Agreement and Plan of Merger between Blaze Software, Inc. and Brokat Aktiengesellschaft (June 19, 2000)

Contract Categories: Mergers & Acquisitions › Merger Agreements
Summary

This agreement outlines the terms of a merger between Blaze Software, Inc. and Brokat Aktiengesellschaft. It details how the merger will be executed, including the conversion of shares, treatment of stock options and warrants, and the structure of the surviving corporation. The contract also sets forth the representations and warranties of both companies, their obligations before closing, and the conditions required for the merger to proceed. The agreement includes provisions for employee benefits, regulatory approvals, and procedures for termination if certain conditions are not met.

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EX-2.1 2 0002.txt AGREEMENT AND PLAN OF MERGER EXHIBIT 2.1 ================================================================================ AGREEMENT AND PLAN OF MERGER by and between BLAZE SOFTWARE, INC. and BROKAT AKTIENGESELLSCHAFT June 19, 2000 ================================================================================ TABLE OF CONTENTS
Page ---- RECITALS..................................................................................... 1 ARTICLE I THE MERGER...................................................................... 2 Section 1.1 The Merger................................................................ 2 Section 1.2 Effective Time............................................................ 2 Section 1.3 Closing................................................................... 3 Section 1.4 Effects of the Merger..................................................... 3 Section 1.5 The Certificate of Incorporation.......................................... 3 Section 1.6 The By-Laws............................................................... 3 Section 1.7 Directors of Surviving Corporation........................................ 3 Section 1.8 Officers of Surviving Corporation......................................... 3 ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES................. 4 Section 2.1 Conversion of Capital Stock............................................... 4 Section 2.2 Exchange of Certificates.................................................. 5 Section 2.3 No Appraisal Rights....................................................... 9 Section 2.4 Adjustments to Prevent Dilution........................................... 9 Section 2.5 Withholding Rights........................................................ 9 Section 2.6 Treatment of Stock Options/Restricted Stock............................... 9 Section 2.7 Treatment of Warrants..................................................... 11 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................... 12 Section 3.1 Organization and Qualification; Subsidiaries.............................. 12 Section 3.2 Certificate of Incorporation and By-Laws.................................. 12 Section 3.3 Capitalization............................................................ 12 Section 3.4 Authority................................................................. 14 Section 3.5 No Conflict............................................................... 15 Section 3.6 Required Filings and Consents............................................. 15 Section 3.7 Permits; Compliance with Law.............................................. 16 Section 3.8 SEC Filings; Financial Statements......................................... 16 Section 3.9 Absence of Certain Changes or Events...................................... 18 Section 3.10 Employee Benefit Plans; Employee Relations................................ 19 Section 3.11 Accounting and Tax Matters................................................ 21 Section 3.12 Contracts; Debt Instruments............................................... 21 Section 3.13 Litigation................................................................ 22 Section 3.14 Environmental Matters..................................................... 22 Section 3.15 Intellectual Property..................................................... 23 Section 3.16 Taxes..................................................................... 26 Section 3.17 Non-Competition Agreements................................................ 26 Section 3.18 Agreements with Regulatory Agencies....................................... 26
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Page ---- Section 3.19 Opinion of Financial Advisor.............................................. 27 Section 3.20 Brokers................................................................... 27 Section 3.21 Certain Statutes.......................................................... 27 Section 3.22 Information............................................................... 27 Section 3.23 Vote Required............................................................. 27 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT...................................... 28 Section 4.1 Organization and Qualification; Subsidiaries.............................. 28 Section 4.2 Charter Documents......................................................... 29 Section 4.3 Capitalization............................................................ 29 Section 4.4 Authority................................................................. 30 Section 4.5 No Conflict............................................................... 30 Section 4.6 Required Filings and Consents ............................................ 31 Section 4.7 Financial Statements...................................................... 32 Section 4.8 Absence of Certain Changes or Events...................................... 32 Section 4.9 Accounting and Tax Matters................................................ 34 Section 4.10 Litigation................................................................ 34 Section 4.11 Intellectual Property..................................................... 34 Section 4.12 Taxes..................................................................... 34 Section 4.13 Brokers................................................................... 34 Section 4.14 Information............................................................... 35 ARTICLE V COVENANTS.......................................................................... 35 Section 5.1 Conduct of Business of the Company........................................ 35 Section 5.2 Certain Interim Operations of the Parent.................................. 38 Section 5.3 Notification of Certain Matters........................................... 39 Section 5.4 Proxy Statement........................................................... 39 Section 5.5 Company Stockholders...................................................... 41 Section 5.6 Access to Information; Confidentiality.................................... 41 Section 5.7 No Solicitation........................................................... 42 Section 5.8 Employee Benefits Matters................................................. 44 Section 5.9 Directors' and Officers' Indemnification and Insurance.................... 45 Section 5.10 Letters of Accountants.................................................... 46 Section 5.11 Commercially Reasonable Efforts........................................... 46 Section 5.12 Consents; Filings; Further Action ........................................ 46 Section 5.13 Plan of Reorganization.................................................... 48 Section 5.14 Public Announcements...................................................... 48 Section 5.15 Stock Exchange Listings and De-Listings................................... 48 Section 5.16 Expenses.................................................................. 48 Section 5.17 Takeover Statutes; Exon-Florio............................................ 49 Section 5.18 Dividends................................................................. 49 Section 5.19 Control of the Company's Operations....................................... 49 Section 5.20 Certain Obligations of the Parent......................................... 49
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Page ---- ARTICLE VI CONDITIONS........................................................................ 50 Section 6.1 Conditions to Each Party's Obligation to Effect the Merger................ 50 Section 6.2 Conditions to Obligations of the Parent................................... 50 Section 6.3 Conditions to Obligation of the Company................................... 52 ARTICLE VII TERMINATION...................................................................... 53 Section 7.1 Termination............................................................... 53 Section 7.2 Effect of Termination..................................................... 54 Section 7.3 Expenses Following Certain Termination Events............................. 54 ARTICLE VIII MISCELLANEOUS................................................................... 56 Section 8.1 Certain Definitions....................................................... 56 Section 8.2 Survival.................................................................. 57 Section 8.3 Counterparts.............................................................. 57 Section 8.4 GOVERNING LAW; WAIVER OF JURY TRIAL....................................... 57 Section 8.5 Notices................................................................... 58 Section 8.6 Entire Agreement.......................................................... 59 Section 8.7 No Third Party Beneficiaries.............................................. 59 Section 8.8 Amendment................................................................. 59 Section 8.9 Waiver.................................................................... 59 Section 8.10 Obligations of the Parent and of the Company.............................. 59 Section 8.11 Severability.............................................................. 59 Section 8.12 Interpretation............................................................ 60 Section 8.13 Assignment................................................................ 60 Section 8.14 Specific Performance...................................................... 60 Section 8.15 Submission to Jurisdiction; Waivers; Consent to Service of Process........ 60
EXHIBITS Exhibit A Company Voting Agreements iii AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated June 19, 2000, --------- by and between BLAZE SOFTWARE, INC., a Delaware corporation (the "Company"), and ------- BROKAT AKTIENGESELLSCHAFT, a German corporation which is in the process of changing its name from BROKAT Infosystems Aktiengesellschaft (the "Parent"). ------ RECITALS (a) The management board (Vorstand) of the Parent and the board of directors of the Company have determined that the merger of Merger Sub with and into the Company on the terms and subject to the conditions set forth on this Agreement (the "Merger"), with the Company surviving as a wholly owned ------ subsidiary of the Parent, is advisable and that it is in the best interests of their respective corporations and stockholders to combine the respective businesses of the Parent and the Company, and consequently have approved the merger of Merger Sub with and into the Company (the "Merger") and have approved ------ and adopted the Merger and this Agreement, in accordance with the General Corporation Law of the State of Delaware (the "DGCL") and the laws of Germany. ---- (b) Concurrently with the execution of this Agreement, as a condition to the willingness of the Parent to enter into this Agreement, (i) certain holders (the "Principal Stockholders") of the Company's common stock, par value ---------------------- $0.0001 per share ("Company Common Stock"), are entering into one or more -------------------- stockholders' agreements, dated as of the date hereof, with the Parent and the Company, copies of which are attached to this Agreement as Exhibit A (the "Company Voting Agreements"). ------------------------- (c) For federal income tax purposes it is intended that the Merger shall qualify as a reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the rules and ---- regulations promulgated under the Code. (d) Certain terms used in this Agreement which are not capitalized have the meanings specified in Section 8.1. NOW, THEREFORE, the parties to this Agreement, intending to be legally bound by this Agreement, agree as follows: ARTICLE I THE MERGER Section 1.1 The Merger. (a) As promptly as practicable following the date hereof, the Parent and the Company shall appoint a United States bank or trust company or other independent financial institution in the United States (the "Exchange -------- Agent") to act as exchange agent for the Share Exchange (as defined in Section - ----- 2.2 (a)(ii) hereof) and the delivery of the Merger Consideration (as defined in Section 2.1(c) hereof). Following such appointment, the Exchange Agent (as agent for the Parent) shall cause to be incorporated pursuant to the DGCL a corporation which shall be a constituent company in the Merger ("Merger Sub") ---------- and which shall not transact any business other than participating in the Merger as described herein. To accommodate the transactions described in this Article I and Article II, the Exchange Agent shall hold all the issued and outstanding shares of common stock, par value $0.01 per share, of the Merger Sub (the "Merger Sub Common Stock") as agent for the Parent; at and following the ----------------------- Effective Time, the Exchange Agent shall receive and hold the Merger Consideration and the Exchange Fund solely as agent for the Company's shareholders. The Parent and the Company shall enter into an exchange agent agreement with the Exchange Agent in form and substance reasonably satisfactory to the Parent and the Company, which agreement shall set forth the duties, responsibilities and obligations of the Exchange Agent consistent with the terms of this Agreement. (b) Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, in accordance with the DGCL, Merger Sub shall be merged with and into the Company in accordance with this Agreement and the separate corporate existence of Merger Sub shall cease. The Company shall be the surviving corporation in the Merger (sometimes referred to as the "Surviving --------- Corporation") and shall continue to be governed by the laws of the State of - ----------- Delaware, and the separate corporate existence of the Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger. Section 1.2 Effective Time. As soon as practicable following the satisfaction or, if permissible, waiver of the conditions set forth in Article VI but in no event later than the third business day following such satisfaction or waiver (unless another date is agreed to by each of the parties in writing), the Company, Merger Sub and the Parent will cause a Certificate of Merger (the "Certificate of Merger") to be signed, acknowledged and delivered for filing --------------------- with the Secretary of State of the State of Delaware as provided in Section 251 of the DGCL. The Merger shall become effective at the time when a Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or such other subsequent date or time as shall be agreed upon by the parties 2 and set forth in the Certificate of Merger and in accordance with the DGCL (the "Effective Time"). -------------- Section 1.3 Closing. Subject to the satisfaction or waiver of all of the conditions to closing contained in Article VI hereof, the closing of the Merger (the"Closing") shall take place (a) at the offices of Paul, Weiss, ------- Rifkind, Wharton & Garrison, New York, New York at 12:00 (noon, New York time) on the third business day after the day on which the last to be fulfilled or waived of such conditions (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions) shall be satisfied or waived in accordance with this Agreement or (b) at such other place and time or on such other date as the Company and the Parent may agree in writing (the "Closing Date"). ------------ Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in the DGCL, including Section 259 of the DGCL, and in accordance therewith, at the Effective Time, all the properties, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Corporation. Section 1.5 The Certificate of Incorporation. The certificate of incorporation of Merger Sub in effect immediately prior to the Effective Time shall, from and after the Effective Time, be the certificate of incorporation of the Surviving Corporation until duly amended as provided therein or by applicable law; provided, however, that at the Effective Time, the certificate of incorporation of the Surviving Corporation shall be amended so that the name of the Surviving Corporation shall be "Blaze Software, Inc." Section 1.6 The By-Laws. The by-laws of Merger Sub in effect immediately prior to the Effective Time shall, from and after the Effective Time, be the by-laws of the Surviving Corporation until duly amended as provided therein or by applicable law. Section 1.7 Directors of Surviving Corporation. The directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be the directors of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Certificate of Incorporation and by-laws of the Surviving Corporation. Section 1.8 Officers of Surviving Corporation. The officers of the Company at the Effective Time shall, from and after the Effective Time, be the officers of the Surviving Corporation until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and by-laws of the Surviving Corporation. 3 ARTICLE II EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES Section 2.1 Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the holder of any capital stock of the Company: (a) Capital Stock of Merger Sub. Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.0001 per share, of the Surviving Corporation ("Surviving Corporation Common Stock"). ---------------------------------- (b) Cancellation of Treasury Stock and Parent-Owned Stock. All shares of Company Common Stock that are owned by the Company as treasury stock or by the Parent, Merger Sub or any Parent Subsidiary issued and outstanding immediately prior to the Effective Time shall, by virtue of the Merger and without any action on the part of the holder of any such shares, no longer be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist; provided, however, that all shares of Company Common Stock that are owned by any trust established pursuant to Section 2.6 hereof shall remain issued and outstanding and the holders thereof shall be entitled to the Merger Consideration. (c) Exchange Ratio. Each share of the common stock, par value $0.0001 per share, of the Company (the "Company Common Stock") issued and -------------------- outstanding immediately prior to the Effective Time (other than shares of Company Common Stock that are owned by the Company as treasury stock or by the Parent or any Parent Subsidiary) shall be converted into the right to receive (the "Exchange Ratio") 0.3652 American Depositary Shares of the Parent ("Parent -------------- ------ ADSs"), each representing 0.5 shares (stuckaktien) of the Parent ("Parent Common - ---- ------------- Stock"), subject to adjustment as provided in Section 2.4 and subject to cash in - ----- lieu of fractional Parent ADSs, if any, pursuant to Section 2.2(f) (collectively, the "Merger Consideration"). At the Effective Time, all shares of -------------------- Company Common Stock shall no longer be outstanding, shall be canceled and retired and shall cease to exist, and each certificate (a "Certificate") ----------- formerly representing any Shares of Company Common Stock (other than shares of Company Common Stock owned by the Company or by the Parent, Merger Sub or any Parent Subsidiary) shall thereafter represent only the right to receive the Merger Consideration and any distribution or dividend under Section 2.2(c) in each case without interest. 4 Section 2.2 Exchange of Certificates. (a) The Share Exchange. Consistent with the terms of this Agreement, as soon as practicable following the signing of this Agreement and in no event later than five business days following the Effective Time (unless otherwise agreed to by each of the parties in writing): (i) the Parent shall issue the Parent Common Stock underlying the Parent ADSs to be issued on behalf of the Parent in connection with the Merger and cause American Depositary Receipts ("ADRs") representing ---- Parent ADSs representing such Parent Common Stock (such Parent ADSs, together with any dividends or distributions with respect thereto to which the holders of Certificates may be entitled pursuant to Section 2.2(c) and with the proceeds held in the Exchange Trust, being hereinafter referred to as the "Exchange -------- Fund") to be delivered to the Exchange Agent, for the benefit of the holders of - ---- Certificates, for exchange in accordance with this Article II, through the Exchange Agent, issuable pursuant to Section 2.1(c) in exchange for outstanding shares of Company Common Stock; and (ii) the Exchange Agent shall contribute, on behalf of the former stockholders of the Company, all of the issued and outstanding shares of Surviving Corporation Common Stock to the Parent as a contribution in kind (the "Share Exchange"). -------------- Subject to Section 5.20, the Share Exchange shall be effected in accordance with Sections 52, 203, 185 et seq. (including in particular Section 187) of the German Stock Corporation Law (Aktiengesetz), in each case to the extent each such provision may be applicable, by registering the increase of the Parent stated share capital by contribution-in-kind (the "Share Capital ------------- Increase") with the commercial register (Handelsregister) for the Parent. At - -------- the Effective Time, the obligation of the parties to effect the Share Exchange shall be unconditional. (b) Exchange Procedures. Promptly after the Effective Time, and in no event later than five business days thereafter (unless otherwise agreed to by each of the parties in writing), the Surviving Corporation shall cause the Exchange Agent to mail to each holder of record of a Certificate (other than the Company, the Parent, Merger Sub or any Parent Subsidiary) (i) a letter of transmittal specifying that delivery shall be effected, and that risk of loss and title to the Certificates shall pass, only upon proper delivery of the Certificates (or affidavits of loss in lieu of Certificates) to the Exchange Agent, in a form and with other customary provisions reasonably specified by the Parent and the Company, and (ii) instructions for surrendering the Certificates to the Exchange Agent in exchange for (A) an ADR representing the number of whole Parent ADSs pursuant to Section 2.2(f), (B) cash in lieu of any fractional Parent ADSs, and (C) any unpaid dividends and other distributions (if any) pursuant to Section 2.2(c). Upon surrender of a Certificate for cancellation to the Exchange Agent together with such 5 letter of transmittal, duly executed, the holder of that Certificate shall be entitled to receive in exchange (1) an ADR representing that number of whole Parent ADSs that the holder is entitled to receive under this Article II, (2) a check in the amount (after giving effect to any required tax withholding) of (x) any cash in lieu of fractional Parent ADSs plus (y) any unpaid dividends (other than stock dividends) and any other dividends or other distributions that such holder has the right to receive under the provisions of this Article II (if any), and the Certificate so surrendered shall immediately be canceled. