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Title: |
Acquisition Agreement |
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Date: |
2003 |
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Preview shows 15KB of 265KB total |
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$81 |
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ID: |
#1270588 |
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ACQUISITION AGREEMENT
BETWEEN
COREL HOLDINGS, L.P.
AND
VECTOR CC ACQUISITIONS INC.
and
COREL CORPORATION
June 6, 2003
<PAGE>
TABLE OF CONTENTS
ARTICLE 1.
INTERPRETATION
1.1. Definitions........................................................ 1
1.2. Interpretation Not Affected by Headings, etc....................... 14
1.3. Rules of Construction.............................................. 14
1.4. Date For Any Action................................................ 15
1.5. Subsidiaries....................................................... 15
1.6. Schedules.......................................................... 15
1.7. Accounting Matters................................................. 15
1.8. Material Adverse Effect............................................ 15
ARTICLE 2.
THE TRANSACTION
2.1. The Transaction.................................................... 16
2.2. Interim Order...................................................... 17
2.3. Articles of Continuance............................................ 18
2.4. Articles of Arrangement............................................ 18
2.5. Corel Circular..................................................... 19
2.6. Securities Compliance.............................................. 19
2.7. Preparation of Filings............................................. 19
2.8. Approvals and Recommendations...................................... 20
ARTICLE 3.
PUBLICITY AND PROXY SOLICITATION
3.1. Publicity.......................................................... 21
3.2. Proxy Solicitation................................................. 21
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF COREL
4.1. Organization and Standing.......................................... 22
4.2. Capitalization..................................................... 23
4.3. Authority and No Conflicts......................................... 24
4.4. Consents and Approvals............................................. 25
4.5. No Defaults........................................................ 25
4.6. Absence of Certain Changes or Events............................... 25
4.7. Public Disclosure.................................................. 26
4.8. Financial Statements and Financial Matters......................... 27
4.9. Indebtedness....................................................... 28
<PAGE>
- ii -
4.10. As to Certain Contracts In and Out of the Ordinary Course.......... 28
4.11. Employment Matters................................................. 29
4.12. Litigation......................................................... 30
4.13. Tax Matters........................................................ 30
4.14. Pension and Employee Benefits...................................... 32
4.15. Title to Assets.................................................... 33
4.16. Owned Real Property................................................ 33
4.17. Leased Real Property............................................... 33
4.18. Zoning and Other Matters Relating to Real Property................. 34
4.19. Environmental Matters.............................................. 34
4.20. Intellectual Property.............................................. 34
4.21. Compliance with Laws and Permits; Regulatory Matters............... 37
4.22. Restrictions on Business Activities................................ 38
4.23. Customers and Suppliers............................................ 38
4.24. Insurance.......................................................... 39
4.25. Foreign Private Issuer............................................. 39
4.26. Brokerage and Finders' Fees........................................ 39
4.27. Representations Complete........................................... 39
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF VECTOR
5.1. Organization and Standing.......................................... 40
5.2. Corel Series A Shares.............................................. 40
5.3. Authority and No Conflicts......................................... 40
5.4. Consents and Approvals............................................. 41
5.5. Litigation......................................................... 41
5.6. No Defaults........................................................ 41
5.7. Brokerage and Finders' Fees........................................ 41
5.8. Representations Complete........................................... 42
ARTICLE 6.
COVENANTS RELATING TO THE TRANSACTION
6.1. Covenants of Corel................................................. 42
6.2. Covenants of Vector................................................ 47
6.3. Access to Information.............................................. 49
6.4. Physical Due Diligence............................................. 49
6.5. Standstill Exception............................................... 49
6.6. Regulatory Approvals............................................... 49
6.7. Third Party Consents............................................... 50
<PAGE>
- iii -
6.8. Non-Solicitation of Alternative Proposals.......................... 50
6.9. Notice of Superior Proposal........................................ 52
6.10. Adjourning or Postponing the Meeting............................... 53
6.11. Pre-Closing and Closing Matters.................................... 54
6.12. Financial Information.............................................. 55
6.13. Executive Employment............................................... 55
6.14. Directors' and Officers' Insurance................................. 55
ARTICLE 7.
CONDITIONS
7.1. Mutual Conditions.................................................. 57
7.2. Additional Conditions to the Obligations of Vector................. 57
7.3. Additional Conditions to the Obligations of Corel.................. 59
7.4. Closing Matters.................................................... 60
7.5. Delivered Calculations............................................. 60
ARTICLE 8.
TERMINATION, AMENDMENT AND WAIVER
8.1. Termination........................................................ 60
8.2. Effect of Termination.............................................. 62
8.3. Termination Fee and Expenses....................................... 62
ARTICLE 9.
