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Title: |
Agreement and Plan of Merger |
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Date: |
2002 |
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$70 |
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#1269759 |
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
GEAC COMPUTER CORPORATION LIMITED
CAGE ACQUISITION INC.
AND
EXTENSITY, INC.
DATED AS OF AUGUST 26, 2002
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS IS AN AGREEMENT AND PLAN OF MERGER made and entered into as of
August 26, 2002 by and among GEAC COMPUTER CORPORATION LIMITED, a corporation
governed by the Canada Business Corporations Act ("Geac"), CAGE ACQUISITION
INC., a Delaware corporation that is a wholly-owned subsidiary of Geac ("Geac
Sub"), and EXTENSITY, INC., a Delaware corporation ("Extensity").
B A C K G R O U N D
The boards of directors of Geac, Geac Sub and Extensity have approved
the merger of Geac Sub into Extensity upon the terms and subject to the
conditions set forth in this Agreement, the Extensity board of directors having
determined that the merger is fair to, and in the best interests of, its
stockholders. This Agreement and that merger will need to be approved by
Extensity's stockholders before the merger can close. If the merger does close,
each outstanding share of Extensity common stock (other than shares whose
holders properly demand a statutory appraisal for those shares) will be
converted into a fraction of a Geac common share or cash, as provided in this
Agreement. Concurrently with the signing of this Agreement, certain directors,
officers, stockholders and employees of Extensity are signing one or more of the
following: (a) a voting agreement regarding their Extensity shares, (b) a
lock-up agreement regarding any Geac shares they receive if the merger is
completed and (c) an employment letter and related items regarding their
employment after the merger.
ACCORDINGLY, THE PARTIES HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINED TERMS
1.1. Definitions. As used in this Agreement, these terms have these meanings:
<PAGE>
"ACTION" means a private or government claim, action, suit,
arbitration, investigation or proceeding of any nature.
"AGREEMENT" means this Agreement and Plan of Merger, including
the exhibits and the Extensity Disclosure Statement.
"BUSINESS DAY" means any day on which both the NASDAQ National
Market and the TSX are open for trading.
"CANADIAN GAAP" means Canadian generally accepted accounting
principles applied on a consistent basis as of the dates and for the periods
involved (except as may be indicated in the notes to any particular financial
statement, including the explanations in the notes to the effect that certain of
the information presented in the notes is presented in accordance with U.S.
GAAP).
"CANADIAN SECURITIES COMMISSION" means the securities
commission or similar regulatory authority in each of the Provinces of Canada.
"CANADIAN SECURITIES LAWS" means the multilateral instruments,
securities legislation and regulations thereto applicable in each of the
Provinces of Canada, together with published rules, blanket rulings, blanket
orders and published policy statements of each Canadian Securities Commission in
force on the date hereof.
"CASH ELECTION SHARE" means a share of Extensity Common Stock
with respect to which the last election, if any, properly and timely filed in
accordance with Subsection 3.1(d), on or before the Merger Record Date,
specified that that share was to be converted into cash, in the Merger, in
accordance with Subsection 3.1(a). "Cash Election Share" also means a share of
Extensity Common Stock with respect to which no election was properly and timely
filed under Subsection 3.1(d). In no event shall Stock Election Shares or
Dissenting Shares be considered "Cash Election Shares".
"CASH PRICE" means the amount, expressed in U.S. dollars,
determined in accordance with Subsection 3.1(a).
"CERCLA" has the meaning specified in Subsection 4.20(a).
"CERTIFICATE OF MERGER" has the meaning specified in Section
2.2.
"CLOSING" has the meaning specified in Section 2.2.
"CLOSING DATE" has the meaning specified in Section 2.2.
"COBRA" means the United States Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
2
<PAGE>
"CODE" means the United States Internal Revenue Code of 1986,
as amended.
"CONFIDENTIALITY AGREEMENT" has the meaning specified in
Subsection 6.2(a).
"DELAWARE LAW" means the Delaware General Corporation Law.
"DISSENTING SHARES" has the meaning specified in Section 3.5.
"EFFECTIVE TIME" has the meaning specified in Section 2.2.
"END DATE" has the meaning specified in Subsection 9.1(g).
"ENVIRONMENT" has the meaning specified in Subsection 4.20(a).
"ENVIRONMENTAL LAW" has the meaning specified in Subsection
4.20(a).
"ENVIRONMENTAL PERMIT" has the meaning specified in Subsection
4.20(a).
"ERISA" means the United States Employee Retirement Income
Security Act of 1974, as amended.
