AGREEMENT AND PLAN OF MERGER by and among ON-X LIFE TECHNOLOGIES HOLDINGS, INC., CRYOLIFE, INC., CAST ACQUISITION CORPORATION, FORTIS ADVISORS LLC, solely in its capacity as the Stockholders’ Representative and EACH OF THE HOLDERS Dated as of December...
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
by and among
ON-X LIFE TECHNOLOGIES HOLDINGS, INC.,
CRYOLIFE, INC.,
CAST ACQUISITION CORPORATION,
FORTIS ADVISORS LLC,
solely in its capacity as the Stockholders’ Representative
and
EACH OF THE HOLDERS
Dated as of December 22, 2015
TABLE OF CONTENTS
Page
1.1Definitions.....................................................................................................................2
2.1Merger.........................................................................................................................21
2.2Closing.........................................................................................................................22
2.3Effective Time...............................................................................................................24
2.4Effects of the Merger.....................................................................................................24
2.5Certificate of Incorporation and Bylaws...............................................................................24
2.6Directors and Officers.....................................................................................................24
2.7Conversion of Shares and Options.....................................................................................24
2.8Dissenting Shares.........................................................................................................26
2.9Payment of Merger Consideration.......................................................................................27
2.10Adjustment of Purchase Price...........................................................................................32
2.11Certain Adjustments.......................................................................................................35
2.12Maximum Obligation.....................................................................................................35
Article III REPRESENTATIONS AND WARRANTIES OF THE COMPANY36
3.1Organization, Standing and Power.....................................................................................36
3.2Capital Stock...............................................................................................................36
3.3Subsidiaries.................................................................................................................38
3.4Authority.....................................................................................................................38
3.5No Conflict; Consents and Approvals.................................................................................39
3.6Financial Statements.......................................................................................................40
3.7No Undisclosed Liabilities...............................................................................................41
3.8Information Statements...................................................................................................42
3.9Absence of Certain Changes or Events.................................................................................42
3.10Litigation.......................................................................................................................42
3.11Compliance with Laws and Permits.....................................................................................43
3.12Benefit Plans...............................................................................................................46
3.13Labor and Employment Matters.........................................................................................49
3.14Environmental Matters...................................................................................................50
3.15Taxes...........................................................................................................................51
3.16Contracts...................................................................................................................53
3.17Insurance...................................................................................................................56
3.18Properties...................................................................................................................56
3.19Intellectual Property.......................................................................................................57
3.20Products.......................................................................................................................61
3.21Accounts Receivable.....................................................................................................61
3.22Inventories.................................................................................................................61
TABLE OF CONTENTS
(Continued)
Page
3.23Related Party Transactions...............................................................................................61
3.24Brokers.......................................................................................................................62
3.25Exclusivity of Representations and Warranties.........................................................................62
Article IV REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB62
4.1Organization, Standing and Power.....................................................................................62
4.2Authority.....................................................................................................................62
4.3No Conflict; Consents and Approvals.................................................................................63
4.4Capitalization...............................................................................................................63
4.5Financing...................................................................................................................64
4.6Vote/Approval Required.................................................................................................64
4.7SEC Reports...............................................................................................................65
4.8Absence of Certain Changes or Events.................................................................................66
4.9Compliance with Laws and Permits.....................................................................................66
4.10Intellectual Property.......................................................................................................66
4.11Taxes...........................................................................................................................66
4.12Brokers.......................................................................................................................67
4.13Issuance of Parent Common Stock.....................................................................................67
4.14Private Placement.........................................................................................................67
4.15Registration Rights.........................................................................................................67
4.16Listing Requirements.......................................................................................................67
4.17Accountants; No Disagreements with Accountants...................................................................68
4.18Application of Takeover Protections...................................................................................68
4.19Operations of Merger Sub...............................................................................................68
4.20Information Statements...................................................................................................68
4.21Exclusivity of Representations and Warranties.........................................................................68
5.1Access to Information and Facilities.....................................................................................69
5.2Preservation of Company Business.....................................................................................69
5.3Preservation of Parent Business.........................................................................................73
5.4Exclusivity...................................................................................................................74
5.5Efforts; Consents; Updated Financial Statements.....................................................................74
