-----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, ALTCUQAFifLGwXKILffSIkeojKdcGpO1llOYcUxtkxDI9m32/aw4xdKuuguttluk uFfqbYnMF08p+kwDzZSW+g== 0000950123-02-010767.txt : 20021113 0000950123-02-010767.hdr.sgml : 20021113 20021113171203 ACCESSION NUMBER: 0000950123-02-010767 CONFORMED SUBMISSION TYPE: SC TO-T PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20021113 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ENGHOUSE SYSTEMS LTD CENTRAL INDEX KEY: 0001203589 IRS NUMBER: 000000000 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: SC TO-T MAIL ADDRESS: STREET 1: 80 TIVERTON COURT STREET 2: STE 800 CITY: TORONTO ONTARIO CANADA STATE: A6 ZIP: 999999999 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: SYNTELLECT INC CENTRAL INDEX KEY: 0000758830 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 860486871 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC TO-T SEC ACT: 1934 Act SEC FILE NUMBER: 005-41290 FILM NUMBER: 02820843 BUSINESS ADDRESS: STREET 1: 16610 N. BLACK CANYON HIGHWAY STREET 2: SUITE 100 CITY: PHOENIX STATE: AZ ZIP: 85053 BUSINESS PHONE: 602-789-2800 MAIL ADDRESS: STREET 1: 16610 N. BLACK CANYON HIGHWAY STREET 2: SUITE 100 CITY: PHOENIX STATE: AZ ZIP: 85053 SC TO-T 1 t08191sctovt.txt SCHEDULE TO-T SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 SCHEDULE TO (RULE 14d-100) TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 SYNTELLECT INC. (Name of Subject Company (Issuer)) ARIZONA ACQUISITION CORP. ENGHOUSE SYSTEMS LIMITED (Name of Filing Persons (Offerors)) COMMON STOCK, $.01 PAR VALUE (Title of Class of Securities) 87161-L-10-5 (CUSIP Number of class of securities) NEIL SHAFRAN 80 TIVERTON COURT, SUITE 800 MARKHAM, ONTARIO, CANADA L3R 0G4 (905) 946-3200 (Name, Address and Telephone No. of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons) with copies to: BRIAN HOFFMANN RICHARD D. PRITZ CLIFFORD CHANCE US LLP 200 PARK AVENUE NEW YORK, NEW YORK 10166 (212) 878-8000 CALCULATION OF FILING FEE TRANSACTION VALUATION AMOUNT OF FILING FEE $8,091,854.44* $744.45** * Estimated for the purpose of calculating the filing fee only. The filing fee was determined assuming the purchase of all outstanding shares of common stock, par value $.01 per share of Syntellect Inc. (the "Shares") and the cash out of all outstanding options to purchase Shares, based upon the sum of (a) the product obtained by multiplying (x) 11,122,902 (the aggregate number of Shares outstanding and not held by the Filing Persons) and (y) the offer price of $0.72 per Share, and (b) the product obtained by multiplying (x) 226,500 (the aggregate number of outstanding options to purchase Shares with an exercise price less than the offer price of $0.72 per Share) and (y) the difference between $0.72 per Share and the exercise price per Share of each such option. ** The amount of the filing fee, calculated in accordance with Section 14(g)(3) of the Securities Exchange Act of 1934, as amended, equals $92 per $1,000,000 of the value of the transaction. [_] Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the offsetting fee with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form of Schedule and the date of its filing. Amount Previously Paid: Not Applicable Filing Parties: Not Applicable Form or Registration No.: Not Applicable Date Filed: Not Applicable [_] Check the box if the filing relates solely to preliminary communications made before commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: [X] third-party tender offer subject to Rule 14d-1. [_] issuer tender offer subject to Rule 13e-4. [_] going-private transaction subject to Rule 13e-3. [_] amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: [_] SCHEDULE TO This Tender Offer Statement on Schedule TO is being filed by Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse"), in connection with the offer by the Purchaser to purchase all of the outstanding common shares, $.01 par value per share ("Shares"), of Syntellect Inc., a Delaware corporation (the "Company"), that are not already owned by the Company, the Purchaser or Enghouse, at $0.72 per Share, net to the seller in cash, without interest, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 13, 2002, a copy of which is attached as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of which is attached as Exhibit (a)(2). ITEMS 1 - 6, 8, 9, 11. The information in the Offer to Purchase and the related Letter of Transmittal is incorporated in this Schedule TO by reference in answer to each of the Items 1 through 9 and Item 11 of Schedule TO. ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) The information in the Offer to Purchase and the related Letter of Transmittal is incorporated by reference in answer to part (a) of this Item 7. (b) Not applicable. (d) Not applicable. ITEM 10. FINANCIAL STATEMENTS. Not applicable. ITEM 12. EXHIBITS. EXHIBIT NO. DESCRIPTION - ----------- ----------- (a)(1) Offer to Purchase, dated November 13, 2002 (a)(2) Letter of Transmittal (a)(3) Notice of Guaranteed Delivery (a)(4) Letter to brokers, dealers, trust companies, commercial banks and other nominees (a)(5) Letter to Clients for use by brokers, dealers, trust companies, commercial banks and nominees (a)(6) Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9 (a)(7) Press release issued November 6, 2002 by Enghouse and the Company * (b) Not applicable. (d)(1) Agreement and Plan of Merger, dated as of November 5, 2002, among Enghouse, the Purchaser and the Company (d)(2) Tender and Voting Agreement, dated as of November 5, 2002, among Enghouse, the Company, and the stockholders of the Company listed on Schedule A thereto (d)(3) Stock Option Agreement, dated as of November 5, 2002, among Enghouse and the Company (g) Not applicable (h) Not applicable * Incorporated herein by reference to the Tender Offer Statement on Schedule TO, dated November 6, 2002, of Enghouse and the Purchaser SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: November 13, 2002 ENGHOUSE SYSTEMS LIMITED By: /s/ Neil Shafran ------------------------------------- Name: Neil Shafran Title: Executive Vice President Corporate Development ARIZONA ACQUISITION CORP. By: /s/ Neil Shafran ------------------------------------ Name: Neil Shafran Title: Vice President INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- (a)(1) Offer to Purchase, dated November 13, 2002 (a)(2) Letter of Transmittal (a)(3) Notice of Guaranteed Delivery (a)(4) Letter to brokers, dealers, trust companies, commercial banks and other nominees (a)(5) Letter to Clients for use by brokers, dealers, trust companies, commercial banks and nominees (a)(6) Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9 (a)(7) Press release issued November 6, 2002 by Enghouse and the Company* (b) Not applicable. (d)(1) Agreement and Plan of Merger, dated as of November 5, 2002, among Enghouse, the Purchaser and the Company (d)(2) Tender and Voting Agreement, dated as of November 5, 2002, among Enghouse, the Company, and the stockholders of the Company listed on Schedule A thereto (d)(3) Stock Option Agreement, dated as of November 5, 2002, among Enghouse and the Company (g) Not applicable (h) Not applicable * Incorporated herein by reference to the Tender Offer Statement on Schedule TO, dated November 6, 2002, of Enghouse and the Purchaser EX-99.A.1 3 t08191exv99waw1.txt OFFER TO PURCHASE DATED NOVEMBER 13, 2002 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTELLECT INC. AT US$0.72 NET PER SHARE BY ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. On November 5, 2002 we entered into an Agreement and Plan of Merger with Syntellect Inc. Syntellect's board of directors has unanimously (1) approved the Merger Agreement, (2) determined that the Offer and the Merger Agreement are fair to and in the best interests of Syntellect and its stockholders, and (3) recommended that Syntellect stockholders accept the Offer and tender their Shares pursuant to the Offer. The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer a number of Shares that, together with any outstanding shares solely owned by Enghouse Systems Limited or any of its subsidiaries, constitutes a majority of the outstanding Shares (determined on a fully diluted basis). The Offer is also subject to other conditions described in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. Under the Merger Agreement, following the successful completion of the Offer, Arizona Acquisition Corp. is to be merged into Syntellect and each outstanding Share (other than Shares owned by Enghouse or any subsidiary or held by stockholders, if any, who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the price per share paid in the Offer in cash, without interest thereon. A summary of the material terms of the Offer appears on pages 1 through 5. You should read this entire document carefully before deciding whether to tender your Shares in the Offer. ---------------------------------------------------- The Information Agent for the Offer is: MACKENZIE PARTNERS, INC. November 13, 2002 IMPORTANT Any stockholder of Syntellect wishing to tender Shares in the Offer must either (1) complete and sign the Letter of Transmittal (or a facsimile thereof) for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal and mail or deliver the Letter of Transmittal and all other required documents to the depositary for the Offer, Computershare Trust Company of New York (the "Depositary"), together with certificates representing the Shares tendered, or follow the procedure for book-entry transfer set forth in Section 3 (Procedure for Accepting the Offer and Tendering Shares) of this Offer to Purchase or (2) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for the stockholder. A stockholder whose shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such person if such stockholder wishes to tender such Shares. Any stockholder of Syntellect who wishes to tender Shares in the Offer and cannot deliver certificates representing such Shares and all other required documents to the Depositary on or prior to the Expiration Date (as defined in Section 1 (Terms of the Offer) of this Offer to Purchase) or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such shares pursuant to the guaranteed delivery procedure set forth in Section 3 (Procedure for Accepting the Offer and Tendering Shares) of this Offer to Purchase. Questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for copies of these documents. TABLE OF CONTENTS
PAGE ---- SUMMARY TERM SHEET.......................................... 1 INTRODUCTION................................................ 7 THE TENDER OFFER............................................ 9 1. Terms of the Offer.................................... 9 2. Acceptance for Payment and Payment for Shares......... 11 3. Procedures for Accepting the Offer and Tendering Shares............................................... 12 4. Withdrawal Rights..................................... 15 5. Certain United States Federal Income Tax Consequences......................................... 15 6. Price Range of Shares; Dividends...................... 16 7. Certain Information Concerning Syntellect............. 17 8. Certain Information Concerning Enghouse and the Purchaser............................................ 17 9. Source and Amount of Funds............................ 18 10. Background of the Offer; Past Contacts or Negotiations with Syntellect...................................... 18 11. The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement........................... 18 12. Purpose of the Offer; Plans for Syntellect............ 26 13. Certain Effects of the Offer.......................... 27 14. Dividends and Distributions........................... 28 15. Certain Conditions of the Offer....................... 28 16. Certain Legal Matters; Regulatory Approvals........... 30 17. Dissenters' Rights.................................... 31 18. Fees and Expenses..................................... 31 19. Miscellaneous......................................... 31 SCHEDULE I Directors and Executive Officers of Enghouse and the Purchaser............................................. I-1
SUMMARY TERM SHEET Arizona Acquisition Corp. is offering to purchase all of the outstanding shares of common stock of Syntellect Inc. for $0.72 per share in cash. The following are some of the questions you, as a stockholder of Syntellect, may have, and answers to those questions. This summary term sheet provides important and material information about our offer that is described in more detail elsewhere in this Offer to Purchase, but this summary term sheet may not include all of the information about our offer that is important to you. We urge you to carefully read the remainder of this Offer to Purchase and the Letter of Transmittal because the information in this summary term sheet is not complete. Additional important information about our offer is contained in the remainder of this Offer to Purchase and the Letter of Transmittal for our offer. WHO IS OFFERING TO BUY MY SYNTELLECT SHARES? Our name is Arizona Acquisition Corp. We are a Delaware corporation formed for the purpose of making a tender offer for all shares of Syntellect. We are a wholly owned subsidiary of Enghouse Systems Limited, a publicly traded software company currently serving the utility, telecommunications, and pipeline industries. See the "Introduction" to this Offer to Purchase and Section 8 (Certain Information Concerning Enghouse and the Purchaser) of this Offer to Purchase. HOW MANY SHARES ARE YOU OFFERING TO PURCHASE? We are making an offer to purchase all of the outstanding shares. See the "Introduction" to this Offer to Purchase and Section 1 (Terms of the Offer) of this Offer to Purchase. HOW MUCH ARE YOU OFFERING TO PAY? WHAT IS THE FORM OF PAYMENT? WILL I HAVE TO PAY ANY FEES OR COMMISSIONS IF I TENDER MY SHARES IN YOUR OFFER? We are offering to pay $0.72 per share, net to you, in cash (without interest) for each of your shares. If you are the record owner of your shares and you tender your shares to us in the offer, you will not have to pay brokerage fees or similar expenses. If you own your shares through a broker or other nominee, and your broker or nominee tenders your shares on your behalf, they may charge you a fee for doing so. You should consult your broker or nominee to determine whether any charges will apply. See the "Introduction" to this Offer to Purchase. ALL REFERENCES IN THIS OFFER TO PURCHASE TO $ ARE TO US DOLLARS. DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? Yes. Enghouse, our parent company, will provide us with sufficient funds to purchase all shares validly tendered in the offer and to make payment for all shares converted into the right to receive cash in the merger described below, which is expected to follow the successful completion of the offer in accordance with the terms and conditions of the Merger Agreement. Enghouse has sufficient cash on hand to provide us with these funds. The offer is not conditioned upon any financing arrangements or financing contingencies. See Section 9 (Source and Amount of Funds) of this Offer to Purchase. IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER? No. We do not believe our financial condition is relevant to your decision whether to tender your shares in our offer because the form of payment consists solely of cash, there is no financing contingency and the offer is for all outstanding shares. See Section 9 (Source and Amount of Funds) of this Offer to Purchase. WHAT IS THE PURPOSE OF THE OFFER? The purpose of the offer is to enable Enghouse to acquire at least a majority of the fully diluted shares. Following the offer, we intend to acquire the remaining shares that are not acquired in the offer in a merger transaction. See the "Introduction" to this Offer to Purchase and Section 12 (Purpose of the Offer; Plans for Syntellect) of this Offer to Purchase. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER? Unless we extend our offer, you will have until 12:00 midnight, New York City time, on Wednesday, December 11, 2002, to tender your shares. If you cannot deliver everything that is required in order to make a valid tender of your shares by that time, you may be able to use a guaranteed delivery procedure, which is described later in this Offer to Purchase. See Sections 1 (Terms of the Offer) and Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase. CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES? We have agreed in the merger agreement that: - we may extend the offer, but not beyond, January 31, 2003, if at a scheduled or extended expiration date any of the conditions to our obligation to accept for payment and to pay for the shares are not satisfied or, to the extent permitted by the merger agreement, waived; - we may extend the offer for any period required by any rule, regulation or interpretation of the Securities and Exchange Commission applicable to the offer; and - we may extend the offer for any reason up to 10 days beyond the latest date which would otherwise be permissible under the first two bullet points, above. We may extend the offer for a longer period if Syntellect consents to such extension. At our option, we may (but are not required to) also provide for a subsequent offering period, and one or more extensions thereof, following the expiration of and acceptance of shares tendered in our offer. During any subsequent period, if there is one, you could tender your shares to us for the same offer price payable in our offer. See Section 1 (Terms of the Offer) of this Offer to Purchase for more information. HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED? If we extend the offer, we will inform the Depositary of that fact and will make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day on which the offer was previously scheduled to expire. See Section 1 (Terms of the Offer) of this Offer to Purchase. WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? We are not obligated to purchase any shares that are validly tendered in the offer unless, prior to the expiration of our offer (as it may be extended), there shall have been validly tendered in accordance with the terms of our offer a number of shares which, together with any outstanding shares solely owned by Enghouse or any of its subsidiaries, constitutes a majority of the outstanding shares (determined on a fully diluted basis) (we call this condition the "minimum condition"). For purposes of the offer, "on a fully diluted basis" means, as of any time, on a basis that includes the number of shares that are actually issued and outstanding plus the maximum number of such shares that Syntellect may be required to issue under stock options, warrants and other rights or securities convertible into shares, whether or not currently exercisable. Our offer is not subject to any financing contingencies, but is subject to a number of other conditions, including with respect to the accuracy of Syntellect's representations and warranties in the Merger Agreement, Syntellect's compliance with its covenants set forth in the Merger Agreement and the absence of a material adverse effect on Syntellect. We can waive the conditions to the offer, other than the minimum condition, without Syntellect's consent. See Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. HOW DO I TENDER MY SHARES? To tender your shares, you must deliver the certificates representing your shares, together with the Letter of Transmittal enclosed with this Offer to Purchase, properly completed and duly executed, and any other documents required by the Letter of Transmittal, to the Depositary not later than the time the tender offer expires. If you hold your shares in street name through a broker, dealer, bank, trust company or other nominee 2 and you wish to tender your shares in our offer, the broker, dealer, bank, trust company or other nominee that holds your shares must tender them on your behalf through the Depositary. If you cannot deliver the items that are required to be delivered to the Depositary by the expiration of our offer, you may obtain additional time to do so by having a broker, bank or other fiduciary that is a member of the Securities Transfer Agent's Medallion Program or other eligible institution guarantee that the missing items will be received by the Depositary within three Nasdaq National Market trading days. If you are one of the institutions mentioned in the preceding sentence, you may use the Notice of Guaranteed Delivery enclosed with this Offer to Purchase for this purpose. To tender shares in this manner, however, the Depositary must receive the required items within such three trading day period. A share that is properly withdrawn shall not be considered validly tendered. However, such share may be re-tendered by following the procedures for validly tendering a share. See Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase. UNTIL WHAT TIME MAY I WITHDRAW PREVIOUSLY TENDERED SHARES? You may withdraw shares at any time until the offer has expired and, if we have not accepted your shares for payment by January 11, 2003, you may withdraw them at any time after that date until we accept shares for payment. This right to withdraw will not apply to a subsequent offering period, if any, as discussed in Section 1 (Terms of the Offer) of this Offer to Purchase. See Section 4 (Withdrawal Rights) of this Offer to Purchase. HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES? To withdraw any shares that you previously tendered in our offer, you (or, if your shares are held in street name, the broker, dealer, bank, trust company or other nominee that holds your shares) must deliver a written notice of withdrawal (or a facsimile copy of one), with the required information, to the Depositary while you still have the right to withdraw your shares. See Section 4 (Withdrawal Rights) of this Offer to Purchase. WHAT DOES SYNTELLECT'S BOARD OF DIRECTORS RECOMMEND REGARDING THE OFFER? We are making the offer pursuant to an Agreement and Plan of Merger, dated as of November 5, 2002, among Enghouse, Syntellect and us. Syntellect's Board of Directors has, by the unanimous vote of all directors of Syntellect: (i) approved the Merger Agreement, (ii) approved the offer and the merger and certain other actions described in the Merger Agreement, (iii) determined that the Merger Agreement and the transactions contemplated thereby, including the offer and the merger are fair to, and in the best interests of, Syntellect and its stockholders, (iv) recommended that Syntellect's stockholders accept the offer, tender their shares pursuant to the offer and approve the Merger Agreement (if required), and (v) approved the acquisition of shares by Enghouse and us pursuant to the Offer, the Tender and Voting Agreement, the Stock Option Agreement and the other transactions contemplated by the Merger Agreement, the Tender and Voting Agreement and the Stock Option Agreement. See Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. The factors considered by Syntellect's Board of Directors in making the determinations and the recommendation described above are described in Syntellect's Solicitation/Recommendation Statement on Schedule 14D-9, which has been filed with the SEC and is being mailed to the stockholders of Syntellect with this Offer to Purchase. Alliant Partners, Syntellect's financial advisor, has delivered to Syntellect's Board of Directors its written opinion dated November 5, 2002, to the effect that, as of such date and based on and subject to the matters stated in such opinion, the consideration to be received by holders of shares in the offer and the merger is fair, from a financial point of view, to such holders. The full text of Alliant's written opinion, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is included as an annex to Syntellect's Solicitation/Recommendation Statement on Schedule 14D-9. Stockhold- 3 ers are urged to, and should, carefully read Syntellect's Solicitation/Recommendation Statement on Schedule 14D-9 and the opinion of Alliant in their entireties. See the "Introduction" to this Offer to Purchase. HAVE ANY STOCKHOLDERS OF SYNTELLECT AGREED TO TENDER THEIR SHARES IN THE OFFER? Yes. Pursuant to the Tender and Voting Agreement, we have secured the commitment of MCM Associates and Wynnefield Capital Management and some of their affiliates, holding an aggregate of approximately 15% of the outstanding shares, to tender their shares in the offer. Syntellect has informed us that it has been advised by each of its directors and executive officers that they intend to tender all of their shares in the offer. See Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. IF A MAJORITY OF THE SHARES ARE TENDERED AND ACCEPTED FOR PAYMENT, WILL SYNTELLECT CONTINUE AS A PUBLIC COMPANY? No. Following the purchase of shares in the offer we expect to consummate the merger. If the merger takes place, Syntellect will no longer be publicly owned. Even if for some reason the merger does not take place, if we purchase all of the tendered shares, there may be so few remaining stockholders and publicly held shares that there will no longer be a public trading market for shares, and Syntellect may cease making filings with the SEC or otherwise cease being required to comply with the SEC rules relating to publicly held companies. See Section 13 (Certain Effects of the Offer) of this Offer to Purchase. WILL THE OFFER BE FOLLOWED BY A MERGER IF ALL OF SYNTELLECT'S SHARES ARE NOT TENDERED IN THE OFFER? Yes. If we accept for payment and pay for at least a majority of the shares on a fully diluted basis and all of the conditions to the merger are satisfied or waived, we will be merged with Syntellect. If that merger takes place, Enghouse will own all of the shares of Syntellect and all remaining stockholders of Syntellect (other than Enghouse and its subsidiaries and stockholders, if any, properly exercising dissenters' rights under Delaware law) will receive $0.72 per share in cash (or any higher price per share that is paid in the offer). See the "Introduction" to this Offer to Purchase. WHY SHOULD I TENDER IF I WILL RECEIVE $0.72 PER SHARE IN THE MERGER ANYWAY? We will not purchase any shares in the offer or the merger unless at least a majority of the outstanding shares, on a fully diluted basis, are validly tendered. In addition, if the offer is completed, stockholders who tender their shares in the offer will be paid before stockholders who wait until the merger is completed. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES? If the merger described above takes place, stockholders not tendering in the offer will receive the same amount of cash per share that they would have received had they tendered their shares in the offer, subject to any dissenters' rights properly exercised under Delaware law. Therefore, if the merger takes place, the only difference to you between tendering your shares and not tendering your shares is that you will be paid earlier if you tender your shares. If the merger does not take place, however, the number of stockholders and the number of shares of Syntellect that are still in the hands of the public may be so small that there no longer will be an active public trading market (or, possibly, there may not be any public trading market) for the common stock. Also, as described above, Syntellect may cease making filings with the SEC or otherwise may not be required to comply with the SEC rules relating to publicly held companies. See the "Introduction" and Section 13 (Certain Effects of the Offer) of this Offer to Purchase. WHAT WILL HAPPEN IF YOU DON'T BUY SHARES IN THE OFFER? If we don't receive tenders of at least a majority of the fully diluted Syntellect shares under our offer, we would have the right to terminate the Merger Agreement. Syntellect would then be under certain continuing 4 obligations to us, including obligations, in certain circumstances, to pay us up to $500,000, reimburse our expenses, or both. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE? On November 5, 2002, the last trading day before we announced the signing of the Merger Agreement, the last sale price of shares reported on the Over The Counter Bulletin Board was $0.21 per share. On November 12, 2002, the last trading day before we commenced the tender offer, the closing price of shares reported on the Over The Counter Bulletin Board was $0.69. WE ENCOURAGE YOU TO OBTAIN A RECENT QUOTATION FOR THE SHARES IN DECIDING WHETHER TO TENDER YOUR SHARES. See Section 6 (Price Range of Shares; Dividends) of this Offer to Purchase. WHAT ARE THE TAX CONSEQUENCES TO ME OF TENDERING SHARES? The receipt of cash for shares pursuant to the tender offer or the merger will be a taxable transaction for United States federal income tax purposes and possibly for state, local and foreign income tax purposes as well. Stockholders are urged to consult their own tax advisors to determine the particular tax consequences to them (including the application and effect of any state, local, or foreign income and other tax laws) of our offer and the merger. See Section 5 (Certain United States Federal Income Tax Consequences) of this Offer to Purchase. TO WHOM MAY I SPEAK IF I HAVE QUESTIONS ABOUT THE OFFER? You may call MacKenzie Partners, Inc., the Information Agent for our offer, at (212) 929-5500 (call collect) or (800) 322-2885 (toll free). The address of MacKenzie Partners, Inc. is 105 Madison Avenue, New York, New York 10016. 5 To the Holders of Shares of Common Stock of Syntellect Inc.: INTRODUCTION Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse"), hereby offers to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation ("Syntellect"), at a price of $0.72 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal enclosed with this Offer to Purchase, which, together with any amendments or supplements hereto or thereto, collectively constitute the "Offer". The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of November 5, 2002 (the "Merger Agreement"), among Enghouse, the Purchaser and Syntellect pursuant to which, following the purchase by the Purchaser of Shares in the Offer and the satisfaction or waiver of each of the conditions to the Offer set forth in the Merger Agreement, the Purchaser will be merged with and into Syntellect (the "Merger"), with Syntellect surviving the Merger as a wholly owned subsidiary of Enghouse. As a result of the Merger, each outstanding Share (other than Shares owned by Enghouse, the Purchaser, Syntellect or any of their respective subsidiaries, or by stockholders, if any, who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the Offer Price. The Merger Agreement is more fully described in Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase, which also contains a discussion of the treatment of Syntellect stock options. Tendering stockholders who are record owners of their Shares and tender directly to Computershare Trust Company of New York, which is acting as the depositary for the Offer (the "Depositary"), will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by the Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Enghouse or the Purchaser will pay all charges and expenses of the Depositary and MacKenzie Partners, Inc., which is acting as the information agent for the Offer (the "Information Agent"). See Section 18 (Fees and Expenses) of this Offer to Purchase. THE BOARD OF DIRECTORS OF SYNTELLECT HAS, AT A MEETING HELD ON NOVEMBER 5, 2002, UNANIMOUSLY (I) APPROVED THE MERGER AGREEMENT, (II) APPROVED THE OFFER AND THE MERGER AND CERTAIN OTHER ACTIONS DESCRIBED IN THE MERGER AGREEMENT, (III) DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, SYNTELLECT AND ITS STOCKHOLDERS, (IV) RECOMMENDED THAT SYNTELLECT'S STOCKHOLDERS ACCEPT THE OFFER, TENDER THEIR SHARES PURSUANT TO THE OFFER, AND APPROVE THE MERGER AGREEMENT (IF REQUIRED), AND (V) APPROVED THE ACQUISITION OF SHARES BY ENGHOUSE AND THE PURCHASER PURSUANT TO THE OFFER, THE TENDER AND VOTING AGREEMENT, THE STOCK OPTION AGREEMENT, AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT, THE TENDER AND VOTING AGREEMENT, AND THE STOCK OPTION AGREEMENT. ACCORDINGLY, SYNTELLECT'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS OF SYNTELLECT ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE PURCHASER IN THE OFFER AND, IF REQUIRED, VOTE TO ADOPT THE MERGER AGREEMENT. Alliant Partners ("Alliant"), Syntellect's financial advisor, has delivered to Syntellect's Board of Directors its written opinion dated November 5, 2002, to the effect that, as of such date and based on and subject to the matters stated in such opinion, the consideration to be received by holders of Shares pursuant to the Merger Agreement is fair, from a financial point of view, to such holders. The full text of Alliant's written opinion, which describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken, is included as an annex to Syntellect's Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9") under the Securities Exchange Act of 1934 (the "Exchange Act"), which is being mailed to stockholders herewith. Stockholders are urged to read such opinion carefully in its entirety. 7 THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY TENDERED A NUMBER OF SHARES WHICH, TOGETHER WITH ANY OUTSTANDING SHARES SOLELY OWNED BY ENGHOUSE OR ANY OF ITS SUBSIDIARIES, CONSTITUTES A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS) (THE "MINIMUM CONDITION"). FOR PURPOSES OF THE OFFER, "ON A FULLY DILUTED BASIS" MEANS, AS OF ANY TIME, ON A BASIS THAT INCLUDES THE NUMBER OF SHARES THAT ARE ACTUALLY ISSUED AND OUTSTANDING PLUS THE MAXIMUM NUMBER OF SUCH SHARES THAT SYNTELLECT MAY BE REQUIRED TO ISSUE UNDER STOCK OPTIONS, WARRANTS AND OTHER RIGHTS OR SECURITIES CONVERTIBLE INTO SHARES, WHETHER OR NOT CURRENTLY EXERCISABLE. THE OFFER IS ALSO SUBJECT TO THE SATISFACTION OF CERTAIN OTHER CONDITIONS. SEE SECTION 15 (CERTAIN CONDITIONS OF THE OFFER) OF THIS OFFER TO PURCHASE. Pursuant to the Tender and Voting Agreement, dated as of November 5, 2002 (the "Tender and Voting Agreement"), among Syntellect, Enghouse and MCM Associates, Wynnefield Capital Management and certain of their respective controlling persons and affiliated entities (the "Holders"), the Holders agreed to tender all of their Shares to the Purchaser in the Offer. The Holders beneficially own an aggregate of approximately 15% of the outstanding Shares. See Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. Pursuant to the Stock Option Agreement, dated as of November 5, 2002 (the "Stock Option Agreement"), between Syntellect and Enghouse, Syntellect has granted an option to Enghouse to purchase a number of newly issued Shares equal to 19.9% of Syntellect's outstanding Shares at a purchase price of $0.72 per Share (subject to adjustment in certain circumstances). The option will be exercisable upon termination of the Merger Agreement (except in certain circumstances), or upon any event obligating Syntellect to pay to Enghouse the $500,000 termination fee described in paragraph (a) or paragraph (b) of the "Fees and Expenses" portion of Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. Pursuant to the Merger Agreement, Syntellect granted to the Purchaser an option to purchase from Syntellect such number of Shares as will result in the Purchaser owning 90.1% of the total number of Shares, at a price per Share equal to the Offer Price (the "Purchaser Option"). The Purchaser Option is exercisable only to the extent Syntellect has a sufficient number of authorized but unissued Shares and following the time the Purchaser has accepted Shares for payment pursuant to the Offer and Enghouse and its subsidiaries beneficially own at least a majority of the then outstanding Shares. The purpose of the Purchaser Option is to enable the Purchaser to acquire a sufficient number of Shares so that it can complete a "short form" merger under Delaware law without requiring a vote of the remaining stockholders of Syntellect. Syntellect has advised Enghouse that, on November 4, 2002, 11,369,152 Shares were issued and outstanding, 2,358,392 Shares were subject to outstanding stock options (of which 226,500 were exercisable at prices at or below $0.72 per Share), and 30,000 Shares were subject to outstanding warrants (none of which were exercisable at prices at or below $0.72 per Share). Enghouse owns 246,250 Shares. Accordingly, the Purchaser believes that the Minimum Condition would be satisfied if approximately 6,632,521 Shares are validly tendered. The Merger Agreement provides that promptly upon the acceptance for purchase of any Shares pursuant to the Offer, Enghouse will be entitled to designate such number of directors, rounded up to the next whole number, on Syntellect's Board of Directors that equals the product of (1) the total number of directors on Syntellect's Board of Directors (giving effect to the directors designated by Enghouse pursuant to the Merger Agreement) and (2) a fraction, the numerator of which is the aggregate number of Shares then beneficially owned by Enghouse (including Shares accepted for payment pursuant to the Offer), and the denominator of which is the total number of Shares then outstanding. Syntellect has agreed to take all action necessary, including seeking and accepting resignations from directors and causing any required increase of the number of directors comprising Syntellect's Board of Directors, as is necessary to enable Enghouse's designees to be so elected to Syntellect's Board of Directors and, subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, to cause Enghouse's designees to be so elected. See Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. 8 The Merger is subject to the satisfaction or waiver of certain conditions, including, if required, the approval and adoption of the Merger Agreement by the affirmative vote of the holders of a majority of the outstanding Shares. If the Minimum Condition is satisfied, the Purchaser would have sufficient voting power to approve the Merger without the affirmative vote of any other stockholder of Syntellect. Syntellect has agreed, if required, to cause a meeting of its stockholders to be held as promptly as practicable following consummation of the Offer for the purposes of considering and taking action upon the approval and adoption of the Merger Agreement. Enghouse and the Purchaser agreed to vote their Shares in favor of the approval and adoption of the Merger Agreement. If the Purchaser becomes the owner of at least 90% of the outstanding Shares, the Merger may be consummated pursuant to the "short form" merger provisions of Delaware law without further notice to or the vote of any other stockholder. See Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. THE TENDER OFFER 1. TERMS OF THE OFFER Upon the terms, and subject to the conditions, of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn as permitted under Section 4 (Withdrawal Rights) of this Offer to Purchase. The term "Expiration Date" means 12:00 midnight, New York City time, on Wednesday, December 11, 2002 unless the Purchaser, in accordance with the Merger Agreement, extends the period during which the Offer is open, in which event the term "Expiration Date" means the latest time and date on which the Offer, as so extended (other than any extension with respect to a Subsequent Offering Period described below), expires. The Offer is conditioned upon the satisfaction of the Minimum Condition and the other conditions set forth in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. Subject to the provisions of the Merger Agreement, the Purchaser may waive any or all of the conditions to its obligation to purchase Shares pursuant to the Offer. If by the initial or any subsequent Expiration Date, any or all of the conditions to the Offer have not been satisfied or waived, subject to the provisions of the Merger Agreement, the Purchaser may elect to (i) terminate the Offer and return all tendered Shares to tendering stockholders, (ii) waive all of the unsatisfied conditions and, subject to any required extension, purchase all Shares validly tendered by the Expiration Date and not properly withdrawn or (iii) extend the Offer and, subject to the right of stockholders to withdraw Shares until the new Expiration Date, retain the Shares that have been tendered until the expiration of the Offer, as extended. The Purchaser will not make any change without the prior written consent of Syntellect that (i) reduces the number of Shares subject to the Offer, (ii) reduces the Offer Price, (iii) amends or adds to any of the conditions to the Offer set forth in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase, (iv) except as otherwise provided in this Offer to Purchase, extends the Offer, (v) changes the form of consideration payable in the Offer, (vi) waives the Minimum Condition, or (vii) amends any other term of the Offer in any manner adverse to the holders of Shares. Subject to the terms of the Merger Agreement, the Purchaser may, without the consent of Syntellect (i) extend the Offer, but not beyond January 31, 2003, if at the scheduled or extended Expiration Date of the Offer any of the conditions to the Offer shall not be satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff applicable to the Offer, or (iii) extend the Offer for any reason on one or more occasions for an aggregate period of not more than ten business days beyond the latest Expiration Date that would otherwise be permitted under clause (i) or (ii) of this sentence. 9 Rule 14d-11 under the Exchange Act permits the Purchaser, subject to certain conditions, to provide a subsequent offering period following the expiration of the Offer on the Expiration Date (a "Subsequent Offering Period"). A Subsequent Offering Period is an additional period of time from three business days to 20 business days in length, beginning after the Purchaser purchases Shares tendered in the Offer, during which stockholders may tender, but not withdraw, their Shares and receive the Offer Price. The Purchaser may, in its discretion, provide a Subsequent Offering Period of not less than three business days in the event that all of the conditions to the Offer have been satisfied or waived, as permitted by the Merger Agreement, as of the Expiration Date. Pursuant to Rule 14d-7 under the Exchange Act, no withdrawal rights apply to Shares tendered during a Subsequent Offering Period and no withdrawal rights apply during the Subsequent Offering Period with respect to Shares tendered in the Offer prior to the Expiration Date and accepted for payment. During a Subsequent Offering Period, Purchaser will promptly purchase and pay for all Shares tendered at the same price paid in the Offer. Subject to the applicable rules and regulations of the SEC and the provisions of the Merger Agreement, the Purchaser also expressly reserves the right, in its sole discretion, at any time or from time to time, (i) to terminate the Offer if any of the conditions set forth in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase have not been satisfied and (ii) to waive any condition to the Offer or otherwise amend the Offer in any respect, in each case by giving oral or written notice of such extension, termination, waiver or amendment to the Depositary and by making a public announcement thereof. If the Purchaser accepts for payment any Shares pursuant to the Offer, it will accept for payment all Shares validly tendered prior to the Expiration Date and not properly withdrawn, and will promptly pay for all Shares so accepted for payment. The rights reserved by the Purchaser by the preceding paragraph are in addition to the Purchaser's rights described in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. Any extension, delay, termination, waiver or amendment will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date, in accordance with the public announcement requirements of Rule 14e-1(d) under the Exchange Act. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser shall have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to the Dow Jones News Service. If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment for Shares or it is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 4 (Withdrawal Rights) of this Offer to Purchase. However, the ability of the Purchaser to delay the payment for Shares that the Purchaser has accepted for payment is limited by (i) Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of such bidder's offer, unless such bidder elects to offer a Subsequent Offering Period and pays for shares tendered during the Subsequent Offering Period in accordance with Rule 14d-11 under the Exchange Act and (ii) the terms of the Merger Agreement, which require that the Purchaser pay for Shares that are tendered pursuant to the Offer as soon as permitted after the Offer. