MERGER AGREEMENT
BY AND BETWEEN
AREMISSOFT CORPORATION,
AREMISSOFT MANUFACTURING (US), INC.
AND
FOURTH SHIFT CORPORATION
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TABLE OF CONTENTS
1. Definitions...........................................................1
2. Basic Transaction.....................................................5
(a) The Merger.....................................................5
(b) The Closing....................................................5
(c) Actions at the Closing.........................................5
(d) Effect of Merger...............................................5
(e) Procedure for Payment..........................................6
(f) Closing of Transfer Records....................................7
(g) Stock Options..................................................7
3. Representations and Warranties of Fourth Shift........................7
(a) Organization, Qualification, and Corporate Power...............7
(b) Capitalization.................................................7
(c) Authorization of Transaction...................................7
(d) Noncontravention...............................................8
(e) Filings with the SEC...........................................8
(f) Financial Statements...........................................8
(g) Events Subsequent to Most Recent Fiscal Quarter End............8
(h) Undisclosed Liabilities and Litigation........................10
(i) Brokers' Fees.................................................10
(j) Disclosure....................................................10
(k) Tax Matters...................................................10
(l) Real Property.................................................11
(m) Intellectual Property.........................................12
(n) Contracts.....................................................13
(o) Accounts Receivable...........................................14
(p) Insurance.....................................................14
(q) Employees.....................................................14
(r) Employee Benefits.............................................14
(s) Compliance with Laws..........................................15
(t) Minnesota Takeover Statutes...................................15
(u) Rights Agreement..............................................15
4. Representations and Warranties of AremisSoft and AremisSoft
Manufacturing........................................................15
(a) Organization..................................................16
(b) Authorization of Transaction..................................16
(c) Noncontravention..............................................16
(d) Brokers' Fees.................................................16
5. Additional Covenants and Agreements..................................16
(a) General.......................................................16
(b) Notices and Consents..........................................16
(c) Regulatory Matters and Approvals..............................16
(d) Fairness Opinion and Comfort Letters..........................17
(e) Operation of Business.........................................17
(f) Full Access...................................................18
(g) Notice of Developments........................................18
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(h) No Solicitation of Transactions...............................18
(i) Termination Fee Payable by Fourth Shift.......................19
(j) Directors' and Officers' Indemnification and Insurance........20
6. Conditions to Obligation to Close....................................21
(a) Conditions to Obligation of AremisSoft and AremisSoft
Manufacturing.................................................21
(b) Conditions to Obligation of Fourth Shift......................22
7. Termination..........................................................23
(a) Termination of Agreement......................................23
(b) Effect of Termination.........................................24
8. Miscellaneous........................................................24
(a) Survival......................................................24
(b) Press Releases and Public Announcements.......................24
(c) No Third-Party Beneficiaries..................................24
(d) Entire Agreement..............................................24
(e) Succession and Assignment.....................................24
(f) Counterparts..................................................24
(g) Headings......................................................24
(h) Notices.......................................................24
(i) Governing Law.................................................25
(j) Amendments and Waivers........................................25
(k) Severability..................................................25
(l) Expenses......................................................25
(m) Construction..................................................26
(n) Incorporation of Exhibits and Schedules.......................26
Exhibit A1-Articles of Merger
Exhibit A2-Certificate of Merger
Exhibit B-Form of Letter of Transmittal
Exhibit C-Form of Opinion of Counsel to Fourth Shift
Exhibit D-Form of Opinion of Counsel to AremisSoft and AremisSoft Manufacturing
Disclosure Schedule--Exceptions to Representations and Warranties
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MERGER AGREEMENT
This Agreement is entered into as of February 26, 2001, by and between
AremisSoft Corporation, a Delaware corporation ("AremisSoft"), AremisSoft
Manufacturing (US), Inc., a Delaware corporation and a wholly-owned Subsidiary
of AremisSoft ("AremisSoft Manufacturing"), and FOURTH SHIFT CORPORATION, a
Minnesota corporation ("Fourth Shift"). AremisSoft, AremisSoft Manufacturing,
and Fourth Shift are referred to collectively herein as the "Parties."
This Agreement contemplates a transaction in which AremisSoft will
acquire all of the outstanding capital stock of Fourth Shift for cash through a
reverse subsidiary merger of AremisSoft Manufacturing with and into Fourth
Shift.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
"Affiliates" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"Affiliated Group" means any affiliated group within Code
ss.1504(a) or any similar group defined under similar provision of state, local
or foreign law.
"Agreement" means this Merger Agreement.
"Acquisition Event" means the consummation of any transaction, or
series of transactions, that result in any Person, entity, or group acquiring
more than 50% of the outstanding Fourth Shift Shares or assets of Fourth Shift
(including through any merger or business combination).
"AremisSoft" has the meaning set forth in the preface above.
"AremisSoft Manufacturing" has the meaning set forth in the
preface above.
"Articles of Merger" has the meaning set forth in Section 2(c).
"Certificate of Merger" has the meaning set forth in ss.2(c)
below.
"Closing" has the meaning set forth in ss.2(b) below.
"Closing Date" has the meaning set forth in ss.2(b) below.
"Code" means the Internal Revenue Code of 1983, as amended.
"Confidential Information" means any information concerning the
businesses and affairs of Fourth Shift and its Subsidiaries that is not already
generally available to the public.
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"Confidentiality Agreements" means those certain confidentiality
and non-disclosure letter agreements dated as of December 18, 2000 and as of
February 20, 2001 between Fourth Shift and AremisSoft.
"Definitive Proxy Materials" means the definitive proxy materials
relating to the Special Meeting.
"Delaware General Corporation Law" means the General Corporation
Law of the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in ss.3 below.
"Dissenting Share" means any Fourth Shift Share which any
stockholder who or which has exercised his or its appraisal rights under
Minnesota Law holds of record.
"Effective Time" has the meaning set forth in ss.2(d)(i) below.
"Employee Benefit Plan" means any "employee benefit plan" (as
such term is defined in ERISA ss.3(3)) and any other employee benefit plan,
program or arrangement of any kind.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Executive Officer" of Fourth Shift means M. M. Stuckey, J. H.
Caldwell, D. G. Latzke and R. Tofteland.
"Fairness Opinion" has the meaning set forth in ss.5(d) below.
"Fourth Shift Option" has the meaning set forth in ss.2(g) below.
"Fourth Shift" has the meaning set forth in the preface above.
"Fourth Shift Share" means any share of the Common Stock, $.01
par value per share, of Fourth Shift.
"Fourth Shift Stockholder" means any Person who or which holds
any Fourth Shift Shares.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
"Intellectual Property" means (a) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all patents, patent applications, and patent
disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection
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therewith, (d) all mask works and all applications, registrations, and renewals
in connection therewith, (e) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals), (f) all
computer software (including data and related documentation), (g) all other
proprietary rights, and (h) all copies and tangible embodiments thereof (in
whatever form or medium).
"Knowledge" means actual knowledge after reasonable
investigation.
"Liability" means any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due) including any liability for Taxes.
"Material Adverse Effect" means, unless the context otherwise
requires, an event that, considered individually or in the aggregate with other
events, would have a material adverse effect on the business, financial
condition or properties of Fourth Shift and its Subsidiaries, or on the
consummation of the transactions contemplated hereby.
"Merger" has the meaning set forth in ss.2(a) below.
"Merger Consideration" has the meaning set forth in ss.2(d)(v)
below.
"Minnesota Law" shall mean the general corporate and business
laws and statutes of the State of Minnesota, as amended.
"Most Recent Fiscal Quarter End" has the meaning set forth in
ss.3(f) below.
"Ordinary Course of Business" means the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).
"Party" has the meaning set forth in the preface above.
"Paying Agent" means the Person who shall deliver payment of the
Merger Consideration to the Fourth Shift Stockholders. Such entity shall be
designated by AremisSoft, subject to the approval of Fourth Shift, which
approval shall not be unreasonably withheld.
