SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): SEPTEMBER 30, 1998
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PERVASIVE SOFTWARE INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Delaware 000-23043 74-2693793
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8834 Capital of Texas Highway, Austin, Texas 78759
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (512) 794-1719
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Same
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(Former name or Former Address, if Changed Since Last Report.)
ITEM 5. OTHER EVENTS.
On September 30, 1998, Pervasive Software Inc. ("Pervasive" or the
"Company") announced that it will commence an offer to purchase for cash all of
the outstanding Common Shares of EveryWare Development Inc. ("EveryWare"), an
Internet application development and Web-application server provider based in
Toronto Canada. The price of the offer is Canadian $1.20 per share. If all the
Common Shares are tendered into the offer, the value of the offer is
approximately US$9,692,000. The total value of the acquisition, including
assumption of outstanding options and warrants, would be approximately
US$10,750,000.
The offer to purchase EveryWare Common Shares is conditional upon,
among other things, at least 66 2/3% of the then outstanding Common Shares being
tendered. Under the terms of an agreement with Pervasive, certain shareholders
of EveryWare, representing more than 50% of EveryWare's outstanding shares, have
irrevocably agreed to tender their shares into the Pervasive offer. The Board
of Directors of EveryWare has unanimously approved the offer and recommends that
shareholders tender their Common Shares into the offer. In addition, EveryWare
has agreed not to solicit, encourage or recommend any other offer for its
shares.
An offering circular containing details of the offer is expected to be
mailed to all registered holders of Common Shares on or before October 10, 1998.
A notice relating to the offer will also be published in the financial press.
The offer is expected to expire at 12:00 midnight (local time) on the 21st day
following the date of the offer, unless extended.
The foregoing description is qualified in its entirety by reference to
the Support Agreement, a copy of which is attached hereto as Exhibit 2.1 and
incorporated herein by reference.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable
(b) Not applicable
(c) Exhibits:
Exhibit
Number Description
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2.1* Support Agreement between Pervasive Software Inc. and
EveryWare Development Inc. dated September 30, 1998,
including Schedules A and B thereto.
99.1 Text of Press Release dated September 30, 1998.
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* Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Support Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PERVASIVE SOFTWARE INC.
Date: October 6, 1998 By: /s/ James R. Offerdahl
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James R. Offerdahl
Chief Operating Officer and Chief Financial
Officer
(Duly Authorized Officer and Principal
Financial Officer)
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EXHIBIT INDEX
Exhibit
Number Description
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2.1* Support Agreement between Pervasive Software Inc. and EveryWare
Development Inc. dated September 30, 1998, including Schedules A and
B thereto.
99.1 Text of Press Release dated September 30, 1998.
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* Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Support Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
EXHIBIT 2.1
SUPPORT AGREEMENT
(INCLUDING SCHEDULES A & B THERETO)*
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* Pursuant to Item 601(b)(2) of Regulation S-K, the remaining exhibits and
schedules to this Support Agreement have been omitted. Such exhibits and
schedules will be submitted to the Securities and Exchange Commission upon
request.
EXHIBIT 2.1
SUPPORT AGREEMENT
STRICTLY CONFIDENTIAL
September 30, 1998
EveryWare Development Inc.
6733 Mississauga Road, Seventh Floor
Mississauga, Ontario, Canada
L5N6J5
Attention: Mr. Daniel A. McKenzie
Chairman of the Board
Dear Sirs:
Pervasive Software Inc., a Delaware corporation ("Pervasive") and its
wholly-owned subsidiary ("Offer Sub"), have entered into a letter agreement (the
"Lock-Up Agreement") with certain shareholders (individually, a "Seller" and
collectively, the "Sellers") which sets out the terms and conditions upon which
the Offeror will make an offer on substantially the terms summarized in Schedule
A to the Lock-Up Agreement as it may be amended, modified or changed with the
prior written consent of EveryWare Development Inc. (the "Corporation") or
pursuant to Section 4.2 (collectively, the "Offer") to purchase all of the
issued and outstanding shares (the "Shares") of the Corporation. The Lock-Up
Agreement also provides, among other things, for the agreement of the Sellers
not to solicit expressions of interest for or assist or encourage competing
offers for the Shares and to deposit irrevocably and unconditionally under the
Offer all of the Seller's Shares, and sets out the obligations and commitments
of the Sellers in connection therewith. Offer Sub and Pervasive are referred to
herein together as the "Offeror."
This letter agreement (the "Agreement") sets out the terms and conditions
of the agreement by the Corporation, among other things, to recommend that the
holders of the Shares accept the Offer and agrees not to solicit expressions of
interest for or assist or encourage competing offers for the Shares and the
representations and warranties to the Offeror from the Corporation and other
obligations and commitments of the Corporation in connection with the Offer.
ARTICLE I
THE OFFER
1.1 The Offeror agrees to make the Offer to purchase 100% of the Shares
on the terms and subject to the conditions of this Agreement and the Lock-Up
Agreement, a copy of which is appended hereto as Schedule A.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION. The Corporation
represents and warrants to the Offeror:
(a) that all of the representations and warranties set out in
Schedule B hereto are true and correct as of the date hereof and shall be true
and correct at all times while the Offer is outstanding; and
(b) that the Board of Directors of the Corporation will recommend
that the holders of Shares accept the Offer, provided that this Agreement has
not been terminated pursuant to Article VII. 2.2 REPRESENTATIONS AND WARRANTIES
OF THE OFFEROR. Offer Sub and Pervasive hereby, jointly and severally, represent
and warrant that:
2.2 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR. Offer Sub and
Pervasive hereby, jointly and severally, represent and warrant that:
(a) Offer Sub is a corporation validly existing under the Canada
Business Corporations Act (the "BCA") and Pervasive is a corporation validly
existing under the laws of the State of Delaware;
(b) Pervasive and Offer Sub each have all requisite power and
authority to enter into this Agreement and to perform their respective
obligations hereunder;
(c) this Agreement, the Lock-Up Agreement and the Offer have been
duly authorized by the Boards of Directors of Pervasive and Offer Sub, and upon
the due execution and delivery of this Agreement by the Corporation, this
Agreement shall be a valid and binding agreement enforceable by the Corporation
against the Offeror in accordance with its terms, subject, however, to
limitations with respect to enforcement imposed by law in connection with
bankruptcy or similar proceedings, the equitable power of the courts to stay
proceedings before them and the execution of judgements and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the court from which they are sought; and
(d) the execution of this Agreement and the consummation of the
transactions contemplated hereunder, including the Offer, do not and will not,
with notice or lapse of time or both, violate any provision of the charter
documents of Offer Sub or Pervasive or any material agreement to which Offer Sub
or Pervasive is bound.
ARTICLE III
COVENANTS OF THE CORPORATION
3.1 GENERAL. The Corporation hereby covenants that, provided the terms
and conditions herein are complied with, from the date hereof until the earlier
of (i) the Offeror
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having taken up and paid for Shares deposited under the Offer or abandoned the
Offer; or (ii) this Agreement having been terminated pursuant to Article 7
hereof, the Corporation will:
(a) not take any action of any kind which may reduce the
likelihood of success of or delay the take up of and payment for Shares
deposited under the Offer or the completion of the Offer, including but not
limited to any action to continue, solicit, initiate, assist or encourage
enquiries, submissions, proposals or offers from any other person, entity or
group relating to, and will not participate in any discussions or negotiations
regarding or furnish to any other person, entity or group any information with
respect to, or otherwise cooperate in any way with or assist or participate in,
or facilitate or encourage any effort or attempt with respect to:
(i) the direct or indirect acquisition or disposition of
all or any Shares or any other securities of the Corporation or its subsidiaries
(except from or to the Corporation or one of its subsidiaries in the ordinary
course of business or in transactions referred to in section 3.3(a)(ii)); or
(ii) any amalgamation, merger, sale (other than a sale in
the ordinary course of business consistent with past practice or sales referred
to in section 3.3(a)(ii)) of any part of the Corporation's or any of its
subsidiaries' assets, take-over bid, plan of arrangement, reorganization,
substantial issuer bid, substantial dividend or distribution out of the ordinary
course of business, recapitalization, liquidation or winding-up of, reverse
take-over or other business combination or similar transaction involving the
Corporation or any of its subsidiaries or assets;
The foregoing provisions shall not prevent the Corporation from providing
information, as required by law, or making disclosures to the Corporation's
Shareholders, as required by law, with respect to any unsolicited submission or
proposal regarding a Competing Transaction, if in the opinion of the
Corporation's Board of Directors based upon the written advice of counsel such
information or disclosures are required by applicable law;
(b) through its Board of Directors, unanimously and
unconditionally, recommend that its shareholders tender Shares to the Offer and
as promptly as practicable following the mailing of the Offeror's circular in
respect of the Offer, the Board of Directors of the Corporation shall issue and
file a directors' circular, including such recommendation, in all jurisdictions
where the same is required in accordance with applicable law;
(c) notify the Offeror forthwith upon becoming aware of any notice
of conversion being given in respect of the issue of any Shares or the exercise
of any Stock Options (as defined herein) or Warrants, and inform the Offeror of
all information (including the identity of the giver thereof) known to it
regarding such notice of conversion;
(d) not, directly or indirectly, bid for or purchase Shares or any
right to purchase any such security or attempt to induce any person to purchase
any such security or right, other than pursuant to the Offer;
(e) use its reasonable best efforts to assist the Offeror
successfully to complete the transactions contemplated by this Agreement,
including cooperating with the
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Offeror in making all requisite regulatory filings, and giving evidence in
relation thereto, and in mailing or otherwise making the Offer to holders of the
Shares;
(f) provide lists of shareholders of all classes and series of
securities of the Corporation prepared by the Corporation or the transfer agent
of the Corporation and a list of holders of stock options and any other rights,
warrants or convertible securities currently outstanding (with full particulars
as to the purchase, exercise or conversion price, vesting and expiry date)
prepared by the Corporation (as well as a security position listing from each
depositary, including The Canadian Depositary for Securities Limited) and
deliver that list to the Offeror within two business days after execution of
this Agreement and obtain and deliver to the Offeror thereafter on demand
supplemental lists setting out any changes thereto, all such deliveries to be
both in printed form and if available in computer-readable format;
(g) cause the Corporation to execute as of the date hereof the OEM
Agreement (the "OEM Agreement") attached hereto as Schedule C; and
(h) cause each employee of the Corporation to sign an Option
Exchange and Proprietary Information and Inventions Agreement of the Offeror
conditional upon successful completion of the transactions contemplated by the
Offer.
3.2 ONGOING ACCESS TO INFORMATION. Notwithstanding the pre-agreement
investigation of the Corporation conducted by or on behalf of the Offeror, the
Corporation shall give the Offeror and their authorized agents reasonable
ongoing access during the term of this Agreement, upon reasonable notice to the
Corporation, to all of the Corporation's and its subsidiaries' personnel,
assets, properties, books, records, agreements and commitments, on terms
mutually agreed by the Offeror and the Corporation and shall reasonably
cooperate with the Offeror and any such authorized persons in their review and
furnish such persons with all material information with respect to the
Corporation and its subsidiaries and their ongoing operations and activities as
the Offeror or any person authorized by them may reasonably request, provided
that the Offeror shall designate an individual or individuals to coordinate such
access and further provided that the Offeror shall not unreasonably disrupt the
normal business operations of the Corporation or its subsidiaries, and the
provisions of the Confidentiality Agreement shall continue to apply, mutatis
mutandis, to information received by the Offeror.