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an offer must remain open following material changes in the terms of the Offer, other than a change in price, percentage of securities sought or inclusion of or changes to a dealer's soliciting fee, will depend upon the facts and circumstances, including the materiality, of the changes. In the SEC's view, an offer should remain open for a minimum of five business days from the date 10 the material change is first published, sent or given to stockholders and, if material changes are made with respect to information that approaches the significance of price and share levels, a minimum of ten business days may be required to allow for adequate dissemination to stockholders. Accordingly, if, prior to the Expiration Date, the Purchaser decreases the number of Shares being sought or increases the consideration offered pursuant to the Offer, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such tenth business day. Syntellect has provided the Purchaser with Syntellect's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on Syntellect's stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment) and the satisfaction or earlier waiver of all the conditions to the Offer set forth in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase, the Purchaser will accept for payment and will pay for all Shares validly tendered prior to the Expiration Date and not properly withdrawn pursuant to the Offer as soon as it is permitted to do so under applicable law. The Purchaser will make any determination concerning the satisfaction of the terms and conditions of the Offer. Subject to the Merger Agreement and compliance with Rule 14e-1(c) under the Exchange Act, the Purchaser expressly reserves the right to delay payment for Shares in order to comply in whole or in part with any applicable law. See Section 16 (Certain Legal Matters; Regulatory Approvals) of this Offer to Purchase. In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) the certificates evidencing such Shares (the "Share Certificates") or confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase, (2) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined below) in lieu of the Letter of Transmittal and (3) any other documents required by the Letter of Transmittal. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not properly withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the Offer Price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payments from the Purchaser and transmitting such payments to tendering stockholders whose Shares have been accepted for payment. If the Offer is extended for a period subsequent to the Expiration Date, payment for Shares which are tendered during such period will be made by deposit of the purchase price for such Shares with the Depositary promptly after receipt of such Shares. If, for any reason whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer is delayed, or the Purchaser is unable to accept for payment Shares tendered pursuant to the Offer, then, without prejudice to the Purchaser's rights under Section 1 (Terms of the Offer) of this Offer to Purchase, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn, except to the extent that the tendering stockholders are entitled to withdrawal rights as described in Section 4 (Withdrawal Rights) of this Offer to Purchase and as otherwise required by Rule 14e-1(c) under the Exchange Act. UNDER NO CIRCUMSTANCE WILL INTEREST ON THE OFFER PRICE FOR SHARES BE PAID, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT. 11 If any tendered Shares are not accepted for payment for any reason pursuant to the terms and conditions of the Offer, or if Share Certificates are submitted evidencing more Shares than are tendered, Share Certificates evidencing unpurchased Shares will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility pursuant to the procedure set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase, such Shares will be credited to an account maintained at the Book-Entry Transfer Facility), as promptly as practicable following the expiration or termination of the Offer. The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to Enghouse or to any wholly owned subsidiary of Enghouse, the right to purchase all or any portion of the Shares tendered pursuant to the Offer, but any such transaction or assignment will not relieve the Purchaser of its obligations under the Offer and will in no way prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer. Upon deposit with the Depositary of funds for the purpose of making payments of the Offer Price for any validly tendered Shares, the Purchaser's obligation to pay for such Shares will be satisfied and any tendering stockholders must look solely to the Depositary for payment of any amounts owed to them in respect of the Shares tendered by them. 3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES VALID TENDERS. In order for a stockholder validly to tender Shares pursuant to the Offer, either (1) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message in lieu of the Letter of Transmittal) and any other documents required by the Letter of Transmittal must be received by the Depositary at its address set forth on the back cover of this Offer to Purchase and either the Share Certificates evidencing tendered Shares must be received by the Depositary at such address or such Shares must be tendered pursuant to the procedure for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (2) the tendering stockholder must comply with the guaranteed delivery procedures described below. The term "Agent's Message" means a message, transmitted by the Book-Entry Transfer Facility, to and received by the Depositary, and forming a part of a Book-Entry Confirmation, that states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares that are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make a book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary's account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility's procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer at the Book-Entry Transfer Facility, either the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or the tendering stockholder must comply with the guaranteed delivery procedure described below. Delivery of documents to the Book-Entry Transfer Facility or the Purchaser does not constitute delivery to the Depositary. SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of Transmittal (1) if the Letter of Transmittal is signed by the registered holder of the Shares tendered therewith, unless such holder has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal or (2) if the Shares are tendered for the account of a firm that is participating in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion 12 Signature Guarantee Program or the Stock Exchange Medallion Program (each an "Eligible Institution" and collectively "Eligible Institutions"). In all other cases, all signatures on a Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If a Share Certificate is registered in the name of a person or persons other than the signer of the Letter of Transmittal, or if payment is to be made or delivered to, or a Share Certificate not accepted for payment or not tendered is to be issued, in the name of a person other than the registered holder(s), then the Share Certificate must be endorsed or accompanied by appropriate duly executed stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear on the Share Certificate, with the signature(s) on such Share Certificate or stock powers guaranteed by an Eligible Institution as provided in the Letter of Transmittal. See Instructions 1 and 5 of the Letter of Transmittal. If Share Certificates are delivered to the Depositary separately or at different times, or if the name reflected on Share Certificates delivered at the same time do not match exactly, then a properly executed Letter of Transmittal must accompany each such delivery and, within each such delivery, each set of Share Certificates with identical holder names. GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and the Share Certificates evidencing such stockholder's Shares are not immediately available or such stockholder cannot deliver the Share Certificates and all other required documents to the Depositary prior to the Expiration Date, or such stockholder cannot complete the procedure for delivery by book-entry transfer on a timely basis, such Shares may nevertheless be tendered; provided that all of the following conditions are satisfied: (1) such tender is made by or through an Eligible Institution; (2) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, is received prior to the Expiration Date by the Depositary as provided below; and (3) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message), and any other documents required by the Letter of Transmittal are received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile transmission or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by the Purchaser. In all cases, Shares will not be deemed validly tendered unless a properly completed and duly executed Letter of Transmittal (or a facsimile thereof) (or, in the case of a book-entry transfer, an Agent's Message) is received by the Depositary. The method of delivery of Share Certificates, the Letter of Transmittal and all other required documents, including delivery through the Book-Entry Transfer Facility, is at the option and risk of the tendering stockholder, and the delivery will be deemed made only when actually received by the Depositary (including, in the case of a Book-Entry Transfer, receipt of a Book Entry Confirmation). If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. DETERMINATION OF VALIDITY. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser in its sole discretion, which determination shall be final and binding on all parties. The Purchaser reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance for payment of which may, in the opinion of its counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. No tender of Shares will be deemed to have been validly made until all defects and irregularities have been cured or waived to the satisfaction of the Purchaser. None of the Purchaser, the Depositary, the Information Agent or any other person will be under any duty to 13 give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding. OTHER REQUIREMENTS. By executing the Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder's proxies, each with full power of substitution, in the manner set forth in the Letter of Transmittal, to the full extent of such stockholder's rights with respect to the Shares tendered by such stockholder and accepted for payment by the Purchaser (including, with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of this Offer to Purchase). All such proxies shall be considered coupled with an interest in the tendered Shares. Such appointment will be effective when, and only to the extent that, the Purchaser accepts such Shares for payment. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares (and such other Shares and securities) will be revoked without further action, and no subsequent proxies may be given nor any subsequent written consent executed by such stockholder (and, if given or executed, will not be deemed to be effective) with respect thereto. The designees of the Purchaser will, with respect to the tendered Shares and any other securities for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual or special meeting of Syntellect's stockholders or any adjournment or postponement thereof, by written consent in lieu of any such meeting or otherwise. The Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's payment for such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder's acceptance of the Offer, as well as the tendering stockholder's representation and warranty that such stockholder has the full power and authority to tender and assign the Shares tendered, as specified in the Letter of Transmittal. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of Syntellect's stockholders. Any such solicitation of proxies will be made only with separate proxy soliciting materials which comply with the Exchange Act, if it is applicable thereto. The Purchaser's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer. BACKUP WITHHOLDING. Under the general "backup withholding" provisions of United States federal income tax law, the Depositary may be required to withhold 30% of the amount of any payments pursuant to the Offer. In order to prevent backup withholding with respect to payments to certain stockholders of the Offer Price of Shares purchased pursuant to the Offer, each such stockholder must provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") and certify that such stockholder is not subject to backup withholding by completing Substitute Form W-9 in the Letter of Transmittal. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. If a stockholder does not provide its correct TIN or fails to provide the certifications described above, the Internal Revenue Service may impose a penalty on the stockholder and the payment of cash to the stockholder pursuant to the Offer may be subject to backup withholding. All stockholders surrendering Shares pursuant to the Offer should complete, sign and submit to the Depositary the Substitute Form W-9 included in the Letter of Transmittal to provide the information necessary to avoid backup withholding. Non-corporate foreign stockholders should complete, sign and submit to the Depositary a Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, or Form W-8ECI, Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States, (copies of which may be obtained from the Depositary) in order to avoid backup withholding. See Instruction 8 of the Letter of Transmittal. Further, under the Foreign Investment in Real Property Tax Act ("FIRPTA"), the Depositary may be required to withhold 10% of the amount of any payments pursuant to the Offer from persons not US citizens. A tendering stockholder is required to complete and provide to the Depositary the FIRPTA Affidavit included in the Letter of Transmittal certifying such tendering stockholder's taxpayer identification number and address and that the tendering stockholder is not a foreign person. Failure to so complete and provide the FIRPTA 14 Affidavit may result in the Purchaser's withholding of federal income tax in an amount equal to 10% of the Offer Price. 4. WITHDRAWAL RIGHTS Tenders of Shares made pursuant to the Offer are irrevocable, except that such Shares may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn at any time after January 11, 2003. No withdrawal rights will apply to Shares tendered into any Subsequent Offering Period and no withdrawal rights apply during any Subsequent Offering Period with respect to Shares tendered in the Offer and accepted for payment. See Section 1 (Terms of the Offer) of this Offer to Purchase. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name, address and taxpayer identification number of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If Share Certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such Share Certificates, the serial numbers shown on such Share Certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase, any notice of withdrawal must also specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares. If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described herein. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding. None of the Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. WITHDRAWALS OF SHARES MAY NOT BE RESCINDED. Any Shares properly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered at any time prior to the Expiration Date or during any Subsequent Offering Period by following one of the procedures described in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of this Offer to Purchase. 5. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES The following is a summary of certain United States federal income tax consequences of the Offer and the Merger to stockholders of Syntellect whose Shares are tendered and accepted for payment pursuant to the Offer or whose Shares are converted into the right to receive cash in the Merger. The discussion is for general information only and does not purport to consider all aspects of United States federal income taxation that might be relevant to stockholders of Syntellect. The discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations promulgated thereunder and administrative and judicial interpretations thereof, all of which are subject to change, possibly with retroactive effect. The discussion applies only to stockholders of Syntellect in whose hands Shares are capital assets within the meaning of Section 1221 of the Code. This discussion does not apply to Shares received pursuant to the 15 exercise of employee stock options or otherwise as compensation or to certain types of stockholders (such as insurance companies, tax-exempt organizations, financial institutions and broker-dealers) which may be subject to special rules. This discussion does not discuss the United States federal income tax consequences to any stockholder of Syntellect who, for United States federal income tax purposes, is a non-resident alien individual, a foreign corporation, a foreign partnership or a foreign estate or trust, nor does it consider the effect of any foreign, state or local tax laws. BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH STOCKHOLDER SHOULD CONSULT ITS TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED BELOW AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE MERGER TO SUCH STOCKHOLDER, INCLUDING THE APPLICATION AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND ANY STATE, LOCAL, AND FOREIGN TAX LAWS. The exchange of Shares for cash pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes and possibly for state, local, and foreign income tax purposes as well. In general, a stockholder who sells Shares pursuant to the Offer or receives cash in exchange for Shares pursuant to the Merger will recognize capital gain or loss for United States federal income tax purposes equal to the difference, if any, between the amount of cash received and the stockholder's adjusted tax basis in the Shares sold pursuant to the Offer or exchanged for cash pursuant to the Merger. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction) tendered pursuant to the Offer or exchanged for cash pursuant to the Merger. Such capital gain or loss will generally be long-term capital gain or loss provided that a stockholder's holding period for such Shares is more than one year at the time of consummation of the Offer or the Merger, as the case may be. Such gain or loss will generally be short-term capital gain or loss if the holding period is less than or equal to one year at time of consummation of the Offer or the Merger, as the case may be. 6. PRICE RANGE OF SHARES; DIVIDENDS The Shares traded on the Nasdaq National Market ("Nasdaq") under the symbol "SYNL" until August 12, 2002 when it was delisted from Nasdaq and began trading on the Over The Counter Bulletin Board ("OTC BB") under the symbol "SYNL.OB". The following table sets forth the high and low sale prices per Share for the periods indicated. Syntellect has never paid any dividends on the Shares. Share prices are as reported on Nasdaq or OTC BB (as applicable) based on published financial sources.
HIGH LOW -------- ------- 2000: First Quarter............................................. $7.0625 $ 2.9375 Second Quarter............................................ 6.6875 3.00 Third Quarter............................................. 9.1875 5.6875 Fourth Quarter............................................ 8.1875 3.25 2001: First Quarter............................................. 4.9375 1.5625 Second Quarter............................................ 3.05 1.1875 Third Quarter............................................. 2.67 1.00 Fourth Quarter............................................ 1.90 1.00 2002: First Quarter............................................. 2.00 1.42 Second Quarter............................................ 1.64 .50 Third Quarter............................................. .63931 .25 Fourth Quarter (through November 7)....................... .69 .17
On November 5, 2002, the last full day of trading before the public announcement of the execution of the Merger Agreement, the closing price of the Shares on OTC BB was $0.21 per Share. On November 12, 2002, the last full day of trading before the commencement of the Offer, the closing price of the Shares on OTC BB was $0.69 per Share. STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES. 16 7. CERTAIN INFORMATION CONCERNING SYNTELLECT GENERAL. Syntellect is a Delaware corporation with its principal offices located at 16610 N. Black Canyon Highway, Suite 100, Phoenix, Arizona 85053-4075. The telephone number of Syntellect is (602) 789-2800. Syntellect is a global leader in speech-enabled customer, employee and supply-chain self-service software solutions. Syntellect has informed Enghouse that it has recently begun pursuing alternatives regarding its Hosted Services Group ("HSG"), as it does not regard HSG as a core asset. Such alternatives include the possible sale of HSG. Syntellect has also informed Enghouse that it currently has no agreements or arrangements regarding these actions. Under the Merger Agreement, until such time as Enghouse's designees constitute a majority of the members of the Board of Directors of Syntellect, any agreement or implementation of such alternatives would require Enghouse's consent. AVAILABLE INFORMATION. The Shares are registered under the Exchange Act. Accordingly, Syntellect is subject to the informational reporting requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. Syntellect's filings are also available to the public on the SEC's Internet site (http://www.sec.gov). Copies of such materials may also be obtained by mail from the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. 8. CERTAIN INFORMATION CONCERNING ENGHOUSE AND THE PURCHASER GENERAL. Enghouse is an Ontario corporation with its principal offices located at 80 Tiverton Court, 8(th) Floor, Markham, Ontario, Canada, L3R OG4. The telephone number of Enghouse is (905) 946-3200. Enghouse is a publicly traded software company currently serving the utility, telecommunications, and pipeline industries. The Purchaser is a Delaware corporation with its principal offices located at 80 Tiverton Court, 8(th) Floor, Markham, Ontario, Canada, L3R OG4. The telephone number of the Purchaser is (905) 946-3200. The Purchaser is a wholly owned subsidiary of Enghouse. The Purchaser has not carried on any activities other than in connection with the Merger Agreement and the transactions contemplated thereby. The name, citizenship, business address, principal occupation or employment and five-year employment history for each of the directors and executive officers of Enghouse and the Purchaser and certain other information are set forth in Schedule I hereto; the business phone number for each such person is (905) 946-3200, unless otherwise indicated in Schedule I. Except as described in this Offer to Purchase, (1) none of Enghouse, the Purchaser nor, to the best knowledge of Enghouse and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Enghouse or the Purchaser or any of the persons so listed beneficially owns or has any right to acquire, directly or indirectly, any Shares and (2) none of Enghouse, the Purchaser nor, to the best knowledge of Enghouse and the Purchaser, any of the persons or entities referred to above nor any director, executive officer or subsidiary of any of the foregoing has effected any transaction in the Shares during the past 60 days. Except as provided in the Merger Agreement, the Tender and Voting Agreement, the Stock Option Agreement or as otherwise described in this Offer to Purchase, none of Enghouse, the Purchaser nor, to the best knowledge of Enghouse and the Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of Syntellect, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or voting of such securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss, guarantees of profits, division of profits or loss or the giving or withholding of proxies. 17 Except as set forth in this Offer to Purchase, none of Enghouse, the Purchaser nor, to the best knowledge of Enghouse and the Purchaser, any of the persons listed on Schedule I hereto, has had any business relationship or transaction with Syntellect or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer. Except as set forth in this Offer to Purchase, there have been no contracts, negotiations or transactions between Enghouse or any of its subsidiaries or, to the best knowledge of Enghouse, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and Syntellect or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets. None of the persons listed in Schedule I has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the persons listed in Schedule I has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws. 9. SOURCE AND AMOUNT OF FUNDS The total amount of funds required by the Purchaser to purchase Shares pursuant to the Offer and the Merger is estimated to be approximately $8,200,000. The Purchaser will obtain the funds necessary for the purchase of Shares in the Offer and the Merger from Enghouse. Enghouse has sufficient cash on hand to provide the required funds to the Purchaser to purchase the Shares. 10. BACKGROUND OF THE OFFER; PAST CONTACTS OR NEGOTIATIONS WITH SYNTELLECT Enghouse is continually evaluating strategic acquisition opportunities to accelerate growth and to enter new vertical markets. In furtherance of that goal, management of Syntellect, together with Alliant, held its first meeting with Stephen J. Sadler, Chairman and Chief Executive Officer of Enghouse, on August 20, 2002, at which time Syntellect provided general industry and company information. Enghouse indicated its interest in pursuing further discussions regarding Syntellect in a letter to Alliant dated August 29, 2002. Following the initial meeting, through September and October, the parties held a number of discussions regarding a possible strategic transaction and conducted due diligence with respect to one another. On October 9, 2002, Syntellect announced that it had retained the investment banking services of Alliant to explore strategic alternatives to support Syntellect's current business strategy and that it was exploring alternative operational and financial strategies in order to increase the opportunities for Syntellect. Discussions between Enghouse and Syntellect continued. In late October, Enghouse provided Syntellect with drafts of the Merger Agreement, the Tender and Voting Agreement, and the Stock Option Agreement. The parties began to negotiate the terms of these agreements. On November 5, 2002, the board of directors of each of Enghouse and Syntellect held separate meetings to consider the proposed transaction, and each board approved the transaction. The parties then executed the Merger Agreement and the related agreements. Shortly thereafter, the parties issued a press release announcing the transaction. On November 13, 2002, the Purchaser commenced the Offer. 11. THE MERGER AGREEMENT; THE TENDER AND VOTING AGREEMENT; THE STOCK OPTION AGREEMENT The following is a summary of the material provisions of the Merger Agreement, the Tender and Voting Agreement, and the Stock Option Agreement, copies of which are filed as exhibits to the Tender Offer Statement on Schedule TO filed with the SEC by Enghouse and the Purchaser pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act in connection with the Offer (the "Schedule TO"). The summary is qualified in its entirety by reference to the Merger Agreement, the Tender and Voting Agreement, and the Stock Option Agreement, each of which is deemed to be incorporated by reference 18 herein. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Merger Agreement. THE OFFER. The Merger Agreement provides for the making of the Offer. The obligation of the Purchaser to accept for payment and pay for Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Condition (or waiver thereof, with Syntellect's consent) and the satisfaction or waiver of the other conditions that are described in Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. DIRECTORS. The Merger Agreement provides that promptly upon the acceptance for payment of Shares pursuant to the Offer, Enghouse will be entitled to designate such number of directors, rounded up to the next whole number, on Syntellect's Board of Directors that equals the product of (1) the total number of directors on Syntellect's Board of Directors (giving effect to the directors designated by Enghouse pursuant to the Merger Agreement) and (2) a fraction, the numerator of which is the aggregate number of Shares then beneficially owned by Enghouse (including Shares accepted for payment pursuant to the Offer), and the denominator of which is the total number of Shares then outstanding. In furtherance thereof, Syntellect will take all action necessary to secure the resignations of such number of directors as is necessary to enable Enghouse's designees to be so elected to Syntellect's Board of Directors and will cause Enghouse's designees to be so elected; provided, however, that, subject to the terms of the Merger Agreement, until the Effective Time there shall be at least two members of Syntellect's Board of Directors who are directors as of the date of the Merger Agreement and who are not employees of Syntellect or any of its subsidiaries ("Continuing Directors"). See Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. Following the election of Enghouse's designees to Syntellect's Board of Directors, (a) any amendment or termination of the Merger Agreement by Syntellect, (b) any extension or waiver by Syntellect of the time for the performance of any of the obligations of Enghouse or the Purchaser under the Merger Agreement or (c) any waiver or exercise of any of Syntellect's rights under the Merger Agreement, will require the concurrence of a majority of the Continuing Directors. THE MERGER. The Merger Agreement provides that no later than two business days after the satisfaction or waiver of each of the conditions to the Merger set forth therein, at the Effective Time the Purchaser will be merged with and into Syntellect, with Syntellect being the surviving corporation in the Merger. Following the Merger, the separate existence of the Purchaser will cease, and Syntellect will continue as the surviving corporation, wholly owned by Enghouse. If required by the DGCL, Syntellect will call and hold a meeting of its stockholders (the "Stockholders' Meeting") promptly following expiration of the Offer for the purpose of voting upon the approval of the Merger Agreement. At any such meeting all Shares then owned by Enghouse or any subsidiary of Enghouse will be voted in favor of approval of the Merger Agreement. Pursuant to the Merger Agreement, each Share outstanding at the Effective Time (other than Shares owned by Enghouse, the Purchaser, Syntellect or any of their respective subsidiaries, all of which will be cancelled, and other than Shares that are held by stockholders, if any, who properly exercise their dissenters' rights under the DGCL) will be converted into the right to receive the Offer Price. Stockholders who perfect their dissenters' rights under the DGCL will be entitled to the amounts determined pursuant to such proceedings. See Section 17 (Dissenters' Rights) of this Offer to Purchase. PURCHASER OPTION. Pursuant to the Merger Agreement, Syntellect granted to the Purchaser the Purchaser Option to purchase from Syntellect such number of Shares as will result in the Purchaser owning 90.1% of the total number of Shares at a price per Share equal to the Offer Price. The Purchaser Option is exercisable only to the extent Syntellect has a sufficient number of authorized but unissued Shares and following the time the Purchaser has accepted Shares for payment pursuant to the Offer and Enghouse and its subsidiaries beneficially own at least a majority of the then outstanding Shares. In the event that Enghouse, the Purchaser and any other subsidiaries of Enghouse acquire in the aggregate at least 90% of the outstanding Shares pursuant to the Offer (including any Subsequent Offering Period), upon exercise of the Purchaser Option or otherwise, Enghouse, the Purchaser and Syntellect will, subject to the conditions to the Merger in 19 the Merger Agreement, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after such acquisition, without a meeting of stockholders of Syntellect, in accordance with the "short form" merger provisions of Section 253 of the DGCL. STOCK OPTIONS AND WARRANTS. In the Merger Agreement, Syntellect agreed that it has taken all necessary action so that, as of the Effective Time, each holder of an option to purchase Shares that has been granted and is outstanding under Syntellect's stock option plans, whether or not then exercisable or vested, and each holder of a warrant to purchase Shares, whether or not then exercisable or vested, shall be entitled to receive a cash amount equal to the product of (i) the excess, if any, of the Offer Price over the exercise price per Share of such option or warrant, as the case may be, and (ii) the number of Shares previously subject to such option or warrant, as the case may be. All stock option, incentive or other equity-based plans established by Syntellect or any subsidiary shall terminate as of the Effective Time. REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, Syntellect has made customary representations and warranties to Enghouse and the Purchaser, including representations relating to corporate existence and power; capitalization; corporate authorizations; approval of the Merger Agreement and the transactions contemplated thereby for the purposes of Section 203 of the DGCL and Article Fourteenth of Syntellect's certificate of incorporation; SEC filings; financial statements, absence of undisclosed liabilities; contracts; compliance with laws; environmental matters; benefit plans, employees and employment practices; absence of certain changes (including any material adverse effect on Syntellect); litigation; sale of products and performance of services; certain business practices; transactions with affiliates; books and records; brokers and finders; accuracy of certain disclosures; intellectual property; taxes; the opinion of Syntellect's financial advisor; and full disclosure. Certain representations and warranties in the Merger Agreement made by Syntellect and Enghouse are qualified as to "materiality" or "Material Adverse Effect." For purposes of the Merger Agreement and this Offer to Purchase, the term "Material Adverse Effect" means, with respect to any person, a fact, event, or effect that has had, or is reasonably likely to have, together with all similar or related or other facts, events or effects, a material adverse effect on the financial condition, prospects, business, assets or results of operations of such person and its subsidiaries, taken as a whole, or on the ability of such person to perform its obligations pursuant to the Merger Agreement or which would prevent or delay the transactions contemplated by the Merger Agreement. Pursuant to the Merger Agreement, Enghouse and the Purchaser have made customary representations and warranties to Syntellect, including representations relating to their corporate existence and power; good standing; corporate authority; corporate authorizations; the accuracy of certain disclosures; and their ability to finance the Offer and the Merger. CONDUCT OF BUSINESS COVENANTS. The Merger Agreement provides that, prior to the time that Enghouse's designees constitute a majority of the members of the Board of Directors of Syntellect and except as may be otherwise agreed in writing by Enghouse, or as expressly permitted by the Merger Agreement, Syntellect will operate its business only in the ordinary course. STOCKHOLDER MEETING. The Merger Agreement provides that if the adoption of the Merger Agreement by the holders of a majority of the outstanding Shares (the "Company Stockholder Approval") is required by law in order to consummate the Merger, Syntellect, as promptly as practicable following the expiration of the Offer, will, in accordance with applicable law, duly call, give notice of, convene and hold the Stockholders Meeting for the purposes of obtaining Company Stockholder Approval. Syntellect shall, through its Board of Directors, recommend to its stockholders that Company Stockholder Approval be given. Notwithstanding the foregoing, in the event that the Purchaser or any other subsidiary of Enghouse acquires in the aggregate at least 90% of the outstanding Shares, the parties to the Merger Agreement shall, subject to the conditions to the Merger (see "Conditions to the Merger" below), take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a meeting of stockholders of Syntellect, in accordance with the short form merger provisions of the DGCL. 20 TAKEOVER STATUTES. Pursuant to the Merger Agreement, Syntellect has agreed that notwithstanding any other provision in the Merger Agreement, in no event will the approval of the Merger Agreement, the Tender and Voting Agreement, the Stock Option Agreement and the transactions contemplated thereby, including the Offer and the Merger, resulting in the inapplicability of Section 203 of the DGCL and Article Fourteenth of Syntellect's certificate of incorporation be withdrawn, revoked or modified by Syntellect's Board of Directors. If any other "fair price," "moratorium," "control share acquisition" or other form of anti-takeover statute or regulation shall become applicable to the transactions contemplated by the Merger Agreement, each of Syntellect, Enghouse and the Purchaser and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms contemplated thereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the transactions contemplated by the Merger Agreement. COMMERCIALLY REASONABLE EFFORTS. The Merger Agreement provides that each of Enghouse, the Purchaser and Syntellect will act in good faith and use all commercially reasonable efforts 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 the Merger Agreement as promptly as practicable. NO SOLICITATION. The Merger Agreement provides that unless and until the Merger Agreement has been terminated, Syntellect (i) shall, and shall cause its subsidiaries and its and its subsidiaries' officers, directors, employees, investment bankers, financial advisors, attorneys, accountants, representatives and agents, to immediately cease any discussions or negotiations with any parties that may be ongoing with respect to a Takeover Proposal (as defined below) and, upon request by Enghouse, shall request the return or destruction of all confidential information provided to any such person; and (ii) shall not, and shall cause its subsidiaries and its and its subsidiaries' officers, directors, employees, investment bankers, financials advisors, attorneys, accountants, representatives and agents not to, (a) solicit, initiate, encourage (including by way of furnishing information), knowingly facilitate or induce (directly or indirectly) any inquiry with respect to, or the making, submission or announcement of, any proposal that constitutes, or could reasonably be expected to result in, a proposal or offer for a Takeover Proposal, (b) participate in any discussions or negotiations regarding, or furnish to any person any nonpublic information with respect to, or take any other action to knowingly facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, a Takeover Proposal, (c) approve or endorse any Takeover Proposal, or (d) enter into any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any Takeover Proposal or transaction contemplated thereby. Notwithstanding the foregoing, if, at any time prior to the acceptance for payment of Shares pursuant to the Offer, the Board of Directors of Syntellect determines in good faith, after consultation with outside counsel, that it is necessary to do so in order to comply with its fiduciary duties to Syntellect's stockholders under applicable law and has provided Enghouse with at least two business days' notice of its intention to do so (including in such notice the information required by Section 6.2(e) of the Merger Agreement), Syntellect may, in response to a Superior Proposal (as defined below) that was not solicited subsequent to the date of the Merger Agreement and subject to compliance with the terms of the Merger Agreement and the execution by the person making the Superior Proposal of a confidentiality agreement on customary terms and conditions, reasonably acceptable to Enghouse, (x) furnish information with respect to Syntellect to the person making the Superior Proposal and (y) participate in discussions or negotiations with the person making the Superior Proposal. As used in the Merger Agreement, a "Takeover Proposal" means any inquiry, proposal, offer or expression of interest by any third party relating a merger, consolidation or other business combination involving Syntellect or any subsidiary, or any acquisition of more than 15% of the consolidated assets of Syntellect or more than 15% of the Shares, or any similar transaction. Any material modification of a Takeover Proposal shall constitute a new Takeover Proposal. As used in the Merger Agreement, a "Superior Proposal" means any bona fide written Takeover Proposal for or in respect of all outstanding Shares made by a third party on terms which the Board of Directors of Syntellect determines in its good faith judgment (after 21 consultation with a financial advisor of nationally recognized reputation and after taking into account all terms and conditions of the proposal) to be more favorable, from a financial point of view, to Syntellect's stockholders than the Offer and the Merger (after taking into account any proposal by Enghouse to amend the Merger Agreement) and for which financing, to the extent required, is then committed, which is reasonably capable of being consummated on a prompt basis, and which is not subject to any conditions which are not reasonably expected to be satisfied on a prompt basis. The Merger Agreement provides that unless and until the Merger Agreement has been terminated, and except as otherwise set forth in the Merger Agreement, neither the Board of Directors of Syntellect nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, the approval or recommendation by such Board of Directors (or any committee of the Board of Directors of Syntellect) with regard to any of the Offer, the Merger or the Merger Agreement, the Tender and Voting Agreement or the Stock Option Agreement, (ii) approve or recommend or take no position with respect to, or propose to approve or recommend or take no position with respect to, any Takeover Proposal or (iii) cause Syntellect to enter into any agreement related to any Takeover Proposal (other than a confidentiality agreement as contemplated above). Unless and until the Merger Agreement has been terminated, Syntellect agrees not to release any person from, or waive any provision of, or fail to enforce, any standstill agreement or similar agreement to which it is a party related to, or that could affect, a Takeover Proposal. Notwithstanding the foregoing, in the event that prior to the acceptance for payment of Shares pursuant to the Offer the Board of Directors of Syntellect determines in good faith, after consultation with outside counsel, that it is necessary to do so in order to comply with its fiduciary duties to Syntellect's stockholders under applicable law, the Board of Directors of Syntellect may, in response to a Superior Proposal that was not solicited subsequent to the date of the Merger Agreement, (x) withdraw or modify its approval or recommendation of the Offer, the Merger or the Merger Agreement or (y) subject to the provisions of the Merger Agreement, terminate the Merger Agreement