AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
BY AND AMONG
DIGITAL INSIGHT CORPORATION,
BLACK TRANSITORY CORPORATION
AND
nFRONT, INC.
Dated as of November 21, 1999
-
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
A-1
TABLE OF CONTENTS
Page
----
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION........................... A-5
ARTICLE I THE MERGER...................................................... A-6
1.1 The Merger....................................................... A-6
1.2 Effective Time; Closing.......................................... A-6
1.3 Effect of the Merger............................................. A-6
1.4 Articles of Incorporation; Bylaws................................ A-6
1.5 Directors and Officers........................................... A-6
1.6 Effect on Capital Stock.......................................... A-6
1.7 Surrender of Certificates........................................ A-7
1.8 No Further Ownership Rights in Company Common Stock.............. A-9
1.9 Lost, Stolen or Destroyed Certificates........................... A-9
1.10 Tax and Accounting Consequences.................................. A-9
1.11 Taking of Necessary Action; Further Action....................... A-9
ARTICLE II REPRESENTATIONS AND WARRANTIES OF COMPANY...................... A-9
2.1 Organization and Qualification; No Subsidiaries.................. A-9
2.2 Articles of Incorporation and Bylaws............................. A-10
2.3 Capitalization................................................... A-10
2.4 Authority Relative to this Agreement............................. A-11
2.5 No Conflict; Required Filings and Consents....................... A-11
2.6 Compliance; Permits.............................................. A-12
2.7 SEC Filings; Financial Statements................................ A-12
2.8 No Undisclosed Liabilities....................................... A-12
2.9 Absence of Certain Changes or Events............................. A-13
2.10 Absence of Litigation............................................ A-13
2.11 Employee Benefit Plans........................................... A-13
2.12 Registration Statement/Joint Proxy Statement/Prospectus.......... A-15
2.13 Restrictions on Business Activities.............................. A-15
2.14 Title to Property................................................ A-15
2.15 Taxes............................................................ A-15
2.16 Environmental Matters............................................ A-16
2.17 Brokers.......................................................... A-17
2.18 Intellectual Property............................................ A-17
2.19 Agreements, Contracts and Commitments............................ A-19
2.20 Opinion of Financial Advisor..................................... A-20
2.21 Board Approval................................................... A-20
2.22 Vote Required.................................................... A-20
2.23 State Takeover Statutes.......................................... A-20
2.24 Pooling of Interests............................................. A-20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB....... A-20
3.1 Organization and Qualification; Subsidiaries..................... A-20
3.2 Certificate of Incorporation and Bylaws.......................... A-20
3.3 Capitalization................................................... A-21
3.4 Authority Relative to this Agreement............................. A-21
3.5 No Conflict; Required Filings and Consents....................... A-21
3.6 SEC Filings; Financial Statements................................ A-22
3.7 No Undisclosed Liabilities....................................... A-22
3.8 Absence of Certain Changes or Events............................. A-22
3.9 Absence of Litigation............................................ A-23
3.10 Registration Statement; Joint Proxy Statement/Prospectus......... A-23
A-2
TABLE OF CONTENTS--(continued)
Page
----
3.11 Restrictions on Business Activities.......... A-23
3.12 Title to Property............................ A-23
3.13 Taxes........................................ A-23
3.14 Environmental Matters........................ A-24
3.15 Brokers...................................... A-24
3.16 Intellectual Property........................ A-24
3.17 Agreements, Contracts and Commitments........ A-26
3.18 Opinion of Financial Advisor................. A-26
3.19 Board Approval............................... A-26
3.20 Vote Required................................ A-27
3.21 Delaware Law Section 203..................... A-27
3.22 Pooling of Interests......................... A-27
3.23 Merger Sub Operations........................ A-27
ARTICLE IV CONDUCT PRIOR TO THE EFFECTIVE TIME........ A-27
4.1 Conduct of Business by Company............... A-27
4.2 Conduct of Business by Parent................ A-29
ARTICLE V ADDITIONAL AGREEMENTS....................... A-30
Joint Proxy Statement/Prospectus;
5.1 Registration Statement....................... A-30
5.2 Shareholder and Stockholder Meetings......... A-31
5.3 Confidentiality; Access to Information....... A-32
5.4 No Solicitation.............................. A-32
5.5 Public Disclosure............................ A-34
5.6 Reasonable Efforts; Notification............. A-34
5.7 Third Party Consents......................... A-35
5.8 Stock Options and Employee Benefits.......... A-35
5.9 Form S-8..................................... A-36
5.10 Indemnification.............................. A-36
5.11 Nasdaq Listing............................... A-36
5.12 Affiliates................................... A-36
5.13 Regulatory Filings; Reasonable Efforts....... A-37
5.14 Parent Board of Directors.................... A-37
5.15 Registration Rights.......................... A-37
5.16 Exemption from Liability under Section 16(b).... A-38
ARTICLE VI CONDITIONS TO THE MERGER................... A-38
Conditions to Obligations of Each Party to
6.1 Effect the Merger............................ A-38
Additional Conditions to Obligations of
6.2 Company...................................... A-39
Additional Conditions to the Obligations of
6.3 Parent and Merger Sub........................ A-39
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER......... A-40
7.1 Termination.................................. A-40
Notice of Termination; Effect of
7.2 Termination.................................. A-41
7.3 Fees and Expenses............................ A-41
7.4 Amendment.................................... A-42
7.5 Extension; Waiver............................ A-42
ARTICLE VIII GENERAL PROVISIONS....................... A-43
8.1 Survival of Representations and Warranties... A-43
8.2 Notices...................................... A-43
8.3 Interpretation; Definitions.................. A-43
A-3
TABLE OF CONTENTS--(continued)
Page
----
8.4 Counterparts..................................................... A-44
8.5 Entire Agreement; Third Party Beneficiaries...................... A-44
8.6 Severability..................................................... A-44
8.7 Other Remedies; Specific Performance............................. A-44
8.8 Governing Law.................................................... A-45
8.9 Rules of Construction............................................ A-45
8.10 Assignment....................................................... A-45
INDEX OF EXHIBITS
Exhibit A Form of Shareholder Agreement.............................