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates. In the event of a transfer of ownership of shares of Company Common Stock that is not registered in the transfer records of the Company, an ADR representing the proper number of Parent ADSs, together with a check for any cash to be paid upon the surrender of the Certificate and any other dividends or distributions (if any) in respect of those shares, may be issued or paid to such a transferee if the Certificate formerly representing such Shares of Company Common Stock is presented to the Exchange Agent, accompanied by all documents required to evidence and effect the transfer and to evidence that any applicable stock transfer taxes have been paid. If any ADRs for shares of Parent ADSs is to be issued in a name other than that in which the surrendered Certificate is registered, it shall be a condition of such exchange that the person requesting such exchange shall pay any transfer or other taxes required by reason of the issuance of certificates for shares of Parent Common Stock in a name other than that of the registered holder of the surrendered Certificate, or shall establish to the satisfaction of the Parent or the Exchange Agent that such tax has been paid or is not applicable. (c) Distributions with Respect to Unexchanged Company Common Stock. Whenever a dividend or other distribution is declared by the Parent in respect of Parent Common Stock and the record date for that dividend or other distribution is at or after the Effective Time, that declaration shall include dividends or other distributions in respect of all ADSs issuable under this Agreement. No dividends or other distributions in respect of the Parent ADSs shall be paid to any holder of any unsurrendered Certificate until that Certificate is surrendered for exchange in accordance with this Article II. Subject to the effect of applicable laws, following surrender of any such Certificate, there shall be issued or paid to the holder of the ADRs representing whole shares of Parent ADSs issued in exchange therefor, without interest, (i) at the time of such surrender, the dividends or other distributions with a record date at or after the Effective Time and a payment date on or prior to the date of issuance of such whole Parent ADSs and not previously paid, and (ii) at the appropriate payment date, the dividends or other distributions payable with respect to such whole shares of Parent Common Stock with a record date at or after the Effective Time but with a payment date subsequent to surrender. For purposes of dividends or other distributions in respect of Parent ADSs, all Parent ADSs to be issued pursuant to the Merger shall be deemed issued and outstanding as of the Effective Time. (d) No Further Ownership Rights in Company Common Stock. Until surrendered as contemplated by this Section 2.2, each Certificate shall be 6 deemed at any time after the Effective Time to represent only the right to receive the ADR representing Parent ADSs and cash in lieu of any fractional Parent ADSs, as contemplated by this Section 2.2. All Parent ADSs, together with any cash paid under Section 2.2(c) or Section 2.2(f) issued upon the surrender for or exchange of Certificates in accordance with the terms of this Agreement, shall be deemed to have been issued in full satisfaction of all rights pertaining to the shares of Company Common Stock formerly represented by such Certificates. (e) No Further Transfers. After the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the records of the Company of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. (f) Fractional Shares. (i) No ADRs representing fractional Parent ADSs shall be issued upon the surrender for exchange of Certificates, and such fractional interest will not entitle its owner to receive dividends or to any other rights of a holder of Parent ADSs. Notwithstanding any other provision of this Agreement, each holder of shares of Company Common Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a Parent ADS (after taking into account all Certificates delivered by such holder) shall receive from the Exchange Agent, in accordance with the provisions of this Article II, a cash payment in lieu of such fractional Parent ADS, as applicable, representing such holder's proportionate interest, if any, in the net proceeds from the sale by the Exchange Agent in one or more transactions (which sale transactions shall be made at such times, in such manner and on such terms as the Exchange Agent shall determine in its reasonable discretion) on behalf of all such holders of the aggregate of the fractional Parent ADSs, as applicable, which would otherwise have been issued (the "Excess Parent ADSs"). The sale of ------------------ the Excess Parent ADSs by the Exchange Agent shall be executed on the Nasdaq National Market, at such time the Parent ADSs are quoted on the Nasdaq National Market, and shall be executed in round lots to the extent practicable. Until the net proceeds of such sale or sales have been distributed to the holders of Certificates, the Exchange Agent will hold such proceeds in trust (the "Exchange -------- Trust") for the holders of Certificates. All commissions, transfer taxes and - ----- other out-of-pocket transaction costs, including the expenses and compensation of the Exchange Agent, incurred in connection with this sale of the Excess Parent ADSs shall be paid by the Parent. As soon as practicable after the determination of the amount of cash, if any, to be paid to holders of Certificates in lieu of any fractional shares of Parent ADSs, the Exchange Agent shall make available such amounts to such holders of Certificates without interest. The Exchange Agent shall determine the portion of such net proceeds to which each holder of shares of Company Common Stock shall be entitled, if any, by multiplying the amount of the aggregate net proceeds by a fraction the numerator of which is the amount of the fractional share interest to which such holder of shares of Company Common Stock is entitled (after taking into account all shares of Company 7 Common Stock then held by such holder) and the denominator of which is the aggregate amount of fractional interests to which all holders of Certificates representing shares of Company Common Stock are entitled. (ii) Notwithstanding the provisions of subsection (i) of this Section 2.2(f), the Parent may elect, at its option exercised prior to the Effective Time and in lieu of the issuance and sale of Excess Parent ADSs and the making of the payments contemplated in such subsection, to pay to the Exchange Agent an amount in cash sufficient for the Exchange Agent to pay each holder of shares of Company Common Stock an amount in cash equal to the product obtained by multiplying (A) the fractional interest to which such holder would otherwise be entitled (after taking into account all shares of Company Common Stock held at the Effective Time by such holder) by (B) the closing price for a share of Parent ADSs on the Nasdaq National Market (or, if there is not yet a closing price for Parent ADSs on such market, the closing price for the Parent Common Stock underlying such Parent ADS on the Neuer Market (as defined in Section 4.6)) on the first business day immediately following the Effective Time and, in such case, all references in this Agreement to the cash proceeds of the sale of the Excess Shares and similar references shall be deemed to mean and refer to the payments calculated as set forth in this Section 2.2(f)(ii). (g) Termination of Exchange Fund. Any Parent ADSs and any portion of the Exchange Fund or of dividends or other distributions with respect to the Parent ADSs deposited by the Parent with the Exchange Agent (including the proceeds of any investments of those funds) that remains unclaimed by the former stockholders of the Company within one year after the Effective Time shall be delivered by the Exchange Agent to a depositary bank deposited by the Parent, upon demand, whereupon such depositary bank shall hold the Exchange Fund on behalf of holders of unsurrendered Certificates, and any former stockholders of the Company who have not theretofore complied with this Article II shall thereafter look only to such depositary bank for payment of their claim for Merger Consideration and any dividends and other distributions issuable or payable pursuant to Section 2.1 and Section 2.2(c) upon due surrender of their Certificates (or affidavits of loss in lieu of Certificates), in each case, without any interest and the Parent shall cause the depositary bank to satisfy such claim. Notwithstanding the foregoing, none of the Parent, the Surviving Corporation, the Exchange Agent, the depositary bank or any other person shall be liable to any former holder of shares of Company Common Stock for any amount properly delivered to a public official under applicable abandoned property, escheat or similar laws. (h) Lost, Stolen or Destroyed Certificates. In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and the posting by such person of a bond in the form customarily required by the Parent as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate 8 the Parent ADSs, any unpaid dividends or other distributions and any cash payment in lieu of a fractional share in respect of that Certificate issuable or payable under this Article II upon due surrender thereof and deliverable in respect of the shares of Company Common Stock represented by such Certificate under this Agreement, in each case, without interest. (i) No Liability. None of the Parent, the Surviving Corporation or the Exchange Agent shall be liable to any person in respect of any Parent ADSs, any dividends or distributions with respect to Parent ADSs or any cash from the Exchange Fund, in each case properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Section 2.3 No Appraisal Rights. In accordance with Section 262(b)(1) of the DGCL, no appraisal rights shall be available to holders of shares of Company Common Stock in connection with the Merger. Section 2.4 Adjustments to Prevent Dilution. In the event that prior to the Effective Time there is a change in the number of shares of Company Common Stock or shares of Parent Common Stock or securities convertible or exchangeable into or exercisable for shares of Company Common Stock or shares of Parent Common Stock issued and outstanding as a result of a distribution, reclassification, stock split (including a reverse stock split), stock dividend or distribution or other similar transaction, the Exchange Ratio shall be equitably adjusted to eliminate the effects of that event. Section 2.5 Withholding Rights. Each of the Exchange Agent and Parent shall be entitled to deduct and withhold from any amounts otherwise payable pursuant to this Agreement to any holder of a Certificate such amounts as it is required to deduct and withhold with respect to the making of such payment under the Code, or any provisions of Law (as defined in Section 3.5(a)(ii) hereof). To the extent that amounts are so withheld by the Exchange Agent or the Parent, as the case may be, such withheld amounts shall be treated for purposes of this Agreement as having been paid to the holder of a Certificate in respect to which such deduction and withholding was made by the Exchange Agent or Parent, as the case may be. Section 2.6 Treatment of Stock Options/Restricted Stock. (a) On June 14, 2000, the Company established a trust, which trust was funded by the Company promptly after its establishment with shares of the Company Common Stock in order to satisfy the obligations of the Company under the outstanding Company Stock Options and the outstanding Company Warrants (as defined in Section 2.7(a)) (the "Trust"). Prior to the Effective Time, the ----- Company shall issue and deliver to the Trust such number of shares of Company Common Stock to satisfy the obligations under all outstanding Company Stock Options immediately prior to the Effective Time. 9 (b) Each Company Stock Option granted prior to the Effective Time and which remains outstanding immediately prior to the Effective Time shall cease to represent a right to acquire shares of Company Common Stock and shall be converted, at the Effective Time, into an option to acquire from the Trust, on the same terms and conditions as were applicable under the Company Stock Option (but taking into account any changes thereto, except for any acceleration thereof, by reason of this Agreement or the transactions contemplated hereby as may be provided for in the Company's Option Plans, in any award agreement or in such option), that number of Parent ADSs determined by multiplying the number of shares of Company Common Stock subject to such Company Stock Option by the Exchange Ratio, rounded, if necessary, to the nearest whole Parent ADS, at a price per share (rounded to the nearest one-hundredth of a cent) equal to the per share exercise price specified in such Company Stock Option divided by the Exchange Ratio; provided, however, that in the case of any Company Stock Option to which Section 421 of the Code applies by reason of its qualification under Section 422 of the Code, the option price, the number of shares subject to such option and the terms and conditions of exercise of such option shall be determined in a manner consistent with the requirements of Section 424(a) of the Code.46 (c) At the Effective Time, each right of the Company to repurchase shares of Company Common Stock from optionees pursuant to the Company's Option Plans ("Repurchase Right") shall be assigned to the Trust, and ---------------- shall apply to the Parent ADSs received in exchange for the shares of Company Common Stock pursuant to Section 2.2 hereof, on the same terms and conditions as were applicable under the Company's Option Plans (but taking into account any changes thereto, except for any acceleration thereof, by reason of this Agreement or the transactions contemplated hereby as may be provided for in the Company's Option Plans, in any award agreement or in such option). Prior to the Effective Time, the Company shall obtain from holders of the shares of Company Common Stock subject to Repurchase Rights (such shares being referred to as "Company Restricted Stock" waivers (as may be reasonably requested by the Parent ------------------------ and in the form reasonably satisfactory to the Parent) waiving any and all rights to accelerate the vesting of the shares of Company Common Stock. (d) Prior to the Effective Time, the Company shall (i) cause the plan administrator of each of the Company's Option Plans to determine that the adjustments pursuant to this Section 2.6 are sufficient to not cause any vesting in connection with the Merger, and (ii) deliver to the holders of Company Stock Options and Company Restricted Stock appropriate notices setting forth such holders' rights (including that (A) such Company Stock Options or Company Restricted Stock have not accelerated in connection with the Merger, and (B) the Trust shall satisfy the obligations under the Company Stock Options) and the agreements evidencing the grants of such Company Stock Options shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.6). 10 (e) No later than 15 business days following the Effective Time, the Parent shall file a registration statement on Form S-8 (or any successor or other appropriate forms), with respect to the Parent ADSs subject to such Company Stock Options or shares of Company Restricted Stock and shall use commercially reasonable efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as such Company Stock Options or shares of Company Restricted Stock remain outstanding. Section 2.7 Treatment of Warrants. (a) Each warrant to purchase shares of Company Common Stock ("Company Warrant") granted prior to the Effective Time and which remains --------------- outstanding immediately prior to the Effective Time shall cease to represent a right to acquire shares of Company Common Stock and shall be converted, at the Effective Time, into a warrant to acquire from the Trust, on the same terms and conditions as were applicable under the Company Warrants, that number of shares of Parent ADSs determined by multiplying the number of shares of Company Common Stock subject to such Company Warrant by the Exchange Ratio, rounded, if necessary, to the nearest whole Parent ADS, at a price per share (rounded to the nearest one-hundredth of a cent) equal to the per share exercise price specified in such Company Warrant divided by the Exchange Ratio. As soon as practicable after the Effective Time, the Parent shall deliver to the holders of Company Warrants appropriate notices setting forth such holders' rights and the agreements evidencing the grants of such Company Warrants shall continue in effect on the same terms and conditions. (b) Prior to the Effective Time, the Company shall deliver to the holders of Company Warrants appropriate notices setting forth such holders' rights (including that the Trust shall satisfy the obligations under the Company Warrants) and the agreements evidencing the grants of such Company Warrants shall continue in effect on the same terms and conditions (subject to the adjustments required by this Section 2.7). ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to the Parent, subject to such exceptions or qualifications to specific representations and warranties as are disclosed in writing in the disclosure letter previously delivered by the Company to the Parent (the "Company Disclosure Letter"), that: ------------------------- Section 3.1 Organization and Qualification; Subsidiaries. 11 (a) Each of the Company and each subsidiary of the Company (collectively, the "Company Subsidiaries") has been duly organized and is -------------------- validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, as the case may be, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted. Each of the Company and each Company Subsidiary is duly qualified or licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that, individually or in the aggregate, have no Material Adverse Effect on the Company. For purposes of this Agreement, "Material Adverse Effect on the Company" means any state of affairs -------------------------------------- or change that has had, or will have, a material adverse effect on the business, assets, properties, results of operations or condition (financial or otherwise) of the Company and the Company Subsidiaries, taken as a whole, or that has materially impaired or will materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement, except that none of the following shall be deemed in themselves to constitute a Material Adverse Effect on the Company: (i) any change in the market price or trading volume of the Company Common Stock after the date hereof, (ii) any change in general economic conditions, (iii) any adverse change affecting the e-commerce industry generally, and (iv) transaction costs, taxes, accounting changes, integration costs and other effects that result directly from the announcement or consummation of the transactions contemplated by this Agreement. (b) Section 3.1(b) of the Company Disclosure Letter sets forth a complete and correct list of all of the Company Subsidiaries, their jurisdiction of organization and the ownership or other interest therein of the Company and of each other Company Subsidiary. Neither the Company nor any Company Subsidiary holds any interest in any person other than the Company Subsidiaries so listed. Section 3.2 Certificate of Incorporation and By-Laws. The copies of the Company's certificate of incorporation and by-laws, each as amended through the date of this Agreement that are filed as exhibits to the Company's registration statement on Form S-1 (Registration No. 333-94549) are complete and correct copies of those documents. Such certificate of incorporation and by-laws and all comparable organizational documents of the Company Subsidiaries are in full force and effect. The Company is not in violation of any of the provisions of such certificate of incorporation or by-laws. Section 3.3 Capitalization. (a) The authorized capital stock of the Company consists of (i) 200,000,000 shares of Company Common Stock and (ii) 10,000,000 shares of 12 undesignated preferred stock, $0.0001 par value (the "Company Preferred Stock"). ----------------------- As of May 31, 2000 (i) 22,624,834 shares of Company Common Stock were issued and outstanding (of which 680,891 shares were subject to repurchase rights/options and shall be deemed to be Company Restricted Stock for purposes of this Agreement and treated pursuant to Section 2.6 hereof), all of which were validly issued and are fully paid, non-assessable and not subject to preemptive rights, (ii) no shares of Company Common Stock were held in the treasury of the Company or by the Company Subsidiaries, (iii) 4,719,424 shares of Company Common Stock were reserved for issuance upon exercise of outstanding Company Stock Options, (iv) an additional 813,059 shares of Company Common Stock were reserved for grants of additional Company Stock Options pursuant to the Company's 1996 Stock Option Plan and 2000 Stock Option Plan, (v) 750,000 shares of Company Common Stock were reserved for issuance pursuant to the Company's 