in order to sign a definitive agreement to implement such Superior Proposal, but in each such case, only at a time that is after the fifth business day following Enghouse's receipt of written notice advising Enghouse that the Board of Directors of Syntellect has received such Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal, only if Syntellect is in compliance with the terms described in the Merger Agreement and only if Syntellect's Board of Directors has determined that such proposal is a Superior Proposal, taking into account any proposals from Enghouse. The Merger Agreement provides that Syntellect shall immediately advise Enghouse orally and in writing of any request for information or of any Takeover Proposal, the material terms and conditions of such request or Takeover Proposal (including a copy thereof if in writing and any related documentation or correspondence (including emails)) and the identity of the person making such request or Takeover Proposal. Syntellect will immediately inform Enghouse of any material change in the details (including amendments or proposed amendments) of any such request or Takeover Proposal. Syntellect will promptly provide to Enghouse any non-public information provided to any other person in connection with a Takeover Proposal which was not previously provided to Enghouse. Nothing contained in the Merger Agreement prohibits Syntellect from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to Syntellect's stockholders if, in the good faith judgment of the Board of Directors of Syntellect, after consultation with outside counsel, failure to disclose would be inconsistent with applicable law, provided, however, neither Syntellect nor its Board of Directors nor any committee thereof shall, except as specifically permitted by the Merger Agreement, withdraw or modify, or propose to withdraw or modify, its position with respect to the Offer, the Merger or the Merger Agreement, the Tender and Voting Agreement or the Stock Option Agreement, or approve or recommend, or propose to approve or recommend, a Takeover Proposal. PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that neither Enghouse, the Purchaser nor Syntellect will issue any press release or otherwise make any public statement with respect to the transactions contemplated by the Merger Agreement without prior consultation with the other parties to the Merger 22 Agreement, except as may be required by law, court process or the rules of any applicable securities exchange or Nasdaq or as otherwise provided by the Merger Agreement. CONDITIONS TO THE MERGER. The Merger Agreement provides that the obligations of Enghouse, the Purchaser, and Syntellect to consummate the Merger are subject to the satisfaction of the following conditions: (a) If required by applicable law, Company Stockholder Approval shall have been obtained. (b) No statute, law, ordinance, rule or regulation (a "Law") or judgment, order, writ, preliminary or permanent injunction (an "Order") issued by any court of competent jurisdiction or other governmental body, court, agency, official or regulatory or other authority (collectively "Governmental Entities") or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect, provided, however, that each of the parties shall have used reasonable efforts to prevent the entry of any such Order and to appeal as promptly as possible any Order that may be entered. (c) The Purchaser shall have previously accepted for payment and paid for Shares pursuant to the Offer. TERMINATION. The Merger Agreement may be terminated at any time prior to the Effective Time, whether before or after approval of the terms of the Merger Agreement by the stockholders of Syntellect: (a) by mutual written consent of Enghouse and Syntellect; (b) by either Enghouse or Syntellect: (i) if (x) the Offer shall have expired without the acceptance for payment of Shares thereunder or (y) the Purchaser shall not have accepted for payment any Shares pursuant to the Offer prior to January 31, 2003, provided, however, that the right to terminate the Merger Agreement pursuant to the foregoing shall not be available to any party whose failure to perform any of its obligations under the Merger Agreement results in the failure of any such condition or if the failure of such condition results from facts or circumstances that constitute a breach of representation or warranty under the Merger Agreement by such party; or (ii) if any Governmental Entity shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and such Order or other action shall have become final and nonappealable; (c) by Enghouse prior to the purchase of Shares pursuant to the Offer if Syntellect shall have breached or failed to perform in any material respect any representation, warranty, covenant or other agreement contained in the Merger Agreement that (i) would give rise to the failure of a condition described in paragraph (e) or (g) of Section 15 (Certain Conditions of the Offer) of this Offer to Purchase and (ii) cannot be or has not been cured within 20 days after the giving of written notice to Syntellect; (d) by Enghouse or the Purchaser if either Enghouse or the Purchaser is entitled to terminate the Offer as a result of the occurrence of any event set forth in paragraph (d) of Section 15 (Certain Conditions of the Offer) of this Offer to Purchase; (e) by Syntellect in accordance with the Merger Agreement in order to simultaneously enter into a definitive agreement to implement a Superior Proposal, provided that it has complied with all provisions of the Merger Agreement, including the notice provisions contained therein, and that it has paid Enghouse the termination fee (including expenses for which Enghouse has then submitted an invoice) in accordance with the terms of the Merger Agreement; or (f) by Syntellect prior to the purchase of Shares pursuant to the Offer if Enghouse or the Purchaser shall have breached or failed to perform in any material respect any of their respective representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform is incapable of being cured or has not been cured within 20 days after the giving of written notice to Enghouse or 23 the Purchaser, as applicable, except, in any case, such breaches and failures which are not reasonably likely to materially and adversely affect Enghouse's or the Purchaser's ability to consummate the Offer or the Merger. FEES AND EXPENSES. Except as otherwise specified below, all fees and expenses incurred in connection with the transactions contemplated by the Merger Agreement will be paid by the party incurring such expenses, whether or not the Offer or the Merger is consummated. (a) If the Merger Agreement is terminated (i) pursuant to paragraph (c) under "Termination" above, (ii) pursuant to paragraph (d) under "Termination" above, (iii) pursuant to paragraph (e) under "Termination" above, or (iv) following the time a third party makes a Takeover Proposal, then Syntellect shall pay to Enghouse a fee of $500,000, plus reimbursement of Enghouse's direct and reasonable out-of-pocket expenses in connection with the Merger Agreement and the transactions contemplated thereby, including Enghouse's investigation of Syntellect and negotiation of the Merger Agreement ("Enghouse's Expenses"), by wire transfer of immediately available funds. Such fee shall be paid prior to termination in the case of clause (iii) and within one business day of termination otherwise. Such payment shall include reimbursement of Enghouse's Expenses if an invoice therefor was received by Syntellect prior to the making of such payment, or, if not, reimbursement of Enghouse's Expenses shall be paid within two business days of receipt of an invoice from Enghouse by Syntellect, by wire transfer of immediately available funds. (b) If (i) the Merger Agreement is terminated other than under paragraph (f) under "Termination" above and (ii) no fee is otherwise payable under paragraph (a) above, then within one day of the receipt of an invoice therefor, Syntellect shall reimburse Enghouse's Expenses by wire transfer of immediately available funds. If within six months of a termination described in the preceding sentence a third party makes a Takeover Proposal, then Syntellect shall pay Enghouse a fee of $500,000 plus Enghouse's Expenses (except to the extent such expenses have been reimbursed under the immediately preceding sentence), by wire transfer of immediately available funds immediately upon the closing of any transaction contemplated by any Takeover Proposal with such third party. The maximum aggregate fee under these provisions of the Merger Agreement shall be $500,000 plus the reimbursement of Enghouse's Expenses. AMENDMENT. At any time prior to the Effective Time, the Merger Agreement may be amended by written agreement of the parties thereto; provided, however, that after adoption of the Merger Agreement by the stockholders of Syntellect, there shall be no amendment or change to the Merger Agreement that would reduce the amount or change the type of consideration into which each Share shall be converted upon consummation of the Merger or other change requiring stockholder approval without further approval by the stockholders of Syntellect. TENDER AND VOTING AGREEMENT. As a condition and inducement to Syntellect and Enghouse to enter into the Merger Agreement, the Holders have entered into the Tender and Voting Agreement. As of November 5, 2002, the Holders beneficially owned in the aggregate 1,708,720 Shares, which represented approximately 15% of the Shares outstanding as of such date. Pursuant to the Tender and Voting Agreement, the Holders agreed, in their capacity as stockholders of Syntellect, as follows: (i) to promptly (and not later than 15 business days after commencement of the Offer) tender all of their respective outstanding Shares; (ii) to not (a) sell, transfer, pledge, assign or otherwise dispose of, or enter into any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement, option or other instrument, obligation or arrangement or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, any Shares to any person other than Enghouse or Enghouse's designee, (b) enter into any voting arrangement with respect to any Shares, or (c) take any other action that would in any way restrict, limit or interfere with the performance of their respective obligations under the Tender and Voting Agreement or the transactions contemplated thereby; (iii) to not, and cause their respective affiliates and their respective and their respective affiliates' officers, directors, attorneys, accountants, representatives and agents not to, directly or indirectly (y) solicit, initiate or encourage (including by way of furnishing information, or take any other action designed or reasonably likely to make any of their respective representations or warranties untrue or to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal, or (z) participate in any discussions or negotiations regarding any Takeover Proposal; and (iv) at any meeting of 24 the stockholders of Syntellect called to vote on the Merger and the Merger Agreement or at any adjournment thereof or in any other circumstance upon which a vote, consent or other approval (including by way of written consent) with respect to the Merger and the Merger Agreement is sought, to vote all of their respective Shares in favor of the Merger, the adoption of the Merger Agreement and otherwise in such manner as may be necessary to consummate the Merger. Pursuant to the Tender and Voting Agreement, the Holders also agreed that at any meeting of stockholders of Syntellect or at any adjournment thereof or in any other circumstances upon which their vote, consent or other approval is sought, they shall vote (or cause to be voted) their respective Shares against (i) (other than the Merger Agreement and the Merger) any Takeover Proposal or any other reorganization, recapitalization, dissolution, liquidation or winding up of or by Syntellect or (ii) any amendment of Syntellect's certificate of incorporation or by-laws or other proposal or transaction involving Syntellect or any of its subsidiaries, which amendment or other proposal or transaction could reasonably be expected to result in any condition to the obligation of Syntellect or of Enghouse to consummate the transactions contemplated by the Merger Agreement or could otherwise be reasonably expected to in any manner impede, frustrate, prevent or nullify, the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement, including any consent to the treatment of any Shares or in connection with such transaction (collectively, "Frustrating Transactions"). In addition, pursuant to the Tender and Voting Agreement, each Holder irrevocably granted to, and appointed, any person designated by Enghouse, and each of them, such Holder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Holder, to vote and otherwise act with respect to all of such Holder's Shares, and to grant any consents or approvals in respect of such Shares, at any meeting of the stockholders of Syntellect or at any adjournment thereof or in any other circumstance upon which their vote, consent or other approval is sought, (i) in favor of the Merger, the adoption by Syntellect of the Merger Agreement and the approval of the other transactions contemplated by the Merger Agreement, and (ii) against any Takeover Proposal or Frustrating Transaction. STOCK OPTION AGREEMENT. Simultaneously with entering into the Merger Agreement, Enghouse and Syntellect entered into the Stock Option Agreement. Pursuant to the Stock Option Agreement, Syntellect granted Enghouse an option to purchase a number of newly issued Shares equal to 19.9% of the then outstanding Shares of Syntellect at a price per Share of $0.72 (subject to adjustment in certain circumstances). Except as described below, the option will be exercisable in whole or in part at any time after the earlier of (i) termination of the Merger Agreement (unless such termination is (a) by mutual written consent of Syntellect and Enghouse or (b) by Syntellect prior to the purchase of Shares pursuant to the Offer after Enghouse or the Purchaser shall have breached or failed to perform in any material respect any of their respective representations, warranties, covenants or other agreements contained in the Merger Agreement, and where such breach or failure to perform is incapable of being cured or has not been cured within 20 days after the giving of written notice to Enghouse or the Purchaser, as applicable, except, in any case, such breaches and failures which are not reasonably likely to materially and adversely affect Enghouse's or the Purchaser's ability to consummate the Offer or the Merger), or (ii) upon any event obligating Syntellect to pay to Enghouse the $500,000 termination fee described in paragraph (a) of the "Fees and Expenses" portion of Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. The right to purchase Shares under the Stock Option Agreement expires upon the earliest to occur of: (i) the completion of the Merger; (ii) 180 days after Syntellect pays to Enghouse the $500,000 termination fee described in paragraph (a) of the "Fees and Expenses" portion of Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase; or (iii) 180 days after the termination of the Merger Agreement so long as no event has occurred or could still occur which would cause Syntellect to have to pay to Enghouse the $500,000 termination fee described in paragraph (a) or paragraph (b) of the "Fees and Expenses" portion of Section 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement) of this Offer to Purchase. 25 At any time after a Takeover Proposal and during the period when the option is exercisable, Enghouse may cause Syntellect to pay to Enghouse cash in exchange for cancellation of the option or for the repurchase of Shares acquired through the exercise of the option, as applicable. If Enghouse exercises this cash out option, Syntellect must pay Enghouse, on the date of the closing of such Takeover Proposal (or the date of the notice of Enghouse to Syntellect of its intention to be so cashed out, if later), for each Share issued or issuable upon exercise of the option, the highest price per Share described below, less $0.72 per Share issuable pursuant to the unexercised portion of the option being cancelled: (i) the highest price per Share paid or proposed to be paid by any person pursuant to such Takeover Proposal; or (ii) the average closing price per Share (or other property for which the option is then exercisable) for the five trading days immediately preceding the date upon which Enghouse requested the cash payment, as reported on Syntellect's stock exchange or other quotation system. Enghouse has certain rights to require Syntellect to register under applicable securities laws any Shares purchased under the option, if such registration is necessary for Enghouse to be able to sell such Shares, and to require Syntellect to list such Shares on Nasdaq or another national securities exchange. 12. PURPOSE OF THE OFFER; PLANS FOR SYNTELLECT PURPOSE OF THE OFFER. The purpose of the Offer is to acquire control of, and the entire equity interest in, Syntellect. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. If the Offer is successful, the Purchaser intends to consummate the Merger as promptly as practicable. Syntellect's Board of Directors has approved the Merger and the Merger Agreement. Depending upon the number of Shares purchased by the Purchaser pursuant to the Offer, Syntellect's Board of Directors may be required to submit the Merger Agreement to Syntellect's stockholders for approval at a stockholder's meeting convened for that purpose in accordance with the DGCL. If Company Stockholder Approval is required, the Merger Agreement must be approved by a majority of all votes entitled to be cast at such meeting. If the Minimum Condition is satisfied, the Purchaser will have sufficient voting power to approve the Merger Agreement at the Stockholders' Meeting without the affirmative vote of any other stockholder. If the Purchaser acquires at least 90% of the then outstanding Shares pursuant to the Offer (including any Subsequent Offering Period), the Purchaser Option or otherwise, the Merger may be consummated without a stockholder meeting and without the Company Stockholder Approval. See Section 1 (Terms of the Offer) and Sections 11 (The Merger Agreement; The Tender and Voting Agreement; The Stock Option Agreement). The Merger Agreement provides that the Purchaser will be merged into Syntellect, with Syntellect surviving the Merger, and that the certificate of incorporation and bylaws of the surviving corporation shall be amended and restated as of the Effective Time to conform to the certificate of incorporation and bylaws of the Purchaser as in effect immediately prior to the Effective Time, provided that Article I of the certificate of incorporation shall provide that the name of the surviving corporation shall be the name of Syntellect. Under the DGCL, holders of Shares do not have dissenters' rights as a result of the Offer. In connection with the Merger, however, stockholders of Syntellect may have the right to dissent and demand appraisal of their Shares under the DGCL. Dissenting stockholders who comply with the applicable statutory procedures under the DGCL will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the price per Share paid in the Merger and the market value of the Shares. In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other things, that "proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court" should be considered in an appraisal proceeding. Stockholders should recognize that the value so determined could be higher or lower than the Offer Price paid pursuant to the Offer or the consideration per Share to be paid in the Merger. Moreover, Enghouse may argue in an 26 appraisal proceeding that, for purposes of such a proceeding, the fair value of the Shares is less than the price paid in the Offer or the Merger. PLANS FOR SYNTELLECT. Pursuant to the terms of the Merger Agreement, promptly upon the purchase of and payment for any Shares by the Purchaser pursuant to the Offer, the Purchaser currently intends to seek maximum representation on Syntellect's Board of Directors, subject to the requirements in the Merger Agreement. The Purchaser currently intends, as soon as practicable after consummation of the Offer, to consummate the Merger. The Purchaser and Enghouse will continue to evaluate the business and operations of Syntellect during the pendency of the Offer and after the consummation of the Offer and the Merger in order to determine what actions, if any, they will take to consolidate the business of Syntellect with that of Enghouse, and will take such actions as they deem appropriate. Enghouse intends to seek additional information about Syntellect during this period. Enghouse intends to review such information as part of a comprehensive review of Syntellect's business, operations, capitalization and management with a view to optimizing development of Syntellect's potential in conjunction with Enghouse's business. Except as described above or elsewhere in this Offer to Purchase, the Purchaser has no present plans or proposals that would relate to or result in (i) any extraordinary corporate transaction involving Syntellect or any of its subsidiaries (such as a merger, reorganization, liquidation, relocation of any operations or sale or other transfer of a material amount of assets), (ii) any sale or transfer of a material amount of assets of Syntellect or any of its subsidiaries, (iii) any change in Syntellect's Board of Directors or management of Syntellect, (iv) any material change in Syntellect's capitalization or dividend policy, (v) any other material change in Syntellect's corporate structure or business, (vi) a class of securities of Syntellect being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association or (vii) a class of equity securities of Syntellect being eligible for termination of registration pursuant to Section 12(g) of the Exchange Act. 13. CERTAIN EFFECTS OF THE OFFER MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will reduce the number of holders of Shares and the number of Shares that might otherwise trade publicly, which could adversely affect the liquidity and market value of the remaining Shares held by stockholders other than the Purchaser. The Purchaser cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for, or marketability of, the Shares or whether such reduction would cause future market prices to be greater or less than the Offer Price. STOCK QUOTATION. Depending on the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued inclusion on the OTC BB. If as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the criteria for continuing inclusion in the OTC BB, the market for the Shares could be adversely affected. According to the OTC BB listing requirements, the Shares would not be eligible for continued listing if Syntellect ceased to be current in its filings with the SEC or ceased to be registered under the Exchange Act. The extent of the public market for the Shares and the availability of such quotations would depend upon such factors as the number of stockholders, the aggregate market value of the Shares remaining at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act and other factors. Neither Enghouse nor the Purchaser can predict whether the reduction in the number of the Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer Price. MARGIN REGULATIONS. The Shares are currently "margin securities" under the Regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is possible that, 27 following the Offer, the Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. EXCHANGE ACT REGISTRATION. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of Syntellect to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by Syntellect to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to Syntellect, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders' meetings and the related requirement of furnishing an annual report to stockholders, and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions. Furthermore, the ability of "affiliates" of Syntellect and persons holding "restricted securities" of Syntellect to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933 may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or be eligible for trading on the OTC BB. Enghouse and the Purchaser currently intend to seek to cause Syntellect to terminate the registration of the Shares under the Exchange Act as soon after consummation of the Offer as the requirements for termination of registration are met. 14. DIVIDENDS AND DISTRIBUTIONS The Merger Agreement provides that from the date of the Merger Agreement until such time as Enghouse's designees constitute a majority of the members of Syntellect's Board of Directors, without the prior written approval of Enghouse, Syntellect will not and will not permit any of its subsidiaries to authorize or pay any dividends on or make any distribution with respect to its outstanding shares of capital stock (except for dividends paid by a wholly owned subsidiary of Syntellect to its parent). 15. CERTAIN CONDITIONS OF THE OFFER Notwithstanding any other term of the Offer, the Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless prior to the Expiration Date there shall have been validly tendered a number of Shares which, together with any outstanding Shares solely owned by Enghouse or any of its subsidiaries, constitutes a majority of the outstanding Shares (determined on a fully diluted basis). Furthermore, notwithstanding any other term of the Offer or the Merger Agreement, the Purchaser shall not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may terminate the Offer if, at any time on or after the date of the Merger Agreement and prior to the Expiration Date, any of the following conditions exists (other than as a result of any action or inaction of Enghouse or any of its subsidiaries that constitutes a breach of the Merger Agreement): (a) there shall be threatened, instituted or pending by or before any Governmental Entity any suit, action or proceeding (i) challenging the acquisition by Enghouse or the Purchaser of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or seeking to obtain from Syntellect, Enghouse or the Purchaser any damages that are material in relation to Syntellect and its subsidiaries taken as a whole, (ii) seeking to prohibit or materially limit the ownership or operation by Syntellect, Enghouse or any of their respective subsidiaries of a material portion of the business or assets of Syntellect and its subsidiaries, taken as a whole, or Enghouse and its subsidiaries, taken as a whole, or to compel Syntellect and its subsidiaries, taken as a whole or Enghouse to dispose of or hold separate any material portion of the business or assets of Syntellect or Enghouse and its subsidiaries, taken as a whole, in each case as a result of the Offer or any of the other transactions contemplated by the Merger Agreement, (iii) seeking to impose material limitations on the ability of Enghouse or the Purchaser to acquire or hold, or 28 exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of Syntellect, (iv) seeking to prohibit Enghouse or any of its subsidiaries from effectively controlling in any material respect any material portion of the business or operations of Syntellect or its subsidiaries or (v) which would have a Material Adverse Effect on Syntellect or would result in the payment of substantial damages; (b) there shall be any Law or Order enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, by any Governmental Entity, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) there shall have occurred any Material Adverse Effect with respect to Syntellect; (d) (i) the Board of Directors of Syntellect or any committee thereof shall have (x) withdrawn or modified in a manner adverse to Enghouse or the Purchaser its approval or recommendation of the Offer or the Merger or its adoption of the Merger Agreement, (y) approved or recommended or taken a neutral position with respect to any Takeover Proposal, (z) failed to reaffirm its recommendation of the Offer or the Merger or its adoption of the Merger Agreement within five business days of being requested by Enghouse to do so, (ii) a Takeover Proposal is publicly announced, disclosed or commenced or submitted, made or publicly communicated to the Board of Directors of Syntellect and Syntellect fails to comply with the requirements of the Merger Agreement, or (iii) the Board of Directors of Syntellect or any committee thereof shall have resolved to take any of the foregoing actions; (e) any of the representations and warranties of Syntellect set forth in the Merger Agreement shall not be true and correct in any material respect (without regard to any materiality qualifiers therein), in each case at the date of the Merger Agreement or at the scheduled or extended expiration of the Offer as if such representation or warranty were made as of such date; (f) Enghouse, Syntellect and their respective subsidiaries, as applicable, shall have failed to obtain the consent or approval of any person whose consent or approval shall be required under any agreement or instrument in order to permit the consummation of the Offer and the Merger or any of the other transactions contemplated by the Merger Agreement, except those that the failure to obtain would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Syntellect if the closing of the transactions contemplated by the Merger Agreement were to occur; (g) Syntellect shall have failed to perform or comply, in all material respects, with any agreement, obligation or covenant to be performed or complied with by it under the Merger Agreement, which failure to perform or comply has not been cured within five business days after the giving of written notice to Syntellect; (h) there shall not have occurred and be continuing: (i) (A) any general suspension of trading in, or limitation on prices for, securities on The New York Stock Exchange or Nasdaq (excluding any organized halt triggered solely as a result of a specified decrease in a market index or suspensions or limitations resulting solely from physical damage, technological or software breakdowns or malfunctions or interference with such exchange not related to market conditions) or (B) any decline in any of the Dow Jones Industrial Average, the Standard & Poors Index of 500 Industrial Companies or the Nasdaq Composite Index in excess of 20% measured from the close of business on the date of the Merger Agreement; (ii) a declaration by a Governmental Body of a banking moratorium or any suspension of payments in respect of banks in the United States; (iii) an act of terrorism or a commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States or Canada, which in any case could have a Material Adverse Effect on Syntellect or Enghouse or could materially adversely affect Enghouse's or the Purchaser's ability to consummate the Offer or the Merger; (iv) any extraordinary limitation (whether or not mandatory) by any Governmental Entity on the extension of credit generally by banks or other financial institutions; or (v) a change in general financial, bank or capital market conditions which materially and adversely affects the ability of financial institutions in the United States to extend credit or syndicate loans; (i) any person, entity or group directly or indirectly acquires or agrees to acquire, or discloses an intention to acquire beneficial ownership of securities representing 15% or more of the outstanding securities of any class of voting securities of Syntellect; or 29 (j) the Merger Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Enghouse and the Purchaser and may, subject to the terms of the Merger Agreement, be waived by Enghouse and the Purchaser in whole or in part at any time and from time to time in their reasonable discretion. The failure by Enghouse or the Purchaser at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. 16. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS GENERAL. The Purchaser is not aware of any pending legal proceeding relating to the Offer. Except as described in this Section 16, based on its examination of publicly available information filed by Syntellect with the SEC and other publicly available information concerning Syntellect, the Purchaser is not aware of any governmental license or regulatory permit that appears to be material to Syntellect's business that might be adversely affected by the Purchaser's acquisition of Shares as contemplated herein or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Purchaser as contemplated herein. Should any such approval or other action be required, the Purchaser currently contemplates that, except as described below under "State Takeover Statutes," such approval or other action will be sought. While the Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to Syntellect's business, or certain parts of Syntellect's business might not have to be disposed of, any of which could cause the Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. STATE TAKEOVER STATUTES. A number of states have adopted laws that purport, to varying degrees, to apply to attempts to acquire corporations that are incorporated in, or that have substantial assets, stockholders, principal executive offices or principal places of business or whose business operations otherwise have substantial economic effects in, such states. Syntellect, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted such laws. In Edgar v. MITE Corp., the Supreme Court of the United States invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of Indiana could, as a matter of corporate law, constitutionally disqualify a potential acquirer from voting shares of a target corporation without the prior approval of the remaining stockholders where, among other things, the corporation is incorporated in, and has a substantial number of stockholders in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a Federal District Court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal District Court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. Syntellect is incorporated under the laws of the State of Delaware. In general, Section 203 of the DGCL prevents an "interested stockholder" (including a person who has the right to acquire 15% or more of the corporation's outstanding voting stock) from engaging in a "business combination" (defined to include mergers and certain other actions) with a Delaware corporation for a period of three years following the date such person became an interested stockholder. Syntellect's Board of Directors approved for purposes of Section 203 the entering into by Enghouse, the Purchaser and Syntellect of the Merger Agreement, the Tender and Voting Agreement and the Stock Option Agreement and the consummation of the transactions 30 contemplated thereby and has taken all appropriate action so that Section 203, with respect to Syntellect, will not be applicable to Enghouse and the Purchaser by virtue of such actions. If any government official or third party should seek to apply any state takeover law to the Offer or the Merger or other business combination between the Purchaser or any of its affiliates and Syntellect, the Purchaser will take such action as then appears desirable, which action may include challenging the applicability or validity of such statute in appropriate court proceedings. In the event it is asserted that one or more state takeover statutes is applicable to the Offer or the Merger and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, the Purchaser might be required to file certain information with, or to receive approvals from, the relevant state authorities or holders of Shares, and the Purchaser might be unable to accept for payment or pay for Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer or the Merger. In such case, the Purchaser may not be obligated to accept for payment or pay for any tendered Shares. See Section 15 (Certain Conditions of the Offer) of this Offer to Purchase. 17. DISSENTERS' RIGHTS If the Merger is consummated, stockholders of Syntellect may have the right to dissent and demand appraisal of their Shares under the DGCL. See Section 12 (Purpose of the Offer; Plans for Syntellect) of this Offer to Purchase. Under the DGCL, dissenting stockholders who comply with the applicable statutory procedures will be entitled to receive a judicial determination of the fair value of their Shares (exclusive of any element of value arising from the accomplishment or expectation of the Merger) and to receive payment of such fair value in cash, together with a fair rate of interest, if any. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the Offer Price, the consideration per Share to be paid in the Merger and the market value of the Shares, including asset values and the investment value of the Shares. Stockholders should recognize that the value so determined could be higher or lower than the price per Share paid pursuant to the Offer or the consideration per Share to be paid in the Merger. Additional information with regard to dissenters' rights will be provided to stockholders in connection with the Merger. 18. FEES AND EXPENSES Enghouse and the Purchaser have retained MacKenzie Partners, Inc. to be the Information Agent and Computershare Trust Company of New York to be the Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telecopy, telegraph and personal interview and may request banks, brokers, dealers and other nominees to forward materials relating to the Offer to beneficial owners of Shares. The Information Agent and the Depositary each will receive reasonable and customary compensation for their respective services, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities and expenses in connection therewith, including certain liabilities under federal securities laws. Neither Enghouse nor the Purchaser will pay any fees or commissions to any broker or dealer or to any other person (other than to the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will, upon request, be reimbursed by the Purchaser for customary mailing and handling expenses incurred by them in forwarding offering materials to their customers. 19. MISCELLANEOUS The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction. 31 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED HEREIN OR IN THE RELATED LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. The Purchaser has filed with the SEC a Tender Offer Statement on Schedule TO pursuant to Rule 14d-3 of the General Rules and Regulations under the Exchange Act, together with exhibits furnishing certain additional information with respect to the Offer, and may file amendments thereto. In addition, Syntellect has filed with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9, together with exhibits, pursuant to Rule 14d-9 under the Exchange Act, setting forth the recommendation of Syntellect's Board of Directors with respect to the Offer and the reasons for such recommendation and furnishing certain additional related information. A copy of such documents, and any amendments thereto, may be examined at, and copies may be obtained from, the SEC in the manner set forth in Section 7 (Certain Information Concerning Syntellect) of this Offer to Purchase. Arizona Acquisition Corp. November 13, 2002 32 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF ENGHOUSE AND THE PURCHASER 1. DIRECTORS AND EXECUTIVE OFFICERS OF ENGHOUSE The following table sets forth the name, age, present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of Enghouse and of each of its affiliates. Unless otherwise indicated, the current business address of each person is 80 Tiverton Court, 8(th) Floor, Markham, Ontario, Canada, L3R OG4. Each such person is a citizen of Canada and each occupation set forth opposite an individual's name refers to employment with Enghouse, except as otherwise set forth below.
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD DURING THE NAME AND AGE PAST FIVE YEARS - ------------ ------------------------------------------------------------------------------ Stephen J. Sadler (51)*.............. Mr. Sadler is the Chairman and Chief Executive Officer of Enghouse Systems Limited, a position he has held since April 2000. Since May of 1998 Mr. Sadler has also served as Chairman of Helix Investments, a venture capital firm. From 1987-May 1999 Mr. Sadler had been employed in a variety of capacities with Geac Computer Corporation including President & Chief Executive Officer from 1990-1996, and Vice Chairman from 1996-1998. Mr. Sadler also sits on the board of a number of other private and public companies including Open Text Corporation, Belzberg Technologies, and Cyberplex, Inc. Reid M. Drury (47)*.................. Since 1992 Mr. Drury has been a partner in Polar Capital Corporation, a merchant banking firm he co-founded. Prior to this he spent eight years as a partner and Director of Helix Investments, one of Canada's premier and oldest venture firms. Mr. Drury is also currently executive Chairman of Speedware Corporation Inc., and also serves as a director of certain public and private companies including Burnstand Inc. and AQT Systems Inc. Mr. Drury received a B. Comm from Queen's University and an MBA from INSEAD, Fontainbleau, France. Albert Gnat (64)*.................... Mr. Gnat has been a partner in the law firm, of Lang, Michener since 1974, where his practice focuses on matters relating to securities, mergers and acquisitions, and finance, largely in the communications and technology sectors. Mr. Gnat serves on the board of directors of several private and public companies, including Rogers Communications Inc., Rogers AT&T Wireless Inc., Rogers Cablesystems Inc., The Toronto Blue Jays Baseball Club Advisory Committee, IKEA Limited Canadian subsidiaries, Leitch Technology Corporation, and CCL Industries Inc. Sheldon Inwentash (47)*.............. Mr. Inwentash is the Chairman & CEO of Pinetree Capital Corp., a publicly traded venture capital firm he founded in 1992. He is a Chartered Accountant who has worked for Price Waterhouse, North America Life Insurance Co., and Elliot & Page. Since 1995, Mr. Inwentash has also been Chairman and Chief Executive Officer of GeneVest Inc., a Canadian biotech investment company. Mr. Inwentash also sits on a number of other boards.
I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT; MATERIAL POSITIONS HELD DURING THE NAME AND AGE PAST FIVE YEARS - ------------ ------------------------------------------------------------------------------ Pierre Lassonde (55)*................ Mr. Lassonde was elected President of Newmont Mining Corporation, in February 2002. He joined Newmont following Newmont's acquisition of Franco-Nevada Mining Corporation Limited, where he was co-founder and he had served as President and Co-Chief Executive Officer since 1982. He holds a Bachelor of Arts degree from the University of Montreal and a Bachelor of Science in electrical engineering from Ecole Polytechnique, and an MBA from the University of Utah, and was designated a Professional Engineer by the Association of Professional Engineers of Ontario in 1976. Mr. Lassonde also sits on the board of directors of Newmont Mining Corporation, the World Gold Council, and is an Honorary Trustee of the Toronto General and Western Hospital Foundation. Neil C. Shafran (42)................. Mr. Shafran joined Enghouse Systems Limited in April 2000 as Executive Vice President Corporate Development. From March 1996 to January 2000 Mr. Shafran was Corporate Vice President of Mergers & Acquisitions for Geac Computer Corporation, a large publicly traded Canadian software company. Mr. Shafran had previously run the Canadian computer systems division for Fujitsu Canada, Inc., and from 1983-1988 had been a partner in a successful Toronto based software firm. Douglas Bryson (38).................. Mr. Bryson currently serves as Vice President, Finance & Corporate Secretary for Enghouse Systems Limited, a position he has held since May 1999. Prior to this he had been the Controller for Enghouse Systems Limited since January 1999, and prior to that he held a variety of accounting and finance positions with Hitachi Data Systems Inc. from 1991-1998. Mr. Bryson is a Chartered Accountant who worked for the firm of KPMG from 1987 to 1991.