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations adopted by the SEC under that
statute.
"EXCHANGE AGENT" means Computershare Trust Company.
"EXCHANGE RATIO" means the fraction of a Geac Common Share,
expressed as a decimal, determined in accordance with Subsection 3.1(b).
"EXTENSITY ACQUISITION PROPOSAL" has the meaning specified in
Subsection 6.2(b).
"EXTENSITY ACQUISITION TRANSACTION" has the meaning specified
in Subsection 6.2(b).
"EXTENSITY BALANCE SHEET" means the consolidated balance sheet
of Extensity dated as of the Reference Date and included in the SEC Reports.
"EXTENSITY COMMON STOCK" means the common stock, USD0.001 par
value per share, of Extensity.
"EXTENSITY CONTRACTS" has the meaning specified in Subsection
4.14(b).
3
<PAGE>
"EXTENSITY DISCLOSURE STATEMENT" has the meaning specified in
the preamble to Article IV.
"EXTENSITY EMPLOYEE BENEFIT PLANS" has the meaning specified
in Subsection 4.19(a).
"EXTENSITY ERISA AFFILIATE" has the meaning specified in
Subsection 4.19(a).
"EXTENSITY EXCESS TRANSACTION EXPENSES" means the Extensity
Transaction Expenses minus USD1.85 million.
"EXTENSITY FINANCIAL STATEMENTS" means the consolidated
financial statements (including the related notes) of Extensity included in the
SEC Reports.
"EXTENSITY IP RIGHTS" has the meaning specified in Subsection
4.17(a).
"EXTENSITY MATERIAL ADVERSE EFFECT" means any change, event or
effect that is or is reasonably likely to become materially adverse to the
affairs, business (including, without limitation, a decrease greater than 35% in
the customer and revenue "pipeline" of Extensity, on a consolidated basis, as
compared to the Extensity pipeline figures initialed by officers of Extensity
and Geac when this Agreement was signed), an aggregate increase greater than
USD500,000 in the consolidated liabilities of Extensity or an aggregate decrease
greater than USD500,000 in the book value of the consolidated assets of
Extensity, operations, assets, financial condition or results of operations of
Extensity and the Extensity Subs taken as whole. However, none of the following
shall constitute an "Extensity Material Adverse Effect" and none of the
following shall be taken into account in determining whether an "Extensity
Material Adverse Effect" has occurred or is reasonably likely to occur: (a) the
consequences of the announcement or pendency of the Merger (including any
disruption in partner, customer or similar relationships or any loss of
employees if, in any such case, that disruption is caused by the announcement or
pendency of the Merger), (b) any adverse change, effect, event, occurrence,
state of facts or development attributable to conditions affecting the industry
in which Extensity and the Extensity Subs participate or the U.S. economy as a
whole, (c) any adverse change in the stock price of Extensity in and of itself,
as quoted on the NASDAQ National Market, (d) any adverse change, effect, event,
occurrence, state of facts or development arising from or relating to acts of
terrorism or war, (e) any adverse change, effect, event, occurrence, state of
facts or development arising from or relating to any change in Law, (f) the
entry of a competitor in the industry in which Extensity and the Extensity Subs
participate, (g) any effect relating to compliance with the terms of, or the
taking of any action required by, this Agreement or the taking of any action
consented to by Geac, (h) the effect of depreciation of depreciable assets in
accordance with U.S. GAAP or (i) any
4
<PAGE>
changes (by themselves) in any of the elements used to calculate Extensity WC.
The purpose of clause (i) of the preceding sentence is to assure that changes in
the elements used to calculate Extensity WC only have the effects reflected in
Subsections 3.1(a), (b) and (c), and in Section 3.2. However, if any change,
event or effect, not constituting an element used to calculate Extensity WC,
nevertheless itself constitutes an Extensity Material Adverse Effect but for
that clause (i), then the fact that the change, event or effect also correlates
with, is caused by, or causes a change in one or more of the elements used to
calculate Extensity WC shall not cause that change, event or effect not to be an
Extensity Material Adverse Effect.
"EXTENSITY NON-U.S. PLANS" has the meaning specified in
Subsection 4.19(n).
"EXTENSITY OPTIONS" has the meanings specified in Sections 3.2
and 4.6.
"EXTENSITY PENSION PLANS" has the meaning specified in
Subsection 4.19(a).
"EXTENSITY PREFERRED STOCK" means a new class of preferred
stock of Extensity to be designated by Extensity's board of directors, as
contemplated by Section 2.4.
