AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is entered
into as of January 13, 1997, by and among VERITAS Software Corporation, a
California corporation ("VERITAS"), VERITAS Software Corporation, a Delaware
corporation ("Newco"), and OpenVision Technologies, Inc., a Delaware corporation
("OpenVision").
RECITALS
A. The parties intend that, subject to the terms and conditions of this
Agreement, VERITAS and OpenVision will each become a subsidiary of a new
Delaware corporation referred to herein as Newco which has been formed by
VERITAS solely for the purpose of the transactions contemplated hereunder (the
"Merger"). To effect the Merger, (i) Newco will form two new Delaware
corporations ("VERITAS Sub" and "OpenVision Sub", respectively) as wholly-owned
subsidiaries of Newco, (ii) VERITAS Sub will merge with and into VERITAS, with
VERITAS to be the surviving corporation of such merger (the "VERITAS Merger"),
and (iii) OpenVision Sub will merge with and into OpenVision, with OpenVision to
be the surviving corporation of such merger (the "OpenVision Merger"), all
pursuant to the terms and conditions of this Agreement, the Agreements of Merger
substantially in the forms of Exhibit A and Exhibit B hereto (the "Agreements of
Merger") and the applicable provisions of the Delaware General Corporation Law
(the "Delaware Law") and the California General Corporation Law (the "CGCL").
Upon the effectiveness of the Merger, all of the outstanding capital stock of
VERITAS and all of the outstanding capital stock of OpenVision will be converted
into Common Stock of Newco (the "Newco Common Stock"). Newco will assume all
outstanding options, warrants and rights to purchase shares of Common Stock of
both VERITAS and OpenVision, as provided in this Agreement and the Agreements of
Merger. The Newco Common Stock issued in the Merger will be registered under the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Newco
registration statement.
B. The Merger is intended to be treated as (i) a tax-free reorganization
pursuant to the provisions of Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code"), and (ii) a "pooling of interests" for accounting
purposes.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. PLAN OF REORGANIZATION
1.1 THE ORGANIZATION OF NEWCO, VERITAS SUB AND OPENVISION SUB. VERITAS has
formed Newco under the laws of the State of Delaware for the purposes of the
transactions contemplated by the Merger. Newco currently has no outstanding
securities and will not issue any securities prior to the Effective Time (as
defined below), will conduct no business or operations, will have no assets and
will enter into no agreements or obligations except as required or contemplated
by this Agreement or necessary to perform its obligations hereunder. As soon as
practicable after the date of this Agreement, Newco shall form a wholly-owned
subsidiary named VERITAS Sub, Inc. and a wholly-owned subsidiary named
OpenVision Sub, Inc. under the laws of Delaware.
1.2 THE VERITAS MERGER. Subject to the terms and conditions of this
Agreement, Newco will cause VERITAS Sub to execute and deliver an Agreement of
Merger substantially in the form of Exhibit A hereto (the "VERITAS Agreement of
Merger") providing for the merger of VERITAS Sub with and into VERITAS (the
"VERITAS Merger"), with VERITAS being the surviving corporation upon the
effectiveness of the VERITAS Merger and thereby becoming a wholly-owned
subsidiary of Newco, pursuant to this Agreement, the VERITAS Agreement of Merger
and in accordance with applicable provisions of the Delaware Law and the CGCL as
follows:
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(a) Conversion of VERITAS Shares. Each share of the Common Stock of
VERITAS ("VERITAS Common Stock"), that is issued and outstanding immediately
prior to the Effective Time (as defined below) will by virtue of the VERITAS
Merger and at the Effective Time, and without any further action on the part of
VERITAS, Newco or any holder of VERITAS Common Stock, be converted into one
share (the "VERITAS Applicable Ratio") of validly issued, fully paid and
nonassessable Common Stock, $0.001 par value of Newco ("Newco Common Stock").
1.3 THE OPENVISION MERGER. Subject to the terms and conditions of this
Agreement, and simultaneously with the VERITAS Merger, Newco will cause
OpenVision Sub to execute and deliver an Agreement of Merger substantially in
the form of Exhibit B hereto (the "OpenVision Agreement of Merger") providing
for the merger of OpenVision Sub with and into OpenVision (the "OpenVision
Merger"), with OpenVision being the surviving corporation upon the effectiveness
of the OpenVision Merger and thereby becoming a wholly-owned subsidiary of
Newco, pursuant to this Agreement, the OpenVision Agreement of Merger and in
accordance with applicable provisions of the Delaware law as follows:
(a) Conversion of OpenVision Shares. Each share of Common Stock of
OpenVision, $0.001 par value, and each share of Class B Common Stock of
OpenVision, $0.001 par value, (collectively "OpenVision Common Stock"), that is
issued and outstanding immediately prior to the Effective Time (as defined
below) will by virtue of the OpenVision Merger and at the Effective Time, and
without any further action on the part of OpenVision, Newco or any holder of
OpenVision Common Stock, be converted into a fraction of a share of validly
issued, fully paid and nonassessable Newco Common Stock, equal to a fraction,
the numerator of which is 7,500,000 and the denominator of which is 73,000, plus
the total number of shares of OpenVision Common Stock outstanding, plus the
total number of shares of OpenVision Common Stock issuable upon exercise of the
OpenVision Options and OpenVision Warrants (as both terms are defined in Section
1.9 hereof), in each case as of the Effective Time (the "OpenVision Applicable
Ratio" and collectively with the VERITAS Applicable Ratio, the "Applicable
Ratios"). The "Effective Time" shall mean the effective time and date that both
Agreements of Merger have been filed with the Secretary of State of the State of
Delaware in accordance with the relevant provisions of Delaware law and the
VERITAS Agreement of Merger has been filed with the Secretary of State of the
State of California in accordance with the relevant provisions of the CGCL.
1.4 CANCELLATION OF VERITAS-OWNED AND OPENVISION-OWNED STOCK. Each share
of OpenVision Common Stock held in the treasury of OpenVision and each share of
VERITAS Common Stock held in the treasury of VERITAS or any of which are owned
by Newco, VERITAS, OpenVision or any direct or indirect wholly-owned subsidiary
of Newco, VERITAS or OpenVision immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof.
1.5 ADJUSTMENTS FOR CAPITAL CHANGES. If, prior to the Effective Time,
either VERITAS or OpenVision recapitalizes through a subdivision of its
outstanding shares into a greater number of shares, or a combination of its
outstanding shares into a lesser number of shares, or reorganizes, reclassifies
or otherwise changes its outstanding shares into the same or a different number
of shares of other classes, or declares a dividend on its outstanding shares
payable in shares of its capital stock or securities convertible into shares of
its capital stock, then the Applicable Ratios will be adjusted appropriately so
as to maintain the relative proportionate interests of the holders of VERITAS
Common Stock and the holders of the OpenVision Common Stock in Newco securities.
1.6 DISSENTING SHARES. Holders of shares of OpenVision Common Stock who
dissent from the OpenVision Merger are not entitled to rights of appraisal under
Section 262 of the Delaware Law. Holders of shares of VERITAS Common Stock who
dissent from the VERITAS Merger are not entitled to dissenters' rights under
Chapter 13 of the CGCL provided, however, that (i) if demands for payment under
Chapter 13 of the CGCL are filed with respect to 5% or more of the outstanding
shares of VERITAS Common Stock by the holders of shares which voted against the
VERITAS Merger, then such holders of VERITAS Common Stock shall be entitled to
exercise dissenters' rights to the extent available under Chapter 13 of the CGCL
with respect to the shares for which such demand has been filed in accordance
with Chapter 13 of the CGCL; and (ii) any shares of VERITAS Common Stock whose
transfer is restricted by law or regulation or by
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VERITAS and that are voted against the VERITAS Merger shall be entitled to
exercise dissenters' rights to the extent available under Chapter 13 of the
CGCL.
1.7 FRACTIONAL SHARES. No fractional shares of Newco Common Stock will be
issued in connection with the Merger, but in lieu thereof each holder of VERITAS
Common Stock and of OpenVision Common Stock who would otherwise be entitled to
receive a fraction of a share of Newco Common Stock will receive from the
Exchange Agent (as hereinafter defined), at such time as such holder shall
receive a certificate representing shares of Newco Common Stock as contemplated
by Section 6.2, an amount of cash (rounded up to the nearest whole cent) equal
to the per share market value of VERITAS Common Stock (based on the average of
the Closing sale prices of VERITAS Common Stock as quoted on the Nasdaq Stock
Market during the ten day trading period ending on the Closing Date (as defined
in Section 6.1) as reported in the Wall Street Journal) (the "Average Price")
multiplied by the fraction of a share of Newco Common Stock to which such holder
would otherwise be entitled. The fractional interests of each VERITAS
shareholder and of each OpenVision stockholder will be aggregated such that no
VERITAS shareholder or OpenVision stockholder will receive cash in an amount
equal to or greater than the value of one full share of Newco Common Stock.
Newco shall provide sufficient funds to the Exchange Agent to make the payments
contemplated by this Section 1.7.
1.8 VERITAS OPTIONS AND WARRANTS.
(a) Conversion. At the Effective Time, each of the then outstanding
options to purchase shares of VERITAS Common Stock (collectively, the "VERITAS
Options") (consisting of all outstanding options granted under VERITAS' 1985
Stock Option Plan, 1991 Executive Stock Option Plan, 1993 Equity Incentive Plan
and 1993 Director Stock Option Plan (collectively, and with the VERITAS Stock
Purchase Plan referred to in Section 1.8(b) below, the "VERITAS Plans"), and any
individual non-Plan options) and each of the then outstanding warrants to
purchase shares of VERITAS Common Stock (the "VERITAS Warrants") will by virtue
of the Merger, and without any further action on the part of any holder thereof,
be assumed and converted into an option (or warrant, as the case may be) to
purchase an equivalent number of shares of Newco Common Stock at an exercise
price per share equal to the per share exercise price of the VERITAS Option (or
VERITAS Warrant, as the case may be) in effect at the Effective Time. The term,
exercisability, vesting schedule, status as an "incentive stock option" under
Section 422 of the Code, if applicable, and all other terms and conditions of
the VERITAS Options and VERITAS Warrants will be unchanged and all references in
any option or warrant agreement governing such option or warrant to VERITAS
shall be deemed to refer to Newco, where appropriate. Continuous service as an
employee or consultant with VERITAS or any of the VERITAS Subsidiaries (as
hereinafter defined) will be credited to an optionee of VERITAS for purposes of
determining the number of shares of Newco Common Stock subject to exercise under
a converted VERITAS Option after the Effective Time.
(b) At the Effective Time, each of the then outstanding options to
purchase shares of VERITAS Common Stock (collectively, the "VERITAS Stock
Purchase Plan Options"), consisting of all outstanding options to purchase
shares under VERITAS' 1993 Employee Stock Purchase Plan (the "VERITAS Stock
Purchase Plan"), will by virtue of the Merger, and without any further action on
the part of any holder thereof, be assumed and converted into an option to
purchase the same number of shares of Newco Common Stock on the next Purchase
Date (as such term is defined in the VERITAS Stock Purchase Plan) following the
Effective Time at a purchase price per share determined in accordance with the
VERITAS Stock Purchase Plan.
1.9 OPENVISION OPTIONS AND WARRANTS.
(a) Conversion. At the Effective Time, each of the then outstanding
options to purchase OpenVision Common Stock (collectively, the "OpenVision
Options") (consisting of all outstanding options granted under OpenVision's 1992
Stock Plan and 1996 Director Option Plan (collectively the "OpenVision Plans"),
and any individual non-Plan options) and each of the then outstanding warrants
to purchase OpenVision Common Stock (the "OpenVision Warrants") will by virtue
of the Merger, and without any further action on the part of any holder thereof,
be assumed and converted into an option (or warrant, as the case may be) to
purchase that number of shares of Newco Common Stock determined by multiplying
the number of shares of
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OpenVision Common Stock subject to such OpenVision Option or OpenVision Warrant
at the Effective Time by the OpenVision Applicable Ratio, at an exercise price
per share of Newco Common Stock equal to the exercise price per share of such
OpenVision Option or OpenVision Warrant immediately prior to the Effective Time
divided by the Applicable Ratio rounded up to the nearest cent. If the foregoing
calculation results in an assumed OpenVision Option or OpenVision Warrant being
exercisable for a fraction of a share of Newco Common Stock, then the number of
shares of Newco Common Stock subject to such option (or warrant, as the case may
be) will be rounded down to the nearest whole number of shares, with no cash
being payable for such fractional share. The term, exercisability, vesting
schedule, status as an "incentive stock option" under Section 422 of the Code,
if applicable, and all other terms and conditions of the OpenVision Options and
OpenVision Warrants will otherwise be unchanged. Continuous service as an
employee or consultant with OpenVision or any of the OpenVision Subsidiaries (as
hereinafter defined) will be credited to an optionee of OpenVision for purposes
of determining the number of shares of Newco Common Stock subject to exercise
under a converted OpenVision Option after the Effective Time.