- --------------- * Director 2. DIRECTORS AND OFFICERS OF PURCHASER The directors and executive officers of the Purchaser are:
NAME TITLE - ---- ----- Stephen J. Sadler.................... Director, President and Treasurer Neil C. Shafran...................... Director, Vice President and Secretary
See above for information concerning such persons. I-2 Manually signed facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of Syntellect or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at the address set forth below: THE DEPOSITARY FOR THE OFFER IS: COMPUTERSHARE TRUST COMPANY OF NEW YORK By Mail: Computershare Trust Company of New York Wall Street Station P.O. Box 1010 New York, NY 10268-1010 By Hand or Overnight Courier: Computershare Trust Company of New York Wall Street Plaza 88 Pine Street, 19(th) Floor New York, NY 10005 By Facsimile Transmission: (For Eligible Institutions Only) (212) 701-7636 Confirm Facsimile by Telephone: (212) 701-7624 (For Confirmation Only) Questions or requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and related materials may be obtained from the Information Agent as set forth below and will be furnished promptly at Purchaser's expense. Stockholders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. THE INFORMATION AGENT FOR THE OFFER IS: MACKENZIE PARTNERS, INC. 105 Madison Avenue New York, New York 10016 (212) 929-5500 (Call Collect) or CALL TOLL-FREE (800) 322-2885 Email: proxy@mackenziepartners.com EX-99.A.2 4 t08191exv99waw2.txt LETTER OF TRANSMITTAL LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF SYNTELLECT INC. FOR US$0.72 NET PER SHARE TO ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. The Depositary for the Offer is: Computershare Trust Company of New York By Mail: By Facsimile Transmission: By Hand or Overnight Courier: Wall Street Station (For Eligible Institutions Wall Street Plaza P.O. Box 1010 Only) 88 Pine Street, 19(th) Floor New York, 10268-1010 (212) 701-7636 New York, NY 10005 For Confirmation Telephone: (800) 245-7630 (For Confirmation Only)
-------- DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TO A NUMBER OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR BELOW, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE FIRPTA AFFIDAVIT AND SUBSTITUTE FORM W-9 SET FORTH BELOW. THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. - ------------------------------------- DESCRIPTION OF SHARES TENDERED - ----------------------------------------------------------------------------------------------------------------- NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) (PLEASE FILL IN EXACTLY AS NAME(S) SHARE CERTIFICATE(S) TENDERED APPEAR(S) ON CERTIFICATE(S)) (PLEASE ATTACH ADDITIONAL SIGNED LIST, IF NECESSARY) - ------------------------------------------------------------------------------------------------------- TOTAL NUMBER CERTIFICATE OF SHARES NUMBER(S)(1) TENDERED(2) TOTAL NUMBER OF SHARES REPRESENTED BY CERTIFICATE(S)(1) ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- TOTAL SHARES TENDERED..................... - ------------------------------------------------------------------------------------------------------- (1) Need not be completed by stockholders tendering by book-entry transfer. (2) Unless otherwise indicated, all Shares represented by certificates delivered to the Depositary will be deemed to have been tendered. See Instruction 4. [ ] CHECK HERE IF CERTIFICATES HAVE BEEN LOST OR MUTILATED. SEE INSTRUCTION 11. - -------------------------------------------------------------------------------------------------------
This Letter of Transmittal is to be used by stockholders of Syntellect Inc. ("Syntellect") if certificates for Shares (as defined below) are to be forwarded herewith or, unless an Agent's Message (as defined in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at the Book-Entry Transfer Facility (as defined in Section 2 (Acceptance for Payment and Payment for Shares) of the Offer to Purchase and pursuant to the procedures set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) thereof). Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available, or who cannot complete the procedure for book-entry transfer on a timely basis, or who cannot deliver all other required documents to the Depositary prior to the Expiration Date (as defined in Section 1 (Terms of the Offer) of the Offer to Purchase), must tender their Shares according to the guaranteed delivery procedure set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. TENDER OF SHARES [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER): Name of tendering institution: Account number: Transaction code number: [ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name(s) of registered holder(s): Date of execution of Notice of Guaranteed Delivery: Name of Eligible Institution that guaranteed delivery: By executing and delivering this Letter of Transmittal the undersigned acknowledges that it is tendering all Shares referenced in this Letter of Transmittal. NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY Ladies and Gentlemen: The undersigned hereby tenders to Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse"), the above-described shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation ("Syntellect"), pursuant to the Purchaser's offer to purchase all outstanding Shares, at a price of US$0.72 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 13, 2002 (the "Offer to Purchase") and in this Letter of Transmittal. The Offer to Purchase and this related Letter of Transmittal, together with any amendments or supplements to either of them, collectively constitute the "Offer" as used in this Letter of Transmittal. Receipt of the Offer is hereby acknowledged. The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of November 5, 2002 (the "Merger Agreement"), among Enghouse, Syntellect and the Purchaser. Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and effective upon acceptance for payment of the Shares tendered herewith in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Shares or other securities issued or issuable in respect thereof on or after the date hereof (collectively, "Distributions")) and irrevocably constitutes and appoints Computershare Trust Company of New York (the "Depositary") the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates for such Shares (and any and all Distributions) or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by the Book-Entry Transfer Facility, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of Syntellect, and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms of the Offer. By executing this Letter of Transmittal, the undersigned hereby irrevocably appoints Stephen Sadler and Neil Shafran in their respective capacities as officers or directors of the Purchaser, and any individual who shall thereafter succeed to any such office of the Purchaser, and any other designees of the Purchaser, and each of them, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote at any annual or special meeting of Syntellect's stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, to execute any written consent concerning any matter as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, and to otherwise act as each such attorney-in-fact and proxy or his or her substitute shall in his or her sole discretion deem proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for purchase and payment by the Purchaser. This appointment will be effective if and when, and only to the extent that, the Purchaser accepts such Shares for purchase and payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for purchase and payment of such Shares in accordance with the terms of the Offer. Such acceptance for purchase and payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). The Purchaser reserves the right to require that, in order for the Shares or other securities to be deemed validly tendered, immediately upon the Purchaser's acceptance for purchase and payment of such Shares, the Purchaser must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of Syntellect's stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and all Distributions and that, when the same are accepted for purchase and payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claims. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchaser all Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of the Shares tendered hereby or deduct from such purchase price, the amount or value of such Distribution as determined by the Purchaser in its sole discretion. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that the valid tender of the Shares pursuant to any one of the procedures described in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase and in the Instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms or conditions of any such extension or amendment). Without limiting the foregoing, if the price to be paid in the Offer is amended in accordance with the Merger Agreement, the price to be paid to the undersigned will be the amended price notwithstanding the fact that a different price is stated in this Letter of Transmittal. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Purchaser may not be required to accept for purchase and payment any of the Shares tendered hereby. Unless otherwise indicated under "Special Payment Instructions", please issue the check for the purchase price of all of the Shares purchased and/or return any certificates for the Shares not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under "Description of Shares Tendered". Similarly, unless otherwise indicated under "Special Delivery Instructions", please mail the check for the purchase price of all of the Shares purchased and/or return any certificates for the Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under "Description of Shares Tendered". In the event that the boxes entitled "Special Payment Instructions" and "Special Delivery Instructions" are both completed, please issue the check for the purchase price of all Shares purchased and/or return any certificates evidencing Shares not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and/or return any such certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled "Special Payment Instructions", please credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at the Book-Entry Transfer Facility designated above. The undersigned recognizes that the Purchaser has no obligation, pursuant to the "Special Payment Instructions", to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of the Shares so tendered. SPECIAL PAYMENT INSTRUCTIONS (see Instructions 5, 6 and 7) To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or certificates representing Shares not tendered or accepted for payment are to be issued in the name of someone other than the undersigned. Issue: [ ] check [ ] certificate(s) to: Name: --------------------------------------------------------------------------- (Please print) Address: ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (Include zip code) - -------------------------------------------------------------------------------- (Taxpayer identification or Social Security Number) (Also complete Substitute Form W-9 below) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SPECIAL DELIVERY INSTRUCTIONS (See Instructions 5, 6 and 7) To be completed ONLY if the check for the purchase price of Shares accepted for payment and/or certificates representing Shares not tendered or accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown under "Description of Shares Tendered". Mail: [ ] check [ ] certificate(s) to: Name: --------------------------------------------------------------------------- (Please print) Address: ------------------------------------------------------------------------ - -------------------------------------------------------------------------------- (Include zip code) IMPORTANT STOCKHOLDER: SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (SIGNATURE(S) OF OWNER(S)) Dated: ------------, 2002 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on stock certificate(s) or on a security position listing or by the person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and provide the information described in Instruction 5.) Name(s): ----------------------------------------------------------------------- (PLEASE PRINT) Capacity (full title): --------------------------------------------------------- (SEE INSTRUCTIONS) Address: ----------------------------------------------------------------------- - -------------------------------------------------------------------------------- (INCLUDE ZIP CODE) Area code and telephone number: ------------------------------------------------ Taxpayer identification or Social Security Number: -------------------------------------------------- (SEE SUBSTITUTE FORM W-9) GUARANTEE OF SIGNATURE(S) (If required -- see Instructions 1 and 5) Authorized signature(s): ---------------------------------------------------------- Name: -------------------------------------------------------------------------- Name of Firm: ------------------------------------------------------------------ Address: ----------------------------------------------------------------------- (INCLUDE ZIP CODE) Area code and telephone number: ------------------------------------------------ Dated: ------------, 2002 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this Letter of Transmittal (a) if this Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility's system whose name appears on a security position listing as the owner of the Shares) of the Shares tendered herewith, unless such registered holder(s) has completed either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" on this Letter of Transmittal or (b) if such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agent's Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or by any other "Eligible Guarantor Institution", as such term is defined in Rule 17Ad-15 under the Exchange Act (each, an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by stockholders if certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedure for tender by book-entry transfer set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. Share Certificates evidencing tendered Shares, or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of Shares into the Depositary's account at the Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a manually signed facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its address set forth herein prior to the Expiration Date (as defined in Section 1 (Terms of the Offer) of the Offer to Purchase). Stockholders whose Share Certificates are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis or who cannot deliver all other required documents to the Depositary prior to the Expiration Date may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary prior to the Expiration Date; and (iii) the Share Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with this Letter of Transmittal (or a manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry delivery, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq National Market trading days after the date of execution of such Notice of Guaranteed Delivery. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK IF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE IF A BOOK-ENTRY TRANSFER, RECEIPT OF A BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted. All tendering stockholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein is inadequate, the certificate numbers and/or the number of Shares being tendered and any other required information should be listed on a separate signed schedule attached hereto. 4. PARTIAL TENDERS. (Not applicable to stockholders who tender by book-entry transfer.) If fewer than all of the Shares evidenced by any Share Certificate are to be tendered, fill in the number of Shares that are to be tendered in the box entitled "Number of Shares Tendered". In this case, new Share Certificates for the Shares that were evidenced by your old Share Certificates, but were not tendered by you, will be sent to you, unless otherwise provided in the appropriate box on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by Share Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the certificate(s), without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are held of record by two or more joint owners, all such owners must sign this Letter of Transmittal. IF ANY OF THE TENDERED SHARES ARE REGISTERED IN DIFFERENT NAMES ON DIFFERENT CERTIFICATES, IT WILL BE NECESSARY TO COMPLETE, SIGN AND SUBMIT AS MANY SEPARATE LETTERS OF TRANSMITTAL AS THERE ARE DIFFERENT REGISTRATIONS ON CERTIFICATES. If this Letter of Transmittal or any certificates or stock powers are signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of the authority of such person so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of certificates or separate stock powers are required unless payment is to be made or certificates for Shares not tendered or not accepted for payment are to be issued in the name of a person other than the registered holder(s). Signatures on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed and transmitted hereby, the certificate(s) must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name(s) of the registered holder(s) appear(s) on the certificate(s). Signature on any such Share Certificates or stock powers must be guaranteed by an Eligible Institution. If Share Certificates are delivered to the Depositary separately or at different times, or if the name reflected on Share Certificates delivered at the same time do not match exactly, then a properly executed Letter of Transmittal must accompany each delivery and, within each delivery, each set of Share Certificates with identical holder names. 6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6, the Purchaser will pay all stock transfer taxes with respect to the transfer and sale of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificate(s) for Shares not tendered or not accepted for payment are to be registered in the name of, any person other than the registered holder(s), or if tendered certificate(s) are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person) payable on account of the transfer to such other person will be deducted from the purchase price of such Shares purchased unless evidence satisfactory to the Purchaser of the payment of such taxes, or exemption therefrom, is submitted. Except as provided in this Instruction 6, it will not be necessary for transfer tax stamps to be affixed to the certificate(s) evidencing the Shares tendered hereby. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in the name of, and/or certificates for Shares not tendered or not accepted for payment are to be issued or returned to, a person other than the signer of this Letter of Transmittal or if a check and/or such certificates are to be returned to a person other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, the appropriate boxes on this Letter of Transmittal must be completed. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery, Internal Revenue Service ("IRS") Form W-8BEN or W-8ECI and the Guidelines for Request for Taxpayer Identification Number and Certification of Substitute Form W-9 may be directed to the Information Agent at the address and phone number set forth below, or from brokers, dealers, commercial banks or trust companies. 9. WAIVER OF CONDITIONS. Subject to the terms and conditions of the Merger Agreement, the Purchaser reserves the right, in its sole discretion, to waive, at any time or from time to time, any of the specified conditions of the Offer, in whole or in part, in the case of any Shares tendered (other than the Minimum Condition, as defined in the Offer to Purchase) without Syntellect's consent. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing Shares has been lost, destroyed or stolen, the stockholder should promptly notify MacKenzie Partners, Inc., in its capacity as Information Agent for the Shares (toll-free telephone number: (800) 322-2885). The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate. THIS LETTER OF TRANSMITTAL AND RELATED DOCUMENTS CANNOT BE PROCESSED UNTIL THE PROCEDURES FOR REPLACING LOST OR DESTROYED CERTIFICATES HAVE BEEN FOLLOWED. 11. SUBSTITUTE FORM W-9; FIRPTA WITHHOLDING. A tendering stockholder is required to provide the Depositary with a correct Taxpayer Identification Number ("TIN") on Substitute Form W-9, which is provided under "Important Tax Information" below, and to certify, under penalties of perjury, that such number is correct and that such stockholder is not subject to backup withholding of Federal income tax. If a tendering stockholder is subject to backup withholding, the stockholder must cross out Item (Y) of Part 3 of the Certification Box of Substitute Form W-9. Failure to provide the information on Substitute Form W-9 may subject the tendering stockholder to Federal income tax withholding of 30% of any payments made to the stockholder pursuant to the Offer, but such withholdings will be refunded if the tendering stockholder provides a completed Substitute Form W-9 within 60 days of the date the Purchaser accepts for payment the Shares tendered herewith. Certain stockholders (including, among others, all corporations and certain foreign individuals and entities) are not subject to backup withholding. Non-corporate foreign stockholders should submit an appropriate and properly completed IRS Form W-8BEN or W-8ECI, copies of which may be obtained from the Depositary, in order to avoid backup withholding. See the enclosed "Guidelines for Request for Taxpayer Identification Number and Certification of Substitute Form W-9" for more instructions. Further, under the Foreign Investment in Real Property Tax Act ("FIRPTA"), the Depositary may be required to withhold from persons who are not United States citizens 10% of the amount of any payments pursuant to the Offer. A tendering stockholder is required to complete and provide to the Depositary the FIRPTA Affidavit included in this Letter of Transmittal certifying such tendering stockholder's taxpayer identification number and address and that the tendering stockholder is not a foreign person. Failure to so complete and provide the FIRPTA Affidavit may result in the Purchaser's withholding of federal income tax in an amount equal to 10% of the Offer Price. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE HEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY. IMPORTANT TAX INFORMATION Under the United States federal income tax laws, payments for Shares pursuant to the Offer may be subject to backup withholding. Each stockholder who would like to avoid backup withholding should provide the Depositary (as payer) with such stockholder's correct TIN (or with a certification that such stockholder is awaiting a TIN) and with a certification that such stockholder is not subject to backup withholding by completing Substitute Form W-9 below. If such stockholder is an individual, the TIN is his or her social security number. If such stockholder is subject to backup withholding, such stockholder must cross out Item (Y) of Part 3 on Substitute Form W-9. If the Depositary is not provided with the correct taxpayer identification number, such stockholder may be subject to a US$50 penalty imposed by the IRS. Certain stockholders (including, among others, all corporations and certain foreign individuals) are exempt from the backup withholding and reporting requirements. In general, in order for a foreign individual to qualify as an exempt recipient, that stockholder must submit to the Depositary a properly completed IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding or Form W-8ECI, Certificate of Foreign Person's Claim of Exemption from Withholding on Income Effectively Connected with Conduct of a Trade or Business in the United States, signed under the penalties of perjury, attesting to that individual's exempt status. Such forms may be obtained from the Depositary. Exempt stockholders, while not required to file Substitute Form W-9, should file Substitute Form W-9 to avoid possible erroneous backup withholding. See the enclosed Guidelines for Request for Taxpayer Identification Number and Certification of Substitute Form W-9 for additional instructions. Stockholders that are foreign persons may be subject to FIRPTA withholding of 10% on any payments for Shares pursuant to the Offer and/or the Merger. Stockholders that are not foreign persons may be able to avoid withholding under FIRPTA by completion and delivery to the Depositary of the FIRPTA Affidavit included in this Letter of Transmittal. Additionally, any purchases of Shares pursuant to the Offer and/or the Merger may not be subject to withholding obligations under FIRPTA depending on the volume of recent trading in the Shares. If backup withholding applies, the Depositary will be required to withhold 30% of any payments made for Shares pursuant to the Offer. Backup withholding is not an additional tax. Rather, the amount of backup withholding is treated as an advance payment of the stockholder's tax liability, with the outstanding tax liability of stockholders subject to backup withholding reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. PURPOSE OF FIRPTA AFFIDAVIT To prevent withholding of tax pursuant to Section 1445 of the Internal Revenue Code, each tendering stockholder who or which is a United States person should certify, under penalties of perjury, the stockholder's TIN and address, and that the stockholder is not a foreign person. In addition, if the stockholder is a corporation, it is required to certify its jurisdiction of incorporation the stockholder. PURPOSE OF SUBSTITUTE FORM W-9 To prevent backup withholding on payments for Shares pursuant to the Offer, the stockholder must notify the Depositary of such stockholder's correct TIN by completing Substitute Form W-9 below and certifying on Substitute Form W-9 that it is a United States person (including a U.S. citizen or resident alien) and that the TIN provided is correct (or that such stockholder is awaiting a TIN). In addition, the stockholder is required to certify on Substitute Form W-9 that (i) it is exempt from backup withholding, or (ii) it is not subject to backup withholding due to prior under reporting of interest or dividend income or (iii) the IRS has notified it that it is no longer subject to backup withholding. WHAT NUMBER TO GIVE THE DEPOSITARY The stockholder is required to give the Depositary the TIN of the record owner of the Shares. If such record owner is an individual, the TIN is the taxpayer's social security number. For most other entities, the TIN is the employer identification number. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9 for additional guidelines on what number to report. If the Depositary is not provided with the correct TIN in connection with such payments, the stockholder may be subject to a penalty imposed by the IRS. FIRPTA AFFIDAVIT (for individual transferor) ------------------------------------ Section 1445 of the Internal Revenue Code provides that a transferee (buyer) of a U.S. real property interest must withhold tax if the transferor (seller) is a foreign person. To inform the Purchaser (the transferee) and Enghouse that withholding of a tax is not required upon my disposition of a U.S. real property interest, I, - ------------------------, hereby certify the following: 1. I am not a nonresident alien for purposes of U.S. income taxation; 2. My U.S. taxpayer identifying number (Social Security Number) is --------------------------; and 3. My home address is ---------------------------------------------------------------------- ---------------------------------------------------------------------- . I understand that this certification may be disclosed to the Internal Revenue Service by the Purchaser and Enghouse and that any false statement I have made here could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct, and complete. SIGNATURE: -------------------------------------- NAME: -------------------------------------- DATE: -------------------------------------- FIRPTA AFFIDAVIT (or non-individual/entity transferor) ------------------------------------ Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the Purchaser (the transferee) and Enghouse that withholding of tax is not required upon the disposition of a U.S. real property interest by - ------------------------------------ (name of transferor), the undersigned hereby certifies the following on behalf of - ------------------------------------ (name of transferor): 1. ----------------------------------------- (name of transferor) is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. -----------------------------------------'s U.S. employer identification number is - ------------------------; and 3. -----------------------------------------'s office address is ------------------------------------------------------------------------- ------------------------------------------------------------------------- ----------------------------------------- (name of transferor) understands that this certification may be disclosed to the Internal Revenue Service by the Purchaser and Enghouse and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of - ------------------------------------ (name of transferor). SIGNATURE: -------------------------------------- NAME: -------------------------------------- TITLE: -------------------------------------- DATE: -------------------------------------- - -------------------------------------------------------------------------------- PAYER'S NAME: COMPUTERSHARE TRUST COMPANY OF NEW YORK SUBSTITUTE FORM W-9 Name ------------------------------ DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE Address ------------------------------ (Number and Street) ------------------------------ (Zip Code)------------------------------ (City)------------------------------ (State)------------------------------ ---------------------------------------------------------------------------------------------- PAYER'S REQUEST FOR PART 1(A) -- PLEASE PROVIDE TAXPAYER IDENTIFICATION YOUR TIN IN THE BOX AT RIGHT TIN: NUMBER ("TIN") AND CERTIFY BY SIGNING AND ------------------------------ DATING BELOW. (Social Security Number or Employer Identification No.) ---------------------------------------------------------------------------------------------- PART 1(B) -- PLEASE CHECK THE BOX AT RIGHT IF YOU HAVE APPLIED FOR, AND ARE AWAITING RECEIPT OF, YOUR TIN [ ] ---------------------------------------------------------------------------------------------- PART 2 -- FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING PLEASE WRITE "EXEMPT" HERE (SEE INSTRUCTIONS) ---------------------------------------------------------------------------------------------- PART 3 -- CERTIFICATION UNDER PENALTIES OF PERJURY, I CERTIFY THAT (X) The number shown on this form is my correct TIN (or I am waiting for a number to be issued to me) and (Y) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding and (Z) I am a United States person (including any United States citizen or resident alien). ---------------------------------------------------------------------------------------------- SIGN HERE: SIGNATURE ------------------------------ DATE ------------------------------ - ----------------------------------------------------------------------------------------------
CERTIFICATION OF INSTRUCTIONS -- You must cross out Item (Y) of Part 3 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such Item (Y). YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 1(B) OF THE SUBSTITUTE FORM W-9 INDICATING YOU HAVE APPLIED FOR, AND ARE AWAITING RECEIPT OF, YOUR TIN. - ---------------------------------------------------------------------------------------------- CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number to the Payer by the time of payment, 30% of all reportable payments made to me pursuant to the Offer will be withheld. Signature: Date: - -------------------------------------------------------------- ------------------------------ - ---------------------------------------------------------------------------------------------- NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 30% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Manually signed facsimile copies of this Letter of Transmittal will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stock-holder of Syntellect or such stockholder's broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth on the first page. Questions and requests for assistance or for additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may be directed to the Information Agent at the telephone numbers and location listed below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: MacKenzie Partners, Inc. 105 Madison Avenue New York, New York 10016 (212) 929-5500 (Call Collect) or CALL TOLL-FREE (800) 322-2885 Email: proxy@mackenziepartners.com EX-99.A.3 5 t08191exv99waw3.txt NOTICE OF GUARANTEED DELIVERY NOTICE OF GUARANTEED DELIVERY FOR TENDERS OF SHARES OF COMMON STOCK OF SYNTELLECT INC. TO ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED (NOT TO BE USED FOR SIGNATURE GUARANTEES) THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. This Notice of Guaranteed Delivery, or a form substantially equivalent hereto, must be used to accept the Offer (as defined below) if certificates for Shares (as defined below) are not immediately available, if the procedure for book-entry transfer cannot be completed on a timely basis, or if time will not permit all required documents to reach Computershare Trust Company of New York (the "Depositary") on or prior to the Expiration Date (as defined in Section 1 (Terms of the Offer) of the Offer to Purchase). This form may be delivered by hand, transmitted by facsimile transmission or mailed to the Depositary. See Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. The Depositary for the Offer is: Computershare Trust Company of New York By Mail: By Facsimile Transmission: By Hand or Overnight Courier: Wall Street Station (For Eligible Institutions Wall Street Plaza P.O. Box 1010 Only) 88 Pine Street, 19(th) Floor New York, NY 10268-1010 (212) 701-7636 New York, NY 10005 For Confirmation Telephone: (800) 245-7630 (For Confirmation Only)
-------- DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN ONE SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN THE FACSIMILE NUMBER SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. THIS NOTICE OF GUARANTEED DELIVERY TO THE DEPOSITARY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" (AS DEFINED IN THE OFFER TO PURCHASE) UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEES MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal or an Agent's Message (as defined in the Offer to Purchase) and certificates for or book-entry transfer of Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution. Ladies and Gentlemen: The undersigned hereby tenders to Arizona Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 13, 2002 (the "Offer to Purchase") and the related Letter of Transmittal (the "Letter of Transmittal"), the number set forth below of shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation, pursuant to the guaranteed delivery procedures set forth in the Offer to Purchase. The Offer to Purchase and the related Letter of Transmittal, together with any amendments or supplements to either of them, collectively constitute the "Offer" as used in this Notice of Guaranteed Delivery. I hereby acknowledge receipt of the Offer to Purchase and the Letter of Transmittal. Number of Shares tendered: ---------------------------------------------------- Name(s) of record holder(s): --------------------------------------------------- (PLEASE PRINT) Address(es): ------------------------------------------------------------------- (ZIP CODE) Area code and telephone number(s): --------------------------------------------- Certificate Number(s) (if available): ------------------------------------------ Check if Shares will be tendered by book-entry transfer: [ ] The Depositary Trust Company Name of tendering institution: ------------------------------------------------- Account number: ---------------------------------------------------------------- Authorized Signature(s): ------------------------------------------------------- Dated:________________, 2002 THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED. GUARANTEE (not to be used for signature guarantee) The undersigned, a bank, broker, dealer, credit union, savings association or other entity that is a member in good standing of the Securities Transfer Agent's Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (a) represents that the above named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents that such tender of Shares complies with Rule 14e-4 and (c) guarantees to deliver to the Depositary either the certificates evidencing all tendered Shares, in proper form for transfer, or to deliver Shares pursuant to the procedure for book-entry transfer into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility"), in either case together with the Letter of Transmittal (or a facsimile thereof) properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, all within three Nasdaq National Market trading days after the date hereof. Name of firm: ------------------------------------------------------------------ Address: ----------------------------------------------------------------------- (ZIP CODE) Area code and tel. no.: -------------------------------------------------------- - -------------------------------------------------------------------------------- (AUTHORIZED SIGNATURE) Name: -------------------------------------------------------------------------- Title: ------------------------------------------------------------------------- Dated: ____________, 2002 NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.A.4 6 t08191exv99waw4.txt LETTER TO BROKERS, DEALERS, ETC. OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTELLECT INC. AT US$0.72 NET PER SHARE BY ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse"), to act as Information Agent in connection with the Purchaser's offer to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation ("Syntellect"), at a price of US$0.72 per Share, net to the seller in cash, without interest thereon (the "Offer Price"). The Offer to Purchase dated November 13, 2002 (the "Offer to Purchase") and the related Letter of Transmittal enclosed herewith, together with any amendments or supplements to either of them, collectively constitute the "Offer" as used in this letter. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available, who cannot complete the procedures for book-entry transfer on a timely basis, or who cannot deliver all other required documents to Computershare Trust Company of New York (the "Depositary") prior to the Expiration Date (as defined in the Offer to Purchase) must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer and not properly withdrawn prior to the Expiration Date a number of Shares that, together with any outstanding Shares solely owned by Enghouse or any of its subsidiaries, constitutes a majority of the outstanding Shares (determined on a fully diluted basis). The Offer is also subject to other conditions described in Section 15 (Certain Conditions of the Offer) of the Offer to Purchase. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee: 1. Offer to Purchase dated November 13, 2002; 2. Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients (manually signed facsimile copies of the Letter of Transmittal may be used to tender Shares); 3. Notice of Guaranteed Delivery to be used to accept the Offer if Share Certificates are not immediately available or if such Share Certificates and all other required documents cannot be delivered to the Depositary prior to the Expiration Date, or if the procedures for book-entry transfer cannot be completed on a timely basis; 4. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer; 5. The letter to stockholders of Syntellect from Anthony V. Carollo, Jr., the Chief Executive Officer of Syntellect, accompanied by Syntellect's Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by Syntellect, which includes the recommendation of the Board of Directors of Syntellect that stockholders accept the Offer and tender their Shares to Purchaser pursuant to the Offer; 6. Guidelines for Request for Taxpayer Identification Number and Certification on Substitute Form W-9; and 7. A return envelope addressed to the Depositary. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of November 5, 2002, among Enghouse, the Purchaser and Syntellect, pursuant to which, following the purchase by Purchaser of Shares in the Offer and the satisfaction or waiver of each of the conditions to the Offer set forth in the Merger Agreement, the Purchaser will be merged with and into Syntellect (the "Merger"), with Syntellect surviving the Merger as a wholly owned subsidiary of Enghouse. As a result of the Merger, each outstanding Share of Syntellect (other than Shares owned by Enghouse, the Purchaser, Syntellect or any of their respective subsidiaries, or by stockholders, if any, who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the Offer Price in cash. The Board of Directors of Syntellect has, at a meeting held on November 5, 2002, unanimously (i) approved the Merger Agreement, (ii) approved the Offer and the Merger and certain other actions described in the Merger Agreement, (iii) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Syntellect and its stockholders and (iv) recommended that Syntellect's stockholders accept the Offer, tender their Shares pursuant to the Offer and approve the Merger Agreement (if required). In all cases, payment for Shares accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (1) the Share Certificates or confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase, (2) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or, in the case of a book-entry transfer, an Agent's Message (as defined below) in lieu of the Letter of Transmittal and (3) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when certificates for Book-Entry Confirmations into the Depositary's account at the Book-Entry Transfer Facility are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE OFFER PRICE TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR DELAY IN MAKING SUCH PAYMENT. If holders of Shares wish to tender Shares to the Purchaser in the Offer, but it is impracticable for them to forward their Share Certificates or other required documents prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender may be effected by following the guaranteed delivery procedures specified in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase. The Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Depositary and the Information Agent as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary mailing and handling costs incurred by you in forwarding the enclosed materials to your customers. The Purchaser will pay or cause to be paid all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, except as otherwise provided in Instruction 6 of the Letter of Transmittal. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent at the address and telephone number set forth on the back cover of the Offer to Purchase. Very truly yours, MacKenzie Partners, Inc. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF ENGHOUSE, THE PURCHASER, SYNTELLECT, THE INFORMATION AGENT, THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. EX-99.A.5 7 t08191exv99waw5.txt LETTER TO CLIENTS OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTELLECT INC. AT US$0.72 NET PER SHARE BY ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON WEDNESDAY, DECEMBER 11, 2002, UNLESS THE OFFER IS EXTENDED. To Our Clients: Enclosed for your consideration in connection with the offer by Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse"), to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation ("Syntellect"), at a price of US$0.72 per Share, net to the seller in cash, without interest thereon (the "Offer Price"), is the Offer to Purchase dated November 13, 2002 (the "Offer to Purchase"). The Offer to Purchase and the related Letter of Transmittal enclosed herewith, together with any amendments or supplements to either of them, collectively constitute the "Offer" as used in this letter. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE ENCLOSED LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase. Please note the following: 1. The offer price is US$0.72 per Share, net to you in cash, without interest, upon the terms and subject to the conditions set forth in the Offer. 2. The Offer is being made for all outstanding Shares. 3. The Offer is being made pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as of November 5, 2002, among Enghouse, the Purchaser and Syntellect, pursuant to which, following the purchase by the Purchaser of Shares in the Offer and the satisfaction or waiver of each of the conditions to the Offer set forth in the Merger Agreement, the Purchaser will be merged with and into Syntellect (the "Merger"), with Syntellect surviving the Merger as a wholly owned subsidiary of Enghouse. As a result of the Merger, each outstanding Share (other than Shares owned by Enghouse, the Purchaser, Syntellect or any of their respective subsidiaries, or by stockholders, if any, who properly exercise appraisal rights under Delaware law) will be converted into the right to receive the Offer Price in cash. 4. The Board of Directors of Syntellect has, at a meeting held on November 5, 2002, unanimously (i) approved the Merger Agreement, (ii) approved the Offer and the Merger and certain other actions described in the Merger Agreement, (iii) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are fair to, and in the best interests of, Syntellect and its stockholders, and (iv) recommended that Syntellect's stockholders accept the Offer, tender their Shares pursuant to the Offer and approve the Merger Agreement (if required). 5. The Offer and withdrawal rights will expire at 12:00 midnight New York City time, on Wednesday, December 11, 2002, unless the Offer is extended. 6. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes on purchase of Shares by the Purchaser pursuant to the Offer. 7. The Offer is conditioned upon, among other things, there being validly tendered in accordance with the terms of the Offer and not properly withdrawn prior to the Expiration Date (as defined in the Offer to Purchase) a number of Shares that, together with any outstanding Shares solely owned by Enghouse or any of its subsidiaries, constitutes a majority of the outstanding Shares (determined on a fully diluted basis). The Offer is also subject to other conditions described in Section 15 (Certain Conditions of the Offer) of the Offer to Purchase. For purposes of the Offer, the Purchaser shall be deemed to have accepted for payment, and thereby purchased, tendered Shares, if, as and when the Purchaser gives oral or written notice to the Depositary (as defined below) of the Purchaser's acceptance of such Shares for payment. Upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by Computershare Trust Company of New York (the "Depositary") of (a) share certificates for such Shares ("Share Certificates") (or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with respect to such Shares) into the account maintained by the Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility"), pursuant to the procedures set forth in Section 3 (Procedures for Accepting the Offer and Tendering Shares) of the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile of one), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase), in connection with a book-entry delivery, and (c) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when certificates for or Book-Entry Confirmations into the Depositary's account at the Book-Entry Transfer Facility are actually received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN PAYMENT OF THE PURCHASE PRICE. The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser shall make a good faith effort to comply with such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of Shares in such state. In those jurisdictions where the securities, blue sky or other laws require the Offer to be made by a licensed broker dealer, the Offer will be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form set forth on the reverse side of this letter. An envelope to return your instructions to us is also enclosed. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified on the reverse side of this letter. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE OF THE OFFER. INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF SYNTELLECT INC. AT US$0.72 NET PER SHARE BY ARIZONA ACQUISITION CORP., A WHOLLY OWNED SUBSIDIARY OF ENGHOUSE SYSTEMS LIMITED The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated November 13, 2002 and the related Letter of Transmittal of Arizona Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of Enghouse Systems Limited, an Ontario corporation ("Enghouse") with respect to the Purchaser's offer to purchase all outstanding shares of common stock, par value $.01 per share (the "Shares"), of Syntellect Inc., a Delaware corporation ("Syntellect"), at a price of US$0.72 per Share, net to the seller in cash, without interest thereon upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. This will instruct you to tender to the Purchaser the number of Shares indicated below (or, if no number is indicated below, all Shares) that are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal. - -------------------------------------------------------------------------------- Number of Shares to Be Tendered: -------------------------------------------- Date: ------------------- SIGN HERE Signature(s): ------------------------------------------------------------------ Print Name(s): ----------------------------------------------------------------------- Print Address(es): ------------------------------------------------------------------- Area Code and Telephone Number(s): --------------------------------------------------------------------- Tax Identification or Social Security Number(s): ---------------------------------------------------------------------
