Document:

Exhibit 10.7

 

Final
Version

 

SSA GLOBAL TECHNOLOGIES, INC.

2003 EQUITY INCENTIVE PLAN

 

I.              PURPOSE

 

The purpose of
this SSA Global Technologies, Inc. 2003 Equity Incentive Plan (“Plan”) is to
further the growth, development and financial success of the SSA Global
Technologies, Inc., a Delaware corporation (the “Company”), and its
subsidiaries, by providing equity based incentives and equity ownership
opportunities to certain directors, officers, and employees of and consultants
to the Company or its subsidiaries.

 

II.            DEFINITIONS

 

A.            “Award” means a grant under the Plan of an
Option, Common Stock, or an Equity Incentive.

 

B.            “Award Agreement” means an agreement
entered into by the Company and a Participant setting forth the terms and
provisions applicable to an Award,

 

C.            “Board” means the Board of Directors of the
Company.

 

D.            “Change in Control” shall mean (i) the
approval by the shareholders of the Company of a plan of complete liquidation
or dissolution of the Company, (ii) the consummation of a sale of all or
substantially all of the assets of the Company; (iii) the consummation of any
transaction as a result of which any individual or entity (other than Cerberus
Capital Management, L.P., General Atlantic Partners 76, L.P. or any of their
related entities or affiliates) becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing more than fifty percent (50%) of the total voting
power of all voting securities of the Company then issued and outstanding; or
(iv) the consummation of a merger, consolidation, reorganization, or business
combination, other than a merger, consolidation, reorganization or business
combination which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting
securities of the Company or the surviving entity immediately after such
merger, consolidation, reorganization of business combination.

 

E.             “Code” means the Internal Revenue Code of
1986, as amended.

 

F.             “Committee” means the committee composed
of two (2) or more members of the Board as may be appointed by the Board from
time to time to administer the Plan. If Section 162(m) of the Code is
applicable to the Company, the membership of the Committee shall comply with
the requirements of Section 162(m) of the Code with respect to “outside
directors” and the rules of the appropriate securities market where the Common
Stock is traded.

 

 

G.            “Common Stock”
means the Class A Common Stock, $0.01 par value per share, of the Company.

 

H.            “Company” has the
meaning ascribed to such term in Section I.

 

I.              “Disability”
means a determination by the Company in accordance with applicable law that, as
a result of a physical or mental illness, the Participant is unable and has
been unable to perform the essential functions of his or her job with or
without reasonable accommodation for a period of (i) 90 consecutive days or
(ii) 180 days in any one (1) year period; provided, that in the event that the
Participant is subject to an employment agreement with the Company and such
agreement contains a definition of “disability”, such definition in such
agreement shall be substituted for the definition set forth above the purposes
of this Plan.

 

J.             “Effective Date” has the meaning given
to such term in Section III.

 

K.            “Eligible Individual” means an individual
who (i) is an employee of the Company or any Subsidiary, (ii) is a member of
the board of directors of the Company or any Subsidiary, or (iii) provides
services to the Company or any Subsidiary as an independent contractor.

 

L.            “Equity Incentive” means an award of
rights, other than an Option or grant of Common Stock, the value of which, in
whole or in part, at any point in time is based on the value of a share of
Common Stock.

 

M.           “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

N.            “Fair Market Value
Per Share” means, in the event the shares of Common Stock are listed on an
established national or regional stock exchange, are admitted to quotation on
the National Association of Security Dealers Automated Quotation System, or are
publicly traded on an established securities market, the closing price of the
shares of Common Stock on such exchange or system or in such market (the
highest such closing price if there is more than one such exchange or market on
the relevant date) for the business day as of which such value is being
determined. In the event that the shares are not listed, quoted or publicly
traded or even if listed, quoted or publicly traded, the price cannot be
determined, “Fair Market Value Per Share” shall be determined by the Board, in
its good faith business judgment.

 

O.            “Grant Date” means
with respect to an Award the date set forth in the Award Agreement as the
effective grant date or, if the effective grant date is not stated, the date of
the Award Agreement.

 

P.            “Incentive Stock
Option” or “ISO” means an Option intended to qualify under Section 422 of
the Code.

 

Q.            “Nonqualified
Option” or “NQO” means an Option that is not intended to qualify under
Section 422 of the Code.

 

2

 

R.            “Option” means the
right to purchase shares of Common Stock of the Company pursuant to the terms
and conditions of an Option Agreement.

 

S.            “Option Amount”
has the meaning ascribed to such term in Section VI.

 

T.            “Option Price”
means the price at which a share of Common Stock may be purchased pursuant to
the exercise of an Option.

 

U.            “Participant”
means each Eligible Individual who has received an Award under the Plan.

 

V.            “Performance
Goals” means goals established by the Committee that relate to the achievement
by a Participant, the Company, any Subsidiary of one or more of the following:
revenue, earnings per share, return on stockholder equity, return on average
total capital employed, return on net assets employed, cash flow, economic
value added, earnings before interest and taxes, earnings before interest,
taxes, and amortization and depreciation allowances or such other goals as may
be established by the Committee in its discretion, in each case in accordance
with the provisions of Section 162(m) of the Code if and where applicable
to the Company.

 

W.           “Person” means a
person as defined in Section 3(a)(9) of the Exchange Act as modified and
used in Sections 13(d) and 14(d) thereof.

 

X.            “Plan” has the
meaning ascribed to such term in Section I.

 

Y.            “Restriction
Period” means the period during which a transfer of Common Stock is limited in
some way (based on the passage of time, achievement of Performance Goals or the
occurrence of other events determined by the Committee) or other Equity
Incentives are not vested.

 

Z.            “Section 162(m)
Participant” means a Participant who is subject to the provisions of
Section 162(m) of the Code, if Section 162(m) of the Code is
applicable.

 

AA.         “Securities Act”
means the Securities Act of 1933, as amended.

 

BB.         “Subsidiary” means
any corporation, limited liability company, limited liability partnership, or
partnership 50% or more of the equity securities, measured either by vote or
value, of which is owned by the Company or by a Subsidiary of the Company.

 

CC.         “Ten Percent
Stockholder” means an individual who owns stock possessing more than ten
percent (10%) of the combined voting power of all classes of stock of the
Company or its parent or subsidiary corporations within the meaning of
Section 422 of the Code.

 

DD.         “Withholding Amount”
has the meaning ascribed to such term in Section VI.

 

3

 

III.           EFFECTIVE DATE OF PLAN

 

The Plan shall
become effective on July 15, 2003, the shareholders of the Company having
approved the adoption of the Plan by the Board prior to such date, within
twelve months before or following the date of adoption of the Plan by the
Board, in a manner intended to comply with the shareholder approval requirement
of Section 422(b)(l) of the Code.

 

IV.           ADMINISTRATION

 

A.            Committee.  The Plan shall be administered by the Committee. The members of
the Committee shall be appointed from time to time by, and shall serve at the
discretion of, the Board. The Committee shall meet at such times and places as
it determines and may meet either in person or telephonically. A majority of
its members shall constitute a quorum, and the decision of a majority of those
present at any meeting at which a quorum is present shall constitute the
decision of the Committee. A memorandum signed by all of its members shall
constitute the decision of the Committee without necessity, in such event, for
holding an actual meeting.

 

B.            Authority.  The Committee shall have full power, and authority (subject to
the provisions of the Plan) to establish such rules and regulations as it may
deem appropriate for proper administration of the Plan and to make such
determinations under, and issue such interpretations of, the Plan and any
Awards thereunder. Decisions of the Committee shall be final and binding on all
parties who have an interest in the Plan or any Award thereunder.

 

C.            Powers.  Subject to the terms of the Plan, the Committee shall have full
power and discretionary authority to (i) make Awards to Participants; (ii)
determine the type, terms and conditions and number of shares of Common Stock
subject to or with respect to which such Award is granted, including the terms
of the Award Agreement; (iii) specify the Option Price; (iv) determine which
Options are to be ISOs and which Options are to be NQOs; (v) accelerate the
time during which an Option may be exercised, notwithstanding the provisions of
the Award Agreement; (vi) accelerate the vesting of any Award involving Common
Stock, notwithstanding the provisions of the Award Agreement; (vii) with the
Participant’s consent, accelerate the date by which any unexercised but vested
portion of an Option terminates, (vii) interpret and administer the Plan and
any instrument or agreement relating thereto or made thereunder, (ix) with the
Participant’s consent, cancel an Award and issue a new Award in substitution
for the cancelled Award on the same or different terms, (x) establish, amend,
suspend, and waive such rules and regulations and appoint such agents as it may
deem appropriate for the proper administration of the Plan, (xi) authorize any
person to execute on behalf of the Company any instrument required to
effectuate the grant of an Award previously granted by the Committee; (xii)
determine the rights and obligations of Participants under the Plan; and (xiii)
make any other determination or take any other action that the Committee deems
necessary or advisable for the proper administration of the Plan.

 

4

 

D.            Decisions
Binding.  The interpretation
and construction by the Committee of any provision of the Plan or of any Award
Agreement shall be final, conclusive and binding on all Participants and any
other individual with a right under the Plan. The Committee’s decisions under
the Plan need not be uniform and may be made selectively among Participants. No
member of the Committee shall be liable for any action or determination made
with respect to the Plan or any Award made under it.

 

E.             Waiver
of Conditions.  The Committee may,
in whole or in part, waive any conditions or other restrictions with respect to
any Award.

 

F.             Indemnification.  In addition to such other rights of
indemnification as they may have as directors, the members of the Board or
Committee shall be indemnified by the Company to the fullest extent permitted
by law against the reasonable expenses, including attorneys’ fees, actually and
necessarily incurred in connection with the defense of any action, suit or
proceeding, or in connection with any appeal therein, to which they or any of
them may be a party by reason of any action taken or failure to act under or in
connection with the Plan or any Award thereunder, and against all amounts paid
by them in satisfaction of a judgment in any such action, suit or proceeding
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee member is not entitled to
indemnification under applicable law; provided that within 60 days after
institution of any such action, suit or proceeding such Committee member shall
in writing offer the Company the opportunity, at the Company’s expense, to
handle and defend the same, and such Committee member shall cooperate with and
assist the Company in the defense of any such action, suit or proceeding. The
Company shall not be obligated to indemnify any Committee member with regard to
any settlement of any action, suit or proceeding of which the Company did not
consent to in writing prior to such settlement.

 

V.            SHARES SUBJECT TO THE PLAN

 

A.            Shares Subject to the Plan.  Subject to adjustment as provided in
paragraph (D) below, the aggregate number of shares of Common Stock with
respect to which Awards may be granted under the Plan shall be 600,000 and the
Company shall reserve 600,000 shares of Common Stock for issuance under the
Plan, provided, however, that on
and after the date Section 162(m) of the Code is applicable to the
Company, no person may be granted an Award intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, during
any calendar year, with respect to more than 500,000 shares. The shares with
respect to which Awards may be granted under the Plan may consist, in whole or
in part, of authorized but unissued Common Stock or treasury shares. To the
extent Awards of Equity Incentives are made under the Plan, an appropriate
number of shares shall be deemed reserved for issuance with respect to such
Awards and the number of shares which may be issued under the Plan with respect
to other types of Awards shall be reduced by a corresponding number.

 

B.            Unused Stock: Unexercised Rights.  If (a) any Award terminates, expires or is
cancelled prior to delivery of all of the shares of Common Stock reserved with
respect thereto or of other consideration issuable or payable with respect to
such Award, or (b)

 

5

 

any shares of
Common Stock acquired pursuant to the Plan are forfeited, then the number of
shares of Common Stock reserved with respect to such Award shall again be
available for granting in connection with additional Awards under the Plan.

 

C.            Adjustment in Capitalization.  In the event of any dividend or other
distribution (in whatever form), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin off, combination,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other similar corporate transaction or event
which affects the Common Stock, the Committee shall adjust the Plan and the
terms of any Award as it deems appropriate, in its discretion, in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan or such Award. The foregoing
notwithstanding, the Committee shall not make any adjustment to the Plan or any
Award which would subject any Award to variable accounting treatment under then
current generally accepted accounting principles applicable in the United
States.

 

VI.           OPTIONS

 

A.            Grant of Options.  Subject to the terms and provisions of the
Plan, Options may be granted to Eligible Individuals in such number and types,
upon such terms, and at any time and from time to time as shall be determined
by the Committee. All Options shall be granted pursuant to the terms of an
Award Agreement which specifies the type of Option granted, the duration of the
Award, the Restriction Period, if any, the Option Price, the number of shares
of Common Stock to which the Award relates, and such other provisions as the
Committee deems appropriate to the Award. Options granted to employees of the
Company or a Subsidiary may be in the form of ISOs or NQOs. Options granted to
other Eligible Individuals shall be in the form of NQOs.

 

B.            Option Price.  The Option Price with respect to each Award
intended to be treated as a NQO shall be determined by the Committee and may be
less than Fair Market Value Per Share at the time of the Award, provided that
NQOs granted to a Section 162(m) Participant shall either have an Option
Price of not less than 100% of the Fair Market Value Per Share of the
underlying Common Stock or be subject to the attainment of such Performance
Goals as are established by the Committee, unless otherwise determined by the
Committee. The Option Price with respect to each Option intended to be treated
as an Incentive Stock Option shall not be less than 100% of the Fair Market
Value Per Share on the Grant Date (or less than 110% of the Fair Market Value
Per Share on the Grant Date if the Participant is a Ten Percent Shareholder).

 

6

 

C.            Incentive Stock Options.  The term over which each Option intended to
be treated as an ISO shall not exceed ten years (five years where the
Participant is a Ten Percent Shareholder. The aggregate Fair Market Value Per
Share (determined at the time the Option is granted) of Common Stock with
respect to which ISOs are first exercisable by any Participant during any calendar
year under all option plans of the Company or any Subsidiary shall not exceed
$100,000.

 

D.            California Law Provisions  To the extent that the Company may be
relying on the registration exemption under Section 25102(o) of the
California Corporate Securities Law of 1968, each Award Agreement involving an
Option granted to an Eligible Individual who is an employee, but not an
officer, of the Company, shall comply with the provisions of such law regarding
minimum vesting periods, exercise periods following termination of employment,
and maximum option terms.

 

E.             Termination of Employment.  Except as otherwise provided in the Award
Agreement, no option may be exercised more than (a) ninety days after a
Participant’s employment (or other service arrangement) with the Company
terminates for any reason other than Disability or death or (b) one (1) year
after a Participant’s employment (or other service arrangement) with the
Company terminates by reason of Disability or death.

 

F.             Manner of Exercise.  The manner in which a Participant exercises
an Option shall be set forth in the Award Agreement, provided that in all
events such exercise shall be conditioned on payment to the Company at the time
of exercise, in a manner permitted under G. below, an amount equal to the sum
of (i) the product of the number of shares of Common Stock to be acquired
pursuant to such exercise and the applicable Option Price (“Option Amount”) and
(ii) the minimum applicable federal, state, and local income and employment
taxes which the Company is required to withhold and deposit on behalf of the
Participant with respect to such exercise (“Withholding Amount”).

 

G.            Payment.  The Committee shall determine the method and form of payment of
the Option Amount and Withholding Amount. The foregoing notwithstanding, the
Committee shall not allow payment of the Withholding Amount by means of the
delivery of Common Shares or the cancellation of a portion of an Option to the
extent that a fractional share of Common Stock or an Option including the right
to acquire a fractional share would remain after such payment and obligate the
Company to make a cash payment with respect to such fractional share.

 

H.            Rights as a
Stockholder.  No Participant (or any
legal representative, heir, legatee or permitted transferee) shall have any
rights as a stockholder with respect to any shares covered by an Option until
exercise thereof. Unless otherwise provided in the Award Agreement, no
adjustment shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions or other rights for which the
record date is prior to the exercise date.

 

7

 

VII.         STOCK GRANTS

 

A.            Awards.  The Committee shall have discretion to grant Awards in the form
of grants of Common Stock to Eligible Individuals, with or without payment
therefore. Such Awards shall be subject to such Restriction Periods and such
other terms and conditions as the Committee deems appropriate, including,
without limitation, restrictions on sale or other disposition and rights of the
Company to reacquire such Common Stock upon termination of the Participant’s
employment or service within specified periods.

 

B.            Performance Goals.  Without limitation, and unless otherwise determined
by the Committee if Section 162(m) of the Code is applicable to the
Company, any grant of Common Stock to a Section 162(m) Participant shall
provide that the Stock shall be subject to forfeiture if certain Performance
Goals established by the Committee over a designated period of time are not
achieved.

 

C.            Registration.  Any grant of Common Stock under the Plan to
a Participant may be evidenced in such manner as the Committee may deem
appropriate, including, without limitation, book-entry registration or issuance
of a stock certificate or certificates. In the event any stock certificate is
issued in respect of shares of Common Stock granted under the Plan to a
Participant, such certificate shall be registered in the name of the
Participant and shall bear an appropriate legend (as determined by the
Committee) referring to the terms,
conditions and restrictions applicable to such stock.

 

D.            Other Rights.  Unless otherwise determined by the
Committee, during any Restriction Period, Participants holding shares of Common
Stock granted hereunder may exercise full voting rights with respect to those
shares (if applicable) and shall be entitled to receive all dividends and other
distributions paid or made with respect to those shares while they are so held;
provided, however, that the
Committee may provide in any grant of shares of Common Stock that payment of
dividends thereon may be deferred until termination of the Restriction Period
and may be made subject to the same restrictions regarding forfeiture as apply
to such shares of stock.  If any such
dividends or distributions are paid in shares of Common Stock, the shares shall
be subject to the same restrictions on transferability as the shares of
restricted stock with respect to which they were paid.

 

E.             Forfeiture.  Except as otherwise determined by the
Committee and reflected in the Award Agreement, upon termination of employment
or service of a Participant with the Company or a Subsidiary for any reason
during the applicable Restriction Period, all shares of Common Stock still
subject to restriction shall be forfeited by the Participant to the Company; provided, however, that the Committee may,
waive in whole or in part any or all remaining restrictions with respect to
shares of Common Stock held by a Participant at such time.

 

VIII.        EQUITY INCENTIVES

 

A.            Other Stock-Based Awards.  Equity Incentives, valued in whole or in
part by reference to, or otherwise based on, shares of Stock, may be granted
either alone or in

 

8

 

addition to or
in conjunction with other Awards for such consideration, if any, and in such
amounts and having such terms and conditions as the Committee may determine.

 

B.            Other Benefits.  The Committee shall have the right to
provide types of benefits under the Plan in addition to those specifically
listed, if the Committee believes that such benefits would further the purposes
for which the Plan was established.

 

C.            Substitute Awards.  If the Company at any time should acquire
the business of another entity through a merger or consolidation, or through
the acquisition of stock or assets of such entity or its affiliates, Awards may
be granted under the Plan to those employees or directors of such entity or its
affiliates who, in connection with such succession, become employees or
directors of the Company or its Subsidiaries, in substitution for Awards with
respect to such entity held by them at the time of succession. The Committee
shall, in its sole and absolute discretion, determine the extent to which such
substitute Awards shall be granted (if at all), the person or persons to
receive such substitute Awards, the number of Awards to be received by each
such person, the Option Price of any Options and the terms and conditions of
such substitute Awards; provided, however, that the Option Price of each such
substituted Option shall be an amount such that, in the sole and absolute
judgment of the Committee and in compliance with Section 424(a) of the
Code (in the case of an ISO), the economic benefit provided by such Award is
not greater than the economic benefit represented by the Award with respect to
the acquired entity as of the date of the Company’s acquisition of such entity.
Notwithstanding anything to the contrary herein, no Award shall be granted, nor
any action taken, permitted or omitted, which would cause the Plan, or any
Awards granted hereunder as to which Rule 16b-3 under the Exchange Act may
apply, not to comply with such Rule.

 

IX.           CONDITIONS OF AWARDS

 

A.            Transferability.  Except as specifically provided herein,
Awards may be exercised during the lifetime of a Participant only by the
Participant.  Each Award shall not be
transferable other than by will or the laws of descent and distribution, except
that a Participant may, to the extent allowed by the Committee and in a manner
specified by the Committee: (a) designate in writing a beneficiary to exercise
the Award after the Participant’s death; or (b) transfer an Award; provided, however, that in no event may
ISOs be transferred other than by will or the laws of descent and distribution.

 

B.            Award Agreement.  Each Award granted by the Committee shall be
evidenced by an Award Agreement in such form as is determined by the Committee.
The Award Agreement shall include the terms and conditions of the Award,
including but not limited to, the type of Award, the number of shares of Common
Stock covered by the Award, the purchase or grant price of the Award, and the
term of the Award. No person shall have any rights under any Award granted under
the Plan unless and until the Company and the Participant to whom the Award was
granted shall have executed an Award Agreement. In the event of a conflict
between the Award Agreement and any other agreement with a Participant,
including but not limited to an employment agreement, the Award Agreement shall
govern.

 

9

 

C.            Issuance of Stock.  Shares of Common Stock issued under the Plan
may not be sold or otherwise disposed of except if applicable: (a) pursuant to
an effective registration statement under the Securities Act, or in a
transaction which, in the opinion of counsel for the Company, is exempt from
registration under the Securities Act; and (b) in compliance with state
securities laws. Further, as a condition to issuance of shares of Common Stock
under the Plan, the Participant, his beneficiary or his heirs, legatees or
legal representatives, as the case may be, shall execute and deliver to the
Company a restrictive stock transfer agreement in such form, and subject to
such terms and conditions, as shall be determined or approved by the Committee,
which agreement, among other things, may (a)
impose certain restrictions on the sale or other disposition of any shares of
Common Stock acquired under the Plan (including a minimum holding period
requirement), and (b) require the surrender of shares of Common Stock acquired
under the Plan in connection with a Change in Control or other transaction
involving a change in ownership of the Company. The Committee may waive the
foregoing restrictions, in whole or in part, in any particular case or cases or
may terminate such restrictions in its discretion.

 

D.            Additional Restrictions; Legends.  All shares delivered under the Plan pursuant
to any Award shall be subject to such stock transfer orders and other
restrictions as the Committee may deem advisable under the Plan and any
applicable federal or state securities laws, and the Committee may cause a
legend or legends to be put on any certificates for shares of Common Stock to
make appropriate references to such restrictions.

 

E.             General Restrictions.  Notwithstanding any other provision of the
Plan, the Company shall have no liability to recognize any exercise of an
Option, deliver any shares of Common Stock under the Plan or make any payment
unless such exercise, delivery or payment would comply with all applicable laws
and the applicable requirements of any securities exchange or similar
entity.  The Company reserves the right
to restrict, in whole or in part, the delivery of Common Stock pursuant to any
Award prior to the satisfaction of all legal requirements relating to the
issuance of such Stock, their registration, qualification or listing or an
exemption from registration, qualification or listing.

 

X.            RIGHTS OF PARTICIPANTS

 

Nothing in the
Plan shall interfere with or limit in any way the right of the Company or a
Subsidiary to terminate any Participant’s employment or service at any time nor
confer upon any Participant any right to continue in the employ or service of
the Company or a Subsidiary.

 

XI.           CHANGE IN CONTROL

 

A.            Change
in Control.  Unless otherwise
provided in the applicable Award Agreement, each Award outstanding under the
Plan at the time of a Change in Control shall vest and become fully exercisable
and all restrictions with respect to each Award involving a stock grant shall
lapse and all such shares of Common Stock shall vest in full

 

10

 

immediately
prior to the effective date of the Change in Control, provided that such
acceleration of vesting and lapse of restrictions shall not occur if and to the
extent: (a) the Award Agreement is assumed, or replaced with a similar type of
award with terms and conditions no less favorable to the Participant, by the
successor entity (or parent thereof) in the Change in Control or (b) the Award
is replaced with a cash incentive program of the successor entity which
preserves the full, after-tax, economic value of the Award at the time of the
Change in Control and provides for subsequent payout consistent with the
vesting schedule applicable to Award. Immediately following the
consummation of the Change in Control, but upon at least 10 days’ advance
notice to all affected Participants, all outstanding options shall terminate
and cease to be outstanding, except to the extent assumed by the successor
entity (or parent thereof).

 

Each Award
which is assumed by the successor entity (or parent thereof) shall be
appropriately adjusted, immediately after such Change in Control, to apply to
the number and class of securities which would have been issuable to the
Participant in the consummation of such Change in Control had the option been
exercised or all restrictions lapsed immediately prior to such Change in
Control. Appropriate adjustments shall also be made to the number and class of
securities available for issuance under the Plan and the exercise price payable
per share under each outstanding option, provided that the aggregate exercise
price shall remain unchanged.

 

The portion of
an ISO accelerated in connection with a Change in Control shall remain
exercisable as an ISO only to the extent of the applicable annual limitation
and to the extent such annual limitation is exceeded such option shall be
treated as a NQO.

 

The grant of
Options or shares of Common Stock under the Plan shall in no way affect the
right of the Company to adjust, reclassify, reorganize, or otherwise change it
capital or business structure or to merge, consolidate, dissolve, liquidate or
sell or transfer all or any part of its business or assets.

 

With respect
to Awards that are not Options or grants of Common Stock, the Committee shall
specify in the Award Agreement the effect of a Change in Control on such award.

 

B.             Amendment
or Rescission.  Notwithstanding
anything contained in this Section XI, the Board may, in its sole and
absolute discretion, amend, modify or rescind the provisions of this
Section XI if it determines that the operation of this Section XI may
prevent the Change in Control from receiving desired tax treatment, including
without limitation requiring that each Participant receive a replacement or
substitute Award issued by the surviving or acquiring corporation.

 

XII.         AMENDMENT, MODIFICATION AND TERMINATION OF PLAN

 

A.            Term of Plan.  Unless terminated earlier by the Board
pursuant to Section XIII, the Plan shall terminate on, and no Award shall
be granted under the Plan after, July 15, 2013.

 

B.            Amendments and Termination.  The Board may at any time amend, alter,
suspend, discontinue or terminate the Plan; provided,
however, that stockholder approval

 

11

 

of any
amendment of the Plan shall be obtained if required by: (a) the Code or any
rules promulgated thereunder; (b) any applicable state or federal law; or (c)
the listing requirements of the principal securities exchange or market on
which Common Stock is then traded.

 

C.            Amendment of Award Agreements.  The Committee may at any time amend any
outstanding Award Agreement; provided, however,
that any amendment that decreases or impairs the rights of a
Participant under such Award Agreement shall not be effective unless consented
to by the Participant in writing, except that Participant consent shall not be
required in the event an Award is amended, adjusted or cancelled under Sections
V or XI.

 

D.            Survival Following Termination.  Notwithstanding the foregoing, the authority
of (a) the Committee to amend, alter, adjust, suspend, discontinue or terminate
any Award, waive any conditions or restrictions with respect to any Award, and
otherwise administer the Plan and any Award, and (b) the Board to amend the
Plan as it applies with respect to Awards granted prior to the date of the
Plan’s termination, shall extend beyond the date of the Plan’s termination.
Except to the extent the Committee has acted to amend, alter, adjust, suspend,
discontinue or terminate any Award pursuant to the preceding sentence,
termination of the Plan shall not affect the rights of Participants with
respect to Awards previously granted to them, and all unexpired Awards shall
continue in force and effect after termination of the Plan except as they may
lapse or be terminated by their own terms and conditions.

 

XIII.        TAXES

 

The Company or
a Subsidiary shall be entitled to withhold from any payment made hereunder or
from any payment otherwise owing to the holder of an Award, the amount of any
tax attributable to any amount payable, or shares of Common Stock deliverable,
under the Plan, after giving the person entitled to receive such amount or
shares of Common Stock notice as far in advance as practicable, and the Company
may defer making payment or delivery under such Award if any such tax may be
pending unless and until indemnified to its satisfaction. Subject to VI(G) above,
the Committee may, in its discretion, permit a Participant to pay all or a
portion of the federal, state and local withholding taxes arising in connection
with the exercise or realization of an Award by electing to (a) have the
Company withhold shares of Common Stock, (b) deliver a promissory note of the
Participant, in such form, and subject to such terms and conditions as shall be
acceptable to Committee, provided that in all such instances, the promissory
note shall be secured by the shares of Stock being acquired, (c) tender back
shares of Common Stock received in connection with such benefit, or (d) deliver
other previously owned shares of Stock, having a Fair Market Value equal to the
amount to be withheld; provided, however, that
the amount to be withheld shall not exceed the Participant’s statutory minimum
total federal, state and local tax obligations associated with the transaction.
The election must be made on or before the date as of which the amount of tax
to be withheld is determined and otherwise as required by the Committee.

