders Meeting and at the Effective Time, contain any statement
which, at such time, is false or misleading with respect to any material fact,
or omit to state any material fact necessary in order to make the statements
made therein, in light of the circumstances under which they are made, not false
or misleading; or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for the Company Stockholders Meeting which has become false or
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misleading. Each of Parent and the Company shall indemnify and hold harmless the
other from any obligations, claims or liabilities arising from any statement
supplied by such party for inclusion in the Proxy Statement which, at the time
such statement was made, is false or misleading with respect to any material
fact, or omits to state any material fact necessary in order to make the
statement, in light of the circumstances under which is was made, not false or
misleading. If at any time prior to the Effective Time any event or information
should be discovered by Parent, Merger Sub or the Company which should be set
forth in a supplement to the Proxy Statement, Parent, Merger Sub or the Company,
as the case may be, will promptly inform the other parties. The Proxy Statement
shall include the declaration of the Company Board of the advisability of the
Merger and its recommendation that the Company's stockholders approve the
Merger, unless the Company Board determines in good faith, after considering the
advice of its financial advisor and reputable outside legal counsel experienced
in such matters (and the parties recognize that Sutherland Asbill & Brennan LLP
is so experienced), that withdrawal or modification of its declaration and
recommendation is necessary because this Agreement or the Merger is no longer in
the best interests of the Company's stockholders. The Proxy Statement shall be
reviewed and approved by Parent and Parent's counsel prior to the mailing of
such Proxy Statement to the Company's stockholders.
5.3 Meeting of Stockholders. The Company shall, promptly after the
date hereof, take all action necessary in accordance with the DGCL and its
Certificate of Incorporation and Bylaws to convene the Company Stockholders
Meeting within 30 days of the filing of a definitive Proxy Statement with the
SEC, whether or not the Company Board determines at any time after the date
hereof that the Merger is no longer advisable. The Company shall consult with
Parent regarding the date of the Company Stockholders Meeting. The Company shall
use commercially reasonable efforts to solicit from stockholders of the Company
proxies in favor of the Merger and shall take all other commercially reasonable
action necessary or advisable to secure the vote or consent of stockholders
required to effect the Merger, unless the Company Board determines in good
faith, after considering the advice of its financial advisor and reputable
outside legal counsel experienced in such matters (and the parties recognize
that Sutherland Asbill & Brennan LLP is so experienced), that the Merger is no
longer in the best interests of the Company's stockholders.
5.4. Additional Agreements, Cooperation.
(a) Subject to the terms and conditions herein provided,
each of the parties hereto agrees to use its best efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement, and to cooperate, subject to
compliance with applicable law, with each other in connection with the
foregoing, including using its best efforts (i) to obtain all necessary waivers,
consents and approvals from other parties to loan agreements, material leases
and other material contracts, (ii) to obtain all necessary consents, approvals
and authorizations as are required to be obtained under any United States
federal or state, or other foreign law or regulations, (iii) to defend all
lawsuits or other legal proceedings challenging this Agreement or the
consummation of the transactions contemplated hereby, (iv) to lift or rescind
any injunction or restraining order or other order adversely affecting
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the ability of the parties to consummate the transactions contemplated hereby,
(v) to effect all necessary registrations and filings and submissions of
information requested by Governmental Entities, and (vi) to fulfill all
conditions to this Agreement.
(b) Each of the parties hereto agrees, subject to
compliance with applicable law, to furnish to each other party hereto such
necessary information and reasonable assistance as such other party may request
in connection with its preparation of necessary filings or submissions to any
regulatory or governmental agency or authority, including, without limitation,
any filing necessary under the provisions of the HSR Act, the Exchange Act, the
Securities Act or any other United States federal or state, or foreign statute
or regulation. Each party hereto shall promptly inform each other party of any
material communication from the U.S. Federal Trade Commission or any other
government or governmental authority regarding any of the transactions
contemplated thereby.
5.5. Publicity. Except as otherwise required by law or the rules of
any applicable securities exchange or the Nasdaq National Market, so long as
this Agreement is in effect, Parent and the Company will not, and will not
permit any of their respective affiliates or representatives to, issue or cause
the publication of any press release or make any other public announcement with
respect to the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld or delayed.
Parent and the Company will cooperate with each other in the development and
distribution of all press releases and other public announcements with respect
to this Agreement and the transactions contemplated hereby, and will furnish the
other with drafts of any such releases and announcements as far in advance as
possible. Nothing in this Section 5.5 shall prohibit or restrict the Company
from at any time communicating to the Company's stockholders if the Company
Board has determined in good faith, after considering the advice of reputable
outside legal counsel experienced in such matters (and the parties recognize
that Sutherland Asbill & Brennan LLP is so experienced), that any such
communication is required to fulfill its fiduciary duties to the Company's
stockholders.
5.6. No Solicitation.
(a) Immediately upon execution of this Agreement, the
Company shall (and shall cause its officers, directors, employees, investment
bankers, attorneys and other agents or representatives to) cease all
discussions, negotiations, responses to inquiries and other communications
relating to any potential business combination with all third parties who, prior
to the date hereof, may have expressed or otherwise indicated any interest in
pursuing an Acquisition Proposal (as hereinafter defined) with the Company.
(b) Prior to termination of this Agreement pursuant to
Article VII hereof, the Company and its Subsidiaries shall not, nor shall the
Company authorize or permit any officers, directors or employees of, or any
investment bankers, attorneys or other agents or representatives retained by or
acting on behalf of, the Company or any of its Subsidiaries to, (i) initiate,
solicit or encourage, directly or indirectly, any inquiries or the making of any
proposal that constitutes an Acquisition Proposal, (ii) except as permitted
below, engage or participate in negotiations or discussions with, or furnish any
information or data to, or take any other action to, facilitate any
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inquiries or making any proposal by, any third party relating to an Acquisition
Proposal, or (iii) except as permitted below, enter into any agreement with
respect to any Acquisition Proposal or approve an Acquisition Proposal.