2000 Employee Stock Purchase Plan, and (vi) 1,005 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding Warrants. Except as set forth above, as of May 31, 2000, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding and, since such date, no shares of capital stock or other voting securities or options in respect thereof have been issued except upon the exercise of the Company Stock Options outstanding on such date. (b) Between May 31, 2000 and the date of this Agreement, (i) an aggregate of 31,500 options to purchase shares of Company Common Stock ("Company ------- Stock Options") have been granted by the Company under the Company's 1996 Stock - ------------- Option Plan and the Company's 2000 Stock Option Plan (collectively, the "Company's Option Plans"), and (ii) no shares of Company Common Stock vested ---------------------- pursuant to the Company's Option Plans and are not subject to any repurchase options/rights. Except for (i) Company Stock Options to purchase an aggregate of 5,782,483 shares of Company Common Stock outstanding or available for grant to the extent permitted under Section 5.1(b) hereof under the Company's Option Plans, (ii) the Warrants to purchase 1,005 shares of Company Common Stock or (iii) under agreements or arrangements described in Section 3.3(b) of the Company Disclosure Letter, there are no options, warrants, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights or other rights, agreements, arrangements or commitments of any character to which the Company is a party or by which the Company is bound relating to the issued or unissued capital stock of the Company or any Company Subsidiary or obligating the Company or any Company Subsidiary to issue or sell any shares of capital stock of, other equity interests in, or securities exchangeable for or convertible into capital stock or other equity interests in, the Company or any Company Subsidiary. Section 3.3(b) of the Company Disclosure Letter sets forth, as of the date of this Agreement, (x) the persons to whom Company Stock Options have been granted and the persons who hold Company Restricted Stock, (y) the exercise price for the Company Stock Options held by each such person and (z) whether such Company Stock Options (or Company Restricted Stock issued upon exercise of any Company Stock Options) are subject to vesting and, if subject to vesting, the dates on which each of those Company 13 Stock Options (or Company Restricted Stock issued upon exercise of any Company Stock Options) vest. None of the Company Stock Options or Company Restricted Stock which are subject to vesting will vest as a result of the consummation of the Merger and the transactions contemplated by this Agreement. (c) All shares of Company Common Stock subject to issuance, upon issuance prior to the Effective Time on the terms and conditions specified in the instruments under which they are issuable, will be duly authorized, validly issued, fully paid, nonassessable and will not be subject to preemptive rights. There are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any shares of Company Common Stock or any capital stock of any Company Subsidiary. Each outstanding share of capital stock of each Company Subsidiary is duly authorized, validly issued, fully paid, nonassessable and not subject to preemptive rights and each such share owned by the Company or a Company Subsidiary is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Company's or such other Company Subsidiary's voting rights, charges and other encumbrances of any nature whatsoever (collectively, "Liens"). There are no outstanding material contractual ----- obligations of the Company or any Company Subsidiary to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Company Subsidiary that is not wholly owned by the Company or in any other person. Section 3.4 Authority. (a) The Company has all necessary corporate power and authority to execute and deliver this Agreement and, subject to adoption of this Agreement by the affirmative vote by a majority of the holders of the outstanding Company Common Stock (the "Requisite Company Vote"), to perform its obligations under ---------------------- this Agreement and to consummate the Merger and the other transactions contemplated by this Agreement to be consummated by the Company. The execution and delivery of this Agreement by the Company and the consummation by the Company of such transactions have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate such transactions, other than, with respect to the Merger, the adoption of this Agreement by the Requisite Company Vote. This Agreement has been duly authorized and validly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. (b) The Board of Directors of the Company (i) has unanimously adopted the plan of merger set forth in this Agreement and approved this Agreement and the other transactions contemplated by this Agreement and (ii) has declared that the Merger and this Agreement and the other transactions contemplated by this Agreement are advisable. 14 Section 3.5 No Conflict. (a) The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not: (i) conflict with or violate any provision of the Company's certificate of incorporation or by-laws or any comparable organizational documents of any Company Subsidiary; (ii) assuming that all consents, approvals, authorizations and other actions described in Section 3.6 have been obtained and all filings and obligations described in Section 3.6 have been made, conflict with or violate any foreign or domestic law, statute, ordinance, rule, regulation, order, judgment or decree ("Law") applicable to the Company or any Company --- Subsidiary or by which any property or asset of the Company or any Company Subsidiary is or may be bound or affected; or (iii) result in any breach of or constitute a default (or an event which with or without notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of the Company or any Company Subsidiary under any note, bond, mortgage, indenture, contract, agreement, commitment, lease, license, permit, franchise or other instrument or obligation (collectively, "Contracts") --------- to which the Company or any Company Subsidiary is a party or by which any of them or their assets or properties is or may be bound or affected, except for any such breaches, defaults or other occurrences which, individually or in the aggregate, have no Material Adverse Effect on the Company. (b) Section 3.5(b) of the Company Disclosure Letter sets forth a list of all Contracts to which the Company or any Company Subsidiaries are a party or by which they or their assets or properties are or may be bound or affected under which consents or waivers are or may be required prior to consummation of the transactions contemplated by this Agreement, except for those Contracts under which the Company's failure to obtain the required consents or waivers, individually or in the aggregate, would not result in a Material Adverse Effect on the Company. Section 3.6 Required Filings and Consents. The execution and delivery of this Agreement by the Company do not, and the performance of this Agreement by the Company will not, require any consent, approval, authorization or permit of, or filing with or notification to, any domestic or foreign national, federal, state, provincial or local governmental, regulatory or administrative authority, agency, commission, court, tribunal or arbitral body or self- regulated entity (each, a "Governmental Entity"), except (i) for applicable ------------------- requirements of the United States Securities Exchange Act of 1934 as amended (together with the rules and regulations 15 promulgated thereunder, the "Exchange Act"), applicable requirements of the ------------ United States Securities Act of 1933, as amended (together with the rules and regulations promulgated thereunder, the "Securities Act"), applicable -------------- requirements of state securities or "blue sky" laws ("Blue Sky Laws"), the rules ------------- and regulations of the Nasdaq National Market, applicable requirements of Takeover Statutes, the pre-merger notification requirements of the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder (the "HSR Act"), for the filing of the ------- Certificate of Merger as required by the DGCL and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually or in the aggregate, would have no Material Adverse Effect on the Company. Section 3.7 Permits; Compliance with Law. Each of the Company and the Company Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company or any Company Subsidiary to own, lease and operate its properties or to carry on its business as it is now being conducted (collectively, the "Company Permits"), --------------- except where the failure to have, or the suspension or cancellation of, any of the Company Permits, individually or in the aggregate, has no Material Adverse Effect on the Company, and, as of the date of this Agreement, no suspension or cancellation of any of the Company Permits is pending or, to the knowledge of the Company, threatened, except where the failure to have, or the suspension or cancellation of, any of the Company Permits, individually or in the aggregate, has no Material Adverse Effect on the Company. Neither the Company nor any Company Subsidiary is in conflict with, or in default or violation of, (i) any Law applicable to the Company or any Company Subsidiary or by which any property or asset of the Company or any Company Subsidiary is or may be bound or affected or (ii) any Company Permits, except for any such conflicts, defaults or violations that, individually or in the aggregate, have no Material Adverse Effect on the Company. Section 3.8 SEC Filings; Financial Statements. (a) Prior to March 23, 2000, the Company was not subject to the periodic reporting requirements of the Exchange Act or was otherwise required to file any documents with the SEC or any national securities exchange or quotation service or comparable Governmental Entity. The Company has filed all forms, reports, schedules, statements and other documents (including all exhibits, annexes, supplements and amendments to such documents) required to be filed by it under the Exchange Act and the Securities Act since January 12, 2000 (collectively, including any such documents filed subsequent to the date of this Agreement, the "Company SEC Reports") and the Company has made available to the ------------------- Parent each Company SEC Report filed with the United States Securities and Exchange Commission (the "SEC"). The Company SEC Reports, including any financial statements or schedules included or incorporated therein by reference, at the time they were filed, (i) complied in all material respects with the requirements of the Exchange Act or the Securities Act or both, as the case may be, 16 applicable to those Company SEC Reports and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated or necessary in order to make the statements made in those Company SEC Reports, in the light of the circumstances under which they were made, not misleading. No Company Subsidiary is subject to the periodic reporting requirements of the Exchange Act or is otherwise required to file any documents with the SEC or any national securities exchange or quotation service or comparable Governmental Entity. (b) Each of the consolidated balance sheets included in or incorporated by reference into the Company SEC Reports (including the related notes and schedules) fairly presented, in all material respects, the consolidated financial position of the Company as of the dates set forth in those consolidated balance sheets. Each of the consolidated statements of income and of cash flows included in or incorporated by reference into the Company SEC Reports (including any related notes and schedules) fairly presented, in all material respects, the consolidated results of operations and cash flows, as the case may be, of the Company and the consolidated Company Subsidiaries for the periods set forth in those consolidated statements of income and of cash flows (subject, in the case of unaudited quarterly statements, to notes and normal year-end audit adjustments that will not be material in amount or effect), in each case in conformity with United States generally accepted accounting principles ("U.S. GAAP") (except, in the case of --------- unaudited quarterly statements, as permitted by Form 10-Q of the SEC) consistently applied throughout the periods indicated. All of such balance sheets and statements complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. (c) The consolidated balance sheet as of March 31, 2000 provided by the Company to the Parent (including the related notes and schedules) fairly presented, in all material respects, the consolidated financial position of the Company as of such date. The consolidated statement of income and of cash flows for the year ended March 31, 2000 provided by the Company to the Parent (including the related notes and schedules) fairly presented, in all material respects, the consolidated results of operations and cash flows, as the case may be, of the Company and the consolidated Company Subsidiaries for such period, in conformity with U.S. GAAP consistently applied with previous periods. All of such balance sheets and statements comply as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto. (d) Except as and to the extent set forth on the consolidated balance sheet of the Company and the consolidated Company Subsidiaries as of March 31, 2000 including the related notes, neither the Company nor any Company Subsidiary has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in the related notes prepared in accordance with U.S. GAAP, except for liabilities or obligations incurred in 17 the ordinary course of business that, individually or in the aggregate, have no Material Adverse Effect on the Company. Section 3.9 Absence of Certain Changes or Events. (a) Since March 31, 2000, the Company and the Company Subsidiaries have conducted their businesses only in the ordinary course and, since such date, there has not been any Material Adverse Effect on the Company. (b) Except as set forth in Section 3.9(b) of the Company Disclosure Letter, or except as disclosed in the Company SEC Reports filed with the SEC since March 23, 2000 and which have been filed and are publicly available prior to the date of this Agreement (the "Company Filed SEC Reports") ------------------------- and except as permitted pursuant to Section 5.1, since March 31, 2000, there has not been: (i) any damage, destruction or other casualty loss with respect to any asset or property owned, leased or otherwise used by it or any Company Subsidiaries, whether or not covered by insurance, which damage, destruction or loss, individually or in the aggregate, has a Material Adverse Effect on the Company; (ii) any material change by the Company in its or any Company Subsidiary's accounting methods, principles or practices, except as required by U.S. GAAP and disclosed in Section 3.9(b) of the Company Disclosure Letter; (iii) any declaration, setting aside or payment of any dividend or distribution in respect of Shares of Company Common Stock or any redemption, purchase or other acquisition of any of the Company's securities other than the repurchase at cost of unvested shares held by employees of the Company on the termination of their employment; (iv) any increase in the compensation or benefits or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or any other increase in the compensation payable or to become payable to any executive officers of the Company or any Company Subsidiary except as required by applicable Law other than any increase or modification in the ordinary course of business; (v) (A) any incurrence or assumption by the Company or any Company Subsidiary of any indebtedness for borrowed money or (B) any guarantee, endorsement or other incurrence or assumption of material liability (whether directly, contingently or otherwise) by the Company or any Company Subsidiary for the obligations of any other person (other than any wholly owned Company Subsidiary), 18 other than indebtedness of less than U.S. $500,000 in the aggregate in the ordinary course of business; (vi) any creation or assumption by the Company or any Company Subsidiary of any Lien on any material asset of the Company or any Company Subsidiary, other than (i) in the ordinary course of business, or (ii) Liens arising after the date of this Agreement by operation of Law or without the Company's consent, in each case that has no Material Adverse Effect on the Company; (vii) any making of any loan, advance or capital contribution to or investment in any person by the Company or any Company Subsidiary, other than in the ordinary course of business, and not in excess of U.S. $500,000; (viii) (A) any contract or agreement entered into by the Company or any Company Subsidiary on or prior to the date hereof relating to any material acquisition or disposition of any assets or business or (B) any modification, amendment, assignment or termination of or relinquishment by the Company or any Company Subsidiary of any rights under any other Contract (including any insurance policy naming it as a beneficiary or a loss payable payee) that has, individually or in the aggregate, a Material Adverse Effect on the Company other than transactions, commitments, contracts or agreements in the ordinary course of business or those contemplated by this Agreement; (ix) any adverse change in the Company's relationships with its material customers, except for changes that, individually or in the aggregate, have no Material Adverse Effect on the Company. Section 3.10 Employee Benefit Plans; Employee Relations. (a) Section 3.10(a) of the Company Disclosure Letter contains a true and complete list of each "employee benefit plan" (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including multiemployer plans within the meaning of ERISA section ----- 3(37) of ERISA), stock purchase, stock option, severance, employment, change-in- control, fringe benefit, welfare benefit, collective bargaining, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transaction contemplated by this Agreement or otherwise), whether formal or informal, oral or written, legally binding or not, under which any employee or former employee of the Company has any present or future right to benefits or under which the Company has any present or future liability. All such plans, agreements, programs, policies and arrangements shall be collectively referred to as the "Benefit Plans." Where appropriate all ------------- references to the "Company" in this Section 3.10 shall refer to the Company and any member of its "controlled group" within the meaning of Section 414 of the Code. 19 (b) The Company has, with respect to each Benefit Plan, if applicable, delivered or made available to the Parent true and complete copies of: (i) all plan texts and agreements and related trust agreements (or other funding vehicles); (ii) the most recent summary plan descriptions and material employee communications; (iii) the most recent annual report (including all schedules thereto); (iv) the most recent annual audited financial statement and opinion; (v) if the plan is intended to qualify under Section 401(a) of the Code, the most recent determination letter received from the Internal Revenue Service; and (vi) all material communications with any Governmental Entity (including the Pension Benefit Guaranty Corporation and the Internal Revenue Service) given or received within the past three years. (c) Except as set forth on Section 3.10(c) of the Company Disclosure Letter, all amounts properly accrued as liabilities to or expenses of any Benefit Plan have been properly reflected on the Company's most recent financial statements to the extent required by U.S. GAAP. Since December 31, 1998, there has been no amendment or change in interpretation by the Company relating to any Benefit Plan which would materially increase the cost thereof. (d) No Benefit Plan is subject to either Section 412 of the Code or Title IV of ERISA. (e) Each Benefit Plan is in material compliance with all applicable laws and regulations. Each Benefit Plan which is intended to qualify under Section 401(a) of the Code has been issued a favorable determination, opinion, notification or advisory letter by the Internal Revenue Service and has not been amended in a manner, and no event has occurred since such date, which would cause any such plan to fail to remain so qualified. Each Benefit Plan that requires registration with a relevant Governmental Entity has been so registered. (f) Except as set forth on Section 3.10(f) of the Company Disclosure Letter, there are no actions, liens, suits or Claims pending or threatened (other than routine claims for benefits) with respect to any Benefit Plan as to which the Company has or could reasonably be expected to have any direct or indirect actual or contingent material liability. (g) Each Benefit Plan which is a "group health plan" (as defined in Section 607(1) of ERISA) is in material compliance with the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, the Health Insurance Portability and Accountability Act and any other applicable federal, state or local law. (h) There are no (i) Benefit Plans maintained by the Company pursuant to which welfare benefits are provided to current or former employees beyond their retirement or other termination of service, other than coverage mandated by applicable Law, the cost of which is fully paid by the current or former employees or their 20 dependents; or (ii) unfunded Benefit Plan obligations with respect to any employee of the Company which are not fairly reflected by reserves shown on the Company's financial statements for March 31, 2000. (i) The consummation of the transactions contemplated by this Agreement will not (i) except as disclosed in Section 3.10(i) of the Company Disclosure Letter, entitle any current or former employee of the Company to severance pay, unemployment compensation or any similar payment, (ii) except as disclosed in Section 3.10(i) of the Company Disclosure Letter, accelerate the time of payment or vesting, or increase the amount of any compensation due to, any current or former employee of the Company, or (iii) constitute or involve a prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of the Code), constitute or involve a breach of fiduciary responsibility within the meaning of Section 502(l) of