AGREEMENT AND PLAN OF MERGER
Between
EXCALIBUR TECHNOLOGIES CORPORATION
EXCALIBUR ACQUISITION CORP.
and
CONQUEST SOFTWARE, INC.
Dated as of July 5, 1995
TABLE OF CONTENTS
ARTICLE I - THE MERGER 1
Section 1.1 The Merger 1
Section 1.2 Effective Time of the Merger 2
ARTICLE II - THE SURVIVING CORPORATION 2
Section 2.1 Articles of Incorporation 2
Section 2.2 By-Laws 2
Section 2.3 Directors and Officers 2
ARTICLE III - CONVERSION OF SHARES AT EFFECTIVE TIME 4
Section 3.1 Conversion of Shares of the
Company Common Stock 4
Section 3.2 Status of Securities After 5
Effective Time
Section 3.3 Intentionally Omitted 6
Section 3.4 Dividends 6
Section 3.5 Closing 7
Section 3.6 Exchange of Stock Certificates 7
Section 3.7 Legend on Certificates 7
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF EXCALIBUR 8
AND EAC
Section 4.1 Corporate Organization and Good 8
Standing
Section 4.2 Authorization; Binding Agreement 9
Section 4.3 Capitalization of Excalibur 9
Section 4.4 Subsidiaries; Other 10
Transactions
Section 4.5 Financial Statements and SEC 10
Reports
Section 4.6 Absence of Certain Changes 11
Section 4.7 Certain Fees 11
Section 4.8 Consents and Approvals; No 12
Violations
Section 4.9 Litigation 13
Section 4.10 Excalibur Common Stock 14
Section 4.11 Intellectual Property 14
Section 4.12 Permits and Licenses 18
Section 4.13 Environmental Matters 19
Section 4.14 No Misrepresentation 19
Section 4.15 Contracts; Minutes 20
Section 4.16 Insurance 21
Section 4.17 Certain Employment Matters; Labor 21
Relations
Section 4.18 Employee Benefit Plans 22
Section 4.19 Property; etc. 23
Section 4.20 Tax Returns 24
Section 4.21 Tax Free Status of Merger 24
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF CONQUEST 25
Section 5.1 Corporate Organization and Good 25
Standing
Section 5.2 Authorization ; Binding Agreement 26
Section 5.3 Capitalization of ConQuest 26
Section 5.4 Subsidiaries;Other Transactions 27
Section 5.5 Financial Statements 28
Section 5.6 Absence of Certain Changes 28
Section 5.7 Certain Fees 28
Section 5.8 Consents and Approvals; No 29
Violations
Section 5.9 Litigation 30
Section 5.10 Certain Employment Matters; Labor
Relations 31
Section 5.11 Employee Benefit Plans 32
Section 5.12 Property; etc. 33
Section 5.13 Vote 33
Section 5.14 Tax Returns 33
Section 5.15 Intellectual Property 34
Section 5.16 Contracts; Minutes 38
Section 5.17 Permits and Licenses 39
Section 5.18 Real Property; Environmental 40
Matters
Section 5.19 No Misrepresentation 41
Section 5.20 Insurance 41
ARTICLE VI - CONDUCT OF BUSINESS PENDING THE MERGER 41
Section 6.1 Conduct of Business by ConQuest 41
Pending the Merger
Section 6.2 Conduct of Business by Excalibur 44
Pending the Merger
ARTICLE VII - ADDITIONAL AGREEMENTS 47
Section 7.1 Access to Information 47
Section 7.2 Proxy Statement 49
Section 7.3 Shareholders' Approval 49
Section 7.4 Agreement to Cooperate 50
Section 7.5 Public Statements 51
Section 7.6 Stock Options and Acquisition 51
Rights
Section 7.7 Excalibur Options 52
Section 7.8 Employment Agreements 53
Section 7.9 Certain Fees and Liabilities 53
Section 7.10 Registration Rights 54
Section 7.11 Confidentiality 54
Section 7.12 Excalibur Employee Benefit Plans 58
Section 7.13 ConQuest Stockholder 59
Representative
ARTICLE VIII - CONDITIONS 59
Section 8.1 Conditions to Each Party's 59
Obligation to Effect the Merger
Section 8.2 Conditions to Obligation of 60
ConQuest to Effect the Merger
Section 8.3 Conditions to Obligation of 61
Excalibur and EAC to Effect
the Merger
ARTICLE IX - TERMINATION, AMENDMENT AND WAIVER 63
Section 9.1 Termination 63
Section 9.2 Effect of Termination 65
Section 9.3 Amendment 65
Section 9.4 Waiver 66
ARTICLE X - GENERAL PROVISIONS 66
Section 10.1 Survival of Representations 66
and Warranties and Agreements
Section 10.2 Material Adverse Effect 67
Section 10.3 Knowledge 67
Section 10.4 Additional Disclosures 67
Section 10.5 Notices 68
Section 10.6 Interpretation 69
Section 10.7 Miscellaneous 69
Section 10.8 Counterparts 70
Section 10.9 Parties in Interest 70
Section 10.10 Schedules 70
Section 10.11 Arbitration 70
Disclosure Schedules
Exhibit 8.2(b) - Form of Opinion of Holtzmann, Wise & Shepard
Exhibit 8.2(g) - Form of Opinion of Piper & Marbury to ConQuest
Exhibit 8.3(b) - Form of Opinion of Piper & Marbury to Excalibur
Exhibit 7.8 - Form of Excalibur Employment Agreements
Exhibit 8.2(c) - Comfort Letter from Arthur Andersen
Exhibit 2.3 - Affiliate Stockholders' Agreement
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of July 5, 1995 (the "Agreement"),
between and among Excalibur Technologies Corporation, a Delaware corporation
("Excalibur"), Excalibur Acquisition Corp., a Maryland corporation ("EAC"),
which is a wholly-owned subsidiary of Excalibur, and ConQuest Software, Inc., a
Maryland corporation ("ConQuest").
WHEREAS, the Boards of Directors of Excalibur, EAC and ConQuest have
approved the merger of ConQuest with and into EAC (the "Merger") pursuant to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the parties hereto,
intending to be legally bound hereby, agree as follows:
ARTICLE I
Section 1.1 The Merger. Upon the terms and subject to the conditions of
this Agreement, at the Effective Time (as defined in Section 1.2 hereof) in
accordance with the General Corporation Law of the State of Maryland (the
"Maryland Act"), ConQuest shall be merged with and into EAC in accordance with
this Agreement and appropriate articles of merger (the "Articles of Merger"),
and the separate existence of ConQuest shall thereupon cease. EAC shall be the
surviving corporation in the Merger (hereinafter sometimes referred to as the
"Surviving Corporation").
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Section 1.2 Effective Time of the Merger. The Merger shall become
effective at such time (the "Effective Time") as a copy of the duly completed
and executed Articles of Merger are accepted for filing by the Maryland State
Department of Assessments and Taxation or at such later time as the parties may
agree to specify in the Articles of Merger.
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Articles of Incorporation. The Articles of Incorporation of
EAC shall be the Articles of Incorporation of the Surviving Corporation after
the Effective Time.
Section 2.2 By-Laws. The By-laws of EAC shall be the By-laws of the
Surviving Corporation after the Effective Time until the same shall be altered
or amended.
Section 2.3 Directors and Officers.
(a) Subject to the remaining provisions of this Section 2.3 and the
Affiliate Stockholders' Agreement attached as Exhibit 2.3 hereto, the
following individuals shall serve as the Board of Directors and as officers of
the Surviving Corporation after the Effective Time to serve thereafter until
their successors are elected and qualified:
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Board of Directors
Richard M. Crooks
J.M. Kennedy
Jay H. Diamond
Officers
Chairman Richard M. Crooks
Chief Executive Officer J.M. Kennedy
President and Secretary Patrick Condo
(b) For a period of at least two (2) years after the Effective Date,
a representative of ConQuest (the "ConQuest Representative") shall be nominated
to serve as a director of Excalibur. During such two-year period, each of the
parties to the Affiliate Stockholders' Agreement shall, in accordance with the
terms of the Affiliate Stockholders' Agreement, vote for the ConQuest
Representative as a director of Excalibur.
(c) Ed Addison shall be the ConQuest Representative; provided that if
Mr. Addison dies, resigns or his employment or services as a director or officer
of Excalibur is terminated prior to the expiration of the two-year period, Paul
Nelson shall act as the alternate to Mr. Addison as ConQuest Representative, and
Donald Wilson shall act as the alternate to Mr. Nelson as ConQuest
Representative. If none of the foregoing individuals are available to serve as
the ConQuest Representative during the two-year period, then another ConQuest
Representative shall be selected by a majority of the persons who are ConQuest
stockholders at the Effective Time and who remain Excalibur stockholders at the
time of such selection.
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ARTICLE III
CONVERSION OF SHARES AT EFFECTIVE TIME
Section 3.1 Conversion of Shares of ConQuest Stock.
(a) Each share of ConQuest Common Stock issued and outstanding at the
Effective Time, except as otherwise provided in the last sentence of
subparagraph (c), shall, as of the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into the
right to receive 0.9617 shares of Excalibur Common Stock, except as provided in
Section 3.1(b) below. For the purposes of this Agreement, "ConQuest Common
Stock" shall mean ConQuest's Common Stock, without par value; and "Excalibur
Common Stock" shall mean Excalibur's Common Stock, $.01 par value per share.
(b) No fraction of a share of Excalibur Common Stock shall be issued.
Each holder of a certificate or certificates representing shares of ConQuest
Common Stock issued
and outstanding immediately prior to the Effective Time who would otherwise be
entitled to receive a fractional share of Excalibur Common Stock (after taking
into account all shares of ConQuest Common Stock then held by such holder) shall
receive only the whole number of shares of Excalibur Common Stock into which
such holder's ConQuest Common Stock is converted under Section 3.1(a) above.
(c) The Excalibur Common Stock to be received upon the conversion
ConQuest Common Stock pursuant to the Merger hereof shall be referred to herein
as the "Merger Consideration."
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(d) As set forth below in Section 7.6, each holder of an option to
acquire ConQuest Common Stock shall be entitled to receive upon exercise of such
option after the Effective Time in lieu of ConQuest Common Stock, that number of
shares of Excalibur Common Stock as such person would have received in the
exchange set forth in Sections 3.1(a) and (b), if such person had exercised such
option immediately prior to the Effective Time.
Section 3.2 Status of Securities After Effective Time.
(a) From and after the Effective Time, and until surrendered and
exchanged, each outstanding certificate formerly representing shares of ConQuest
Common Stock shall be deemed for all purposes (other than the payment of
dividends or other distributions, if any, to shareholders of Excalibur) to
represent the right conferred upon such shares in accordance with Section 3.1
above to receive the number of whole shares of Excalibur Common Stock into which
such shares of ConQuest Common Stock are converted in the Merger. Upon surrender
and exchange of each outstanding certificate theretofore representing shares of
ConQuest Common Stock, there shall be paid to the record holders of the
certificate or certificates of Excalibur Common Stock issued in exchange
therefor the amount, without interest thereon, of dividends and other
distributions declared and paid to shareholders of record subsequent to the
Effective Time with respect to the number of whole shares of Excalibur Common
Stock represented thereby.
(b) If any certificate evidencing Excalibur Common Stock is to be
registered in any name other than that in which the certificate surrendered in
exchange therefor is registered, it shall be a condition of such registration
that the certificate so surrendered shall be properly endorsed and otherwise in
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proper form for transfer as reasonably determined by Excalibur, that any
applicable securities laws are complied with, and that the person requesting
such exchange pay to Excalibur any transfer or other taxes required by reason of
the issuance of a certificate for shares of Excalibur Common Stock in any name
other than that of the registered holder of the certificate surrendered or
otherwise establish to the satisfaction of Excalibur that such tax has been paid
or is not payable by Excalibur.
(c) From and after the Effective Time, the stock transfer books of
ConQuest shall be closed and no transfer of shares of ConQuest Common Stock
shall be made.
Section 3.3 Intentionally Omitted.
Section 3.4 Dividends. If Excalibur shall, at any time after the date
hereof but before the Effective Time, (i) issue a dividend in shares of
Excalibur Common Stock, (ii) combine the outstanding Excalibur Common Stock into
a smaller number of shares, (iii) subdivide the outstanding Excalibur Common
Stock, (iv) reclassify the Excalibur Common Stock, or (v) otherwise increase or
decrease the total number of shares of issued and outstanding capital stock of
Excalibur, then, in such event, the Merger Consideration to be delivered to
holders of ConQuest Common Stock who are entitled to receive Merger
Consideration in exchange for ConQuest Common Stock shall be adjusted so that
each shareholder shall be entitled to receive such Merger Consideration as such
shareholder would have been entitled to receive if the Effective Time had
occurred prior to the happening of such event (or, if applicable, the record
date in respect thereof).