3.3 OPERATION OF BUSINESS. During the period commencing on the date
hereof and continuing until the Effective Date (as defined in Section 8.9 of the
Lock-Up Agreement) the Corporation agrees (except as expressly contemplated by
this Agreement, as provided in the Lock-Up Agreement, or to the extent that the
Offeror shall otherwise consent which consent shall not be unreasonably
withheld) that it shall:
(a) not, and shall cause each of its subsidiaries not to, take any
action (directly or indirectly) with respect to any of the following, except to
the extent necessary to give affect to obligations under this Agreement:
(i) any take-over bid for the Shares of the Corporation
(other than the Offer), merger, amalgamation, plan of arrangement,
reorganization, joint venture,
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strategic alliance or other business combination or similar transaction
involving the Corporation or substantially all of its assets;
(ii) any acquisition or disposition of assets or
securities in an amount in excess of $25,000, except transactions in the
ordinary course of their respective businesses and except for certain
transactions specified in writing by the Offeror (the "Permitted Transactions");
subject however to the Offeror's prior approval, which shall not be unreasonably
withheld, with respect to any Permitted Transactions and the terms thereof;
(iii) any change in its capitalization (including, but not
limited to, option grants) and any increase in the amount or maturity of its
consolidated borrowings, except that the Corporation may increase borrowings
under the existing credit facilities identified in Schedule D only in the
ordinary course and as necessary to the operation of its business up to a
maximum of $150,000 ("Permitted Borrowings"); provided, however, that the
Corporation shall consult with the Offeror prior to incurring any such Permitted
Borrowings;
(iv) any capital expenditures in an amount in excess of
$25,000, except in the ordinary course of their respective businesses;
(v) any combination of any or all of the transactions
referred to in paragraphs (ii), (iii) and (iv) above which individually do not
exceed the permitted amounts but which in the aggregate exceed $50,000,
excluding Permitted Transactions and Permitted Borrowings;
(vi) declaring or paying any dividend or declaring,
authorizing or making any distribution of, on or in respect of any of its
securities whether payable in cash, securities or otherwise;
(vii) any release or relinquishment not in the ordinary
course of business of any material contractual rights;
(viii) the amendment of its articles or bylaws, or the
issuance or purchase or other acquisition of any shares of its capital stock of
any class or securities convertible into, or rights, warrants or options to
acquire, any such shares or other convertible securities, other than pursuant to
the exercise of Stock Options or Warrants;
(ix) agreeing or committing to the guarantee of payment of
any material indebtedness, other than Permitted Borrowings;
(x) instituting, cancelling or modifying any pension
plans or other employee benefit arrangements, except as contemplated by this
Agreement, with the Offeror's prior written approval which shall not be
unreasonably withheld; or
(xi) any material change in the business of the
Corporation, including product pricing practices and programs, except with the
Offeror's prior written approval;
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(b) not, and will not permit any of its subsidiaries to, grant to
any officer of the Corporation or any of its subsidiaries any increase in
compensation or in severance or termination pay, or enter into any employment
agreement with any officer of the Corporation or any subsidiary, other than as
contemplated by this Agreement, or hire additional salaried personnel other than
the replacement of existing personnel in the ordinary course of business;
(c) except as otherwise contemplated hereby or in the ordinary
course of business, not enter into or amend existing agreements, commitments or
contracts which, individually or in the aggregate, are material to the
Corporation and its subsidiaries taken as a whole;
(d) use all reasonable efforts, and cause each of its subsidiaries
to use all reasonable efforts, to preserve intact their respective business
organizations and goodwill, to keep available the services of their respective
officers and employees as a group and to maintain satisfactory relationships
with suppliers, distributors, customers and others with whom they have business
relationships;
(e) promptly advise the Offeror in writing of any change in the
financial condition or operations of the Corporation that is likely to result in
a Material Adverse Change and of the occurrence of any Material Adverse Change;
(f) not, and will cause each of its subsidiaries not to, enter
into any transaction or perform any act which might (i) interfere or be
inconsistent with the successful completion of the transactions contemplated by
this Agreement, including the Subsequent Transaction, (ii) render inaccurate any
of the representations and warranties set forth herein if such representations
and warranties were made at a date subsequent to such transaction or act and all
references to the date hereof were to such later date or (iii) adversely affect
the Corporation's ability to perform its covenants and agreements under this
Agreement;
(g) cause the Corporation to assist the Offeror in the
negotiations with certain option holders of the Corporation who currently hold
outstanding Stock Options which provide for accelerated vesting to modify such
vesting provisions prior to the commencement of the Offer and subject to
completion of the Offer;
(h) use best efforts to cause the Warrants, other than the
InContext Warrants and the Employee Warrants, to be terminated prior to
commencement of the Offer, subject to completion of the Offer;
(i) assist the Offeror in causing existing Stock Options and
Employee Warrants to be replaced by comparable Pervasive Stock Options; and
(j) cause the Management Sellers to enter into new Management
Employment Agreements, in a form acceptable to Offeror to be effective upon
consummation of the Offer.
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ARTICLE IV
COVENANTS OF THE OFFEROR
4.1 GENERAL. The Offeror hereby covenants to comply with its respective
covenants under the Lock-Up Agreement and to use all reasonable best efforts to
successfully complete the transactions contemplated by this Agreement and the
Lock-Up Agreement in accordance with Section 1.1 of the Lock-Up Agreement,
including cooperating with the Corporation in making all requisite regulatory
filings, and giving evidence in relation to such filings, and in mailing or
otherwise making the Offer to holders of the Shares in accordance with Schedule
A to the Lock-Up Agreement and in accordance with all applicable securities
laws.
4.2 MODIFICATION OF OFFER. The Offeror agrees that it will not amend,
modify or change the Offer without the prior written consent of the Corporation,
which consent shall not be unreasonably withheld (provided, however, that it is
agreed that the Corporation is not required to consent to an amendment to the
Offer which reduces the consideration payable under the Offer), other than to
extend the Offer for a period of up to 90 days from the day of the Offer to
permit satisfaction of one or more conditions to the Offer, to increase the
consideration under the Offer, waive any conditions to the Offer or comply with
the legal obligations of the Offeror with respect to any amendment, modification
or change of the Offer. The Offeror shall provide a draft of any proposed
amendment, modification or change to the Offer to the Corporation and shall
consult with the Corporation with respect to the terms and conditions of such
proposed amendment, modification or change of the Offer. The foregoing
restrictions shall not apply if the Offeror has been notified or becomes aware
of a Competing Transaction.
4.3 REPLACEMENT OPTIONS. The Offeror agrees that it shall grant
replacement options in accordance with the Pervasive stock option plan to all
holders of Stock Options and Employee Warrants outstanding after completion of
the Offer, providing for terms substantially similar to the terms of the Stock
Options and Employee Warrants.
4.4 OFFERING CIRCULAR. The Offeror shall provide the Corporation with
reasonable opportunity to review and comment upon the form and contents of the
offering circular to be provided to holders of Shares in connection with the
Offer.
4.5 SUBSEQUENT TRANSACTIONS. If the Offeror takes up and pays for the
Shares pursuant to the Offer, then the Offeror shall use reasonable efforts to
acquire the balance of the Shares by way of a Subsequent Transaction. For
purposes of this Agreement, "Subsequent Transaction" shall mean those
transactions to be undertaken by the Offeror after completion of the Offer to
accomplish the acquisition of all of the outstanding Shares, and rights to
acquire Shares, of the Corporation pursuant to either (i) the compulsory
acquisition procedures prescribed by Section 206 of the Canada Business
Corporations Act or (ii) a "going private transaction" as construed under
applicable securities laws, rules and policies on the basis of a two thirds
minority approval (as provided for by Ontario Securities Commission Policy No.
9.1) including a determination by the Ontario Securities Commission excluding
votes attaching to the Shares acquired from Sellers in determining such
approval. If any Subsequent Transaction requires the approval of the
Corporation's shareholders, the Offeror shall take all action necessary in
accordance with applicable laws to duly call, give notice of, convene and hold a
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meeting of the Corporation's shareholders as promptly as practicable to consider
and vote upon the Subsequent Transaction.
ARTICLE V
COMPETING TRANSACTION
5.1 The Corporation shall inform the Offeror forthwith upon becoming
aware of a Competing Transaction and shall not withdraw or otherwise change its
recommendation to support the Offer upon notice of a Competing Transaction. For
the purposes hereof "Competing Transaction" means an offer or a proposal made to
the Corporation in writing and duly authorized by the board of directors of the
person making the offer to purchase or otherwise acquire all or a material
portion of the Shares.
ARTICLE VI
EXPENSES AND BREAK-UP FEES
6.1 EXPENSES. Expenses of the Offeror, the Corporation and the Sellers
shall be paid in accordance with Section 8.12 of the Lock-Up Agreement.
6.2 OFFEROR'S FEE. If the transactions contemplated hereby have not
been consummated, other than due to the termination of this Agreement by the
Corporation under Section 7.1, then the Corporation shall pay or cause to be
paid to Offeror a fee (the "Offeror's Break-Up Fee") in an amount equal to
U.S.$400,000 if: (a) the Corporation's Board of Directors withdraws, amends or
modifies in any manner adverse to the Offeror, its unanimous recommendation in
favor of the Offer;
(b) the Corporation's Board of Directors shall have approved or
publicly recommended any other acquisition proposal or Competing Transaction; or
(c) the Offeror terminates this Agreement pursuant to Section 7.2 (d) of this
Agreement.
6.3 EXCLUSIVITY FEE. In addition to the Offeror's Break-Up Fee
described in Section 6.2, in the event that the Offer is not consummated (other
than due to a termination of by the Corporation under Section 7.1, provided,
however, that there is no Competing Transaction prior to such termination),
Offeror shall be entitled to an additional fee (the "Exclusivity Fee") if at any
time prior to the date that is nine months after the date this Agreement is
terminated in accordance with its terms if any of the following is consummated,
or agreed to be consummated, with or among a party, entity or group other than
the Offeror or any of its affiliates:
(a) a sale, exchange, transfer or other disposition of greater
than 50% of the businesses and assets of the Corporation (other than the
transactions referred to in Section 1.2(d)(ii) of this Agreement);
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(b) a merger, amalgamation, arrangement, reorganization or other
business combination or similar transaction of or affecting the Corporation or
its subsidiaries other than the transactions referred to in paragraph 1.2(d)(ii)
of this Agreement; or
(c) a sale, exchange, transfer or other disposition of all or
substantially all the Shares of the Corporation owned by the Sellers other than
the transactions referred to in paragraph 1.2(d)(ii) of this Agreement.
The Exclusivity Fee shall be equal to 75% of the difference between the
Offeror's per share purchase price and the per share purchase price (or in the
case of a sale of assets or a merger, amalgamation, arrangement reorganization
or other business combination, the fair market value of such transaction
computed on a per share basis) offered by the party, entity or group other than
the Offeror or any of its affiliates multiplied by the total number of
outstanding shares of the Corporation. Such fee shall be payable in cash,
immediately upon the closing of the other transaction.
6.4 CORPORATION'S FEE. If the transactions contemplated hereby have not
been consummated due to a termination of this Agreement by the Corporation
pursuant to Section 7.1(d) of this Agreement, then the Offeror shall pay or
cause to be paid to the Corporation a fee (the "Corporation's Break-Up Fee") in
an amount equal to U.S.$400,000.
ARTICLE VIII
TERMINATION
7.1 TERMINATION BY THE CORPORATION. The Corporation, when not in
default in the performance of all of its obligations under this Agreement may,
without prejudice to any other rights, terminate this Agreement by notice to the
Offeror if:
(a) the Offer has not been made on or before the time provided for
in Section 1.1 of the Lock-up Agreement;
(b) the Offer does not substantially conform or is modified or
withdrawn, other than as provided for in Section 4.2 or with the prior written
consent of the Corporation, in a manner not to conform with the description in
Schedule A to the Lock-Up Agreement;
(c) shares deposited under the Offer (including the Seller's
Shares) have not, for any reason whatsoever, been taken up and paid for on or
before the expiry of ten days after the expiry of the Offer; or
(d) the Offeror breaches this Agreement or the Lock-Up Agreement
and has not cured such breach within 10 business days after receipt of written
notice of such breach from the Corporation and in any event such breach
constitutes a Material Adverse Change.
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7.2 TERMINATION BY THE OFFEROR. The Offeror when not in default in the
performance of its obligations under this Agreement may, without prejudice to
any other rights, terminate this Agreement by notice to the Corporation if:
(a) the conditions in Section 1.2 of the Lock-Up Agreement are not
satisfied or waived by the Offeror on or prior to the date at which they must
make the Offer;
(b) the conditions in Section 4 of Schedule A to the Lock-Up
Agreement are not satisfied or waived by the Offeror on or prior to the
Expiration Time;
(c) the circumstances entitling the Offeror to payment under
Section 6.2 (a) or (b) are in effect; or
(d) the Corporation breaches this Agreement and has not cured such
breach within 10 business days after receipt of written notice of such breach
from the Offeror, and in any event such breach constitutes a Material Adverse
Change or has a Material Adverse Effect.
7.3 EFFECT OF TERMINATION. In the case of any termination of this
Agreement pursuant to this Article VII, this Agreement shall be of no further
force and effect except for Article VI, and nothing herein shall relieve any
party from liability for any breach of this Agreement; provided that if the
Corporation becomes obligated to and has paid the fees provided for in Sections
6.2 and 6.3, the Corporation shall have no further liability under this
Agreement and if the Offeror becomes obligated and has paid the fees provided
for in Section 6.4, Offeror shall have no further liability under this
Agreement.