Exhibit A-2 Form of Stockholder Agreement.............................
Exhibit B-1 Form of Company Affiliate Agreement.......................
Exhibit B-2 Form of Parent Affiliate Agreement........................
Exhibit C-1 Persons to Sign Employment Agreement......................
Exhibit C-2 Form of Employment Agreement..............................
A-4
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
This AGREEMENT AND PLAN OF MERGER AND REORGANIZATION is made and entered
into as of November 21, 1999, among Digital Insight corporation, a Delaware
corporation ("Parent"), Black Transitory Corporation, a Delaware corporation
and a wholly-owned subsidiary of Parent ("Merger Sub"), and nFront, Inc., a
Georgia corporation ("Company").
RECITALS
A. Upon the terms and subject to the conditions of this Agreement (as
defined in Section 1.2 below) and in accordance with the Georgia Business
Corporation Code ("Georgia Law") and the Delaware General Corporation Law (the
"Delaware Law"), Parent and Company intend to enter into a business
combination transaction.
B. The Board of Directors of Company (i) has determined that the Merger (as
defined in Section 1.1) is consistent with and in furtherance of the long-term
business strategy of Company and fair to, and in the best interests of,
Company and its shareholders, (ii) has approved this Agreement, the Merger (as
defined in Section 1.1) and the other transactions contemplated by this
Agreement and (iii) has determined (subject to Section 5.4 hereof) to
recommend that the shareholders of Company adopt and approve this Agreement
and approve the Merger.
C. The Board of Directors of Parent (i) has determined that the Merger is
consistent with and in furtherance of the long-term business strategy of
Parent and is fair to, and in the best interests of, Parent and its
stockholders, (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement and (iii) has determined to
recommend that the stockholders of Parent approve the issuance of shares of
Parent Common Stock (as defined below) pursuant to the Merger (the "Share
Issuance").
D. Concurrently with the execution of this Agreement, and as a condition
and inducement to Parent's willingness to enter into this Agreement, certain
affiliated shareholders of Company are entering into shareholder agreements in
the form attached hereto as Exhibit A-1 (the "Shareholder Agreements"), and
concurrently with the execution of this Agreement, and as a condition and
inducement to Company's willingness to enter into this Agreement, certain
affiliated stockholders of Parent are entering into stockholder agreements in
the form attached hereto as Exhibit A-2 (the "Stockholder Agreements").
E. The parties intend, by executing this Agreement, to adopt a plan of
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
F. It is also intended by the parties hereto that the Merger shall qualify
for pooling of interests accounting treatment.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:
A-5
ARTICLE I
THE MERGER
1.1 The Merger. At the Effective Time (as defined in Section 1.2) and
subject to and upon the terms and conditions of this Agreement and the
applicable provisions of Georgia Law and Delaware Law, Merger Sub shall be
merged with and into Company (the "Merger"), the separate corporate existence
of Merger Sub shall cease and Company shall continue as the surviving
corporation. Company as the surviving corporation after the Merger is
hereinafter sometimes referred to as the "Surviving Corporation."
1.2 Effective Time; Closing. Subject to the provisions of this Agreement,
the parties hereto shall cause the Merger to be consummated by filing a
certificate of merger with the Secretary of State of the State of Georgia in
accordance with the relevant provisions of Georgia Law (the "Certificate of
Merger") and a certificate of merger with the Secretary of State of the State
of Delaware in accordance with the relevant provisions of Delaware Law (the
"Delaware Certificate of Merger") (the time of the later of such filings (or
such later time as may be agreed in writing by Company and Parent and
specified in the Certificate of Merger) being the "Effective Time") as soon as
practicable on or after the Closing Date (as herein defined). Unless the
context otherwise requires, the term "Agreement" as used herein refers
collectively to this Agreement and Plan of Merger and Reorganization, the
Certificate of Merger and the Delaware Certificate of Merger. The closing of
the Merger (the "Closing") shall take place at the offices of Wilson Sonsini
Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo Alto,
California at a time and date to be specified by the parties, which shall be
no later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VI, or at such other time, date and location
as the parties hereto agree in writing (the "Closing Date").
1.3 Effect of the Merger. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of
Georgia Law and Delaware Law. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of Company and Merger Sub shall vest
in the Surviving Corporation, and all debts, liabilities and duties of Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4 Articles of Incorporation; Bylaws.
(a) At the Effective Time, the Articles of Incorporation of Company, as in
effect immediately prior to the Effective Time, shall be the Articles of
Incorporation of the Surviving Corporation until thereafter amended as
provided by law and such Articles of Incorporation of the Surviving
Corporation.
(b) The Bylaws of Company, as in effect immediately prior to the Effective
Time, shall be, at the Effective Time, the Bylaws of the Surviving Corporation
until thereafter amended.
1.5 Directors and Officers. The initial directors of the Surviving
Corporation shall be the directors of Merger Sub immediately prior to the
Effective Time, until their respective successors are duly elected or
appointed and qualified. The initial officers of the Surviving Corporation
shall be the officers of Merger Sub immediately prior to the Effective Time,
until their respective successors are duly appointed.