(b) At the Effective Time, the OpenVision 1996 Employee Stock Purchase
Plan (the "OpenVision Stock Purchase Plan") will be assumed by Newco solely with
respect to outstanding options, and the securities reserved thereunder shall
become shares of Newco Common Stock, determined by multiplying (i) the number of
shares reserved thereunder and not issued thereunder prior to the Effective Time
by (ii) the OpenVision Applicable Ratio. Except for an increase to the reserve
by 100,000 shares necessary to honor existing OpenVision Stock Purchase Plan
Options, which increase is to be approved by the OpenVision Stockholders at the
OpenVision Stockholders Meeting, no additional shares shall be reserved under
the OpenVision Stock Purchase Plan before or after its assumption by Newco. At
the Effective Time, each then outstanding "option" to purchase OpenVision Common
Stock under the OpenVision Stock Purchase Plan for the open offering period that
runs from October 31, 1996 until October 30, 1998 (the "OpenVision Stock
Purchase Plan Options") will by virtue of the Merger, and without any further
action on the part of any holder thereof, be assumed and converted into a right
to purchase shares of Newco Common Stock on the same terms and conditions as set
forth in the OpenVision Stock Purchase Plan except that (i) each OpenVision
Stock Purchase Plan Option shall thereafter be exercisable for Newco Common
Stock, and (ii) the exercise price per share for the number of whole shares of
Newco Common Stock issuable upon exercise of each the OpenVision Stock Purchase
Option shall be determined in accordance with the formula set forth in the
OpenVision Stock Purchase Plan, except that the "fair market value" of the Newco
Common Stock subject to purchase pursuant to the OpenVision Stock Purchase Plan
Options (A) on the first day of an "Offering Period" under the OpenVision Stock
Purchase Plan shall be the quotient resulting from the division of the last sale
price of OpenVision Common Stock as reported on the Nasdaq Stock Market on the
trading day immediately prior to such date by the OpenVision Applicable Ratio
rounded up to the nearest cent; and (B) on the last day of any "Purchase Period"
under the OpenVision Stock Purchase Plan shall be the last sale price of Newco
Common Stock as reported on the Nasdaq Stock Market on the trading day
immediately prior to such date. No new "Offering Periods" (as defined in the
OpenVision Stock Purchase Plan) will be commenced. OpenVision shall take all
action that may be necessary (under the OpenVision Stock Purchase Plan and
otherwise) to effectuate the provisions of this Section 1.9(b) and to ensure
that, from and after the Effective Time, holders of OpenVision Stock Purchase
Plan Options and employees of OpenVision participating in the OpenVision Stock
Purchase Plan after the Effective Time have no rights with respect to the
OpenVision Stock Purchase Plan that are inconsistent with this Section 1.9(b).
1.10 NEWCO PLANS. Newco shall assume, effective as of the Effective Time,
the OpenVision Stock Purchase Plan, the VERITAS 1993 Equity Incentive Plan, its
1993 Director Stock Option Plan and its 1993 Employee Stock Purchase Plan and
shall have reserved 107,810, 4,100,000, 250,000 and 1,000,000 shares,
respectively, for issuance thereunder (collectively, the "Newco Plans"). Newco
shall also reserve a sufficient number of shares of Newco Common Stock for
issuance pursuant to the assumption of the Stock Rights (as defined below)
provided for in Sections 1.8 and 1.9 above. Upon the Effective Time, and subject
to assumption of such Stock Rights, the OpenVision Plans shall be terminated in
accordance with their respective terms.
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1.11 REGISTRATION. VERITAS will cause Newco to cause the Newco Common
Stock issuable upon exercise of the assumed OpenVision Stock Purchase Plan
Options, VERITAS Options, VERITAS Stock Purchase Plan Options, and OpenVision
Options (collectively, the "Stock Rights") and the shares reserved for issuance
pursuant to future awards under the Newco Plans to be registered on Form S-8
(the "Form S-8") promulgated by the Securities and Exchange Commission (the
"SEC") within 5 days after the Effective Time and will use its reasonable best
efforts to maintain the effectiveness of such registration statement or
registration statements for so long as any such assumed Stock Rights shall
remain outstanding. With respect to those individuals who subsequent to the
Merger will be subject to the reporting requirements under Section 16(a) of the
Exchange Act (as hereinafter defined), Newco shall administer the Stock Rights
assumed pursuant to Sections 1.8 and 1.9 (including the provisions of the
VERITAS Plans, and the OpenVision Plans incorporated in the Stock Rights) in a
manner that complies with Rule 16b-3 promulgated by the SEC under the Exchange
Act.
1.12 EFFECTS OF THE MERGER. At the Effective Time: (a) the separate
existence of VERITAS Sub will cease and VERITAS Sub will be merged with and into
VERITAS, with VERITAS being the surviving corporation of the VERITAS Merger (the
"VERITAS Surviving Corporation"), pursuant to the terms of this Agreement and
the VERITAS Agreement of Merger; (b) the separate existence of OpenVision Sub
will cease and OpenVision Sub will be merged with and into OpenVision, with
OpenVision being the surviving corporation of the OpenVision Merger (the
"OpenVision Surviving Corporation"), pursuant to the terms of this Agreement and
the OpenVision Agreement of Merger, (c) the Articles of Incorporation of the
VERITAS Surviving Corporation shall be in the form attached as Exhibit A to the
VERITAS Agreement of Merger, and the Certificate of Incorporation of the
OpenVision Surviving Corporation shall be in the form attached as Exhibit A to
the OpenVision Agreement of Merger; (d) the Bylaws of VERITAS immediately prior
to the Effective Time will be the Bylaws of the VERITAS Surviving Corporation
and the Bylaws of OpenVision Sub immediately prior to the Effective Time will be
the Bylaws of the OpenVision Surviving Corporation; (e) the directors and
officers of VERITAS immediately prior to the Effective Time will be the
directors and officers of the VERITAS Surviving Corporation; (f) the director of
the OpenVision Surviving Corporation shall be Mark Leslie and the officers of
the OpenVision Surviving Corporation shall be Mark Leslie as President,
Treasurer, Secretary and Chief Financial Officer, (g) each share of the Common
Stock of VERITAS Sub outstanding immediately prior to the Effective Time will be
converted into one share of Common Stock of the VERITAS Surviving Corporation;
(h) each share of the Common Stock of OpenVision Sub outstanding immediately
prior to the Effective Time will be converted into one share of Common Stock of
the OpenVision Surviving Corporation; (i) each share of VERITAS Common Stock,
OpenVision Common Stock, and each Stock Right outstanding immediately prior to
the Effective Time will be converted as provided in Sections 1.2, 1.3, 1.8 and
1.9; (j) the OpenVision Stock Purchase Plan and the VERITAS Plans shall be
assumed by Newco; and (k) the Merger will, from and after the Effective Time,
have all of the effects provided by applicable law, including, without
limitation, the CGCL and the Delaware Law.
1.13 REGISTRATION ON FORM S-4. The Newco Common Stock to be issued in the
Merger shall be registered under the Securities Act on the Form S-4 (as
hereinafter defined). As promptly as practicable after the date of this
Agreement, VERITAS, Newco and OpenVision shall prepare and file with the SEC a
Form S-4 registration statement (the "Form S-4"), together with the
prospectus/joint proxy statement to be included therein (the "Prospectus/Proxy
Statement") and any other documents required by the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection
with the Merger. Each of VERITAS, Newco and OpenVision shall use its reasonable
best efforts to respond promptly to any comments of the SEC and to have the Form
S-4 declared effective under the Securities Act as promptly as practicable after
such filing. VERITAS and Newco shall also take any action required to be taken
under any applicable state securities or "blue sky" laws and regulations of the
Nasdaq Stock Market in connection with the issuance of the Newco Common Stock
pursuant to the Merger. OpenVision shall promptly furnish to VERITAS all
information concerning OpenVision and the OpenVision stockholders as may be
reasonably required in connection with any action contemplated by this Section
1.13. Each of VERITAS, Newco and OpenVision will notify the other promptly of
the receipt of any comments from the SEC or its staff and of any request by the
SEC or its staff for amendments or supplements to the Form S-4 or
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the Prospectus/Proxy Statement or for additional information and will supply the
other with copies of all correspondence with the SEC or its staff with respect
to the Form S-4 or the Prospectus/Proxy Statement. Whenever any event occurs
which should be set forth in an amendment or supplement to the Form S-4 or the
Prospectus/Proxy Statement, VERITAS and Newco or OpenVision, as the case may be,
shall promptly inform the other of such occurrence and cooperate in filing with
the SEC or its staff, and/or mailing to stockholders of VERITAS and OpenVision,
such amendment or supplement.
1.14 TAX FREE REORGANIZATION. The parties intend to adopt this Agreement
and the Merger as a tax-free plan of reorganization under Section 368(a)(1)(A)
of the Code by virtue of the provisions of Section 368(a)(2)(E) of the Code. The
Newco Common Stock issued in the Merger will be issued solely in exchange for
the VERITAS Common Stock and the OpenVision Common Stock, and no other
transaction other than the Merger represents, provides for or is intended to be
an adjustment to the consideration paid for either the VERITAS Common Stock or
the OpenVision Common Stock. Except for cash paid in lieu of fractional shares
of any VERITAS Common Stock or OpenVision Common Stock, no consideration that
could constitute "other property" within the meaning of Section 356(b) of the
Code is being transferred by Newco for either the VERITAS Common Stock or the
OpenVision Common Stock in the Merger. The parties shall not take a position on
any tax return inconsistent with this Section 1.14. In addition, Newco hereby
represents, and will represent as of the Closing Date, that it intends to
continue both VERITAS' and OpenVision's historic businesses or use a significant
portion of VERITAS' and OpenVision's business assets in a trade or business.
1.15 POOLING OF INTERESTS. The parties intend that the Merger be treated
as a "pooling of interests" for accounting purposes. The parties shall use their
reasonable best efforts to cause their respective affiliates to execute and
deliver Affiliates Agreements, as contemplated by Sections 4.5 and 5.5 below, to
ensure compliance by such affiliates with the restrictions required to allow
such accounting treatment to be utilized. In addition, Newco hereby represents
and warrants that it shall not after the Closing Date take any action that will
cause the Merger not to qualify as a "pooling of interests" for accounting
purposes.
1.16 HART-SCOTT-RODINO FILINGS. VERITAS and Newco will, and OpenVision
shall use its reasonable best efforts to cause Warburg, Pincus Investors, L.P.
("Warburg") to, promptly prepare and file the applicable notices (if any)
required to be filed by them under the Hart-Scott-Rodino Antitrust Improvements
Act (the "HSR Act"), and comply promptly with any requests to any of them from
the Federal Trade Commission or United States Department of Justice for
additional information.
