-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BXikGszp/lneEsTgOly66Tu+7fvmzA8k/1sU3McmV4B2Q316ziIeTUNddxcotTCW j7cDRzjGzTB4zce0oaReKw== 0000950172-96-000180.txt : 19960422 0000950172-96-000180.hdr.sgml : 19960422 ACCESSION NUMBER: 0000950172-96-000180 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19960326 ITEM INFORMATION: Other events FILED AS OF DATE: 19960419 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCURRENT COMPUTER CORP/DE CENTRAL INDEX KEY: 0000749038 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 042735766 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-13150 FILM NUMBER: 96548686 BUSINESS ADDRESS: STREET 1: 2 CRECENT PLACE CITY: OCEANPORT STATE: NJ ZIP: 07757 BUSINESS PHONE: 9088704500 MAIL ADDRESS: STREET 1: 2 CRECENT PLACE CITY: OCEANPORT STATE: NJ ZIP: 07757 FORMER COMPANY: FORMER CONFORMED NAME: MASSACHUSETTS COMPUTER CORP DATE OF NAME CHANGE: 19881018 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 March 26, 1996 (Date of earliest event reported) CONCURRENT COMPUTER CORPORATION (Exact name of Registrant as specified in its charter) Delaware 0-13150 04-2735766 (State of (Commission File No.) (IRS Employer Incorporation) Identification No.) Two Crescent Place Oceanport, NJ 07757 (Address of principal executive offices, including zip code) (908) 870-4354 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS On March 26, 1996, Concurrent Computer Corporation ("Concurrent"), executed a Purchase and Sale Agreement (the "Purchase and Sale Agreement") between Concurrent and Harris Computer Systems Corporation, a Florida corpo- ration ("Harris"). The Purchase and Sale Agreement provides for the assets of the real-time computer busi- ness of Harris (the "Real-Time Business") to be sold to Concurrent together with 683,178 shares of newly issued common stock of Harris (the "Purchased Harris Shares") in exchange for (i) 10,000,000 newly issued shares of common stock of Concurrent, par value $.01 per share (the "Con- current Common Stock Consideration"); (ii) convertible exchangeable preferred stock of Concurrent (the "Concur- rent Preferred Stock") paying a 9% cumulative annual dividend quarterly in arrears with a liquidation prefer- ence of $10,000,000, subject to adjustment; and (iii) the assumption by Concurrent of certain liabilities (the "Assumed Liabilities"). The sale of the Real-Time Busi- ness and the Purchased Harris Shares in exchange for the Concurrent Common Stock Consideration, the Concurrent Preferred Stock and the assumption by Concurrent of the Assumed Liabilities is referred to herein as the "Trans- action." The Purchase and Sale Agreement also contemplates the execution at the closing of the Transaction of cer- tain ancillary agreements, including a Share Holding Agreement that will contain certain standstill, gover- nance, transfer and registration provisions, and provi- sions relating to the composition of the Board of Direc- tors of Harris and Concurrent. Consummation of the Transaction is conditioned upon a number of events, including approval of the Purchase and Sale Agreement and the Transaction by the sharehold- ers of Concurrent and Harris, the approval by the share- holders of Concurrent of an amendment to the Concurrent 1991 Restated Stock Option Plan, the approval by the shareholders of Harris of an amendment to Harris's Stock Incentive Plan, certain regulatory approvals, and other conditions. The description of the Transaction herein is quali- fied entirely by reference to the Purchase and Sale Agreement, and the exhibits thereto, filed as exhibits to this Current Report on Form 8-K. ITEM 7. EXHIBITS The following exhibits are filed as part of this Form 8-K: (c) Exhibits EXHIBIT NO. DESCRIPTION 10.1 Purchase and Sale Agreement (and certain exhibits thereto) dated March 26, 1996 between Concurrent and Harris. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONCURRENT COMPUTER CORPORATION By:/s/ Kevin J. Dell Kevin J. Dell Vice President General Counsel and Secretary Dated: April __, 1996 EX-10 2 EXHIBIT 10.1 - PURCHASE AND SALE AGREEMENT --------------------------------------------------------- PURCHASE AND SALE AGREEMENT BETWEEN CONCURRENT COMPUTER CORPORATION, AND HARRIS COMPUTER SYSTEMS CORPORATION, DATED AS OF MARCH 26, 1996 --------------------------------------------------------- TABLE OF CONTENTS PAGE ARTICLE I SALE AND PURCHASE OF ASSETS.................. 2 Section 1.1 Transfer of Assets.................. 2 Section 1.2 Excluded Assets; Omitted Property.......................... 5 Section 1.3 Assumed Liabilities; Excluded Liabilities.............. 7 Section 1.4 Exact Effective Time................ 9 ARTICLE II TRANSFER OF STOCK; ADDITIONAL AGREEMENTS............ 9 Section 2.1 Sale of Harris Common Stock......... 9 Section 2.2 Sale of Concurrent Stock............ 9 Section 2.3 Preparation of Audited Financial Statements; Net Current Assets Adjustment......... 10 Section 2.4 Ancillary Agreements; Certificate of Designation........ 17 Section 2.5 Allocation of Purchase Price............................. 18 ARTICLE III CLOSING............................ 19 Section 3.1 Closing............................. 19 Section 3.2 Deliveries by Harris................ 20 Section 3.3 Deliveries by Concurrent............ 22 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HARRIS............ 23 Section 4.1 Organization Etc.................... 23 Section 4.2 Capitalization...................... 25 Section 4.3 Authority........................... 28 Section 4.4 Consents and Approvals; No Violations..................... 29 Section 4.5 SEC Reports and Financial Statements........................ 32 Section 4.6 Information in Disclosure Documents......................... 33 Section 4.7 Litigation.......................... 34 Section 4.8 Absence of Certain Changes.......... 35 Section 4.9 Opinion of Financial Advisor........................... 36 Section 4.10 Tax Matters......................... 36 Section 4.11 Vote Required....................... 41 Section 4.12 Employee Benefit Plans; ERISA............................. 41 Section 4.13 Applicability of Certain Laws.............................. 45 Section 4.14 Major Contracts..................... 45 Section 4.15 Interests of Officers and Directors......................... 48 Section 4.16 Intellectual Property............... 48 Section 4.17 Questionable Payments............... 55 Section 4.18 Insurance........................... 56 Section 4.19 No Brokers.......................... 56 Section 4.20 Environmental....................... 57 Section 4.21 Assets.............................. 60 Section 4.22 Audited Balance Sheet............... 62 Section 4.23 Leased Properties................... 63 Section 4.24 Subsidiaries........................ 64 Section 4.25 Outstanding Liabilities to Related Parties................... 65 Section 4.26 Product Returns; Warranties......... 65 Section 4.27 Transferred Subsidiaries............ 66 Section 4.28 Transferred Subsidiaries Financial Statement............... 67 Section 4.29 Investment Purpose.................. 67 Section 4.30 Rights Agreement.................... 68 ARTICLE V REPRESENTATIONS AND WARRANTIES OF CONCURRENT.......... 69 Section 5.1 Organization........................ 69 Section 5.2 Capitalization...................... 70 Section 5.3 Authority........................... 72 Section 5.4 Consents and Approvals; No Violations..................... 74 Section 5.5 SEC Reports and Financial Statements........................ 77 Section 5.6 Information in Disclosure Documents......................... 78 Section 5.7 Litigation.......................... 79 Section 5.8 Absence of Certain Changes.......... 80 Section 5.9 Opinion of Financial Advisor........................... 81 Section 5.10 Rights Agreement.................... 81 Section 5.11 Tax Matters......................... 81 Section 5.12 Vote Required....................... 85 Section 5.13 Employee Benefit Plans; ERISA............................. 85 Section 5.14 Major Contracts..................... 88 Section 5.15 Interests of Officers and Directors......................... 89 Section 5.16 Intellectual Property............... 90 Section 5.17 Questionable Payments............... 96 Section 5.18 Insurance........................... 97 Section 5.19 No Brokers.......................... 98 Section 5.20 Environmental....................... 98 Section 5.21 Investment Purpose..................100 Section 5.22 Applicability of Certain Laws..............................101 Section 5.23 Product Returns; Warranties.........101 ARTICLE VI COVENANTS...........................102 Section 6.1 Conduct of Business of Harris............................102 Section 6.2 Conduct of Business of Concurrent........................106 Section 6.3 Best Efforts........................111 Section 6.4 Registration Rights.................113 Section 6.5 Occurrence of Closing Prior to or Following the Reference Date..............................114 Section 6.6 Access to Information...............115 Section 6.7 Stockholders Meetings...............117 Section 6.8 No Solicitation.....................118 Section 6.9 Brokers or Finders..................121 Section 6.10 Rights Plan.........................121 Section 6.11 Publicity...........................121 Section 6.12 Notification of Certain Matters...........................122 Section 6.13 Management and Corporate Governance Matters................123 Section 6.14 Employment Agreements...............126 Section 6.15 Expenses............................126 Section 6.16 IRS Determination Letter............127 Section 6.17 Insurance...........................127 Section 6.18 Supplemental Disclosure.............127 Section 6.19 Further Assurances; Subsequent Transfers..............129 Section 6.20 Risk of Loss........................132 Section 6.21 Compliance with Applicable Bulk Sales Laws...................136 Section 6.22 Audited Financial Statements; Statutory Financial Statements....136 Section 6.23 Tax Matters.........................136 Section 6.24 HSR Approval........................138 ARTICLE VII EMPLOYMENT AND EMPLOYEE BENEFIT PLANS.............139 Section 7.1 Existing Employee Benefit Plans of Harris...................139 Section 7.2 Employment of Employees Employed in Business..............143 Section 7.3 Employee Benefit Plans of Concurrent........................144 ARTICLE VIII CONDITIONS...........................147 Section 8.1 Conditions to Each Party's Obligation To Perform this Agreement.........................147 Section 8.2 Conditions of Obligation of Concurrent........................151 Section 8.3 Conditions of Obligation of Harris............................153 ARTICLE IX TERMINATION AND AMENDMENT...................156 Section 9.1 Termination by Mutual Consent...........................156 Section 9.2 Termination by Either Concurrent or Harris..............157 Section 9.3 Termination by Harris...............158 Section 9.4 Termination by Concurrent...........159 Section 9.5 Effect of Termination...............160 Section 9.6 Termination Fee.....................161 ARTICLE X OBLIGATIONS OF PARTIES AFTER CLOSING DATE...........162 Section 10.1 Survival Periods....................162 Section 10.2 Indemnification.....................163 Section 10.3 Claims..............................165 ARTICLE XI MISCELLANEOUS.........................168 Section 11.1 Amendment...........................168 Section 11.2 Extension; Waiver...................169 Section 11.3 Notices.............................169 Section 11.4 Interpretation......................170 Section 11.5 Counterparts........................171 Section 11.6 Entire Agreement; No Third Party Beneficiaries...............172 Section 11.7 Governing Law.......................172 Section 11.8 Specific Performance................173 Section 11.9 Assignment..........................173 Section 11.10 Incorporation of Exhibits...........173 Section 11.11 Severability........................173 INDEX OF DEFINED TERMS Term Section Acquiring Person................................................4.3 and 5.10 Acquisition Transaction.........................................6.8(a)(i) affiliate.......................................................4.15 and 5.15 Allocation......................................................2.5 Ancillary Agreements............................................2.4(a) Appraisal Rights................................................5.22 Article.........................................................11.4 Assets..........................................................1.1(d) associate.......................................................4.15 and 5.15 Assumed Concurrent Transfer Tax Liability.......................1.3(a) Assumed Liabilities.............................................1.3(a) at the closing; exact effective time............................1.4 Audited Balance Sheet...........................................2.3(a)(i) Audited Balance Sheet Disagreement..............................2.3(a)(iii) Audited Base Financial Statements...............................4.22 Best Efforts....................................................6.3 Business........................................................Introduction Business Combinations with Interested Stockholders..............5.22 Business Employees..............................................7.1(a)(i) Business Intellectual Property Rights...........................4.16(a) Business Portion................................................1.3(a) Closing.........................................................3.1 Closing Date....................................................3.1 Code............................................................2.5 Common Stock Consideration......................................2.2 Concurrent......................................................Introduction Concurrent 401(k) Plan..........................................7.3(a) Concurrent Additional Cost......................................6.20(a)(ii) Concurrent Casualty Deficiency..................................6.20(a)(ii) Concurrent Common Stock.........................................Introduction Concurrent Designees............................................6.13(b) Concurrent ERISA Affiliate......................................5.13(a) Concurrent ERISA Plans..........................................5.13(a) Concurrent Intellectual Property Rights.........................5.16(a) Concurrent Matching Contribution................................7.3(a)(iii) Concurrent Options..............................................5.2 Concurrent Plans................................................5.13(a) Concurrent Preferred Stock......................................Introduction Concurrent Rights Agreement.....................................5.2 Concurrent SEC Documents........................................5.5 Concurrent Stock Plan...........................................5.2 Concurrent Stock Plan Amendment.................................5.12 Concurrent Stockholder Meeting..................................4.6 Confidentiality Agreement.......................................6.6 Control-Share Acquisitions......................................4.13 Corporate Target Goals..........................................7.3(d) Damages.........................................................10.2(a) the date hereof.................................................11.4 the date of this Agreement......................................11.4 Debentures......................................................2.2 DGCL............................................................5.22 Disclosure Schedule.............................................4.16(d) Distribution....................................................4.10(e) Distribution Date...............................................5.10 employee benefit plan...........................................4.12(a) and 5.13(a)employee pension plan................................4.12(g) and 5.13(h) Employment Effective Time...........................7.1(a)(i) Encumbrances....................................................4.21(d) Environmental Claim.............................................4.20(d) Environmental Laws..............................................4.20(d) ERISA...........................................................4.12(a) Exchange Act....................................................4.4(a) Excluded Assets.................................................1.2(b) Fair Market Value...............................................6.20(b) Final Net Current Asset Reconciliation..........................2.3(b)(i) First Appraiser.................................................6.20(b) Flip-in Date....................................................4.30 Flip-over Transaction...........................................4.30 GAAP............................................................2.3(a)(i) Governmental Entity.............................................4.4(a) Harris..........................................................Introduction Harris 401(k) Plan..............................................7.1(a) Harris Common Stock.............................................Introduction Harris Designees................................................6.13(a) Harris ERISA Affiliate..........................................4.12(a) Harris ERISA Plans..............................................4.12(a) Harris Plans....................................................4.12(a) Harris Rights...................................................4.2 Harris Rights Agreement.........................................4.2 Harris SEC Documents............................................4.5 Harris Stock Plan...............................................4.2 Harris Stock Plan Amendment.....................................4.11 Harris Stockholder Meeting......................................4.6 Harris Subsidiary Shares........................................1.1(c) herein..........................................................11.4 hereof..........................................................11.4 hereunder.......................................................11.4 Hired Business Employee.........................................7.1(a)(iv)(B) HSR Act.........................................................4.4(a) Identified Real Time Assets.....................................1.1(a) Identified Trusted Assets.......................................1.2(a) include(s)......................................................11.4 including.......................................................11.4 Indemnified Parties.............................................10.2(b) Indemnifying Party..............................................10.3(a) Individual Target Goals.........................................7.3(d) Intellectual Property Rights....................................4.16(a) IRS.............................................................4.10(b)(ii) ISRA............................................................8.3(g) KPMG............................................................2.3(a)(i) Leases..........................................................4.23(a) Liabilities.....................................................1.3(c) Material Adverse Effect.........................................4.1(a) Materials of Environmental Concern..............................4.20(d) multiemployer pension plan......................................4.12(d) and 5.13(d) Net Assets..........................................2.3(c)(i) Net Current Asset Reconciliations...............................2.3(b)(i) Omitted Property................................................1.2(c) Original Concurrent Designee....................................6.13(b) Original Harris Designees.......................................6.13(a) Other Real Time Assets..........................................1.1(a) Person..........................................................6.8(a)(iii) Preferred Stock Consideration...................................2.2 Projected Net Current Asset Reconciliation......................2.3(b)(i) Property........................................................1.1(a) and 6.20(a)(i) Proxy Statement.................................................4.6 Purchased Harris Shares.........................................2.1 qualified.......................................................4.12(f) and 5.13(f) qualified beneficiaries.........................................7.1(b)(iii) qualifying event................................................7.1(b)(iii) Reconciliation Disagreement.....................................2.3(b)(iii) Reference Date..................................................2.3(b)(i) Representatives.................................................10.2(a) Right of Stockholders to Dissent................................4.13 S-3 Registration Statement(s)...................................6.4 Schedule........................................................11.4 SEC.............................................................4.5 Second Appraiser................................................6.20(b) Section.........................................................11.4 Securities Act..................................................4.4(a) Separation Time.................................................4.30 SERP............................................................7.3(e) Shared Assets...................................................1.1(b) Shared IP Right.................................................1.1(b) Shared Liabilities..............................................1.3(a) Shared Real Time Assets.........................................1.1(a) Shared Trusted Assets...........................................1.2(a) single employer.................................................4.12(a) and 5.13(a) Stock Acquisition Date..........................................4.30 and 5.10 Stockholder Meetings............................................4.6 Subsequently Acquired Real Time Assets..........................1.1(a) Subsidiary......................................................4.1(a) Supplemental Disclosure.........................................6.18(a) Target Bonuses..................................................7.3(d) Tax Return......................................................4.10(d) Tax Sharing Agreement...........................................4.10(e) Taxes...........................................................4.10(d) Termination Fee.................................................9.6(c) Third Appraiser.................................................6.20(b) Transfer Taxes..................................................6.23(b) Transferred Subsidiaries........................................1.1(c) Transferred Subsidiaries Benefit Plans..........................4.12(j) Transferred Subsidiaries Financial Statements...................4.28(a) Triggering Event................................................5.10 Trusted Assets..................................................1.2 Trusted Systems Business........................................Introduction Welfare and Fringe Benefit Plans................................7.1(b) without limitation..............................................11.4 EXHIBITS Exhibit A Form of Certificate of Designation Exhibit B Debenture Term Sheet Exhibit C Form of Share Holding Agreement Exhibit D Employment Agreement SCHEDULES Schedule 1.1(a)(i) Identified Real Time Assets Schedule 1.1(b) Shared Assets Schedule 1.2(a)(ii) Identified Trusted Assets Schedule 1.3(a) Assumed Liabilities Schedule 1.3(b)(iv) Excluded Tax Liabilities Schedule 2.3(a) Audited Balance Sheet Procedures Schedule 2.3(b) Net Current Asset Reconciliation Procedures Schedule 2.5 Allocation of Purchase Price Schedule 4.2 Capitalization Schedule 4.4(a) Consents and Approvals Schedule 4.4(b) No Violation Schedule 4.5 Material Undisclosed Liabilities Schedule 4.7 Litigation Schedule 4.8 Absence of Certain Changes Schedule 4.10(b)(i) List of Localities in which Registered to do Business and Tax Liens Schedule 4.10(b)(ii) Tax Years Examined; Tax Deficiencies and As- sessments Schedule 4.10(c) Agreements or Waivers Schedule 4.12(a) Employee Benefit Plans Schedule 4.12(i) Unvested Harris Options Schedule 4.12(k) Transferred Subsidiaries Benefit Plans Schedule 4.14 Major Contracts Schedule 4.15 Interests of Officers and Directors Schedule 4.16(b) Business Intellectual Property Rights Schedule 4.16(c) Products Sold by Harris Schedule 4.16(e) Payments to Third Parties for Intellectual Property Rights Schedule 4.16(m) Agreements Granting Rights to any Third Party in any of the Business Intellectual Property Rights Schedule 4.18 Insurance Schedule 4.20(a) Compliance with Environmental Laws Schedule 4.20(b) Pending Environmental Claims Schedule 4.20(c) Harris Actions Leading to Possible Environ- mental Claims Schedule 4.23(b) Leased Properties Schedule 4.24(a) Subsidiaries of Harris Schedule 4.24(b) Ownership of the Stock of the Transferred Subsidiaries Schedule 4.24(c) Officers and Directors of the Transferred Subsidiaries Schedule 5.2 Capitalization Schedule 5.4(a) Consents and Approvals Schedule 5.4(b) No Violation Schedule 5.5 Material Undisclosed Liabilities Schedule 5.7 Litigation Schedule 5.8 Absence of Certain Changes Schedule 5.11(b)(i) List of Localities in which Registered to do Business and Tax Liens Schedule 5.11(b)(ii) Tax Years Examined; Tax Deficiencies and As- sessments Schedule 5.11(c) Agreements or Waivers Schedule 5.13(a) Employee Benefit Plans Schedule 5.14 Major Contracts Schedule 5.15 Interests of Officers and Directors Schedule 5.16(b) Business Intellectual Property Rights Schedule 5.16(e) Payments to Third Parties for Intellectual Property Rights Schedule 5.16(m) Agreements Granting Rights to any Third Party in any of the Concurrent Intellectual Prop- erty Rights Schedule 5.18 Insurance Schedule 5.20(a) Compliance with Environmental Laws Schedule 5.20(b) Pending Environmental Claims Schedule 5.20(c) Concurrent Actions Leading to Possible Envi- ronmental Claims Schedule 6.1 Conduct of Business of Harris Schedule 6.14 Terms of the Stihl Employment Agreement Amendment Schedule 7.1 Business Employees Schedule 8.1(g) Consents Schedule 8.2(d) Contracts and Agreements THIS AGREEMENT is made as of the 26th day of March 1996, between HARRIS COMPUTER SYSTEMS CORPORATION, a Florida corporation ("Harris") and CONCURRENT COMPUTER CORPORATION, a Delaware corporation ("Concurrent"). W I T N E S S E T H: WHEREAS, Harris and its subsidiaries are engaged in the businesses of providing and servicing high-performance real-time computer systems on a worldwide basis (the "Business") and supplying "trusted products," including operating systems and firewall application products (the "Trusted Systems Business"); WHEREAS, Concurrent has agreed to purchase from Harris, and Harris has agreed to sell to Concurrent, the Business and shares of common stock, par value $0.01 per share, of Harris (the "Harris Common Stock") on the terms and subject to the conditions set forth herein; and WHEREAS, in exchange for the Business and such shares of Harris Common Stock, Concurrent has agreed to sell to Harris, and Harris has agreed to purchase from Concurrent, shares of common stock, par value $0.01 per share, of Concurrent (the "Concurrent Common Stock") and shares of a new class of convertible exchangeable preferred stock of Concurrent (the "Concurrent Preferred Stock") on the terms and subject to the conditions set forth herein. NOW, THEREFORE, the parties agree as follows: ARTICLE I SALE AND PURCHASE OF ASSETS Section 1.1 Transfer of Assets. (a) Except as provided in Section 1.2, at the Closing, Harris shall sell, transfer and assign to Concurrent, and Concurrent shall purchase, acquire and/or accept from Harris, all of Harris' rights, title and interests in all the Property (as defined below), of Harris which (i) is listed in Schedule 1.1(a)(i) (the "Identified Real Time Assets") and including the Property identified on the Final Net Current Asset Reconciliation in existence on the Closing Date; (ii) constitutes the Shared Assets (as defined in Section 1.1(b)) to the extent such Property is to be transferred and sold to, or utilized by, Concurrent as provided in Schedule 1.1(b) (the "Shared Real Time Assets"); (iii) constitutes all other Property of Harris which is not an Excluded Asset (as defined in Section 1.2) (the "Other Real Time Assets"); (iv) is tangible Property which is manufacturing Property, hardware customer support Property and hardware development Property; and (v) constitutes all other Property of the kind described in clauses (i) and (ii) above and acquired by Harris between the date hereof and the Closing (the "Subsequently Acquired Real Time Assets"). The term "Property" shall mean assets, properties and rights, tangible and intangible, wherever located. (b) The term "Shared Assets" shall mean the Property of Harris having a significant use in both the Business and the Trusted Systems Business. To the extent they have been identified as of the date hereof, the Shared Assets are set forth in Schedule 1.1(b), which Schedule indicates which of the therein identified Shared Assets shall be transferred to Concurrent or retained by Harris. To the extent that any Shared Assets are not identified in Schedule 1.1(b), they shall be transferred to Concurrent at Closing or retained by Harris as follows: (i) if the Shared Asset not identified in Schedule 1.1(b) is a "Business Intellectual Property Right" (as defined in Section 4.16(a)) (each Shared Asset that is also a Business Intellectual Property Right, a "Shared IP Right"), then each such asset shall be transferred as described in the second sentence of this paragraph; and (ii) if the Shared Asset not identified in Schedule 1.1(b) is not a Shared IP Right, then, unless Concurrent acknowledges that such asset is not needed for the conduct of the Business after the Closing, it shall be transferred to Concurrent. Shared IP Rights that have not been identified in Schedule 1.1(b) shall be made available by license or otherwise to Concurrent and Harris as follows: (i) if the use of the Shared IP Rights does not require royalties or other payments to be made to third parties, then the Shared IP Right shall be made available, without cost, by license or otherwise so that each of Concurrent and Harris may freely utilize such Shared IP Rights after Closing, subject to the terms of the Non-Competition Agreement required to be delivered in accordance with Section 2.4, and (ii) to the extent the use of the Shared IP Rights requires royalties or payments to be made to third parties, Schedule 1.1(b) sets forth the method by which such royalties or other payments will be borne by Concurrent and Harris after the Closing. (c) At the Closing, Harris shall sell, transfer and assign, directly or indirectly, to Concurrent and Concurrent shall purchase, acquire and accept from Harris, good and valid legal title to and beneficial ownership of all of the issued and outstanding shares of capital stock (the "Harris Subsidiary Shares"), free and clear of all Encumbrances (as defined in Section 4.21) or assets, as the case may be, of certain subsidiaries to be mutually agreed upon by the parties prior to Closing. The subsidiaries, if any, to be transferred as agreed to by the parties hereto shall be collectively referred to as the "Transferred Subsidiaries". The shares shall constitute all of the issued and outstanding shares of each such Transferred Subsidiary. (d) The term "Assets" shall mean the Identified Real Time Assets, the Shared Real Time Assets, the Other Real Time Assets and the Subsequently Acquired Real Time Assets, including the stock or assets, if any, of each of the Transferred Subsidiaries, which will be being transferred by Harris to Concurrent in accordance with Sections 1.1(a) and (b). Section 1.2 Excluded Assets; Omitted Property. (a) Concurrent is not acquiring from Harris, and Harris shall retain ownership of all right, title and interest in and to, and exclude from sale, transfer or assignment hereunder (i) all Property of Harris used in the Trusted Systems Business (other than Property which constitutes Shared Assets in accordance with Section 1.1(b)) as conducted on the date hereof (the "Trusted Assets"); (ii) the Trusted Assets listed in Schedule 1.2(a)(i) (the "Identified Trusted Assets"), (iii) the Shared Assets, to the extent they shall be retained or permitted to be utilized by Harris as provided in Schedule 1.1(b) (the "Shared Trusted Assets"). (b) The term "Excluded Assets" shall mean the Trusted Assets, the Identified Trusted Assets and the Shared Trusted Assets. (c) The Parties hereto acknowledge that the Schedules of Assets and Excluded Assets will not together contain a complete list of all Property of Harris, but that at the Closing, the updated Schedules together with the lists of Property attached to the bills of sale and other documents of transfer delivered to Concurrent will list all the Assets as of the Closing. To the extent that there is any Property of Harris as of the Closing which failed to be identified on a Schedule of any Assets or Excluded Assets or on a list of Property attached to the bill of sale or other document of transfer delivered at Closing (the "Omitted Property"), it will be transferred, assigned, or sold to Concurrent or retained or utilized by Harris in accordance with the Assets or Excluded Assets to which such Omitted Property is most similar. Any adjustments to the Final Net Asset Reconciliation which may be appropriate in connection with such Omitted Property shall be made so long as, pursuant to the terms hereof, the time period during which the parties hereto may dispute the Final Net Asset Reconciliation (as defined in Section 2.3(b)) has not elapsed. Section 1.3 Assumed Liabilities; Excluded Liabilities. (a) At the Closing, subject to Section 1.3(b) below, Concurrent shall assume, and shall be solely and exclusively liable with respect to, (i) Liabilities of Harris specifically reflected or reserved against on the Final Net Current Asset Reconciliation (as defined below) and in existence on the Closing Date; (ii) Liabilities arising from activities of the Business after the Closing; (iii) Liabilities set forth on Schedule 1.3(a); (iv) Liabilities specifically related to products sold in the Business, including product warranty liabilities and liabilities for product returns; (v) Liabilities exclusively associated with the Business; (vi) 50% of the Transfer Taxes (as defined in Section 6.24) hereof resulting from the transfer of the Assets (other than the Harris Subsidiary Shares, if any) and 100% of the Transfer Taxes resulting from the transfer of the Harris Subsidiary Shares, if any (the "Assumed Concurrent Transfer Tax Liability") and (vii) the allocable portion (the "Business Portion") of all Liabilities associated with both the Business and the Trusted Systems Business (the "Shared Liabilities"), such portion to be based on the Business' contribution to the total net revenues of Harris for the fiscal year ended September 30, 1995 (items (i) through (vii), collectively, the "Assumed Liabilities"); (b) Concurrent is not assuming, and shall not be deemed to have assumed, any of the following Liabilities of Harris: (i) Liabilities exclusively associated with the Trusted Systems Business; (ii) Liabilities arising from activities of the Business prior to the Closing relating to environmental matters, claims of shareholders of Harris, claims of employees of Harris at the time of the applicable violation that Harris violated employment practices laws, rules or regulations or antidiscrimination laws, rules or regulations insofar as such claims are based on acts or omissions that shall have occurred prior to Closing; (iii) the portion of the Shared Liabilities after the assumption by Concurrent of the Business Portion of such Liabilities; (iv) Liabilities in connection with any Taxes imposed upon Harris's operations set forth in Schedule 1.3(b)(iv); and (v) all other Liabilities of Harris which are not Assumed Liabilities. (c) The term "Liabilities" shall mean any liabilities or obligations, fixed or contingent, known or unknown as of the date hereof, and including such liabilities or obligations under contracts and leases. Section 1.4 Exact Effective Time. Unless otherwise expressly provided, the exact effective time of the sale, transfer and assignment of the Assets and the Harris Subsidiary Shares, and of the assumption of Assumed Liabilities, which is stated herein to be "at the Closing," shall be 12:01 a.m. of the morning of the Closing Date. ARTICLE II TRANSFER OF STOCK; ADDITIONAL AGREEMENTS Section 2.1 Sale of Harris Common Stock. In addition to the sale of the Assets described in Article I hereof, subject to the terms and upon the conditions set forth in this Agreement and in reliance upon the representations, warranties and agreements of Concurrent contained herein, Harris shall issue, sell and deliver to Concurrent, and Concurrent shall purchase and acquire, good and valid title to 227,726 shares of Harris Common Stock, subject to adjustment for stock dividends, stock splits and similar transactions prior to the Closing (such shares, the "Purchased Harris Shares"). Section 2.2 Sale of Concurrent Stock. As consideration for the sale of the Assets and the Purchased Harris Shares to Concurrent described in Article I and Section 2.1 hereof, subject to the terms and upon the conditions set forth in this Agreement and in reliance upon the representations, warranties and agreements of Harris contained herein, Concurrent shall issue, sell and deliver to Harris, and Harris shall purchase and acquire, (i) good and valid title to ten million (10,000,000) shares of Concurrent Common Stock, subject to adjustment for stock splits, stock dividends and similar transactions prior to the Closing (the "Common Stock Consideration") and (ii) ten million dollars ($10,000,000) in total liquidation preference of Concurrent Preferred Stock, as adjusted pursuant to the terms thereof and Section 2.3(c) hereof (the "Preferred Stock Consideration"). The terms of the Preferred Stock Consideration are set forth in the Certificate of Designation (as defined below) attached hereto as Exhibit A. In accordance with the terms of the Certificate of Designation such Preferred Stock Consideration may be converted into debentures of Concurrent having the terms substantially set forth in the term sheet attached hereto as Exhibit B (the "Debentures"). Section 2.3 Preparation of Audited Financial Statements; Net Current Assets Adjustment. In connection with the transactions contemplated hereby, Harris and Concurrent also agree to the following: (a) Audited Financial Statements. (i) Within 45 days after March 29, 1996, Harris shall deliver to Concurrent an audited balance sheet of the Business as of March 29, 1996, prepared in accordance with United States generally accepted accounting principles ("GAAP") and such additional procedures set forth in Schedule 2.3(a) hereto (such financials, the "Audited Balance Sheet"). The audit for the Audited Balance Sheet shall be performed by KPMG Peat Marwick LLP ("KPMG"). (ii) Following completion and delivery of the Audited Balance Sheet, Harris shall promptly make available to Concurrent all available work papers of KPMG created in connection with the preparation of the Audited Balance Sheet. Harris shall cause the representatives of KPMG to be available promptly to assist Concurrent and its auditors in its review of such work papers. In addition, in accordance with Section 6.6, Concurrent and its auditors shall be entitled to review the books and records of Harris relating to the Business. (iii) Concurrent may dispute the Audited Balance Sheet by giving written notice to Harris within 20 days after delivery of the Audited Balance Sheet to Concurrent, setting forth in reasonable detail the basis for such dispute (hereinafter called an "Audited Balance Sheet Disagreement"). The parties shall promptly commence good faith negotiations with a view to resolving such Audited Balance Sheet Disagreement, which resolution shall be not later than 30 days after the date the Audited Balance Sheet is received by Concurrent. (iv) If Concurrent or Harris delivers a written notice to the other party that an Audited Balance Sheet Disagreement is unable to be resolved, such Audited Balance Sheet Disagreement shall be re- ferred to a nationally recognized accounting firm other than KPMG, Coopers & Lybrand or Ernst & Young for determination of the disputed amounts in accordance with this Agreement. If Concurrent and Harris do not promptly agree on the selection of a nationally recognized accounting firm, their respective independent public accountants shall select such accounting firm which shall be a firm other than KPMG, Coopers & Lybrand or Ernst & Young. The determination of such firm shall be final and binding upon the parties. Such firm shall render its determination as soon as practicable after referral of the Audited Balance Sheet Disagreement. The fees and expenses of such firm with respect to the Audited Balance Sheet Disagreement shall be paid by Concurrent and Harris as follows: 30% of such fees shall be paid by the party whose position in the Audited Balance Sheet Disagreement submitted to the arbiter is closest to the final determination of the accounting firm selected, and the remaining 70% of such fees shall be paid by the other party. (b) Net Current Asset Reconciliations. (i) Not later than 5 business days prior to the Closing, Harris shall deliver to Concurrent a projected reconciliation, certified by the chief financial officer of Harris, which shall set forth the portion of the current assets of the Business to be assigned, transferred and sold to Concurrent pursuant to the terms hereof as of June 30, 1996 (the "Reference Date") and the current liabilities of the Business which are not to be retained by Harris as of the Reference Date (the "Projected Net Current Asset Reconciliation"). The Projected Net Current Asset Reconciliation shall, except as set forth in this subsection (i), be prepared in accordance with GAAP consistent with the accounting principles used in preparation of the Audited Balance Sheet and prepared in accordance with the additional procedures set forth in Schedule 2.3(b) hereto. Harris shall cause KPMG to prepare promptly after the Reference Date, but in no event more than 30 days following the Reference Date, consistent with (i) the provisions of Schedule 2.3(b) and (ii) the Projected Net Current Asset Reconciliation (to the extent it does not conflict with Schedule 2.3(b)), a reconciliation of the portion of the current assets of the Business assigned, transferred and sold to Concurrent as of the Reference Date and the current liabilities of the Business which were not retained by Harris as of the Reference Date (the "Final Net Current Asset Reconciliation" and with the Projected Net Current Asset Reconciliation, the "Net Current Asset