1.6 Effect on Capital Stock. Subject to the terms and conditions of this
Agreement, at the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, Company or the holders of any of the
following securities, the following shall occur:
(a) Conversion of Company Common Stock. Each share of Common Stock, no
par value per share, of 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 1.6(b), will be
canceled and extinguished and automatically converted (subject to Sections
1.6(e) and (f)) into the right to receive 0.579 shares of Common Stock, $0.001
par value per share, of Parent (the "Parent Common Stock") (the "Exchange
Ratio") upon surrender of the certificate representing such share of Company
Common Stock in the
A-6
manner provided in Section 1.7 (or in the case of a lost, stolen or destroyed
certificate, upon delivery of an affidavit (and bond, if required) in the
manner provided in Section 1.9). If any shares of Company Common Stock
outstanding immediately prior to the Effective Time are unvested or are
subject to a repurchase option, risk of forfeiture or other condition under
any applicable restricted stock purchase agreement or other agreement with the
Company, then the shares of Parent Common Stock issued in exchange for such
shares of Company Common Stock will also be unvested and subject to the same
repurchase option, risk of forfeiture or other condition, and the certificates
representing such shares of Parent Common Stock may accordingly be marked with
appropriate legends. The Company shall take all action that may be necessary
to ensure that, from and after the Effective Time, Parent is entitled to
exercise any such repurchase option or other right set forth in any such
restricted stock purchase agreement or other agreement.
(b) Cancellation of Parent-Owned Stock. Each share of Company Common Stock
held by Company or owned by Merger Sub, Parent or any direct or indirect
wholly-owned subsidiary of Company or of Parent immediately prior to the
Effective Time shall be canceled and extinguished without any conversion
thereof.
(c) Stock Options; Employee Stock Purchase Plans. At the Effective Time,
all options to purchase Company Common Stock and stock appreciation rights
then outstanding under Company's Stock Incentive Plan, as amended, (the
"Incentive Plan"), Company's Director Stock Option Plan (the "Director Plan"
and, together with the Incentive Plan, the "Company Option Plans") and each of
the Company Option Plans shall be assumed by Parent in accordance with Section
5.8 hereof. Purchase rights outstanding under Company's Employee Stock
Purchase Plan (the "ESPP") shall be treated as set forth in Section 5.8.
(d) Capital Stock of Merger Sub. Each share of Common Stock, $0.001 par
value per share, of Merger Sub (the "Merger Sub Common Stock") issued and
outstanding immediately prior to the Effective Time shall be converted into
one validly issued, fully paid and nonassessable share of Common Stock, $0.001
par value per share, of the Surviving Corporation. Each certificate evidencing
ownership of shares of Merger Sub Common Stock shall evidence ownership of
such shares of capital stock of the Surviving Corporation.
(e) Adjustments to Exchange Ratio. The Exchange Ratio shall be adjusted to
reflect appropriately the effect of any stock split, reverse stock split,
stock dividend (including any dividend or distribution of securities
convertible into Parent Common Stock or Company Common Stock), extraordinary
cash dividends, reorganization, recapitalization, reclassification,
combination, exchange of shares or other like change with respect to Parent
Common Stock or Company Common Stock occurring on or after the date hereof and
prior to the Effective Time.
(f) Fractional Shares. No fraction of a share of Parent Common Stock will
be issued by virtue of the Merger, but in lieu thereof each holder of shares
of Company Common Stock who would otherwise be entitled to a fraction of a
share of Parent Common Stock (after aggregating all fractional shares of
Parent Common Stock that otherwise would be received by such holder) shall,
upon surrender of such holder's Certificates(s) (as defined in Section 1.7(c))
receive from Parent an amount of cash (rounded to the nearest whole cent),
without interest, equal to the product of (i) such fraction, multiplied by
(ii) the average closing price of Parent Common Stock for the five trading
days immediately preceding the last full trading day prior to the Effective
Time, as reported on the Nasdaq National Market System ("Nasdaq").
1.7 Surrender of Certificates.
(a) Exchange Agent. Parent shall select a bank or trust company reasonably
acceptable to Company to act as the exchange agent (the "Exchange Agent") in
the Merger.
(b) Parent to Provide Common Stock. Promptly after the Effective Time,
Parent shall make available to the Exchange Agent for exchange in accordance
with this Article I, the shares of Parent Common Stock issuable pursuant to
Section 1.6 in exchange for outstanding shares of Company Common Stock and
cash in an amount sufficient for payment in lieu of fractional shares pursuant
to Section 1.6(f) and any dividends or distributions to which holders of
shares of Company Common Stock may be entitled pursuant to Section 1.7(d).
A-7
(c) Exchange Procedures. As soon as practicable after the Effective Time,
Parent shall cause the Exchange Agent to mail to each holder of record (as of
the Effective Time) of a certificate or certificates (the "Certificates"),
which immediately prior to the Effective Time represented outstanding shares
of Company Common Stock whose shares were converted into the right to receive
shares of Parent Common Stock pursuant to Section 1.6, cash in lieu of any
fractional shares pursuant to Section 1.6(f) and any dividends or other
distributions pursuant to Section 1.7(d), (i) a letter of transmittal in
customary form (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall contain such other provisions as
Parent may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Parent Common Stock, cash in lieu of any fractional shares pursuant to
Section 1.6(f) and any dividends or other distributions pursuant to Section
1.7(d). Upon surrender of Certificates for cancellation to the Exchange Agent
or to such other agent or agents as may be appointed by Parent, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, the holders of such Certificates shall be
entitled to receive in exchange therefor certificates representing the number
of whole shares of Parent Common Stock into which their shares of Company
Common Stock were converted at the Effective Time, payment in lieu of
fractional shares which such holders have the right to receive pursuant to
Section 1.6(f) and any dividends or distributions payable pursuant to Section
1.7(d), and the Certificates so surrendered shall forthwith be canceled. Until
so surrendered, outstanding Certificates will be deemed from and after the
Effective Time, for all corporate purposes, subject to Section 1.7(d) as to
the payment of dividends, to evidence only the ownership of the number of full
shares of Parent Common Stock into which such shares of Company Common Stock
shall have been so converted and the right to receive an amount in cash in
lieu of the issuance of any fractional shares in accordance with Section
1.6(f) and any dividends or distributions payable pursuant to Section 1.7(d).