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Section 3.5 Closing. The closing (the "Closing") of the transactions
contemplated by this Agreement shall take place at the offices of Holtzmann,
Wise & Shepard, 1271 Avenue of the Americas, New York, New York 10020, at 10:00
a.m., Eastern Time, on the business day immediately following the date on which
the last of the conditions set forth in Article VIII hereof is fulfilled or
waived, or at such other time and place as Excalibur and ConQuest shall agree.
Section 3.6 Exchange of Stock Certificates. At the Closing, the ConQuest
Stockholders will surrender to EAC the certificates theretofore representing all
of the shares of ConQuest Common Stock issued and outstanding at the Effective
Time, and EAC will deliver to the ConQuest Stockholders certificates
representing the Excalibur Common Stock into which the shares of ConQuest Common
Stock theretofore represented by the certificates so surrendered shall have been
converted pursuant to the provisions of Section 3.1 (a) and (b) above. The
ConQuest Common Stock certificates so surrendered will forthwith be canceled.
Section 3.7 Legend on Certificates. Each certificate representing
Excalibur Common Stock issued pursuant to this Agreement shall bear a legend
endorsed thereon in the form set forth below; provided that Excalibur shall
issue unlegended certificates in place of such legended certificates upon (i)
expiration of the applicable holding period then in effect under Rule 144
promulgated under the Securities Act of 1933, as amended, or (ii) transfer of
such shares pursuant to a registration of such shares pursuant to this Agreement
(including shares subject to the options described in Sections 7.6 below),
whichever occurs first:
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TRANSFER OF THE SHARES REPRESENTED HEREBY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 OR UNDER ANY SECURITIES OR
SIMILAR LAWS OF ANY STATE. THE SHARES MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF, IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH
ACT AND LAWS.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EXCALIBUR AND EAC
Excalibur and its subsidiaries represent and warrant to ConQuest as
follows:
Section 4.1 Corporate Organization and Good Standing. Excalibur and each
of its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of their respective jurisdiction of incorporation,
with all requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as it is now being conducted, and is
qualified or licensed to do business and is in good standing in each
jurisdiction in which the ownership or leasing of property by it or the conduct
of its business requires such licensing or qualification, except for such
failures to be so qualified or licensed which would not have a Material Adverse
Effect (as defined in Section 10.2 hereof) on Excalibur or any of its
subsidiaries. Each of Excalibur and EAC has delivered to ConQuest true and
correct copies of its Certificate or Articles of Incorporation and By-laws as in
effect on the date hereof.
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Section 4.2 Authorization; Binding Agreement. Excalibur and EAC have all
requisite corporate power and authority to execute and deliver this Agreement
and to perform their obligations hereunder. The execution, delivery and
performance of this Agreement by Excalibur and EAC, and the consummation by
Excalibur and EAC of the transactions contemplated hereby, have been duly
authorized by Excalibur's Board of Directors and EAC's Board of Directors and
security holders, and no other corporate action or proceeding on the part of
Excalibur or Excalibur's security holders or EAC or EAC's security holders is
necessary for the execution, delivery and performance of this Agreement by
Excalibur and EAC and the consummation of the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by Excalibur and
EAC and is a legal, valid and binding obligation of Excalibur and EAC,
enforceable against them in accordance with its terms except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors rights generally, by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and by any limitations on enforcement or
indemnification obligations in connection with the violation of laws as may be
required by public policy.
Section 4.3 Capitalization of Excalibur. As of the date hereof, Excalibur
and EAC have the authorized and outstanding capital stock and options set forth
on Schedule 4.3. All outstanding Excalibur and EAC shares are duly authorized,
validly issued, fully paid and non-assessable, and are entitled to vote and have
not been issued in violation of any preemptive rights of any person. Except as
reflected on Schedule 4.3 or in the SEC Reports, as defined in Section 4.5,
10
there are no outstanding subscriptions, options, warrants, conversion rights or
other rights or other agreements or commitments providing for the issuance by
Excalibur of, or the granting of rights to acquire from Excalibur, any capital
stock of Excalibur or securities convertible into, or exchangeable for, or
evidencing the right to subscribe for, any shares of capital stock of Excalibur
or any stock appreciation rights. There are no voting trusts or other written
agreements or understandings or other restrictions to which Excalibur is a party
with respect to the voting or issuance or transfer of the capital stock of
Excalibur, except for customary restrictions imposed by federal and state
securities laws.
Section 4.4 Subsidiaries; Other Transactions. Except as set forth in
Schedule 4.4 hereof, there are no subsidiaries of Excalibur. Excalibur owns all
of the issued and outstanding securities of each of its subsidiaries. Other
than as set forth in Schedule 4.4, Excalibur does not own, directly or
indirectly, any capital stock or other equity securities of any corporation or
have any direct or indirect equity or ownership interest in any other business.
As of the date of this Agreement, Excalibur has no obligations or commitments
to, and does not presently contemplate that it will, within the foreseeable
future, invest any funds in any business or entity or engage in any merger,
consolidation, reorganization, sale of assets or sale or purchase of securities
or any similar transaction with any business or entity other than as set forth
in Schedule 4.4.
Section 4.5 Financial Statements and SEC Reports. Excalibur heretofore
has delivered to ConQuest true and complete copies of (i) its Annual Report on
Form 10-K for the fiscal years ended January 31, 1995 and 1994, (ii) its Form
10-Q for the period ended April 30, 1995; and (iii) its proxy statement relating
to its last meeting of its shareholders (the documents referred to in clauses
11
(i) through (iii) being hereinafter referred to as "Excalibur SEC Reports"). As
of their respective dates,the Excalibur SEC Reports (x) complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be, and (y) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements (including any
related notes) of Excalibur included in the Excalibur SEC Reports were prepared
in conformity with generally accepted accounting principles applied on a
consistent basis, and present fairly the consolidated financial position,
results of operations and cash flows of Excalibur as of the dates and for the
periods indicated. As at the date of each balance sheet of Excalibur included
in the Excalibur SEC Reports, Excalibur had no material liabilities or
obligations, contingent or otherwise, that are not reflected in such balance
sheet.
Section 4.6 Absence of Certain Changes. Except as described in Schedule
4.6, at no time between January 31, 1995 and the Closing shall Excalibur or any
of its subsidiaries have suffered any Material Adverse Effect, or taken, failed
to take or suffered to exist any action that if taken, not taken or suffered to
exist after the date of this Agreement would constitute a breach of any of the
covenants set forth herein.
Section 4.7 Certain Fees. Except as disclosed on Schedule 4.7 hereto,
neither Excalibur , EAC, nor any of their respective officers, directors,
employees or agents has employed any broker or finder or incurred any liability
for any financial advisory, brokerage or finder's fees or commissions in
connection with the transactions contemplated herein. No other agent or broker
12
or other person is entitled to any commission or finder's fee in connection with
the transaction contemplated by this Agreement.
Section 4.8 Consents and Approvals; No Violations.
(a) To the knowledge of Excalibur and its subsidiaries, neither
Excalibur nor any of its subsidiaries is in violation of any applicable law,
statute, ordinance, order, rule or regulation promulgated or judgment, decree,
order, concession, grant, permit, license or other governmental authorization or
approval, issued or entered by, any federal, state or local, United States or
foreign, court or governmental authority relating to or affecting the operation,
conduct or ownership of the property or business of Excalibur or any of its
subsidiaries, which violation or violations could, individually or in the
aggregate, have a Material Adverse Effect on Excalibur or any of its
subsidiaries.
(b) Except for applicable requirements of the Exchange Act, the
Securities Act, state securities laws, and the filing of Articles of Merger
pursuant to the Maryland Act, no filing or registration with, no notice to and
no permit, authorization, consent or approval of any public or governmental body
or authority is necessary for the consummation by Excalibur and EAC of the
transactions contemplated by this Agreement or to enable Excalibur or any of its
subsidiaries to continue to conduct its business after the Effective Time in a
manner which is consistent with that in which it is presently conducted, except
where the failure to make such filing or to obtain such permit, authorization,
consent or approval will not have a Material Adverse Effect on Excalibur or any
of its subsidiaries or on ConQuest, and will not prevent consummation of the
transactions contemplated hereby.
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(c) Neither the execution and delivery of this Agreement by Excalibur
or EAC, the performance by Excalibur and EAC of their obligations hereunder nor
the consummation by Excalibur and EAC of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
Certificate or Articles of Incorporation or By-laws of Excalibur or any of its
subsidiaries, (ii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or the happening or occurrence of any other
event) a default by Excalibur or any of its subsidiaries, or permit the
termination of, or require the consent of any other party to, or result in the
acceleration of, or entitle any party to accelerate (or give rise to the
creation of any lien, charge, security interest or encumbrance upon any
properties or assets of Excalibur or any of its subsidiaries) under any of the
terms, conditions or provisions of any contract, note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which
Excalibur or any of its subsidiaries is a party or by which any of them or any
of their properties or assets may be bound, or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation of any court or governmental
authority applicable to Excalibur or any of its subsidiaries or any of their
properties or assets.
Section 4.9 Litigation. Except as disclosed in the Excalibur SEC Reports,
there is no action, suit, set of related actions or suits concerning a common
issue, complaint, arbitration, inquiry, proceeding or investigation pending or,
to the knowledge of Excalibur or any of its subsidiaries, threatened against or
involving Excalibur or any of its subsidiaries, or any properties or rights of
Excalibur or any of its subsidiaries, before any court, arbitrator or
14
administrative or governmental body, and there is no judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against Excalibur or any of
its subsidiaries which would individually or in the aggregate, if adversely
determined, have a Material Adverse Effect on Excalibur or any of its
subsidiaries. As of the date hereof, there are no actions, suits or proceedings
pending or, to the knowledge of Excalibur or any of its subsidiaries, threatened
against Excalibur or any of its subsidiaries arising out of or in any way
related to this Agreement, the Merger or any of the transactions contemplated
hereby or thereby.
Section 4.10 Excalibur Common Stock. The Excalibur Common Stock which
will be issued in accordance with this Agreement has been duly authorized and,
when issued as contemplated hereby, will be validly issued, fully paid and
nonassessable.
Section 4.11 Intellectual Property. As used herein, "Intellectual
Property Rights" means any and all rights to exclude existing from time to time
in the United States or any specified foreign jurisdiction under patent law,
copyright law, moral rights law, trade-secret law, semiconductor chip protection
law, trademark law, unfair competition law, or other similar rights.
(a) Schedule 4.11 sets forth all Intellectual Property Rights owned by
Excalibur and its subsidiaries, including, but not limited, to all U.S. and
foreign trademarks, service marks, trade names, copyrights, U.S. and foreign
patents, patent applications and provisional specifications and applications,
reissues, divisionals, substitutes, continuations, and continuations-in-part
thereof, utility models, design patents and applications therefore, computer
programs and computer software, proprietary information, relating to products,
processes therefore, apparatus and maintenance thereof, research, computer
15
software, manufacturing techniques, program files, flow charts, drawings,
techniques, source and executable codes, standards, specifications,
improvements, inventions, statistical data, development plans, technologies, and
manuals (both design and end-user), and all licenses or other proprietary rights
associated with any of the foregoing owned by Excalibur and its subsidiaries and
all applications for any of the foregoing (together with all related trade
secrets and know-how the "Excalibur Intellectual Property Rights"). The
Excalibur Intellectual Property rights, together with the intellectual property
rights licensed by Excalibur under agreements identified in Schedule 4.11 and
other information in the public domain constitute all of the intellectual
property necessary to enable Excalibur to conduct and to continue to conduct all
phases of its business (including products under development) in the manner
presently conducted or contemplated. Excalibur and its subsidiaries have good
title to all of the Excalibur Intellectual Property Rights set forth in Schedule
4.11, free and clear of all liens, charges, encumbrances, licenses (exclusive or
nonexclusive) or grants of any other rights of any nature whatsoever, except as
set forth in Schedule 4.11. Each of the Excalibur Intellectual Property Rights
is valid and enforceable, and the making, using, selling, reproductions in
copies thereof, preparation of derivative works based thereon, distribution of
copies by sale or other transfer of ownership, or otherwise, and the licensing
and sublicensing of others, to do any of the aforementioned acts with regard to
any of the products or works under such Excalibur Intellectual Property Rights
do not infringe any rights owned or held by any other person.
(b) To the best of Excalibur's and its subsidiaries' knowledge,
the conduct of the business of Excalibur and its subsidiaries as heretofore
carried on is free from any infringement of Intellectual Property Rights of
others and there is no pending, or to the best of Excalibur's knowledge,
threatened claim against Excalibur or EAC for any infringement of any of the
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foregoing. Neither Excalibur, EAC nor, to their knowledge, any of their
respective employees or agents, has notified any person or entity that it
believes such person or entity is infringing, or making any preparation to
infringe, or contributing to or inducing others to infringe, any of the
Excalibur Intellectual Property Rights.
(c) Excalibur and its subsidiaries have taken all reasonable measures
to protect the secrecy, confidentiality and value of their respective trade
secrets and the Excalibur Intellectual Property Rights, and the same have not
been disclosed to others except pursuant to reasonable confidentiality
agreements. All of the Excalibur Intellectual Property Rights subject to a
patent or copyright are presently valid and protectable and are not part of the
public knowledge, nor to Excalibur's and its subsidiaries' knowledge have they
been used, divulged or appropriated for the benefit of any past or present
employees or other persons, or to the detriment of Excalibur or its
subsidiaries.