Notwithstanding anything to the contrary contained in this Section 5.6 or in any
other provision of this Agreement, prior to the Company Stockholders Meeting,
the Company Board may participate in discussions or negotiations with or furnish
information to any third party making an unsolicited Acquisition Proposal (a
"Potential Acquiror") or approve or recommend an unsolicited Acquisition
Proposal if both (A) a majority of the directors of the Company Board, without
including directors who may be considered Affiliates (as defined in Rule 405
under the Securities Act) of any person making an Acquisition Proposal
("Disinterested Directors") determines in good faith, after receiving advice
from its independent financial advisor, that a Potential Acquiror has submitted
to the Company an Acquisition Proposal that is a Superior Proposal (as
hereinafter defined), and (B) a majority of the Disinterested Directors of the
Company Board determines in good faith, after considering advice from reputable
outside legal counsel experienced in such matters (and the parties hereto agree
that the law firm of Sutherland Asbill & Brennan LLP is so experienced), that
the failure to participate in such discussions or negotiations or to furnish
such information or to approve or recommend such unsolicited Acquisition
Proposal is inconsistent with the Company Board's fiduciary duties under
applicable law. In the event that the Company shall receive any Acquisition
Proposal, it shall promptly (and in no event later than 24 hours after receipt
thereof) furnish to Parent the identity of the recipient of the Acquisition
Proposal and of the Potential Acquiror, the terms of such Acquisition Proposal
and copies of all non-public information requested by the Potential Acquiror not
previously delivered to Parent, and shall further promptly inform Parent in
writing as to the fact such information is to be provided after compliance with
the terms of the preceding sentence. Nothing contained herein shall prevent the
Company from complying with Rules 14d-9 and 14e-2 promulgated under the Exchange
Act with regard to an Acquisition Proposal or making any disclosure to the
Company's stockholders if, in the good faith judgment of the Company Board,
after considering advice from reputable outside legal counsel experienced in
such matters (and the parties hereto agree that the law firm of Sutherland
Asbill & Brennan LLP is so experienced), such disclosure is required by
applicable law. Without limiting the foregoing, the Company understands and
agrees that any violation of the restrictions set forth in this Section 5.6(b)
by the Company or any of its Subsidiaries, or by any director or officer of the
Company or any of its Subsidiaries or any financial advisor, attorney or other
advisor or representative of the Company or any of its Subsidiaries, whether or
not such person is purporting to act on behalf of the Company or any of its
Subsidiaries or otherwise, shall be deemed to be a breach of this Section 5.6(b)
sufficient to enable Parent to terminate this Agreement pursuant to Section
7.1(d)(i) hereof.
(c) For the purposes of this Agreement, "Acquisition
Proposal" shall mean any proposal, whether in writing or otherwise, made by any
person other than Parent and its Subsidiaries to acquire "beneficial ownership"
(as defined under Rule 13(d) of the Exchange Act) of 20% or more of the assets
of, or 20% or more of the outstanding capital stock of any of the Company or its
Subsidiaries pursuant to a merger, consolidation, exchange of shares or other
business combination, sale of shares of capital stock, sales of assets, tender
offer or exchange offer or similar transaction involving the Company or its
Subsidiaries.
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(d) The term "Superior Proposal" means any bona fide
Acquisition Proposal to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, more than 50% of the Company Common Stock
then outstanding or all or substantially all the assets of the Company, and
otherwise on terms that a majority of the Disinterested Directors determines, in
good faith, is reasonably likely to be more favorable to the Company and its
stockholders than the Merger (after considering advice from the Company's
independent financial advisor that the Acquisition Proposal is more favorable to
the Company's stockholders, from a financial point of view, than the Merger).
5.7. Access to Information. From the date of this Agreement until
the Effective Time, and upon reasonable notice, the Company will give Parent and
its authorized representatives (including counsel, other consultants,
accountants and auditors) reasonable access during normal business hours to all
facilities, personnel and operations and to all books and records of it and its
Subsidiaries, will permit Parent to make such inspections as it may reasonably
require, will cause its officers and those of its Subsidiaries to furnish Parent
with such financial and operating data and other information with respect to its
business and properties as Parent may from time to time reasonably request and
confer with Parent to keep it reasonably informed with respect to operational
and other business matters relating to the Company and its Subsidiaries and the
status of satisfaction of conditions to the Closing. All information obtained by
Parent pursuant to this Section 5.7 shall be kept confidential in accordance
with the Confidentiality Agreement, dated February 10, 2000, between Parent and
the Company.
5.8. Notification of Certain Matters. The Company or Parent, as the
case may be, shall promptly notify the other of (a) its obtaining of Knowledge
as to the matters set forth in clauses (i), (ii) and (iii) below, or (b) the
occurrence, or failure to occur, of any event, which occurrence or failure to
occur would be likely to cause (i) any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date hereof to the Effective Time, (ii) any material failure of the
Company or Parent, as the case may be, or of any officer, director, employee or
agent thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it under this Agreement or (iii) the
institution of any claim, suit, action or proceeding arising out of or related
to the Merger or the transactions contemplated hereby; provided, however, that
no such notification shall affect the representations or warranties of the
parties or the conditions to the obligations of the parties hereunder.
5.9. Resignation of Officers and Directors. Except as otherwise
provided in Section 5.18 hereof, at or prior to the Effective Time, the Company
shall deliver to Parent the resignations of such officers and directors of the
Company and its Subsidiaries (in each case, in their capacities as officers and
directors, but not as employees if any of such persons are employees of the
Company or any Subsidiary) as Parent shall specify, which resignations shall be
effective at the Effective Time and shall contain an acknowledgment that the
relevant individual has no outstanding claims for compensation for loss of
office, redundancy, unfair dismissal or otherwise.
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5.10. Indemnification.
(a) As of the Effective Time and for a period of seven
years following the Effective Time, Parent will indemnify and hold harmless from
and against all claims, damages, losses, obligations or liabilities ("Losses")
Company's Chief Executive Officer and any persons who, as of June 1, 2000, were
parties to change of control agreements with the Company (the "Indemnified
Persons") to the fullest extent such person could have been indemnified for such
Losses under applicable law and under the Governing Documents of the Company or
any Subsidiary or under the indemnification agreements listed in Section 5.10 of
the Company Disclosure Letter (a true and accurate form of which has been
attached to the Company Disclosure Letter) in effect immediately prior to the
date hereof (the "Indemnification Agreements"), with respect to any act or
failure to act by any such Indemnified Person prior to the Effective Time.
(b) Except as otherwise set forth in the Indemnification
Agreements, any determination required to be made with respect to whether an
Indemnified Person's conduct complies with the standards set forth under the
DGCL or other applicable law shall be made by independent counsel selected by
Parent and reasonably acceptable to the Indemnified Persons. Except as otherwise
set forth in the Indemnification Agreements, Parent shall pay such counsel's
fees and expenses so long as the Indemnified Persons do not challenge any such
determination by such independent counsel.
(c) In the event that Parent or any of its successors or
assigns (i) consolidates with or merges into any other person, and Parent or
such successor or assign is not the continuing or surviving corporation or
entity of such consolidation or merger, (ii) sells or otherwise disposes of all
of the capital stock of the Surviving Corporation to any person, or (iii)
transfers all or substantially all of its properties and assets to any person,
then, and in each case, proper provision shall be made so that such person or
the continuing or surviving corporation assumes the obligations set forth in
this Section 5.10 and none of the actions described in clauses (i), (ii) and
(iii) above shall be taken until such provision is made.
(d) Parent shall maintain in effect for not less than
seven years from the Effective Time the current policies of directors' and
officers' liability insurance maintained by the Company (provided that Parent
may substitute therefor policies of at least comparable coverage containing
terms and conditions which are no less advantageous to the Indemnified Parties
in all material respects so long as no lapse in coverage occurs as a result of
such substitution) with respect to all matters, including the transactions
contemplated hereby, occurring prior to, and including the Effective Time;
provided, however, that, in the event that any Claim is asserted or made within
such seven-year period, such insurance shall be continued in respect of any such
Claim until final disposition of any and all such Claims; and provided, further,
that Parent shall not be obligated to make annual premium payments for such
insurance to the extent such premiums exceed 200% of the premiums paid as of the
date hereof by the Company or any Subsidiary for such insurance. In such case,
Parent shall purchase as much coverage as possible for 200% of the premiums paid
as of the date hereof for such insurance, which coverage shall be at least as
favorable as that provided by Parent to its directors.