(d) Distributions With Respect to Unexchanged Shares. No dividends or other
distributions declared or made after the date of this Agreement with respect
to Parent Common Stock with a record date after the Effective Time will be
paid to the holders of any unsurrendered Certificates with respect to the
shares of Parent Common Stock represented thereby until the holders of record
of such Certificates shall surrender such Certificates. Subject to applicable
law, following surrender of any such Certificates, the Exchange Agent shall
deliver to the record holders thereof, without interest, certificates
representing whole shares of Parent Common Stock issued in exchange therefor
along with payment in lieu of fractional shares pursuant to Section 1.6(f)
hereof and the amount of any such dividends or other distributions with a
record date after the Effective Time payable with respect to such whole shares
of Parent Common Stock.
(e) Transfers of Ownership. If certificates representing shares of Parent
Common Stock are to be issued in a name other than that in which the
Certificates surrendered in exchange therefor are registered, it will be a
condition of the issuance thereof that the Certificates so surrendered will be
properly endorsed and otherwise in proper form for transfer and that the
persons requesting such exchange will have paid to Parent or any agent
designated by it any transfer or other taxes required by reason of the
issuance of certificates representing shares of Parent Common Stock in any
name other than that of the registered holder of the Certificates surrendered,
or established to the satisfaction of Parent or any agent designated by it
that such tax has been paid or is not payable.
(f) Required Withholding. Each of the Exchange Agent, Parent and the
Surviving Corporation shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable pursuant to this Agreement to
any holder or former holder of Company Common Stock such amounts as may be
required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax law or under any other applicable
legal requirement. To the extent such amounts are so deducted or withheld,
such amounts shall be treated for all purposes under this Agreement as having
been paid to the person to whom such amounts would otherwise have been paid.
(g) No Liability. Notwithstanding anything to the contrary in this Section
1.7, neither the Exchange Agent, Parent, the Surviving Corporation nor any
party hereto shall be liable to a holder of shares of Parent Common Stock or
Company Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
A-8
1.8 No Further Ownership Rights in Company Common Stock. All shares of
Parent Common Stock issued in accordance with the terms hereof (together with
any cash paid in respect thereof pursuant to Section 1.6(f) and 1.7(d)) shall
be deemed to have been issued in full satisfaction of all rights pertaining to
such shares of Company Common Stock, and there shall be no further
registration of transfers on the records of the Surviving Corporation of
shares of Company Common Stock which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to
the Surviving Corporation for any reason, they shall be canceled and exchanged
as provided in this Article I.
1.9 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent
shall issue in exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the holder thereof, certificates
representing the shares of Parent Common Stock into which the shares of
Company Common Stock represented by such Certificates were converted pursuant
to Section 1.6, cash for fractional shares, if any, as may be required
pursuant to Section 1.6(f) and any dividends or distributions payable pursuant
to Section 1.7(d); provided, however, that Parent may, in its discretion and
as a condition precedent to the issuance of such certificates representing
shares of Parent Common Stock, cash and other distributions, require the owner
of such lost, stolen or destroyed Certificates to deliver a bond in such sum
as it may reasonably direct as indemnity against any claim that may be made
against Parent, the Surviving Corporation or the Exchange Agent with respect
to the Certificates alleged to have been lost, stolen or destroyed.
1.10 Tax and Accounting Consequences.
(a) It is intended by the parties hereto that the Merger shall constitute a
reorganization within the meaning of Section 368 of the Code. The parties
hereto adopt this Agreement as a "plan of reorganization" within the meaning
of Sections 1.368-2(g) and 1.368-3(a) of the United States Income Tax
Regulations.
(b) It is intended by the parties hereto that the Merger shall be treated
as a pooling of interests for accounting purposes.
1.11 Taking of Necessary Action; Further Action. 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 assets, property, rights, privileges,
powers and franchises of Company and Merger Sub, the current officers and
directors of Company and Merger Sub will take all such lawful and necessary
action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF COMPANY
As of the date hereof and as of the Closing Date, Company represents and
warrants to Parent and Merger Sub, subject to such exceptions as are
specifically disclosed in writing in the disclosure letter and referencing a
specific representation supplied by Company to Parent dated as of the date
hereof and certified by a duly authorized officer of Company (the "Company
Schedule"), as follows:
2.1 Organization and Qualification; No Subsidiaries
(a) Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Georgia and has the requisite
corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted. Company
is in possession of all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates, approvals and orders ("Approvals")
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, except
where the failure to have such Approvals would not, individually or in the
aggregate, be material to the Company. Company is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or
A-9
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not, either individually or in the
aggregate, be material to the Company.
(b) Company has no subsidiaries. Company has neither agreed nor is
obligated to make nor be bound by any written, oral or other agreement,
contract, subcontract, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan,
commitment or undertaking of any nature, as of the date hereof or as may
hereafter be in effect (a "Contract") under which it may become obligated to
make, any future investment in or capital contribution to any other entity.