"EXTENSITY PURCHASE PLAN" means the 2000 Extensity Employee
Stock Purchase Plan.
"EXTENSITY REAL PROPERTY" has the meaning specified in
Subsection 4.20(b).
"EXTENSITY RELATED PARTY AGREEMENTS" has the meaning specified
in Subsection 4.14(a).
"EXTENSITY STOCK PLANS" has the meaning specified in Section
3.2.
"EXTENSITY SUBS" mean Extensity Europe Limited, a corporation
organized under the laws of the United Kingdom, and Extensity (Australia) PTY
Limited, a corporation organized under the laws of the Commonwealth of
Australia.
"EXTENSITY SUPERIOR OFFER" has the meaning specified in
Subsection 6.4(c).
"EXTENSITY TRANSACTION EXPENSES" means the following costs and
expenses (determined in accordance with U.S. GAAP) incurred by Extensity and the
Extensity Subs, on or before the Effective Time, in connection with this
Agreement, the Merger and the other transactions contemplated by this Agreement:
(a) investment banker fees (including any "success" or similar fee) and
reimbursable costs; (b) legal fees and reimbursable costs; (c) printing and
mailing expenses and costs; (d) the other costs and
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<PAGE>
expenses associated with the Stockholder Meeting, including the fees and
reimbursable costs of any proxy solicitation firm; and (e) accounting fees.
"EXTENSITY TRIGGERING EVENT" has the meaning in Subsection
9.1(k).
"EXTENSITY WELFARE PLANS" has the meaning specified in
Subsection 4.19(a).
"EXTENSITY WC" means: (a) Extensity's consolidated accounts
receivable, and cash and cash equivalents, all as of the Merger Record Date
minus (b) Extensity's consolidated accounts payable and the accrued liabilities
included in Extensity's consolidated current liabilities, all as of the Merger
Record Date minus (c) any Extensity Excess Transaction Expenses, all as
determined in accordance with U.S. GAAP. However, for purposes of clause (a) of
the preceding sentence, any Extensity Transaction Expenses paid in fact, by
Extensity, on or before the Merger Record Date shall not reduce cash or cash
equivalents. Also, for purposes of clause (b) of the preceding sentence,
accounts payable and accrued liabilities shall not include any unpaid Extensity
Transaction Expenses.
"EXTENSITY WC DECREMENT" means the amount, if any, by which 97
percent of the Extensity WC Standard exceeds the Extensity WC. For example, if
the Closing Date is December 4, 2002 (in which case the Extensity WC Standard
would be USD31,239,000) and the Extensity WC is USD29,500,000, then the
Extensity WC Decrement would be USD801,830.
"EXTENSITY WC INCREMENT" means the amount, if any, by which
the Extensity WC exceeds 103 percent of the Extensity WC Standard. For example,
if the Closing Date is December 4, 2002 (in which case the Extensity WC Standard
would be USD31,239,000) and the Extensity WC is USD33,000,000, then the
Extensity WC Increment would be USD823,830.
"EXTENSITY WC STANDARD" means the amount that equals:
(a) USD34,019,000 minus (b) a per diem figure for the period beginning and
including October 1, 2002 and ending and including the day before the Closing
Date. That per diem figure shall be: (c) USD50,000 for each day during the first
month of each calendar quarter; (b) USD40,000 for each day during the second
month of each calendar quarter and (c) USD10,000 for each day during the third
month of each calendar quarter. For example, if the Closing Date is December 4,
2002, the Extensity WC Standard would be USD31,239,000.
"GEAC COMMON SHARE" means a common share of Geac.
6
<PAGE>
"GEAC DISCLOSURE STATEMENT" has the meaning specified in the
preamble to Article V.
"GEAC FINANCIAL STATEMENTS" means the consolidated financial
statements (including the related notes) of Geac as of April 30, 2002 and for
the fiscal year then ended, accompanied by the audit report of
PricewaterhouseCoopers, as previously furnished to Extensity.