ARTICLE VIII
GENERAL
8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties shall survive the consummation of the Offer but only for a period of
two years after the date of this Agreement. No investigations made by or on
behalf of the Offeror or any of its authorized agents at any time shall have the
effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty or covenant made by the Corporation in or pursuant to
this Agreement.
8.2 DISCLOSURE. Except as required by applicable laws or regulations,
or as required by any competent governmental, judicial or other authority, or in
accordance with the requirements of any stock exchange, neither the Offeror nor
the Corporation shall make any public announcement or statement with respect to
this Agreement without the approval of the Corporation or the Offeror, as the
case may be, which approval shall not be unreasonably withheld. Moreover, the
parties agree to consult with each other prior to issuing each public
announcement or statement with respect to this Agreement. The Execution of this
Agreement and the Lock-Up Agreement shall be promptly announced by joint press
release.
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8.3 SHARES. References to "Shares" include any shares into which the
Shares may be reclassified, subdivided, consolidated or converted and any rights
and benefits arising therefrom including any extraordinary distributions of
securities which may be declared in respect of the Shares but excluding any
dividend permitted to be paid under this Agreement.
8.4 ASSIGNMENT. The Offeror may assign all or any part of its rights
under this Agreement to a direct or indirect wholly-owned subsidiary of the
Offeror, but, if such assignment takes place, the Offeror shall continue to be
liable to the Corporation for any default in performance by the assignee. This
Agreement shall not otherwise be assignable by any party hereto without the
consent of the other parties, which consent may be unreasonably withheld.
8.5 TIME. Time shall be of the essence.
8.6 CURRENCY. Except where otherwise indicated to the contrary, all
sums of money referred to in this Agreement shall mean Canadian dollars.
8.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
8.8 ENTIRE AGREEMENT. This Agreement, together with the Lock-Up
Agreement, No Shop Agreement, OEM Agreement and Confidentiality Agreement,
constitute the entire agreement and understanding between and among the parties
hereto with respect to the subject matter hereof and supersedes any prior
agreement, representation or understanding with respect thereto.
8.9 AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
8.10 DEFINITIONS. For the purposes of this Agreement, unless the context
otherwise requires, defined terms in the Lock-Up Agreement shall have the same
meaning in this Agreement.
8.11 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the
parties recognizes and acknowledges that this Agreement is an integral part of
the transactions contemplated in the Offer, that the Offeror would not make the
Offer, and that the Corporation would not agree to facilitate the Offer, unless
this Agreement was executed, and accordingly acknowledges and agrees that a
breach by a party of any covenants or other commitments contained in this
Agreement will cause any of the other parties to sustain injury for which it
would not have an adequate remedy at law for money damages. Therefore, each of
the parties agrees that in the event of any such breach, the aggrieved party
shall be entitled to the remedy of specific performance of such covenants or
commitments and preliminary and permanent injunctive and other equitable relief
in addition to any other remedy to which it may be entitled, at law or in
equity, and the parties further agree to waive any requirement for the securing
or posting of any bond in connection with the obtaining of any such injunctive
or other equitable relief.
11
8.12 NOTICES. Any notice, request, consent, agreement or approval which
may or is required to be given pursuant to this Agreement shall be in writing
and shall be sufficiently given or made if delivered or telecopied, in the case
of:
the Offeror, addressed as follows:
Pervasive Software Inc.
8834 Capital of Texas Highway, Suite 300
Austin, Texas 78759
ATTENTION: PRESIDENT
Telephone No.: (512) 794-1719
Telecopier No.: (512) 794-1778
and
with a copy to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP
155 Constitution Drive
Menlo Park, CA 94025
ATTENTION: JAY K. HACHIGIAN, ESQ.
Telephone No.: (650) 321-2400
Telecopier No.: (650) 321-2800
to the Seller, addressed as follows:
EveryWare Development Inc.
6733 Mississauga Road, Seventh Floor
Mississauga, Ontario, Canada L5N6J5
ATTENTION: PRESIDENT
Telephone No.: (905) 819-1173
Telecopier No.: (905) 819-1172
with a copy to:
Burstall Ward
Suite 3100 Home Oil Tower
324-8th Avenue S.W.
Calgary, Alberta, Canada T2P222
ATTENTION: DOUGLAS M. STUVE
Telephone No.: (403) 234-3337
Telecopier No.: (403) 266-6016
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery or telecopy (if during normal business hours or, if not, the
next business day).
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8.13 BUSINESS DAY. A business day for the purpose of this Agreement
shall mean any day on which banks in the City of Toronto, Ontario and in the
City of Austin, Texas are open for business. If the last day of a period of days
is not a business day, the period shall be extended to the next following day
which is a business day.
8.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and binding
agreement and delivery of the counterparts may be effected by means of a
telecopied transmission.
Yours truly,
PERVASIVE SOFTWARE INC.
By:
-------------------------------------
President
PERVASIVE ACQUISITION CORPORATION
By:
-------------------------------------
President
Agreed and accepted as of this 30th day of September, 1998.
EVERYWARE DEVELOPMENT INC.
By:
-------------------------------------
Daniel A. McKenzie
Chairman of the Board
13
SCHEDULE A
LOCK-UP AGREEMENT
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LOCK-UP AGREEMENT
STRICTLY CONFIDENTIAL
- ---------------------
September 25, 1998
Mr. Daniel A. McKenzie
Chairman and Chief Operating Officer and Director
EveryWare Development Inc.
6733 Mississauga Road, 7th Floor
Mississauga, Ontario, Canada
L5N6J5
Dear Sirs:
This letter agreement (the "Agreement") sets out the terms and
conditions upon which a wholly-owned subsidiary ("Offer Sub") of Pervasive
Software Inc., a Delaware corporation ("Pervasive"), will make an offer to
purchase all of the issued and outstanding shares (the "Shares") of the
EveryWare Development Inc. (the "Corporation") on substantially the terms and
conditions summarized in Schedule A forming part of this Agreement as it may be
amended, modified or changed with the prior written consent of the Corporation
or pursuant to Section 4.2 (collectively the "Offer"). Offer Sub and Pervasive
are referred to herein together as the "Offeror."
This Agreement also sets out the terms and conditions of the agreement
by those holders of shares set forth on such holder's signature page to this
Agreement (individually, a "Seller" and collectively, the "Sellers") to deposit
under the Offer the Shares presently owned beneficially by each Seller (the
"Sellers' Shares"), and sets out the obligations and commitments of each Seller
in connection therewith. For purposes of this Agreement, certain Sellers are
designated as "Management Sellers" as identified on Schedule B. In connection
with the Offer, the Offeror has entered into a Support Agreement dated of even
date herewith with the Corporation (the "Support Agreement").
ARTICLE 1
THE OFFER
---------
1.1 TIMING. The Offeror agrees to use its reasonable best efforts to commence
the Offer for all of the Shares as soon as reasonably practicable (which is
currently expected to be by October 7, 1998) but, in any event, not later than
October 20, 1998. This Agreement shall terminate if the Offer has not been
commenced by October 20, 1998.
1.2 CONDITIONS PRECEDENT. Notwithstanding Section 1.1, the Offeror shall not
be required to make the Offer (and the Offeror may, without prejudice to any
other rights, by notice to the Seller, terminate this Agreement) if:
S-2
(a) prior to the making of the Offer, (i) any act, action, suit or
proceeding shall have been taken before or by any domestic or
foreign arbitrator, court or tribunal or governmental agency
or other regulatory authority or administrative agency or
commission or by any elected or appointed public official or
private person (including without limitation, any individual,
corporation, firm, group or other entity) in Canada, the
United States or elsewhere, whether or not having the force of
law, or (ii) any law, regulation, rule or policy shall have
been proposed, enacted, promulgated or applied, in the case of
(i) or (ii) above:
(A) to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the
sale to the Offeror of the Shares or the rights of
the Offeror to own or exercise full rights of
ownership of the Shares;
(B) which has resulted in, or if the Offer was
consummated would result in, a Material Adverse
Change (as such term, and certain other terms used
herein, are defined in Section 8.9); or
(C) which would prevent completion of a Subsequent
Transaction;
(b) at the time the Offeror proposes to make the Offer, there
exists any prohibition at law (other than those referred to in
any of paragraphs 4(b), (c) or (d) in Schedule A hereto)
against the Offeror making the Offer or taking up and paying
for the Shares under the Offer;
(c) the Corporation shall not have performed in all respects any
of its covenants or complied with any of its agreements to be
performed and complied with by it under the Support Agreement
or any representation or warranty of the Corporation under the
Support Agreement shall not have been, as of the date that the
Offer is required to be made pursuant to Section 1.1, true and
correct;
(d) there shall have occurred or arisen (or there shall have been
generally disclosed or discovered, if not previously disclosed
in the Support Agreement to Offeror), a Material Adverse
Change;
(e) the Corporation and its subsidiaries shall not have taken all
steps reasonably requested by the Offeror (other than steps
which would have an adverse effect on the Corporation and its
subsidiaries' respective businesses if the Offer were not
completed) in connection with the Offer, including, without
limitation, any steps required up to the date of the Offer to
satisfy the regulatory requirements or approvals (domestic or
foreign) whether or not mentioned in Section 1.2(c) hereof in
order for the Offeror to purchase the Shares;
(f) any representation or warranty of any Seller in this Agreement
shall not have been, as of the date made and as of the date
that the Offer is required to be made pursuant to Section 1.1,
true and correct and such inaccuracy in the representation and
warranty has a Material Adverse Effect; or
S-3
(g) any Seller shall not have performed in all respects any of its
covenants or complied with any of its agreements to be performed
and complied with by it under this Agreement, and such non-
performance has a Material Adverse Effect.
The foregoing conditions are for the sole benefit of the Offeror,
and may be waived by the Offeror in whole or in part at any time and shall be
deemed to have been waived by the making of the Offer.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
------------------------------
2.1 REPRESENTATIONS AND WARRANTIES OF THE SELLERS. Each of the Sellers,
severally and not jointly, hereby represents and warrants to the Offeror that:
(a) Incorporation; Authorization. If a Seller is a corporation, it is
a corporation duly incorporated and validly existing under the
laws of its jurisdiction of incorporation. Seller has all
necessary power, authority, capacity and right, and has received
all requisite corporate approvals, to enter into this Agreement
and to complete the transactions contemplated hereby. This
Agreement has been duly executed and delivered by the Seller and
constitutes a legal, valid and binding agreement enforceable by
the Offeror against the Seller in accordance with its terms
subject, however, to limitations with respect to enforcement
imposed by law in connection with bankruptcy or similar
proceedings, the equitable power of the courts to stay
proceedings before them and the execution of judgments and to the
extent that equitable remedies such as specific performance and
injunction are in the discretion of the court from which they are
sought.
(b) Ownership of Shares. Each Seller is the sole beneficial owner of
such Seller's Shares, and the Seller's Shares constitute all of
the Shares owned or controlled, directly or indirectly, by the
Seller. The Seller has the exclusive right to dispose of the
Seller's Shares as provided in this Agreement and the Seller is
not a party to, bound or affected by or subject to, any charter
or by-law provision, statute, regulation, judgment, order, decree
or law which would be violated, contravened, breached by, or
under which default would occur as a result of the execution and
delivery of this Agreement or the consummation of any of the
transactions provided for in this Agreement.
(c) Good Title. The Seller's Shares to be acquired by the Offeror
from the Seller and its wholly-owned subsidiaries pursuant to the
Offer will be acquired with good and marketable title, free and
clear of any and all mortgages, liens, charges, restrictions,
security interests, adverse claims, pledges, encumbrances and
demands or rights of others of any nature or kind whatsoever
other than as imposed on Shares identified on Seller's signature
page, by the Escrow Agreement dated April 10, 1995 between inter
alia certain of the Sellers, the Corporation and Montreal Trust
Company of Canada, the Escrow Agreement dated November 7, 1995
between inter alia certain
S-4
of the Sellers, the Corporation and Montreal Trust Company of
Canada, as amended by agreements dated as of November 7, 1995 and
March 12, 1996, and the Performance Escrow Agreement dated as of
March 12, 1996, as amended, between inter alia certain of the
Sellers, the Corporation and Montreal Trust Company of Canada
(collectively the "Escrow Agreements") and the rights dated March
18, 1997, April 4, 1997 and July 22, 1997 granted to certain
parties to acquire up to 648,494 Shares held by certain
Management Sellers as indicated on such Management Sellers'
signature page to this Agreement (the "Founders Warrants").