ERISA as to which the Company has or reasonably could be expected to have any direct or indirect actual material liability. (j) No Benefit Plan is a "multiemployer plan" or "multiple employer plan" within the meaning of the Code or ERISA or the regulations promulgated thereunder. (k) Neither the Company nor any Benefit Plan, or to the knowledge of the Company, any "disqualified person" (as defined in Section 4975 of the Code) or any "party in interest" (as defined in Section 3(18) of ERISA), has engaged in any non-exempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which could reasonably be expected to result in any material liability to the Company. (l) None of the employees is represented by a union, and no union organizing efforts have been conducted within the last five years or are now being conducted. The Company does not currently have, nor to knowledge of the Company, is there now threatened, a strike, picket, work stoppage, work slowdown or other organized labor dispute. The Company has not as of the date hereof incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act, as it may have been amended from time to time, or any similar state law. Section 3.11 Accounting and Tax Matters. Neither the Company nor, to the knowledge of the Company, any of its affiliates has taken or agreed to take any action, nor is the Company aware of any agreement, plan or other circumstance, that would prevent the Merger from constituting a transaction qualifying as a reorganization under Section 368(a) of the Code. Section 3.12 Contracts; Debt Instruments. Except for the Contracts filed as exhibits to the Company's Registration Statement on Form S-1 and subsequent Contracts disclosed in Section 3.12 of the Company Disclosure Letter (copies of which have been made available to the Parent), there is no Contract that is material to the business, financial condition or results of operations of the Company and the Company 21 Subsidiaries taken as a whole. Each of the Contracts to which the Company or a Company Subsidiary is a party or by which it or any of its properties or assets is or may be bound or affected, constitutes a valid and legally binding obligation of the Company or such Company Subsidiary and of the other parties thereto, enforceable in accordance with its terms, and is in full force and effect, except to the extent the failure to be so valid, binding or enforceable, individually or in the aggregate, has no Material Adverse Effect on the Company. Neither the Company nor any Company Subsidiary, nor to the Company's knowledge, any other person, is in violation of or in default under (nor does there exist any condition which with the passage of time or the giving of notice would cause such a violation of or default under) any Contract to which the Company or a Company Subsidiary is a party or by which it or any of its properties or assets is or may be bound or affected, except for violations or defaults that, individually or in the aggregate, have no Material Adverse Effect on the Company. Set forth in Section 3.12 of the Company Disclosure Letter is a description of any material changes to the amount and terms of the indebtedness of the Company and the consolidated Company Subsidiaries as described in the notes to the financial statements set forth in the Company's consolidated financial statements for the year ended March 31, 2000 provided by the Company to the Parent prior to the execution of this Agreement. Section 3.13 Litigation. Except as disclosed in Section 3.13 of the Company Disclosure Letter, and except as disclosed in the Company Filed SEC Reports, there is no suit, claim, action, proceeding or investigation (collectively, "Claims") pending or, to the knowledge of the Company, threatened ------ against the Company or any Company Subsidiary before any Governmental Entity that, if adversely determined, individually or in the aggregate, has a Material Adverse Effect on the Company. Neither the Company nor any Company Subsidiary is subject to any outstanding order, writ, injunction or decree which, individually or in the aggregate, has a Material Adverse Effect on the Company. Section 3.14 Environmental Matters. Except as has no Material Adverse Effect on the Company or as disclosed in the Company Filed SEC Reports: (a) the Company and the Company Subsidiaries are and have been in compliance with all applicable Laws relating to pollution, protection of the environment or health and safety ("Environmental Laws"); ------------------ (b) there is no claim pursuant to Environmental Laws or principles of common law relating to pollution, protection of the environment or health and safety (an "Environmental Claim") pending or threatened against the ------------------- Company or any Company Subsidiary; and (c) there is no civil, criminal or administrative judgment or notice of violation outstanding against the Company or any Company Subsidiary pursuant to Environment Laws or principles of common law relating to pollution, protection of the environment or health and safety. 22 Section 3.15 Intellectual Property. (a) For purposes of this Agreement, "Intellectual Property" --------------------- means all of the following as they exist in any jurisdiction throughout the world, in each case, to the extent owned by, licensed to, or otherwise used or held for use by the Company: (i) patents, patent applications and the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights (including any divisions, continuations, continuations- in-part, substitutions, or reissues thereof, whether or not patents are issued on any such applications and whether or not any such applications are amended, modified, withdrawn, or resubmitted) (collectively, "Patents"); ------- (ii) trademarks, service marks, trade dress, trade names, brand names, Internet domain names, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration thereof (collectively, "Trademarks"); ---------- (iii) copyrights, including all renewals and extensions, copyright registrations and applications for registration, and non-registered copyrights (collectively, "Copyrights"); ---------- (iv) trade secrets, confidential business information, concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary rights (whether or not patentable or subject to copyright, trademark, or trade secret protection) (collectively, "Technology"); ---------- (v) computer software programs, including all source code, object code, and documentation related thereto ("Software"); and -------- (vi) all licenses, and sublicenses, and other agreements or permissions related to the property described in Section 3.15(a). (b) Disclosure. (i) Section 3.15(b)(i) of the Company Disclosure Letter sets forth all United States and foreign patents and patent applications, trademark and service mark registrations and applications, Internet domain name registrations and applications, and copyright registrations and applications owned or licensed by the Company or any Company Subsidiary or otherwise used or held for use by the Company or any Company Subsidiary (excluding off-the-shelf software licensed to the Company and licenses or 23 sublicenses that are not material to the business of the Company and the Company Subsidiaries, taken as a whole), specifying as to each item, as applicable: (A) the nature of the item, including the title; (B) the owner of the item; (C) the jurisdictions in which the item is issued or registered or in which an application for issuance or registration has been filed; and (D) the issuance, registration or application numbers and dates. (ii) Section 3.15(b)(ii) of the Company Disclosure Letter sets forth all licenses, sublicenses and other agreements or permissions ("IP Licenses") under which the Company or any Company Subsidiary is a licensee ----------- or otherwise is authorized to use or practice any Intellectual Property other than licenses of off-the-shelf software and licenses or sublicenses that are not material to the business of the Company and the Company Subsidiaries, taken as a whole. (iii) Section 3.15(b)(iii) of the Company Disclosure Letter sets forth and describes the status of any material agreements (including licenses and sublicenses, but excluding off-the-shelf software licensed to the Company) involving Intellectual Property currently in negotiation or proposed ("Proposed Intellectual Property Agreements") by the Company or any Company ----------------------------------------- Subsidiary. (c) Ownership. Except as set forth on Section 3.15(c) of the Company Disclosure Letter, the Company owns, free and clear of all Liens, has valid and enforceable rights in, and has the unrestricted right to use, sell, license, transfer or assign, all Intellectual Property that is material to the business of the Company and the Company Subsidiaries, taken as a whole. (d) Licenses. The Company has a valid and enforceable license to use all Intellectual Property not owned by the Company that is material to the business of the Company and the Company Subsidiaries, taken as a whole. (e) Claims. (i) No claim or action is pending or threatened and the Company does not know of any basis for any claim that challenges the validity, enforceability, ownership, or right to use, sell or license any Intellectual Property, and no item of Intellectual Property is subject to any outstanding order, ruling, decree, stipulation, charge or agreement restricting in any manner the use or the licensing thereof, except for those claims, actions, orders, rulings, decrees, stipulations, charges and agreements which, individually or in the aggregate, have no Material Adverse Effect on the Company. (ii) The Company has not received any notice that it has infringed upon or otherwise violated the intellectual property rights of third parties or received any claim, charge, complaint, demand or notice alleging any such infringement or violation, or knows of any basis for any such claim. 24 (iii) To the knowledge of the Company, no third party is infringing upon or otherwise violating any material Intellectual Property. (iv) The Company's products have been marked as required by the applicable Patent statute and the Company has given the public notice of its Copyrights and notice of its Trademarks as required by the applicable Trademark and Copyright statutes, in each case except to the extent the failure to do so has no Material Adverse Effect on the Company. (f) Administration and Enforcement. The Company has taken all reasonable actions to maintain and protect the Intellectual Property owned by the Company. (g) Protection of Intellectual Property. The Company has taken reasonable precautions to protect the secrecy, confidentiality, and value of its trade secrets and the proprietary nature and value of the Intellectual Property. (h) Software. All Software that is material to the Company's business is described in Section 3.15(h) of the Company Disclosure Letter. The Software performs in material conformance with its documentation and may following the Merger be used by the Surviving Corporation on identical terms and conditions as the Company enjoyed immediately prior to the Merger. (i) Year 2000 Compliance. All Software, hardware, databases and embedded control systems (collectively, the "Systems") used by the Company ------- (i) accurately process date and time data (including calculating, comparing, and sequencing) from, into, and between the twentieth and twenty-first centuries, the years 1999 and 2000, and leap year calculations and (ii) operate accurately with other software and hardware that use standard date format (4 digits) for representation of the year. (j) Employee Breaches. To the Company's knowledge, no employee of the Company or any of the Company Subsidiaries has transferred Intellectual Property or confidential or proprietary information to the Company or any of the Company Subsidiaries or to any third party in violation of any Law or any term of any employment agreement, patent or invention disclosure agreement or other contract or agreement relating to the relationship of such employee with the Company or any of the Company Subsidiaries or any prior employer. (k) Related Parties; Etc. The Company and the Company Subsidiaries do not use any Intellectual Property owned by any director, officer, employee or consultant of the Company. At no time during the conception or reduction to practice of any of the Intellectual Property owned by the Company or any of the Company Subsidiaries was any developer, inventor or other contributor to such Intellectual Property operating under any grants from any Governmental Entity or subject to any employment agreement, invention assignment, nondisclosure agreement or other Contract with any 25 person that could adversely affect the rights of the Company or any of the Company Subsidiaries to any Intellectual Property that is material to the business of the Company and the Company Subsidiaries, taken as a whole. Section 3.16 Taxes. Except to the extent that failure to do so, individually or in the aggregate, has no Material Adverse Effect on the Company, the Company and the Company Subsidiaries have filed all Tax returns and reports to be filed by them and have paid, or established adequate reserves for, all Taxes required to be paid by them. Except as, individually or in the aggregate, has no Material Adverse Effect on the Company, no deficiencies for any Taxes have been proposed, asserted or assessed against the Company or any Company Subsidiaries, and no requests for waivers of the time to assess any such Taxes are pending. As used in this Agreement, "Taxes" shall mean all federal, state, ----- local and foreign income, property, sales, excise and other taxes, tariffs or governmental charges of any nature whatsoever. Section 3.17 Non-Competition Agreements. Neither the Company nor any Company Subsidiary is a party to any Contract which purports to restrict or prohibit in any material respect the Company and the Company Subsidiaries collectively from, directly or indirectly, engaging in any business involving the development, marketing and offering of computer software and the provision of related services currently engaged in by the Company, any Company Subsidiary or any other persons affiliated with the Company. None of the Company's officers, directors or key employees is a party to any agreement which, by virtue of such person's relationship with the Company, restricts in any material respect the Company or any Company Subsidiary or affiliate of either of them from, directly or indirectly, engaging in any of the businesses described above. Section 3.18 Agreements with Regulatory Agencies. Neither the Company nor any of the Company Subsidiaries is subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter from, or has adopted any board resolutions at the request of (each, whether or not listed in Section 3.18 of the Company Disclosure Letter, a "Company Regulatory Agreement"), any ---------------------------- Governmental Entity that restricts the conduct of its business or that in any manner relates to its management or its business, except for any Company Regulatory Agreements that, individually or in the aggregate, have no Material Adverse Effect on the Company or could reasonably be expected, following consummation of the Merger, to impair the Parent's ability to conduct the business of the Surviving Corporation, the Parent or any Parent Subsidiary, as presently conducted. Neither the Company nor any Company Subsidiary has been advised by any Governmental Entity that such Governmental Entity is considering issuing or requesting any Company Regulatory Agreement, except for any such proposed Company Regulatory Agreements that, individually or in the aggregate, has no Material Adverse Effect on the Company. 26 Section 3.19 Opinion of Financial Advisor. Chase Securities, Inc. (the "Company Financial Advisor") has delivered to the Board of Directors of the ------------------------- Company its oral opinion to the effect that, as of the date of this Agreement, the Exchange Ratio is fair to the Company's stockholders from a financial point of view, which opinion was or will promptly after the date of this Agreement be confirmed in writing and accompanied by an authorization to include a copy of such opinion in the Proxy Materials. The Company has delivered or will, promptly after receipt of such written opinion, deliver a signed copy of that written opinion to the Parent. Section 3.20 Brokers. No broker, finder or investment banker other than the Company Financial Advisor is entitled to any brokerage, finder's or other fee or commission in connection with the Merger or the other transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. Prior to the date of this Agreement, the Company has made available to the Parent a complete and correct copy of all agreements between the Company and the Company Financial Advisor under which the Company Financial Advisor would be entitled to any payment relating to the Merger or such other transactions. Section 3.21 Certain Statutes. The Board of Directors of the Company has taken or will take all appropriate and necessary actions to ensure that the restrictions on business combinations in Section 203 of the DGCL will not have any effect on the Merger or the other transactions contemplated by this Agreement. No "fair price," "moratorium," "control share acquisition" or other similar state or federal anti-takeover statute or regulation (each a "Takeover Statute") is, as of the date of this Agreement, applicable to the Merger or such other transactions. Section 3.22 Information. To the best of the Company's knowledge, none of the information to be supplied by the Company for inclusion or incorporation by reference in the Proxy Statement or the Registration Statement will, in the case of the Registration Statement, at the time it becomes effective and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated in that Registration Statement or necessary to make the statements in that Registration Statement not misleading, or, in the case of the Proxy Statement or any amendments of or supplements to the Proxy Statement, at the time of the mailing of the Proxy Statement and any amendments of or supplements to the Proxy Statement and at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated in that Proxy Statement or necessary in order to make the statements in that Proxy Statement, in light of the circumstances under which they are made, not misleading. The Proxy Statement (except for those portions of the Proxy Statement that relate only to the Parent or the Parent Subsidiaries or affiliates of the Parent) will comply as to form in all material respects with the provisions of the Exchange Act. Section 3.23 Vote Required. The Requisite Company Vote is the only vote of the holders of any class or series of the Company's capital stock necessary (under 27 the Company Charter Documents, the DGCL, other applicable Law or otherwise) to approve this Agreement, the Merger or the other transactions contemplated by this Agreement. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT The Parent represents and warrants to the Company, subject to such exceptions or qualifications to specific representations and warranties as are disclosed in writing in the disclosure letter previously delivered by the Parent to the Company (the "Parent Disclosure Letter"): ------------------------ Section 4.1 Organization and Qualification; Subsidiaries. (a) The Parent has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, and has the requisite power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as it is now being conducted. Each of the Parent and the subsidiaries of the Parent (each a "Parent Subsidiary") is duly qualified or ----------------- licensed to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such failures to be so qualified or licensed and in good standing that, individually or in the aggregate, has no Material Adverse Effect on the Parent. For purposes of this Agreement, "Material Adverse Effect on the Parent" means any state of ------------------------------------- affairs or change that has had, or will have, a material adverse effect on the business, assets, properties, results of operations or condition (financial or otherwise) of the Parent and the Parent Subsidiaries, taken as a whole, or that has materially impaired or will materially impair the ability of the Parent to perform its obligations under this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement, except that none of the following shall be deemed in themselves to constitute a Material Adverse Effect on the Parent: (i) any change in the market price or trading volume of the securities of the Parent after the date hereof, (ii) any change in general economic conditions, (iii) any adverse change involving the e-commerce industry generally, and (iv) transaction costs, taxes, accounting changes, integration costs and other effects that result directly from the announcement or consummation of the transactions contemplated by this Agreement. (b) Section 4.1(b) of the Parent Disclosure Letter sets forth a complete and correct list of all of the Parent Subsidiaries, their jurisdiction of organization and the ownership or other interest therein of the Parent and of each other Parent Subsidiary. Neither the Parent nor any Parent Subsidiary holds any interest in any person other than the Parent Subsidiaries so listed. 