5.6Section 280G...............................................................................................................75
5.7Confidentiality; Public Announcements.................................................................................76
5.8Indemnification of Directors and Officers...............................................................................76
5.9Information Statements and Appraisal Notice.........................................................................77
5.10Financing...................................................................................................................77
5.11Financing Assistance.......................................................................................................78
5.12Certain Employment and Benefits Matters.............................................................................80
5.13Merger Consideration Table.............................................................................................82
TABLE OF CONTENTS
(Continued)
Page
5.14Tax Matters.................................................................................................................82
5.15Release and Waiver.......................................................................................................84
Article VI CONDITIONS PRECEDENT TO OBLIGATIONS OF PARENT AND MERGER SUB85
6.1Accuracy of Warranties...................................................................................................85
6.2Compliance with Agreements and Covenants.........................................................................86
6.3No Prohibition.............................................................................................................86
6.4Company Stockholder Approval.......................................................................................86
6.5Dissenting Shares.........................................................................................................86
6.6Listing Approval...........................................................................................................86
6.7Release of Certain Liens.................................................................................................86
6.8Transaction Costs Payoff Letters.......................................................................................87
6.9Amendment of Certificate of Incorporation...........................................................................87
6.10Closing Deliveries.........................................................................................................87
6.11Joinder Agreements and Option Cancellation Agreements...........................................................87
6.12Absence of Litigation.....................................................................................................87
6.13Company Material Adverse Effect.....................................................................................87
6.14Termination of Company 401(k) Plan...................................................................................87
Article VII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY87
7.1Accuracy of Warranties...................................................................................................88
7.2Compliance with Agreements and Covenants.........................................................................88
7.3No Prohibition.............................................................................................................88
7.4Listing Approval...........................................................................................................88
7.5Closing Deliveries.........................................................................................................88
7.6Parent Material Adverse Effect.........................................................................................88
8.1Termination.................................................................................................................88
8.2Expenses...................................................................................................................90
8.3Effect of Termination.......................................................................................................90
8.4Specific Performance.....................................................................................................90
9.1Indemnification by the Holders...........................................................................................90
9.2Indemnification by the Parent.............................................................................................92
9.3Procedural Provisions Regarding Indemnification.....................................................................92
9.4Limitations on Liability.....................................................................................................97
9.5Materiality Disregarded...................................................................................................99
9.6Exclusive Remedy.....................................................................................................100
9.7Tax Treatment of Indemnity Payments...............................................................................100
TABLE OF CONTENTS
(Continued)
Page
10.1Survival.....................................................................................................................100
10.2Amendment.............................................................................................................101
10.3Notices.....................................................................................................................101
10.4Waivers...................................................................................................................103
10.5Counterparts...........................................................................................................103
10.6Interpretation...........................................................................................................103
10.7APPLICABLE LAWS...............................................................................................104
10.8Binding Agreement.....................................................................................................104
10.9Assignment.............................................................................................................104
10.10Third Party Beneficiaries...............................................................................................105
10.11No Recourse; Certain Limitations on Remedies...................................................................105
10.12Stockholders’ Representative.........................................................................................106
10.13Further Assurances.....................................................................................................110
10.14Entire Understanding...................................................................................................110
10.15JURISDICTION OF DISPUTES...................................................................................110
10.16WAIVER OF JURY TRIAL.........................................................................................111
10.17Disclosure Letters.......................................................................................................111
10.18Severability...............................................................................................................112
10.19Construction.............................................................................................................112
10.20Attorney‑Client Privilege...............................................................................................112
Exhibits
Exhibit AForm of Stockholders Written Consent
Exhibit BForm of Escrow Agreement
Exhibit C-1Form of Joinder Agreement (Pre-Closing)
Exhibit C-2Form of Joinder Agreement (Post-Closing)
Exhibit DForm of Letter of Transmittal
Exhibit EForm of Merger Consideration Table
Exhibit FForm of Option Cancellation Agreement
Exhibit GForm of Lockup Agreement
Exhibit HForm of Registration Rights Agreement
Exhibit IForm of Press Release
Exhibit JForm of Amendment to Certificate of Incorporation
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made as of December 22, 2015, by and among ON-X LIFE TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (“Company”), CRYOLIFE, INC., a Florida corporation (“Parent”), CAST ACQUISITION CORPORATION, a Delaware corporation (“Merger Sub”), Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the representative of the Holders (the “Stockholders’ Representative”), and each of the Holders that become a party hereto via the execution of a Joinder Agreement or an Option Cancellation Agreement. Certain capitalized terms used herein are defined in Article I.