 

12

 

XIV.        MISCELLANEOUS

 

A.            Other Terms.  Subject to applicable law, the grant of any
Award under the Plan may also be subject to other provisions (whether or not
applicable to the benefit awarded to any other Participant) as the Committee
determines appropriate, including, without limitation, provisions for (a) one
or more means to enable Participants to defer recognition of taxable income
relating to Awards or cash payments derived therefrom, which means may provide
for a return to a Participant on amounts deferred as determined by the
Committee (provided that no such
deferral means may result in an increase in the number of shares of Common
Stock issuable hereunder); (b) the purchase of Common Stock under options in
installments; (c) the financing of the purchase of Common Stock under the
options in the form of a promissory note issued to the Company by a Participant
on such terms and conditions as the Committee determines; (d) restrictions on
resale or other disposition; and (e) compliance with federal or state
securities laws and stock exchange or market requirements.

 

B.            No Fractional Shares.  No fractional shares or other securities
shall be issued or delivered pursuant to the Plan, and the Committee shall
determine (except as otherwise provided in the Plan) whether cash, other
securities or other property shall be paid or transferred in lieu of any
fractional shares or other securities, or whether such fractional shares or
other securities or any rights thereto shall be canceled, terminated or
otherwise eliminated.

 

C.            Issuance of Certificate.  To the extent the Plan provides for the
issuance of shares of Common Stock, the issuance may be effected on a
non-certificated basis, to the extent not prohibited by applicable law or the
applicable rules of any stock exchange.

 

XV.         LEGAL CONSTRUCTION

 

A.             Governing
Law.  The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
Illinois, without reference to any conflict of law principles thereof. Any
legal action or proceeding with respect to this Plan, any Award or any award
agreement, or for recognition and enforcement of any judgment in respect
thereof, may only be brought and determined in a court sitting in the State of
Illinois.

 

B.             Severability.  If any provision of the Plan or any award
agreement or any Award (a) is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction, or as to any person or Award, or (b) would
disqualify the Plan, any award agreement or any Award under any law deemed
applicable by the Committee, then such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or
deemed amended without, in the determination of the Committee, materially
altering the intent of the Plan, award agreement or Award, such provision shall
be stricken as to such jurisdiction, person or Award, and the remainder of the
Plan, such award agreement and such Award shall remain in full force and
effect.

 

13

 

C.            Benefit Amounts Not Salary.  No Options or compensation received upon
exercise of any Options under this Plan shall be deemed salary or other
compensation to the Participant for the purpose of computing benefits to which
a Participant may be entitled under any vacation, disability, profit sharing,
pension plan or other arrangement of the Company for the benefit of its
employees.

 

D.            No Additional Rights.  Neither the adoption of this Plan nor the
participation of any Participant in this Plan shall (a) affect or restrict in
any way the power of the Company to undertake any action otherwise permitted
under applicable law, or (b) affect or restrict in any way the discretion or
authority of the Board or officers of the Company in the management of the
business and affairs of the Company, or (c) confer upon any Participant the
right to continue performing services for the Company as an employee, nor shall
it interfere in any way with the right of the Company to terminate the services
of any Participant as an employee or otherwise at any time, with or without
cause, or (d) create any security or otherwise confer any rights or duties
under or in respect of any state or federal securities laws.

 

E.             Designation of Beneficiary.  A Participant shall be entitled to designate
one or more persons or entities as his or her beneficiary with respect to
Awards under the Plan. Any such designation shall be made in a written
instrument filed with the Committee. In the event that such Participant fails
to designate a beneficiary or such beneficiary dies before such Participant, then the Participant’s beneficiary shall be
his or her estate.

 

F.             Non-Transferability.  Awards under this Plan are not assignable or
transferable, except as expressly otherwise provided in Section IX. No
Participant or beneficiary designated according to this Plan shall have the
right to sell, assign, transfer, pledge, gift, bequeath, encumber or
hypothecate his or her right in or to any Award in any manner except as
expressly provided in Section IX, nor shall such right of any Participant
or beneficiary be subject to claims of his or her creditors other than the
Company, or be liable to attachment, execution or other process of law. Any
attempted sale, assignment, transfer, pledge, hypothecation, gift, bequest or
other disposition of Participant’s right in or to the Awards other than in
accordance with Section IX shall be null and void and without effect.

 

G.            Transfers and Leaves of Absence.  For purposes of the Plan, (a) a transfer of
an Participant’s employment or consulting relationship, without an intervening
period, between the Company and the Company’s parent or a Subsidiary (or vice
versa), between the Company’s parent and a Subsidiary (or vice versa), or
between Subsidiaries shall not be deemed a termination of employment or a
termination of a consulting relationship and (b) an Participant who is granted
in writing a leave of absence shall be deemed to have remained in the employ
of, or in a consulting relationship with, the Company (or a Subsidiary,
whichever is applicable) during such leave of absence.

 

H.            Effectiveness and Termination of Plan.  The Plan shall be effective on the Effective
Date; provided, however, (a) the Plan shall be approved by the shareholders of
the Company within 12 months of such date of adoption by the Board, (b) no
Award shall be exercised pursuant to the Plan until the Plan has been approved
by the shareholders of

 

14

 

the Company,
and (c) no Award may be granted hereunder on or after that date which is ten
years from the effective date of the Plan. The Plan shall terminate when all
Awards granted hereunder either have been fully exercised, and all shares of
Common Stock which may be purchased pursuant to the exercise of such Awards
have been so purchased, or have expired; provided, however, that the Board may
in its absolute discretion terminate the Plan at any time. Unless earlier
terminated by the Board, the Plan shall terminate on that date which is ten
years from the effective date of the Plan. No such termination, except as
expressly provided for herein, shall in any way affect any Award then
outstanding without the Participant’s consent.

 

I.              Notices.  All notices or communications required or permitted to be given
under this Plan shall be given in writing and signed by the appropriate party,
dated, and shall be effective on the date such notice or communication is
delivered to the executive offices of the Company or sent to the last address
provided by a Participant to the Company, as the case may be.

 

J.             Captions.  Captions of the various sections herein are solely for the
convenience of the parties and shall not affect or control the meaning or
construction of this Plan.

 

15EXHIBIT 10.9

 

 

 

 

AGREEMENT AND PLAN OF MERGER

 

BY AND AMONG

 

SSA GLOBAL TECHNOLOGIES, INC.,

 

SAMURAI MERGER SUBSIDIARY, INC.

 

AND

 

INFINIUM SOFTWARE, INC.

 

 

Dated as of October 28, 2002

 

 

 

 

Table of Contents

 

	
  ARTICLE I
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II THE MERGER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
  The Merger

  	
   

  
	
  Section 2.2.

  	
  Effective Time of the Merger

  	
   

  
	
  Section 2.3.

  	
  Directors and Officers

  	
   

  
	
  Section 2.4.

  	
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III CONVERSION OF SECURITIES  

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
  Conversion of Capital Stock

  	
   

  
	
  Section 3.2.

  	
  Payment of Cash Merger Consideration

  	
   

  
	
  Section 3.3.

  	
  Appraisal Rights

  	
   

  
	
  Section 3.4.

  	
  Stock Options and Restricted Stock

  	
   

  
	
  Section 3.5.

  	
  Employee Stock Purchase Plan

  	
   

  
	
  Section 3.6.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND
  WARRANTIES OF THE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
  Organization

  	
   

  
	
  Section 4.2.

  	
  Capitalization

  	
   

  
	
  Section 4.3.

  	
  Authorization; Validity of Agreement;
  Company Action

  	
   

  
	
  Section 4.4.

  	
  Consents and Approvals; No Violations

  	
   

  
	
  Section 4.5.

  	
  SEC Reports and Financial Statements

  	
   

  
	
  Section 4.6.

  	
  No Undisclosed Liabilities

  	
   

  
	
  Section 4.7.

  	
  Absence of Certain Changes

  	
   

  
	
  Section 4.8.

  	
  Taxes

  	
   

  
	
  Section 4.9.

  	
  Title to Properties; Owned and Leased Real
  Properties; No Liens

  	
   

  
	
  Section 4.10.

  	
  Intellectual Property

  	
   

  
	
  Section 4.11.

  	
  Products

  	
   

  
	
  Section 4.12.

  	
  Agreements, Contracts and Commitments

  	
   

  
	
  Section 4.13.

  	
  Litigation

  	
   

  
	
  Section 4.14.

  	
  Environmental Matters

  	
   

  
	
  Section 4.15.

  	
  Employee Benefit Plans

  	
   

  
	
  Section 4.16.

  	
  Compliance with Laws

  	
   

  
	
  Section 4.17.

  	
  Permits and Licenses

  	
   

  
	
  Section 4.18.

  	
  Labor Matters

  	
   

  
	
  Section 4.19.

  	
  Insurance

  	
   

  
	
  Section 4.20.

  	
  Information in Proxy Statement

  	
   

  
	
  Section 4.21.

  	
  Brokers

  	
   

  
	
  Section 4.22.

  	
  State Takeover Statutes

  	
   

  
	
  Section 4.23.

  	
  Voting Requirements

  	
   

  

 

i

 

	
  Section 4.24.

  	
  Rights Agreement

  	
   

  
	
  Section 4.25.

  	
  Opinion of Financial Advisor

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE
  MERGER SUBSIDIARY

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
  Organization

  	
   

  
	
  Section 5.2.

  	
  Authorization; Validity of Agreement; Necessary Action

  	
   

  
	
  Section 5.3.

  	
  Consents and Approvals; No Violations

  	
   

  
	
  Section 5.4.

  	
  Sufficiency of Funds

  	
   

  
	
  Section 5.5.

  	
  Information in Proxy Statement

  	
   

  
	
  Section 5.6.

  	
  No Existing Discussions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI COVENANTS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
  Interim Operations of the Company

  	
   

  
	
  Section 6.2.

  	
  Confidentiality

  	
   

  
	
  Section 6.3.

  	
  No Solicitation of Other Offers

  	
   

  
	
  Section 6.4.

  	
  Access to Information

  	
   

  
	
  Section 6.5.

  	
  Special Meeting

  	
   

  
	
  Section 6.6.

  	
  Proxy Statement

  	
   

  
	
  Section 6.7.

  	
  Reasonable Best Efforts

  	
   

  
	
  Section 6.8.

  	
  Public Disclosure

  	
   

  
	
  Section 6.9.

  	
  Notification of Certain Matters

  	
   

  
	
  Section 6.10.

  	
  Rights Agreement

  	
   

  
	
  Section 6.11.

  	
  Subsequent Filings

  	
   

  
	
  Section 6.12.

  	
  Communication to Employees

  	
   

  
	
  Section 6.13.

  	
  Indemnification of Officers and Directors;
  Exculpation

  	
   

  
	
  Section 6.14.

  	
  Service Credit

  	
   

  
	
  Section 6.15.

  	
  Parent Acquisition Proposals

  	
   

  
	
  Section 6.16.

  	
  Company Credit Agreement

  	
   

  
	
  Section 6.17.

  	
  UCC Terminations

  	
   

  
	
  Section 6.18.

  	
  UK and Malaysia Filings

  	
   

  
	
  Section 6.19.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII CONDITIONS TO EFFECT THE MERGER

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
  Conditions to Each Party’s Obligation to Effect the Merger

  	
   

  
	
  Section 7.2.

  	
  Conditions to the Parent’s and the Merger Subsidiary’s Obligation to
  Effect the Merger

  	
   

  
	
  Section 7.3.

  	
  Conditions to the Company’s Obligation to Effect the Merger

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TERMINATION

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
  Termination

  	
   

  
	
  Section 8.2.

  	
  Effect of Termination

  	
   

  
	
  Section 8.3.

  	
  Fees and Expenses

  	
   

  
	
  Section 8.4.

  	
  Amendment

  	
   

  
	
  Section 8.5.

  	
  Extension; Waiver

  	
   

  

 

ii

 

	
  ARTICLE IX MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
  Nonsurvival of Representations and Warranties

  	
   

  
	
  Section 9.2.

  	
  Notices

  	
   

  
	
  Section 9.3.

  	
  Entire Agreement

  	
   

  
	
  Section 9.4.

  	
  No Third Party Beneficiaries

  	
   

  
	
  Section 9.5.

  	
  Assignment

  	
   

  
	
  Section 9.6.

  	
  Interpretation

  	
   

  
	
  Section 9.7.

  	
  Counterparts

  	
   

  
	
  Section 9.8.

  	
  Severability

  	
   

  
	
  Section 9.9.

  	
  Governing Law

  	
   

  
	
  Section 9.10.

  	
  Submission to Jurisdiction

  	
   

  
	
  Section 9.11.

  	
  Remedies

  	
   

  
	
  Section 9.12.

  	
  Waiver of Jury Trial

  	
   

  

 

 

Exhibits and Schedules

 

Exhibit A                               Voting
Agreement

 

Company Disclosure Letter

 

iii

 

AGREEMENT AND PLAN OF MERGER

 

This AGREEMENT AND PLAN OF MERGER dated as of October 28, 2002
(this “Agreement”) is made by and
among SSA Global Technologies, Inc., a Delaware corporation (the “Parent”), Samurai Merger Subsidiary, Inc.,
a Massachusetts corporation and a direct wholly-owned subsidiary of the Parent
(the “Merger Subsidiary”), and
Infinium Software, Inc., a Massachusetts corporation (the “Company”). 
The Parent, the Merger Subsidiary and the Company are each individually
referred to herein as a “Party”
and together collectively referred to herein as the “Parties”.

 

WITNESSETH

 

WHEREAS, the respective Boards of Directors of the Company, the Parent
and the Merger Subsidiary have approved the merger of the Merger Subsidiary
with and into the Company, with the Company surviving (the “Merger”), upon the terms and subject to the
conditions set forth in this Agreement and the Massachusetts Business
Corporation Law (as in effect from time to time, the “BCL”);

 

WHEREAS, the respective Boards of Directors of the Parent and the
Company have determined that the Merger is in the interest of their respective
stockholders; and

 

WHEREAS, as a condition and inducement to the Parent’s willingness to
enter into this Agreement, the Parent, the Company and certain of the Company’s
stockholders are entering into a voting agreement and irrevocable proxy, dated
as of the date hereof, substantially in the form as that attached hereto as Exhibit
A (the “Voting Agreement”),
pursuant to which the Company Stockholders party thereto have agreed, among
other things, to vote the shares of Company Common Stock held by them in favor
of the adoption of this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth below, the
Parties agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

For purposes of this Agreement the following terms shall have the
meanings set forth below:

 

“Acquisition Agreement”
shall mean any letter of intent, agreement in principle, acquisition agreement,
voting agreement, stock purchase agreement or other similar agreement relating
to an Acquisition Proposal.

 

“Acquisition Proposal”
shall mean (a) any inquiry, proposal or offer (including any proposal to stockholders
of the Company) from any Person or group relating to any direct or indirect
acquisition or purchase of 15% or more of the 

 

 

consolidated assets of the Company and its Subsidiaries or 15% or more
of any class of equity securities of the Company or any of its Subsidiaries in
a single transaction or a series of related transactions, (b) any tender offer
(including a self-tender offer) or exchange offer that, if consummated, would
result in any Person or group beneficially owning 15% or more of any class of
equity securities of the Company or any of its Subsidiaries or the filing with
the SEC of a registration statement under the Securities Act or any statement,
schedule or report under the Exchange Act in connection therewith, (c) any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries (other than as expressly permitted pursuant to Section 6.1)
or (d) any public announcement by or on behalf of the Company, any of its
Subsidiaries or any of their respective Affiliates (or any of their respective
Representatives) or by any third party of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing.

 

“Action or Proceeding”
shall mean actions, suits, proceedings, pleadings, claims, arbitrations,
investigations, charges, allegations, complaints or demands.

 

“Affiliate” shall have the
meaning set forth in Rule 12b-2 of the Exchange Act.

 

“Ancillary Product Materials” shall mean all
Documentation concerning the Products, including the Engineering Information,
the Testing Materials, the Marketing or User Materials and the Customer Support
Materials.

 

“Appraisal Provisions”
shall mean Sections 85 through 98 of the BCL and any successor provisions, as
in effect as of the Effective Time.

 

“Appraisal Shares” shall
mean Company Common Stock outstanding immediately prior to the Effective Time
that are held by any Person who properly objects to the Merger and demands payment
for and appraisal of such Company Common Stock pursuant to, and who complies in
all respects with, the Appraisal Provisions.

 

“Benefit Plans” shall mean
each retirement, pension, savings, bonus, stock purchase, profit sharing, stock
option, deferred compensation, severance or termination pay, insurance, death,
medical, hospital, dental, vision care, drug, sick leave, disability, salary
continuation, vacation, incentive or other compensation plan or arrangement or
other employee benefit that the Company and its Subsidiaries currently maintain
or to which the Company and its Subsidiaries currently contribute or are
required to contribute for the benefit of any of its employees or former
employees (or dependents or beneficiaries thereof) (or as to which the Company
and its Subsidiaries may otherwise have any liability, including, but not
limited to, any pension plan (“Pension Plan”)
as defined in Section 3(2) of ERISA, any welfare plan (“Welfare Plan”) as defined in
Section 3(1) of ERISA or any program administered by a government,
including, but not limited to, a Foreign Pension Plan, whether funded, insured
or self-funded or whether written or oral.

 

“Business Day” shall mean
any day except a Saturday, Sunday or any other day on which commercial banks are
required or authorized to be closed in New York, New York or Boston,
Massachusetts.

 

2

 

“Business Intellectual Property”
shall mean the material Owned Intellectual Property and the Licensed
Intellectual Property.

 

“CAA” shall have the
meaning ascribed to such term within the definition of Environmental Law.

 

“CERCLA” shall have the
meaning ascribed to such term within the definition of Environmental Law.

 

“Code” shall mean the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder.

 

“Company Common Stock”
shall mean the common stock, par value $0.01 per share, of the Company.

 

“Company Contribution”
shall have the meaning ascribed to such term within the definition of Payment
Fund.

 

“Company Credit Agreement”
shall mean the Loan and Security Agreement, dated October 26, 2001, by and
between the Company and Silicon Valley Bank, as such agreement is in effect on
the date hereof, without giving effect to any amendments, modifications or
supplements after the date hereof, and all agreements and arrangements entered
into pursuant thereto and in connection therewith.

 

“Company Material Adverse Effect”
shall mean any event, change, occurrence, effect, development or circumstance
that has or is reasonably likely to have, individually or in the aggregate, a
material adverse effect on (a) the ability of the Company to duly perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby on a timely basis or (b) the business, properties, financial condition
or results of operations of the Company and its Subsidiaries, taken as a whole;
provided, however, that none of the following (individually or in
combination) shall be deemed to constitute, or shall be taken into account in
determining whether there has been or would be, a Company Material Adverse
Effect:  (A) any adverse event, change,
occurrence, effect, development or circumstance resulting from or relating to
general business, economic, industry or financial market conditions, including
any such conditions arising out of acts of terrorism or war or any armed
hostilities to the extent such acts do not directly affect the Company or its
assets or employees; (B) any adverse event, change, occurrence, effect,
development or circumstance (including any adverse change or effect resulting
from or relating to a cancellation of or delay in customer orders, a reduction
in sales, a loss of employees, an action taken by a competitor, a disruption in
any relationship with any supplier, licensor, licensee, partner, employee or
other person or a claim, action or proceeding other than those commenced by any
Governmental Entity) resulting primarily from or relating primarily to the
announcement or pendency of the Merger or any of the other transactions
contemplated by this Agreement; (C) any adverse event, change, occurrence,
effect, development or circumstance resulting primarily from or relating
primarily to the taking of any action contemplated by this Agreement or any
action to which the Parent shall have consented in writing; (D) any adverse
event, change,

 

3

 

occurrence, effect, development or circumstance resulting primarily
from or relating primarily to any material breach by the Parent of any
provision of this Agreement or any other action by the Parent or any Subsidiary
of the Parent; (E) any failure to meet internal, published or other estimates,
predictions, projections or forecasts of revenues, net income or any other
measure of financial performance, provided that any underlying event,
change, occurrence, effect, development or circumstance that gave rise to such
failure shall be taken into account in determining whether there has been or
would be a Company Material Adverse Effect, except as otherwise provided in
this paragraph.

 

“Company Gaming Permits”
shall mean permits, approvals, licenses, authorizations, certificates, rights,
exemptions, orders and franchises from gaming regulatory bodies necessary for
the lawful conduct of the business of the Company and its Subsidiaries as now
conducted.

 

“Company Permits” shall
mean permits, approvals, licenses, authorizations, certificates, rights,
exemptions, orders and franchises from Governmental Entities necessary for the
ownership of assets and the lawful conduct of the business of the Company and
its Subsidiaries as now conducted or as conducted through the Effective Time,
including any Company Gaming Permits.

 

“Company Real Property”
shall mean, collectively, the Owned Real Property and the Leased Real Property.

 

“Company SEC Documents”
shall mean all forms, reports, schedules, statements and other documents
(including, in each case, exhibits, schedules, amendments or supplements
thereto, and any other information incorporated by reference therein) required
to be filed with the SEC by the Company since October 1, 1999 under the
Exchange Act or the Securities Act (as such documents have been amended or
supplemented between the time of their respective filing and the date of this
Agreement).

 

“Company Stockholders”
shall mean the record holders of the Company Common Stock.

 

“Computer Software”
shall have the meaning ascribed to such term within the definition of
Intellectual Property.

 

“Confidentiality Agreement”
shall mean the Confidentiality Agreement, dated as of September 5, 2002,
by and between the Company and the Parent, as in effect from time to time.

 

“Contract(s)” shall mean
any contract, agreement, instrument, guarantee, license or executory commitment
to which the Company is a party or pursuant to which the properties or assets
of the Company or any of its Subsidiaries are bound.

 

“Copyrights” shall have
the meaning ascribed to such term within the definition of Intellectual
Property.

 

4

 

“Current Version” shall
mean the current version and all currently supported versions.

 

“Customer Agreement” shall
mean a customer agreement with respect to a Product.

 

“Customer Support Materials”
shall mean any and all customer support materials relating to the Products,
including support training materials, support bulletins, and any and all data
contained in the customer support organization computer system of the Company
or its Subsidiaries.

 

“CWA” shall have the meaning
ascribed to such term within the definition of Environmental Law.

 

“Disabling Devices” shall
mean Computer Software viruses, time bombs, logic bombs, Trojan horses, trap
doors, back doors, or other computer instructions, intentional devices or techniques
that are designed to threaten, infect, assault, vandalize, defraud, disrupt,
damage, disable, maliciously encumber, hack into, incapacitate, infiltrate or
slow or shut down a computer system or any component of such computer system,
including any such device affecting system security or compromising or
disclosing user data.

 

“Documentation” shall mean
all documentation (including data entry and data processing procedures, report
generation and quality control procedures), logic and designs for all programs,
algorithms, edit controls, methodologies, flow charts and file layouts and
written narratives of all procedures used in the coding, operation or
maintenance of and customer support with respect to Computer Software.

 

“Engineering Information”
shall mean any and all design and code documentation, methodologies, processes,
trade secrets, design information, product information, technology, formulae,
routines, engineering specifications, technical manuals and data, drawings,
inventions (exclusive of inventions covered by patents and patent
applications), know-how, techniques, engineering work papers and programmers
notes relating to the Products.

 

“Environmental Law”
includes the Comprehensive Environmental Response, Compensation and Liability
Act (“CERCLA”), 42 U.S.C. 9601 et
seq., as amended, the Clean Air Act (“CAA”),
42 U.S.C. 7401 et seq., as amended, the Clean Water Act (“CWA”), 33 U.S.C. 1251 et seq., as amended,
the Occupational Safety and Health Act (“OSHA”),
29 U.S.C. 655 et seq., and any other federal, state, local or municipal laws,
statutes, regulations, rules or ordinances imposing liability or establishing
standards of conduct for protection of the environment.

 

“Environmental Permits”
shall mean, collectively, all permits, licenses and/or approvals required under
Environmental Laws to operate the business of the Company and its Subsidiaries
as currently operated and as contemplated in material compliances with all
Environmental Laws.

 

“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended.

 

5

 

“ERISA Affiliates” shall
mean any entity which, together with the Parent, the Merger Subsidiary and the
Company, as the case may be, would be treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code.

 

“Exchange Act” shall mean
the Securities Exchange Act of 1934, as amended, including the rules and
regulations promulgated thereunder.

 

“Foreign Pension Plan”
shall mean any plan, fund (including any superannuation fund) or other similar
program established or maintained by the Company, any Subsidiary of the Company
or any of the Company’s Affiliates outside the United States of America
primarily for the benefit of employees of the Company or any of the Subsidiaries
of the Company residing outside the United States of America, which fund or
similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination
of employment, and which plan is not subject to ERISA or the Code.

 

“GAAP” shall mean United
States generally accepted accounting principles applied on a consistent basis
during the periods involved.

 

“Governmental Approval”
shall mean any required filing, recordation, declaration or registration with,
or permit, order, authorization, consent or approval of, or action by or in
respect of, or the giving of notice to, any Governmental Entity.

 

“Governmental Directive”
shall mean any judgment, order, decree or directive by or at the request of any
Governmental Entity.

 

“Governmental Entity”
shall mean any federal, state, local, Native American tribal or foreign
government, court, arbitral tribunal, administrative agency, body or commission
or other governmental or other regulatory authority, commission, agency or body
or any non-governmental, self-regulatory authority, commission, agency or body.

 

“HSR Act” shall mean the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended.

 

“Intellectual Property”
shall mean all foreign and domestic (i) trademarks, service marks, brand names,
certification marks, collective marks, d/b/a’s, Internet domain names, logos,
symbols, trade dress, assumed names, fictitious names, trade names, and other
indicia of origin, all applications and registrations for all of the foregoing,
and all goodwill associated therewith and symbolized thereby, including all
extensions, modifications and renewals of same (collectively, “Trademarks”); (ii) inventions, discoveries
and ideas, whether patentable or not, and all patents, registrations, and
applications therefor, including divisions, continuations,
continuations-in-part and renewal applications, and including renewals,
extensions and reissues (collectively, “Patents”);
(iii) confidential and proprietary information, trade secrets and know-how,
including processes, schematics, databases, formulae, drawings, prototypes,
models, designs and customer lists (collectively, “Trade Secrets”); (iv) published and unpublished works of
authorship, whether copyrightable or not (including computer software),
copyrights therein and thereto, and registrations and applications therefor,
and all renewals, extensions, restorations and reversions thereof
(collectively, “Copyrights”); (v)
proprietary computer 

 

6

 

software and all service and data offerings of the Company in
connection with its business (including all computer programs, object code,
source code, user interface, data bases and documentation) (collectively, “Computer Software”); and (vi) all other
intellectual property or proprietary rights and claims or causes of action
arising out of or related to any infringement, misappropriation or other
violation of any of the foregoing, including rights to recover for past, present
and future violations thereof (collectively, “Other
Proprietary Rights”).

 

“Intellectual Property Contracts”
shall mean all agreements concerning material Owned Intellectual Property or
Licensed Intellectual Property to which the Company, any of its Subsidiaries or
their respective properties or assets are bound, including agreements granting
the Company and the Subsidiaries rights to use the Licensed Intellectual
Property, agreements granting rights to use material Owned Intellectual
Property, confidentiality agreements, Trademark coexistence agreements,
Trademark consent agreements and nonassertion agreements.

 

“Knowledge”, with respect
to any individual (and with respect to any other Person, the executive officers
of such Person), shall mean the actual knowledge of such individual (and with
respect to any other Person, the executive officers of such Person) after
reasonable inquiry.

 

“Laws” shall mean (i) any
provisions of any federal, state, local or foreign statute, law, rule,
regulation or ordinance applicable to a Person and (ii) any order, judgment,
writ, injunction or decree entered by a Governmental Entity specifically naming
a Person or, to the knowledge of such Person, binding on such Person or its
business or assets.