1.17 BOARD OF DIRECTORS AND OFFICERS OF NEWCO. At the Effective Time, the
directors of Newco shall be Mark Leslie, Roel Pieper, Joseph Rizzi, Steven
Brooks, Fred van den Bosch, Geoffrey Squire and William Janeway. At the
Effective Time, the following individuals shall be elected to the following
offices of Newco:
<TABLE>
<CAPTION>
NAME OFFICE
----------------------- -----------------------------------------------
<S> <C>
Mark Leslie President, CEO and Co-Chairman of Board
Geoffrey Squire Co-Chairman of Board and Executive Vice
President
Fred van den Bosch Senior Vice President, Engineering
Peter Levine Vice President, Marketing
Fred Crary Vice President, International and OEM Sales
Paul Sallaberry Vice President, North American Sales
Kenneth Lonchar Chief Financial Officer and Vice President,
Finance
Jay Jones Vice President, General Counsel and Secretary
</TABLE>
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2. REPRESENTATIONS AND WARRANTIES OF OPENVISION
Except as set forth in a letter dated the date of this Agreement, delivered
by OpenVision to VERITAS concurrently herewith, and certified by an officer of
OpenVision, on behalf of OpenVision, to be true, accurate and complete to the
best of his knowledge (the "OpenVision Disclosure Letter"), OpenVision hereby
represents and warrants to VERITAS that:
2.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. OpenVision, and
each of its subsidiaries set forth in Section 2.1 of the OpenVision Disclosure
Letter (the "OpenVision Subsidiaries") (the OpenVision Subsidiaries being the
only subsidiaries of OpenVision), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect on OpenVision (as
defined below). The OpenVision Disclosure Letter sets forth a correct and
complete list of the OpenVision Subsidiaries, the holders of record of each
OpenVision Subsidiary's outstanding equity, and a correct and complete list of
each jurisdiction in which each of OpenVision and the OpenVision Subsidiaries is
duly qualified and in good standing to do business. OpenVision has delivered to
VERITAS or its counsel complete and correct copies of the Certificate of
Incorporation and Bylaws of OpenVision and will deliver to VERITAS or its
counsel prior to the Closing Date the equivalent charter documents for each of
the OpenVision Subsidiaries, in each case as amended to the date of this
Agreement. Other than the OpenVision Subsidiaries, OpenVision does not own,
directly or indirectly, any capital stock or other equity interest of any
corporation or have any direct or indirect equity or ownership interest in any
other business, whether organized as a corporation, partnership, joint venture
or otherwise.
In this Agreement, any reference to the term "Material Adverse Effect on
OpenVision" means any event, change or effect which would have a material
adverse effect on the business, assets (including intangible assets), financial
condition, results of operations, or prospects of OpenVision and the OpenVision
Subsidiaries, taken as a whole. In addition, any reference to the terms "to
OpenVision's knowledge" or "known to OpenVision" refers to the current actual
knowledge of any officer of OpenVision.
2.2 CAPITAL STRUCTURE.
(a) Stock and Options. The authorized capital stock of OpenVision
consists of 50,000,000 shares of OpenVision Common Stock, $0.001 par value,
3,400,000 of which are designated Class B Common Stock, and 5,000,000 shares of
Preferred Stock, $0.01 par value (the "OpenVision Preferred Stock"). At the
close of business on January 10, 1997, 15,475,774 shares of OpenVision Common
Stock were issued and outstanding, 3,247,142 shares of OpenVision Class B Common
Stock were issued and outstanding, no shares of OpenVision Common Stock were
held by OpenVision in its treasury, 2,186,673 shares of OpenVision Common Stock
were reserved for issuance upon the exercise of outstanding OpenVision Options,
910,082 shares of OpenVision Common Stock were available for the grant of
additional awards under the OpenVision Plans, 12,500 shares of OpenVision Common
Stock were reserved for issuance upon exercise of outstanding OpenVision
Warrants, and 200,808 shares of OpenVision Common Stock were reserved for
issuance pursuant to the OpenVision Stock Purchase Plan. No shares of OpenVision
Preferred Stock are issued or outstanding. All outstanding shares of OpenVision
Common Stock are validly issued, fully paid and nonassessable and not subject to
preemptive rights by statute, the Certificate of Incorporation or Bylaws of
OpenVision, or any agreement or document to which OpenVision is a party or by
which it is bound. All outstanding shares of the capital stock of each of the
OpenVision Subsidiaries are validly issued, fully paid and nonassessable and are
owned by OpenVision or one of the OpenVision Subsidiaries free and clear of any
liens, security interests, pledges, agreements, claims, charges or encumbrances.
OpenVision has delivered to VERITAS a correct and complete list of each
OpenVision Option and OpenVision Warrant outstanding as of the date hereof,
including the name of the holder of such OpenVision Option or OpenVision
Warrant, the OpenVision Plan pursuant to which such OpenVision Option was
issued, the number of shares covered by such OpenVision Option or OpenVision
Warrant, the per share exercise price of such OpenVision Option or OpenVision
Warrant and the vesting
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commencement date and vesting schedule applicable to each such
OpenVision Option, including the number of shares vested as of the date of this
Agreement. OpenVision has further delivered to VERITAS a correct and complete
list of the employees currently enrolled in the current Offering Period of the
OpenVision Stock Purchase Plan, the amount of the periodic payroll deduction
from each such employee's compensation with respect to such plan, the aggregate
amount of payroll deductions with respect to the current Purchase Period of such
plan for each such employee to date, and the fair market value (as determined in
accordance with the OpenVision Stock Purchase Plan) of the OpenVision Common
Stock on the date of commencement of the current Offering Period. OpenVision has
also delivered to VERITAS a correct and complete list of OpenVision Common Stock
outstanding as of the date hereof purchased pursuant to Restricted Stock Awards
under OpenVision's 1992 Stock Plan which are subject to a right of OpenVision to
repurchase such shares, including the name of the holder of such stock, the
purchase price of such stock and the vesting commencement date and vesting
schedule relating to such stock providing for the lapse of OpenVision's
repurchase rights, including the number of shares vested as of the date of this
Agreement.
(b) No Other Commitments. Except for the OpenVision Options, OpenVision
Warrants and OpenVision Stock Purchase Plan Options disclosed in Section 2.2(a)
above, a list of which has been provided to VERITAS, there are no options,
warrants, calls, rights, commitments, conversion rights or agreements of any
character to which OpenVision or any of the OpenVision Subsidiaries is a party
or by which OpenVision or any of the OpenVision Subsidiaries is bound obligating
OpenVision or any of the OpenVision Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, any shares of capital stock of OpenVision
or any of the OpenVision Subsidiaries or securities convertible into or
exchangeable for shares of capital stock of OpenVision or any of the OpenVision
Subsidiaries, or obligating OpenVision or any of the OpenVision Subsidiaries to
grant, extend or enter into any such option, warrant, call, right, commitment,
conversion right or agreement. There are no voting trusts or other agreements or
understandings to which OpenVision is a party with respect to the voting of the
capital stock of OpenVision or any of the OpenVision Subsidiaries.
(c) Registration Rights. OpenVision is not under any obligation to
register under the Securities Act any of its presently outstanding securities or
any securities that may be subsequently issued, except as disclosed in the
OpenVision Disclosure Letter.
2.3 AUTHORITY.
(a) Corporate Action. Subject to approval of this Agreement and the
Merger by the stockholders of OpenVision, OpenVision has all requisite corporate
power and authority to enter into this Agreement and the OpenVision Agreement of
Merger, to perform its obligations hereunder and to consummate the Merger and
the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the OpenVision Agreement of Merger by OpenVision
and, subject to approval of this Agreement and the Merger by the stockholders of
OpenVision, the filing and recordation of the OpenVision Agreement of Merger
pursuant to Delaware Law and the consummation by OpenVision of the Merger and
the other transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of OpenVision. This Agreement has been,
and upon the Closing Date the OpenVision Agreement of Merger will have been,
duly executed and delivered by OpenVision and this Agreement is, and the
OpenVision Agreement of Merger as of the Effective Time will be, valid and
binding obligations of OpenVision, enforceable in accordance with their terms,
except as enforceability may be limited by bankruptcy and other similar laws and
general principles of equity.
(b) No Conflict. Neither the execution, delivery and performance of this
Agreement or the OpenVision Agreement of Merger, nor the consummation of the
transactions contemplated hereby or thereby nor compliance with the provisions
hereof or thereof will: (i) conflict with, or result in any violations of, or
cause a default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or acceleration of
any obligation contained in, or the loss of any material benefit under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties or assets of OpenVision or any of the
OpenVision Subsidiaries under, any term, condition or provision of (x) the
Certificate of Incorporation or Bylaws of OpenVision or the equivalent
organizational documents of any of the OpenVision Subsidiaries or (y) any loan
or credit agreement, note, bond, mortgage,
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indenture, lease or other material agreement, judgment, order, decree, statute,
law, ordinance, rule or regulation applicable to OpenVision or any of the
OpenVision Subsidiaries or their respective properties or assets, other than any
such conflicts, violations, defaults, rights, losses, liens, security interests,
charges or encumbrances which, individually or in the aggregate, would not have
a Material Adverse Effect on OpenVision; or (ii) require the affirmative vote of
the holders of greater than a majority of the issued and outstanding shares of
OpenVision Common Stock.
(c) Governmental Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign (each a "Governmental Entity"), is required to be obtained
by OpenVision or any of the OpenVision Subsidiaries in connection with the
execution and delivery of this Agreement or the OpenVision Agreement of Merger,
or the consummation of the transactions contemplated hereby or thereby, except
for: (i) the filing with the SEC, and the effectiveness, of the Form S-4, and
the filing of the Prospectus/Proxy Statement relating to the meeting of the
stockholders of OpenVision (the "OpenVision Stockholders Meeting") to be held
with respect to the approval by OpenVision's stockholders of this Agreement and
the Merger, and the filing of such reports and information under the Exchange
Act, and the rules and regulations promulgated by the SEC thereunder, as may be
required in connection with this Agreement and the transactions contemplated
hereby; (ii) the filing of the OpenVision Agreement of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which OpenVision is qualified to do business;
(iii) such filings, authorizations, orders and approvals as may be required
under state "control share acquisition," "anti-takeover," "blue sky" or other
similar statutes and regulations (collectively, "State Takeover Laws"); (iv)
such filings and notifications as may be necessary under the HSR Act; and (v)
such other filings, authorizations, orders and approvals which, if not obtained
or made, would not have a Material Adverse Effect on OpenVision or VERITAS or
have a material adverse effect on the ability of the parties to consummate the
Merger.
2.4 SEC DOCUMENTS.
(a) SEC Reports. OpenVision has delivered to VERITAS or its counsel
correct and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by OpenVision with the SEC on or after May 7,
1996 (the "OpenVision SEC Documents"), which are all the documents (other than
preliminary material) that OpenVision was required to file with the SEC on or
after May 7, 1996. As of their respective dates or, in the case of registration
statements, their effective dates, none of the OpenVision SEC Documents
(including all exhibits and schedules thereto and documents incorporated by
reference therein) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and there is no requirement under the Securities Act or
the Exchange Act, as the case may be, to have amended any such filing. The
OpenVision SEC Documents complied, when filed, in all material respects with the
then applicable requirements of the Securities Act or the Exchange Act, as the
case may be, and the rules and regulations promulgated by the SEC thereunder.
OpenVision has filed all documents and agreements which were required to be
filed as exhibits to the OpenVision SEC Documents.
(b) Financial Statements. The financial statements of OpenVision
included in the OpenVision SEC Documents complied as to form in all material
respects with the then applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except as may have been indicated
in the notes thereto) and fairly present (subject, in the case of the unaudited
statements, to normal year-end audit adjustments) the consolidated financial
position of OpenVision and its consolidated OpenVision Subsidiaries as at the
respective dates thereof and the consolidated results of their operations and
cash flows for the respective periods then ended.
2.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by OpenVision for inclusion or incorporation by reference in the Form
S-4 and Prospectus/Proxy Statement will, at the time the Form S-4 is declared
effective, at the date the Prospectus/Proxy Statement is mailed to the
stockholders of OpenVision and at the time of the OpenVision Stockholders
Meeting contain, after giving effect to any
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supplement or amendment thereto, any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The Prospectus/Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations promulgated by the SEC thereunder. Notwithstanding the foregoing,
OpenVision makes no representation or warranty with respect to any information
supplied by VERITAS or Newco which is contained in any of the foregoing
documents.