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5.11. Stockholder Litigation. The Company shall give Parent the
reasonable opportunity to participate in the defense of any stockholder
litigation against or in the name of the Company and/or its respective directors
relating to the transactions contemplated by this Agreement.
5.12. Employee Benefit Plans.
(a) 401(k) Plan. At least three days prior to the
Effective Time, the Company shall terminate the Centigram Communications
Corporation 401(k) Plan pursuant to written resolutions, the form and substance
of which shall be reasonably satisfactory to Parent. Subject to plan eligibility
rules, individuals employed by the Company at the Effective Time ("Company
Employees") shall be allowed to participate in Parent's 401(k) plan effective as
of the first full payroll period following the Effective Time; and all service
with the Company shall be considered service with Parent for purposes of
determining eligibility, vesting, and benefit accrual (i.e., matching
contributions) under Parent's 401(k) plan. As soon as administratively feasible
after assets are distributed from the Centigram Communications Corporation
401(k) Plan, Company Employees shall be offered an opportunity to roll their
Centigram Communications Corporation 401(k) Plan account balances into Parent's
401(k) Plan, subject to the rules of such plan. Parent shall make reasonable
efforts to amend its 401(k) Plan to accept rollovers of unpaid loan balances,
but makes no assurances that such amendment will be effective as of the date
assets are distributed from Company's 401(k) Plan.
(b) Welfare Plans. Company Employees shall be eligible to
participate in Parent's short term disability plan, long term disability plan,
group life insurance plan, medical plan, dental plan, and section 125 cafeteria
plan as soon as administratively feasible after the Effective Time but no later
than January 1, 2001. Prior to such time, Company Employees shall remain
eligible for Company's welfare plans, as applicable, and such plans will not be
amended or changed by Parent or Company. Parent shall include service and prior
earnings with the Company for purposes of determining eligibility,
participation, and benefit accrual under its short-term disability plan,
long-term disability plan, group life insurance plan, medical plan, dental plan,
and section 125 cafeteria plan. In connection with the transfer of Company
employees to Parent's long-term disability plan, no Company employee who becomes
disabled after the transition to Parent's plan shall have long-term disability
benefits less favorable than those provided to similarly situated Parent
employees and all participation in the Company's long-term disability plan shall
be treated as participation in Parent's long-term disability plan for purposes
of applying the preexisting condition exclusion under Parent's long-term
disability plan.
(c) Vacation and PTO. Company Employees shall be eligible
to participate in Parent's vacation or PTO policy, as applicable, as soon as
administratively feasible after the Effective Time but no later than January 1,
2001. Prior to such date Company Employees shall remain eligible for Company's
vacation pay or sick pay policies, as applicable, and such plans or policies
will not be amended or changed by Parent or Company. Parent shall include
service with the Company for purposes of determining eligibility, participation,
and calculation of
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vacation pay, sick pay, or paid time off (PTO) under Parent's vacation or PTO
policy, as applicable. With respect to accrued but unused vacation pay under
Company's vacation plan, employees may carry over to Parent's vacation plan or
PTO policy, as applicable, any accrued but unused vacation time that does not
exceed 175% of an employee's annual accrual under Company's vacation plan. As
soon as administratively feasible after the Effective Date, but in any event no
later than 60 days thereafter, a payment shall be made to employees in an amount
that reflects any accrued but unused vacation time in excess of such carryover
amount.
5.13. Determination of Optionholders. At least ten business days
before the Effective Time, the Company shall provide Parent with a true and
complete list of (a) the holders of Company Options, (b) the number of shares of
Company Common Stock subject to Company Options held by each such optionholder,
(c) the exercise price of each option outstanding and (d) the address of each
such optionholder as set forth in the books and records of the Company or any
Subsidiary, which list shall be certified by the Company's Secretary as being
true and correct based upon the Company's records, following upon which there
shall be no additional grants of Company Options without Parent's prior consent.
5.14. Preparation of Tax Returns. The Company shall file (or cause
to be filed) at its own expense, on or prior to the due date thereof, all
Returns required to be filed on or before the Closing Date. The Company shall
provide Parent with a copy of appropriate workpapers, schedules, drafts and
final copies of each foreign and domestic, federal, provincial and state income
Tax return or election of the Company (including returns of all Employee Benefit
Plans) at least ten days before filing such return or election and shall consult
with Parent with respect thereto prior to such filing. Any Return filed after
the date hereof but prior to the Closing Date shall first be approved by Parent,
which approval shall not be unreasonably withheld.
5.15. SEC Filings; Compliance. The Company and Parent shall each
cause the forms, reports, schedules, statements and other documents required to
be filed with the SEC by the Company and Parent, respectively, between the date
of this Agreement and the Effective Time (with respect to either the Company or
Parent, the "New SEC Reports") to be prepared in all material respects with all
applicable requirements of the Securities Act and the Exchange Act, as the case
may be, and such New SEC Reports will not at the time they are filed 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.
5.16. Rights Agreement. Prior to the Effective Time, the Company
Board shall not take any action in contravention of the actions required by
Section 3.25 hereof.
5.17. Stock Repurchase Plan. As of the date of this Agreement, the
Company shall terminate its stock repurchase plan, if any.
5.18 Release of Receivership Stock; Appeal Process. The Company
shall use its reasonable commercial efforts to obtain the release of the
Receivership Stock from Credit Bancorp or the Bancorp Receiver prior to the
Effective Time and at the lowest reasonable cost to
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the Company. If, at the Effective Time, the Appeal Period remains open or an
appeal of the Final Order remains pending, the Company shall be entitled to
designate one member of the Company Board who shall be appointed by the
Surviving Corporation to serve as a director of the Surviving Corporation until
such time as the Appeal Period terminates and all pending appeals have been
resolved, and such designee director shall be appointed as a member of a special
litigation committee of the board of directors of the Surviving Corporation
which shall be established by the Surviving Corporation for the sole purpose of
negotiating or otherwise participating on behalf of the Surviving Corporation in
the resolution of any and all appeals of the Final Order. Such designee director
shall be consulted by such committee prior to the Surviving Corporation
negotiating or executing any resolution of any and all appeals of the Final
Order.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver on or prior to the Effective Date of the following
conditions:
(a) Stockholder Approval. This Agreement and the Merger
shall have been approved and adopted by the requisite vote of the stockholders
of the Company under the DGCL and the Company's Charter Document and Governing
Documents.
(b) Governmental Action; No Injunction or Restraints. No
action or proceeding shall be instituted by any Governmental Entity seeking to
prevent consummation of the Merger, asserting the illegality of the Merger or
this Agreement or seeking material damages directly arising out of the
transactions contemplated hereby which continues to be outstanding. No judgment,
order, decree, statute, law, ordinance, rule or regulation entered, enacted,
promulgated, enforced or issued by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition shall be in
effect (i) imposing or seeking to impose material sanctions, damages, or
liabilities directly arising out of the Merger on the Company or any of its
officers or directors; or (ii) preventing the consummation of the Merger.