"Payment Fund" has the meaning set forth in ss.2(e) below.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Pre-Closing Funds" has the meaning set forth in ss.2(e) below.
"Public Report" has the meaning set forth in ss.3(e) below.
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"Requisite Stockholder Approval" means the affirmative vote of
the holders of a majority of Fourth Shift Shares in favor of this Agreement and
the Merger.
"Rights Agreement" means that certain Rights Agreement dated
December 16, 1998 between Fourth Shift and Wells Fargo Bank (formerly Norwest
Bank Minnesota National Association).
"Rights Plan" shall mean the Shareholder Rights Plan pursuant to
which each holder of a Fourth Shift Share has a right to purchase 1/100th of a
share of "Series A Junior Participating Preferred Stock," or in certain events
common stock, as described in the Rights Agreement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialman's, and similar liens, (b) liens for taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Special Meeting" has the meaning set forth in ss.5(c)(ii) below.
"Stock Plans" means Fourth Shift's 1989 Stock Option Plan, 1993
Stock Option Plan, 1994 Stock Purchase Plan and any similar plans of Fourth
Shift which may be converted by the holders into the capital stock of Fourth
Shift.
"Subsidiary" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"Surviving Corporation" has the meaning set forth in ss.2(a)
below.
"Takeover Proposal" means any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving Fourth Shift
or any of its Subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets of,
Fourth Shift or its Subsidiaries other than the transactions contemplated by
this Agreement.
"Tax" means any federal, state, local, or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code ss.59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not.
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"Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Trigger Event" has the meaning set forth in Section 5(i) below.
2. Basic Transaction.
(a) The Merger. On and subject to the terms and conditions of
this Agreement, AremisSoft Manufacturing will merge with and into Fourth Shift
(the "Merger") at the Effective Time. Fourth Shift shall be the corporation
surviving the Merger (the "Surviving Corporation").
(b) The Closing. Following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself), the closing of the
transactions contemplated by this Agreement (the "Closing") shall take place at
the offices of Bartel Eng & Schroder in Sacramento, California, commencing at
9:00 a.m. local time on May 15, 2001 or such other date or location as the
Parties may mutually determine (the "Closing Date").
(c) Actions at the Closing. At the Closing, (i) Fourth Shift will
deliver to AremisSoft and AremisSoft Manufacturing the various certificates,
instruments, and documents referred to in ss.6(a) below, (ii) AremisSoft and
AremisSoft Manufacturing will deliver to Fourth Shift the various certificates,
instruments, and documents referred to in ss.6(b) below, (iii) Fourth Shift will
file with the Secretary of State of the State of Minnesota Articles of Merger in
substantially the form attached hereto as Exhibit A1 ("Articles of Merger") and
AremisSoft Manufacturing will file with the Secretary of State of the State of
Delaware a Certificate of Merger in substantially the form attached hereto as
Exhibit A2 (the "Certificate of Merger"), and (iv) AremisSoft will cause the
Surviving Corporation to deliver the Payment Fund to the Paying Agent in the
manner provided below in this ss.2.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time
(the "Effective Time") Fourth Shift and AremisSoft Manufacturing file
the Certificate of Merger with the Secretary of State of the State of
Delaware and Articles of Merger with the Secretary of State of the State
of Minnesota. The Surviving Corporation may, at any time after the
Effective Time, take any action (including executing and delivering any
document) in the name and on behalf of either Fourth Shift or AremisSoft
Manufacturing in order to carry out and effectuate the transactions
contemplated by this Agreement.
(ii) Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation shall be amended and restated
at and as of the Effective Time to read as did the Certificate of
Incorporation of AremisSoft Manufacturing immediately prior to the
Effective Time, as consistent with Minnesota Law.
(iii) Bylaws. The Bylaws of the Surviving Corporation
shall be amended and restated at and as of the Effective Time to read as
did the Bylaws of AremisSoft Manufacturing immediately prior to the
Effective Time, as consistent with Minnesota Law.
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(iv) Directors and Officers. The directors and officers of
AremisSoft Manufacturing shall become the directors and officers of the
Surviving Corporation at and as of the Effective Time.
(v) Conversion of Fourth Shift Shares. At and as of the
Effective Time, (A) each Fourth Shift Share (other than any Dissenting
Share) shall be converted into the right to receive an amount (the
"Merger Consideration") equal to $3.70 per Fourth Shift Share, in cash
(without interest), and (B) each Dissenting Share shall be converted
into the right to receive payment from the Surviving Corporation with
respect thereto in accordance with the provisions of Minnesota Law;
provided, however, that the Merger Consideration shall be subject to
equitable adjustment in the event of any stock split, stock dividend,
reverse stock split, or other change in the number of Fourth Shift
Shares outstanding. No Fourth Shift Share shall be deemed to be
outstanding or to have any rights other than those set forth above in
this ss.2(d)(v) after the Effective Time.
(vi) Conversion of Capital Stock of AremisSoft
Manufacturing. At and as of the Effective Time, each share of Common
Stock, $.001 par value per share, of AremisSoft Manufacturing shall be
converted into one share of Common Stock, $.01 par value per share, of
the Surviving Corporation.
(e) Procedure for Payment.
(i) On or prior to the date of this Agreement, AremisSoft
will deliver, or cause AremisSoft Manufacturing to deliver to Bartel Eng
& Schroder in cash or short term investments the amount of $40.0 million
(the "Pre-Closing Funds") which shall be deposited into an interest
bearing account or held by Bartel Eng & Schroder for retention until the
Effective Time. AremisSoft shall cause Bartel Eng & Schroder to maintain
the Pre-Closing Funds at all times prior to the Effective Time;
provided, however, that AremisSoft may cause Bartel Eng & Schroder to
invest the cash portion of the Pre-Closing Funds in the same manner, as
provided for in ss.2(e)(ii), as it may cause the Paying Agent to invest
the cash portion of the Payment Fund. From time to time prior to the
Effective Time and upon the reasonable written request of Fourth Shift,
AremisSoft shall cause Bartel Eng & Schroder to verify to Fourth Shift
the then current amount of the Pre-Closing Funds. At the Effective Time,
(A) AremisSoft shall cause Bartel Eng & Schroder to deliver the
Pre-Closing Funds to the Paying Agent and, if necessary, will deliver
additional cash in an aggregate amount sufficient for the Paying Agent
to make full payment of the Merger Consideration to the holders of all
of the outstanding Fourth Shift Shares (other than any Dissenting
Shares) (the "Payment Fund") and (B) AremisSoft will cause the Paying
Agent to mail a letter of transmittal (with instructions for its use) in
substantially the form attached hereto as Exhibit B to each record
holder of outstanding Fourth Shift Shares for the holder to use in
surrendering the certificates which represented his or its Fourth Shift
Shares against payment of the Merger Consideration. No interest will
accrue or be paid to the holder of any outstanding Fourth Shift Shares.
(ii) AremisSoft may cause the Paying Agent to invest the
cash included in the Payment Fund in one or more investments; provided,
however, that the terms and conditions of the investments shall be such
as to permit the Paying Agent to make prompt payment of the Merger
Consideration as necessary. AremisSoft may cause the Paying Agent to pay
over to the Surviving Corporation any net earnings with respect to the
investments, and AremisSoft will cause the Surviving Corporation to
replace promptly any portion of the Payment Fund which the Paying Agent
loses through investments.
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(iii) AremisSoft may cause the Paying Agent to pay over to
the Surviving Corporation any portion of the Payment Fund (including any
earnings thereon) remaining 180 days after the Effective Time, and
thereafter all former stockholders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat, and other
similar laws) as general creditors thereof with respect to the cash
payable upon surrender of their certificates.
(iv) AremisSoft shall cause the Surviving Corporation to
pay all charges and expenses of the Paying Agent.
(f) Closing of Transfer Records. After the close of business on
the Closing Date, transfers of Fourth Shift Shares outstanding prior to the
Effective Time shall not be made on the stock transfer books of the Surviving
Corporation.