Company does not directly or indirectly own any equity or similar interest in
or any interest convertible, exchangeable or exercisable for, any equity or
similar interest in, any corporation, partnership, joint venture or other
business, association or entity.
2.2 Articles of Incorporation and Bylaws. Company has previously furnished
to Parent a complete and correct copy of its Articles of Incorporation and
Bylaws as amended to date (together, the "Company Charter Documents"). Such
Company Charter Documents are in full force and effect. Company is not in
violation of any of the provisions of the Company Charter Documents.
2.3 Capitalization
(a) The authorized capital stock of Company consists of 70,000,000 shares
of Company Common Stock and 10,000,000 shares of Preferred Stock ("Company
Preferred Stock"), each having no par value per share. At the close of
business on November 15, 1999 (i) 14,196,136 shares of Company Common Stock
were issued and outstanding, all of which are validly issued, fully paid and
nonassessable; (ii) no shares of Company Common Stock were held in treasury by
Company or by subsidiaries of Company; (iii) 100,000 shares of Company Common
Stock were available for future issuance pursuant to Company's ESPP; (iv)
1,016,751 shares of Company Common Stock were reserved for issuance upon the
exercise of outstanding options to purchase Company Common Stock under the
Incentive Plan; (v) 4,000 shares of Company Common Stock were reserved for
issuance upon the exercise of outstanding options to purchase Company Common
Stock under the Director Plan; (vi) 1,172,149 shares of Company Common Stock
were available for future grant under the Incentive Plan; (vii) 196,000 shares
of Company Common Stock were available for future grant under the Director
Plan; and (viii) 50,000 shares of Company Common Stock were reserved for
future issuance upon conversion of warrants of the Company. As of the date
hereof, no shares of Company Preferred Stock were issued or outstanding.
Section 2.3(a) of the Company Schedule sets forth the following information
with respect to each Company Stock Option (as defined in Section 5.8)
outstanding as of the date of this Agreement: (i) the name and address of the
optionee; (ii) the particular plan pursuant to which such Company Stock Option
was granted; (iii) the number of shares of Company Common Stock subject to
such Company Stock Option; (iv) the exercise price of such Company Stock
Option; (v) the date on which such Company Stock Option was granted; (vi) the
applicable vesting schedule; and (vii) the date on which such Company Stock
Option expires. Company has made available to Parent accurate and complete
copies of all stock option plans pursuant to which the Company has granted
such Company Stock Options that are currently outstanding and the form of all
stock option agreements evidencing such Company Stock Options. All shares of
Company Common Stock subject to issuance as aforesaid, upon issuance on the
terms and conditions specified in the instrument pursuant to which they are
issuable, would be duly authorized, validly issued, fully paid and
nonassessable. There are no commitments or agreements of any character to
which the Company is bound obligating the Company to accelerate the vesting of
any Company Stock Option as a result of the Merger. All outstanding shares of
Company Common Stock and all outstanding Company Stock Options have been
issued and granted in compliance with (i) all applicable securities laws and
other applicable Legal Requirements (as defined below) and (ii) all
requirements set forth in applicable Contracts. For the purposes of this
Agreement, "Legal Requirements" means any federal, state, local, municipal,
foreign or other law, statute, constitution, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issues, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Entity (as
defined below) and (ii) all requirements set forth in applicable contracts,
agreements, and instruments.
A-10
(b) Except as set forth in Section 2.3(a) there are no subscriptions,
options, warrants, equity securities, partnership interests or similar
ownership interests, calls, rights (including preemptive rights), commitments
or agreements of any character to which Company is a party or by which it is
bound obligating Company to issue, deliver or sell, or cause to be issued,
delivered or sold, or repurchase, redeem or otherwise acquire, or cause the
repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of the Company or
obligating the Company to grant, extend, accelerate the vesting of or enter
into any such subscription, option, warrant, equity security, call, right,
commitment or agreement. As of the date of this Agreement, except as
contemplated by this Agreement, there are no registration rights and there is,
except for the Shareholder Agreements, no voting trust, proxy, rights plan,
antitakeover plan or other agreement or understanding to which the Company is
a party or by which they are bound with respect to any equity security of any
class of the Company. Shareholders of the Company will not be entitled to
dissenters' rights under applicable state law in connection with the Merger.
2.4 Authority Relative to this Agreement. Company has all necessary
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and, subject to obtaining the approval of
the shareholders of Company of the Merger, to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Company
and the consummation by Company of the transactions contemplated hereby have
been duly and validly authorized by all necessary corporate action on the part
of Company and no other corporate proceedings on the part of Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated (other than, with respect to the Merger, the approval and
adoption of this Agreement by holders of a majority of the outstanding shares
of Company Common Stock in accordance with Georgia Law and the Company Charter
Documents). This Agreement have been duly and validly executed and delivered
by Company and, assuming the due authorization, execution and delivery by
Parent and Merger Sub, constitute legal and binding obligations of Company,
enforceable against Company in accordance with their respective terms.
2.5 No Conflict; Required Filings and Consents
(a) The execution and delivery of this Agreement by Company do not, and the
performance of this Agreement by Company shall not, (i) conflict with or
violate the Company Charter Documents or the equivalent organizational
documents of any of Company's subsidiaries, (ii) subject to obtaining the
approval of Company's shareholders of the Merger and compliance with the
requirements set forth in Section 2.5(b) below, conflict with or violate any
law, rule, regulation, order, judgment or decree applicable to Company or any
of its subsidiaries or by which its or any of their respective properties is
bound or affected, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or impair Company's or any of its subsidiaries' rights or alter the
rights or obligations of any third party under, or give to others any rights
of termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or assets of
Company or any of its subsidiaries pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Company or any of its subsidiaries is
a party or by which Company or any of its subsidiaries or its or any of their
respective properties are bound or affected, except to the extent such
conflict, violation, breach, default, impairment or other effect could not in
the case of clauses (ii) or (iii) individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Company.