(c) Governmental Consents. All necessary authorizations,
consents, orders or approvals of, or declarations or filings with, or expiration
or waiver of waiting periods imposed by, any Governmental Entity of any
applicable jurisdiction required for the consummation of the transactions
contemplated by this Agreement shall have been filed, expired or obtained, as to
which the failure to obtain, make or occur would have the effect of making the
Merger or this Agreement or any of the transactions contemplated hereby illegal
or which, individually or in the aggregate, would have a Parent Material Adverse
Effect (assuming the Merger had taken place), including, but not limited to, the
expiration or termination of the applicable waiting period, or any extensions
thereof, pursuant to the HSR Act.
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<PAGE> 44
6.2. Conditions to Obligations of Parent. The obligation of Parent
to effect the Merger is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations
and warranties of the Company set forth herein shall be true and correct both
when made and at and as of the Effective Date, as if made at and as of such time
(except to the extent expressly made as of an earlier date, in which case as of
such date), except where the failure of such representations and warranties to
be so true and correct (without giving effect to any limitation as to
materiality or material adverse effect set forth therein) does not have, and
would not, individually or in the aggregate, reasonably be expected to have, a
Company Material Adverse Effect.
(b) Performance of Obligations of the Company. The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Effective Date.
(c) No Material Adverse Effect. Since the date of this
Agreement, there has not been a Company Material Adverse Effect nor has there
been any change, event or condition that, with the passage of time, would
reasonably be expected to result in a Company Material Adverse Effect.
(d) No Injunctions or Restraints. No judgment, order,
decree, statute, law, ordinance, rule or regulation entered, enacted,
promulgated, enforced or issued by any court or other Governmental Entity of
competent jurisdiction or other legal restraint or prohibition shall be in
effect (i) imposing or seeking to impose material limitations on the ability of
Parent to acquire or hold or to exercise full rights of ownership of any
securities of the Company; (ii) imposing or seeking to impose material
limitations on the ability of Parent or its Affiliates to combine and operate
the business and assets of the Company; (iii) imposing or seeking to impose
other material sanctions, damages, or liabilities directly arising out of the
Merger on Parent or any of its officers or directors; or (iv) requiring or
seeking to require divestiture by Parent of any significant portion of the
business, assets or property of the Company or of Parent.
(e) Delivery of Closing Documents. At or prior to the
Effective Time, the Company shall have delivered to Parent all of the following:
(i) a certificate of the President and the Chief
Financial Officer of the Company (in their capacities as such
officers), dated as of the Effective Date, stating that the conditions
precedent set forth in Sections 6.2(a), (b) and (c) hereof have been
satisfied;
(ii) a copy of (A) the Certificate of
Incorporation of the Company, dated as of a recent date, certified by
the Secretary of State of the State of Delaware, and (B) the Bylaws of
the Company and the resolutions of the Company Board and stockholders
authorizing the Merger and the other transactions contemplated by this
Agreement, certified by the Secretary of the Company; and
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<PAGE> 45
(iii) a list of (A) all options that have been
exercised after the date of this Agreement and (B) the gross amount
received by the Company for the ESPP Offering Period occurring
immediately prior to the Effective Time and the number of shares issued
thereunder for such period.
(f) Director and Officer Resignations. Merger Sub shall
have received the resignation of the directors and officers of the Company as
are described in Section 5.9 hereof.
(g) Key Employee Agreements. The persons identified in
Section 6.2(g) of the Company Disclosure Letter shall have entered into
employment agreements with Parent, and such agreements shall be in full force
and effect, and none of such employees shall have indicated any intention of not
fulfilling his or her obligations thereunder.
(h) Employee Waivers. From the list of employees
identified by the Company on Section 3.15 of the Company Disclosure Letter as
having change of control agreements in place as of the date hereof, Parent shall
specify fifteen (15) of such employees who will be offered positions by Parent
providing equal or better duties, responsibilities and total compensation, of
whom at least twelve (12) shall have executed and delivered to Parent waivers of
certain change in control benefits provided in such agreements to the
satisfaction of Parent, and such waivers shall not have been in any way amended
or rescinded; provided, however, if Parent is unable to offer equal or better
total compensation to one or more of such specified employees, such employee(s)
shall not be counted toward the number of employees who must execute and deliver
the waivers described above, and the minimum number of waivers shall be reduced
accordingly.
(i) Exercise of Appraisal Rights. The total shares of
Company Common Stock held by stockholders of the Company who have indicated in
accordance with the DGCL (and not withdrawn) their intent to elect to exercise
their appraisal rights under the DGCL shall not exceed 5% of the shares of
Company Common Stock outstanding as of the date of the Company Stockholders
Meeting. Parent shall have received a certificate of the Chief Executive Officer
or Chief Financial Officer of the Company to that effect.
6.3. Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger is further subject to satisfaction or waiver of
the following conditions:
(a) Representations and Warranties. The representations
and warranties of Parent and Merger Sub set forth herein shall be true and
correct both when made and at and as of the Effective Date, as if made at and as
of such time (except to the extent expressly made as of an earlier date, in
which case as of such date), except where the failure of such representations
and warranties to be so true and correct (without giving effect to any
limitation as to materiality or material adverse effect set forth therein) does
not have, and would not, individually or in the aggregate, reasonably be
expected to have a Parent Material Adverse Effect.
41
<PAGE> 46
(b) Performance of Obligations of Parent. Parent shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Date.
(c) Delivery of Closing Documents. At or prior to the
Effective Time, the Parent shall have delivered to the Company a certificate of
the President and the Chief Financial Officer of Parent (in their capacities as
such officers), dated as of the Effective Date, stating that the conditions
precedent set forth in Sections 6.3(a) and (b) hereof have been satisfied.