(d) No Agreements. No person, firm or corporation has any agreement
or option, or any right or privilege (whether by law, pre-emptive
or contractual) capable of becoming an agreement or option, for
the purchase, requisition or transfer from the Seller or its
wholly-owned subsidiaries of any of the Seller's Shares, or any
interest therein or right thereto, except pursuant to this
Agreement and the Founders Warrants.
(e) Voting. None of the Sellers has previously granted or agreed to
grant any ongoing proxy in respect of the Seller's Shares or
entered into any voting trust, vote pooling or other agreement
with respect to the right to vote, call meetings of shareholders
or give consents or approvals of any kind as to the Seller's
Shares.
(f) Consents. No consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by, or filing with, or
notification to any governmental, administrative or regulatory
authority is required to be made or obtained by the Seller in
connection with (i) the execution and delivery by the Seller and
enforcement against the Seller of this Agreement or (ii) the
consummation of any transactions by the Seller provided for
herein except for, in either case, those consents referred to in
paragraphs 4(b), (c) and (d) of Schedule A hereto (the
"Regulatory Approvals"), those required under the Escrow
Agreements and the Founders Warrants, and the filing of press
releases and material change reports and early warning reports
under applicable securities legislation.
(g) Non-Resident. Except as set forth as on each Seller's
signature page to this Agreement, Seller is a resident of
Canada for the purposes of the Income Tax Act (Canada).
(h) Arm's Length Negotiation. The purchase price to be offered under
the Offer for the Seller's Shares was determined by the Offeror
in circumstances in which the Seller had full knowledge of and
access to information concerning the Corporation such that the
underlying value of the Corporation was a material factor
considered by the Seller in determining whether to accept such
purchase price and there were no non-financial factors or other
factors peculiar to the Seller which were considered relevant by
the Seller in assessing the purchase price to be offered by the
Offeror for the Seller's Shares or that would have had the effect
of reducing the price that would otherwise have been considered
acceptable by the Seller.
S-5
2.2 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF THE MANAGEMENT SELLERS. In
addition, each of the Management Sellers, severally and not jointly, hereby
represents and warrants to the Offeror that:
(a) Non-Arm's Length Transactions. There does not exist any guarantee
or obligation or any agreement, understanding or commitment
giving rise to any guarantee or obligation, financial or
otherwise, on the part of the Corporation to the Management
Seller or any affiliate of the Seller (or any associates or
insiders of any of the foregoing) and except for loans described
on each Seller's signature page, there are no loans to Seller or
any affiliates of the Seller (or any associates or insiders of
any of the foregoing) by the Corporation or any of its
subsidiaries or associates.
(b) Disclosure. There is no fact which the Corporation has not
disclosed to the Offeror and of which a Management Seller is
aware and which has or would reasonably be expected to result in
a Material Adverse Change or Material Adverse Effect.
ARTICLE 3
COVENANTS OF THE SELLERS
------------------------
3.1 GENERAL. Each of the Sellers, severally and not jointly, hereby covenants
that so long as such Seller is obligated to deposit any Shares pursuant to the
Offer, is not entitled to withdraw any Shares from the Offer under the terms of
this Agreement or is entitled to withdraw Shares from the Offer but has not
withdrawn Shares from the Offer and until the Offeror has taken up and paid for
the Shares under the Offer or abandoned the Offer, or the terms of this
Agreement have been terminated by such Seller pursuant to Section 6.1, the
Seller will:
(a) except as permitted by this Agreement, not take any action of any
kind which may reduce the likelihood of success of or delay the
take up of and payment for Shares deposited under the Offer, the
completion of the Offer or any Subsequent Transaction, including
but not limited to any action to continue, solicit, initiate,
assist or encourage inquiries, submissions, proposals or offers
from any other person, entity or group relating to, and will not
continue or participate in any discussions or negotiations
regarding or furnish to any other person, entity or group any
information with respect to, or otherwise cooperate in any way
with or assist or participate in, or facilitate or encourage any
effort or attempt with respect to:
(i) the direct or indirect acquisition or disposition of all
or any Shares or any other securities of the Corporation
or its subsidiaries, or
(ii) any amalgamation, merger, sale (other than a sale in the
ordinary course of business consistent with past
practice or sales referred to in paragraph 1.2(d)(ii) of
this Agreement) of any part of the Corporation's or any
of its subsidiaries' assets, take-over bid, plan of
arrangement, reorganization, recapitalization,
liquidation or winding-up of, reverse take-over or other
S-6
business combination or similar transaction involving
the Corporation or any of its subsidiaries or assets.
Notwithstanding the foregoing, if an individual Seller is also
a director of the Corporation, the foregoing provisions shall
not prevent such Seller, when acting solely in his role as a
director of the Corporation, from providing information, as
required by law, or making disclosures to the Corporation's
Shareholders, as required by law, with respect to any
unsolicited submission or proposal regarding a Competing
Transaction, if in the opinion of the Corporation's Board of
Directors based upon the written advice of counsel such
response or disclosures are required by applicable law;
(b) notify the Offeror promptly upon becoming aware of a proposal
which the Seller reasonably believes, if made in writing,
would be an offer or a proposal made to the Corporation in
writing and duly authorized by the board of directors of the
person making the offer to purchase or otherwise acquire all,
or any material portion, of the Shares;
(c) not option, sell, transfer, pledge, encumber, grant a security
interest in, hypothecate or otherwise convey the Seller's
Shares, or any right or interest therein (legal or equitable),
to any person, entity or group or agree to do any of the
foregoing;
(d) not grant or agree to grant any proxy or other right to vote
the Seller's Shares, or enter into any voting trust, vote
pooling or other agreement with respect to the right to vote,
call meetings of shareholders or give consents or approval of
any kind as to the Seller's Shares;
(e) not do indirectly that which it may not do directly in respect
of the restrictions on its rights with respect to the Seller's
Shares pursuant to this Section 3.1, including, but not
limited to, the sale of any direct or indirect holding company
of the Seller or the granting of a proxy on the Shares of any
direct or indirect holding company of the Seller which would
have, indirectly, the effect prohibited by this Section 3.1;
(f) exercise the voting rights attaching to the Seller's Shares
and otherwise use its best efforts to oppose any proposed
action by the Corporation, its shareholders, any of its
subsidiaries or any other person: (i) in respect of any
amalgamation, merger, sale of the Corporation's or its
affiliates' or associates' assets, take-over bid, plan of
arrangement, reorganization, recapitalization, liquidation or
winding-up of, reverse take-over or other business combination
or similar transaction involving, the Corporation or any of
its subsidiaries other than a Subsequent Transaction, (ii)
which might reasonably be regarded as being directed towards
or likely to prevent or delay the take up of and payment for
Shares deposited under the Offer or successful completion of
the Offer or a Subsequent Transaction, or (iii) which could
result in a Material Adverse Change;
S-7
(g) use all reasonable commercial efforts to assist the Offeror to
successfully complete the transactions contemplated by this
Agreement, including using its reasonable commercial efforts
to keep the Seller's nominees on the board of directors of the
Corporation if requested by the Offeror;
(i) in the event that the Offeror takes up and pays for the Shares
deposited under the Offer and acquires more than 50% of all
outstanding Shares, cause its representatives and nominees on
the boards of directors of the Corporation and its
subsidiaries to resign, at the time and in the manner
requested by the Offeror, after the Offeror takes up and pays
for the Seller's Shares under the Offer;
(j) execute such Agreement as may be reasonably requested by the
Corporation to effect the termination of any Warrants held by
a Seller prior to the commencement of the Offer; and
(k) not purchase or obtain or enter into any agreement or right to
purchase any additional Shares from and including the date
hereof until the termination or withdrawal of the Offer.
3.2 ADDITIONAL COVENANTS OF THE MANAGEMENT SELLERS. In addition, each
of the Management Sellers, severally and not jointly, hereby covenants that so
long as such Management Seller is obligated to deposit any Shares pursuant to
the Offer, is not entitled to withdraw any Shares from the Offer under the terms
of this Agreement or is entitled to withdraw Shares from the Offer but has not
withdrawn Shares from the Offer and until the Offeror has taken up and paid for
the Shares under the Offer or abandoned the Offer, or the terms of this
Agreement have been terminated by such Management Seller pursuant to Section
6.1, each Management Seller will:
(a) co-operate (and use their best efforts to cause the
Corporation to co-operate) with the Offeror in making all
requisite regulatory filings, and giving evidence in relation
thereto, and in mailing or otherwise making and successfully
completing the Offer and the Subsequent Transaction;
(b) use its best efforts to cause the Corporation to comply with
its covenants, agreements and obligations as contained in the
Support Agreement;
(c) promptly advise the Offeror in writing of any Material Adverse
Change known to the Management Seller;
(d) if a Management Seller is identified by Offeror as an
individual who will remain with the Corporation following the
completion of the Offer, execute such Agreements as may
reasonably be requested by the Corporation to effect the
modification of outstanding Stock Options and Employee
Warrants in exchange for options to purchase Pervasive common
stock on substantially similar terms; and
(e) execute such Agreements as may reasonably be requested in
connection with the Management Employment Agreements.
S-8
3.3 PROHIBITION ON EMPLOYMENT AND SOLICITATION.
(a) During the period of one year immediately following the date
hereof, no Management Seller nor any affiliate of any
Management Seller will hire any person who is, at the date
hereof, an officer or employee of the Corporation, unless such
person's employment was terminated by the Corporation after
the completion of the Offer;
(b) During the period of one year immediately following the date
hereof, no Management Seller nor any affiliate of any
Management Seller will solicit for hire or employment,
directly or indirectly, any person who is, at the date hereof,
an officer or employee of the Corporation, except for persons
whose employment was terminated by the Corporation after the
completion of the Offer. For the purposes of this clause,
"solicitation" shall not include solicitation of any officer
or employee who is solicited:
(i) by advertising in a newspaper or periodical of
general circulation; or
(ii) by an employee of an executive search firm where such
solicitation was not encouraged or instructed; and
(c) During the period of one year immediately following the date
hereof, Management Sellers who are also employees of the
Corporation shall not become employees, officers, consultants
or otherwise with a corporation, partnership or similar entity
which competes with the Corporation, except as may be provided
to the contrary in the Management Employment Agreements.
ARTICLE 4
COVENANTS OF OFFEROR
--------------------
4.1 GENERAL. The Offeror Agrees to use its reasonable best efforts to
commence the Offer on the terms set forth in Schedule A as provided in Section
1.1. The Offeror hereby covenants to use its reasonable best efforts to
successfully complete the transactions contemplated by this Agreement.
4.2 MODIFICATION OF OFFER. The Offeror agrees that it will not amend,
modify or change the Offer without the prior written consent of the Seller which
consent shall not be unreasonably withheld (provided, however, that it is agreed
that Seller is not required to consent to an amendment to the Offer which
reduces the consideration under the Offer), other than to (as per Section 4.2 of
Support Agreement) increase the consideration under the Offer, waive any
conditions to the Offer or comply with the legal obligations of the Offeror with
respect to any amendment, modification or change of the Offer.
4.3 REPLACEMENT OPTIONS. The Offeror agrees that it shall grant replacement
options in accordance with the Pervasive stock option plan to all holders of
Stock Options and Employee Warrants, providing for terms substantially similar
to the terms of the Stock Options and Employee Warrants.
S-9
4.4 SUBSEQUENT TRANSACTIONS. If the Offeror takes up and pays for the
Shares pursuant to the Offer, then the Offeror shall use reasonable efforts to
acquire the balance of the Shares by way of a Subsequent Transaction. If any
Subsequent Transaction requires the approval of the Corporation's shareholders,
the Offeror shall take all action necessary in accordance with applicable laws
to duly call, give notice of, convene and hold a meeting of the Corporation's
shareholders as promptly as practicable to consider and vote upon the Subsequent
Transaction.
ARTICLE 5
OFFEROR'S REPRESENTATIONS AND WARRANTIES
----------------------------------------
5.1 REPRESENTATIONS AND WARRANTIES OF THE OFFEROR. Pervasive and Offer Sub,
jointly and severally, hereby represent and warrant to the Sellers
that:
(a) Offer Sub is a corporation validly existing under the Canada
Business Corporations Act and Pervasive is a corporation
validly existing under the laws of the State of Delaware;
(b) Pervasive and Offer Sub each have all requisite power and
authority to enter into this Agreement and to perform their
respective obligations hereunder;
(c) this Agreement, the Support Agreement and the Offer have been
duly authorized by the board of directors of Pervasive and,
upon the due execution and delivery of this Agreement by a
Seller, this Agreement shall be a valid and binding agreement
enforceable by such Seller against the Offeror in accordance
with its terms, subject, however, to limitations with respect
to enforcement imposed by law in connection with bankruptcy or
similar proceedings, the equitable power of the courts to stay
proceedings before them and the execution of judgements and to
the extent that equitable remedies such as specific
performance and injunction are in the discretion of the court
from which they are sought; and
(d) the execution of this Agreement and the consummation of the
transactions contemplated hereunder, including the Offer, do
not and will not, with notice or lapse of time or both,
violate any provision of the charter documents of Offer Sub or
Pervasive or any material agreement to which Offer Sub or
Pervasive is bound.