(d) Excalibur and its subsidiaries, and to their knowledge, each
person associated in any way with the filing and prosecution of any application
for a patent or copyright relating to the Excalibur Intellectual Property Rights
have, throughout the prosecution of such application, acted in good faith before
the United States Patent and Trademark Office (the "Patent Office") or the
copyright office of the U.S. Library of Congress (the "Copyright Office"), as
the case may be, and all information provided by or on behalf of Excalibur or
any of its subsidiaries to the Patent Office and Copyright Office has been true
and correct in all material respects.
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(e) Other than the proceedings and challenges listed and identified
in Schedule 4.11 hereto, there is no pending or, to the knowledge of Excalibur
and its subsidiaries, threatened, action, suit or other proceeding before any
court, the United States Patent and Trademark Office, any foreign patent office,
arbitrator or federal or state administrative agency involving Excalibur (i)
that in any manner draws into question the validity or enforceability of any of
the Excalibur Intellectual Property Rights or alleges that the products, systems
or processes made or practiced with the Excalibur Intellectual Property Rights
infringed upon any patents, copyrights or other intellectual property rights of
others, (ii) in which there is a reasonable possibility of an adverse decision
or decisions which could otherwise prevent or have a Materially Adverse Effect
upon the right of Excalibur or any of its subsidiaries to use, sell or license
the Excalibur Intellectual Property Rights or (iii) in which Excalibur or its
subsidiaries or any of their respective agents is or was alleged to have
violated any legal restriction, including any competition law, with respect to
such Excalibur Intellectual Property Rights.
(f) The use of the trade names and trademarks listed on Schedule
4.11, if any, by Excalibur and its subsidiaries has been continuous, and such
names have never been abandoned by Excalibur or its subsidiaries.
(g) Except as shown on Schedule 4.11 hereto, neither Excalibur nor
any of its subsidiaries is aware of (i) any circumstances that would prevent,
delay or condition the issuance of a pending patent or copyright application
covering any of the Excalibur Intellectual Property Rights, or that would modify
or reduce the coverage of such patent or copyright as described in the
application therefor, a copy of which has been delivered to ConQuest (ii) any
18
prior art with respect to any pending or issued patent or copyright or any of
the Excalibur Intellectual Property Rights, or (iii) any protest, objection or
challenge to any pending patent or copyright application covering the Excalibur
Intellectual Property Rights.
(h) Excalibur has delivered true and correct copies of each patent,
copyright registration and application therefor to ConQuest.
Section 4.12 Permits and Licenses. Excalibur and each of its subsidiaries
has acquired and currently holds all permits, licenses, franchises,
authorizations, approvals and other certificates of authority as may be required
for Excalibur or its subsidiaries to conduct its business and the absence of
which would have a Material Adverse Effect on the business or operations of
Excalibur or any of its subsidiaries. Excalibur and its subsidiaries are in
material compliance with all the terms thereof, and Excalibur is not aware of
any reason why any such permit, license, franchise, authorization, approval or
other certificates of authority could not be renewed on terms at least as
advantageous to Excalibur and its subsidiaries as the current license,
franchise, authorization, approval and other certificates of authority held by
Excalibur or any of its subsidiaries. Excalibur is not aware of any change in
any law, rule or regulation, whether or not yet effective, which is likely to
require Excalibur or any of its subsidiaries to obtain in the future any
additional license, franchise, authorization, approval or any other certificates
of authority, the absence of which would have a Material Adverse Effect on the
business or operations of Excalibur or any of its subsidiaries.
19
Section 4.13 Environmental Matters. Neither Excalibur nor any of its
subsidiaries nor, to its knowledge, any other person, has (either with or
without negligence) caused or permitted the escape, disposal or release in
violation of applicable law of any biologically active or other hazardous
substances, or materials causing harm in or on any real property occupied or
owned by Excalibur or any of its subsidiaries or utilized by Excalibur or any of
its subsidiaries in conducting its business (the "Premises"). Neither Excalibur
nor any of its subsidiaries, nor, to its knowledge, any other person, has stored
or used such substances or materials on or about any Premises in any manner not
sanctioned by law or by commercially reasonable standards in the industry for
the storage and use of such substances or materials. Neither Excalibur nor any
of its subsidiaries has brought or allowed to be brought onto the Premises any
such materials or substances except to use in the ordinary course of Excalibur's
or EAC's business. During the use and occupancy of the Premises by Excalibur or
any of its subsidiaries or any lessee or sublessee or licensee of Excalibur or
any of its subsidiaries, Excalibur or EAC or such lessee, sublessee or licensee
have kept and maintained the Premises so as to be in material compliance with
all then existing statutes, laws, rules, ordinances, orders, permits and
regulations of state, federal, local and other governmental and regulatory
authorities, agencies and bodies pertaining to environmental matters, or
regulating, prohibiting or otherwise having to do with asbestos and all other
toxic, radioactive or hazardous wastes or materials, including, but not limited
to, the Federal Clean Air Act, the Federal Water Pollution Control Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, as
from time to time amended.
Section 4.14 No Misrepresentation. No representation or warranty by
Excalibur or EAC in this Agreement, nor any statement, certificate or schedule
20
furnished or to be furnished by or on behalf of Excalibur or EAC pursuant to
this Agreement, when taken together with the foregoing, contains or shall
contain any untrue statement of material fact or omits or shall omit to state a
material fact. Excalibur and EAC have delivered true and complete copies of all
documents referred to in this Article IV (or in any Schedule delivered by
Excalibur or EAC) to ConQuest.
Section 4.15 Contract; Minutes. Schedule 4.15A sets forth a complete and
correct list of the following contracts, whether written or oral, to which
Excalibur or EAC is party (a) development agreements, sales agency agreements,
marketing or distribution agreements; (b) guarantees of any obligation; (c)
agreements for the sale of any properties or assets of Excalibur or EAC other
than sales of products in the ordinary course of business; (d) contracts,
pursuant to which Excalibur or EAC is or maybe obligated to make payments,
contingent or otherwise, on account of or arising out of the acquisition, prior,
pending or future, of the business or other assets of another enterprise; (e)
secrecy or invention agreements under which Excalibur, EAC, or to either of
their knowledge, any of the present officers or employees of Excalibur or EAC,
has any obligation; (f) requirements contracts with Excalibur or EAC as
purchaser or seller or other agreements for the purchase or sale of goods or
services not terminable without liability by Excalibur or EAC on 30 days' notice
(g) agreements or arrangements limiting the freedom of Excalibur or EAC, or to
either of their knowledge, any of their respective present officers or
employees, to compete in any line of business with any person or other entity or
in any geographical area, (h) joint venture agreements or partnership, profit
sharing or other agreements, (i) agreements pursuant to which Excalibur or EAC
has indemnified or shared tax liability with any party; (j) policies and
procedures manuals with respect to the Excalibur and EAC employees; and (k)
contracts, commitments or agreements with an annual commitment of $1,000,000 or
21
more that are not referred to above in Section 4.15 or in any other Schedule to
this Agreement which relate to or affect Excalibur or EAC or any of their
subsidiaries. Except as provided in Schedule 4.15B, Excalibur and its
subsidiaries are in compliance with all material contracts and agreements to
which Excalibur or any of its subsidiaries is a party or by which Excalibur or
any of its subsidiaries is bound (regardless of type of contract or annual sales
volume), and to the knowledge of Excalibur, no other party is in breach thereof.
Excalibur and EAC have provided to ConQuest true, correct and complete copies of
all minutes and/or consents of all actions taken by the shareholders and Board
of Directors of Excalibur and EAC since February 1, 1994.
Section 4.16 Insurance. Excalibur maintains insurance for the protection
of its business, properties and assets against such hazards and in such amounts
as is customary among businesses of like size and nature as Excalibur. All such
insurance is in full force and effect, and Excalibur has neither received nor
given any notice of termination or reduction in coverage thereunder.
Section 4.17 Certain Employment Matters; Labor Relations. Except as set
forth in Schedule 4.17, there are no written employment or consulting agreements
or contracts in effect between Excalibur and any of its employees nor any oral
contracts or understandings of employment or consultation which are not
terminable upon the giving of notice not to exceed thirty (30) days. Excalibur
has complied with all applicable laws, rules and regulations relating to the
employment of labor which could have a Material Adverse Effect on the business,
assets, condition or prospects, financial or otherwise, of Excalibur, including
without limitation those relating to wages, hours, collective bargaining, age
and sex discrimination and the payment and withholding of taxes; Excalibur has
withheld all amounts required by law or agreement to be withheld from the wages
22
or salaries of their employees; and Excalibur has no unaccrued liability for any
arrears of wages or any taxes or penalties for failure to comply with any of the
foregoing. There are no controversies pending, threatened or reasonably
anticipated between Excalibur and any employee or former employee. None of the
employees of Excalibur are represented by a labor union, and no petition has
been filed or proceeding instituted of which Excalibur has notice by any
employee or group of employees with any labor relations boards seeking
recognition of a bargaining representative. There is no dispute or controversy
with any union or other organization representing employees, and no arbitration
proceeding is pending or threatened involving such a dispute or controversy.
Section 4.18 Employee Benefit Plans.
(a) Schedule 4.18 lists all Benefit Plans (as hereinafter defined),
and Excalibur has previously provided to ConQuest true and complete copies of
all qualified pension or profit sharing plans, any deferred compensation,
consultant, bonus or group insurance contract, or any other incentive, welfare,
or employee benefit plan or agreement maintained for the benefit of employees or
former employees of Excalibur (for purposes of this Section 4.18, the "Benefit
Plans"), together with (i) the most recent actuarial and financial reports
prepared with respect to any Benefit Plans, (ii) the most recent annual reports
filed with any government agency, and (iii) all rulings and determination
letters and any open requests for rulings or letters that pertain to any Benefit
Plan. Excalibur has no commitment to create any such additional plans,
contracts or arrangements or to amend any such plans, contracts or arrangements
so as to increase, benefits thereunder. Except as set forth in the employment
and consulting agreements set forth on Schedule 4.17, Excalibur is not obligated
to provide any post-retirement welfare benefits to its employees, including
post-retirement health or life insurance coverage.
23
(b) To the best knowledge of Excalibur after reasonable investigation
and consultation with legal counsel, neither Excalibur nor any administrator or
fiduciary of any of such Benefit Plans (or agent or delegate of any of the
foregoing) has engaged in any transaction or acted or failed to act in any
manner which could subject Excalibur to any direct or indirect liability for a
breach of any fiduciary, co-fiduciary, or other duty under ERISA, which
individually or in the aggregate could result in a Material Adverse Effect to
Excalibur. No oral or written representation or communication by Excalibur with
respect to any aspect of the Benefit Plans has been or will be made to employees
of Excalibur prior to the Effective Time which is not in accordance with the
written or otherwise preexisting terms and provisions of such Benefit plans in
effect immediately prior to the Effective Time. There are no unresolved claims
or disputes under the terms of, or in connection with, the Benefit Plans and no
action, legal or otherwise, has been commenced with respect to any claim.
Section 4.19 Property; etc. Except for leased property and as specified
in such Schedule 4.19, and except for computers loaned to Excalibur for
development purposes, Excalibur has good, marketable and insurable title to all
of the property, real or personal, tangible or intangible, owned or used by it,
free and clear of all mortgages, pledges, liens, security interests or
encumbrances of any nature (other than liens for taxes, assessments or other
governmental charges not yet due and payable, or presently payable without
penalty or interest), (collectively, the "Encumbrances"). All machinery,
equipment, tools, furniture and fixtures owned or leased by Excalibur are in
good operating condition and repair. There are no outstanding enforcement
actions or notices of violation issued or threatened by any federal, state,
county or municipal authority having jurisdiction over any such property.
24
Section 4.20 Tax Returns. Excalibur and its subsidiaries have filed all
federal, state and other tax returns and reports required to be filed for all
periods on or before the due dates (as extended by any valid extensions of time)
and has paid all taxes shown to be due by said returns. Such returns reflect
all taxes due and payable with respect to the periods covered thereby and there
are no liabilities, claims, interest or penalties pending, assessed, asserted or
threatened against Excalibur or any of its subsidiaries in connection with any
such taxes and no basis therefor. The reserve, for taxes (federal, state and
local) reflected in Excalibur's balance sheet at January 31, 1995 are adequate
to cover any and all taxes, including deferred taxes, and any interest and
penalties in connection therewith which may be assessed with respect to the
property, business and operations of Excalibur up to the date of Excalibur's
balance sheet and all prior periods. Excalibur has not been given or been
requested to give waivers of any statutes of limitations relating to the payment
of taxes for any taxable period. Furthermore, to the best knowledge of
Excalibur, no fact exists which would constitute grounds for assessment of any
further tax liability.