- -------------------------------------------------------------------------------- BY EXECUTING AND DELIVERING THIS LETTER THE UNDERSIGNED ACKNOWLEDGES THAT IT IS TENDERING ALL SHARES REFERENCED IN THIS LETTER. EX-99.A.6 8 t08191exv99waw6.txt GUIDELINES FOR REQUEST FOR TAXPAYER ETC. GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION ON SUBSTITUTE FORM W-9 Social Security numbers (SSN's) have nine digits separated by two hyphens, i.e., 000-00-0000. Employer identification numbers (EIN's) have nine digits separated by only one hyphen, i.e., 00-0000000. The table below will help determine the number to give the payer. - ------------------------------------------------------------ GIVE NAME FOR THIS TYPE OF ACCOUNT: AND SSN OF: - ------------------------------------------------------------ 1. Individual The individual 2. Two or more individuals (joint The actual owner of account) the account or, if combined funds, the first individual on the account(1) 3. Custodian account of a minor The minor(2) (Uniform Gift to Minors Act) 4. a. The usual revocable savings The grantor- trust (grantor is also trustee) trustee(1) b. The so-called trust account The actual owner(1) that is not a legal or valid trust under state law 5. Sole proprietorship The owner(3) 6. A valid trust, estate or pension The legal entity(4) trust - ------------------------------------------------------------ - ------------------------------------------------------------ GIVE NAME FOR THIS TYPE OF ACCOUNT: AND SSN OF: - ------------------------------------------------------------ 7. Corporation The corporation 8. Association, club, religious, The organization charitable, educational or other tax-exempt organization 9. Partnership The partnership 10. A broker or registered nominee The broker or nominee 11. Account with the Department of The public entity Agriculture in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments - ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish. If only one person on a joint account has a Social Security number, that person's number must be furnished. (2) Circle the minor's name and furnish the minor's Social Security number. (3) You must show your individual name but you may also enter your business or "doing business as" name. You may use either your Social Security number or employer identification number (if you have one). (4) List first and circle the name of the legal trust, estate or pension trust. (Do not furnish the taxpayer identification number of the personal representative or trustee unless the legal entity itself is not designated in the account title.) NOTE:If no name is circled when more than one name is listed, the number will be considered to be that of the first name listed. GUIDELINES FOR REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION ON SUBSTITUTE FORM W-9 OBTAINING A TAXPAYER IDENTIFICATION NUMBER (TIN) If you do not have a taxpayer identification number, apply for one immediately. To apply for a Social Security number, get Form SS-5, Application for a Social Security Number Card, from your local Social Security Administration office. Get Form W-7 to apply for an individual taxpayer identification number or Form SS-4, Application for Employer Identification Number, to apply for an employer identification number. You can get Forms W-7 and SS-4 from the IRS. PAYEES EXEMPT FROM BACKUP WITHHOLDING Individuals (including sole proprietors) generally are NOT exempt from backup withholding. Payees specifically exempted from backup withholding on payments from brokers include: - - A corporation, whether domestic or foreign. - - A financial institution. - - An organization exempt from tax under section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code") or an individual retirement plan. - - The United States or any of its wholly-owned agencies or instrumentalities. - - A State, the District of Columbia, a possession of the United States, or political subdivisions or wholly-owned agencies or instrumentalities thereof. - - A foreign government, a political subdivision of a foreign government, or any wholly-owned agencies or instrumentalities thereof. - - An international organization or any wholly-owned agencies or instrumentalities thereof. - - A dealer in securities or commodities registered as such under the laws of the United States, the District of Columbia or a possession of the United States. - - A futures commission merchant registered as such with the Commodities Futures Trading Commission. - - A real estate investment trust, as defined in section 856 of the Code. - - A common trust fund operated by a bank under section 584(a) of the Code. - - An entity registered at all times during the tax year under the Investment Company Act of 1940. - - A foreign central bank of issue. - - A person registered under the Investment Advisors Act of 1940 who regularly acts as a broker. Payments that are not subject to information reporting are also not subject to backup withholding. For details, see sections 6041 and 6045 of the Code, and their regulations. IF YOU ARE EXEMPT FROM BACKUP WITHHOLDING, YOU SHOULD STILL COMPLETE AND FILE SUBSTITUTE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. ENTER YOUR CORRECT TAXPAYER IDENTIFICATION NUMBER IN PART 1, WRITE "EXEMPT" IN PART 2, AND SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, YOU MUST GIVE THE PAYER A PROPERLY COMPLETED FORM W-8BEN, CERTIFICATE OF FOREIGN STATUS OF BENEFICIAL OWNER FOR UNITED STATES TAX WITHHOLDING OR W-8ECI, CERTIFICATE OF FOREIGN PERSON'S CLAIM OF EXEMPTION FROM WITHHOLDING ON INCOME EFFECTIVELY CONNECTED WITH CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES. A FORM W-8BEN OR W-8ECI CAN BE OBTAINED FROM THE PAYER. PRIVACY ACT NOTICE -- Section 6109 of the Code requires you to give your correct taxpayer identification number to persons who must file information returns with the IRS to report interest, dividends and certain other income paid to you. The IRS uses the taxpayer identification numbers for identification purposes and to help verify the accuracy of your tax return. The IRS may also provide the taxpayer identification numbers to the Department of Justice for civil and criminal litigation and to cities, states, and the District of Columbia to carry out their tax laws. You must provide your taxpayer identification number whether or not you are required to file a tax return. Payers must generally withhold 31% of taxable interest, dividends and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willing neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION, CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. 2 EX-99.D.1 9 t08191exv99wdw1.txt AGREEMENT AND PLAN OF MERGER DATED NOV. 5, 2002 ================================================================================ AGREEMENT AND PLAN OF MERGER among ENGHOUSE SYSTEMS LIMITED ARIZONA ACQUISITION CORP. and SYNTELLECT INC. Dated as of November 5, 2002 ================================================================================ TABLE OF CONTENTS ARTICLE I THE OFFER........................................................1 Section 1.1. The Offer.....................................................1 Section 1.2. Company Actions...............................................2 Section 1.3. Directors.....................................................3 Section 1.4. Grant of Option...............................................4 ARTICLE II THE MERGER.......................................................5 Section 2.1. The Merger....................................................5 Section 2.2. Effective Time................................................5 Section 2.3. Certificate of Incorporation and By-laws......................5 Section 2.4. Directors and Officers........................................5 ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES...............6 Section 3.1. Effect on Capital Stock.......................................6 Section 3.2. Exchange of Certificates......................................6 Section 3.3. Stock Options.................................................8 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................8 Section 4.1. Organization..................................................8 Section 4.2. Capitalization................................................9 Section 4.3. Authority.....................................................9 Section 4.4. Consents and Approvals; No Violations........................10 Section 4.5. SEC Reports and Financial Statements.........................10 Section 4.6. Absence of Certain Changes or Events.........................11 Section 4.7. No Undisclosed Liabilities...................................11 Section 4.8. Information Supplied.........................................11 Section 4.9. Benefit Plans; Employees and Employment Practices............11 Section 4.10. Contracts....................................................13 Section 4.11. Litigation...................................................14 Section 4.12. Compliance with Applicable Law...............................14 Section 4.13. Tax Matters..................................................15 Section 4.14. Environmental................................................17 Section 4.15. State Takeover Statutes......................................18 Section 4.16. Intellectual Property........................................18 Section 4.17. Sale of Products; Performance of Services....................21 Section 4.18. Certain Business Practices...................................21 Section 4.19. Transactions with Affiliates.................................21 Section 4.20. Books and Records............................................21 Section 4.21. Opinion of Financial Advisor.................................22 Section 4.22. Brokers and Finders..........................................22 Section 4.23. Full Disclosure..............................................22 ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB................22 Section 5.1. Organization.................................................22 Section 5.2. Authority....................................................22 Section 5.3. Consents and Approvals; No Violations........................22 Section 5.4. Information Supplied.........................................23 Section 5.5. Interim Operations of Sub....................................23 Section 5.6. Brokers......................................................23 Section 5.7. Financing....................................................23 ARTICLE VI COVENANTS.......................................................23 Section 6.1. Covenants of the Company.....................................23 Section 6.2. No Solicitation..............................................25 Section 6.3. Stockholder Approval; Preparation of Proxy Statement.........27 Section 6.4. Access to Information........................................28 Section 6.5. Disclosure Supplements.......................................28 Section 6.6. Reasonable Efforts...........................................28 Section 6.7. Certain Litigation...........................................29 Section 6.8. Takeover Statute.............................................29 ARTICLE VII CONDITIONS......................................................29 Section 7.1. Conditions to Each Party's Obligation To Effect the Merger...29 ARTICLE VIII TERMINATION AND AMENDMENT.......................................29 Section 8.1. Termination..................................................29 Section 8.2. Effect of Termination........................................30 Section 8.3. Amendment....................................................30 Section 8.4. Extension; Waiver............................................30 Section 8.5. Expenses.....................................................31 ARTICLE IX MISCELLANEOUS...................................................31 Section 9.1. Nonsurvival of Representations and Warranties................31 Section 9.2. Notices......................................................31 Section 9.3. Interpretation...............................................32 Section 9.4. Counterparts.................................................33 Section 9.5. Entire Agreement; No Third Party Beneficiaries...............33 Section 9.6. Governing Law................................................33 Section 9.7. Publicity....................................................33 Section 9.8. Assignment...................................................33 Section 9.9. Enforcement..................................................33 Section 9.10. Severability.................................................34 CONDITIONS TO THE OFFER..................................................ANNEX A AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of November 5, 2002, among Enghouse Systems Limited, an Ontario corporation ("Parent"), Arizona Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), and Syntellect Inc., a Delaware corporation (the "Company"). WHEREAS, the Boards of Directors of Parent, Sub and the Company deem it advisable and in the best interests of their respective stockholders that Parent acquire the Company upon the terms and subject to the conditions provided for in this Agreement; WHEREAS, Parent proposes to cause Sub to make a tender offer (as it may be amended from time to time as permitted under this Agreement, the "Offer") to purchase all the outstanding shares of Common Stock, par value $0.01 per share (the "Shares" or "Share", when used in the singular), of the Company at a purchase price (the "Offer Price") of $0.72 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in this Agreement; and the Board of Directors of the Company has adopted resolutions approving the Offer and recommending that holders of Shares accept the Offer; WHEREAS, the merger of Sub with and into the Company (the "Merger") upon the terms and subject to the conditions set forth in this Agreement has been authorized by all necessary corporate action on behalf of Parent and Sub and has been adopted and declared advisable by the Board of Directors of the Company; and WHEREAS, concurrently with the execution of this Agreement and as an inducement to Parent to enter into this Agreement, (i) Parent, Sub, the Company and certain stockholders of the Company are entering into a Tender and Voting Agreement (the "Tender and Voting Agreement") pursuant to which such stockholders have, among other things, agreed to tender their Shares to Sub in the Offer, upon the terms and subject to the conditions set forth in the Tender and Voting Agreement and (ii) the Company has granted Parent an option to acquire a number of Shares equal to up to 19.9% of the Company's Shares outstanding immediately prior to the exercise of such option (the "Stock Option Agreement") upon the terms and subject to the conditions set forth in the Stock Option Agreement, and each of the Tender and Voting Agreement and the Stock Option Agreement has been approved by the Board of Directors of the Company. NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: ARTICLE I THE OFFER Section 1.1. The Offer. (a) Subject to the provisions of this Agreement, Sub shall commence the Offer as promptly as practicable. The obligation of Sub to commence the Offer and accept for payment, and pay for, any Shares tendered pursuant to the Offer shall be subject only to the conditions set forth in Annex A (the "Offer Conditions") (any of which may be waived in whole or in part by Sub in its reasonable discretion, except that Sub shall not waive the Minimum Condition (as defined in Annex A) without the consent of the Company) and to the terms and conditions of this Agreement. Sub expressly reserves the right to modify the terms of the Offer, except that, without the consent of the Company, Sub shall not (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) amend or add to the Offer Conditions, (iv) except as provided in the next sentence, extend the Offer, (v) change the form of consideration payable in the Offer or (vi) amend any other term of the Offer in any manner adverse to the holders of the Shares. Notwithstanding the foregoing, Sub may, without the consent of the Company, (i) extend the Offer, but not beyond January 31, 2003, if at the scheduled or extended expiration date of the Offer any of the Offer Conditions shall not be satisfied or waived, (ii) extend the Offer for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the "SEC") or the staff thereof applicable to the Offer and (iii) extend the Offer for any reason on one or more occasions for an aggregate period of not more than 10 business days beyond the latest expiration date that would otherwise be permitted under clause (i) or (ii) of this sentence. Subject to the terms and conditions of the Offer and this Agreement, Sub shall accept for payment, and pay for, all Shares validly tendered pursuant to the Offer that Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer as promptly as practicable after the expiration of the Offer. Nothing herein shall restrict Sub's ability to provide a "subsequent offering period" as contemplated by Rule 14d-11 under the Securities Exchange Act of 1934 (the "Exchange Act"). (b) On the date of commencement of the Offer, Parent and Sub shall file with the SEC a Tender Offer Statement on Schedule TO (the "Schedule TO") with respect to the Offer, which shall contain an offer to purchase and a related letter of transmittal and all other ancillary offer documents (such Schedule TO and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the "Offer Documents"). Parent and Sub shall cause the Offer Documents to be disseminated to the holders of Shares as and to the extent required by applicable federal securities laws. Parent and Sub agree that the Offer Documents shall comply in all material respects with the Exchange Act, and the rules and regulations promulgated thereunder and the Offer Documents, on the date first published, sent or given to the Company's stockholders, shall not 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 were made, not misleading, except that no covenant is made by Parent or Sub with respect to information supplied by the Company or any of its stockholders specifically for inclusion or incorporation by reference in the Offer Documents. Each of Parent, Sub and the Company agree promptly to correct any information provided by it for use in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and Parent and Sub further agree to take all steps necessary to cause the Schedule TO as so corrected to be filed with the SEC and the other Offer Documents as so corrected to be disseminated to the Company's stockholders, in each case, as and to the extent required by applicable federal securities laws. The Company and its counsel shall be given reasonable opportunity to review and comment upon the Offer Documents prior to their filing with the SEC or dissemination to the stockholders of the Company. Parent and Sub agree to provide the Company and its counsel any comments, whether oral or written, that Parent, Sub or their counsel may receive from the SEC or its staff with respect to the Offer Documents promptly after the receipt of such comments and to consult with the Company and its counsel prior to responding to any such comments. (c) Parent shall provide or cause to be provided to Sub on a timely basis the funds necessary to accept for payment, and pay for, any Shares that Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer. (d) If, between the date of this Agreement and the date on which any particular Share is accepted for payment pursuant to the Offer, the outstanding Shares are changed into a different number or class of shares by reason of any stock split, division or subdivision of shares, stock dividend, reverse stock split, consolidation of shares, reclassification, recapitulation or other similar transaction, then the Offer Price shall be appropriately adjusted to reflect such change or transaction. Section 1.2. Company Actions. (a) The Company hereby approves of and consents to the Offer and represents and warrants that the Board of Directors of the Company, at a meeting duly called and held, duly and unanimously adopted resolutions (i) approving this Agreement, (ii) approving the Offer and the Merger (and effecting the other actions referred to in Section 4.15) in accordance with the 2 requirements of the Delaware General Corporation Law ("DGCL"), (iii) determining that this Agreement and the transactions contemplated hereby, including the Offer and the Merger are fair to, and in the best interests of, the Company and its stockholders, (iv) recommending that the Company's stockholders accept the Offer, tender their Shares pursuant to the Offer and approve this Agreement (if required), and (v) approving the acquisition of Shares by Parent and Sub pursuant to the Offer, the Tender and Voting Agreement, the Stock Option Agreement (as applicable) and the other transactions contemplated by this Agreement, the Tender and Voting Agreement and the Stock Option Agreement. The Company hereby consents to the inclusion of such recommendation referenced above in the Offer Documents. The Company has been advised by each of its directors and executive officers that each such person intends to tender all Shares owned by such person pursuant to the Offer. (b) On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, and the documents included therein, together with any supplements or amendments thereto, the "Schedule 14D-9") containing the recommendation described in paragraph (a) and shall distribute the Schedule 14D-9 to the stockholders of the Company as and to the extent required by applicable federal securities laws. The Company agrees that the Schedule 14D-9 shall comply in all material respects with the requirements of the Exchange Act and the rules and regulations promulgated thereunder and, on the date filed with the SEC and on the date first published, sent or given to the Company's stockholders, shall not 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 were made, not misleading, except that no covenant is made by the Company with respect to information supplied by Parent or Sub specifically for inclusion in the Schedule 14D-9. Each of the Company, Parent and Sub agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company further agrees to take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the Company's stockholders, in each case, as and to the extent required by applicable federal securities laws. Parent and its counsel shall be given reasonable opportunity to review and comment upon the Schedule 14D-9 prior to its filing with the SEC or dissemination to stockholders of the Company. The Company agrees to provide Parent and its counsel any comments, whether oral or written, that the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 promptly after the receipt of such comments and to consult with Parent and its counsel prior to responding to any such comments. (c) In connection with the Offer and the Merger, the Company shall cause its transfer agent to furnish Sub promptly with mailing labels containing the names and addresses of the record holders of Shares as of a recent date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Shares, and shall furnish to Sub such information and assistance (including updated lists of stockholders, security position listings and computer files) as Parent may reasonably request in communicating the Offer to the Company's stockholders. Subject to the requirements of applicable law, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Offer or the Merger, Parent and Sub and their agents shall hold in confidence the information contained in any such labels, listings and files, will use such information only in connection with the Offer and the Merger and, if this Agreement shall be terminated in accordance with Section 8.1, will, upon request, deliver, and will cause their agents to deliver, to the Company all copies and any extracts or summaries from such information then in their possession or control. Section 1.3. Directors. (a) Effective upon the acceptance for payment of Shares by Sub pursuant to the Offer, Parent shall be entitled to designate the number of directors, rounded up to the next 3 whole number, on the Board of Directors of the Company that equals the product of (i) the total number of directors on the Board of Directors of the Company (giving effect to the election of any additional directors pursuant to this Section) and (ii) a fraction whose numerator is the aggregate number of Shares then beneficially owned by Parent (including Shares accepted for payment pursuant to the Offer), and whose denominator is the total number of Shares then outstanding. In furtherance thereof, the Company shall take all action necessary to cause Parent's designees to be elected or appointed to the Company's board of directors at such time, including increasing the number of directors, and seeking and accepting resignations of incumbent directors. At such time, to the extent requested by Parent, the Company will also cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (i) each committee of the Board of Directors of the Company and (ii) each board of directors of each subsidiary of the Company (and each committee thereof) that represents the same percentage as individuals designated by Parent to serve on the Board of Directors of the Company. Notwithstanding the foregoing, if Shares are purchased pursuant to the Offer, there shall be until the Effective Time at least two members of the Company's Board of Directors who are directors (but not employees of the Company or any of its subsidiaries) on the date hereof (the "Continuing Directors"); provided, however, that if at any time prior to the Effective Time there shall be in office only one Continuing Director for any reason, the Company's Board of Directors shall cause a person who is not an officer or employee of the Company, Parent, Sub or any of their respective subsidiaries or affiliates designated by the remaining Continuing Director to fill such vacancy (and such person shall be deemed to be a Continuing Director for all purposes of this Agreement), and if at any time prior to the Effective Time no Continuing Directors then remain, the other directors of the Company then in office shall use reasonable efforts to designate two persons to fill such vacancies who are not officers or employees or affiliates of the Company, its subsidiaries, Parent, Sub or any of their respective subsidiaries or affiliates (and such persons shall be deemed to be Continuing Directors for all purposes of this Agreement). (b) The Company's obligations to appoint Parent's designees to the Company's Board of Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 of the Exchange Act require in order to fulfill its obligations under this Section, so long as Parent shall have provided to the Company on a timely basis the information with respect to Parent and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1 of the Exchange Act. The provisions of this Section 1.3 are in addition to and shall not limit any rights which Sub, Parent or any of their affiliates may have as a holder or beneficial owner of Shares as a matter of applicable law with respect to the election of directors or otherwise. (c) Following the election or appointment of Parent's designees pursuant to this Section 1.3 and prior to the Effective Time, the affirmative vote of a majority of the Continuing Directors, or if there shall only be one, of a Continuing Director, shall be required to (i) amend or terminate this Agreement by the Company, (ii) exercise or waive any of the Company's rights or remedies under this Agreement or (iii) extend the time for performance of Parent's and Sub's respective obligations under this Agreement. Section 1.4. Grant of Option. The Company hereby grants to Sub an option to purchase from the Company such number of Shares as will result in Sub owning 90.1% of the total number of outstanding Shares, at a price per Share equal to the Offer Price. Such option shall only be exercisable (1) to the extent the Company has a sufficient number of authorized but unissued Shares and (2) following the time Sub has accepted Shares for payment pursuant to the Offer and Parent and its subsidiaries beneficially own at least a majority of the then outstanding Shares. That portion of the purchase price owing upon exercise of such option which equals the product of (a) the number of Shares purchased pursuant to such option multiplied by (b) the par value per Share shall be paid to the Company in cash by wire transfer or check, and the balance of the purchase price shall be paid by delivery to the Company of 4 a non-interest bearing unsecured demand note of Parent. Such option shall be exercised by notice from Sub to the Company and Sub shall be the owner of such Shares immediately following such notice. ARTICLE II THE MERGER Section 2.1. The Merger. Upon the terms and subject to the conditions set forth herein and in accordance with the DGCL, at the Effective Time Sub shall be merged with and into the Company, the separate existence of Sub shall thereupon cease and the Company shall continue as the surviving corporation (hereinafter sometimes referred to as the "Surviving Corporation") and a wholly owned subsidiary of Parent. The Merger shall have the effects set forth in this Agreement and in the DGCL. Section 2.2. Effective Time. Subject to the provisions of this Agreement, as promptly as practicable (but in no event more than two business days) after the satisfaction or waiver of the conditions to the Merger (other than conditions which by their nature are to be satisfied at the Closing (as defined below), but subject to such conditions) the parties shall (a) file a certificate of merger (the "Certificate of Merger") or, if applicable, a certificate of ownership and merger (the "Certificate of Ownership and Merger") in such form as is required by and executed in accordance with the relevant provisions of the DGCL and (b) make all other filings or recordings required under the DGCL. The Merger shall become effective at such time as the Certificate of Merger or Certificate of Ownership and Merger, as applicable, is duly filed with the Secretary of State of the State of Delaware or at such subsequent time as Parent and the Company shall agree and as shall be specified in the Certificate of Merger or the Certificate of Ownership and Merger (the date and time the Merger becomes effective being the "Effective Time"). Prior to such filing, a Closing (the "Closing") shall be held at the offices of Clifford Chance US LLP, New York, New York. The date of the Closing is sometimes referred to as the "Closing Date." Section 2.3. Certificate of Incorporation and By-laws. Unless otherwise determined by Parent prior to the Effective Time: (a) the certificate of incorporation of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the certificate of incorporation of Sub as in effect immediately prior to the Effective Time until thereafter changed or amended in accordance with the provisions thereof and applicable law, provided that Article I shall provide that the name of the Surviving Corporation shall be the name of the Company; and (b) the bylaws of the Surviving Corporation shall be amended and restated as of the Effective Time to conform to the bylaws of Sub as in effect immediately prior to the Effective Time until thereafter changed or amended in accordance with the provisions thereof and applicable law. Section 2.4. Directors and Officers. Unless otherwise determined by Parent prior to the Effective Time: (a) the directors of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are directors of Sub immediately prior to the Effective Time until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be; and (b) the officers of the Surviving Corporation immediately after the Effective Time shall be the respective individuals who are officers of the Company immediately prior to the Effective Time until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be. 5 ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES Section 3.1. Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any further action on the part of Parent, Sub, the Company or any stockholder of the Company: (a) Conversion of Shares. Subject to Section 3.1(d), each issued and outstanding Share (other than Shares to be canceled in accordance with Section 3.1(b) hereof) shall be converted into the right to receive the Offer Price in cash, (the "Merger Consideration"), payable, without interest, to the holder of such Share, upon surrender, in the manner provided in Section 3.2, of the certificate that formerly evidenced such Share. All such Shares, when so converted, shall no longer be outstanding and shall automatically be canceled and retired and shall cease to exist, and each holder of a certificate representing any such Shares shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration therefor upon the surrender of such certificate in accordance with Section 3.2. (b) Cancellation of Treasury Stock and Parent Owned Stock. Each Share that is owned by the Company or any wholly owned subsidiary of the Company (or held in the Company's treasury) and each Share that is owned by Parent or Sub or any of their respective subsidiaries shall be canceled and retired and shall cease to exist, and no consideration shall be delivered in exchange therefor. (c) Capital Stock of Sub. Each issued and outstanding share of common stock of Sub shall be converted into and become one validly issued, fully paid and nonassessable share of common stock of the Surviving Corporation. (d) Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, any Shares held by a person (a "Dissenting Stockholder") who does not vote to approve the Merger and complies with all the provisions of the DGCL concerning the right of holders of Shares to dissent from the Merger and require payment of fair value (as defined in the DGCL) for their Shares ("Dissenting Shares") shall not be converted as described in Section 3.1(a), but shall be converted into the right to receive such consideration as may be determined to be due to such Dissenting Stockholder pursuant to the DGCL. If, after the Effective Time, such Dissenting Stockholder withdraws his demand or fails to perfect or otherwise loses his rights as a Dissenting Stockholder to payment of fair value, in any case pursuant to the DGCL, his Shares shall be deemed to be converted as of the Effective Time into the right to receive the Merger Consideration. The Company shall give Parent (i) prompt notice of any demands for fair value for Shares received by the Company and (ii) the opportunity to participate in and direct all negotiations and proceedings with respect to any such demands. The Company shall not, without the prior written consent of Parent, make any payment with respect to, or settle, offer to settle or otherwise negotiate, any such demands. Section 3.2. Exchange of Certificates. (a) Prior to the Effective Time, Parent shall designate a bank or trust company to act as Exchange Agent in the Merger (the "Exchange Agent"), and, from time to time on, prior to or after the Effective Time, Parent shall make available, or cause the Surviving Corporation to make available, to the Exchange Agent cash in amounts and at the times necessary for the prompt payment of the Merger Consideration upon surrender of certificates that immediately prior to the Effective Time represented outstanding Shares ("Certificates"). (b) Exchange Procedure. Promptly after the Effective Time, the Exchange Agent shall mail to each holder of record of a Certificate (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in a form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange 6 for the Merger Consideration. Upon surrender of a Certificate to the Exchange Agent, together with a duly executed letter of transmittal and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificate shall be entitled to receive in exchange therefor the Merger Consideration for each Share theretofore represented by such Certificate, and the Certificate so surrendered shall forthwith be canceled. (c) No Further Ownership Rights in Shares. All Merger Consideration delivered upon the surrender of Certificates in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to the Shares theretofore represented by such Certificates. Until surrendered as contemplated by this Section 3.2, each Certificate shall be deemed at all times after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration into which the Shares theretofore represented by such Certificate shall have been converted pursuant to Section 3.1. No interest will be paid or will accrue on the cash payable upon the surrender of any Certificate. (d) Stock Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and thereafter there shall be no further registration of transfers of the Shares in the records of the Company. If, after the Effective Time, Certificates are presented to the Surviving Corporation or the Exchange Agent for any reason, they shall be canceled and exchanged as provided in this Article III. (e) Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Exchange Agent, the posting by such person of a bond or other surety in such amount as the Exchange Agent may reasonably direct as indemnity against any claim that may be made with respect to such Certificate and subject to such other reasonable conditions as the Exchange Agent may impose, the Exchange Agent shall deliver in exchange for such Certificate the Merger Consideration into which the Shares theretofore represented by such Certificate shall have been converted pursuant to Section 3.1. (f) Transferred Certificates. If any payment under this Article III is to be made to a person other than the person in whose name the Certificate surrendered in exchange therefor is registered, it shall be a condition of payment that the Certificate so surrendered shall be properly endorsed or otherwise in proper form for transfer and that the person requesting such payment shall pay any transfer or other taxes required by reason of the payment to a person other than the registered holder of the Certificate surrendered or such person shall establish to the satisfaction of the Surviving Corporation that such tax has been paid or is not applicable. (g) Investment. The Exchange Agent shall invest any funds held by it for purposes of this Section 3.2 as directed by Parent, on a daily basis. Any interest and other income resulting from such investments shall be paid to Parent. (h) Withholding Tax. Parent and Sub shall be entitled to deduct and withhold, or cause the Exchange Agent to deduct and withhold, from the Offer Price or the Merger Consideration payable to a holder of Shares pursuant to the Offer or the Merger any such amounts as are required under the Internal Revenue Code of 1986, as amended (the "Code"), or any applicable provisions of state, local or foreign tax law. To the extent that amounts are so withheld by Parent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares in respect of which such deduction and withholding was made by Parent or Sub. (i) No Liability. None of Parent, Sub, the Company or the Exchange Agent shall be liable to any person in respect of any cash delivered to a public official pursuant to any applicable abandoned property, escheat or similar law. Any portion of the cash that has been made available to the 7 Exchange Agent pursuant to this Section 3.2 that remains unclaimed by the holder of any Certificate six months after the Effective Time shall be returned to Parent and any such holder who has not exchanged such holder's Certificate prior to such time shall thereafter look only to the Surviving Corporation for any claim for Merger Consideration hereunder. Section 3.3. Stock Options. The Company has taken all necessary action so that effective as of the Effective Time, (a) each outstanding employee or director stock option (the "Options") to purchase Shares granted under the Company's stock option plans (the "Company Option Plans") and each outstanding warrant to purchase Shares (a "Warrant"), whether or not then exercisable or vested, will become fully exercisable and vested, (b) each Option and Warrant that is then outstanding will be cancelled and (c) in consideration of such cancellation, and except to the extent that Parent or Sub and the holder of any such Option or Warrant otherwise agree, the Company (or, at Parent's option, Sub) will pay to each holder of an Option or Warrant an amount in respect thereof equal to the product of (x) the excess, if any, of the Offer Price over the exercise price of each such Option or Warrant and (y) the number of Shares previously subject to the Option or Warrant immediately prior to its cancellation (such payment to be net of applicable withholding taxes, if any). The Company represents that (i) no consent of any holder of an option is necessary for the transactions contemplated by this Section 3.3, (ii) following the Effective Time no holder of an Option or Warrant shall have any rights thereunder other than to receive cash as contemplated by this Section 3.3, and (iii) following the Effective Time no person shall have any right to acquire any security of the Surviving Corporation (or any subsidiary thereof) as a result of any agreement or obligation of the Company or any subsidiary and no person shall have any rights under any security of the Company or any subsidiary except as explicitly provided herein. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as set forth in the disclosure schedule delivered by the Company to Parent prior to the execution of this Agreement (the "Company Disclosure Schedule"), which Company Disclosure Schedule identifies the Section (or, if applicable, subsection) to which such exception relates, the Company represents and warrants to Parent and Sub as follows: Section 4.1. Organization. Each of the Company and its subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite corporate power and authority to own, lease or operate its properties and to carry on its business as now being conducted. Each of the Company and 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 in such jurisdictions where the failure to be so duly qualified or licensed and in good standing would not have a Material Adverse Effect on the Company. For purposes of this Agreement, a "Material Adverse Effect" means, with respect to any person, a fact, event or effect which has had, or is reasonably likely to have, together with all similar or related or other facts, events and effects, a material adverse effect on the financial condition, prospects, business, assets or results of operations of such person and its subsidiaries taken as a whole or on the ability of such person to perform its obligations hereunder or which would prevent or delay the consummation of the transactions contemplated hereby. The Company has made available to Parent complete and correct copies of its certificate of incorporation and by-laws and the certificate of incorporation and by-laws (or similar organizational documents) of each of its subsidiaries. The certificate of incorporation of the Company and the by-laws of the Company are in full force and effect, and the Company is not in violation of any provisions of its certificate of incorporation or by-laws. The certificate of incorporation and by-laws of such subsidiary are in full force and effect, and no subsidiary of the Company is in violation of its certificate of incorporation or by-laws. 8 Section 4.2. Capitalization. (a) The authorized capital stock of the Company consists of 25,000,000 Shares and 2,500,000 shares of preferred stock. At the close of business on November 4, 2002, (i) 11,369,152 Shares were issued and outstanding, (ii) no shares of preferred stock were issued and outstanding, (iii) 2,358,392 Shares were issuable upon the exercise of Options to purchase Shares under the Company Option Plans, and (iv) 30,000 Shares were issuable upon the exercise of an outstanding Warrant, and (v) 3,322,432 Shares were issued and held in the treasury of the Company. All outstanding shares of capital stock of Company have been duly authorized and validly issued and are fully paid and nonassessable. Except as set forth above, and for changes since such date resulting from the exercise of Options outstanding on such date in accordance with their terms, there are outstanding (x) no shares of capital stock or other voting securities of the Company, (y) no securities of the Company convertible into or exchangeable for shares of capital stock or other securities of the Company, and (z) no options, warrants or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or other securities. There are no outstanding obligations of the Company or any subsidiary to repurchase, redeem or otherwise acquire any securities of the Company or to vote or to dispose of any shares of the capital stock of any of the Company's subsidiaries. The Company does not have a "Shareholders Right Plan" or similar arrangement. (b) Section 4.2(b) of the Company Disclosure Schedule lists each outstanding Option and Warrant, the holder thereof, the number of Shares issuable thereunder and the exercise price thereof. (c) Section 4.2(c) of the Company Disclosure Schedule lists each subsidiary of the Company. All the outstanding shares of capital stock of each such subsidiary are owned by the Company, by another wholly owned subsidiary of the Company or by the Company and another wholly owned subsidiary of the Company, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature (collectively, "Liens"), and are duly authorized, validly issued, fully paid and nonassessable. Except for the capital stock of its subsidiaries, the Company does not own, directly or indirectly, any capital stock or other ownership interest in any entity. Section 4.3. Authority. The Company has all requisite corporate power and authority to execute and deliver this Agreement, the Tender and Voting Agreement and the Stock Option Agreement, and to consummate the transactions contemplated hereby and thereby. The Board of Directors of the Company (at a meeting duly called and held) has, by the unanimous vote of all directors of the Company determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are fair to and in the best interests of the Company's stockholders and declared that this Agreement is advisable. The execution, delivery and performance of this Agreement, the Tender and Voting Agreement and the Stock Option Agreement, and the consummation of the transactions contemplated hereby and thereby, including the consummation by the Company of the Merger, have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement, the Tender and Voting Agreement or the Stock Option Agreement or to consummate the transactions contemplated hereby or thereby, other than, with respect to the Merger, the adoption of this Agreement by the holders of a majority of the outstanding Shares (the "Company Stockholder Approval") (if required) and the filing of the Certificate of Merger or the Certificate of Ownership and Merger, as applicable. This Agreement, the Voting and Tender Agreement and the Stock Option Agreement have been duly executed and delivered by the Company and each such agreement constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with the respective terms of such agreement, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. 