(g) Stock Options. Each option to purchase shares of Fourth Shift
Common Stock (a "Fourth Shift Option") outstanding immediately prior to the
Effective Time shall remain outstanding following the Effective Time. At the
Effective Time, AremisSoft shall assume each Fourth Shift Option by virtue of
the Merger and without any further action on the part of Fourth Shift or the
holders thereof. AremisSoft shall assume each such option in such manner that
AremisSoft (i) is a corporation "assuming a stock option in a transaction to
which Section 424(a) applies" within the meaning of Section 424 of the Code or
(ii) to the extent that Section 424 of the Code does not apply to any such
Fourth Shift Option, would be such a corporation were Section 424 of the Code
applicable to such Fourth Shift Option. From and after the Effective Time, all
references to "Fourth Shift" in the Fourth Shift Options and the related stock
option agreements shall be deemed to refer to "AremisSoft." After the Effective
Time, each Fourth Shift Option assumed by AremisSoft shall be exercisable upon
the same terms and conditions as were in effect under the Fourth Shift Options
and the related option agreements immediately prior to the Effective Time,
except that (i) each Fourth Shift Option shall be exercisable for that whole
number of shares of AremisSoft Common Stock (rounded down to the nearest whole
share) equal to the number of shares of Fourth Shift Common Stock subject to
such Fourth Shift Option immediately prior to the Effective Time divided by
6.14159, and (ii) the option price per share of AremisSoft Common Stock shall be
an amount equal to the option price per share of Fourth Shift Common stock
subject to such Fourth Shift Option in effect immediately prior to the Effective
Time multiplied by 6.14159 (the option price per share, as so determined, being
rounded upward to the nearest full cent).
3. Representations and Warranties of Fourth Shift. Fourth Shift
represents and warrants to AremisSoft and AremisSoft Manufacturing that the
statements contained in this ss.3 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this ss.3), except as set forth in the disclosure
schedule accompanying this Agreement and initialed by the Parties (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this ss.3.
(a) Organization, Qualification, and Corporate Power. Each of
Fourth Shift and its Subsidiaries is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation. Each of Fourth Shift and its Subsidiaries is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required and where the failure to so qualify would
have a Material Adverse Effect on Fourth Shift and such subsidiaries considered
as a whole. Each of Fourth Shift and its Subsidiaries has full corporate power
and authority to carry on the businesses in which it is engaged and to own and
use the properties owned and used by it.
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(b) Capitalization. The entire authorized capital stock of Fourth
Shift consists of 26,000,000 shares, of which 20,000,000 are shares of common
stock, $.01 par value, and 6,000,000 are shares of preferred stock, $.01 par
value, including 200,000 shares designated the "Series A Junior Participating
Preferred Stock." As of the date of this Agreement there were 10,825,081 Fourth
Shift Shares, and no shares of any other class or series, issued and
outstanding. All of the issued and outstanding Fourth Shift Shares have been
duly authorized and are validly issued, fully paid, and nonassessable. There are
2,912,137 Fourth Shift Shares reserved for issuance pursuant to the Stock Plans,
of which options to purchase up to 2,409,875 Fourth Shift Shares are issued and
outstanding, and 22,500 Fourth Shift Shares are reserved for issuance upon
exercise of options granted outside the Stock Plans and, except for rights
outstanding under the Rights Plan, there are no other outstanding or authorized
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require Fourth Shift to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom stock, profit
participation or similar rights with respect to Fourth Shift. There are no
outstanding bonds, debentures or other obligations in which the holders have the
right to vote (or that are convertible or exercisable for securities having the
right to vote) with the Fourth Shift Shares or any matter. There are no Fourth
Shift Shares reserved for issuance other than as provided in this ss.3(b) and
there are no programs in place, nor any contractual obligations of Fourth Shift
or its Subsidiaries to repurchase, redeem or otherwise acquire any shares of the
capital stock of Fourth Shift.
(c) Authorization of Transaction. Fourth Shift has full power and
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform its obligations hereunder; provided, however, that
Fourth Shift cannot consummate the Merger unless and until it receives the
Requisite Stockholder Approval. This Agreement and the consummation by Fourth
Shift of the transactions contemplated hereby have been duly authorized by
Fourth Shift's Board of Directors and no other corporate proceedings are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby (other than with respect to the Merger and receipt of the
Requisite Stockholder Approval).This Agreement has been duly and validly
executed by Fourth Shift and constitutes the valid and legally binding
obligation of Fourth Shift, enforceable in accordance with its terms and
conditions.
(d) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which any of Fourth Shift and its Subsidiaries
is subject or any provision of the charter or bylaws of any of Fourth Shift and
its Subsidiaries or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, that would have a Material Adverse
Effect or require any notice where the failure to provide notice would have such
a Material Adverse Effect, under any agreement, contract, lease, license,
instrument, or other arrangement to which any of Fourth Shift and its
Subsidiaries is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Security Interest upon any of its
assets). Other than in connection with the provisions of Minnesota Law, the
Securities Exchange Act, the Securities Act, and the state securities laws, none
of Fourth Shift and its Subsidiaries needs to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement.
(e) Filings with the SEC. Fourth Shift has made all filings with
the SEC that it has been required to make under the Securities Act and the
Securities Exchange Act (collectively the "Public Reports"). As of the
respective dates of their filing, each of the Public Reports complied as to form
in all
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material respects with the Securities Act and the Securities Exchange Act, and
all rules and regulations promulgated thereunder. None of the Public Reports, as
of their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
(f) Financial Statements. Fourth Shift has filed Quarterly
Reports on Form 10-Q for the fiscal quarters ended September 30, 2000, June 30,
2000, and March 31, 2000, and an Annual Report on Form 10-K for the fiscal year
ended December 31, 1999 and has delivered to AremisSoft a preliminary version of
its financial statements for the year ended December 31, 2000 (the "Most Recent
Fiscal Quarter End"). Such preliminary financial statements, and the financial
statements included in or incorporated by reference into these Public Reports
(including the related notes and schedules) have been prepared in accordance
with GAAP applied on a consistent basis throughout the periods covered thereby,
present fairly the financial condition of Fourth Shift and its Subsidiaries as
of the indicated dates and the results of operations of Fourth Shift and its
Subsidiaries for the indicated periods, are correct and complete in all
respects, and are consistent with the books and records of Fourth Shift and its
Subsidiaries; provided, however, that the interim statements are subject to
normal year-end adjustments (which will not be material, individually or in the
aggregate) and lack footnotes and other presentation items.
(g) Events Subsequent to Most Recent Fiscal Quarter End. Since
the Most Recent Fiscal Quarter End, there has not been any material adverse
change in the business, financial condition, operations, results of operations,
or future prospects of any of Fourth Shift and its Subsidiaries. Without
limiting the generality of the foregoing, since that date:
(i) none of Fourth Shift and its Subsidiaries has sold,
leased, transferred, or assigned any of its assets, tangible or
intangible, other than for a fair consideration in the Ordinary Course
of Business;
(ii) none of Fourth Shift and its Subsidiaries has entered
into any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) outside the Ordinary Course
of Business;
(iii) no party (including any of Fourth Shift and its
Subsidiaries) has accelerated, terminated, modified, or cancelled any
agreement, contract, lease, or license (or series of related agreements,
contracts, leases, and licenses) to which any of Fourth Shift and its
Subsidiaries is a party or by which any of them is bound;
(iv) none of Fourth Shift and its Subsidiaries has imposed
any Security Interest upon any of its assets, tangible or intangible;
(v) none of Fourth Shift and its Subsidiaries has made any
capital investment in, any loan to, or any acquisition of the securities
or assets of, any other Person (or series of related capital
investments, loans, and acquisitions);
(vi) none of Fourth Shift and its Subsidiaries has issued
any note, bond, or other debt security or created, incurred, assumed, or
guaranteed any indebtedness for borrowed money or capitalized lease
obligation either involving more than $10,000 singly or $100,000 in the
aggregate;
10
(vii) none of Fourth Shift and its Subsidiaries has
delayed or postponed the payment of accounts payable and other
Liabilities outside the Ordinary Course of Business;
(viii) none of Fourth Shift and its Subsidiaries has
cancelled, compromised, waived, or released any right or claim (or
series of related rights and claims);
(ix) none of Fourth Shift and its Subsidiaries has granted
any license or sublicense of any rights under or with respect to any
Intellectual Property, except licenses of its software and services in
the Ordinary Course of Business;
(x) none of Fourth Shift and 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;
(xi) none of Fourth Shift and 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;
(xii) none of Fourth Shift and its Subsidiaries has made
any loan to, or entered into any other transaction with, any of its
directors, officers, and employees;
(xiii) none of Fourth Shift and its Subsidiaries has
entered into any employment contract or collective bargaining agreement,
written or oral, or modified the terms of any existing such contract or
agreement;
(xiv) none of Fourth Shift and its Subsidiaries has
adopted, amended, modified, or terminated any bonus, profit-sharing,
incentive, severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, and employees (or taken any
such action with respect to any other Employee Benefit Plan);
(xv) there has not been any other material occurrence,
event, incident, action, failure to act, or transaction outside the
Ordinary Course of Business involving any of Fourth Shift and its
Subsidiaries; and
(xvi) none of Fourth Shift and its Subsidiaries has
committed to any of the foregoing.