 

“Leased Real Property” shall
mean, collectively, all real property leased, subleased or licensed by the
Company or any of its Subsidiaries (as lessor or lessee or under which the
Company or any of its Subsidiaries has any liability).

 

“Licensed Intellectual Property”
shall mean Intellectual Property that the Company and the Subsidiaries are
licensed or otherwise permitted by other Persons to use.

 

“Liens” shall mean any
pledges, claims, liens, charges, mortgages, easements, rights-of-way,
encumbrances or security interests of any kind or nature whatsoever.

 

“Marketing or User Materials”
shall mean any and all customer and marketing materials relating to the
Products, including product documentation, sale and marketing collateral, white
papers, product data sheets known as “Software Product Descriptions,”
performance benchmark reports, customer training materials, sales training
materials and sales presentation materials.

 

“Merger Subsidiary Common Stock”
shall mean the common stock, par value $0.01 per share, of the Merger Subsidiary.

 

“Options” shall mean any
options to purchase Company Common Stock outstanding as of the Closing Date in
accordance with the Company’s:  (a) 1989
Stock 

 

7

 

Option Plan, amended as of October 1, 1994; (b) 1995 Stock Plan;
and (c) 1995 Non-Employee Director Stock Option Plan.

 

“OSHA” shall have the
meaning ascribed to such term within the definition of Environmental Law.

 

“Other Proprietary Rights”
shall have the meaning ascribed to such term within the definition of
Intellectual Property.

 

“Owned Intellectual Property”
shall mean Intellectual Property owned by the Company and the Subsidiaries.

 

“Owned Real Property”
shall mean all real property owned in whole or in part by the Company or any of
its Subsidiaries.

 

“Patents” shall have the
meaning ascribed to such term within the definition of Intellectual Property.

 

“Paying Agent” shall mean
the bank or trust company, which shall be located in the United States of
America, designated by the Parent (with the consent of the Company, not to be
unreasonably withheld or delayed) to act as paying agent for the holders of the
Cash Merger Shares in connection with the Merger and to receive the funds to
which holders of the Cash Merger Shares shall become entitled pursuant to
Section 3.1(c).

 

“Payment Fund” shall mean
cash in an aggregate amount which (i) is equal to (a) the aggregate Cash Merger
Consideration payable in accordance with Section 3.1(c) minus (b)(1) the
funds available to the Company in cash at the Effective Time, less (2) an
amount for short term operating expenses of the Company to be mutually agreed
upon by the Parent and the Company three days prior to the Closing (the amount
described in clause (b), the “Company Contribution”) and (ii) is sufficient to
enable the Paying Agent, upon combining the Payment Fund with the Company
Contribution, to make payments pursuant to Sections 3.1(c) and 3.2, which funds
prior to disbursement in accordance with the terms of this Agreement shall be
invested by the Paying Agent as directed by the Parent.

 

“Pension Plan” shall have
the meaning ascribed to such term within the definition of Benefit Plans.

 

“Permitted Lien(s)” shall
mean (a) Liens reflected in the Company’s consolidated balance sheet as of
June 30, 2002 contained in the Company SEC Documents (including the notes
thereto), (b) Liens consisting of zoning or planning restrictions, easements,
permits and other restrictions or limitations on the use of real property or
irregularities in title thereto that do not materially detract from the value
of, or materially impair the use of, such property by the Company or any of its
Subsidiaries in the operation of their respective business, (c) Liens of
carriers, warehousemen, mechanics, suppliers, materialmen or repairmen arising
in the ordinary course of business or (d) Liens for taxes, assessments or
governmental charges or levies on property not yet due and delinquent or being
contested in good faith by appropriate proceedings, if all of such Liens
referred to in preceding clauses (a) through (d), inclusive, do not have a
Company Material Adverse Effect.

 

8

 

“Person(s)” shall mean and
include an individual, a partnership (general or limited), a joint venture, a
corporation, a trust, an estate, a limited liability company, an association, a
joint-stock company,  an unincorporated
organization or other entity and a Governmental Entity, government or other
department or agency thereof.

 

“Product Tools” shall mean all Computer Software
design and development tools and any and all scripts, modifications and
additions to such tools which are owned and used by the Company or its
Subsidiaries to compile, link, integrate or build the Products, including all
related back-up tapes and archival tapes.

 

“Products” shall mean the
Computer Software products currently marketed, sold, licensed, supported,
serviced or maintained by the Company or its Subsidiaries, together with the
inventory of the Products, the Ancillary Product Materials and any and all such
Computer Software related to, comprising or constituting such products, and all
supplements, modifications, updates, corrections and enhancements to past and
current versions of such products, shipping versions of such products, and versions
of such products currently under development; and any and all English and
foreign language versions of current and past versions of such products,
shipping versions of such products and versions of such products currently
under development, in each case including the source code and object code
versions of such Computer Software; and all Documentation relating thereto; and
any and all back-up tapes and archival tapes relating to the foregoing.

 

“Proxy Statement” shall
mean the definitive proxy statement of the Company mailed to its stockholders
relating to the Merger and this Agreement, as amended or supplemented.

 

“Registered” shall mean
(i) issued patents, (ii) registered trademarks, service marks or copyrights, or
(iii) renewed trademarks or service marks.

 

“Representative(s)” shall
mean with respect to any Person, such Person’s Affiliates, officers, directors,
employees, representatives, consultants, investment bankers, attorneys,
accountants and other agents.

 

“Required Consents” shall
mean, collectively, all approvals, consents or waivers under each of the
Company Material Contracts that may be required under the terms thereof with
respect to the Merger, including the change of control of the Company resulting
therefrom, and the other transactions contemplated by this Agreement.

 

“Rights Agreement” shall
mean the Rights Agreement, dated as of February 5, 1999, between the
Company and BankBoston, N.A., as rights agent thereunder, as in effect on the
date of this Agreement and amended as contemplated by Section 6.10 of this
Agreement and without giving any effect to any other amendments, modifications
or supplements after the date of this Agreement.

 

“SEC” shall mean the
United States Securities and Exchange Commission.

 

“Securities Act” shall
mean the Securities Act of 1933, as amended, including the rules and
regulations promulgated thereunder.

 

9

 

“Special Meeting” shall
mean a special meeting of the stockholders of the Company for the purpose of
considering and taking action upon the approval of this Agreement and the
Merger.

 

“Stock Plans” shall mean
any stock option or restricted stock plan or agreement of the Company.

 

“Subsequent Filings”
means, collectively, all subsequent filings made after the date of this
Agreement amending or superseding any Company SEC Documents (including any
statements or schedules therein) and any forms, reports, schedules, statements,
registration statements, proxy statements, or other documents (including in
each case, exhibits, schedules, amendments or supplements thereto, and any
other information incorporated by reference therein) filed with the SEC after
the date of this Agreement.

 

“Subsidiary” shall mean,
with respect to any Person at any time, any partnership (general or limited),
joint venture, corporation, trust, estate, limited liability company,
association, joint-stock company, unincorporated organization or other entity
of which (or in which) more than 50% of (a) the issued and outstanding shares
of capital stock having ordinary voting power to elect a majority of the board
of directors of such corporation (irrespective of whether at the time shares of
capital stock of any other class or classes of such corporation shall or might
have voting power upon the occurrence of any contingency), (b) the interest in
the capital or profits of such partnership, joint venture, association, joint
stock company, unincorporated organization, limited liability company or other
entity, or (c) the beneficial interest in such trust or estate, is, at such
time, directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person’s
other Subsidiaries.

 

“Superior Proposal” shall
mean a bona fide written offer which is not solicited by or on behalf of the
Company, any of its Subsidiaries or any of their respective Affiliates (or any
of their respective Representatives) made by a third party to acquire, directly
or indirectly, (i) more than 50% of the shares of Company Common Stock pursuant
to a tender offer followed by a merger, (ii) all of the shares of Company
Common Stock pursuant to a merger or (iii) all or substantially all of the
assets of the Company and its Subsidiaries, (w) on terms (taken as a whole) which
the Board of Directors of the Company determines in good faith, after
consultation with its outside nationally recognized legal counsel (which may be
its current outside legal counsel) and a financial advisor of nationally
recognized reputation (which may be Updata Capital, Inc.), would, if
consummated, be more favorable from a financial point of view to the Company
and its stockholders (in their capacity as such) than the transactions
contemplated hereby, (x) which the Board of Directors determines in good faith
(after consultation with outside nationally recognized legal counsel (which may
be its current outside legal counsel) and a financial advisor of nationally
recognized reputation (which may be Updata Capital, Inc.)) is reasonably
capable of being consummated (taking into account such factors as the Board of
Directors of the Company in good faith deems relevant, including all legal,
financial, regulatory and other aspects of such proposal (including the terms
of any financing and the likelihood that the transaction would be consummated)
and the identity of the Person making such proposal), (y) which is not
conditioned on the receipt of any financing and (z) 

 

10

 

which is not made in violation of any standstill, confidentiality or
similar agreement entered into by the Company or any of its Subsidiaries or any
of their Affiliates or Representatives.

 

“Tax Returns” all material
tax returns, statements, forms and reports (including elections, declarations,
disclosures, schedules, estimates and information Tax returns and other
information required to be supplied to a taxing authority in connection with
Taxes) for Taxes that are required to be filed by, or with respect to, the
Company and its Subsidiaries  on or
prior to the Closing Date.

 

“Taxes” shall mean all
taxes, charges, duties, fees, levies or other similar assessments or
liabilities (whether payable directly or by withholding and whether or not
requiring the filing of a Tax Return), including income, gross receipts, ad
valorem, premium, value-added, excise, real property, personal property, sales,
use, services, transfer, withholding, employment, payroll, franchise, profits,
capital gains, capital stock, occupation, severance, windfall profits, stamp,
license, social security and other taxes imposed by the United States or any
state, local or foreign government, or any agency thereof, or other political
subdivision of the United States or any such government, and any interest,
fines, penalties, assessments or additions to tax resulting from, attributable
to or incurred in connection with any of the foregoing.

 

“Testing Materials” shall mean any and all
Engineering Information relating to testing and correcting defects in the
Products (including regression tests, test beds, test plans, software defect
database and historical defect data), and other documents and materials which
relate to maintaining, enhancing and correcting errors in the Products.

 

“Third Party Software”
shall mean all Computer Software used or held for use, sale or license by the
Company or any of its Subsidiaries (as a separate Product or as a component of
a Product) that neither the Company nor any of its Subsidiaries owns.

 

“Trade Secrets” shall have
the meaning ascribed to such term within the definition of Intellectual
Property.

 

“Trademarks” shall have
the meaning ascribed to such term within the definition of Intellectual
Property.

 

“Transfer Regulations”
shall means the Transfer of Undertakings (Protection of Employment) Regulations
1981 or such legislation enacted in an relevant jurisdictions pursuant to the
EC Directive 77/187/EEC (the “Acquired Rights
Directive”).

 

“U.S. Benefit Plan” shall
mean each Benefit Plan covering, or providing benefits to, employees of the
Company and its Subsidiaries based in the United States or to which ERISA or
the Code is applicable.

 

“Voting Debt” shall mean,
collectively, bonds, debentures, notes or other indebtedness or obligations
which entitle the holders thereof to vote (or which are convertible into or
exercisable or exchangeable for securities which entitle the holders thereof to
vote) with the stockholders of the Company or a Subsidiary of the Company, as
the case may be, on any matter.

 

11

 

“Voting Stockholders”
shall mean the Company Stockholders who are party to the Voting Agreement.

 

“WARN Act” shall mean the
Workers Adjustment Retraining Notification Act, 29 U.S.C. §§ 2101, et.
seq.

 

“Welfare Plans” shall have
the meaning ascribed to such term within the definition of Benefit Plans.

 

In addition to the foregoing definitions, the following terms shall
have the definitions specified in the section of the Agreement listed
below:

 

	
  Defined Terms

  	
   

  	
  Section

  
	
   

  	
   

  	
   

  
	
  Affiliated Group

  	
   

  	
  4.8(a)

  
	
  Agreement

  	
   

  	
  Introduction

  
	
  Articles of Merger

  	
   

  	
  2.2

  
	
  BCL

  	
   

  	
  Recitals

  
	
  Cash Merger Consideration

  	
   

  	
  3.1(c)

  
	
  Cash Merger Shares

  	
   

  	
  3.1(c)

  
	
  Certificates

  	
   

  	
  3.2(b)(i)

  
	
  Closing

  	
   

  	
  2.4

  
	
  Closing Date

  	
   

  	
  2.4

  
	
  COBRA

  	
   

  	
  4.15(b)

  
	
  Company

  	
   

  	
  Introduction

  
	
  Effective Time

  	
   

  	
  2.2

  
	
  Environmental Claim

  	
   

  	
  4.14

  
	
  Executive Agreements

  	
   

  	
  4.18(h)

  
	
  Expense Reimbursement

  	
   

  	
  8.3(b)(ii)

  
	
  Indemnified Parties

  	
   

  	
  6.13

  
	
  Insurance Policies

  	
   

  	
  4.19

  
	
  Merger

  	
   

  	
  Recitals

  
	
  Merger Subsidiary

  	
   

  	
  Introduction

  
	
  Option Consideration

  	
   

  	
  3.4

  
	
  Parent

  	
   

  	
  Introduction

  
	
  Parties

  	
   

  	
  Introduction

  
	
  Party

  	
   

  	
  Introduction

  
	
  Replacement Contracts

  	
   

  	
  6.7(a)(i)

  
	
  Restated Articles of Organization

  	
   

  	
  2.1

  
	
  SEC Contracts

  	
   

  	
  4.12

  
	
  Stock Acquisition Date

  	
   

  	
  6.10

  
	
  Stock Incentive Plans

  	
   

  	
  3.4

  
	
  Surviving Corporation

  	
   

  	
  2.1

  
	
  Termination Date

  	
   

  	
  8.1(b)

  
	
  Termination Fee

  	
   

  	
  8.3(b)(ii)

  
	
  Voting Agreement

  	
   

  	
  Recitals

  

 

12

 

ARTICLE II

 

THE MERGER

 

Section 2.1.            The Merger.  Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the BCL, at the Effective
Time, the Parent, the Merger Subsidiary and the Company shall consummate the
Merger pursuant to which (a) the Merger Subsidiary shall be merged with and
into the Company and the separate corporate existence of the Merger Subsidiary
shall cease, (b) the Company shall be the successor or surviving corporation in
the Merger (the “Surviving Corporation”)
and shall continue to be governed by the BCL, (c) the separate corporate
existence of the Company with all of its rights, powers and franchises shall
continue unaffected by the Merger, (d) the Restated Articles of Organization as
amended to date prior to the Effective Time of the Company (the “Restated Articles of Organization”) shall
be amended in their entirety to read as the Articles of Organization of the
Merger Subsidiary, as in effect immediately prior to the Effective Time; provided,
that Article 1 of the Articles of Organization of the Surviving
Corporation shall read in its entirety as follows:  “The name by which the corporation shall be known is:  Infinium Software, Inc.”, and as so amended
shall be the Articles of Organization of the Surviving Corporation until
further amended in accordance with the terms thereof and the BCL, and (e) the
By-laws of the Merger Subsidiary, as in effect immediately prior to the
Effective Time, shall be the By-laws of the Surviving Corporation until further
amended in accordance with the terms thereof and the BCL.  The Surviving Corporation shall possess all
the rights, privileges, immunities, powers and franchises of the Company and
the Merger Subsidiary, and the Surviving Corporation shall by operation of law
become liable for all of the debts, liabilities and duties of the Company and
the Merger Subsidiary.  The purpose of
the Surviving Corporation shall be as set forth in Article 2 of the
Articles of Organization of the Surviving Corporation.  The Merger shall have the effects set forth
in this Agreement and §80 of the BCL.

 

Section 2.2.            Effective
Time of the Merger.  Upon the
terms and subject to the conditions set forth in this Agreement, prior to the
Closing, the Merger Subsidiary and the Company shall prepare, execute, and on
the Closing Date shall cause to be filed with the Secretary of the Commonwealth
of The Commonwealth of Massachusetts, Articles of Merger in such form as is
required by the relevant provisions of the BCL (the “Articles of Merger”) and all other filings or recordings
required under the BCL.  The Merger
shall become effective upon the filing of the Articles of Merger, executed in
accordance with the relevant provisions of the BCL, with the Secretary of the
Commonwealth of The Commonwealth of Massachusetts or at such later time as is
established by the Parties and set forth in the Articles of Merger (the “Effective Time”).

 

Section 2.3.            Directors
and Officers.  The directors of
the Merger Subsidiary immediately prior to the Effective Time shall, from and
after the Effective Time, be the directors of the Surviving Corporation, each
to hold office in accordance with the Articles of Organization and By-laws of the
Surviving Corporation, until such director’s successor is duly elected or
appointed and qualified or until his or her earlier death, resignation or
removal in accordance with the Articles of Organization and the By-

 

13

 

laws of the
Surviving Corporation.  The officers of
the Merger Subsidiary immediately prior to the Effective Time shall be, from
and after the Effective Time, the officers of the Surviving Corporation, each
to hold office in accordance with the Articles of Organization and By-laws of
the Surviving Corporation, until such officer’s successor is duly elected or
appointed and qualified or until his or her earlier death, resignation or
removal in accordance with the Articles of Organization and the By-laws of the
Surviving Corporation.

 

Section 2.4.            Closing.  (a) 
Unless this Agreement shall have been terminated and the transactions
contemplated hereby shall have been abandoned pursuant to Article VIII,
and subject to the satisfaction or waiver (to the extent permitted by
applicable law) of all of the conditions set forth in Article VII, the
closing of the Merger (the “Closing”)
shall take place at 10:00 a.m. on a date to be specified by the Parties, which
shall be no later than two Business Days following the satisfaction or waiver
(to the extent permitted by applicable law) of all of the conditions set forth
in Article VII other than such conditions that by their nature are to be
satisfied at the Closing, but subject to the fulfillment or waiver (to the
extent permitted by applicable law) of those conditions (the “Closing Date”), at the offices of Schulte
Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022, unless
another date, place or time is agreed to in writing by the Parties.

 

(b)           Subject
to fulfillment or waiver of the conditions set forth in Article VII, at
the Closing, Parent shall deliver to the Company all of the following:

 

(i)            a
certificate executed on behalf of the Parent by an officer thereof, dated as of
the Closing Date, in form and substance reasonably satisfactory to the Company
certifying as to the incumbency and signatures of the officers of the Parent
executing this Agreement and any Ancillary Agreement; and

 

(ii)           the
certificate contemplated by Section 7.3(a).

 

(c)           Subject
to fulfillment or waiver of the conditions set forth in Article VII, at
the Closing, the Merger Subsidiary shall deliver to the Company all of the
following:

 

(i)            a
copy of the Articles of Organization of the Merger Subsidiary with all
amendments thereto certified as of a recent date by the Secretary of the
Commonwealth of the Commonwealth of Massachusetts;

 

(ii)           a
certificate of good standing of the Merger Subsidiary, issued as of a recent
date by the Secretary of the Commonwealth of the Commonwealth of Massachusetts;

 

(iii)          a
certificate of the Secretary or an Assistant Secretary of the Merger
Subsidiary, dated as of the Closing Date, in form and substance reasonably
satisfactory to the Company, certifying as to (A) the Articles of Organization
and the Bylaws of the Merger Subsidiary and (B) the incumbency and signatures
of the officers of the Merger Subsidiary executing this Agreement and the
Voting Agreement; and

 

(iv)          the
certificate contemplated by Section 7.3(a).

 

14

 

(d)           Subject
to fulfillment or waiver of the conditions set forth in Article VII, at
the Closing, the Company shall deliver to the Parent and the Merger Subsidiary
all of the following:

 

(i)            a
copy of the Articles of Organization of the Company, certified as of a recent
date by the Secretary of the Commonwealth of The Commonwealth of Massachusetts;

 

(ii)           a
certificate of good standing of the Company, issued as of a recent date by the
Secretary of the Commonwealth of The Commonwealth of Massachusetts;

 

(iii)          a
certificate of the Secretary or an Assistant Secretary of the Company, dated as
of the Closing Date, in form and substance reasonably satisfactory to Parent
certifying as to (A) the Company’s Articles of Organization and Bylaws, and (C)
the incumbency and signatures of the officers of the Company executing this
Agreement and the Voting Agreement;

 

(iv)          all
consents, waivers or approvals that have been obtained by the Company with
respect to the consummation of the transactions contemplated by this Agreement;

 

(v)           the
certificates contemplated by Section 7.2(a) and (d); and

 

(vi)          a
certificate executed on behalf of the Company’s transfer agent certifying as to
the number of issued and outstanding shares of Company Common Stock.

 

ARTICLE III

 

CONVERSION OF SECURITIES

 

Section 3.1.            Conversion
of Capital Stock.  As of the
Effective Time, by virtue of the Merger and without any action on the part of
any Party or the Company Stockholders or the Merger Subsidiary Stockholders:

 

(a)           Capital
Stock of the Merger Subsidiary. 
Each issued and outstanding share of Merger Subsidiary Common Stock
shall be converted into and become one fully paid and nonassessable share of
common stock, par value $0.01 per share, of the Surviving Corporation and shall
be the only issued and outstanding capital stock of the Surviving
Corporation.  From and after the
Effective Time, each outstanding certificate theretofore representing shares of
Merger Subsidiary Common Stock shall be deemed for all purposes to evidence
ownership and to represent the same number of shares of common stock of the
Surviving Corporation.

 

(b)           Cancellation
of Treasury Stock and Subsidiary-Owned Stock.  All Company Common Stock that is owned by the Company or by any
of its Subsidiaries or held in the Company’s treasury immediately prior to the
Effective Time shall be cancelled and shall cease to exist and no consideration
shall be delivered in exchange therefor.

 

(c)           Exchange
of Company Common Stock.  Each
issued and outstanding share of Company Common Stock (other than (i) shares of
Company Common Stock to be 

 

15

 

cancelled in
accordance with Section 3.1(b) and (ii) any Appraisal Shares) (including
each outstanding share of restricted Common Stock, whether or not vested) shall
be converted into the right to receive an amount in cash equal to $7.00 per
share of Company Common Stock (the “Cash
Merger Consideration”), payable to the holder thereof.  Such Cash Merger Consideration shall be paid
upon surrender of the certificate formerly representing such share of Company
Common Stock pursuant to Section 3.2. 
The shares of Company Common Stock converted into the right to receive
the Cash Merger Consideration are hereinafter referred to collectively as the “Cash Merger Shares”.  All such Cash Merger Shares, from and after
the Effective Time, shall no longer be outstanding and shall automatically be
cancelled and retired and shall cease to exist, and each holder of a
certificate representing any Cash Merger Shares shall cease to have any rights
with respect thereto, except the right to receive the Cash Merger Consideration
therefor upon the surrender of such certificate in accordance with
Section 3.2, without interest.

 

Section 3.2.            Payment
of Cash Merger Consideration.

 

(a)           Paying
Agent.  At least five Business Days
prior to the Effective Time, the Parent shall designate the Paying Agent.  At or prior to the Effective Time the Parent
shall deposit the Payment Fund in trust with the Paying Agent and at the
Effective Time, the Parent shall cause the Company to deposit the Company
Contribution in trust with the Payment Agent. 
The Payment Fund and the Company Contribution shall be invested by the
Paying Agent as directed by the Parent. 
The Paying Agent shall, pursuant to irrevocable instructions, make the
payments referred to in Section 3.1(c) and this Section 3.2 out of
the Payment Fund and the Company Contribution. 
Neither the Payment Fund nor the Company Contribution shall be used for
any other purpose except as otherwise agreed to by the Parent.  If the sum of the Payment Fund and the
Company Contribution is insufficient to pay in cash all of the amounts required
to be paid pursuant to Section 3.1(c) and this Section 3.2, the
Parent from time to time after the Effective Time shall promptly deposit in
trust additional cash with the Paying Agent sufficient to make all such
payments, or shall cause the Surviving Corporation to do so.

 

(b)           Exchange
Procedures.

 

(i)            As
soon as reasonably practicable (but in any event not later than 5 Business
Days) following the Effective Time, the Parent shall cause the Paying Agent to
mail to each holder of record of a certificate or certificates that immediately
prior to the Effective Time represented outstanding Cash Merger Shares
(collectively, the “Certificates”),
whose shares of Company Common Stock were converted pursuant to
Section 3.1(c) into the right to receive the Cash Merger Consideration,
(A) a letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificates shall pass, only upon actual
delivery of the Certificates to the Paying Agent, and shall otherwise be in
customary form), and (B) instructions for use in effecting the surrender of the
Certificates in exchange for payment of the Cash Merger Consideration.

 

(ii)           Upon
surrender of a Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by the Surviving Corporation,
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereon, together with any other items
specified by the letter of transmittal 

 

16

 

or otherwise
reasonably required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor the Cash Merger Consideration for
each Cash Merger Share represented by such Certificate, and the Certificate so
surrendered shall forthwith be cancelled. 
Until so surrendered, each Certificate shall be deemed, for all
purposes, to evidence only the right to receive upon such surrender the Cash
Merger Consideration deliverable in respect thereof to which the holder thereof
is entitled pursuant to Section 3.1(c) and this Section 3.2.  No interest will be paid or will accrue in
respect of any cash payable upon the surrender of any Certificate.

 

(iii)          If
any Certificate shall have been lost, stolen or destroyed, then, upon the
making of an affidavit of that fact by the Person claiming such Certificate to
be lost, stolen or destroyed, the Parent shall cause the Paying Agent to pay in
exchange for such lost, stolen or destroyed Certificate the Cash Merger
Consideration deliverable in respect thereof to which the holder thereof is
entitled pursuant to Section 3.1(c) and this Section 3.2; provided,
that the Parent may require the Person to whom any such Cash Merger
Consideration is paid, as a condition precedent to the payment thereof, to give
the Surviving Corporation a bond in such sum as it may direct or otherwise
indemnify the Surviving Corporation in a manner reasonably satisfactory to the
Parent against any claim that may be made against the Surviving Corporation
with respect to the Certificate claimed to have been lost, stolen or destroyed.

 

(iv)          If
payment of Cash Merger Consideration is to be made to a Person other than the
Person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered be properly endorsed
or be otherwise in proper form for transfer and that the Person requesting such
payment shall have paid any transfer and other taxes required by reason of the
payment of Cash Merger Consideration to a Person other than the registered
holder of the Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such tax either has been paid or
is not applicable.  Each of the Paying
Agent, the Parent and the Surviving Corporation shall be entitled to deduct and
withhold, or cause to be deducted and withheld, from any consideration payable
or otherwise deliverable pursuant to this Agreement to any holder or former
holder of Cash Merger Shares such amounts as may be required to be deducted and
withheld therefrom under the Code or any provision of state, local or foreign
Tax law or under any other applicable legal requirement.  To the extent such amounts are so deducted
or withheld, such amounts shall be treated for all purposes under this Agreement
as having been paid to the Person to whom such amounts would otherwise have
been paid and shall be paid to the appropriate Governmental Entity on behalf of
such Person.

 

(v)           The
Surviving Corporation shall pay all charges and expenses of the Paying Agent in
connection with the exchange of the Cash Merger Consideration for the Cash
Merger Shares.

 

(c)           No
Further Transfer or Ownership Rights in the Shares of Common Stock.  From and after immediately prior to the
Effective Time, the stock transfer books of the Company shall be closed with
respect to Company Common Stock and there shall be no further registration of
transfers of the Cash Merger Shares on the records of the Company (or the
Surviving Corporation) or its transfer agent of Certificates representing
Company Common Stock, and if any such Certificates are presented to the Company
(or 

 

17

 

the Surviving
Corporation) for transfer, they shall be cancelled and exchanged as provided in
this Article III, subject to applicable law in the case of Appraisal
Shares.  All Cash Merger Consideration
paid upon the surrender for exchange of Certificates in accordance with the
terms of this Article III shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the Company Common Stock
exchanged for Cash Merger Consideration theretofore represented by such
Certificates.