ARTICLE VII
TERMINATION
7.1. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the Merger by
the Company's stockholders:
(a) by mutual written consent of the Company and Parent
(on behalf of Parent and Merger Sub);
(b) by either the Company or Parent (on behalf of Parent
and Merger Sub):
(i) if the Merger shall not have been completed
by October 31, 2000; provided, however, that the right to terminate
this Agreement pursuant to this Section 7.1(b)(i) shall not be
available to any party whose failure to perform any of its obligations
under this Agreement results in the failure of the Merger to be
consummated by such time;
(ii) if stockholder approval shall not have been
obtained at the Company Stockholders Meeting duly convened therefor or
at any adjournment or postponement thereof;
(iii) if any restraint having any of the effects
set forth in Section 6.1(b) or Section 6.2(d) hereof shall be in effect
and shall have become final and nonappealable; or
(iv) if the Company enters into a merger,
acquisition or other agreement (including an agreement in principle) or
understanding to effect a Superior Proposal or the Company Board or a
committee thereof resolves to do so; provided, however, that the
Company may not terminate this Agreement pursuant to this Section
7.1(b)(iv) unless (a) the Company has delivered to Parent and Merger
Sub a written notice of the Company's intent to enter into such an
agreement to effect such Acquisition Proposal, which notice shall
include, without limitation, the material terms and conditions of the
Acquisition Proposal and the identity of the Person making the
Acquisition Proposal, (b) three business days have elapsed following
delivery to Parent and Merger Sub of such written notice by the Company
and (c) during such three-business-day
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<PAGE> 47
period, the Company has fully cooperated with Parent and Merger Sub to
allow Parent and Merger Sub within such three-business-day period to
propose amendments to the terms of this Agreement to be at least as
favorable as the Superior Proposal; provided, further, that the Company
may not terminate this Agreement pursuant to this Section 7.1(b)(iv)
unless, at the end of such three-business-day-period (and after due
consideration by the Company Board of any proposed amendment to this
Agreement that has been submitted by Parent during such three-day
period), the Company Board continues reasonably to believe that the
Acquisition Proposal constitutes a Superior Proposal;
(c) by the Company, if Parent or Merger Sub shall have
breached any of its representations and warranties contained in Article IV
hereof which breach has or is reasonably likely to have a Parent Material
Adverse Effect or Parent or Merger Sub shall have breached or failed to perform
in any material respect any of its covenants or other agreements contained in
this Agreement, in each case, which breach or failure to perform has not been
cured by Parent or Merger Sub within thirty days following receipt of notice
thereof from the Company; or
(d) by Parent (on behalf of Parent and Merger Sub):
(i) if the Company shall have breached any of
its representations and warranties contained in Article III hereof
which breach has or is reasonably likely to have a Company Material
Adverse Effect or the Company shall have breached or failed to perform
in any material respect any of its covenants or other agreements
contained in this Agreement, in each case (other than a breach of
Section 5.6(b) hereof, as to which no cure period shall apply), which
breach or failure to perform has not been cured by the Company within
thirty days following receipt of notice thereof from Parent; or
(ii) if (a) the Company Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
its approval or recommendation of the Merger or this Agreement, or
approved or recommended an Acquisition Proposal (including a Superior
Proposal), or (b) the Company Board or any committee thereof shall have
resolved to take any of the foregoing actions.
7.2. Effect of Termination. The termination of this Agreement
pursuant to the terms of Section 7.1 hereof shall become effective upon delivery
to the other party of written notice thereof. In the event of the termination of
this Agreement pursuant to the foregoing provisions of this Article VII, there
shall be no obligation or liability on the part of any party hereto (except as
provided in Section 7.3 hereof) or its stockholders or directors or officers in
respect thereof, except for agreements in Sections 5.5, 5.7, 7.2, 7.3 and 8.8,
which survive the termination of this Agreement, and except for liability that
Parent or Merger Sub or the Company might have to the other party or parties
arising from the willful and material breach by a party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement, which breach results in a termination of this Agreement pursuant to
Sections 7.1(c) or 7.1(d)(i), or otherwise due to the fraudulent or willful
misconduct of such party.
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<PAGE> 48
7.3. Fees and Expenses.
(a) Except as provided in this Section 7.3, whether or
not the Merger is consummated, the Company, on the one hand, and Parent and
Merger Sub, on the other, shall bear their respective expenses incurred in
connection with the Merger, including, without limitation, the preparation,
execution and performance of this Agreement and the transactions contemplated
hereby, and all fees and expenses of investment bankers, finders, brokers,
agents, representatives, counsel and accountants.
(b) Notwithstanding any provision in this Agreement to
the contrary, if this Agreement is terminated (x) by the Company or Parent
pursuant to Section 7.1(b)(ii) and if, after the date hereof and prior to the
termination date, an Acquisition Proposal occurs, or (y) by Parent pursuant to
Section 7.1(b)(iv), 7.1(d)(i) or 7.1(d)(ii) hereof, then, in each case, the
Company shall (without prejudice to any other rights Parent may have against the
Company for breach of this Agreement), reimburse Parent upon demand for all
reasonable out-of-pocket fees and expenses not to exceed $500,000 incurred or
paid by or on behalf of Parent or any Affiliate of Parent in connection with
this Agreement, the Merger and transactions contemplated herein, including all
fees and expenses of counsel, investment banking firms, accountants and
consultants.
(c) Notwithstanding any other provision in this Agreement
to the contrary, if (x) this Agreement is terminated by the Company or Parent at
a time when Parent is entitled to terminate this Agreement pursuant to Section
7.1(b)(ii) or 7.1(d)(i) (other than due to a breach of Section 5.6(b) hereof)
and, concurrently with or within nine months after such a termination, the
Company shall enter into an agreement, arrangement or binding understanding with
respect to an Acquisition Proposal (which shall include, for this purpose, the
commencement by a third party of a tender offer or exchange offer or similar
transaction directly with the Company's stockholders) with a third party
(collectively, a "Third Party Deal") or (y) this Agreement is terminated
pursuant to Section 7.1(b)(iv), Section 7.1(d)(i) (if such termination results
from a breach of Section 5.6(b) hereof) or 7.1(d)(ii), then, in each case, the
Company shall (in addition to any obligation under Section 7.3(b) hereof and as
liquidated damages and not as a penalty or forfeiture) pay to Parent
U.S.$6,400,000 (the "Termination Fee") in cash, such payment to be made
promptly, but in no event later than the second business day following, in the
case of clause (x), the later to occur of such termination and the entry into of
such Third Party Deal, or, in the case of clause (y), such termination.
(d) Notwithstanding any provision in this Agreement to
the contrary, if this Agreement is terminated by the Company pursuant to Section
7.1(c) hereof, then Parent shall (without prejudice to any other rights the
Company may have against Parent for breach of this Agreement), reimburse the
Company upon demand for all reasonable out-of-pocket fees and expenses not to
exceed $500,000 incurred or paid by or on behalf of the Company or any Affiliate
of the Company in connection with this Agreement, the Merger and the
transactions contemplated herein, including all fees and expenses of counsel,
investment banking firm, accountants and consultants.
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<PAGE> 49
(e) The parties acknowledge that the agreements contained
in Sections 7.3(b), (c) and (d) hereof are an integral part of the transactions
contemplated by this Agreement, and that, without these agreements, Parent and
Merger Sub on the one hand, and the Company on the other, would not enter into
this Agreement. Accordingly, if the Company fails promptly to pay the amounts
due pursuant to Sections 7.3(b) and/or (c) hereof, or if Parent fails promptly
to pay the amounts due pursuant to Section 7.3(d) hereof, (i) the party failing
to so pay shall pay interest on such amounts at the prime rate announced by U.S.
Bank National Association, Minneapolis office, in effect on the date the
Termination Fee (or fees and expenses) were required to be paid, and (ii) if, in
order to obtain such payment, a party commences a suit or takes other action
which results in a judgment or other binding determination against the nonpaying
party for the fees and expenses in Sections 7.3(b) or 7.3(d) hereof or the
Termination Fee, the nonpaying party shall also pay to the party entitled to
receive payment its reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection with such suit, together with interest
payable under the preceding clause (i).