28 Section 4.2 Charter Documents. The copies of the Parent's articles of incorporation (Satzung) and management board (Vorstand) Rules of Procedure (Geschaftsordnung), each as amended through the date of this Agreement that have been furnished to the Company (collectively, the "Parent Charter Documents"), ------------------------ are complete and correct copies of those documents. The Parent is not in violation of any of the provisions of such charter documents. Section 4.3 Capitalization. (a) As of May 19, 2000, (i) 27,311,184 shares of Parent Common Stock were issued and outstanding, all of which were validly issued and are fully paid, nonassessable and not subject to preemptive rights, (ii) the authorized I capital of the Parent consisted of 10,337,589 shares of Parent Common Stock, (iii) the authorized II capital of the Parent consisted of 2,600,000 shares of Parent Common Stock, and (iv) 2,409,639 shares of Parent Common Stock were reserved for issuance upon exercise of outstanding Parent Stock Options. Except as set forth above, as of May 19, 2000, no shares of capital stock or other voting securities of the Parent were issued, reserved for issuance or outstanding and, since such date, no shares of capital stock or other voting securities or options in respect thereof have been issued except upon the exercise of the Parent Stock Options outstanding on such date. On May 26, 2000, the Parent's shareholders authorized the issuance of convertible bonds in an aggregate principal amount of Euro 2,600,000 which may be used in connection with employee participation scheme and the Parent's shareholders resolved to create a new Contingent Capital II in the amount of Euro 2,600,000 non-par value bearer shares and authorized the management board to purchase own shares of up to 10% of the share capital for a time period of 18 months. No other increase of share capital has been resolved since May 19, 2000. The Parent has sufficient authorized share capital to proceed with the Share Capital increase as set forth in this Agreement. (b) Between December 31, 1999 and the date of this Agreement, no options to purchase shares of Parent Common Stock ("Parent Stock Options") -------------------- have been granted by the Parent under the Parent's 1998 Plan or the Parent's 1999 Plan (collectively, the "Parent's Option Plans"). Except (i) Parent Stock --------------------- Options to purchase an aggregate of 2,409,639 shares of Parent Common Stock outstanding or available for grant under the Parent's Option Plans, or (ii) under agreements or arrangements described in Section 4.3(b) of the Parent Disclosure Letter, there are no options, warrants, calls, conversion rights, stock appreciation rights, redemption rights, repurchase rights or other rights, agreements, arrangements or commitments of any character to which the Parent is a party or by which the Parent is bound relating to the issued or unissued capital stock of the Parent or any Parent Subsidiary or obligating the Parent or any Parent Subsidiary to issue or sell any shares of capital stock of, other equity interests in, or securities exchangeable for or convertible in the capital stock or other equity interest in the Parent or any Parent Subsidiary. None of the Parent Stock Options which are subject to vesting will vest as a result of the consummation of the Merger. 29 (c) Subject to Section 5.20, the shares of Parent Common Stock that underlie the Parent ADSs to be delivered in connection with the Merger have been duly authorized by all necessary corporate action, and when issued in accordance with this Agreement, will be validly issued, fully paid, nonassessable and will not be subject to preemptive rights. Each outstanding share of capital stock of each Parent Subsidiary is duly authorized, validly issued, fully paid, nonassessable and not subject to preemptive rights and each such share owned by the Parent or a Parent Subsidiary is free and clear of all security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on the Parent's or such other Parent Subsidiary's voting rights, charges and other encumbrances or any nature whatsoever (collectively, "Liens"), except where failure to own such shares free and clear, individually ----- or in the aggregate, has no Material Adverse Effect on the Parent. Section 4.4 Authority. (a) The Parent has all necessary corporate power and authority to execute and deliver this Agreement and, subject to compliance with Section 52 of the German Stock Corporation Law (Aktiengesetz), the resolutions of the management board (Vorstand) and the supervisory board (Aufsichtsrat) of the Parent with respect to the Share Capital Increase, the appointment of an auditor and the preparation of an audit (valuation) report by such auditor in connection with the Share Capital Increase and the registration of the Share Capital Increase with the commercial register (Handelsregister) for the Parent (the "Requisite Parent Approval"), to perform its obligations under this ------------------------- Agreement and to consummate the Merger and the other transactions contemplated by this Agreement to be consummated by the Parent. This Agreement has been validly executed and delivered by the Parent, and assuming the due authorization, execution and delivery by the other parties hereto and subject to Section 5.20, constitutes a legal, valid and binding obligation of the Parent, enforceable against the Parent in accordance with its terms. Section 4.5 No Conflict. (a) Except as set forth in Section 4.5 of the Parent Disclosure Letter, the execution and delivery of this Agreement by the Parent do not, and the performance of this Agreement by the Parent will not: (i) conflict with or violate any provision of the Parent's articles of association (Satzung) or management board (Vorstand) rules of procedure (Geschaftsordnung) of the Parent; (ii) assuming that all consents, approvals, authorizations and other actions described in Section 4.6 have been obtained and all filings and obligations described in Section 4.6 have been made, conflict with or violate any Law applicable to the Parent or by which any property or asset of the Parent is or may 30 be bound or affected, except for any such conflicts or violations that, individually or in the aggregate, have no Material Adverse Effect on the Parent; or (iii) result in any breach of or constitute a default (or an event which with or without notice or lapse of time or both would become a default) under, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of the Parent or any Parent Subsidiary under, any Contract to which the Parent or any Parent Subsidiary is a party or by which any of them or their assets or properties is or may be bound or affected, except for any such breaches, defaults or other occurrences which, individually or in the aggregate, have no Material Adverse Effect on the Parent. (b) Section 4.5(b) of the Parent Disclosure Letter sets forth a list of all Contracts to which the Parent or any Parent Subsidiaries are a party or by which they or their assets or properties are or may be bound or affected under which consents or waivers are or may be required prior to consummation of the transactions contemplated by this Agreement, except for those Contracts under which the Parent's failure to obtain the required consents or waivers, individually or in the aggregate, would not result in a Material Adverse Effect on the Parent. Section 4.6 Required Filings and Consents. The execution and delivery of this Agreement by the Parent do not, and the performance of this Agreement by the Parent will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Entity except (i) for applicable requirements of the Exchange Act, applicable requirements of the Securities Act, applicable requirements of Blue Sky Laws, the rules and regulations of the Nasdaq National Market, the rules and regulations of the Neuer Markt segment of the Frankfurt Stock Exchange (the "Neuer Markt"), ----------- applicable requirements of Takeover Statutes, the pre-merger notification requirements of the HSR Act, the filing of the Certificate of Merger as required by the DGCL, compliance with Section 52 of the German Stock Corporation Law (Aktiengesetz) and the registration of the Share Capital Increase with the commercial register (Handelsregister) for the Parent, and (ii) where failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, individually or in the aggregate, have no Material Adverse Effect on the Parent. Neither the Parent nor any of the Parent Subsidiaries is a party to, bound by, any contract or other agreement that would prohibit or materially delay the transactions contemplated by this Agreement. Except as set forth in Section 4.6 of the Parent Disclosure Letter, as of the date of this Agreement, neither the Parent nor any of the Parent Subsidiaries is in negotiations in respect of an acquisition of a business, corporation, partnership, association or other business organization or division thereof that would require the inclusion in the Registration Statement (as defined in Section 5.4(a)) pro forma financial information regarding such acquisition. 31 Section 4.7 Financial Statements. (a) The Parent has provided the Company with true and complete copies of (i) the audited consolidated balance sheet of the Parent as of December 31, 1999, June 30, 1999 and June 30, 1998 and the related consolidated statements of operations, cash flows and shareholders' equity for the six month period ended December 31, 1999 and for each of the three fiscal years ended June 30, 1999 (including all related notes and schedules thereto) (collectively, including any such documents provided subsequent to the date of this Agreement, the "Parent Financial Statements"). --------------------------- (b) Each of the consolidated balance sheets included in the Parent Financial Statements (including the related notes and schedules) fairly presented, in all material respects, the consolidated financial position of the Parent as of the dates set forth in those consolidated balance sheets. Each of the consolidated statements of income and of cash flows included in the Parent Financial Statements (including any related notes and schedules) fairly presented, in all material respects, the consolidated results of operations and cash flows, as the case may be, of the Parent and the consolidated Parent Subsidiaries for the periods set forth in those consolidated statements of income and of cash flows, in each case in conformity with generally accepted accounting principles in Germany ("German GAAP") or U.S. GAAP, as noted in the ----------- Parent Financial Statements, consistently applied throughout the periods indicated. (c) Except as and to the extent set forth on the consolidated balance sheet of the Parent and the consolidated Parent Subsidiaries as of December 31, 1999 including the related notes, neither the Parent nor any Parent Subsidiary has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) that would be required to be reflected on a balance sheet or in the related notes, except for liabilities or obligations incurred in the ordinary course of business since December 31, 1999 that, individually or in the aggregate, have no Material Adverse Effect on the Parent. Section 4.8 Absence of Certain Changes or Events. (a) Since December 31, 1999, the Parent and the Parent Subsidiaries have conducted their businesses only in the ordinary course and, since such date, there has not been any Material Adverse Effect on the Parent. (b) Except as set forth in Section 4.8(b) of the Parent Disclosure Letter and except as permitted pursuant to Section 5.2, since December 31, 1999, there has not been: (i) any damage, destruction or other casualty loss with respect to any asset or property owned, leased or otherwise used by it or any Parent 32 Subsidiaries, whether or not covered by insurance, which damage, destruction or loss, individually or in the aggregate, has a Material Adverse Effect on the Parent; (ii) any material change by the Parent in its or any Parent Subsidiary's accounting methods, principles or practices, except as required by U.S. GAAP or German GAAP and disclosed in Section 4.8(b) of the Parent Disclosure Letter; (iii) any declaration, setting aside or payment of any dividend or distribution in respect of Parent Shares or any redemption, purchase or other acquisition of any of the Parent's securities; (iv) any increase in the compensation or benefits or establishment of any bonus, insurance, severance, deferred compensation, pension, retirement, profit sharing, stock option (including, the granting of stock options, stock appreciation rights, performance awards or restricted stock awards), stock purchase or other employee benefit plan, or any other increase in the compensation payable or to become payable to any executive officers of the Parent or any Parent Subsidiary except in the ordinary course of business or except as required by applicable Law; (v) (A) any incurrence or assumption by the Parent or any Parent Subsidiary of any indebtedness for borrowed money or (B) any guarantee, endorsement or other incurrence or assumption of material liability (whether directly, contingently or otherwise) by the Parent or any Parent Subsidiary for the obligations of any other person (other than any wholly owned Parent Subsidiary), other than in the ordinary course of business; (vi) any creation or assumption by the Parent or any Parent Subsidiary of any Lien on any material asset of the Parent or any Parent Subsidiary, other than (i) in the ordinary course of business, or (ii) Liens arising after the date of this Agreement by operation of Law or without the Parent's consent, in each case that has no Material Adverse Effect on the Parent; (vii) any making of any loan, advance or capital contribution to or investment in any person by the Parent or any Parent Subsidiary, other than in the ordinary course of business, and not in excess of U.S.$500,000; (viii) (A) any contract or agreement entered into by the Parent or any Parent Subsidiary on or prior to the date hereof relating to any material acquisition or disposition of any assets or business or (B) any modification, amendment, assignment or termination of or relinquishment by the Parent or any Parent Subsidiary of any rights under any other Contract (including any insurance policy naming it as a beneficiary or a loss payable payee) that has, individually or in the aggregate, a Material Adverse Effect on the Parent other than transactions, commitments, contracts or agreements in the ordinary course of business or those contemplated by this Agreement; 33 (ix) any adverse change in the Parent's relationships with its material customers, except for changes that, individually or in the aggregate, have no Material Adverse Effect on the Parent. Section 4.9 Accounting and Tax Matters. Neither the Parent, nor to the knowledge of the Parent, any of Parent's affiliates has taken or agreed to take any action, nor is the Parent aware of any agreement, plan or other circumstance, that (i) would prevent the Merger from constituting a transaction qualifying as a reorganization under Section 368(a) of the Code or (ii) prevent the exchange of shares of Parent Common Stock from meeting the requirements of Treasury Regulation Section 1.367(a)-3(c)(1). Section 4.10 Litigation. Except as disclosed in Section 4.10 of the Parent Disclosure Letter, there is no Claim pending or, to the knowledge of the Parent, threatened against the Parent or any Parent Subsidiary before any Governmental Entity that, individually or in the aggregate, has a Material Adverse Effect on the Parent. Neither the Parent nor any Parent Subsidiary is subject to any outstanding order, writ, injunction or decree which, individually or in the aggregate, has a Material Adverse Effect on the Parent. Section 4.11 Intellectual Property. The Parent owns, or is validly licensed or otherwise has the right to use all Intellectual Property that is material to the conduct of the business of the Parent and the Parent Subsidiaries, taken as a whole. To the reasonable knowledge of the Parent, as of the date of this Agreement, no suits, actions or proceedings are pending, and no person has threatened in a writing delivered to the Parent since January 1, 1999 to commence any suit, action or proceeding, alleging that the Parent or any Parent Subsidiaries are infringing the rights of any person with regard to any Intellectual Property, except for suits, actions or proceedings that, individually or in the aggregate, would not have a Material Adverse Effect on the Parent. To the knowledge of the Parent, no person is infringing the Intellectual Property rights of the Parent or any Parent Subsidiary, except for infringements which, individually or in the aggregate, would not have a Material Adverse Effect on the Parent. Section 4.12 Taxes. Except to the extent that failure to do so, individually or in the aggregate, has no Material Adverse Effect on the Parent, the Parent and the Parent Subsidiaries have filed all Tax returns and reports to be filed by them and have paid, or established adequate reserves for, all Taxes required to be paid by them. Except as, individually or in the aggregate, has no Material Adverse Effect on the Parent, no deficiencies for any Taxes have been proposed, asserted or assessed against the Parent or any Parent Subsidiaries, and no requests for waivers of the time to assess any such Taxes are pending. Section 4.13 Brokers. No broker, finder or investment banker other than the Parent Financial Advisor is entitled to any brokerage, finder's or other fee or commission in connection with the Merger or the other transactions contemplated by this 34 Agreement based upon arrangements made by or on behalf of the Parent. Prior to the date of this Agreement, the Parent has made available to the Company a complete and correct copy of all agreements between the Parent and the Parent Financial Advisor under which the Parent Financial Advisor would be entitled to any payment relating to the Merger or such other transactions. Section 4.14 Information. To the best of the Parent's knowledge, none of the information to be supplied by the Parent for inclusion or incorporation by reference in the Registration Statement or the Proxy Statement will, in the case of the Registration Statement, at the time it becomes effective and at the Effective Time, contain any untrue statement of a material fact or omit to state any material fact required to be stated in that Registration Statement or necessary to make the statements in that Registration Statement not misleading, or, in the case of the Proxy Statement or any amendments of or supplements to the Proxy Statement, at the time of the mailing of the Proxy Statement and any amendments of or supplements to the Proxy Statement and at the time of the Company Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated in that Proxy Statement or necessary in order to make the statements in that Proxy Statement, in light of the circumstances under which they are made, not misleading. The Proxy Statement (except for those portions of the Proxy Statement that relate only to the Company or the Company Subsidiaries or affiliates of the Company) and the Registration Statement will comply as to form in all material respects with the provisions of the Exchange Act and the Securities Act, respectively. ARTICLE V COVENANTS Section 5.1 Conduct of Business of the Company. Except as contemplated by this Agreement or with the prior written approval of the Parent, during the period from the date of this Agreement to the Effective Time, the Company will, and will cause each of the Company Subsidiaries to, conduct its operations only in the ordinary course of business and, to the extent consistent therewith, with no less diligence and effort then would be applied in the absence of this Agreement, will use commercially reasonable efforts to, and to cause each Company Subsidiary to, preserve intact the business organization of the Company and each of the Company Subsidiaries, to keep available the services of the present officers and key employees of the Company and the Company Subsidiaries, and to preserve the good will of customers, suppliers and all other persons having business relationships with the Company and the Company Subsidiaries. Without limiting the generality of the foregoing, and except as otherwise contemplated by this Agreement or disclosed in Section 5.1 of the Company Disclosure Letter, prior to the Effective Time, the Company will not, and will not permit any Company Subsidiary to, without the prior written approval of the Parent: 35 (a) except as required by applicable Law, adopt any amendment to the certificate of incorporation or by-laws of the Company or the comparable organizational documents of any Company Subsidiary; (b) except for (i) issuances of capital stock of Company Subsidiaries to the Company or a wholly owned Company Subsidiary, (ii) issuances of options to purchase shares of Company Common Stock pursuant to the Company's 2000 Stock Option Plan effected in accordance with Section 5.8, (iii) grants of rights pursuant to the Company's 2000 Employee Stock Purchase Plan, and (iv) repurchases of unvested shares at cost in connection with the termination of a relationship with any employee, consultant or director pursuant to stock option or purchase agreement in effect on the date hereof, issue, reissue, sell or pledge, or authorize the issuance, reissuance, sale or pledge of (x) additional shares of capital stock or other equity securities of any class, or securities convertible into capital stock or other equity securities or any rights, warrants or options to acquire any such convertible securities or capital stock or other equity securities, other than the issue of Company Common Stock, in accordance with the terms of the instruments governing such issuance on the date hereof, pursuant to the exercise of Company Stock Options outstanding on the date hereof, or (y) any other securities in respect of, in lieu of, or in substitution for, Company Common Stock outstanding on the date hereof; (c) declare, set aside, make or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock other than between the Company and any wholly owned Company Subsidiary; (d) directly or indirectly, split, combine, subdivide, reclassify or redeem, retire, purchase or otherwise acquire, or propose to redeem, retire or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; (e) except for (A) increases in salary, wages and benefits of officers or employees of the Company or the Company Subsidiaries or increases in salary, wages and benefits granted to officers and employees of the Company or the Company Subsidiaries in conjunction with new hires, promotions or other changes in job status or increases in salary, wages and benefits to employees of the Company or the Company Subsidiaries pursuant to collective bargaining agreements entered into in the ordinary course of business, and (B) the modification of the terms of the 75,000 Company Stock Options issued to certain members of the board of directors of the Company prior to the date of this Agreement to allow for such Company Stock Options to vest immediately but expire by June 30, 2000, (i) increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from the Company or any Company Subsidiaries), (ii) pay any benefit not required by any existing plan or arrangement (including the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or grant any severance or termination pay to (except pursuant to existing agreements, plans or policies), or enter into any employment or 36 severance agreement with, any director, officer or other employee of the Company or any Company Subsidiaries or (iii) establish, adopt, enter into, amend or take any action to accelerate rights under any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, savings, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, except in each case to the extent required by applicable Law; provided, however, that nothing in this Agreement will be deemed to prohibit the payment of benefits as they become payable or prevent the Company from fulfilling any obligation entered into prior to the date of this Agreement; (f) acquire, sell, lease, license, transfer, pledge, encumber, grant or dispose of (whether by merger, consolidation, purchase, sale or otherwise) any assets, including capital stock of Company Subsidiaries (other than the acquisition and sale of inventory or the disposition of used or excess equipment and the purchase of raw materials, supplies and equipment, or licensing the Company's products, in each case in the ordinary course of business), or enter into any material commitment or transaction outside the ordinary course of business, other than transactions between a wholly owned Company Subsidiary and the Company or another wholly owned Company Subsidiary; (g) (i) incur, assume or prepay any long-term indebtedness or incur or assume any short-term indebtedness (including, in either case, by issuance of debt securities), (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person, or (iii) make any loans, advances or capital contributions to, or investments in, any other person except for loans, advances, capital contributions or investments between any wholly owned Company Subsidiary and the Company or another wholly owned Company Subsidiary, except (A) in connection with the financing of ordinary course trade payables, (B) advances to customers in the ordinary course of business, or (C) indebtedness between the Company and any directly or indirectly wholly owned subsidiary of the Company; or (h) terminate, cancel or request any material change in, or agree to any material change in any Contract which is material to the Company and the Company Subsidiaries taken as a whole, or enter into any Contract which would be material to the Company and the Company Subsidiaries taken as a whole, in each case other than in the ordinary course of business; or make or authorize any capital expenditure, other than capital expenditures that are not, in the aggregate, for any fiscal year, in excess of U.S.