 

(d)           Termination
of Fund; No Liability.  At any time
following the date which is the twelve month anniversary of the Effective Time,
the Parent shall be entitled to require the Paying Agent to deliver to it any
funds (including any and all interest and other income received with respect
thereto) that had been made available to the Paying Agent and that have not
been disbursed to holders of Certificates, and thereafter, such holders shall
be entitled to look to the Parent (subject to abandoned property, escheat or
other similar Laws) with respect to the Cash Merger Consideration payable upon
due surrender of their Certificates, without any interest thereon; provided,
that such holders shall have no greater rights against the Parent than may be
accorded to general creditors of the Parent under applicable Laws.  Any portion of the Payment Fund remaining
unclaimed as of a date which is immediately prior to such time as such amounts
would otherwise escheat to or become property of any government entity shall,
to the extent permitted by applicable law, become the property of the Parent
free and clear of any claims or interest of any Person previously entitled thereto.  Notwithstanding the foregoing, neither the
Parent nor the Paying Agent shall be liable to any Person for any amounts
delivered to a public official pursuant to any applicable abandoned property,
escheat or other similar Laws.

 

Section 3.3.            Appraisal Rights.  Notwithstanding anything in this Agreement
to the contrary, Appraisal Shares shall not be converted into or represent the
right to receive Cash Merger Consideration in accordance with Sections 3.1(c)
and 3.2, but rather each of the Appraisal Shares shall be converted into the
right to receive payment of the appraised value of such Appraisal Shares in
accordance with the Appraisal Provisions; provided, however, that
if any holder of Appraisal Shares shall (i) fail to establish his entitlement
to appraisal rights as provided in the Appraisal Provisions or (ii) otherwise
shall waive, withdraw or lose the right to appraisal under the Appraisal
Provisions, then such holder shall forfeit the right to appraisal of such
Appraisal Shares and such Appraisal Shares shall thereupon be deemed to have
been converted as of the Effective Time into, and to have become exchangeable
solely, without any interest thereon, for the right to receive Cash Merger
Consideration otherwise payable in accordance with Sections 3.1(c) and
3.2.  The Company shall give the Parent
(a) prompt written notice of any objection filed pursuant to the Appraisal
Provisions received by the Company, the withdrawal of any such objection filed
pursuant to the Appraisal Provisions, and any other notice or instrument
delivered or served pursuant to the Appraisal Provisions and (b) the
opportunity to direct, at the Parent’s own expense, all negotiations and
proceedings with respect to any objections under the Appraisal Provisions.  The Company shall not, except with the prior
written consent of the Parent, (i) make any payment with respect to any
objection, (ii) offer to settle or settle any such objection, (iii) waive any
failure to timely deliver a written objection in accordance with the Appraisal
Provisions, or (iv) agree to do any of the foregoing.

 

Section 3.4.            Stock
Options and Restricted Stock. 
With respect to any Options outstanding prior to the Effective Time, the
Company shall take such action as shall be required to effectuate (i) the cancellation,
as of the Effective Time, of all Options 

 

18

 

(whether or
not then vested or exercisable and without regard to the exercise price, if
applicable, of such Options) granted under any Stock Plan or otherwise, and to
cause, pursuant to the Stock Plans, all outstanding Options (whether or not
then vested or exercisable) to represent solely the right to receive, in
accordance with this Section 3.4, a cash payment in the amount of the
Option Consideration (as defined below), if any, with respect to any such
Option and to no longer represent or represent the right to purchase Company
Common Stock or any other equity securities of the Company, the Parent, the
Surviving Corporation or any other Person or any other consideration, and (ii)
the termination, as of the Effective Time, of the Stock Plans and any other
plan, program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock or equity of the Company or any
Subsidiary or Affiliate thereof (collectively, with the Stock Plans, the “Stock Incentive Plans”).  The forgoing actions shall take effect
immediately prior to the Effective Time. 
Each holder of an option to purchase Company Common Stock shall receive
from Parent, in respect and in consideration of each Option so cancelled, as
soon as practicable following the Effective Time (but in any event not later
than 5 Business Days), an amount (net of applicable taxes) equal to the excess,
if any, of the Cash Merger Consideration over the exercise price of such
Option, multiplied by the total number of shares of Common Stock subject to
such Option, without any interest thereon (the “Option Consideration”). 
In the event that the exercise price of such option is equal to or
greater than the Cash Merger Consideration, such option shall be cancelled and
have no further force or effect.  As
soon as practicable following the execution of this Agreement, the Company
shall mail to each person who is a holder of any such Options a letter
describing the treatment of and payments for such Options pursuant to this
Section 3.4 and providing instructions for use in obtaining payment for
such Options.  The Company shall take
all steps to ensure that neither it nor any of its Subsidiaries or Affiliates
is or shall be bound by any Options, other options, warrants, rights or
agreements which would entitle any Person, other than the Parent or its
Affiliates, to own any capital stock or equity of the Company or any of the
Subsidiaries or to receive any payment in respect thereof, except as expressly
contemplated by this Section 3.4.

 

Section 3.5.            Employee
Stock Purchase Plan  As of the
end of the Payment Period (within the meaning of the Company’s 1995 Employee
Stock Purchase Plan (the “ESPP”))
ending December 31, 2002, the ESPP shall be terminated.  Prior to the end of such Payment Period, the
Company shall take all actions (including preventing any payroll deductions
under the ESPP with respect to any period after such Payment Period and, if
appropriate, amending the terms of the ESPP) that are necessary to effect such
termination.  Notwithstanding the
foregoing, in the event that the Closing Date occurs prior to December 31,
2002, options held by a participant under the ESPP shall be terminated as of
the Closing Date, in exchange for a cash payment equal to the excess of the
Cash Merger Consideration over the applicable option price under the ESPP,
multiplied by the number of shares of Company Common Stock that the
participant’s accumulated payroll deductions as of the Closing Date could
purchase, subject to the limitations contained in Section 12 of the ESPP.

 

Section 3.6.            Further
Assurances.  If at any time
after the Effective Time the Surviving Corporation shall consider or be advised
that any agreements, documents, deeds, bills of sale, assignments or assurances
or any other acts or things are necessary, desirable or proper (a) to vest,
perfect or confirm, of record or otherwise, in the Surviving 

 

19

 

Corporation,
its right, title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of either of the constituent
corporations in the Merger, or (b) otherwise to carry out the purposes of this Agreement,
the Surviving Corporation and its proper officers and directors or their
designees are hereby authorized to execute and deliver, in the name and on
behalf of either of the constituent corporations in the Merger, all such deeds,
bills of sale, assignments and assurances and do, in the name and on behalf of
such constituent corporations, all such other acts and things necessary,
desirable or proper, consistent with the terms of this Agreement, to vest,
perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of such
constituent corporations and otherwise to carry out the purposes of this
Agreement.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company has delivered to the Parent a Disclosure Letter, dated the
date hereof (the “Company Disclosure Letter”),
receipt of which has been acknowledged in writing thereon by the Parent.  The Company Disclosure Letter shall be
arranged in sections and subsections corresponding to the sections and
subsections of this Article IV (including specific cross references
between sections and subsections where appropriate).  Any reference in this Article IV to an agreement being
“enforceable” shall be deemed to be qualified to the extent such enforceability
is subject to (i) laws of general application relating to bankruptcy,
insolvency, moratorium and the relief of debtors, and (ii) the availability of
specific performance, injunctive relief and other equitable remedies.  The Company hereby represents and warrants
to the Parent and the Merger Subsidiary on the date hereof, except as set forth
in the Company Disclosure Letter as noted above, as follows:

 

Section 4.1.            Organization.  The Company and each of its Subsidiaries is
an entity duly organized, validly existing and in corporate good standing under
the Laws of its jurisdiction of organization and has all requisite power and
authority to own, lease and operate its properties and assets and to carry on
its business as now being conducted and as contemplated.  The Company and each of its Subsidiaries is
duly qualified or licensed to do business, and is in corporate good standing as
a foreign entity, in each jurisdiction where the character of its properties or
assets owned, operated and leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or
licensed or in good standing has not resulted in a Company Material Adverse
Effect.  The Company has, prior to the
date of this Agreement, made available to the Parent true, complete and correct
copies of the Articles of Organization and the By-laws of the Company and the
comparable governing documents of each of the Company’s Subsidiaries, in each
case as amended and in full force and effect as of the date of this
Agreement.  The respective charters and
by-laws or other organizational documents of such Subsidiaries do not contain
any provision limiting or otherwise restricting the ability of the Company to
control such Subsidiaries in any material respect.

 

Section 4.2.            Capitalization.  (a) The authorized capital stock of the
Company consists of (a) 40,000,000 shares of Company Common Stock and (b)
1,000,000 shares of preferred stock, par value $0.01 per share.  As of the close of business on the date 

 

20

 

hereof, (i)
with respect to Company Common Stock, 13,566,249 shares of Company Common Stock
are issued and outstanding, 96,396 shares of Company Common Stock are issued
and held in the treasury of the Company, 2,510,095 shares of Company Common
Stock are reserved for issuance upon exercise of outstanding Options to
purchase Company Common Stock; (ii) with respect to preferred stock, no shares
are issued and outstanding, or held in the treasury of the Company, and 150,000
shares are designated Series A Junior Participating Preferred Stock and are
reserved for issuance in connection with the Company’s stockholder rights plan
pursuant to the Rights Agreement. 
Section 4.2(a) of the Company Disclosure Letter sets forth the
exercise price, grant date, for and number of shares subject to all outstanding
options to purchase Company Common Stock and the grant date for all shares of
Restricted Stock.  All outstanding
shares of capital stock or other equity interests, as the case may be, of the
Company and each of the Subsidiaries are duly authorized, validly issued, fully
paid and non-assessable, and are not subject to and were not issued in
violation of any preemptive rights, purchase option, call option, right of
first refusal, subscription right or any similar right, and were issued in
compliance with applicable federal and state securities laws and
regulations.  All shares of capital
stock of the Company subject to issuance on the terms and conditions set forth
in the instruments pursuant to which they are issuable, will, when issued in
accordance with the terms of such instruments, be duly authorized, validly
issued, fully paid and non-assessable, and will not be subject upon issuance to,
nor issued in violation of, any preemptive rights, purchase option, call
option, right of first refusal, subscription right or any similar right, and
will be issued in compliance with applicable federal and state securities laws
and regulations.  Except as set forth
above, (i) there are no shares of capital stock or other equity securities
(voting or nonvoting) of the Company or any of its Subsidiaries authorized,
issued or outstanding, (ii) there are no outstanding or authorized options or
restricted stock (other than the Options to purchase Company Common Stock and
Restricted Stock described in Section 4.2(a) of the Company Disclosure
Letter) or warrants, calls, preemptive rights, subscriptions or other similar
rights, convertible or exchangeable securities, “phantom” stock rights, stock
appreciation rights, limited stock appreciation rights, stock-based performance
units, agreements, arrangements, commitments or claims of any character,
contingent or otherwise, (1) relating to the issued or unissued capital stock
of the Company or any of its Subsidiaries or (2) obligating the Company or any
of its Subsidiaries to issue, transfer or sell or cause to be issued,
transferred or sold any shares of capital stock or other equity interests in
the Company or any of its Subsidiaries or securities convertible into or
exchangeable for such shares or equity interests, or obligating the Company or
any of its Subsidiaries to grant, extend or enter into any such option,
restricted stock, warrant, call, preemptive right, subscription or other right,
convertible or exchangeable security, agreement, arrangement, commitment or
claim, and (iii) neither the Company nor any of its Subsidiaries has authorized
or outstanding Voting Debt.

 

(b)           Section 4.2
of the Company Disclosure Letter sets forth a complete and accurate list of the
Subsidiaries of the Company.  Except for
the Company’s interest in its Subsidiaries and investments in marketable
securities and mutual funds, neither the Company nor any of its Subsidiaries
owns directly or indirectly any interest or investment (whether equity or debt)
in, nor is the Company or any of the Subsidiaries subject to any obligation or
requirement to provide for or to make any investment (whether equity or debt)
to or in, any Person.

 

21

 

(c)           All
of the outstanding shares of capital stock or other equity interests of each of
the Company’s Subsidiaries are owned, of record and beneficially, by the
Company, or directly or indirectly beneficially, by either the Company or one
or more of its Subsidiaries, in each case free and clear of all Liens, options,
call rights, rights of first refusal, “tag” or “drag” along rights or other
similar restrictions.  No shares of
capital stock of, or ownership interests in, any of the Company’s Subsidiaries
are reserved for issuance to any Person other than the Company or any of its
Subsidiaries.

 

(d)           Other
than the Voting Agreement and the Rights Agreement, there are no voting trusts,
proxies, registration rights agreements, or other agreements, commitments,
arrangements or understandings of any character by which the Company or any of
its Subsidiaries is bound with respect to the voting of any shares of capital
stock or other equity interests of the Company or any of its Subsidiaries or
with respect to the registration of the offering, sale or delivery of any
shares of capital stock or other equity interests of the Company or any of its
Subsidiaries under the Securities Act.

 

(e)           None
of the Company or its Subsidiaries are required to redeem, repurchase or
otherwise acquire shares of capital stock or other equity interests of the
Company or any of its Subsidiaries.

 

(f)            There
are no restrictions of any kind which prevent or restrict the payment of
dividends by the Company or any of its Subsidiaries other than those imposed by
the corporate laws of general applicability of their respective jurisdictions
of organization.

 

Section 4.3.            Authorization; Validity of
Agreement; Company Action

 

The Company has full corporate power and authority to execute and
deliver this Agreement, the Voting Agreement and each instrument required
hereby to be executed and delivered by the Company prior to or at the Effective
Time, and, subject to obtaining Company Stockholder approval to the extent
required by the BCL and the Company’s Articles of Organization, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  The
execution, delivery and performance by the Company of this Agreement, the
Voting Agreement and each instrument required hereby to be executed and
delivered by the Company prior to or at the Effective Time and the performance
of its obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by its
Board of Directors, and, except for obtaining the approval of the Company
Stockholders as contemplated by Section 6.5, no other corporate action on
the part of the Company is necessary to authorize the execution, delivery and
performance by the Company of this Agreement, the Voting Agreement and the
consummation by it of the transactions contemplated hereby and thereby.  This Agreement, the Voting Agreement and
each instrument required hereby to be executed and delivered by the Company
prior to the Effective Time have been duly executed and delivered by the
Company and, assuming due and valid authorization, execution and delivery
hereof by the Parent and the Merger Subsidiary, is a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms.

 

22

 

Section 4.4.            Consents
and Approvals; No Violations. 
The execution and delivery of this Agreement and the Voting Agreement by
the Company does not, and the consummation by the Company of the transactions
contemplated by this Agreement and the Voting Agreement and the compliance by
the Company with the applicable provisions of this Agreement and the Voting Agreement
will not:

 

(a)           subject
to the obtaining of the approval of a majority of the outstanding shares of
Company Common Stock held by the Company Stockholders, violate or conflict with
or result in any breach of any provision of the Articles of Organization or the
By-laws of the Company or the comparable governing documents of any of its
Subsidiaries;

 

(b)           require
any Governmental Approval, except for (i) the filing by the Company of a
premerger notification and report form under the HSR Act and the expiration or
termination of any waiting periods under the HSR Act; (ii) the filing with the
SEC of (A) the Proxy Statement, and (B) such reports, schedules or materials
under the Exchange Act as may be required in connection with this Agreement and
the transactions contemplated by this Agreement; (iii) the Governmental
Approvals set forth in Section 4.4(b) of the Company Disclosure Letter;
and (iv) the filing of the Articles of Merger with the Secretary of the
Commonwealth of The Commonwealth of Massachusetts, all other filings and
recordings required under the BCL and appropriate documents with the relevant
authorities of other states and countries in which the Company and its
Subsidiaries are qualified to do business;

 

(c)           result
in a violation or breach of, conflict with, constitute (with or without due
notice or lapse of time or both) a default under, give rise to any penalty,
right of amendment, modification, renegotiation, termination, cancellation,
payment or acceleration of any material right or obligation or loss of any
material benefit or right under, or result in the creation of any Liens upon
any of the properties or assets of the Company or any of its Subsidiaries under
any of the terms, conditions or provisions of any loan or credit agreement,
note, bond, mortgage, indenture, lease, license, sublicense, franchise, permit,
concession, agreement, contract, obligation, commitment, understanding,
arrangement, franchise agreement or other instrument, obligation or
authorization to which the Company or any of its Subsidiaries is a party, or by
which any such Person’s properties or assets may be bound, other than such
violations, breaches, conflicts, defaults, penalties, rights of amendment,
modifications, terminations, cancellations or acceleration of any such right or
obligation or losses of material benefits or rights under or creation of such
Liens which are not, individually or in the aggregate, material to the Company
and its Subsidiaries; or

 

(d)           violate
or conflict with, in any material respect, any Law applicable to the Company or
any of the Subsidiaries or by which any of their properties or assets may be
bound.

 

Section 4.5.            SEC
Reports and Financial Statements. 
(a)  The Company has timely filed
with the SEC all Company SEC Documents, all of which are publicly available by
EDGAR.  Except to the extent amended or
superseded by a subsequent filing with the SEC made prior to the date hereof,
as of their respective dates (and if so amended or superseded, then on the date
of such filing prior to the date hereof), the Company SEC Documents (including
any financial statements or schedules included therein) and any forms, reports,
schedules, statements, registration statements, proxy statements and other 

 

23

 

documents
(including in each case, exhibits, schedules, amendments or supplements
thereto, and any other information incorporated by reference therein) (i) did
not, and in the case of Subsequent Filings will not, contain any untrue
statement of a material fact or omit, or in the case of Subsequent Filings will
not omit, to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading and (ii) complied, and in the case of
Subsequent Filings will comply, in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may
be.  Notwithstanding the foregoing, the
Company makes no representation or warranty with respect to any information
supplied by the Parent or the Merger Subsidiary in writing relating to the
Parent, the Merger Subsidiary or any affiliate thereof (other than the Company
or any of its Subsidiaries), as the case may be, expressly for inclusion or
incorporation by reference in the Proxy Statement.  None of the Company’s Subsidiaries is required to file any forms,
reports or other documents with the SEC.

 

(b)           Each
of the financial statements contained or to be contained in the Company SEC
Documents (including, in each case, any related notes and schedules) has (i)
been prepared from, and is in accordance with, the books and records of the
Company and its consolidated Subsidiaries, complies in all material respects
with applicable accounting requirements and with the published rules and
regulations of the SEC with respect thereto, (ii) been prepared in accordance
with GAAP (except as may be indicated in the notes thereto) and fairly presents
the consolidated financial position and the consolidated results of operations
and cash flows of the Company and its consolidated Subsidiaries at the dates
and for the periods covered thereby except that the unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.

 

Section 4.6.            No
Undisclosed Liabilities  The
Company and its Subsidiaries do not have any liabilities, indebtedness or
obligations of any nature (whether known or unknown, accrued, absolute,
contingent, asserted, liquidated or otherwise), except (a) as disclosed in
Section 4.6 of the Company Disclosure Letter; (b) as reflected and
reserved against on the June 30, 2002 balance sheet included in the
Company SEC Documents, (c) liabilities which have arisen since June 30,
2002 in the ordinary course of business of the Company to the extent they do
not constitute, individually or when aggregated with the other liabilities
referred to in clauses (c), (d) and (e) of this Section 4.6, a Company Material
Adverse Effect; (d) contractual and other liabilities incurred in the ordinary
course of business which are not required by GAAP to be reflected on a balance
sheet to the extent they do not constitute, individually or when aggregated
with the other liabilities referred to in clauses (c), (d) and (e) of this
Section 4.6, a Company Material Adverse Effect, or (e) that would not
individually or when aggregated with the other liabilities referred to in
clauses (c), (d) and (e) of this Section 4.6, cause a Company Material
Adverse Effect.

 

Section 4.7.            Absence
of Certain Changes.  Between
June 30, 2002 and the date of this Agreement, the Company has conducted,
and has caused its Subsidiaries to conduct, their respective businesses only in
the ordinary course of business consistent with past practice.  Without limiting the generality of the
foregoing:

 

24

 

(a)           there
has not occurred any Company Material Adverse Effect;

 

(b)           there
has been no declaration, setting aside or payment by the Company or any
Subsidiary of any dividend or other distribution payable in cash, securities or
other property with respect to, or split, combination, redemption,
reclassification, purchase or other acquisition effectuated or authorized by
the Company or any Subsidiary of, any shares of capital stock (or other equity
interests) or other securities of the Company or any of its Subsidiaries, other
than those payable by a wholly-owned Subsidiary of the Company solely to the
Company or to another wholly-owned Subsidiary of the Company, or any other
change in the capital structure of the Company or any of its Subsidiaries;

 

(c)           except
as set forth in Section 4.2 of the Company Disclosure Schedule, there has
been no issuance or sale, or authorization therefor, by the Company or any
Subsidiary of any shares of capital stock (whether unrestricted or restricted)
or any other securities (equity or debt) of the Company or any of its
Subsidiaries or issuance, sale or authorization by the Company or any
Subsidiary for any securities (equity or debt) convertible into or exchangeable
for, or options, warrants, calls, commitments or rights of any kind to purchase
or subscribe for, or the entering into by the Company or any Subsidiary of any
arrangement or contract with respect to the issuance or sale of, any shares of
capital stock of any class of the Company or Voting Debt or other securities
(equity or debt), or any other changes to the capital structure of the Company
or any of its Subsidiaries, except for the issuance by the Company of shares of
Company Common Stock pursuant to the terms of Options in the ordinary course,
consistent with past practices and as set forth in Section 4.2(a) of the
Company Disclosure Letter;

 

(d)           there
have been no Contracts (or amendments, modifications, supplements or
replacements to existing Contracts) made or committed to be made or entered
into to be performed by the Company or any of its Subsidiaries relating to, and
none of them have made any, capital expenditures with a value in excess of
$50,000 in any calendar year, or in the aggregate for capital expenditures with
a value in excess of $200,000;

 

(e)           neither
the Company nor any of its Subsidiaries has acquired, by merging or
consolidating with, by purchasing an equity interest in, by purchasing all or a
portion of the assets of, or by any other manner, any business or any Person,
or other acquisition of any assets of any Person (other than the purchase of
equipment, inventories and supplies in the ordinary course of business
consistent with past practice or acquisitions through the merger of a
Subsidiary into the Company);

 

(f)            there
have been no transfers, leases, licenses, guarantees, sales, mortgages,
pledges, disposals of, subjecting to Liens (other than Permitted Liens) or
other encumbrances on, any assets of the Company or any of its Subsidiaries
that are material to their business or that have a value individually in excess
of $100,000 other than with respect to (i) transactions between wholly-owned
Subsidiaries of the Company and the Company or between wholly-owned
Subsidiaries of the Company, (ii) dispositions of excess or obsolete assets of
the Company or any of its Subsidiaries in the ordinary course of business
consistent with past practice and (iii) leases, licenses or sales in the
ordinary course of business consistent with past practice;

 

25

 

(g)           except
to the extent required under existing employee and director benefit plans,
agreements or arrangements in effect on June 30, 2002, as set forth in
Section 4.2 of the Company Disclosure Schedule or required by
applicable law or contemplated by Section 3.4, there have been no
increases in the compensation or fringe benefits of any of the Company’s or its
Subsidiaries’ directors, officers or employees (except for immaterial increases
to employees who are not officers of the Company or any of its Subsidiaries in
the ordinary course of business consistent with past practice), no grants of
any severance or termination pay not required to be paid under then existing
severance plans, no employment, benefit (including with respect to life or
disability insurance or with respect to premiums therefor), consulting or
severance agreements, policies or arrangements with any present or former
directors, officers or other employees of the Company or any of the Company’s
Subsidiaries, no establishment or adoption of or amendments, modifications,
supplements, replacements or terminations of any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, benefit
(including with respect to life or disability insurance or with respect to
premiums therefor), pension, retirement, deferred compensation, employment,
termination, severance or other plans, agreements, trusts, funds, policies or
arrangements for the collective benefit of any directors, officers or employees
except with respect to new hires of non-officer employees in the ordinary
course of business and as consistent with past practice;

 

(h)           there
have been no plans of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganizations of the
Company or any of its Subsidiaries or any agreements relating to any
Acquisition Proposals adopted or entered into except as otherwise contemplated
or permitted hereby;

 

(i)            there
has been no (i) incurrence, assumption, modification or prepayment of any
indebtedness for borrowed money, issuance of any debt securities or warrants or
other rights for the acquisition of debt securities, or guarantees,
endorsements or liabilities or responsibilities for the obligations or
indebtedness of another Person by the Company or any of its Subsidiaries, other
than indebtedness owing to or guarantees of indebtedness owing to, the Company
or any direct or indirect wholly-owned Subsidiary of the Company, or capital
leases entered into, or (ii) loans, extensions of credit or advances by the
Company or any of its Subsidiaries to any other Person, other than to the
Company or to any direct or indirect wholly-owned Subsidiary of the Company,
except, in the case of preceding clauses (i) and (ii), for loans, extensions of
credit or advances constituting trade payables or receivables arising in the
ordinary course of business and in the case of preceding clause (ii), for
advances to employees in respect of travel and entertainment expenses in the
ordinary course of business in amounts of $10,000 or less to any individual on
any date of determination and $50,000 in the aggregate outstanding on any date
of determination;

 

(j)            except
for the acceleration of vesting of Options and Restricted Stock set forth in
Section 4.2 of the Company Disclosure Schedule, there have been no
accelerations of the payment, right to payment or vesting of any bonus,
severance, profit sharing, retirement, deferred compensation, stock option,
restricted stock, insurance (including arrangements or agreements for premiums
therefor) or other compensation or benefits of the Company or any of its Subsidiaries;

 

26

 

(k)           neither
the Company nor any of its Subsidiaries has made any payments, discharges,
settlements or satisfactions of any claims, litigation, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) other than (i) the payment, discharge, settlement or satisfaction,
in the ordinary course of business consistent with past practice, of (A)
liabilities reflected or reserved against in the June 30, 2002 balance
sheet included in the Company SEC Documents or (B) liabilities (other than
litigation) subsequently incurred in the ordinary course of business consistent
with past practice and (ii) other claims, litigation, liabilities or
obligations (qualified as aforesaid) that in the aggregate do not exceed
$250,000;

 

(l)            there
have been no plans, announcements, implementations or effectuations of any
reductions in force, lay-offs, early retirement programs, severance programs or
other programs or efforts concerning the termination of employment of employees
of the Company or its Subsidiaries, other than routine employee terminations in
the ordinary course of business and consistent with past practice;

 

(m)          there
have been no actions or omissions by or on behalf of the Company or any of its
Subsidiaries which (i) constitute a violation of any material Company Permit,
which violations would result in or would reasonably be likely to result in,
individually or in the aggregate, the modification, suspension, cancellation,
termination of any one or more material Company Permit or otherwise have or
would reasonably be likely to have a material adverse impact on any material
customer or material client contract or relationship or the nature or level of
discipline imposed on account of future violations of the Laws applicable to
the Company and the Surviving Corporation or (ii) would (or would reasonably be
likely to) materially impede, delay, hinder or make more burdensome for the
Surviving Corporation or the Parent to obtain and maintain any and all
authorizations, approvals, consents or orders from any Governmental Entity
necessary or required to maintain the Company Permits in effect at all times
following the Merger on the same terms as in effect on the date of this Agreement;

 

(n)           there
have been no entries into any new material lines of business;

 

(o)           there
has been no failure to maintain with current or other financially responsible
insurance companies insurance on the Company’s or its Subsidiaries’ assets,
tangible and intangible, and their respective businesses in such amounts and
against such risks and losses as are consistent with past practice and standard
practice in the Company’s industry;

 

(p)           there
has been (i) no materially amended Tax Returns or claims for refund filed, (ii)
no making or rescission of any material Tax election or other failure to
prepare all Tax Returns in a manner which is consistent with the past practices
of the Company and each Subsidiary of the Company, as the case may be, with
respect to the treatment of items on such Tax Returns except to the extent that
any inconsistency (1) did not, would not, or may not materially increase the
Parent’s, the Company’s or any of the Company’s Subsidiaries’ liability for
Taxes for any period or (2) is or was required by Law, (iii) no incurrence of
any material liability for Taxes other than in the ordinary course of business,
or (iv) no settlement or closing agreement with a taxing authority that
materially increases or would reasonably be likely to materially increase the
Tax liability of the Company or any of its Subsidiaries for any period entered
into;

 

27

 

(q)           there
has been no material change by the Company or any of its Subsidiaries in any
accounting practices, policies or procedures or any methods of reporting
income, deductions or other items for income tax purposes (except insofar as
may have been required by applicable law, GAAP or SEC rule and which are
disclosed in the Company SEC Documents); and

 

(r)            there
has been no material damage, destruction or loss (whether or not covered by
insurance) to the Company’s or any of its Subsidiaries’ tangible or intangible
property or assets, including software or systems.