(h) Undisclosed Liabilities and Litigation. None of Fourth Shift
and its Subsidiaries has any material Liability except for (i) liabilities set
forth on the face of the balance sheet dated as of the Most Recent Fiscal
Quarter End (rather than in any notes thereto) and (ii) liabilities which have
arisen after the Most Recent Fiscal Quarter End in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law). None of Fourth Shift and its Subsidiaries is
the subject of or involved in, any civil, criminal or administrative actions,
suits, claims, hearings, investigations or proceedings, whether pending or
threatened, or that could result in any claims against, or obligations or
liabilities of Fourth Shift and its Subsidiaries. None of Fourth Shift and its
Subsidiaries has any outstanding judgments, decrees, injunctions or orders of
any governmental entity or arbitrator.
11
(i) Brokers' Fees. Except with respect to fees due Trilogy
Capital and Broadview Associates none of Fourth Shift and its Subsidiaries has
any liability or obligation to pay any fees or commissions to any broker,
finder, or agent with respect to the transactions contemplated by this
Agreement.
(j) Disclosure. The Definitive Proxy Materials will comply with
the Securities Exchange Act in all material respects. The Definitive Proxy
Materials will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made therein, in
the light of the circumstances under which they will be made, not misleading;
provided, however, that Fourth Shift makes no representation or warranty with
respect to any information that AremisSoft and AremisSoft Manufacturing will
supply specifically for use in the Definitive Proxy Materials.
(k) Tax Matters.
(i) Each of Fourth Shift and its Subsidiaries has filed
all Tax Returns that it was required to file. All such Tax Returns were
correct and complete in all respects. Fourth Shift and its Subsidiaries
(whether or not shown on any Tax Return) have paid all Taxes required to
be paid, (except where the failure to pay the same would not have a
Material Adverse Effect). None of Fourth Shift and its Subsidiaries
currently is the beneficiary of any extension of time within which to
file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where any of Fourth Shift and its Subsidiaries does not
file Tax Returns that it is or may be subject to taxation by that
jurisdiction. There are no Security Interests on any of the assets of
any of Fourth Shift and its Subsidiaries that arose in connection with
any failure (or alleged failure) to pay any Tax.
(ii) Each of Fourth Shift and its Subsidiaries has
withheld and paid all Taxes required to have been withheld and paid in
connection with amounts paid to any employee, independent contractor,
creditor, stockholder, or other third party.
(iii) No Executive Officer has Knowledge of any pending or
proposed assessment against Fourth Shift for additional Taxes for any
period for which Tax Returns have been filed. There is no dispute or
claim concerning any Tax Liability of any of Fourth Shift and its
Subsidiaries either (A) claimed or raised by any authority in writing
(including any audit of any Tax Return) or (B) known to the Executive
Officers of Fourth Shift based upon personal contact with any agent of
such authority.
(iv) None of Fourth Shift and its Subsidiaries has waived
any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
(v) None of Fourth Shift and its Subsidiaries has filed a
consent under Code ss.341(f) concerning collapsible corporations. None
of Fourth Shift and its Subsidiaries has made any payments, is obligated
to make any payments, or is a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be
deductible under Code ss.280G. None of Fourth Shift and its Subsidiaries
has been a United States real property holding corporation within the
meaning of Code ss.897(c)(2) during the applicable period specified in
Code ss.897(c)(1)(A)(ii). None of Fourth Shift and its Subsidiaries is a
party to any Tax allocation or sharing agreement. None of Fourth Shift
and its Subsidiaries (A) has been a member of an Affiliated Group filing
a consolidated federal income Tax Return (other than a group the common
parent of which was Fourth Shift) or (B) has any Liability for the Taxes
of any Person (other than any of
12
Fourth Shift and its Subsidiaries) under Reg.ss.1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor,
by contract, or otherwise.
(vi) The financial statement for the Most Recent Quarter End reflect
an adequate reserve for all current Taxes payable by Fourth Shift and its
Subsidiaries.
(l) Real Property.
(i) None of Fourth Shift and its Subsidiaries owns any
real property.
(ii) With respect to each such parcel of real property
leased by Fourth Shift and its Subsidiaries:
(A) the lease or sublease is in full force and
effect and Fourth Shift or such subsidiary has a valid leasehold
interest in the property subject to such lease;
(B) Fourth Shift or such subsidiary is not in
breach or default under such lease or sublease, and no event has
occurred which, with notice or lapse of time, would constitute a
breach or default by Fourth Shift or such subsidiary or permit
termination, modification, or acceleration thereunder;
(C) none of the Executive Officers has Knowledge of
any breach or default by any other party to any such lease or
sublease;
(D) no party to the lease or sublease has notified
Fourth Shift that it has repudiated any provision thereof;
(E) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease;
(F) none of Fourth Shift and its Subsidiaries has
assigned, transferred, conveyed, mortgaged, deeded in trust, or
encumbered any interest in the leasehold or subleasehold;
(G) to the Knowledge of the Executive Officers, all
facilities leased or subleased thereunder have received all
approvals of governmental authorities (including licenses and
permits) required in connection with the operation thereof by
Fourth Shift and its Subsidiaries and have been operated and
maintained by Fourth Shift and its Subsidiaries in accordance
with applicable laws, rules and regulations; and
(H) all facilities leased or subleased thereunder
are supplied with utilities and other services necessary for the
operation of said facilities.
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(m) Intellectual Property.
(i) Fourth Shift and its Subsidiaries own or have the
right to use pursuant to license, sublicense, agreement, or permission
all Intellectual Property necessary for the operation of the businesses
of Fourth Shift and its Subsidiaries as presently conducted and as
presently proposed to be conducted. Each of Fourth Shift and its
Subsidiaries has taken all necessary action to maintain and protect each
item of Intellectual Property that it owns or uses and the consummation
of the transactions contemplated hereby will not materially alter the
terms and conditions of such ownership or use.
(ii) None of Fourth Shift and its Subsidiaries has
received notice of, nor do the Executive Officers have Knowledge of any
facts that would indicate the likelihood of, any interference,
infringement or misappropriation of its Intellectual Property, or any
conflict with the Intellectual Property rights of third parties, and,
except as disclosed in ss.4(m)(ii) of the Disclosure Schedule, none of
Fourth Shift and its Subsidiaries has received during the past three (3)
years any written charge, complaint, claim, demand or notice alleging
any such interference, infringement or misappropriation (including any
claim that Fourth Shift or its Subsidiaries must license or refrain from
using any Intellectual Property rights of any third party).