Section 4.21 Tax Free Status of Merger. Excalibur and EAC acknowledge
that the Merger is intended to qualify as a "reorganization" within the meaning
of Section 368(a)(2)(D) of the Code and that the Merger is intended to be
pursuant to a "plan of reorganization" within the meaning of Section 354(a)(1)
of the Code. Excalibur and EAC agree to report the Merger in accordance with
such intent for United States income tax purposes. Excalibur represents that it
has and at the Closing will have no plan or intention to take any action and
covenants to take no action that would cause the Merger to fail to qualify as a
"reorganization" within the meaning of Section 368(a)(2)(D) of the Code,
25
including but not limited to any action that would (i) cause or permit Excalibur
not to own directly stock of EAC possessing at least 80% of the total combined
voting power of all classes of stock entitled to vote and at least 80% of the
total number of shares of each other class of stock of EAC, (ii) cause or permit
EAC not to conduct the business carried on by ConQuest at the time of Closing or
not to use at least 50% of the assets owned by ConQuest at the time of Closing
and used at that time in connection with ConQuest's business in the business of
EAC, or (iii) cause or permit EAC to liquidate, merge into another corporation,
or otherwise transfer a substantial portion of its assets outside the ordinary
course of business.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF CONQUEST
ConQuest represents and warrants to Excalibur and EAC as follows:
Section 5.1 Corporate Organization and Good Standing. ConQuest is a
corporation duly organized, validly existing and in good standing under the laws
of Maryland, with all requisite corporate power and authority to own, operate
and lease its properties and to carry on its business as it is now being
conducted, and, except as provided in Schedule 5.1 hereto, is qualified or
licensed to do business and is in good standing in each jurisdiction in which
the ownership or leasing of property by it or the conduct of its business
requires such licensing or qualification, except for such failures to be so
qualified or licensed which would not have a Material Adverse Effect on
ConQuest. ConQuest has delivered to Excalibur true and correct copies of its
Articles of Incorporation and By-laws as in effect on the date hereof.
26
Section 5.2 Authorization; Binding Agreement. ConQuest has all requisite
corporate power and authority to execute and deliver this Agreement and, subject
to the requisite approval of its stockholders, to perform its obligations
hereunder. The execution, delivery and performance of this Agreement by
ConQuest, and the consummation by ConQuest of the transactions contemplated
hereby, have been duly authorized by ConQuest's Board of Directors and no other
corporate action or proceeding on the part of ConQuest is necessary for the
execution, delivery and performance of this Agreement by ConQuest and the
consummation of the transactions contemplated hereby except for obtaining the
requisite approval of ConQuest's shareholders. This Agreement has been duly and
validly executed and delivered by ConQuest and is a legal, valid and binding
obligation of ConQuest, enforceable against it in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and by any limitations or enforcement or indemnification obligations in
connection with the violation of laws as may be required by public policy.
Section 5.3 Capitalization of ConQuest. As of the date hereof, the
authorized capital stock of ConQuest consists of 2,500,000 shares of ConQuest
Common Stock, without par value. As of the date hereof, there were issued and
outstanding 1,478,287 shares of ConQuest Common Stock. All of the outstanding
shares of ConQuest Common Stock have been duly authorized and validly issued,
were not issued in violation of any person's preemptive rights and are fully
paid and nonassessable. As of the date hereof, options to acquire 593,122
shares of ConQuest Common Stock were issued and outstanding under ConQuest's
27
stock option plan. As of the date hereof, except as set forth above or in
Schedule 5.3 hereof, there are no outstanding options, warrants, subscriptions,
conversion rights or other rights, agreements or commitments obligating ConQuest
or any of its subsidiaries to issue any additional shares of the capital stock
of ConQuest or any other securities convertible into, exchangeable for or
evidencing the right to subscribe for or acquire from ConQuest any shares of the
capital stock of ConQuest, or any stock appreciation rights. Except as set
forth in Schedule 5.3, as of the date hereof, to the knowledge of ConQuest there
are no voting agreements, voting trusts or other restrictions on the transfer of
the shares of the capital stock of ConQuest or limiting the voting rights of any
such shares, except for customary restrictions imposed by federal and state
securities laws.
Section 5.4 Subsidiaries; Other Transactions. Except as set forth in
Schedule 5.4 hereof, there are no subsidiaries of ConQuest. Schedule 5.4 sets
forth the issued and outstanding securities of each of its subsidiaries as of
the date hereof and the number of such shares thereof which are owned by
ConQuest. Other than as set forth in Schedule 5.4, ConQuest does not own
directly or indirectly, any capital stock or other equity securities of any
corporation or have any direct or indirect equity or ownership interest in any
other business. As of the date of this Agreement, except as set forth on
Schedule 5.4, ConQuest has no obligations or commitments to, and does not
presently contemplate that it will, within the foreseeable future, invest any
funds in any business or entity or engage in any merger, consolidation,
reorganization, sale of assets or sale or purchase of securities or any similar
transaction with any business or entity other than as set forth in Schedule 5.4.
28
Section 5.5 Financial Statements. Schedule 5.5 consists of the Balance
Sheet of ConQuest as of December 31, 1994 and a Statement of Operations and
Stockholders Deficit and Changes in Cash Flows for the year ended December
31,1994, as audited by Arthur Andersen LLP (the "Audited Statements") and the
unaudited Balance Sheet of ConQuest as of April 30, 1995 and a Statement of
Operations and Stockholders Deficit and Changes in Cash Flows for the four
month period ended April 30, 1995 (the "Unaudited Statements"). The Audited
Statements and the footnotes thereto fairly present the financial condition of
ConQuest at December 31, 1994, and the results of operations of ConQuest for the
year then ended, and have been prepared in accordance with generally accepted
accounting principles consistently applied. At December 31, 1994 and April 30,
1995, ConQuest had no liabilities or obligations of any kind, contingent or
otherwise, which are not reflected in the Audited Statements and the Unaudited
Statements or the footnotes thereto, other than as to the Unaudited Statements,
any deferred revenue.
Section 5.6 Absence of Certain Changes. Since December 31, 1994, except
as set forth on Schedule 5.6 ConQuest has not and prior to Closing shall not
have suffered any Material Adverse Effect or taken, failed to take or suffered
to exist any action that if taken, not taken or suffered to exist after the date
of this Agreement would constitute a breach of any of the covenants set forth
herein.
Section 5.7 Certain Fees. Except as provided on Schedule 5.7 hereto,
neither ConQuest, nor any of their officers, directors, employees or agents has
employed any broker or finder or incurred any liability for any financial
advisory, brokerage or finder's fee or commissions in connection with the
transactions contemplated herein. No other agent or broker or other person is
29
entitled to any commission or finder's fee in connection with the transaction
contemplated by this Agreement.
Section 5.8 Consents and Approvals; No Violations.
(a) To the knowledge of ConQuest, ConQuest is not in violation of any
applicable law, statute, ordinance, order, rule or regulation promulgated or
judgment, decree, order, concession, grant, permit, license or other
governmental authorization or approval, issued or entered by, any federal, state
or local, United States or foreign, court or governmental authority relating to
or affecting the operation, conduct or ownership of the property or business of
ConQuest, which violation or violations could, individually or in the aggregate,
have a Material Adverse Effect on ConQuest.
(b) Except for applicable requirements of the Exchange Act, the
Securities Act, state securities laws, and the filing of Articles of Merger
pursuant to the Maryland Act, no filing or registration with, no notice to and
no permit, authorization, consent or approval of any public or governmental body
or authority is necessary for the consummation by ConQuest of the transactions
contemplated by this Agreement or to enable ConQuest to continue to conduct its
business after the Effective Time in a manner which is consistent with that in
which it is presently conducted, except where the failure to make such filing or
to obtain such permit, authorization, consent or approval will not have a
Material Adverse Effect on ConQuest, or on Excalibur or EAC and will not prevent
consummation of the transactions contemplated hereby.
30
(c) Neither the execution and delivery of this Agreement by ConQuest,
the performance by ConQuest of its obligations hereunder nor the consummation by
ConQuest of the transactions contemplated hereby will (i) conflict with or
result in any breach of any provision of the Articles of Incorporation or By-
laws of ConQuest, (ii) except as set forth on Schedule 5.8(c) hereto, result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or the happening or occurrence of any other event) a default by ConQuest,
or permit the termination of, or require the consent of any other party to, or
result in the acceleration of, or entitle any party to accelerate (whether as a
result of a change in control of ConQuest or otherwise) (or give rise to the
creation of any lien, charge, security interest or encumbrance upon any
properties or assets of ConQuest) under, any of the terms, conditions or
provisions of any contract, note, bond, mortgage, indenture, license, agreement
or other instrument or obligation to which ConQuest is a party or by which it or
any of its properties or assets may be bound or (iii) violate any order, writ,
injunction, decree, statute, rule or regulation of any court or governmental
authority applicable to ConQuest, or any of its properties or assets.
Section 5.9 Litigation. There is no action, suit, set of related actions
or suits concerning a common issue, complaint, arbitration, inquiry, proceeding
or investigation pending or, to the knowledge of ConQuest, threatened against or
involving ConQuest, or any properties or rights of ConQuest, before any court,
arbitrator or administrative or governmental body, and there is no judgment,
decree, injunction, rule or order of any court, governmental department,
commission, agency, instrumentality or arbitrator outstanding against ConQuest
which would individually or in the aggregate, if adversely determined, have a
Material Adverse Effect on ConQuest. As of the date hereof, there are no
actions, suits or proceedings pending or, to the knowledge of ConQuest,
31
threatened against ConQuest arising out of or in any way related to this
Agreement, the Merger or any of the transactions contemplated hereby or thereby.
Section 5.10 Certain Employment Matters; Labor Relations. Except as set
forth in Schedule 5.10(a), there are no written employment or consulting
agreements or contracts in effect between ConQuest and any of its employees nor
any oral contracts or understandings of employment or consultation which are not
terminable upon the giving of notice not to exceed thirty (30) days. Except as
set forth on Schedule 5.10(b): ConQuest has complied with all applicable laws,
rules and regulations relating to the employment of labor which could have a
Material Adverse Effect on the business, assets, condition or prospects,
financial or otherwise, of ConQuest, including without limitation those relating
to wages, hours, collective bargaining, age and sex discrimination and the
payment and withholding of taxes; ConQuest has withheld all amounts required by
law or agreement to be withheld from the wages or salaries of their employees;
and ConQuest has no unaccrued liability for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing. Except as set forth
in Schedule 5.10(a), there are no controversies pending, threatened or
reasonably anticipated between ConQuest and any employee or former employee.
None of the employees of ConQuest are represented by a labor union, and no
petition has been filed or proceeding instituted of which ConQuest has notice by
any employee or group of employees with any labor relations boards seeking
recognition of a bargaining representative. There is no dispute or controversy
with any union or other organization representing employees, and no arbitration
proceeding is pending or threatened involving such a dispute or controversy.
32
Section 5.11 Employee Benefit Plans.
(a) Schedule 5.11(a) lists all Benefit Plans (as hereinafter
defined), and ConQuest has previously provided to Excalibur true and complete
copies of all qualified pension or profit sharing plans, any deferred
compensation, consultant, bonus or group insurance contract, or any other
incentive, welfare, or employee benefit plan or agreement maintained for the
benefit of employees or former employees of ConQuest (for purposes of this
Section 5.11, the "Benefit Plans"), together with (i) the most recent actuarial
and financial reports prepared with respect to any Benefit Plans, (ii) the most
recent annual reports filed with any government agency, and (iii) all rulings
and determination letters and any open requests for rulings or letters that
pertain to any Benefit Plan. ConQuest has no commitment to create any such
additional plans, contracts or arrangements or to amend any such plans,
contracts or arrangements so as to increase, benefits thereunder. Except as set
forth in the employment and consulting agreements set forth on Schedule 5.10(a),
ConQuest is not obligated to provide any post-retirement welfare benefits to its
employees, including post-retirement health or life insurance coverage.
(b) Except as provided under Schedule 5.11(b) hereto, to the best
knowledge of ConQuest after reasonable investigation and consultation with legal
counsel, neither ConQuest nor any administrator or fiduciary of any of such
Benefit Plans (or agent or delegate of any of the foregoing) has engaged in any
transaction or acted or failed to act in any manner which could subject ConQuest
to any direct or indirect liability for a breach of any fiduciary, co-fiduciary,
or other duty under ERISA, which individually or in the aggregate could result
in a Material Adverse Effect to ConQuest. No oral or written representation or
communication by ConQuest with respect to any aspect of the Benefit Plans has
been or will be made to employees of ConQuest prior to the Effective Time which
33
is not in accordance with the written or otherwise preexisting terms and
provisions of such Benefit Plans in effect immediately prior to the Effective
Time. Except as disclosed on Schedule 5.11(b) hereto, there are no unresolved
claims or disputes under the terms of, or in connection with, the Benefit Plans
and no action, legal or otherwise, has been commenced with respect to any claim.
