Agreement & Plan Of Merger

EXECUTION COPY

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EXHIBIT 10.37

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AGREEMENT AND PLAN OF MERGER



by and among



PERITUS SOFTWARE SERVICES, INC.,



VISTA TECHNOLOGIES INCORPORATED







listed on Schedule I

----------







January 29, 1996

TABLE OF CONTENTS



1. The Merger and Related Matters......................................... 2



1.01 Merger.......................................................... 2

1.02 Stockholder Approval............................................ 2

1.03 Effective Date.................................................. 2

1.04 Capital Stock of Vista.......................................... 2

1.05 Capital Stock of Peritus........................................ 3

1.06 Stock Certificates.............................................. 4

1.07 Succession...................................................... 4

1.08 Article of Organization and By-Laws............................. 4

1.09 Directors and Officers.......................................... 5

1.10 No Further Rights............................................... 5

1.11 Closing of Transfer Books....................................... 5

1.12 Stockholders' Representative.................................... 5



2. Representations and Warranties of the Stockholders..................... 7



3. Representations and Warranties of Vista................................ 8



3.01 Organization.................................................... 8

3.02 Capitalization of Vista......................................... 8

3.03 No Subsidiaries................................................. 9

3.04 Authorization................................................... 9

3.05 Financial Statements............................................ 9

3.06 Absence of Undisclosed Liabilities.............................. 10

3.07 Litigation...................................................... 10

3.08 Insurance....................................................... 11

3.09 Personal Property............................................... 11

3.10 Intangible Property............................................. 12

3.11 Leases.......................................................... 13

3.12 Real Estate..................................................... 14

3.13 Accounts Receivable............................................. 14

3.14 Tax Matters..................................................... 14

3.15 Books and Records............................................... 15

3.16 Contracts and Commitments....................................... 16

3.17 Compliance with Agreements and Laws............................. 19

3.18 Employee Relations.............................................. 19

3.19 Employee Benefit Plans.......................................... 20

3.20 Absence of Certain Changes or Events............................ 24

3.21 Customers....................................................... 25

3.22 Suppliers....................................................... 26

3.23 Warranty and Product Liability Claims........................... 26

3.24 Prepayments and Deposits........................................ 26

3.25 Indebtedness to and from Officers, Directors and Stockholders... 26

3.26 Banking Facilities.............................................. 27

3.27 Powers of Attorney and Suretyships.............................. 27



- i - 3.28 Conflicts of Interest........................................... 27

3.29 Regulatory Approvals............................................ 28

3.30 Disclosure...................................................... 28



4. Representations and Warranties of Peritus.............................. 28



4.01 Organization and Authority...................................... 28

4.02 Capitalization of Peritus....................................... 29

4.03 Authorization................................................... 29

4.04 Regulatory Approvals............................................ 30

4.05 Disclosure...................................................... 30



5. Access to Information; Public Announcements............................ 30



5.01 Access to Management, Properties and Records.................... 30

5.02 Confidentiality................................................. 31

5.03 Public Announcements............................................ 31



6. Pre-Effective Covenants of Vista....................................... 31



6.01 Conduct of Business............................................. 32

6.02 Absence of Material Changes..................................... 32

6.03 Delivery of Interim Financial Statements........................ 34

6.04 Communications with Customers and Suppliers..................... 34

6.05 Compliance with Laws............................................ 34

6.06 Continued Truth of Representations and Warranties............... 34

6.07 Continuing Obligation to Inform................................. 34

6.08 Exclusive Dealing............................................... 35