2.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the OpenVision
SEC Documents filed prior to the date of this Agreement, the businesses of
OpenVision and the OpenVision Subsidiaries are not being conducted in violation
of any law, ordinance, regulation, rule or order of any Governmental Entity
where such violation would have a Material Adverse Effect on OpenVision. Except
as disclosed in the OpenVision SEC Documents filed prior to the date of this
Agreement, OpenVision has not been notified in writing by any Governmental
Entity that any investigation or review with respect to OpenVision or any of the
OpenVision Subsidiaries is pending or threatened, nor has any Governmental
Entity notified OpenVision in writing of its intention to conduct the same,
which investigation or review could reasonably be expected to have a Material
Adverse Effect on OpenVision. OpenVision and the OpenVision Subsidiaries have
all permits, licenses and franchises from Governmental Entities required to
conduct their businesses as now being conducted, except for those whose absence
would not have a Material Adverse Effect on OpenVision.
2.7 LITIGATION. Except as disclosed in the OpenVision SEC Documents filed
prior to the date of this Agreement, or as would not reasonably be expected to
have a Material Adverse Effect on OpenVision, there is no suit, action,
arbitration, demand, claim or proceeding pending or, to the knowledge of
OpenVision, threatened against OpenVision or any of the OpenVision Subsidiaries;
nor is there any judgment, decree, injunction, ruling or order of any
Governmental Entity or arbitrator or settlement agreement outstanding against
OpenVision or any of the OpenVision Subsidiaries. OpenVision has delivered or
made available to VERITAS or its counsel correct and complete copies of all
correspondence prepared by its counsel for OpenVision's auditors in connection
with the last two completed audits of OpenVision's financial statements and any
such correspondence since the date of the last such audit. Neither OpenVision
nor any of the OpenVision Subsidiaries is a party to any decree, order or
arbitration award (or agreement entered into in any administrative, judicial or
arbitration proceeding with any governmental authority) with respect to its
properties, assets, personnel or business activities which could reasonably be
expected to have a Material Adverse Effect on OpenVision. OpenVision is not in
violation of, or delinquent in respect of, any decree, order or arbitration
award naming OpenVision or a OpenVision Subsidiary as a party or otherwise known
to it, or law, ordinance, statute, or governmental authority to which its
properties, assets, personnel or business activities are subject or to which
OpenVision or a OpenVision Subsidiary is subject, including, without limitation,
laws, rules and regulations relating to occupational health and safety, equal
employment opportunities, fair employment practices, and sex, race, religious
and age discrimination, except for such violations as would not have a Material
Adverse Effect on OpenVision.
2.8 ERISA AND OTHER COMPLIANCE.
(a) The OpenVision Disclosure Letter lists all the employees of
OpenVision and of any OpenVision Subsidiary and their salaries or base wage as
of December 31, 1996. The OpenVision Disclosure Letter also identifies each
"employee benefit plan," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), currently or previously
maintained, contributed to or entered into by OpenVision or any of the
OpenVision Subsidiaries under which OpenVision or any of the OpenVision
Subsidiaries or any ERISA Affiliate (as defined below) thereof has any present
or future obligation or liability (collectively, the "OpenVision Employee
Plans"). For purposes of this Section 2.8, "ERISA Affiliate" shall mean any
entity which is a member of (A) a "controlled group of corporations," as defined
in Section 414(b) of the Code, (B) a group of entities under "common control,"
as defined in Section 414(c) of the Code, or (C) an "affiliated service group,"
as defined in Section 414(m) of the Code, or treasury regulations promulgated
under Section 414(o) of the Code, any of which includes OpenVision or any of the
OpenVision Subsidiaries. Copies of all OpenVision Employee Plans (and, if
applicable, related trust agreements) and all amendments thereto and written
interpretations thereof (including summary plan descriptions) have been
delivered to VERITAS or its counsel, together with the three most recent annual
reports (Form 5500,
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including, if applicable, the auditor's reports and any Schedule B thereto)
prepared in connection with any such OpenVision Employee Plan. All OpenVision
Employee Plans which individually or collectively would constitute an "employee
pension benefit plan," as defined in Section 3(2) of ERISA (collectively, the
"OpenVision Pension Plans"), are identified as such in the OpenVision Disclosure
Letter. All OpenVision Employee Plans which individually or collectively would
constitute an "employee welfare benefit plan," as defined in Section 3(1) of
ERISA are identified as such in the OpenVision Disclosure Letter. All
contributions or premiums due from OpenVision or any of the OpenVision
Subsidiaries with respect to any of the OpenVision Employee Plans have been made
as required under ERISA or have been accrued on OpenVision's or any such
OpenVision Subsidiary's financial statements as of September 30, 1996, or will
be made prior to the Closing. Each OpenVision Employee Plan has been maintained
in compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such OpenVision Employee Plans, except as
would not have a Material Adverse Effect on OpenVision.
(b) No OpenVision Pension Plan constitutes, or has since the enactment
of ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of
ERISA. No OpenVision Pension Plans are subject to Title IV of ERISA. No
"prohibited transaction," as defined in Section 406 of ERISA or Section 4975 of
the Code, has occurred with respect to any OpenVision Employee Plan which is
covered by Title I of ERISA which would result in a material liability to
OpenVision or any of the OpenVision Subsidiaries taken individually, excluding
transactions effected pursuant to a statutory or administrative exemption.
Nothing done or omitted to be done and no transaction or holding of any asset
under or in connection with any OpenVision Employee Plan has or will make
OpenVision or any employee, officer or director of OpenVision subject to any
material liability under Title I of ERISA or liable for any material Tax (as
defined in Section 2.14) or penalty pursuant to Sections 4972, 4975, 4976, 4977
or 4979 of the Code or Section 502 of ERISA.
(c) With respect to each OpenVision Pension Plan that is intended to be
qualified under Section 401(a) of the Code (a "OpenVision 401(a) Plan"), either
(i) a favorable determination letter has been received from the Internal Revenue
Service ("IRS") as to the qualification of the OpenVision 401(a) Plan under the
Code as in effect immediately after the Tax Reform Act of 1986, or (ii) the
OpenVision 401(a) Plan has been established under a standardized prototype plan
for which an Internal Revenue Service opinion letter has been obtained and upon
which the OpenVision 401(a) Plan may rely. OpenVision has delivered to VERITAS
or its counsel a complete and correct copy of the most recent Internal Revenue
Service determination letter with respect to each OpenVision 401(a) Plan.
(d) No OpenVision Employee Plan provides or ever has provided death,
medical or health benefits (whether or not insured) with respect to current or
former employees after any such employee's retirement or other termination of
service (other than benefit coverage mandated by applicable law, including,
without limitation, coverage provided pursuant to Section 4980B of the Code).
(e) The OpenVision Disclosure Letter lists each employment, severance,
compensation or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits, severance
benefits, disability benefits, death benefits, hospitalization benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors (other than workers compensation,
unemployment compensation and other government mandated programs) which (A) is
not a OpenVision Employee Plan, (B) is entered into, maintained or contributed
to, as the case may be, by OpenVision or any of the OpenVision Subsidiaries, and
(C) covers any employee or former employee of OpenVision or any of the
OpenVision Subsidiaries. Such contracts, plans and arrangements as are described
in this Section 2.8(e) are herein referred to collectively as the "OpenVision
Benefit Arrangements." Each OpenVision Benefit Arrangement has been maintained
in substantial compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations which are applicable to such
OpenVision Benefit Arrangement. OpenVision has delivered to VERITAS or its
counsel a complete and
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correct copy of each OpenVision Benefit Arrangement document or, if such
OpenVision Benefit Arrangement is unwritten, a description thereof.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by OpenVision or any of the OpenVision
Subsidiaries relating to any OpenVision Employee Plan or OpenVision Benefit
Arrangement that would increase materially the expense of maintaining such
OpenVision Employee Plan or OpenVision Benefit Arrangement above the level of
the expense incurred in respect thereof for the year ended June 30, 1996.
(g) OpenVision has timely provided, or will have provided prior to the
Closing (as defined in Section 6.1), to individuals entitled thereto all
required notices and coverage pursuant to Section 4980B of the Code and the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"),
with respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code). OpenVision will timely provide to individuals entitled thereto all
required notices and coverage pursuant to Code Section 4980B and COBRA with
respect to any "qualifying event" (as defined in Section 4980B(f)(3) of the
Code) occurring prior to and including the Closing Date. No material Tax payable
on account of Section 4980B of the Code has been incurred with respect to any
current or former employees (or their beneficiaries) of OpenVision or any of the
OpenVision Subsidiaries.
(h) No benefit payable or which may become payable by OpenVision or any
of the OpenVision Subsidiaries pursuant to any OpenVision Employee Plan or any
OpenVision Benefit Arrangement or as a result of or arising under this Agreement
shall constitute an "excess parachute payment" (as defined in Section 280G(b)(1)
of the Code) which is subject to the imposition of an excise Tax under Section
4999 of the Code or which would not be deductible by reason of Section 280G of
the Code.
(i) OpenVision and each OpenVision Subsidiary is in compliance in all
material respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours, and terms and conditions of
employment, including, but not limited to, employee compensation matters, but
not including ERISA.
(j) OpenVision and each OpenVision Subsidiary has good labor relations
and has no knowledge of any facts indicating that the consummation of the
transactions contemplated hereby will have a material adverse effect on labor
relations, and has no knowledge that any of its key employees intends to leave
its or their employ.
2.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither OpenVision nor any of the
OpenVision Subsidiaries has any liabilities or obligations of any nature
(matured or unmatured, fixed or contingent) which are, individually or in the
aggregate, of a nature required to be disclosed on the face of a balance sheet
prepared in accordance with GAAP and are material to the business of OpenVision
and the OpenVision Subsidiaries, taken as a whole, except for such liabilities
or obligations as (i) were accrued or fully reserved against in the consolidated
balance sheet of OpenVision at September 30, 1996 (the "OpenVision Balance
Sheet") or (ii) are of a normally recurring nature and were incurred after
September 30, 1996 (the "OpenVision Balance Sheet Date") in the ordinary course
of business consistent with past practice. As of the OpenVision Balance Sheet
Date, there were no material loss contingencies (as such term is used in
Statement of Financial Accounting Standards No. 5 issued by the Financial
Accounting Standards Board in March 1975) which are not adequately provided for
in the OpenVision Balance Sheet as required by said Statement No. 5.
2.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
in the OpenVision SEC Documents filed prior to the date of this Agreement, since
the OpenVision Balance Sheet Date there has not occurred:
(a) any change not identified below that could reasonably be expected to
have a Material Adverse Effect on OpenVision;
(b) any amendments or changes in the Certificate of Incorporation or
Bylaws of OpenVision;
(c) any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting any of the material properties or the
business of OpenVision;
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(d) any redemption, repurchase or other acquisition of shares of
OpenVision Common Stock by OpenVision (other than pursuant to arrangements with
terminated employees or consultants), or any declaration, setting aside or
payment of any dividend or other distribution (whether in cash, stock or
property) with respect to OpenVision Common Stock;
(e) any increase in or modification of the compensation or benefits
payable or to become payable by OpenVision to any of its directors or employees,
except in the ordinary course of business, consistent with past practice;
(f) other than as required by applicable statute or regulation, any
increase in or modification of any bonus, pension, insurance or OpenVision
Employee Plan or OpenVision Benefit Arrangement (including, but not limited to,
the granting of stock options, restricted stock awards or stock appreciation
rights) made to, for or with any of its employees, other than (a) in the
ordinary course of business, consistent with past practice, and (b) after the
date of this Agreement, which is authorized, if required, pursuant to Section
4.3 below;
(g) any acquisition or sale of a material amount of property or assets
of OpenVision, other than in the ordinary course of business, consistent with
past practice;
(h) any alteration in any term of any outstanding security of OpenVision
including, but not limited to, acceleration of the vesting or any change in the
terms of any outstanding stock options;
(i) other than in the ordinary course of business, consistent with past
practice, the total amount of which is not material, any (A) incurrence,
assumption or guarantee by OpenVision of any debt for borrowed money; (B)
issuance or sale of any securities convertible into or exchangeable for debt
securities of OpenVision; or (C) issuance or sale of options or other rights to
acquire from OpenVision, directly or indirectly, debt securities of OpenVision
or any securities convertible into or exchangeable for any such debt securities;
(j) any creation or assumption by OpenVision of any mortgage, pledge,
security interest, lien or other encumbrance on any asset, other than in the
ordinary course of business, consistent with past practice, not in excess of
$100,000 in the aggregate;
(k) any making of any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital contributions
made in the ordinary course of business of OpenVision and (ii) other loans and
advances, where the aggregate amount of all such items outstanding at any time
does not exceed $50,000;
(l) any entering into, amendment of, relinquishment, termination or
non-renewal by OpenVision of any material contract, lease transaction,
commitment or other right or obligation other than in the ordinary course of
business;
(m) any transfer or grant of a right under the OpenVision IP Rights (as
defined in Section 2.15 below), other than those transferred or granted in the
ordinary course of business, consistent with past practices, except for any
grant of a right to OpenVision source code or the grant of any exclusive rights
to any OpenVision IP Rights, each of which shall be set forth in the OpenVision
Disclosure Letter;
(n) any labor dispute or charge of unfair labor practice (other than
routine individual grievances), any activity or proceeding by a labor union or
representative thereof to organize any employees of OpenVision or, to
OpenVision's knowledge, any campaign being conducted to solicit authorization
from employees to be represented by such labor union; or
(o) any agreement by OpenVision or, to OpenVision's knowledge, any
officer or employee thereof, to take any of the actions described in the
preceding clauses (a) through (n) (other than negotiations with VERITAS and its
representatives regarding the transactions contemplated by this Agreement).