ARTICLE VIII
MISCELLANEOUS
8.1. Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time. This Section 8.1
shall not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
8.2. Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of any other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto, and (c) waive compliance with any of the
agreements of any other party or with any conditions to its own obligations
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in writing
duly authorized by and signed on behalf of such party.
8.3. Notices.
(a) Any notice or communication to any party hereto shall
be duly given if in writing and delivered in person, by facsimile (with receipt
electronically acknowledged) or by overnight air courier guaranteeing next day
delivery, to such other party's address.
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<PAGE> 50
If to Parent:
ADC Telecommunications, Inc.
12501 Whitewater Drive
Minnetonka, Minnesota
Telephone No.: (952) 946-8080
Facsimile No.: (952) 946-3209
Attention: General Counsel
with a copy to:
Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
Telephone No.: (612) 340-2600
Facsimile No.: (612) 340-8738
Attention: Robert A. Rosenbaum, Esq.
If to the Company:
Centigram Communications Corporation
91 East Tasman Drive
San Jose, California 95134
Telephone No.: (408) 944-0250
Facsimile No.: (408) 432-2645
Attention: President and Chief Executive Officer
with copies to:
Sutherland Asbill & Brennan LLP
999 Peachtree Street
Atlanta, Georgia 30309
Telephone No.: (404) 853-8000
Facsimile No.: (404) 853-8806
Attention: Thomas C. Herman, Esq.
and to:
Centigram Communications Corporation
91 East Tasman Drive
San Jose, California 95134
Telephone No.: (408) 944-0250
Facsimile No.: (408) 432-2645
Attention: Senior Director of Legal Affairs
46
<PAGE> 51
(b) All notices and communications will be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
sent, if sent by facsimile and receipt is electronically confirmed; and one
business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
8.4. Counterparts. This Agreement may be executed via facsimile in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.5. Interpretation. The language used in this Agreement and the
other agreements contemplated hereby shall be deemed to be the language chosen
by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. The headings of articles and
sections herein are for convenience of reference, do not constitute a part of
this Agreement, and shall not be deemed to limit or affect any of the provisions
hereof. As used in this Agreement, "Person" means any individual, corporation,
limited liability company, limited or general partnership, joint venture,
association, joint stock company, trust, unincorporated organization or other
entity; "Knowledge" means the actual knowledge of a director or any executive
officer of the applicable party or any of its Subsidiaries, and with respect to
the Company, any employee who has an executive change in control agreement with
Company, the Company's Chief Scientist and the Senior Director of Legal Affairs,
as such knowledge has been obtained by such person in the normal conduct of the
business; and all amounts shall be deemed to be stated in U.S. dollars, unless
specifically referenced otherwise.
8.6. Amendment. This Agreement may be amended by the parties at any
time before or after any required approval of matters presented in connection
with the Merger by the stockholders of the Company; provided, however, that
after any such approval, there shall not be made any amendment that by law
requires further approval by such stockholders without obtaining such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties.
8.7. No Third Party Beneficiaries. Except for the provisions of
Section 5.10 hereof (which is intended to be for the benefit of the persons
referred to therein, and may be enforced by such persons) nothing in this
Agreement shall confer any rights upon any person or entity which is not a party
or permitted assignee of a party to this Agreement.
8.8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
8.9. Entire Agreement. This Agreement (together with the Exhibits
and the Company Disclosure Letter, and the other documents delivered pursuant
hereto or contemplated hereby) constitutes the entire agreement between the
parties 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, in each case other than the
Confidentiality Agreement.
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<PAGE> 52
8.10. Validity. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated
hereby are fulfilled to the extent possible.
* * * * *
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<PAGE> 53
IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be executed by their duly authorized officers all as of the
day and year first above written.
ADC TELECOMMUNICATIONS, INC.
By: /s/ LARRY J. FORD
------------------------------------------
Larry J. Ford
Senior Vice President and President of
Integrated Solutions Group
POUNDSTONE ACQUISITION CORP.
By: /s/ LARRY J. FORD
------------------------------------------
Larry J. Ford
President
CENTIGRAM COMMUNICATIONS
CORPORATION
By: /s/ ROBERT L. PUETTE
------------------------------------------
Robert L. Puette
President and Chief Executive
Officer
<PAGE> 54
EXHIBIT A
CERTIFICATE OF MERGER
MERGING
POUNDSTONE AQUISITION CORP.
WITH AND INTO
CENTIGRAM COMMUNICATIONS CORPORATION
Pursuant to Section 251 of the General Corporation Law of
the State of Delaware
Poundstone Acquisition Corp., a Delaware corporation ("Merger Sub"),
and Centigram Communications Corporation, a Delaware corporation ("Company"), DO
HEREBY CERTIFY AS FOLLOWS:
FIRST: That Merger Sub was incorporated on May 25, 2000, pursuant to
the Delaware General Corporation Law (the "Delaware Law"), and that Company was
incorporated on _______, 19__ pursuant to the Delaware Law.
SECOND: That an Agreement and Plan of Merger dated as of June 9, 2000
(the "Merger Agreement"), among ADC Telecommunications, Inc., a Minnesota
corporation, Merger Sub and Company, setting forth the terms and conditions of
the merger of Merger Sub with and into Company (the "Merger"), has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Section 251 of the Delaware Law.
THIRD: That the name of the surviving corporation (the "Surviving
Corporation") shall be Centigram Communications Corporation.
FOURTH: That, pursuant to the Merger Agreement, the Restated
Certificate of Incorporation of the Surviving Corporation is amended to read in
its entirety as set forth in Exhibit A hereto.
FIFTH: That an executed copy of the Merger Agreement is on file at the
principal place of business of the Surviving Corporation at the following
address:
-------------------------
-------------------------
Attention: Secretary
SIXTH: That a copy of the Merger Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: That the Merger shall become effective immediately upon the
filing of this Certificate with the Office of the Secretary of State of the
State of Delaware.
<PAGE> 55
IN WITNESS WHEREOF, each of Merger Sub and Company has caused this
Certificate of Merger to be executed in its corporate name this
____________________________ day of , 2000.
POUNDSTONE ACQUISITION CORP.
By
-----------------------------------
CENTIGRAM COMMUNICATIONS
CORPORATION
By
-----------------------------------
[SIGNATURE PAGE TO CERTIFICATE OF MERGER]
<PAGE> 56
EXHIBIT A TO CERTIFICATE OF MERGER
RESTATED CERTIFICATE OF INCORPORATION
OF
CENTIGRAM COMMUNICATIONS CORPORATION
ARTICLE 1.
The name of this corporation is Centigram Communications
Corporation.
ARTICLE 2.
The purpose of this corporation is to engage in any lawful act
or activity for which corporations may be organized under the Delaware General
Corporation Law.
ARTICLE 3.
The registered office of this corporation in Delaware is
Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County,
Delaware 19801, and the name of its registered agent is The Corporation Trust
Company.
ARTICLE 4.
The total number of shares of stock which this corporation is
authorized to issue is 1,000 common shares, $.0001 per share par value.
ARTICLE 5.
Elections of directors need not be by written ballot except
and to the extent provided in the bylaws of the corporation.
ARTICLE 6.