6.09 Reports, Taxes.................................................. 35

6.10 Termination of Option Plans..................................... 35



7. Best Efforts to Obtain Satisfaction of Conditions...................... 35



8. Conditions to Obligations of Peritus................................... 36



8.01 Continued Truth of Representations and Warranties

of Vista; Compliance with Covenants and Obligations............. 36

8.02 Performance by Vista............................................ 36

8.03 Governmental Approvals.......................................... 36

8.04 Stockholder Approval............................................ 36

8.05 Consent of Lenders, Lessors and Other Third Parties............. 37

8.06 Adverse Proceedings............................................. 37

8.07 Opinion of Counsel.............................................. 37

8.08 Update.......................................................... 37

8.09 Employment Contracts............................................ 38

8.10 Cash Available for Working Capital Purposes..................... 38

8.11 Repayment of Indebtedness....................................... 38

8.12 Trade Payables.................................................. 38

8.13 Deliveries...................................................... 39

8.14 Approval of Merger Documents.................................... 40



- ii - 9. Conditions to Obligations of Vista...................................... 40



9.01 Continued Truth of Representations and Warranties

of Peritus; Compliance with Covenants and

Obligations...................................................... 40

9.02 Corporate Proceedings............................................ 40

9.03 Governmental Approvals........................................... 40

9.04 Consents of Lenders, Lessors and Other Third Parties............. 40

9.05 Adverse Proceedings.............................................. 41

9.06 Opinion of Counsel............................................... 41

9.07 Deliveries....................................................... 41



10. Survival of Representations and Warranties............................. 42



10.01 Survival of Representations and Warranties of Vista.............. 42

10.02 Survival of Representations and Warranties of Peritus............ 42



11. Termination of Agreement; Option to Proceed; Damages................... 42



11.01 Termination by Lapse of Time.................................... 42

11.02 Termination by Agreement of the Parties......................... 42

11.03 Termination by Reason of Breach................................. 43

11.04 Option to Proceed............................................... 43

11.05 Availability of Remedies at Law................................. 44



12. Dispute Resolution..................................................... 44



12.01 General......................................................... 44

12.02 Consent of the Parties.......................................... 44

12.03 Arbitration..................................................... 44



13. Brokers................................................................ 46



13.01 For Vista....................................................... 46

13.02 For Peritus..................................................... 46



14. Notices................................................................ 46



15. Successors and Assigns................................................. 47



16. Entire Agreement; Attachments.......................................... 47



17. Severability........................................................... 47



18. Investigation of the Parties........................................... 48



19. Expenses............................................................... 48



20. Legal Fees............................................................. 48



- iii - 21. Further Assurances.................................................... 48



22. Amendment............................................................. 48



23. Governing Law......................................................... 49



24. Section Headings; Number; Gender...................................... 49



25. Counterparts.......................................................... 49





- iv -

AGREEMENT AND PLAN OF MERGER





THIS AGREEMENT AND PLAN OF MERGER (the "Agreement and Plan of Merger"), dated this 29th day of January, 1996, pursuant to Section 79 of Chapter 156B of Massachusetts General Laws (the "Massachusetts Business Corporation Law") and Section 5/11.35 of Chapter 805 of Illinois Compiled Statutes (the "Illinois Business Corporation Law"), by and among Peritus Software Services, Inc., a Massachusetts corporation having its principal place of business at 304 Concord Road, Billerica, Massachusetts ("Peritus"), Vista Technologies Incorporated, an Illinois corporation having its principal place of business at Two Woodfield Lake, 1100 Woodfield Lake, Suite 437, Schaumburg, Illinois ("Vista"), and the stockholders listed on Schedule I attached hereto (each, a "Stockholder" and

---------- collectively, the "Stockholders").