W I T N E S S E T H:
WHEREAS, the board of directors of Parent has approved the acquisition of the Company by Parent, by means of a merger of Merger Sub with and into the Company (the “Merger”), with the Company continuing as the surviving corporation in the Merger (as such, the “Surviving Company”), on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective boards of directors of the Company and Merger Sub have approved and declared advisable the Merger upon the terms and subject to the conditions of this Agreement and the DGCL, and the respective boards of directors of the Company and Merger Sub have approved and adopted this Agreement and the transactions contemplated in this Agreement, including the Merger;
WHEREAS, the respective boards of directors of the Company and Merger Sub have determined that the Merger is fair to and in the interests of their respective stockholders;
WHEREAS, concurrently with the execution and delivery of this Agreement, the Company shall deliver to Parent a written consent executed and delivered to the Company by the Significant Stockholders (the “Significant Stockholders Written Consent”) in substantially the form attached hereto as Exhibit A who have the authority to vote the shares indicated in such consent, which shares represent at least the minimum number of shares of the Company Capital Stock required to obtain the Company Stockholder Approval through an action by written consent under the Certificate of Incorporation and the DGCL;
WHEREAS, as a condition and inducement to Parent’s willingness to enter into this Agreement, Parent, the Stockholders’ Representative and the Escrow Agent shall, at the Closing, enter into an escrow agreement in substantially the form attached hereto as Exhibit B (the “Escrow Agreement”), pursuant to which a portion of the Merger consideration payable to the Holders pursuant to this Agreement shall be placed in the Indemnification Escrow Account and the Adjustment Reserve as set forth below in this Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement, and as a condition and inducement to Parent’s willingness to enter into this Agreement and as a condition to
receiving any portion of the Merger consideration pursuant to this Agreement or, as applicable, any portion of the Transaction Bonus Pool: (i) each Significant Stockholder with respect to the Company Capital Stock held by such Significant Stockholder shall enter into a Joinder Agreement, (ii) each participant in the Transaction Bonus Pool with respect to the portion of the his or her portion of the Transaction Bonus Pool Amount shall enter into a Joinder Agreement, and (iii) each Significant Option Holder with respect to the Options held by such Significant Option Holder, other than Underwater Options, shall enter into an Option Cancellation Agreement, which Joinder Agreements and Option Cancellation Agreements, as applicable, provide for, among other things, (A) the joinder of such Holder as a party to this Agreement as a “Holder” hereunder, (B) the confirmation of the reduction of the Escrowed Amounts from the Merger consideration and Transaction Bonus Pool payable to such Holder pursuant to the establishment of the Escrow Accounts and subject to the terms of the Escrow Agreement, (C) the requirement that a Holder, with respect to Company Capital Stock held by such Holder, must deliver a Letter of Transmittal as a condition to receiving payment of Merger consideration, (D) the release of claims pursuant to Section 5.15, (E) the imposition of indemnification obligations with respect to the Escrowed Amounts and potentially in excess of the Escrowed Amounts, (F) the appointment of the Stockholders’ Representative pursuant to the terms of Section 10.12, and (G) the Holders of shares of Preferred Stock that are Accredited Investors making certain representations and warranties to Parent as a condition to such Holders’ receipt of a portion of the Aggregate Accredited Equity Merger Consideration; and
WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, agreements and warranties herein contained, the parties to this Agreement agree as follows:
Definitions. The following terms shall have the following meanings for the purposes of this Agreement:
“2013 Confidentiality Agreement” shall mean that certain confidentiality agreement, dated as of November 26, 2013, between the Company and Parent relating to the transactions contemplated hereby, as subsequently amended by the parties thereto on April 10, 2015 and on the date hereof upon the effectiveness of this Agreement.
“510(k)s” shall have the meaning set forth in Section 3.11(c).
“ACA” shall mean, collectively, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, and the applicable regulatory and other governmental agency guidance issued thereunder.”
“ACA employer mandate” shall have the meaning set forth in Section 3.12(i).
“Accredited Investor” shall have the meaning set forth in Section 2.9(c)(i).
“Accredited Investor Questionnaires” shall have the meaning set forth in Section 2.9(c)(i).
“Accredited Investor Shares” shall mean the aggregate number of shares of Preferred Stock that are held by the Accredited Investors.
“Acquisition Engagement” shall have the meaning set forth in Section 10.20(a).
“Adjustment Reserve” shall mean an amount equal to $500,000.
“Adjustment Reserve Account” shall mean the account into which the Adjustment Reserve is deposited by Parent at Closing and which shall be held and administered by the Escrow Agent pursuant to the Escrow Agreement.
“Adjustments” shall have the meaning set forth in Section 2.10(b).
“Administrative Expense Amount” shall have the meaning set forth in Section 10.12(j).
“Advisory Group” shall have the meaning set forth in Section 10.12(i).
“Affiliate” shall mean, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person. For the purposes of this Agreement, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of securities, by contract, management control, or otherwise. “Controlled” and “Controlling” shall be construed accordingly.
“Aggregate Accredited Cash Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, in cash equal to the Aggregate Cash Merger Consideration, minus the Aggregate Common Stock Merger Consideration, minus the Aggregate Non‑Accredited Merger Consideration.
“Aggregate Accredited Equity Merger Consideration” shall mean 3,703,704 shares of Parent Common Stock.
“Aggregate Cash Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, in cash equal to the Estimated Purchase Price, minus the Aggregate Equity Amount, minus the Aggregate Option Merger Consideration, minus the Option Proceeds.
“Aggregate Common Stock Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, in cash equal to the product of (a) the Per Share
Common Stock Merger Consideration, multiplied by (b) the total number of shares of Common Stock issued and outstanding as of immediately prior to the Effective Time.
“Aggregate Equity Amount” shall mean an amount equal to $39,000,000.
“Aggregate Non‑Accredited Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, in cash equal to the product of the Per Share Preferred Stock Closing Amount, multiplied by the total number of shares of Preferred Stock issued and outstanding immediately prior to the Effective Time that are (a) held by Stockholders that are not Accredited Investors, or (b) otherwise Beneficially Owned by any Persons that are not Accredited Investors, provided that the same shares shall not be double counted to the extent such shares are covered by (a) and (b).