Section 5.12 Property; etc. Except for leased property and as specified
in such Schedule 5.12, ConQuest has good, marketable and insurable title to all
of the property, real or personal, tangible or intangible, owned or used by it,
free and clear of all mortgages, pledges, liens, security interests or
encumbrances of any nature (other than liens for taxes, assessments or other
governmental charges not yet due and payable, or presently payable without
penalty or interest), (collectively, the "Encumbrances"). All machinery,
equipment, tools, furniture and fixtures owned or leased by ConQuest are in good
operating condition and repair. There are no outstanding enforcement actions or
notices of violation issued or threatened by any Federal, state, county or
municipal authority having jurisdiction over any such property.
Section 5.13 Vote. The affirmative vote of two-thirds of the votes that
holders of the outstanding shares of ConQuest Common Stock, voting together as a
class, are entitled to cast is the only vote of the holders of ConQuest's
capital stock necessary to approve this agreement and the Articles of Merger and
the transactions contemplated hereby.
Section 5.14 Tax Returns. Except as disclosed on Schedule 5.14 hereto,
ConQuest has filed all federal, state and other tax returns and reports required
to be filed for all periods on or before the due dates (as extended by any valid
34
extensions of time) and has paid all taxes shown to be due by said returns.
Such returns reflect all taxes due and payable with respect to the periods
covered thereby and there are no liabilities, claims, interest or penalties
pending, assessed, asserted or threatened against ConQuest in connection with
any such taxes and no basis therefor. The reserves for taxes (federal, state
and local) including payroll and employment related taxes reflected in
ConQuest's balance sheet at December 31, 1994 are adequate to cover any and all
taxes, including deferred taxes, and any interest and penalties in connection
therewith which may be assessed with respect to the property, business and
operations of ConQuest up to the date of ConQuest's balance sheet and all prior
periods. ConQuest has not been given or been requested to give waivers of any
statutes of limitations relating to the payment of taxes for any taxable period.
Furthermore, to the best knowledge of ConQuest, no fact exists which would
constitute grounds for assessment of any further tax liability.
Section 5.15 Intellectual Property. As used herein, "Intellectual
Property Rights" means any and all rights to exclude existing from time to time
in the United States or any specified foreign jurisdiction under patent law,
copyright law, moral rights law, trade-secret law, semiconductor chip protection
law, trademark law, unfair competition law, or other similar rights.
(a) Schedule 5.15 sets forth all Intellectual Property Rights owned by
ConQuest, including, but not limited to, all U.S. and foreign trademarks,
service marks, trade names, copyrights, U.S. and foreign patents, patent
applications and provisional specifications and applications, reissues,
divisionals, substitutes, continuations, and continuations-in-part thereof,
utility models, design patents and applications therefore, computer programs and
computer software, proprietary information, relating to products, processes
therefore, apparatus and maintenance thereof, research, computer software,
35
manufacturing techniques, program files, flow charts, drawings, techniques,
source and executable codes, standards, specifications, improvements,
inventions, statistical data, development plans, technologies, and manuals (both
design and end-user), and all licenses or other proprietary rights associated
with any of the foregoing owned by ConQuest and all applications for any of the
foregoing (together with all related trade secrets and know-how the "ConQuest
Intellectual Property Rights"). The ConQuest Intellectual Property rights,
together with the intellectual property rights licensed by ConQuest under
agreements identified in Schedule 5.15 and other information in the public
domain constitute all of the intellectual property necessary to enable ConQuest
to conduct and to continue to conduct all phases of its business (including
products under development) in the manner presently conducted or contemplated.
ConQuest has good title to all of the ConQuest Intellectual Property Rights set
forth in Schedule 5.15, free and clear of all liens, charges, encumbrances,
licenses (exclusive or nonexclusive) or grants of any other rights of any nature
whatsoever, except as set forth in Schedule 5.15. Each of the ConQuest
Intellectual Property Rights is valid and enforceable, and the making, using,
selling, reproductions in copies thereof, preparation of derivative works based
thereon, distribution of copies by sale or other transfer of ownership, or
otherwise, and the licensing and sublicensing of others, to do any of the
aforementioned acts with regard to any of the products or works under such
ConQuest Intellectual Property Rights do not infringe any rights owned or held
by any other person.
(b) To the best of ConQuest's knowledge, the conduct of the business
of ConQuest carried on is free from any infringement of Intellectual Property
Rights of others and there is no pending, or to the best of ConQuest's
knowledge, threatened claim against ConQuest for any infringement of any of the
36
foregoing. Neither ConQuest, nor to its knowledge, any of their respective
employees or agents, has notified any person or entity that it believes such
person or entity is infringing, or making any preparation to infringe, or
contributing to or inducing others to infringe, any of the ConQuest Intellectual
Property Rights.
(c) ConQuest has taken all reasonable measures to protect the
secrecy, confidentiality and value of its trade secrets and the ConQuest
Intellectual Property Rights, and the same have not been disclosed to others
except pursuant to reasonable confidentiality agreements. All of the ConQuest
Intellectual Property Rights subject to a patent or copyright are presently
valid and protectable and are not part of the public knowledge, nor to
ConQuest's knowledge have they been used, divulged or appropriated for the
benefit of any past or present employees or other persons, or to the detriment
of ConQuest.
(d) ConQuest, and to its knowledge, each person associated in any way
with the filing and prosecution of any application for a patent or copyright
relating to the ConQuest Intellectual Property Rights have, throughout the
prosecution of such application, acted in good faith before the United Sates
Patent and Trademark Office (the "Patent Office") or the Copyright Office, as
the case may be, and all information provided by or on behalf of ConQuest to the
Patent Office and Copyright Office has been true and correction all material
respects.
(e) Other than the proceedings and challenges listed and identified
in Schedule 5.15 hereto, there is no pending or, to the knowledge of ConQuest,
threatened, action, suit or other proceeding before any court, the United States
37
Patent and Trademark Office, any foreign patent office, arbitrator or federal or
state administrative agency involving ConQuest (i) that in any manner draws into
question the validity or enforceability of any of the ConQuest Intellectual
Property Rights, or alleges that the products, systems or processes made or
practiced with the ConQuest Intellectual Property Rights infringe upon any
patents, copyrights or other intellectual property rights of others, (ii) in
which there is a reasonable possibility of an adverse decision of decisions
which could otherwise prevent or have a Materially Adverse Effect upon the right
of ConQuest to use, sell or license the ConQuest Intellectual Property Rights or
(iii) in which ConQuest or its agents is or was alleged to have violated any
legal restrictions, including any competition law, with respect to such ConQuest
Intellectual Property Rights.
(f) ConQuest's use of the trade names and trademarks listed in
Schedule 5.15, if any, has been continuous, and such names have never been
abandoned by ConQuest.
(g) Except as shown on Schedule 5.15 hereto, ConQuest is not aware of
(i) any circumstances that would prevent, delay or condition the issuance of a
pending patent or a copyright application covering any of the ConQuest
Intellectual Property Rights, or that would modify or reduce the coverage of
such patent or copyright as described in the application therefor, a copy of
which has been delivered to Excalibur, (ii) any prior art with respect to any
pending or issued patent or copyright or any of the ConQuest Intellectual
Property Rights, or (iii) any protest, objection or challenge to any pending
patent or copyright application covering the ConQuest Intellectual Property
Rights.
38
(h) ConQuest has delivered true and correct copies of each patent,
copyright registration and applications therefor to Excalibur.
Section 5.16 Contracts; Minutes. Schedule 5.16A sets forth a complete and
correct list of the following contracts, whether written or oral, to which
ConQuest is a party: (a) mortgages, debentures, notes or installment
obligations, or other instruments or contracts for the borrowing or lending of
money, including, without limitation, any agreements or arrangements relating to
the maintenance of compensating balances or the availability of a line of
credit; (b) license or development agreements, sales agency agreements,
marketing or distribution agreements; (c) guarantees of any obligation; (d)
agreements for the sale of any properties or assets of ConQuest other than sales
of products in the ordinary course of business; (e) contracts, pursuant to which
ConQuest is or may be obligated to make payments, contingent or otherwise, on
account of or arising out of the acquisition, prior, pending or future, of the
business or other assets of another enterprise; (f) secrecy or invention
agreements under which ConQuest or, to ConQuest's knowledge, any of the present
officers or employees of ConQuest, has any obligation; (g) requirements
contracts with ConQuest as purchaser or seller or other agreements for the
purchase of sale of goods or services not terminable without liability by
ConQuest on 30 days' notice; (h) agreements of ConQuest with, or loans or
advances by ConQuest to or from, or other obligations of ConQuest to or from any
officer or director of ConQuest; (i) leases of real or personal property
(whether as lessor or lessee), of ConQuest, involving rents of more than $25,000
per year; (j) agreements or arrangements limiting the freedom of ConQuest or, to
ConQuest's knowledge, any of its present officers or employees, to compete in
any line of business with any person or other entity or in any geographical
area, (k) insurance policies (including fidelity and surety bonds) covering
39
ConQuest having a currently unexpired term; (l) joint venture agreements or
partnership, profit sharing or other agreements; (m) agreements pursuant to
which ConQuest has indemnified or shared tax liability with any party; (n)
policies and procedures manuals with respect to the ConQuest employees; and (o)
contracts, commitments or agreements involving an annual commitment of $250,000
or more that are not referred to above in Section 5.16 or in any other Schedule
to this Agreement which relate to or affect ConQuest. Except as provided in
Schedule 5.16B hereto, ConQuest and its subsidiaries are in compliance with all
material contracts and agreements to which ConQuest is a party or by which
ConQuest is bound (regardless of type of contract or annual sales volume), and
to the knowledge of ConQuest, no other party is in breach thereof. ConQuest has
provided to Excalibur and EAC true, correct and complete copies of all minutes
and/or consents of all actions taken by the shareholders and Board of Directors
of ConQuest since the date of incorporation of ConQuest.
Section 5.17 Permits and Licenses. ConQuest has acquired and currently
holds all permits, licenses, franchises, authorizations, approvals and other
certificates of authority as may be required for ConQuest to conduct its
business and the absence of which would have a Material Adverse Effect on the
business or operations of ConQuest and copies of all such documents have been
provided to Excalibur. ConQuest is in material compliance with all the terms
thereof, and ConQuest is not aware of any reason why any such permit, license,
franchise, authorization, approval or other certificates of authority could not
be renewed on terms at least as advantageous to ConQuest as the current license,
franchise, authorization, approval and other certificates of authority held by
ConQuest. ConQuest is not aware of any change in any law, rule or regulation,
whether or not yet effective, which is likely to require ConQuest to obtain in
the future any additional license, franchise, authorization, approval or any
40
other certificates of authority, the absence of which would have a Material
Adverse Effect on the business or operations of ConQuest.
Section 5.18 Real Property; Environmental Matters. ConQuest does not own
any real property and is not a party to any agreement to acquire ownership of
any real property or any interests in real property other than leases of real
property, copies of which have been provided to Excalibur. Except as disclosed
on Schedule 5.18, ConQuest has not (either with or without negligence) caused or
permitted the escape, disposal or release in violation of applicable law of any
biologically active or other hazardous substances, or materials causing harm in
or on any real property occupied by ConQuest or utilized by ConQuest in
conducting its business (the "CQ Premises"). ConQuest has not stored or used
such substances or materials on or about the CQ Premises in any manner not
sanctioned by law or by commercially reasonable standards in the industry for
the storage and use of such substances or materials. ConQuest has not brought
or allowed to be brought into the CQ Premises any such materials or substances
except to use in the ordinary course of ConQuest's business. During the use and
occupancy of the CQ Premises by ConQuest, ConQuest has kept and maintained the
CQ Premises so as to be in material compliance with all then existing statutes,
laws, rules, ordinances, orders, permits and regulations of state, federal,
local and other governmental and regulatory authorities, agencies and bodies
pertaining to environmental matters, or regulating, prohibiting or otherwise
having to do with asbestos and all other toxic, radioactive or hazardous wastes
or materials, including, but not limited to, the Federal Clean Air Act, the
Federal Water Pollution Control Act, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as from time to time amended.
41
Section 5.19 No Misrepresentations. No representation or warranty by
ConQuest in this Agreement, nor any statement, certificate or schedule furnished
or to be furnished by or on behalf of ConQuest pursuant to this Agreement, when
taken together with the foregoing, contains or shall contain any untrue
statement of material fact or omits or shall omit to state a material fact.
ConQuest has delivered true and complete copies of all documents referred to in
this Article V (or in any Schedule delivered by ConQuest) to Excalibur or EAC.