In furtherance, and not in limitation of the powers conferred
by statute, the board of directors is expressly authorized to make, amend,
alter, change, add to or repeal bylaws of this corporation, without any action
on the part of the stockholders. The bylaws made by the directors may be
amended, altered, changed, added to or repealed by the stockholders. Any
specific provision in the bylaws regarding amendment thereof shall be
controlling.
ARTICLE 7.
A director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that this article shall not
eliminate or limit the liability of a director (a) for any breach of the
director's duty of loyalty to the corporation or its stockholders; (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (c) for the unlawful payment of dividends or unlawful
stock repurchases under Section 174 of the Delaware General Corporation Law; or
(d) for any transaction from which the director derived an improper personal
<PAGE> 57
benefit. This article shall not eliminate or limit the liability of a director
for any act or omission occurring prior to the effective date of this article.
If the Delaware General Corporation Law is hereafter amended
to authorize any further limitation of the liability of a director, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as amended.
Any repeal or modification of the foregoing provisions of this
article by the stockholders of the corporation shall not adversely affect any
right or protection of a director of the corporation existing at the time of
such repeal or modification.
ARTICLE 8.
The corporation shall, to the fullest extent permitted by the
provisions of Section 145 of the Delaware General Corporation Law, as the same
may be amended and supplemented, provide indemnification of (and advancement of
expenses to) any and all persons whom it shall have the power to indemnify under
said section from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those indemnified may be entitled through bylaw provisions, agreements with such
agents or persons, vote of stockholders or disinterested directors or otherwise,
in excess of the indemnification and advancement otherwise permitted by Section
145 of the General Corporation Law of the State of Delaware, subject only to
limits created by applicable Delaware law (statutory or non-statutory).
Any repeal or modification of any of the foregoing provisions
of this Article 8 shall not adversely affect any right or protection of a
director, officer, agent or other person existing at the time of, or increase
the liability of any directors of this corporation with respect to any acts or
omissions of such directors, officer or agent occurring prior to such repeal or
modification.
<PAGE> 58
EXHIBIT B
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement) is made and entered into
as of _________ __, 2000, by and among ADC Telecommunications, Inc., a Minnesota
corporation ("Parent"), Centigram Communications Corporation, a Delaware
corporation (the "Company"), Norwest Bank Minnesota, N.A., as escrow agent (the
"Escrow Agent"), and _____________, (the "Stockholders' Representative").
WHEREAS, Parent, Poundstone Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of Parent ("Merger Sub"), and the Company entered
into an Agreement and Plan of Merger (the "Merger Agreement") dated as of June
9, 2000 pursuant to which the Merger Sub will be merged with and into the
Company (the "Merger"), the separate existence of the Merger Sub will cease, and
the Company will continue as the surviving corporation (the Company, in its
capacity as the corporation surviving the Merger, is referred to herein as the
"Surviving Corporation"). Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Merger Agreement;
WHEREAS, the Merger Agreement requires that if (i) any shares of
Receivership Stock have not been returned to the Company or have been ordered by
a court of competent jurisdiction to be returned to the Bancorp Receiver as of
the Effective Time or (ii) the Appeal Period remains open or an appeal of the
Final Order has been filed and remains pending at the Effective Time, Parent
shall deposit into an escrow account with Escrow Agent the aggregate Per Share
Amount payable with respect to such shares of Receivership Stock pursuant to
Section 2.1(b) of the Merger Agreement (the "Escrow Amount") until such time as
all shares of Receivership Stock have been returned to the Surviving
Corporation, the Appeal Period has terminated and all pending appeals, if any,
have been resolved; and
WHEREAS, this Escrow Agreement sets forth the basis on which the Escrow
Agent will receive and hold, and make disbursements from, the Escrow Amount and
the duties for which the Escrow Agent will be responsible.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. Appointment and Agreement of Escrow Agent. Parent, Company and
Stockholders' Representative hereby appoint and designate Norwest Bank
Minnesota, N.A. as the Escrow Agent, and Norwest Bank Minnesota, N.A. hereby
accepts such appointment and agrees to perform the duties of the Escrow Agent
under the terms and conditions set forth herein.
2. Merger Agreement Not Limited by this Escrow Agreement. The
Merger Agreement and the procedures contained therein are not limited by this
Escrow Agreement. Notwithstanding any express provision of this Escrow Agreement
to the contrary, in the event
<PAGE> 59
this Escrow Agreement is unclear, silent or in conflict with the Merger
Agreement, reference shall be made to the Merger Agreement and the Merger
Agreement shall control.
3. Deposit of Escrow Amount. Promptly after the Effective Time,
Parent shall deposit into an escrow account an amount in cash equal to the
Escrow Amount. The Escrow Agent shall hold the Escrow Amount in escrow on behalf
of the parties hereto. The Escrow Amount shall be held and invested by the
Escrow Agent in such investments as shall be directed in accordance with the
instructions set forth in Schedule A attached hereto (the "Permitted
Investments"), and shall be treated by the Escrow Agent as a trust fund in
accordance with the terms hereof. The Escrow Agent agrees to disburse the Escrow
Amount, including the interest earned thereon, in accordance with the terms and
procedures set forth in this Escrow Agreement and the Merger Agreement.
4. Escrow Period; Termination. Subject to the following
requirements, the Escrow Amount shall be held in escrow until such time as the
Escrow Agent shall be notified by Parent and the Stockholders' Representative
that all shares of Receivership Stock have been returned to the Surviving
Corporation and canceled, the Appeal Period has terminated and all pending
appeals, if any, have been resolved (the "Escrow Period"). At the termination of
the Escrow Period, the Escrow Agent shall deliver to the former stockholders of
the Company the portion of the Escrow Amount not required to reimburse Parent or
the Surviving Corporation for the amount paid to cause the return of the
Receivership Stock, as set forth in greater detail in Section 5 below. The
Escrow Agent shall be entitled to rely on the letters of transmittal received by
the Disbursement Agent for purposes of distributing funds from the Escrow Amount
to the former stockholders of the Company.
5. Procedures for Disbursements. Parent and the Stockholders'
Representative shall notify the Escrow Agent in writing (a "Release
Certificate"), (a) that all shares of Receivership Stock have been returned to
the Surviving Corporation and canceled, (b) the amount paid after the Effective
Time by Parent, the Surviving Corporation or an affiliate thereof plus Parent or
the Surviving Corporation's out-of-pocket costs, including the reasonable fees
and expenses of legal counsel and other advisors, incurred to cause such return
(including the resolution of any appeal) (the "Offset Amount"), and (c) the
calculation of the Escrow Per Share Amount. Subject to payment of all
outstanding fees of Escrow Agent pursuant to Section 6.3 hereof, the Escrow
Agent shall release and promptly disburse to Parent from the Escrow Fund the
Offset Amount (plus any amount to be reimbursed to Parent pursuant to Section
6.3) together with the interest earned on such amount while held by the Escrow
Agent. Additionally, if, upon resolution of all available methods of appeal by
any party, the Settlement Agreement is found to be void or unenforceable and
each of the Bancorp Receiver and Credit Bancorp Ltd. is unable or unwilling to
repay or give full credit to Parent or the Surviving Corporation for the amount
previously paid to the Bancorp Receiver to obtain the return of the Receivership
Stock, the Release Certificate shall so state and set forth the lesser of the
amount of the Receiver Payment Credit and the amount not repaid or credited to
Parent or the Surviving Corporation, which lesser amount shall be released from
the Escrow Amount and disbursed to Parent. After payment of the Offset Amount
and/or Receiver Payment Credit amount (or such lesser amount as determined in
the immediately preceding sentence) to Parent, each former holder of Company
Common Stock that
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received the Per Share Amount pursuant to Section 2.1(a) of the Merger Agreement
shall be entitled to receive an amount of cash equal to the Escrow Per Share
Amount, with the interest earned thereon while held by the Escrow Agent. Any
portion of the Escrow Amount remaining after payment of the Additional
Stockholder Payment shall be released to Parent.