9 Section 4.4. Consents and Approvals; No Violations. (a) The execution, delivery and performance by the Company of this Agreement, the Tender and Voting Agreement and the Stock Option Agreement and the consummation by the Company of the transactions contemplated hereby and thereby do not and will not require any filing or registration with, notification to, or authorization, permit, consent or approval of, or other action by or in respect of, any governmental body, court, agency, official or regulatory or other authority (collectively, "Governmental Entities") other than (i) the filing of the Certificate of Merger or the Certificate of Ownership and Merger, as applicable, as contemplated by Article I hereof, and (ii) compliance with any applicable requirements of the Exchange Act. (b) The execution, delivery and performance by the Company of this Agreement, the Tender and Voting Agreement and the Stock Option Agreement and the consummation by the Company of the transactions contemplated hereby and thereby do not and will not (i) conflict with or result in any breach of any provision of the certificate of incorporation or by-laws of the Company or any similar organizational documents of any of its subsidiaries, (ii) to the best of the Company's knowledge, result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation, acceleration or loss of benefits under, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its subsidiaries under, or require consent pursuant to, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation (a "contract") to which the Company or any of its subsidiaries is a party or by which any of its properties or assets may be bound or (iii) to the best of the Company's knowledge, violate any judgment, order, writ, preliminary or permanent injunction or decree (an "Order") or any statute, law, ordinance, rule or regulation of any Governmental Entity (a "Law") applicable to the Company, any of its subsidiaries or any of their properties or assets, except in the case of clauses (ii) or (iii) for violations, breaches or defaults that would not have a Material Adverse Effect on the Company. Section 4.5. SEC Reports and Financial Statements. (a) The Company has made available (and with respect to future filings, will make available) via EDGAR to Parent accurate and complete copies of all registration statements, proxy statements and other statements, reports, schedules, forms and other documents filed by the Company with the SEC since December 31, 1999, and all amendments thereto (the "Company SEC Documents"). All statements, reports, schedules, forms and other documents required to be filed by the Company with the SEC since such date have been so filed on a timely basis. The Company SEC Documents, to the best of the Company's knowledge (a) do 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) comply in all material respects with the applicable requirements of the Exchange Act and the Securities Act of 1933 (the "Securities Act"), as the case may be, and the applicable rules and regulations of the SEC thereunder. No subsidiary of the Company is required to make any filings with the SEC. (b) The financial statements (including any related notes) of the Company included in the Company SEC Documents comply 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 generally accepted accounting principles applied on a consistent basis during the periods covered (except as may be indicated in the notes thereto, or, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, and except that the unaudited financial statements may not contain footnotes and are subject to normal and recurring year-end adjustments that will not, individually or in the aggregate, be material in amount) and fairly present the consolidated financial position of the Company and its consolidated subsidiaries as at the respective dates thereof and the consolidated results of the operations and cash flows of the Company and its consolidated subsidiaries for the periods then ended. 10 Section 4.6. Absence of Certain Changes or Events. Except as disclosed in the Company SEC Documents filed and publicly available prior to the date of this Agreement (the "Company Filed SEC Documents"), since December 31, 2001, (i) the Company and its subsidiaries have conducted their respective businesses only in the ordinary course, (ii) there has not been any Material Adverse Effect with respect to the Company and (iii) neither the Company nor any subsidiary has taken any action contemplated by Section 6.1. Section 4.7. No Undisclosed Liabilities. Except as and to the extent set forth in the Company Filed SEC Documents, neither the Company nor any of its subsidiaries has any liabilities or obligations of any nature whether or not accrued, contingent or otherwise, and there is no existing condition, situation or set of circumstances which could be expected to result in such a liability or obligation, except liabilities or obligations (a) reflected in the Company Filed SEC Documents or (b) which were incurred since December 31, 2001 and were normal and recurring expenses incurred in the ordinary course of business and would not be reasonably expected to have a Material Adverse Effect on the Company. Section 4.8. Information Supplied. None of the information supplied or to be supplied by the Company for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the information to be filed by the Company in connection with the Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the "Information Statement") or (iv) the Proxy Statement, will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Proxy Statement, at the time the Proxy Statement is first mailed to the Company's stockholders or at the time of the Stockholders Meeting (as defined in Section 6.3), to the best of the Company's knowledge, 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 Schedule 14D-9, the Information Statement and the Proxy Statement will comply in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the Company with respect to statements made or incorporated by reference therein based on information supplied by Parent or Sub for inclusion or incorporation by reference therein. Section 4.9. Benefit Plans; Employees and Employment Practices. To the best of the Company's knowledge (a) Section 4.9(a) of the Company Disclosure Schedule lists each employment, consulting, bonus, incentive compensation, deferred compensation, pension, profit sharing, retirement, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, equity (or equity-based), leave of absence, layoff, vacation, day or dependent care, legal services, cafeteria, life, health, medical, dental, vision, welfare, accident, disability, workmen's compensation or other insurance, severance, separation, termination, change of control, collective bargaining or other benefit plan, understanding, agreement, practice, policy or arrangement of any kind, whether written or oral, and whether or not subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including, but not limited to, any "employee benefit plan" within the meaning of Section 3(3) of ERISA (a "Plan"), which the Company or any subsidiary, or any person required at any relevant time to be aggregated with any of the Company or any subsidiary under Sections 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an "ERISA Affiliate"), sponsors, maintains, has any obligation to contribute to, has or may have liability under or is otherwise a party to, or which otherwise provides benefits for employees, former employees, independent contractors or former independent contractors (or their dependents and beneficiaries) of the Company or any subsidiary, on the date of this Agreement or at any time subsequent thereto and on or prior to the Effective Time (each, a "Company Plan"). The Company has delivered with respect to each such Company Plan, true, correct, and complete copies of the applicable following documents: (i) all current Company Plan documents and related trust documents, and any amendment thereto; (ii) Forms 5500, financial statements, and actuarial reports for the last three 11 plan years; (iii) the most recently issued Internal Revenue Service determination letter; (iv) summary plan descriptions and all summaries of material modifications; and (v) all written communications to employees relating to such Company Plans. (b) To the best of the Company's knowledge, each of the Company Plans is, and its administration (including without limitation, with respect to reporting and disclosure) is and has been, in compliance with, its terms and with ERISA, the Code (including, without limitation, all tax rules compliance with which is required for any intended favorable tax treatment is intended) and any and all other applicable law. Without limiting any other provision of this Section 4.9(b), no event has occurred and no condition exists, with respect to any Plan, that has subjected or could reasonably be expected to subject the Company or any subsidiary, or any Company Plan or any successor thereto, to any tax, fine, penalty or other liability (other than a liability arising in the normal course to make contributions or payments, as applicable, when ordinarily due under the Company Plans with respect to employees (or, if applicable, independent contractors) of the Company and its subsidiaries). No event has occurred and no condition exists, with respect to any Plan that could subject Parent or any of its affiliates, or any Plan maintained by Parent or any affiliate (other than an affiliate which becomes such pursuant to the transactions contemplated by this Agreement) thereof, to any tax, fine, penalty or other liability, that would not have been incurred by Parent or any of its affiliates, or any such Plan, but for the transactions contemplated hereby. (c) Each of the Company Plans which is intended to be tax-qualified under Section 401(a) of the Code and, if applicable, 401(k) of the Code has been determined by the Internal Revenue Service to be so qualified and such determination has not been modified, revoked or limited, and no circumstances have occurred that would adversely affect the tax-qualified status of any such Company Plan. (d) To the best of the Company's knowledge, neither the Company nor any ERISA Affiliate has ever sponsored, contributed to, maintained or had any liability (whether contingent or otherwise) under (i) a "multiemployer plan" (as defined in Section 4001(a)(3) of ERISA) or (ii) an employee benefit plan that is or was subject to Part 3 of Subtitle B of Title I of ERISA, or Section 412 of the Code, or Title IV of ERISA, nor have any of them ever done so. (e) There is no suit, action, dispute, claim, arbitration or legal, administrative or other proceeding or governmental investigation pending, or threatened, alleging any breach of the terms of any Company Plan or of any fiduciary duties thereunder or violation of any applicable law with respect to any such Company Plan. (f) To the best of the Company's knowledge, none of the Company or any of its subsidiaries is in default in performing any of its contractual obligations under any of the Company Plans or any related trust agreement or insurance contract. (g) To the best of the Company's knowledge, none of the Company or any subsidiary, or any "party in interest" (as defined in Section 3(14) of ERISA) or any "disqualified person" (as defined in Section 4975 of the Code) with respect to any Company Plan, has engaged in a non-exempt "prohibited transaction" within the meaning of Section 4975 of the Code or Section 406 of ERISA. (h) To the best of the Company's knowledge (i) no Company Plan that is a "welfare benefit plan" as defined in Section 3(1) of ERISA provides for continuing benefits or coverage for any participant or beneficiary or covered dependent of a participant after such participant's termination of employment, except to the extent required by law; (ii) there has been no violation of Section 4980B of the Code or Sections 601 through 608 of ERISA with respect to any such Company Plan that could result in any material liability; and (iii) all Company Plans which provide medical, dental health or long-term 12 disability benefits are fully insured and claims with respect to any participant or covered dependent under such Company Plan could not result in any uninsured liability to the Company, any subsidiary or Parent. (i) No Company Plan covers or otherwise benefits any individuals other than current or former employees of the Company and its subsidiaries (and their dependents and beneficiaries). (j) Neither the Company nor any subsidiary has agreed or otherwise committed to, whether in writing or otherwise, to increase or improve the compensation, benefits or terms and conditions of employment or service of any director, officer, employee or consultant. None of the Company or any subsidiary maintains any Plan which provides severance or similar benefits to current or former employees or other service providers. Each such Plan provides for the unrestricted right of the Company or any subsidiary (as applicable) to amend or terminate such Plan. The Company will not have any outstanding liability under the Workers Adjustment and Retraining Notification Act, as amended, with respect to any events occurring or conditions existing on or prior to the Effective Time. (k) (i) There are no material controversies, strikes, work stoppages or disputes pending or threatened between the Company or any of its subsidiaries and any current or former employees, (ii) no labor union or other collective bargaining unit represents or has ever represented any employee of the Company or any of its subsidiaries with respect to employment by the Company or such subsidiary and (iii) no organizational effort by any labor union or other collective bargaining unit currently is under way or threatened with respect to any employee. (l) To the best of the Company's knowledge, Section 4.9(l) of the Company Disclosure Schedule lists each employment, severance, consulting or other contract or plan with or for the benefit of any officer, director, employee or agent of the Company or any subsidiary with a "change of control" provision or that will provide any payment, additional benefits, vesting or acceleration of benefits or rights or otherwise be affected by the execution of this Agreement or the consummation of the transactions contemplated hereby. Section 4.10. Contracts. (a) To the best of the Company's knowledge, neither the Company nor any of its subsidiaries nor, in the case of (vii) below, any affiliate of the Company, is a party to or is bound by: (i) any contract or commitment restricting the Company, any subsidiary or any of their respective employees from engaging in any activity or line of business or competing with any person or limiting the ability of any person to compete with the Company or any subsidiary; (ii) any agreement, option or commitment or right with, or held by, any third party to acquire, use or have access to any assets or properties, or any interest therein, of the Company or any subsidiary; (iii) any employment, severance or consulting contract which is material to the business of the Company or its subsidiaries; (iv) any agreement or commitment not entered into in the ordinary course of business or any agreement which, if terminated, would reasonably be expected to result in a Material Adverse Effect; (v) any material license, sublicense, development, support or maintenance agreement not entered into in the ordinary course of its business nor consistent with the Company's standard practices; (vi) any agreement relating to common or preferred stock issued by the Company or any subsidiary; 13 (vii) any agreement which provides rights to parties other than the Company or any subsidiary which are contingent upon a merger, consolidation or other "change-in-control" of the Company; (viii) any agreement containing confidentiality and non-disclosure obligations from the Company which, if violated, could reasonably be expected to result in a Material Adverse Effect; (ix) any other agreement that (A)(1) involves the payment or potential payment, pursuant to the terms of any such agreement, by or to the Company or any subsidiary of more than $125,000 and (2) cannot be terminated within 60 calendar days after giving notice of termination without resulting in any material cost or penalty to the Company or any subsidiary or (B) obligates the Company to provide services for a period in excess of 90 calendar days unless such obligation is terminable by the Company without resulting in any material cost or penalty to the Company or any subsidiary or was entered into in the ordinary course of business and did not include any extraordinary inducement to the other party; or (x) any agreement granting any license or other right to use the Intellectual Property Rights (as defined below) of the Company, except to customers in the ordinary course of business. (b) To the best of the Company's knowledge, the Company has previously delivered (or made available) true, complete and correct copies of all such agreements (including all amendments) to Parent (or, in the case of oral agreements only, true, complete and correct descriptions thereof have been set forth in Section 4.10 of the Company Disclosure Schedule). To the best of the Company's knowledge, neither the Company nor any of its subsidiaries, or to the best knowledge of the Company, any other party, is in violation or breach of or in default (nor does there exist any condition which upon the passage of time or the giving of notice would result in a violation or breach of, or constitute a default under, or give rise to any right of termination, amendment, cancellation, acceleration or loss of benefits, or result in the creation of any Lien upon any of the properties or assets of the Company or any of its subsidiaries) under any contract to which it is a party or by which it or any of its properties or assets is bound, except for violations, breaches or defaults that would not have a Material Adverse Effect on the Company. No other party to any such contract has, to the best knowledge of the Company, alleged that the Company or any subsidiary is in violation or breach of or in default under any such contract or has notified the Company or any subsidiary of an intention to modify any material terms of or not to renew any such contract, where such events would have a Material Adverse Effect on the Company. No additional consideration shall be due under such contracts as a result of the Merger and neither the Company nor any subsidiary is currently renegotiating any such agreement or paying liquidated damages in lieu thereof. Section 4.11. Litigation. Except as disclosed in the Company Filed SEC Documents, there is no suit, claim, action, proceeding or investigation pending before any Governmental Entity or, to the best knowledge of the Company, threatened against the Company or any of its subsidiaries that would have a Material Adverse Effect. Except as disclosed in the Company SEC Documents, neither the Company nor any of its subsidiaries is subject to any outstanding Order that would have a Material Adverse Effect on the Company. Section 4.12. Compliance with Applicable Law. To the best of the Company's knowledge, the Company and its subsidiaries hold all permits, licenses, variances, exemptions, orders and approvals of all Governmental Entities necessary for the lawful conduct of their respective businesses (the "Company Permits"), except for failures to hold such Company Permits that would not have a Material Adverse Effect on the Company. To the best of the Company's knowledge, the Company and its subsidiaries are in compliance with the terms of the Company Permits, except where the failure so to comply would not have a Material Adverse Effect on the Company. To the best of the Company's knowledge, the 14 businesses of the Company and its subsidiaries have not been, and are not being, conducted in violation of any Law, except for violations that would not have a Material Adverse Effect. No investigation or review by any Governmental Entity with respect to the Company or any of its subsidiaries is pending or, to the best knowledge of the Company, threatened, nor has any Governmental Entity indicated an intention to conduct any such investigation or review, other than, in each case, where the outcome would not have a Material Adverse Effect on the Company. Section 4.13. Tax Matters. (a) The Company and each of its subsidiaries has timely filed all tax returns and reports required to be filed by it. All such tax returns and reports are complete and correct in all material respects. The Company and each of its subsidiaries has timely paid (or the Company has paid on its subsidiaries' behalf) all taxes due with respect to the taxable periods covered by such tax returns and reports and all other taxes, and the most recent financial statements contained in the Company Filed SEC Documents reflect an adequate reserve for all taxes payable by the Company and its subsidiaries for all taxable periods and portions thereof through the date of such financial statements. (b) Neither the Company nor any of its subsidiaries is under audit or examination by any taxing authority, and no written or unwritten notice of such an audit or examination has been received by the Company or its subsidiaries. Each material deficiency resulting from any audit or examination relating to taxes by any taxing authority has been timely paid. No material issues relating to taxes were raised by the relevant taxing authority during any presently pending audit or examination, and no material issues relating to taxes were raised by the relevant taxing authority in any completed audit or examination that can reasonably be expected to recur in a later taxable period. No tax return or report of the Company or any of its subsidiaries has ever been under audit or examination by the Internal Revenue Service or other relevant taxing authority. The Company has not voluntarily extended the relevant statute of limitations with respect to the U.S. federal tax returns of the Company and its subsidiaries. (c) The best of the Company's knowledge, there is no agreement or other document extending, or having the effect of extending, the period of assessment or collection of any taxes and no power of attorney with respect to any taxes has been executed or filed with any taxing authority. (d) No material Liens for taxes exist with respect to any assets or properties of the Company or any of its subsidiaries, except for statutory liens for taxes not yet due. (e) Neither the Company nor any of its subsidiaries is a party to or bound by any tax sharing agreement, tax indemnity obligation or similar agreement, arrangement or practice with respect to taxes (including any advance pricing agreement, closing agreement or other agreement relating to taxes with any taxing authority). (f) To the best of the Company's knowledge, neither the Company nor any of its subsidiaries will be required to include in a taxable period ending after the Effective Time taxable income attributable to income that accrued in a prior taxable period but was not recognized in any prior taxable period as a result of the installment method of accounting, the completed contract method of accounting, the long-term contract method of accounting, the cash method of accounting or Section 481 of the Code or comparable provisions of state or local tax law, domestic or foreign, or for any other reason. (g) The disallowance of a deduction under Section 162(m) of the Code for employee remuneration will not apply to any amount paid or payable by the Company or any of its subsidiaries under any Company Plan or other compensation arrangement currently in effect. (h) Any amount or other entitlement that could be received (whether in cash or property or the vesting of property) as a result of any of the transactions contemplated by this Agreement by any employee, officer or director of the Company or any of its affiliates who is a "disqualified individual" (as such term is defined in proposed Treasury Regulation Section 1.280G-1) under any Company Plan or other compensation arrangement currently in effect would not be characterized as an 15 "excess parachute payment" or a "parachute payment" (as such terms are defined in Section 280G(b)(1) of the Code). (i) To the best of the Company's knowledge, the Company has complied in all respects with all applicable laws, rules and regulations relating to the payment and withholding of taxes (including, without limitation, withholding of taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code or similar provisions under any foreign federal laws or any state or local laws, domestic and foreign) and has, within the time and the manner prescribed by law, withheld from and paid over to the proper governmental authorities all amounts required to be so withheld and paid over under applicable laws. (j) Neither the Company nor any of its subsidiaries currently is the beneficiary of any extension of time within which to file any tax return. No claim has ever been made by an authority in a jurisdiction where any of the Company or its subsidiaries does not file tax returns that the Company or its subsidiaries is or may be subject to taxation by that jurisdiction. (k) Neither the Company nor any of its subsidiaries has filed a consent under Code Sec. 341(f) concerning collapsible corporations. Neither the Company nor any of its subsidiaries has been a United States real property holding corporation within the meaning of Code Sec. 897(c)(2) during the applicable period specified in Code Sec. 897(c)(1)(A)(ii). Neither the Company nor any of its subsidiaries is subject to any accumulated earnings tax or personal holding Company tax. Each of the Company and its subsidiaries has disclosed on its federal income tax returns all positions taken therein that could give rise to a substantial understatement of federal income tax within the meaning of Code Sec. 6662. Neither the Company nor any of its subsidiaries (A) has been a member of an Affiliated Group (as defined below) filing a consolidated federal income tax return (other than an Affiliated Group the common parent of which was the Company) or (B) has any liability for the taxes of any person (other than any of the Company and its subsidiaries) under Treas. Reg. ss. 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise. (l) Section 4.13(1) of the Company Disclosure Schedule sets forth the following information with respect to each of the Company and its subsidiaries (or, in the case of clause (B) below, with respect to each of the Company's subsidiaries) as of the most recent practicable date (as well as on an estimated pro forma basis as of the Closing giving effect to the consummation of the transactions contemplated hereby) and to the best of the Company's knowledge: (A) the amount of any excess loss accounts; (B) the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign tax, or excess charitable contribution allocable to the Company or any of its subsidiary and any limitations thereon; (C) the amount of any deferred gain or loss allocable to the Company or any of its subsidiaries arising out of any deferred intercompany transaction; (D) all material elections and consents relating to tax and agreements with any taxing authorities which are still in effect; (E) an estimate of the current and accumulated earnings and profits of such company; (F) any partnership, trust or other entity (other than the Company and its subsidiaries) in which the Company or its subsidiaries are owners whether or not such entity is disregarded for tax purposes and (G) all closing agreements and tax rulings requested or received from any taxing authority. (m) Neither the Company nor any of its subsidiaries (A) has participated in an international boycott as defined in Code Section 999; (B) has been the distributing corporation with respect to a transaction described in Code Section 355 within the three-year period ending on the date of this Agreement; (C) has a permanent establishment or office or fixed place of business outside the country in which it was organized or (D) has an overall foreign loss described in Code Section 904(f). (n) None of the assets of the Company or its subsidiaries are (A) tax exempt use property under Code Section 168(h); (B) tax-exempt bond financed property under Code Section 168(g); (C) limited use property under Revenue Procedure 76-30, or (D) treated as owned by any other person 16 under Code Section 168. None of the Company or it subsidiaries is a party (other than as an investor) to any industrial development bond. (o) Neither the Company nor any of its subsidiaries own shares of any controlled foreign corporations as described in Code Section 957, passive foreign investment company as described in Code Section 1297, or foreign investment company as described in Code Section 1246. (p) None of the Company's subsidiaries which are organized outside the United States (A) have material loss carryovers; (B) have any investments in United States property as described in Code Section 956; (C) have any United States real property interests as described in Code Section 897, or (D) generate material Subpart F income as described in Code Section 952. (q) To the best of the Company's knowledge, neither the Company nor any of its subsidiaries which are organized outside the United States are a (A) controlled foreign corporation as described in Code Section 957; (B) passive foreign investment Company as described in Code Section 1297; (C) contiguous country corporation described in Code Section 1504(d); or (D) foreign investment company described in Code Section 1246. (r) Neither the Company nor any of its subsidiaries which are organized outside the United States has made an election under United States law with respect to its status or classification for United States tax purposes. (s) None of the Company's subsidiaries which are organized outside the United States are engaged in the conduct of a trade or business in the United States or have a branch, office or fixed place of business or permanent establishment in the United States. (t) As used in this Agreement, (i) "Affiliated Group" means any affiliated group within the meaning of Code Section 1504 (or any similar group defined under a similar provision of state, local or foreign law); (ii) "tax" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code Sec. 59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not; and (iii) "tax return" means any return, declaration, report, claim for refund, or information return or statement relating to taxes, including any schedule or attachment thereto, and including any amendment thereof. Section 4.14. Environmental. (a) Except to the extent that any of the following, individually or in the aggregate, would not result in a Material Adverse Effect on the Company (i) the Company and its subsidiaries comply and have complied with all applicable Environmental Laws (as defined below), (ii) no Hazardous Substances (as defined below) are present at or have been disposed on or released or discharged from, onto or under any of the properties currently owned, leased, operated or otherwise used by the Company or its subsidiaries (including soils, groundwater, surface water, buildings or other structures), (iii) no Hazardous Substances were present at or disposed on or released or discharged from, onto or under any of the properties formerly owned, leased, operated or otherwise used by the Company or its subsidiaries during the period of ownership, lease, operation or use by Company or its subsidiaries, (iv) neither the Company nor any subsidiary is subject to any liability or obligation in connection with 17 Hazardous Substances present at any location owned, leased, operated or otherwise used by any third party, (v) neither the Company nor any subsidiary has received any notice, demand, letter, claim or request for information alleging that the Company or any subsidiary is or may be in violation of or liable under any Environmental Law, (vi) neither the Company nor any subsidiary is subject to any order, decree, injunction or other directive of any governmental authority or is subject to any indemnity or other agreement with any person or entity relating to Hazardous Substances and (vii) there are no circumstances or conditions involving the Company and its subsidiaries, any assets (including real property) or businesses previously owned, leased, operated or otherwise used by Company or its subsidiaries, or any of the assets (including real property) or businesses of any predecessors of Company or its subsidiaries that could reasonably be expected to result in any damages or liabilities to the Company or any subsidiary arising under or pursuant to Environmental Law or in any restriction on the ownership, use or transfer of any of the assets of the Company or any subsidiary arising under or pursuant to any Environmental Law. (b) As used herein, the term "Environmental Law" means any international, national, provincial, regional, federal, state, municipal or local law, regulation, order, judgement, decree, permit, authorization, opinion, common or decisional law (including, without limitation, principles of negligence and strict liability) or agency requirement relating to the protection, investigation or restoration of the environment (including, without limitation, natural resources) or the health or safety of human or other living organisms, including, without limitation, the manufacture, introduction into commerce, export, import, handling, use, presence, disposal, release or threatened release of any Hazardous Substance or noise, odor, wetlands, pollution, contamination or any injury or threat of injury to persons or property. (c) As used herein, the term "Hazardous Substance" means any element, compound, substance or other material (including any pollutant, contaminant, hazardous waste, hazardous substance, chemical substance, or product) that is listed, classified or regulated pursuant to any Environmental Law, including, without limitation, any petroleum product, by-product or additive, asbestos, presumed asbestos-containing material, asbestos-containing material, medical waste, chloroflourocarbon, hydrochloroflourocarbon, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive material or radon. Section 4.15. State Takeover Statutes. The Board of Directors of the Company has adopted this Agreement and approved the Offer, the Tender and Voting Agreement, the Stock Option Agreement, the acquisition of Shares by Parent and Sub pursuant to the Offer, the Tender and Voting Agreement, the Stock Option Agreement (as applicable) and the other transactions contemplated by this Agreement, the Tender and Voting Agreement and the Stock Option Agreement, and such adoptions and approvals are sufficient to render inapplicable to the Offer, the Merger, this Agreement, the Tender and Voting Agreement, the Stock Option Agreement, the acquisition of Shares by Parent and Sub pursuant to the Offer, the Tender and Voting Agreement and the Stock Option Agreement (as applicable) and the other transactions contemplated by this Agreement, the Tender and Voting Agreement and the Stock Option Agreement, the provisions of Section 203 of the DGCL and Article Fourteenth of the Company's certificate of incorporation. To the best knowledge of the Company, no other state takeover statute or similar Law applies or purports to apply to the Offer, the Merger, this Agreement, the Tender and Voting Agreement, the Stock Option Agreement, the acquisition of Shares by Parent and Sub pursuant to the Offer, the Tender and Voting Agreement and the Stock Option Agreement (as applicable) or any of the transactions contemplated by this Agreement, the Tender and Voting Agreement or the Stock Option Agreement. The Company will take all reasonable actions to prevent the application of such Laws. The Company does not have more than 500 employees residing in the state of Arizona. Section 4.16. Intellectual Property. (a) Section 4.16(a) of the Company Disclosure Schedule sets forth a true, complete and accurate list of all Intellectual Property Rights (other than trade secrets, know-how and goodwill attendant to the Intellectual Property Rights and other rights relating to intellectual property not reducible or not already reduced to schedule form), to the best of the Company's 18 knowledge, all of the Intellectual Property Rights and licenses and agreements relating to the Intellectual Property Rights are subsisting in full force and effect and have not been cancelled, expired or abandoned and are valid and enforceable, and the Company either owns or has a valid and enforceable unrestricted right to the Intellectual Property Rights. (b) To the best of the Company's knowledge, the Company is the sole and exclusive owner of all right, title and interest in and to the Intellectual Property Rights, free and clear of all Liens or other restrictions of any kind whatsoever. (c) Except for the Intellectual Property Rights, and to the best of the Company's knowledge, no other intellectual property or intangible property rights are required for the Company and its subsidiaries to conduct their business in the ordinary course consistent with past practice, and upon the date hereof the rights in and to the Intellectual Property Rights will enable Parent and the Surviving Corporation to fully carry on without restriction all aspects of the business of the Company and its subsidiaries as and to the extent such business was carried on by the Company and its subsidiaries prior to the date hereof. (d) To the best of the Company's knowledge (i) all registrations with and applications to Governmental Entities in respect of the Intellectual Property Rights are valid and in full force and effect, (ii) the Company is in compliance with all Laws regarding the manufacture, advertising, sale, import, and export of the Intellectual Property Rights and products incorporating or made using the same, and (iii) the Company is not in default (or with the giving of notice or lapse of time or both, will not be in default) in any material respect under any license, or any other contract or agreement pursuant to which the Company has been granted a right, to use the Intellectual Property Rights. (e) To the best of the Company's knowledge (i) all works of authorship, including, without limitation, the computer software, documentation, software design, technical and functional specifications, and all other materials subject to copyright protection, and included in the Intellectual Property Rights, are original and were either created by employees of the Company within the scope of their employment or are otherwise works made for hire or all right, title and interest in and to such works of authorship have been legally and fully assigned and transferred to the Company, (ii) all rights in all inventions and discoveries made, developed or conceived by any employee or independent contractor of the Company, during the course of their employment (or other retention) by the Company and relating to or included in the Intellectual Property Rights or made, written, developed or conceived with the use or assistance of the Company's facilities or resources, or which are the subject of one or more issued letters patent or applications for letters patent and which relate to or are included in the Intellectual Property Rights, have been assigned in writing to the Company; and (iii) all employees and independent contractors of the Company have signed documents confirming that each of them will assign to the Company all intellectual property rights made, written, developed or conceived by them during the course of their employment (or other retention) by the Company and which relate to or are included in the Intellectual Property Rights or made, written, developed or conceived with the use or assistance of the Company's facilities or resources to the extent that ownership of any such intellectual property rights does not vest in the Company by operation of law. (f) Other than with respect to those agreements entered into in the ordinary course of business and consistent with the Company's standard practices, (i) Section 4.16(f)(i) of the Company Disclosure Schedule sets forth a true, accurate and complete list of the agreements, including but not limited to license agreements, and an identification of relevant particulars thereof and of all parties thereto under which the Company has obtained or is the beneficiary of any ownership of, or license right to use, any of the Intellectual Property Rights, and (ii) Section 4.16(f)(ii) of the Company Disclosure Schedule sets forth a true, accurate and complete list of the agreements, including but not limited to license agreements, development agreements and joint venture agreements, to which the Company is a party and 19 pursuant to which a third party is authorized to use or has obtained any ownership rights in any of the Intellectual Property Rights. (g) To the best of the Company's knowledge (i) the use by the Company or its subsidiaries of each of the Intellectual Property Rights and the operations of the Company's and its subsidiaries respective businesses as currently operated do not infringe upon the rights of any other person, (ii) the Intellectual Property Rights are not being infringed upon by any other person or its property, (iii) the Company has not received any claim, any cease and desist or equivalent letter or any other notice of any allegation that any of the Intellectual Property Rights, or any operations of the Company's or any of its subsidiaries' businesses as currently operated, infringes upon, misappropriates or otherwise violates the rights of any third parties, (iv) there has been no unauthorized use by, disclosure to or by or infringement, misappropriation or other violation of any of the Intellectual Property Rights by any third party and/or any current or former officer, employee, independent contractor, consultant or any other agent of the Company or its subsidiaries, and (v) none of the Intellectual Property Rights, and none of the operations of the Company's or any of its subsidiaries' businesses as currently operated, are subject to any suits, actions, claims or demands of any third party, and no action or proceeding, whether judicial, administrative or otherwise, has been instituted or is pending or threatened which challenges or affects the rights of the Company in the Intellectual Property Rights or with respect to any of the operations of the Company's or its subsidiaries' respective businesses as currently operated, and the Company is not aware of any such claim, demand, action or proceeding which is unasserted with respect to any of the Intellectual Property Rights or with respect to any of the operations of the Company's or its subsidiaries' respective businesses as currently operated. (h) To the best of the Company's knowledge, the documentation relating to any know-how and/or trade secrets included in the Intellectual Property Rights (i) is current, accurate, and sufficient in detail and content to identify and explain such know-how and/or trade secrets and to allow its full and proper use without reliance on the knowledge or memory of any individual, and the Company has taken all reasonable precautions to protect the secrecy, confidentiality and value of such know-how and/or trade secrets, and (ii) includes all know-how and/or trade secrets necessary for the operation of the business of the Company and its subsidiaries as currently conducted. (i) All former and current employees of the Company have executed written agreements with the Company, including without limitation, employment contracts and patent disclosure agreements, which in whole or part relate to and/or contain provisions or covenants relating to: (i) the nondisclosure and/or confidentiality of the Intellectual Property Rights, and (ii) non-competition with the Company and its successors and designed to protect the Intellectual Property Rights. (j) To the best knowledge of the Company, no employee of the Company is in violation or breach of any term of any employment contract, patent disclosure agreement or any other contract or agreement with the Company or any other party, which breach or violation is a breach or violation of any provision relating to the nondisclosure or confidentiality of Intellectual Property Rights or of any non-compete covenants. (k) As used in this Agreement, "Intellectual Property Rights" means all of the United States and foreign intellectual property and other proprietary rights, arising under statutory, common, or other law and whether or not perfected, owned by or licensed to the Company or its subsidiaries, including, without limitation: (i) United States and foreign patents, patent applications (including United States provisional applications and applications filed pursuant to the Patent Cooperation Treaty), patent disclosures and inventions and discoveries which may be patentable and improvements thereto, industrial designs, invention disclosures, and any and all divisions, continuations, continuations-in-part, reissues, continuing patent applications, reexaminations, and extensions thereof, any counterparts claiming priority therefrom and like statutory rights related to the foregoing, (ii) registered and unregistered trademarks, service marks, trade dress, logos, trade names, corporate names, business names, internet domain names 20 and general intangibles of like nature, including without limitation other names and slogans, the registrations and applications for registration thereof, and the goodwill associated therewith, (iii) United States and foreign copyrights and works of authorship, and all registrations and applications to register the foregoing, (iv) all categories of trade secrets, as defined in the Uniform Trade Secrets Act, and under corresponding foreign statutory and common law, including, but not limited to, business, technical and know-how information (collectively, the "Trade Secrets"), (v) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source or object code form, user interfaces, databases and compilations, including any and all data and collections of data, and all manuals and other specifications and documentation and all know-how relating thereto, (vi) other intellectual property rights used in, material to or necessary for the conduct of the business of the Company and its subsidiaries, (vii) rights of publicity and privacy relating to the use of names, likenesses, voices, signatures and biographical information of real persons, and (viii) all licenses and agreements pursuant to which the Company or any subsidiary has acquired rights in or to any of the aforementioned Intellectual Property Rights, or agreements pursuant to which the Company has licensed or transferred the right to use any of the foregoing. Section 4.17. Sale of Products; Performance of Services. (a) To the best of the Company's knowledge, all installation services, programming services, integration services, repair services, maintenance services, support services, training services, upgrade services and other services that have been performed by the Company or any of its subsidiaries were performed properly and in conformity with the terms and requirements of all applicable warranties and other contracts in all material respects and with all applicable Laws. (b) To the best of the Company's knowledge, since January 1, 2001, no customer or other person has asserted or, to the knowledge of the Company, threatened to assert any claim against the Company or any of its subsidiaries, (i) under or based upon any warranty provided on behalf of the Company or any of its subsidiaries, or (ii) based upon any services performed by the Company or any of its subsidiaries, other than claims the total cost to remedy which does not exceed $25,000 with respect to standard maintenance in the ordinary course of business. Section 4.18. Certain Business Practices. To the best of the Company's knowledge, neither the Company nor any of its subsidiaries, and no director, officer, agent or employee of the Company or any of its subsidiaries, has (i) used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to foreign or domestic political parties or campaigns or violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or (iii) made any other unlawful payment. Section 4.19. Transactions with Affiliates. Except as set forth in the Company Filed SEC Documents, between the date of the Company's last annual meeting proxy statement filed with the SEC and the date of this Agreement, no event has occurred that would be required to be reported by the Company pursuant to Item 404 of Regulation S-K promulgated by the SEC. Section 4.19 of the Company Disclosure Schedule identifies each person who is (or who may be deemed to be) an "affiliate" (as that term is used in Rule 145 under the Securities Act) of the Company as of the date of this Agreement. Section 4.20. Books and Records. To the best of the Company's knowledge, the minute books and other similar records of the Company and its subsidiaries as made available to Parent prior to the execution of this Agreement contain a true and complete record, in all material respects, of all actions taken at all meetings and by all written consents in lieu of meetings of the stockholders, the boards of directors and committees of the boards of directors of the Company and its subsidiaries. 21 Section 4.21. Opinion of Financial Advisor. The Company has received the opinion of Alliant Partners (the "Financial Advisor"), dated the date of this Agreement, to the effect that, as of the date of this Agreement, the consideration to be received in the Offer and the Merger by the Company's stockholders is fair to the Company's stockholders from a financial point of view, and a complete and correct signed copy of such opinion has been delivered to Parent. Section 4.22. Brokers and Finders. No broker, investment banker, financial advisor or other person, other than the Financial Advisor, the fees and expenses of which will be paid by the Company (as reflected in an agreement between such firm and the Company, a copy of which has been delivered to Parent), is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. Section 4.23. Full Disclosure. To the best of the Company's knowledge, no representation or warranty by the Company contained in this Agreement (including, without limitation, the Company Disclosure Schedule) and no statement contained in any document (including, without limitation, financial statements and certificates), or other writings furnished by the Company to Parent or Sub or any of their representatives (excluding financial forecasts, and other forward looking projections or information) pursuant to the provisions hereof or identified or referred to in the Company Disclosure Schedule, contains any untrue statement of material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was made, in order to make the statements herein or therein not false or misleading. ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB Parent and Sub jointly and severally represent and warrant to the Company as follows: Section 5.1. Organization. Each of Parent and Sub is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business as now being conducted, except where the failure to be so organized, existing and in good standing or to have such power and authority would not be reasonably expected to prevent or materially delay the consummation of the Offer or the Merger. Section 5.2. Authority. Each of Parent and Sub has all requisite corporate power and authority to execute and deliver this Agreement, and, in the case of Parent, the Tender and Voting Agreement and the Stock Option Agreement and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement, the Tender and Voting Agreement and the Stock Option Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of Parent and Sub and no other corporate proceedings on the part of Parent and Sub are necessary to authorize this Agreement, the Tender and Voting Agreement or the Stock Option Agreement or to consummate the transactions contemplated hereby or thereby. No vote of Parent stockholders is required to approve this Agreement, the Tender and Voting Agreement or the Stock Option Agreement or the transactions contemplated hereby or thereby. This Agreement has been duly executed and delivered by Parent and Sub, as the case may be, and constitutes a valid and binding obligation of each of Parent and Sub enforceable against them in accordance with its terms. The Tender and Voting Agreement and the Stock Option Agreement have been duly executed and delivered by Parent and each such agreement constitutes a valid and binding obligation of Parent enforceable against Parent in accordance with its terms. Section 5.3. Consents and Approvals; No Violations. (a) The execution, delivery and performance by Parent and Sub of this Agreement, and, in the case of Parent, the Tender and Voting Agreement and the Stock Option Agreement, and the consummation by Parent and Sub of the transactions 22 contemplated hereby and thereby do not and will not require any filing or registration with, notification to, or authorization, permit, consent or approval of, or other action by or in respect of, any Governmental Entities other than (i) the filing of the Certificate of Merger or the Certificate of Ownership and Merger, as applicable, as contemplated by Article I hereof, and (ii) compliance with any applicable requirements of the Exchange Act. (b) The execution, delivery and performance by Parent and Sub of this Agreement and the consummation by Parent and Sub of the transactions contemplated by this Agreement do not and will not (i) conflict with or result in any breach of any provision of the certificate of incorporation or by-laws of Parent and Sub, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation, acceleration or loss of benefits under, or result in the creation of any Lien upon any of the properties or assets of Parent or Sub or any of their subsidiaries under, any of the terms, conditions or provisions of contract to which Parent or Sub or any of their subsidiaries is a party or by which any of its properties or assets may be bound or (iii) violate any Order or Law applicable to Parent or Sub, any of their subsidiaries or any of their properties or assets, except in the case of clauses (ii) or (iii) for violations, breaches or defaults that would not reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger. Section 5.4. Information Supplied. None of the information supplied or to be supplied by Parent or Sub specifically for inclusion or incorporation by reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Information Statement or (iv) the Proxy Statement will, in the case of the Offer Documents, the Schedule 14D-9 and the Information Statement, at the respective times the Offer Documents, the Schedule 14D-9 and the Information Statement are filed with the SEC or first published, sent or given to the Company's stockholders, or, in the case of the Proxy Statement, at the time the Proxy Statement is first mailed to the Company's stockholders or at the time of the Stockholders Meeting, 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 Offer Documents will comply in all material respects with the requirements of the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by Parent or Sub with respect to statements made or incorporated by reference therein based on information supplied by the Company specifically for inclusion or incorporation by reference therein. Section 5.5. Interim Operations of Sub. Sub was formed solely for the purpose of engaging in the transactions contemplated hereby, has engaged in no other business activities and has conducted its operations only as contemplated hereby. Section 5.6. Brokers. No broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent or Sub. Section 5.7. Financing. Parent has, or will have, sufficient funds available to purchase, or to cause Sub to purchase, all the Shares pursuant to the Offer and the Merger and to pay all fees and expenses payable by Parent or Sub which are related to the transactions contemplated by this Agreement. ARTICLE VI COVENANTS Section 6.1. Covenants of the Company. Until such time as Parent's designees shall constitute a majority of the members of the Board of Directors of the Company, except as provided in Section 6.1 of the Company Disclosure Schedule, the Company shall, and shall cause its subsidiaries to, 23 conduct their business in the ordinary course and use all reasonable efforts to preserve intact their business organizations and relationships with third parties, keep available the services of their present officers and employees and preserve their relationships with customers, suppliers and others having business dealings with the Company and its subsidiaries and prepare and file required tax returns and pay taxes due. Without limiting the generality of the foregoing, except as expressly permitted in this Agreement or provided in Section 6.1 of the Company Disclosure Schedule (identifying the relevant subsection), from the date hereof until such time as Parent's designees shall constitute a majority of the members of the Board of Directors of the Company, the Company shall not, and shall cause its subsidiaries not to: (a) Dividends; Changes in Stock. (i) declare or pay any dividends on or make other distributions in respect of any of its capital stock (except for dividends by a wholly owned subsidiary of the Company to its parent), (ii) split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock or (iii) repurchase, redeem or otherwise acquire, or modify or amend, any shares of capital stock of the Company or any of its subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities; (b) Issuance of Securities. issue, deliver, sell, pledge or encumber, or authorize, propose or agree to the issuance, delivery, sale, pledge or encumbrance of, any shares of its capital stock or any other security (or any right to acquire such capital stock or other security) other than the issuance of Shares upon the exercise of Options or Warrants outstanding on the date of this Agreement and in accordance with the terms of such Options or Warrants; (c) Governing Documents. amend or propose to amend its certificate of incorporation or by-laws (or similar organizational documents); (d) Acquisitions. acquire or agree to acquire any material assets (including securities) or merge or consolidate with any person or engage in any similar transaction; (e) Dispositions. sell, lease, license, encumber or otherwise dispose of any of its assets or any interest therein, other than in the ordinary course or adopt a plan of complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization; (f) Indebtedness. (i) incur or suffer to exist any indebtedness for borrowed money or guarantee any such indebtedness, guarantee any debt of others, enter into any "keep-well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing, except for working capital borrowings incurred in the ordinary course of business, or (ii) make any loans, advances or capital contributions to, or investments in, any other person, other than to the Company or any wholly owned subsidiary of the Company; (g) Tax Matters. make, revoke or change any tax election or settle or compromise any tax liability of the Company or any of its subsidiaries or make any change of the accounting methods used by it unless required under generally accepted accounting principles in the United States; (h) Capital Expenditures. make or agree to make any capital expenditures out of the ordinary course of business; (i) Discharge of Liabilities. pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their terms, of claims, liabilities or obligations recognized or disclosed in the most recent financial statements (or the notes thereto) of the Company included in the Company Filed SEC Documents or incurred since the date of such financial statements in the ordinary course of business; 24 (j) Material Contracts. (i) modify, amend or terminate any material contract, (ii) waive, release or assign any material rights or claims, (iii) waive the benefits of, or agree to modify in any manner, any confidentiality, standstill or similar agreement or (iv) except in the ordinary course of business, enter into any material contracts or transactions; (k) Benefits Changes. (i) increase the compensation or benefits of any director, officer, employee or consultant, except for increases to employees or consultants (but not directors or officers) in the ordinary course of business, (ii) adopt any new employee Plan or any amendment to an existing Company Plan that materially increases the cost thereof, (iii) enter into any employment or consulting agreement with any director, officer, employee or consultant, (iv) accelerate the payment of compensation or benefits to any director, officer, employee or consultant or (v) modify or amend any of the Options or the Company Option Plans; (l) Insurance. permit any of its properties or assets to fail to be covered by insurance policies reflecting coverage that is consistent with prudent industry practices; (m) Intellectual Property Rights. fail to take, or cause to be taken, all actions or fail to do, or cause to be done, all things necessary to register, maintain, and prevent the diminution in value of the Intellectual Property Rights, including paying all recordation, registration, maintenance and other fees, responding to all office action or other correspondence from the United States Patent and Trademark Office, United States Copyright Office, and all other corresponding governmental offices throughout the world, and paying all fees necessary to maintain any domain name registrations, and recording all documents necessary to establish, maintain, transfer, or identify the Intellectual Property Rights, and protect the secrecy, confidentiality and value of the Intellectual Property Rights, including all know-how, trade secrets and source code; or (n) General. authorize any of, or announce an intention, commit or agree to take any of, the foregoing actions or any action which would result in a breach of any representation or warranty of the Company contained in this Agreement as of the date when made or as of any future date or would result in any of the Offer Conditions not being satisfied. Section 6.2. No Solicitation. (a) Unless and until this Agreement has been terminated pursuant to Section 8.1, the Company shall, and shall cause its subsidiaries and its and its subsidiaries' officers, directors, employees, investment bankers, financials advisors, attorneys, accountants, representatives and agents to, immediately cease any discussions or negotiations with any parties that may be ongoing with respect to a Takeover Proposal (as hereinafter defined) and, upon request by Parent, shall request the return or destruction of all confidential information provided to any such person. (b) Unless and until this Agreement has been terminated pursuant to Section 8.1, the Company shall not, and shall cause its subsidiaries and its and its subsidiaries' officers, directors, employees, investment bankers, financials advisors, attorneys, accountants, representatives and agents not to, (i) solicit, initiate, encourage (including by way of furnishing information), knowingly facilitate or induce (directly or indirectly) any inquiry with respect to, or the making, submission or announcement of, any proposal that constitutes, or could reasonably be expected to result in, a proposal or offer for a Takeover Proposal, (ii) participate in any discussions or negotiations regarding, or furnish to any person any nonpublic information with respect to, or take any other action to knowingly facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, a Takeover Proposal, (iii) approve or endorse any Takeover Proposal, or (iv) enter into any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any Takeover Proposal or transaction contemplated thereby. Notwithstanding the foregoing, if, at any time prior to the acceptance for payment of Shares pursuant to the Offer, the Board of Directors of the Company (1) determines in good faith, after 25 consultation with outside counsel, that it is necessary to do so in order to comply with its fiduciary duties to the Company's stockholders under applicable law and has (2) provided Parent with at least two business days' notice of its intention to do so (including in such notice the information required by Section 6.2(e) hereof), the Company may, in response to a Superior Proposal (as defined below) that was not solicited subsequent to the date hereof and subject to compliance with this Section 6.2 and the execution by the person making the Superior Proposal of a confidentiality agreement on customary terms and conditions, reasonably acceptable to Parent, (x) furnish information with respect to the Company to the person making the Superior Proposal and (y) participate in discussions or negotiations with the person making the Superior Proposal. (c) For purposes of this Agreement, "Takeover Proposal" means any inquiry, proposal, offer or expression of interest by any third party relating a merger, consolidation or other business combination involving the Company or any subsidiary, or any acquisition of more than 15% of the consolidated assets of the Company or more than 15% of the Shares, or any similar transaction. Any material modification of a Takeover Proposal shall constitute a new Takeover Proposal. For purposes of this Agreement, a "Superior Proposal" means any bona fide written Takeover Proposal for or in respect of all outstanding Shares made by a third party on terms which the Board of Directors of the Company determines in its good faith judgment (after consultation with a financial advisor of nationally recognized reputation and after taking into account all terms and conditions of the proposal) to be more favorable, from a financial point of view, to the Company's stockholders than the Offer and the Merger (after taking into account any proposal by Parent to amend this Agreement) and for which financing, to the extent required, is then committed, which is reasonably capable of being consummated on a prompt basis and which is not subject to any conditions which are not reasonably expected to be satisfied on a prompt basis. (d) Unless and until this Agreement has been terminated pursuant to Section 8.1, except as set forth in this Section 6.2, neither the Board of Directors of the Company nor any committee thereof shall (i) withdraw or modify, or propose to withdraw or modify, the approval or recommendation by such Board of Directors (or any committee of the Board of Directors of the Company) with regard to any of the Offer, the Merger or this Agreement, the Tender and Voting Agreement or the Stock Option Agreement, (ii) approve or recommend or take no position with respect to, or propose to approve or recommend or take no position with respect to, any Takeover Proposal or (iii) cause the Company to enter into any agreement related to any Takeover Proposal (other than a confidentiality agreement contemplated by paragraph (b) above). Unless and until this Agreement has been terminated pursuant to Section 8.1, the Company agrees not to release any person from, or waive any provision of, or fail to enforce, any standstill agreement or similar agreement to which it is a party related to, or that could affect, a Takeover Proposal. Notwithstanding the foregoing, in the event that prior to the acceptance for payment of Shares pursuant to the Offer the Board of Directors of the Company determines in good faith, after consultation with outside counsel, that it is necessary to do so in order to comply with its fiduciary duties to the Company's stockholders under applicable law, the Board of Directors of the Company may, in response to a Superior Proposal that was not solicited subsequent to the date hereof, (x) withdraw or modify its approval or recommendation of the Offer, the Merger or this Agreement or (y) subject to the provisions of Section 8.1(e) hereof, terminate this Agreement and the Tender and Voting Agreement in order to sign a definitive agreement to implement such Superior Proposal, but in each such case, only at a time that is after the fifth business day following Parent's receipt of written notice advising Parent that the Board of Directors of the Company has received such Superior Proposal, specifying the material terms and conditions of such Superior Proposal and identifying the person making such Superior Proposal, only if the Company is in compliance with this Section 6.2 and only if the Company's Board of Directors has determined that such proposal is a Superior Proposal, taking into account any proposals from Parent. (e) The Company shall immediately advise Parent orally and in writing of any request for information or of any Takeover Proposal, the material terms and conditions of such request or 26 Takeover Proposal (including a copy thereof if in writing and any related documentation or correspondence (including emails)) and the identity of the person making such request or Takeover Proposal. The Company will immediately inform Parent of any material change in the details (including amendments or proposed amendments) of any such request or Takeover Proposal. The Company will promptly provide to Parent any non-public information provided to any other person in connection with a Takeover Proposal which was not previously provided to Parent. (f) Nothing contained in this Section 6.2 shall prohibit the Company from taking and disclosing to its stockholders a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or from making any disclosure to the Company's stockholders if, in the good faith judgment of the Board of Directors of the Company, after consultation with outside counsel, failure to disclose would be inconsistent with applicable law, provided, however, neither the Company nor its Board of Directors nor any committee thereof shall, except as specifically permitted by Section 6.2(d), withdraw or modify, or propose to withdraw or modify, its position with respect to the Offer, the Merger or this Agreement, the Tender and Voting Agreement or the Stock Option Agreement, or approve or recommend, or propose to approve or recommend, a Takeover Proposal. Section 6.3. Stockholder Approval; Preparation of Proxy Statement. (a) If the Company Stockholder Approval is required by law, the Company shall, as promptly as practicable following the expiration of the Offer, duly call, give notice of, convene and hold a meeting of its stockholders (the "Stockholders Meeting") for the purpose of obtaining the Company Stockholder Approval. The Company shall, through its Board of Directors, recommend to its stockholders that the Company Stockholder Approval be given. Notwithstanding the foregoing, if Sub or any other subsidiary of Parent shall acquire at least 90% of the outstanding Shares, the parties shall, at the option and request of Parent, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the expiration of the Offer without a Stockholders Meeting in accordance with the short form merger provisions of the DGCL. Without limiting the generality of the foregoing, except as specifically permitted by Section 6.2(d) the Company agrees that its obligations pursuant to the first sentence of this Section 6.3(a) shall not be affected by (i) the commencement, public proposal, public disclosure or communication to the Company of any Takeover Proposal or (ii) the withdrawal or modification by the Board of Directors of the Company of its approval or recommendation of the Offer, this Agreement or the Merger. (b) If the Company Stockholder Approval is required by law, the Company shall, as soon as practicable following the expiration of the Offer, prepare and file a preliminary Proxy Statement with the SEC and shall use all reasonable efforts to respond to any comments of the SEC or its staff and to cause the Proxy Statement to be mailed to the Company's stockholders as promptly as practicable. The Company shall notify Parent promptly of the receipt of any comments from the SEC or its staff and of any request by the SEC or its staff for amendments or supplements to the Proxy Statement or for additional information and will supply Parent with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Proxy Statement or the Merger. The Company shall give Parent an opportunity to comment on any correspondence with the SEC or its staff or any proposed material to be included in the Proxy Statement prior to transmission to the SEC or its staff and shall not transmit any such material to which Parent reasonably objects. If at any time prior to the Stockholders Meeting there shall occur any event that should be set forth in an amendment or supplement to the Proxy Statement, the Company shall promptly prepare and mail to its stockholders such an amendment or supplement. The Company shall not mail any Proxy Statement, or any amendment or supplement thereto, to which Parent reasonably objects. (c) Parent agrees to cause all Shares owned by Parent or any subsidiary of Parent to be voted in favor of the Company Stockholder Approval. 27 Section 6.4. Access to Information. The Company shall, and shall cause each of its subsidiaries to, afford to Parent and its officers, employees, accountants, counsel, agents and other representatives reasonable access during normal business hours to all of the properties, offices, facilities, personnel, contracts, commitments and books and records (including tax returns and supporting work papers) of the Company and its subsidiaries and any report, schedule or other document filed or received by it pursuant to the requirements of federal or state securities laws, and shall (and shall cause each of it subsidiaries to) furnish promptly all information concerning the business, properties and personnel of Company and its subsidiaries as Parent may reasonably request. No investigation pursuant to this Section 6.4 shall affect any representation or warranty in this Agreement of any party hereto or any condition to the obligations of the parties hereto. Section 6.5. Disclosure Supplements. From time to time prior to the Effective Time, the Company shall supplement or amend the Company Disclosure Schedule with respect to any matter hereafter arising or any information obtained after the date hereof of which, if existing, occurring or known at or prior to the date of this Agreement, would have been required to be set forth or described in the Company Disclosure Schedule or which is necessary to complete or correct any information in such schedule or in any representation and warranty of the Company which has been rendered inaccurate thereby. The Company shall promptly inform Parent of any claim by a third party that a contract has been breached, is in default, may not be renewed or that a consent would be required as a result of the transactions contemplated by this Agreement. For purposes of determining the satisfaction of the conditions to the consummation of the transactions contemplated hereby, no such supplement, amendment or information shall be considered. Section 6.6. Reasonable Efforts. (a) Each of the parties hereto shall act in good faith and use all commercially reasonable efforts 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 as promptly as practicable including, but not limited to, (i) the preparation and filing of all forms, registrations and notices required to be filed to consummate the transactions contemplated by this Agreement and the taking of such commercially reasonable actions as are necessary to obtain any requisite approvals, consents, approvals, licenses, permits, authorizations, registrations, qualifications, orders, exemptions, waivers or other permissions or actions by, and give all necessary notices to, and make all filings with, and applications and submissions to, any third party or Governmental Entity, and (ii) using all commercially reasonable efforts to cause the satisfaction of all conditions to Closing. 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 or any other information supplied by such party to a Governmental Entity in connection with this Agreement and the transactions contemplated by this Agreement. Nothing herein shall require any party to divest, sell, dispose of, hold separate or otherwise take or commit to take any action that limits its freedom of action with respect to its or its subsidiaries' ability to operate or retain any of the businesses, product lines or assets of it or any of its subsidiaries. (b) Each party hereto shall promptly inform the others of any communication from any Governmental Entity regarding any of the transactions contemplated by this Agreement. If any party or affiliate thereof receives a request for additional information or documentary material from any such Governmental Entity with respect to the transactions contemplated by this Agreement, then such party will endeavor in good faith to make, or cause to be made, as soon as reasonably practicable and after consultation with the other party, an appropriate response in compliance with such request. Nothing herein shall require any party to waive any substantial rights or agree to any substantial limitation on its (or the Surviving Corporation's) operations or to dispose of any assets. (c) Parent shall cause Sub to comply with its obligations under this Agreement. 28 Section 6.7. Certain Litigation. The Company agrees that it shall not settle any litigation commenced after the date hereof against the Company or any of its directors by any stockholder of the Company relating to the Offer, the Merger, this Agreement, the Tender and Voting Agreement or the Stock Option Agreement, without the prior written consent of Parent. In addition, the Company shall not voluntarily cooperate with any third party that may hereafter seek to restrain or prohibit or otherwise oppose the Offer or the Merger and shall cooperate with Parent and Sub to resist any such effort to restrain or prohibit or otherwise oppose the Offer or the Merger. Section 6.8. Takeover Statute. Notwithstanding any other provision in this Agreement, in no event shall the approval of this Agreement, the Tender and Voting Agreement, the Stock Option Agreement and the transactions contemplated hereby or thereby, including the Offer and the Merger, be withdrawn, revoked or modified by the Company's Board of Directors if such withdrawal, revocation, or modification would result in Section 203 of the DGCL and Article Fourteenth of the Company's certificate of incorporation becoming applicable to the transactions contemplated by this Agreement, the Tender and Voting Agreement or the Stock Option Agreement. If any other "fair price," "moratorium," "control share acquisition" or other form of anti-takeover statute or regulation shall become applicable to the transactions contemplated hereby, each of the Company, Parent and Sub and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise shall act to eliminate or minimize the effects of any such provision, statute or regulation on the transactions contemplated hereby. ARTICLE VII CONDITIONS Section 7.1. Conditions to Each Party's Obligation To Effect the Merger. The respective obligation of each party to effect the Merger shall be subject to the satisfaction of the following conditions: (a) Company Stockholder Approval. If required by applicable law, the Company Stockholder Approval shall have been obtained. (b) No Injunctions or Restraints. No Law or Order issued by any court of competent jurisdiction or other Governmental Entity or other legal restraint or prohibition preventing the consummation of the Merger shall be in effect, provided, however, that each of the parties shall have used reasonable efforts to prevent the entry of any such Order and to appeal as promptly as possible any Order that may be entered. (c) Purchase of Shares. Sub shall have previously accepted for payment and paid for Shares pursuant to the Offer. ARTICLE VIII TERMINATION AND AMENDMENT Section 8.1. Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after approval of the terms of this Agreement by the stockholders of the Company: (a) by mutual written consent of Parent and the Company; (b) by either Parent or the Company: (i) if (x) the Offer shall have expired without the acceptance for payment of Shares thereunder or (y) Sub shall not have accepted for payment any Shares pursuant to the 29 Offer prior to January 31, 2003, provided, however, that the right to terminate this Agreement pursuant to this (b)(i) shall not be available to any party whose failure to perform any of its obligations under this Agreement results in the failure of any such condition or if the failure of such condition results from facts or circumstances that constitute a breach of representation or warranty under this Agreement by such party; or (ii) if any Governmental Entity shall have issued an Order or taken any other action permanently enjoining, restraining or otherwise prohibiting the acceptance for payment of, or payment for, Shares pursuant to the Offer or the Merger and such Order or other action shall have become final and nonappealable; (c) by Parent prior to the purchase of Shares pursuant to the Offer if the Company shall have breached or failed to perform in any material respect any representation, warranty, covenant or other agreement contained in this Agreement that (i) would give rise to the failure of a condition set forth in paragraph (e) or (g) of Annex A and (ii) cannot be or, if such breach is of a nature that could be cured by the Company, has not been cured within 20 days after the giving of written notice to the Company; (d) by Parent or Sub if either Parent or Sub is entitled to terminate the Offer as a result of the occurrence of any event set forth in paragraph (d) of Annex A to this Agreement; (e) by the Company in accordance with Section 6.2(d) in order to simultaneously enter into a definitive agreement to implement a Superior Proposal, provided that it has complied with all provisions thereof, including the notice provisions therein, and that it has paid Parent the termination fee (including expenses for which Parent has then submitted an invoice) in accordance with the terms of Section 8.5(b) of this Agreement; or (f) by the Company prior to the purchase of Shares pursuant to the Offer if Parent or Sub shall have breached or failed to perform in any material respect any of their respective representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform is incapable of being cured or has not been cured within 20 days after the giving of written notice to Parent or Sub, as applicable, except, in any case, such breaches and failures which are not reasonably likely to materially and adversely affect Parent's or Sub's ability to consummate the Offer or the Merger. Section 8.2. Effect of Termination. In the event of a termination of this Agreement by either the Company or Parent as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Parent, Sub or the Company or their respective officers or directors, provided, however, that the foregoing shall not apply with respect to the provisions of Section 8.5 which shall survive termination of this Agreement and nothing herein shall relieve any party for liability for any willful breach hereof. Section 8.3. Amendment. This Agreement may be amended by the parties hereto, by duly authorized action taken, at any time before or after obtaining the Company Stockholder Approval, but, after the purchase of Shares pursuant to the Offer, no amendment shall be made which decreases the Merger Consideration and, after the Company Stockholder Approval, no amendment shall be made which by law requires further approval by such stockholders without obtaining 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 8.4. Extension; Waiver. At any time prior to the Effective Time, the parties hereto may, to the extent legally allowed, subject to Section 8.3, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part 30 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. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. Section 8.5. Expenses. (a) Except as otherwise provided in this Section 8.5, each party shall bear its own expenses in connection with the transactions contemplated by this Agreement. (b) If this Agreement is terminated (i) pursuant to Section 8.1(c), (ii) pursuant to Section 8.1(d), (iii) pursuant to Section 8.1(e), or (iv) following the time a third party makes a Takeover Proposal, then the Company shall pay to Parent a fee of $500,000, plus reimbursement of Parent's direct and reasonable out-of-pocket expenses in connection with this Agreement and the transactions contemplated hereby, including Parent's investigation of the Company and negotiation of this Agreement ("Parent's Expenses"), by wire transfer of immediately available funds. Such fee shall be paid prior to termination in the case of clause (iii) and within one business day of termination otherwise. Such payment shall include reimbursement of Parent's Expenses if an invoice therefor was received by the Company prior to the making of such payment, or, if not, reimbursement of Parent's Expenses shall be paid within two business days of receipt of an invoice from Parent by the Company, by wire transfer of immediately available funds. (c) If (i) this Agreement is terminated other than under 8.1(f) and (ii) no fee is otherwise payable under Section 8.5(b) hereof, then within one day of the receipt of an invoice therefore, the Company shall reimburse Parent's Expenses by wire transfer of immediately available funds. If within six months of a termination described in the preceding sentence a third party makes a Takeover Proposal, then the Company shall pay Parent a fee of $500,000 plus Parent's Expenses (except to the extent such expenses have been reimbursed under the immediately preceding sentence), by wire transfer of immediately available funds immediately upon the closing of any transaction contemplated by any Takeover Proposal with such third party. The maximum aggregate fee under this Section 8.5(c) and under Section 8.5(b) shall be $500,000 plus the reimbursement of Parent's Expenses. (d) The Company acknowledges that the agreements contained in this Section 8.5 are an integral part of the transactions contemplated in this Agreement, and that, without these agreements, Parent would not enter into this Agreement. Accordingly, if the Company fails to pay any amount due pursuant to Section 8.5 (b) or Section 8.5(c) when it is required to be paid, and, in order to obtain such payment, Parent commences a suit which results in a judgment against the Company for any amount set forth in Section 8.5(b) or Section 8.5(c), the Company shall pay to Parent (i) interest on the amounts due under Section 8.5(b) or Section 8.5(c) at a rate equal to that rate which is determined under the provisions of the Company's current line of credit facility beginning from the date such fee was required to be paid and (ii) its costs and expenses (including attorneys' fees) in connection with such suit, including any costs of collection. ARTICLE IX MISCELLANEOUS Section 9.1. Nonsurvival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the Effective Time. Section 9.2. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (a) if to Parent or Sub, to 31 Enghouse Systems Limited 80 Tiverton Court, Suite 800 Markham (Toronto), Ontario L3R OG4 Canada Fax: (905) 946-3201 Attention: Neil Shafran with a copy to: Clifford Chance US LLP 200 Park Avenue New York, NY 10166 Fax: (212) 878-8375 Attention: Brian Hoffmann Richard D. Pritz and (b) if to the Company, to Syntellect Inc. 16610 N. Black Canyon Highway Suite 100 Phoenix, AZ 85053-4075 Fax: (602) 789-2899 Attention: President with a copy to: Rogers & Theobald LLP Suite 850 The Camelback Esplanade 2425 East Camelback Road Phoenix, Arizona 85016 Fax: (602) 852-5570 Attention: Robert K. Rogers Section 9.3. Interpretation. (a) When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. (b) The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (c) This Agreement is the result of the joint efforts of Parent, Sub and the Company, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of that party's involvement in the drafting thereof. (d) The symbol "$" refers to the United States Dollars. (e) The words "include", "includes" or "including" shall be deemed to be followed by the words "without limitation." 32 (f) A "subsidiary" of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. (g) The term "ordinary course of business" (or similar terms) shall be deemed to be followed by the words "consistent with past practice." (h) An individual will be deemed to have "knowledge" of a particular fact or other matter if such individual is actually aware of such fact or other matter. The Company will be deemed to have "knowledge" of a particular fact or other matter if a member of the Company's senior management is actually aware of such fact or other matter. Section 9.4. 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 9.5. Entire Agreement; No Third Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein) (a) constitutes 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 (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. Section 9.6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW. Section 9.7. Publicity. Except as otherwise required by law, court process or the rules of any applicable securities exchange or the Nasdaq or as contemplated or provided elsewhere herein, no party hereto shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this Agreement without prior consultation with the other parties hereto. Section 9.8. 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, except that Sub may assign, in its sole discretion, any or all of its rights, interests and obligations hereunder to Parent or to any wholly owned subsidiary of Parent. 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. Section 9.9. Enforcement. THE PARTIES 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 SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT, IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. THE PARTIES HEREBY (i) SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE STATE OF DELAWARE AND AGREE NOT TO BRING ANY ACTIONS RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY OTHER COURT, OTHER THAN TO ENFORCE THE JUDGMENTS OF SUCH COURTS, (ii) AGREE NOT TO OBJECT TO VENUE IN SUCH COURTS OR TO CLAIM THAT SUCH FORUM IS INCONVENIENT AND (iii) AGREE THAT NOTICE OR THE SERVICE OF PROCESS IN ANY 33 PROCEEDING SHALL BE PROPERLY SERVED OR DELIVERED IF DELIVERED IN THE MANNER CONTEMPLATED BY SECTION 9.2 HEREOF. IN ADDITION, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. Section 9.10. Severability. This Agreement shall be deemed severable; the invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of the balance of this Agreement or of any other term hereof, which shall remain in full force and effect. If of any of the provisions hereof are determined to be invalid or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible. [SIGNATURE PAGE FOLLOWS] 34 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the date first written above. ENGHOUSE SYSTEMS LIMITED By: /s/ Stephen J. Sadler ----------------------------------- Name: Stephen J. Sadler Title: Chairman and CEO ARIZONA ACQUISITION CORP. By: /s/ Neil Shafran ----------------------------------- Name: Neil Shafran Title: Vice President and Secretary SYNTELLECT INC. By: /s/ Anthony V. Carollo ----------------------------------- Name: Anthony V. Carollo Title: Chairman, CEO and President SIGNATURE PAGE TO PLAN AND AGREEMENT OF MERGER 35 ANNEX A Conditions of the Offer Notwithstanding any other term of the Offer, Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act (relating to Sub's obligation to pay for or return tendered Shares after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer unless prior to the Expiration Date (as defined in the Offer) there shall have been validly tendered a number of Shares which, together with any outstanding Shares solely owned by Parent or any of its subsidiaries, constitutes a majority of the outstanding Shares (determined on a fully diluted basis) (the "Minimum Condition"). Furthermore, notwithstanding any other term of the Offer or this Agreement, Sub shall not be required to accept for payment or, subject as aforesaid, to pay for any Shares not theretofore accepted for payment or paid for, and may terminate the Offer if, at any time on or after the date of this Agreement and prior to the Expiration Date, any of the following conditions exists (other than as a result of any action or inaction of Parent or any of its subsidiaries that constitutes a breach of this Agreement): (a) there shall be threatened, instituted or pending by or before any Governmental Entity any suit, action or proceeding (i) challenging the acquisition by Parent or Sub of any Shares under the Offer, seeking to restrain or prohibit the making or consummation of the Offer or the Merger or seeking to obtain from the Company, Parent or Sub any damages that are material in relation to the Company and its subsidiaries taken as a whole, (ii) seeking to prohibit or materially limit the ownership or operation by the Company, Parent or any of their respective subsidiaries of a material portion of the business or assets of the Company and its subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a whole, or to compel the Company and its subsidiaries, taken as a whole or Parent to dispose of or hold separate any material portion of the business or assets of the Company or Parent and its subsidiaries, taken as a whole, in each case as a result of the Offer or any of the other transactions contemplated by this Agreement, (iii) seeking to impose material limitations on the ability of Parent or Sub to acquire or hold, or exercise full rights of ownership of, any Shares to be accepted for payment pursuant to the Offer including, without limitation, the right to vote such Shares on all matters properly presented to the stockholders of the Company, (iv) seeking to prohibit Parent or any of its subsidiaries from effectively controlling in any material respect any material portion of the business or operations of the Company or its subsidiaries or (v) which would have a Material Adverse Effect on the Company or would result in the payment of substantial damages; (b) there shall be any Law or Order enacted, entered, enforced, promulgated or deemed applicable to the Offer or the Merger, by any Governmental Entity, that is reasonably likely to result, directly or indirectly, in any of the consequences referred to in clauses (i) through (v) of paragraph (a) above; (c) there shall have occurred any Material Adverse Effect with respect to the Company; (d) (i) the Board of Directors of the Company or any committee thereof shall have (x) withdrawn or modified in a manner adverse to Parent or Sub its approval or recommendation of the Offer or the Merger or its adoption of this Agreement, (y) approved or recommended or taken a neutral position with respect to any Takeover Proposal, (z) failed to reaffirm its recommendation of the Offer or the Merger or its adoption of this Agreement within five business days of being requested by Parent to do so, (ii) a Takeover Proposal is publicly announced, disclosed or commenced or submitted, made or publicly communicated to the Board of Directors of the Company and the Company fails to comply with the requirements of Section 6.2, or (iii) the Board of Directors of the Company or any committee thereof shall have resolved to take any of the foregoing actions; (e) any of the representations and warranties of the Company set forth in this Agreement shall not be true and correct in any material respect (without regard to any materiality qualifiers therein), in each case at the date of the Agreement or at the scheduled or extended expiration of the Offer as if such representation or warranty were made as of such date; (f) Parent, the Company and their respective subsidiaries, as applicable, shall have failed to obtain the consent or approval of any person whose consent or approval shall be required under any agreement or instrument in order to permit the consummation of the Offer and the Merger or any of the other transactions contemplated by this Agreement, except those that the failure to obtain, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company if the Closing were to occur; (g) the Company shall have failed to perform or comply, in all material respects, with any agreement, obligation or covenant to be performed or complied with by it under the Agreement, which failure to perform or comply has not been cured within five business days after the giving of written notice to the Company; (h) there shall not have occurred and be continuing: (i) (A) any general suspension of trading in, or limitation on prices for, securities on The New York Stock Exchange or the Nasdaq Stock Market (excluding any organized halt triggered solely as a result of a specified decrease in a market index or suspensions or limitations resulting solely from physical damage, technological or software breakdowns or malfunctions or interference with such exchange not related to market conditions) or (B) any decline in any of the Dow Jones Industrial Average, the Standard & Poors Index of 500 Industrial Companies or the Nasdaq Composite Index in excess of 20% measured from the close of business on the date of the Agreement; (ii) a declaration by a Governmental Body of a banking moratorium or any suspension of payments in respect of banks in the United States; (iii) an act of terrorism or a commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States or Canada, which in any case could have a Material Adverse Effect on the Company or Parent or could materially adversely affect Parent's or Sub's ability to consummate the Offer or the Merger; (iv) any extraordinary limitation (whether or not mandatory) by any Governmental Entity on the extension of credit generally by banks or other financial institutions; or (v) a change in general financial, bank or capital market conditions which materially and adversely affects the ability of financial institutions in the United States to extend credit or syndicate loans; (i) any person, entity or group directly or indirectly acquires or agrees to acquire, or discloses an intention to acquire beneficial ownership of securities representing 15% or more of the outstanding securities of any class of voting securities of the Company; or (j) the Agreement shall have been terminated in accordance with its terms. The foregoing conditions are for the sole benefit of Parent and Sub and may, subject to the terms of this Agreement, be waived by Parent and Sub in whole or in part at any time and from time to time in their reasonable discretion. The failure by Parent or Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances shall not be deemed a waiver with respect to any other facts and circumstances and each such right shall be deemed an ongoing right that may be asserted at any time and from time to time. Terms used but not defined herein shall have the meanings assigned to such terms in the Agreement to which this Annex A is a part. 2 EX-99.D.2 10 t08191exv99wdw2.txt TENDER AND VOTING AGREEMENT DATED NOV. 5, 2002 TENDER AND VOTING AGREEMENT TENDER AND VOTING AGREEMENT dated as of November 5, 2002 (this "Agreement"), among Enghouse Systems Limited, an Ontario corporation ("Parent"), Syntellect Inc., a Delaware corporation (the "Company"), and the persons listed on Schedule A hereto (each, a "Holder" and collectively, the "Holders"). WHEREAS, Parent, the Company and Arizona Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), are discussing the execution of an agreement (the "Merger Agreement") providing for a tender offer for all of the outstanding shares of common stock, par value $.01 per share (the "Shares"), of the Company at a cash price of no less than $0.72 per Share (the "Offer"), to be followed by a merger of Sub with and into the Company (the "Merger") in which each outstanding Share (other than Shares held by Parent or any subsidiary or by holders properly exercising appraisal rights under Delaware law) would be converted into the right to receive the cash price paid in the Offer; WHEREAS, as a condition to Parent's willingness to enter into the Merger Agreement, Parent has requested that the Company and the Holders enter into this Agreement; WHEREAS, each Holder is the record and beneficial owner of the number of shares of Shares set forth opposite such Holder's name on Schedule A hereto, such Shares, as they may be adjusted by any stock dividend, stock split, recapitalization, combination or exchange of shares, merger, consolidation, reorganization or other change or transaction of or by the Company, together with securities beneficial ownership of which may be acquired after the date hereof by such Holder, and including Shares issuable upon the exercise of options to purchase Shares (as the same may be adjusted as aforesaid), being also referred to herein as "Shares"; WHEREAS, each of the Holders desires Parent, Sub and the Company to enter into the Merger Agreement and to conduct the Offer; and NOW, THEREFORE, in consideration of the premises and the representations, warranties and agreements contained herein and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: Section 1. Covenants of the Holders. Each Holder, severally and not jointly, agrees as follows: (a) Promptly (and not later than 15 business days after commencement of the Offer), such Holder will tender, in accordance with the terms of the Offer, all outstanding Shares beneficially owned by such Holder into the Offer and such Holder will not withdraw such Shares. If any Holder shall breach the foregoing sentence then, without limiting the remedies otherwise available to Parent, Parent shall have the option, exercisable by notice to such Holder, to purchase such Shares immediately following the closing of the Offer at the price per share paid in the Offer. (b) Such Holder shall not (i) sell, transfer, pledge, assign or otherwise dispose of, or enter into any Contract (as defined below), option or other arrangement (including any profit sharing arrangement) or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, any Shares to any person other than Parent or Parent's designee, (ii) enter into any voting arrangement, whether by proxy, voting agreement, voting trust, power-of-attorney or otherwise, with respect to any Shares, or (iii) take any other action that would in any way restrict, limit or interfere with the performance of its obligations hereunder or the transactions contemplated hereby; (c) Such Holder shall not, and shall cause its affiliates and its and its affiliates' officers, directors, employees, investment bankers, financials advisors, attorneys, accountants, representatives and agents not to, directly or indirectly (i) solicit, initiate or encourage (including by way of furnishing information), or take any other action designed or reasonably likely to make any representation or warranty of such Holder untrue or to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Takeover Proposal, or (ii) participate in any discussions or negotiations regarding any Takeover Proposal. Without limiting the foregoing, it is understood that any violation of the restrictions set forth in the preceding sentence by an investment banker, financial advisor, attorney, accountant or other representative or agent of any Holder shall be deemed to be a violation of this Section 1(c) by that Holder. If a Holder is a director of the Company, nothing in this Section 1(c) shall restrict actions of such Holder which actions are required by such Holder's fiduciary duties as a director of the Company. For purposes of this Agreement, the Company will not be deemed an affiliate of any Holder. (d) At any meeting of holders of securities of the Company called to vote upon the Merger and the Merger Agreement or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to the Merger and the Merger Agreement is sought, each Holder shall, including by initiating a written consent solicitation if requested by Parent (at Parent's expense), vote (or cause to be voted) all of such Holder's Shares in favor of the Merger, the adoption of the Merger Agreement and the approval of the other transactions contemplated by the Merger Agreement and otherwise in such manner as may be necessary to consummate the Merger. At any meeting of Holders of the Company or at any adjournment thereof or in any other circumstances upon which the Holder's vote, consent or other approval is sought, such Holder shall vote (or cause to be voted) such Holder's Shares against (i) (other than the Merger Agreement and the Merger) any Takeover Proposal or any other, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company or (ii) any amendment of the Company's Certificate of Incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries, which amendment or other proposal or transaction could reasonably be expected to result in any condition to the obligations of the Company or of Parent to consummate the transactions contemplated by the Merger Agreement or could otherwise be reasonably be expected to in any manner impede, frustrate, prevent or nullify, the Merger, the Merger Agreement or any of the other transactions contemplated by the Merger Agreement including any consent to the treatment of any Shares in or in connection with such transaction (collectively, "Frustrating Transactions"). Section 2. Grant of Irrevocable Proxy Coupled with an Interest; Appointment of Proxy. (a) Each Holder hereby irrevocably grants to, and appoints, any person who shall be designated by Parent, and each of them, such Holder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of such Holder, to vote and otherwise act with respect to all such Holder's Shares, and to grant any consents or approvals in respect of such Shares, at any meeting of Holders of the Company or at any adjournment thereof or in any other circumstances upon which their vote, consent or other approval is sought, (i) in favor of the Merger, the adoption by the Company of the Merger Agreement and the approval of the other transactions contemplated by the Merger Agreement, and (ii) against any Takeover Proposal or Frustrating Transaction. (b) Each Holder represents that any proxies heretofore given in respect of such Holder's Shares are not irrevocable, and that any such proxies are hereby revoked. (c) Each Holder hereby affirms that the proxy set forth in this Section 2 is coupled with an interest, is irrevocable until such time as this Agreement terminates in accordance with its terms and shall be binding on any person to whom such Holder transfers Shares in breach of this Agreement. 