 

Section 4.8.            Taxes.  (a) Tax Returns.  The Company, each of its Subsidiaries and
each affiliated group (within the meaning of Section 1504(a) of the Code)
or consolidated, combined, or unitary group (under state or local law) of which
the Company or any such Subsidiary is or has been a member (each, an “Affiliated Group”) have timely filed or
caused to be timely filed with the appropriate taxing authorities all material
Tax Returns that are required to be filed by, or with respect to, the Company,
each Subsidiary and each Affiliated Group.

 

(b)           Payment
of Taxes.  All Taxes imposed with
respect to the income, assets or operations of the Company or any of its
Subsidiaries for all taxable years or other taxable periods that end on or
before the Closing Date have been either timely paid or will be timely paid in
full on or prior to the Closing Date or accrued and adequately disclosed and
fully provided for in the Company SEC Documents in accordance with GAAP.  With respect to any taxable year or other
taxable period beginning on or before and ending after the Closing Date,
neither the Company nor any of its Subsidiaries nor any Affiliated Group has
incurred any individual Tax liability, or any such Tax liabilities in the
aggregate, in excess of $250,000 outside of the ordinary course of business with
respect to the portion of such taxable year or other taxable period ending on
and including the Closing Date.

 

(c)           Other
Tax Matters.

 

(1)           (i)  Neither the Company nor any of its
Subsidiaries nor any Affiliated Group is currently the subject of an audit or
other examination of Taxes by the tax authorities of any nation, state or
locality, (ii) no such audit or other examination is pending, or to the
Company’s Knowledge, threatened, and (iii) neither the Company nor any of its
Subsidiaries has received any written notice from any taxing authority relating
to any issue which would have or would be reasonably likely to have
individually or in the aggregate with respect to all such written notices an
adverse effect on the Tax liability of the Company or any of its Subsidiaries
in excess of $250,000.

 

(2)           Neither
the Company nor any of its Subsidiaries (i) has entered into an agreement or
waiver that will be in effect as of the Closing Date or been requested to enter
into an agreement or waiver extending any statute of limitations relating to
the payment or collection of Taxes of the Company or any of its Subsidiaries,
or (ii) is presently contesting the Tax liability of the Company or any of its
Subsidiaries in any administrative or judicial proceeding.

 

28

 

(3)           Neither
the Company nor any of its Subsidiaries has been included in any Affiliated
Group with any Person (other than the Company or any current Subsidiary
thereof) provided for under the law of the United States, any foreign
jurisdiction or any state or locality with respect to Taxes for any taxable
period for which the statute of limitations has not expired.

 

(4)           All
Taxes which the Company and each or any of its Subsidiaries is (or was)
required by law to withhold or collect in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other third
party have been duly withheld or collected, and have been timely paid over to
the proper authorities to the extent due and payable.

 

(5)           No
claim has been made in writing with respect to the 1998 tax year or subsequent
tax years or, to the Company’s Knowledge, with respect to any tax year prior to
the 1998 tax year by any taxing authority in a jurisdiction where the Company
or any of its Subsidiaries does not file Tax Returns that the Company or any of
its Subsidiaries is or may be subject to taxation by that jurisdiction.

 

(6)           There
are no tax sharing, allocation, indemnification or similar agreements in effect
as between the Company or any of its Subsidiaries or any predecessor or
affiliate thereof (other than the Parent and its affiliates) and any other
party under which the Parent, the Merger Subsidiary, the Company or any of the
Company’s Subsidiaries could be liable for any Taxes or other claims of, or
could otherwise have any liability or obligation to, any party after the
Closing Date.

 

(7)           Neither
the Company nor any of its Subsidiaries has applied for, been granted, or
agreed to any accounting method change for which it will be required to take
into account any adjustment under Section 481 of the Code or any similar
provision of the Code or the corresponding tax laws of any nation, state or
locality.

 

(8)           No
election under Section 341(f) of the Code has been made or shall be made
prior to the Closing Date to treat the Company or any of its Subsidiaries as a
consenting corporation, as defined in Section 341 of the Code.

 

(9)           Neither
the Company nor any of its Subsidiaries is a party to any agreement that would
require (including as a result of the execution and delivery of this Agreement
or the consummation of the Merger or any of the other transactions contemplated
by this Agreement) the Company or any of its Subsidiaries or any affiliate
thereof to make any payment that would constitute an “excess parachute payment”
for purposes of Sections 280G and 4999 of the Code or that would not be
deductible pursuant to Section 162(m) of the Code.

 

(10)         The
Company and each of its Subsidiaries have made available to the Parent and the
Merger Subsidiary true, complete and correct copies of each of the Tax Returns
for income Taxes filed on behalf of the Company and each of its Subsidiaries
for the 1998 tax year and all subsequent tax years.

 

29

 

(11)         There
are (i) no deferred intercompany transactions between the Company and any of
its Subsidiaries or between the Company’s Subsidiaries and there is no excess
loss account (within the meaning of Treasury Regulations Section 1.1502-19
with respect to the stock of the Company or any of its Subsidiaries) which will
or may result in the recognition of income upon the consummation of the
transaction contemplated by this Agreement, and (ii) no other transactions or
facts existing with respect to the Company and/or its Subsidiaries which by
reason of the consummation of the transaction contemplated by this Agreement
will result in the Company and/or its Subsidiaries recognizing income.

 

(12)         No
indebtedness of the Company or any of its Subsidiaries consists of “corporate
acquisition indebtedness” within the meaning of Section 279 of the Code.

 

(13)         The
Company and each of its Subsidiaries is in substantial compliance with any and
all material requirements with respect to the reporting, withholding, payment
of employment Taxes and filing of Tax Returns with respect to fees paid to any
consultants or temporary employees or staff of the Company and its
Subsidiaries.

 

Section 4.9.            Title to Properties; Owned and
Leased Real Properties; No Liens.  (a)  The Company and each
of its Subsidiaries has good and marketable, and in the case of Owned Real
Property, fee simple, title to, or, in the case of Leased Real Property and
leased assets, valid leasehold interests in, (A) all of its material tangible
properties and assets (real and personal), including all such properties and
assets reflected in the Company’s consolidated balance sheet as of
June 30, 2002 contained in the Company SEC Documents, except as indicated
in the notes thereto or as sold or otherwise disposed of in the ordinary course
of business after such date, and (B) all the material tangible properties and
assets that have been purchased by the Company or any of the Subsidiaries since
June 30, 2002, except for such properties and assets that have been sold
or otherwise disposed of in the ordinary course of business, in each case
subject to no Liens, except for Permitted Liens.

 

(b)           Section 4.9(b)
of the Company Disclosure Letter sets forth a complete and correct list of the
addresses of all Owned Real Property.

 

(c)           Section 4.9(c)
of the Company Disclosure Letter sets forth a complete and correct list of the
addresses of all Leased Real Property. 
The Company or one of its Subsidiaries has a valid leasehold interest in
all Leased Real Property, free and clear of any and all Liens except for
Permitted Liens.  Each lease with
respect to the Leased Real Property is in full force and effect in accordance
with its terms in all material respects; in each case, the Company or its
Subsidiary, as applicable, has been in peaceable possession since the
commencement of the original term of such lease and is not in default
thereunder in any material respect, and there exists no default or event,
occurrence, condition or act by the Company or its Subsidiaries, as applicable,
(including the Merger and transactions contemplated hereby) which, with the
giving of notice, the lapse of time or the happening of any further event or
condition (including the Merger and the other transactions contemplated by this
Agreement), would become a default in any material respect under 

 

30

 

such lease.  Neither the Company nor any of its
Subsidiaries has violated any of the terms or conditions under any such lease
in any material respect, and, to the Company’s Knowledge, all of the covenants
to be performed by any other party under any such lease have been fully
performed in all material respects.  The
Company has, prior to the date of this Agreement, made available to the Parent
true, complete and correct copies of each lease or other agreement (including,
in each case, any and all amendments, modifications and supplements thereto)
with respect to each Leased Real Property.

 

Section 4.10.          Intellectual Property.           (a)  Section 4.10(a) of the Company Disclosure
Letter sets forth a true and complete list of all of the (i) Registered or
material Owned Intellectual Property (each identified as a Patent, Trademark,
Trade Secret, Copyright, Computer Software or Other Proprietary Right, as the
case may be), (ii) pending Intellectual Property applications (each identified
as a Patent, Trademark or Copyright application) and (iii) Intellectual
Property Contracts (other than license agreements or licenses entered into by
the Company or its Subsidiaries, with their respective customers as end users
or resellers or distributors of the Company’s Products).

 

(b)           To the Company’s
Knowledge, all Owned Intellectual Property and all Licensed Intellectual
Property is valid, subsisting and enforceable. 
None of the Owned Intellectual Property (and to the Company’s Knowledge,
none of the Licensed Intellectual Property) (i) has been adjudicated invalid or
unenforceable, (ii) has been abandoned or cancelled (excepting any expirations
in the ordinary course), or (iii) is subject to any outstanding order, judgment
or decree restricting its use or adversely affecting the Company’s or its
Subsidiaries’ rights thereto.  To the
Company’s Knowledge, all material Owned Intellectual Property has been marked
where appropriate or necessary with notices and legends as permitted or
required by Federal and State laws or otherwise permitted to indicate the
Company’s or its Subsidiaries’ patent, trademark, copyright, confidential,
proprietary, and other Intellectual Property rights in such Owned Intellectual
Property.

 

(c)           The execution and
delivery of this Agreement and consummation of the transactions contemplated
hereby will not result in the breach of, or create on behalf of any third party
the right to terminate or modify any Intellectual Property Contract.

 

(d)           No Person other than
the Company has any ownership interest in, or a right to receive a royalty or
similar payment with respect to, any material Owned Intellectual Property, or
to the Company’s Knowledge, any non-material Owned Intellectual Property.  The Company and its Subsidiaries own or have
the right to use all Intellectual Property used or in the midst of being
developed to be used in the business of the Company and its Subsidiaries.  The Business Intellectual Property
constitutes all Intellectual Property necessary to operate the business of the
Company and its Subsidiaries.

 

(e)           No suit, action,
reissue, reexamination, public protest, interference, arbitration, mediation,
opposition, cancellation or other proceeding (collectively, “Suit”) is pending
against the Company or its Subsidiaries concerning any claim or position that
the Company or the Subsidiaries have violated any Intellectual Property rights
of any Person, (ii) no claim has been asserted, or to the Company’s Knowledge,
threatened against the Company or its Subsidiaries or any of their indemnitees
for violation of any Intellectual

 

31

 

Property rights of any Person
within the last two years, and (iii) to the Company’s Knowledge, the Company
and its Subsidiaries are not violating and have not, within the last two years,
violated any Person’s Intellectual Property rights.

 

(f)            No Suit is pending by
or against the Company or its Subsidiaries concerning a claim that (i) an
Intellectual Property Contract has been breached, or (ii) an Intellectual
Property Contract is invalid or unenforceable. 
No such claim has been asserted or, to the Company’s Knowledge, threatened
within the last two years.  To the
Company’s Knowledge, there exists no event, condition or occurrence which, with
the giving of notice or lapse of time, or both, would constitute a breach or
default under any Intellectual Property Contract by the Company or the
Subsidiaries or another Person who is a party to such Intellectual Property
Contract.  No party to any Intellectual
Property Contract listed in Section 4.10(a) of the Company Disclosure Letter
has given the Company or the Subsidiaries written notice of its intention to
cancel, terminate or fail to renew any Intellectual Property Contract.

 

(g)           (i) No Suit is pending
by or against the Company or its Subsidiaries concerning the Owned Intellectual
Property, including any Suit concerning a claim or position that the Owned
Intellectual Property has been violated or is invalid, unenforceable,
unpatentable, unregisterable, cancelable, not owned or not owned exclusively by
the Company or the Subsidiaries and (ii) no such claim has been asserted or, to
the Company’s Knowledge threatened, within the last two years.

 

(h)           No Suit is pending by
or against the Company or the Subsidiaries concerning the Licensed Intellectual
Property, including any Suit concerning the right of the Company or the
Subsidiaries to use the Licensed Intellectual Property and (ii) no such claims
have been asserted or, to the Company’s Knowledge, threatened within the last
two years.

 

(i)            The Company has no
Knowledge that any Person is violating any Business Intellectual Property.

 

(j)            The Company has timely
made all filings and payments with the appropriate foreign and domestic
agencies required to maintain in subsistence all material Registered Owned
Intellectual Property (including, but not limited to, all registrations and
applications for Trademarks comprising or consisting of “Infinium” or the
“circle - i” design).  There are no due
dates for filings or payments (including office action responses, affidavits of
use, affidavits of continuing use, renewals, requests for extension of time,
maintenance fees, application fees and foreign convention priority filings)
concerning any material Owned Intellectual Property (including, but not limited
to, all registrations and applications for Trademarks comprising or consisting
of “Infinium” or the “circle - i” design) falling due within ninety (90) days
of the Closing Date, whether or not such due dates are extendable.  The Company and the Subsidiaries have
complied with the applicable rules and regulations of such agencies with
respect to material Owned Intellectual Property (including, but not limited to,
all registrations and applications for Trademarks comprising or consisting of
“Infinium” or the “circle - i” design). 
Except for any documentation that may be necessary as a result of the
transactions contemplated by this Agreement, all documentation necessary to
confirm and effect the Company’s and the Subsidiaries’ ownership of material
Owned Intellectual Property (including, but not

 

32

 

limited to, all registrations
and applications for Trademarks comprising or consisting of “Infinium” or the
“circle - i” design), if acquired from other Persons, has been recorded in the
United States Patent and Trademark Office and, where appropriate, in the United
States Copyright Office and other official offices.

 

(k)           The Company and the
Subsidiaries have taken commercially reasonable measures to protect the
secrecy, confidentiality and value of all Trade Secrets used in their business
(collectively, “Business Trade Secrets”) (including entering into appropriate
confidentiality agreements with all officers, directors, employees, and other
Persons with access to the Business Trade Secrets).  To the Company’s Knowledge, neither the Company nor any of its subsidiaries
nor any of its employees has taken any actions not in conformity with the
Company policies under circumstances which are reasonably likely to lead to the
loss of protection and maintenance of such Business Trade Secrets.

 

(l)            To the Company’s
Knowledge, all current or former Company or Subsidiary employees whose
employment terminated within the last two years have been required to disclose
to the Company any confidentiality agreement and/or agreement not to compete
that restricts or forbids, or restricted or forbade at any time during such
employee’s employment by the Company or a Subsidiary such employee’s
performance of the Company’s or the Subsidiaries’ business, or any other
activity that such employee was hired to perform or otherwise performed on
behalf of or in connection with such employee’s employment by the Company or a
Subsidiary.  To the Company’s Knowledge,
no such agreement has been breached in a manner which is reasonably likely to
have an adverse effect on any Owned Intellectual Property.

 

Section 4.11.          Products.  (a)        The
Company is the sole and exclusive owner of the Products and all constituent
parts thereof (other than Licensed Intellectual Property).

 

(b)           Section 4.11(b) of the
Company Disclosure Letter contains a true and complete list of all Licensed
Intellectual Property (including Third Party Software) separated into the
following categories and sub-categories: 
(i) Licensed Intellectual Property that is incorporated into the Current
Version of the Company’s Products that is (A) embedded in one or more of the
Current Version of the Company’s Products, or (B) separate from the Current
Version of the Company’s Products (i.e.,
an add-on Product) that is sold or licensed (bundled) together with one or more
of the Current Version of the Company’s Products, and (ii) Third Party Software
not licensed by the Company or its Subsidiaries to customers but used
internally by the Company or its Subsidiaries in their business.

 

(c)           The Current Version of
the Company’s Products will perform substantially in accordance with the documentation
that accompanies such Products as provided to customers who purchase or
license, or have purchased or licensed, such Products from the Company,
Subsidiaries or their agents.  There are
no Disabling Devices associated with or contained in the Company’s
Products.  The Current Versions of the
Products are sufficient to satisfy all written warranties made by the Company
or its Subsidiaries to customers in licensing agreements for such Products or
on behalf of the Company and its Subsidiaries to any customer of such Products.

 

33

 

(d)           The source code for the
Current Versions of the Products will compile into executable object code and
such executable object code will be capable of performing the functions
described in the documentation that accompanies such Products as provided to
customers who purchase or license, or have purchased or licensed, such Products
from the Company, its Subsidiaries or their agents.  The source code and Documentation, to the extent pertaining to
the Current Versions of the Products, are accurate and sufficiently documented
to enable a Computer Software developer of reasonable skill to understand
modify, repair, maintain, compile and otherwise use the material aspects of the
Products.  The Company or its
Subsidiaries have taken commercially reasonable steps to protect the
confidentiality of source code for the Current Versions of the Products in
accordance with Company policy.

 

(e)           Section 4.11(e) of the
Company Disclosure Letter contains true and complete copies of the Company’s
current versions of its standard Customer Agreements.  All of the authorized users of the Products are authorized to use
the Products pursuant to non-exclusive licenses.

 

(f)            Neither the Company
nor any of its Subsidiaries has granted to any Person, and no Person, other
than the Company (including any independent contractors who have performed
services for the Company or its Subsidiaries), holds any rights in, or licenses
to produce, support, maintain, modify, distribute, license, sublicense, sell,
use in development or otherwise use, any of the Current Versions of the
Products.  There are no exclusive
arrangements between the Company or any of its Subsidiaries and any other
Person to license, sublicense, sell or distribute any of the Products, except
for geographic exclusive reseller or distributor restrictions.  Section 4.11(f) of the Company Disclosure
Letter sets forth a true and complete list of (i) all agreements by the Company
or its Subsidiaries with resellers or distributors of the Products and (ii) all
agreements pursuant to which the Company or its Subsidiaries are resellers or
distributors of third-party Computer Software.

 

(g)           No Person has a license
to use or the right to acquire a license to use any future version of the
Current Version of Products or the Product Tools, except for end-user rights to
obtain licenses to future versions of the Current Version of Products or the
Product Tools pursuant to maintenance agreements and/or support arrangements,
and nothing restricts the Company’s or any of its Subsidiaries’ ability to
charge its customers for any such new version, other than such maintenance
and/or support arrangements.

 

(h)           Section 4.11(h) of the
Company Disclosure Letter sets forth a true and complete list of all agreements
pursuant to which the Company or its Subsidiaries is obligated to provide
support services with respect to the Products.

 

(i)            There are no written
agreements pursuant to which the Company or any of its Subsidiaries has licensed
the use of the Products to any Person which obligates the Company or any of its
Subsidiaries to develop and provide any specific improvement, enhancement,
change in functionality or other alteration in the performance of the Products
beyond the Company’s current Products.

 

Section 4.12.          Agreements, Contracts
and Commitments.  Except for
Contracts filed as exhibits to Company SEC Documents pursuant to Item 601 of

 

34

 

Regulation S-K and listed on
the exhibit index to the Company’s annual report on Form 10-K for the fiscal
year ended September 30, 2001, or any subsequent report filed by the Company
with the SEC on Forms 10-Q or 8-K prior to the date of this Agreement (“SEC Contracts”), neither the Company nor
any of its Subsidiaries is a party to nor are any of their respective
properties or assets bound by any Contract currently in effect and of the
following nature (collectively, the “Company
Material Contracts”):

 

(a)           Contracts with any
current or former employee, director or officer of, or consultant of or to, the
Company or any of its Subsidiaries under which the Company or its Subsidiaries
may have ongoing or future payment obligations for services rendered or to be
rendered;

 

(b)           Contracts that involve
the performance of services by third parties of an amount, payments or value
(as measured by the revenue derived therefrom during the fiscal year ended
September 30, 2002) in excess of $100,000 annually, unless terminable by the
Company on not more than thirty (30) days notice without material penalty;

 

(c)           Contracts (x) for the
sale of assets of the Company or any of its Subsidiaries involving aggregate
consideration of $50,000 or more (other than licenses of Products in the
ordinary course of business), or (y) for the grant to any Person of any
preferential rights to purchase any material amount of assets or any material
asset of the Company or any of its Subsidiaries;

 

(d)           Contracts for the
acquisition, by merging or consolidating with, by purchasing an equity interest
in or a portion of the assets of, or by any other manner having the same or
similar effect, any business or any Person or assets of any Person (other than
the purchase of equipment, inventories and supplies in the ordinary course of
business consistent with past practice);

 

(e)           Contracts (including
loan agreements, credit agreements, notes, bonds, mortgages or other
agreements, indentures or instruments) relating to indebtedness for borrowed
money, letters of credit, the deferred purchase price of property, conditional
sale arrangements, capital lease obligations, obligations secured by a Lien, or
interest rate or currency hedging activities (including guarantees or other
contingent liabilities in respect of any of the foregoing but in any event
excluding trade payables arising in the ordinary course of business consistent
with past practice, intercompany indebtedness shown on the Company’s balance
sheet as of June 30, 2002 included in the Company SEC Documents or otherwise
disclosed to Buyer in writing and immaterial leases for telephones, copy
machines, facsimile machines and other office equipment);

 

(f)            Loans or advances to
(other than advances to employees in respect of travel and entertainment
expenses in the ordinary course of business in amounts of $10,000 or less to
any individual on any date of determination, and $50,000 in the aggregate on
any date of determination), or investments in, any Person, other than the
Company or a Subsidiary, or any Contracts relating to the making of any such
loans, advances or investments or any Contracts involving a sharing of profits
(except for bonus arrangements with employees entered into in the ordinary
course of business consistent with past practice);

 

35

 

(g)           Contracts relating to
any joint venture, partnership, strategic alliance or similar arrangement
(including any franchising agreement);

 

(h)           Contracts to be
performed relating to capital expenditures with a value in excess of $10,000 in
any fiscal year, or in the aggregate capital expenditures with a value in
excess of $100,000;

 

(i)            Contracts relating to
any Company Permits other than Contracts with customers as a result of which
the Company is required to obtain a Company Permit;

 

(j)            Contracts which
contain restrictions with respect to payment of dividends or any other
distribution in respect of its capital stock;

 

(k)           Contracts containing
covenants purporting to restrict the Company or any of its Subsidiaries or its
or their affiliates from competing with or otherwise legally or contractually
restraining, limiting or impeding the Company’s or any of its Subsidiaries’
ability to compete with, any Person or conduct any business or line of business
or which restrict any other Person from competing with the Company, any of its
Subsidiaries or any of its or their affiliates;

 

(l)            Contracts which are
material to the Company or any of its Subsidiaries and which restrict the
Company or any of its Subsidiaries from disclosing any information concerning
or obtained from any other Person (other than Contracts entered into in the
ordinary course of business);

 

(m)          Contracts required to be
disclosed under Item 404 of Regulation S-K under the Securities Act;

 

(n)           Contracts required to
be filed under Item 601(b)(10) of Regulation S-K under the Securities Act; and

 

(o)           Contracts that contain
minimum annual purchase obligations (take-or-pay) or that contain penalties or
repricing provisions (e.g., “retroactive discounts”) if certain minimum
quantities are not purchased.

 

Each Company Material Contract
and SEC Contract is in full force and effect, is a valid and binding obligation
of the Company or the Subsidiary of the Company party thereto and, to the
Company’s Knowledge, each other party thereto. 
There exists no default or event of default or event, occurrence,
condition or act (including the consummation of the transactions contemplated
hereby) on the part of the Company or any Subsidiary or, to the Company’s
Knowledge, on the part of any other party to any Company Material Contract
that, with the giving of notice or the lapse of time or both, would become a
default or event of default under any Company Material Contract or SEC
Contract.

 

Section 4.13.          Litigation.  (a) There are no Actions or Proceedings
pending against or, to the Company’s Knowledge, threatened against or binding
upon the Company or any of its Subsidiaries, or any of their respective
properties or rights, or seeking to prevent the transactions contemplated by
this Agreement.

 

36

 

(b)           Neither the Company nor
any of its Subsidiaries is a party to any Governmental Directive mandating or
prohibiting any conduct by any of them or subject to any commitment letter or
similar undertaking executed in connection with any such Governmental Directive
or has adopted any board resolution with respect to any Governmental Directive
specifically naming the Company or any of its Subsidiaries.

 

Section 4.14.          Environmental Matters.  (a) The operations of the Company and its
Subsidiaries are in compliance with Environmental Laws, except for such
noncompliance that would not have a Company Material Adverse Effect.

 

(b)           Each of the Company and
its Subsidiaries has obtained and is in compliance with all necessary permits or
authorizations required under Environmental Laws, except for such failure to
have, or noncompliance with, such permits or authorizations that would not have
a Company Material Adverse Effect with respect to the Company and its
Subsidiaries.

 

(c)           There has been no
Release to the environment of any substances defined as hazardous under any
Environmental Law associated with any Company operations at any of the
properties operated by the Company and its Subsidiaries while such properties
were operated by the Company or any of its Subsidiaries.

 

(d)           No claims have been
asserted against the Company or any of its Subsidiaries under any Environmental
Law (“Environmental Claims”), nor
has the Company or any of its Subsidiaries received written notice of any
threatened or pending Environmental Claims against the Company or any of its
Subsidiaries and, to the Company’s knowledge, there is no valid basis for any
such Environmental Claim.

 

(e)           With respect to each
Owned Real Property, the Company has obtained Phase I environmental assessments
and, as appropriate, Phase II environmental assessments, and such assessments
did not report material non-compliance with Environmental Laws.

 

Section 4.15.          Employee Benefit
Plans.  (a) Section 4.15(a) of the
Company Disclosure Letter sets forth a true, complete and correct list of all
Benefit Plans.  The Benefit Plans comply
in all material respects with the requirements of all applicable Laws and each
Benefit Plan has been operated, maintained and administered in all material
respects in compliance with its terms. 
The Company has distributed copies of the Company’s Salary Savings Plan
Summary Plan Description to participants and beneficiaries and has provided
participants and beneficiaries with copies of such Summary Plan Description
upon request.  There are no pending, nor
has the Company or any of its Subsidiaries received notice of any threatened,
Actions or Proceedings by any Governmental Entity, against or otherwise
involving any of the Benefit Plans.  All
contributions required to be made as of the date of this Agreement to the
Benefit Plans have been made or provided for.

 

(b)           Any U.S. Benefit Plan
intended to be qualified under Section 401(a) of the Code has been determined
by the IRS to be so qualified and no Benefit Plan has been amended since the
effective date of its most recent determination letter in any respect that
would reasonably be expected to result in its disqualification.  Each of the Company, its Subsidiaries and
each of their Affiliates has submitted each U.S. Benefit Plan intended to

 

37

 

be qualified under Section
401(a) of the Code for a determination letter in accordance with Revenue
Procedure 2001-55.  Neither the Company
nor any of its Subsidiaries nor any of their ERISA Affiliates has any liability
(contingent or otherwise) under Title IV of ERISA (other than for the payment
of premiums, none of which are overdue) or has incurred or expects to incur any
liability in connection with an “accumulated funding deficiency” within the
meaning of Section 412 of the Code, whether or not waived.  Neither the Company nor any of its
Subsidiaries has incurred or expects to incur any material liability (including
additional contributions, fines, taxes or penalties) as a result of a failure
to administer or operate any Benefit Plan that is a “group health plan” (as
such term is defined in Section 607(1) of ERISA or Section 5000(b)(1) of the
Code) in compliance with the applicable requirements of Part 6 of Subtitle B of
Title I of ERISA or Section 4980B of the Code (“COBRA”).  No reportable
event (as defined in Section 4043(c) of ERISA) has occurred or is expected to
occur with respect to any Pension Plan. 
Neither the Company nor any of its Subsidiaries nor any of their ERISA
Affiliates has incurred any withdrawal liability with respect to a
“multiemployer plan” under Title IV of ERISA and no event or condition has
occurred which would be expected to cause the Company, any Subsidiary of the
Company, or any ERISA Affiliate to incur such withdrawal liability.  The execution of, and performance of the
transactions contemplated in, this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) constitute an event under
any plan, policy, arrangement or agreement or any trust or loan that will or
may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness or indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any current or former
employees of the Company or any of its Subsidiaries.  Neither the Company, any Subsidiary of the Company nor any of
their ERISA Affiliates has incurred any material liability or penalty under
Section 4975 of the Code or Section 502(i) of ERISA with respect to any U.S.
Benefit Plan, or has engaged in a “prohibited transaction” (as defined in
Section 4975 of the Code or Section 406 of ERISA) which has resulted in
material liability to the Company or any of its Subsidiaries.