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ARTICLE 6
DEPOSIT AND PAYMENT
-------------------
6.1 DEPOSIT. Subject to limitations imposed on certain Sellers under the
Escrow Agreements or the Founders Warrants, each Seller hereby irrevocably and
unconditionally agrees to deposit all of the Seller's Shares, together with a
duly completed and executed letter of transmittal, under the Offer. The Seller
shall, within 14 days of the date of the Offer, tender all of the Seller's
Shares to the Offer in accordance with the terms of the Offer.
6.2 NO WITHDRAWAL. Each Seller hereby irrevocably and unconditionally
agrees that neither it nor any person on its behalf will withdraw or take any
action to withdraw any of the Seller's Shares deposited under the Offer
notwithstanding any statutory rights or other rights under the terms of the
Offer or otherwise which it might have, unless this Agreement is terminated in
accordance with its terms prior to the taking up of the Seller's Shares under
the Offer.
ARTICLE 7
TERMINATION BY THE SELLER AND OFFEROR
-------------------------------------
7.1 TERMINATION BY SELLERS. Each Seller, when not in default in the
performance of its obligations under this Agreement, may, without prejudice to
any other rights, terminate its obligations under this Agreement by written
notice to the Offeror if:
(a) the Seller's Shares deposited under the Offer have not, for
any reason whatsoever, been taken up and paid for on or before
the date the Shares, other than the Sellers' Shares are taken
up and paid for under the Offer, and on or before the expiry
of ten days after the expiry of the Offer;
(b) the Support Agreement has been terminated; or
(c) the Offer has been withdrawn.
7.2 TERMINATION BY OFFEROR. The Offeror, when not in default in the
performance of its obligations under this Agreement, may, without prejudice to
any other rights, terminate this Agreement by notice to the Sellers if:
(a) the conditions precedent in Section 1.2 hereof are not
satisfied or waived by the Offeror on or prior to the date at
which it must make the Offer;
(b) the Seller has not complied with all of its covenants to the
Offeror contained herein in and such non-compliance has a
Material Adverse Effect;
(c) the representations and warranties of the Corporation as set
forth in the Support Agreement are not true and correct, and
such inaccuracy results in a Material Adverse Change or has a
Material Adverse Effect;
S-11
(d) the Corporation has not complied with all of its covenants to
the Offeror contained in the Support Agreement and such
non-compliance has not been cured within 10 business days
after receipt of written notice of such non-compliance and in
any event such non-compliance results in a Material Adverse
Change or has a Material Adverse Effect;
(e) the conditions in Section 4 of Schedule A hereto are not
satisfied or waived by the Offeror on or prior to the
Expiration Time (as defined in Schedule A hereto); or
(f) the circumstances entitling the Offeror to payment pursuant to
Article 6 of the Support Agreement have occurred.
7.3 EFFECT OF TERMINATION. In the case of any termination of this Agreement
pursuant to this Article 7, this Agreement shall be of no further force and
effect. Such termination shall not relieve any party from liability for any
breach of this Agreement prior to such termination.
ARTICLE 8
GENERAL
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8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except for the
representations and warranties of Sellers contained in Sections 2.1 (b) - 2.1
(f) hereof, which shall survive indefinitely, the representations and warranties
shall not survive the consummation of the Offer. No investigations made by or on
behalf of the Offeror or any of their authorized agents at any time shall have
the effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty or covenant made by a Seller in or pursuant to this
Agreement.
8.2 DISCLOSURE. Except as required by applicable laws or regulations, or as
required by any competent governmental, judicial or other authority, or in
accordance with the requirements of any stock exchange, the Sellers shall not
make any public announcement or statement with respect to this Agreement or the
Offer without the prior written approval of the Offeror.
8.3 ASSIGNMENT. This agreement shall not be assignable by any party hereto
without the consent of the other parties, which may be unreasonably withheld,
provided, however, that the Offeror may assign its rights and obligations under
this Agreement to a wholly-owned subsidiary.
8.4 TIME. Time shall be of the essence.
8.5 CURRENCY. Except where specifically indicated to the contrary, all sums
of money referred to in this Agreement shall mean Canadian dollars.
8.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
8.7 ENTIRE AGREEMENT. This Agreement, including the schedules hereto,
constitutes the entire agreement and understanding between and among the parties
hereto with respect to the subject
S-12
matter hereof and supersedes any prior agreement, representation or
understanding with respect thereto.
8.8 AMENDMENTS. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.
8.9 DEFINITIONS. For the purposes of this Agreement the terms:
(a) "affiliates" and "associates" means the persons, corporations
and other entities included in the definitions of such term
under the Securities Act (Ontario);
(b) "business day" means any day, other than a Saturday or Sunday,
on which chartered banks in the City of Toronto, Ontario and
in the City of Austin, Texas, are open for business;
(c) "Competing Transaction" means a written offer, other than the
Offer, made to all holders of the Shares and prepared in
accordance with applicable securities laws, whether by way of
take-over bid, amalgamation, plan of arrangement, or
otherwise, which in the opinion of the board of directors of
the Corporation, acting in good faith, would result, directly
or indirectly, in holders of Shares receiving consideration
with a fair value in excess of the fair market value of the
Offer Price.
(d) "Effective Date" means the date upon which the Offeror takes
up and pays for the Shares under the Offer;
(d) "Employee Warrants" means the 600,000 share purchase warrants
outstanding under those certain Share Purchase Warrant
Agreements, each entitling the holder thereof to acquire one
share of the Corporation at a price of $0.52 until October 31,
1999;
(e) "InContext Warrants" means the 1,707,067 share purchase
warrants outstanding under those certain Share Purchase
Warrant Agreements, each entitling the holder thereof to
acquire one share of the Corporation at a price of $1.80 until
July 1, 1999;
(g) "Management Employment Agreements" means the agreements with
respect to the new employment arrangements to be entered into
with the Management Employees (as defined in the Support
Agreement) prior to the Offer, such agreements to be effective
upon completion of the Offer;
(h) "Material Adverse Change" means any change (or any condition,
event or development involving a prospective change) in the
business, operations, affairs, assets, liabilities (including
any contingent liabilities that may arise through outstanding,
pending or threatened litigation or otherwise),
capitalization, financial condition, licenses, permits,
rights, privileges or prospects of the Corporation or any of
its subsidiaries which could reasonably be expected to
materially and adversely affect the Corporation or its
subsidiaries, provided that a Material Adverse Change
S-13
shall not include the effect of any sale consented to by the
Offeror pursuant to Section 1.2(d)(ii);
(i) "Material Adverse Effect" shall mean any change, condition,
event or development involving a prospective change, condition
or event which could reasonably be expected to materially and
adversely effect the ability of or prospects for the Offeror
completing the Offer or a Subsequent Transaction;
(j) "material fact", "material change" and "misrepresentation" are
used as defined under the Securities Act (Ontario);
(j) "Shares" shall include any shares into which the Shares may be
reclassified, subdivided, consolidated or converted and any
rights and benefits arising therefrom including any
extraordinary distributions of securities which may be
declared in respect of the Shares;
(k) "Stock Options" shall mean those stock options to purchase
common stock of the Corporation as set forth in the Disclosure
Letter (as defined in the Support Agreement).
(l) "Subsequent Transaction" shall mean those transactions to be
undertaken by the Offeror after completion of the Offer to
accomplish the acquisition of all of the outstanding Shares,
and rights to acquire Shares, of the Corporation pursuant to
either (i) the compulsory acquisition procedures prescribed by
Section 206 of the Canada Business Corporations Act or (ii) a
"going private transaction" as construed under applicable
securities laws, rules and policies on the basis of a two
thirds minority approval (as provided for by Ontario
Securities Commission Policy No. 9.1) including a
determination by the Ontario Securities Commission excluding
votes attaching to the Shares acquired from Sellers in
determining such approval; and
(m) "Warrants" shall mean the 100,000 share purchase warrants
outstanding under those certain Share Purchase Warrant
Agreements, each entitling the holder thereof to acquire one
share of the Corporation at a price of $1.65 until November
19, 1998 and the 1,268,500 share purchase warrants outstanding
under those certain Special Warrant Certificates, each
entitling the holder thereof to acquire one share of the
Corporation at a price of $1.65 until March 18, 1999.
For the purposes of this Agreement, if the last day of a period of days is not a
business day, the period shall be extended to the next following day which is a
business day.
8.10 NOTICES. Any notice, request, consent, agreement or approval which may
or is required to be given pursuant to this Agreement shall be in writing and
shall be sufficiently given or made if delivered or telecopied in the case of:
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(a) the Offeror, addressed as follows:
Pervasive Software Inc.
8834 Capital of Texas Highway, Suite 300
Austin, Texas 78759
ATTENTION: PRESIDENT
Telephone No.: (512) 794-1719
Telecopier No.: (512) 794-1778
and
with a copy to:
Gunderson Dettmer Stough Villeneuve Franklin & Hachigian
155 Constitution Drive
Menlo Park, CA 94025
ATTENTION: JAY K. HACHIGIAN, ESQ.
Telephone No.: (650) 321-2400
Telecopier No.: (650) 321-2800
(b) to the Seller, addressed as follows:
EveryWare Development Inc.
6733 Mississauga Road, Seventh Floor
Mississauga, Ontario, Canada L5N6J5
ATTENTION: PRESIDENT
Telephone No.: (905) 819-1173
Telecopier No.: (905) 819-1172
with a copy to:
Burstall Ward
Suite 3100 Home Oil Tower
324-8th Avenue S.W.
Calgary, Alberta, Canada T2P222
ATTENTION: DOUGLAS M. STUVE
Telephone No.: (403) 234-3337
Telecopier No.: (403) 266-6016
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery or telecopy (if during normal business hours or, if not, the
next day).
8.11 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS. Each of the parties
recognizes and acknowledges that this Agreement is an integral part of the
transactions contemplated in the Offer,
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that the Offeror would not make the Offer, and that the Corporation would not
agree to facilitate the Offer, unless this Agreement was executed, and
accordingly acknowledges and agrees that a breach by a party of any convenants
or other commitments contained in this Agreement will cause any of the other
parties to sustain injury for which it would not have an adequate remedy at law
for money damages. Therefore, each of the parties agrees that in the event of
any such breach, the aggrieved party shall be entitled to the remedy of specific
performance of such covenants or commitments and preliminary and permanent
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity, and the parties further agree to waive
any requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
8.12 EXPENSES. Each of the parties shall pay its legal, financial advisory
and accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement and all documents and instruments
executed or prepared pursuant hereto and any other costs and expenses whatsoever
and howsoever incurred, provided, however, that the fees and expenses of the
Corporation (including the fees and expenses of Cowen & Company) in excess of
U.S.$500,000 in the aggregate shall be deducted from the Aggregate Purchase
Price payable to Sellers (as defined in Schedule A attached hereto).
8.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts which together shall be deemed to constitute one valid and binding
agreement and delivery of the counterparts may be effected by means of a
telecopied transmission.
8.14 EFFECTIVENESS. This Agreement shall not be effective until the Support
Agreement has been executed by the Corporation and the Offeror.
[Intentionally Left Blank]
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Yours truly,
PERVASIVE SOFTWARE INC.
By:
-----------------------------
President
PERVASIVE SOFTWARE CANADA
By:
-----------------------------
President
Agreed and accepted as of this _______ day of _________, 1998
EVERYWARE DEVELOPMENT INC.