2 Such Holder hereby further affirms that the irrevocable proxy is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of such Holder under this Agreement. Such Holder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable in accordance with the provisions of Section 212 of the Delaware General Corporation Law (the "DGCL"). Each Holder hereby revokes each other power of attorney or proxy with respect to any of such Holder's Shares, and hereby agrees that any subsequent power of attorney or proxy with respect to any such Shares shall be void. All authority conferred under this Agreement by any Holder shall survive the death or dissolution of the Holder and shall be binding on the successors, assigns, personal representatives and heirs of such Holder. Section 3. Representations and Warranties of the Holders. Each Holder hereby, severally and not jointly, represents and warrants to Parent as follows: (a) Authority. Such Holder has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. If such Holder is not an individual, it is duly formed validly existing and in good standing in the jurisdiction of its formation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by such Holder. This Agreement has been duly executed and delivered by such Holder and, assuming this Agreement constitutes a valid and binding obligation of Parent, constitutes a valid and binding obligation such Holder enforceable against such Holder in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, or other similar laws now or hereafter in effect, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. Except for the informational filings with the Securities and Exchange Commission, neither the execution, delivery or performance of this Agreement by such Holder nor the consummation by such Holder of the transactions contemplated hereby will (i) require any filing with, or permit, authorization, consent or approval of, any Governmental Entity, (ii) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under, or give rise to any right of termination, amendment, cancellation or acceleration under, or result in the creation of any Lien upon any of the properties or assets of the Holder under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, permit, concession, franchise, contract, agreement or other instrument or obligation (a "Contract") to which such Holder is a party or by which such Holder or any of such Holder's properties or assets, including such Holder's Shares, may be bound or (iii) violate any Order or Law applicable to such Holder or any of such Holder's properties or assets, including such Holder's Shares. (b) Shares. Such Holder's Shares and the certificates representing such Shares are now, and until such Holder's tender pursuant to the Offer will be, held of record or beneficially by such Holder, and the Holder has good and marketable title to such Shares, free and clear of any Liens, proxies, voting trusts or agreements, understandings or arrangements, except for any such Liens or proxies arising hereunder. Neither such Holder nor any affiliate of such Holder owns of record or beneficially any securities of the Company, or any options, warrants or rights exercisable for securities of the Company, other than such Holder's Shares and shares of common stock of the Company issuable upon the exercise of Options, in each case as set forth on Schedule A hereto. Other than grants under this Agreement, neither such Holder nor any affiliate of such Holder has granted or appointed any proxy, power of attorney or other rights (except any expired or effectively revoked proxy) with respect to any Shares. (c) Brokers. No broker, investment banker, financial advisor or other person is entitled to any broker's, finder's, financial advisor's or other similar fee or commission in connection 3 with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Holder. (d) Merger Agreement. Such Holder understands and acknowledges that Parent and Sub are continuing to discuss the Merger Agreement with the Company and would enter into the Merger Agreement only in reliance upon the Holder's execution and delivery of this Agreement. (e) Absence of Litigation. As of the date of this Agreement, there is no litigation, suit, claim, action, proceeding or investigation pending or, to the knowledge of such Holder, threatened against any Holder, or any property or asset of any Holder, before any Governmental Entity that (i) seeks to delay or prevent the consummation of the transactions contemplated by this Agreement or the Merger Agreement or (ii) relates to the Shares. Section 4. Further Representations and Warranties of the Company. The Company further represents and warrants to Parent that the Board of Directors of the Company has duly and validly authorized and approved by all necessary corporate action, this Agreement, the Merger Agreement and the transactions contemplated hereby and thereby, so that by the execution and delivery hereof no restrictive provision of any "fair price," "moratorium," "control-share acquisition," "interested shareholders" or other similar anti-takeover statute or regulation (including Section 203 of the DGCL) or restrictive provision of any applicable anti-takeover provision in the Articles of Incorporation (including Article Fourteenth thereof) or by-laws of the Company is, or at the closing of the transactions contemplated hereby will be, applicable to the Company, Parent, the Shares, the Merger or any other transaction contemplated by this Agreement. Section 5. Further Assurances. Each Holder will, from time to time, execute and deliver, or cause to be executed and delivered, such additional or further transfers, assignments, endorsements, consents and other instruments and provide such information as Parent may reasonably request for the purpose of effectively carrying out the transactions contemplated by this Agreement, including to vest the power to vote such Holder's Shares as contemplated by Section 2. Each Holder acknowledges that Parent and the Company may disclose information regarding the Holders, this Agreement and the transactions contemplated hereby in filings required to be made by Parent and the Company under the Exchange Act. Section 6. Assignment; Binding Effect. 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. 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. Section 7. Termination. This Agreement, and all rights and obligations of the parties hereunder, may be terminated by any party at or after the close of business on December 1, 2002, provided that if the Merger Agreement is executed by Parent and the Company prior to such time, this Agreement shall terminate upon (i) the termination of the Merger Agreement in accordance with its terms, including pursuant to the provision allowing the Company to terminate the Merger Agreement in order to simultaneously enter into a definitive agreement to implement a Superior Proposal or (ii) the consummation of the Merger. Nothing in this Section 7 shall relieve any party from liability for willful breach of this Agreement. Section 8. Legending of Certificates; Nominees Shares; Stop Transfer. Upon request by Parent, each Holder agrees to submit to Parent contemporaneously with or promptly following execution of this Agreement all certificates representing their Shares so that Parent may note thereon a legend referring to the rights granted to it under this Agreement. If any of the Shares beneficially owned by a 4 Holder are held of record by a brokerage firm in "street name" or in the name of any other nominee (a "Nominee," and, as to such Shares, "Nominee Shares"), such Holder agrees that, upon written request by Parent, such Holder will within five days of such request execute and deliver to Parent a limited power of attorney, in form and substance reasonably satisfactory to Parent, enabling Parent to require such Nominee to (i) enter into an agreement to the same effect as Section 2 hereof with respect to the Nominee Shares held by such Nominee, (ii) tender such Nominee Shares in the Offer pursuant to Section 1 hereof and (iii) submit to Parent the certificates representing such Nominee Shares for notation of the above-referenced legend thereon. The Company agrees with, and covenants to, Parent that the Company shall not register the transfer of any certificate representing any Holder's Shares unless such transfer is made in accordance with the terms of this Agreement. Section 9. General Provisions. (a) Expenses. Except as otherwise provided in this Agreement or in the Merger Agreement, each party shall bear its own expenses in connection with the transactions contemplated by this Agreement. (b) Amendments. This Agreement may be amended by the parties hereto, by duly authorized action taken. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. (c) Extension; Waiver. The parties hereto may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or (iii) waive compliance with any of the agreements or conditions contained herein. 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. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. (d) Notice. All notices and other communications hereunder shall be in writing and shall be deemed given upon receipt by the parties at the following addresses (or at such other address for a party as shall be specified by like notice): (i) if to Parent, to: Enghouse Systems Limited 80 Tiverton Court, Suite 800 Markham, Ontario, Canada L3R 0G4 Attention: Neil Shafran Facsimile: 905-946-3201 with a copy to: Clifford Chance US LLP 200 Park Avenue New York, NY 10166 Attention: Brian Hoffmann Richard D. Pritz Facsimile: 212-878-8375 5 (ii) if to the Company, to: Syntellect Inc. 16610 N. Black Canyon Highway, Suite 100, Phoenix, Arizona 85053 Attention: Timothy Vatuone Facsimile: (609) 789-2899 with a copy to: Rogers & Theobald LLP Suite 850 The Camelback Esplanade 2425 East Camelback Road Phoenix, Arizona 85017 Attention: Robert K. Rogers Facsimile: 602-852-5570 and (iii) if to any Holder, to the address set forth under the name of such Holder on Schedule A hereto (or at such other address for such Holder as shall be specified by like notice). (e) Interpretation. Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. When a reference is made in this Agreement to an Article or a Section, such reference shall be to an Article or a Section of this Agreement unless otherwise indicated. 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. This Agreement is the result of the joint efforts of Parent, the Company, and each of the Holders and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of that party's involvement in the drafting thereof. The symbol "$" refers to United States Dollars. The words "include", "includes" or "including" shall be deemed to be followed by the words "without limitation." A "subsidiary" of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. The term "ordinary course of business" (or similar terms) shall be deemed to be followed by the words "consistent with past practice." Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Merger Agreement. (f) 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. This Agreement shall be binding upon each Holder upon the execution of this Agreement by Parent, the Company and such Holder, without regard to whether it is executed by any other Holder. (g) Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein) (a) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject 6 matter hereof, and (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. (h) Severability. This Agreement shall be deemed severable; the invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of the balance of this Agreement or of any other term hereof, which shall remain in full force and effect. If of any of the provisions hereof are determined to be invalid or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible. (i) Enforcement. The parties 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 shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. THE PARTIES HEREBY (i) SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE STATE OF DELAWARE AND AGREE NOT TO BRING ANY ACTIONS RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY OTHER COURT, OTHER THAN TO ENFORCE THE JUDGMENTS OF SUCH COURTS, (ii) AGREE NOT TO OBJECT TO VENUE IN SUCH COURTS OR TO CLAIM THAT SUCH FORUM IS INCONVENIENT AND (iii) AGREE THAT NOTICE OR THE SERVICE OF PROCESS IN ANY PROCEEDING SHALL BE PROPERLY SERVED OR DELIVERED IF DELIVERED IN THE MANNER CONTEMPLATED BY SECTION 9(d) HEREOF. IN ADDITION, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. (j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW. (k) Publicity. Except as otherwise required by law, court process or the rules of any applicable securities exchange or the Nasdaq or as contemplated or provided elsewhere herein, no party hereto shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this Agreement without prior consultation with the other parties hereto. [SIGNATURE PAGES FOLLOW] 7 IN WITNESS WHEREOF, each party has duly signed this Agreement, all as of the date first written above. SYNTELLECT INC. By: /s/ Anthony V. Carollo ---------------------------------- Name: Anthony V. Carollo Title: Chairman, CEO and President ENGHOUSE SYSTEMS LIMITED By: /s/ Stephen J. Sadler --------------------------------- Name: Stephen J. Sadler Title: Chairman and CEO SIGNATURE PAGE TO TENDER AND VOTING AGREEMENT 8 HOLDERS /s/ Geoffrey Nixon --------------------------------------------- GEOFFREY NIXON MISSION PARTNERS, L.P. By: MCM Associates, Ltd., General Partner By: /s/ Geoffrey Nixon ----------------------------------------- Geoffrey Nixon, President LIBERTY NOMINEES LIMITED By: MCM Associates, Ltd., Investment Manager By: /s/ Geoffrey Nixon ----------------------------------------- Geoffrey Nixon, President HORIZON OFFSHORE, LTD. By: /s/ Geoffrey Nixon ----------------------------------------- Geoffrey Nixon, Director MAYFAIR CAPITAL FUND, L.P. By : MCM Capital Management, LLC., General Partner By: /s/ Geoffrey Nixon ----------------------------------------- Geoffrey Nixon, President MCM PROFIT SHARING PLAN CSFB-MCM ASSOCIATES LTD FBO Geoffrey Nixon By: /s/ Geoffrey Nixon ----------------------------------------- Geoffrey Nixon, Trustee SIGNATURE PAGE TO TENDER AND VOTING AGREEMENT 9 MCM ASSOCIATES, LTD. By: /s/ Geoffrey Nixon -------------------------------------- Geoffrey Nixon, President SIGNATURE PAGE TO TENDER AND VOTING AGREEMENT 10 WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. By: Wynnefield Capital Management, LLC, General Partner By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD PARTNERS SMALL CAP VALUE, L.P. I By: Wynnefield Capital Management, LLC, General Partner By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD SMALL CAP VALUE OFFSHORE FUND, LTD. By: Wynnefield Capital, Inc. By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, President WYNNEFIELD CAPITAL MANAGEMENT, L.L.C. By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, Co-Managing Member WYNNEFIELD CAPITAL, INC. By: /s/ Nelson Obus ------------------------------------------ Nelson Obus, President SIGNATURE PAGE TO TENDER AND VOTING AGREEMENT 11 SCHEDULE A
NUMBER OF SHARES SUBJECT NAME AND ADDRESS SHARES HELD TO OPTIONS HELD - ---------------- ----------- --------------- Mayfair Capital Fund, L.P.* 367,500 0 Mission Partners, L.P.* 559,600 0 Horizon Offshore, Ltd.* 44,400 0 Liberty Nominees Limited* 115,400 0 Geoffrey Nixon* 1,020 0 MCM Associates, Ltd.* 10,000 0 MCM Profit Sharing Plan CSFB- 10,000 0 MCM Associates Ltd. FBO Geoffrey Nixon* Wynnefield Partners Small Cap 44,500 0 Value, L.P.** Wynnefield Partners Small Cap 38,000 0 Value, L.P. I** Wynnefield Small Cap Value, 518,300 0 Offshore Fund, Ltd.** Wynnefield Capital 0 0 Management, L.L.C.** Wynnefield Capital, Inc.** 0 0
* Address for each entity: Mr. Geoffrey Nixon, c/o MCM Associates, Ltd., 11 West 42nd Street, 19t Fl., New York, NY 10036 ** Address for each entity: Wynnefield Partners Small Cap Value, L.P., 450 Seventh Avenue, Suite 509, New York, NY 10123, Attn: Mr. Nelson Obus. A-1 EX-99.D.3 11 t08191exv99wdw3.txt STOCK OPTION AGREEMENT DATED NOV. 5, 2002 STOCK OPTION AGREEMENT STOCK OPTION AGREEMENT (this "Agreement") dated as of November 5, 2002, between Enghouse Systems Limited, an Ontario corporation ("Grantee"), and Syntellect Inc., a Delaware corporation ("Issuer"). WHEREAS, Grantee, Arizona Acquisition Corp, a Delaware corporation and a wholly owned subsidiary of Grantee ("Sub"), and Issuer have entered into an Agreement and Plan of Merger, dated as of the date hereof (the "Merger Agreement"; capitalized terms used but not otherwise defined herein have the meanings set forth in the Merger Agreement), providing for, among other things, the merger of Sub with and into Issuer; and WHEREAS, as a condition and inducement to Grantee's willingness to enter into the Merger Agreement, Grantee has requested that Issuer agree, and Issuer has agreed, to grant Grantee the Option (as defined below). NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein, Issuer and Grantee agree as follows: Section 1. Grant of Option. Subject to the terms and conditions set forth herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to purchase up to that number of shares of Issuer's common stock, par value $.01 per share (the "Common Stock") which equals 19.9% of the issued and outstanding shares of Common Stock of Issuer (the "Option Shares") immediately prior to the exercise of this Option at a price per share (the "Option Price") equal to $0.72, payable in cash. The number of Option Shares and the Option Price are subject to adjustment as set forth herein. Section 2. Exercise and Termination of Option. (a) Subject to the terms and conditions hereof, Grantee may exercise the Option at any time after the occurrence of a Trigger Event and prior to the close of business on the Termination Date (the "Exercisability Period"). "Trigger Event" shall mean the termination of the Merger Agreement by its terms, other than in accordance with Section 8.1(a) or 8.1(f) of the Merger Agreement, or any Payment Event. "Termination Date" shall mean the earliest of (i) the Effective Time of the Merger, (ii) 180 days after the date full payment of the Termination Fee contemplated by Section 8.5(b) of the Merger Agreement is made by Issuer to Grantee thereunder, or (iii) 180 days after the termination of the Merger Agreement so long as no Payment Event has occurred or could still occur pursuant to Section 8.5(b) or 8.5(c) of the Merger Agreement, as the case may be. For purposes of this Section 2(a), "Payment Event" shall mean any event which obligates Issuer to pay Grantee the $500,000 fee (the "Termination Fee") contemplated under Section 8.5(b) or 8.5(c) of the Merger Agreement. Notwithstanding the occurrence of the Termination Date, Grantee shall be entitled to purchase Option Shares pursuant to any exercise of the Option, on the terms and subject to the conditions hereof, to the extent Grantee exercised the Option prior to the occurrence of the Termination Date. (b) If Grantee is entitled to and wishes to exercise the Option, it shall deliver to Issuer a written notice (an "Exercise Notice"), the date of receipt of which is referred to as the "Notice Date") specifying (i) the number of Option Shares it intends to purchase pursuant to such exercise and (ii) a place and date not earlier than three business days nor later than 15 business days from the Notice Date for the closing of such purchase; provided, that if the closing of a purchase and sale pursuant to the Option (a "Closing") cannot be consummated by reason of any applicable judgment, decree, order, law or regulation, the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which such restriction on consummation has expired or been terminated; and, provided, further that, without limiting the foregoing, if prior notification to or approval of any regulatory authority is required in connection with such purchase, Grantee and, if applicable, Issuer shall promptly file the required notice or application for approval and shall expeditiously process the same (and Issuer shall cooperate with Grantee in the filing of any such notice or application and the obtaining of any such approval), and the period of time that otherwise would run pursuant to this sentence shall run instead from the date on which, as the case may be, (i) any required notification period has expired or been terminated or otherwise satisfied or (ii) such approval has been obtained, and in either event, any requisite waiting period has passed. Issuer shall take any action reasonably requested by Grantee to cause the Closing to occur as promptly as practicable. Any exercise of the Option shall be deemed to occur on the Notice Date relating thereto. Any extensions of the periods specified in this Section 2(b) shall extend the Exercisability Period on a day-for-day basis. (c) Notwithstanding anything herein to the contrary, it shall be a condition to the exercise of this Option and the purchase of the Option Shares that (i) no preliminary or permanent injunction or other order, decree or ruling against the sale or delivery of the Option Shares issued by any federal or state court of competent jurisdiction in the United States is in effect at such time, (ii) any approval required to be obtained prior to the delivery of the Option Shares under the laws of any jurisdiction shall have been obtained and shall be in full force and effect. Section 3. Payment and Delivery of Certificates. (a) At any Closing, Grantee will pay to Issuer in immediately available funds by wire transfer to a bank account designated in writing by Issuer an amount equal to the Option Price multiplied by the number of Option Shares to be purchased at such Closing; provided, that failure or refusal of Issuer to designate such a bank account shall not preclude Grantee from exercising the Option. (b) At any Closing, simultaneously with the delivery of immediately available funds as provided in Section 3(a), Issuer will deliver, or cause to be delivered, to Grantee or its nominee a certificate or certificates representing the Option Shares to be purchased at such Closing, which Option Shares will be fully paid and non-assessable and free and clear of all Liens (except for any such Lien due to the issuance of the Option Shares not being registered under the Securities Act and Liens arising from acts of Grantee). If at the time of issuance of Option Shares pursuant to an exercise of the Option hereunder, Issuer shall have issued any securities similar to rights under a shareholder rights plan, then each Option Share issued pursuant to such exercise will also represent such a corresponding right with terms substantially the same as and at least as favorable to Grantee as are provided under any such shareholder rights plan then in effect. (c) Certificates for the Option Shares delivered at a Closing will have typed or printed thereon a restrictive legend which will read substantially as follows: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 AND MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE." It is understood and agreed that such legend will be removed by delivery of substitute certificate(s) without such reference if such Option Shares have been registered pursuant to the Securities Act, such Option Shares have been sold in reliance on and in accordance with Rule 144 under the 2 Securities Act or Grantee has delivered to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel in customary form to the effect that such legend is not required for purposes of the Securities Act. (d) When Grantee provides an Exercise Notice and tenders the applicable purchase price in immediately available funds (or offers such tender if the proviso to the Section 3(a) is applicable), Grantee shall be deemed to be the holder of record of the Option Shares issuable upon such exercise, notwithstanding that the stock transfer books of Issuer shall then be closed or that certificates representing such Option Shares shall not then be actually delivered to Grantee. Section 4. Representations and Warranties of Issuer. Issuer hereby represents and warrants to Grantee as follows: (a) Issuer is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. The execution, delivery and performance by Issuer of this Agreement and the consummation of the transactions contemplated hereby (i) are within Issuer's corporate powers, (ii) have been duly authorized by all necessary corporate action, (iii) require no action by or in respect of, or filing with, any Governmental Entity, (iv) do not contravene, or conflict with the certificate of incorporation or by-laws of Issuer, (v) do not contravene or conflict with or constitute a violation of any provision of any law, regulation or judgment, injunction, order or decree binding upon Issuer or any of its subsidiaries and (vi) will not require any consent, approval or notice under and will not conflict with, or result in the breach or termination of any provision of or constitute a default (with or without the giving of notice or the lapse of time or both) under, or allow the acceleration of the performance of, any material obligation of Issuer or any of its subsidiaries under, or result in the creation of a Lien upon, any of the properties, assets or business of Issuer or any of its subsidiaries under any indenture, mortgage, deed of trust, lease, licensing agreement, contract, instrument or other agreement to which Issuer or any of its subsidiaries is a party or by which Issuer or any of its subsidiaries or any of their respective assets or properties is subject or bound other than, in the case of each of (iii), (iv), (v) or (vi), any such items that would not, individually or in the aggregate, be reasonably likely to have a Material Adverse Effect on Issuer or prevent or materially impair the ability of Issuer to consummate the transactions contemplated by this Agreement. This Agreement has been duly executed and delivered by Issuer and constitutes a valid and binding agreement of Issuer, enforceable in accordance with its terms (except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally or by principles governing availability of equitable remedies). (b) Issuer has taken all necessary corporate and other action to authorize and reserve and to permit it to issue, and at all times from the date hereof until such time as the obligation to deliver Option Shares upon the exercise of the Option terminates, will have reserved for issuance, upon any exercise of the Option, the number of Option Shares subject to the Option. All of the Option Shares to be issued pursuant to the Option are duly authorized and, upon issuance and delivery thereof pursuant to this Agreement, will be duly authorized, validly issued, fully paid and nonassessable, and free and clear of all Liens (except for any such Lien due to the issuance of the Option Shares not being registered under the Securities Act and Liens arising from acts of Grantee), and not subject to any preemptive, first refusal, first offer or similar rights. (c) The Board of Directors of Issuer has duly and validly authorized and approved by all necessary corporate action, this Agreement, the Merger Agreement and the transactions contemplated hereby and thereby, so that by the execution and delivery hereof no restrictive provision of any "fair price," "moratorium," "control-share acquisition," "interested shareholders" or other similar anti-takeover statute or regulation (including Section 203 of the DGCL) or restrictive provision of any 3 applicable anti-takeover provision in the Articles of Incorporation (including Article Fourteenth thereof) or by-laws of the Issuer is, or at the closing of the transactions contemplated hereby will be, applicable to the Issuer, Grantee, the Option Shares, the Merger or any other transaction contemplated by this Agreement. Section 5. Representations and Warranties of Grantee. Grantee hereby represents and warrants to Issuer that: (a) Grantee is a corporation duly organized, validly existing and in good standing under the laws of Ontario, Canada. The execution, delivery and performance by Grantee of this Agreement and the consummation of the transactions contemplated hereby (i) are within Grantee's corporate powers, and (ii) have been duly authorized by all necessary corporate action. (b) Grantee is not acquiring this Option nor the Option Shares with a view to sale or distribution in violation of any securities laws. Section 6. Adjustment upon Changes in Capitalization, etc. (a) In the event of any change in the capital stock of Issuer by reason of any stock dividends, stock splits, split-ups, spin-offs, recapitalizations, recombinations, extraordinary dividends or the like, the type and number of Option Shares, and the Option Price, as the case may be, shall be adjusted appropriately to reflect such event and proper provision shall be made in any agreement governing any such transaction to provide for such adjustment and the full satisfaction of Issuer's obligations hereunder, provided, that in no event shall the number of shares of Common Stock of Issuer subject to the Option exceed 19.9% of the number of shares of Common Stock of Issuer issued and outstanding on the date of exercise. For purposes of clarity, if any event or transaction described in the first sentence of this Section 6(a) shall occur, the Option Shares issuable upon exercise of the Option shall thereafter be the securities and other property which would have been receivable in respect of the Option Shares which would have been issuable upon exercise of the Option immediately prior to such event or transaction. The Option Price shall be adjusted such that the aggregate Option Price payable on full exercise of the Option shall be identical before and after any such event or transaction. (b) Without limiting the parties' relative rights and obligations under the Merger Agreement, if Issuer enters into an agreement with respect to any Takeover Proposal or other transaction involving the exchange or conversion of Common Stock of Issuer (or other Option Shares then issuable under the Option) for shares or other securities of Issuer or another Person, then the agreement governing such transaction shall make proper provision so that the Option shall, upon the consummation of any such transaction and upon the terms and conditions set forth herein, be converted into, or exchanged for, an option with identical terms appropriately adjusted to acquire the number and class of shares or other securities or property that Grantee would have received in respect of the Common Stock of Issuer (or other Option Shares then issuable under the Option) if the Option had been exercised immediately prior to the consummation of such Takeover Proposal, or the record date therefor, as applicable. (c) If, at any time during the Exercisability Period a Takeover Proposal is made, Grantee sends to Issuer a notice (a "Cash-Out Notice") indicating Grantee's election to exercise its right pursuant to this Section 6(c), then Issuer shall pay to Grantee, on the date on which such Takeover Proposal is consummated (or the date of the Cash-Out Notice, if later), in exchange for the cancellation of the Option (if and to the extent that the Option has not been fully exercised) and/or the repurchase of any Option Shares issued to Grantee pursuant hereto which Grantee then beneficially owns and has requested that Issuer repurchase (if and to the extent that the Option has been exercised), at a price per share equal to the higher of (x) if applicable, the highest price per share of Common Stock of Issuer or other Option 4 Shares, as applicable, paid or proposed to be paid by any Person pursuant to such Takeover Proposal (non-cash consideration to be valued as set forth in Section 6(d) hereof) or (y) the average of the closing prices of the shares of Option Shares or Common Stock of Issuer, as applicable, on the principal securities exchange or quotation system on which shares of the Common Stock of Issuer or the Option Shares, as applicable, are then listed or traded as reported in The Wall Street Journal (or another authoritative source) for the five consecutive trading days immediately preceding the date of the Cash-Out Notice, less, if and to the extent that the Option has not been exercised, the Option Price in respect of each Option Share issuable under the Option rights being cancelled. Notwithstanding the termination of the Option, Grantee will be entitled to exercise its rights under this Section 6(c) if it has sent to Issuer a Cash-Out Notice in accordance with the terms hereof prior to the termination of the Option. The payment contemplated by this Section 6(c) shall be made in immediately available funds to an account specified by Grantee. (d) As used herein, the "fair market value" of any non-cash consideration consisting of: (i) securities listed on a national securities exchange or traded on Nasdaq shall be equal to the average closing price per share of such security as reported on such exchange or Nasdaq for the five trading days before the date of determination; and (ii) consideration which is other than cash or securities of the form specified in clause (i) above shall be determined by a nationally recognized independent investment banking firm mutually agreed upon by the parties five business days prior to the event requiring selection of such banking firm, provided that if the parties are unable to agree as to the investment banking firm within three business days of a request to do so by either Grantee or Issuer, then the parties shall each select one such firm within 48 hours after the end of such three-day period, and those firms shall select a third nationally recognized independent investment banking firm within 48 hours after the end of such previous 48-hour period, which third firm shall make such determination as promptly as reasonably practicable. The third firm's determination shall be final and binding on each of the parties. Section 7. Registration Rights. Issuer will, if requested by Grantee at any time and from time to time within three years of the exercise of the Option, as promptly as practicable (but in no event later than 90 days after receipt of such request) prepare and file up to three registration statements under the Securities Act if such registration is necessary in order to permit the sale or other disposition of any or all shares of securities that have been acquired by or are issuable to Grantee upon exercise of the Option in accordance with the intended method of sale or other disposition stated by Grantee, including a "shelf" registration statement under Rule 415 under the Securities Act or any successor provision, and Issuer will use its best efforts to qualify such shares or other securities under any applicable state securities laws. A registration statement shall not be deemed filed if it is withdrawn by Issuer, subject to a stop or similar order or not kept effective in accordance with the following sentence. Issuer will use reasonable efforts to cause each such registration statement to become effective, to obtain all consents or waivers of other parties which are required therefor, and to keep such registration statement effective for such period not in excess of 180 calendar days from the day such registration statement first becomes effective as may be reasonably necessary to effect such sale or other disposition. The obligations of Issuer hereunder to file a registration statement and to maintain its effectiveness may be suspended for up to 60 calendar days in the aggregate if the Board of Directors of Issuer shall have determined that the filing of such registration statement or the maintenance of its effectiveness would require premature disclosure of material nonpublic information that would materially and adversely affect Issuer or otherwise interfere with or adversely affect any pending or proposed offering of securities of Issuer or any other material transaction involving Issuer. Any registration statement prepared and filed under this Section 7, and any sale covered thereby, will be at Issuer's expense except for underwriting discounts or commissions, brokers' fees and 5 the fees and disbursements of Grantee's counsel related thereto. Grantee will provide all information reasonably requested by Issuer for inclusion in any registration statement to be filed hereunder. If, during the time periods referred to in the first sentence of this Section 7, Issuer effects a registration under the Securities Act of its Common Stock (or other Option Shares) for its own account or for any other stockholders of Issuer (other than on Form S-4 or Form S-8, or any successor form), it will allow Grantee the right to participate in such registration, and such participation will not affect the obligation of Issuer to effect demand registration statements for Grantee under this Section 7; provided, that if the managing underwriters of such offering advise Issuer in writing that in their opinion the number of shares of Common Stock of Issuer requested to be included in such registration exceeds the number which can be sold in such offering, then Issuer will include only the shares requested to be included therein by Grantee that may be included therein without adversely affecting the success of the offering. In connection with any registration pursuant to this Section 7, Issuer and Grantee will provide each other and any underwriter of the offering with customary representations, warranties, covenants, indemnification, and contribution in connection with such registration. Section 8. Listing. If the Common Stock of Issuer or any other securities to be acquired upon exercise of the Option are then listed on Nasdaq (or any other national securities exchange or national securities quotation system), Issuer, upon the request of Grantee, will promptly file an application to list its Common Stock or other securities to be acquired upon exercise of the Option on Nasdaq (or any such other national securities exchange or national securities quotation system) and will use reasonable efforts to obtain approval of such listing as promptly as practicable. Section 9. Loss or Mutilation. Upon receipt by Issuer of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Agreement, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Agreement, if mutilated, Issuer will execute and deliver a new Agreement of like tenor and date. Section 10. Miscellaneous. (a) Expenses. Except as otherwise provided in this Agreement or in the Merger Agreement, each party shall bear its own expenses in connection with the transactions contemplated by this Agreement. Issuer acknowledges that this Agreement is an integral part of the transactions contemplated in the Merger Agreement, and that, without this Agreement, Grantee would not enter into the Merger Agreement. Accordingly, if Issuer fails to timely perform any obligation under this Agreement (including payment of any amount due), and, in order to obtain such performance, Grantee commences a suit which results in a judgment against Issuer for payment or performance of an obligation pursuant to this Agreement, then Issuer shall pay to Grantee (i) interest on any amount due at a rate equal to that rate which is determined under the provisions of Issuer's then-current line of credit facility beginning from the date such amount was required to be paid and (ii) its costs, expenses and disbursements (including attorneys' fees) in connection with such suit, including any costs of collection. (b) Amendment. This Agreement may be amended by the parties hereto, by duly authorized action taken, at any time before or after obtaining the Company Stockholder Approval, but, after the Company Stockholder Approval, no amendment shall be made which by law requires further approval by such stockholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. (c) Extension; Waiver. At any time prior to the Effective Time, the parties hereto may, to the extent legally allowed, subject to Section 10(b), (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto or 6 (iii) waive compliance with any of the agreements or conditions contained herein. 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. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights. (d) Entire Agreement, No Third-Party Beneficiaries. This Agreement (including the documents and the instruments referred to herein) (a) constitutes 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 (b) is not intended to confer upon any person other than the parties hereto any rights or remedies hereunder. (e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ANY APPLICABLE CONFLICTS OF LAW. (f) Notices. All notices and other communications hereunder shall be in writing and shall be sent in the manner and to the addresses set forth in the Merger Agreement. (g) 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, except that Grantee may assign, in its sole discretion, any or all of its rights, interests and obligations under this Agreement to any direct or indirect wholly owned subsidiary of Grantee, but no such assignment shall relieve Grantee of any of its obligations hereunder. 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. (h) Further Assurances. In the event of any exercise of the Option by Grantee, Issuer and Grantee will execute and deliver all other documents and instruments and take all other actions that may be reasonably necessary in order to consummate the transactions contemplated hereunder in connection with such exercise. (i) Section 16(b). Any time period hereunder shall be extended to the extent necessary for any Grantee to avoid liability under Section 16(b) of the Exchange Act. (j) Enforcement. The parties 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 shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, in addition to any other remedy to which they are entitled at law or in equity. THE PARTIES HEREBY (i) SUBMIT TO THE EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN THE STATE OF DELAWARE AND AGREE NOT TO BRING ANY ACTIONS RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY IN ANY OTHER COURT, OTHER THAN TO ENFORCE THE JUDGMENTS OF SUCH COURTS, (ii) AGREE NOT TO OBJECT TO VENUE IN SUCH COURTS OR TO CLAIM THAT SUCH FORUM IS INCONVENIENT AND (iii) AGREE THAT NOTICE OR THE SERVICE OF PROCESS IN ANY PROCEEDING SHALL BE PROPERLY SERVED OR DELIVERED IF DELIVERED IN THE MANNER CONTEMPLATED BY SECTION 10(f) HEREOF. IN ADDITION, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. 7 (k) Severability. This Agreement shall be deemed severable; the invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of the balance of this Agreement or of any other term hereof, which shall remain in full force and effect. If of any of the provisions hereof are determined to be invalid or unenforceable, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible. (l) Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated. 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. This Agreement is the result of the joint efforts of Grantee and Issuer and each provision hereof has been subject to the mutual consultation, negotiation and agreement of the parties and there shall be no construction against any party based on any presumption of that party's involvement in the drafting thereof. The symbol "$" refers to United States Dollars. The words "include", "includes" or "including" shall be deemed to be followed by the words "without limitation." A "subsidiary" of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person. (m) Publicity. Except as otherwise required by law, court process or the rules of any applicable securities exchange or the Nasdaq or as contemplated or provided elsewhere herein, no party hereto shall issue any press release or otherwise make any public statement with respect to the transactions contemplated by this Agreement without prior consultation with the other parties hereto. (n) 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. [SIGNATURE PAGE FOLLOWS] 8 IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be signed by their respective officers thereunto duly authorized as of the day and year first written above. SYNTELLECT INC. By: /s/ Anthony V. Carollo -------------------------------- Name: Anthony V. Carollo Title: Chairman, CEO and President ENGHOUSE SYSTEMS LIMITED By: /s/ Stephen J. Sadler -------------------------------- Name: Stephen J. Sadler Title: Chairman and CEO -----END PRIVACY-ENHANCED MESSAGE-----