Reconciliations"). (ii) Following delivery of the Final Net Current Asset Reconciliation, Harris shall promptly make available to Concurrent all available work papers (including those relating to inventories and accounts receivable) of KPMG created in connection with the preparation of the Final Net Current Asset Reconciliation. Harris shall cause the representatives of KPMG to be available to promptly assist Concurrent and its auditors in its review of such work papers. In addition, in accordance with Section 6.6, Concurrent and its auditors shall be entitled to review the books and records of Harris relating to the Business. (iii) Concurrent may dispute the Final Net Current Asset Reconciliation by giving written notice to Harris within 30 days after delivery of the Final Net Current Asset Reconciliation to Concurrent, setting forth in reasonable detail the basis for such dispute (hereinafter called a "Reconciliation Disagreement"). The parties shall promptly commence good faith negotiations with a view to resolving such Reconciliation Disagreement, which resolution shall be not later than 70 days after the Closing Date. (iv) If Concurrent or Harris delivers a written notice to the other party that a Reconciliation Disagreement is unable to be resolved, such Reconciliation Disagreement shall be referred to a nationally recognized accounting firm other than KPMG, Coopers & Lybrand or Ernst & Young for determination of the disputed amounts in accordance with this Agreement. If Concurrent and Harris do not promptly agree on the selection of a nationally recognized accounting firm, their respective independent public accountants shall select such accounting firm which shall be a firm other than KPMG, Coopers & Lybrand or Ernst & Young. The determination of such firm shall be final and binding upon the parties. Such firm shall render its determination as soon as practicable after referral of the Reconciliation Disagreement. The fees and expenses of such firm with respect to a Reconciliation Disagreement shall be paid by Concurrent and by Harris as follows: 30% of such fees shall be paid by the party whose position in the Reconciliation Disagreement submitted to the arbiter is closest to the final determination of the accounting firm selected, and the remaining 70% of such fees shall be paid by the other party. (c) Adjustment to Preferred Stock Consideration. (i) After delivery of the Projected Net Current Asset Reconciliation and prior to the Closing, the Preferred Stock Consideration shall be adjusted by reducing the total $10,000,000 liquidation preference and stated value thereof, dollar for dollar, to the extent that total current assets minus the total current liabilities (such difference, the "Net Assets") shown on such Projected Net Current Asset Reconciliation is less than $14,400,000. Such reduced amount of Preferred Stock Consideration, if there shall be any reduction, shall be the actual amount of such consideration delivered to Harris at the Closing. (ii) After the Closing, additional reductions, if any, in the liquidation preference of the Preferred Stock Consideration shall be in accordance with the terms of the Certificate of Designation. In accordance with the terms of the Certificate of Designation, if the Net Assets shown on the Final Net Asset Reconciliation (after resolution of all Reconciliation Disagreements) is in excess of the Net Assets shown on the Projected Net Asset Reconciliation, then the liquidation preference and stated value of the Preferred Stock Consideration delivered at Closing shall be increased, dollar for dollar, to the extent of such excess up to $10,000,000 and any remainder of such excess shall be paid, dollar for dollar, in cash as soon as practicable after the determination of such excess. Section 2.4 Ancillary Agreements; Certificate of Designation. (a) On the Closing Date, the parties hereto shall enter into (1) leases to be mutually agreed to by the parties hereto prior to Closing, (2) a Shared Services Agreement to be mutually agreed to by the parties hereto prior to Closing, (3) a Non-Competition/ Distribution Agreement, to be mutually agreed to by the parties hereto prior to Closing, and (4) a Share Holding Agreement, substantially in the form of Exhibit C hereto. The foregoing agreements and any other agreements the parties hereto determine to be necessary to effectuate this Agreement and the transactions contemplated hereby and mutually agree shall be considered "Ancillary Agreements" referred to herein as the "Ancillary Agreements". (b) Prior to the Closing, the Board of Directors of Concurrent shall have also adopted the Certificate of Designation. Section 2.5 Allocation of Purchase Price. Concurrent shall prepare and deliver, and Concurrent and Harris shall mutually agree to, the allocation of the Purchase Price and the Assumed Liabilities among the Assets to be purchased hereunder which allocation shall be reflected on Schedule 2.5 and which shall be finalized as of the Closing Date but shall be adjusted to take account of any post-closing purchase price adjustments (the "Allocation"). The Allocation shall be made in accordance with Section 1060 of the Internal Revenue Code (the "Code") and applicable Treasury regulations. Each of Harris and Concurrent shall (i) be bound by the Allocation for purposes of determining any Taxes (as defined in Section 4.10), (ii) prepare and file, and cause its affiliates to prepare and file, its Tax Returns (as defined in Section 4.10) on a basis consistent with the Allocation and (iii) take no position, and cause its affiliates to take no position, inconsistent with the Allocation of any applicable Tax Return, in any proceeding before any taxing authority or otherwise. In the event that the Allocation is disputed by any taxing authority, the party receiving notice of the dispute shall promptly notify the other party hereto of the receipt of such notice. ARTICLE III CLOSING Section 3.1 Closing. The closing of the transactions contemplated by this Agreement (the "Closing") shall take place (a) at the offices of Skadden, Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022, on June 30, 1996 or as soon as practicable following the satisfaction (or waiver) of the conditions set forth in Article VIII, whether earlier or later than June 30, 1996 or (b) at such other date, time or place as the parties shall mutually agree (the "Closing Date"). Section 3.2 Deliveries by Harris. At or prior to the Closing, Harris shall deliver or shall cause to be delivered the following documents to Concurrent: (a) Cash by wire transfer in immediately available funds to an account designated by Concurrent in the amount of the cash set forth on the Projected Net Current Asset Reconciliation. (b) Certificates representing the Purchased Harris Shares. (c) A duly executed bill of sale and assignment with respect to the Assets in the form mutually agreed to by the parties hereto. (d) (i) A duly executed instrument of assignment, in recordable form, sufficient to transfer title in the Business Intellectual Property Rights to Concurrent in the form mutually agreed to by the parties hereto and (ii) such other duly executed individual instruments of assignments in recordable form appropriate to transfer title in the Business Intellectual Property Rights to Concurrent in the jurisdiction in which the Business Intellectual Property Rights are registered or in which an application for registration is pending in the form mutually agreed to by the parties hereto. (e) Such other duly executed instruments of conveyance and transfer as may be reasonably requested by Concurrent prior to the Closing Date. (f) Opinions of counsel to Harris mutually agreed to by the parties hereto. (g) The certificates required by Sections 8.2(a) and 8.2(b) hereof relating to truthfulness of representations and warranties and the performance of all covenants of Harris hereunder. (h) The records and files of the Business in the manner requested by Concurrent, including the corporate documents of the Transferred Subsidiaries, which records, files and documents shall remain at the premises of such Transferred Subsidiaries and be deemed to be delivered to Concurrent. (i) Certificates representing the Harris Subsidiary Shares, if any, accompanied by stock powers duly executed in blank or duly executed stock transfer forms or instruments of transfer, with any requisite documentary or stock transfer taxes affixed thereto. (j) The consents set forth on Schedule 8.2(d). (k) Duly executed counterparts of the Ancillary Agreements. (l) The resignation of E. Courtney Siegel as a director and an executive officer of Harris. (m) The Audited Balance Sheet. (n) Separate statutory financial statements for each of the Transferred Subsidiaries as of and for the periods ended September 30, 1994 and September 30, 1995, respectively. (o) Such other documents reasonably requested by Concurrent prior to the Closing Date. Section 3.3 Deliveries by Concurrent. At or prior to the Closing, Concurrent shall deliver or shall cause to be delivered the following to Harris: (a) Certificates representing the Common Stock Consideration. (b) Certificates representing the Preferred Stock Consideration, as adjusted, if at all, prior to the Closing pursuant to the terms hereof. (c) Duly executed instruments of assumption, in the form mutually agreed to by the parties hereto. (d) Such other duly executed instruments of assumption as may be reasonably requested by Harris prior to the Closing Date. (e) Duly executed counterparts of the Ancil- lary Agreements. (f) Opinions of counsel to Concurrent mutually agreed to by the parties hereto. (g) The certificates required by Sections 8.3(a) and 8.3(b) hereof relating to the truthfulness of representations and warranties, and the performance of all covenants of Concurrent. (h) The determinations and declarations re- quired by Section 8.3(f) hereof. (i) A certified copy of the Certificate of Designation. (j) Such other documents reasonably requested by Harris prior to the Closing Date. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HARRIS Harris represents and warrants to Concurrent as follows: Section 4.1 Organization Etc. (a) Harris and each of its Subsidiaries (as defined below) is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite corporate power and authority to own, lease and operate the assets owned and leased by it and to carry on its business as now being conducted, except where the failure to be so organized, existing or in good standing or to have such power and authority would not, individually or in the aggregate, have a Material Adverse Effect (as defined herein) on either Harris and its Subsidiaries taken as a whole or the Business. As used in this Agreement, the term "Material Adverse Effect" with respect to an entity (or group of entities taken as a whole) means such event, change or effect which is materially adverse to the business, properties, assets, liabilities, results of operations or financial condition of such entity (or group of entities taken as a whole). Harris and each of its Subsidiaries is duly qualified or licensed to do business and in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing would not, individually or in the aggregate, have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business. For purposes of this Agreement, the term "Subsidiary" when used with respect to any party, means any entity of which such party (either alone or through or together with any other Subsidiary) owns, directly or indirectly, 50% or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such entity. (b) Harris has heretofore made available to Concurrent a complete and correct copy of the charter and by-laws or comparable organizational documents, each as amended to date, of Harris and each of its Subsidiaries. Such charters, by-laws and comparable organizational documents are in full force and effect. Neither Harris nor any of its Subsidiaries is in violation of any provision of its charter, by-laws or comparable organizational documents, except for such violations that would not, individually or in the aggregate, have a Material Adverse Effect on Harris or its Subsidiaries taken as a whole. Section 4.2 Capitalization. As of the date of this Agreement, the authorized capital stock of Harris consists of: (a) 20,000,000 shares of Harris Common Stock of which, as of March 17, 1996, 1,995,389 shares were issued and outstanding, no shares were held in treasury and (b) 5,000,000 shares of Preferred Stock, par value $0.01 per share, of which, as of the date hereof, no shares were issued and outstanding and 20,000 shares were reserved for issuance in accordance with the Stockholder Protection Rights Agreement dated as of September 15, 1994, by and between Harris and Society National Bank, as Rights Agent (the "Harris Rights Agreement"), pursuant to which Harris has issued rights (the "Harris Rights") to purchase shares of Harris Preferred Stock. As of December 31, 1995, not more than 325,000 shares of Harris Common Stock and as of March 17, 1996 not more than 675,000 shares of Harris Common Stock were reserved for issuance (i) upon exercise of outstanding options or for grants of restricted stock pursuant to the Harris Stock Incentive Plan (the "Harris Stock Plan") and (ii) upon exercise of outstanding options awarded to directors and employees outside the Harris Stock Plan. Except as permitted by Section 6.1 and Schedule 6.1, since the date hereof, Harris has not issued any shares of Harris Common Stock, except upon the exercise of options granted under the Harris Stock Plan which were outstanding on the date hereof. All the outstanding shares of Harris's capital stock are, and all shares which may be issued pursuant to the Harris Stock Plan will be, when issued and paid for in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rights of third parties in respect thereto. The Purchased Harris Shares when issued and paid for in accordance with the terms hereof will be duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rights of third parties in respect thereto. Except as set forth above or on Schedule 4.2 hereto, as of the date of this Agreement, there are no existing options, warrants, calls, subscriptions or other rights or other agreements or commitments of any character relating to the issued or unissued capital stock of Harris or any of its Subsidiaries obligating Harris or any of its Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock of, or other equity interests in, Harris or any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests or obligating Harris or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement or commitment. As of the date of this Agree- ment, except as set forth on Schedule 4.2 hereto, there are no outstanding contractual obligations of Harris or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Harris or any of its Subsidiaries. Each of the outstanding shares of capital stock of each of Harris's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and such shares are owned by Harris free and clear of any lien, claim, option, charge, security interest, limitation on voting rights and encumbrance of any kind, except as would not have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business. Section 4.3 Authority. Harris has the requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby (other than the approval and adoption of this Agreement and the transactions contemplated hereby by the affirmative vote of the holders of a majority of the outstanding shares of Harris Common Stock). The execution, delivery and performance of this Agreement and the Ancillary Agreements by Harris and the consummation by Harris of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Harris and no other corporate proceedings on the part of Harris are necessary to authorize this Agreement or the Ancillary Agreements or to consummate the transactions contemplated hereby or thereby (other than the approval and adoption of this Agreement and the transactions contemplated hereby by the affirmative vote of a majority of the outstanding shares of Harris Common Stock). This Agreement has been, and when executed the Ancillary Agreements will be, duly executed and delivered by Harris and, assuming this Agreement, and the Ancillary Agreements when executed, constitute valid and binding obligations of Concurrent, constitute, or will constitute, valid and binding obligations of Harris, enforceable against Harris in accordance with their terms. Section 4.4 Consents and Approvals; No Violations. (a) Except as set forth on Schedule 4.4(a) hereto and except for filings, permits, authorizations, notices, consents and approvals as may be required under, and other applicable requirements of, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Securities Act of 1933, as amended (the "Securities Act"), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), the FBCA, certain state takeover statutes or state securities or blue sky laws, neither the execution, delivery or performance of this Agreement and the Ancillary Agreements by Harris nor the consummation by Harris of the transactions contemplated hereby and thereby and compliance by Harris with any of the provisions hereof and thereof will (i) conflict with or result in any breach of any provisions of the certificate of incorporation or by-laws or comparable organizational documents of Harris or any of its Subsidiaries, (ii) require any filing with, or permit, authorization, consent or approval of, any court, arbitral tribunal, administrative agency or commission or other governmental or other regulatory authority or agency (a "Governmental Entity") (except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings would not prevent or delay consummation of the transactions contemplated by this Agreement and the Ancillary Agreements in any material respect and would not, individually or in the aggregate, have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, or result in the creation of any lien or other encumbrance on any property or asset of Harris or any of its Subsidiaries pursuant to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Harris or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Harris or any of its Subsidiaries or by which any property or asset of Harris or any of its Subsidiaries is bound or affected, except, in the case of clauses (iii) and (iv), for violations, breaches, defaults or other occurrences which would not prevent or delay consummation of this Agreement or the Ancillary Agreements or the transactions contemplated hereby or thereby in any material respect and would not, individually or in the aggregate, have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business. (b) Except as disclosed in the Harris SEC Documents (as defined in Section 4.5) or on Schedule 4.4(b) hereto, neither Harris nor any of its Subsidiaries is in conflict with, or in default or violation of, (i) any order, writ, injunction, decree, statute, rule or regulation of any Governmental Entity applicable to Harris or any of its Subsidiaries or by which any of them or any of their properties or assets may be bound or (ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Harris or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or affected, except for any such conflicts, defaults or violations which have not had and are not likely to have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business. Section 4.5 SEC Reports and Financial Statements. Harris has filed with the Securities and Exchange Commission (the "SEC"), and has heretofore made available to Concurrent true and complete copies of all forms, reports and documents required to be filed by it since June 30, 1994, under the Exchange Act or the Securities Act (as such documents have been amended since the time of their filing, collectively, the "Harris SEC Documents"). The Harris SEC Documents, including without limitation any financial statements or schedules included therein, at the time filed, (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (b) complied in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be. The financial statements of Harris included in the Harris SEC Documents complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted on Harris's Form 10-Q as filed with the SEC under the Exchange Act) and fairly present (subject, in the case of the unaudited statements, to normal, recurring audit adjustments which will not be material in amount or effect) the consolidated financial position of Harris and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended. Except as reflected, reserved against or otherwise disclosed in the financial statements of Harris included in the Harris SEC Documents or as disclosed on Schedule 4.5 hereto, neither Harris nor any of its Subsidiaries has any liabilities or obligations (absolute, accrued, fixed, contingent or otherwise) material to Harris and its Subsidiaries taken as a whole that would be required to be reflected on, or reserved against in, a balance sheet of Harris or the notes thereto, prepared in accordance with generally accepted accounting principles consistently applied. Section 4.6 Information in Disclosure Documents. None of the information supplied or to be supplied by Harris in writing specifically for inclusion or incorporation by reference in the joint proxy statement relating to the meeting of the stockholders of Harris and Concurrent (respectively, the "Harris Stockholder Meeting" and the "Concurrent Stockholder Meeting" and collectively, the "Stockholder Meetings") to be held in connection with the transactions contemplated by this Agreement (the "Proxy Statement") will, at the time the Proxy Statement is filed with the SEC, at the time such Proxy Statement is mailed to stockholders of Harris and Concurrent, at the times of the Stockholder Meetings to be held in connection with the transactions contemplated by this Agreement and at the Closing Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement will, when filed with the SEC, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation is made by Harris with respect to statements made therein based on information supplied by Concurrent in writing specifically for inclusion in the Proxy Statement. Section 4.7 Litigation. Except as disclosed in the Harris SEC Documents or on Schedule 4.7 hereto, there is no suit, claim, action, proceeding or investigation pending or, to the best knowledge of Harris, threatened, against Harris or any of its Subsidiaries before any Governmental Entity which, individually or in the aggregate, is reasonably likely to have a Material Adverse Effect on either Harris or any of its Subsidiaries taken as a whole or the Business or a Material Adverse Effect on the ability of Harris to consummate the transactions contemplated by this Agreement. Except as disclosed in the Harris SEC Documents or on Schedule 4.7 hereto, neither Harris nor any of its Subsidiaries is subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen, individually or in the aggregate, would in the future have a Material Adverse Effect on either Harris or any of its Subsidiaries taken as a whole or the Business or a Material Adverse Effect on the ability of Harris to consummate the transactions contemplated by this Agreement. Harris has, in accordance with GAAP, made adequate provision in its financial statements for the payment of losses arising out of suits, claims, actions, proceedings or investigations disclosed in the Harris SEC Document or on Schedule 4.7 and such provision has continued to be adequate. Section 4.8 Absence of Certain Changes. Except as disclosed in the Harris SEC Documents or on Schedule 4.8 hereto, since September 30, 1995, Harris has conducted its business only in the ordinary course of such business and there has not been (a) any material adverse change in either Harris and its Subsidiaries taken as a whole or the Business, (b) any declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock or (c) any material change in its accounting principles, practices or methods. Section 4.9 Opinion of Financial Advisor. Harris has received the opinion of Bear, Stearns & Co. Inc., its financial advisor, to the effect that, as of the date of this Agreement, the transactions contemplated hereby are fair, from a financial point of view, to the stockholders of Harris. Section 4.10 Tax Matters. (a) Harris and each of its Subsidiaries has duly filed all, or as of the Closing Date will have filed, all Tax Returns (as defined in Section 4.10(e)) required to be filed by it or its Subsidiaries on or before the Closing Date, and such Tax Returns are or will be true, correct and complete in all material respects. Harris and its Subsidiaries have duly paid, caused to be paid, or made adequate provision in the Harris SEC Documents in accordance with GAAP for the payment of all Taxes (as defined in Section 4.10(d)) required to be paid in respect of all periods covered by such Tax Returns. Harris has made adequate provision in accordance with GAAP for the payment of all Taxes anticipated to be payable in respect of all taxable periods or portions thereof ending on or before the Closing Date since the periods covered by such Tax Returns. (b) (i) The reserves for Taxes (except for deferred Taxes) reflected in the Harris SEC Documents are sufficient for the payment of all unpaid Taxes (whether or not currently disputed) accrued through the date thereof. Since September 30, 1995, neither Harris nor its Subsidiaries have incurred any material liability for Taxes other than in the ordinary course of business consistent with past practice. Harris and its Subsidiaries are qualified or registered to do business in the states and localities set forth on Schedule 4.10(b)(i) hereto. Except as set forth on Schedule 4.10(b)(i) hereto, there are no liens for Taxes upon the assets of Harris or its Subsidiaries except for statutory liens for current Taxes not yet due. (ii) The Tax Returns filed by Harris have been examined by the Internal Revenue Service (the "IRS") or other appropriate taxing authority, for all taxable years as set forth on Schedule 4.10(b)(ii) hereto. Except as set forth on Schedule 4.10(b)(ii) hereto, all deficiencies and assessments asserted as a result of such examinations or other audits by federal, state, local or foreign taxing authorities have been paid, fully settled or adequately provided for in the Harris SEC Documents in accordance with GAAP, and no issue or claim has been asserted for Taxes by any taxing authority for any prior period, the adverse determination of which would result in a deficiency which would have a Material Adverse Effect on either Harris and its Subsidiaries taken as a whole or the Business, other than those heretofore paid or provided for. Except as disclosed on Schedule 4.10(b)(ii) hereto, no issue has been raised during the past five years by any federal, state, local or foreign taxing authority which, if raised with regard to any other period not so examined, could reasonably be expected to result in a proposed deficiency for any other period not so examined. (c) (i) Except as set forth on Schedule 4.10(c) hereto, there are no outstanding agreements or waivers extending the statutory period of limitation applicable to any Tax Return of Harris or its Subsidiaries. Except as set forth on Schedule 4.10(c) hereto, neither Harris nor any of its Subsidiaries (x) has been a member of a group filing consolidated returns for federal income tax purposes, or (y) is a party to a tax sharing or tax indemnity agreement or any other agreement of a similar nature that remains in effect. Except as set forth on Schedule 4.10(c) hereto, no power of attorney has been executed by, or on behalf of Harris or its Subsidiaries with respect to any matter relating to Taxes which is currently in force. (ii) Neither Harris nor any of its Subsidiaries has filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(2) of the Code) owned by Harris or any of its Subsidiaries. (iii) The respective net operating losses, net operating loss carryforwards and tax credit carryforwards, if any, of each of the Transferred Subsidiaries for all federal, state, local and foreign tax purposes as of December 29, 1995, are as set forth on Schedule 4.10(c)(iii) hereto. (d) As used in this Agreement, "Taxes" shall mean all taxes, charges, fees, levies or other assess- ments, including, without limitation, income, gross receipts, excise, property, sales, transfer, use (or any similar taxes), license, payroll, withholding, social security, capital stock and franchise taxes, imposed by any federal, state, local or foreign taxing authority, including any interest, penalties or additions thereto. As used in this Agreement, the term "Tax Return" shall mean any report, return or other information or document required to be supplied to a taxing authority in connection with Taxes. (e) Neither Harris nor any of its Subsidiaries has committed any breach of any representation or covenant contained in the Tax Sharing Agreement (as defined herein) or made in connection with the opinion rendered by Sullivan & Cromwell (as described in Section 1.12(a) of the Tax Sharing Agreement), in each case relating to the qualification of the Distribution (as defined herein) as a distribution pursuant to Section 355 of the Code, and none of the actions contemplated by this Agreement shall result in or otherwise give rise to a breach of any such representation or covenant. As used in this Agreement, the term "Distribution" shall refer to the distribution of Harris Common Stock pursuant to the Distribution Agreement by and between Harris and Harris Corporation dated September 16, 1994 and "Tax Sharing Agreement" shall refer to the Tax Disaffiliation Agreement by and between Harris and Harris Corporation dated September 13, 1994. Section 4.11 Vote Required. The only votes of the holders of any class or series of Harris's capital stock necessary to approve the transactions contemplated hereby are the affirmative vote of a majority of (a) all votes entitled to be cast by the holders of Harris Common Stock with respect to this Agreement and the transactions contemplated hereby and (b) the voting shares of Harris Common Stock, in a separate vote, with respect to an amendment to the Harris Stock Plan (the "Harris Stock Plan Amendment") to increase the number of shares of Harris Common Stock reserved and available for issuance under the Harris Stock Plan to 675,000 shares of Harris Common Stock. Section 4.12 Employee Benefit Plans; ERISA. (a) Schedule 4.12(a) contains a true and com- plete list of each bonus, deferred compensation, incentive compensation, stock purchase, stock option, severance or termination pay, hospitalization or other medi-cal, life or other insurance, supplemental unemployment benefits, profit-sharing, pension, or retirement plan, program, agreement or arrangement, and each other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to or required to be contributed to by Harris or by any trade or business, whether or not incorporated (a "Harris ERISA Affiliate"), that together with Harris would be deemed a "single employer" within the meaning of section 4001 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), for the benefit of any employee or terminated employee of Harris or any Harris ERISA Affiliate (the "Harris Plans"). Schedule 4.12(a) identifies each of the Harris Plans that is an "employee benefit plan," as that term is defined in section 3(3) of ERISA (the "Harris ERISA Plans"). (b) With respect to each Harris Plan, Harris has heretofore delivered to Concurrent true and complete copies of each of the following documents: (i) a copy thereof; (ii) a copy of the most recent annual re- port and actuarial report, if required under ERISA and the most recent report prepared with respect thereto in accordance with Statement of Financial Accounting Standards No. 87, Employer's Accounting for Pensions; (iii) a copy of the most recent Summary Plan Description required under ERISA with respect thereto; (iv) if the Harris Plan is funded through a trust or any third party funding vehicle, a copy of the trust or other funding agreement and the latest financial statements thereof; and (v) the most recent determination letter received from the IRS with respect to each Harris Plan intended to qualify under section 401 of the Code. (c) Neither Harris nor any Harris ERISA Affiliate maintains or has ever maintained an ERISA Plan subject to Title IV of ERISA. (d) No Harris ERISA Plan is a "multiemployer pension plan," as defined in section 3(37) of ERISA, nor is any Harris ERISA Plan a plan described in section 4063(a) of ERISA. (e) Each Harris Plan has been operated and administered in all material respects in accordance with its terms and applicable law, including but not limited to ERISA and the Code. (f) To the best knowledge of Harris, each Harris ERISA Plan intended to be "qualified" within the meaning of section 401(a) of the Code is so qualified and the trusts maintained thereunder are exempt from taxation under section 501(a) of the Code. (g) No Harris Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees of Harris or any Harris ERISA Affiliate beyond their retirement or other termination of service (other than (i) coverage mandated by applicable law or (ii) death benefits or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA). (h) There are no pending, threatened or anticipated claims by or on behalf of any Harris Plan, by any employee or beneficiary covered under any such Harris Plan, or otherwise involving any such Harris Plan (other than routine claims for benefits). (i) Except with respect to the Harris Options which are set forth on Schedule 4.12(i) hereto and shall continue to have the vesting schedule in effect on the date hereof, at the Closing Date, all Harris Options then outstanding under the Harris Stock Plan shall become exercisable and vested to the extent provided for pursuant to the stock option agreements under which such Harris Options were granted. (j) As of the Closing Date, full payment will have been made or accrued in accordance with GAAP, and to the extent applicable, section 412 of the Code of all amounts required to be paid under the terms of each of the Harris Plans and any other similar fringe or employee benefit plans, programs or arrangements applicable to employees of the Transferred Subsidiaries (the "Transferred Subsidiaries Benefit Plans") as contributions to such plans. (k) Listed on Schedule 4.12(k) is a description of each of the Transferred Subsidiaries Benefit Plans that provides post-retirement medical, health or other post-retirement benefits to employees. (l) Where applicable, the Transferred Subsidiaries Benefit Plans required to be registered with applicable regulatory authorities have been registered and have been maintained in good standing with such applicable regulatory authorities. Section 4.13 Applicability of Certain Laws. The provisions of Section 607.0901-.0903 ("Control-Share Acquisitions") and Section 607.1302(1)-(3) ("Right of Stockholders to Dissent"), respectively, of the FBCA will not apply to this Agreement or any of the transactions contemplated hereby. Section 4.14 Major Contracts. Except as disclosed in the Harris SEC Documents or as set forth on Schedule 4.14 hereto, neither Harris nor any of its Subsidiaries is a party to or subject to: (a) Any joint venture contract or arrangement or any other agreement which has involved or is expected to involve a sharing of profits with other persons; (b) Any existing OEM agreement, distribution agreement, volume purchase agreement, or other similar agreement in which the annual amount involved in 1995 exceeded or is expected to exceed in fiscal 1996 $500,000 in aggregate amount or pursuant to which Harris has granted or received exclusive marketing rights related to any product, group of products or territory; (c) Any material license agreement, either as licensor or licensee (excluding nonexclusive software licenses granted to customers or end-users in the ordinary course of business) involving the payment of at least $250,000; (d) Any contract containing covenants purporting to limit Harris's freedom or that of any of its Subsidiaries to compete in any line of business in any geographic area; (e) Any mortgage, loan agreement, note, or guarantee of obligations of others for borrowing of money in excess of $50,000; (f) Any agreement or arrangement for the purchase or sale of any Assets, or for the grant of any preferential right to purchase any of the Assets, other than in the ordinary course of business or would exceed $50,000; (g) Any lease for Equipment or other personal property involving an aggregate commitment of $50,000 ; (h) Any agreement, contract or commitment for maintenance, consulting, engineering or other services involving an aggregate commitment of $50,000 or more on an annual basis; (i) Any agreement, contract or commitment for purchase of materials or supplies (other than capital equipment), or any group of such agreements, contracts or commitments with a single vendor, involving an aggregate commitment of $100,000 or more on an annual basis; (j) Any agreement, contract or commitment for purchase of capital equipment under which the remaining commitment is $50,000 or more; (k) Any distribution, dealer, manufacturer's representative, sales agency or franchise contract not terminable without penalty within 90 days and in excess of $50,000; and (l) Any shareholders' agreements relating to any of Harris's Subsidiaries. Each of the contracts set forth in Schedule 4.14 is in full force and effect. Harris is not in default, and there are no existing acts, events or conditions (other than the transactions contemplated hereby) which, with notice or lapse of time, or both, will result in a material default by Harris under any of the contracts. Section 4.15 Interests of Officers and Directors. Except as disclosed on Schedule 4.15 hereto or in the Harris SEC Documents, no officer or director of Harris or any of its Subsidiaries 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: (a) any person or entity which purchases from or sells, licenses or furnishes to Harris or any Subsidiary any goods, property, technology or intellectual or other property rights or services; (b) any contract or agreement to which Harris or any of its Subsidiaries is a party or by which it may be bound or affected; or (c) any property, real or personal, tangible or intangible, used in or pertaining to the Business, including any interest in the Harris Intellectual Property Rights (as defined herein), except for rights as a stockholder, and except for rights under any Harris Plan. Section 4.16 Intellectual Property. (a) Harris and any of the Transferred Subsid- iaries own, or are licensed or otherwise entitled to exercise all rights in and to, all domestic and foreign patents, trademarks, trade names, service marks, copyrights, mask works, trade secrets and other intellectual property rights, and any applications, registrations, certificates and/or Letters Patent therefor, and all net lists, schematics, sketches, drawings, notebooks, reports, memoranda, prints, drafts, worksheets, and any other writings, methods and practices, business information, procedures, technology, source code, know-how, computer software programs and all other tangible and intangible information or material, and all goodwill associated with any of the foregoing, including goodwill in respect of trademarks, that are used in the operation of the Assets as currently operated (collectively, the "Business Intellectual Property Rights"). Harris or any of its Subsidiaries own or are licensed or otherwise are entitled to exercise all rights in and to all of the foregoing types of intellectual property used in the operation of the Trusted Systems Business (such other intellectual property, together with the Business Intellectual Property Rights, the "Intellectual Property Rights"). There are no restrictions applicable to the Business Intellectual Property Rights that interfere in any material respect with the current use of such Business Intellectual Property Rights. (b) Schedule 4.16(b) hereto is a complete and accurate list of the Business Intellectual Property Rights. For each item listed thereon, Schedule 4.16(b) hereto identifies the owner thereof and, if the owner is not Harris or any of the Transferred Subsidiaries, the means by which Harris or any of the Transferred Subsidiaries obtains rights thereto, and which party obtains such rights. Schedule 4.16(b) hereto identifies all oral or written licenses, agreements and other arrangements for any Business Intellectual Property Rights between any two or more of Harris and its Subsidiaries, the parties thereto and the subject matter thereof. (c) Schedule 4.16(c) hereto lists all of the currently marketed products of the Business and an indication as to which, if any, of such products are the subject of certificates of copyright issued by the United States Copyright Office, and any similar office or agency of any foreign country or jurisdiction, and/or are the subject of applications for patent or original Letters Patent in the United States or any foreign country or jurisdiction. (d) Neither Harris nor any of its Subsidiaries is, or as a result of the execution and delivery of this Agreement or the other transactions contemplated hereby or the performance of Harris's obligations hereunder will be, in violation of, or lose any rights pursuant to any license, sublicense or agreement that is materially related to a Business Intellectual Property Right and is described in the disclosure schedule attached to this Agreement (the "Disclosure Schedule") with respect to Harris. (e) Harris and one of the Transferred Subsidiaries is the owner or licensee of the Business Intellectual Property Rights, and Harris and one of the Subsidiaries is the owner of all other Intellectual Property Rights, with all necessary right, title and interest in and to the same free and clear of any liens, encumbrances or security interests. Except as set forth on Schedule 4.16(e) hereto, neither Harris nor any of its Subsidiaries is contractually obligated to pay any compensation to any third party in an amount in excess of $250,000 in respect to the use of any of the Intellectual Property Rights or the material covered thereby in connection with the services or products being manufactured and/or used and/or sold by Harris or any of its Subsidiaries. (f) No claims with respect to the Intellectual Property Rights have been asserted or, to the best knowledge of Harris, after reasonable investigation, are threatened by any person. Harris knows of no claims: (i) to the effect that the manufacture, offer for sale, sale or use of any product as now used or offered by Harris or any of its Subsidiaries, or the use thereof by any customer or licensee of Harris or any of its Subsidiaries infringes any copyright, patent, trademark or service mark, or violates any