(iii) ss.4(m)(iii) of the Disclosure Schedule identifies
each patent or registration which has been issued to Fourth Shift or its
Subsidiaries and each trade name or unregistered trademark used by any
of Fourth Shift and its Subsidiaries in connection with any of its
businesses. With respect to each item of Intellectual Property required
to be identified in ss.4(m)(iii) of the Disclosure Schedule:
(A) Fourth Shift and its Subsidiaries possess all
right, title, and interest in and to the item, free and clear of
any Security Interest, license, or other restriction;
(B) the item is not subject to any outstanding
injunction, judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or
is threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(D) none of Fourth Shift and its Subsidiaries has
any agreement to indemnify any Person for or against any
interference, infringement or misappropriation with respect to
the item.
(iv) ss.4(m)(iv) of the Disclosure Schedule identifies
each item of Intellectual Property that any third party owns, that any
of Fourth Shift and its Subsidiaries uses pursuant to license,
sublicense, agreement, or permission and that is material to the
business of Fourth Shift and its Subsidiaries. Fourth Shift and its
Subsidiaries have delivered to AremisSoft and/or AremisSoft
Manufacturing correct and complete copies of all such material licenses,
sublicenses, agreements, and permissions (as amended to date). With
respect to each item of Intellectual Property required to be identified
in ss.4(m)(iv) of the Disclosure Schedule:
14
(A) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding,
enforceable, and in full force and effect;
(B) Fourth Shift is not in breach or default of the
license, sublicense, agreement, or permission, and no event has
occurred which with notice or lapse of time would constitute a
breach or default or permit termination, modification, or
acceleration thereunder;
(C) the Executive Officers do not have Knowledge of
any repudiation of any material provision of any such license,
sublicense, agreement, or permission;
(D) none of Fourth Shift and its Subsidiaries has
granted any sublicense or similar right with respect to the
license, sublicense, agreement, or permission except in the
Ordinary Course of Business;
(E) to the Knowledge of Fourth Shift, its
Subsidiaries and the Executive Officers, the consummation of the
transactions contemplated hereby will not result in the
termination or impairment of the Intellectual Property of Fourth
Shift and its Subsidiaries.
(n) Contracts.ss.3(n) of the Disclosure Schedule lists the
following contracts and other agreements to which any of Fourth Shift and its
Subsidiaries is a party:
(i) any agreement (or group of related agreements) for the
purchase or sale of more than $25,000 per annum of raw materials,
commodities, supplies, products, or other personal property, or for the
furnishing or receipt of services, the performance of which will extend
over a period of more than one year, result in a material loss to any of
Fourth Shift and its Subsidiaries;
(ii) any agreement concerning a partnership or joint
venture;
(iii) any agreement (or group of related agreements) under
which it has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money, or any capitalized lease obligation, or under which
it has imposed a Security Interest on any of its assets, tangible or
intangible;
(iv) any agreement concerning confidentiality or
noncompetition;
(v) any profit sharing, stock option, stock purchase,
stock appreciation, deferred compensation, severance, or other material
plan or arrangement for the benefit of its current or former directors,
officers, and employees;
(vi) any collective bargaining agreement;
(vii) any agreement under which it has advanced or loaned
any amount to any of its directors, officers, and employees outside the
Ordinary Course of Business;
(viii) any agreement providing for payments between
Fourth Shift and its Subsidiaries; or
15
(viii) any agreement under which the consequences of a
default or termination could have a Material Adverse Effect on the
business, financial condition, operations, results of operations, or
future prospects of any of Fourth Shift and its Subsidiaries.
(o) Accounts Receivable. All accounts receivable reflected on the
books and records of Fourth Shift and its Subsidiaries are properly recorded,
valid receivables, not subject to any setoffs or counterclaims, are collectible,
and will be collected in accordance with their terms at their recorded amounts,
subject only to the reserve for bad debts in accordance with the past custom and
practice of Fourth Shift and its Subsidiaries. Fourth Shift has made available
to AremisSoft a copy of its accounts receivable aging report, which is accurate
in all material respects.
(p) Insurance. The Disclosure Schedule, under the caption
referencing this Section (p), lists and briefly describes each insurance policy
maintained by Fourth Shift and its Subsidiaries with respect to the properties,
assets and operations of Fourth Shift and its Subsidiaries and sets forth the
date of expiration of each such insurance policy. All of such insurance policies
are in full force and effect and are issued by insurers of recognized
responsibility. Fourth Shift and its Subsidiaries are not in default with
respect to its obligations under any of such insurance policies. Each of Fourth
Shift and its Subsidiaries has been covered during the past 5 years by insurance
in scope and amount customary and reasonable for the businesses in which it has
engaged during the aforementioned period.
(q) Employees. The Executive Officers do not have Knowledge of
any executive, key employee, or group of employees that has plans to terminate
employment with Fourth Shift and its Subsidiaries. None of Fourth Shift and its
Subsidiaries is a party to or bound by any collective bargaining agreement, nor
has any of them experienced any strikes, grievances, formal claims of unfair
labor practices, or other collective bargaining disputes.
(r) Employee Benefits.
(i) ss.3(r) of the Disclosure Schedule lists each Employee
Benefit Plan that Fourth Shift and its Subsidiaries maintains, to which
Fourth Shift and its Subsidiaries contribute, or with respect to which
any of Fourth Shift and its Subsidiaries has any material Liability or
potential Liability.
(A) Each such Employee Benefit Plan (and each
related trust, insurance contract, or fund) has been maintained,
funded and administered in accordance with the terms of such
Employee Benefit Plan and complies in form and in operation in
all material respects with the applicable requirements of ERISA,
the Code, and other applicable laws.
(B) All contributions (including all employer
contributions and employee salary reduction contributions) which
are due have been made within the time period prescribed by ERISA
to each such Employee Benefit Plan which is an Employee Pension
Benefit Plan and all contributions for any period ending on or
before the Closing Date which are not yet due have been made to
each such Employee Pension Benefit Plan or accrued in accordance
with the past custom and practice of Fourth Shift and its
Subsidiaries. All premiums or other payments for all periods
ending on or before the Closing Date have been paid with respect
to each such Employee Benefit Plan which is an Employee Welfare
Benefit Plan.
16
(C) Each such Employee Benefit Plan which is
intended to meet the requirements of a "qualified plan" under
Code ss.401(a) has received a determination from the Internal
Revenue Service that such Employee Benefit Plan is so qualified,
and nothing has occurred since the date of such determination
that could adversely affect the qualified status of any such
Employee Benefit Plan.
(s) Compliance with Laws. Fourth Shift and its Subsidiaries are,
and have been, in material compliance with all laws, statutes, ordinances,
rules, regulations, licenses and permits of any governmental entity including
all laws relating to environment, health and safety.
(t) Minnesota Takeover Statutes. Neither the entering into of
this Agreement nor the consummation of the transactions contemplated hereby
will, after receiving the Requisite Stockholder Approval, be impeded by or
subject to any "fair price," "merger moratorium," "control share acquisition" or
other anti-takeover provisions of Minnesota Law.
(u) Rights Agreement. All requisite corporate action by Fourth
Shift has been taken or will be taken promptly to (i) render the Rights
Agreement inapplicable with respect to the Merger and the transactions
contemplated hereby, (ii) ensure that neither AremisSoft or AremisSoft
Manufacturing nor any of their Affiliates is considered to be an Acquiring
Person or an Adverse Person (as defined in the Rights Agreement) and (iii)
ensure that neither the entering into of this Agreement, the announcement or the
consummation of the Merger shall trigger a Distribution Date (as defined in the
Rights Agreement).
4. Representations and Warranties of AremisSoft and AremisSoft
Manufacturing. Each of AremisSoft and AremisSoft Manufacturing represents and
warrants to Fourth Shift that the statements contained in this ss.4 are correct
and complete as of the date of this Agreement and will be correct and complete
as of the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this ss.4), except as set
forth in the Disclosure Schedule. The Disclosure Schedule will be arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this ss.4.
(a) Organization. Each of AremisSoft and AremisSoft Manufacturing
is a corporation duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation.