Section 5.20 Insurance. ConQuest maintains insurance for the protection
of its business, properties and assets against such hazards and in such amounts
as is customary among businesses of a like size and nature as ConQuest. All
such insurance is in full force and effect, and ConQuest has neither received
nor given any notice of termination or reduction in coverage thereunder.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.1 Conduct of Business by ConQuest Pending the Merger. Except as
otherwise expressly contemplated hereby, after the date hereof and prior to the
Effective Time or earlier termination of this Agreement, unless Excalibur shall
otherwise agree in writing or as otherwise expressly contemplated by this
Agreement, ConQuest shall:
(a) conduct its business in the ordinary and usual course of business
and consistent with past practice;
42
(b) not (i) amend or propose to amend its charter or by-laws; or (ii)
split, combine or reclassify its outstanding capital stock or declare, set aside
or pay any dividend or distribution payable in cash, stock, property or
otherwise;
(c) not, except as described on Schedule 6.1(c) hereto, (i) authorize
the issuance of, or issue, sell, pledge or dispose of, or agree to issue, sell,
pledge or dispose of, any additional shares of, or any options, warrants or
rights of any kind to acquire any shares of, its capital stock of any class or
any debt or equity securities convertible into or exchangeable for such capital
stock, except issuance of shares of ConQuest Common Stock pursuant to the
exercise of stock options outstanding on the date hereof; (ii) sell (including,
without limitation, by sale-leaseback), lease, pledge, dispose of or encumber
any material assets or interests therein; except in the ordinary course of
business (iii) redeem, purchase, acquire or offer to purchase or acquire any
shares of its capital stock; (iv) borrow additional funds or make additional
advances as loans; or (v) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing;
(d) use its best efforts to preserve intact its business organization
and goodwill, keep available the services of its present officers and key
employees, and preserve the goodwill and business relationships with suppliers,
distributors, customers, and others having business relationships with it to the
extent that such relationships are reasonably deemed by ConQuest to be in the
best interests of ConQuest or its subsidiaries;
43
(e) promptly notify Excalibur of any event having a Material Adverse
Effect on ConQuest or any of its subsidiaries;
(f) not acquire, or publicly propose to acquire, all or any
substantial part of the business and properties or capital stock of any person
not a party to this Agreement, whether by merger, purchase of assets, tender
offer or otherwise;
(g) not initiate, solicit, encourage or respond positively to, and
will direct and use its best efforts to cause any officer, director, employee,
investment banker, attorney, accountant or other agent employed or retained by
ConQuest not to initiate, solicit, encourage or respond positively to any
proposal or offer to acquire all or any substantial part of the business and
properties or capital stock of ConQuest or to provide information about ConQuest
to any prospective acquirer, whether by merger, purchase of assets, tender offer
or otherwise.
(h) not enter into or amend any employment, severance, bonus, special
pay arrangement with respect to termination of employment or other similar
arrangements or agreements with any directors or officers;
(i) not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee or retiree, except (i) as
required to comply with changes in applicable law occurring after the date
hereof and (ii) with respect to all plans other than in the ordinary course of
business and consistent with past practice;
44
(j) not transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the ConQuest Intellectual Property Rights
other than in the ordinary course of business;
(k) not take or agree orally or in writing, or otherwise, to take any
of the foregoing actions or any other action which would or which, with the
passage of time would make any representation or warranty contained in Article
VI untrue or incorrect in any material respect as of the time of the Closing.
Section 6.2 Conduct of Business by Excalibur Pending the Merger. Except
as otherwise expressly contemplated hereby, after the date hereof and prior to
the Effective Time or earlier termination of this Agreement, unless ConQuest
shall otherwise agree in writing or as otherwise expressly contemplated by this
Agreement (it being agreed, however, that Excalibur shall be solely responsible
for its operations and those of its subsidiaries in accordance with the
provisions of this Agreement), Excalibur and each of its subsidiaries shall:
(a) conduct its businesses in the ordinary and usual course of
business and consistent with past practice;
45
(b) not (i) amend or propose to amend its charter or by-laws; or (ii)
split, combine or reclassify its outstanding capital stock or declare, set aside
or pay any dividend or distribution payable in cash, stock, property or
otherwise;
(c) use its best efforts to preserve intact its business organization
and goodwill, keep available the services of its present officers and key
employees, and preserve the goodwill and business relationships with suppliers,
distributors, customers, and others having business relationships with it, to
the extent that such relationships are deemed to be in the best interest of
Excalibur or its subsidiaries;
(d) promptly notify ConQuest of any event having a Material Adverse
Effect on Excalibur or its subsidiaries;
(e) not acquire, or publicly propose to acquire, all or any
substantial part of the business and properties or capital stock of any person
not a party to this Agreement, whether by merger, purchase of assets, tender
offer or otherwise;
(f) not initiate, solicit, encourage or respond positively to, and
will direct and use its best efforts to cause any officer, director, employee,
investment banker, attorney, accountant or other agent employed or retained by
Excalibur not to initiate, solicit, encourage or respond positively to any
proposal or offer to acquire all or any substantial part of the business and
properties or capital stock of Excalibur or to provide information about
Excalibur to any prospective acquirer, whether by merger, purchase of assets,
tender offer or otherwise;
46
(g) not to enter into or amend any employment, severance, bonus,
special pay arrangement with respect to termination of employment or other
similar arrangements or agreements with any directors or officers;
(h) not (i) authorize the issuance of, or issue, sell, pledge or
dispose of, or agree to issue, sell pledge or dispose of, any more than 150,000
additional shares of, or options, warrants or rights of any kind to acquire any
shares of, its capital stock of any class or any debt or equity securities
convertible into or exchangeable for such capital stock, except the issuance of
shares of Excalibur Common Stock pursuant to the exercise of stock options
outstanding on the date hereof; (ii) sell (including, without limitation, by
sale-leaseback), lease, pledge, dispose of or encumber any material assets or
interest therein, except in the ordinary course of business, (iii) redeem,
purchase, acquire or offer to purchase or acquire any shares of its capital
stock; (iv) borrow additional funds or make additional advances as loans; or (v)
enter into any contract agreement, commitment or arrangement with respect to any
of the foregoing.
(i) not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust fund or
arrangement for the benefit or welfare of any employee or retiree, except (A) as
required to comply with changes in applicable law occurring after the date
hereof and (B) with respect to all plans other than in the ordinary course of
business and consistent with past practice;
47
(j) not take or agree orally or in writing, or otherwise, to take any
of the foregoing actions or any other action which would or which, with the
passage of time would make any representation or warranty contained in Article
IV untrue or incorrect in any material respect as of the time of the Closing.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access to Information. (a) ConQuest shall afford to Excalibur
and its accountants, counsel, and other representatives reasonable access during
normal business hours and upon reasonable notice throughout the period prior to
the Effective Time to all of their respective properties, books, contracts,
commitments and records (including, but not limited to, tax returns) and, during
such period, shall furnish promptly to Excalibur (i) a copy of each report,
schedule and other document filed or received by any of them pursuant to the
requirements of federal or state securities laws or filed or received by any of
them from any other governmental agency and (ii) all other information
concerning their respective businesses, properties and personnel as Excalibur
may reasonably request. ConQuest shall promptly advise Excalibur in writing of
any change or occurrence of any event after the date of this agreement having,
or which, insofar as can reasonably be foreseen, in the future may have, a
Material Adverse Effect on ConQuest.
48
(b) Excalibur and its subsidiaries shall afford to ConQuest and its
accountants, counsel and other representatives reasonable access during normal
business hours and upon reasonable notice throughout the period prior to the
Effective Time to all of their respective properties, books, contracts,
commitments and records (including, but not limited to, tax returns) and, during
such period, shall furnish promptly to ConQuest (i) a copy of each report,
schedule and other document filed or received by any of them pursuant to the
requirements of federal or state securities laws or filed or received by any of
them from the SEC or any other governmental agency, and (ii) all other
information concerning their respective businesses, properties and personnel as
ConQuest may reasonably request. Excalibur and its subsidiaries shall promptly
advise ConQuest in writing of any change or occurrence of any event after the
date of this Agreement having, or which, insofar as can reasonably be foreseen,
in the future may have, a Material Adverse Effect on Excalibur.
(c) Each of Excalibur and its subsidiaries and ConQuest acknowledges
that it has had access to confidential information relating to the others'
business, and hereby covenants and agrees that it shall not directly or
indirectly use it for its own behalf or divulge to any third party any
confidential information or trade secrets of the other. As used herein,
confidential information shall consist of all information, knowledge or data
furnished pursuant to this Article VII or otherwise, relating to the business of
either party (including without limitation the ConQuest Intellectual Property
Rights, the Excalibur Intellectual Property Rights, and all other information
relating to inventions, production methods, customer and prospective customer
lists, prices and trade practices) which is not in the public domain or
otherwise published or publicly available.
49
Section 7.2 Proxy Statement. (a) ConQuest and Excalibur shall prepare as
promptly as practicable, a proxy statement with respect to the Shareholders'
Meeting referred to in Section 7.3 and the distribution of the Excalibur Common
Stock to the stockholders of ConQuest as set forth in Article III. The term
"Proxy Statement" shall mean such proxy statement at the time it initially is
mailed to ConQuest's shareholders and all amendments or supplements thereto
similarly mailed. Each of Excalibur and ConQuest agrees to correct promptly
(but in no event later than the date of the Shareholders' Meeting referred to in
Section 7.3) any information provided by it for use in the Proxy Statement which
contains any untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
Excalibur and ConQuest shall cooperate with each other in the preparation of
such Proxy Statement.
(b) As soon as practicable after the date hereof, ConQuest and
Excalibur shall promptly prepare and file any filings required under the
Exchange Act, the Securities Act or any other federal or state securities laws
relating to the Merger and the transactions contemplated herein ("Other
Filings").
Section 7.3 Shareholders' Approval. ConQuest, in accordance with
applicable law, shall promptly submit this Agreement and the transactions
contemplated hereby for the approval of its shareholders at a Shareholders
Meeting to be held as soon as reasonably practicable and shall use its best
efforts to obtain shareholder approval of this Agreement and the transactions
contemplated hereby in accordance with the terms of the Proxy Statement.
Schedule 7.3 sets forth the names of ConQuest Shareholders who have executed
50
irrevocable proxies representing the number of shares set forth opposite their
names, permitting Excalibur to vote their shares in favor of this Agreement at
the Shareholders Meeting. These proxies represent more than 70% of the total
number of shares of ConQuest Common Stock outstanding.
Section 7.4 Agreement to Cooperate.
(a) Subject to the terms and conditions herein provided, each of the
parties hereto shall use reasonable efforts to take, or cause to be taken, all
action to do, or cause to be done, all things necessary, proper or advisable to
cause all of the conditions herein to Closing to be satisfied and to consummate
and make effective the transactions contemplated by this Agreement.
(b) In addition to the undertaking specified under Section 4.21, each
of the parties hereby agrees that it will use its best efforts to cause the
Merger to be treated as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
(c) Each of the parties hereby agrees that it will use its best
efforts and will cause its respective subsidiaries and other "affiliates"
(defined in accordance with Rule 145 promulgated under the Securities Act (each
such person being referred to as an "Affiliate")) to use their respective best
efforts to cause the business combination to be effected by the Merger to be
accounted for as a pooling of interests, not to take any action inconsistent
therewith, and to deliver to ConQuest a "pooling letter" from Arthur Andersen
LLP in form and substance agreed upon by Excalibur and ConQuest.
51
Section 7.5 Public Statements. The parties shall consult with each other
prior to issuing any public announcement or statement with respect to this
Agreement or the transactions contemplated hereby and shall not issue any such
public announcement or statement prior to such consultation, except as may be
required by law.
Section 7.6 Stock Options and Acquisition Rights.
(a) Schedule 7.6 sets forth all options and other rights to acquire
ConQuest Common Stock ("Option") setting forth the holder of each Option, the
exercise price, vesting schedule and term thereof. Pursuant to this Agreement,
each holder of an outstanding Option shall be entitled to receive upon exercise
of such Option after the Effective Time in lieu of ConQuest Common Stock, for
each share of ConQuest Common Stock subject to such Option, for the same
aggregate exercise price of the Option, that number of shares of Excalibur
Common Stock as such person would have received in the exchange provided in
Section 3.1(a) and (b) hereof, if such person had exercised the Option
immediately prior to the Effective Time (subject to Section 7.6(b) below), and
on such terms as nearly identical as the terms of the Option as permitted by
applicable securities and tax laws including, without limitation, any vesting
schedule, or, if not so permitted, consistent with the terms of the option plans
of Excalibur (except that any Option exercise period shall not be extended
beyond the original termination date except as provided below and the number of
shares of Excalibur Common Stock issuable upon exercise of the option shall be
rounded down to the nearest whole number of shares and neither Excalibur nor EAC
shall be obligated to pay the Option holder for any fractional options which
shall lapse). Upon approval of this Agreement by the shareholders of ConQuest,
52
the shareholders of ConQuest shall be deemed to have adopted and approved an
amendment to the stock option plans of ConQuest to change the stock issued
pursuant to such plans to Excalibur Common Stock after the Effective Time.
Nothing contained in this Section 7.6 or elsewhere in this Agreement shall be
construed to, or have the effect of, changing the date upon which any option was
issued by ConQuest or the period of time for which any option holder shall be
deemed to have held any option, for purposes of vesting, option expiration or
for any other purpose.