$2,000,000 for the Company and the Company Subsidiaries taken as a whole; (i) change the Company's accounting policies or procedures, other than actions in the ordinary course of business and consistent with past practice or as required pursuant to applicable Law or U.S. GAAP in the reasonable opinion of the Company's independent certified accountants; 37 (j) waive, release, assign, settle or compromise any material rights, claims or litigation; (k) pay, discharge or satisfy any material claim, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) other than in the ordinary course of business; (l) enter into any agreement or arrangement that materially limits or otherwise restricts the Company or any Company Subsidiary or any successor thereto, or that would, after the Effective Time, limit or restrict the Surviving Corporation and its affiliates (including Parent) or any successor thereto, from engaging or competing in any line of business or in any geographic area; (m) make any Tax election or settle or compromise any material federal, state, local or foreign Tax liability; (n) authorize or enter into any formal or informal written or other agreement or otherwise make any commitment to do any of the foregoing; or (o) take any action with the intent to directly or indirectly adversely affect the Merger. Section 5.2 Certain Interim Operations of the Parent. The Parent covenants and agrees that, except as expressly provided in this Agreement or as disclosed in Section 5.2 of the Parent Disclosure Letter, during the term of this Agreement, without the prior written consent of the Company, which consent will not be unreasonably withheld or delayed, the Parent will not: (a) adopt any amendment to the articles of incorporation (Satzung) of the Parent in any manner that changes the fundamental attributes, or adversely affects the value or rights, of the Parent Common Stock; (b) declare, set aside, make or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock other than between the Parent and any wholly owned Parent Subsidiary; (c) liquidate or adopt a plan of liquidation; (d) purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of the Parent or any Parent Subsidiary in any amount that would adversely affect the Parent's financial condition or liquidity; (e) authorize or enter into any formal or informal written or other agreement or otherwise make any commitment to do any of the foregoing; 38 (f) take any action with the intent to directly or indirectly adversely affect Merger; or (g) change the Parent's accounting policies or procedures, other than actions in the ordinary course of business and consistent with past practice or as required pursuant to applicable Law or U.S. GAAP or German GAAP. Section 5.3 Notification of Certain Matters. The Parent and the Company shall promptly notify each other of (a) the occurrence or non-occurrence of any fact or event which could reasonably be expected (i) to cause any representation or warranty contained in this Agreement to be untrue or inaccurate in any material respect at any time from the date of this Agreement to the Effective Time, (ii) to cause any material covenant, condition or agreement hereunder not to be complied with or satisfied in all material respects or (iii) to result in, in the case of Parent, a Material Adverse Effect on the Parent; and, in the case of the Company, a Material Adverse Effect on the Company, (b) any failure of the Company or the Parent, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder in any material respect; provided, however, that no such notification shall affect the representations or warranties of any party or the conditions to the obligations of any party hereunder, (c) any notice or other material communications from any Governmental Entity in connection with the transactions contemplated by this Agreement and (d) the commencement of any suit, action or proceeding that seeks to prevent, seeks damages in respect of, or otherwise relates to the consummation of the transactions contemplated by this Agreement. Section 5.4 Proxy Statement. (a) As promptly as practicable after the execution of this Agreement, the Parent and the Company shall jointly prepare and file with the SEC a single document that will constitute (i) the proxy statement of the Company relating to the special meeting of the Company's stockholders (the "Company Stockholders Meeting") to be held to consider approval and adoption of ---------------------------- this Agreement and the Merger, (ii) the registration statement on Forms F-4 and F-6 of the Parent (together with all amendments thereto, the "Registration ------------ Statement"), in connection with the registration under the Securities Act of the - --------- Parent ADSs (and the Parent Common Stock underlying such Parent ADSs) to be issued to the stockholders of the Company in connection with the Merger and the prospectus included in the Registration Statement (such single document, together with any amendments thereof or supplements thereto, the "Proxy ----- Statement"). Substantially contemporaneously with the filing of the Proxy - --------- Statement with the SEC, copies of the Proxy Statement shall be provided to the Nasdaq National Market. The Parent and the Company each shall use commercially reasonable efforts to cause the Registration Statement to become effective as promptly as practicable, and, prior to the effective date of the Registration Statement (the "Registration Statement Effective Date"), the Parent shall take ------------------------------------- all or any action required under any applicable Law in connection with the issuance of Parent ADSs pursuant to the Merger. 39 The Parent or the Company, as the case may be, shall furnish all information concerning the Parent or the Company as the other party may reasonably request in connection with such actions and the preparation of the Proxy Statement. As promptly as practicable after the Registration Statement Effective Date, the proxy statement and prospectus included in the Proxy Statement (collectively, the "Proxy Materials") will be mailed to the stockholders of the Company. The --------------- Parent and the Company shall cause the Proxy Statement to comply as to form and substance in all material respects with the applicable requirements of (i) the Exchange Act, including Sections 14(a) and 14(d) thereof and the respective regulations promulgated thereunder, (ii) the Securities Act, (iii) the rules and regulations of the Nasdaq National Market principal securities exchanges and quotation services on which the common stock, (iv) the DGCL and (v) any other applicable law. (b) The Proxy Statement shall include the unconditional recommendation of the Board of Directors of the Company to the stockholders of the Company that they vote in favor of the adoption of this Agreement and the Merger; provided, however, that the Board of Directors of the Company may, at any time prior to the Effective Time, withdraw, modify or change any such recommendation if the Board of Directors of the Company determines in good faith (after consultation with the Company's counsel) that failure to so withdraw, modify or change its recommendation would be inconsistent with its fiduciary duties to the Company's stockholders under applicable Laws. In addition, the Proxy Statement and the Proxy Materials will include a copy of the written opinion of the Company Financial Advisor referred to in Section 3.19. (c) No amendment or supplement to the Proxy Statement will be made without the approval of each of the Parent and the Company, which approval shall not be unreasonably withheld or delayed. Each of the Parent and the Company will advise the other, promptly after it receives notice thereof, of the time when the Registration Statement has become effective or any supplement or amendment has been filed, of the issuance of any stop order, of the suspension of the qualification of Parent Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, or of any request by the SEC or the Nasdaq National Market for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information. (d) The information supplied by the Company for inclusion in the Proxy Statement shall not, at (i) the time the Registration Statement is declared effective, (ii) the time the Proxy Materials (or any amendment of or supplement to the Proxy Materials) is first mailed to the stockholders of Company, (iii) the time of the Company Stockholders Meeting, and (iv) the Effective Time, contain any untrue statement of a material fact or fail to state any material fact required to be stated in the Proxy Statement or necessary in order to make the statements in the Proxy Statement not misleading. If at any time prior to the Effective Time any event or circumstance relating to the Company or any Company Subsidiary, or their respective officers or directors, should be discovered by the Company that should be set forth in an amendment or a supplement to the Proxy Statement, the Company shall promptly inform the Parent. All 40 documents that the Company is responsible for filing with the SEC in connection with the transactions contemplated by this Agreement will comply as to form and substance in all material respects with the applicable requirements of the DGCL, the Securities Act and the Exchange Act. (e) The information supplied by the Parent for inclusion in the Proxy Statement shall not, at (i) the time the Registration Statement is declared effective, (ii) the time the Proxy Materials (or any amendment of or supplement to the Proxy Materials) are first mailed to the stockholders the Company, (iii) the time of the Company Stockholders Meeting, and (iv) the Effective Time, contain any untrue statement of a material fact or fail to state any material fact required to be stated in the Proxy Statement or necessary in order to make the statements in the Proxy Statement not misleading. If, at any time prior to the Effective Time, any event or circumstance relating to the Parent or any Parent Subsidiary, or their respective officers or directors, should be discovered by the Parent that should be set forth in an amendment or a supplement to the Proxy Statement, the Parent shall promptly inform the Company. All documents that the Parent is responsible for filing in connection with the transactions contemplated by this Agreement will comply as to form and substance in all material aspects with the applicable requirements of the DGCL, the Securities Act and the Exchange Act. Section 5.5 Company Stockholders Meeting. The Company shall call and hold the Company Stockholders Meeting as promptly as practicable after the Registration Statement Effective Date for the purpose of voting upon the adoption of this Agreement and the Parent and the Company will cooperate with each other to cause the Company Stockholders Meeting to be held as soon as practicable following the mailing of the Proxy Materials to the stockholders of the Company. The Company shall use commercially reasonable efforts (through its agents or otherwise) to solicit from its stockholders proxies in favor of the adoption of this Agreement, and shall take all other action necessary or advisable to secure Requisite Company Vote, except to the extent that the Board of Directors of the Company determines in good faith (after consultation with the Company's counsel) that doing so would be inconsistent with its fiduciary duties to the Company's stockholders under applicable Laws. Section 5.6 Access to Information; Confidentiality. (a) Except as required under any confidentiality agreement or similar agreement or arrangement to which the Parent or the Company or any of their respective subsidiaries is a party or under applicable Law or the regulations or requirements of any securities exchange or quotation service or other self regulatory organization with whose rules the parties are required to comply, from the date of this Agreement to the Effective Time, the Parent and the Company shall (and shall cause their respective subsidiaries to): (i) provide to the other (and its officers, directors, employees, accountants, consultants, legal counsel, financial advisors, investment bankers, agents and 41 other representatives (collectively, "Representatives")) access at reasonable --------------- times upon prior notice to the officers, employees, agents, properties, offices and other facilities of the other and its subsidiaries and to the books and records thereof; and (ii) furnish promptly such information concerning the business, properties, Contracts, assets, liabilities, personnel and other aspects of the other party and its subsidiaries as the other party or its Representatives may reasonably request. No investigation conducted under this Section 5.6 shall affect or be deemed to modify any representation or warranty made in this Agreement. (b) The parties shall comply with, and shall cause their respective Representatives to comply with, all of their respective obligations under the Confidentiality Agreement, dated May 17, 2000 (the "Confidentiality Agreement"), ------------------------- between the Parent and the Company with respect to the information disclosed under this Section 5.6. Section 5.7 No Solicitation. (a) The Company agrees that, prior to the Effective Time, it shall not, and shall not authorize or permit any Company Subsidiaries or any of its or the Company Subsidiaries' Representatives, directly or indirectly, to (i) solicit, initiate or encourage any inquiries or the making of any offer or proposal with respect to (x) any merger, consolidation, share exchange, recapitalization, business combination or similar transaction, (y) any sale, lease, exchange, mortgage, transfer or other disposition, in a single transaction or series of related transactions, of assets representing 15% or more of the assets of the Company and the Company Subsidiaries, taken as a whole, or (z) any sale of shares of capital stock representing, individually or in the aggregate, 10% or more of the voting power of the Company other than to the Company or a Company Subsidiary, including by way of a tender offer or exchange offer by any person (other than the Company or a Company Subsidiary) for shares of capital stock representing 5% or more of the voting power of the Company, other than the transactions contemplated by this Agreement (any of the foregoing inquiries, offers or proposals being referred to in this Agreement as a "Takeover Proposal"), (ii) negotiate or otherwise engage in substantive ----------------- discussions with any person (other than the Parent, Merger Sub or their respective Representatives) that has submitted or proposed to submit any Takeover Proposal, (iii) provide to any person any non-public information or data relating to the Company or any Company Subsidiary for the purpose of facilitating the making of any Takeover Proposal, or (iv) agree to approve or recommend any Takeover Proposal or otherwise enter into any agreement, arrangement or understanding requiring it to abandon, terminate or fail to consummate the Merger or any other transactions contemplated by this Agreement; provided, however, that if the Board of Directors of the Company determines in good faith (after consultation with the Company's legal counsel) that failure to do so would be inconsistent with its fiduciary duties to the Company's stockholders under applicable Laws, the Company may, in response to any Superior Proposal, or any Takeover Proposal that would reasonably be expected to lead to a Superior Proposal, which proposal was not solicited by it and which did not otherwise 42 result from a breach of this Section 5.7, and subject to providing prior written notice of its decision to take such action to the Parent and compliance with the other requirements of this Section 5.7, (A) furnish information with respect to the Company and the Company Subsidiaries to any person making a Superior Proposal pursuant to a customary confidentiality agreement (as determined in good faith by the Company after consultation with its independent legal counsel), (B) participate in discussions or negotiations regarding such Superior Proposal or (C) enter into a definitive agreement providing for the implementation of a Superior Proposal (as defined below) if the Company or the Board of Directors is simultaneously terminating this Agreement pursuant to Section 7.1(h). (b) In addition to the obligations of the Company set forth in paragraph (a) of this Section 5.7, the Company shall as promptly as is practicable advise the Parent orally and in writing of any request for information relating to any Takeover Proposal, the material terms and conditions of such request or Takeover Proposal and the identity of the person making such request or Takeover Proposal. The Company will keep the Parent informed of the status (including amendments or proposed amendments) of any such request or Takeover Proposal. (c) Nothing contained in this Section 5.7 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act, or from making any other disclosure to the Company's stockholders, that is required by applicable Law or by the Board of Directors' fiduciary duties. (d) The Company will immediately cease and cause to be terminated any existing activities, discussions or negotiations by the Company or its Representatives with any parties conducted heretofore with respect to any of the foregoing, and will promptly inform the Representatives of the obligations undertaken in this Section 5.7. (e) The Board of Directors of the Company will not withdraw or modify, or propose to withdraw or modify, in any manner adverse to the Parent, its approval or recommendation of this Agreement or the Merger except in connection with a Superior Proposal and then only upon or after the termination of this Agreement pursuant to Section 7.1(h) and payment to the Parent of the amounts referred to in Section 7.3(b). (f) For purposes of this Agreement: (i) "Superior Proposal" means any bona fide written ----------------- proposal made by a third party to acquire, directly or indirectly, including pursuant to a tender offer, exchange offer, merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or similar transaction, for consideration to the Company's stockholders consisting of cash and/or securities, over 50% of the shares of the Company's capital stock then outstanding on terms which the 43 Board of Directors of the Company determines in their good faith judgment (after consultation with the Company's financial advisors), to be more favorable to the Company's stockholders than the Merger and for which financing, to the extent required, is then committed or which a majority of the members of the Board of Directors of the Company determines in their good faith judgment (after such consultation), is likely to be obtained by such third party. (ii) "Acquisition Agreement" means any letter of intent, --------------------- agreement in principle, definitive acquisition or merger agreement or other similar agreement, contract or commitment related to any Takeover Proposal. Section 5.8 Employee Benefits Matters. (a) Effective as of the Effective Time and for a one-year period following the Effective Time, the Parent shall provide, or cause the Surviving Corporation and its subsidiaries and successors to provide, those persons who, at the Effective Time, were employees of the Company and its subsidiaries ("Covered Employees"), with benefits and compensation during their continuing ----------------- employment that are substantially equivalent, in the aggregate, to the compensation and benefits provided to such employees as of the date of this Agreement; provided that the foregoing shall not apply to the Company's 2000 Employee Stock Purchase Plan, which shall be terminated upon or prior to the Effective Time; provided, further, that nothing herein shall restrict the Parent or the Surviving Corporation from terminating the employment of any such employees in accordance with applicable laws and