By:
------------------------------------
Daniel A. McKenzie
Chairman and Chief Operating Officer
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Agreed and accepted this ___ day of ________, 1998
SELLER
---------------------------------------------
( Print Name of Seller)
---------------------------------------------
(Signature of Seller or Authorized Signatory)
---------------------------------------------
(Place of Residency)
---------------------------------------------
(Print or Type Name and Title if Seller is
not an Individual)
Address:
-----------------------------------
-----------------------------------
-----------------------------------
Telephone:
-----------------------------------
Facsimile:
-----------------------------------
---------------------------------------------
(Number of Shares Held)
---------------------------------------------
(Number of Shares subject to Founders
Warrants)
---------------------------------------------
(Number of Shares subject to Escrow
Agreements)
---------------------------------------------
(Amount of Loan(s) to Seller by the
Corporation, if any)
PLEASE PROVIDE ALL OF THE ABOVE-REQUESTED INFORMATION
-----------------------------------------------------
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SCHEDULE A
TERMS OF THE OFFER
------------------
1. GENERAL TERMS. The Offer shall be made to purchase all of the Shares by
way of a take-over bid circular prepared in compliance with the Securities Act
(Ontario) and other applicable provincial securities laws and, if necessary, in
accordance with the applicable laws of the United States. The Offer shall be
made on the terms herein set forth and upon such other terms and conditions as
are required by law and shall be open for a period of 21 calendar days or such
longer period as may be permitted in the circumstances prescribed in Section 2
below.
2. MAXIMUM OFFER PERIOD. The Offer shall provide that not later than the
expiration of 90 calendar days from the day of the Offer, the Offeror shall
either:
(a) abandon the Offer and return all Shares deposited thereunder;
or
(b) waive any conditions that have not been satisfied, if any,
and take up and pay for all Shares deposited under the Offer,
including the Shares agreed to be deposited by the Sellers;
provided that, notwithstanding clauses (a) and (b) above,
(A) the Offer may be extended by the Offeror from time to
time in accordance with its terms and applicable law,
and will be extended by the Offeror from time to time
until the expiration of not less than 120 calendar days
from the date of the Offer (the "Expiration Time") if
any requisite regulatory approvals (domestic and
foreign) have not been obtained or statutory or
regulatory waiting periods (domestic or foreign) have
not expired, in each case on terms satisfactory to the
Offeror prior to the date on which an extension is made
so long as there is a reasonable prospect of the
approval being obtained within that period of time; and
(B) the Offer may be extended by the Offeror from time to
time in the event that the Offeror takes up and pays for
all deposited Shares, including the Shares deposited by
the Sellers.
(c) Notwithstanding Section 2 of this Schedule A, the Offeror
shall take up and pay for all deposited Shares within 2 (two)
business days of the date when all conditions of the Offer
contained in Section 4 of this Schedule A are met.
3. PRICE OF THE OFFER. The Offeror shall pay, for each whole Share validly
deposited under the Offer and not withdrawn, consideration in the form of $1.18
in cash for each Share.
4. CONDITIONS OF THE OFFER. The Offer shall not be subject to any
conditions other than those substantially described as follows:
S-19
(a) not less than 66 2/3% of the then outstanding Shares are
validly deposited under the Offer and not withdrawn at the
expiration of the Offer;
(b) the Director under the Competition Act (Canada) has not
notified the Offeror that he intends to apply to the
Competition Tribunal for an order under Section 92 of such
Act in respect of the Transaction, and no proceedings shall
have been taken or threatened under the merger provisions of
Part VII of such Act in respect of the Transaction;
(c) any applicable waiting periods under any other competition,
merger control or similar law, regulation or other
governmental authority (domestic or foreign) having
jurisdiction over any party hereto or the Offer or any other
transaction contemplated herein shall have expired in respect
of such transactions;
(d) all required domestic or foreign governmental or regulatory
approvals relating to the transaction and the purchase of
Shares by the Offeror under the Offer (in addition to those
referred to in (b) and (c) above and including without
limitation those of any federal, provincial and state
regulatory body or government office regulating insurance
companies, other financial institutions or financial or
market intermediaries, any stock exchange or other regulatory
authorities in Canada and the United States of America or
elsewhere) shall have been obtained or waived on terms
satisfactory to the Offeror, other than any such approval
which if not obtained would not, in the reasonable opinion of
the Offeror, have a material adverse effect on the
Corporation, taken as a whole;
(e) (i) no act, action, suit or proceeding shall have been
initiated or taken before or by any domestic or foreign
arbitrator, court or tribunal or governmental agency or other
regulatory authority or administrative agency or commission
or by any elected or appointed public official or private
person (including, without limitation, any individual,
corporation, firm, group or other entity) in Canada or
elsewhere, whether or not having the force of law, and (ii)
no law, regulation, rule or policy shall have been proposed,
enacted, promulgated or applied, in the case of (i) or (ii)
above:
(A) to cease trade, enjoin, prohibit or impose material
limitations or conditions on the purchase by or the sale
to the Offeror of the Shares or the right of the Offeror
to own or exercise full rights of ownership of the
Shares; or
(B) which has had, or if the Offer was consummated, would
result in a Material Adverse Change (as such term, and
certain other terms used herein, are defined in Section
8.9); or
(C) which would prevent completion of a Subsequent
Transaction.
(f) at the time the Offeror proposes to take up and pay for the
Shares, there does not exist any prohibition at law (other
than as referred to in paragraphs (b), (c) or (d)
S-20
above) against the Offeror taking up and paying for the
Shares under the Offer and completing the Subsequent
Transaction;
(g) at the time the Offeror proposes to take up and pay for the
Shares, none of the Shares is subject to any restriction on
transfer by Seller or any other restrictions, and none of the
Sellers is obligated under, any of the Escrow Agreements or
the Founders Warrants;
(h) during the time the Offer is outstanding there shall not have
occurred or arisen (or there shall not have been generally
disclosed or discovered, if not previously disclosed in the
Support Agreement), a Material Adverse Change or a Material
Adverse Effect;
(i) the Corporation and its subsidiaries shall have taken all
steps reasonably requested by the Offeror in connection with
the Offer (other than such steps which would have an adverse
effect on the Corporation's and its subsidiaries' respective
business if the Offer were not completed) including, without
limitation, any steps required to satisfy the regulatory
requirements or approvals (domestic or foreign) whether or
not mentioned in this Agreement or the Support Agreement in
order for the Offeror to purchase the Shares and complete the
Subsequent Transaction;
(j) any representation or warranty of a Seller in the Agreement
shall not be, as of the date on which the Offeror is to take
up Shares deposited under the Offer, true and correct or any
Seller shall not have performed any of its covenants or
complied with any of its agreements to be performed and
complied with by it under the Agreement and such inaccuracy
or non-performance constitutes a Material Adverse Change or
has a Material Adverse Effect; or
(m) any representation and warranty of the Corporation in the
Support Agreement shall not be, true and correct or the
Corporation shall not have performed any of its covenants or
complied with any of its agreements to be performed and
complied with under the Support Agreement and such inaccuracy
or non-performance gives rise to a Material Adverse Change or
has a Material Adverse Effect.
The foregoing conditions are for the exclusive benefit of the
Offeror and may be asserted by the Offeror regardless of the circumstances or
may be waived by the Offeror acting jointly in their sole discretion, in whole
or in part, at any time and from time to time without prejudice to any other
rights which the Offeror may have under the Offer. Any determination by the
Offeror concerning the events described above will be final and binding.
S-21
SCHEDULE B
MANAGEMENT SELLERS
1. David Hackett
2. Daniel McKenzie
3. Donald Whitbeck
4. 1068303 Ontario Ltd.
5. 1069812 Ontario Inc.
6. Advantage Software Inc.
7. Greg Hemstreet
8. Mark Verdun
9. Robert Arn
10. Rudy Wolfs
S-22
SCHEDULE B
REPRESENTATIONS AND WARRANTIES OF THE
CORPORATION
Subject to the specific disclosures contained in the Disclosure Letter (the
"Disclosure Letter") delivered simultaneously with this Agreement by the
Corporation, the Corporation hereby represents and warrants to the Offeror that
the following are true and correct as of the date hereof and at all times during
which the Offer is outstanding.
INCORPORATION AND QUALIFICATION
Each of the Corporation and its subsidiaries (as defined below) is a
corporation duly incorporated, organized, validly subsisting and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted and is duly registered,
licensed or qualified to carry on business in each jurisdiction in which the
nature of the business as now being conducted by it or the property owned or
leased by it makes such registration, licensing or qualification necessary,
unless the failure to be so registered or qualified would not result in a
Material Adverse Change. The copies of the Corporation's articles and bylaws
which have been furnished to the Offeror reflect all amendments made thereto at
any time prior to the execution of the Agreement and are correct and complete.
The Corporation is not in default under or in violation of any provision of its
articles or bylaws.
CAPITALIZATION
The authorized capital of the Corporation consists of an unlimited number
of Common Shares and unlimited number of Preferred Shares.
As of the date hereof, 12,291,082 Common Shares and 0 Preferred Shares are
issued and outstanding, 1,191,000 Common Shares are reserved for issuance upon
the exercise of Stock Options and 2,472,067 Common Shares are reserved for
issuance upon the exercise of Warrants. 53,846 Common Shares are held by a
subsidiary of the Corporation and shall not be delivered into the Offer. The
issued and outstanding Shares and the Preferred Shares have been, and the Shares
issued upon exercise of the Stock Options and Warrants and upon payment of the
exercise price thereof will be, validly authorized and issued, fully paid and
non-assessable and free of preemptive rights. The Shares are listed and posted
for trading on The Alberta Stock Exchange. There are no other issued and
outstanding shares in the capital of the Corporation. No shares are held as
treasury stock or by any subsidiary of the Corporation, except as set forth
above.
A schedule of outstanding Stock Options, including the holder and vesting
schedule for each Stock Option and a schedule of outstanding Warrants, including
the holder and expiry date for each Warrant, other than the InContext Warrants,
is set forth in the Disclosure Letter.
S-23
Except for the Stock Options and the Warrants, there are not now, and at
the Effective Date there will not be, any outstanding options, warrants or
rights to purchase or acquire, or securities convertible into or exchangeable
for, any shares in the share capital of the Corporation and there are no
contracts, commitments, agreements, understandings, arrangements or restrictions
which require the Corporation to issue, sell or deliver any shares in its share
capital or any securities or obligations convertible into, or exchangeable for,
any shares of its share capital. Neither the Corporation nor any of its
subsidiaries has outstanding any bonds, debentures, notes or other indebtedness
the holders of which have the right to vote (or that are convertible or
exercisable into securities having the right to vote) with holders of Shares or
in respect of the election of directors of the Corporation. None of the
outstanding shares of the capital stock of the Corporation or of its
subsidiaries were issued, and none of the shares of capital stock issuable upon
the exercise of the Stock Options or Warrants will be issued, in violation of
applicable securities legislation.
SUBSIDIARIES
The corporations named in the Disclosure Letter as subsidiaries of the
Corporation (the "subsidiaries") are the only subsidiaries of the Corporation
within the meaning of the BCA and all outstanding shares in the capital of the
subsidiaries are beneficially owned directly or indirectly by the Corporation
free and clear of all liens and restrictions whatsoever, except restrictions on
transfer contained in the constating documents of such subsidiaries.
All of the issued and outstanding shares in the capital of the subsidiaries
are duly authorized, validly issued, fully paid and non-assessable. There are
not now, and at the Effective Date there will not be, any outstanding options,
warrants or rights to purchase or acquire, or securities convertible into or
exchangeable for, any shares in the share capital of such subsidiaries and there
are no contracts, commitments, agreements, understandings, arrangements or
restrictions which require any such subsidiary to issue, sell or deliver any
shares in its share capital or any securities or obligations convertible into or
exchangeable for, any shares of its share capital.
AUTHORITY, FILINGS
The Corporation has the corporate power and authority and has received all
necessary corporate approvals to enter into this Agreement and the Lock-Up
Agreement and to carry out the transactions contemplated hereby and thereby.
This Agreement and the Lock-Up Agreement have been duly authorized, executed and
delivered by the Corporation and constitute valid and binding obligations of the
Corporation enforceable by the Offeror against it in accordance with their
terms, subject, however, to limitations with respect to enforcement imposed by
law in connection with bankruptcy or similar proceedings, the equitable power of
the courts to stay proceedings before them and the execution of judgements and
to the extent that equitable remedies such as specific performance and
injunction are in the discretion of the court from which they are sought.
Other than in connection with or in compliance with the provisions, to the
extent applicable, of the Competition Act (Canada) (the "Competition Act") or in
respect of other regulatory approvals and except for the filing of appropriate
notices with the relevant stock
S-24
exchanges, material change reports and press releases, no other authorization,
consent or approval of any agency is necessary for the completion by the
Corporation of its obligations under the Agreement, the failure to obtain which,
individually or in the aggregate, would result in a Material Adverse Change or
have a Material Adverse Effect.