(b) The execution and delivery of this Agreement by Company do not, and the
performance of this Agreement by Company shall not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
court, administrative agency, commission, governmental or regulatory
authority, domestic or foreign (a "Governmental Entity"), except (i) for
applicable requirements, if any, of the Securities Act of 1933, as amended
(the "Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), state securities laws ("Blue Sky Laws"), the pre-merger
notification requirements (the "HSR Approval") of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the rules and
regulations of Nasdaq, and the filing and recordation of the Certificate of
Merger as required by Georgia Law and the filing and recordation of the
Delaware Certificate of Merger as required by Delaware Law and (ii) where
A-11
the failure to obtain such consents, approvals, authorizations or permits, or
to make such filings or notifications, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on
Company, would not prevent consummation of the Merger or otherwise prevent
Company from performing its obligations under this Agreement.
2.6 Compliance; Permits
(a) Company is not in conflict with, or in default or violation of, (i) any
law, rule, regulation, order, judgment or decree applicable to Company or by
which its or any of their respective properties is bound or affected, or (ii)
any material note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Company
is a party or by which Company or its properties is bound or affected, except
for any conflicts, defaults or violations that (individually or in the
aggregate) would not cause the Company to lose any material benefit or incur
any material liability. No investigation or review by any governmental or
regulatory body or authority is pending or, to the Knowledge of Company,
threatened against Company, nor has any governmental or regulatory body or
authority indicated an intention to conduct the same, other than, in each such
case, those the outcome of which could not, individually or in the aggregate,
reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of the Company, any acquisition of material
property by the Company or the conduct of business by the Company.
(b) Company hold all permits, licenses, variances, exemptions, orders and
approvals from governmental authorities which are material to operation of the
business of Company (collectively, the "Company Permits"). Company is in
compliance in all material respects with the terms of the Company Permits.
2.7 SEC Filings; Financial Statements
(a) Company has made available to Parent a correct and complete copy of
each report, schedule, registration statement and definitive proxy statement
filed by Company with the Securities and Exchange Commission ("SEC") since
June 29, 1999 (the "Company SEC Reports"), which are all the forms, reports
and documents required to be filed by Company with the SEC since June 29,
1999. The Company SEC Reports (A) were prepared in accordance with the
requirements of the Securities Act or the Exchange Act, as the case may be,
and (B) did not at the time they were filed (and if amended or superseded by a
filing prior to the date of this Agreement then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(b) Each set of consolidated financial statements (including, in each case,
any related notes thereto) contained in the Company SEC Reports was prepared
in accordance with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, do not
contain footnotes as permitted by Form 10-Q of the Exchange Act) and each
fairly presents the consolidated financial position of Company at the
respective dates thereof and the consolidated results of its operations and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal adjustments which were not
or are not expected to be material in amount.
(c) Company has previously furnished to Parent a complete and correct copy
of any amendments or modifications, which have not yet been filed with the SEC
but which are required to be filed, to agreements, documents or other
instruments which previously had been filed by Company with the SEC pursuant
to the Securities Act or the Exchange Act.
2.8 No Undisclosed Liabilities. Company has no liabilities (absolute,
accrued, contingent or otherwise) which are, individually or in the aggregate,
material to the business, results of operations or financial condition of
Company taken as a whole, except (i) liabilities provided for in Company's
balance sheet as of September 30, 1999 or (ii) liabilities incurred since
September 30, 1999 in the ordinary course of business.
A-12
2.9 Absence of Certain Changes or Events. Since September 30, 1999, there
has not been: (i) any Material Adverse Effect on Company, (ii) any
declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of
Company's capital stock, or any purchase, redemption or other acquisition by
Company of any of Company's capital stock or any other securities of Company
or any options, warrants, calls or rights to acquire any such shares or other
securities except for repurchases from employees following their termination
pursuant to the terms of their pre-existing stock option or purchase
agreements, (iii) any split, combination or reclassification of any of
Company's capital stock, (iv) any granting by Company of any increase in
compensation or fringe benefits, except for normal increases of cash
compensation to non-officer employees in the ordinary course of business
consistent with past practice, or any payment by Company of any bonus, except
for bonuses made to non-officer employees in the ordinary course of business
consistent with past practice, or any granting by Company of any increase in
severance or termination pay or any entry by Company into any currently
effective employment, severance, termination or indemnification agreement or
any agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving Company of
the nature contemplated hereby, (v) entry by Company into any licensing or
other agreement with regard to the acquisition or disposition of any
Intellectual Property (as defined in Section 2.19) other than licenses in the
ordinary course of business consistent with past practice or any amendment or
consent with respect to any licensing agreement filed or required to be filed
by Company with the SEC, (vi) any material change by Company in its accounting
methods, principles or practices, except as required by concurrent changes in
GAAP, or (vii) any revaluation by Company of any of its assets, including,
without limitation, writing down the value of capitalized inventory or writing
off notes or accounts receivable or any sale of assets of the Company other
than in the ordinary course of business.
2.10 Absence of Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of Company, threatened (or, to the
knowledge of Company, any governmental or regulatory investigation pending or
threatened) against Company or any properties or rights of Company, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign.