 

(c)           Neither the Company nor
any of its Subsidiaries, nor any Affiliate of the Company maintains or is
required to contribute to any Foreign Pension Plan to which the Company would
have any liability.

 

(d)           Except as required
under Section 4980B of the Code or other applicable Law, neither the Company
nor any of its Subsidiaries has any obligation to provide post-retirement
health or life benefits.

 

(e)           Any terminated Benefit
Plan has been terminated in accordance with applicable Laws and all benefits
under any such terminated Benefit Plan have been made in accordance with the
terms of such Benefit Plan.

 

(f)            Each Benefit Plan in
the form as of the Closing Date may be amended or terminated at any time after
the Closing Date without liability to the Company other than for accrued
benefits and costs of termination.

 

(g)           The Company has made
available to the Parent and the Merger Subsidiary true and complete copies of
the Benefit Plans and each Executive Agreement,

 

38

 

together will all amendments
thereto, and to the extent applicable (i) all current summary plan
descriptions; (ii) the most recent annual report on Internal Revenue Service
Form 5500-series, including any attachments thereto; (iii) the most recent
accountant’s report, if any; and (iv) the most recent Internal Revenue Service
determination letter.

 

Section 4.16.          Compliance with Laws.  Neither the Company nor any of the
Subsidiaries are in material violation of, nor have any of them received any
notice alleging any such violation with respect to, any applicable provisions
of any Laws applicable to the conduct of their businesses or the ownership or
operation of their properties or assets. 
No investigation or review by any Governmental Entity with respect to
the Company or any of its Subsidiaries is pending or, to the Company’s
Knowledge, threatened, nor, to the Company’s Knowledge, has any Governmental
Entity indicated an intention to conduct the same.

 

Section 4.17.          Permits and Licenses.  The Company and each of the Subsidiaries
have obtained and have complied with, and are in compliance with, all material
Company Permits (including any material Company Gaming Permits) and there has
not occurred any default under any such Company Permit and no Action or
Proceeding has been filed or commenced against any of them alleging any failure
to so comply.  Set forth on Section 4.17
of the Company Disclosure Letter is a description of any oral or written
understandings or waivers between the Company or any of its Subsidiaries, on the
one hand, and any Governmental Entity, on the other, with respect to any
Company Gaming Permit.

 

Section 4.18.          Labor Matters.  (a) Neither the Company nor any of its
Subsidiaries is a party to or otherwise bound by any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor organization.  There is no
material pending or threatened labor strike, or dispute, walkout, work
stoppage, slow-down, lockout or organizational effort involving employees of
the Company or any of its Subsidiaries. 
There is no unfair labor practice charge or complaint against the
Company or any of its Subsidiaries, either pending or, to the Company’s
Knowledge, threatened; no union is currently certified, and there is no union
representation question and no union or other organizational activity that
would be subject to the National Labor Relations Act (20 U.S.C. §151 et  seq.)
exists or, to the Company’s Knowledge, is threatened with respect to the
Company’s or any of its Subsidiaries’ operations; neither the Company nor any
of its Subsidiaries has any Equal Employment Opportunity Commission charges or
other claim of employment discrimination pending or, to the Company’s
Knowledge, currently threatened against them; no wage and hour department
investigation has been made of the Company or any of its Subsidiaries; there
are no occupational health and safety claims against the Company or any of its
Subsidiaries; neither the Company nor any of its Subsidiaries has effectuated
(i) a “plant closing” (as defined
in the WARN Act) affecting any site of employment or one or more facilities or
operating units within any site of employment of the Company or any Subsidiary;
or (ii) a “mass layoff” (as
defined in the WARN Act) affecting any site of employment or facility of the
Company or any of its Subsidiaries; nor has the Company and/or any Subsidiary
been engaged in layoffs or employment terminations sufficient in number to
trigger application of any similar state or local law; and none of the affected
employees has suffered an “employment loss”
(as defined in the WARN Act) since ninety days prior to the date hereof; the
Company and its Subsidiaries are in compliance with the terms and provisions of
the Immigration Reform and Control Act of 1986, as amended, and all related
regulations promulgated thereunder.

 

39

 

(b)           Since June 30, 2002, no
officer of the Company or any of its Subsidiaries has given or received notice
to terminate his employment.

 

(c)           There are no officers
or employees of the Company or any of its Subsidiaries who are on secondment,
maternity leave or absent on grounds of disability, military or other leave of
absence (other than normal holidays or absence of no more than one week due to
illness).

 

(d)           All salaries and wages
and other benefits, bonuses and commissions of all directors, officers or
employees of the Company and its Subsidiaries have, to the extent due, been
paid or discharged in full.

 

(e)           The Company and its
Subsidiaries have not entered into any agreement and no event has occurred
which may involve the Company and its Subsidiaries in the future acquiring any
undertaking or part of one such that the Transfer Regulations may apply
thereto.

 

(f)            The Sellers and the
Company and its Subsidiaries have complied with their obligations to inform and
consult with trade unions and other representatives of workers and to send
notices to relevant governmental officials.

 

(g)           The Company and its
Subsidiaries have maintained adequate and suitable records regarding the
service of their directors, officers and employees and such records comply in
all material respects with requirements of data protection legislation
regarding the processing and storage of personal data on individuals.  Neither the Company nor its Subsidiaries
have entered into any agreement or arrangement for the management or operation
of its business or any part thereof other than with their respective employees.

 

(h)           Neither the Company nor
any of its Subsidiaries is a party to any oral or written:  (i) agreement with any executive officer or
employee of the Company or any of its Subsidiaries (A) the benefits of which
are contingent, or the payment or terms of which are accelerated or materially
altered, upon the occurrence of a transaction involving the Company or any of
its Subsidiaries of the nature of any of the transactions contemplated by this
Agreement, (B) providing any term of employment or compensation guarantee or
(C) providing severance benefits or other benefits after the termination of
employment of such executive officer or employee; or (ii) agreement or plan
binding the Company or any of its Subsidiaries, including any stock option
plan, stock appreciation right plan, restricted stock plan, stock purchase plan,
severance benefit plan, insurance plan or arrangement (including with respect
to life, health, or disability insurance) or with respect to the premiums
therefor, any of the benefits of which shall be increased, or the vesting of
the benefits of which shall be accelerated, by the occurrence of any of the
transactions contemplated by this Agreement (either alone or upon the
occurrence of any additional or subsequent event) or the value of any of the
benefits of which shall be calculated on the basis of any of the transactions
contemplated by this Agreement (such agreements and plans referred to in clause
(i) or (ii), collectively, the “Executive
Agreements”).

 

40

 

(i)            Neither the Company
nor any of its Subsidiaries has currently outstanding any loan to any employee,
except for advances in respect of travel and entertainment expenses in the
ordinary course of business.

 

Section 4.19.          Insurance.  Section 4.19 of the Company Disclosure
Letter sets forth the material insurance coverages maintained by the Company
and its Subsidiaries.  The Company has
made available to the Parent and the Merger Subsidiary copies of all material
insurance policies which are owned by the Company or its Subsidiaries or which
name the Company or any of its Subsidiaries as an insured, additional insured
or loss payee (including those pertaining to the Company’s or any of its
Subsidiaries’ assets, employees or operations) (collectively, the “Insurance Policies”) and (a) each of the
Insurance Policies is in full force and effect and is valid, outstanding and
enforceable, and all premiums due thereon have been paid in full and cover
against the risks of the nature normally insured against by entities in the
same or similar lines of business as the Company and its Subsidiaries in
coverage amounts typically and reasonably carried by such entities, (b) none of
the Insurance Policies shall terminate or lapse (or be affected in any other
adverse manner) by reason of the transactions contemplated by this Agreement,
(c) each of the Company and its Subsidiaries has complied in all material
respects with the provisions of each Insurance Policy under which it is the
insured party, (d) no insurer under any Insurance Policy has cancelled or
generally disclaimed liability under any such Insurance Policy or indicated any
intent to do so or not to renew any such Insurance Policy and (e) all material
claims under the Insurance Policies have been filed in a timely fashion.

 

Section 4.20.          Information in Proxy
Statement.  The Proxy Statement will
comply in all material respects with all applicable Laws.  If at any time prior to the date of the
Special Meeting any event occurs which should be described in an amendment or
supplement to the Proxy Statement, the Company will file and disseminate, as
required, an amendment or supplement which complies in all material respects
with the Exchange Act and any other applicable Laws.

 

Section 4.21.          Brokers.  No agent, broker, Person or firm acting on
behalf of the Company or any of its Subsidiaries other than Updata Capital,
Inc. is or will be entitled to any advisory commission or broker’s or finder’s
fee from any of the Parties (or their respective Affiliates) in connection with
this Agreement or any of the transactions contemplated hereby.  All amounts paid, or which are or will be
payable, to Updata Capital, Inc. arising out of or in connection with this
transaction are set forth on Section 4.21 of the Company Disclosure Letter.

 

Section 4.22.          State Takeover
Statutes.  The Board of Directors of
the Company has approved the Merger, this Agreement, the Voting Agreement and
the transactions contemplated hereby and thereby and have declared them
advisable and fair to, and in the best interest of, the Company and the Company
Stockholders, and have resolved to recommend the adoption of this Agreement by
the Company Stockholders and directed that this Agreement be submitted to the
Company Stockholders, all in accordance with the BCL.  Except for the Appraisal Provisions, the Board of Directors has
taken all requisite action such that no other “fair price”, “moratorium”,
“control share acquisition”, “business combination” or other state takeover
statute or similar statute, rule

 

41

 

or regulation (including
Chapters 110C, 110D, 110E or 110F of the Massachusetts General Laws) is
applicable or purports to be applicable to the Merger, this Agreement, the
Voting Agreement or any of the other transactions contemplated hereby or
thereby.

 

Section 4.23.          Voting Requirements.  The affirmative vote of the holders of at
least a majority of the outstanding shares of Company Common Stock held by
Company Stockholders is the only vote of the holders of any class or series of
the Company’s capital stock or other securities of the Company necessary under
applicable law or stock exchange (or similar self-regulatory organization)
regulations to adopt this Agreement and approve the transactions contemplated
by this Agreement and for consummation by the Company of the transactions
contemplated by this Agreement.

 

Section 4.24.          Rights Agreement.  The Company has amended the Rights Agreement
(without redeeming the Rights (as such term is defined in the Rights Agreement)
identified therein), (a) to render the Rights Agreement inapplicable with
respect to this Agreement, the Voting Agreement and the Merger and the other
transactions contemplated hereby and thereby, (b) so that (i) neither the
Parent nor the Merger Subsidiary nor any of their “Affiliates” or “Associates”
(as such terms are defined in the Rights Agreement) is considered to be an
“Acquiring Person” (as such term is defined in the Rights Agreement) as a
result of the announcement or execution of this Agreement or the Voting
Agreement or the consummation of the Merger or any of the other transactions
contemplated hereby or thereby and (ii) the provisions of the Rights Agreement,
including the occurrence of a “Distribution Date”, “Stock Acquisition Date” or
a “Triggering Event” (as such terms are defined in the Rights Agreement), are
not and shall not be triggered by reason of the announcement or execution of
this Agreement or the Voting Agreement or the consummation of the Merger or any
of the other transactions contemplated hereby or thereby, and (c) to cause the
Rights to expire immediately prior to the Effective Time.

 

Section 4.25.          Opinion of Financial
Advisor.  The Board of Directors of
the Company has received the written opinion of Updata Capital, Inc., dated
October 27, 2002, a true, complete and correct signed copy of which shall be
delivered to the Parent promptly after receipt of a written copy thereof by the
Company, to the effect that, as of the date of such written opinion and on the
basis of and subject to the assumptions set forth therein, the Cash Merger
Consideration to be received in the Merger by the holders of Company Common
Stock is fair to such holders from a financial point of view, and such opinion
has not been withdrawn or modified as of the date of this Agreement.  The Company has been authorized by Updata
Capital, Inc. to permit the inclusion of such fairness opinion in the Proxy
Statement.

 

ARTICLE
V

 

REPRESENTATIONS AND WARRANTIES

OF THE PARENT AND THE MERGER SUBSIDIARY

 

Each of the
Parent and the Merger Subsidiary hereby represents and warrants to the Company
that:

 

42

 

Section 5.1.            Organization.  Each of the Parent and the Merger Subsidiary
is a corporation duly organized, validly existing and in good standing under
the Laws of its jurisdiction of organization and has all requisite corporate
power and authority to own, lease and operate its properties and assets and to
carry on its business as it is currently being conducted.  Each of the Parent and the Merger Subsidiary
is duly qualified or licensed to do business, and is in good standing as a
foreign corporation in each jurisdiction where the character of its properties
or assets owned, operated and leased or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified or
licensed or in good standing has not resulted in and would not reasonably be
likely to result in, individually or in the aggregate, a material adverse
effect on either the Parent or the Merger Subsidiary or materially impair the
ability of either the Parent or the Merger Subsidiary to consummate the
transactions contemplated hereby.  Each
of Parent and Merger Sub has, prior to the date of this Agreement, delivered to
the Company true, complete and correct copies of their respective Articles of
Organization and the By-laws (or other comparable governing documents), in each
case as amended and in full force and effect as of the date of this Agreement.

 

Section 5.2.            Authorization;
Validity of Agreement; Necessary Action. 
Each of the Parent and the Merger Subsidiary has full corporate power
and authority to execute and deliver this Agreement and each instrument
required hereby to be executed and delivered by it prior to or at the Effective
Time, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby.  The
execution, delivery and performance by each of the Parent and the Merger
Subsidiary of this Agreement and each instrument required hereby to be executed
and delivered by it prior to or at the Effective Time and the performance of
its obligations hereunder and thereunder and the consummation by it of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of each of the Parent and the Merger Subsidiary, by the stockholders
of the Parent and by the Parent as the sole stockholder of the Merger
Subsidiary, and no other corporate action on the part of the Parent or the
Merger Subsidiary is necessary to authorize the execution, delivery and performance
by the Parent and the Merger Subsidiary of this Agreement and the consummation
by them of the transactions contemplated hereby.  This Agreement and each instrument required hereby to be executed
and delivered by the Company prior to the Effective Time has been duly executed
and delivered by each of the Parent and the Merger Subsidiary and, assuming due
and valid authorization, execution and delivery hereof by the Company, is a
valid and binding obligation of each of the Parent and the Merger Subsidiary enforceable
against each of them in accordance with its terms.

 

Section 5.3.            Consents and
Approvals; No Violations.  The
execution and delivery of this Agreement by the Parent and the Merger
Subsidiary does not, and the consummation by the Parent and the Merger
Subsidiary of the transactions contemplated by this Agreement and the
compliance by the Parent and the Merger Subsidiary with the applicable
provisions of this Agreement will not:

 

(a)           violate or conflict
with or result in any breach of any provision of the Certificate of
Incorporation or the By-laws of the Parent or the Articles of Organization or
the By-laws of the Merger Subsidiary;

 

43

 

(b)           require any filing,
recordation, declaration or registration with, or permit, order, authorization,
consent or approval of, or action by or in respect of, or the giving of notice
to, any Governmental Entity, except for (i) the filing by the Parent of a
premerger notification and report form under the HSR Act and the expiration or
termination of any waiting periods under the HSR Act; (ii) the Governmental
Approvals with respect to the Merger and the transactions contemplated hereby;
and (iii) the filing of the Articles of Merger with the Secretary of the
Commonwealth of The Commonwealth of Massachusetts, all other filings or
recordings required under the BCL and appropriate documents with the relevant
authorities of other states in which the Parent and the Merger Subsidiary are
qualified to do business;

 

(c)           result in a violation
or breach of, conflict with, constitute (with or without due notice or lapse of
time or both) a default under, give rise to any penalty, right of amendment,
modification, renegotiation, termination, cancellation, payment or acceleration
or any right or obligation or loss of any material benefit or right under, or
result in the creation of any Liens upon any of the properties or assets of the
Parent or the Merger Subsidiary under, any of the terms, conditions or
provisions of any loan or credit agreement, note, bond, mortgage, indenture,
lease, license, sublicense, franchise, permit, concession, agreement, contract,
obligation, commitment, understanding, arrangement, franchise agreement or
other instrument, obligation or authorization applicable to the Parent or the
Merger Subsidiary, or by which any such Person or any of its properties or
assets may be bound; or

 

(d)           violate or conflict
with any Laws applicable to the Parent or the Merger Subsidiary or by which any
of their properties or assets may be bound;

 

excluding from preceding
clauses (b), (c) and (d) such matters that have not resulted in and would not
reasonably be likely to result in, individually or in the aggregate, a material
adverse effect on either the Parent or the Merger Subsidiary and would not
materially impair the ability of either the Parent or the Merger Subsidiary to
consummate the transactions contemplated hereby.

 

Section 5.4.            Sufficiency of
Funds.  Parent, together with its
Affiliates, have funds on hand or available financing in an amount sufficient
to consummate the transactions contemplated by this Agreement.

 

Section 5.5.            Information in
Proxy Statement.  None of the
information supplied or to be supplied by the Parent and the Merger Subsidiary
in writing relating to the Parent, the Merger Subsidiary or any Affiliate
thereof (other than the Company or any of its Subsidiaries), as the case may
be, expressly for inclusion or incorporation by reference in the Proxy
Statement, any amendment or supplement thereto or any other documents filed
with the SEC by the Company in connection with the Merger, when supplied to the
Company, when filed with the SEC and, in case of the Proxy Statement, when
mailed to the stockholders of the Company and at the time of the Special
Meeting, will contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading.  Notwithstanding
the foregoing, the Parent and the Merger Subsidiary make no representation or
warranty with respect to any information supplied by the Company in writing
relating to the Company or

 

44

 

any Affiliate thereof (other
than the Parent or the Merger Subsidiary) expressly for inclusion or
incorporation by reference in the Proxy Statement.

 

Section 5.6.            No Existing
Discussions.  As of the date of this
Agreement, neither Parent nor any of its Subsidiaries is engaged, directly or
indirectly, in any discussions or negotiations with any Person (other than with
their Affiliates and potential financing sources (whether debt or equity) and
with the Company and its Representatives) with respect to an Acquisition
Proposal.

 

ARTICLE
VI

 

COVENANTS

 

Section 6.1.            Interim Operations
of the Company.  Except as (i) set
forth on Section 6.1 of the Company Disclosure Letter, (ii) expressly provided
herein or (iii) consented to in writing by the Parent (such consent not to be
unreasonably withheld), from and after the date of this Agreement until the
earlier of the termination of this Agreement in accordance with its terms or
the Effective Time, the Company shall, and shall cause each of its Subsidiaries
to, act and carry on its business only in the ordinary course of business
consistent with past practice and use reasonable best efforts to maintain and
preserve its and its Subsidiaries’ business organization, assets and
properties, keep available the services of its officers and key employees and
maintain and preserve its advantageous business relationships with customers,
clients, suppliers and others having material business dealings with it.  Without limiting the generality of the
foregoing, from and after the date of this Agreement until the earlier of the
termination of this Agreement in accordance with its terms or the Effective
Time, the Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, do any of the following without the prior written consent
of the Parent (such consent not to be unreasonably withheld) except as
otherwise contemplated by Section 6.1 of the Company Disclosure Letter:

 

(a)           except as contemplated
by Section 2.1, amend its Articles of Organization or By-laws or comparable governing
documents;

 

(b)           sell, transfer or
pledge or agree to sell, transfer or pledge any shares of capital stock or
other equity interests owned by it in any other Person;

 

(c)           declare, set aside or
pay any dividend or other distribution payable in cash, securities or other
property with respect to, or split, combine, redeem or reclassify, or purchase
or otherwise acquire, any shares of its capital stock (or other equity
interests) or other securities of the Company or any of its Subsidiaries, other
than the making of a dividend or other distribution by a wholly-owned
Subsidiary to another wholly-owned Subsidiary or to the Company, or any other
change in the capital structure of the Company on any of its Subsidiaries,
except for (i)  the issuance by the Company
of shares of Company Common Stock pursuant to the terms of any Options
outstanding on the date hereof and disclosed in Section 4.2(a) of the Company
Disclosure Letter, (ii) the repurchase of unvested shares of restricted Common
Stock at cost upon the termination of employment of the holder thereof, or
(iii) the acceptance of shares of Common Stock as payment of withholding
obligations arising upon the vesting of restricted Common Stock prior to the
Effective Time;

 

45

 

(d)           except as contemplated
by Sections 2.1 and 3.1, issue or sell, or authorize to issue or sell, any
shares of its capital stock (whether unrestricted or restricted) or any other
securities (equity or debt) of the Company or any of its Subsidiaries, or issue
or sell, or authorize to issue or sell, any securities (equity or debt)
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to purchase or subscribe for, or enter into any
arrangement or contract with respect to the issuance or sale of, any shares of
its capital stock of any class of the Company or Voting Debt or other
securities (equity or debt), or make any other change in its capital structure,
except for the issuance by the Company of shares of Company Common Stock
pursuant to the terms of any Options outstanding on the date hereof and
disclosed in Section 4.2(a) of the Company Disclosure Letter or pursuant to the
terms of the ESPP (as in effect on the date hereof) and Section 3.5 hereof;

 

(e)           acquire, authorize or
make (or commit to make) any investment in, or make any capital contribution
to, any Person, other than transactions between a wholly-owned Subsidiary of
the Company and the Company or between wholly-owned Subsidiaries of the Company;

 

(f)            make (or commit to
make), or enter into any Contracts (or any amendments, modifications,
supplements or replacements to existing Contracts) to be performed relating to
the making of capital expenditures in excess of $50,000 in any calendar year,
or in the aggregate for capital expenditures with a value in excess of
$200,000;

 

(g)           acquire, by merging or
consolidating with, by purchasing an equity interest in or by purchasing all or
a portion of the assets of, or by any other manner, any business or any Person
(other than the purchase of equipment, inventories and supplies in the ordinary
course of business consistent with past practice or the acquisition of a wholly
owned Company Subsidiary by way of merger, asset sale or otherwise);

 

(h)           transfer, lease,
license, guarantee, sell, mortgage, pledge, dispose of, subject to any Lien
(other than a Permitted Lien) or otherwise encumber any material assets or
assets that have a value individually in excess of $10,000 other than with
respect to (i) transactions between a wholly-owned Subsidiary of the Company
and the Company or between wholly-owned Subsidiaries of the Company, (ii)
dispositions of excess or obsolete assets in the ordinary course of business
consistent with past practice and (iii) leases, licenses or sales of the
Company’s software or other assets in the ordinary course of business
consistent with past practice;

 

(i)            except to the extent
required under existing employee and director benefit plans, agreements or
arrangements in effect on June 30, 2002, as set forth in Section 4.2 of the
Company Disclosure Letter, or required by applicable law or contemplated by
Section 3.4, (i) increase the compensation or fringe benefits of any of its
directors, officers or employees (except for immaterial increases to employees
who are not officers of the Company or any of its Subsidiaries in the ordinary
course of business consistent with past practice) or grant any severance or
termination pay not currently required to be paid under existing severance plans,
(ii) enter into, amend, modify, supplement or replace any employment, benefit
(including with respect to life or disability insurance or with respect to
premiums therefor), consulting or severance agreement, policy or arrangement
with any

 

46

 

present or former director,
officer or other employee of the Company or any of its Subsidiaries, except
with respect to new hires of non-officer employees in the ordinary course of
business consistent with past practice, or (iii) establish, adopt, enter into
or amend, modify, supplement, replace or terminate any collective bargaining,
bonus, profit sharing, thrift, compensation, stock option, restricted stock,
benefit (including with respect to life or disability insurance or with respect
to premiums therefor), pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the collective benefit of any directors, officers or employees
(it being understood and agreed that in no event shall the Company or any of
its Subsidiaries amend, modify, supplement, replace or terminate the policy in
effect on the date hereof and previously disclosed to the Parent with respect
to suspension of any increases in the compensation of directors, officers and
other employees of the Company and its Subsidiaries);

 

(j)            except as may be
required by applicable law, GAAP or SEC rule, make any change in any of its
accounting practices, policies or procedures or any of its methods of reporting
income, deductions or other items for income tax purposes;

 

(k)           except as contemplated
by Sections 2.1 and 3.1, adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company or any of its Subsidiaries or any
agreement relating to an Acquisition Proposal, except as expressly permitted in
Section 6.3;

 

(l)            except as contemplated
by Section 6.7(a)(i), (i) incur, assume, modify or prepay any indebtedness for
borrowed money (including under the Company Credit Agreement), issue any debt
securities or warrants or other rights to acquire debt securities, or
guarantee, endorse or otherwise become liable or responsible for the obligations
or indebtedness of another Person, other than indebtedness owing to the Company
or any direct or indirect wholly-owned Subsidiary of the Company or guarantees
of indebtedness of the Company or any direct or indirect wholly-owned
Subsidiary of the Company, or enter into any capital lease in each case, in an
amount in excess of $200,000, or (ii) make any loans, extensions of credit or
advances to any other Person, other than to the Company or to any direct or
indirect wholly-owned Subsidiary of the Company, except, in the case of
preceding clauses (i) and (ii), for loans, extensions of credit or advances
constituting trade payables or receivables arising in the ordinary course of
business and in the case of preceding clause (ii), for advances to employees in
respect of travel and entertainment expenses in the ordinary course of business
in amounts of $5,000 or less to any individual on any date of determination and
$25,000 in the aggregate outstanding on any date of determination;

 

(m)          except as provided by
this Agreement accelerate the payment, right to payment or vesting of any
bonus, severance, profit sharing, retirement, deferred compensation, stock
option, restricted stock, insurance (including arrangements or agreements for
the premiums therefor) or other compensation or benefits;

 

(n)           pay, discharge, settle
or satisfy any claims, litigation, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise) other than (i) the
payment, discharge, settlement or satisfaction, in the ordinary course of
business

 

47

 

consistent with past practice,
of (A) liabilities reflected or reserved against in the June 30, 2002 balance
sheet included in the Company SEC Documents or (B) liabilities (other than
litigation) subsequently incurred in the ordinary course of business consistent
with past practice and (ii) other claims, litigation, liabilities or
obligations (qualified as aforesaid) that in the aggregate do not exceed
$200,000;

 

(o)           plan, announce,
implement or effectuate any reduction in force, lay-off, early retirement
program, severance program or other program or effort concerning the
termination of employment of employees of the Company or its Subsidiaries,
other than routine employee terminations in the ordinary course of business and
consistent with past practice;

 

(p)           take any action or omit
to take any action (including the adoption of any shareholder rights plan or
amendments to its Articles of Organization or By-laws (or comparable governing
documents)) which would, directly or indirectly, restrict or impair the ability
of the Parent or the Merger Subsidiary, as the case may be, to vote or
otherwise to exercise the rights and receive the benefits of a stockholder with
respect to securities of the Company that may be acquired or controlled by the
Parent or the Merger Subsidiary, as the case may be;

 

(q)           take any action or omit
to take any action which (i) constitutes a violation of any material Company
Permit, which violations would result in or would reasonably be likely to
result in, individually or in the aggregate, the modification, suspension,
cancellation, termination of any one or more material Company Permits or
otherwise have or would reasonably be likely to have a material adverse impact
on any customer or client contract or relationship or the nature or level of
discipline imposed on account of future violations of the Laws applicable to
the Company and the Surviving Corporation or (ii) would (or would reasonably be
likely to) materially impede, delay, hinder or make more burdensome for the
Surviving Corporation or the Parent to obtain and maintain any and all
authorizations, approvals, consents or orders from any Governmental Entity or
other third party necessary or required to maintain the Company Permits in
effect as of the date hereof in effect at all times following the Merger on the
same terms as in effect on the date of this Agreement;

 

(r)            enter into any new
material line of business or enter into any agreement that contains covenants
that purport to restrict the Company’s or any of its Subsidiaries’ ability to
compete with any Person or to conduct any business or line of business;

 

(s)           (i) file or cause to be
filed any materially amended Tax Returns or claims for refund; (ii) make or
rescind any material Tax election or otherwise fail to prepare all Tax Returns
in a manner which is consistent with the past practices of the Company and each
Subsidiary of the Company, as the case may be, with respect to the treatment of
items on such Tax Returns except to the extent that any inconsistency (1) would
not or may not materially increase the Parent’s, the Company’s or any of the
Company’s Subsidiaries’ liability for Taxes for any period or (2) is required
by Law; (iii) incur any material liability for Taxes other than in the ordinary
course of business; or (iv) enter into any settlement or closing agreement with
a taxing authority that materially increases or would reasonably be likely to
materially increase the Tax liability of the Company or any of its Subsidiaries
for any period;

 

48

 

(t)            fail to maintain with
current or other financially responsible insurance companies insurance on its
assets, tangible and intangible, and its businesses in such amounts and against
such risks and losses as are consistent with past practice and standard
practice in the Company’s industry; or

 

(u)           authorize, agree or
announce an intention, in writing or otherwise, to take any of the foregoing actions
or fail to take any action that would prevent any of the foregoing from
occurring.