ABSENCE OF CHANGES
Since June 30, 1997, and except as disclosed in the public disclosure
documents filed by the Corporation since June 30, 1997 with the Alberta
Securities Commission (the "Public Disclosure Documents"), or as set forth in
the financial statements (the "Unaudited Financial Statements") contained in the
Disclosure Letter, there has not been any Material Adverse Change. Without
limiting the generality of the foregoing, from June 30, 1998 to the date hereof:
(a) neither the Corporation nor any of its subsidiaries has sold,
leased, transferred or assigned, in one or more transactions, any assets,
tangible or intangible, outside the ordinary course of business other than
transactions which are not material to the Corporation and its subsidiaries
taken as a whole, and other than transactions among one or more of the
Corporation and its subsidiaries;
(b) neither the Corporation nor any of its subsidiaries has
entered into any agreement, contract, lease or license, in one or more
transactions, outside the ordinary course of business other than transactions
which are not material to the Corporation or its subsidiaries;
(c) except for Stock Options that may accelerate by their terms as
a result of completion of the Offer (which are identified on the Disclosure
Letter) and transactions contemplated by the Agreement, no person (including any
of the Corporation and its subsidiaries) has accelerated, terminated, made
modifications to, or cancelled any agreement, contract, stock option, lease, or
license to which any of the Corporation and its subsidiaries is a party or by
which any of them is bound or to which their property is subject outside the
ordinary course of business other than transactions which are not material to
the Corporation or its subsidiaries;
(d) neither the Corporation nor any of its subsidiaries has made,
any loan to, or any other investment in, any other person other than the
Corporation or any of its subsidiaries other than transactions which are not
material to the Corporation or its subsidiaries;
(e) except for Permitted Borrowings and operating furniture and
equipment leases, neither the Corporation nor any of its subsidiaries has
created, incurred, assumed or guaranteed indebtedness for borrowed money or
obligations in respect of capitalized leases;
(f) except in the ordinary course of business, neither the
Corporation nor any of its subsidiaries has granted any license or sublicense of
any rights under or with respect to any intellectual property other than to the
Corporation or another subsidiary;
(g) there has been no change made or authorized in the articles or
bylaws of the Corporation or of any of its subsidiaries other than changes which
are not material to the Corporation or its subsidiaries;
S-25
(h) neither the Corporation nor any of its subsidiaries has
issued, sold or otherwise disposed of any of its capital stock, or granted any
options, warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of its capital stock, other than pursuant
to any stock option plan in the ordinary course and other than to the
Corporation or another subsidiary;
(i) neither the Corporation nor any of its subsidiaries has
declared, set aside or paid any dividend or made any distribution with respect
to its capital stock (whether in cash or in kind) or redeemed, purchased or
otherwise acquired any of its capital stock, other than in the ordinary course
or as permitted under this Agreement;
(j) neither the Corporation nor any of its subsidiaries has
entered into any collective bargaining agreement or modified the terms of any
such existing agreement;
(k) except in the ordinary course, neither the Corporation nor any
of its subsidiaries has granted any increase in the base compensation of any of
its officers or directors; and
(l) neither the Corporation nor any of its subsidiaries has
adopted, amended, modified, or terminated any bonus, profit-sharing, incentive,
severance, pension or other plan, contract, or commitment (or taken any such
action with respect to any other such plan) for the benefit of (i) any of its
officers or directors or (ii) any of its other employees outside the ordinary
course of business.
ABSENCE OF UNDISCLOSED LIABILITIES
Other than as disclosed in the Unaudited Financial Statements, neither the
Corporation nor any of its subsidiaries has any material liabilities or
obligations of any nature (whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become due,
including any liability for taxes).
SECURITIES LAW FILINGS
The Corporation has filed all information or proxy circulars, reports and
other documents required to be filed by it pursuant to applicable securities
legislation. The Corporation has provided to the Offeror copies of the Public
Disclosure Documents requested by the Offeror relating to the Corporation and
all of the Corporation's information or proxy circulars, reports and other
documents filed by the Corporation since March 12, 1996 pursuant to applicable
securities legislation (collectively, the "Securities Reports"). Each Securities
Report was, as of the date of filing such report, in compliance in all material
respects with all applicable requirements of securities legislation and none of
the Securities Reports, as of their respective filing dates, contained any
untrue statement of material fact or omitted 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.
S-26
NO CONFLICT
Subject to compliance with the Competition Act and in respect of other
regulatory approvals, the execution and delivery of the Agreement by the
Corporation does not, and the performance of the Agreement by the Corporation
and the consummation by it of the transactions contemplated in the Agreement
shall not:
(a) conflict with or violate the articles or bylaws or equivalent
organizational documents of the Corporation or any subsidiary;
(b) conflict with or violate any law, rule, permit, order,
judgement or decree applicable to the Corporation or any of its subsidiaries or
by which any of their respective properties is bound or affected, the conflict
with which or violation of which would result in a Material Adverse Change or
have a Material Adverse Effect;
(c) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien on any of the properties or
assets of the Corporation or any of its subsidiaries pursuant to any note, bond,
mortgage, indenture or other similar contract, agreement or instrument relating
to indebtedness for borrowed money (the "Debt Agreements") to which the
Corporation or any of its subsidiaries is a party or by which the Corporation or
any of its subsidiaries or any of their respective properties is bound or
affected; or
(d) result in any breach of or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of or result in the creation of a lien on any of the properties or
assets of the Corporation or any of its subsidiaries pursuant to, any contract,
agreement, lease, licence, permit, franchise or other instrument or obligation
(other than the Debt Agreements), to which the Corporation or any of its
subsidiaries is a party or by which the Corporation or any of its subsidiaries
or any of their respective properties is bound or affected which breach or
default, in any such case, would result in a Material Adverse Change or have a
Material Adverse Effect.
COMPLIANCE
Neither the Corporation nor any of its subsidiaries is in conflict with, or
in default (including cross-defaults) or violation of:
(a) its articles or bylaws or equivalent organizational documents;
(b) any law, rule, order, permit, judgement or decree applicable
to the Corporation or any of its subsidiaries or by which any one of their
respective properties is bound or affected, which conflict, default or violation
would result in a Material Adverse Change or have a Material Adverse Effect;
S-27
(c) any Debt Agreement to which the Corporation or any of its
subsidiaries is a party or by which the Corporation or any of its subsidiaries
or any of their respective properties is bound or affected; or
(d) any contract, agreement, lease, licence, permit, franchise or
other instrument or obligation (other than the Debt Agreements) to which the
Corporation or any of its subsidiaries is a party or by which the Corporation or
any of its subsidiaries or any of their respective properties is bound or
affected which conflict, default or violation, in any such case, would result in
a Material Adverse Change or have a Material Adverse Effect.
In particular, and without limiting the generality of the foregoing, the
Corporation has complied with the provisions of all applicable securities
legislation, except for non compliance that could not reasonably be expected to
result in a Material Adverse Change or have a Material Adverse Effect.
FINANCIAL STATEMENTS
The Corporation has, previously furnished the Offeror with true and
complete copies of the Corporation's audited Consolidated Balance Sheet, Income
Statement and Changes in Financial Position for the fiscal year ended December
31, 1996 and six months ending June 30, 1997 (the "Audited Financial
Statements"). In addition the Unaudited Financial Statements for the fiscal year
ended June 30, 1998 are included in the Disclosure Letter. The Audited Financial
Statements and the Unaudited Financial Statements present fairly, in all
material respects, the consolidated financial position of the Corporation and
the results of its operations and its changes in financial position as of the
respective dates and for the periods presented therein in conformity with GAAP
as in effect on the applicable dates of such financial statements and applied on
a consistent basis, except as noted therein and except that the Unaudited
Financial Statements may be subject to normal, recurring adjustments that would
be made in the course of an audit and that would not be in excess of $150,000 in
aggregate and there shall be no audit adjustments as a result of material
internal control or revenue recognition deficiencies. The parties agree that any
normal, recurring adjustments in excess of $150,000 in the aggregate or any
audit adjustment as a result of material internal control or revenue recognition
deficiencies shall constitute a Material Adverse Change.
FORECASTS
The Corporation has provided Offeror with copies of its financial forecasts
(the "Forecasts") for the fiscal quarter ended September 30, 1998. The
Corporation shall have completed final unaudited financial statements (the
"Statements") prepared in conformity with GAAP for the fiscal quarter ended
September 30,1998 on or before October 20, 1998. The parties agree that it shall
be a Material Adverse Change if the Statements reflect a total revenue (Sales)
amount which is less than US$1,000,000.
S-28
LITIGATION
There are no claims, actions, proceedings, suits, investigations, reviews,
judgements, or decrees pending or, to the knowledge of the Corporation,
threatened against or involving the Corporation or any of its subsidiaries or
any of their business, assets or properties before any court or other tribunal
or by or before any agency or arbitrator. As of the date hereof neither the
Corporation nor any of its subsidiaries nor any of their assets or properties is
subject to any judgement, order or decree which was or will result in a Material
Adverse Change.
LABOR AND EMPLOYMENT RELATIONS
Neither the Corporation nor any of its subsidiaries is a party to any
written or oral agreement providing for severance or termination payments to any
director or officer as a result of the transactions contemplated by the
Agreement or any employment agreement with any of its directors or officers. The
Corporation has no knowledge that any organizational effort is presently being
made or threatened by or on behalf of any labour union with respect to employees
of the Corporation or any of its subsidiaries.
BENEFIT PLANS
With regard to the Corporation, (i) there are no material pension,
retirement, profit sharing, bonus, savings, deferred compensation, stock option,
purchase or appreciation, health, life insurance, disability, sick pay,
severance pay, group insurance or other material employee benefit plans,
programmes or arrangements maintained or contributed to by the Corporation or
any of its subsidiaries (each such plan, programme or arrangement being referred
to herein as a "Plan"), (ii) there are no outstanding violations or defaults
thereunder nor any actions, claims, or other proceedings pending or, to the
knowledge of the Corporation, threatened with respect to any Plan, (iii) no Plan
is currently under a governmental investigation or audit and, to the knowledge
of the Corporation, no such investigation or audit is contemplated or under
consideration, (iv) each Plan covers only current or former employees of the
Corporation and its subsidiaries and their dependents or beneficiaries, (v) no
promise or commitment to increase benefits under any Plan or to adopt any
additional Plan has been made except as required by law, (vi) no event has
occurred which could subject any person or fund to any tax, penalty or fiduciary
liability in connection with any Plan, and (vii) there have been no withdrawals
of surplus or contributions holidays, except as permitted by law and the terms
of the Plans.
PROPERTY
Each of the Corporation and the subsidiaries has good title to all of its
respective material properties and assets (real and personal, tangible and
intangible, including leasehold interests) including all the properties and
assets reflected in the balance sheets forming part of the Financial Statements,
except as indicated in the notes thereto. Neither the Corporation nor any of its
subsidiaries has committed a material breach or default under any property
lease, nor has there occurred any event that with the passage of time or the
giving of notice or both would constitute such a material breach or default, nor
are there any facts or circumstances that would reasonably indicate that the
Company is likely to be in material breach or default thereunder.
S-29
CONTRACTS AND COMMITMENTS
All of the material contracts, agreements and instruments involving
payments to, or obligations (contingent or otherwise) of the Corporation or any
of its subsidiaries (the "Material Agreements") to which the Corporation or any
of its subsidiaries is a party are valid, binding, in full force and effect in
all material respects and enforceable by the Corporation or its subsidiaries (as
applicable) in accordance with their respective terms, subject, however, to
limitations with respect to enforcement imposed by law in connection with
bankruptcy or similar proceedings, the equitable power of the courts to stay
proceedings before them and the execution of judgements and to the extent that
equitable remedies such as specific performance and injunction are in the
discretion of the courts from which they are sought. Each of the Corporation and
its subsidiaries has performed its obligations under such Material Agreements in
accordance with the terms thereof in all material respects. To the knowledge of
the Corporation, no other party is in breach, in any material respect, of any of
the Material Agreements. A complete list of the Material Agreements is set forth
in the Disclosure Letter.
TAX MATTERS
Each of the Corporation and the subsidiaries has filed on a timely basis
all tax returns required to be filed by it (except if not yet due), has paid all
taxes which are due and payable, other than as disclosed in writing to the
Offeror, and has made adequate provision in the Financial Statements for the
payment of all taxes not then due and payable. Each of them has made adequate
and timely installments of taxes for the taxation period ending on or
immediately before the Effective Date and all tax returns filed by each of them
have been duly and accurately completed as required by law. With respect to any
taxation period up to and including the Effective Date for which tax returns
have not yet been filed or for which taxes are not yet due and payable, each of
them has only incurred liabilities for taxes the ordinary course of its
business. All taxes owed by any of the Corporation and its subsidiaries (whether
or not shown on any tax return) have been timely withheld, remitted and paid.