trade secret rights, or other intellectual property rights of any third party, (ii) challenging the ownership or validity of any of the Intellectual Property Rights. (g) To the best knowledge of Harris, all patents and registered trademarks, service marks, copyrights and patents held by Harris or any of its Subsidiaries are valid and subsisting. (h) To the best knowledge of Harris, there has not been and there is not now any material unauthorized use, infringement or misappropriation of any of the Intellectual Property Rights by any third party, including, without limitation, any employee or former employee of Harris or any of its Subsidiaries; neither Harris nor any of its Subsidiaries has been sued or charged in writing as a defendant in any claim, suit, action or proceeding which involves a claim of infringement of any patents, trademarks, service marks, copyrights or other intellectual property rights and which has not been finally terminated prior to the date hereof; there are no such charges or claims outstanding; and to the best knowledge of Harris neither Harris nor any of its Subsidiaries has any infringement liability with respect to any patent, trademark, service mark, copyright or other intellectual property right of another. (i) No Intellectual Property Right is subject to any outstanding order, judgment, decree, stipulation or agreement restricting in any manner the licensing or other disposition thereof by Harris or any of its Subsidiaries. Except with respect to products and software described in the Night Hawk Product Catalog a true and complete copy of which has been delivered to Concurrent, neither Harris nor any of its Subsidiaries has entered into any agreement to indemnify any other person against any charge of infringement of any Intellectual Property Right. Neither Harris nor any of its Subsidiaries has entered into any agreement granting any third party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any Intellectual Property Right. (j) Harris and its Subsidiaries have the exclusive right to file, prosecute and maintain all applications, certificates, registrations and Letters Patent with respect to the Intellectual Property Rights owned by Harris or its Subsidiaries. Harris or any of its Subsidiaries is listed in the records of the appropriate agency as the sole owner of record for each registration, grant, Letters Patent and application listed on Schedule 4.16(b) hereto as owned by Harris or any of the Subsidiaries. All registration and maintenance fees that have become due and payable with respect of such Intellectual Property Rights have been paid. (k) To the best knowledge of Harris, no act has been done, or omitted to be done, by Harris or any of its Subsidiaries to impair or dedicate to the public or to entitle any governmental authority to cancel, forfeit, modify or hold abandoned any of the Intellectual Property Rights. (l) Harris and its Subsidiaries, with respect to all Intellectual Property Rights owned and/or developed thereby, have taken or caused to be taken all reasonable steps to obtain and retain valid and enforceable intellectual property rights therein, including, without limitation, the use of non-disclosure agreements adequate to protect the proprietary nature of any confidential information disclosed by Harris or any of its Subsidiaries to third parties. (m) Schedule 4.16(m) hereto sets forth a complete and accurate list of all licenses, assignments and other agreements pursuant to which Harris, or any of its Subsidiaries, grants rights to any third party in and to any of the Business Intellectual Property Rights. (n) To the best knowledge of Harris, the components of all software, hardware and firmware that are material to the Assets and are used or currently proposed to be used in the operation of the Assets and the Excluded Assets as currently operated are (i) owned by Harris and any of the Subsidiaries, or (ii) currently in the public domain or otherwise available to Harris and any of its Subsidiaries without the approval or consent of any third party, or (iii) used by Harris or any of its Subsidiaries, or included in any of their products, pursuant to rights granted to Harris or any of its Subsidiaries pursuant to a written license or lease from a third party. Section 4.17 Questionable Payments. Neither Harris nor any of its Subsidiaries nor to its best knowledge any director, officer or other employee of Harris or any of its Subsidiaries has: (a) corruptly made any payments or provided services in the United States or in any foreign country in order to obtain preferential treatment or consideration by any Governmental Entity in order to obtain or retain business for Harris or any of its Subsidiaries in violation of Section 30A of the Exchange Act; or (b) made any political contributions unlawful under the laws of the United States and the foreign country in which such payments were made. Neither Harris nor any of its Subsidiaries nor to its best knowledge any director, officer or other employee of Harris or any of its Subsidiaries has been the subject of any inquiry or investigation by any Governmental Entity relating to the conduct described above in this Section 4.17. Section 4.18 Insurance. Except as set forth on Schedule 4.18 hereto, Harris and each of its Subsidiaries is, and has been continuously since at least October 7, 1994, insured with financially responsible insurers in such amounts and against such risks and losses as are customary in all material respects for companies conducting the Business as conducted by Harris and its Subsidiaries during such time period. Except as set forth on Schedule 4.18 hereto, neither Harris nor any of its Subsidiaries has received any notice of cancellation or termination with respect to any material insurance policy of Harris or any of its Subsidiaries. The insurance policies of Harris and its Subsidiaries are valid and enforceable policies in all material respects. Section 4.19 No Brokers. Harris has not entered into any contract, arrangement or understanding with any person or firm which may result in the obligation of Harris or Concurrent to pay any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby, except that Harris has retained Bear, Stearns & Co. Inc. as its financial advisor, the arrangements with which have been disclosed in writing to Concurrent prior to the date hereof. Other than the foregoing arrangement or as disclosed in Section 5.19, Harris is not aware of any claim for payment of any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby. Section 4.20 Environmental. (a) Except as set forth on Schedule 4.20(a) hereto, Harris and its Subsidiaries are in compliance in all material respects with all applicable Environmental Laws (as defined herein). Except as set forth on Schedule 4.20(a) hereto, Harris has not received any communication (written or oral), whether from a governmental authority, citizen group, employee or otherwise, that alleges that Harris is not in such compliance, and, to Harris's best knowledge after due inquiry, there are no circumstances that may prevent or interfere with such compliance in the future. Except as set forth on Schedule 4.20(a) hereto, Harris has not received in the past five years any written request for information from a governmental authority concerning or relating to the treatment, transportation or disposal of any Materials of Environmental Concern (as defined herein). Except as set forth on Schedule 4.20(a) hereto: Harris has acquired all necessary permits, licenses, approvals and other governmental authorizations necessary to operate in compliance with all applicable Environmental Laws; such permits, licenses, approvals and authorizations are currently valid; and Harris is in compliance in all material respects with such permits, licenses, approvals and authorizations. To Harris's best knowledge, after due inquiry, there are no circumstances that may prevent or interfere with the renewal of the permits, licenses, approvals and other governmental authorizations held by Harris pursuant to Environmental Laws. (b) Except as set forth on Schedule 4.20(b) hereto, there has been in the last five years and there is no Environmental Claim (as defined herein) pending or threatened against Harris or, to Harris's best knowledge after due inquiry, against any person or entity whose liability for any Environmental Claim Harris's has or may have retained or assumed either contractually or by operation of law. (c) Except as set forth on Schedule 4.20(c) hereto, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, the release, emission, discharge or disposal of any Material of Environmental Concern (as defined herein), that could form the basis of any Environmental Claim against Harris or, to Harris' best knowledge after due inquiry, against any person or entity whose liability for any Environmental Claim Harris has or may have retained or assumed either contractually or by operation of law. (d) As used in this Agreement, the term "Environmental Laws" means all federal, state, local and foreign laws and regulations relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata), including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of Materials of Environmental Concern, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern. As used in this Agreement, the term "Environmental Claim" means any notice (written or oral) by any person or entity alleging potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (i) the presence, or release into the environment, of any Material of Environmental Concern at any location, whether or not owned by Harris, Concurrent or any of their Subsidiaries or (ii) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law. As used in this Agreement, the term "Materials of Environmental Concern" means chemicals, pollutants, hazardous substances, contaminants, toxic substances, hazardous waste, petroleum and petroleum products as those terms are defined by Environmental Laws. Section 4.21 Assets. (a) The lists of assets to be attached to the Bill of Sale to be delivered by Harris to Concurrent at the Closing will be a true and complete listing of Assets as of the Closing. (b) Schedule 1.1(b) is a true and complete listing of the Property used in both the Business and the Trusted Systems Business as the date of this Agreement. (c) Schedule 1.2(a)(i) is a true and complete listing of all of the Property used in the Trusted Systems Business. (d) The Assets and the assets of the Transferred Subsidiaries, together with the other arrangements contemplated by this Agreement (including the Ancillary Agreements), constitute all the Property used in the operation of the Business as they are presently being operated by Harris and the Transferred Subsidiaries, and, except as otherwise contemplated by the terms hereof and the terms of the Ancillary Agreements, will enable Concurrent and the Transferred Subsidiaries to operate the Business immediately after the Closing as Harris and the Transferred Subsidiaries operated the Business immediately prior to the Closing. As of the Closing Date, all of the machines, equipment and other assets that constitute tangible personal property that are being operated in connection with the Business are in usable condition for the purpose for which they are intended subject to ordinary wear and tear and routine maintenance. Harris has, and, except as otherwise contemplated by the terms hereof (including Schedule 1.1(b) which describes the extent to which Shared Assets are transferred to Concurrent) or the terms of the Ancillary Agreements, at Closing Harris will deliver to Concurrent, good and valid title to all of the tangible personal property included in the Assets subject to (i) any security interests, mortgages, liens, pledges, conditional sale or other title retention agreements, rights of first refusal, options, leases, adverse claims, or any other encumbrances (the "Encumbrances") relating to purchase money security interests entered into in the ordinary course of business consistent with past practice and reflected in the Audited Balance Sheet or the Final Net Current Asset Reconciliation; and (ii) Encumbrances relating to lessors' interests in leased tangible personal property. Harris has valid and subsisting leasehold interests in the Leased Properties. To the best knowledge of Harris after reasonable inquiry, the Transferred Subsidiaries have valid and subsisting leasehold interests in the leased property of the Transferred Subsidiaries. Upon the Closing, Concurrent shall acquire, directly or indirectly, the same right, title and interest in and to all of the assets, real or personal, of the Transferred Subsidiaries as held by Harris immediately prior to Closing. Section 4.22 Audited Balance Sheet. The Audited Balance Sheet and all financial statements or financial data with respect to the Business included in the Proxy Statement (the "Audited Base Financial Statements") will be prepared in accordance with GAAP and will present fairly, in all material respects, the financial position of the Business or portion thereof, as the case may be, as of the date or for the periods indicated therein. Section 4.23 Leased Properties. (a) Schedules 1.1(a)(ii) and 1.1(b) contain an accurate and complete list of all Leases, including the name and address of the lessor of each such Leased Property, and the date of each of the Leases. Harris has delivered to Concurrent true and complete copies of all Leases. For purposes of Section 4.23, the term "Leases" shall include all leases, amendments thereto, assignments thereof, subleases, subordination and/or nondisturbance agreements and all other agreements creating, amending or modifying the leasehold estates in the Leased Properties. (b) With respect to the Leased Properties: (i) to the best knowledge of Harris, there are no material defects in the buildings, improvements and structures located thereon which would be reasonably expected to substantially impair the operation of the Business immediately preceding the Closing as compared with the operation of the Business by Harris on the date hereof; (ii) to the best knowledge of Harris, all Leases are in full force and effect, and constitute legal, valid and binding obligations of Harris, in accordance with their respective terms; (iii) no written waiver, indulgence or postponement of landlord's obligations thereunder has been granted by Harris and Harris has not received any such written waiver, indulgence or postponement of its obligations thereunder except as set forth on Schedule 4.23(b); and (iv) to the best knowledge of Harris, there exists no event of default, event, occurrence, condition or act (other than the transaction contemplated hereunder) which, with the giving of notice, the lapse of time or the happening of any further event or condition, would become a material default thereunder. Section 4.24 Subsidiaries. (a) Schedule 4.24(a) contains a true and com- plete list of all Subsidiaries beneficially owned, directly or indirectly, by Harris and a description of those Subsidiaries that are involved in the conduct of the Business. (b) Schedule 4.24(b) contains a true and complete list of the authorized and issued capital stock of each of the Transferred Subsidiaries, and the record owners thereof. (c) Schedule 4.24(c) contains a complete list of the officers and directors of each of the Transferred Subsidiaries. (d) Upon delivery of certificates representing the Harris Subsidiary Shares to Concurrent or appropriate entries in the stock register, as the case may be, Concurrent shall acquire legal and beneficial ownership of, and shall have good and valid title to, the Harris Subsidiary Shares, free and clear of any Encumbrance, as analogous concepts are understood under applicable local laws. Upon delivery, all of the issued and outstanding shares of each Transferred Subsidiary will be duly authorized, validly issued, fully paid and non-assessable and not subject to any preemptive rights of third parties in respect thereto. Section 4.25 Outstanding Liabilities to Related Parties. There are no outstanding liabilities, contingent or otherwise, relating to the Business or that will arise out of the transactions contemplated by this Agreement (except as set forth in this Agreement) for amounts due to shareholders, directors, officers, employees or other parties affiliated with or related to Harris or, to the best knowledge of Harris after reasonable inquiry, the Transferred Subsidiaries other than amounts due to directors, officers and employees in the ordinary course of business consistent with past practice. Section 4.26 Product Returns; Warranties. (a) There are no liabilities for product returns, warranty obligations and product services other than those arising in the ordinary course of business, consistent with Harris's historical practice relating to the Business and in accordance with normal industry standards. Harris has no knowledge of any threatened claims for any extraordinary (i) product returns, (ii) warranty obligations or (iii) product services, relating to the Business, reserved or otherwise. Harris has made adequate provision for product returns and warranty obligations in the Audited Balance Sheet in accordance with GAAP. (b) Any liabilities for product returns and warranty obligations are fully accrued and fully reserved against on each of the Audited Base Financial Statements provided by Harris to Concurrent. Such reserves are adequate to pay any amounts which may be owed by Harris of any of its Subsidiaries to any party as a result of the incurrence of such liabilities. (c) True and correct copies of the standard warranty provided by Harris on sales orders and other related documents which are delivered in connection with the Business have been made available to Concurrent. Such warranty delivered is the only warranty applicable to the products of the Business except for warranties provided by applicable law. Section 4.27 Transferred Subsidiaries. There exists no debt, liability or other obligation of the Transferred Subsidiaries, contingent or otherwise, except those that will be reflected on the Final Net Current Asset Reconciliation. Section 4.28 Transferred Subsidiaries Financial Statement. (a) Harris has previously delivered to Concurrent true and complete copies of the statutory balance sheets as of September 30, 1995 and 1994 and the statements of operations for the fiscal periods ended September 30, 1995 and 1994 of each Transferred Subsidiary, together with the notes to such financial statements (where available) (the "Transferred Subsidiaries Financial Statements"). (b) Each Transferred Subsidiary Financial Statement presents fairly in all material respects, the financial condition of such Transferred Subsidiary as at its respective date or during the respective period; and each of such Transferred Subsidiary Financial Statements has been prepared in accordance with GAAP consistently applied during the periods involved, except as otherwise stated therein. Section 4.29 Investment Purpose. Harris will acquire the shares of Concurrent Common Stock to be issued pursuant to this Agreement and the transactions contemplated hereby for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof, except pursuant to an effective registration statement under the Securities Act and all applicable state securities laws or pursuant to an exemption from the Securities Act and all applicable state securities laws confirmed by an opinion of counsel satisfactory to Concurrent, the expense for which shall be borne by Harris. Section 4.30 Rights Agreement. Harris shall take all necessary and appropriate actions such that (i) Concurrent will not become an "Acquiring Person", (ii) no "Stock Acquisition Date", "Separation Time", "Flip-over Transaction" or "Flip-in Date" (as such terms are defined in the Harris Rights Agreement) will occur and (iii) the stockholders of Harris will not be entitled to receive any right or benefit under the Harris Rights Agreement as a result of the approval, execution or delivery of this Agreement by Harris or the consummation of the transactions contemplated hereby. ARTICLE V REPRESENTATIONS AND WARRANTIES OF CONCURRENT Concurrent represents and warrants to Harris as follows: Section 5.1 Organization. (a) Concurrent and each of its Subsidiaries is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to be so organized, existing or in good standing or to have such power and authority would not, individually or in the aggregate, have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole. Concurrent and each of its Subsidiaries is duly qualified or licensed to do business and in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification or licensing necessary, except where the failure to be so duly qualified or licensed and in good standing would not, individually or in the aggre- gate, have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole. (b) Concurrent has heretofore made available to Harris a complete and correct copy of the charter and by-laws or comparable organizational documents, each as amended to date, of Concurrent and each of its Subsidiaries. Such charters, by-laws and comparable organizational documents are in full force and effect. Neither Concurrent nor any of its Subsidiaries is in violation of any provision of its charter, by-laws or comparable organizational documents, except for such violations that would not, individually or in the aggregate, have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole. Section 5.2 Capitalization. As of the date of this Agreement, the authorized capital stock of Concurrent consists of: (a) 100,000,000 shares of Concurrent Common Stock of which, as of March 20, 1996 30,569,159 shares were issued and outstanding and 840 shares were held in treasury; and (b) 25,000,000 shares of Series Preferred Stock, par value $.01 per share, of which, as of the date of this Agreement, no shares are issued and outstanding and 300,000 shares are designated as Series A Participating Cumulative Preferred Stock, and are reserved for issuance in accordance with the Rights Agreement as of July 31, 1992, between Concurrent and First National Bank of Boston, as Rights Agent (the "Concurrent Rights Agreement"). As of December 31, 1995, 3,042,495 shares of Concurrent Common Stock and as of the date hereof not more than 3,042,495 shares of Concurrent Common Stock were reserved for issuance upon exercise of outstanding options (the "Concurrent Options") pursuant to Concurrent's Stock Option Plan (the "Concurrent Stock Plan"). Since the date hereof, Concurrent has not issued any shares of Concurrent Common Stock, except upon the exercise of options granted under Concurrent Stock Plan which were outstanding on the date hereof. All the outstanding shares of Concurrent's capital stock are, and all shares of Concurrent Common Stock and Concurrent Preferred Stock which are to be issued to Harris pursuant to the transactions contemplated by this Agreement will be, when issued and paid for in accordance with the respective terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rights of third parties in respect thereto. The Debentures issuable in exchange for the Preferred Stock Consideration have been duly authorized. Except as set forth above or on Schedule 5.2 hereto, as of the date of this Agreement, there are no existing options, warrants, calls, subscriptions or other rights or other agreements or commitments of any character relating to the issued or unissued capital stock of Concurrent or any of its Subsidiaries obligating Concurrent or any of its Subsidiaries to issue, transfer or sell or cause to be issued, transferred or sold any shares of capital stock of, or other equity interests in, Concurrent or of any of its Subsidiaries or securities convertible into or exchangeable for such shares or equity interests or obligating Concurrent or any of its Subsidiaries to grant, extend or enter into any such option, warrant, call, subscription or other right, agreement or commitment. As of the date of this Agreement, except as set forth on Schedule 5.2 hereto, there are no outstanding contractual obligations of Concurrent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any shares of capital stock of Concurrent or any of its Subsidiaries. Each of the outstanding shares of capital stock of each of Concurrent's Subsidiaries is duly authorized, validly issued, fully paid and nonassessable, and such shares are owned by Concurrent or by a Subsidiary of Concurrent free and clear of any lien, claim, option, charge, security interest, limitation on voting rights and encumbrance of any kind, except as would not have a Material Adverse Effect on Concurrent and its Subsidiaries taken as whole. Section 5.3 Authority. Concurrent has the requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby (other than (a) with respect to the issuance of shares of Concurrent Common Stock pursuant to the transactions contemplated by this Agreement and the Ancillary Agreements, the approval of the holders of Concurrent Common Stock required for such issuance by the affirmative vote of a majority of the total votes cast and (b) with respect to the Concurrent Stock Plan Amendment (as defined in Section 5.12) the affirmative vote of a majority of the voting shares of Concurrent Common Stock in a separate vote). The execution, delivery and performance of this Agreement and the Ancillary Agreements by Concurrent and the consummation by Concurrent of the other transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Concurrent and no other corporate proceedings on the part of Concurrent are necessary to authorize this Agreement and the Ancillary Agreements or to consummate the transactions contemplated hereby and thereby (other than, with respect to the issuance of shares of Concurrent Common Stock and Preferred Consideration pursuant to the transactions contemplated by this Agreement (including Common Stock issuable upon the conversion of the Preferred Stock Consideration or any debentures for which such consideration is exchangeable pursuant to its terms) and the Ancillary Agreements, the approval of the holders of Concurrent Common Stock required for such issuance by the affirmative vote of a majority of the total votes cast). This Agreement and the Ancillary Agreements have been duly executed and delivered by Concurrent and, assuming this Agreement and the Ancillary Agreements constitute valid and binding obligations of Harris, consti- tute valid and binding obligations of Concurrent, enforceable against Concurrent in accordance with their respective terms. Section 5.4 Consents and Approvals; No Violations. (a) Except as set forth on Schedule 5.4(a) hereto, and except for filings, permits, authorizations, notices, consents and approvals as may be required under, and other applicable requirements of, the Exchange Act, the Securities Act, the HSR Act, the FBCA, certain state takeover statutes or state securities or blue sky laws, neither the execution, delivery or performance of this Agreement and the Ancillary Agreements by Concurrent nor the consummation by Concurrent of the transactions contemplated hereby and thereby and compliance by Concurrent with any of the provisions hereof and thereof will (i) conflict with or result in any breach of any provision of the respective certificates of incorporation or by-laws or comparable organizational documents of Concurrent or any Subsidiary of Concurrent, (ii) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity (except where the failure to obtain such permits, authorizations, consents or approvals or to make such filings would not prevent or delay consummation of the transactions contemplated by this Agreement and the Ancillary Agreements in any material respect and would not, individually or in the aggregate, have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole), (iii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, amendment, cancellation or acceleration) under, or result in the creation of any lien or other encumbrance on any property or asset of Concurrent or any of its Subsidiaries pursuant to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which Concurrent or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or (iv) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Concurrent or any of its Subsidiaries or by which any property or asset of Concurrent or any of its Subsidiaries is bound or affected, except, in the case of clauses (iii) and (iv), for violations, breaches, defaults or other occurrences which would not prevent or delay consummation of this Agreement and the Ancillary Agreements or the transactions contemplated hereby or thereby in any material respect and would not, individually or in the aggregate, have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole. (b) Except as disclosed in the Concurrent SEC Documents (as defined in Section 5.5) or on Schedule 5.4(b) hereto, neither Concurrent nor any of its Subsidiaries is in conflict with, or in default or violation of, (i) any order, writ, injunction, decree, statute, rule or regulation of any Governmental Entity applicable to Concurrent or any of its Subsidiaries or by which any of them or any of their properties or assets may be bound or (ii) any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which Concurrent or any of its Subsidiaries is a party or by which any of them or any of their properties or assets may be bound or affected, except for any such conflicts, defaults or violations which have not had and are not likely to have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole. Section 5.5 SEC Reports and Financial Statements. Concurrent has filed with the SEC, and has heretofore made available to Harris true and complete copies of all forms, reports and other documents required to be filed by it since June 30, 1995 under the Exchange Act or the Securities Act (as such documents have been amended since the time of their filing, collectively, the "Concurrent SEC Documents"). The Concurrent SEC Documents, including without limitation any financial statements or schedules included therein, at the time filed, (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading and (b) complied in all material respects with the applicable requirements of the Exchange Act or the Securities Act, as the case may be. The financial statements of Concurrent included in the Concurrent SEC Documents complied as to form in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted on Concurrent's Form 10-Q as filed with the SEC under the Exchange Act) and fairly present (subject, in the case of the unaudited statements, to normal, recurring audit adjustments which will not be material in amount or effect) the consolidated financial position of Concurrent and its consolidated Subsidiaries as at the dates thereof and the consolidated results of their operations and cash flows for the periods then ended. Except as reflected, reserved against or otherwise disclosed in the financial statements of Concurrent included in the Concurrent SEC Documents or as disclosed on Schedule 5.5 hereto, neither Concurrent nor any of its Subsidiaries has any liabilities or obligations (absolute, accrued, fixed, contingent or otherwise) material to Concurrent and its Subsidiaries taken as a whole that would be required to be reflected on, or reserved against in, a balance sheet of Concurrent or the notes thereto, prepared in accordance with generally accepted accounting principles consistently applied. Section 5.6 Information in Disclosure Documents. None of the information supplied or to be supplied by Concurrent in writing specifically for inclusion or incorporation by reference the Proxy Statement will, at the time the Proxy Statement is filed with the SEC, at the time such Proxy Statement is mailed to stockholders of Concurrent and Harris, at the times of the meetings of stockholders of Concurrent and Harris to be held in connection with the transactions contemplated by this Agreement and at the Closing Date, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Proxy Statement will, when filed with the SEC, comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations thereunder, except that no representation is made by Concurrent with respect to statements made therein based on information supplied by Harris in writing specifically for inclusion in the Proxy Statement. Section 5.7 Litigation. Except as disclosed in the Concurrent SEC Documents or on Schedule 5.7 hereto, there is no suit, claim, action, proceeding or investigation pending or, to the best knowledge of Concurrent, threatened, against Concurrent or any of its Subsidiaries before any Governmental Entity which, individually or in the aggregate, is reasonably likely to have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole or a Material Adverse Effect on the ability of Concurrent to consummate the transactions contemplated by this Agreement. Except as disclosed in the Concurrent SEC Documents or on Schedule 5.7 hereto, neither Concurrent nor any of its Subsidiaries is subject to any outstanding order, writ, injunction or decree which, insofar as can be reasonably foreseen, individually or in the aggregate, would in the future have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole or a Material Adverse Effect on the ability of Concurrent to consummate the transactions contemplated by this Agreement. Concurrent has, in accordance with GAAP, made adequate provision in its financial statements for the payment of losses arising out of suits, claims, actions, proceedings or investigations disclosed in the Concurrent SEC Documents or on Schedule 5.7 and such provision has continued to be adequate. Section 5.8 Absence of Certain Changes. Except as disclosed in the Concurrent SEC Documents or on Schedule 5.8 hereto, since June 30, 1995, Concurrent has conducted its business in the ordinary course of such business and there has not been any (a) material adverse change in Concurrent and its Subsidiaries taken as a whole (b) any declaration, setting aside or payment of any dividend or other distribution with respect to its capital stock or (c) any material change in its accounting principles, practices or methods. Section 5.9 Opinion of Financial Advisor. Concurrent has received the opinion of Berenson Minella & Company, its financial advisor, to the effect that, as of the date of this Agreement, the purchase of the Assets and the Purchased Harris Shares for the Common Stock Consideration and the Preferred Stock Consideration and the Assumed Liabilities, taken as a whole, are fair to the stockholders of Concurrent from a financial point of view. Section 5.10 Rights Agreement. Concurrent shall take all necessary and appropriate actions such that (a) Harris will not become an "Acquiring Person", (b) no "Stock Acquisition Date", "Distribution Date" or "Triggering Event" (as such terms are defined in Concurrent Rights Agreement) will occur and (c) Concurrent Stockholders will not become entitled to receive any right or benefit under the Concurrent Rights Agreement as a result of the approval, execution or delivery of this Agreement by Concurrent, or the consummation of the transactions contemplated hereby. Section 5.11 Tax Matters. (a) Concurrent and each of its Subsidiaries has duly filed all, or as of the Closing Date will have filed, all Tax Returns required to be filed by it or its Subsidiaries on or before the Closing Date, and such Tax Returns are or will be true, correct and complete in all material respects. Concurrent and its Subsidiaries have duly paid, caused to be paid or made adequate provision in the Concurrent SEC Documents in accordance with GAAP for the payment of all Taxes required to be paid in respect of all periods covered by such Tax Returns. Concurrent has made adequate provision in accordance with GAAP for payment of all Taxes anticipated to be payable in respect of all taxable periods or portions thereof ending on or before the Closing Date since the periods covered by such Tax Returns. (b) (i) The reserves for Taxes (except for deferred Taxes) reflected in the Concurrent SEC Documents are sufficient for the payment of all unpaid Taxes (whether or not currently disputed) accrued through the date thereof. Since June 30, 1995, neither Concurrent nor its Subsidiaries incurred any material liability for Taxes other than in the ordinary course of business consistent with past practice. Concurrent and its Subsidiaries are registered to do business in the states and localities set forth on Schedule 5.11(b)(i) hereto, and Concurrent or its Subsidiaries file all required Tax Returns in such states and localities. Except as set forth on Schedule 5.11(b)(i) hereto, there are no liens for Taxes upon the assets of Concurrent or its Subsidiaries except for statutory liens for current Taxes not yet due. (ii) The Tax Returns required to be filed by Concurrent have been examined by the IRS or other appropriate taxing authority for all taxable years as set forth on Schedule 5.11(b)(ii) hereto. Except as set forth on Schedule 5.11(b)(ii) hereto, all deficiencies and assessments asserted as a result of such examinations or other audits by federal, state, local or foreign taxing authorities have been paid, fully settled or adequately provided for in the Concurrent SEC Documents in accordance with GAAP, and no issue or claim has been asserted for Taxes by any taxing authority for any prior period, the adverse determination of which would result in a deficiency which would have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole, other than those heretofore paid or provided for. Except as disclosed on Schedule 5.11(b)(ii) hereto, no issue has been raised during the past five years by any federal, state, local or foreign taxing authority which, if raised with regard to any other period not so examined, could reasonably be expected to result in a proposed deficiency for any other period not so examined. (c) (i) Except as set forth on Schedule 5.11(c) hereto, there are no outstanding agreements or waivers extending the statutory period of limitation applicable to any Tax Return of Concurrent or its Subsidiaries. Except as set forth on Schedule 5.11(c) hereto, neither Concurrent nor any of its Subsidiaries (x) has been a member of a group filing consolidated returns for federal income tax purposes, or (y) is a party to a tax sharing or tax indemnity agreement or any other agreement of a similar nature that remains in effect. Except as set forth on Schedule 5.11(c) hereto, no power of attorney has been executed by, or on behalf of Concurrent or its Subsidiaries with respect to any matter relating to Taxes which is currently in force. (ii) Neither Concurrent nor any of its Subsidiaries have filed a consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as such term is defined in Section 341(f)(2) of the Code) owned by Concurrent or any of its Subsidiaries. Section 5.12 Vote Required. The only votes of the holders of any class or series of Concurrent's capital stock necessary to approve the transactions contemplated hereby are the affirmative vote of a majority of (i) the total votes cast by the holders of Concurrent Common Stock with respect to the issuance of Concurrent Common Stock pursuant to the transactions contemplated by this Agreement and (ii) the voting shares of Concurrent Common Stock, in a separate vote, with respect to an amendment to the Concurrent Stock Plan (the "Concurrent Stock Plan Amendment") to increase the number of shares of Concurrent Common Stock available for issuance under the Concurrent Stock Plan to 8,000,000 shares of Concurrent Common Stock. Section 5.13 Employee Benefit Plans; ERISA. (a) Schedule 5.13(a) contains a true and com- plete list of each bonus, deferred compensation, incentive compensation, stock purchase, stock option, severance or termination pay, hospitalization or other medi-cal, life or other insurance, supplemental unemployment benefits, profit-sharing, pension, or retirement plan, program, agreement or arrangement, and each other employee benefit plan, program, agreement or arrangement, sponsored, maintained or contributed to or required to be contributed to by Concurrent or by any trade or business, whether or not incorporated (a "Concurrent ERISA Affiliate"), that together with Concurrent would be deemed a "single employer" within the meaning of section 4001 of ERISA, for the benefit of any employee or terminated employee of Concurrent or any Concurrent ERISA Affiliate (the "Concurrent Plans"). Schedule 5.13(a) identifies each of Concurrent Plans that is an "employee benefit plan," as that term is defined in section 3(3) of ERISA (the "Concurrent ERISA Plans"). (b) With respect to each Concurrent Plan, Concurrent has heretofore delivered to Harris true and complete copies of each of the following documents: (i) a copy thereof; (ii) a copy of the most recent annual re- port and actuarial report, if required under ERISA and the most recent report prepared with respect thereto in accordance with Statement of Financial Accounting Standards No. 87, Employer's Accounting for Pensions; (iii) a copy of the most recent Summary Concurrent Plan Description required under ERISA with respect thereto; and (iv) if Concurrent Plan is funded through a trust or any third party funding vehicle, a copy of the trust or other funding agreement and the latest financial statements thereof. (c) Neither Concurrent nor any Concurrent ERISA Affiliate maintains or has ever maintained an ERISA Plan subject to Title IV of ERISA. (d) No Concurrent ERISA Plan is a "multiemployer pension plan," as defined in section 3(37) of ERISA, nor is any Concurrent ERISA Plan a plan described in section 4063(a) of ERISA. (e) Each Concurrent Plan has been operated and administered in all material respects in accordance with its terms and applicable law, including but not limited to ERISA and the Code. (f) To the best knowledge of Concurrent, each Concurrent ERISA Plan intended to be "qualified" within the meaning of section 401(a) of the Code is so qualified and the trusts maintained thereunder are exempt from taxation under section 501(a) of the Code. (g) No amounts payable under the Concurrent Plans will fail to be deductible for federal income tax purposes by virtue of section 280G of the Code. (h) No Concurrent Plan provides benefits, including death or medical benefits (whether or not insured), with respect to current or former employees of Concurrent or any Concurrent ERISA Affiliate beyond their retirement or other termination of service (other than (i) coverage mandated by applicable law or (ii) death benefits or retirement benefits under any "employee pension plan," as that term is defined in section 3(2) of ERISA). (i) There are no pending, threatened or anticipated claims by or on behalf of any Concurrent Plan, by any employee or beneficiary covered under any such Concurrent Plan, or otherwise involving any such Concurrent Plan (other than routine claims for benefits). (j) At the