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2.11 AGREEMENTS. The OpenVision Disclosure Letter sets forth a list of any
of the following currently effective contracts, agreements and other instruments
to which OpenVision or any OpenVision Subsidiary is a party, copies of each of
which have been delivered to VERITAS or its counsel:
(a) contract with or commitment to any labor union;
(b) continuing contract for the future purchase, sale or manufacture of
products, material, supplies, equipment or services requiring payment to or from
OpenVision or any OpenVision Subsidiary of an amount in excess of $100,000 per
annum which is not terminable on 120 days' or less notice without cost or other
liability at, or at any time after, the Effective Time or in which OpenVision or
such OpenVision Subsidiary has granted or received manufacturing rights, most
favored nations pricing provisions or exclusive marketing rights relating to any
product, group of products or territory, provided, however, that only purchase
orders for the top ten (10) vendors of OpenVision (as measured by calendar year
1996 OpenVision purchases) are listed in the OpenVision Disclosure Letter;
(c) contract providing for the development of technology for OpenVision
which technology is used or incorporated in any products currently distributed
by OpenVision or is anticipated to be used or incorporated in any planned
products of OpenVision or which requires OpenVision to perform specified
development work for a third party;
(d) joint venture contract or agreement or other agreement which has
involved, or is reasonably expected to involve, a sharing of profits or losses
in excess of $25,000 per annum with any other party;
(e) contract or commitment for the employment of any officer, employee
or consultant, or any other type of contract or understanding with any officer,
employee or consultant, which is not immediately terminable without cost, notice
or other liability (except for normal severance benefits available to employees
generally as set forth in any OpenVision Benefit Arrangement and except to the
extent general principles of wrongful termination law may limit OpenVision's or
any of OpenVision Subsidiaries' ability to terminate employees at will);
(f) indenture, mortgage, promissory note, loan agreement, guarantee or
other agreement or commitment for the borrowing of money, for a line of credit
or for a leasing transaction of a type required to be capitalized in accordance
with Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board (other than equipment leases entered into in the
ordinary course of business pursuant to which payments by OpenVision do not
exceed $100,000 in the aggregate);
(g) lease or other agreement under which OpenVision or any OpenVision
Subsidiary is lessee of or holds or operates any items of tangible personal
property or real property owned by any third party and under which payments to
such third party exceed $60,000 per annum;
(h) agreement or arrangement for the sale of any assets, properties or
rights having a value in excess of $25,000, other than in the ordinary course of
business consistent with past practice;
(i) agreement which restricts OpenVision or any OpenVision Subsidiary
from engaging in any aspect of its business or competing in any line of business
in any geographic area (including any agreement pursuant to which OpenVision has
granted exclusive rights to a third party);
(j) OpenVision IP Rights Agreement (as defined in Section 2.15 below),
other than standard form license agreements with end users (copies of which have
been delivered to VERITAS or its counsel), and, in any event, any agreement that
grants rights or access to any source code included in the OpenVision IP Rights;
or
(k) agreement between or among OpenVision or any OpenVision Subsidiary
regarding inter company loans, revenue or cost sharing, ownership or license of
OpenVision IP Rights, inter company royalties or dividends or similar matters.
The OpenVision Disclosure Letter further includes a schedule of the
outstanding maintenance and support obligations to be performed by OpenVision
pursuant to any contract or other arrangement, including a description of such
obligations, the names of the customers for whom such obligations must be
performed, the
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expiration date of such obligations and the fees payable to OpenVision in
respect of performance of such obligations.
2.12 NO DEFAULTS. Except as disclosed in the OpenVision SEC Documents
filed prior to the date of this Agreement, to OpenVision's knowledge, neither it
nor any of the OpenVision Subsidiaries is in default under, and there exists no
event, condition or occurrence which, after notice or lapse of time, or both,
would constitute such a default by OpenVision or any of the OpenVision
Subsidiaries under, any contract or agreement to which OpenVision or any of the
OpenVision Subsidiaries is a party and which would, if terminated or modified,
have a Material Adverse Effect on OpenVision.
2.13 CERTAIN AGREEMENTS. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance, unemployment
compensation, golden parachute, bonus or otherwise) becoming due to any director
or employee of OpenVision or any of the OpenVision Subsidiaries from OpenVision
or any of the OpenVision Subsidiaries, under any OpenVision Employee Plan,
OpenVision Benefit Arrangement or otherwise, (ii) materially increase any
benefits otherwise payable under any OpenVision Employee Plan or OpenVision
Benefit Arrangement or (iii) result in the acceleration of the time of payment
or vesting of any such benefits.
2.14 TAXES. OpenVision and each of the OpenVision Subsidiaries have filed,
or caused to be filed, all Tax (as defined below) returns required to be filed
by them (all of which returns were true, correct and complete in all material
respects) and have paid or withheld, or caused to be paid or withheld, all Taxes
that are shown on such Tax returns as due and payable, other than such Taxes as
are being contested in good faith and for which adequate reserves have been
established on the OpenVision Balance Sheet and other than where the failure to
so file, pay or withhold would not have a Material Adverse Effect on OpenVision.
All Taxes required to have been paid or accrued by OpenVision and the OpenVision
Subsidiaries for all periods prior to the OpenVision Balance Sheet Date have
been fully paid or are adequately provided for or reflected in the OpenVision
Balance Sheet. Since the OpenVision Balance Sheet Date, no material Tax
liability has been assessed, proposed to be assessed, incurred or accrued other
than in the ordinary course of business. Neither OpenVision nor any OpenVision
Subsidiary has received any notification that any material issues have been
raised (and are currently pending) by the Internal Revenue Service or any other
taxing authority, including, without limitation, any sales tax authority, in
connection with any of the Tax returns referred to in the first sentence of this
Section 2.14, and no waivers of statutes of limitations have been given or
requested with respect to OpenVision or any of the OpenVision Subsidiaries. No
taxing authority is currently conducting an audit of any Tax returns of
OpenVision or, to OpenVision's knowledge, about to conduct such an audit. Any
deficiencies asserted or assessments (including interest and penalties) made as
a result of any examination by the Internal Revenue Service or by appropriate
national, state or departmental authorities of the Tax returns of or with
respect to OpenVision or any of the OpenVision Subsidiaries have been fully paid
or are adequately provided for in the OpenVision Balance Sheet and no material
proposed (but unassessed) additional Taxes have been asserted and no Tax liens
have been filed other than for Taxes not yet due and payable. None of OpenVision
or any of the OpenVision Subsidiaries (i) has made an election to be treated as
a "consenting corporation" under Section 341(f) of the Code or (ii) is a
"personal holding company" within the meaning of Section 542 of the Code.
As used in this Agreement, "Tax" means any of the Taxes and "Taxes" means,
with respect to any entity, (A) all income taxes (including any tax on or based
upon net income, gross income, income as specially defined, earnings, profits or
selected items of income, earnings or profits) and all gross receipts, sales,
use, ad valorem, transfer, franchise, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall profits
taxes, alternative or add-on minimum taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties or additional amounts imposed by any taxing authority (domestic or
foreign) on such entity, and (B) any liability for the payment of any amount of
the type described in the immediately preceding clause (A) as a result of being
a "transferee" (within the meaning of Section 6901 of the Code or of any other
applicable law) of another entity or a member of an affiliated or combined
group.
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2.15 INTELLECTUAL PROPERTY.
(a) The OpenVision Disclosure Letter contains a complete and accurate
list of all United States and foreign: (i) patents; (ii) copyright registrations
and mask work registrations; (iii) trademarks registrations and trademark
intent-to-use registrations; (iv) registered user licenses; (v) all
applications, provisional applications or other filings for or to obtain any of
the foregoing, and (vi) any other similar registrations or applications for
Intellectual Property Rights (as defined below) owned by, or filed by or on
behalf of, OpenVision or any of the OpenVision Subsidiaries anywhere in the
world (all of the foregoing, "OpenVision Registered Intellectual Property").
(b) The OpenVision Disclosure Letter contains a complete and accurate
list of all material software programs and other products sold or licensed by
OpenVision or any of the OpenVision Subsidiaries.
(c) All OpenVision Intellectual Property Rights are owned free and clear
of any liens, encumbrances or security interests.
(d) OpenVision and the OpenVision Subsidiaries own, or have the right to
use, sell or license such Intellectual Property Rights (as defined below) as are
necessary or required for the conduct of their respective businesses as
presently conducted (such Intellectual Property Rights being hereinafter
collectively referred to as the "OpenVision IP Rights") and such ownership or
rights to use, sell or license are reasonably sufficient for such conduct of
their respective businesses, except for any failure to own or have the right to
use, sell or license that would not have a Material Adverse Effect on
OpenVision;
(e) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not constitute a
material breach of any material instrument or material agreement in respect of
any Intellectual Property Rights licensed by or to OpenVision (the "OpenVision
IP Rights Agreements"), will not cause the forfeiture or termination or give
rise to a right of forfeiture or termination of any OpenVision IP Right or
materially impair the right of OpenVision and the OpenVision Subsidiaries or the
OpenVision Surviving Corporation to use, sell or license any OpenVision IP Right
or portion thereof (except where such breach, forfeiture, termination or
impairment would not have a Material Adverse Effect on OpenVision);
(f) There are no royalties, honoraria, fees or other payments payable by
OpenVision to any person by reason of the ownership, use, license, purchase,
sale, disposition or acquisition of the OpenVision IP Rights (other than as set
forth in the OpenVision IP Rights Agreements listed in the OpenVision Disclosure
Letter);
(g) To OpenVision's knowledge, no third party is infringing or
misappropriating any Intellectual Property Rights, including OpenVision
Registered Intellectual Property, owned by OpenVision or any of the OpenVision
Subsidiaries.
(h) Neither the manufacture, marketing, license, sale nor the intended
use of any product currently licensed or sold by OpenVision or any of the
OpenVision Subsidiaries or currently under development by OpenVision or any of
the OpenVision Subsidiaries violates any license or agreement between OpenVision
or any of the OpenVision Subsidiaries and any third party or infringes any
Intellectual Property Right of any other party; and there is no pending or, to
OpenVision's knowledge, threatened claim or litigation contesting the validity,
ownership or right to use, sell, license or dispose of any OpenVision IP Right,
nor has OpenVision received any notice asserting that any OpenVision IP Right or
the proposed use, sale, license or disposition thereof conflicts or will
conflict with the rights of any other party, except for any violations,
infringements, claims or litigation that would not have a Material Adverse
Effect on OpenVision, nor, to OpenVision's knowledge, is there any basis for any
such assertion; and
(i) OpenVision has taken reasonable and practicable steps designed to
safeguard and maintain the secrecy and confidentiality of, and its proprietary
rights in, all material trade secrets or other confidential information
constituting OpenVision IP Rights. To OpenVision's knowledge, no current or
prior officers, employees or consultants of OpenVision or of any of the
OpenVision Subsidiaries claim an ownership interest in any OpenVision IP Rights
as a result of having been involved in the development of such property while
employed by or consulting to OpenVision or of any of the OpenVision
Subsidiaries, or otherwise. All officers
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and development employees and, to OpenVision's knowledge, all other employees
and consultants of OpenVision or any of the OpenVision Subsidiaries have
executed and delivered to OpenVision or the OpenVision Subsidiary an agreement
regarding the protection of proprietary information and the assignment to
OpenVision or the OpenVision Subsidiary of all Intellectual Property Rights
arising from the services performed for OpenVision or the OpenVision Subsidiary
by such persons.