6. Escrow Agent.
6.1 Indemnification of the Escrow Agent. Parent and the
Surviving Corporation jointly and severally agree to indemnify and hold the
Escrow Agent and its directors, officers and employees harmless from and against
any and all costs, charges, damages and reasonable attorneys' fees that the
Escrow Agent in good faith may incur or suffer in connection with or arising out
of this Escrow Agreement except as set forth in Section 6.7 hereof.
6.2 Duties of the Escrow Agent. The Escrow Agent shall
have no duties other than those expressly imposed on it herein and in the Merger
Agreement, and shall not be liable for any act or omission except for its own
gross negligence or willful misconduct.
6.3 Fees of the Escrow Agent. The fees and charges of the
Escrow Agent with respect to this Agreement are identified on Schedule B
attached hereto. The initial fee shall be paid by Parent, with the amount of
such initial fee reimbursed to Parent from the interest earned on the Escrow
Amount while held by Escrow Agent. The annual fees and any miscellaneous fees of
Escrow Agent shall first be deducted from the interest earned on the Escrow
Amount while held by the Escrow Agent, and second, if such interest earned is
insufficient to cover the fees of Escrow Agent, shall be paid by Parent.
6.4 Instructions to the Escrow Agent. Notwithstanding any
provision herein to the contrary, the Escrow Agent shall at any time and from
time to time take such additional actions hereunder with respect to the Escrow
Amount as shall be agreed to in writing by the Parent and the Stockholders'
Representative. In the performance of its duties hereunder, the Escrow Agent may
rely on any document reasonably believed by it to be genuine.
6.5 Resignation of the Escrow Agent. The Escrow Agent may
resign at any time by providing Parent, the Surviving Corporation and
Stockholders' Representative with 30 days' prior written notice of its intention
to do so; provided that a successor Escrow Agent has been appointed in writing
by Parent, the Surviving Corporation and Stockholders' Representative. If a
successor Escrow Agent is not appointed within the 30-day period following such
notice, the Escrow Agent may petition any court of competent jurisdiction to
name a successor Escrow Agent. The Escrow Agent's resignation shall be effective
upon delivery of the Escrow Amount to the successor Escrow Agent and upon such
successor's assumption of the obligations, rights and duties of the Escrow Agent
hereunder.
6.6 Disputes. In the event conflicting demands are made
or notices are served upon the Escrow Agent with respect to the Escrow Amount,
or there is any dispute over action to be taken or not taken by the Escrow
Agent, the Escrow Agent will have the absolute right, at the Escrow Agent's
election, to do either or both of the following: resign so a successor can be
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appointed pursuant to Section 6.5 hereof or file a suit in interpleader and
obtain an order from a court of competent jurisdiction requiring the parties to
interplead and litigate in such court their several claims and rights among
themselves. The Escrow Agent agrees that, if it files a suit in interpleader, it
shall do so in any of the state or federal courts having jurisdiction in the
State of Minnesota. In the event such interpleader suit is brought, the Escrow
Agent will thereby be fully released and discharged from all further obligations
imposed upon it under the provisions hereof, and Parent will bear the costs,
expenses and reasonable attorneys' fees expended or incurred by the Escrow Agent
pursuant to the exercise of the Escrow Agent's rights under this Section 6.6.
6.7 Liability of Escrow Agent. In order to induce the
Escrow Agent to act as Escrow Agent, the parties hereto agree that the Escrow
Agent shall not be liable for any mistake of fact or error of judgment, or for
any acts or omissions of any kind unless caused by its willful misconduct or
gross negligence.
7. Miscellaneous.
7.1 Severability. Whenever possible, each provision of
this Escrow Agreement will be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Escrow Agreement is
held to be prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Escrow Agreement.
7.2 Assignment. This Escrow Agreement and all of the
provisions hereof will be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors and
permitted assigns, except that neither this Escrow Agreement nor any of the
rights, interests or obligations hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto.
7.3 Amendment and Waiver. The provisions of this Escrow
Agreement may not be amended or waived except in a writing executed by the party
against which such amendment or waiver is sought to be enforced. No course of
dealing between or among any persons having any interest in this Escrow
Agreement will be deemed effective to modify or amend any part of this Escrow
Agreement or any rights or obligations of any person under or by reason of this
Escrow Agreement.
7.4 Notices. All notices, requests, claims, demands and
other communications to be given or delivered under or by reason of the
provisions of this Escrow Agreement shall be in writing and shall be deemed to
have been given when personally delivered, or one day after being sent by
reputable overnight delivery service, or when receipt is acknowledged, if sent
by facsimile, telecopy or other electronic transmission device. Notices, demands
and communications to any party hereto shall be sent to the address indicated
below:
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If to Parent and
Surviving Corporation: ADC Telecommunications, Inc.
12501 Whitewater Drive
Minnetonka, Minnesota 55343
Attention: Office of General Counsel
Fax: (952) 946-3209
With a copy to: Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
Attention: Robert A. Rosenbaum
Fax: 612/340-8738
Notices to the Stockholders'
Representative:
With a copy to: -------------------------
-------------------------
Attention:
--------------
Fax:
---------------------
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
(provided that notice of any change of address shall be effective only upon
receipt thereof).
7.5 Governing Law. This Escrow Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Minnesota, without regard for its conflict of laws principles.
7.6 Counterparts. This Escrow Agreement may be executed
in one or more counterparts, each of which when so executed shall be deemed to
be an original, and any one of which need not contain the signatures of more
than one party, and all of such counterparts taken together shall constitute one
and the same instrument.
7.7 Entire Agreement. This Escrow Agreement and the
Merger Agreement constitute the entire understanding and agreement of the
parties hereto and supersede all other prior agreements and understandings,
written or oral, between or among the parties with respect to the subject matter
of this Escrow Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the day and year first above written.
ADC TELECOMMUNICATIONS, INC.
-------------------------------------
Name:
Title:
CENTIGRAM COMMUNICATIONS
CORPORATION
-------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, N.A.
-------------------------------------
Name:
Title:
[Stockholder Representative]
-------------------------------------
Name:
Title:
<PAGE> 64
SCHEDULE A
PERMITTED INVESTMENTS
<PAGE> 65
SCHEDULE B
FEES OF ESCROW AGENT