WITNESSETH:



WHEREAS, Peritus is a corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and is authorized to issue 3,760,000 shares of Class A Voting Common Stock, no par value (the "Peritus Class A Common Stock"), of which 2,225,815 shares are issued and outstanding as of the date hereof, and 40,000 shares of Class B Non-Voting Common Stock, no par value (the "Peritus Class B Common Stock"), of which 39,715 shares are issued and outstanding as of the date hereof;



WHEREAS, Vista is a corporation duly organized and existing under the laws of the State of Illinois and is authorized to issue (i) 2,000,000 shares of Class A Common Stock, no par value (the "Vista Class A Common Stock"), of which 138,760 shares are issued and outstanding as of the date hereof, (ii) 200,000 shares of Class B Common Stock, no par value (the "Vista Class B Common Stock"), of which 31,240 shares are issued and outstanding as of the date hereof, and (iii) 1,000,000 shares of Class C Common Stock, no par value (the "Vista Class C Common Stock"), of which 36,000 shares are issued and outstanding as of the date hereof;



WHEREAS, the Stockholders own all of the issued and outstanding capital stock of Vista;



WHEREAS, Peritus desires that Vista be merged into Peritus;



WHEREAS, Vista desires to merge itself into Peritus; and



WHEREAS, the Boards of Directors of Peritus and Vista have approved and adopted this Agreement and Plan of Merger.

NOW THEREFORE, in consideration of the foregoing premises and the undertakings herein contained and for other good valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:



1. The Merger and Related Matters

------------------------------



1.01 Merger. As soon as practicable after the satisfaction of the

------- conditions set forth in Sections 8 and 9 hereof, Vista shall be merged with and into Peritus pursuant to the Massachusetts Business Corporation Law and the Illinois Business Corporation Law by delivering to the Secretary of the Commonwealth of the Commonwealth of Massachusetts and to the Secretary of State of the State of Illinois the articles of merger, together with such other documents and certificates as may be required by the Massachusetts Business Corporation Law and the Illinois Business Corporation Law, each in such form or forms as may be required by, and executed and acknowledged in accordance with, the relevant provisions of the Massachusetts Business Corporation Law and the Illinois Business Corporation Law (such documents being collectively referred to as the "Merger Documents"), and shall make all other filings and recordings required by the Massachusetts Business Corporation Law and the Illinois Business Corporation Law in connection with the Merger. Peritus shall survive the merger herein contemplated and shall continue to be governed by the laws of the Commonwealth of Massachusetts. The separate corporate existence of Vista shall cease forthwith upon the Effective Date (as defined below). The merger of Vista into Peritus shall herein be referred to as the "Merger."



1.02 Stockholder Approval. As soon as practicable after the

-------------------- execution of this Agreement and Plan of Merger, each of Peritus and Vista shall, if necessary under the Massachusetts Business Corporation Law or the Illinois Business Corporation Law, submit this Agreement and Plan of Merger to their respective stockholders for approval.



1.03 Effective Date. The Merger shall be effective upon the filing

-------------- of articles of merger with the Secretary of the Commonwealth of the Commonwealth of Massachusetts, which filing shall be made as soon as practicable after all required stockholder approvals have been obtained. The time of such effectiveness shall herein be referred to as the "Effective Date."



1.04 Capital Stock of Vista.

----------------------



(a) Subject to the other provisions of this Subsection 1.04, on the Effective Date, by virtue of the Merger and without any action on the part of the holder thereof, each



share of the capital stock of Vista (whether of Vista Class A Common Stock, Vista Class B Common Stock, or Vista Class C Common Stock, and whether voting or non-voting) issued and outstanding immediately prior thereto shall cease to exist and shall be changed and converted into 0.5437 fully paid and non- assessable shares of the Peritus Class A Common Stock (such ratio, the "Conversion Ratio").



(b) Notwithstanding the provisions of paragraph (a) of this Subsection 1.04, shares of the capital stock of Vista held by a holder who, in accordance with Section 5/11.65 et seq. of the Illinois Business Corporation Law

-- --- has asserted and perfected his right to dissent and obtain payment for such shares and has not effectively withdrawn or lost such right, shall not be converted into shares of Peritus Class A Common Stock unless such holder withdraws or otherwise loses his right to obtain payment for such shares. If after the Effective Date such holder withdraws or loses his right to receive payment for his shares of the capital stock of Vista, such shares shall be treated as if they had been converted as of the Effective Date into shares of Peritus Class A Common Stock pursuant to the provisions of paragraph (a) of this Subsection 1.04.