(b) Authorization of Transaction. Each of AremisSoft and
AremisSoft Manufacturing has full power and authority (including full corporate
power and authority) to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this
Agreement, the Certificate of Merger and the Articles of Merger by each of
AremisSoft and AremisSoft Manufacturing and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
requisite corporate action, and no other corporate proceedings on their part are
necessary to authorize the execution, delivery and performance of this
Agreement, the Certificate of Merger or the Articles of Merger. This Agreement
has been duly executed and delivered by AremisSoft and AremisSoft Manufacturing
and constitutes their valid and legally binding obligation, enforceable in
accordance with its terms.
(c) Noncontravention. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby,
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
17
governmental agency, or court to which either AremisSoft or AremisSoft
Manufacturing is subject or any provision of the charter or bylaws of either
AremisSoft or AremisSoft Manufacturing or (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which either AremisSoft or AremisSoft Manufacturing is a party or
by which it is bound or to which any of its assets is subject other than in
connection with the provisions of the Delaware General Corporation Law, the
Securities Exchange Act, the Securities Act, and the state securities laws,
neither AremisSoft nor AremisSoft Manufacturing needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(d) Brokers' Fees. Neither AremisSoft nor AremisSoft
Manufacturing has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement for which any of Fourth Shift and its Subsidiaries could become
liable or obligated.
5. Additional Covenants and Agreements. The Parties agree as
follows with respect to the period from and after the execution of this
Agreement.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in ss.6 below).
(b) Notices and Consents. Fourth Shift will give any notices (and
will cause each of its Subsidiaries to give any notices) to third parties, and
will use its best efforts to obtain (and will cause each of its Subsidiaries to
use its best efforts to obtain) any third party consents, that AremisSoft may
request in connection with the matters referred to in ss.3(d) above.
(c) Regulatory Matters and Approvals. Each of the Parties will
(and Fourth Shift will cause each of its Subsidiaries to) give any notices to,
make any filings with, and use its best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in ss.3(d) and ss.4(d) above. Without limiting the
generality of the foregoing:
(i) AremisSoft and Fourth Shift will cooperate and prepare
and file with the SEC proxy materials under the Securities Exchange Act
relating to the Special Meeting. Fourth Shift, with the assistance of
AremisSoft, will use its best efforts to respond to the comments of the
SEC thereon and will make any further filings (including amendments and
supplements) in connection therewith that may be necessary, proper, or
advisable. AremisSoft will provide Fourth Shift with whatever
information and assistance in connection with the foregoing filing that
Fourth Shift reasonably may request.
(ii) Fourth Shift will call a special meeting of its
stockholders (the "Special Meeting"), as soon as reasonably practicable
in order that the stockholders may consider and vote upon the adoption
of this Agreement and the approval of the Merger in accordance with
Minnesota Law. Fourth Shift will mail the proxy materials to its
stockholders as soon as reasonably practicable. The proxy materials will
contain the affirmative recommendation of the Board of Directors of
Fourth Shift in favor of the adoption of this Agreement and the approval
of the Merger; provided, however,
18
that no director or officer of Fourth Shift shall be required to violate
any fiduciary duty or other requirement imposed by law in connection
therewith.
(d) Fairness Opinion and Comfort Letters. Fourth Shift has
obtained and delivered to AremisSoft an opinion of Broadview as to the fairness
of the Merger to Fourth Shift from a financial point of view (the "Fairness
Opinion").
(e) Operation of Business. Without the prior written consent of
AremisSoft, Fourth Shift will not (and will not cause or permit any of its
Subsidiaries to) engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing:
(i) none of Fourth Shift and its Subsidiaries will
authorize or effect any change in its charter or bylaws;
(ii) none of Fourth Shift and its Subsidiaries will grant
any options, warrants, or other rights to purchase or obtain any of its
capital stock or issue, sell, or otherwise dispose of any of its capital
stock (except upon the conversion or exercise of options, warrants, and
other rights currently outstanding);
(iii) none of Fourth Shift and its Subsidiaries will
split, combine, subdivide or reclassify any Fourth Shift Shares;
(iv) none of Fourth Shift and its Subsidiaries will make
any acquisition by merger, consolidation or otherwise, or material
disposition of inventory, supplies and products, of assets or
securities, or permit any assets to become subject to any material lien,
encumbrance or Security Interest outside the Ordinary Course of
Business;
(v) none of Fourth Shift and its Subsidiaries will pay or
agree to pay or accelerate the payment of any pension, retirement
allowance or other employee benefit not required or contemplated by any
of the existing Employee Benefit Plans;
(vi) none of Fourth Shift and its Subsidiaries will
declare, set aside, or pay any dividend or distribution with respect to
its capital stock (whether in cash or in kind), or redeem, repurchase,
or otherwise acquire any of its capital stock;
(vii) none of Fourth Shift and its Subsidiaries will issue
any note, bond, or other debt security or create, incur, assume, or
guarantee any indebtedness for borrowed money or capitalized lease
obligation outside the Ordinary Course of Business;
(viii) none of Fourth Shift and its Subsidiaries will
impose any Security Interest upon any of its assets outside the Ordinary
Course of Business;
(ix) none of Fourth Shift and its Subsidiaries will make
any capital investment in, make any loan to, or acquire the securities
or assets of any other Person outside the Ordinary Course of Business;
19
(x) none of Fourth Shift and its Subsidiaries will make
any change in employment terms, including any increases in compensation,
for any of its directors, officers, and employees outside the Ordinary
Course of Business;
(xi) none of Fourth Shift and its Subsidiaries shall issue
any press release or make any public announcements regarding the
business, prospects or financial condition of Fourth Shift and its
Subsidiaries; provided, however, that Fourth Shift and its Subsidiaries
may make any public disclosure it believes in good faith, after
consultation with its counsel, is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities
(in which case Fourth Shift will use its best efforts to advise
AremisSoft prior to making the disclosure); and
(xii) none of Fourth Shift and its Subsidiaries will
commit to any of the foregoing.
(f) Full Access. Fourth Shift will (and will cause each of its
Subsidiaries to) permit representatives of AremisSoft to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of Fourth Shift and its Subsidiaries, to all premises,
properties, personnel, books, records (including Tax records), contracts, and
documents of or pertaining to each of Fourth Shift and its Subsidiaries. Each of
AremisSoft and AremisSoft Manufacturing will treat and hold any such information
it receives from any of Fourth Shift and its Subsidiaries in the course of the
reviews contemplated by this ss.5(f) as Confidential Information within the
meaning of the Confidentiality Agreements.
(g) Notice of Developments. Each Party will give prompt written
notice to the others of any material adverse development causing a breach of any
of its own representations and warranties in ss.3 and ss.4 above. No disclosure
by any Party pursuant to this ss.5(g), however, shall be deemed to amend or
supplement the Disclosure Schedule or to prevent or cure any misrepresentation,
breach of warranty, or breach of covenant.