contractual rights, if any, of such employees. (b) The Parent will, or will cause the Surviving Corporation to: (i) waive all limitations as to pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to the Covered Employees under any welfare plan that such employees may be eligible to participate in after the Effective Time; (ii) provide each such Covered Employee with credit for any co-payment and deductibles paid prior to the Effective Time in satisfying any applicable deductible or out-of-pocket requirements under any welfare plans that such employees are eligible to participate in after the Effective Time; and (iii) provide each Covered Employee with credit for purposes of vesting and eligibility for all service with the Company and its affiliates under each employee benefit plan, program, or arrangement of the Parent or its affiliates in which such employees are eligible to participate to the extent such service was credited for similar purposes under similar plans of the Company or its subsidiaries; provided, however, that in no event shall the Covered Employees be entitled to any credit to the extent that it would result in a duplication of benefits with respect to the same period of service. (c) The Parent shall (i) cause the Surviving Corporation after the consummation of the Offer to pay all amounts provided under all of the Company's Benefit Plans in accordance with their terms, and (ii) honor and cause the Surviving 44 Corporation to honor all rights, privileges and modifications to or with respect to any Benefit Plans which become effective as a result of such change in control in accordance with their terms, subject in each case to all rights amend or terminate any Benefit Plan in accordance with its terms. (d) The Parent and the Company shall jointly determine, no later than June 30, 2000, an appropriate number of options to be granted between the date of this Agreement and the Effective Time. The Parent and the Company shall, in good faith, jointly identify the optionees and determine the amount and terms of individual grants. Section 5.9 Directors' and Officers' Indemnification and Insurance. (a) The Parent agrees that the Certificate of Incorporation and By- laws of the Surviving Corporation will contain provisions with respect to exculpation and indemnification at least as favorable to employees, agents, directors or officers of the Company and the Company Subsidiaries (the "Indemnified Parties") as those provided in the certificate of incorporation or ------------------- by-laws of the Company as in effect on the date hereof, which provisions will not be amended, repealed or otherwise modified for a period of six years from the Effective Time in any manner that would adversely affect the rights thereunder of individuals who, immediately prior to the Effective Time, were directors, officers, employees or agents of the Company, unless such modification is required by law; provided, however, that in the event any claim or claims are asserted or made within such six-year period, all rights to indemnification in respect of any such claim or claims shall continue until final disposition of any and all such claims. The foregoing parties are expressly made third party beneficiaries to the provisions of this Section 5.9. The Parent also agrees to indemnify all Indemnified Parties to the fullest extent permitted by applicable law with respect to all acts and omissions arising out of such individuals' services as officers, directors, employees or agents of the Company or any of the Company Subsidiaries or as trustees or fiduciaries of any plan for the benefit of employees, or otherwise on behalf of, the Company or any of the Company Subsidiaries, occurring prior to the Effective Time, including the transactions contemplated by this Agreement. Without limiting of the foregoing, in the event any such Indemnified Party is or becomes involved in any capacity in any action, proceeding or investigation in connection with any matter, including the transactions contemplated by this Agreement, occurring prior to, and including, the Effective Time, the Parent will pay as incurred such Indemnified Party's legal and other expenses (including the cost of any investigation and preparation) incurred in connection therewith. (b) The Parent agrees that the Company and, at and after the Effective Time, the Surviving Corporation shall cause to be maintained in effect for not less than six years from the Effective Time the current policies of the directors' and officers' liability insurance maintained by the Company; provided that the Surviving Corporation may substitute therefor policies of at least the same coverage containing terms and conditions which are at least as favorable and provided that such substitution 45 shall not result in any gaps or lapses in coverage with respect to matters occurring prior to the Effective Time; and provided, further, that the Surviving Corporation shall not be required to pay an annual premium in excess of 175% of the last annual premium paid by the Company prior to the date of this Agreement and if the Surviving Corporation is unable to obtain the insurance required by this Section 5.9(b) it shall obtain as much comparable insurance as possible for an annual premium equal to such maximum amount. Section 5.10 Letters of Accountants. (a) The Company shall cause to be delivered to the Parent "comfort" letters of PricewaterhouseCoopers LLP, the Company's independent public accountants, dated and delivered on the Registration Statement Effective Date and as of the Effective Time, and addressed to the Parent in form and substance reasonably satisfactory to the Parent and reasonably customary in scope and substance for letters delivered by independent public accountants in connection with transactions contemplated by this Agreement. (b) The Parent shall cause to be delivered to the Company "comfort" letters of Arthur Andersen, the Parent's independent public accountants, dated and delivered the Registration Statement Effective Date and as of the Effective Time, and addressed to the Company, in form and substance reasonably satisfactory to the Company and reasonably customary in scope and substance for letters delivered by independent public accountants in connection with transactions contemplated by this Agreement. Section 5.11 Commercially Reasonable Efforts. Subject to the terms and conditions provided in this Agreement and to applicable legal requirements, each of the parties to this Agreement agrees to use commercially reasonable efforts to take, or cause to be taken, all action, and to do, or cause to be done, and to assist and cooperate with the other parties to this Agreement in doing, as promptly as practicable, all things necessary, proper or advisable under applicable laws and regulations to ensure that the conditions set forth in Article VI are satisfied and to consummate and make effective the transactions contemplated by this Agreement. If at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, including the execution of additional instruments, the proper officers and directors of each party to this Agreement shall take all such necessary or desirable action. Section 5.12 Consents; Filings; Further Action. (a) Upon the terms and subject to the conditions of this Agreement, each of the parties to this Agreement shall use commercially reasonable efforts to (i) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the Merger and the other transactions contemplated by this Agreement, (ii) obtain from Governmental Entities any consents, licenses, permits, 46 waivers, approvals, authorizations or orders required to be obtained or made by the Parent or the Company or any of their subsidiaries in connection with the authorization, execution and delivery of this Agreement and the consummation of the Merger and the other transactions contemplated by this Agreement, (iii) make all necessary filings, and thereafter make any other submissions either required or deemed appropriate by each of the parties, with respect to this Agreement and the Merger and the other transactions contemplated by this Agreement required under (A) the Securities Act, the Exchange Act and any other applicable federal or Blue Sky Laws, (B) the HSR Act, (C) the DGCL and the German Stock Corporation Law (Aktiengesetz), (D) any other applicable Law and (E) the rules and regulations of the Nasdaq National Market. The parties to this Agreement shall cooperate and consult with each other in connection with the making of all such filings, including by providing copies of all such documents to the nonfiling party and its advisors prior to filing, and none of the parties will file any such document if any of the other parties shall have reasonably objected to the filing of such document. No party to this Agreement shall consent to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the Merger and the other transactions contemplated by this Agreement at the behest of any Governmental Entity without the consent and agreement of the other parties to this Agreement, which consent shall not be unreasonably withheld or delayed. (b) Without limiting the generality of Section 5.12(a), each party to this Agreement shall promptly inform the others of any material communication from the Federal Trade Commission, the Department of Justice or any other domestic or foreign government or governmental or multinational authority regarding any of the transactions contemplated by this Agreement. If any party or any affiliate thereof receives a request for additional information or documentary material from any such government or authority with respect to the transactions contemplated by this Agreement, then such party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request. The Parent will advise the Company promptly in respect of any understandings, undertakings or agreements (oral or written) which the Parent proposes to make or enter into with the Federal Trade Commission, the Department of Justice or any other domestic or foreign government or governmental or multinational authority in connection with the transactions contemplated by this Agreement. In furtherance and not in limitation of the foregoing, the Parent shall use commercially reasonable efforts to resolve such objections, if any, as may be asserted with respect to the transactions contemplated by this Agreement under any antitrust, competition or trade regulatory laws, rules or regulations of any domestic or foreign government or governmental authority or any multinational authority. Notwithstanding the foregoing, nothing in this Section 5.12 shall require, or be construed to require, the Parent or the Company, in connection with the receipt of any regulatory approval, to proffer to, or agree to (A) sell or hold separate and agree to sell, divest or to discontinue or limit, before or after the Effective Time, any assets, businesses, or interest in any assets or businesses of the Parent, the Company or any of their respective affiliates (or to the consent to any sale, or agreement to sell, or discontinuance or limitation by the Parent or the Company, 47 as the case may be, of any of its assets or businesses) or (B) agree to any conditions relating to, or changes or restriction in, the operations of any such asset or businesses which, in either case, could reasonably be expected to result in a Material Adverse Effect on the Parent or a Material Adverse Effect on the Company. Section 5.13 Plan of Reorganization. This Agreement is intended to constitute a "plan of reorganization" within the meaning of Section 1.368-2(g) of the income tax regulations promulgated under the Code. From and after the date of this Agreement and until the Effective Time, each party to this Agreement shall use commercially reasonable efforts to cause the Merger to qualify, and will not, without the prior written consent of the parties to this Agreement, take any actions or cause any actions to be taken which could prevent the Merger from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. Following the Effective Time, and consistent with any such consent, (i) none of the Surviving Corporation, the Parent or any of their affiliates shall take any action or cause any action to be taken which would cause the Merger to fail to so qualify as a reorganization under Section 368(a) of the Code and (ii) the Surviving Corporation and the Parent shall comply with the record keeping and reporting requirements of Sections 368(a) and 367 of the Code. Section 5.14 Public Announcements. The initial press release concerning the Merger shall be a joint press release and, thereafter, the Parent and Merger Sub and the Company shall consult with each other before issuing any press release or otherwise making any public statements with respect to this Agreement or any of the transactions contemplated by this Agreement and shall not issue any such press release or make any such public statement prior to such consultation, except to the extent required by applicable Law or the requirements of the Nasdaq National Market and the Neuer Market, in which case the issuing party shall use commercially reasonable efforts to consult with the other parties before issuing any such release or making any such public statement. Section 5.15 Stock Exchange Listings and De-Listings. Each of the Company and the Parent shall use commercially reasonable efforts to cause (i) the Parent ADSs to be issued in the Merger to be approved for quotation on the Nasdaq National Market subject to official notice of issuance, prior to the Effective Time, and (ii) if necessary, the Parent Common Stock underlying the Parent ADSs to be approved for listing on the Neuer Market subject to official notice of issuance, prior to the Effective Time. The parties shall use their commercially reasonable efforts to cause the Surviving Corporation to cause the Company Common Stock to be de-listed from Nasdaq National Market and de- registered under the Exchange Act as soon as practicable following the Effective Time. Section 5.16 Expenses. Except as otherwise provided in Section 7.3, whether or not the Merger is consummated, all Expenses incurred in connection with this Agreement and the Merger and the other transactions contemplated by this Agreement shall be paid by the party incurring such Expense, except that Expenses incurred in 48 connection with the filing fee for the Proxy Statement and printing and mailing the Proxy Materials (other than legal, accounting, investment and banking, expert and consultant fees and expenses) and the filing fee under the HSR Act shall be shared equally by the Parent and the Company. Section 5.17 Takeover Statutes; Exon-Florio. If any Takeover Statute is or may become applicable to the Merger or the other transactions contemplated by this Agreement, each of the Parent and the Company and its respective board of directors shall grant such approvals and take such actions as are necessary so that such transactions may be consummated as promptly as practicable on the terms contemplated by this Agreement, any necessary filings are made and otherwise act to eliminate or minimize the effects of such statute or regulation on such transactions. In addition, if the Parent so requests, the Parent and the Company shall cooperate to file a notification pursuant to Section 721(a) of the Exon-Florio Amendment to the Defense Production Act of 1950 Section 5.18 Dividends. The Company shall coordinate with the Parent the declaration, setting of record dates and payment dates of dividends on Company Common Stock so that holders of Company Common Stock do not receive dividends on both Company Common Stock and Parent ADS received in the Merger in respect of any calendar quarter or fail to receive a dividend on either Company Common Stock or Parent Common Stock received in the Merger in respect of any calendar quarter. Section 5.19 Control of the Company's Operations. Nothing contained in this Agreement shall give the Parent or the Company, directly or indirectly, rights to control or direct the other party's operations prior to the Effective Time. Section 5.20 Certain Obligations of the Parent. (a) Certain obligations of the Parent set forth in this Agreement, including those obligations designed to survive the consummation of the Share Exchange, may require additional corporate actions specified in the German Stock Corporation Law (Aktiengesetz), including Sections 52, 203 and 185 et seq. thereof, be taken by or with respect to the Parent. As required by law, certain of such obligations of the Parent shall be incorporated in agreements in connection with the contributions in kind to the Parent, which agreements shall be entered into by the Parent and the Exchange Agent in the context of the Share Exchange pursuant to Sections 52 and 183 et seq. of the German Stock Corporation Law (Aktiengesetz). (b) Effective as of the Effective Time and during the period in which any of the Company Stock Options remain outstanding, the Parent shall not cause the Surviving Corporation to commence a bankruptcy or insolvency proceeding under any applicable Law. 49 ARTICLE VI CONDITIONS Section 6.1 Conditions to Each Party's Obligation to Effect the Merger. The respective obligation of each party to consummate the other transactions contemplated by this Agreement to be consummated on the Closing Date is subject to the satisfaction or waiver at or prior to the Effective Time of each of the following conditions: (a) Stockholder Approval. This Agreement and consummation of the Merger shall have been duly approved by holders of outstanding Company Common Stock by the Requisite Company Vote, and this Agreement, the consummation of the Merger, the Share Capital Increase (including the approvals of the Parent's management board (Vorstand) and supervisory board (Aufsichtsrat)) and the issuance of the Parent Common Stock underlying the Parent ADSs to be issued in the Merger shall have been duly approved in accordance with applicable law and the articles of association (Satzung) of the Parent; (b) Listing. The Parent ADSs issuable to the Company's stockholders pursuant to this Agreement shall have been authorized for quotation on the Nasdaq National Market, upon official notice of issuance. (c) HSR. The waiting period applicable to the consummation of the Merger under the HSR Act shall have expired or been terminated. (d) Consents. All consents, approvals and action of any Governmental Entity required to permit the consummation of the Merger, the Share Capital Increase and the other transactions contemplated by this Agreement shall have been obtained or made, free of any condition that could reasonably be expected to result in a Material Adverse Effect on the Parent or a Material Adverse Effect on the Company. (e) Injunctions. No Governmental Entity of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any Law, orders, injunction or decree (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the Merger, the Share Capital Increase or the other transactions contemplated by this Agreement. (f) Registration Statement. The Registration Statement shall have become effective under the Securities Act. No stop order suspending the effectiveness of the Registration Statement shall have been issued, and no proceedings for that purpose shall have been initiated or be threatened by the SEC. Section 6.2 Conditions to Obligations of the Parent. The obligations of the Parent to consummate the transactions contemplated by this Agreement to be 50 consummated on the Closing Date are also subject to the satisfaction or waiver by the Parent at or prior to the Effective Time of the following conditions: (a) Representations and Warranties. The representations and warranties of the Company set forth in this Agreement that are qualified as to materiality shall be true and correct, and the representations and warranties of the Company set forth in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date, and the Parent shall have received a certificate (which certificate may be qualified by knowledge to the same extent as the representations and warranties of the Company contained in this Agreement are so qualified) signed on behalf of the Company by an executive officer of the Company to such effect. (b) Performance of Obligations of the Company. The Company shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and the Parent shall have received a certificate signed on behalf of the Company by an executive officer of the Company to such effect. (c) Material Adverse Effect. Since the date of this Agreement, there shall have been no Material Adverse Effect on the Company. (d) Consents Under Agreements. The Company shall have obtained the consent, approval or waiver of each person that is not a Governmental Entity whose consent, approval or waiver shall be required in order to consummate the transactions contemplated by this Agreement, except those for which the failure to obtain such consent, approval or waiver, individually or in the aggregate, would have no Material Adverse Effect on the Company. (e) Tax Opinion. The Parent shall have received the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, special counsel to the Parent, dated the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code, and that each of the Parent, Merger Sub and the Company will be a party to that reorganization within the meaning of Section 368(b) of the Code. Each of the parties hereto agree to make such reasonable representations related to the requirements of Sections 367 and 368 of the Code as may be requested by counsel in connection with such opinion. (f) Auditors' Report. The Parent shall have received an unqualified auditors' report from the Company's independent certified auditors on the Company's consolidated balance sheet and consolidated statement of income and of cash flows (including the related notes and schedules) provided by the Company to the Parent prior to the signing of this Agreement. 