2.11 Employee Benefit Plans
(a) All material employee compensation, incentive, fringe or benefit plans,
programs, policies, commitments or other arrangements (whether or not set
forth in a written document and including, without limitation, all "employee
benefit plans" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (i) covering any active or
former employee, director or consultant of Company, or any trade or business
(whether or not incorporated) which is a member of a controlled group with or
which is under common control with Company within the meaning of Section 414
of the Code (an "Affiliate"), or (ii) with respect to which Company has or
liability, are listed in Section 2.11(a) of the Company Schedule (such plans,
programs, policies, commitments or other arrangements herein referred to as
the "Plans"). Company has provided to Parent: (i) correct and complete copies
of all documents embodying each Plan including (without limitation) all
amendments thereto, all related trust documents, and all material written
agreements and contracts relating to each such Plan; (ii) the three (3) most
recent annual reports (Form Series 5500 and all schedules and financial
statements attached thereto), if any, required under ERISA and/or the Code in
connection with each Plan; (iii) the most recent summary plan description
together with the summary(ies) of material modifications thereto, if any,
required under ERISA with respect to each Plan; (iv) all IRS or DOL
determination, opinion, notification and advisory letters relating to each
Plan; (v) all material correspondence to or from any governmental agency
relating to any Plan; (vi) pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"), all discrimination tests for
each Plan for the most recent three (3) plan years; (vii) the most recent
annual actuarial valuations, if any, prepared for each Plan; (viii) if the
Plan is funded, the most recent annual and periodic accounting of Plan assets;
(ix) all material written agreements and contracts relating to each Plan,
including, but not limited to, administrative service agreements, group
annuity contracts and group insurance contracts; (x) all material
communications to employees or former employees regarding in each case,
relating to any amendments, terminations, establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or other
events which would result in any material liability under any Plan or proposed
Plan; (xi) all policies pertaining to fiduciary liability insurance
A-13
covering the fiduciaries for each Plan; and (xii) all registration statements,
annual reports (Form 11-K and all attachments thereto) and prospectuses
prepared in connection with any Plan.
(b) Each Plan has been maintained and administered in all material respects
in compliance with its terms and with the requirements prescribed by any and
all statutes, orders, rules and regulations (foreign or domestic), including
but not limited to ERISA and the Code, which are applicable to such Plans. No
suit, action or other litigation (excluding claims for benefits incurred in
the ordinary course of Plan activities) has been brought, or to the knowledge
of Company is threatened, against or with respect to any such Plan. There are
no audits, inquiries or proceedings pending or, to the knowledge of Company,
threatened by the Internal Revenue Service (the "IRS") or Department of Labor
(the "DOL") with respect to any Plans. All contributions, reserves or premium
payments required to be made or accrued as of the date hereof to the Plans
have been timely made or accrued. Any Plan intended to be qualified under
Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code has either (i) obtained a favorable determination,
notification, advisory and/or opinion letter, as applicable, as to its
qualified status from the IRS or still has a remaining period of time under
applicable Treasury Regulations or IRS pronouncements in which to apply for
such letter and to make any amendments necessary to obtain such a favorable
determination, and (ii) has received a favorable determination from the IRS
that such Plan incorporates all provisions required to comply with the Tax
Reform Act of 1986 and subsequent legislation or still has a remaining period
of time under applicable Treasury Regulations or IRS pronouncements in which
to apply for such letter and to make any amendment necessary to obtain such a
favorable determination. Company does not have any commitment to establish any
new Plan or to modify any Plan (except to the extent required by law or to
conform any such Plan to the requirements of any applicable law. Each Plan can
be amended, terminated or otherwise discontinued after the Effective Time in
accordance with its terms.
(c) Neither Company nor any of its Affiliates has at any time ever
maintained, established, sponsored, participated in, or contributed to any
plan subject to Title IV of ERISA or Section 412 of the Code and at no time
has Company contributed to or been requested to contribute to any
"multiemployer plan," as such term is defined in ERISA or to any plan
described in Section 413(c) of the Code. Neither Company nor any officer or
director of Company or any of its subsidiaries is subject to any liability or
penalty under Section 4975 through 4980B of the Code or Title I of ERISA. No
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, not otherwise exempt under Section 408 of
ERISA, has occurred with respect to any Plan.
(d) Neither Company nor any of its Affiliates has, prior to the Effective
Time and in any material respect, violated any of the health continuation
requirements of COBRA, the requirements of the Family Medical Leave Act of
1993, as amended, the requirements of the Women's Health and Cancer Rights
Act, as amended, the requirements of the Newborns' and Mothers' Health
Protection Act of 1996, as amended, or any similar provisions of state law
applicable to employees of the Company or any of its subsidiaries. None of the
Plans promises or provides medical or other welfare benefits to any former
employee of Company except as required by COBRA or other applicable law or by
the terms of a written agreement with such former employee, and Company has
not represented, promised or contracted (whether in oral or written form) to
provide such retiree benefits to any employee, former employee, director,
consultant or other person, except to the extent required by statute.
(e) Company is not bound by or subject to (and none of its respective
assets or properties is bound by or subject to) any arrangement with any labor
union. No employee of Company is represented by any labor union or covered by
any collective bargaining agreement and, to the Knowledge of Company, no
campaign to establish such representation is in progress. There is no pending
or, to the Knowledge of Company, threatened labor dispute involving Company
and any group of its employees nor has Company experienced any labor
interruptions over the past three (3) years, and Company consider their
relationships with their employees to be good. The Company is in compliance in
all material respects with all applicable material foreign, federal, state and
local laws, rules and regulations respecting employment, employment practices,
terms and conditions of employment and wages and hours.
A-14
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
bonus or otherwise) becoming due to any shareholder, director or employee of
Company or any of its subsidiaries under any Plan or otherwise, (ii)
materially increase any benefits otherwise payable under any Plan, or (iii)
result in the acceleration of the time of payment or vesting of any such
benefits.