GENERAL
9.1. Arbitration........................................................ 63
9.2. Amendment.......................................................... 64
9.3. Waiver. .......................................................... 64
9.4. Investigation...................................................... 64
9.5. Survival of Representations and Warranties, Agreements
and Covenants ................................................... 64
9.6. Notices. .......................................................... 64
9.7. Assignment......................................................... 66
9.8. Binding Effect..................................................... 66
9.9. Further Assurances................................................. 66
9.10. Expenses........................................................... 66
9.11. Governing Law...................................................... 66
9.12. Time of Essence.................................................... 67
9.13. Entire Agreement................................................... 67
9.14. Severability....................................................... 67
9.15. Remedies........................................................... 67
<PAGE>
- iv -
9.16. Counterparts....................................................... 67
SCHEDULE A - REGULATORY APPROVALS AND CONSENTS
SCHEDULE B - TRANSACTION RESOLUTION
SCHEDULE C - RIGHTS PLAN WAIVER RESOLUTION
SCHEDULE D - PLAN OF ARRANGEMENT
SCHEDULE E - ARTICLES OF CONTINUANCE
<PAGE>
ACQUISITION AGREEMENT
THIS AGREEMENT is made as of June 6, 2003,
B E T W E E N:
COREL HOLDINGS, L.P., a limited partnership formed under the laws of the
State of Delaware ("Vector")
- and -
VECTOR CC ACQUISITIONS INC., a corporation incorporated under the laws of
the Province of Ontario
- and -
COREL CORPORATION, a corporation incorporated under the federal laws of
Canada
RECITALS:
A. The board of directors of Corel has determined that the Transaction is in
the best interests of Corel and fair to its shareholders, has agreed to
recommend to Corel Voting Securityholders that they vote in favour of the
Transaction and has determined to take all reasonable action to support
and effect the Transaction on and subject to the terms of this Agreement.
B. Vector has determined to enter into this Agreement and to take all
reasonable action to support and effect the Transaction on and subject to
the terms of this Agreement.
NOW THEREFORE in consideration of the mutual covenants and agreements
contained in this Agreement and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
ARTICLE 1.
INTERPRETATION
1.1. Definitions.
In this Agreement:
"Acquired Subsidiaries" means, collectively, Micrografx, Inc. and SoftQuad
Software, Ltd. and their Subsidiaries at the date of acquisition;
"Additional Arrangements" has the meaning specified in section 4.10.3;
"Adjusted Cash" has the meaning specified in section 7.2.6.1;
<PAGE>
- 2 -
"affiliate" has the meaning specified in the Securities Act, and, in the
case of Vector, includes persons who constitute fund entities that are
managed or controlled by the general partner of Vector or its affiliates;
"Agreement" means this agreement, all schedules attached to this agreement
and the Corel Disclosure Letter, Vector Disclosure Letter and Operating
Plan contemplated by this agreement, in each case as they may be amended
or supplemented from time to time in accordance with the terms of this
Agreement, and the expressions "hereof", "herein", "hereto", "hereunder",
"hereby" and similar expressions refer to this agreement and unless
otherwise indicated, references to Articles and sections are to Articles
and sections in this agreement;
"Alternative Proposal" means (other than the Transaction or transactions
permitted by section 6.1) (1) any merger, amalgamation, arrangement, share
exchange, take-over bid, recapitalization, consolidation or business
combination involving, directly or indirectly, Corel or any of its
Material Subsidiaries, in any case with the effect that Corel Shareholders
own less than 50% of the resulting entity or the combined business, (2)
any acquisition of assets (or any lease, long-term supply agreement,
exchange, mortgage, pledge or other arrangement having a similar economic
effect), in a single transaction or a series of related transactions (A)
related to the WordPerfect Office or CorelDRAW Suite groupings of Software
or (B) representing 50% or more of the consolidated net revenues or assets
of Corel and its Subsidiaries, taken as a whole, (3) any acquisition of
beneficial ownership of 50% or more of the then issued and outstanding
Corel Shares in a single transaction or a series of related transactions,
(4) any acquisition by Corel of any assets or securities of another person
(other than acquisitions of capital stock or assets or securities of any
other person in an amount or amounts that, individually or in the
aggregate do not represent in excess of 50% or more of the consolidated
net revenues or assets of Corel and its Subsidiaries, taken as a whole
before giving effect to the acquisition), or (5) any proposal, or public
announcement of an intention, to do any of the foregoing, and includes any
amendment to an Alternative Proposal;
"Approval Date" means the date on which all of the Consents specified in
section 7.2.7 have been obtained;
"Arbitration Act" means the International Commercial Arbitration Act
(Ontario);
"Arrangement" means, subject to section 2.1.1, an arrangement under
Section 182 of the OBCA on the terms and subject to the conditions set out
in the Plan of Arrangement, subject to any amendments or variations to the
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