Closing Date, Concurrent shall take all actions to cause all Concurrent Options then outstanding under the Concurrent Stock Plan to become fully vested and exercisable. (k) As of the Closing Date, full payment will have been made or accrued in accordance with GAAP, and to the extent applicable, section 412 of the Code of all amounts required to be paid under the terms of each of the Concurrent Plans. Section 5.14 Major Contracts. Except as disclosed in Concurrent SEC Documents or as set forth on Schedule 5.14 hereto, neither Concurrent nor any of its Subsidiaries is a party to or subject to: (a) Any joint venture contract or arrangement or any other agreement which has involved or is expected to involve a sharing of profits with other persons; (b) Any existing OEM agreement, distribution agreement, volume purchase agreement, or other similar agreement in which the annual amount involved in 1995 exceeded or is expected to exceed in fiscal 1996 $500,000 in aggregate amount or pursuant to which Concurrent has granted or received exclusive marketing rights related to any product, group of products or territory; (c) Any material license agreement, either as licensor or licensee (excluding nonexclusive software licenses granted to customers or end-users in the ordinary course of business) involving the payment of at least $250,000; or (d) Any contract containing covenants purporting to limit Concurrent's freedom or that of any of its Subsidiaries in any line of business in any geographic area. Section 5.15 Interests of Officers and Directors. Except as disclosed on Schedule 5.15 hereto, no officer or director of Concurrent 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: (a) any person or entity which purchases from or sells, licenses or furnishes to Concurrent or any of its Subsidiaries any goods, property, technology or intellectual or other property rights or services; (b) any contract or agreement to which Concurrent or any of its Subsidiaries is a party or by which it may be bound or affected; or (c) any property, real or personal, tangible or intangible, used in its business or that of its Subsidiaries, including any interest in the Concurrent Intellectual Property Rights (as defined in Section 5.16(a) except for rights as a stockholder, and except for rights under any Concurrent Plan. Section 5.16 Intellectual Property. (a) Concurrent owns, or is licensed or other- wise entitled to exercise, without restriction, all rights in and to, all domestic and foreign patents, trademarks, trade names, service marks, copyrights, mask works, trade secrets and other intellectual property rights, and any applications, registrations, certificates and/or Letters Patent therefor, and all net lists, schematics, sketches, drawings, notebooks, reports, memoranda, prints, drafts, worksheets, and any other writings, methods and practices, business information, procedures, technology, source code, know-how, computer software programs and all other tangible and intangible information or material and all goodwill associated with any of the foregoing including goodwill in respect of trademarks, that are used in or necessary for the conduct of the business of Concurrent and its Subsidiaries as currently conducted or as currently proposed to be conducted (collectively, the "Concurrent Intellectual Property Rights"). (b) Schedule 5.16(b) hereto is a complete and accurate list of all domestic and foreign patents, registered copyrights, unregistered copyrightable subject matter; trade names, registered and unregistered trademarks and service marks, and other company, product or service identifiers; mask work rights; and any applications, registrations or grants thereof or therefor, included in the Concurrent Intellectual Property Rights. For each item listed thereon, Schedule 5.16(b) hereto identifies the owner thereof and, if the owner is not Concurrent or any of its Subsidiaries, the means by which Concurrent or any of its Subsidiaries obtains rights thereto. (c) Concurrent has provided to Harris a copy of Concurrent's proprietary Product Information Book, dated November 1994, which identifies all of Concurrent's currently marketed products. No such products are the subject of certificates of copyright issued by the United States Copyright Office, and any similar office or agency of any foreign country or jurisdiction, and/or are the subject of applications for patent or original Letters Patent in the United States or any foreign country or jurisdiction. (d) Neither Concurrent nor any of its Subsidiaries is, or as a result of the execution and delivery of this Agreement or the performance of Concurrent's obligations hereunder will be, in violation of, or lose any rights pursuant to any license, sublicense or agreement described in the Concurrent Disclosure Schedule. (e) Concurrent or one of its Subsidiaries is the owner or licensee of the Concurrent Intellectual Property Rights, with all necessary right, title and interest in and to the same free and clear of any liens, encumbrances or security interests. Except as set forth on Schedule 5.16(e) hereto, Concurrent is not contractually obligated to pay any compensation to any third party, in an amount in excess of $250,000 in respect to the use of any of the Concurrent Intellectual Property Rights or the material covered thereby in connection with the services or products being manufactured and/or used and/or sold by Concurrent. (f) No claims with respect to Concurrent Intellectual Property Rights have been asserted or, to the best knowledge of Concurrent, after reasonable investigation, are threatened by any person. Concurrent knows of no claims (i) to the effect that the manufacture, offer for sale, sale or use of any product as now used or offered by Concurrent or any Subsidiary of Concurrent, or the use thereof by any customer or licensee of Concurrent infringes any copyright, patent, trademark or service mark, or violates any trade secret rights, or other intellectual property rights of any third party, or (ii) challenging the ownership or validity of any of the Concurrent Intellectual Property Rights. (g) To the best knowledge of Concurrent, all patents and registered trademarks, service marks, copyrights and patents held by Concurrent are valid and subsisting. (h) To the best knowledge of Concurrent, there has not been and there is not now any material unauthorized use, infringement or misappropriation of any of the Concurrent Intellectual Property Rights by any third party, including, without limitation, any employee or former employee of Concurrent or any of its Subsidiaries; neither Concurrent nor any of its Subsidiaries has been sued or charged in writing as a defendant in any claim, suit, action or proceeding which involves a claim of infringement of any patents, trademarks, service marks, copyrights or other intellectual property rights and which has not been finally terminated prior to the date hereof; there are no such charges or claims outstanding; and to the best knowledge of Concurrent neither Concurrent nor any of its Subsidiaries has any infringement liability with respect to any patent, trademark, service mark, copyright or other intellectual property right of another. (i) No Concurrent Intellectual Property Right is subject to any outstanding order, judgment, decree, stipulation or agreement restricting in any manner the licensing or other disposition thereof by Concurrent or any of its Subsidiaries. Neither Concurrent nor any of its Subsidiaries has entered into any agreement to indemnify any other person against any charge of infringement of any Concurrent Intellectual Property Right. Neither Concurrent nor any of its Subsidiaries has entered into any agreement granting any third party the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any Concurrent Intellectual Property Right. (j) Concurrent and its Subsidiaries have the exclusive right to file, prosecute and maintain all applications, certificates, registrations and Letters Patent with respect to the Concurrent Intellectual Property Rights owned by Concurrent or its Subsidiaries. Concurrent or any of its Subsidiaries is listed in the records of the appropriate agency as the sole owner of record for each registration, grant Letters Patent and application listed on Schedule 5.16(b) hereto as owned by Concurrent or any of its Subsidiaries. All registration and maintenance fees that have become due and payable with respect of such Concurrent Intellectual Property Rights have been paid. (k) To the best knowledge of Concurrent, no act has been done, or omitted to be done, by Concurrent or any of its Subsidiaries to impair or dedicate to the public or to entitle any governmental authority to cancel, forfeit, modify or hold abandoned any of the Concurrent Intellectual Property Rights. (l) Concurrent and its Subsidiaries, with respect to all Concurrent Intellectual Property Rights owned and/or developed thereby, have taken or caused to be taken all reasonable steps to obtain and retain valid and enforceable intellectual property rights therein, including, without limitation, the use of non-disclosure agreements adequate to protect the proprietary nature of any confidential information disclosed by Concurrent or any of its Subsidiaries to third parties. (m) Schedule 5.16(m) hereto sets forth a complete and accurate list of all licenses, assignments and other agreements pursuant to which Concurrent, or any of its Subsidiaries, grants rights to any third party in and to any of the Concurrent Intellectual Property Rights. (n) To the best knowledge of Concurrent, the components of all software, hardware and firmware that are material to the business of Concurrent and are used or currently proposed to be used in or necessary for the conduct of the business of Concurrent and its Subsidiaries as currently conducted or as currently proposed to be conducted are (i) owned by Concurrent or any of its Subsidiaries, or (ii) currently in the public domain or otherwise available to Concurrent or any of its Subsidiaries without the approval or consent of any third party, or (iii) used by Concurrent or any of its Subsidiaries, or included in any of their products, pursuant to rights granted to Concurrent or any of its Subsidiaries pursuant to a written license or lease from a third party. Section 5.17 Questionable Payments. Neither Concurrent nor any of its Subsidiaries nor to its best knowledge any director, officer or other employee of Concurrent or any of its Subsidiaries has: (a) corruptly made any payments or provided services in the United States or in any foreign country in order to obtain preferential treatment or consideration by any Governmental Entity in order to obtain or retain business for Concurrent or any of its Subsidiaries in violation of Section 30A of the Exchange Act; or (b) made any political contributions unlawful under the laws of the United States and the foreign country in which such payments were made. Neither Concurrent nor any of its Subsidiaries nor to its best knowledge any director, officer or other employee of Concurrent or any of its Subsidiaries has been the subject of any inquiry or investigation by any Governmental Entity relating to the conduct described above in this Section 5.17. Section 5.18 Insurance. Except as set forth on Schedule 5.18 hereto, Concurrent and each of its Subsidiaries is, and has been continuously since at least July 1, 1995, insured with financially responsible insurers in such amounts and against such risks and losses as are customary in all material respects for companies conducting the business as conducted by Concurrent and its Subsidiaries during such time period. Except as set forth on Schedule 5.18 hereto, neither Concurrent nor any of its Subsidiaries has received any notice of cancellation or termination with respect to any material insurance policy of Concurrent or any of its Subsidiaries. The insurance policies of Concurrent and each of its Subsidiaries are valid and enforceable policies in all material respects. Section 5.19 No Brokers. Concurrent has not entered into any contract, arrangement or understanding with any person or firm which may result in the obligation of Concurrent or Harris to pay any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby, except that Concurrent has retained Berenson Minella & Company as its financial advisor, the arrangements with which have been disclosed in writing to Harris prior to the date hereof. Other than the foregoing arrangements other than as disclosed in Section 4.19, Concurrent is not aware of any claim for payment of any finder's fees, brokerage or agent's commissions or other like payments in connection with the negotiations leading to this Agreement or the consummation of the transactions contemplated hereby. Section 5.20 Environmental. (a) Except as set forth on Schedule 5.20(a) hereto, Concurrent and its Subsidiaries are in compliance in all material respects with all applicable Environmental Laws. Except as set forth on Schedule 5.20(a) hereto, Concurrent has not received any communication (written or oral), whether from a governmental authority, citizen group, employee or otherwise, that alleges that Concurrent is not in such compliance, and, to Concurrent's best knowledge after due inquiry, there are no circumstances that may prevent or interfere with such compliance in the future. Except as set forth on Schedule 5.20(a) hereto, Concurrent has not received in the past five years any written request for information from a governmental authority concerning or relating to the treatment, transportation or disposal of any Materials of Environmental Concern. Except as set forth on Schedule 5.20(a) hereto: Concurrent has acquired all necessary permits, licenses, approvals and other governmental authorizations necessary to operate in compliance with all applicable Environmental Laws; such permits, licenses, approvals and authorizations are currently valid; and Concurrent is in compliance in all material respects with such permits, licenses, approvals and authorizations. To Concurrent's best knowledge, after due inquiry, there are no circumstances that may prevent or interfere with the renewal of the permits, licenses, approvals and other governmental authorizations held by Concurrent pursuant to Environmental Laws. (b) Except as set forth on Schedule 5.20(b) hereto, there has been in the last five years and there is no Environmental Claim pending or threatened against Concurrent or, to Concurrent's best knowledge after due inquiry, against any person or entity whose liability for any Environmental Claim Concurrent has or may have retained or assumed either contractually or by operation of law. (c) Except as set forth on Schedule 5.20(c) hereto, there are no past or present actions, activities, circumstances, conditions, events or incidents, including the release, emission, discharge or disposal of any Material of Environmental Concern, that could form the basis of any Environmental Claim against Concurrent or, to Concurrent's best knowledge after due inquiry, against any person or entity whose liability for any Environmental Claim Concurrent has or may have retained or assumed either contractually or by operation of law. Section 5.21 Investment Purpose. Concurrent will acquire the shares of Harris Common Stock to be issued pursuant to this Agreement and the transactions contemplated hereby for its own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof, except pursuant to an effective registration statement under the Securities Act and all applicable state securities laws or pursuant to an exemption from the Securities Act and all applicable state securities laws confirmed by an opinion of counsel satisfactory to Harris the expense for which shall be borne by Concurrent. Section 5.22 Applicability of Certain Laws. The provisions of Section 203 ("Business Combinations with Interested Stockholders") and Section 262 ("Appraisal Rights"), respectively, of the Delaware General Corporation Law (the "DGCL") will not apply to this Agreement or any of the transactions contemplated hereby. Section 5.23 Product Returns; Warranties. There are no liabilities for product returns, warranty obligations and product services other than those arising in the ordinary course of business, consistent with Concurrent's historical practice and in accordance with normal industry standards. Concurrent has no knowledge of any threatened claims for any extraordinary (i) product returns, (ii) warranty obligations or (iii) product services, reserved or otherwise. Concurrent has made adequate provision in the latest Concurrent SEC Document for product returns and warranty obligations in accordance with GAAP. ARTICLE VI COVENANTS Section 6.1 Conduct of Business of Harris. Except as contemplated by this Agreement (including Schedule 6.1 hereto) and the Ancillary Agreements or with the prior written consent of Concurrent, during the period from the date of this Agreement to the Closing Date, Harris will, and will cause each of its Subsidiaries to, use all reasonable efforts, to conduct the Business only in the ordinary course and consistent with prior practice, to use Best Efforts to maintain, keep and preserve the Assets and the assets of the Transferred Subsidiaries in operating condition and repair and maintain or, if necessary, replace insurance thereon in accordance with present practices, to preserve intact the present organization of the Business, keep available the services of its present officers and employees and preserve its relationships with licensors, licensees, customers, suppliers, employees and any others having business dealings with it. Without limiting the generality of the foregoing, and except as otherwise provided in or contemplated by this Agreement (including Schedule 6.1 hereto) or the Ancillary Agreements, Harris will not, and will not permit any of its Subsidiaries to, prior to the Closing Date, without the prior written consent of Concurrent: (a) adopt any amendment to its charter or by- laws or comparable organizational documents or to the Harris Rights Agreement; (b) except for issuances of capital stock of any of the Transferred Subsidiaries to Harris or to another Transferred Subsidiary of Harris, issue, reissue, sell, deliver or pledge or authorize or propose the issuance, reissuance, sale, delivery or pledge of additional shares of capital stock of any class or any securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, other than the issuance of shares of Harris Common Stock upon the exercise of stock options or stock grants pursuant to the Harris Stock Plan outstanding on or prior to the Closing Date in accordance with the terms of the agreements under which they are issued; (c) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock, except that any Transferred Subsidiary may pay dividends to Harris or any of the other Transferred Subsidiaries; (d) adjust, split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; (e) (i) incur, assume or pre-pay any long-term debt or incur or assume any short-term debt, except that Harris and its Subsidiaries may incur or pre-pay debt in the ordinary course of business consistent with past practice under existing lines of credit, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except in the ordinary course of business consistent with past practice, or (iii) make any loans, advances or capital contributions to, or investments in, any other person, except Transferred Subsidiaries of Harris and except in the ordinary course of business consistent with past practice; (f) except for increases in salary, wages and benefits of employees of Harris or its Subsidiaries (other than executive or corporate officers of Harris) in accordance with past practice and except for increases in salary, wages and benefits granted to employees of Harris or its Subsidiaries (other than executive or corporate officers of Harris) in conjunction with promotions or other changes in job status consistent with past practice or required under existing agreements increase the com- pensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from Harris or any of its Subsidiaries), or pay any benefit not required by any existing plan or arrangement or grant any severance or termination pay to (except pursuant to existing agreements or policies as set forth on Schedule 4.12(a) hereto), or enter into any employment or severance agreement with, any director, officer or other key employee of Harris or any of the Transferred Subsidiaries or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, welfare, deferred compensation, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, except to the extent such termina- tion or amendment is required by applicable law; provided, however, that nothing herein shall be deemed to prohibit the payment of benefits as they become payable; provided, further, however that Harris shall be permitted to take action so that at the Closing Date, each stock option issued and outstanding at the date hereof under the Harris Stock Plan will be fully vested and exercisable; (g) other than as may be required by law to consummate the transactions contemplated hereby, acquire, sell, lease, transfer or dispose of any assets or securities which are material to Harris and its Subsidiaries taken as a whole, or enter into any commitment to do any of the foregoing; (h) settle any material tax liability or make any material tax election; or (i) agree in writing or otherwise to take any of the foregoing actions or any action which would make any representation or warranty in this Agreement untrue or incorrect in any material respect or which would result in any of the conditions set forth in Article VIII not being satisfied. Section 6.2 Conduct of Business of Concurrent. Except as contemplated by this Agreement and the Ancillary Agreements or with the prior written consent of Harris, during the period from the date of this Agreement to the Closing Date, Concurrent will, and will cause each of its Subsidiaries to, conduct its operations only in the ordinary and usual course of business consistent with past practice and will use all reasonable efforts, and will cause each of its Subsidiaries to use all reasonable efforts, to preserve intact its present business organization, keep available the services of its present officers and employees and preserve its relationships with licensors, licensees, customers, suppliers, employees and any others having business dealings with it. Without limiting the generality of the foregoing, and except as otherwise provided in or contemplated by this Agreement or the Ancillary Agreements, Concurrent will not, and will not permit any of the Subsidiaries to, prior to the Closing Date, without the prior written consent of Harris: (a) adopt any amendment to its charter or by- laws or comparable organizational documents or to the Concurrent Rights Agreement; (b) except for (i) issuances of capital stock of Concurrent's Subsidiaries to Concurrent or a wholly owned Subsidiary of Concurrent, or (ii) issuances of capital stock of Concurrent to employees of Concurrent who become, at or after the Closing Date, entitled to severance under Concurrent's existing severance contracts and policies in lieu of an equivalent cash payment under such contracts and policies, issue, reissue, sell, deliver or pledge or authorize or propose the issuance, reissuance, sale, delivery or pledge of additional shares of capital stock of any class or any securities convertible into capital stock of any class, or any rights, warrants or options to acquire any convertible securities or capital stock, other than the issuance of shares of Concurrent Common Stock upon the exercise of stock options or stock grants pursuant to the Concurrent Stock Plan outstanding on or prior to the Closing Date in accordance with the terms of the Agreements under which they are issued; (c) declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any class or series of its capital stock, except that any wholly owned Subsidiary of Concurrent may pay dividends to Concurrent or any of Concurrent's wholly owned Subsidiaries; (d) adjust, split, combine, subdivide, reclassify or redeem, purchase or otherwise acquire, or propose to redeem or purchase or otherwise acquire, any shares of its capital stock, or any of its other securities; (e) (i) incur, assume or pre-pay any long-term debt or incur or assume any short-term debt, except that Concurrent and its Subsidiaries may incur or pre-pay debt in the ordinary course of business consistent with past practice under existing lines of credit, (ii) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person except in the ordinary course of business consistent with past practice, or (iii) make any loans, advances or capital contributions to, or investments in, any other person, except Subsidiaries of Concurrent and except in the ordinary course of business consistent with past practice; (f) except for increases in salary, wages and benefits of employees of Concurrent or its Subsidiaries (other than executive or corporate officers of Concurrent) in accordance with past practice and except for increases in salary, wages and benefits granted to employees of Concurrent or its Subsidiaries (other than executive or corporate officers of Concurrent) in conjunction with promotions or other changes in job status consistent with past practice or required under existing agreements, increase the compensation or fringe benefits payable or to become payable to its directors, officers or employees (whether from Concurrent or any of its Subsidiaries), or pay any benefit not required by any existing plan or arrangement or grant any severance or termination pay to (except pursuant to existing agreements or policies as set forth on Schedule 5.13(a) hereto), or enter into any employment or severance agreement with, any director, officer or other key employee of Concurrent or any of its Subsidiaries or establish, adopt, enter into, terminate or amend any collective bargaining, bonus, profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, welfare, deferred compensa- tion, employment, termination, severance or other employee benefit plan, agreement, trust, fund, policy or arrangement for the benefit or welfare of any directors, officers or current or former employees, except to the extent such termination or amendment is required by applicable law; provided, however, that nothing herein shall be deemed to prohibit the payment of benefits as they become payable; provided, further, however, that Concurrent shall be permitted to take action so that at the Closing Date, each stock option issued and outstanding at such time under the Concurrent Stock Plan will become fully vested and exercisable (it being understood and agreed that the transactions contemplated hereby will be deemed to be a change in control for purposes of such plan and the option agreements entered into thereunder); provided, further, that nothing herein shall prevent Concurrent or any of its Subsidiaries from instituting retention and/or severance arrangements with employees of Concurrent or any of its Subsidiaries, for the purpose of encouraging employees to remain with Concurrent until the Closing Date subject to (i) Concurrent consulting with Harris prior to implementing any such retention and/or severance arrangement and (ii) a ceiling of $2,000,000 on the aggregate dollar amount which may be paid or pursuant to which the obligation may be incurred between November 5, 1995 and the Closing Date pursuant to all such reten- tion and/or severance arrangements. (g) other than as may be required by law to consummate the transactions contemplated hereby, acquire, sell, lease, transfer or dispose of any assets or securities which are material to Concurrent and its Subsidiaries taken as a whole, or enter into any commitment to do any of the foregoing; (h) settle any material tax liability or make any material tax election; or (i) agree in writing or otherwise to take any of the foregoing actions or any action which would make any representation or warranty in this Agreement untrue or incorrect in any material respect or which would result in any of the conditions set forth in Article VIII not being satisfied. Section 6.3 Best Efforts. Subject to the terms and conditions of this Agreement, each of the par- ties hereto agrees to use its Best Efforts (as defined herein) to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement including (a) the prompt preparation and filing with the SEC of the Proxy Statement, (b) such actions as may be required to have the Proxy Statement cleared by the SEC, in each case as promptly as practicable, including by consulting with each other as to, and responding promptly to, any SEC comments with respect thereto, and (c) such actions as may be required to be taken under applicable state securities or blue sky laws in connection with the issuance of the Purchased Harris Shares and shares of Concurrent Common Stock and Concurrent Preferred Stock contemplated hereby or the Ancillary Agreements. As used in this Agreement, the term "Best Efforts" means all such efforts as may be taken in a commercially reasonable manner. It shall be a condition to the mailing of the Proxy Statement to the stockholders of Concurrent and Harris that (a) Concurrent shall have received an opinion from Berenson Minella & Company, dated the date of the Proxy Statement, to the effect that, as of the date thereof, the purchase of the Assets and the Purchased Harris Shares for the Common Stock Consideration and the Preferred Stock Consideration and the Assumed Liabilities, taken as a whole, are fair to the stockholders of Concurrent from a financial point of view and (b) Harris shall have received an opinion from Bear, Stearns & Co. Inc., dated the date of the Proxy Statement, to the effect that, as of the date thereof, and the transactions contemplated hereby are fair, from a financial point of view, to the stockholders of Harris. Each party shall promptly consult with the other with respect to, provide any necessary information with respect to and provide the other (or its counsel) copies of, all filings made by such party with any Governmental Entity in connection with this Agreement and the transactions contemplated hereby. In addition, if at any time prior to the Closing Date any event or circumstance relating to either Harris or any of the Transferred Subsidiaries of Concurrent or any of its Subsidiaries, or any of their respective officers or directors, should be discovered by Harris or Concurrent, as the case may be, and which should be set forth in an amendment or supplement to the Proxy Statement, the discovering party shall promptly inform the other party of such event or circumstance. Section 6.4 Registration Rights. Each of Harris and Concurrent shall prepare and file as promptly as practicable after the date hereof, and shall cause to become effective on the Closing Date, a registration statement on Form S-3 (or if either Concurrent or Harris is not eligible to use Form S-3 on such other form as Concurrent or Harris may use) (each, an "S-3 Registration Statement" and collectively, the "S-3 Registration State- ments"), in compliance with the Securities Act relating to the sale by the other party hereto and its permitted pledgees of the registrant's shares of common stock (and, in the case of Concurrent, the common stock issuable upon conversion of the Preferred Stock Consideration or the Debentures) issued in accordance with the terms of this Agreement and the Share Holding Agreement. Each of Harris and Concurrent shall indemnify the other in connection with the S-3 Registration Statements in accordance with the provisions set forth in the Share Holding Agreement. Each of Harris and Concurrent shall also cause the shares of common stock issued by it to the other party to be approved for inclusion on the NASDAQ/NMS on the effective date of the applicable Registration Statement, subject to official notice of issuance. Section 6.5 Occurrence of Closing Prior to or Following the Reference Date. In the event the Closing occurs prior to the Reference Date, Concurrent shall operate the Business only in the ordinary course consistent with past practice between the Closing and the Reference Date. In the event the Closing occurs after the Reference Date, without limiting the provisions of Section 6.6 below, Harris shall provide to Concurrent on a weekly basis information with respect to the status of the net current assets, except inventory and current liabilities which will be provided on a monthly basis. Section 6.6 Access to Information. Upon reasonable notice, Harris and Concurrent shall each (and shall cause each of their respective Subsidiaries to) afford to the officers, employees, accountants, counsel and other representatives of the other, access, during normal business hours during the period prior to the Closing Date, to all its properties, facilities, books, contracts, commitments and records and other information and, during such period, each of Harris and Concurrent shall (and shall cause each of their respective Subsidiaries to) (a) furnish promptly to the other a copy of each report, schedule, registration statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws, (b) furnish promptly to the other all other information concerning the Business, properties and personnel as such other party may reasonably request, (c) make available to the other all its environmental sampling, assessment, remediation reports, studies and any other document and all its permits, licenses, approvals and other governmental authorizations referenced in Schedules to Section 4.20 or Section 5.20 of this Agreement, and (d) afford access to the other to all its employees and outside environmental consultants who have conducted or assisted in preparing environmental sampling, assessment or remediation studies. Neither party nor any of their respective Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of customers, jeopardize the attorney-client privilege of the institution in possession or control of such information or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. Unless otherwise required by law, the parties will hold any such information which is nonpublic in confidence in accordance with the terms of Section 1 of that certain letter agreement, dated September 28, 1995, between Concurrent and Harris (the "Confidentiality Agreement"), and in the event of termination of this Agreement for any reason each party shall promptly return all nonpublic documents obtained from any other party, and any copies made of such documents, to such other party in the manner contemplated by the Confidentiality Agreement. Section 6.7 Stockholders Meetings. Harris and Concurrent each shall call a meeting of its stockholders for the purpose of voting, in the case of Harris, upon (a) the sale of the Business (including the Assets and the Transferred Subsidiaries) and (b) an amendment to the Harris Stock Plan to increase the number of shares of Harris Common Stock reserved and available for distribution under the Harris Stock Plan in accordance with Section 4.11, and, in the case of Concurrent, upon (x) the issuance of shares of Concurrent Common Stock pursuant to this Agreement and (y) an amendment to the Concurrent Stock Plan to increase the number of shares of Concurrent Common Stock reserved and available for distribution under the Concurrent Stock Plan in accordance with Section 5.12. Harris and Concurrent will, through their respective Boards of Directors, recommend to their respective stockholders approval of such matters and will coordinate and cooperate with respect to the timing of such Stockholders Meetings and shall use their Best Efforts to hold such Stockholders Meetings on the same day and as soon as practicable after the date hereof; provided, however, that nothing contained in this Section 6.7 shall require the Board of Directors of Harris or Concurrent to take any action or refrain from taking any action in violation of its fiduciary duties. In addition, Concurrent may seek approval from its shareholders at the Concurrent Stockholders Meeting, if required by applicable law or the rules and regulations of NASDAQ; for a reverse stock split at or following the Closing Date; provided, however, that the transactions contemplated by this Agreement shall not be conditioned on approval of any such reverse stock split proposal. Section 6.8 No Solicitation. (a) Except as provided in Section 6.8(b), Schedule 6.1 or otherwise agreed to by the parties hereto, until the termination of this Agreement pursuant to Article IX, Harris and Concurrent will not, nor will either of them permit its officers, directors, affiliates, representatives or agents, directly or indirectly, to do any of the following: (i) discuss, negotiate, undertake, authorize, recommend, propose or enter into, either as the proposed surviving, merged, acquiring or acquired corporation, any transaction (other than the transactions contemplated by this Agreement and the Ancillary Agreements) involving any disposition or other change of ownership of a substantial portion of (x) Harris's or Concurrent's or their respective Subsidiaries' capital stock or assets or (y) the Business (an "Acquisition Transaction"); (ii) facilitate, encourage, solicit or initiate or in any way engage in any discussion, negotiation or submission of a proposal or offer in respect of an Acquisition Transaction; (iii) furnish or cause to be furnished to any corporation, partnership, individual or other entity or group (other than the other party and its representatives) (a "Person") any information concerning the business, operations, properties or assets of Harris or Concurrent in connection with an Acquisition Transaction; or (iv) otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to do or seek any of the foregoing. Harris and Concurrent will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person conducted heretofore with regard to an Acquisition Transaction and will take the necessary steps to inform such Persons of the obligations undertaken in this Section 6.8. Each party will inform the other party by telephone within 24 hours of its receipt of any proposal or bid (including the terms thereof and the Person making such proposal or bid) in respect of any Acquisition Transaction. (b) Notwithstanding anything else contained in this Section 6.8, either party may engage in discussions or negotiations with, and may furnish information to, a third party who, or representatives of a third party who, makes a written, bona fide proposal with respect to an Acquisition Transaction that is reasonably capable of being consummated and, as determined in good faith by its Board of Directors after consultation with its financial advisors, is more favorable to such party's stockholders than the transactions contemplated hereby, provided that the Board of Directors of such party shall have determined in good faith on the basis of the advice of outside counsel that failure to take such action creates a substantial risk that the Board of Directors would fail to comply with its fiduciary duties under applicable law. Nothing in this Section 6.8 shall (i) permit any party to terminate this Agreement (except as specifically provided in Article IX hereof), (ii) permit any party to enter into any agreement with respect to an Acquisition Transaction during the term of this Agreement (it being agreed that during the term of this Agreement, no party shall enter into any agreement with any person that provides for, or in any way facilitates, an Acquisition Transaction (other than a confidentiality agreement in customary form)), or (iii) affect any other obligation of any party under this Agreement. Section 6.9 Brokers or Finders. Each of Concurrent and Harris agree to indemnify and hold the other harmless from and against any claims with respect to any fees, commissions or expenses asserted by any person on the basis of any act or statement alleged to have been made by such party or its Subsidiary or affiliate. Section 6.10 Rights Plan. Harris shall not redeem the Harris Rights, or amend or terminate the Harris Rights Agreement prior to the Closing Date unless required to do so by order of a court of competent jurisdiction. Concurrent shall not redeem Concurrent Rights or amend (other than in accordance with Section 5.10) or terminate Concurrent Rights Agreements unless required to do so by order of a court of competent jurisdiction. Section 6.11 Publicity. The initial press release relating to this Agreement shall be a joint press release and thereafter Harris and Concurrent shall, subject to their respective legal obligations (including requirements of stock exchanges and other similar regulatory bodies), consult with each other, and use reasonable efforts to agree upon the text of any press release, before issuing any such press release or otherwise making public statements with respect to the transactions contemplated hereby and in making any filings with any federal or state governmental or regulatory agency or with any national securities exchange with respect thereto. With respect to all other press releases during the term of this Agreement, the parties hereto shall use reasonable efforts to consult with each other prior to issuing such press releases. Section 6.12 Notification of Certain Matters. Harris shall give prompt notice to Concurrent, and Concurrent shall give prompt notice to Harris, of (a) the occurrence, or non-occurrence, of any event the occurrence, or non-occurrence, of which would be likely to cause (i) any representation or warranty contained in this Agreement to be untrue or inaccurate or (ii) any covenant, condition or agreement contained in this Agreement not to be complied with or satisfied and (b) any failure of Harris or Concurrent, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.12 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice. Section 6.13 Management and Corporate Gover- nance Matters. (a) Composition of Concurrent's Board of Directors. The Board of Directors of Concurrent shall take action to cause the number of directors comprising the full board of directors of Concurrent to be nine persons, three of whom shall be designated by Harris prior to the Closing Date ("Original Harris Designees") and six of whom shall be designees of Concurrent. If any Original Harris Designee shall decline or be unable to serve, Harris shall designate a person to serve in such person's stead (the Original Harris Designees together with any alternate or alternates selected in accordance with this sentence are herein referred to as the "Harris Designees"). From and after the Closing Date until at least September 30, 1997, unless a majority of Harris Designees then serving as Concurrent directors shall consent to a waiver of this Section 6.13(a), Concurrent shall maintain a Board of Directors consisting of no more than nine directors, three of whom shall be Harris Designees. (b) Composition