“Aggregate Option Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, equal to (a) the product of (i) the Per Share Common Stock Merger Consideration, multiplied by (ii) the aggregate number of Options issued and outstanding immediately prior to the Effective Time that are not Underwater Options, minus (b) the Option Proceeds.
“Aggregate Participating Amount” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, equal to the Estimated Purchase Price, minus the Aggregate Preferred Stock Liquidation Preference Amount.
“Aggregate Preferred Stock Liquidation Preference Amount” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, equal to the product of the Per Share Preferred Stock Liquidation Preference Amount, multiplied by the total number of shares of Preferred Stock issued and outstanding as of immediately prior to the Effective Time.
“Agreement” shall mean this Agreement, including the Company Disclosure Letter, the Parent Disclosure Letter and the exhibits hereto, as it and they may be amended from time to time.
“Audited Annual Financials” shall have the meaning set forth in Section 5.11.
“Basket” shall have the meaning set forth in Section 9.4(a).
“Beneficial Owner” means any Person who is the beneficial owner (within the meaning of Rule 13d‑3 under the Securities Exchange Act) of Company Capital Stock.
“Benefit Plans” shall have the meaning set forth in Section 3.12(a).
“Bribery Laws” shall mean the FCPA and other similar anti-corruption laws applicable in the countries in which the Company (and its Subsidiaries) or Parent (and its Subsidiaries), as applicable, is doing business on the Closing Date.
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or required by law or other action of a Governmental Authority to close.
“Canceled Shares” shall have the meaning set forth in Section 2.7(d).
“Cash on Hand” shall mean, as of any date, all cash and cash equivalents held in the Company’s and its Subsidiaries’ bank accounts, but excluding any Restricted Cash.
“Certificate” shall mean a stock certificate which, immediately prior to the Effective Time, represents shares of Company Capital Stock.
“Certificate of Incorporation” shall mean the certificate of incorporation of the Company, as amended from time to time.
“Certificate of Merger” shall have the meaning set forth in Section 2.3.
“Closing” shall mean the consummation of the transactions contemplated herein.
“Closing Date” shall have the meaning set forth in Section 2.2(a).
“Code” shall mean the Internal Revenue Code of 1986, as amended.
“Collar Amount” shall mean $1,965,000.
“Common Stock” shall have the meaning set forth in Section 3.2(a).
“Common Stockholder” shall mean a holder of Common Stock.
“Company” shall have the meaning set forth in the Preamble.
“Company 401(k) Plan” shall have the meaning set forth in Section 5.12(e).
“Company Annual Financial Statements” shall have the meaning set forth in Section 3.6(a).
“Company Capital Stock” shall mean the Common Stock and the Preferred Stock.
“Company Copyrights” shall have the meaning set forth in Section 3.19(b).
“Company Disclosure Letter” shall have the meaning set forth in the introductory language to Article III.
“Company Employees” shall have the meaning set forth in Section 5.12(a).
“Company Engagements” shall have the meaning set forth in Section 10.20(a).
“Company Financial Statements” shall have the meaning in Section 3.6(a).
“Company Fundamental Representations” shall have the meaning set forth in Section 10.1.
“Company Interim Financial Statements” shall have the meaning set forth in Section 3.6(a).
“Company IP” shall have the meaning set forth in Section 3.19(b) .
“Company Leased Real Property” shall mean real property, including any buildings, structures, facilities, fixtures, and improvements thereon, which the Company or any of its Subsidiaries, as of the date of this Agreement, leases, subleases or occupies as tenant, subtenant or occupant pursuant to any Company Lease.
“Company Leases” shall mean leases, subleases or other occupancy agreements (together with any and all amendments and modifications thereto and any guarantees thereof) binding on the Company or any of its Subsidiaries.
“Company Marks” shall have the meaning set forth in Section 3.19(b).
“Company Material Adverse Effect” shall mean any change, event, fact, effect or occurrence that has, or would reasonably be expected to have, a material adverse effect on the financial condition, business, assets or results of operations of the Company and its Subsidiaries, taken as a whole; provided, however, that in determining whether there has been a Company Material Adverse Effect, any change, event, fact, effect or occurrence attributable to, arising out of, or resulting from any of the following shall be disregarded: (a) general political, economic, business, industry, credit, financial or capital market conditions in the United States or internationally, including conditions affecting generally the principal industries in which the Company and its Subsidiaries operate, (b) pandemics, earthquakes, tornados, hurricanes, floods and acts of God, (c) acts of war (whether declared or not declared), sabotage, terrorism, military actions or the escalation thereof, (d) any change in applicable Laws or GAAP (or authoritative interpretation or enforcement thereof) which is proposed, approved or enacted on or after the date hereof, (e) any failure, in and of itself, to meet estimates or projections of financial performance (but excluding any underlying change, event, fact, effect or occurrence giving rise, in whole or in part, to such failure), and (f) the announcement, in and of itself, of this Agreement and the transactions contemplated hereby; provided, further, that the changes, events, facts, effects or occurrences described in clauses (a)‑(d) may be taken into account in determining whether there has been, could or would be a Company Material Adverse Effect to the extent such changes, events, facts, effects or occurrences negatively and disproportionately adversely affect the Company and its Subsidiaries, taken as whole, in relation to other Persons in the principal industries of the Company and its Subsidiaries.