As used herein, the term "Intellectual Property Rights" shall mean all
industrial, intellectual property or other rights of a person in, to, or arising
out of: (i) any United States or foreign patent or any application therefor and
any and all reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof; (ii) inventions (whether patentable or not in any
country), invention disclosures, industrial designs, improvements, trade
secrets, proprietary information, know-how, technology and technical data; (iii)
copyrights, mask works, copyright registrations, mask work registrations, and
applications therefor in the United States or any foreign country, and all other
rights corresponding thereto throughout the world; (iv) United States or foreign
registered or common law trademarks, service marks, trade dress, trade names,
logos, intent-to-use registrations or notices, and applications to register or
use any of the foregoing anywhere in the world; and (v) any other proprietary
rights in technology, including software, all source and object code,
algorithms, architecture, structure, display screens, layouts, inventions,
development tools and all documentation and media constituting, describing or
relating to the above, including, without limitation, manuals, memoranda,
records, business information, or trade marks, trade dress or names, anywhere in
the world.
2.16 FEES AND EXPENSES. Except for the fees and expenses set forth in
OpenVision's engagement letter with Alex. Brown & Sons Incorporated, a copy of
which has been provided to VERITAS (the "Alex. Brown Engagement Letter"),
neither OpenVision nor any of the OpenVision Subsidiaries has paid or become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the transactions contemplated by this Agreement.
2.17 INSURANCE. OpenVision and the OpenVision Subsidiaries maintain fire
and casualty, general liability, business interruption, directors and officers,
product liability and sprinkler and water damage insurance that OpenVision
believes to be reasonably prudent for its business. Correct and complete copies
of all such insurance policies presently in effect have been provided to VERITAS
or its counsel.
2.18 OWNERSHIP OF PROPERTY. Except (a) as disclosed in the OpenVision SEC
Documents filed prior to the date of this Agreement, (b) for liens for current
Taxes not yet delinquent or (c) for liens imposed by law and incurred in the
ordinary course of business for obligations not yet due to carriers,
warehousemen, laborers, material men and the like, OpenVision and each of the
OpenVision Subsidiaries owns its real and personal property free and clear of
all security interests, mortgages, liens, charges, claims, options and
encumbrances. All real and personal property of OpenVision and each of the
OpenVision Subsidiaries is in generally good repair and is operational and
usable in the operations of OpenVision, subject to ordinary wear and tear.
Neither OpenVision nor any OpenVision Subsidiary is in violation of any zoning,
building or safety ordinance, regulation or requirement or other law or
regulation applicable to the operation of owned or leased properties (the
violation of which would have a Material Adverse Effect on OpenVision), or has
received any notice of violation with which it has not complied, except where
such violation would not have a Material Adverse Effect on OpenVision.
2.19 ENVIRONMENTAL MATTERS.
(a) During the period that OpenVision and the OpenVision Subsidiaries
have leased or owned their respective properties or owned or operated any
facilities, there have been, to OpenVision's knowledge, no disposals, releases
or threatened releases of Hazardous Materials (as defined below) on, from or
under such properties or facilities. OpenVision has no knowledge of any
presence, disposals, releases or threatened releases of Hazardous Materials on,
from, under or about any of such properties or facilities, which may have
occurred prior to OpenVision or any of the OpenVision Subsidiaries having taken
possession of any of such properties or facilities. For the purposes of this
Agreement, the terms "disposal," "release," and "threatened release" shall have
the definitions assigned thereto by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. sec. 9601 et seq., as amended
("CERCLA"). For the purposes of this Agreement "Hazardous Materials" shall mean
any hazardous or toxic substance, material or waste which is or
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becomes prior to the Closing regulated under, or defined as a "hazardous
substance," "pollutant," "contaminant," "toxic chemical," "hazardous materials,"
"toxic substance" or "hazardous chemical" under, (1) CERCLA; (2) any similar
international, federal, state or local law; or (3) regulations promulgated under
any of the above laws or statutes.
(b) None of the properties or facilities of OpenVision or the OpenVision
Subsidiaries is or has been in violation of any federal, state or local law,
ordinance, regulation or order relating to industrial hygiene or to the
environmental conditions on, above, under or about such properties or
facilities, including, but not limited to, air, soil, ground water or surface
water condition ("Environmental Violation"), except for such violations as would
not, individually or in the aggregate, have a Material Adverse Effect on
OpenVision. During the time that OpenVision or the OpenVision Subsidiaries have
owned or leased their respective properties and facilities, neither OpenVision,
nor any of the OpenVision Subsidiaries, nor, to OpenVision's knowledge, any
third party, has used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials (except those Hazardous Materials associated with
general office use or janitorial supplies).
(c) During the time that OpenVision or the OpenVision Subsidiaries have
owned or leased their respective properties and facilities, there has been no
litigation brought or, to OpenVision's knowledge, threatened against OpenVision
or any of the OpenVision Subsidiaries by, or any settlement reached by
OpenVision or any of the OpenVision Subsidiaries with, any party or parties
alleging the presence, disposal, release or threatened release of any Hazardous
Materials on, from or under any of such properties or facilities or relating to
any alleged Environmental Violation.
2.20 INTERESTED PARTY TRANSACTIONS. Except as disclosed in the OpenVision
SEC Documents filed prior to the date of this Agreement, no officer or director
of OpenVision or any "affiliate" or "associate" (as those terms are defined in
Rule 405 promulgated under the Securities Act) of any such person has had,
either directly or indirectly, a material interest in: (i) any person or entity
which purchases from or sells, licenses or furnishes to OpenVision or any of the
OpenVision Subsidiaries any goods, property, technology or intellectual or other
property rights or services; or (ii) any contract or agreement to which
OpenVision or any of the OpenVision Subsidiaries is a party or by which it may
be bound or affected.
2.21 BOARD APPROVAL. The Board of Directors of OpenVision has unanimously
(i) approved this Agreement and the Merger, and (ii) determined that the Merger
is in the best interests of the stockholders of OpenVision and the terms of the
Merger are fair to such stockholders.
2.22 VOTE REQUIRED. The affirmative vote of at least a majority of the
votes that holders of the outstanding shares of OpenVision Common Stock are
entitled to cast is the only vote of the holders of any class or series of
OpenVision's capital stock necessary to approve this Agreement and the Merger.
2.23 DISCLOSURE. No representation or warranty made by OpenVision in this
Agreement, nor any document, written information, statement, financial
statement, certificate or exhibit prepared and furnished or to be prepared and
furnished by OpenVision or its representatives pursuant hereto or in connection
with the transactions contemplated hereby, when taken together, contains any
untrue statement of a material fact, or omits to state a material fact necessary
to make the statements or facts contained herein or therein not misleading in
light of the circumstances under which there were furnished.
2.24 FAIRNESS OPINION. OpenVision's Board of Directors has received an
opinion as of the date hereof from Alex. Brown & Sons Incorporated to the effect
that, as of the date hereof, the OpenVision Applicable Ratio is fair to
OpenVision's stockholders from a financial point of view.
3. REPRESENTATIONS AND WARRANTIES OF VERITAS AND NEWCO
Except as set forth in a letter dated the date of this Agreement, delivered
by VERITAS and Newco to OpenVision concurrently herewith, and certified by an
officer of VERITAS and Newco, on behalf of
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VERITAS and Newco, to be true, accurate and complete to the best of his
knowledge (the "VERITAS Disclosure Letter"), VERITAS and Newco hereby represent
and warrant to OpenVision that:
3.1 ORGANIZATION; GOOD STANDING; QUALIFICATION AND POWER. VERITAS, Newco
and each of VERITAS' subsidiaries set forth in Section 3.1 of the VERITAS
Disclosure Letter (the "VERITAS Subsidiaries") (the VERITAS Subsidiaries being
the only subsidiaries of VERITAS), is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, and
is duly qualified and in good standing to do business in each jurisdiction in
which the nature of its business or the ownership or leasing of its properties
makes such qualification necessary, other than in such jurisdictions where the
failure so to qualify would not have a Material Adverse Effect on VERITAS (as
defined below). The VERITAS Disclosure Letter sets forth a correct and complete
list of the VERITAS Subsidiaries and a correct and complete list of each
jurisdiction in which each of VERITAS, Newco and the VERITAS Subsidiaries is
duly qualified and in good standing to do business. VERITAS has delivered to
OpenVision or its counsel complete and correct copies of the Articles of
Incorporation and Bylaws of VERITAS, the Certificate of Incorporation and Bylaws
of Newco and will deliver to OpenVision or its counsel prior to the Closing Date
the equivalent charter documents of each of the VERITAS Subsidiaries, in each
case as amended to the date of this Agreement. Newco does not own and, except
for the VERITAS Subsidiaries, VERITAS does not own, directly or indirectly, any
capital stock or other equity interest of any corporation or have any direct or
indirect equity or ownership interest in any other business, whether organized
as a corporation, partnership, joint venture or otherwise.
In this Agreement, any reference to the term "Material Adverse Effect on
VERITAS" means any event, change or effect which would have a material adverse
effect on the business, assets (including intangible assets), financial
condition, results of operations or prospects of VERITAS, Newco and the VERITAS
Subsidiaries, taken as a whole. In addition, any reference to the terms "to
VERITAS' knowledge" or "known to VERITAS" refers to the current actual knowledge
of any officer of VERITAS.
3.2 CAPITAL STRUCTURE.
(a) Stock and Options. The authorized capital stock of VERITAS consists
of 25,000,000 shares of VERITAS Common Stock, no par value, and 10,000,000
shares of Preferred Stock, no par value (the "VERITAS Preferred Stock"). At the
close of business on January 10, 1997, 13,543,926 shares of VERITAS Common Stock
were issued and outstanding, no shares of VERITAS Common Stock were held by
VERITAS in its treasury, 1,838,379 shares of VERITAS Common Stock were reserved
for issuance upon the exercise of outstanding VERITAS Options, 239,793 shares of
VERITAS Common Stock were available for the grant of additional awards under the
1993 Equity Incentive Plan, 55,000 shares of VERITAS Common Stock were available
for the grant of additional awards under the 1993 Director Stock Option Plan,
and 383,835 shares of VERITAS Common Stock were reserved for issuance upon the
exercise of VERITAS Stock Purchase Plan Options. No shares of VERITAS Preferred
Stock are issued or outstanding. All outstanding shares of VERITAS Common Stock
are validly issued, fully paid and nonassessable and not subject to preemptive
rights by statute, the Articles of Incorporation or Bylaws of VERITAS, or any
agreement or document to which VERITAS is a party or by which it is bound. All
outstanding shares of the capital stock of each of the VERITAS Subsidiaries are
validly issued, fully paid and nonassessable and are owned by VERITAS or one of
the VERITAS Subsidiaries free and clear of any liens, security interests,
pledges, agreements, claims, charges or encumbrances. VERITAS has delivered to
OpenVision a correct and complete list of each VERITAS Option outstanding as of
the date hereof, including the name of the holder of such VERITAS Option, the
VERITAS Plan pursuant to which such VERITAS Option was issued (if applicable),
the number of shares covered by such VERITAS Option, the per share exercise
price of such VERITAS Option, and the vesting schedule applicable to each such
VERITAS Option, including the number of shares vested as of the date of this
Agreement. VERITAS has also delivered to OpenVision a correct and complete list
of the employees currently enrolled in the current Offering Period (as defined
in the VERITAS Stock Purchase Plan), the amount of the periodic payroll
deduction from each such employee's compensation with respect to such plan, the
aggregate amount of payroll deductions with respect to the current Purchase
Period (as defined in the VERITAS Stock Purchase Plan) for each such employee to
date and the fair market
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value (as determined in accordance with the VERITAS Stock Purchase Plan) of the
VERITAS Common Stock on the date of commencement of the current Offering Period.