of Harris' Board of Directors. The Board of Directors of Harris shall take action to cause the number of directors comprising the full board of directors of Harris to be not more than seven persons, one of whom shall be designated by Concurrent prior to the Closing Date ("Original Concurrent Designee") and six of whom shall be designees of Harris. If the Original Concurrent Designee shall decline or be unable to serve, Concurrent shall designate a person to serve in such person's stead (the Original Concurrent Designee together with any alternate selected in accordance with this sentence are herein referred to as the "Concurrent Designees"). From and after the Closing Date until at least September 30, 1997, Harris shall maintain a Board of Directors consisting of no more than seven directors, one of whom shall be a Concurrent Designee. (c) Chief Executive Officers of Harris. Harris shall use its Best Efforts to cause E. Courtney Siegel to resign as a director, President and Chief Executive Officer of Harris effective as of the Closing. Harris will keep Concurrent reasonably informed of the status of the search for a new chief executive officer of Harris and will use Best Efforts to find and disclose, if found prior to the mailing of the Proxy Statement or if required by applicable law, the identity of such chief executive officer in the Proxy Statement. (d) Designation of Concurrent Officers. Con- current shall cause the election or appointment, effec- tive as of the Closing Date, of E. Courtney Siegel as the President and Chief Executive Officer of Concurrent and John T. Stihl as the Chairman of the Board of Directors of Concurrent. Mr. Siegel shall be an Original Harris Designee. (e) Increase in Shares Available under Concurrent Stock Plan. Concurrent shall use its Best Efforts to cause the number of shares of Concurrent Common Stock authorized for issuance under the Concurrent Stock Plan to be increased to 8,000,000 such shares (of which approximately 5,000,000 will be available for grant thereunder), including the inclusion of such increase in the matters submitted for a vote of shareholders in the Proxy Statement. (f) Increase in Shares Available under Harris Stock Plan. Harris shall use its Best Efforts to cause the number of shares of Harris Common Stock authorized for issuance under the Harris Stock Plan to be 675,000 such shares (of which approximately 350,000 will be available for grant thereunder), including the inclusion of such increase in the matters submitted for a vote of shareholders in the Proxy Statement. (g) Amendment of Concurrent By-laws. At or prior to the Closing Date Concurrent shall amend its Bylaws to provide that the President of Concurrent shall be the exclusive chief executive officer of Concurrent, reporting directly to Concurrent's Board of Directors. Section 6.14 Employment Agreements. Concurrent shall cause the amendment to the employment agreement with John T. Stihl, the material terms of which are set forth on Schedule 6.14 hereto, to become effective upon Closing. Prior to or simultaneously with the execution hereof, Concurrent entered into an employment agreement with E. Courtney Siegel, a copy of which is attached hereto as Exhibit D. Section 6.15 Expenses. Whether or not the transactions contemplated by this Agreement are consummated but subject to the provisions of Article IX hereto, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby, shall be paid by the party incurring such costs and expenses except as expressly provided herein. Notwithstanding the above, (i) the filing fee in connection with the HSR Act filing, the filing fee in connection with the filing of the Proxy Statement with the SEC, the fees and expenses incurred in connection with the preparation of the Audited Balance Sheet and the Net Current Asset Reconciliation, Transfer Taxes (as defined in Section 6.24(b)) with respect to Assets other than the stock of Transferred Subsidiaries, and the expenses incurred in connection with printing and mailing the Proxy Statement, shall be shared equally by Harris and Concurrent and (ii) Transfer Taxes with respect to the transfer of the stock of Trans ferred Subsidiaries shall be borne entirely by Concurrent. Section 6.16 IRS Determination Letter. Prior to the Closing Date, Concurrent shall deliver to Harris a copy of the most recent determination letter received from the Internal Revenue Service with respect to each Concurrent Plan intended to qualify under Section 401 of the Code. Section 6.17 Insurance. Harris shall and shall cause its Subsidiaries to use their Best Efforts to maintain the insurance policies referred to in Section 4.18 in full force and effect through the Closing Date. Concurrent shall use its Best Efforts to maintain the insurance policies referred to in Section 5.18 in full force and effect through the Closing Date. Section 6.18 Supplemental Disclosure. (a) Prior to the Closing, Harris shall have a continuing obligation to notify Concurrent, and Concurrent shall have a continuing obligation to notify Harris, of events, circumstances or discoveries which would be likely to result in any of the representations and warranties in Article IV or Article V hereof, respectively, being inaccurate or incomplete in any respect and supplement or amend the Schedules with respect to any matter hereafter arising or discovered which, if existing or known at the date of this Agreement, would have been required to be set forth or described in the Disclosure Schedules. Any amendments or supplements to the Disclosure Schedules after the date hereof and prior to the Closing Date shall be referred to herein as "Supplemental Disclosure." (b) In the event of a Supplemental Disclosure occurring within five (5) business days prior to a date on which a scheduled Closing would otherwise occur, the party to which such Supplemental Disclosure is delivered shall have the right to delay the Closing for up to five (5) business days from the date such party receives such Supplemental Disclosure. (c) The Supplemental Disclosure will not be deemed to have cured any breach of any representation or warranty made in this Agreement as of the date hereof for purposes of determining whether or not the conditions set forth in Article VIII have been satisfied or for purposes of the indemnification obligations set forth in Article X hereof. Section 6.19 Further Assurances; Subsequent Transfers. (a) The parties hereto shall execute and deliver such further instruments of conveyance, transfer, assignment and other similar documents and shall take such other actions as each of them may reasonably request of the other in order to effectuate the purposes of this Agreement and to carry out the terms hereof. Without limiting the generality of the foregoing, at any time and from time to time after the Closing Date, (i) at the request of Concurrent, Harris shall execute and deliver to Concurrent such other instruments of transfer, conveyance, assignment and confirmation and take such action as Concurrent may reasonably deem necessary or desirable in order to more effectively transfer, convey and assign to Concurrent and to confirm Concurrent's title to all of the Assets, to put Concurrent in actual possession and operating control thereof and to permit Concurrent to exercise all rights with respect thereto (including, without limitation, rights under contracts and other arrangements as to which the consent of any third party to the transfer thereof shall not have previously been obtained), (ii) at the request of Harris, Concurrent shall execute and deliver to Harris all instruments, undertakings or other documents and take such other action as Harris may reasonably deem necessary or desirable in order to have Concurrent fully assume and be liable for the Assumed Liabilities and shall deliver to Harris any of the Excluded Assets inadvertently left in the control or possession of Concurrent, and (iii) at the request of Concurrent, Harris shall execute and deliver to the appropriate Transferred Subsidiaries all instruments, undertakings or other documents and take such other action as Concurrent may reasonably deem necessary or desirable in order to have Harris fully assume the Excluded Liabilities as they relate to the Transferred Subsidiaries. Notwithstanding the foregoing, the parties shall not be obligated, in connection with the foregoing, to expend monies other than reasonable out-of-pocket expenses and attorneys' fees. (b) Harris shall use its Best Efforts to obtain any consent, approval or amendment required to novate and/or assign all agreements, Leases, licenses and other rights of any nature whatsoever relating to the transfer of the Assets to Concurrent. In the event and to the extent that Harris is unable to obtain any such required consent, approval, amendment or modification (except with respect to any Lease, agreement or license set forth in Schedule 8.2(d) hereof) (i) Harris shall continue to be bound by such agreements, leases, licenses or other matters, (ii) unless not permitted by law, Concurrent shall pay, perform and discharge fully all the obligations of Harris thereunder and indemnify Harris for all liabilities arising out of such performance by Concurrent (but only to the extent that (x) such liabilities are Assumed Liabilities and (y) in the case of a Lease, upon such payment or performance, Concurrent shall be entitled to use and occupancy of the premises covered by such lease) and (z) so long as Concurrent has paid, performed and discharged the obligations of Harris, Harris shall, without further consideration therefor, pay and remit to Concurrent promptly all monies, rights and other considerations received in respect of such performance. Harris shall exercise or exploit its rights and options under all such agreements, leases, licenses and other rights and commitments (other than in connection with the Leases referred to in Schedule 8.2(d) hereof) referred to in this Section 6.19(b) only as reasonably directed by Concurrent. If and when any such consent shall be obtained or such agreement, lease, license or other right (other than in connection with the Leases referred to in Schedule 8.2(d) hereof) shall otherwise become assignable or able to be novated, Harris shall promptly assign and novate all its rights and obligations thereunder to Concurrent without payment of further consideration and Concurrent shall, without the payment of any further consideration therefor, assume such rights and obligations. Section 6.20 Risk of Loss. (a) Leasehold Properties: (i) In the event that during the period between the date hereof and the Closing, all or any portion of the Leased Property included in the Assets (a "Property") is damaged by fire or other casualty, Harris shall promptly give notice thereof to Concurrent. If such damage materially affects the ability of Concurrent at Closing to conduct the Business as contemplated herein, Concurrent shall have the right to terminate this Agreement. In the event of such termination, all parties shall be released from all liability hereunder. (ii) If as a result of such casualty, the Property is partially damaged or rendered partially unusable for the purposes for which such Property is used by Harris on the date hereof, but such damage does not materially affect Concurrent's ability to conduct the Business at Closing as conducted on the date hereof, then Harris shall convey such Property to Concurrent at Closing in its damaged condition upon and subject to all of the other terms and conditions of this Agreement, and Harris shall assign to Concurrent all of Harris's right, title and interest in and to any claims Harris may have under its insurance policies, and/or any causes of action with respect to such damage or destruction, and shall assign to Concurrent all insurance proceeds awarded to Harris under such policies with respect to the damage to the Property. Notwithstanding the foregoing, in the event that the damaged Property was not covered by insurance or the insurance proceeds received by Concurrent pursuant to the preceding sentence are insufficient to restore the Property to its condition prior to such casualty ("Concurrent Casualty Deficiency"), then (x) if a Concurrent Casualty Deficiency is discovered prior to the determination of the Preferred Stock Consideration pursuant to Section 2.3, the liquidation value and stated value of the Preferred Stock Consideration shall be reduced by an amount equal to the additional cost (the "Concurrent Additional Cost"), as estimated by an engineer or architect, selected by Harris and reasonably acceptable to Concurrent, required to repair such damage and restore the Property to its condition immediately prior to the casualty or (y) if a Concurrent Casualty Deficiency is discovered subsequent to the determination of the Preferred Stock Consideration pursuant to Section 2.3, Harris shall, within five days of the determination of the Concurrent Additional Cost, pay such cost to Concurrent in cash or other immediately available funds. (iii) In the event such Property is totally destroyed or rendered wholly unusable for the purposes for which it was used by Harris prior to the casualty but such damage does not materially affect Concurrent's ability to conduct the Business at Closing as conducted on the date hereof, then such Property shall be excluded from Assets, and the parties shall proceed to the Closing with respect to the remaining Assets upon and subject to all of the other terms and conditions of this Agreement, except that the liquidation preference Preferred Stock Consideration hereunder shall be reduced in an amount equal to the Fair Market Value (as defined in Section 6.20(b)) of such Property prior to such casualty. (b) Fair Market Value: Fair Market Value of the Leased Properties shall mean the fair market value of the interest on such Property contemplated to be transferred by this Agreement, as if such Property were available in the then leasing market, for comparable property, as determined by an independent real estate appraiser selected by Harris (in the case of the Leased Properties) (the "First Appraiser"), which appraisal shall be made within thirty (30) days after the occurrence of the casualty. If Concurrent (in the event of a total destruction of the Leased properties), disputes the determination of the First Appraiser, which dispute must be raised within twenty (20) days after receipt by Concurrent of the First Appraiser's determination, Concurrent shall appoint its own independent real estate appraiser (the "Second Appraiser"). If within thirty (30) days after Concurrent disputes the determination of the First Appraiser, the First Appraiser and Second Appraiser shall mutually agree upon the determination of the Fair Market Value of the property in question, their determination shall be final and binding upon the parties. If the First Appraiser and Second Appraiser are unable to reach a mutual determination within said thirty (30) day period, both such Appraisers shall jointly select a third real estate appraiser (the "Third Appraiser"), whose fee shall be borne equally by Harris and Concurrent, and who shall, within thirty (30) days of his selection, choose either the First or Second Appraiser's determination; such choice by the Third Appraiser shall be conclusive and binding upon the parties hereto. Section 6.21 Compliance with Applicable Bulk Sales Laws. Without admitting the applicability of the bulk transfer laws of any jurisdiction, Harris and Concurrent have agreed to waive the compliance with the requirements of any applicable laws relating to bulk sales. Harris shall defend, indemnify and hold Concurrent harmless from and against any Losses incurred as a result of Harris's noncompliance with any applicable bulk transfer laws. Section 6.22 Audited Financial Statements; Statutory Financial Statements. Prior to the Closing, Harris shall have delivered to Concurrent the Audited Balance Sheet and the statutory financial statements of the Transferred Subsidiaries for the periods ended September 30, 1995 and September 30, 1994. Section 6.23 Tax Matters. For purposes of Section 1.3, Taxes of Harris accruing prior to Closing shall mean any Taxes of the Business attributable to any Tax period (or portion thereof) of Harris, or any of its Subsidiaries ending on or before the close of business on the Closing Date, and, in the case of any Taxes that are imposed on a periodic basis or are payable for a taxable period that includes (but does not end on) the Closing Date, the portion of such Taxes related to the portion of such taxable period ending on the Closing Date shall (i) in the case of any Taxes other than Taxes based upon or related to income, be deemed to be determined on a per diem basis, and (ii) in the case of any Taxes based upon or related to income, be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date. Any credits relating to a taxable period that begins before and ends after the Closing Date shall be taken into account as though the relevant taxable period ended on the Closing Date. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with the prior practice of Harris, the Transferred Subsidiaries and their subsidiaries. (a) Without the prior written consent of Concurrent, if a Material Adverse Effect on the liability for Taxes of the Transferred Subsidiaries will result therefrom, none of the Transferred Subsidiaries nor their subsidiaries shall make or change any election, change an annual accounting period, adopt or change any accounting method, file any amended Tax return or report, enter into any closing agreement, settle any Tax claim or assessment relating to any of the Transferred Subsidiaries or their subsidiaries, surrender any right to claim a refund of Taxes, or consent to any extension or waiver of the limitations period applicable to any Tax claim or assessment relating to any of the Transferred Subsidiaries or their subsidiaries. (b) "Transfer Taxes" shall be borne by Harris and Concurrent as provided in Section 6.15. Transfer Taxes include all sales, use, transfer, recording, ad valorem, bulk sales and other similar taxes and fees, arising out of or in connection with the transactions contemplated by this Agreement. The party which has primary responsibility for the payment of any particular Transfer Tax shall prepare and file the relevant Tax Return, pay the Transfer Taxes shown on such Return, and notify the other party in writing of the Transfer Taxes shown on such Tax return and how such Transfer Taxes were calculated; the other party shall, within 5 days of the receipt of such notice, pay to the first party its share of such Transfer Taxes. Section 6.24 HSR Approval. If the lowest closing bid price of Concurrent Common Stock is greater than $1.50 per share on the date that the Proxy Statement is mailed to shareholders of Concurrent and Harris, each of the parties hereto agrees to use its Best Efforts to take, or cause to be taken, and to do, or cause to be done, all things necessary to promptly prepare and file the pre-merger notification report form and to seek early termination or expiration of the waiting period under the HSR Act. ARTICLE VII EMPLOYMENT AND EMPLOYEE BENEFIT PLANS Section 7.1 Existing Employee Benefit Plans of Harris. Notwithstanding any other provisions contained herein, none of Harris's obligations under any of its employee benefit plans, including the Harris Stock Plan, shall be assumed by Concurrent. Contributions shall be made to and benefits shall be provided under the Harris Plans as follows: (a) With respect to the Harris Computer Sys- tems Corporation Savings Plan (the "Harris 401(k) Plan"), (i) Harris shall, in accordance with Section 3.9(a) of the Harris 401(k) Plan, remit to the Trustee of the Harris 401(k) Plan all pre-tax contributions and after-tax contributions authorized by the employees listed in Schedule 7.1 (Harris employees who will be employed by Concurrent following Closing) ("Business Employees") and collected by Harris prior to 12:01 a.m. of the morning of the Closing Date (hereinafter in this Article VII, the "Employment Effective Time"); (ii) Harris shall, in accordance with Section 3.9(a) of the Harris 401(k) Plan, remit to the Trustee of the Harris 401(k) Plan the Matching Employer Contribution to which the Business Employees are entitled for the 1995 Plan Year; (iii) In applying Section 12.4 of the Harris 401(k) Plan, Harris shall deem a partial termination to have occurred with respect to the Business Employees as of the Employment Effective Time. As a result of said partial termination, each Business Employee shall be fully vested and have a nonforfeitable interest in that portion of such Business Employee's account attributable to Matching Employer Contributions as of the Employment Effective Time without regard to the number of years of service such Business Employee has completed for Harris. (iv) Harris shall distribute the Harris 401(k) Plan account balances of the Business Employees according to either (A) or (B) below, whichever is applicable: (A) If the sale of the Assets described in Article I constitutes a sale of substantially all the assets of a trade or business, within the meaning of Section 401(k)(10)(A)(ii) of the Code, Harris shall notify each Business Employee of his rights with respect to the distribution of his Harris 401(k) Plan account balance and shall make distribution of such account balances in accordance with the terms of the Harris 401(k) Plan, ERISA and the Code. (B) If the sale of the Assets described in Article I does not constitute a sale of substantially all the assets of a trade or business, within the meaning of Section 401(k)(10)(A)(ii) of the Code, Harris shall not distribute the Harris 401(k) Plan account balance of any Business Employee who becomes an employee of Concurrent ("Hired Business Employee") to such Hired Business Employee until the termination of his employment with Concurrent. Concurrent shall notify Harris of the termination of the employment of any Hired Business Employee no later than five days following the date on which such Hired Business Employee's employment with Concurrent terminates. (b) With respect to the Harris Computer Systems Corporation Medical/Dental Plan, the Harris Computer Systems Corporation Long Term Disability Plan, the Harris Computer Systems Corporation Life, AD&D, and Business Travel Accident Plan, the Harris Computer Systems Corporation Short Term Disability Plan, the Harris Computer Systems Corporation Cafeteria Plan, the Harris Computer Systems Corporation Medical Reimbursement Plan, and the Harris Computer Systems Corporation Dependent Care Plan (collectively, the "Welfare and Fringe Benefit Plans"), (i) Harris shall make, as soon as administratively practicable following the Closing, all contributions and shall pay all insurance premiums necessary to provide the benefits to which the Business Employees are entitled, under the terms of the Welfare and Fringe Benefit Plans; (ii) Harris shall be responsible for the payment of all expenses and claims incurred prior to 12:01 a.m. of the morning of the Closing Date under the Welfare and Fringe Benefits Plans, and shall use Best Efforts to make arrangements with Welfare and Fringe Benefits providers for a runoff period in which claims incurred prior to but submitted after 12:01 a.m. of the morning of the Closing Date will be honored for payment by Harris; and (iii) Harris shall be responsible for compliance with the requirements of Section 4980B of the Code and Part 6 of Title I of ERISA for its employees employed in the Business and their "qualified beneficiaries" whose "qualifying event" (as such terms are defined in Section 4980B of the Code) occurs prior to the Employment Effective Time. Section 7.2 Employment of Employees Employed in Business. (a) Effective the Employment Effective Time, Concurrent shall offer employment to each Business Employee at the same annual salary or hourly compensation and on other terms not materially less favorable to the Business Employees than those in effect as of the date of this Agreement. (b) Harris shall transfer to Concurrent any records (including, but not limited to, Forms W-4 and Employee Withholding Allowance Certificates) relating to withholding and payment of income and employment taxes (federal, state and local) and FICA taxes with respect to wages paid by Harris during the 1996 calendar year to any employees retained by Concurrent. Concurrent shall, to the extent permitted by applicable law, provide such employees with Forms W-2, Wage and Tax Statements for the 1996 calendar year setting forth the wages and taxes withheld with respect to such employees for the 1996 calendar year by Harris and Concurrent as predecessor and successor employers, respectively. Harris and Concurrent shall also comply with the filing requirements set forth in Revenue Procedure 84-77, 1984-2 C.B. 753, to implement this Section 7.2(b). Section 7.3 Employee Benefit Plans of Concurrent. Concurrent agrees to use Best Efforts to amend the existing Concurrent Plans and to establish new employee benefit plans, programs, policies or arrangements to accomplish the following effective at Closing: (a) Amend its Code section 401(k) retirement plan ("Concurrent 401(k) Plan") to provide (i) coverage for each Hired Business Em- ployee on the same basis as provided for each current participant in the Concurrent 401(k) Plan as of the date of this Agreement; (ii) credit for each Hired Business Employee's prior years of service with Harris for purposes of eligibility and vesting; (iii) a contribution by Concurrent for each plan year equal to 100% of each Hired Business Employee's elective deferral contributions up to 6% of such Hired Business Employee's compensation for the plan year ("Concurrent Matching Contribution"), with 2% of the Concurrent Matching Contribution made in the form of cash and 4% of the Concurrent Matching Contribution made in the form of Concurrent stock; (iv) acceptance of direct rollovers and elective transfers of the cash and non-cash assets of the Harris 401(k) Plan accounts of Hired Business Employees, including promissory notes related to outstanding participant loans received by Hired Business Employees from the Harris 401(k) Plan; and (v) the repayment of outstanding participant loans received from the Harris 401(k) Plan by the Hired Business Employees who elect a direct rollover to the Concurrent 401(k) Plan promissory notes related to such outstanding participant loans. (b) in accordance with Section 6.13(e) hereof, Concurrent shall use its Best Efforts to cause the number of shares of Concurrent Common Stock authorized for issuance under the Concurrent Stock Plan to be increased to 8,000,000 (of which approximately 5,000,000 shall be available for grant). (c) implement a long term incentive program for executive officers comprised of the vesting of stock option grants contingent upon identified Company performance objectives for the three (3) fiscal years following the purchase of the Assets and the Purchased Harris Shares pursuant to the terms hereof. (d) implement a management bonus program for executive officers of the Company pursuant to which they will have the opportunity to receive cash bonuses ("Target Bonuses") upon achievement of both individual goals established for such persons ("Individual Target Goals") and corporate financial goals established based upon the business plan ("Corporate Target Goals"), and up to 150% of such Target bonuses upon achievement of goals in excess of such persons Target Individuals Goals and Target Corporate Goals. The Individual Target Goals, Corporate Target Goals, the levels of performance required to result in payments thereunder and all other matters relating to the bonus program shall be determined by the Board of Directors of Concurrent (or a committee thereof). (e) review the appropriateness of providing a nonqualified deferred compensation arrangement or Supplemental Employer Retirement Plan ("SERP") for the benefit of allowing the employee directed deferral and Company match on contributions under the Concurrent 401(k) Plan otherwise limited by the Code, including sections 401(a)(4), 401(a)(17), 401(k) and 402(g). ARTICLE VIII CONDITIONS Section 8.1 Conditions to Each Party's Obligation To Perform this Agreement. The respective obligations of the parties to perform this Agreement and the transactions contemplated hereby shall be subject to the satisfaction or waiver, on or prior to the Closing Date, of the following conditions: (a) Stockholder Approval. This Agreement and the transactions contemplated hereby shall have been approved and adopted by the affirmative vote of a majority of all the votes entitled to be cast with respect to the holders of Harris Common Stock and the issuance of shares of Concurrent Common Stock pursuant to this Agreement shall have been approved by the affirmative vote of a majority of the total votes cast with respect to the stockholders of Concurrent. The Concurrent Stock Plan Amendment shall have been approved by the affirmative vote of a majority of the voting shares of Concurrent Common Stock in a separate vote. The Harris Stock Plan Amendment shall have been approved by the affirmative vote of a majority of the voting shares of Harris Common Stock in a separate vote. (b) Other Approvals. All authorizations, notices, consents, orders or approvals of, or declarations or filings with, or expirations of waiting periods imposed by, any Governmental Entity, the failure to obtain or make which would have a Material Adverse Effect on (i) Concurrent and its Subsidiaries, (ii) Harris and its Subsidiaries, in each case taken as a whole, or (iii) the Business shall have been filed, occurred or been obtained. Concurrent and Harris each shall have received all state securities or blue sky permits and other authorizations necessary to issue Concurrent Common Stock pursuant to this Agreement. (c) No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the this Agreement and the transactions contemplated hereby shall be in effect (each party agreeing to use all reasonable efforts to have any such order reversed or injunction lifted). (d) No Action. No action, suit or proceeding by any Governmental Entity before any court or governmental or regulatory authority shall be pending against Harris, Concurrent or any of their Subsidiaries challenging the validity or legality of the transactions contemplated by this Agreement, other than actions, suits or proceedings which, in the reasonable opinion of counsel to the parties hereto, are unlikely to result in an adverse judgment having a Material Adverse Effect on either Concurrent, Harris or any of their respective Subsidiaries taken as a whole or the Business. (e) Tax Opinion. Harris and Concurrent shall have received an opinion of Holland & Knight, counsel to Harris, in form and substance reasonably satisfactory to Harris and Concurrent, dated a date within two days prior to the expected date of the Proxy Statement, substantially to the effect that none of the actions expressly contemplated by this Agreement shall result in or otherwise give rise to a breach of any covenant contained in the Tax Sharing Agreement or made in connection with the opinion rendered by Sullivan & Cromwell (as described in Section 1.12(a) of the Tax Sharing Agreement), in each case relating to the qualification of the Distribution as a distribution pursuant to Section 355 of the Code. In rendering such opinion, Holland & Knight may rely exclusively without an independent investigation upon representations contained in certificates of officers of Harris and others unless Holland & Knight has actual knowledge or reason to believe that such representations are false or inaccurate. (f) HSR Approval. Any applicable waiting period under the HSR Act shall have expired or been terminated. (g) Consents. The consents set forth in Schedule 8.1(g) shall have been obtained. (h) The Ancillary Agreements (each of which shall provide that it shall become effective simultaneously with the effectiveness of this Agreement) shall have been executed and delivered by the parties thereto. (i) Concurrent and Harris shall have reached mutual agreement with respect to the transfer of stock and assets of the Transferred Subsidiaries. Section 8.2 Conditions of Obligation of Concurrent. The obligation of Concurrent to perform this Agreement and the transactions contemplated hereby are subject to the satisfaction, on or prior to the Closing Date, of the following conditions unless waived by Concurrent: (a) Representations and Warranties. The representations and warranties of Harris set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date. Concurrent shall have received a certificate signed on behalf of Harris by the Chief Executive Officer and the Chief Financial Officer of Harris to the foregoing effect. (b) Performance of Obligations of Harris. Harris shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Concurrent shall have received a certificate signed on behalf of Harris by the Chief Executive Officer and the Chief Financial Officer of Harris to such effect. (c) Filings and Consents with Governmental Entities. Harris shall have made all filings or registrations with, and obtained all permits, authorizations, notices, consents and approvals from, Governmental Entities as may be required in connection with the transactions contemplated by this Agreement under the Exchange Act, the Securities Act, the HSR Act, the FBCA, any state securities or blue sky laws or other applicable laws, except for filings, registrations, permits, authorizations, notices, consents and approvals, the failure to obtain of which would not have a Material Adverse Effect on Harris, Concurrent and their Subsidiaries taken as a whole or the Business (after giving effect to the transactions contemplated hereby). (d) Consents Under Agreements. The parties to the contracts and agreements identified on Schedule 8.2(d) hereto shall consented to the assignment of such contracts and agreement to Concurrent. (e) Material Adverse Effect. From the date of this Agreement through the Closing Date, there shall not have occurred any change in the financial condition, business, operations or prospects of Harris and the Transferred Subsidiaries, taken as a whole, that would have or would be reasonably likely to have a Material Adverse Effect on either Harris and its Subsidiaries, taken as a whole, or the Business other than any such change that affects both Concurrent and Harris in a substantially similar manner. (f) Fairness Opinion. The fairness opinion letter from Berenson Minella & Company referred to in Section 5.9 shall not, in good faith, have been withdrawn by Berenson Minella & Company. (g) Approval of Schedules. Concurrent shall have approved all Schedules delivered by Harris pursuant to Article I hereof, the non-approval of which shall not be based on matters regarding amortization or reclassification for purposes of changes in depreciation or for other financial statement purposes and which approval may not be unreasonably withheld. (h) Effectiveness of Registration Statement/Inclusion of NASDAQ/NMS. A Registration Statement of Harris shall be effective under the Securities Act covering the Purchased Harris Shares to be received by Concurrent at the Closing and such Purchased Harris Shares shall have been approved for inclusion on the NASDAQ/NMS, subject to official notice of issuance. Section 8.3 Conditions of Obligation of Harris. The obligation of Harris to perform this Agreement and the transactions contemplated hereby is subject to the satisfaction of the following conditions, on or prior to the Closing Date, unless waived by Harris: (a) Representations and Warranties. The representations and warranties of Concurrent set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and (except to the extent such representations and warranties speak as of an earlier date) as of the Closing Date as though made on and as of the Closing Date. Harris shall have received a certificate signed on behalf of Concurrent by the Chief Executive Officer and the Chief Financial Officer of Concurrent to the foregoing effect. (b) Performance of Obligations of Concurrent. Concurrent shall have performed in all material respects all obligations required to be performed by it under this Agreement at or prior to the Closing Date, and Harris shall have received a certificate signed on behalf of Concurrent by the Chief Executive Officer and the Chief Financial Officer of Concurrent to such effect. (c) Filings and Consents with Governmental Entities. Concurrent shall have made all filings or registrations and obtained all permits, authorizations, notices, consents and approvals from, Governmental Entities as may be required in connection with the transactions contemplated by this Agreement under the Exchange Act, the Securities Act, the HSR Act, the FBCA, any state securities or blue sky laws or other applicable laws, except for filings, registrations, permits, authorizations, notices, consents and approvals, the failure to obtain of which would not have a Material Adverse Effect on Harris, Concurrent and their Subsidiaries taken as a whole (after giving effect to the transactions contemplated hereby). (d) Material Adverse Effect. From the date of this Agreement through the Closing Date, there shall not have occurred any change in the financial condition, business, operations or prospects of Concurrent and its Subsidiaries, taken as a whole, that would have or would be reasonably likely to have a Material Adverse Effect on Concurrent and its Subsidiaries, taken as a whole, other than any such change that affects both Concurrent and Harris in a substantially similar manner. (e) Effectiveness of Registration Statement/ Inclusion on NASDAQ/NMS. A Registration Statement of Concurrent shall be effective under the Securities Act covering the Concurrent Common Stock to be received by Harris at the Closing and the Concurrent Common Stock issuable upon conversion of the Concurrent Preferred Stock to be received by Harris at the Closing or the Debentures, and such Concurrent Common Stock shall have been approved for inclusion on the NASDAQ/NMS, subject to official notice of issuance. (f) Fairness Opinion. The fairness opinion letter from Bear, Stearns & Co. Inc. to Harris referred to in Section 4.9 shall not, in good faith, have been withdrawn by Bear, Stearns & Co. Inc. (g) New Jersey Advice. Harris shall have received from Concurrent (i) a written determination by the New Jersey Department of Environmental Protection of the nonapplicability of the New Jersey Industrial Site Recovery Act, as amended ("ISRA") to the transactions contemplated by this Agreement, or (ii) a written Negative Declaration (as defined in ISRA) from the New Jersey Department of Environmental Protection to the effect that no soil or groundwater assessment or remediation is required or (iii) written assurances to Harris that Concurrent has otherwise complied with ISRA in a manner which does not require a material financial commitment on behalf of Concurrent. ARTICLE IX TERMINATION AND AMENDMENT Section 9.1 Termination by Mutual Consent. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing Date, before or after the approval of this Agreement by the stockholders of Harris or Concurrent, by the mutual consent of Concurrent and Harris. Section 9.2 Termination by Either Concurrent or Harris. This Agreement may be terminated and the transactions contemplated hereby may be abandoned by action of the Board of Directors of either Harris or Concurrent if (a) the Closing contemplated by this Agreement shall not have been consummated by August 30, 1996 provided, in the case of a termination pursuant to this clause (a), that the terminating party shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the occurrence of the failure referred to in said clause, or (b) the approval of Harris's stockholders referred to in Section 4.11 shall not have been obtained at a Harris Stockholder Meeting duly convened therefor or at any adjournment thereof, or (c) the approval of Concurrent's stockholders referred to in Section 5.12 shall not have been obtained at a Concurrent Stockholder Meeting duly convened therefor or at any adjournment thereof, or (d) a United States federal or state court of competent jurisdiction or United States federal or state governmental, regulatory or administrative agency or commission shall have issued an order, decree or ruling or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and non-appealable; provided, that the party seeking to terminate this Agreement pursuant to this clause (d) shall have used all reasonable efforts to remove such injunction, order or decree. Section 9.3 Termination by Harris. This Agreement may be terminated at any time prior to the Closing Date, before or after the adoption and approval by the stockholders of Harris referred to in Section 4.11, by action of the Board of Directors of Harris, if (a) in the exercise of its good faith judgment as to its fiduciary duties to its stockholders imposed by law the Board of Directors of Harris determines that such termination is required by reason of an Acquisition Transaction proposal being made, (b) there has been a breach by Concurrent of any representation or warranty contained in this Agreement which would have or would be reasonably likely to have a Material Adverse Effect on Concurrent and its Subsidiaries taken as a whole, (c) there has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of Concurrent, which breach is not curable or, if curable, is not cured within 30 days after written notice of such breach is given by Harris to Concurrent or (d) Concurrent withdraws, amends, or modifies its favorable recommendation of this Agreement and the transactions contemplated hereby or promulgates any recommendation with respect to an Acquisition Transaction other than a recommendation to reject such Acquisition Transaction. Section 9.4 Termination by Concurrent. This Agreement may be terminated at any time prior to the Closing Date, before or after the approval by the stockholders of Concurrent referred to in Section 5.12, by action of the Board of Directors of Concurrent, if (a) in the exercise of its good faith judgment as to its fiduciary duties to its stockholders imposed by law the Board of Directors of Concurrent determines that such termination is required by reason of an Acquisition Transaction proposal being made, (b) there has been a breach by Harris of any representation or warranty contained in this Agreement which would have or would be reasonably likely to have a Material Adverse Effect on either Harris and the Transferred Subsidiaries, taken as a whole or the Business, (c) there has been a material breach of any of the covenants or agreements set forth in this Agreement on the part of Harris, which breach is not curable or, if curable, is not cured within 30 days after written notice of such breach is given by Concurrent to Harris or (d) Harris withdraws, amends, or modifies its favorable recommendation of the transactions contemplated by this Agreement and the transactions contemplated hereby or promulgates any recommendation with respect to an Acquisition Transaction other than a recommendation to reject such Acquisition Transaction. Section 9.5 Effect of Termination. In the event of termination of this Agreement pursuant to this Article IX, all obligations of the parties hereto shall terminate, except the obligations of the parties pursuant to this Section 9.5 and Sections 6.6 and 6.9. Moreover, in the event of termination of this Agreement pursuant to Section 9.3 or 9.4, nothing herein shall prejudice the ability of the non-terminating party from seeking damages from any other party for any breach of this Agreement, attorneys' fees and the right to pursue any remedy at law or in equity; provided, however, that in the event non-terminating party has received the Termination Fee (as defined in Section 9.6(c)) from the terminating party, the non-terminating party shall not (a) assert or pursue in any manner, directly or indirectly, any claim or cause of action based in whole or in part upon alleged tortious or other interference with rights under this Agreement against any entity or person submitting a proposal for an Acquisition Transaction (b) assert or pursue in any manner, directly or indirectly, any claim or cause of action against the terminating party or any of its officers or directors based in whole or in part upon its or their receipt, consideration, recommendation, or approval of an Acquisition Transaction or the terminating party's exercise of its right of termination under Section 9.3(a) or 9.4(a), as appropriate, or assert any claim for any of the expenses referred to in Section 6.15 herein. Notwithstanding the foregoing, in the event the non-terminating party is required to file suit to seek such Termination Fee, and it ultimately succeeds on the merits, it shall be entitled to all expenses, including reasonable attorneys' fees, which it has incurred in enforcing its rights hereunder. Section 9.6 Termination Fee. (a) If (i) (x) this Agreement is terminated by either Concurrent or Harris in accordance with Section 9.2(b), (y) prior to the Harris Stockholder Meeting a proposal for a competing Acquisition Transaction involving Harris is publicly announced, and (z) any Acquisition Transaction involving Harris is consummated within 1 year of the date of termination of this Agreement or (ii) this Agreement is terminated by Harris in accordance with Section 9.3(a), Harris shall pay to Concurrent the Termination Fee. (b) If (i) (x) this Agreement is terminated by either Concurrent or Harris in accordance with Section 9.2(c), (y) prior to the Concurrent Stockholder Meeting a proposal for a competing Acquisition Transaction involving Concurrent is publicly announced, and (z) any Acquisition Transaction involving Concurrent is consummated within 1 year of the date of termination of this Agreement or (ii) this Agreement is terminated by Concurrent in accordance with Section 9.4(a), Concurrent shall pay to Harris the Termination Fee. (c) The Termination Fee shall be $1.75 million payable by wire transfer of immediately available funds within five business days of the date of the first to occur of clauses (i) or (ii) of either Section 9.6 (a) or (b), as appropriate, to such account as the receiving party shall specify to the paying party. ARTICLE X OBLIGATIONS OF PARTIES AFTER CLOSING DATE Section 10.1 Survival Periods. Except as otherwise provided herein, the representations and warranties of the parties contained in this Agreement or any certificate delivered in connection herewith shall not survive the Closing. The covenants and agreements of the parties hereto shall survive the Closing if and to the extent so provided in such covenant or agreement. Section 10.2 Indemnification. Subject to the other provisions of this Article X, from and after the Closing: (a) Harris shall indemnify and hold harmless Concurrent and its affiliates, and each of their affiliates' and their respective affiliates' directors, officers, employees, representatives and agents, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the "Representatives") from and against any costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, damages and amounts paid in settlement (collectively, "Damages") to the extent they are the result of (i) any breach of any representation or warranty made by or on behalf of Harris under this Agreement that is a result of fraud or intentional or wilful misrepresentation by Harris or (ii) the Excluded Liabilities. As to claims for Damages by Concurrent and its Representatives in respect of misrepresentations pursuant to clause (i) of this Section 10.2(a), such claims, to the extent practicable, shall be satisfied by reductions in the Liquidation Preference for the Outstanding Preferred Stock Consideration pursuant to the terms of the Certificate of Designation. (b) Concurrent shall indemnify and hold harmless Harris and its Representatives from and against any Damages to the extent they arise out of and are the result of (i) any breach of any representation or warranty made by or on behalf of Concurrent under this Agreement that is a result of fraud or intentional or wilful misconduct by Concurrent or (ii) the Assumed Liabilities. Concurrent and its Representatives, on the one hand, and Harris and its Representatives, on the other hand, as the case may be, are referred to herein as the "Indemnified Parties." (c) Neither Harris nor Concurrent, as the case may be, shall be obligated to indemnify a party pursuant to this Article X for any Damages pursuant to Sections 10.2(a)(i) and 10.2(b)(i) unless Harris or Concurrent, as the case may be, shall have received written notice of such Damages (i) in the case of a breach of a representation and warranty (other than the representations and warranties set forth in Sections 4.10 and 5.11, as the case may be), within 2 years from the Closing Date and (ii) in the case of the representations and warranties set forth in Sections 4.10 and 5.11, as the case may be, prior to the expiration of the applicable statute of limitations; provided, however, in the event that an Indemnified Party (x) receives notice of any matter which provides a reasonable basis for a claim to indemnification hereunder and within the applicable period provided in this Section 10.2(c) and (y) provides notice to the Indemnifying Party (as defined hereinafter) of the receipt of such notice, then such Indemnified Party shall be entitled to indemnification with respect to such claim until its final resolution, and provided, further, that there shall be no period of time within which notice of or a claim for indemnity must be provided by an Indemnified Party to an Indemnifying Party (as defined in Section 10.3(a)) with respect to those items set forth in Section 10.2(a)(ii) and 10.2(b)(ii) hereof. Section 10.3 Claims. (a) If an Indemnified Party intends to seek indemnification pursuant to this Article X, such Indemnified Party shall promptly notify Harris or Concurrent, as the case may be (the "Indemnifying Party"), in writing of such claim describing such claim in reasonable detail; provided, however, that the failure to provide such notice shall not affect the obligations of the Indemnifying Party unless it is actually prejudiced thereby, subject, however, to the time periods specified in Section 10.1 hereof. In the event that such claim involves a claim by a third party against the Indemnified Party, the Indemnifying Party shall have 30 days after receipt of such notice to decide whether it will undertake, conduct and control, through counsel of its own choosing and at its own expense, the settlement or defense thereof, and if it so decides, the Indemnified Party shall cooperate with it in connection therewith; provided, however, that the Indemnified Party may participate in such settlement or defense through counsel chosen by it; and provided, further, however, that the fees and expenses of such counsel shall be borne by the Indemnified Party. The decision by an Indemnifying Party to undertake the defense or settlement of such claim shall be conclusive evidence of its concurrence that any Indemnified Party involved in such claim is entitled to indemnification hereunder with respect to such claim. Notwithstanding anything in this Section 10.3(a) to the contrary, the Indemnifying Party may, without the consent of the Indemnified Party, settle or compromise any action or consent to the entry of any judgment which includes as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a duly executed written release of the Indemnified Party from all liability in respect of such action, which release shall be reasonably satisfactory in form and substance to counsel for the Indemnified Party; provided, however, that the Indemnifying Party shall not, without the written consent of the Indemnified Party, settle or compromise any action in any manner that, in the reasonable judgment of the Indemnified Party or its counsel, would materially and adversely affect the Indemnified Party, other than as a result of money damages or other money payments. If the Indemnifying Party does not notify the Indemnified Party within 30 days after the receipt of the Indemnified Party's notice of a claim of indemnity hereunder that it elects to undertake the defense thereof, the Indemnified Party shall have the right to contest, settle or compromise the claim but shall not thereby waive any right to indemnity therefor pursuant to this Agreement. So long as the Indemnifying Party is contesting any such claim in good faith, the Indemnified Party shall not pay or settle any such claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to pay or settle any such claim; provided, however, that so long as the Indemnifying Party is contesting such claim in good faith, any such settlement shall include as an uncondi- tional term thereof the delivery by the claimant or plaintiff to the Indemnifying Party of a duly executed written release of the Indemnifying Party from all liability in respect of such action; and provided, further, however, that in such event it shall waive any right to indemnity therefor by the Indemnifying Party; and provided, further, ][however, that the Indemnified Party shall provide the Indemnifying Party reasonable advance notice of any proposed settlement or payment and shall not pay or settle any claim if the Indemnifying Party shall reasonably object. (b) The Indemnified Party shall cooperate fully in all aspects of any investigation, defense, pretrial activities, trial, compromise, settlement or discharge of any claim in respect of which indemnity is sought pursuant to Article X, including, but not limited to, by providing the other party with reasonable access to employees and officers (including as witnesses) and other information. ARTICLE XI MISCELLANEOUS Section 11.1 Amendment. This Agreement may be amended by the parties hereto, by action taken or authorized by their respective Boards of Directors, at any time before or after approval of this Agreement and the transactions contemplated hereby by the stockholders of Harris or of Concurrent, but, after any such approval, no amendment shall be made which by law requires further approval by such stockholders without such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. Section 11.2 Extension; Waiver. At any time during the term of this Agreement or during the time any provision survives termination hereof or Closing as provided herein, the parties hereto, by action taken or authorized by the respective Boards of Directors, may to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (b) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (c) waive compliance with any of the agreements or conditions contained here. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party. Section 11.3 Notices. All consents, notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses or telephone numbers (or at such other address for a party as shall be speci- fied by like notice): (a) if to Concurrent, to Concurrent Computer Corporation 2 Crescent Place Oceanport, NJ 07757 Attention: Kevin Dell Telecopy: (908) 870-4779 with a copy, which copy shall not constitute notice, to Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, N.Y. 10022 Telecopy: (212) 735-3764 Attention: Eric L. Cochran and (b) if to Harris, to Harris Computer Systems Corporation 2101 W. Cypress Creek Road Ft. Lauderdale, FL 33309 Attention: Daniel Dunleavy Telecopy: (305) 973-5253 with a copy, which copy shall not constitute notice, to Holland & Knight One East Broward Blvd. P.O. Box 14070 Fort Lauderdale, FL 33302 Telecopy: (305) 463-2030 Attention: Brian Foremny Section 11.4 Interpretation. Any reference in this Agreement to an "Article", a "Section" or a "Schedule" without reference to a document is a reference to an Article or a Section hereof or a Schedule hereto. Notwithstanding any specific reference to a Schedule in this Agreement, all of the representations, warranties and covenants of the parties contained in this Agreement are qualified by the entire Disclosure Schedule. With respect to any discrepancy between this Agreement and the Ancillary Agreements, and other agreements and instruments delivered herewith, the provisions set forth in this Agreement shall control. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "hereof", "herein", and "hereunder" are used in this Agreement they shall refer to this Agreement as a whole unless the context otherwise requires. Whenever the words "include", "includes" or "including" are used in this Agreement they shall be deemed to be followed by the words "without limitation." The phrases "the date of this Agreement," "the date hereof" and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date first written above. The use of any gender herein shall be deemed to include the other gender. Section 11.5 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart. Section 11.6 Entire Agreement; No Third Party Beneficiaries. (a) This Agreement, including all Schedules hereto, together with the Ancillary Agreements referred to in Section 2.4 and the Confidentiality Agreement (a) constitute the entire agreement and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and thereof, and (b) except as expressly provided herein are not intended to confer upon any person other than the parties hereto and thereto any rights or remedies hereunder or thereunder. (b) Effective as of the date hereof, the Agreement and Plan of Merger and Reorganization, dated November 5, 1995, among Harris, Concurrent and Concurrent Acquisition Corporation, is hereby terminated by the mutual consent of Harris and Concurrent. Section 11.7 Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware applicable to contracts made, executed, delivered and performed wholly within the State of Delaware, without regard to any applicable conflicts of law. Section 11.8 Specific Performance. The parties hereto agree that if any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or equity. Section 11.9 Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties. This Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Section 11.10 Incorporation of Exhibits. The Disclosure Schedule, Concurrent Disclosure Schedule and all Exhibits attached hereto and referred to herein are hereby incorporated herein and made a part hereof for all purposes as if fully set forth herein. Section 11.11 Severability. Any term or pro- vision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. IN WITNESS WHEREOF, Concurrent and Harris have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above. CONCURRENT COMPUTER CORPORATION By: /s/ John T. Stihl John T. Stihl Chairman, President and Chief Executive Officer HARRIS COMPUTER SYSTEMS CORPORATION By: /s/ E. Courtney Siegel E. Courtney Siegel Chairman, President and Chief Executive Officer EX-99 3 EXHIBIT A - CERTIFICATE OF DESIGNATIONS DESIGNATION, PREFERENCES AND RIGHTS OF CLASS B CONVERTIBLE PREFERRED STOCK 1. DESIGNATION AND NUMBER OF SHARES. The designation of such series shall be 9.00% Class B Convertible Preferred Stock (the "Convertible Preferred Stock"), and the number of shares constituting such series initially shall be [1,000,000]. 2. PAR VALUE; PREEMPTIVE RIGHTS. As provided in Article Fourth of the Corporation's Restated Certificate of Incorporation, the Convertible Preferred Stock shall have a par value of $.01 per share. Holders of Convertible Preferred Stock shall not be entitled to any preemptive rights to acquire shares of any class or series of capital stock of the Corporation. 3. RANK. The Convertible Preferred Stock shall rank, with respect to rights to receive dividends and rights to receive distributions upon the liquidation, winding up or dissolution of the Corporation (whether voluntary or involuntary): (a) senior to the Corporation's Common Stock, par value $.01 per share (the "Common Stock"), and senior to any class or series of capital stock, including any preferred stock, issued by the Corporation, other than the Class A Preferred Stock (the "Junior Stock"), and (b) on a parity with the Class A Preferred Stock (the "Parity Stock"). 4. DIVIDENDS AND DISTRIBUTIONS; METHOD OF PAYMENT. (a) The holders of shares of Convertible Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for such purpose, dividends at the rate per annum of 9.00% of the Liquidation Preference (as defined in Section 8 hereof) of such shares. Such dividends shall be fully cumulative, shall accumulate from the date of original issuance of the Convertible Preferred Stock, and shall be payable quarterly in arrears in cash on each [ ], [ ], [ ] and [ ] , commencing ______, 1996 1 (provided, that if any such date is not a Business Day, then such dividend shall be payable without interest on the next succeeding Business Day), to holders of record as they appear on the stock books of the Corporation on such record dates as shall be fixed by the Board of Directors. Such record dates shall be not more than 60 nor less than 10 days preceding the respective dividend payment dates. The amount of dividends payable per share of Convertible Preferred Stock for each full quarterly dividend period shall be computed by dividing the annual dividend amount by four. The amount of dividends payable for the initial dividend period and for any other period shorter than a full quarterly dividend period shall be computed on the basis of a 360-day year of twelve 30-day months. Dividends on account of arrears for any past dividend periods may be declared and paid at any time, without reference to any regular dividend payment date, to holders of record of Convertible Preferred Stock on such date, not exceeding 45 days preceding the payment date thereof, as may be fixed in advance by the Board of Directors. Dividends shall not be paid or declared and set apart for payment on any Parity Stock for any period unless full cumulative dividends have been, or contemporaneously are, paid or declared and set apart for payment on the Convertible Preferred Stock for all dividend periods terminating on or prior to the date of payment of such full cumulative dividends. Dividends shall not be paid or declared and set apart for payment on the Convertible Preferred Stock for any period unless full cumulative dividends have been, or contemporaneously are, paid or declared and set apart for payment on any Parity Stock for all dividend periods terminating on or prior to the date of payment of such full cumulative dividends. When dividends are not paid in full upon the Convertible Preferred Stock and any Parity Stock, the Corporation may make dividend payments on account of arrears on the Convertible Preferred Stock or any such Parity Stock, provided that the Corporation shall make such payments ratably upon all outstanding shares of Convertible Preferred Stock and such Parity Stock in proportion to the respective amounts of dividends in arrears upon all such outstanding shares of Convertible Preferred Stock and Parity Stock to the date of such dividend payment. So long as any Convertible Preferred Stock shall be outstanding, the Corporation shall not declare or pay any dividends on the Common Stock or any other Junior Stock, or make any payment on account of, or set apart money for, a sinking fund or other similar fund or agreement for the purchase, redemption or other retirement of any shares of Junior Stock, or make any distribution in respect thereof, whether in cash or property or in obligations or stock of the Corporation, other than (A) the Rights (as defined in Section 13 hereof) and (B) a distribution consisting solely of Junior Stock (such dividends, payments, setting apart and distributions being herein called "Junior Stock Payments"), unless the following conditions shall be satisfied at the date of such declaration in the case of any such dividend, or the date of such setting apart in the case of any such fund, or the date of such payment or distribution in the case of any other Junior Stock Payment: (i) full cumulative dividends shall have been paid or declared and set apart for payment on all outstanding shares of Convertible Preferred Stock through the last quarterly dividend payment date established pursuant to this Section 4(a) that immediately precedes such dividend, setting apart, payment or distribution; and (ii) the Corporation shall not be in default or in arrears with respect to any redemption (whether optional or mandatory) of any shares of Convertible Preferred Stock. Holders of shares of Convertible Preferred Stock shall not be entitled to any dividend in excess of full cumulative dividends on such shares. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment that is in arrears. - -------- 1 Insert as the first payment date the first day of the first fiscal quarter following the Closing. (a) The Corporation may pay dividends pursuant to this Section 4 and any redemption payments pursuant to Sections 5 and 6 hereof to holders of record of Convertible Preferred Stock by checks payable to such holders in money of the United States. 5. REDEMPTION AT OPTION OF THE CORPORATION. Whenever the Current Market Price (as defined in Section 13) exceeds $3.75 (the "Triggering Price"), as such price may be adjusted pursuant to Section 9(e) hereof, prior to the date of any notice of redemption, the Corporation may, at its option, redeem all or a portion of the shares of Convertible Preferred Stock, at any time or from time to time, at a price per share equal to the Liquidation Preference. The Corporation's right to redeem pursuant to this provision is subject to the payment of all accrued and accumulated but unpaid dividends, whether or not declared, without interest, to the Redemption Date (as defined below) on the shares to be redeemed; and dividends on the shares to be redeemed will cease to accrue on the Redemption Date. Notice of any redemption pursuant to this Section 5 shall be given by the Corporation by first class mail, postage prepaid, not more than 30 days after the end of the period during which the applicable Current Market Price is determined and not less than 30 or more than 90 days prior to the date fixed for redemption (the "Redemption Date"), to each holder of record of the shares to be redeemed, at such holder's address as shown on the stock register of the Corporation. Each such notice shall state: (a) the Redemption Date; (b) the number of shares of Convertible Preferred Stock to be redeemed and, if less than all such shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (c) the Redemption Price; (d) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price; (e) the then effective Conversion Price (as defined in Section 9(a) hereof); (f) that the right of holders of Convertible Preferred Stock called for redemption to exercise their conversion rights pursuant to Section 9 hereof shall cease and terminate as to such shares at the close of business on the Redemption Date (provided that there is no default in payment of the Redemption Price); (g) that payment of the Redemption Price will be made upon presentation and surrender of certificates representing the shares of Convertible Preferred Stock called for redemption; (h) that, in accordance with the second sentence of the first paragraph of this Section 5, accumulated but unpaid dividends to the Redemption Date on the shares to be redeemed will be paid on the Redemption Date; and (i) that dividends on the shares to be redeemed will cease to accrue on the Redemption Date. If a notice is mailed to a holder in the manner provided above within the time prescribed, it is duly given with respect to such holder. Notice having been mailed as aforesaid, from and after the Redemption Date (unless default shall be made by the Corporation in providing money for the payment of the Redemption Price) dividends on the shares of Convertible Preferred Stock so called for redemption shall cease to accrue, and such shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as shareholders of the Corporation by virtue of the ownership of such shares (except the right to receive from the Corporation the Redemption Price without interest) shall cease. Upon surrender in accordance with such notice of the certifi- cates for any shares so redeemed (properly endorsed or assigned for transfer, if the Board of Directors shall so require and the notice shall so state), the Corporation shall redeem such shares at the Redemption Price. If less than all the then outstanding shares of Convertible Preferred Stock are to be redeemed, the Corporation shall effect such redemption pro rata (as nearly as practicable) among all holders of Convertible Preferred Stock. If fewer than all the shares represented by a surrendered certificate or certificates are redeemed, the Corporation shall issue a new certificate representing the unredeemed shares. Notwithstanding the foregoing, the Corporation shall not redeem less than all the outstanding shares of Convertible Preferred Stock pursuant to this Section 5, or purchase or acquire any shares of Convertible Preferred Stock otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of shares of Convertible Preferred Stock, unless full cumulative dividends shall have been paid upon all outstanding shares of Convertible Preferred Stock for all past dividend periods. 6. MANDATORY REDEMPTION. On _____2, 2006 (the "Mandatory Redemption Date"), the Corporation shall redeem all of the Convertible Preferred Stock then outstanding at the Liquidation Preference. Accrued and accumulated but unpaid dividends, whether or not declared, without interest, to the Mandatory Redemption Date will be paid on the Mandatory Redemption Date and on and after the Mandatory Redemption Date, dividends will cease to accumulate on the Convertible Preferred Stock. Notice of such redemption shall be given by the Corporation by first class mail, postage prepaid, not less than 30 or more than 90 days prior to the Mandatory Redemption Date, to each holder of record of the shares to be redeemed, at such holder's address as shown on the stock register of the Corporation. Each such notice shall state: (a) the Mandatory Redemption Date; (b) the Redemption Price; (c) the place or places where certificates for such shares are to be surrendered for payment of the Redemption Price; (d) the then effective Conversion Price; (e) that the right of holders of Convertible Preferred Stock to exercise their conversion rights pursuant to Section 9 hereof shall cease and terminate at the close of business on the Mandatory Redemption Date (provided that there is no default in payment of the Redemption Price); (f) that payment of the Redemption Price will be made upon presentation and surrender of certificates representing the shares of Convertible Preferred Stock; (g) that, in accordance with the second sentence of the first paragraph of this Section 6, accumulated but unpaid dividends to the Mandatory Redemption Date will be paid on the Mandatory Redemption Date; and (h) that on and after the Mandatory Redemption Date, dividends will cease to accumulate on the Convertible Preferred Stock. If a notice is mailed to a holder in the manner provided above within the time prescribed, it is duly given with respect to such holder. On or after the Mandatory Redemption Date, each holder of the shares of outstanding Convertible Preferred Stock (other than shares which have been duly surrendered for conversion at or before the close of business on the Mandatory Redemption Date) shall surrender the certifi- cate or certificates evidencing such shares to the Corporation at the place designated in the redemption notice and shall thereupon be entitled to receive payment of the Redemption Price. If, on the Mandatory Redemption Date, funds necessary for the redemption shall be available therefor and shall have been irrevocably deposited or set aside, then, notwithstanding that the certificates evidencing any shares to be redeemed shall not have been surrendered, the dividends with respect to such shares shall cease to accumulate on and after the Mandatory Redemption Date, such shares shall no longer be deemed to be outstanding, the holders thereof shall cease to be shareholders of the Corporation by virtue of the ownership of such shares, and all rights whatsoever with respect to such shares (except the right of the holders thereof to receive the Redemption Price without interest upon surrender of their certificates) shall terminate. 7. VOTING. (a) No General Voting Rights. Except as otherwise provided from time to time by the laws of Delaware or this Corporation's Restated Certificate of Incorporation, the entire voting power for the election of directors of the Corporation and for all other purposes shall be vested in the holders of Common Stock which shall vote as a single class, with the holder of each share of Common Stock being entitled to one vote in respect of such shares. (b) Other Voting Rights. Without the consent or affirmative vote of the holders of a majority of the outstanding shares of Convertible Preferred Stock, voting separately as a class to the exclusion of holders of any other shares of capital stock of the Corporation (either in writing without a meeting, if permitted by the Certificate of Incorporation and applicable law, or by vote at any meeting called for that purpose), the Corporation may not amend, alter or repeal (by any means whatsoever, including, without limitation, by merger or consolidation any provision of the Certificate of Incorporation, any amendment or supplement thereto or this Certificate of Designations (or any similar document relating to any series or class of preferred stock of the Corporation), if such action would (a) increase or decrease the aggregate number of authorized shares of Convertible Preferred Stock, (b) increase or decrease the par value of such shares or (c) amend, alter, repeal or change the powers, rights, privileges or preferences of the holders of shares of Convertible Preferred Stock so as to affect them adversely, provided, however, that the creation, issuance or increase in the amount of authorized shares of any series of Junior Stock will not be deemed to adversely affect such powers, rights, privileges or preferences of the Convertible Preferred Stock. For purposes of the foregoing provisions of this Section 7, each share of Convertible Preferred Stock shall have one vote per share. The foregoing provisions of this Section 7 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Convertible Preferred Stock shall have been redeemed or called for redemption and sufficient funds shall have been irrevocably deposited in trust to effect such redemption and all other steps necessary or desirable to effect such redemption shall have been taken. 8. LIQUIDATION PREFERENCE. (i) In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of Convertible Preferred Stock shall be entitled to receive out of the assets of the Corporation available for distribution to shareholders, before any distribution of assets shall be made to the holders of the Common Stock or of any other shares of Junior Stock, a liquidating distribution in the total amount of [$10,000,000]3 (the "Total Liquidation Preference") or an amount equal to $[10] per share (the "Liquidation Preference") plus an amount equal to any accrued and accumulated but unpaid dividends thereon to the date of final distribution to such holders, whether or not declared, without interest; provided, however, if in accordance with the provisions of the Purchase and Sale Agreement, dated as of March 26, 1996, between the Corporation and Harris Computer Systems Corporation (the "Purchase and Sale Agreement") the amount of the net current assets (the "Net Assets")shown on the Final Net Current Asset Reconciliation (as defined in the Purchase and Sale Agreement)(such amount shown, the "Actual Net Asset Amount") is less than the lesser of (i) the amount of the Net Assets shown on the Projected Net Current Asset Reconciliation (as defined in the Purchase and Sale Agreement) and (ii) $14,400,000 (such lesser amount, the "Applicable Amount"), then the Total Liquidation Preference shall be adjusted by reducing it, dollar for dollar, to the extent of the difference (the "Difference") between the Actual Net Asset Amount and the Applicable Amount. The Liquidation Preference shall then be reduced by the amount [(rounded to the nearest $[ ]] determined by dividing the Difference by the number of issued and outstanding shares of Convertible Preferred Stock as of the date of the Final Net Current Asset Reconciliation or, if later, the date any Reconciliation Disagreement (as defined in the Purchase and Sale Agreement) is resolved. Alternatively, if the amount of the Net Assets shown on the Final Net Current Asset Reconciliation after resolution of all reconciliation Disagreements (as defined in the Purchase and Sale Agreement) is in excess of the Net Assets shown on the Projected Net Current Asset Reconciliation (as defined in the Purchase and Sale Agreement), then the Total Liquidation Preference shall be increased, dollar for dollar, to the extent of such excess up to $10,000,000 (such excess up to $10,000,000, the "Excess"). The Liquidation Preference shall then be increased by the amount [(rounded to the nearest $[ ]] determined by dividing the Excess by the number of issued and outstanding shares of Convertible Preferred Stock as of the date of the Final Net Current Asset Reconciliation or, if later, the date any Reconciliation Disagreement is resolved. (ii) The Total Liquidation Preference shall also be further reduced to the extent that the parties to the Purchase and Sale Agreement or a court of competent jurisdiction determines (which determination by such court shall be final and nonappealable) that any Asset (as defined in the Purchase and Sale Agreement) required to be transferred by the Purchase and Sale Agreement was not in fact transferred, such reduction (the "Net Asset Reduction") to be equal to the book value of such Asset on the Final Net Current Asset Reconciliation or with respect to non-current assets the Audited Balance Sheet (as defined in the Purchase and Sale Agreement) less any cash paid to the Corporation in respect thereof. The Liquidation Preference shall then be reduced by the amount [(rounded to the nearest $[])] determined by dividing the Net Asset Reduction by the number of issued and outstanding shares of Convertible Preferred Stock as of the date the amount of the Net Asset Reduction is determined. In addition, in accordance with the terms of the Purchase and Sale Agreement, the Total Liquidation Preference shall be further reduced by the amount of any Damages (as defined in the Purchase and Sale Agreement), less any cash paid to the Corporation in respect thereof (the "Net Damages"), incurred by the Corporation and its Representatives (as defined in the Purchase and Sale Agreement) as a result of a wilful breach by Harris of a representation or warranty contained in the Purchase and Sale Agreement. The Liquidation Preference shall then be reduced by the amount [(rounded to the nearest $[ ])] determined by dividing the Net Damages by the number of issued and outstanding shares of Convertible Preferred Stock as of the date the total amount of the Net Damages is determined. If, upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the assets available for distribution are insufficient to pay in full the amounts payable with respect to the Convertible Preferred Stock and any other outstanding shares of Parity Stock, the holders of the Convertible Preferred Stock and of such other Parity Stock shall share ratably in any distribution of assets of the Corporation in proportion to the full respective preferential amounts to which they are entitled. After payment to the holders of the Convertible Preferred Stock of the full preferential amounts provided for in this Section 8, the holders of the Convertible Preferred Stock shall not be entitled to any further participation in any distribution of assets by the Corporation. For purposes of this Section 8, neither a consolidation or merger of the Corporation with or into another person nor a sale or transfer of all or substantially all of the assets of the Corporation will be deemed a liquidation, dissolution or winding up of the Corporation. 9. CONVERSION AND EXCHANGE RIGHTS. - -------- 2 Insert the first day of the month of the date of original issuance of the Convertible Preferred Stock. 