“Company Parties” shall have the meaning set forth in Section 10.20(a).
“Company Party Counsel” shall have the meaning set forth in Section 10.20(a).
“Company Patents” shall have the meaning set forth in Section 3.19(b) .
“Company-Related Fraud” shall mean fraud by the Company or by any of the Company’s Subsidiaries (or by any agent, employee, officer or director of the Company or any of its Subsidiaries at the time of such fraud) with respect to omissions or misstatements, representations and warranties, misrepresentations or conduct.
“Company Stock Awards” shall have the meaning set forth in Section 3.2(c).
“Company Stockholder Approval” shall have the meaning set forth in Section 3.4(a).
“Competing Transaction” shall have the meaning set forth in Section 5.4.
“Confidentiality Agreements” shall mean the 2013 Confidentiality Agreement and the Nondisclosure Agreement.
“Contamination” shall mean the presence of Hazardous Substances in, on or under the soil, groundwater, surface water, air or other environmental media to an extent that any Response Action is legally required by any Governmental Authority under any Environmental Law with respect to such presence of Hazardous Substances.
“Contract” shall have the meaning set forth in Section 3.5(a).
“Copyrights” shall have the meaning set forth in Section 3.19(a).
“Covered Persons” shall have the meaning set forth in Section 5.8(a).
“Debt Commitment Letter” shall have the meaning set forth in Section 4.5.
“DGCL” shall mean the General Corporation Law of the State of Delaware, as amended from time to time.
“Dispute Notice” shall have the meaning set forth in Section 2.10(b).
“Dissenting Shares” shall have the meaning set forth in Section 2.8.
“Effective Time” shall have the meaning set forth in Section 2.3.
“Environmental Law” shall mean any applicable Laws or common law doctrine pertaining to the protection of the environment, or to the extent relating to exposure to Hazardous Substances, the protection of public health.
“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any applicable Environmental Law.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” shall mean, with respect to the Company or any Subsidiary thereof, any trade or business, whether or not incorporated, which, together with such Person, is treated as a single employer under Section 414 of the Code.
“ERISA Affiliate Plan” shall have the meaning set forth in Section 3.12(c).
“Escrow Accounts” shall mean the Indemnification Escrow Account, the Expense Fund and the Adjustment Reserve Account.
“Escrow Agent” shall mean U.S. Bank National Association.
“Escrow Agreement” shall have the meaning set forth in the Recitals.
“Escrow Amount” shall mean an amount in cash equal to $10,000,000.
“Escrowed Amounts” shall mean the sum of (a) the Escrow Amount, plus (b) the Adjustment Reserve. All parties hereto agree for all Tax purposes that: (i) Parent shall be treated as the owner of the Escrow Amount and the Adjustment Reserve, and all interest and earnings earned from the investment and reinvestment of the Escrow Amount and the Adjustment Reserve, or any portion thereof, shall be allocable to Parent pursuant to Section 468B(g) of the Code and Proposed Treasury Regulation Section 1.468B-8, (ii) if and to the extent any portion of the Escrow Amount and the Adjustment Reserve is actually distributed to the Holders, interest may be imputed on such amount, as required by Section 483 or 1274 of the Code, (iii) the Holders’ right to the Escrow Amount and the Adjustment Reserve under this Agreement shall be treated as installment obligations for purposes of Section 453 of the Code, and (iv) in no event shall the aggregate payments to the Holders under the Escrow Amount and the Adjustment Reserve exceed $11,000,000. Clause (iv) of the immediately preceding sentence is intended to ensure that the right of the Holders to the Escrowed Amounts and any interest and earnings earned thereon is not treated as a contingent payment without a stated maximum selling price under Section 453 of the Code and the Treasury Regulations promulgated thereunder. No party hereto shall take any action or filing position inconsistent with the foregoing.
“Estimated Price Deduction” shall mean the result (which may be a negative number) of (a) the Cash on Hand of the Company, minus (b) unpaid Transaction Costs minus (c) the Indebtedness of the Company and its Subsidiaries, in each case, as specified in the Company’s statement pursuant to Section 2.10(a).
“Estimated Purchase Price” shall mean the Purchase Price, plus the Estimated Price Deduction (for clarification purposes only, if the Estimated Price Deduction is a negative number, then by adding a negative number, the Estimated Purchase Price is reduced), minus the Administrative Expense Amount, plus the Option Proceeds.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Agent” shall have the meaning set forth in Section 2.9(a).
“Exchange Fund” shall have the meaning set forth in Section 2.9(a).
“Expense Fund” shall have the meaning set forth in Section 10.12(j).
“FCPA” shall mean the U.S. Foreign Corrupt Practices Act of 1977, as amended.
“FDA” shall mean the United States Food and Drug Administration.