(h) No Solicitation of Transactions. Fourth Shift and its
Subsidiaries, its Affiliates and their respective officers, directors,
employees, representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted heretofore with
respect to any Takeover Proposal. Fourth Shift and its Subsidiaries, directors,
employees, representatives and agents may furnish information or access to any
person made after the date hereof which is required as a result of their
fiduciary duties and was not initiated, solicited or knowingly encouraged by
Fourth Shift and its Subsidiaries or any of its Affiliates or any of its or
their respective officers, directors, employees, representatives or agents after
the date hereof (with respect to Confidential Information, pursuant to
appropriate confidentiality agreements), and may participate in discussions and
negotiate with such entity or group concerning any Takeover Proposal, only if
such entity or group has submitted a bona fide proposal to the Board of
Directors of Fourth Shift relating to any such transaction and (i) if the Board
of Directors of Fourth Shift determines in good faith, after receiving advice
from its independent financial advisor, that such entity or group has submitted
to Fourth Shift a Takeover Proposal which is reasonably likely to be superior to
the Merger and other transactions contemplated by this Agreement, and (ii) if
the Board of Directors of Fourth Shift determines, in its good faith judgment,
based on the opinion of outside legal counsel to Fourth Shift, that failing to
take such action would constitute a breach of such Board's fiduciary obligations
under applicable law. Fourth Shift shall promptly notify AremisSoft if any
proposal or offer, or any inquiry or contact with any Person with respect
thereto, is made and shall, in any such notice to AremisSoft, indicate in
reasonable detail the identity of the offeror and the terms and conditions of
any proposal or offer, or any such inquiry
20
or contact. Fourth Shift will promptly provide to AremisSoft any non-public
information concerning Fourth Shift provided to any other person which was not
previously provided to AremisSoft. Fourth Shift shall keep AremisSoft promptly
advised of developments that are likely to cause the Board of Directors of
Fourth Shift to modify or amend its recommendation of the Merger and other
transactions contemplated by this Agreement. Except as set forth in this Section
5(h), neither Fourth Shift nor any of its Affiliates, nor any of its or their
respective officers, directors, employees, representatives or agents, shall,
directly or indirectly, knowingly encourage or solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than
AremisSoft, any Affiliate or associate of AremisSoft, or any designees of
AremisSoft), concerning any Takeover Proposal and the Board of Directors shall
not recommend that Fourth Shift Stockholders tender their Shares in connection
with any tender offer unless the Board of Directors of Fourth Shift determines
in its good faith judgment, based on the opinion of independent outside legal
counsel to Fourth Shift, that filing to take such action would constitute a
breach of its fiduciary duties under applicable law.
(i) Termination Fee Payable by Fourth Shift.
(i) In the event that this Agreement is terminated
(regardless of whether such termination is by Fourth Shift or
AremisSoft) and prior to such termination a Trigger Event shall have
occurred, Fourth Shift shall pay to AremisSoft a fee of $2.5 million
(the "Termination Fee"). Such fee shall be payable in immediately
available funds on the third business day following the termination of
this Agreement. Notwithstanding the foregoing, the Termination Fee shall
not be payable in the event that (A) the Special Meeting shall have been
held, a Trigger Event or proxy solicitation in opposition to the Merger
(in anticipation of a Trigger Event) shall not have occurred prior to
the voting of the Fourth Shift Shares at the Special Meeting and,
following the conclusion of the Special Meeting, the Requisite
Stockholder Approval shall not have been obtained, or (B) AremisSoft or
AremisSoft Manufacturing breached in any material respect its
obligations under this Agreement.
(ii) As used herein, "Trigger Event" shall mean the
occurrence of any of the following events:
(A) Fourth Shift, its Subsidiaries or
their respective Board of Directors shall have authorized, recommended
or filed a Solicitation/Recommendation Statement or other Public Report
not opposing any tender or exchange offer, or authorized, recommended
or publicly announced its intention to enter into any merger (other than
the Merger), consolidation, liquidation, dissolution, business combination,
recapitalization, acquisition or disposition of a material amount of assets
or securities or any comparable transaction which has not been consented to
in writing by AremisSoft;
(B) the Board of Directors of Fourth Shift
withdraws or materially modifies its authorization, approval or
recommendation to the Fourth Shift Stockholders with respect to the Merger
or this Agreement, unless such withdrawal or modification results solely
from a material breach by AremisSoft of this Agreement which AremisSoft
fails to cure within ten (10) business days after notice thereof is
received from Fourth Shift;
(C) in the event a proxy solicitation in opposition
to the Merger shall have occurred prior to the voting of the Fourth Shift
Shares at the Special Meeting and thereafter any person, entity or "group"
(as that term is used in ss.13(d)(3) of the Exchange Act (other than its
21
Affiliates) that sponsored, directly or indirectly, promoted or
participated in such proxy solicitation shall, within twelve (12) months
from the date of termination of this Agreement, have commenced a tender
offer for at least a majority of the outstanding Fourth Shift Shares at
a price in excess of $3.70 per Fourth Shift Share or shall have become
the "beneficial owner" (as defined in Rule 13d-3 promulgated under the
Exchange Act) of a majority of the then outstanding Fourth Shift Shares;
or
(D) Fourth Shift shall have taken any action to
amend the Rights Agreement, or to redeem the rights thereunder, with
respect to an offer other than the Merger contemplated hereby.
(j) Directors' and Officers' Indemnification and Insurance. From
and after the Effective Time, AremisSoft shall, and shall cause the Surviving
Company to, jointly and severally, indemnify, defend and hold harmless the
present and former officers and directors of Fourth Shift and persons who become
officers or directors prior to the Effective Time (collectively, the
"Indemnitees") against all losses, expenses, (including reasonable attorney's
fees) claims, damages, liabilities, costs or judgments or amounts that are paid
in settlement with the approval of AremisSoft (which approval shall not be
unreasonably withheld) arising out of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement) to the full extent permitted or required as of
the date hereof by Fourth Shift's articles of incorporation and bylaws (and
shall also advance expenses as incurred to the fullest extent permitted under
the Fourth Shift's articles of incorporation and bylaws, provided that the
person to whom expenses are advanced provides the undertaking to repay such
advances if and as contemplated by applicable law or such articles of
incorporation and bylaws). The Surviving Company shall have in place extended
reporting endorsements (tail coverage) on the fiduciary liability, professional
liability, and directors and officers liability policies currently covering
Fourth Shift or any of the Indemnitees required to be indemnified by AremisSoft,
for a period of three (3) years commencing as of the Effective Time. In
connection with such efforts, the Surviving Company will complete accurately in
all material respects any insurance applications and forms of the applicable
insurer and take any reasonable steps to preserve any claims, including
submitting a full and complete list of any potential claims of which the
Surviving Company has knowledge, under the policy issued by such insurer.
AremisSoft may substitute new directors and officers liability insurance
policies from reputable insurance companies the material terms of which,
including coverage and amount, are no less favorable in any material respect to
the Indemnitees than the insurance coverage otherwise required by this Section
(l). Such extended reporting endorsements shall be obtained by Fourth Shift
prior to the Closing with premiums in an aggregate amount not to exceed
$225,000. Notwithstanding any provisions of this Section (l), failure by the
Surviving Company and/or AremisSoft, to have in place such extended reporting
endorsements or to provide such similar coverage under AremisSoft's policies
shall not in any way affect, lessen or excuse AremisSoft from its obligation to
indemnify, defend and hold harmless the Indemnitees to the extent required by
this Section (l). In the event any claim, action, suit, proceeding or
investigation (a "D&O Claim") for which indemnification is provided under this
Section (l) is brought against an Indemnitee (whether arising before or after
the Effective Time) after the Effective Time (i) such Indemnitee may retain
counsel satisfactory to it (subject to approval by the indemnifying party, which
approval shall not be unreasonably withheld, and subject to the terms and
conditions of the applicable directors and officers liability insurance or
fiduciary liability insurance policies), (ii) the indemnifying party shall pay
all reasonable fees and expenses of such counsel for such Indemnitee promptly as
statements therefor are received (subject to the ability of the indemnifying
party to receive such information relative to the legal services provided as is
customarily provided and reasonably requested by the indemnifying party and
provided that nothing in this Section (l) shall prevent the indemnifying party
from disputing any fees it reasonably believes are not reasonable), and (iii)
the indemnifying party will use all reasonable efforts to assist in the vigorous
defense of any such matter, provided that the indemnifying party shall not be
liable for
22
any settlement of any D&O Claim effected without its written consent, which
consent shall not be unreasonably withheld. Any Indemnitee wishing to claim
indemnification under this Section (l), upon learning of any such D&O Claim,
shall notify the appropriate indemnifying party (but the failure so to notify
such indemnifying party shall not relieve the indemnifying party from any
liability which it may have under this Section (l) except to the extent such
failure materially prejudices such indemnifying party), and shall deliver to
such indemnifying party the undertaking contemplated by applicable law. The
Indemnitees as a group may retain only one law firm to represent them with
respect to each such matter unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnitees. This Subsection (l) is intended to benefit the
Indemnitees, shall be enforceable by each Indemnitee and his or her heirs and
representatives, and shall be binding on all successors and assigns of the
Surviving Company and AremisSoft.