(b) If, after the Effective Time, the number of outstanding shares of
Excalibur Common Stock are increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of Excalibur or of
another corporation, by reason of any stock split, stock dividend,
reorganization, merger, consolidation, recapitalization or reclassification, an
appropriate adjustment in the number and kind of shares issuable upon exercise
of any Options outstanding as of the Effective Date and as of the date of such
increase, decrease, change or exchange, or the unexercised portion of such
options, shall be made. The foregoing adjustment shall be made without any
change in the total exercise price applicable to the Option or unexercised
portion thereof, and shall be made in such a manner so that the stock options
designated as Qualified Stock Options continue to qualify under Section 422 of
the Code.
Section 7.7 Excalibur Options. Excalibur hereby agrees to issue 324,151
stock options to purchase shares of Excalibur Common Stock to the ConQuest
employees set forth on Schedule 7.7 in the amounts set forth opposite their
names pursuant to a new Excalibur Stock Option Plan which has been approved by
53
Excalibur's Board of Directors. Subject to the limits required by Section 422
of the Code, and the stockholder approval as described below, the stock options
shall be Qualified Stock Options (within the meaning of Section 422 of the
Code); if stockholder approval is not obtained as provided under Section 422 of
the Code, the options issued under the Plan will constitute non-qualified stock
options. Each option shall have a term of ten years, will vest in equal 12.5%
increments every six months and will have an exercise price equal to the average
closing price of Excalibur Common Stock during the ten trading days prior to the
Effective Time. The options will be issued within ten days after the Effective
Time. Excalibur agrees to hold a meeting of its stockholders upon the earlier
to occur of (i) Excalibur's next annual meeting of stockholders, and (ii) nine
months after the Effective Time, at which meeting Excalibur's Board will
recommend that Excalibur's stockholders approve the foregoing Stock Option Plan.
The shares issuable upon exercise of these options will be registered two years
after the date of the Closing.
Section 7.8 Employment Agreements Excalibur shall enter into employment
agreements with Messrs. Edwin Addison, Paul Nelson, John McGrath and Donald
Wilson in the forms set forth in Exhibit 7.8.
Section 7.9 Certain Fees and Liabilities. Within fifteen (15) days after
the Effective Date, Excalibur shall cause to be paid in full the liabilities
listed on Schedule 7.9 hereto.
54
Section 7.10 Registration Rights.
(a) Excalibur shall prepare and file with the Securities and Exchange
Commission ("SEC") and use its reasonable best efforts to cause to become
effective a registration statement covering 50,000 shares of Excalibur Common
Stock to be issued pursuant to this Agreement no later than thirty days after
the date when Excalibur files its Form 8-K including combined financial
statements for thirty days of combined operations of Excalibur and ConQuest.
Each ConQuest shareholder shall have the right to sell a pro-rata number of his
or her shares of Excalibur Common Stock pursuant to the foregoing registration
statement.
(b) Excalibur shall prepare and file with the SEC and use its
reasonable best efforts to cause to become effective a registration statement on
additional 50,000 shares of Excalibur Common Stock to be issued pursuant to this
Agreement no later than nine months after the Effective Date. Each ConQuest
shareholder shall have the right to sell a pro-rata number of his or her shares
of Excalibur Common Stock pursuant to the foregoing registration statement.
(c) Excalibur shall prepare and file with the Securities and Exchange
Commission and use its reasonable best efforts to cause to become effective a
registration statement covering all shares issuable upon exercise of all
ConQuest options to acquire shares of Excalibur Common Stock pursuant to Section
7.6 above. This registration statement shall be filed no later than December 1,
1996. Excalibur will use its reasonable best efforts to cause such registration
statement to become effective no later than March 1, 1997.
Section 7.11 Confidentiality. In connection with the transactions
contemplated by this Agreement, each of the parties acknowledges that it has had
access to and shall continue to have access to information concerning the
business, operations and assets of the other, pursuant to Section 7.1 and
55
otherwise. Each of the parties therefore agrees to treat any Confidential
Material (defined below) of the other in accordance with the provisions of this
Section 7.11.
(a) As used herein, the term "Confidential Material" shall mean all
documents, materials, financial information and other information relating to
ConQuest or Excalibur (in this context, a "Disclosing Party") and all documents,
materials, financial information and other information relating to the Merger
which is furnished by or on behalf of a Disclosing Party, whether prepared by
the Disclosing Party, its officers, directors, employees or agents or otherwise,
irrespective of the form of communication of such Confidential Material, and
whether furnished before or after the date of this Agreement "Confidential
Material" also includes all information, notes, compilations, studies and
analyses prepared by or on behalf of a Disclosing Party or by others for the use
of the non-disclosing party (the "Receiving Party") which contain, reflect or
are based upon, in whole or in part, the information furnished to the Receiving
Party by or on behalf of the Disclosing Party. The term "Confidential Material"
does not include information which (i) is or becomes generally available to the
public other than as a result of a disclosure by the Disclosing party, (ii) was
within the possession of the Receiving Party prior to its being furnished by or
on behalf of the Disclosing Party, or (iii) becomes available to the Receiving
Party on a non-confidential basis from a source other than the Disclosing Party;
provided, that with respect to clauses (ii) and (iii) above, the source of such
information was not bound, to the best of the Receiving Party's knowledge, by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Disclosing Party or any other party with
respect to such information.
(b) Each of the parties hereto, as a Receiving Party, agrees that it
shall use the Confidential Material solely for purposes consistent with this
Agreement and the transactions contemplated thereby and not for the purpose of
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competing with the Disclosing Party, providing the information to a competitor
of the Disclosing Party or for any other purpose. Each party, as a Receiving
Party, further agrees that the Confidential Material will be kept confidential
and that neither it nor any of its officers, directors, employees or agents will
disclose any of the Confidential Material of the Disclosing Party in any manner
whatsoever; provided, however, that each party (i) may make any disclosure of
such information as to which the Disclosing Party gives its prior written
consent and (ii) any of such information may be disclosed to the officers,
directors, employees and agents of a Receiving Party who need to know such
information for the purposes consistent with this Agreement and the transactions
contemplated hereby and who agree to keep such information confidential and who
are provided with a copy of this Section 7.11 and agree to be bound by the terms
hereof to the same extent as if they were parties hereto.
(c) Each of the parties hereto, as a Receiving Party shall be
responsible for any breach of this Section 7.11 by any of its officers,
directors, employees and agents and agrees, at such party's sole expense, to
take all reasonable measures to restrain its officers, directors, employees and
agents from prohibited or unauthorized disclosure or use of the Confidential
Material.
(d) In the event that a Receiving Party or any of its officers,
directors, employees or agents is requested or required (by oral questions,
interrogatories, requests for information or documents in legal proceedings,
subpoena, civil investigative demand or other similar process) to disclose any
of the Confidential Material, such party shall provide the Disclosing Party with
prompt written notice of any such request or requirement so that the Disclosing
Party may seek a protective order or other appropriate remedy and/or waive
compliance with the provisions of this Section 7.11. If, in the absence of a
protective order or other remedy or the receipt of a wavier by the Disclosing
57
party, a Receiving Party or any of its officers, directors, employees or agents
is nonetheless legally compelled to disclose the Confidential Material to any
tribunal, regulatory authority, or agency, the Receiving Party or its officers,
directors, employees or agents may, without liability hereunder, disclose to
such tribunal, regulatory authority or agency only that portion of the
Confidential Material which is legally required to be disclosed, provided that
the Receiving Party exercises its best efforts to preserve the confidentiality
of the Confidential Material.
(e) In the event that the Merger does not occur, each party, as a
Receiving Party, will and will cause its respective officers, directors,
employees and agents to promptly deliver to the Disclosing Party all documents
(and all copies thereof) furnished to it or its officers, directors, employees
or agents by or on behalf of the Disclosing Party. All other Confidential
Material not returned to the Disclosing Party, including all Confidential
Material prepared by a Receiving Party or its officers, directors, employees or
agents with respect to the Disclosing Party, shall be destroyed and no copy
thereof shall be retained and, upon request, the Receiving Party shall certify
in writing to the Disclosing Party that such action has been taken.
Notwithstanding the return or destruction of the Confidential Material, the
Receiving Party, its officers, directors, employees and agents will continue to
be bound by the obligations of confidentiality and other obligations hereunder
for a period of two (2) years from the later of the date of this Agreement or
the Effective Time.
(f) Each of the parties hereto recognizes and acknowledges the
competitive value and confidential nature of the Confidential Material and the
damage that could result to a Disclosing Party if information contained therein
is disclosed to any third party. In view of the nature of the Confidential
Material, each of the parties agrees that any unauthorized disclosure of the
58
Confidential Material or other violation, or threatened violation, of this
Section 7.11 would cause irreparable damage to the Disclosing Party and that,
therefore, the Disclosing Party shall be entitled to an injunction prohibiting
the Receiving Party from any such disclosure, attempted disclosure, violation or
threatened violation of this Section 7.11, and each party further agrees to
waive, and to cause its officers, directors, employees and agents to waive, any
requirement for the securing or posting of any bond in connection with such
remedy. Such remedies shall not be in addition to all other remedies available
at law or equity to the Disclosing Party.
Section 7.12 Excalibur Employee Benefit Plans.
(a) After the Effective Time, all Excalibur employees who had
formerly been employees of ConQuest shall be entitled to all of the employee
benefit plans and agreements presently or hereafter maintained or adopted for
the benefit of Excalibur employees, including, without limitation, the Benefit
Plans listed on Schedule 4.18 hereto, and for purposes thereof, each such former
ConQuest employee shall be deemed to have been employed by Excalibur beginning
on the date that he or she became employed by ConQuest.
(b) After the Effective Time, a committee shall be formed to evaluate
employee compensation policies and employee benefit plans heretofore maintained
by ConQuest and Excalibur, which committee shall make recommendations to the
Excalibur Board of Directors regarding the continuance, discontinuance or
adoption of such plans and policies and related transitional matters. Pat Condo
and Ed Addison (or the ConQuest Representative in his absence) shall serve as
the sole members of the committee.
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Section 7.13 ConQuest Stockholder Representative. Excalibur shall deal
exclusively with the Stockholder Representatives (as defined in Section 8.2(i)
below), and their successors and assigns, who are appointed by the ConQuest
stockholders under the Transmittal Letters (as defined in Section 8.2(i) below)
to act on behalf of such ConQuest Stockholders in connection with such matters
as may be described in the Transmittal Letters. Such Stockholder
Representatives shall have authority to act for all of the ConQuest Stockholders
and Excalibur shall rely on the Stockholder Representative to speak for each and
every ConQuest Stockholder.
ARTICLE VIII
CONDITIONS
Section 8.1 Conditions to Each Party's Obligation to Effect the Merger.
The respective obligations of each party to effect the Merger shall be subject
to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) This Agreement and the transactions contemplated hereby shall
have been approved and adopted by the requisite vote of the shareholders of
ConQuest, under applicable law, as herein provided;
(b) No preliminary or permanent injunction or other order or decree
by any federal or state court which prevents the consummation of the Merger
shall have been issued and effective as of the Effective Time, provided that if
any such injunction, order or decree is issued prior to the Effective Time, each
party agrees that it will use its best efforts to have any such injunction,
order or decree lifted; and
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(c) All governmental consents and approvals required by law for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time on terms and conditions
that would not have a Material Adverse Effect on the prospects of EAC as the
Surviving Corporation.
Section 8.2 Conditions to Obligation of ConQuest to Effect the Merger.
The obligation of ConQuest to effect the Merger shall be subject to the
fulfillment or written waiver by ConQuest at or prior to the Effective Time of
the following additional conditions:
(a) Each of Excalibur or EAC shall have performed in all material
respects its agreements contained in this Agreement required to be performed by
it at or prior to the Effective Time and the representations and warranties of
Excalibur and EAC contained in this Agreement shall be true and correct in all
material respects on and as of the date of this Agreement and at and as of the
Effective Time as if made on and as of such date or time, except as contemplated
or permitted by this Agreement, and ConQuest shall have received a certificate
of the Chief Executive Officer and Chief Financial Officer of Excalibur to that
effect;
(b) ConQuest shall have received an opinion addressed to ConQuest
from Holtzmann, Wise & Shepard dated the date on which the Effective Time shall
occur, substantially in the form set forth in Exhibit 8.2(b) hereto;
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(c) Arthur Andersen LLP shall have delivered a letter in the form
attached as Exhibit 8.2(c) addressed to ConQuest and stating that the Merger
would qualify for pooling-of-interest accounting treatment.
(d) Since the date hereof, no event having a Material Adverse Effect
on Excalibur or any of its subsidiaries shall have occurred.
(e) Excalibur and EAC shall deliver to ConQuest such certificates and
other documents as ConQuest shall reasonably request.
(f) Excalibur shall cause to be paid in full certain fees incurred in
connection with this Agreement and the transactions contemplated hereby, which
are listed on Schedule 8.2(f) hereto.
(g) ConQuest shall have received an opinion addressed to ConQuest
from Piper & Marbury dated the date on which the Effective Time shall occur,
substantially in the form of Exhibit 8.2(g) hereto.