“FDA Laws” shall have the meaning set forth in Section 3.11(b).
“Final Adjustment” shall have the meaning set forth in Section 2.10(b).
“Final Price Deduction” shall mean the result (which may be a negative number) of (a) the Cash on Hand of the Company, minus (b) unpaid Transaction Costs minus (c) the Indebtedness of the Company and its Subsidiaries, in each case, as finally determined pursuant to the True Up Calculations pursuant to Section 2.10(b).
“Final Working Capital” shall have the meaning set forth in Section 2.10(b).
“Financing” shall have the meaning set forth in Section 5.11.
“Financing Agreements” shall have the meaning set forth in Section 5.10.
“Financing Group” shall have the meaning set forth in Section 10.11(b).
“Financing Sources” means the parties to the Debt Commitment Letter (other than Parent or any of its Affiliates), together with the parties to joinder agreements related to alternative financing from alternative parties that is obtained in accordance with this Agreement.
“Foreign Device Laws” shall have the meaning set forth in Section 3.11(b).
“Fully Diluted Outstanding Stock” shall mean, as of any date, the total number of shares of Common Stock outstanding as of such date, determined on a fully diluted, as‑if exercised basis and assuming the (a) conversion of all shares of Preferred Stock issued and outstanding as of such date into shares of Common Stock pursuant to the exercise of “Conversion Rights” by the holders thereof, as defined in Section C.4 of Article Fourth of the Certificate of Incorporation, and (b) exercise and settlement of all Options and Warrants issued and outstanding as of such date (assuming that all shares of Common Stock underlying Options and Warrants are delivered to the applicable holders and that no shares of Common Stock are withheld in payment of any applicable exercise price or tax obligations), whether or not exercised, exercisable, settled, eligible for settlement or vested; provided, however, that (i) any Canceled Shares, (ii) any shares underlying an Underwater Option and (iii) any shares of Company Capital Stock reserved for issuance under the Company’s equity incentive plans but not subject to any outstanding option or other equity award, shall be disregarded for purposes of this definition.
“GAAP” shall mean U.S. generally accepted accounting principles, consistently applied.
“Governmental Authority” shall mean any (a) nation, region, state, commonwealth, province, territory, county, municipality, village, district or other jurisdiction of any nature, (b) agency, instrumentality, or political subdivision of a government, (c) governmental authority of any nature (including any supranational, governmental agency, branch, department, division, commission, organization, unit, or body, and any court or other tribunal), (d) governmental body exercising or entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, banking, or taxing authority or power of any nature, (e) federal, state, local or foreign government or political subdivision thereof, (f) any self-regulated organization or other non-governmental regulatory authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority have the force of Law), or (g) any instrumentality or entity designed to act for or on behalf of any of the foregoing.
“Hazardous Substance” shall mean any substance, material or waste that is or contains asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum or any petroleum‑based products or constituents, radon gas, microbiological contamination or related materials or any other substance, material, pollutant, contaminant or waste, that is defined, classified, listed or regulated under, or requires a Response Action pursuant to, any Environmental Law.
“Holder” shall mean a Person who is or was (a) a Stockholder, (b) a participant in the Transaction Bonus Pool, or (c) a holder of Options (other than Underwater Options), in each case as of immediately prior to the Effective Time (other than a holder of solely shares of Company Capital Stock which constitute and remain Dissenting Shares).
“HSR Act” shall mean the Xxxx‑Xxxxx‑Xxxxxx Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder.
“Indebtedness” shall mean, with respect to any Person, without duplication, as of the date of determination (a) all obligations of such Person for borrowed money, including accrued and unpaid interest, and any prepayment fees or penalties, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person issued or assumed as the deferred purchase price of property (including any potential future earn‑out, purchase price adjustment, release of “holdback” or similar payment, but excluding obligations of such Person incurred in the ordinary course of business consistent with past practice), (d) all lease obligations of such Person required in accordance with GAAP to be capitalized on the books and records of such Person, (e) all Indebtedness of others secured by a Lien on property or assets owned or acquired by such Person, whether or not the Indebtedness secured thereby have been assumed, (f) all obligations of such Person under interest rate, currency or commodity derivatives or hedging transactions or similar arrangement, (g) the face value of all undrawn letters of credit or performance bonds issued for the account of such Person, and (h) all guarantees and keepwell arrangements of such Person of any Indebtedness of any other Person of the types described in clauses (a) through (g).
“Indemnification Escrow Account” shall mean the account into which the Escrow Amount is deposited by Parent at Closing and which shall be held and administered by the Escrow Agent pursuant to the Escrow Agreement.
“Indemnified Party” shall have the meaning set forth in Section 9.3.
“Indemnifying Party” shall have the meaning set forth in Section 9.3.
“Independent Accountant” shall have the meaning set forth in Section 2.10(b).
“Information Statements” shall have the meaning set forth in Section 3.8.
“Intellectual Property” shall have the meaning set forth in Section 3.19(a).
“Interim Period” shall have the meaning set forth in Section 5.1.