6. Conditions to Obligation to Close.
(a) Conditions to Obligation of AremisSoft and AremisSoft
Manufacturing. The obligation of each of AremisSoft and AremisSoft Manufacturing
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received
the Requisite Stockholder Approval;
(ii) Fourth Shift and its Subsidiaries shall have procured
all material third party consents specified in ss.5(b) above;
(iii) the representations and warranties set forth in
section 3 above shall be true and correct in all material respects at
and as of the Closing Date;
(iv) Fourth Shift shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing Date;
(v) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (C) affect adversely the right of AremisSoft to own the
capital stock of the Surviving Corporation, or (D) have a Material
Adverse Effect on the rights of the Surviving Corporation and its
Subsidiaries to own its assets and to operate its businesses (an no
injunction, judgment, order, decree, ruling, or charge shall be in
effect);
(vi) Fourth Shift shall have delivered to AremisSoft and
AremisSoft Manufacturing a certificate to the effect that each of the
conditions specified above in section 6(a)(i)-(v) is satisfied in all
respects;
(vii) AremisSoft and AremisSoft Manufacturing shall have
received from counsel to Fourth Shift an opinion in substantially the
form and substance as set forth in Exhibit C attached hereto, addressed
to AremisSoft and AremisSoft Manufacturing, and dated as of the Closing
Date;
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(viii) AremisSoft and AremisSoft Manufacturing shall have
received the resignations, effective as of the Closing, of each director
and officer of Fourth Shift and its Subsidiaries, other than those whom
AremisSoft shall have specified in writing prior to the Closing;
(ix) all actions to be taken by Fourth Shift in connection
with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to AremisSoft and AremisSoft
Manufacturing.
AremisSoft and AremisSoft Manufacturing may waive any condition specified in
this ss.6(a) if they execute a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of Fourth Shift. The obligation
of Fourth Shift to consummate the transactions to be performed by it in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in
section 4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) each of AremisSoft and AremisSoft Manufacturing shall
have performed and complied with all of its covenants hereunder in all
material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency
of any federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree,
ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation;
(iv) each of AremisSoft and AremisSoft Manufacturing shall
have delivered to Fourth Shift a certificate to the effect that each of
the conditions specified above in ss.6(b)(i)-(iii) is satisfied in all
respects;
(v) this Agreement and the Merger shall have received
the Requisite Stockholder Approval;
(vi) Fourth Shift shall have received from counsel to
AremisSoft and AremisSoft Manufacturing an opinion in substantially the
form and substance as set forth in Exhibit D attached hereto, addressed
to Fourth Shift, and dated as of the Closing Date; and
(vii) all actions to be taken by AremisSoft and AremisSoft
Manufacturing in connection with consummation of the transactions
contemplated hereby and all certificates, opinions, instruments, and
other documents required to effect the transactions contemplated hereby
will be reasonably satisfactory in form and substance to Fourth Shift.
Fourth Shift may waive any condition specified in this section 6(b) if it
executes a writing so stating at or prior to the Closing.
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7. Termination.
(a) Termination of Agreement. Any of the Parties may terminate
this Agreement with the prior authorization of its board of directors (whether
before or after the Requisite Stockholder Approval) as provided below:
(i) the Parties may terminate this Agreement by mutual
written consent at any time prior to the Effective Time;
(ii) AremisSoft and AremisSoft Manufacturing may terminate
this Agreement by giving written notice to Fourth Shift at any time
prior to the Effective Time (A) in the event Fourth Shift has breached
any material representation, warranty, or covenant contained in this
Agreement in any material respect, AremisSoft or AremisSoft
Manufacturing has notified Fourth Shift of the breach, and the breach
has continued without cure for a period of thirty (30) days after the
notice of breach or (B) if the Closing shall not have occurred, by
reason of the failure of any condition precedent under ss.6(a) hereof
(unless the failure results primarily from AremisSoft or AremisSoft
Manufacturing breaching any representation, warranty, or covenant
contained in this Agreement);
(iii) Fourth Shift may terminate this Agreement by giving
written notice to AremisSoft and AremisSoft Manufacturing at any time
prior to the Effective Time (A) in the event AremisSoft or AremisSoft
Manufacturing has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, Fourth
Shift has notified AremisSoft and AremisSoft Manufacturing of the
breach, and in the case of any breach other than a failure to maintain
the Pre-Closing Funds in accordance with Section 3(e)(iii) (for which no
cure period shall apply) the breach has continued without cure for a
period of thirty (30) days after the notice of breach or (B) if the
Closing shall not have occurred by reason of the failure of any
condition precedent under ss.6(b) hereof (unless the failure results
primarily from Fourth Shift breaching any representation, warranty, or
covenant contained in this Agreement);
(iv) any Party may terminate this Agreement by giving
written notice to the other Party at any time prior to the Effective
Time in the event the Fairness Opinion is withdrawn; or
(v) any Party may terminate this Agreement by giving
written notice to the other Party at any time after the Special Meeting
in the event this Agreement and the Merger fail to receive the Requisite
Stockholder Approval; or
(vi) either Party may terminate this Agreement if the
Closing Date shall not have occurred on or before June 30, 2001, unless
the failure results primarily from action or inaction of the Party
seeking to terminate this Agreement.
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to ss.7(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party (except
for any liability of any Party then in breach); provided, however, that the
confidentiality and termination fee provisions contained in ss.5(g) and ss.5(i)
above shall survive any such termination.
25
8. Miscellaneous.
-------------
(a) Survival. None of the representations, warranties, and
covenants of the Parties (other than the provisions in ss.2 above concerning
payment of the Merger Consideration) will survive the Effective Time.
(b) Press Releases and Public Announcements. No Party shall issue
any press release or make any public announcement relating to the subject matter
of this Agreement without the prior written approval of the other Parties;
provided, however, that any Party may make any public disclosure it believes in
good faith is required by applicable law or any listing or trading agreement
concerning its publicly-traded securities (in which case the disclosing Party
will use its best efforts to advise the other Party prior to making the
disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns; provided, however, that the
provisions in ss.2 above concerning payment of the Merger Consideration are
intended for the benefit of Fourth Shift Stockholders.
(d) Entire Agreement. This Agreement together with the
Confidentiality Agreements (including the documents referred to herein)
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
(f) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to Fourth Shift: FOURTH SHIFT CORPORATION
Two Meridian Crossing, #800
Minneapolis, MN 55423
Attn: Marion Stuckey
Copy to: Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, MN 55402
Attn: Thomas O. Martin
26
If to AremisSoft: AremisSoft Corporation
or AremisSoft Manufacturing
216 Haddon Avenue, #607
Westmont, NJ 08108
Attn: Roys Poyiadjis
Copy to: Bartel Eng & Schroder
300 Capitol Mall, #1100
Sacramento, CA 95814
Attn: Scott E. Bartel
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
(j) Amendments and Waivers. The Parties may mutually amend any
provision of this Agreement at any time prior to the Effective Time with the
prior authorization of their respective boards of directors; provided, however,
that any amendment effected subsequent to stockholder approval will be subject
to the restrictions contained in Minnesota Law. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
all of the Parties. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(l) Expenses. Each of the Parties will bear its own costs and
expenses (including legal fees and expenses) incurred in connection with this
Agreement and the transactions contemplated hereby.
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(m) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires. The
word "including" shall mean including without limitation.
(n) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
*****
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
AremisSoft Corporation,
a Delaware corporation
By: __________________________
Roys Poyiadjis,
Co-Chief Executive Officer
FOURTH SHIFT CORPORATION,
a Minnesota corporation
By:
--------------------------------------------
Marion Melvin Stuckey,
Chief Executive Officer
AremisSoft Manufacturing (US), Inc.,
a Delaware corporation
By:
---------------------------------------------
Roys Poyiadjis,
Co-Chief Executive Officer