2.12 Registration Statement/Joint Proxy Statement/Prospectus. None of the
information supplied or to be supplied by Company for inclusion or
incorporation by reference in (i) the registration statement on Form S-4 to be
filed with the SEC by Parent in connection with the issuance of the Parent
Common Stock in or as a result of the Merger (the "S-4") will, at the time the
S-4 becomes effective under the Securities Act, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading; and (ii) the joint
proxy statement/prospectus to be filed with the SEC by Company pursuant to
Section 5.1 hereof (the "Joint Proxy Statement/Prospectus") will, at the dates
mailed to the shareholders of Company, at the times of the shareholders
meeting of Company (the "Company Shareholders' Meeting") in connection with
the transactions contemplated hereby, at the dates mailed to the stockholders
of Parent, at the times of the stockholders' meeting of Parent (the "Parent
Stockholders' Meeting") in connection with the Share Issuance and as of the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
are made, not misleading. The Joint Proxy Statement/Prospectus will comply as
to form in all material respects with the provisions of the Exchange Act and
the rules and regulations promulgated by the SEC thereunder. Notwithstanding
the foregoing, the Company makes no representation or warranty with respect to
any information supplied by Parent or Merger Sub which is contained in any of
the foregoing documents.
2.13 Restrictions on Business Activities. There is no agreement,
commitment, judgment, injunction, order or decree binding upon Company or to
which the Company is a party which has or could reasonably be expected to have
the effect of prohibiting or materially impairing any business practice of
Company, any acquisition of property by Company or the conduct of business by
Company as currently conducted.
2.14 Title to Property. Company does not own any material real property.
Company has good and defensible title to all of their material properties and
assets, free and clear of all liens, charges and encumbrances except liens for
taxes not yet due and payable and such liens or other imperfections of title,
if any, as do not materially detract from the value of or interfere with the
present use of the property affected thereby; and all leases pursuant to which
Company lease from others material real or personal property are in good
standing, valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing material default or event
of default (or any event which with notice or lapse of time, or both, would
constitute a material default and in respect of which Company has not taken
commercially reasonable steps to prevent such default from occurring).
2.15 Taxes
(a) For the purposes of this Agreement, "Tax" or "Taxes" refers to any and
all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes,
together with all interest, penalties and additions imposed with respect to
such amounts and any obligations under any agreements or arrangements with any
other person with respect to such amounts and including any liability for
taxes of a predecessor entity.
(b) (i) The Company has timely filed all federal, state, local and foreign
returns, estimates, information statements and reports ("Returns") relating to
Taxes required to be filed by the Company with any Tax authority, except such
Returns which are not material to the Company. The Company has paid all Taxes
shown to be due on such Returns.
A-15
(ii) The Company as of the Effective Time will have withheld with
respect to its employees all federal and state income taxes, Taxes pursuant
to the Federal Insurance Contribution Act, Taxes pursuant to the Federal
Unemployment Tax Act and other Taxes required to be withheld, except such
Taxes which are not material to the Company.
(iii) Company has not been delinquent in the payment of any material Tax
nor is there any material Tax deficiency outstanding, proposed or assessed
against the Company, nor has the Company executed any unexpired waiver of
any statute of limitations on or extending the period for the assessment or
collection of any Tax.
(iv) No audit or other examination of any Return of the Company by any
Tax authority is presently in progress, nor has the Company been notified
of any request for such an audit or other examination.
(v) No adjustment relating to any Returns filed by the Company has been
proposed in writing formally or informally by any Tax authority to the
Company or any representative thereof.
(vi) Company does not have any liability for any material unpaid Taxes
which has not been accrued for or reserved on the Company balance sheet
dated June 30, 1999 in accordance with GAAP, whether asserted or
unasserted, contingent or otherwise, which is material to the Company,
other than any liability for unpaid Taxes that may have accrued since June
30, 1999 in connection with the operation of the business of the Company in
the ordinary course.
(vii) There is no contract, agreement, plan or arrangement to which the
Company is a party as of the date of this Agreement, including but not
limited to the provisions of this Agreement, covering any employee or
former employee of the Company that, individually or collectively, would
reasonably be expected to give rise to the payment of any amount that would
not be deductible pursuant to Sections 280G, 404 or 162(m) of the Code.
There is no contract, agreement, plan or arrangement to which the Company
is a party or by which it is bound to compensate any individual for excise
taxes paid pursuant to Section 4999 of the Code.
(viii) Company has not filed any consent agreement under Section 341(f)
of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as defined in Section 341(f)(4) of
the Code) owned by the Company or any of its subsidiaries.
(ix) Company is not party to nor has any obligation under any tax-
sharing, tax indemnity or tax allocation agreement or arrangement.
(x) None of the Company's assets are tax exempt use property within the
meaning of Section 168(h) of the Code.
(xi) The Company has not distributed the stock of any corporation in a
transaction satisfying the requirements of Section 355 of the Code. No
Company stock has been distributed in a transaction satisfying the
requirements of Section 355 of the Code.
2.16 Environmental Matters. To Company's knowledge, Company (i) has
obtained all applicable permits, licenses and other authorizations that are
required under Environmental Laws the absence of which would have a Material
Adverse Effect on Company; and (ii) is in compliance in all material respects
with all material terms and conditions of such required permits, licenses and
authorizations, and also is in compliance in all material respects with all
Environmental Laws. "Environmental Laws" means all Federal, state, local and
foreign laws and regulations relating to pollution of the environment
(including ambient air, surface water, ground water, land surface or
subsurface strata) or the protection of human health and worker safety,
including, without limitation, laws and regulations relating to