“IRS” shall mean the United States Internal Revenue Service.
“Joinder Agreement” shall mean a joinder agreement in the form attached hereto as Exhibit C-1 (with respect to the Significant Stockholders, participants in the Transaction Bonus Plan, Accredited Investors and any other Holder that enters into the Joinder Agreement prior to the Closing) or Exhibit C-2 (with respect to any Holder that enters into the Joinder Agreement following the Closing), whereby a Holder signing such joinder agreement, among other things, as a condition to a Holder of Company Capital Stock’s right to receive the applicable portion of the Merger consideration as described in Section 2.9 and, if applicable, to such Holder’s right to receive the applicable portion of the Transaction Bonus Pool Amount, agrees to (a) the joinder of such Holder as a party to this Agreement as a “Holder” hereunder, (b) the confirmation of the reduction of the Escrowed Amounts from the Merger consideration payable to such Holder pursuant to the establishment of the Escrow Accounts and subject to the terms of the Escrow Agreement, (c) the requirement that such Holder, with respect to Company Capital Stock held by such Holder, must deliver a Letter of Transmittal as a condition to receiving payment of Merger consideration, (d) the release of claims pursuant to Section 5.15, (e) the imposition of indemnification obligations with respect to the Escrowed Amounts and potentially in excess of the Escrowed Amounts, and (f) the appointment of the Stockholders’ Representative pursuant to the terms of Section 10.12.
“Knowledge of Parent” shall mean the actual knowledge of the individuals set forth on Section 1.1(a) of the Parent Disclosure Letter, after reasonable inquiry of the individuals employed by the Parent and its Subsidiaries charged with administrative or operational responsibility for such matters for the Parent and its Subsidiaries.
“Knowledge of the Company” shall mean the actual knowledge of the individuals set forth on Section 1.1(a) of the Company Disclosure Letter, after reasonable inquiry of the individuals employed by the Company and its Subsidiaries charged with administrative or operational responsibility for such matters for the Company and its Subsidiaries.
“Latest Company Balance Sheet” shall mean the unaudited consolidated balance sheet of the Company and its Subsidiaries, dated as of September 30, 2015, a true, correct and complete copy of which has been provided to Parent prior to the date hereof.
“Laws” shall have the meaning set forth in Section 3.5(a).
“Letter of Transmittal” shall mean a letter of transmittal in the form attached hereto as Exhibit D, whereby the Stockholder signing such letter of transmittal, among other things, as a condition to a Holder of Company Capital Stock’s right to receive the applicable portion of the Merger consideration as described in Section 2.9, surrenders such Stockholder’s shares of Company Capital Stock for delivery pursuant hereto in exchange for the right to receive such Stockholder’s portion of the Per Share Common Stock Merger Consideration or Per Share Preferred Stock Merger Consideration, as applicable.
“Liens” shall mean liens, encumbrances, mortgages, charges, claims, restrictions, options, rights of first refusal, limitations on voting, sale, transfer or other disposition or exercise of any other attribute of ownership, pledges, security interests, title defects, easements, rights‑of‑way, covenants, encroachments or other similar adverse claims of any kind with respect to a property, asset or right (contractual or otherwise).
“Litigation” shall mean any charge, complaint, claim, action, suit, arbitration, prosecution, proceeding, hearing, inquiry or investigation of any nature pending or threatened (civil, criminal, regulatory or otherwise) under any Laws or in equity.
“Losses” shall have the meaning set forth in Section 9.1.
“Lost Certificate Affidavit” shall have the meaning set forth in Section 2.9(b)(iv).
“Marks” shall have the meaning set forth in Section 3.19(a).
“Material Contracts” shall have the meaning set forth in Section 3.16(a).
“Merger” shall have the meaning set forth in the Recitals.
“Merger Consideration Table” means, a table in substantially the form attached hereto as Exhibit E, that includes (a) the Aggregate Accredited Cash Merger Consideration, the Aggregate Cash Merger Consideration, the Aggregate Participating Amount, the Aggregate Common Stock Merger Consideration, the Aggregate Non‑Accredited Merger Consideration, the Aggregate Option Merger Consideration, the Aggregate Preferred Stock Liquidation Preference Amount, the Per Share Accredited Preferred Stock Merger Consideration, the Per Share Common Stock Merger Consideration, the Per Share Preferred Stock Merger Amount, the Per Share Preferred Stock Merger Consideration (both for Stockholders that are Accredited Investors and Stockholders that are not Accredited Investors) and the Per Share Preferred Stock Liquidation Preference Amount, (b) the names of each Holder and their respective addresses, as included in the books and records of the Company, and where available, taxpayer identification numbers and email addresses, (c) the number and kind of shares of Company Capital Stock held by, or subject to the Company Options held by, such Persons, (d) the amount each Holder is to be paid from the Transaction Bonus Pool, (e) each Holder’s Pro Rata Share (calculated in aggregate and with respect to Company Capital Stock and with respect to Company Options and the Transaction Bonus Pool), and (f) each Holder’s share,
expressed as a dollar amount, of each of the Escrow Amount, the Adjustment Reserve and the Administrative Expense Amount.