3 May be adjusted pursuant to the terms of the Purchase and Sale Agreement. (a) General Rights to Convert. Each holder of a share of Convertible Preferred Stock shall have the right, at the option of such holder, at any time to convert, upon the terms and provisions of this Section 9, one or more shares of Convertible Preferred Stock into fully paid and nonassessable shares of Common Stock of the Corporation (and such other securities and property as such holder may be entitled to as hereinafter provided). Such conversion of shares of Convertible Preferred Stock to shares of Common Stock shall be made at a conversion rate of one share of Convertible Preferred Stock for a number of shares of Common Stock equal to (x) the Liquidation Preference divided by (y) the conversion price applicable per share of Common Stock at the time of conversion (the "Conversion Price"). The Conversion Price shall initially be $2.50. The Conversion Price shall be adjusted in certain instances as provided below. An amount in cash equal to the full cumulative dividends accrued and accumulated but unpaid, whether or not declared and without interest, on such shares of Convertible Preferred Stock shall be paid on the effective date of the conversion through the last quarterly payment date that immediately precedes the effective date of the conversion. (b) Mechanics of Conversion. In order to convert shares of Convertible Preferred Stock into Common Stock, the holder or holders thereof shall surrender the certificate or certificates evidencing such shares of Convertible Preferred Stock at the office of the transfer agent for the Convertible Preferred Stock (or if there is no such transfer agent, to the secretary of the Corporation), which certificate or certificates shall be duly endorsed to the Corporation or in blank, or accompanied by proper instruments of transfer, accompanied by (i) a written notice to the Corporation that the holder elects so to convert all or a specified number of such shares of Convertible Preferred Stock and specifying the name or names (with address or addresses) in which a certificate or certificates evidencing shares of Common Stock are to be issued and (ii) if required pursuant to Section 9(j) hereof, an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demonstrating that such taxes have been paid). If more than one share of Convertible Preferred Stock shall be surrendered for conversion at one time by the same holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of Convertible Preferred Stock so surrendered. Shares of Convertible Preferred Stock shall be deemed to have been converted immediately prior to the close of business on the day of the surrender of such shares for conversion in accordance with the foregoing provisions, and the person or persons entitled to receive the Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such Common Stock at such time. As promptly as practicable on or after the surrender of a certificate or certificates for conversion and the receipt of the notice relating thereto (and in any event within five Business Days thereafter), the Corporation shall deliver or cause to be delivered to the person or persons entitled to receive the same: (i) a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion; (ii) any cash owed in lieu of any fraction of a share, determined in accordance with Section 9(i) hereof; (iii) if less than the full number of shares of Convertible Preferred Stock evidenced by the surrendered certificate or certificates is being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares being converted; and (iv) subject to the provisions of the second paragraph of Section 9(a), an amount in cash equal to the full cumulative dividends accrued but unpaid on such shares of Convertible Preferred Stock through the last quarterly dividend payment date established pursuant to Section 4 hereof that immediately precedes the effective date of conversion. If for any reason the Corporation is unable to pay any accrued dividends on the Convertible Preferred Stock being converted, the Corporation will pay such dividends to the converting holder as soon thereafter as funds of the Corporation are legally avail- able for such payment and may be paid under applicable credit agreements with interest thereon, accruing at a rate of 9.00% per annum. At the request of any such converting holder, the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing the Corporation's obligation to such holder. A payment or adjustment shall not be made by the Corporation upon any conversion on account of any dividends on the Common Stock issued upon conversion. (c) Rights to Exchange. (i) Corporation may, at its option, cause shares of Convertible Preferred Stock, as a whole or in part, at any time and from time to time, to be exchanged for debentures of the Corpo- ration having the terms set forth in Exhibit [ ] to the Purchase and Sale Agreement (the "Debentures"). Such exchange of shares of Convertible Preferred Stock for the Debentures pursuant to this Section 9(c)(i) shall be made at an exchange rate of Debentures in the principal amount equal to the Liquidation Preference. On the effective date of the exchange pursuant to this Section 9(c)(i), the Corporation shall pay holders of Convertible Preferred Stock to be exchanged an amount in cash equal to the full cumulative dividends accrued and accumulated but unpaid, whether or not declared and without interest, on such shares of Convertible Preferred Stock through the last quarterly dividend payment date that immediately precedes the effective date of the exchange. (ii) Each holder of shares of Convertible Preferred Stock shall have the right at any time after September 1, 1998 upon the terms and conditions set forth in this Section 9(c)(ii), at the option of such holder, whenever dividends due for four quarterly periods have not been paid, to exchange such shares of Convertible Preferred Stock, as a whole or in part, for Debentures. Such exchange of shares of Convertible Stock for the Debentures shall be of an Exchange Rate of Debentures in the principal amount equal to the Liquidation Preference plus all dividends which are accrued and accumulated but unpaid, whether or not declared and without interest up to the calendar quarter immediately preceding the calendar quarter in which the date of conversion occurs. (d) Mechanics of the Exchange. In connection with the exchange shares of Convertible Preferred Stock for the Debentures, the holder or holders thereof shall surrender the certificate or certificates evidencing such shares of Convertible Preferred Stock at the office of the transfer agent (or the secretary of the Corporation if there is no such transfer agent) for the Convertible Preferred Stock, which certificate or certificates shall be duly endorsed to the Corporation or in blank, or accompanied by proper instruments of transfer, accompanied by (i) a written notice to the Corporation that the holder shall thereby exchange all or the number specified by the Corporation and specifying the name or names (with address or addresses) in which a certificate or certificates evidencing the Debentures are to be issued and (ii) if required pursuant to Section 9(i) hereof, an amount sufficient to pay any transfer or similar tax (or evidence reasonably satisfactory to the Corporation demon- strating that such taxes have been paid). When more than one share of Convertible Preferred Stock is to be surrendered for exchange at one time by the same holder, the principal amount of the Debentures issuable upon exchange thereof shall be computed on the basis of the aggregate number of shares of Convertible Preferred Stock so surrendered. Shares of Convertible Preferred Stock shall be deemed to have been exchanged immediately prior to the close of business on the day of the surrender of such shares for exchange in accordance with the foregoing provisions, and the person or persons entitled to receive the Debentures issuable upon such exchange shall be treated for all purposes as the record holder or holders of such Debentures at such time. As promptly as prac- ticable on or after the surrender of a certificate or certificates for exchange and the receipt of the notice relating thereto (and in any event within five Business Days thereafter), the Corporation shall deliver or cause to be delivered to the person or persons entitled to receive the same: (i) a certificate or certificates for the principal amount of the Debentures issuable upon such conversion; (ii) any cash owed in lieu of any fraction of a Debenture in accordance with Section 9(j) hereof; (iii) if less than the full number of shares of Convertible Preferred Stock evidenced by the surrendered certificate or certificates is being exchanged, a new certificate or certificates, of like tenor, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares being exchanged; and (iv) if exchanged pursuant to Section 9(c)(i), subject to the provisions of the second paragraph of Section 9(c)(i), an amount in cash equal to the full cumulative dividends accrued but unpaid on such shares of Convertible Preferred Stock through the last quarterly dividend payment date established pursuant to Section 4 hereof that immediately precedes the effective date of exchange. If for any reason the Corporation is unable to pay any accrued dividends on the Convertible Preferred Stock being exchanged pursuant to Section 9(c)(i), the Corporation will pay such dividends to the converting holder as soon thereafter as funds of the Corporation are legally available for such payment and may be paid under applicable credit agreements with interest thereon, accruing at a rate of 9.00% per annum. At the request of any such holder converting pursuant to Section 9(c)(i), the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing the Corporation's obligation to such holder. (e) Adjustments to Conversion Price and the Triggering Price. The Conversion Price and Triggering Price shall be adjusted from time to time as follows: (i) In case the Corporation shall pay or make a dividend or other distribution on any class of capital stock of the Corporation in Common Stock, the Conversion Price and Triggering Price in effect at the close of business on the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be reduced to a price determined by multiplying such Conversion Price and Triggering Price each by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and of which the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such reduction to become effective at the opening of business on the day following the date fixed for such determination. In the event that such dividend or distribution is not so paid or made, the Conversion Price and Triggering Price shall be readjusted to be the Conversion Price and Triggering Price which would then be in effect if such date fixed for the determination of shareholders entitled to receive such dividend or other distribution had not been fixed. (ii) In case the Corporation shall issue rights or warrants to all holders of its outstanding shares of Common Stock entitling them to subscribe for or purchase shares of Common Stock (or securities convertible into (which for purposes of this paragraph (ii) shall also mean exchangeable for) Common Stock) at a price per share less than the Current Market Price (as defined in Section 13 hereof) of Common Stock on the date fixed for the determination of shareholders entitled to receive such rights or warrants, the Conversion Price and Triggering Price in effect at the close of business on the date fixed for such determination shall be reduced to a price determined by multiplying such Conversion Price and Triggering Price each by a fraction of which the numerator shall be the total number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so offered for subscription or purchase (or the aggregate conversion price of the convertible securities so offered) would purchase at such Current Market Price and of which the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the total number of additional shares of Common Stock so offered for subscription or purchase (or into which the convertible securities so offered are convertible), such reduction to become effective at the opening of business on the day following the date fixed for such determination. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Conversion Price and Triggering Price shall be readjusted to the Conversion Price and Triggering Price which would then be in effect had the adjustments made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. In the event that such rights or warrants are not so issued, the Conversion Price and Triggering Price shall be readjusted to be the Conversion Price and Triggering Price which would then be in effect if the date fixed for the determination of shareholders entitled to receive such rights or warrants had not been fixed. (iii) In case outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price and Triggering Price in effect at the close of business on the date upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Price and Triggering Price in effect at the close of business on the date upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective at the opening of business on the day following the date upon which such subdivision or combination becomes effective. (iv) Notwithstanding any other provision of this Section 9, no adjustment in the Conversion Price or Triggering Price shall be re- quired unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price or Triggering Price, as the case may be ; provided, however, that any adjustments which by reason of this paragraph (iv) are not required to be made shall be carried forward and taken into account in determining whether any subsequent adjustment shall be required. Once the cumulative effect of any such adjustments that are carried forward would result in an increase or decrease of at least 1% in the Conversion Price or Triggering Price, then the Conversion Price or Triggering Price shall be changed to reflect all adjustments called for by this Section 9 and not previously made. (v) Notwithstanding any other provision of this Section 9, no adjustment to the Conversion Price or Triggering Price shall reduce the Conversion Price or Triggering Price below the then par value per share of the Common Stock, and any such purported adjustment shall instead reduce the Conversion Price or Triggering Price to such par value. (vi) Whenever the Conversion Price or Triggering Price is adjusted as provided herein, the Corporation shall compute the adjusted Conversion Price or Triggering Price in accordance with this Section 9 and shall prepare a certificate signed by the Treasurer of the Corporation setting forth the adjusted Conversion Price or Triggering Price and showing in reasonable detail the facts upon which such adjustment is based, and the corporation shall mail a copy of such certificate as soon as practicable to the holders of record of the shares of Convertible Preferred Stock. (vii) In any case in which this Section 9 shall require that an adjustment shall become effective on the day following a record date for an event, the Corporation may defer until the occurrence of such event (i) issuing to the holder of any share of Convertible Preferred Stock, if such share is converted after such record date and before the occurrence of such event, the additional Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above Common Stock issuable upon such conversion before giving effect to such adjustment and (ii) paying to such holders any amount in cash in lieu of a fractional share of Common Stock pursuant to paragraph (i) of this Section 9; provided, that, upon request of any such holder, the Corporation shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional Common Stock and such cash, upon the occurrence of the event requiring such adjustment; and provided, further, that the failure of such event to occur shall relieve the Corporation of the obligation to make an additional distribution upon conversion by reason of the adjustment required by the occurrence of such event. (viii) The Corporation may make such reductions in the Conversion Price, in addition to those required by this Section 9, as the Board of Directors considers to be advisable in order that any event treated for Federal income tax purposes as a dividend or distribution of stock (or rights to acquire stock) shall not be taxable to the recipients. The Corporation at any time or from time to time, as permitted by applicable law and to the extent the Board of Directors determines that such reduction would be in the best interests of the Corporation, may reduce the Conversion Price by any amount for any period of time, if the period is at least twenty (20) days and if the reduction is irrevocable during the period. (ix) Whenever the Conversion Price is reduced by the Corporation pursuant to paragraph (viii) of this Section 9(e), the Corporation shall mail to holders of the Convertible Preferred Stock a notice of the reduction. The Corporation shall mail such notice by first class mail, postage prepaid, at least fifteen (15) days before the date the reduced Conversion Price takes effect, to each holder of record of shares of Convertible Preferred Stock at such holder's address as shown on the stock register of the Corporation. The notice shall state the reduced Conversion Price and the period it will be in effect. If a notice is mailed to a holder in the manner provided above within the time prescribed, it is duly given with respect to such holder. (f) Reclassification, Consolidation, Merger or Sale of Assets. In the event that the Corporation shall be a party to any transaction (including without limitation any (i) recapitalization or reclassification of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination of the Common Stock), (ii) any consolidation or merger of the Corporation with or into any other person or any merger of another person into the Corporation (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock of the Corporation), (iii) any sale or transfer of all or substantially all of the assets of the Corporation, or (iv) any compulsory share exchange) pursuant to which the Common Stock shall be exchanged for, converted into, acquired for or constitute solely the right to receive other securities, cash or other property, then appropriate provision shall be made as part of the terms of such transaction whereby the holder of each share of Convertible Preferred Stock then outstanding shall thereafter have the right to convert such share only into the kind and amount of securities, cash and other property receivable upon such recapitalization, reclassification, consolidation, merger, sale, transfer or share exchange by a holder of the number of shares of Common Stock into which such share of Convertible Preferred Stock might have been converted immediately prior to such transaction. The Corporation or the person formed by such consolidation or resulting from such merger or which acquired such assets or which acquired the Corporation's shares, as the case may be, shall make provisions in its certificate or articles of incorporation or other constituent document to establish such right. Such certificate or articles of incorporation or other constituent document shall provide for adjustments which, for events subsequent to the effective date of such certificate or articles of incorporation or other constituent document, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section 9. The above provisions shall similarly apply to successive transactions of the type described in this paragraph. (g) Prior Notice of Certain Events. In case at any time: (i) the Corporation shall (1) declare any dividend or any other distribution on its Common Stock, other than (A) a dividend payable solely in shares of Common Stock or (B) the Rights or (2) declare or authorize a redemption or repurchase of any of the then outstanding shares of Common Stock or any other Junior Stock; or (ii) the Corporation shall authorize the granting to all holders of Common Stock of rights or warrants to subscribe for or purchase any shares of stock of any class or of any other rights or warrants; or (iii) of any reclassification of Common Stock (other than a subdivision or combination of the outstanding Common Stock), or of any consolidation or merger to which the Corporation is a party and for which approval of any shareholders of the Corporation shall be required, or of the sale or transfer of all or substantially all of the assets of the Corporation or of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or other property; or (iv) of the voluntary or involuntary liq- uidation, dissolution or winding up of the Corporation; then, in any such case, the Corporation shall cause to be mailed to the holders of record of the Convertible Preferred Stock, at their last addresses as they shall appear upon the stock transfer books of the Corporation, at least twenty (20) days prior to the applicable record date or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, repurchase or granting of rights or warrants or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, share exchange, liquidation, dissolution or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, liquidation, dissolution or winding up. No failure to mail such notice or any defect therein or in the mailing thereof shall affect the validity of the corporate action required to be specified in such notice. (h) Reservation of Shares, etc. The Corporation shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of shares of Convertible Preferred Stock, the full number of shares of Common Stock then deliverable upon the conversion of all shares of Convertible Preferred Stock then outstanding. If the Corporation shall issue any securities or make any change in its capital structure which would change the number of shares of Common Stock into which each share of the Convertible Preferred Stock shall be convertible as herein provided, the Corporation shall at the same time also make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Convertible Preferred Stock on the new basis. If any Debentures or shares of Common Stock required to be reserved for purposes of exchange or conversion of the Convertible Preferred Stock hereunder require registration with or approval of any governmental authority under any Federal or State law before such debentures or shares may be issued upon exchange or conversion, the Corporation will in good faith and as expeditiously as possible endeavor to cause such debentures or shares to be duly registered or approved, as the case may be. The Corporation will, in good faith and as expeditiously as possible, endeavor, if permitted by the rules of the applicable exchange or quotation system, list and keep listed or quote and keep quoted on the principal exchange or quotation system of its Common Stock, as the case may be, upon official notice of issuance or quotation, all Debentures or shares of Common Stock issuable upon exchange or conversion of the Convertible Preferred Stock. (i) No Fractional Shares or Debentures. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon conversion of Convertible Preferred Stock. Instead of any fraction of a share which would otherwise be issuable upon conversion of any shares of Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing Price (as defined in Section 13 hereof) of a share of Common Stock (or, if there is no such Closing Price, the fair market value of a share of Common Stock, as determined in good faith by the Board of Directors or in any manner prescribed by the Board of Directors) at the close of business on the Trading Day immediately preceding the date of conversion. The Debentures will be issued in denominations of $[ ] and integral multiples thereof. No fractional interests in the Debentures shall be issued upon exchange of conversion of Convertible Preferred Stock. Instead of any fraction of a Debenture which would otherwise be issuable upon exchange of any shares of Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fraction in an amount equal to the same fraction of the Closing Price (as defined in Section 13 hereof) of a Debenture in the principal amount of $[ ] (or, if there is no such Closing Price, the fair market value of a Debenture in such principal amount, as determined in good faith by the Board of Directors or in any manner prescribed by the Board of Directors) at the close of business on the Trading Day immediately preceding the date of exchange. (j) Transfer Taxes, etc. The Corporation will pay any and all taxes that may be payable in respect of the issue or delivery of shares of Common Stock or Debentures on conversion or exchange of shares of Convertible Preferred Stock pursuant hereto. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of shares of Common Stock or Debentures in a name other than that in which the shares of Convertible Preferred Stock so exchanged or converted were registered, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax, or has estab- lished to the satisfaction of the Corporation that such tax has been paid. 10. EXCHANGES. Certificates representing shares of Convertible Preferred Stock shall be exchangeable, at the option of the holder, for a new certificate or certificates of the same or different denominations representing in the aggregate the same number of shares of Convertible Preferred Stock. 11. OUTSTANDING SHARES. For purposes of this Certificate of Designations, all shares of Convertible Preferred Stock shall be deemed outstanding except for (a) shares of Convertible Preferred Stock held of record or beneficially by the Corporation or any subsidiary of the Corporation; (b) from the date of surrender of certificates representing Convertible Preferred Stock for conversion pursuant to Section 9 hereof, all shares of Convertible Preferred Stock which have been converted into Common Stock or other securities or property pursuant to Section 9 hereof; and (c) from the date fixed for redemption pursuant to Section 5 or 6 hereof, all shares of Convertible Preferred Stock which have been called for redemption, provided that funds necessary for such redemption are available therefor and have been irrevocably deposited or set aside for such purpose and all other steps necessary to effect such redemption shall have been taken. 12. STATUS OF CONVERTIBLE PREFERRED STOCK UPON RETIREMENT. Shares of Convertible Preferred Stock which are acquired or redeemed by the Corporation or converted pursuant to Section 9 shall return to the status of authorized and unissued shares of Preferred Stock of the Corporation, without designation as to series. Upon the acquisition or redemption by the Corporation or conversion pursuant to Section 9 of all outstanding shares of Convertible Preferred Stock, all provisions of this Certificate of Designations shall cease to be of further effect. 13. DEFINITIONS. For purposes of this Certificate of Designation, the following terms shall have the meanings indicated: (a) "Board of Directors" shall mean the board of directors of the Corporation or any committee authorized by such board of directors to perform any of its responsibilities with respect to the Convertible Pre- ferred Stock. (b) "Business Day" shall mean any day other than a Saturday, Sunday, or a day on which commercial banks in the State of New York are authorized or required by law or executive order to close or a day which is or is declared a national or New York state holiday; (c) "Closing Price" with respect to any securities on any day shall mean the closing sale price regular way on such day or, in case no such sale takes place on such day, the average of the reported closing bid and asked prices, regular way, in each case on the principal national securities exchange or quotation system on which such security is quoted or listed or admitted to trading, or, if not quoted or listed or admitted to trading on any national securities exchange or quotation system, the average of the closing bid and asked prices of such security on the over-the-counter market on the day in question as reported by the National Quotation Bureau Incorporated, or a similarly generally accepted reporting service, or if not so available, in such manner as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors of the Corporation for that purpose or a price determined in good faith by the Board. (d) "Current Market Price" shall mean the average of the daily Closing Prices per share of Common Stock for the thirty consecutive Trading Days immediately prior to the date in question. (e) "fair market value" shall mean the amount which a willing buyer would pay a willing seller in an arm's length transaction. (f) "full cumulative dividends" shall mean, with respect to the Convertible Preferred Stock, or any other capital stock of the Corporation, as of any date the amount of accumulated, accrued and unpaid dividends payable on such shares of Convertible Preferred Stock, or other capital stock, as the case may be, whether or not earned or declared and whether or not there shall be funds legally available for the payment thereof. (g) "record date" shall mean, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise), and with respect to any subdivision or combination of the Common Stock, the effective date of such subdivision or combination. (h) "Rights" shall mean the rights of the Corporation that are issuable under the Corporation's Rights Agreement, dated July 31, 1992 and as amended from time to time, or rights to purchase any capital stock of the Corporation under any successor stockholder rights plan or plans adopted in replacement of the Corporations Rights Agreement. (i) "Trading Day" shall mean (x) if the applicable security is quoted on the Nasdaq National Market of The Nasdaq Stock Market, a day on which trades may be made on such Nasdaq National Market or (y) if the applicable security is listed or admitted for trading on the New York Stock Exchange or another national securities exchange, a day on which the New York Stock Exchange or another national securities exchange is open for business or (z) if the applicable security is not so listed, admitted for trading or quoted, any day other than a Saturday or Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. EX-99 4 EXHIBIT B - NEW DEBENTURES EXHIBIT B CONCURRENT COMPUTER CORPORATION DESCRIPTION OF NEW DEBENTURES The principal terms of the New Debentures are set forth below. ISSUER: Concurrent Computer Corporation. ISSUE: Series A Debentures (the "New Debentures"). PRINCIPAL AMOUNT: If converted pursuant to Concurrent's right to convert, the initial principal amount shall equal the Total Liquidation Preference of the 9.00% Class B Convertible Preferred Stock (the "Class B Preferred Stock") out- standing on the date that the Class B Preferred Stock is con- verted (the "Conversion Date") into the New Debentures in accor- dance with Section 9(c)(i) of the Certificate of Designation (the "Certificate of Designation") of the Class B Preferred Stock. If converted pursuant to a holder's right to convert pursu- ant to Section 9(c)(ii) of the Certificate of Designation, the initial principal amount shall equal the Total Liquidation Pref- erence of the Class B Preferred Stock outstanding on the Conver- sion Date plus all dividends which are accrued and accumulated but unpaid, whether or not de- clared and without interest, up to the calendar quarter immedi- ately preceding the quarter in which the Conversion Date occurs. CHANGES IN PRINCIPAL AMOUNT: If in accordance with the provi- sions of the Purchase and Sale Agreement, dated as of March 26, 1996, between the Concurrent and Harris Computer Systems Corpora- tion (the "Purchase and Sale Agreement") the amount of the net current assets (the "Net As- sets") shown on the Final Net Current Asset Reconciliation (as defined in the Purchase and Sale Agreement)(such amount shown, the "Actual Net Asset Amount") is less the lesser of (i) the amount of the Net Assets shown on the Projected Net Current Asset Rec- onciliation (as defined the Pur- chase Agreement) and (ii) $14,400,000 (such lesser amount, the "Applicable Amount"), then the Principal Amount shall be adjusted by reducing it, dollar for dollar, to the extent of the difference (the "Difference") between the Actual Net Asset Amount and the Applicable Amount. Alternatively, if the amount of the Net Assets shown on the Final Net Current Asset Reconciliation, after resolution of all Reconcil- iation Disagreements (as defined in the Purchase and Sale Agree- ment) is in excess of the Net Current Assets shown on the Pro- jected Net Current Asset Recon- ciliation (as defined in the Pur- chase and Sale Agreement), the Principal Amount shall be in- creased, dollar for dollar, to the extent of such excess up to $10,000,000. The Principal Amount shall also be further re- duced to the extent that the par- ties to the Purchase and Sale Agreement or a court of competent jurisdiction determines (which determination by such court shall be final and nonappealable) that any Asset (as defined in the Pur- chase and Sale Agreement) re- quired to be transferred by the Purchase and Sale Agreement was not in fact transferred, such reduction (the "Net Asset Reduc- tion") to be equal to the book value on the Final Net Current Asset Reconciliation or with re- spect to noncurrent assets, the "Audited Balance Sheet" (as de- fined in the Purchase and Sale Agreement) less any cash paid to Concurrent in respect thereof. In addition, in accordance with the terms of the Purchase and Sale Agreement, the Principal Amount shall be further reduced by the amount of any Damages (as defined in the Purchase and Sale Agreement), less any cash paid to Concurrent in respect thereof (the "Net Damages"), incurred by Concurrent and its Representa- tives (as defined in the Purchase and Sale Agreement) as a result of a wilful breach by Harris of a representation or warranty con- tained in the Purchase and Sale Agreement. These provisions will be drafted so that there will be no double counting of reductions or in- creases in the Liquidation Pref- erence of the Preferred Stock which occurred prior to the ex- change of such stock for the New Debentures. PAYMENT IN KIND: Interest payments on the New De- bentures may be paid in cash or in kind. INTEREST RATE: The New Debentures will bear in- terest at the rate of 9% per an- num, accruing from the first day of the calendar quarter (the "Ac- crual Date") during which the Conversion Date occurred, and payable quarterly on ______, ______, _____ and _____ commenc- ing on the Accrual Date.(1) MATURITY DATE: June __, 2006. OPTIONAL REDEMPTION: Subject to certain adjustments for stock splits, stock dividends and similar transactions, whenev- er the Current Market Price (as defined in the Certificate of Designation) of the Common Stock exceeds $3.75, Concurrent may, at its option, redeem all or a por- tion of the Debentures, at any time or from time to time, at par plus any accrued interest there- on. MANDATORY REDEMP On June __, 2006, Concurrent TION: shall redeem all of the Deben- tures then outstanding at par plus any accrued interest thereon or at any time the outstanding principal amount of the Deben- tures is less than $[ ]. CONVERSION OF DEBENTURES: Each holder of a New Debenture shall have the right, at the op- tion of such holder, at any time or from time to time, in whole or in part, to convert such New De- benture into fully paid and non- assessable shares of Common Stock of Concurrent. Such conversion of New Debentures to shares of Common Stock shall be made at a conversion rate equal to (x) the principal amount of such New De- benture (plus any accrued and _________________ 1 Calendar quarters will be used. unpaid interest thereon) divided by (y) the applicable conversion price per share of Common Stock at the time of conversion (the "Conversion Price"). The Conver- sion Price shall initially be $2.50, subject to certain adjust- ments as provided in the Certifi- cate of Designation. Notwith- standing any other provision to the contrary, the maximum number of shares in which the New Deben- tures shall be convertible shall be 4,000,000 (subject to adjust- ment on a basis similar to the antidilution adjustments con- tained in the Certificate of Des- ignation). RANKING: The New Debentures will be gener- al unsecured indebtedness of Con- current and will rank pari passu in right of payment to existing indebtedness. MODIFICATION OF By majority of outstanding prin DEBENTURE INDENTURE: cipal amount, with certain excep- tions involving certain fundamen- tal changes which shall require unanimous approval. RESTRICTED PAYMENTS: The New Debenture Indenture will provide that Concurrent will not, and will not permit any of its Subsidiaries to directly or indi- rectly: (i) declare or pay any dividend or make any distribution on account of the Equity Inter- ests of Concurrent or any of its Subsidiaries (other than divi- dends or distributions payable in Equity Interests of Concurrent or dividends or distributions pay- able to Concurrent or any Subsid- iary); (ii) purchase, redeem or otherwise acquire or retire for value any Equity Interests of Concurrent, any Subsidiary or other Affiliate of Concurrent (other than any such Equity In- terests owned by Concurrent or its Subsidiaries or in connection with capitalizing a Subsidiary); (iii) purchase, redeem or other- wise acquire or retire for value, or make any cash interest payment on, any Indebtedness of Concur- rent that is subordinated to the New Debentures (all such payments and other actions set forth in clauses (i) through (iii) above being collectively referred to as "Restricted Payments"), unless, at the time of such Restricted Payment no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof and interest due on the New Debentures for the four calendar quarters immediate- ly preceding the quarter in which such Restricted Payment occurs has been paid in cash. LIMITATION ON MERGER, CONSOLIDATION OR SALE OF ASSETS: Concurrent will not consolidate or merge (whether or not Concur- rent shall be the surviving cor- poration), or sell, assign, transfer or lease all or substan- tially all of its properties and assets as an entirety to any person, unless: (i) the entity or person formed by or surviving any such consolidation or merger (if other than Concurrent) or to which such sale, assignment, transfer or lease shall have been made shall be an entity organized under the laws of the United States or any State thereof or the District of Columbia and shall expressly assume, by a sup- plemental indenture, all the ob- ligations of Concurrent under the New Debenture Indenture; (ii) immediately before and immediate- ly after giving effect to such transaction, no Event of Default and no Default will have occurred and be continuing. EVENTS OF DEFAULT: The New Debenture Indenture will provide that each of the follow- ing constitutes an Event of De- fault: (i) default for __ days in the payment when due of Interest on the New Debentures; (ii) de- fault in payment when due of the principal of, or premium, if any, on the New Debentures; (iii) failure by Concurrent for __ days after notice to comply with any of its other agreements in the New Debenture Indenture or the New Debentures; (iv) certain events of bankruptcy or insolven- cy with respect to Concurrent or any of its Subsidiaries. OTHER: Such additional provisions as appropriate, which provisions, however, shall be no less favor- able to the Holder of the Deben- tures than the provisions set forth herein. EX-99 5 EXHIBIT C - SHARE HOLDING AGREEMENT EXHIBIT C SHARE HOLDING AGREEMENT dated as of [ ], 1996 between CONCURRENT COMPUTER CORPORATION and HARRIS COMPUTER SYSTEMS CORPORATION SHARE HOLDING AGREEMENT dated as of [ ], 1996, between CONCURRENT COMPUTER CORPORATION, a Delaware corporation ("Concurrent"), and HARRIS COMPUTER SYSTEMS CORPORATION, a Florida corpora- tion ("Harris"). WHEREAS Harris and Concurrent are parties to a Purchase and Sale Agreement dated as of March 26, 1996 (the "Purchase and Sale Agreement") and upon consummation of the transactions contemplated therein (the "Transac- tions"), Harris will Beneficially Own 10,000,000 shares of Concurrent Common Stock and Concurrent will Benefi- cially Own 227,726 shares of Harris Common Stock (as such terms are defined below); and WHEREAS the parties hereto wish to set forth their agreement concerning certain governance matters of Concurrent and Harris following consummation of the Transactions as well as certain matters relating to Concurrent's and Harris's ownership of Voting Securities (as such term is defined below). NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I. DEFINITIONS Section A. Definitions. As used in this Agreement, the following terms shall have the following meanings: An "affiliate" of any Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. For purposes of the definition of affiliate, "control" has the meaning specified in Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement. An "associate" has the meaning set forth in Rule 12b-2 under the Exchange Act as in effect on the date of this Agreement. A Person shall be deemed to "Beneficially Own", to have "Beneficial Ownership" of, or to be "Beneficially Owning" any securities (which securities shall also be deemed "Beneficially Owned" by such Person) that such Person is deemed to "beneficially own" within the meaning of Rule 13d-3 under the Exchange Act as in effect on the date of this Agreement. "Best Efforts" with respect to any action subject to such a Best Efforts obligation shall mean all efforts to take such action as may be taken in a commer- cially reasonable manner. "Change of Control" with respect to Concurrent or Harris, as the case may be, shall be deemed to have occurred at such time as a "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Ex- change Act) (i) becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Securities of Concurrent or Harris, as the case may be or (ii) other- wise obtains control of Concurrent or Harris, as the case may be. "Closing Date" means the date of the closing of the Purchase and Sale Agreement. "Concurrent", together with any subsidiary of Concurrent that holds shares of Harris Common Stock, has the meaning set forth in the recitals to this Agreement. "Concurrent Board" means the board of directors of Concurrent. "Concurrent Common Stock" means the common stock of Concurrent, par value $0.01 per share. "Concurrent Designee" means such person as is so designated by Concurrent in accordance with Section 2.2(b) to serve as a member of the Harris Board pursuant to Section 2.3 hereof. "Concurrent Liquidity Restrictions" means restrictions, which shall become effective only in accor- dance with the provisions of Article VI hereof and only so long as Concurrent Beneficially Owns at least the Triggering Number of Harris Shares, pursuant to which Concurrent may not sell more than 15,000 shares of Harris Common Stock (subject to adjustment for stock splits, stock dividends and similar transactions) in any consecu- tive thirty day period (which 15,000 share limit shall be reduced by sales of Harris Common Stock by Lenders during such 30 day period, if any) and will not permit more than 35% of the Current Market Value (up to $40 per share) of Harris Common Stock plus (ii) 25% of the Current Market Value (in excess of $40 per share) of Harris Common Stock (in each case measured as of the date such stock is pledged) to serve as collateral for a margin loan from any Lender. "Concurrent President" means the President and Chief Executive Officer of Concurrent. "Current Market Value" means the average of the daily closing prices for the ten consecutive trading days immediately prior to the relevant measuring date. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. "Governmental Entity" means any court of compe- tent jurisdiction, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof. A "group" has the meaning set forth in Section 13(d) of the Exchange Act as in effect on the date of this Agreement. "Harris", together with any subsidiary of Harris that holds shares of Concurrent Common Stock, has the meaning set forth in the recitals to this Agreement. "Harris Board" means the board of directors of Harris. "Harris Common Stock" means the common stock of Harris, par value $0.01 per share. "Harris Designees" means such Persons as are so designated by Harris in accordance with Section 2.1(b), as such designations may change from time to time in accordance with this Agreement, to serve as members of the Concurrent Board pursuant to Section 2.3 hereof. "Harris Liquidity Restrictions" means restric- tions, which shall become effective only in accordance with the provisions of Article VI hereto and only so long as Harris Beneficially Owns at least the Triggering Number of Concurrent Shares, pursuant to which Harris may not sell more than 260,000 shares of Concurrent Common Stock (subject to adjustment for stock splits, stock dividends and similar transactions) in any consecutive thirty day period (which 260,000 share limit shall be reduced by sales of Concurrent Common Stock by Lenders during such 30 day period, if any) and will not permit more than (A) 35% of the Current Market Value (up to $1.25 per share) of Concurrent Common Stock plus (B) 25% of the Current Market Value (in excess of $1.25 per share) of Concurrent Common Stock (in each case measured as of the date such stock is pledged) to serve as collat- eral for a margin loan from any Lender; provided, howev- er, the above restrictions shall not prevent Harris from obtaining a margin or other loan secured by Concurrent Common Stock with a principal amount equal to the product of $.50 and the number of shares of Concurrent Common Stock issued to Harris on the Closing Date (subject to adjustment for stock splits, stock dividends and similar transactions) and still Beneficially Owned by Harris at the time of the execution of the applicable loan agree- ment. "Lender" shall mean any bank, broker-dealer or other lender who grants either party hereto a margin loan or other similar loans secured by the securities of either party hereto. "Minimum Number of Owned Concurrent Shares" means 2,000,000 shares of Concurrent Common Stock Benefi- cially Owned by Harris (subject to adjustment for stock splits, stock dividends and similar transactions) less the total of all shares of Concurrent Common Stock sold by Harris or a Lender of Harris between the date hereof and the applicable date. "Minimum Number of Owned Harris Shares" means 113,863 shares of Harris Common Stock Beneficially Owned by Concurrent (subject to adjustment for stock splits, stock dividends and similar transactions) less the total of all shares of Harris Common Stock sold by Concurrent or a Lender of Concurrent between the date hereof and the applicable date. "in registration" means, with respect to any party hereto, any period during which such party (i) has a good faith intention to complete a Public Offering (as defined below) within three calendar months of the date such intention is communicated in writing to the other party hereto and (ii) is actively taking steps to com- plete such an offering (including steps which may pre- date the filing of a registration statement for a Public Offering). "Other Concurrent Holders" means the holders of the Other Concurrent Shares. "Other Concurrent Shares" means Voting Securi- ties of Concurrent not Beneficially Owned by Harris or any of its affiliates. "Person" means any individual, group, corpora- tion, firm, partnership, joint venture, trust, business association, organization, Governmental Entity or other entity. "Public Offering" means any underwritten offer- ing of stock registered under the Securities Act. "Purchase and Sale Agreement" has the meaning set forth in the recitals to this Agreement. "SEC" means the Securities and Exchange Commis- sion or any successor Governmental Entity. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promul- gated thereunder. "Standstill Period" means the period commencing on the date hereof and expiring [the date which is 42 months following the Closing Date]. "Subsidiary" means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns, directly or indirectly, or other- wise controls, more than 50% of the voting shares or other similar interests. "Third Party Offer" means a bona fide offer to enter into a transaction by a Person other than Harris or any of its respective affiliates or any other Person acting on behalf of Harris or any of its respective affiliates which would result in a Change of Control of Concurrent or a transfer of all or substantially all of the assets of Concurrent. "Transactions" has the meaning set forth in the recitals to this Agreement. "Triggering Number of Concurrent Shares" means 2,000,000 shares of Concurrent Common Stock, subject to adjustment for stock splits, stock dividends and similar transactions. "Triggering Number of Harris Shares" means 113,863 shares of Harris Common Stock, subject to adjust- ment for stock splits, stock dividends and similar trans- actions. "Voting Securities" means Concurrent Common Stock or Harris Common Stock, as the case may be, and any other securities of Concurrent or Harris, as the case may be, entitled to vote generally in the election of direc- tors of Concurrent or Harris, as the case may be. ARTICLE II. CORPORATE GOVERNANCE SECTION A. The Concurrent Board of Direc- tors. 1. At Closing, the Concurrent Board shall consist of no more than nine directors, including the individuals identified in Section 2.3(a) hereto as the initial Harris Designees. 2. After September 30, 1997, so long as Harris Beneficially Owns at least the number of shares of Concurrent Common Stock (including the Concurrent Pre- ferred Stock assuming full conversion of all such shares) set forth below, as such numbers may be appropriately adjusted for stock dividends, stock splits or similar transactions, Concurrent shall exercise all authority under applicable law to maintain a board of directors of no more than nine directors and to cause any slate of directors presented to stockholders for election to the Concurrent Board to include such nominees that, if elect- ed, would result in the Concurrent Board including that number of directors which appears directly opposite the minimum share ownership set forth below: Minimum Number of Shares of Concurrent Common Stock Beneficially Owned Number of Harris Designees by Harris on Concurrent Slate 10,700,000 3 4,700,000 2 2,400,000 1 less than 2,400,000 0 Prior to September 30, 1997, Harris shall be entitled to three Harris Designees unless Harris Beneficially Owns less than 2,400,000 shares of Concurrent Common Stock, as such number of shares may be appropriately adjusted for stock dividends, stock splits or similar transactions, on the date of the mailing of the proxy statement for the next annual meeting of Concurrent shareholders following the date hereof, in which case the provisions of this Section 2.1(b) will not apply and Harris shall not be entitled to any representation on the Concurrent Board in accordance with this Section 2.1(b) and Section 2.3(a) hereof. 3. The initial Chairman of the Concurrent Board shall be John T. Stihl. SECTION B. The Harris Board of Directors. 1. The Harris Board shall consist of no more than seven directors, including the individual identified in Section 2.4(b) hereto as the initial Concurrent Designee. 2. So long as Concurrent Beneficially Owns at least 125,000 (subject to adjustment for stock splits, stock dividends and similar transactions) shares of Harris Common Stock, as such number of shares may be appropriately adjusted for stock dividends, stock splits or similar transactions, the parties hereto shall exer- cise all authority under applicable law to maintain a board of directors of no more than seven directors and to cause any slate of directors presented to stockholders for election to the Harris Board to include such nominees that, if elected, would result in the Harris Board in- cluding one Concurrent Designee; provided, however, that if Concurrent Beneficially Owns less than 125,000 (sub- ject to adjustment for stock splits, stock dividends and similar transactions) shares of Harris Common Stock, as such number of shares may be appropriately adjusted for stock dividends, stock splits or similar transactions, on the date of the mailing of the proxy statement for the next annual meeting of Harris shareholders following the date hereof, then this Section 2.2(b) will not apply and Concurrent shall not be entitled to any representation on the Harris Board in accordance with this Section 2.2(b) and Section 2.3(b) hereof. SECTION C. Initial Designees. 1. The initial Harris Designees shall be E. Courtney Siegel (who shall also be the initial Concurrent President in accordance with Section 6.13 of the Purchase and Sale Agreement), C. Shelton James and Michael F. Maguire. 2. The initial Concurrent Designee shall be Richard P. Rifenburgh. SECTION D. Resignations and Replacements. 1. If at any time a member of the Concurrent Board resigns or is removed, a new member shall be desig- nated to replace such member until the next election of directors. If such director who resigned or was removed was a Harris Designee, Harris shall designate the re- placement of such director. If such director who re- signed or was removed was not a Harris Designee, Concur- rent shall designate the replacement director in accor- dance with the terms of its by-laws. 2. If at any time a member of the Harris Board resigns or is removed, a new member shall be desig- nated to replace such member until the next election of directors. If such director who resigned or was removed was a Concurrent Designee, Concurrent shall designate the replacement of such director. If such director who resigned or was removed was not a Concurrent Designee, Harris shall designate the replacement director in accor- dance with the provisions of its by-laws. SECTION E. Solicitation and Voting of Shares. 1. Concurrent or Harris, as the case may be, shall use reasonable efforts to solicit from its stock- holders eligible to vote for the election of directors proxies in favor of the board designees selected in accordance with Sections 2.1, 2.2 and 2.3. 2. Until Concurrent Beneficially Owns less than the Triggering Number of Harris Shares, Concurrent shall and shall cause any of its Subsidiaries to be present for all stockholders meetings for purposes of establishing a quorum and shall vote and shall cause any of its Subsidiaries to vote all securities of Harris owned by it and entitled to vote, in favor of matters recommended by the Harris Board for approval by stock- holders. 3. So long as either (i) Harris Beneficially Owns 4,700,000 (subject to adjustment for stock splits, stock dividends) or more shares of Concurrent Common Stock or (ii) Harris Beneficially Owns 2,400,000 (subject to adjustment for stock splits, stock dividends) or more shares of Concurrent Common Stock and at least one member of the existing Concurrent Board (other than the Chief Executive Officer) was a Harris Designee, Harris shall and shall cause any of its Subsidiaries to be present for all stockholder meetings for purposes of establishing a quorum and shall vote and cause any Subsidiary of Harris to vote all securities of Concurrent owned by it and entitled to vote, in favor of matters recommended by the Concurrent Board for approval by stockholders. ARTICLE III. STANDSTILL SECTION A. Standstill. 1. During the Standstill Period, except as otherwise expressly provided in this Agreement (including this Section 3.1 and Section 3.2), without the express written consent of the other party, neither Harris, Concurrent nor any of their controlled affiliates, as the case may be, shall, directly or indirectly, (i) take any action, to acquire or affect control of the other party or to encourage or assist any other Person or group to do so, (ii) enter, propose to enter into, solicit or support any merger, business combination, Change of Control, restructuring or similar transaction involving Concurrent or Harris, as the case may be, or any of their Subsidiar- ies, or purchase, acquire, propose to purchase or acquire or solicit or support the purchase or acquisition of any portion of the business, assets or securities of Concur- rent or Harris or any of their Subsidiaries, (iii) seek additional representation on the Concurrent or Harris Board, as the case may be, the removal of any directors from the Concurrent or Harris Board, as the case may be, or a change in the size or composition of such board, (iv) initiate or propose any securityholder proposal without the approval of the Concurrent or Harris Board, as the case may be, granted in accordance with this Agreement or make, engage in, or in any way participate in, any "solicitation" of "proxies" (as such terms are used in the proxy rules promulgated by the SEC under the Exchange Act) to vote, or seek to advise or influence any Person with respect to the voting of, any securities or request or take any action to obtain any list of securityholders for such purposes with respect to any matter (or, as to such matters, solicit any Person in a manner that would require the filing of a proxy statement under Regulation 14A of the Exchange Act), (v) deposit any securities in a voting trust or enter into any voting agreement or arrangement with respect thereto (other than this Agreement), (vi) disclose any intent, purpose, plan, arrangement or proposal inconsistent with the foregoing (including any such intent, purpose, plan, arrangement or proposal that is conditioned on or would require the waiver, amendment, nullification or invalidation of any of the foregoing) or take any action that would require public disclosure of any such intent, purpose, plan, arrangement or proposal, (vii) make any request to amend or waive any provision of this Section 3.1, which request would require public disclosure under applicable law, rule or regulation, (viii) take any action challenging the validity or enforceability of the foregoing or (ix) assist, advise, encourage or negotiate with any Person with respect to, or seek to do, any of the foregoing. 2. Nothing in this Section 3.1 shall (i) prohibit or restrict Concurrent or Harris, as the case may be, from responding to any inquiries from any stock- holders of Harris or Concurrent, as the case may be, as to its intention with respect to the voting of any secu- rities of the other party Beneficially Owned by it so long as such response is consistent with the terms of this Agreement; (ii) restrict the right of each Harris Director on the Concurrent Board or any committee there- of, and each Concurrent Director on the Harris Board or any committee thereof, to vote on any matter as such individual believes appropriate in light of his or her duties to the stockholders of Concurrent or Harris, as the case may be; or (iii) prohibit Harris or Concurrent, as the case may be, from Beneficially Owning securities of the other party issued as dividends or distributions in respect of, or issued upon conversion, exchange or exercise of, securities which Harris or Concurrent, as the case may be, is permitted to Beneficially Own under this Agreement. SECTION B. Third Party Offers. If Concur- rent becomes the subject of a Third Party Offer that is approved by a majority of the Board of Directors of Concurrent at a time when Harris and its controlled affiliates own more than 10% of the outstanding Voting Securities of Concurrent, promptly after such approval by the Board of Directors of Concurrent, Concurrent shall deliver a written notice to Harris, briefly describing the material terms of such Third Party Offer, and Harris shall, within ten business days after receipt of such notice, either (i) offer to acquire all or substantially all of the assets of Concurrent or the Other Concurrent Shares, as the case may be, on terms at least as favor- able to the Other Concurrent Holders as those contemplat- ed by such Third Party Offer or (ii) confirm in writing that it will support, and at the appropriate time will support, such Third Party Offer, including by voting and causing each of its controlled affiliates to vote all its Concurrent Common Stock eligible to vote thereon in favor of such Third Party Offer or, if applicable, tendering or selling and causing each of its controlled affiliates to tender or sell all its securities of Concurrent owned by it to the Person making such Third Party Offer. ARTICLE IV. TRANSFER RESTRICTIONS SECTION A. Restrictions. Except in connec- tion with a Third Party Offer as provided in Section 3.2, neither Harris, Concurrent, nor any of their Subsidiar- ies, as the case may be, shall, directly or indirectly, sell, transfer or otherwise dispose of any securities of the other party except in accordance with one of the following: (i) (a) pursuant to a sale to any other Person of any such securities in an amount of less than 5% of the outstanding securities of any class of Concurrent or Harris, as the case may be, (and for these purposes, sales in open market transactions which are not inten- tionally planned by the Seller to assist any other person in acquiring over 5% of the outstanding securities of any class of Concurrent or Harris shall be permitted) or if such acquiring Person is an institutional investor eligi- ble to file a Statement on Schedule 13G (a "13G Filer") (or any successor form) with respect to its investment, greater than 5% but less than 10% of the outstanding securities of any class of Concurrent or Harris, as the case may be, provided, however, that such 13G Filer provides a certification to Concurrent or Harris, as the case may be, that the securities acquired by it were acquired in the ordinary course of business and were not acquired for the purpose of changing or influencing the control of the issuer of such securities and were not acquired in connection with or as a participant in any transaction having such purpose or effect, (ii) pursuant to a merger, consolidation or other business combination of Harris or Concurrent or any Harris or Concurrent Entity, as the case may be, where such party is not the surviving entity or a sale of all or substantially all of such party's assets; provided, however, that the surviv- ing or purchasing entity agrees to be bound by the terms of this Agreement, (iii) pursuant to a transfer of shares of Concurrent or Harris to affiliates of Harris or Con- current, as the case may be, provided that such affili- ates agree to be bound by the terms of this Agreement, (iv) pursuant to Section 4.2 hereof or (v) in order to, and only to the extent necessary to, comply with applica- ble law. For purposes of Section 4.1(i), the convertible exchangeable preferred stock of Concurrent to be deliv- ered in connection with the Purchase and Sale Agreement shall be deemed to be the same class of securities as the Concurrent Common Stock. SECTION B. Pledge of Stock. 1. Harris or Concurrent, as the case may be, (each, a "Pledgor") may pledge the securities of the other party received by it pursuant to the Purchase and Sale Agreement to a Lender to secure borrowings or other indebtedness as extended from time to time, provided, however, that as a condition to such pledge, (i) the Lender shall agree in writing not to sell, transfer or otherwise dispose of the securities pledged to it other than pursuant to an effective registration statement on Form S-3 (the "S-3 Registration Statement") with respect to the disposition of such securities or an applicable exemption from registration under the Securities Act, (ii) the Lender shall agree in writing that such Lender will be bound by the terms of this Agreement relating to any restrictions on such securities, including with respect to the transfer, pledge or other disposition of securities, applicable to the Pledgor under Article IV hereof and (iii) all certificates representing securities pledged to such Lender shall (x) if pledged after the date on which the S-3 Registration Statement is declared effective, bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A SHARE HOLDING AGREE- MENT (THE "SHARE HOLDING AGREEMENT"), DATED ____ __, 1996 BY AND BETWEEN CONCURRENT COMPUT- ER CORPORATION ("CONCURRENT") AND HARRIS COM- PUTER SYSTEMS CORPORATION ("HARRIS") PURSUANT TO WHICH, AMONG OTHER THINGS, [CONCURRENT] [HARRIS] (THE "ISSUER") HAS FILED, AND THE SEC HAS DECLARED EFFECTIVE, A REGISTRATION STATE- MENT UNDER THE SECURITIES ACT (THE "REGISTRA- TION STATEMENT"). THE ISSUER HAS A BEST EFFORTS OBLIGATION TO MAINTAIN THE EFFECTIVENESS OF THE REGISTRATION STATEMENT UNTIL ___. THE PLEDGEE HEREOF SHALL NOT TRANSFER, SELL OR OTHERWISE DISPOSE OF THE SHARES REPRESENTED BY THIS CER- TIFICATE UNLESS SUCH TRANSFER, SALE OR OTHER DISPOSITION IS UNDERTAKEN PURSUANT TO THE REG- ISTRATION STATEMENT (IF THEN EFFECTIVE) OR AN APPLICABLE EXEMPTION FROM REGISTRATION (CON- FIRMED BY AN OPINION OF COUNSEL SATISFACTORY TO [CONCURRENT] [HARRIS], THE EXPENSE FOR WHICH SHALL BE BORNE BY [CONCURRENT] [HARRIS]), AND IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS SET FORTH IN THE SHARE HOLDING AGREEMENT WHICH INCLUDE, AMONG OTHER THINGS, LIMITS ON THE PERCENTAGE OF SECURITIES WHICH MAY BE SOLD TO ANY PERSON OR ENTITY. ANY TRANSFERS IN VIOLA- TION OF THE SHARE HOLDING AGREEMENT ARE NULL AND VOID. or (y) if pledged prior to the date on which the S-3 Registration Statement is declared effective by the SEC, bear the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF A SHARE HOLDING AGREE- MENT (THE "SHARE HOLDING AGREEMENT"), DATED ____ __, 1996 BY AND BETWEEN CONCURRENT COMPUT- ER CORPORATION ("CONCURRENT") AND HARRIS COM- PUTER SYSTEMS CORPORATION ("HARRIS") PURSUANT TO WHICH, AMONG OTHER THINGS, [CONCURRENT] [HARRIS] (THE "ISSUER") HAS A BEST EFFORTS OBLIGATION TO FILE, AND HAVE THE SEC DECLARE EFFECTIVE, A REGISTRATION STATEMENT UNDER THE SECURITIES ACT (THE "REGISTRATION STATEMENT"). THE ISSUER ALSO HAS A BEST EFFORTS OBLIGATION TO MAINTAIN THE EFFECTIVENESS OF THE REGISTRA- TION STATEMENT UNTIL ___. THE PLEDGEE HEREOF SHALL NOT TRANSFER, SELL OR OTHERWISE DISPOSE OF THE SHARES REPRESENTED BY THIS CERTIFICATE UNLESS SUCH TRANSFER, SALE OR OTHER DISPOSITION IS UNDERTAKEN PURSUANT TO THE REGISTRATION STATEMENT (IF THEN EFFECTIVE) OR AN APPLICABLE EXEMPTION FROM REGISTRATION (CONFIRMED BY AN OPINION OF COUNSEL SATISFACTORY TO [CONCURRENT] [HARRIS], THE EXPENSE FOR WHICH SHALL BE BORNE BY [CONCURRENT] [HARRIS], AND IN ACCORDANCE WITH THE TRANSFER RESTRICTIONS SET FORTH IN THE SHARE HOLDING AGREEMENT WHICH INCLUDE, AMONG OTHER THINGS, LIMITS ON THE PERCENTAGE OF SECU- RITIES WHICH MAY BE SOLD TO ANY PERSON OR ENTI- TY. ANY TRANSFERS IN VIOLATION OF THE SHARE HOLDING AGREEMENT ARE NULL AND VOID. 2. If requested by Harris, Concurrent shall, to the extent it has not done so prior to the Closing, use its Best Efforts to facilitate the receipt by Harris, at or shortly following the Closing Date net proceeds of $5,000,000 from the pledge of Concurrent Common Stock; provided, however, neither Concurrent nor its counsel shall be required to issue an opinion to any Pledgee regarding the legal status of such securities or the Pledgee SECTION C. Effect. Any purported transfer of securities that is inconsistent with the provisions of this Article IV shall be null and void and of no force or effect. ARTICLE V. TERMINATION SECTION A. Termination. 1. This Agreement shall automatically termi- nate upon the last to occur of all of the following: (i) the Standstill Period has expired, (ii) the percentage of the Concurrent Common Stock Beneficially Owned by Harris and any affiliate of Harris, as a group, is less than 5% of the outstanding Concurrent Common Stock and (iii) the percentage of Harris Common Stock Beneficially Owned by Concurrent and any affiliate of Concurrent, as a group, is less than 5% of the outstanding Harris Common Stock. 2. If either party to this Agreement is in breach of or violates any material obligation under this Agreement and fails to cure such breach or violation within 60 days after delivery of written notice from the other party specifying such breach and requesting its cure, such other party may terminate its obligations under this Agreement. ARTICLE VI. REGISTRATION SECTION A. Registration. 1. To the extent that an S-3 Registration Statement with respect to the sale of shares of Harris Common Stock held by Concurrent has not been filed with the SEC or declared effective by the SEC on or prior to the Closing Date, Harris shall use its Best Efforts to prepare and file as promptly as practicable after the Closing Date and shall use its Best Efforts to cause to become effective as soon as possible after the Closing Date, such S-3 Registration Statement, including a final prospectus (the "Harris S-3"), in compliance with the Securities Act, relating to the sale by Concurrent and its permitted pledgees of shares of Harris Common Stock issued to Concurrent pursuant to the terms of the Pur- chase and Sale Agreement. To the extent that an S-3 Registration Statement with respect to the sale of shares of Concurrent Common Stock held by Harris has not been filed with the SEC or declared effective by the SEC on or prior to the Closing Date, Concurrent shall use its Best Efforts to prepare and file as promptly as practicable after the Closing Date and shall use its Best Efforts to cause to become effective as soon as possible after the Closing Date, such S-3 Registration Statement, including a final prospectus (the "Concurrent S-3" and together with a Harris S-3, the "S-3 Registration Statements"), in compliance with the Securities Act, relating to the sale by Harris and its permitted pledgees of the shares of Concurrent Common Stock issued to Harris pursuant to the terms of the Purchase and Sale Agreement and shares issuable upon conversion of the preferred stock or deben- tures issued to Harris in connection with the Transac- tions (references in this Article VI to "shares of Con- current Common Stock held by Harris" shall include the Harris Common Stock issuable upon conversion of such preferred stock or debentures). To the extent the shares of Concurrent Common Stock held by Harris at the Closing have not been so approved on the Closing Date, Concurrent shall also use its Best Efforts to cause the shares of Concurrent Common Stock issued by it to Harris to be approved for inclusion on the NASDAQ/NMS on the effective date of the Concurrent S-3, subject to official notice of issuance. To the extent the shares of Harris Common Stock held by Concurrent at the Closing have not been so approved on the Closing Date, Harris shall also use its Best Efforts to cause the shares of Harris Common Stock issued by it to Concurrent to be approved for inclusion on the NASDAQ/NMS on the effective date of the Harris S-3, subject to official notice of issuance. 2. Subject to Article IV and the other provi- sions of this Article VI, upon the effectiveness of the applicable S-3 Registration Statement for the sale of securities, each of Harris and Concurrent shall be per- mitted to sell shares of such securities of the other party held by it at any time in accordance with applica- ble law; provided, however, no such sales may occur unless and until both of the S-3 Registration Statements have been declared effective. 3. So long as Harris is in registration, Concurrent shall be subject to the Concurrent Liquidity Restrictions. So long as Concurrent is in registration, Harris shall be subject to the Harris Liquidity Restric- tions. 4. Concurrent shall have the right to sell in any Public Offering by Harris of shares of Harris Common Stock up to the Minimum Number of Harris Owned Shares. Harris shall have the right to sell in any Public Offer- ing by Concurrent of shares of Concurrent Common Stock up to the Minimum Number of Concurrent Owned Shares. 5. Subject to Section 6.1(f) below, (i) Harris shall use its Best Efforts to include for the benefit of Concurrent in any Public Offering of its stock (including in connection with the exercise by any under- writer of any over-allotment option) any shares of Harris Common Stock Beneficially Owned by Concurrent in excess of the Minimum Number of Owned Harris Shares as requested by Concurrent and (ii) Concurrent shall use its Best Efforts to include for the benefit of Harris in any Public Offering of its stock (including in connection with the exercise by any underwriter of any over-allot- ment option) any shares of Concurrent Common Stock Bene- ficially Owned by Harris in excess of the Minimum Number of Owned Concurrent Shares as requested by Harris. 6. The Minimum Number of Owned Harris Shares and the Minimum Number of Owned Concurrent Shares sold for the benefit of Concurrent or Harris, as the case may be, in a Public Offering may be reduced if (i) the appli- cable managing underwriter of such Public Offering advis- es Concurrent or Harris, as the case may be, that the distribution of all or a portion of such shares will materially and adversely affect the distribution of the stock being offering in the applicable Public Offering and (ii) the Public Offering in which such number of shares is reduced does not provide for the sale of any shares of stock for the benefit of any party other than the issuer; provided, however, any such reduction in the number of shares shall be the smallest reduction possible in order for the applicable managing underwriter to conclude that the distribution of such reduced number of shares will not materially and adversely affect the distribution of the stock in the applicable Public Offering. 7. If a Public Offering is consummated by Harris in which at least the Minimum Number of Owned Harris Shares is sold for the benefit of Concurrent (or at least such lesser number as requested by Concurrent to be included in such Public Offering), Concurrent shall be subject to a "lock-up" (so long as it Beneficially Owns at least the Triggering Number of Harris Shares at the time of such lock-up) for a period of up to 6 months (or up to such lesser lock-up period which is applicable to any selling shareholder in such Public Offering who is a director, officer, employee or affiliate of Harris at the time the Public Offering is consummated). If a Public Offering is consummated by Concurrent in which at least the Minimum Number of Owned Concurrent Shares is sold for the benefit of Harris (or at least such lesser number as requested by Harris to be included in such Public Offer- ing), Concurrent shall be subject to a lock-up (so long as it Beneficially Owns at least the Triggering Number of Concurrent Shares at the time of such lock-up) for a period of up to 6 months (or up to such lesser lock-up period which is applicable to any selling shareholder in such Public Offering who is a director, officer, or other affiliate of Concurrent at the time the Public Offering is consummated). 8. If a Public Offering is consummated by Harris in which less than the Minimum Number of Owned Harris Shares is sold for the benefit of Concurrent (or less than such lesser number as requested by Concurrent to be included in such Public Offering), the Concurrent Liquidity Restrictions shall remain in effect for a period of up to 6 months (or up to such lesser lock-up period which is applicable to any selling shareholder in such Public Offering who is a director, officer, employee or affiliate of Harris at the time the Public Offering is consummated) but Concurrent shall not be obligated to enter into any other lock-up provisions in connection with such Public Offering. If a Public Offering is con- summated by Concurrent in which less than the Minimum Number of Owned Concurrent Shares is sold for the benefit of Harris (or less than such lesser number as requested by Harris to be included in such Public Offering), the Harris Liquidity Restrictions shall remain in effect for a period of up to 6 months (or up to such lesser lock-up period which is applicable to any selling shareholder in such Public Offering who is a director, officer, employee or affiliate of Concurrent at the time the Public Offer- ing is consummated) but Harris shall not be obligated to enter into any other lock-up provisions in connection with such Public Offering. 9. After such registration statement is declared effective by the SEC, Harris shall use its Best Efforts to maintain the effectiveness of the Harris S-3 until the third anniversary of the effective date plus an additional period beyond the third anniversary equal to the total period of all lock-ups applied to Concurrent pursuant to Section 6.1(g) above. So long as the Harris S-3 remains effective, Harris shall file any material press releases and report any material event as soon as practicable in a Current Report of Form 8-K. 10. After such registration statement is declared effective by the SEC, Concurrent shall use its Best Efforts to maintain the effectiveness of the Concur- rent S-3 until the third anniversary of the effective date plus an additional period beyond the third anniver- sary equal to the total period of all lock-ups applied to Harris pursuant to Section 6.1(g) above. So long as the Concurrent S-3 remains effective, Concurrent shall file any material press releases and report any material event as soon as practicable in a Current Report of Form 8-K. SECTION B. Indemnification; Contribution. 1. In the case of each registration effected by Concurrent or Harris, as the case may be, (each, a "Registrant") pursuant to this Agreement under the feder- al securities laws, the Registrant agrees to indemnify and hold harmless, to the full extent permitted by law, Harris or Concurrent, as the case may be (each, a "Hold- er"), and such Holder's officers, directors, agents and employees against all losses, claims, damages, liabili- ties and expenses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the registration statement under which securities of the Registrant owned by such Holder were registered under the Securities Act, any prospectus or preliminary pro- spectus or in any amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, except insofar as the same arise out of, are based upon or are contained in any informa- tion furnished in writing to the Registrant by such Holder expressly for use therein or by the Holder's failure to deliver a copy of the applicable registration statement or final prospectus after the Registrant has furnished such Holder with a sufficient number of copies of the same. 2. In connection with any registration state- ment in which a Holder is participating, such Holder shall furnish to the Registrant in writing such informa- tion and affidavits as the Registrant reasonably requests for use in connection with any registration statement or prospectus and agrees to indemnify and hold harmless, to the full extent permitted by law, the Registrant, its directors, officers, agents, employees against any loss- es, claims, damages, liabilities and expenses arising out of or based upon any untrue or alleged untrue statement of a material fact contained in the registration state- ment under which securities of the Registrant owned by such Holder were registered under the Securities Act, any prospectus or preliminary prospectus or in any amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circum- stances under which they were made) not misleading, to the extent, but only to the extent, that such untrue or alleged untrue statement or omission or alleged omission is contained in or should have been contained in any information or affidavit so furnished in writing by such Holder to the Registrant specifically for inclusion in such registration statement or prospectus. In no event shall the liability of any Holder, hereunder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the securities of the Registrant giving rise to such indemnification obliga- tion. The Registrant and, to the extent customary in underwriting agreements at the time, its directors, officers, agents, employees, shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any prospectus or registration statement. 3. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it shall seek indemnification and (ii) unless in the reason- able judgment of counsel to such indemnified party a conflict of interest is likely to exist between such indemnified party and the indemnifying party with respect to such claim, permit the indemnifying party to assume the defense of such claim with counsel reasonably satis- factory to the indemnified party. If the indemnifying party assumes the defense of such claim, it shall not be obligated to pay the fees and expenses of more than one counsel with respect to such claim, unless, in the rea- sonable judgment of counsel to such indemnified party, a conflict of interest is likely to exist between such indemnified party and any other indemnified party with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of one additional counsel with respect to such claim. Subject to the foregoing, the indemnifying party shall in no event be liable to an indemnified party for legal and other expenses incurred by such indemnified party in connection with the defense of a claim subsequent to the assumption of such defense by such indemnifying party. The indemnifying party shall not be subject to any lia- bility for any settlement made without its consent. 4. If for any reason the indemnification provided for in the preceding paragraphs of this Section 6.2 is unavailable to an indemnified party or is insuffi- cient to hold it harmless as contemplated by the preced- ing paragraphs (a) and (b), then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemni- fied party as a result of such loss, claim, damage, liability or expense in such proportion as is appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party in connection with the actions which resulted in such loss, claim, damage, liability or ex- pense, as well as any other relevant equitable consider- ations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to informa- tion supplied by, such indemnifying party or indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabil- ities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 6.2(c) hereof, any legal or other fees or expenses rea- sonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6.2(d) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable consider- ations referred to in the immediately preceding para- graph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. No Holder shall be required to contribute in an amount greater than the dollar amount of proceeds received by such Holder with respect to the sale of securities of the Registrant held by such Holder. ARTICLE VII. MISCELLANEOUS SECTION A. Effectiveness. This Agreement shall be executed contemporaneously with the Purchase and Sale Agreement and shall be effective at the Closing Date. SECTION B. Notices. All notices, requests and other communications hereunder shall be in writing (including fax) and shall be sent, delivered or mailed, addressed, or faxed: 1. if to Concurrent, to: Concurrent Corporation 2 Crescent Place Oceanport, NJ 07757 (908) 870-4500 (F) (908) 870-4779 Attention of Kevin J. Dell Vice President, Secretary and General Counsel with a copy to: Skadden, Arps, Slate, Meagher & Flom 919 Third Avenue New York, NY 10022 (T) (212) 735-3000 (F) (212) 735-2000 Attention: Eric L. Cochran, Esq. 2. if to Harris, to: Harris Computer Systems Corporation 2101 West Cypress Creek Road Fort Lauderdale, FL 33309 (T) (305) 974-1700 (F) (305) 973-5253 Attention of President with a copy to: Holland & Knight One East Broward Boulevard P.O. Box 14070 Fort Lauderdale, FL 33302 (T) (305) 525-1000 (F) (305) 463-2030 Attention: Brian Foremny, Esq. Each such notice, request or other communication shall be given (i) by hand delivery, (ii) by nationally recognized courier service or (iii) by fax, receipt confirmed. Each such notice, request or communication shall be effective (A) if delivered by band or by nationally recognized courier service, when delivered at the address specified in this Section 5.1 (or in accordance with the latest unrevoked written direction from such party) and (B) if given by fax, when such fax is transmitted to the fax number specified in this Section 5.1 (or in accordance with the latest unrevoked written direction from such party), and the appropriate confirmation is received. SECTION C. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "included," "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation." SECTION D. Severability. 1. To the extent that any provision of this Agreement, with respect to either party hereto, is deter- mined to be invalid, unenforceable or excessive in scope by any court or other body of competent jurisdiction, unless the analogous provision with respect to the other party hereto is also determined to be invalid, unenforce- able or excessive in scope by such court or other body of competent jurisdiction, or unless the other party waives the effect of such provision in writing then this Agree- ment shall be terminated in its entirety and of no fur- ther force or effect. 2. If such analogous provision is determined to be invalid, unenforceable or excessive in scope by such court or other body of competent jurisdiction, each such provision shall be ineffective only to the most limited extent so as not to render the Agreement unen- forceable, and the remaining provisions shall remain in full force and effect as if this Agreement had been executed with the invalid, unenforceable or excessive provision so limited. SECTION E. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall, taken together, be considered one and the same agreement, it being understood that both parties need not sign the same counterpart. SECTION F. Entire Agreement; No Third Party Beneficiaries. This Agreement together with the Purchase and Sale Agreement (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof and (b) is not intended to confer upon any Person, other than the parties hereto, any rights or remedies hereunder. SECTION G. Further Assurances. Each party shall execute, deliver, acknowledge and file such other documents and take such further actions as may be reason- ably requested from time to time by the other party hereto to give effect to and carry out the transactions contemplated herein. SECTION H. Governing Law; Equitable Reme- dies. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be entitled to equitable relief, including in the form of injunctions, in order to enforce specifically the provisions of this Agreement, in addi- tion to any other remedy to which they are entitled at law or in equity. SECTION I. Consent to Jurisdiction. Each party hereto irrevocably submits to the exclusive juris- diction of the United States District Court for the Southern District of Florida or if such court does not have jurisdiction, the Circuit Court for the Seventeenth Judicial Circuit in and for Broward County, Florida, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contem- plated hereby. Each party hereto further agrees that service of any process, summons, notice or document by U.S. registered mail to such party's respective address set forth in Section 5.1 shall be effective service of process for any action, suit or proceeding in Florida with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately pre- ceding sentence. Each party hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (a) the United States District Court for the Southern District of Florida or (b) the Circuit Court for the Seventeenth Judicial Circuit in and for Broward County, Florida, and hereby further irrevocably and uncondition- ally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. SECTION J. Amendments; Waivers. 1. No provision of this Agreement may be amended or waived unless such amendment or waiver is in writing and signed, in the case of an amendment, by the parties hereto, or in the case of a waiver, by the party against whom the waiver is to be effective; provided that no such amendment or waiver by Concurrent shall be effec- tive without the approval of a majority of the directors of Concurrent. Notwithstanding any provision herein to the contrary, if a majority of the directors of Concur- rent determine in good faith to do so, such directors may seek to enforce, in the name and on behalf of Concurrent, the terms of this Agreement against Harris. 2. No failure or delay by any party in exer- cising any right, power or privilege hereunder shall operate as waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law. SECTION K. Assignment. Neither this Agree- ment nor any of the rights or obligations hereunder shall be assigned by either of the parties hereto without the prior written consent of the other party, except that either party may assign all its rights and obligations to the assignee of all or substantially all of the assets of such party, provided that such party shall in no event be released from its obligations hereunder without the prior written consent of the other party. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered, all as of the date first set forth above. CONCURRENT COMPUTER CORPORATION By__________________________ Name: Title: HARRIS COMPUTER SYSTEMS CORPORATION By__________________________ Name: Title: TABLE OF CONTENTS PAGE ARTICLE I DEFINITIONS . . . . . . . . . . . . 2 Section 1.1. Definitions . . . . . . . . . . . . . . . . . . 2 ARTICLE II CORPORATE GOVERNANCE . . . . . . . . . . 10 SECTION 2.1. The Concurrent Board of Directors. . . . . . . 10 SECTION 2.2. The Harris Board of Directors . . . . . . . . . 12 SECTION 2.3. Initial Designees . . . . . . . . . . . . . . . 13 SECTION 2.4. Resignations and Replacements . . . . . . . . . 13 SECTION 2.5. Solicitation and Voting of Shares . . . . . . . 14 ARTICLE III STANDSTILL . . . . . . . . . . . . 15 SECTION 3.1. Standstill . . . . . . . . . . . . . . . . . . 15 SECTION 3.2. Third Party Offers . . . . . . . . . . . . . . 18 ARTICLE IV TRANSFER RESTRICTIONS . . . . . . . . . . 19 SECTION 4.1. Restrictions . . . . . . . . . . . . . . . . . 19 SECTION 4.2. Pledge of Stock. . . . . . . . . . . . . . . . 21 SECTION 4.3. Effect. . . . . . . . . . . . . . . . . . . . . 24 ARTICLE V TERMINATION . . . . . . . . . . . . 24 SECTION 5.1. Termination . . . . . . . . . . . . . . . . . . 24 ARTICLE VI REGISTRATION . . . . . . . . . . . . 25 SECTION 6.1. Registration . . . . . . . . . . . . . . . . . 25 SECTION 6.2. Indemnification; Contribution. . . . . . . . . 32 ARTICLE VII MISCELLANEOUS . . . . . . . . . . . . 38 SECTION 7.1. Effectiveness. . . . . . . . . . . . . . . . . 38 SECTION 7.2. Notices . . . . . . . . . . . . . . . . . . . . 38 SECTION 7.3. Interpretation . . . . . . . . . . . . . . . . 39 SECTION 7.4. Severability . . . . . . . . . . . . . . . . . 40 SECTION 7.5. Counterparts . . . . . . . . . . . . . . . . . 41 SECTION 7.6. Entire Agreement; No Third Party Beneficiaries . . . . . . . . . . . . . . . . . 41 SECTION 7.7. Further Assurances . . . . . . . . . . . . . . 41 SECTION 7.8. Governing Law; Equitable Remedies . . . . . . . 41 SECTION 7.9. Consent to Jurisdiction . . . . . . . . . . . . 42 SECTION 7.10. Amendments; Waivers . . . . . . . . . . . . . . 43 SECTION 7.11. Assignment . . . . . . . . . . . . . . . . . . 44 -----END PRIVACY-ENHANCED MESSAGE-----