(c) Vista shall give Peritus prompt notice of any demands for payment, or notices of intent to demand payment, received by Vista with respect to any shares of the capital stock of Vista in connection with the Merger, and Peritus shall have the right to participate in all negotiations and proceedings with respect to such demands. Vista shall not, except with the prior written consent of Peritus or as otherwise required by law, make any payment with respect to, or settle or offer to settle, any such demand.



(d) Due to the operation of rounding, as provided in paragraph (b) of Subsection 1.06 hereof, of the number of shares of Peritus Class A Common Stock receivable pursuant to the Merger by holders of the capital stock of Vista, neither certificates nor scrip for fractional shares shall be issued to any person or entity pursuant to the Merger, and no holder of any fractional share of the capital stock of Vista or a fractional share interest therein shall be entitled to any voting or other rights of a holder of shares of capital stock of Peritus.



1.05 Capital Stock of Peritus. On the Effective Date, by virtue of

------------------------ the Merger and without any action on the part of the holder thereof, each share of Peritus Class A Common Stock and Peritus Class B Common Stock issued and outstanding immediately prior thereto shall remain issued and outstanding and each share of Peritus Class A Common Stock and Peritus Class B Common Stock



held in the treasury of Peritus immediately prior thereto (if any) shall remain in the treasury.



1.06 Stock Certificates.

------------------



(a) On and after the Effective Date, all of the outstanding certificates which prior to that time represented shares of capital stock of Vista shall be deemed for all purposes to evidence ownership of and to represent solely the shares of Peritus Class A Common Stock into which the shares of the capital stock of Vista represented by such certificates have been converted as herein provided. The registered owner on the books and records of Peritus of any such outstanding stock certificate shall, until such certificate shall have been surrendered for conversion or transfer or otherwise accounted for to Peritus, have and be entitled to exercise any voting and other rights with respect to and to receive any dividend and other distributions upon the shares of Peritus Class A Common Stock evidenced by such outstanding certificate as above provided.



(b) Notwithstanding the provisions of paragraph (a) of this Subsection 1.06, (i) no holder of shares of capital stock of Vista shall be entitled to receive any certificates or scrip for fractional shares of Peritus Class A Common Stock, (ii) the number of shares of Peritus Class A Common Stock receivable by any holder of shares of capital stock of Vista pursuant to the Merger as calculated in accordance with paragraph (a) of Subsection 1.04 hereof shall, unless it is a whole number of such shares of Peritus Class A Common Stock, be rounded down to the nearest whole number of such shares, and (iii) no fractional shares of, or fractional share interests in, Peritus Class A Common Stock shall be issued to any person or entity pursuant to the Merger.



1.07 Succession. On the Effective Date, Peritus shall succeed to

---------- all of the rights, privileges, debts, liabilities, powers and property of Vista in the manner of and as more fully set forth in Section 80 of the Massachusetts Business Corporation Law and Section 5/11.50 of the Illinois Business Corporation Law. Without limiting the foregoing, upon the Effective Date, all of the estate, property, rights, privileges, powers, franchises, patents, trademarks, licenses, registrations and other assets of every kind and description of Vista shall be transferred to, vested in and devolved upon Peritus without further act or deed and all property, real, personal and mixed, rights, and every other interest of Vista and Peritus, and all the debts due on whatever account to either of them, as well as stock subscriptions and other choses in action belonging to either of them, shall be as effectively the property of Peritus as they were of Vista and Peritus, respectively.





1.08 Article of Organization and By-Laws. The Articles of

----------------------------------- Organization of Peritus in effect on the Effective Date shall continue to be the Articles of Organization of Peritus until further amended in accordance with the provisions thereof and applicable law. The By-laws of Peritus in effect on the Effective Date shall continue to be the By-laws of Peritus until amended in accordance with the provisions thereof and applicable law.