 

Section 6.2.            Confidentiality.  The Parties acknowledge the Confidentiality
Agreement, which Confidentiality Agreement shall continue in full force and
effect in accordance with its terms, except as expressly modified herein or
pursuant hereto.

 

Section 6.3.            No Solicitation of
Other Offers.  (a)  Each of the Company and its Subsidiaries
shall, and shall cause its Affiliates and each of its and their respective
Representatives to, immediately cease any discussions, activities or
negotiations with any other Person or Persons that may be ongoing with respect
to any Acquisition Proposal.  The
Company and its Subsidiaries shall not take, and shall cause their respective
Representatives not to take, any action (i) to encourage, solicit, initiate or
facilitate, directly or indirectly, the making or submission of any Acquisition
Proposal (including by taking any action that would make the Rights Agreement
inapplicable to an Acquisition Proposal, other than deferring the “Distribution
Date” (in a manner that does not breach Section 6.10 hereof) in the case of an
offer to acquire shares of Company Common Stock, but not in the case of any
purchase of such shares as a result of such offer), (ii) to enter into any
agreement, arrangement or understanding with respect to any Acquisition
Proposal, other than a confidentiality agreement referred to below or in
connection with the termination of this Agreement pursuant to Section 8.1(f), in
accordance with the terms and under the circumstances contemplated below in
this Section 6.3(a), or to agree to approve or endorse any Acquisition Proposal
or enter into any agreement, arrangement or understanding that would require
the Company to abandon, terminate or fail to consummate the Merger or any other
transaction contemplated by this Agreement, (iii) to initiate or participate in
any way in any discussions or negotiations with (other than discussions or
negotiations solely related to the execution of a confidentiality agreement
referred to below), or furnish or disclose any information to, any Person
(other than the Parent or the Merger Subsidiary) in furtherance of any proposal
that constitutes, or could reasonably be expected to lead to, any Acquisition
Proposal, or (iv) to grant any waiver or release under any standstill,
confidentiality or similar agreement entered into by the Company or any of its
Subsidiaries or any of their Affiliates or Representatives; provided,
that so long as there has been no breach of this Section 6.3(a), prior to
obtaining the approval of the Company Stockholders contemplated by Section 6.5,
in response to an unsolicited written Acquisition Proposal  (that was not made in violation of any
standstill, confidentiality or similar agreement entered into by the Company or
any of its Subsidiaries or any of their Affiliates or Representatives) and
otherwise in compliance with its obligations under Section 6.3(c), the Company
may (1) request clarifications from, or furnish information to, (but not enter
into discussions with) any Person which makes such unsolicited Acquisition
Proposal if (A) such action is taken subject to a confidentiality agreement
with the Company containing customary terms and conditions; provided,
that if such confidentiality agreement contains

 

49

 

provisions that are less
restrictive than the comparable provisions of the Confidentiality Agreement, or
omits restrictive provisions contained in the Confidentiality Agreement, then
the Confidentiality Agreement shall be deemed to be automatically amended to
contain in substitution for such comparable provisions such less restrictive
provisions, or to omit such restrictive provisions, as the case may be, and in
connection with the foregoing, the Company agrees not to waive any of the
provisions in any such confidentiality agreement without waiving the similar
provisions in the Confidentiality Agreement to the same extent, (B) such action
is taken solely for the purpose of obtaining information reasonably necessary
to ascertain whether such Acquisition Proposal is, or is reasonably likely to
lead to, a Superior Proposal, and (C) the Board of Directors of the Company
determines in good faith, after consultation with outside nationally recognized
legal counsel (which may be its current outside legal counsel), that failure to
take such actions would be inconsistent with its fiduciary duties under
applicable law or (2) participate in discussions with, request clarifications
from, or furnish information to, any Person which makes such unsolicited
Acquisition Proposal if (x) such action is taken subject to a confidentiality
agreement with the Company containing customary terms and conditions; provided,
that if such confidentiality agreement contains provisions that are less
restrictive than the comparable provisions of the Confidentiality Agreement, or
omits restrictive provisions contained in the Confidentiality Agreement, then
the Confidentiality Agreement shall be deemed to be automatically amended to
contain in substitution for such comparable provisions such less restrictive
provisions, or to omit such restrictive provisions, as the case may be, and in
connection with the foregoing, the Company agrees not to waive any of the
provisions in any such confidentiality agreement without waiving the similar
provisions in the Confidentiality Agreement to the same extent, (y) the Board
of Directors of the Company determines in good faith, after consultation with
outside nationally recognized legal counsel (which may be its current outside
legal counsel) and financial advisors, that such Acquisition Proposal is a
Superior Proposal and (z) the Board of Directors of the Company determines in
good faith, after consultation with outside nationally recognized legal counsel
(which may be its current outside legal counsel), that failure to take such
actions would be inconsistent with its fiduciary duties under applicable
law.  Without limiting the foregoing,
the Parent, the Merger Subsidiary and the Company agree that any violation of
the restrictions set forth in this Section 6.3(a) by any Representative of the
Company or any of its Subsidiaries or their respective Affiliates (other than
any such Person who is an Affiliate or employee of the Parent or of any of its
Affiliates), whether or not such Person is purporting to act on behalf of the
Company or any of its Subsidiaries or their respective Affiliates, shall
constitute a breach by the Company of this Section 6.3(a).  It is understood that no discussion with any
Person shall be deemed to constitute a violation of this Section 6.3(a) if (i)
the Company, its Subsidiaries or its Representatives, as applicable, did not
know or have reason to know that such discussion related to an Acquisition
Proposal, and (ii) such discussion was immediately ceased once the Company, its
Subsidiary or its Representatives, as applicable, knew or had reason to know
that such discussion related to an Acquisition Proposal.

 

(b)           Neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw, modify
or amend, or vote or resolve to withdraw, modify or amend, in a manner adverse
to the Parent or the Merger Subsidiary, the approval, adoption or
recommendation, as the case may be, of the Merger, this Agreement or any of

 

50

 

the other transactions
contemplated hereby, (ii) approve or recommend, or vote or resolve to approve
or recommend, any Acquisition Proposal, (iii) cause the Company to accept such
Acquisition Proposal and/or enter into any Acquisition Agreement, or (iv)
resolve to do any of the foregoing; provided, that the Board of
Directors of the Company may withdraw, modify or amend such recommendation
prior to obtaining the approval of the Company Stockholders contemplated by
Section 6.5 if (w) the Company has complied with its obligations under this
Section 6.3, (x) the Board of Directors of the Company determines in good
faith, after consultation with outside nationally recognized legal counsel
(which may be its current outside legal counsel), that failure to take such
actions would be inconsistent with its fiduciary duties under applicable law
and (z) prior to taking such actions, the Board of Directors of the Company
shall have given the Parent at least 72 hours notice of its intention to take
such action and the opportunity to meet with the Company and its outside
counsel and financial advisors.  Any
such withdrawal, modification or change shall not change the approval of the
Board of Directors of the Company for purposes of causing any state takeover
statute or other similar law to be inapplicable to the transactions
contemplated by this Agreement, including the Merger.  During the term of this Agreement, nothing contained in this
Section 6.3(b) shall limit the Company’s obligation to hold and convene the
meeting of the Company Stockholders referred to in Section 6.5 and to submit
this Agreement and the Merger for adoption and approval by the Company
Stockholders (regardless of whether the recommendation of the Company Board of
this Agreement or the Merger shall have been withdrawn or modified).

 

(c)           In addition to the
obligations of the Company set forth in Section 6.3(a), the Company shall as
promptly as practicable (and in any event within 24 hours) advise the Parent of
any request for information with respect to any Acquisition Proposal or of any
Acquisition Proposal, or any inquiry, proposal, discussions or negotiation with
respect to any Acquisition Proposal, the material terms and conditions of such
request, Acquisition Proposal, inquiry, proposal, discussion or negotiation and
the Company shall, within twenty-four hours of the receipt thereof, promptly
provide to the Parent copies of any written materials received by the Company in
connection with any of the foregoing, and the identity of the Person making any
such Acquisition Proposal or such request, inquiry or proposal or with whom any
discussions or negotiations are taking place. 
The Company shall use its reasonable best efforts to keep the Parent
informed of the status and material details (including amendments or proposed
amendments) of any such request or Acquisition Proposal and to keep the Parent
informed as to the material details of any information requested of or provided
by the Company, and shall provide to the Parent within one calendar day of
receipt thereof all written materials received by the Company with respect
thereto.  The Company shall promptly
provide to the Parent any non-public information concerning the Company
provided to any other Person in connection with any Acquisition Proposal, which
was not previously provided to the Parent. 
If an event that is not caused by the Company, its Subsidiaries or any
of their Affiliates or Representatives occurs which prevents the Company from
complying with the timing of the information delivery requirements set forth in
this Section 6.3(c), the Company shall not be deemed to be in violation of this
Section 6.3(c) provided that (i) the Company acts reasonably and in good faith
to supply the required information as soon as possible and (ii) such delay in
the receipt of information does not adversely affect the Parent in any material
respect.

 

51

 

(d)           Nothing contained in
this Section 6.3 shall prohibit the Board of Directors of the Company nor any
committee thereof from (i) making and disclosing to the Company Stockholders a
position contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the
Exchange Act or (ii) making any disclosure to the Company Stockholders, if the
Board of Directors of the Company determines in good faith, after consultation
with outside nationally-recognized legal counsel (which may be its current
outside legal counsel), that failure to make such disclosure pursuant to this
clause (ii) would be inconsistent with its fiduciary duties under applicable
law.

 

(e)           The Company shall
promptly request in writing each Person which has heretofore executed a
confidentiality agreement in connection with its consideration of acquiring the
Company or any portion thereof to return all confidential information
heretofore furnished to such Person by or on behalf of the Company, and the
Company shall use its reasonable best efforts to have such information returned
or destroyed (to the extent destruction of such information is permitted by
such confidentiality agreement).

 

Section 6.4.            Access to
Information.  The Company shall (and
shall cause each of its Subsidiaries to) afford to the Parent and its
Representatives and financing sources reasonable access, upon reasonable
advance notice, during normal business hours during the period prior to the
Effective Time, to all of the properties, books, contracts, commitments,
personnel and records and accountants of the Company and its Subsidiaries and,
during such period, the Company shall (and shall cause each of its Subsidiaries
to) furnish to the Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it or any of its Subsidiaries
during such period pursuant to the requirements of federal or state securities
laws and (b) all other information concerning the business, properties, assets
and personnel of the Company and its Subsidiaries as the Parent may reasonably
request.  The Parent, the Merger
Subsidiary and their Affiliates, Representatives and financing sources will
hold any such information that is nonpublic in confidence in accordance with
the Confidentiality Agreement.  No
information or knowledge obtained in any investigation pursuant to this Section
6.4 or otherwise shall affect or be deemed to modify any representation or
warranty contained in this Agreement or the conditions to the obligations of
the Parties to consummate the Merger.

 

Section 6.5.            Special Meeting.  As promptly as practicable after the
execution and delivery of this Agreement, the Company, acting through its Board
of Directors, shall, in accordance with applicable law, duly call, give notice
of, convene and hold the Special Meeting, which meeting shall be held as
promptly as practicable following the preparation and mailing of the Proxy
Statement, and the Company agrees that this Agreement and the Merger shall be
submitted at such meeting for adoption and approval by the Company
Stockholders.  During the term of this
Agreement and, in the cases of clauses (ii) and (iii) below, subject to the
proviso in Section 6.3(b), the Company shall use its reasonable best efforts to
solicit and obtain from the Company Stockholders proxies and shall take all
other action necessary and advisable to secure the vote of the Company
Stockholders required by applicable law and by the Restated Articles of
Organization or the By-laws of the Company to obtain their adoption of this
Agreement and approval of the Merger; (ii) the Board of Directors of the
Company shall recommend that the Company Stockholders vote in favor of the
adoption of this Agreement and the approval of the Merger at the Special
Meeting; and (iii) the Company agrees that it shall include in the

 

52

 

Proxy Statement such
recommendation of the Board of Directors of the Company that the Company
Stockholders adopt this Agreement and approve the Merger.  Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 6.5 during the term of this Agreement shall not be
affected by (a) the commencement, public proposal, public disclosure or
communication to the Company, any of its Subsidiaries or any of their
respective Affiliates (or any of their respective Representatives) of any
Acquisition Proposal or (b) the withdrawal or modification by the Board of
Directors of the Company of its approval or recommendation of this Agreement or
the Merger.

 

Section 6.6.            Proxy Statement.  As promptly as practicable after the
execution and delivery of this Agreement, the Company shall:

 

(a)           prepare and, after
consultation with and review by the Parent and its outside counsel, file with
the SEC a preliminary proxy statement relating to the Merger and this Agreement
and use its reasonable best efforts (i) to obtain and furnish the information
required to be included by the SEC in the Proxy Statement and, after
consultation with and review by the Parent, to respond promptly to any comments
made by the SEC with respect to the preliminary proxy statement and promptly
cause the Proxy Statement to be mailed to its stockholders and, if necessary,
after the Proxy Statement shall have been so mailed, promptly circulate amended
or supplemental proxy material and, if required in connection therewith,
resolicit proxies; provided, that no such amended or supplemental proxy
material will be mailed by the Company without consultation with and review by
the Parent and its outside counsel and (ii), subject to Section 6.3(b), to
obtain the necessary approvals of the Merger and this Agreement by its
stockholders;

 

(b)           promptly notify the
Parent of the receipt of the comments of the SEC and of any request from the
SEC for amendments or supplements to the preliminary proxy statement or the
Proxy Statement or for additional information, and will promptly supply the
Parent and its outside counsel with copies of all written correspondence
between the Company or its representatives, on the one hand, and the SEC or
members of its staff, on the other hand, with respect to the preliminary proxy
statement, the Proxy Statement or the Merger;

 

(c)           promptly inform the
Parent and its outside counsel if at any time prior to the Special Meeting any
event should occur that is required by applicable law to be set forth in an
amendment of, or a supplement to, the Proxy Statement, in which case, the
Company, with the cooperation and approval of and in consultation with the
Parent and its outside counsel, will, upon learning of such event, promptly
prepare and mail such amendment or supplement; and

 

(d)           it is expressly
understood and agreed that (i) the Parent, the Merger Subsidiary and the
Company will cooperate with each other in connection with all aspects of the
preparation, filing and clearance by the SEC of the Proxy Statement (including
the preliminary proxy statement and any and all amendments or supplements
thereto), (ii) the Company shall give the Parent and its outside counsel the
opportunity to review and comment on the Proxy Statement prior to it being
filed with the SEC and shall give the Parent and its outside counsel the
opportunity to review and comment on all amendments and supplements to the
Proxy Statement and all responses to requests for additional

 

53

 

information and replies to
comments prior to their being filed with, or sent to, the SEC and each of the
Company and the Parent agrees to use its reasonable best efforts, after
consultation with the other, to respond promptly to all such comments of and
requests by the SEC and (iii) to the extent practicable and desired by Parent,
the Company and its outside counsel shall permit the Parent and its outside
counsel to participate in all communications with the SEC and its staff
(including all meetings and telephone conferences) relating to the Proxy
Statement, this Agreement or any of the transactions contemplated thereby (provided,
that in the event that such participation by the Parent is not practicable or
desired by Parent, the Company shall promptly inform the Parent and its counsel
of the content of all such communications and the participants involved
therein).

 

Section 6.7.            Reasonable Best
Efforts.  Subject to the terms and
conditions provided herein, each of the Company, the Parent and the Merger
Subsidiary shall, and the Company shall cause each of its Subsidiaries to,
cooperate and use their reasonable best efforts to take, or cause to be taken,
all appropriate action, and do, or cause to be done, and assist and cooperate
with the other Parties in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement (including the
satisfaction of the respective conditions set forth in Article VII), and to
make, or cause to be made, all filings necessary, proper or advisable under
applicable Laws, rules and regulations to consummate and make effective the
transactions contemplated by this Agreement. 
Without limiting the generality of the foregoing, each of the Company,
the Parent and the Merger Subsidiary shall, and the Company shall cause each of
its Subsidiaries to, cooperate and use their reasonable best efforts to promptly:

 

(a)           make any and all
filings, recordations , declarations or registrations with, obtain any and all
actions or non-actions, licenses, permits, consents, approvals, waivers,
authorizations, qualifications and orders of, give any and all notices to, take
reasonable steps to avoid an Action or Proceeding by, any and all Governmental
Entities (including all filings under the HSR Act) and parties to contracts
with the Company and its Subsidiaries, in each case prior to the Closing Date,
as are necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement; it being understood and agreed that:

 

(i)            the Company and its
Subsidiaries shall use their reasonable best efforts to cooperate with the
Parent in any manner reasonably requested by the Parent in connection with
obtaining at or prior to the Closing all Required Consents (no such Required
Consent to be conditioned on any increase in the amount payable under the
applicable Company Material Contract or any reduction in the term thereof or
any other material changes in the provisions thereof, except as may be required
by the express terms of the applicable Company Material Contract, and such Required
Consent shall otherwise be on terms and conditions reasonably satisfactory to
the Parent); in connection with the foregoing, neither the Company nor any of
its Subsidiaries shall, without the prior written consent of the Parent, make
(or commit to make) any payment or otherwise provide (or commit to provide) any
value or benefit to any Person in connection with obtaining any Required
Consent (except as may be required by the express terms of the respective
Company Material Contracts); provided, that, notwithstanding anything to
the contrary

 

54

 

set forth in Section 6.1, with
the prior written consent of the Parent (not to be unreasonably withheld or
delayed), the Company shall be permitted to enter into one or more Contracts
(collectively, the “Replacement Contracts”)
to replace or refinance any Company Material Contract on terms not materially
less favorable (after taking into account any and all fees and expenses
incurred in connection with such replacement or refinancing) to the Company (or
the applicable Subsidiary) or the Surviving Corporation than the terms of such
Company Material Contract, whereupon the respective Replacement Contract shall
be provided to the Parent and shall be deemed to be disclosed in Section
6.7(a)(i) of the Company Disclosure Letter and to constitute a Company Material
Contract for purposes of this Section 6.7(a)(i);

 

(ii)           each of the Parties
shall expeditiously give and make any and all notices and reports required to
be made by such Party to the appropriate Persons with respect to Company
Permits and each of the Parties shall, prior to the Effective Time, use its
reasonable best efforts to cooperate with the other in any manner reasonably
requested by the other in connection with obtaining at or prior to the Closing
the regulatory approvals or consents as may be required by any Governmental
Entities in order to obtain and maintain in effect at all times following the
Effective Time all Company Permits and other Governmental Approvals necessary
to maintain continuity of its relationships with all customers and clients;
without limiting the foregoing, each of the Parties shall, to the extent
necessary of such Party, (A) duly and promptly file and process any and all
applications necessary to obtain all required regulatory approvals or consents
as a result of the consummation of the transactions contemplated by this
Agreement, including the amendment of any and all documents required to be
amended with respect to the existing licensees under the Company Permits and
(B) duly and promptly file with all appropriate Governmental Entities, and
thereafter duly process renewal applications for all of the Company’s licensed
Subsidiaries whose licenses will expire during the period from the date of this
Agreement and until all of the respective applications shall have been
approved; and

 

(iii)          the Company and its
Board of Directors shall, if any “fair price”, “moratorium”, “control share
acquisition”, “business combination” or other state takeover statute or similar
statute, rule or regulation becomes applicable to the Merger, this Agreement or
any of the other transactions contemplated hereby, take all action within its
power to ensure that the Merger and such other transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute, rule or regulation on the
Merger and such other transactions;

 

(b)           defend any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement or the consummation of any of the transactions contemplated hereby
(including seeking to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed); it being
understood and agreed that the Company shall promptly notify the Parent of any
litigation or threatened litigation (including any stockholder litigation),
other than where the Parent is the adverse party, against the Company and/or
its directors relating to any of the transactions contemplated by this
Agreement and the Company shall give the Parent the opportunity to participate,
at Parent’s sole expense, in the defense or settlement of (but not to control)
any such litigation; provided, that no settlement with respect to any
such litigation shall be agreed to without the Parent’s prior consent (not to
be unreasonably withheld or delayed); and

 

55

 

(c)           execute and deliver any
additional instruments necessary to consummate the transactions contemplated by
this Agreement and to fully carry out the purposes of this Agreement.

 

Section 6.8.            Public Disclosure.  The press release announcing the execution
of this Agreement shall be issued only in such form as shall be mutually agreed
upon by the Company and the Parent and each of the Company and the Parent shall
consult with, and obtain the consent of, the other Party (which shall not be
unreasonably withheld or delayed) before issuing any other press release or
otherwise making any public statement with respect to the Merger or this
Agreement and shall not issue any such press release or make any such public
statement prior to consulting with and obtaining the prior consent of the other
Party (which shall not be unreasonably withheld or delayed); provided,
that a Party may, without consulting with or obtaining the prior consent of the
other Party, issue such press release or make such public statement as may be
required by applicable Law or by any listing agreement with a national
securities exchange or automated quotation system to which the Parent (or an
Affiliate thereof) or the Company, as the case may be, is a party, if such
Party has used reasonable best efforts to consult with the other Party and to
obtain such other Party’s consent, but has been unable to do so in a timely
manner.

 

Section 6.9.            Notification of
Certain Matters.  The Company shall
give prompt notice to the Parent and the Parent shall give prompt written
notice to the Company, of (a) the occurrence or non-occurrence of any event
known to such Party, the occurrence or non-occurrence of which has resulted in,
or is reasonably likely to result in, any representation or warranty set forth
in this Agreement made by such Party to be untrue or inaccurate (taking into
account any materiality qualification, to the extent applicable); (b) any
material failure by such Party to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder; or (c)
any action, suit, proceeding, inquiry or investigation pending or, to the
knowledge of such Party, threatened which questions or challenges this
Agreement or the consummation of any of the transactions contemplated hereby; provided,
that the delivery of any notice pursuant to this Section 6.11 shall not limit
or otherwise affect the remedies available hereunder to the Party receiving
such notice and that no such notification shall modify the representations or
warranties of any Party or the conditions to the obligations of any Party
hereunder.  Each of the Company, the
Parent and the Merger Subsidiary shall give prompt notice to the other Parties
of any written notice from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement.

 

Section 6.10.          Rights Agreement.  During the term of this Agreement and prior
to the Effective Time, the Company shall not, without the prior written consent
of the Parent, unless required to do so by a court of competent jurisdiction
(i) redeem the Rights, (ii) amend (other than, subject to the following clause
(iii), to defer the “Distribution Date” (as such term is defined in the Rights
Agreement) in the case of a tender or exchange offer (but not in the case of
any sale pursuant to such tender or exchange offer) that would otherwise
trigger a “Distribution Date” pursuant to Section 3(a)(ii) of the Rights
Agreement) or terminate the Rights Agreement or (iii) take any action which
would allow any “Person” (as such term is defined in the Rights Agreement)
other than the Parent or the Merger Subsidiary (or their Affiliates) to be the
“Beneficial Owner”

 

56

 

(as such term is defined in the
Rights Agreement) of twenty percent or more of the Company Common Stock without
causing a “Distribution Date” or a “Stock Acquisition Date” (as such term is
defined in the Rights Agreement) to occur.

 

Section 6.11.          Subsequent Filings.  Until the Effective Time, the Company will
timely file with the SEC each Subsequent Filing required to be filed by the
Company and will promptly deliver to the Parent and the Merger Subsidiary
copies of each such Subsequent Filing filed with the SEC.  Each of the audited consolidated financial
statements and unaudited interim financial statements (including, in each case,
any related notes and schedules) contained or to be contained in the Subsequent
Filings shall be prepared from, and shall be in accordance with, the books and
records of the Company and its consolidated Subsidiaries, shall comply in all
material respects with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto, shall be
prepared in accordance with GAAP ( except as may be indicated in the notes
thereto) and shall fairly present the consolidated financial position and the
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries at the dates and for the periods covered thereby.

 

Section 6.12.          Communication to
Employees.  The Company and the
Parent will cooperate with each other with respect to, and endeavor in good
faith to agree in advance upon the method and content of, all written or oral
communications or disclosure to employees of the Company or any of its
Subsidiaries with respect to the Merger and any other transactions contemplated
by this Agreement.

 

Section 6.13.          Indemnification of
Officers and Directors; Exculpation.

 

(a)           From and after the
Effective Time, the Parent shall, to the fullest extent permitted by law, cause
the Surviving Corporation, for a period of six years from the Effective Time,
to indemnify and hold harmless each present and former director and officer of
the Company (the “Indemnified Parties”),
against any costs or expenses (including attorneys’ fees), judgments, fines,
losses, claims, damages, liabilities or amounts paid in settlement incurred in
connection with any claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of or pertaining
to matters existing or occurring at or prior to the Effective Time, whether
asserted or claimed prior to, at or after the Effective Time, to the fullest
extent that the Company would have been permitted under Massachusetts law and
its Articles of Organization or Bylaws in effect on the date hereof to
indemnify an Indemnified Party (and the Parent shall cause the Surviving
Corporation also to advance expenses as incurred to the fullest extent
permitted under applicable law, provided the Indemnified Party to whom expenses
are advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Party is not entitled to indemnification).

 

(b)           For a period of three
years after the Effective Time, the Parent shall cause the Surviving
Corporation to maintain (to the extent available in the market) in effect a
directors’ and officers’ liability insurance policy covering those persons who
are currently covered by the Company’s directors’ and officers’ liability
insurance policy (a copy of which has been heretofore delivered to the Parent)
with coverage in amount and scope at least as favorable to such persons as the
Company’s existing coverage; provided,

 

57

 

that in no event shall the
Parent or the Surviving Corporation be required to expend in excess of
$1.2 million for such coverage.

 

(c)           The provisions of this
Section 6.13 are intended to be in addition to the rights otherwise available
to the current officers and directors of the Company by law, charter, statute,
bylaw or agreement, and shall operate for the benefit of, and shall be
enforceable by, each of the Indemnified Parties, their heirs and their
representatives.

 

Section 6.14.          Service Credit.

 

(a)           Following the Effective
Time, the Parent will give each Company employee full credit for prior service
with the Company or its Subsidiaries for purposes of (i) eligibility and
vesting under any of the Parent’s employee benefit plans, (ii) determination of
benefits levels under any of the Parent’s employee benefit plans or policy
relating to vacation or severance and (iii) determination of “retiree” status
under any of the Parent’s employee benefit plans, in each case for which the Company
employee is otherwise eligible and in which the Company employee is offered
participation, but except where such crediting would (A) result in a
duplication of benefits or (B) otherwise cause the Parent or its Subsidiaries
or any of the Parent’s employee benefit plans or any trust relating thereto to
accrue or pay for benefits that relate to any time period prior to the Company
employee’s participation in the Parent’s employee benefit plans.