Each of the Corporation and its subsidiaries has withheld from payments made to
its past or present employees, officers and directors, and to non-residents of
Canada, the required amount in respect of taxes, and other deductions to be
withheld therefrom, and has remitted such withheld amounts to the applicable
governmental authority within the required time periods under the applicable
legislation.
Each of the Corporation and its subsidiaries has collected all taxes that
it was required to collect and, as of the date hereof all such taxes (of the
nature of payroll or sales taxes) have been remitted to the applicable
governmental authority.
Each of the Corporation and its subsidiaries has not received any refund of
taxes or any credit against taxes from any relevant taxing authority to which it
was not entitled and which has not been returned to any such relevant taxing
authority.
All tax returns have been filed through and including the financial year
ended December 31, 1996 and other than for items in dispute, there are no
outstanding waivers of any limitation periods or agreements providing for an
extension of time for the filing of any tax return or the payment of any taxes.
S-30
Except as disclosed in writing to the Offeror there is no dispute or claim
concerning any tax liability of the Corporation or any of its subsidiaries
either: (i) claimed or raised by any agency in writing; or (ii) as to which the
Corporation and its subsidiaries has knowledge based upon personal contact with
any agent of such agency.
BROKERAGE
No agent, broker, investment banker, or other or person is or will be
entitled to any broker's or finder's fee or other commission or similar fee
incurred by the Corporation in connection with any of, or the consummation of
any of the transactions contemplated hereby, other than Cowen & Company, the
particulars of whose engagement have been provided to the Offeror.
LICENSES
The Corporation and each of its subsidiaries owns, possesses or has
obtained and is in compliance with, all governmental licences, permits,
certificates, consents, orders and other authorizations necessary to conduct its
businesses as now conducted or as proposed to be conducted, subject to such
exceptions which do not result in a Material Adverse Change.
DISCLOSURE DOCUMENTS
The Public Disclosure Documents in respect of the Corporation are, as of
their respective dates, in compliance in all material respects with all
applicable securities legislation and the Management Proxy Circular for the 1997
annual meeting of the Corporation and the Annual Information Form of the
Corporation for the six-month period ended June 30, 1997 as of their respective
dates did not contain any "misrepresentation" within the meaning of the
Securities Act (Ontario).
BOOKS AND RECORDS
The corporate records and minute books of the Corporation and its
subsidiaries are maintained in all material respects in accordance with
applicable laws and good business practices. There have been no changes in
accounting policies of the Corporation and its subsidiaries since June 30, 1997.
INTELLECTUAL PROPERTY
(a) The Corporation and its subsidiaries own, or are licensed or
otherwise possess legally enforceable rights to use, all patents, trademarks,
trade names, service marks, copyrights and mask works, any applications for and
registrations of such patents, trademarks, trade names, service marks,
copyrights and mask works, and all processes, formulae, methods, schematics,
technology, know-how, computer software programs or applications and tangible or
intangible proprietary information or material that are necessary to conduct the
business of the Corporation and its subsidiaries as currently conducted, or
planned to be conducted (the "Corporation Intellectual Property Rights").
S-31
(b) Neither the Corporation nor any of its subsidiaries are, or
will as a result of the execution and delivery of this Agreement or the
performance of the Corporation's obligations under this Agreement or otherwise
be, in breach of any license, sublicense or other agreement relating to the
Corporation Intellectual Property Rights, or any licenses, sublicenses and other
agreements as to which the Corporation or any of its subsidiaries are a party
and pursuant to which the Corporation or any of its subsidiaries are authorized
to use any third party patents, trademarks or copyrights ("Corporation Third
Party Intellectual Property Rights"), including software that is used in the
manufacture of, incorporated in, or forms a part of any product sold by or
expected to be sold by the Corporation or any of its subsidiaries, the breach of
which would give rise to a Material Adverse Change.
(c) All patents, registered trademarks, service marks and
copyrights which are held by the Corporation or any of its subsidiaries and
which are material to the business of the Corporation and its subsidiaries,
taken as a whole, are valid and subsisting. The Corporation (i) has not been
sued in any suit, action or proceeding, or received in writing any claim or
notice, which involves a claim of infringement of any patents, trademarks,
service marks, copyrights or violation of any trade secret or other proprietary
right of any third party; and (ii) has no knowledge that the manufacturing,
marketing, licensing or sale of its products infringes any patent, trademark,
service mark, copyright, trade secret or other proprietary right of any third
party.
ENVIRONMENTAL MATTERS
To the Corporation's best knowledge, except for such matters that,
individually or in the aggregate, are not reasonably likely to a Material
Adverse Change the Corporation and its subsidiaries have complied with all
applicable laws relating to protection of the environment and disposal of toxic
agents.
INSURANCE; RISK MANAGEMENT
All material fire and casualty, general liability, business interruption,
product liability, and sprinkler and water damage insurance policies maintained
by the Corporation or any of its subsidiaries are with reputable insurance
carriers, provide full and adequate coverage (subject to reasonable deductibles,
co-insurance and exclusions) for all normal risks incident to the business of
the Corporation and its subsidiaries and their respective properties and assets,
and are in character and amount at least equivalent to that carried by persons
engaged in similar businesses and subject to the same or similar perils or
hazards, except for any such failures to maintain insurance policies that,
individually or in the aggregate, are not reasonably likely to give rise to a
Material Adverse Change. The steps taken by the Corporation to manage the
various risks incident to the business and operations of the Corporation and its
subsidiaries and their respective properties and assets are at least equivalent
to those taken by persons engaged in similar businesses, except for any failures
to take such steps that, individually or in the aggregate, are not reasonably
likely to give rise to a Material Adverse Change. The Disclosure Letter contains
a list of all insurance policies of the Corporation.
S-32
DISCLOSURE
There is no fact which the Corporation has not disclosed to the Offeror and
of which any of its officers, directors or members of senior management is aware
and which has or would reasonably be expected to result in a Material Adverse
Change.
S-33
SCHEDULE C
OEM AGREEMENT
S-34
SCHEDULE D
CREDIT FACILITIES OF THE CORPORATION
MAXIMUM DRAWDOWN AS OF
CREDIT FACILITY LENDER DRAWDOWN SEPTEMBER 30, 1998
- --------------- ------ -------- ------------------
Factor Agreement TCE Capital $250,000 $0.00
Corporation
S-35
EXHIBIT 99.1
TEXT OF PRESS RELEASE DATED SEPTEMBER 30, 1998
EXHIBIT 99.1
PERVASIVE SOFTWARE TO ACQUIRE EVERYWARE DEVELOPMENT
Offers to Purchase Award-winning Internet Technology for New Generation of Zero-
administration, Web-enabled Data Management Solutions
AUSTIN, TEXAS--OCTOBER 1, 1998--Pervasive Software/(tm)/ Inc. (NASDAQ: PVSW),
a leading provider of zero-administration databases, announced today that it
will commence an offer to purchase for cash all of the outstanding Common Shares
of EveryWare Development Inc. (Alberta Stock Exchange: EVE) at a price of
Canadian $1.20 per share. EveryWare is an Internet application development and
Web-application server provider based in Toronto, Canada. If all the Common
Shares are tendered into the offer, the value of the offer is approximately
US$9,692,000. The total value of the acquisition, including assumption of
outstanding options and warrants, is approximately US$10,750,000.
EveryWare's award-winning Tango solution provides easy-to-use software for the
construction and deployment of Web-application servers. The acquisition will
bring these solutions to Pervasive's expanding product line, which includes
Pervasive.SQL/(TM)/--a zero-administration database embedded in thousands of
packaged client/server software solutions worldwide. The addition of EveryWare's
products will enable Pervasive to create a unique class of solutions for easily
developing and deploying zero-administration, high-performance, Web-enabled
applications. These solutions will also support enterprise databases, including
a direct driver for Oracle.
"We believe there is enormous synergy between Pervasive's channel and
EveryWare's solutions. Thousands of ISVs and VARs build packaged applications on
Pervasive's databases, which are designed for companies with little or no IT
support," said Ron Harris, president and CEO of Pervasive. "With the addition of
EveryWare's fast, easy-to-use Internet application development and Web
application server solutions, Pervasive is poised to deliver a new suite of
zero-administration Web servers for data-centric applications."
DELIVERS EASY, ZERO-ADMINISTRATION INTERNET SOLUTIONS
Pervasive will continue to sell and support all of EveryWare's software
solutions, which include Tango, a rapid development environment for creating
dynamic Web-based business applications, and Bolero, a real-time Internet
decision support system that monitors and analyzes Web-site traffic. EveryWare's
products have been praised for their technical innovation and ease of use by
leading publications, including Application Development Trends, Informationweek,
DBMS, InternetWorld, Network Computing, and Web Developer.
"Software vendors need to quickly create Internet applications that are easy to
deploy and require little ongoing maintenance," said Daniel McKenzie, chairman
and COO of EveryWare. "The acquisition lets Pervasive extend its expertise in
zero-administration technologies to deliver turnkey Web capabilities that will
serve as the foundation for the next generation of Internet, intranet and mobile
computing solutions." "We currently use both EveryWare's Tango and Pervasive's
databases in our products" said Terry Hui, CEO of Multiactive Software Inc., the
makers of Maximizer. "Combining EveryWare's products with Pervasive's zero-
administration database features will allow us to further extend our Internet
capabilities while leveraging our business and reseller models."
THE OFFER
The offer to purchase EveryWare Common Shares is conditional upon, among other
things, at least 66 2/3% of the then outstanding Common Shares being tendered.
Under the terms of an agreement with Pervasive, certain shareholders of
EveryWare, representing more than 50% of EveryWare's outstanding shares, have
irrevocably agreed to tender their shares into the Pervasive offer. The Board of
Directors of EveryWare has unanimously approved the offer and recommends that
shareholders tender their Common Shares into the offer. In addition, EveryWare
has agreed not to solicit, encourage or recommend any other offer for its
shares.
An offering circular containing details of the offer is expected to be mailed to
all registered holders of Common Shares on or before October 10, 1998. A notice
relating to the offer will also be published in the financial press. The offer
is expected to expire at 12:00 midnight (local time) on the 21st day following
the date of the offer, unless extended.
ABOUT PERVASIVE
Pervasive Software Inc. is a leading provider of zero-administration embedded
database software for the cost-effective deployment and support of packaged
client/server, Web enabled and occasionally connected applications. With the
inclusion of EveryWare's products, Pervasive expects to become a leading
provider of zero-administration, Web-enabled data management solutions.
Pervasive.SQL(TM), the company's zero-administration database, is embedded in
thousands of leading client/software solutions worldwide. More than 10,000
value-added resellers (VARs) and independent software vendors (ISVs) build
packaged applications on Pervasive solutions for environments with little or no
IT support. The company's channel-driven approach to selling, marketing, and
supporting its products caters to the specific needs of ISVs, VARs, in-house
development organizations and the no IT infrastructure business environments
they serve.
Headquartered in Austin, Texas, Pervasive Software offers worldwide
distribution, with offices in Frankfurt, Paris, London, Brussels, Dublin, Tokyo,
and Hong Kong. For more information on Pervasive call (800) 287-4383 or (512)
794-1719, visit us at www.pervasive.com, or email info@pervasive.com.
Pervasive, Pervasive Software, Btrieve, Pervasive.SQL and Z-DBA are trademarks
or registered trademarks of Pervasive Software Inc. EveryWare, the EveryWare
logo, Tango Enterprise and Bolero are trademarks of EveryWare Development Inc.
All other company and product names are trademarks or registered trademarks of
their respective companies.
The statements contained in this release that are not purely historical are
forward-looking statements within the meaning of Section 21E of the Securities
and Exchange Act of 1934, including statements regarding Pervasive's
expectations, beliefs, hopes, intentions or strategies regarding the future. All
forward-looking statements included in this document are based upon information
available to Pervasive as of the date hereof, and Pervasive assumes no
obligation to update any such forward-looking statement. Actual results could
differ materially from Pervasive's current expectations. Factors that could
cause or contribute to such differences include, but are not limited to, the
factors and risks discussed in Pervasive's reports filed from time to time with
the Securities and Exchange Commission.
FINANCIAL CONTACT:
James R. Offerdahl
Chief Operating Officer & CFO
(512) 794-1719
investor.relations@pervasive.com
PRESS CONTACT:
Bryan Scanlon or Lauren Arnold
Schwartz Communications
781/684-0770
bryans@schwartz-pr.com
laurena@schwartz-pr.com