(b) Newco Capital. The authorized capital stock of Newco will consist of
75,000,000 shares of Newco Common Stock, $0.001 par value, and 10,000,000 shares
of Newco Preferred Stock, $0.001 par value, none of which shall be outstanding
immediately prior to the Effective Time. Immediately prior to the Effective
Time, Newco shall have reserved shares of Newco Common Stock for
issuance pursuant to OpenVision's Stock Purchase Plan, 4,100,000 shares of Newco
Common Stock for issuance pursuant to Newco's 1993 Equity Incentive Plan,
250,000 shares of Newco Common Stock for issuance pursuant to Newco's 1993
Director Stock Option Plan and 1,000,000 shares of Newco Common Stock for
issuance pursuant to Newco's 1993 Employee Stock Purchase Plan, under which
Newco Plans there shall be no Newco options or purchase rights outstanding.
(c) No Other Commitments. Except for the VERITAS Options and VERITAS
Stock Purchase Plan Options disclosed in Section 3.2(a) above, a list of which
has been provided to OpenVision, and except as provided in this Agreement, there
are no options, warrants, calls, rights, commitments, conversion rights or
agreements of any character to which VERITAS, Newco or any of the VERITAS
Subsidiaries is a party or by which VERITAS, Newco or any of the VERITAS
Subsidiaries is bound obligating VERITAS, Newco or any of the VERITAS
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, any shares of capital stock of VERITAS, Newco or any of the VERITAS
Subsidiaries or securities convertible into or exchangeable for shares of
capital stock of VERITAS, Newco or any of the VERITAS Subsidiaries, or
obligating VERITAS, Newco or any of the VERITAS Subsidiaries to grant, extend or
enter into any such option, warrant, call, right, commitment, conversion right
or agreement. There are no voting trusts or other agreements or understandings
to which VERITAS or Newco is a party with respect to the voting of the capital
stock of VERITAS or Newco or any of the VERITAS Subsidiaries.
(d) Registration Rights. Neither VERITAS nor Newco is under any
obligation to register under the Securities Act any of its presently outstanding
securities or any securities that may be subsequently issued, except as
disclosed in the VERITAS Disclosure Letter.
3.3 AUTHORITY.
(a) Corporate Action. Subject to approval of this Agreement and the
Merger by the shareholders of VERITAS, VERITAS has all requisite corporate power
and authority to enter into this Agreement and the VERITAS Agreement of Merger,
and Newco has, or will have, all requisite corporate power and authority to
enter into this Agreement and the Agreements of Merger, to perform their
respective obligations hereunder and thereunder and to consummate the Merger and
the other transactions contemplated by this Agreement. The execution and
delivery of this Agreement and the VERITAS Agreement of Merger by VERITAS, and
the execution and delivery of this Agreement and the Agreements of Merger by
Newco, and, subject to approval of this Agreement and the Merger by the
shareholders of VERITAS, the filing and recordation of the Agreements of Merger
pursuant to CGCL and the Delaware Law and the consummation by VERITAS and Newco
of the Merger and the other transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action on the part of VERITAS
and Newco, respectively. This Agreement has been, and upon the Closing the
VERITAS Agreement of Merger will have been, duly executed and delivered by
VERITAS and this Agreement is, and the VERITAS Agreement of Merger as of the
Effective Time will be, the valid and binding obligations of VERITAS enforceable
in accordance with their terms, except as enforceability may be limited by
bankruptcy and other similar laws and general principles of equity. This
Agreement has been, and upon the Closing the Agreements of Merger will have
been, duly executed and delivered by Newco, and this Agreement is, and the
Agreements of Merger as of the Effective Time will be, the valid and binding
obligations of Newco, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy and other similar laws and general
principles of equity.
(b) No Conflict. Neither the execution, delivery and performance of this
Agreement, the VERITAS Agreement of Merger in the case of VERITAS, or the
Agreements of Merger in the case of Newco, nor the consummation of the
transactions contemplated hereby or thereby nor compliance with the provisions
hereof or thereof will: (i) conflict with, or result in any violations of, or
cause a default (with or without notice
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or lapse of time, or both) under, or give rise to a right of termination,
amendment, cancellation or acceleration of any obligation contained in, or the
loss of any material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material properties or
assets of VERITAS, Newco or any of the VERITAS Subsidiaries under, any term,
condition or provision of (x) the Articles of Incorporation or Bylaws of
VERITAS, the Certificate of Incorporation or Bylaws of Newco, or the equivalent
organizational documents of any of the VERITAS Subsidiaries or (y) any loan or
credit agreement, note, bond, mortgage, indenture, lease or other material
agreement, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to VERITAS, Newco or any of the VERITAS Subsidiaries or their
respective properties or assets, other than any such conflicts, violations,
defaults, rights, losses, liens, security interests, charges or encumbrances
which, individually or in the aggregate, would not have a Material Adverse
Effect on VERITAS; or (ii) require the affirmative vote of the holders of
greater than a majority of the issued and outstanding shares of VERITAS Common
Stock.
(c) Governmental Consents. No consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required to be obtained by VERITAS, Newco or any of the VERITAS Subsidiaries in
connection with the execution and delivery of this Agreement or the Agreements
of Merger, or the consummation of the transactions contemplated hereby or
thereby, except for: (i) the filing with the SEC, and the effectiveness, of the
Form S-4, the filing of the Prospectus/Proxy Statement relating to the meeting
of the shareholders of VERITAS (the "VERITAS Shareholders Meeting") to be held
with respect to the approval by VERITAS' shareholders of this Agreement and the
Merger, and the filing of the Form S-8, and such reports and information under
the Exchange Act and the rules and regulations promulgated by the SEC
thereunder, including, but not limited to, the filing of a Form 8A by Newco with
the SEC, as may be required in connection with this Agreement and the
transactions contemplated hereby; (ii) the filing of the Agreements of Merger
with the Secretary of State of the State of California and the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which VERITAS or Newco is qualified to do
business; (iii) such filings, authorizations, orders and approvals as may be
required under State Takeover Laws; (iv) such filings and notifications as may
be necessary under the HSR Act; (v) such filings as may be required by the
Nasdaq Stock Market with respect to the Newco Common Stock to be issued in
connection with the Merger and the Stock Rights to be assumed by Newco in the
Merger; and (vi) such other filings, authorizations, orders and approvals which
if not obtained or made, would not have a Material Adverse Effect on VERITAS or
OpenVision or have a material adverse effect on the ability of the parties to
consummate the Merger.
3.4 SEC DOCUMENTS.
(a) SEC Reports. VERITAS has delivered to OpenVision or its counsel
correct and complete copies of each report, schedule, registration statement and
definitive proxy statement filed by VERITAS with the SEC on or after January 1,
1995 (the "VERITAS SEC Documents"), which are all the documents (other than
preliminary material) that VERITAS was required to file with the SEC on or after
January 1, 1995. As of their respective dates or, in the case of registration
statements, their effective dates, none of the VERITAS SEC Documents (including
all exhibits and schedules thereto and documents incorporated by reference
therein) contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and there is no requirement under the Securities Act or the
Exchange Act, as the case may be, to have amended any such filing. The VERITAS
SEC Documents complied, when filed, in all material respects with the then
applicable requirements of the Securities Act or the Exchange Act, as the case
may be, and the rules and regulations promulgated by the SEC thereunder. VERITAS
has filed all documents and agreements which were required to be filed as
exhibits to the VERITAS SEC Documents.
(b) Financial Statements. The financial statements of VERITAS included
in the VERITAS SEC Documents complied as to form in all material respects with
the then applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, were prepared in accordance with
GAAP applied on a consistent basis during the periods involved (except as may
have been indicated in the notes thereto) and fairly present (subject, in the
case of the unaudited statements, to normal year-end audit adjustments) the
consolidated financial position of VERITAS and its consolidated VERITAS
Subsidiaries as
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at the respective dates thereof and the consolidated results of their operations
and cash flows for the respective periods then ended.
3.5 INFORMATION SUPPLIED. None of the information supplied or to be
supplied by VERITAS or Newco for inclusion or incorporation by reference in the
Form S-4 and Prospectus/Proxy Statement will, at the time the Form S-4 is
declared effective, at the date the Prospectus/Proxy Statement is mailed to the
stockholders of VERITAS and at the time of the VERITAS Shareholders Meeting,
contain, after giving effect to any supplement or amendment thereto, any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Prospectus/Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated by the SEC
thereunder. Notwithstanding the foregoing, VERITAS and Newco make no
representation or warranty with respect to any information supplied by
OpenVision which is contained in any of the foregoing documents.
3.6 COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the VERITAS
SEC Documents filed prior to the date of this Agreement, the businesses of
VERITAS and the VERITAS Subsidiaries are not being conducted in violation of any
law, ordinance, regulation, rule or order of any Governmental Entity where such
violation would have a Material Adverse Effect on VERITAS. Except as disclosed
in the VERITAS SEC Documents filed prior to the date of this Agreement, VERITAS
has not been notified in writing by any Governmental Entity that any
investigation or review with respect to VERITAS or any of the VERITAS
Subsidiaries is pending or threatened, nor has any Governmental Entity notified
VERITAS in writing of its intention to conduct the same, which investigation or
review could reasonably be expected to have a Material Adverse Effect on
VERITAS. VERITAS, Newco and the VERITAS Subsidiaries have all material permits,
licenses and franchises from Governmental Entities required to conduct their
businesses as now being conducted, except for those whose absence would not have
a Material Adverse Effect on VERITAS.
3.7 LITIGATION. Except as disclosed in the VERITAS SEC Documents filed
prior to the date of this Agreement, or as would not reasonably be expected to
have a Material Adverse Effect on VERITAS, there is no suit, action,
arbitration, demand, claim or proceeding pending or, to VERITAS' knowledge,
threatened against VERITAS, Newco or any of the VERITAS Subsidiaries; nor is
there any judgment, decree, injunction, ruling or order of any Governmental
Entity or arbitrator or settlement agreement outstanding against VERITAS, Newco
or any of the VERITAS Subsidiaries. VERITAS has delivered or made available to
OpenVision or its counsel correct and complete copies of all correspondence
prepared by its counsel for VERITAS auditors in connection with the last two
completed audits of VERITAS' financial statements and any such correspondence
since the date of the last such audit. Neither VERITAS, Newco nor any of the
VERITAS Subsidiaries is a party to any decree, order or arbitration award (or
agreement entered into in any administrative, judicial or arbitration proceeding
with any governmental authority) with respect to its properties, assets,
personnel or business activities which could reasonably be expected to have a
Material Adverse Effect on VERITAS. Neither VERITAS nor Newco is in violation
of, or delinquent in respect of, any decree, order or arbitration award naming
VERITAS, Newco or a VERITAS Subsidiary as a party or otherwise known to them, or
law, ordinance, statute, or governmental authority to which their properties,
assets, personnel or business activities are subject or to which VERITAS, Newco
or a VERITAS Subsidiary is subject, including, without limitation, laws, rules
and regulations relating to occupational health and safety, equal employment
opportunities, fair employment practices, and sex, race, religious and age
discrimination, except for such violations as would not have a Material Adverse
Effect on VERITAS.