(h) Allen & Company Incorporated and certain affiliates of Allen
shall have agreed in writing to vote at least 4,000,000 of their shares of
Excalibur Common Stock in favor of the new Excalibur Stock Option Plan
referenced in Section 7.7 above.
Section 8.3 Conditions to Obligation of Excalibur and EAC to Effect the
Merger. The obligation of Excalibur and EAC to effect the Merger shall be
subject to the fulfillment or written waiver by Excalibur and EAC at or prior to
the Effective Time of the additional following conditions:
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(a) ConQuest shall have performed in all material respects its
agreements contained in this Agreement required to be performed by it at or
prior to the Effective Time and the representations and warranties of ConQuest
contained in this Agreement shall be true and correct in all material respects
on and as of the date of this Agreement and at and as of the Effective Time as
if made on and as of such date or time, except as contemplated or permitted by
this Agreement, and Excalibur shall have received a Certificate of the Chief
Executive Officer and Chief Financial Officer of ConQuest to that effect;
(b) Excalibur shall have received an opinion from Piper & Marbury,
dated as of the date on which the Effective Time shall occur, substantially in
the form set forth in Exhibit 8.3(b) hereto;
(c) Arthur Andersen LLP shall have delivered a letter to Excalibur
stating that the Merger would qualify for pooling-of-interests accounting
treatment;
(d) No more than 35 ConQuest shareholders will be deemed to be
purchasers of Excalibur Common Stock in this transaction who are not accredited
investors as defined in Rule 501 promulgated under the Securities Act of 1933,
as amended.
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(e) There shall not have been any holder of record of any outstanding
shares of ConQuest Common Stock who shall have perfected his dissenter's rights
to fair value with respect to the Merger as provided by the Maryland Act;
(f) Since the date hereof, no event having a Material Adverse Effect
on ConQuest or any of its subsidiaries shall have occurred;
(g) ConQuest shall deliver to Excalibur and EAC such certificates and
other documents as Excalibur and EAC shall reasonably request; and
(h) Unless otherwise agreed to in writing by Excalibur and EAC, all
of the Board of Directors and executive officers of ConQuest, shall resign as
Directors and executive officers, respectively, effective as of the Effective
Time.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement may be terminated and the Merger
contemplated hereby may be abandoned at any time prior to the Effective Time,
whether before or after approval by the shareholders of ConQuest and Excalibur:
(a) by mutual consent of Excalibur and ConQuest notwithstanding
approval of the Agreement by the shareholders of either Excalibur or ConQuest;
or
64
(b) by either Excalibur or ConQuest if any court of competent
jurisdiction in the United States or any State shall have issued an order,
judgment or decree (other than a temporary restraining order) restraining,
enjoining or otherwise prohibiting the Merger; or
(c) by Excalibur or EAC (i) if the Board of Directors of ConQuest
shall have withdrawn or modified in a manner adverse to Excalibur its approval
or recommendation to the ConQuest stockholders of the Merger, this Agreement or
the transactions contemplated hereby, or shall have resolved to do any of the
foregoing, (ii) ConQuest shall have taken actions prohibited by, or failed to
take any actions required under Section 6.1, except as otherwise provided or
referred to therein (whether or not ConQuest has taken such actions pursuant to
the advice of counsel or otherwise pursuant to the fiduciary duty of its Board
of Directors), which actions or failures to act have not been waived by
Excalibur, (iii) there has been (A) a material breach of any covenant or
agreement herein on the part of ConQuest or any of its subsidiaries which has
not been cured or adequate assurance of cure given, in either case within 15
business days following receipt of notice of such breach, or (B) any material
representation or warranty of ConQuest or any of its subsidiaries herein is
untrue or misleading in any substantial respect, or (iv) if a condition to
Excalibur's or EAC's obligation to close the Merger as set forth in Sections 8.1
or 8.3 is not satisfied or waived by Excalibur or EAC in writing on or before
September 30, 1995; or
(d) by ConQuest (i) if the Board of Directors of Excalibur or EAC
shall have withdrawn or modified in a manner adverse to ConQuest its approval of
the Merger, this Agreement or the transactions contemplated hereby, or shall
have resolved to do any of the foregoing, (ii) Excalibur or its subsidiaries
65
shall have taken any actions prohibited by, or failed to take any actions
required under Section 6.2 (whether or not Excalibur or EAC has taken such
actions pursuant to the advice of counsel or otherwise pursuant to the fiduciary
duty of its respective Board of Directors), which actions or failure to act have
not been waived in writing by ConQuest, (iii) there has been (A) a material
breach of any covenant or agreement herein on the part of Excalibur or any of
its subsidiaries which has not been cured or adequate assurance of cure given,
in either case within 15 business days following receipt of notice of such
breach or (B) any material representation or warranty of Excalibur or any of its
subsidiaries herein is untrue or misleading in any substantial respect, or (iv)
if a condition to ConQuest's obligation to close the Merger as set forth in
Sections 8.1 or 8.2 is not satisfied or waived by ConQuest in writing on or
before September 30, 1995.
Section 9.2 Effect of Termination. In the event of termination of this
Agreement by either Excalibur or ConQuest, as provided in Section 9.1, this
Agreement shall forthwith become void, and there shall be no liability on the
part of either ConQuest or Excalibur or their respective officers or directors
(except with respect to the fees referred to in Section 4.7 and Section 5.7
which shall survive the termination). Nothing in this Section 9.2 shall relieve
any party to this Agreement from liability for its material breach of any
covenant or agreement hereunder, or any material breach of any representation or
warranty known to such party to be untrue at the time it is made or that was not
otherwise made by such party in good faith.
Section 9.3. Amendment. This Agreement may be amended by the parties
hereto, at any time before or after approval hereof by the shareholders of
ConQuest and before filing of the Articles of Merger with the Maryland State
66
Department of Assessments and Taxation, but, after any such approval, no
amendment that materially adversely affects the rights of the ConQuest
shareholders or the Merger Consideration to be received by them shall be made
without the further approval of such shareholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
Section 9.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein; provided, however, that waiver of compliance with
any agreements or conditions herein shall not limit the parties' obligations to
comply with all other agreements or conditions herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Survival of Representations and Warranties and
Agreements. All representations, warranties and agreements in this Agreement
shall expire as of the Effective Time.
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Section 10.2 Material Adverse Effect. For purposes of this
Agreement, "Material Adverse Effect" shall mean any materially adverse change in
or effect on the business, operations, properties, assets, liabilities,
financial condition, results of operations or prospects of a party to this
Agreement and its subsidiaries taken as a whole; provided, however, for the
purposes of this Agreement, the term Material Adverse Effect shall not be deemed
to mean any losses, adverse developments or other conditions suffered by a party
to this Agreement arising from normal operations, market or economic conditions
affecting the industry as a whole, or the announcement of the transactions
contemplated by this Agreement.
Section 10.3 Knowledge. For purposes of this Agreement, "knowledge" of
any party hereto shall be limited to matters within the actual knowledge of the
current officers of the party.
Section 10.4 Additional Disclosures. From time to time prior to the
Effective Time, each party hereto shall promptly provide written disclosures to
the other with respect to any matter which is necessary to correct any
information contained in any representation or warranty of such party that has
been rendered inaccurate thereby. Notwithstanding the foregoing, any additional
disclosure shall not be deemed to modify any representation or warranty set
forth herein, provided that if the Merger does occur, such representations and
warranties, without any further action by any of the parties hereto, shall be
deemed amended as of the date of this Agreement to include such disclosure, as
well as any other information disclosed to or discovered by the party to whom
the representation or warranty is made prior to the Effective Time, and no
breach of warranty or representation shall be deemed to have occurred as a
result of such disclosure or discovery.
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Section 10.5 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by registered or certified mail (return receipt requested) or sent by a private
delivery service such as Federal Express, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) If to Excalibur, to:
Excalibur Technologies Corporation
9255 Towne Centre Drive
Ninth Floor
San Diego, California 92121
Attention; Mr. J.M. Kennedy
with a copy to:
Holtzmann, Wise & Shepard
1271 Avenue of the Americas
New York, New York 10020
Attention: Jay H. Diamond, Esq.
(b) If to ConQuest, to:
ConQuest Software, Inc.
10440 Little Patuxent Parkway
Suite 800
Columbia, Maryland 21044-3561
Attention: Mr. Edwin Addison
69
with a copy to:
Piper & Marbury L.L.P.
36 South Charles Street
Baltimore, Maryland 21301
Attention: Earl S. Wellschlager, Esq.
Section 10.6 Interpretation. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Disclosure of any fact or item in any
disclosure schedule hereto referenced by a particular section in this Agreement
shall, should the existence of the fact or item or its contents be relevant to
any other section, be deemed to be disclosed with respect to that other section
whether or not an explicit cross reference appears.
Section 10.7 Miscellaneous. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties or any of them, with respect to the subject matter hereof; (b)
is not intended to confer upon any third party other than the ConQuest
stockholders, to the extent specified herein, any rights or remedies hereunder;
(c) shall not be assigned by operation of law or otherwise; and (d) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Delaware (without giving effect to the provisions thereof
relating to conflicts of law). The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
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Section 10.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement. Facsimile signatures shall be
binding on all parties upon delivery thereof.
Section 10.9 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and the ConQuest
stockholders, to the extent specified herein, and nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under this Agreement.
Section 10.10 Schedules. Any disclosure on any Schedule hereto shall be
deemed to be a disclosure on each other Schedule to this Agreement.
Section 10.11 Arbitration. Except for any claim or dispute which gives
rise or could give rise to equitable relief under this Agreement, any
disagreement, dispute or controversy arising under this Agreement shall be
settled exclusively and finally by arbitration. The arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA Rules") in Baltimore, Maryland or in such
other city as the parties to the dispute may designate by mutual consent. The
arbitration tribunal shall consist of three arbitrators (or such lesser number
as may be agreed upon by the parties) selected according to the procedure set
forth in the AAA Rules in effect on the date hereof. The chairman of the
arbitration tribunal shall be appointed by the American Arbitration Association
from among the three arbitrators so selected. The fees and expenses of the
arbitration tribunal incurred in connection with such arbitration shall be borne
equally by the parties to the arbitration or otherwise as the arbitrators may
determine.
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IN WITNESS WHEREOF, EACH OF THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT
ON THE DATE FIRST ABOVE WRITTEN.
EXCALIBUR TECHNOLOGIES CORPORATION
By: Patrick C. Condo /s/
Name: Patrick C. Condo
Title: President
EXCALIBUR ACQUISITION CORP.
By: Patrick C. Condo /s/
Name: Patrick C. Condo
Title: President
CONQUEST SOFTWARE, INC.
By: Edwin Addison /s/
Name: Edwin Addison
Title: President
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SCHEDULES
TO
AGREEMENT AND PLAN OF MERGER
AMONG
EXCALIBUR TECHNOLOGIES CORPORATION,
EXCALIBUR ACQUISITION CORP.
AND
CONQUEST SOFTWARE, INC.
Schedule 4.3 Capitalization of Excalibur
Schedule 4.4 Subsidiaries of Excalibur
Schedule 4.6 Material Adverse Effects on Excalibur between January 31,
1995 and Closing
Schedule 4.7 Certain Fees of Excalibur
Schedule 4.11 Intellectual Property of Excalibur
Schedule 4.15A Excalibur Contracts
Schedule 4.15B Excalibur Non-Compliance with Contracts
Schedule 4.17 Excalibur Employment and Consulting Agreements
Schedule 4.18 Excalibur Employee Benefit Plans
Schedule 4.19 Excalibur Exceptions to Title to Property
Schedule 5.1 Conduct of Business in Certain Jurisdictions
Schedule 5.3 ConQuest Options, Warrants, Subscriptions, Etc.
Schedule 5.4 ConQuest Subsidiaries
Schedule 5.5 ConQuest 1994 Audited Financials and March 31, 1995
Financials
Schedule 5.6 Material Adverse Effects on ConQuest between December 31,
1994 and Closing
Schedule 5.7 Certain Fees of ConQuest
Schedule 5.8(c) Conflicts and Consents
Schedule 5.10(a) ConQuest Employment and Consulting Agreements
Schedule 5.10(b) Certain ConQuest Employment Matters
Schedule 5.11(a) ConQuest Employee Benefit Plans
Schedule 5.11(b) Issues Under ConQuest Employee Benefit Plans
Schedule 5.12 ConQuest Exceptions to Title to Property
Schedule 5.14 Tax Returns
Schedule 5.15 Intellectual Property of ConQuest
Schedule 5.16A ConQuest Contracts
Schedule 5.16B ConQuest Non-Compliance with Contracts
Schedule 5.18 ConQuest Environmental Matters
Schedule 6.1(c) Permitted Transactions
Schedule 7.3 ConQuest Stockholder Proxies
Schedule 7.3 ConQuest Stock Options and Acquisition Rights
Schedule 7.7 ConQuest Employees to Receive New Excalibur Options
Schedule 7.9 Fees to be Paid within 15 days after Closing
Schedule 8.2(f) Fees to be Paid at Closing
The company agrees to furnish to the commission supplementary a copy of any
omitted schedule upon request.