51 Section 6.3 Conditions to Obligation of the Company. The obligation of the Company to effect the Merger and consummate the other transactions contemplated by this Agreement to be consummated on the Closing Date is also subject to the satisfaction or waiver by the Company at or prior to the Effective Time of the following conditions: (a) Representations and Warranties. The representations and warranties of the Parent set forth in this Agreement that are qualified as to materiality shall be true and correct, and the representations and warranties of the Parent set forth in this Agreement that are not so qualified shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date, as though made on and as of the Closing Date, except to the extent the representation or warranty is expressly limited by its terms to another date, and the Company shall have received a certificate (which certificate may be qualified by knowledge to the same extent as the representations and warranties of each of the Parent contained in this Agreement are so qualified) signed on behalf of each of the Parent by an executive officer of the Parent to such effect. (b) Performance of Obligations of the Parent. The Parent shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and the Company shall have received a certificate signed on behalf of the Parent by an executive officer of the Parent to such effect. (c) Material Adverse Effect. Since the date of this Agreement, there shall have been no Material Adverse Effect on the Parent. (d) Consents Under Agreements. The Parent shall have obtained the consent, approval or waiver of each person that is not a Governmental Entity whose consent, approval or waiver shall be required in order to consummate the transactions contemplated by this Agreement, except those for which failure to obtain such consents, approval or waiver, individually or in the aggregate, would have no Material Adverse Effect on the Parent. (e) Tax Opinion. The Company shall have received the opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel to the Company, dated the Closing Date, to the effect that the Merger will be treated for federal income tax purposes as a reorganization within the meaning of Section 368(a) of the Code, and that each of the Parent, Merger Sub and the Company will be a party to that reorganization within the meaning of Section 368(b) of the Code. Each of the parties hereto agree to make such reasonable representations related to the requirements of Sections 367 and 368 of the Code as may be requested by counsel in connection with such opinion. 52 ARTICLE VII TERMINATION Section 7.1 Termination. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, notwithstanding any requisite approval and adoption of this Agreement, as follows: (a) by mutual written consent of the Parent and the Company duly authorized by their board of directors of the Company and by the management board of the Parent; (b) by either the Parent or the Company, if the Effective Time shall not have occurred on or before December 31, 2000; provided, however, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to the party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date; (c) by either the Parent or the Company, if any order, injunction or decree preventing the consummation of the Merger shall have been entered by any court of competent jurisdiction or Governmental Entity and shall have become final and nonappealable; (d) by the Parent or the Company, if this Agreement shall fail to receive the Requisite Company Vote at the Company Stockholders Meeting or any adjournment or postponement thereof; (e) by the Parent, upon a breach of any material representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in either of Section 6.2(a) or 6.2(c) would not be satisfied (a "Terminating ----------- Company Breach"); provided, however, that, if such Terminating Company Breach is - -------------- curable by the Company through the exercise of commercially reasonable efforts and for so long as the Company continues to exercise such commercially reasonable efforts, the Parent may not terminate this Agreement under this Section 7.1(e); (f) by the Company, upon breach of any material representation, warranty, covenant or agreement on the part of the Parent set forth in this Agreement, or if any representation or warranty of the Parent shall have become untrue, in either case such that the conditions set forth in either of Section 6.3(a) or 6.3(c) would not be satisfied (a "Terminating Parent ------------------ Breach"); provided, however, that, if such Terminating Parent Breach is curable - ------ by the Parent through commercially reasonable efforts and for so long as the Parent continues to exercise such commercially reasonable efforts, the Company may not terminate this Agreement under this Section 7.1(f); 53 (g) by the Parent, if (i) the Board of Directors of the Company withdraws, modifies or changes its approval or recommendation of this Agreement in a manner adverse to the Parent or shall have resolved to do so, (ii) the Board of Directors of the Company shall have recommended to the stockholders of the Company a Takeover Proposal or shall have resolved to do so, or (iii) a tender offer or exchange offer for 10% or more of the outstanding shares of capital stock of the Company is commenced by a person other than the Parent and either (a) the Board of Directors of the Company recommends acceptance of such tender offer or exchange offer by its stockholders or (b) within ten (10) business days of such commencement the Board of Directors of the Company shall have failed to recommend against acceptance of such tender offer or exchange offer by its stockholders (including by taking no position with respect to the acceptance of such tender offer or exchange offer by its stockholders); (h) by the Company, if the Board of Directors of the Company shall have concluded in good faith (after consultation with the Company's counsel) that failure to so terminate would be inconsistent with its fiduciary duties under applicable Laws and, on or prior to such date, any person or group (other than the Parent) shall have made a public announcement or otherwise communicated to the Company and its stockholders with respect to a Superior Proposal; provided, however, that the Company may not terminate this Agreement pursuant to this Section 7.1(h) until three business days have elapsed following delivery to the Parent of written notice of such determination of the Company (which written notice will inform the Parent of the material terms and conditions of the Superior Proposal); provided, further, however, that such termination under this Section 7.1(h) shall not be effective until the Company has made payment to the Parent of the amounts required to be paid pursuant to Section 7.3(b). (i) on or after July 8, 2000, by the Company, if both the management board (Vorstand) and the supervisory board (Aufsichsrat) of the Parent shall not have approved the Share Capital Increase. Section 7.2 Effect of Termination. Except as provided in Section 8.2, in the event of termination of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become void, there shall be no liability under this Agreement on the part of the Parent or the Company or any of their respective Representatives, and all rights and obligations of each party to this Agreement shall cease, subject to the remedies of the parties as set forth in Sections 7.3(b) and (c); provided, however, that nothing in this Agreement shall relieve any party from liability for the breach of any of its representations and warranties or the breach of any of its covenants or agreements set forth in this Agreement. Section 7.3 Expenses Following Certain Termination Events. (a) Except as set forth in this Section 7.3, all Expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid in accordance with the provisions of Section 5.16. For purposes of this 54 Agreement, "Expenses" consist of all out-of-pocket expenses (including, all fees -------- and expenses of counsel, accountants, investment bankers, experts and consultants to a party to this Agreement and its affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement, the preparation, printing, filing and mailing of the Proxy Statement or the Proxy Materials, the solicitation of stockholder approval and all other matters related to the closing of the transactions contemplated by this Agreement. (b) If this Agreement (i) is terminated by the Parent pursuant to Section 7.1(g), (ii) is terminated by the Company pursuant to Section 7.1(h) or (iii) is terminated by the Company or the Parent pursuant to Section 7.1(d), then, subject to the proviso below, the Company shall (x) on the date specified in the penultimate sentence of this Section 7.3 in the case of a termination pursuant to Section 7.1(d), or (y) simultaneously with a termination of this Agreement in the case of a termination pursuant to Section 7.1(g) or 7.1(h), pay to the Parent (by wire transfer of immediately available funds to an account designated by the Parent) a termination fee of U.S.$20,000,000 plus, subject to the last sentence of this Section 7.3, the reimbursement of all of Parent's actual and documented out-of-pocket expenses (including all investment banking, legal, accounting and other similar expenses) up to a maximum reimbursable amount of U.S.$2,000,000 (the "Parent Expenses"); provided, however, that the --------------- Company shall not be obligated to pay such fee to the Parent if this Agreement is terminated pursuant to Section 7.1(d) unless (i) at the time of the Company Stockholders Meeting, the Company has received a bona fide alternative Acquisition Proposal or a third party has made or publicly announced its intention to make a bona fide Acquisition Proposal and (ii) within 12 months after the termination of this Agreement, the Company enters into a definitive agreement providing for an alternative Acquisition Proposal with any third party or an alternative Acquisition Proposal is consummated with any third party. If a termination fee becomes payable as a result of a termination pursuant to Section 7.1(d), then such termination fee shall be paid promptly (and in any event within two (2) days of receipt by Company of a written notice from the Parent) following the earlier of the execution of such definitive agreement providing for an alternative Acquisition Proposal or the consummation of an alternative Acquisition Proposal, as the case may be. In addition, in the event the Parent or the Company terminates this Agreement pursuant to Section 7.1(d) and at the time of the Company Stockholders Meeting the Company has received a bona fide alternative Acquisition Proposal or a third party has made or publicly announced its intention to make a bona fide Acquisition Proposal, the Company shall promptly on demand reimburse all of the Parent Expenses and thereafter be obligated to pay the termination fee referred to above only in the event such fee becomes payable pursuant to this Section 7.3(b). (c) Each of the Parent and the Company agrees that the payments provided for in Section 7.3(b) shall be the sole and exclusive remedy of the parties upon a termination of this Agreement pursuant to Section 7.1(d), (g) or (h), as the case may be, and such remedy shall be limited to the payment stipulated in Section 7.3(b). 55 (d) The Company acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the Parent would not enter into this Agreement; accordingly, if the Company fails to pay promptly the amounts due pursuant to Section 7.3(b), and, in order to obtain such payment, the Parent commences a suit which results in a judgment against the Company for all or a portion of such amounts, the Company shall pay to the Parent's Expenses in connection with such suit, together with interest on the amounts payable to the Parent at the prime rate of Deutsche Bank in effect on the date such payment was required to be made. ARTICLE VIII MISCELLANEOUS Section 8.1 Certain Definitions. For purposes of this Agreement: (a) The term "affiliate," as applied to any person, means any --------- other person directly or indirectly controlling, controlled by, or under common control with, that person. For the purposes of this definition, "control" ------- (including, with correlative meanings, the terms "controlling," "controlled by" ----------- ------------- and "under common control with"), as applied to any person, means the ------------------------- possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that person, whether through the ownership of voting securities, by contract or otherwise. (b) The term "business day" means any day, other than ------------ Saturday, Sunday or a federal holiday, and shall consist of the time period from 12:01 a.m. through 12:00 midnight Eastern time. In computing any time period under this Agreement, the date of the event which begins the running of such time period shall be included except that if such event occurs on other than a business day such period shall begin to run on and shall include the first business day thereafter. (c) The term "including" means, unless the context clearly --------- requires otherwise, including but not limited to the things or matters named or listed after that term. (d) The term "knowledge," as applied to the Company or the --------- Parent, means the knowledge of the officers of the Company or the Parent, as the case may be. (e) The term "person" shall include individuals, ------ corporations, limited and general partnerships, trusts, limited liability companies, associations, joint ventures, Governmental Entities and other entities and groups (which term shall include a "group" as such term is defined ----- in Section 13(d)(3) of the Exchange Act). 56 (f) The term "subsidiary" or "subsidiaries" means, with ---------- ------------ respect to the Parent, the Company or any other person, any entity of which the Parent, the Company or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, stock or other equity interests constituting more than 50% of the voting or economic interest in such entity. Section 8.2 Survival. The representations, warranties and agreements in this Agreement and in any certificate delivered under this Agreement shall terminate at the Effective Time or upon the termination of this Agreement under Section 7.1, as the case may be, except that the agreements set forth in Articles I and II and Sections 5.8, 5.9, 5.13 and 5.15 and this Article VIII shall survive the Effective Time, those set forth in Sections 5.6(b), 5.16, 7.2 and 7.3 and this Article VIII shall survive termination of this Agreement and those set forth in Section 5.14 shall survive for a period of one year after termination of this Agreement. Each party agrees that, except for the representations and warranties contained in this Agreement, the Company Disclosure Letter and the Parent Disclosure Letter, no party to this Agreement has made any other representations and warranties, and each party disclaims any other representations and warranties, made by itself or any of its officers, directors, employees, agents, financial and legal advisors or other Representatives with respect to the execution and delivery of this Agreement or the transactions contemplated by this Agreement, notwithstanding the delivery of disclosure to any other party or any party's representatives of any documentation or other information with respect to any one or more of the foregoing. Section 8.3 Counterparts. This Agreement may be executed in any number of counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts shall together constitute the same agreement. Section 8.4 GOVERNING LAW; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. (b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO 57 ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.4(b). Section 8.5 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid, or by facsimile: if to the Parent: BROKAT AG Industriestrasse 3 70565 Stuttgart, Germany Attention: Hans-Peter Berger, Esq. Fax: +49-711-788-44-784 with copies to: Paul, Weiss, Rifkind, Wharton & Garrison 1285 Avenue of the Americas New York, New York 10019-6064, U.S.A. Attention: Mark S. Bergman, Esq. David K. Lakhdhir, Esq. Fax: +1 ###-###-#### if to the Company: Blaze Software, Inc. 150 Almaden Boulevard San Jose, California 95113, U.S.A. Attention: Robert Michitarian, Esq. Fax: +1 ###-###-#### with copies to: Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA ###-###-####, U.S.A. Attention: Larry Sonsini, Esq. Fax: +1 ###-###-#### 58 or to such other persons or addresses as may be designated in writing by the party to receive such notice as provided above. Section 8.6 Entire Agreement. This Agreement (including any exhibits and annexes to this Agreement), the Company Disclosure Letter and the Parent Disclosure Letter constitute the entire agreement and supersede all other prior agreements, understandings, representations and warranties, both written and oral, among the parties, with respect to the subject matter of this Agreement. Section 8.7 No Third Party Beneficiaries. Except as provided in Section 5.9 of this Agreement is not intended to confer upon any person other than the parties to this Agreement any rights or remedies under this Agreement. Section 8.8 Amendment. This Agreement may be amended by the parties to this Agreement by action taken by or on behalf of their respective Boards of Directors at any time prior to the Effective Time; provided that, after the approval of this Agreement by the stockholders of the Company, no amendment may be made that would reduce the amount or change the type of consideration into which each share of Company Common Stock shall be converted upon consummation of the Merger or that is otherwise prohibited by applicable Law. This Agreement may not be amended except by an instrument in writing signed by the parties to this Agreement. Section 8.9 Waiver. At any time prior to the Effective Time, any party to this Agreement may (a) extend the time for the performance of any obligation or other act of any other party to this Agreement, (b) waive any inaccuracy in the representations and warranties contained in this Agreement or in any document delivered pursuant to this Agreement, and (c) waive compliance with any agreement or condition contained in this Agreement. Any waiver of a condition set forth in Section 6.1, or any determination that such a condition has been satisfied, will be effective only if made in writing by each of the Company and the Parent and, unless otherwise specified in such writing, shall thereafter operate as a waiver (or satisfaction) of such conditions for any and all purposes of this Agreement. Any such extension or waiver shall be valid if set forth in an instrument in writing signed by the party or parties to be bound thereby. Section 8.10 Obligations of the Parent and of the Company. Whenever this Agreement requires a Parent Subsidiary to take any action, that requirement shall be deemed to include an undertaking on the part of the Parent to cause that Parent Subsidiary to take that action. Whenever this Agreement requires a Company Subsidiary to take any action, that requirement shall be deemed to include an undertaking on the part of the Company to cause that Company Subsidiary to take that action and, after the Effective Time, on the part of the Surviving Corporation to cause that Company Subsidiary to take that action. Section 8.11 Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect 59 the validity or enforceability or the other provisions of this Agreement. If any provision of this Agreement, or the application of that provision to any person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted for that provision in order to carry out, so far as may be valid and enforceable, the intent and purpose of the invalid or unenforceable provision and (b) the remainder of this Agreement and the application of the provision to other persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of the provision, or the application of that provision, in any other jurisdiction. Section 8.12 Interpretation. The table of contents and headings in this Agreement are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions of this Agreement. Where a reference in this Agreement is made to a Section, exhibit or annex, that reference shall be to a Section of or exhibit or annex to this Agreement unless otherwise indicated. Section 8.13 Assignment. This Agreement shall not be assignable by operation of law or otherwise, except that pursuant to Section 1.1(b) the Parent may designate, by written notice to the Company, a Parent Subsidiary that is wholly owned directly or indirectly by the Parent to be merged with and into the Company in lieu of Merger Sub, in which event all references in this Agreement to Merger Sub shall be deemed references to such Parent Subsidiary. Section 8.14 Specific Performance. The parties to this Agreement agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise reached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. Section 8.15 Submission to Jurisdiction; Waivers; Consent to Service of Process. Each of the Parent and the Company irrevocably agree that any legal action or proceeding with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or assigns may be brought and determined in any Delaware state court or Federal court sitting in the State of Delaware, and each of the Parent and the Company thereby (x) irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the personal jurisdiction of the aforesaid court in the event any dispute arises out of this Agreement or any transaction contemplated hereby, (y) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (z) agrees that it will not bring any action relating to this Agreement or any transaction contemplated hereby in any court 60 other than any Delaware state or Federal court sitting in the State of Delaware. Any service of process to be made in such action or proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 8.5. Each of the Parent and the Company hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) the defense of sovereign immunity, (b) any claim that it is not personally subject to the jurisdiction of the above-named court for any reason other than the failure to serve process in accordance with this Section 8.15 that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and (d) to the fullest extent permitted by application law the (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper and (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. 61 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties to this Agreement as of the date first written above. BLAZE SOFTWARE INC. By: /s/ Thomas Kelly -------------------------------- Name: Thomas Kelly Title: Chief Executive Officer BROKAT AKTIENGESELLSCHAFT By: /s/ Michael Janssen -------------------------------- Name: Michael Janssen Title: Chief Financial Officer By: /s/ Michael Schumacher -------------------------------- Name: Michael Schumacher Title: Executive Vice President 62