3.8 ERISA AND OTHER COMPLIANCE.
(a) The VERITAS Disclosure Letter lists all the employees of VERITAS and
any VERITAS Subsidiaries and their salaries or base wage as of December 31,
1996. The VERITAS Disclosure Letter also identifies each "employee benefit
plan," as defined in Section 3(3) of ERISA, currently or previously maintained,
contributed to or entered into by VERITAS or any of the VERITAS Subsidiaries
under which VERITAS or any of the VERITAS Subsidiaries or any ERISA Affiliate
(as defined below) thereof has any present or future obligation or liability
(collectively, the "VERITAS Employee Plans"). For purposes of this Section 3.8,
"ERISA Affiliate" shall mean any entity which is a member of (A) a "controlled
group of
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corporations," as defined in Section 414(b) of the Code, (B) a group of entities
under "common control," as defined in Section 414(c) of the Code, or (C) an
"affiliated service group," as defined in Section 414(m) of the Code, or
treasury regulations promulgated under Section 414(o) of the Code, any of which
includes VERITAS or any of the VERITAS Subsidiaries. Copies of all VERITAS
Employee Plans (and, if applicable, related trust agreements) and all amendments
thereto and written interpretations thereof (including summary plan
descriptions) have been delivered to OpenVision or its counsel, together with
the three most recent annual reports (Form 5500, including, if applicable, the
auditor's report and any Schedule B thereto) prepared in connection with any
such VERITAS Employee Plan. All VERITAS Employee Plans which individually or
collectively would constitute an "employee pension benefit plan," as defined in
Section 3(2) of ERISA (collectively, the "VERITAS Pension Plans"), are
identified as such in the VERITAS Disclosure Letter. All VERITAS Employee Plans
which individually or collectively would constitute an "employee welfare benefit
plan," as defined in Section 3(1) of ERISA are identified as such in the VERITAS
Disclosure Letter. All contributions or premiums due from VERITAS or any of the
VERITAS Subsidiaries with respect to any of the VERITAS Employee Plans have been
made as required under ERISA or have been accrued on VERITAS or any such VERITAS
Subsidiary's financial statements as of September 30, 1996, or will be made
prior to the Closing. Each VERITAS Employee Plan has been maintained in
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations, including, without limitation, ERISA
and the Code, which are applicable to such VERITAS Employee Plans, except as
would not have a Material Adverse Effect on VERITAS.
(b) No VERITAS Pension Plan constitutes, or has since the enactment of
ERISA constituted, a "multiemployer plan," as defined in Section 3(37) of ERISA.
No VERITAS Pension Plans are subject to Title IV of ERISA. No "prohibited
transaction," as defined in Section 406 of ERISA or Section 4975 of the Code,
has occurred with respect to any VERITAS Employee Plan which is covered by Title
I of ERISA which would result in a material liability to VERITAS or any of the
VERITAS Subsidiaries taken individually, excluding transactions effected
pursuant to a statutory or administrative exemption. Nothing done or omitted to
be done and no transaction or holding of any asset under or in connection with
any VERITAS Employee Plan has or will make VERITAS or any employee, officer or
director of VERITAS subject to any material liability under Title I of ERISA or
liable for any material Tax or penalty pursuant to Sections 4972, 4975, 4976,
4977 or 4979 of the Code or Section 502 of ERISA.
(c) With respect to each VERITAS Pension Plan that is intended to be
qualified under Section 401(a) of the Code (a "VERITAS 401(a) Plan"), either (i)
a favorable determination letter has been received from the IRS as to the
qualification of the VERITAS 401(a) Plan under the Code as in effect immediately
after the Tax Reform Act of 1986, or (ii) the VERITAS 401(a) Plan has been
established under a standardized prototype plan for which an Internal Revenue
Service opinion letter has been obtained and upon which the VERITAS 401(a) Plan
may rely. VERITAS has delivered to OpenVision or its counsel a complete and
correct copy of the most recent Internal Revenue Service determination letter
with respect to each VERITAS 401(a) Plan.
(d) No VERITAS Employee Plan provides or ever has provided death,
medical or health benefits (whether or not insured) with respect to current or
former employees after any such employee's retirement or other termination of
service (other than benefit coverage mandated by applicable law, including,
without limitation, coverage provided pursuant to Section 4980B of the Code).
(e) The VERITAS Disclosure Letter lists each employment, severance,
compensation or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits, severance
benefits, disability benefits, death benefits, hospitalization benefits,
retirement benefits, deferred compensation, profit-sharing, bonuses, stock
options, stock purchase, phantom stock, stock appreciation or other forms of
incentive compensation or post-retirement insurance, compensation or benefits
for employees, consultants or directors (other than workers' compensation,
unemployment compensation and other governmental mandated programs) which (A) is
not a VERITAS Employee Plan, (B) is entered into, maintained or contributed to,
as the case may be, by VERITAS or any of the VERITAS Subsidiaries, and (C)
covers any employee or former employee of VERITAS or any of the VERITAS
Subsidiaries. Such contracts, plans and arrangements as are
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described in this Section 3.8(e) are herein referred to collectively as the
"VERITAS Benefit Arrangements." Each VERITAS Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such VERITAS Benefit Arrangement. VERITAS has delivered to
OpenVision or its counsel a complete and correct copy of each VERITAS Benefit
Arrangement document or, if such VERITAS Benefit Arrangement is unwritten, a
description thereof.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by VERITAS or any of the VERITAS
Subsidiaries relating to any VERITAS Employee Plan or VERITAS Benefit
Arrangement that would increase materially the expense of maintaining such
VERITAS Employee Plan or VERITAS Benefit Arrangement above the level of the
expense incurred in respect thereof for the year ended December 31, 1996.
(g) VERITAS has timely provided, or will have provided prior to the
Closing (as defined in Section 6.1), to individuals entitled thereto all
required notices and coverage pursuant to Section 4980B of COBRA with respect to
any "qualifying event" (as defined in Section 4980B(f)(3) of the Code). VERITAS
will timely provide to individuals entitled thereto all required notices and
coverage pursuant to Code Section 4890B and COBRA with respect to any
"qualifying event" (as defined in Section 4980B(f)(3) of the Code) occurring
prior to and including the Closing Date. No material Tax payable on account of
Section 4980B of the Code has been incurred with respect to any current or
former employees (or their beneficiaries) of VERITAS or any of the VERITAS
Subsidiaries.
(h) No benefit payable or which may become payable by VERITAS or any of
the VERITAS Subsidiaries pursuant to any VERITAS Employee Plan or any VERITAS
Benefit Arrangement or as a result of or arising under this Agreement shall
constitute an "excess parachute payment" (as defined in Section 280G(b)(1) of
the Code) which is subject to the imposition of an excise Tax under Section 4999
of the Code or which would not be deductible by reason of Section 280G of the
Code.
(i) VERITAS and each VERITAS Subsidiary is in compliance in all material
respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours and terms and conditions of
employment, including, but not limited to, employee compensation matters, but
not including ERISA.
(j) VERITAS and each VERITAS Subsidiary has good labor relations and has
no knowledge of any facts indicating that the consummation of the transactions
contemplated hereby will have a material adverse effect on labor relations, and
has no knowledge that any of its key employees intends to leave its or their
employ.
3.9 ABSENCE OF UNDISCLOSED LIABILITIES. Neither VERITAS, Newco nor any of
the VERITAS Subsidiaries has any liabilities or obligations of any nature
(matured or unmatured, fixed or contingent) which are, individually or in the
aggregate, of a nature required to be disclosed on the face of a balance sheet
prepared in accordance with GAAP and are material to the business of VERITAS and
the VERITAS Subsidiaries, taken as a whole, except for such liabilities or
obligations as (i) were accrued or fully reserved against in the consolidated
balance sheet of VERITAS at September 30, 1996 (the "VERITAS Balance Sheet") or
(ii) are of a normally recurring nature and were incurred after September 30,
1996 (the "VERITAS Balance Sheet Date") in the ordinary course of business
consistent with past practice. As of the VERITAS Balance Sheet Date, there were
no material loss contingencies (as such term is used in Statement of Financial
Accounting Standards No. 5 issued by the Financial Accounting Standards Board in
March 1975) which are not adequately provided for in the VERITAS Balance Sheet
as required by said Statement No. 5.
3.10 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed herein or
in the VERITAS SEC Documents filed prior to the date of this Agreement, since
the VERITAS Balance Sheet Date there has not occurred:
(a) any change not identified below that could reasonably be expected to
have a Material Adverse Effect on VERITAS;
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(b) any amendments or changes in the Articles of Incorporation or Bylaws
of VERITAS;
(c) any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting any of the material properties or the
business of VERITAS;
(d) any redemption, repurchase or other acquisition of shares of VERITAS
Common Stock by VERITAS (other than pursuant to arrangements with terminated
employees or consultants), or any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with respect
to VERITAS Common Stock;
(e) any increase in or modification of the compensation or benefits
payable or to become payable by VERITAS to any of its directors or employees,
except in the ordinary course of business, consistent with past practice;
(f) other than as required by applicable statute or regulation, any
increase in or modification of any bonus, pension, insurance or VERITAS Employee
Plan or VERITAS Benefit Arrangement (including, but not limited to, the granting
of stock options, restricted stock awards or stock appreciation rights) made to,
for or with any of its employees, other than (a) in the ordinary course of
business, consistent with past practice, and (b) after the date of this
Agreement, which is authorized, if required, pursuant to Section 5.3 below;
(g) any acquisition or sale of a material amount of property or assets
of VERITAS, other than in the ordinary course of business, consistent with past
practice;
(h) any alteration in any term of any outstanding security of VERITAS,
including, but not limited to, acceleration of the vesting or any change in the
terms of any outstanding stock options;
(i) other than in the ordinary course of business, consistent with past
practice, the total amount of which is not material, any (A) incurrence,
assumption or guarantee by VERITAS of any debt for borrowed money; (B) issuance
or sale of any securities convertible into or exchangeable for debt securities
of VERITAS; or (C) issuance or sale of options or other rights to acquire from
VERITAS, directly or indirectly, debt securities of VERITAS or any securities
convertible into or exchangeable for any such debt securities;
(j) any creation or assumption by VERITAS of any mortgage, pledge,
security interest, lien or other encumbrance on any asset other than in the
ordinary course of business, consistent with past practice, not in excess of
$100,000 in the aggregate;
(k) any making of any loan, advance or capital contribution to or
investment in any person other than (i) loans, advances or capital contributions
made in the ordinary course of business of VERITAS, and (ii) other loans and
advances, where the aggregate amount of all such items outstanding at any time
does not exceed $50,000;
(l) any entering into, amendment of, relinquishment, termination or
non-renewal by VERITAS of any material contract, lease transaction, commitment
or other right or obligation other than in the ordinary course of business;
(m) any transfer or grant of a right under the VERITAS IP Rights (as
defined in Section 3.15 below), other than those transferred or granted in the
ordinary course of business, consistent with past practices, except for any
grant of a right to VERITAS source code or grant of any exclusive rights to any
VERITAS IP Rights, each of which shall be set forth in the VERITAS Disclosure
letter;
(n) any labor dispute or charge of unfair labor practice (other than
routine individual grievances), any activity or proceeding by a labor union or
representative thereof to organize any employees of VERITAS or, to VERITAS'
knowledge, any campaign being conducted to solicit authorization from employees
to be represented by such labor union; or
(o) any agreement by VERITAS, or to VERITAS' knowledge, any officer or
employee thereof, to take any of the actions described in the preceding clauses
(a) through (n) (other than negotiations with OpenVision and its representatives
regarding the transactions contemplated by this Agreement.)
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3.11 AGREEMENTS. The VERITAS Disclosure Letter sets forth a list of any of
the following currently effective contracts, agreements and other instruments to
which VERITAS, Newco or any VERITAS Subsidiary is a party, copies of each of
which have been delivered to OpenVision or its counsel:
(a) contract with or commitment to any labor union;
(b) continuing contract for the future purchase, sale or manufacture of
products, material, supplies, equipment or services requiring payment to or from
VERITAS, Newco or any VERITAS Subsidiary in an amount in excess of $100,000 per
annum which is not terminable on 120 days' or less notice without cost or other
liability at, or at any time after, the Effective Time or in which VERITAS,
Newco or such VERITAS Subsidiary has granted or received manufacturing rights,
most favored nations pricing provisions or exclusive marketing rights relating
to any product, group of products or territory, provided, however, that only
purchase orders for the top ten (10) vendors of VERITAS (as measured by 1996
VERITAS purchases) are listed in the VERITAS Disclosure Letter;
(c) contract providing for the development of technology for VERITAS
which technology is used or incorporated in any products currently distributed
by VERITAS or is anticipated to be used or incorporated in any planned products
of VERITAS or which requires VERITAS to perform specified development work for a
third party;
(d) joint venture contract or agreement or other agreement which has
involved or is reasonably expected to involve a sharing of profits or losses in
excess of $25,000 per annum with any other party;
(e) contract or commitment for the employment of any officer, employee
or consultant or any other type of contract or understanding with any officer,
employee or consultant which is not immediately terminable without cost, notice
or other liability (except for normal severance benefits available to employees
generally as set forth in any VERITAS Benefit Arrangement and except to the
extent general principles of wrongful ter