"GEAC MATERIAL ADVERSE EFFECT" means any change, event or
effect that is or is reasonably likely to become materially adverse to the
affairs, business (including, without limitation, a decrease greater than 35% in
the customer and revenue "pipeline" of Geac on a consolidated basis, an
aggregate increase greater than USD5 million in the consolidated liabilities of
Geac or an aggregate decrease greater than USD60 million in the book value of
the consolidated assets of Geac), operations, assets, financial condition or
results of operations of Geac and the Geac Subsidiaries taken as whole. However,
none of the following shall constitute a "Geac Material Adverse Effect" and none
of the following shall be taken into account in determining whether a "Geac
Material Adverse Effect" has occurred or is reasonably likely to occur: (a) the
consequences of the announcement or pendency of the Merger (including any
disruption in partner, customer or similar relationships or any loss of
employees if, in any such case, that disruption is caused by the announcement or
pendency of the Merger), (b) any adverse change, effect, event, occurrence,
state of facts or development attributable to conditions affecting the industry
in which Geac and the Geac Subsidiaries participate or the U.S. or Canadian
economy as a whole, (c) any adverse change in the stock price of Geac in and of
itself, as quoted on the TSX, (d) any adverse change, effect, event, occurrence,
state of facts or development arising from or relating to acts of terrorism or
war, (e) any adverse change, effect, event, occurrence, state of facts or
development arising from or relating to any change in Law, (f) the entry of a
competitor in the industry in which Geac and the Geac Subsidiaries participate,
(g) any effect relating to compliance with the terms of, or the taking of any
action required by, this Agreement or the taking of any action consented to by
Extensity or (h) the consequences of any transaction or action (albeit relating
to Geac or Geac Subsidiaries, rather than Extensity or Extensity Subs) of the
type described in Subsection 4.10 (a), (c), (h) or (j), or Subsection 6.1(a) or
(b).
"GEAC SUB" means Cage Acquisition Inc., a Delaware
corporation.
"GEAC SUB COMMON STOCK" means the common stock, USD0.001 par
value per share, of Geac Sub.
"GEAC SUB PREFERRED STOCK" has the meaning specified in
Subsection 5.4(b).
"GEAC SUBSIDIARIES" means the Subsidiaries of Geac including
Geac Sub.
7
<PAGE>
"GOVERNMENT ENTITY" means a court, administrative agency,
commission, legislature or other governmental or regulatory body, authority or
instrumentality of any jurisdiction whatsoever.
"HAZARDOUS MATERIAL" has the meaning specified in Subsection
4.20(a).
"HIGHER-PRICE EXTENSITY OPTIONS" means those Extensity Options
that have an exercise price per share of Extensity Common Stock greater than
USD1.50.
"HSR" means the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules adopted by the United States
Federal Trade Commission under that statute.
"INDEMNIFIED PARTY" means each individual who, as of the date
of this Agreement, is or has been a director or officer of Extensity or any
Extensity Sub, and each individual who, as of that date, serves or had served,
at the request of Extensity, as a trustee or fiduciary of an employee benefit
plan in which employees of Extensity or any Extensity Sub participate or
participated.
"KNOWLEDGE" (when used in connection with Extensity or the
Extensity Subs) means the knowledge of Sharam Sasson, Bob Spinner, Ken Hahn,
David Yarnold, Don Smith, Ben Netick or Louise Abbott.
"LAW" means any applicable law (whether civil, criminal or
administrative) including, without limitation, any common law, statute, treaty,
regulation, directive, decision, code, order, decree, injunction, resolution or
judgment of any Government Entity.
"LOWER-PRICE EXTENSITY OPTIONS" means those Extensity Options
that have an exercise price per share of Extensity Common Stock equal to or less
than USD1.50.
"MEETING RECORD DATE" means the close of business on the
record date for the Stockholder Meeting.
"MERGER" means the merger of Geac Sub into Extensity.
"MERGER RECORD DATE" means the close of business on the day
before the Closing Date.
"ONTARIO SECURITIES LAWS" means the multilateral instruments,
the securities legislation and the regulations thereto applicable in Ontario,
and the published rules, blanket decisions, orders and published policy
statements of the Ontario Securities Commission in force on the date of this
Agreement.
8
<PAGE>
"PARTY" means any of Geac, Geac Sub and Extensity, and
"Parties" means Geac, Geac Sub and Extensity collectively.
"PERSON" means any individual or entity of any kind.
"PROXY STATEMENT/PROSPECTUS" has the meaning specified in
Section 4.23.
"REFERENCE DATE" means December 31, 2001.
"REGISTRATION STATEMENT" has the meaning specified in Section
4.23.
"SEC" means the United States Securities and Exchange
Commission.
"SEC REPORTS" has the meaning specified in Section 4.7.
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations adopted by the SEC under that
statute.
"SOFTWARE" means any and all: (a) computer programs and
applications, including any and all software implementations of algorithms,
models and methodologies, whether in source code or object code, (b) databases
and compilations, including any and all data and collections of data, whether
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