 

(b)           The Parent shall cause
the Company to maintain and honor the severance agreements set forth in Section
6.14 of the Company Disclosure Letter and for a period of one (1) month
following the Effective Time, the Parent shall cause the Company to provide a
minimum severance payment to each employee of the Company who is terminated
without “cause” during such period equal to one (1) week of such employee’s
base salary for each year of service with the Company, included within, but not
in addition to, any statutory and/or contractual severance, and no such minimum
payment shall be equal to less than two (2) weeks’ base salary.  A termination of employment shall be deemed
to be without “cause” unless such termination occurs as a result of the
employee’s commission of a felony, employee’s continued failure to substantially
perform employee’s duties, or employee’s violation of a Company policy.  In addition, to the extent the Company’s
policies in effect immediately prior to the Effective Time would have provided
for a larger severance payment to an employee than the minimum amount
contemplated hereby, the Parent shall cause the Company to consider such fact
in good faith in determining the severance package for such employee.

 

Section 6.15.          Parent Acquisition
Proposals.  The Parent and its
Subsidiaries shall not take, and shall cause their respective Representatives
not to take, any action (i) to encourage, solicit, initiate or facilitate,
directly or indirectly, the making or submission of any Acquisition Proposal
(ii) to enter into any agreement, arrangement or understanding with respect to
any Acquisition Proposal, or to agree to approve or endorse any Acquisition
Proposal (iii) to initiate or participate in any way in any discussions or
negotiations with, or furnish or disclose any information to, any Person (other
than the Company) in furtherance of any proposal that constitutes, or could
reasonably be expected to lead to, any Acquisition Proposal, or (iv) to
facilitate or further in any other manner any inquiries or the making or
submission of any proposal that constitutes, or could reasonably

 

58

 

be expected to lead to, any
Acquisition Proposal, if, the actions under subparagraphs (i)-(iv) hereof (A)
would require the Company to breach this Agreement; or (B) cause a breach of
the Parent’s representation contained in Section 5.4 hereof.

 

Section 6.16.          Company Credit
Agreement.  The Company shall use
its reasonable best efforts to obtain a waiver in form and substance reasonably
satisfactory to Parent from Silicon Valley Bank of all applicable covenants and
Events of Default contained in the Company Credit Agreement that would prohibit
the transactions contemplated hereby. 
The Company shall keep the Parent informed of its progress in obtaining
such waiver and, if requested by the Parent no later than 20 Business Days
prior to the Effective Time, shall (in lieu of such waiver) terminate the
Company Credit Agreement and use its reasonable best efforts to obtain prior to
the Effective Time evidence in form and substance reasonably satisfactory to
the Parent that (A) the Company has repaid all amounts owing under the Company
Credit Agreement, (B) all letters of credit, if any, issued under the Company
Credit Agreement have expired or been terminated, (C) all commitments to lend under
the Company Credit Agreement have been terminated and (D) all UCC-1 Financing
Statements relating to the Company Credit Agreement have been terminated and
all other collateral held under the Company Credit Agreement has been released.

 

Section 6.17.          UCC Terminations.  The Company shall use its reasonable best
efforts to obtain, prior to the Effective Time, the termination of the UCC-1
financing statements listing Merrill Lynch Business Financial Services Inc. as
secured party that are currently on file in Hyannis, Massachusetts and
Lexington, Massachusetts.

 

Section 6.18.          UK and Malaysia
Filings.  Prior to the Effective
Time, the Company shall cause (i) the Subsidiaries formed in the United Kingdom
to be in good standing and current with all their Companies House filings and
(ii) Infinium Software Asia/Pacific, Inc. to be in good standing as a foreign
entity in Malaysia and to be current with all required filings with the
Register of Accounts in Malaysia, and shall provide evidence reasonably
satisfactory to the Parent thereof prior to the Effective Time.

 

Section 6.19.          Notices.  Prior to the Effective Time, Infinium
Software Europe, Inc. shall provide notice or confirmation thereof to The First
National Bank of Boston-Singapore in the form and containing such information
as is reasonably satisfactory to Parent relating to the transactions
contemplated hereby.

 

ARTICLE
VII

 

CONDITIONS TO EFFECT THE MERGER

 

Section 7.1.            Conditions to Each
Party’s Obligation to Effect the Merger. 
The respective obligations of each Party to this Agreement to effect the
Merger shall be subject to the satisfaction or waiver (to the extent permitted
by applicable law) on or prior to the Closing Date of each of the following
conditions:

 

(a)           Stockholder Approval.  This Agreement and the Merger shall have
been duly adopted and approved by the requisite affirmative vote of the Company

 

59

 

Stockholders in accordance with
applicable law, the Company’s Articles of Organization and the Company’s
By-laws.

 

(b)           Governmental
Approvals.  Other than the filing of
the Articles of Merger and all other filings or recordings required under the
BCL as contemplated by Section 2.2, all authorizations, consents, orders or
approvals of, or declarations or filings with, or expirations of waiting
periods imposed by, any Governmental Entity in connection with the Merger and
the consummation of the other transactions contemplated by this Agreement, the
failure of which to file, obtain or occur, individually or in the aggregate,
would make the consummation of the Merger illegal or result or would not result
in a Company Material Adverse Effect, shall have been filed, been obtained or
occurred and shall not have expired or been withdrawn (including any filings
under the HSR Act and the expiration or termination of any waiting periods
imposed or required by the HSR Act); provided, that the right to assert
this condition shall not be available to a Party whose material failure to
fulfill any obligation under this Agreement has been the principal cause of or
resulted in the failure of this condition to be satisfied.

 

(c)           No Restraints.  There shall be no preliminary or permanent
order or injunction of a court or other Governmental Entity of competent
jurisdiction precluding, restraining, enjoining or prohibiting consummation of
the Merger and there shall not be instituted, pending or threatened in writing
any Action or Proceeding by any Governmental Entity seeking to preclude,
restrain, enjoin or prohibit consummation of the Merger.

 

(d)           Illegality.  There shall have been no action taken, or
statute, rule, regulation, judgment or executive order promulgated, entered,
enforced, enacted, issued or deemed applicable to the Merger by any
Governmental Entity that directly or indirectly prohibits or makes illegal the
consummation of the Merger or the other transactions contemplated by this
Agreement.

 

Section 7.2.            Conditions to the
Parent’s and the Merger Subsidiary’s Obligation to Effect the Merger.  The obligation of the Parent and the Merger
Subsidiary to effect the Merger shall be subject to the satisfaction on or
prior to the Closing Date of each of the following conditions, any and all of
which may be waived in whole or in part by the Parent or the Merger Subsidiary to
the extent permitted by applicable law:

 

(a)           Performance of
Obligations; Representations and Warranties.  (i) The Company shall have performed in all material respects
each of its covenants and agreements contained in this Agreement required to be
performed at or prior to the Effective Time, (ii) each of the representations
and warranties of the Company contained in this Agreement shall be true and
correct, such that the aggregate effect of any inaccuracies in such
representations and warranties do not comprise a Company Material Adverse
Effect on and as of the Effective Time as if made on and as of such date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date and except as
contemplated or permitted by this Agreement), without regard for purposes of
this Section 7.2(a) to any materiality or Company Material Adverse Effect
qualifications contained in such representations and warranties, and (iii)
Parent shall have received a certificate signed on behalf of the Company by its
Chief Executive Officer or its Chief Financial Officer to such effect.

 

60

 

(b)           Voting Agreement.  The Voting Agreement shall be duly executed,
valid, in full force and effect against all parties thereto, and the Company
shall have complied with the Voting Agreement in all material respects.

 

(c)           No Litigation.  There shall not be instituted, pending or
threatened any Action or Proceeding by any Governmental Entity relating to this
Agreement, the Voting Agreement or any of the transactions contemplated herein
or therein.

 

(d)           Company Material
Adverse Effect.  There shall not
have occurred a Company Material Adverse Effect.  The Company shall have delivered to the Parent and the Merger
Subsidiary a certificate, signed on behalf of the Company by the Chief
Executive Officer of the Company, to such effect.

 

(e)           Consents.  The Company shall have obtained each consent
or approval set forth in Section 7.2(e) of the Company Disclosure Letter.

 

(f)            Cort Directions,
Inc.  The sale of all of the issued
and outstanding stock of Cort Directions, Inc. shall have been consummated or
there shall not be existing any obligation of the Company to sell Cort
Directions, Inc.

 

(g)           Resignations.  All of the directors of the Company, its
Subsidiaries and the Company’s nominee, if any, to the board of Metro-Infinium
(Thailand) Company Limited (“Metro-Infinium”) in office immediately prior to
the Effective Time shall have provided executed, undated forms of resignation,
which shall not have been revoked, from their positions as directors of the
Company, each of its Subsidiaries and Metro-Infinium, as applicable.

 

Section 7.3.            Conditions to the
Company’s Obligation to Effect the Merger. 
The obligation of the Company to effect the Merger shall be subject to
the satisfaction on or prior to the Closing Date of each of the following
conditions, any and all of which may be waived in whole or in part by the
Company, to the extent permitted by applicable law:

 

(a)           Performance of
Obligations; Representations and Warranties.  (i) Each of the Parent and the Merger Subsidiary shall have
performed in all material respects each of their respective agreements
contained in this Agreement required to be performed on or prior to the
Effective Time, (ii) each of the representations and warranties of the Parent
and the Merger Subsidiary contained in this Agreement shall be true and
correct, such that the aggregate effect of any inaccuracies in such representations
and warranties will not have a material adverse effect on the ability of the
Parent or Merger Subsidiary to duly perform its obligations under this
Agreement or to consummate the transactions contemplated hereby on a timely
basis on and as of the Effective Time as if made on and as of such date (other
than representations and warranties which address matters only as of a certain
date which shall be true and correct as of such certain date and except as
contemplated or permitted by this Agreement), without regard for purposes of
this Section 7.3(a) to any materiality qualifications contained in such
representations and warranties, and (iii) the Company shall have received a
certificate signed on behalf of the Parent and the Merger Subsidiary by an
officer thereof to such effect.

 

61

 

ARTICLE
VIII

 

TERMINATION

 

Section 8.1.            Termination.  This Agreement may be terminated and the
Merger and the other transactions contemplated by this Agreement may be
abandoned at any time prior to the Effective Time, by written notice by the
terminating Party to the other Parties, whether before or after Company
Stockholder approval thereof, as follows:

 

(a)           by mutual written
consent duly authorized by the Boards of Directors of the Parent and the
Company;

 

(b)           by either the Parent or
the Company, if the Merger shall not have been consummated on or prior to 180
days after the signing of this Agreement (or such later date as may be agreed
to in writing by the Parent and the Company) (as the same may be extended from
time to time as contemplated below, the “Termination
Date”), unless the Merger shall not have been consummated because of
a material breach of any representation, warranty, obligation, covenant or
agreement set forth in this Agreement on the part of the Party seeking to
terminate this Agreement;

 

(c)           by either the Parent or
the Company, if a Governmental Entity or court of competent jurisdiction shall
have issued a nonappealable final order, decree or ruling or taken any other
nonappealable final action, in each case having the effect of permanently
restraining, enjoining or otherwise prohibiting the Merger or the other
transactions contemplated by this Agreement (provided, that the right to
terminate this Agreement under this Section 8.1(c) shall not be available to
any Party whose material failure to fulfill any obligation under this Agreement
has been the principal cause of or resulted in such order, decree ruling or
action);

 

(d)           by either the Parent or
the Company, if at the Special Meeting (including any adjournment or
postponement thereof permitted by this Agreement), the requisite vote of the
stockholders of the Company approving this Agreement and the Merger shall not
have been obtained upon a vote taken thereon;

 

(e)           by the Parent, if (i)
the Company shall have (A) withdrawn, modified or amended, or voted or resolved
to withdraw, modify or amend, in a manner adverse to the Parent or the Merger
Subsidiary, the approval, adoption or recommendation, as the case may be, of
the Merger, this Agreement or any of the other transactions contemplated hereby
or (B) approved or recommended, or voted or resolved to approve or recommend,
or entered into any agreement, arrangement or understanding (other than
confidentiality agreements permitted pursuant to Section 6.3(a)) with respect
to, any Acquisition Proposal; (ii) the Company’s Board of Directors or any
committee thereof shall have resolved to take any of the actions set forth in
preceding subclause (i); (iii) after an Acquisition Proposal has been made, the
Board of Directors of the Company fail to affirm their recommendation and
approval of the Merger and this Agreement within five Business Days of any
written request by the Parent to do so; or (iv) a tender offer or exchange
offer constituting an Acquisition Proposal is commenced and the Board of
Directors of the Company do not recommend against acceptance of such offer by
the Company Stockholders (including by taking no position or a neutral position
with respect thereto);

 

62

 

(f)            by the Company, if a
Superior Proposal is received by the Company and the Board of Directors of the
Company determines in good faith, after consultation with outside nationally
recognized legal counsel (which may be its current outside legal counsel), that
failure to terminate this Agreement and enter into an agreement to effect the
Superior Proposal would be inconsistent with its fiduciary duties under
applicable law; provided, that the Company may not terminate this
Agreement pursuant to this Section 8.1(f) unless the Company has complied with
its obligations under Section 6.3 and (x) until five Business Days have elapsed
following delivery to the Parent of a written notice of such determination by
the Board of Directors of the Company and during such five Business Day period
the Company has fully cooperated with the Parent (including informing the
Parent of the terms and conditions of such Superior Proposal and the identity
of the Person making such Superior Proposal) with the intent of enabling the
Parties to agree to a modification of the terms and conditions of this
Agreement so that the transactions contemplated hereby may be effected on such
adjusted terms, (y) at the end of such five Business Day period, the
Acquisition Proposal continues to constitute a Superior Proposal, and the Board
of Directors of the Company continues to determine in good faith, after
consultation with outside nationally recognized outside legal counsel (which may
be its current outside legal counsel), that failure to terminate this Agreement
and enter into an agreement to effect the Superior Proposal would be
inconsistent with its fiduciary duties under applicable law and (z) (A) prior
to such termination, the Parent has received all fees and expense
reimbursements set forth in Section 8.3 by wire transfer in same day funds and
(B) simultaneously or substantially simultaneously with such termination the
Company enters into a definitive acquisition, merger or similar agreement to
effect the Superior Proposal;

 

(g)           by the Parent, if there
shall have been a breach by the Company of any provision of Section 6.3 other
than unintentional, immaterial breaches that do not adversely affect the rights
of the Parent;

 

(h)           by the Parent, if there
has been a breach of or failure to perform any representation, warranty,
covenant or agreement on the part of the Company set forth in this Agreement,
which breach or failure to perform (i) would cause the conditions set forth in
Section 7.2(a) or 7.2(b) not to be satisfied, and (ii) either cannot be cured
or has not been cured prior to the earlier of (x) the fifteenth calendar day
following receipt by the Company of written notice of such breach from the
Parent and (y) the Termination Date; or

 

(i)            by the Company, if
there has been a breach of or failure to perform any representation, warranty,
covenant or agreement on the part of the Parent or the Merger Subsidiary set
forth in this Agreement, which breach or failure to perform (i) would cause the
conditions set forth in Section 7.3(a) or 7.3(b) not to be satisfied, and (ii)
either cannot be cured or has not been cured prior to the earlier of (x) the
fifteenth calendar day following receipt by the Parent of written notice of
such breach from the Company and (y) the Termination Date.

 

The right of any Party to
terminate this Agreement pursuant to this Section 8.1 shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of any Party, any Person controlling any such Party or any of their
respective officers or directors, whether prior to or after the execution of
this Agreement.

 

63

 

Section 8.2.            Effect of
Termination.  In the event of
termination of this Agreement as provided in Section 8.1, written notice
thereof shall forthwith be given to the other Party or Parties specifying the
provision hereof pursuant to which such termination is made, and this Agreement
shall immediately become void and there shall be no liability or obligation on
the part of the Parent, the Company, the Merger Subsidiary or their respective
officers, directors, stockholders or Affiliates; provided, that (i) any
such termination shall not relieve any Party from liability for any willful
breach of this Agreement and (ii) the provisions of Section 4.21, the provisos
relating to amendment to or waivers of confidentiality agreements set forth in
Sections 6.3(a), the provisions of Sections 6.2, 6.8, this Section 8.2, Section
8.3 and Article IX and the Confidentiality Agreement shall remain in full force
and effect and survive any termination of this Agreement.

 

Section 8.3.            Fees and Expenses.  (a) Except as set forth in this Section 8.3,
all fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such fees
and expenses, whether or not the Merger is consummated.

 

(b)           (i)            If this Agreement is terminated:

 

(1)           at
a time when the Parent is entitled to terminate this Agreement in accordance
with Section 8.1(b) or Section 8.1(d) and an Acquisition Proposal (or an
intention to make an Acquisition Proposal) has been made, proposed,
communicated or disclosed, after the date of this Agreement, in a manner which
is or otherwise becomes public (including being known to unaffiliated
stockholders of the Company);

 

(2)           by
the Company in accordance with Section 8.1(b) and, within six months of such
termination, the Company enters into an agreement, arrangement or understanding
(including a letter of intent) with respect to or consummates any Acquisition
Proposal; or

 

(3)           pursuant
to Section 8.1(e), Section 8.1(f), Section 8.1(g) or Section 8.1(h);

 

(ii)           then the Parent shall
be entitled to receive (in accordance with Section 8.3(d)) from the Company (x)
reimbursement for the out-of-pocket expenses of the Parent and the Merger
Subsidiary (including printing fees, filing fees (including with respect to the
HSR Act or otherwise) and fees and expenses of its legal and financial advisors
and all fees and expenses payable to any financing sources) related to this
Agreement and the transactions contemplated hereby and any related financing,
in an amount not to exceed $500,000 (“Expense
Reimbursement”) and (y) an amount equal to $4,000,000 (the “Termination Fee”).

 

(c)           If this Agreement is
terminated at a time when Parent is entitled to terminate this Agreement in
accordance with Section 8.1(d) and, at the time of such termination no
Acquisition Proposal (or an intention to make an Acquisition Proposal) has been
made, proposed, communicated or disclosed after the date of this agreement in a

 

64

 

manner which is or otherwise
becomes public, then the Parent shall be entitled to receive (in accordance
with Section 8.3(d)) from the Company the Expense Reimbursement.

 

(d)           Upon termination of
this Agreement by the Company pursuant to Section 8.1(i) or by the Parent
pursuant to Section 8.1(b), the Parent agrees to reimburse the Company for its
out-of-pocket expenses (including printing fees, filing fees (including with
respect to the Proxy Statement or otherwise) and fees and expenses of its legal
counsel related to this Agreement and the transactions contemplated hereby and
incremental costs (including lost savings) directly resulting from the Company
having taken or foregone certain actions upon the specific written request of
the Parent in anticipation of the Merger; provided, that the aggregate
amount of the Parent’s obligation pursuant to this Section 8.3(e) shall not
exceed $250,000.

 

(e)           The Company shall, upon
demand or at such other time as is mutually agreed to in writing by the Company
and the Parent, reimburse the Parent for 50% of the fee associated with the
filing of the premerger notification and report form under the HSR Act and the
Parent shall, upon demand or at such other time as is mutually agreed to in
writing by the Company and the Parent, reimburse the Company for 50% of the
filing fee associated with the Proxy Statement.

 

(f)            The Company
acknowledges that the Termination Fee and Expense Reimbursement provided for in
this Section 8.3 are an integral part of the transactions contemplated by this
Agreement and not a penalty, and that, without the Termination Fee and Expense
Reimbursement provided for above, neither the Parent nor the Merger Subsidiary
would enter into this Agreement.  The
Parent acknowledges that the expense reimbursement to the Company provided for
in this Section 8.3 are an integral part of the transactions contemplated by
this Agreement and not a penalty, and that, without this expense reimbursement
provided for above, the Company would not enter into this Agreement.

 

Section 8.4.            Amendment.  To the extent permitted by applicable law,
this Agreement may be amended by the Parties, by action taken or authorized by
their respective Boards of Directors, at any time before or after approval of
the matters presented in connection with the Merger by the Company
Stockholders; provided, that after any such approval, no amendment shall
be made that by law requires further approval by such Company Stockholders
without such further approval.  This
Agreement may not be amended except by an instrument in writing signed on
behalf of each of the Parties.

 

Section 8.5.            Extension; Waiver.  At any time prior to the Effective Time, the
Parties, by action taken or authorized by their respective Boards of Directors,
may, to the extent legally allowed, (a) extend the time for the performance of
any of the obligations or other acts of the other Parties, (b) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any of the
agreements or conditions contained herein; provided, that after the
approval of the Merger by the Company Stockholders, no extension or waiver
shall be made that by law requires further approval by such Company
Stockholders without such further approval. 
Any agreement on the part of a Party to any such extension or waiver
shall be valid only if set forth in a written instrument signed on behalf of
such Party.  The failure of any Party to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.

 

65

 

ARTICLE
IX

 

MISCELLANEOUS

 

Section 9.1.            Nonsurvival of
Representations and Warranties.  The
respective representations and warranties of the Company, on the one hand, and
each of the Parent and the Merger Subsidiary, on the other hand, contained in
this Agreement, any Ancillary Agreement or in any document, certificate or
instrument delivered prior to or at the Closing shall not be deemed waived or
otherwise affected by any investigation made by any Party.  Each and every such representation and
warranty shall expire with, and be terminated and extinguished by, the Closing,
and thereafter none of the Company, the Parent or the Merger Subsidiary shall
be under any liability whatsoever with respect to any such representation and
warranty.  This Section 10.1 shall have
no effect upon any other obligations of the Parties, whether to be performed
before or after the Effective Time.

 

Section 9.2.            Notices.  All notices, requests, claims and demands
and other communications hereunder shall be in writing and shall be deemed duly
delivered (i) four Business Days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one Business Day after
being sent for next business day delivery, fees prepaid, via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:

 

(a)           if to the Parent or the
Merger Subsidiary, to:

 

SSA Global
Technologies, Inc.

110 Sheppard Avenue East

Suite 701

Toronto, Canada M2N 6Y8

Attention:              Shelley
R. Isenberg

Telephone:            (416) 228-2242

Facsimile:               (416) 221-0994

 

with a copy
to:

 

Schulte Roth
& Zabel LLP

919 Third Avenue

New York, New York 10022

Attention:              Robert
B. Loper, Esq. 

Telephone:            (212) 756-2138

Facsimile:               (212) 593-5955

 

66

 

(b)           if to the Company, to:

 

Infinium
Software, Inc.

25 Communications Way

Hyannis, Massachusetts 02601

 

Attention:              General Counsel

Telephone:            (508) 790-6728

Facsimile:               (508) 790-6784

 

with a copy
to:

 

Hale and Dorr
LLP

60 State Street

Boston, Massachusetts  02109

Attention:              Jay
E. Bothwick, Esq.

Telephone:            (617) 526-6526

Facsimile:               (617) 526-5000

 

Any Party may give any notice
or other communication hereunder using any other means (including personal delivery,
messenger service, facsimile or ordinary mail), but no such notice or other
communication shall be deemed to have been duly given unless and until it
actually is received by the Party for whom it is intended.  Any Party may change the address to which
notices and other communications hereunder are to be delivered by giving the
other Parties to this Agreement notice in the manner herein set forth.

 

Section 9.3.            Entire Agreement.  This Agreement (including the Company
Disclosure Letter and the other documents and instruments referred to herein
that are to be delivered at the Closing), including the Confidentiality
Agreement, constitutes the entire agreement among the Parties and supersedes
any prior understandings, agreements or representations by or among the
Parties, or any of them, written or oral, with respect to the subject matter
hereof.

 

Section 9.4.            No Third Party
Beneficiaries.  Except for the
provisions of Section 6.13 and Section 6.14, this Agreement is not intended,
and shall not be deemed, to confer any rights or remedies upon any Person other
the Parties and their respective successors and permitted assigns, to create
any agreement of employment with any Person or to otherwise create any
third-party beneficiary hereto.

 

Section 9.5.            Assignment.  Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part, by operation of law or otherwise by any of the
Parties without the prior written consent of the other Parties, and any such
assignment without such prior written consent shall be null and void, except
that the Parent  may substitute any
direct or indirect wholly-owned subsidiary of the Parent for the Merger
Subsidiary without consent of the Company and the Parent may assign its rights
and obligations under this Agreement to a newly formed Affiliate of the Parent;
provided, that the Parent and/or the Merger Subsidiary, as

 

67

 

the case may be, shall remain
liable for all of its obligations under this Agreement.  Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the Parties and their respective successors and assigns.

 

Section 9.6.            Interpretation.  When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated.  Whenever the words
“include”, “includes” or “including” are used in this Agreement they shall be
deemed to be followed by the words “without limitation”.

 

Section 9.7.            Counterparts.  This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when two or more counterparts have been signed by
each of the Parties and delivered to the other Parties.

 

Section 9.8.            Severability.  If any term, provision, agreement, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, agreements, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not effected in any manner materially adverse to any
Party.  Upon such a determination, the
Parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the Parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.

 

Section 9.9.            Governing Law.  This Agreement shall be governed by and
construed in accordance with the internal Laws of The Commonwealth of
Massachusetts without giving effect to any choice or conflict of law provision
or rule (whether of The Commonwealth of Massachusetts or any other
jurisdiction) that would cause the application of Laws of any jurisdictions
other than those of The Commonwealth of Massachusetts.

 

Section 9.10.          Submission to
Jurisdiction.  Any suit, Action or
Proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought exclusively in any federal or state court located in
the City and State of New York, and each of the Parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, Action or Proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, Action or Proceeding in any such court or
that any such suit, Action or Proceeding brought in any such court has been
brought in an inconvenient forum. 
Process in any such suit, Action or Proceeding may be served on any
Party anywhere in the world, whether within or without the jurisdiction of any
such court.  Without limiting the
foregoing, each Party agrees that service of process on such Party as provided
in Section 9.2 as to giving notice hereunder shall be deemed effective service
of process on such Party.

 

Section 9.11.          Remedies.  Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a Party shall be deemed cumulative
with

 

68

 

and not exclusive of any other
remedy conferred hereby, or by law or equity upon such Party.  No failure or delay on the part of any Party
in the exercise of any right hereunder shall impair such right or be construed
to be a waiver of, or acquiescence in, any breach of any representation,
warranty or agreement herein, nor shall any single or partial exercise of any
such right preclude other or further exercise thereof or of any other
right.  Each party hereto agrees that
irreparable damage would occur to the other party or parties in the event that
any of the provisions of this Agreement were not performed by such party in
accordance with their specific terms or were otherwise breached.  It is accordingly agreed that each party
hereto shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any federal or state court located in the State of New York (as to which the
Parties agree to submit jurisdiction of the purposes of such action), this
being in addition to any other remedy to which they are entitled at law or in
equity including those set forth in Section 8.3.  Each party hereto further agrees to waive any requirement for the
securing or posting of any bond in connection with obtaining any such
injunction or other equitable relief.

 

Section 9.12.          Waiver of Jury Trial.  EACH OF THE PARENT, THE MERGER SUBSIDIARY
AND THE COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARENT, THE MERGER SUBSIDIARY OR THE
COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS
AGREEMENT.

 

[Remainder of this page intentionally left blank.  Signature Page Follows]

 

69

 

IN WITNESS
WHEREOF, the Parties have caused this Agreement to be executed as a sealed
instrument by their duly authorized officers as of the date first written
above.

 

	
   

  	
  SSA GLOBAL TECHNOLOGIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk
  Isaacson

  
	
   

  	
   

  	
  Name:  Kirk
  Isaacson 

  
	
   

  	
   

  	
  Title:     Senior
  Vice President and 

  
	
   

  	
   

  	
  General
  Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAMURAI
  MERGER SUBSIDIARY, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kirk
  Isaacson

  
	
   

  	
   

  	
  Name:  Kirk
  Isaacson 

  
	
   

  	
   

  	
  Title:    President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan
  Hickel

  
	
   

  	
   

  	
  Name:  Susan
  Hickel

  
	
   

  	
   

  	
  Title:     Assistant
  Treasurer and Clerk

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INFINIUM
  SOFTWARE, INC. 

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James E.
  McGowan

  
	
   

  	
   

  	
  Name:  James
  E. McGowan

  
	
   

  	
   

  	
  Title:    President
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W.B.
  Gerraughty, Jr.

  
	
   

  	
   

  	
  Name:  W.B.
  Gerraughty, Jr.

  
	
   

  	
   

  	
  Title:    Senior
  Vice President, Chief Financial Officer and Treasurer

  

 

70

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]