1.09 Directors and Officers. The members of the Board of Directors

---------------------- and the officers of Peritus on the Effective Date shall continue in office until the expiration of their respective terms of office and until their successors have been elected and qualified.



1.10 No Further Rights. From and after the Effective Date, no

----------------- shares of capital stock of Vista shall be deemed to be outstanding, and holders of certificates therefor shall cease to have any rights with respect thereto except as provided herein or by law.



1.11 Closing of Transfer Books. On the Effective Date, the stock

------------------------- transfer books of Vista shall be closed and no transfer of shares of capital stock of Vista shall thereafter be made. If, after the Effective Date, certificates therefor are presented to Peritus, they shall be cancelled and exchanged for shares of Peritus Class A Common Stock in accordance with Subsection 1.04, subject to applicable law in the case of any dissenting shares of capital stock of Vista.



1.12 Stockholders' Representative.

----------------------------



(a) In order to efficiently administer the provisions of this Agreement (including, without limitation, Subsection 11.04 and Section 12 hereof) and all other documents and instruments executed and delivered, or otherwise furnished, by the Stockholders in connection herewith (including, without limitation, the escrow agreement in the form of Exhibit A attached

--------- hereto (the "Escrow Agreement")), the Stockholders hereby designate Adarsh K. Arora as their representative (the "Stockholders' Representative").



(b) The Stockholders hereby authorize the Stockholders' Representative (i) to make all decisions and to take all action necessary to be made or taken by or on behalf of the Stockholders under this Agreement or the Escrow Agreement, (ii) to give and receive all notices required or permitted to be given under this Agreement or the Escrow Agreement, and (iii) to take any and all additional action as is contemplated to be taken by or



on behalf of the Stockholders by the terms of this Agreement or the Escrow Agreement.



(c) In the event that the Stockholders' Representative dies, becomes unable to perform his responsibilities hereunder or resigns from such position, Stockholders holding, prior to the Effective Date, a majority of the shares of capital stock of Vista as set forth on Schedule I attached hereto

---------- shall select another representative to fill such vacancy, and such substituted representative shall be deemed to be the Stockholders' Representative for all purposes of this Agreement and the Escrow Agreement.



(d) All decisions and actions by the Stockholders' Representative in connection with this Agreement or the Escrow Agreement shall be binding upon all of the Stockholders, and no Stockholder shall have the right to object, dissent, protest or otherwise contest the same.



(e) By their execution of this Agreement, the Stockholders agree that:



(i) Peritus shall be able to rely conclusively on the instructions and decisions of the Stockholders' Representative as to any actions required or permitted to be taken by the Stockholders' Representative hereunder or under the Escrow Agreement, and no party hereunder shall have any cause of action against Peritus for any action taken by Peritus in reliance upon the instructions or decisions of the Stockholders' Representative;



(ii) all actions, decisions and instructions of the Stockholders' Representative shall be conclusive and binding upon all of the Stockholders and no Stockholder shall have any cause of action against the Stockholders' Representative for any action taken, decision made or instruction given by the Stockholders' Representative under this Agreement or under the Escrow Agreement, except for fraud or willful breach of this Agreement or the Escrow Agreement by the Stockholders' Representative;



(iii) the provisions of this Subsection 1.12 are independent and severable, are irrevocable and coupled with an interest and shall be enforceable notwithstanding any rights or remedies that any Stockholder may have in connection with the transactions contemplated by this Agreement or the Escrow Agreement;



(iv) remedies available at law for any breach of the provisions of this Subsection 1.12 are inadequate;



therefore, Peritus and Vista shall be entitled to temporary and permanent injunctive relief without the necessity of proving damages if either Peritus or Vista brings an action to enforce the provisions of this Subsection 1.12; and



(v) the provisions ...