“Merger Sub” shall have the meaning set forth in the Preamble.
“Nondisclosure Agreement” shall mean the Nondisclosure Agreement between the Company and the Parent dated September 14, 2015.
“Notice of Claim” shall have the meaning set forth in Section 9.3(a).
“NYSE” shall mean the New York Stock Exchange.
“OFAC” shall have the meaning set forth in Section 3.11(f).
“Option Cancellation Agreement” shall mean an option cancellation agreement in the form attached hereto as Exhibit F, whereby a holder of one or more Options signing such agreement, among other things, as a condition to a Holder of an Option’s right to receive the applicable portion of the Merger consideration as described in Section 2.9, agrees (a) to consent to the cancellation of such holder’s Option(s) in exchange for the right to receive the applicable Per Option Merger Consideration, subject to and reduced by the Escrowed Amounts being withheld and paid or applied at a later time in accordance with the terms of this Agreement and the Escrow Agreement and, if applicable, reduced by the indemnification obligations in Article IX, (b) the joinder of such Holder as a party to this Agreement as a “Holder” hereunder, (c) the confirmation of the reduction of the Escrowed Amounts from the Merger consideration payable to such Holder pursuant to the establishment of the Escrow Accounts and subject to the terms of the Escrow Agreement, (d) the release of claims pursuant to Section 5.15, (e) the imposition of indemnification obligations with respect to the Escrowed Amounts and potentially in excess of the Escrowed Amounts, and (f) the appointment of the Stockholders’ Representative pursuant to the terms of Section 10.12.
“Option Proceeds” shall mean the aggregate exercise price that would be payable to the Company upon exercise of all Options that are outstanding immediately prior to the Effective Time (assuming that an amount in cash equal to the full exercise price of each Option were delivered to the Company, regardless of whether the Option requires payment of an exercise price), which amount shall be set forth in the Merger Consideration Table; provided, however, that any Underwater Option shall be disregarded for purposes of this definition.
“Options” shall mean the outstanding options to purchase shares of Common Stock granted under a Benefit Plan.
“Order” shall mean any award, judgment, injunction, determination, consent, ruling, decree or order (whether temporary, preliminary or permanent) issued, adopted, granted, awarded or entered by any Governmental Authority or private arbitrator of competent jurisdiction.
“Organizational Documents” shall mean the articles of incorporation, certificate of incorporation, charter, bylaws, articles of formation, certificate of formation, regulations, operating
agreement, certificate of limited partnership, partnership agreement and all other similar documents, instruments or certificates executed, adopted or filed in connection with the creation, formation or organization of a Person, including any amendments, restatements and supplements thereto.
“Owned Real Property” shall mean all real property owned in fee simple by the Company or any of its Subsidiaries as of the date of this Agreement.
“Parent” shall have the meaning set forth in the Preamble.
“Parent 401(k) Plan” shall have the meaning set forth in Section 5.12(e).
“Parent Common Stock” shall mean the common stock of Parent.
“Parent Disclosure Letter” shall have the meaning set forth in the introductory language to Article IV.
“Parent Indemnitees” shall have the meaning set forth in Section 9.1.
“Parent Leased Real Property” shall mean real property, including any buildings, structures, facilities, fixtures, and improvements thereon, which the Parent or any of its Subsidiaries, as of the date of this Agreement, leases, subleases or occupies as tenant, subtenant or occupant pursuant to any Parent Lease.
“Parent Leases” shall mean leases, subleases or other occupancy agreements (together with any and all amendments and modifications thereto and any guarantees thereof) binding on the Parent or any of its Subsidiaries.
“Parent Material Adverse Effect” shall mean any change, event, fact, effect or occurrence that has, or would reasonably be expected to have, a material adverse effect on the financial condition, business, assets or results of operations of Parent and its Subsidiaries, taken as a whole; provided, however, that in determining whether there has been a Parent Material Adverse Effect, any change, event, fact, effect or occurrence attributable to, arising out of, or resulting from any of the following shall be disregarded: (a) general political, economic, business, industry, credit, financial or capital market conditions in the United States or internationally, including conditions affecting generally the principal industries in which Parent and its Subsidiaries operate, (b) pandemics, earthquakes, tornados, hurricanes, floods and acts of God, (c) acts of war (whether declared or not declared), sabotage, terrorism, military actions or the escalation thereof, (d) any change in applicable Laws or GAAP (or authoritative interpretation or enforcement thereof) which is proposed, approved or enacted on or after the date hereof, (e) any failure, in and of itself, to meet estimates or projections of financial performance (but excluding any underlying change, event, fact, effect or occurrence giving rise, in whole or in part, to such failure), and (f) the announcement, in and of itself, of this Agreement and the transactions contemplated hereby; provided, further, that the changes, events, facts, effects or occurrences described in clauses (a)‑(d) may be taken into account in determining whether there has been, could or would be a Parent Material Adverse Effect to the extent such changes, events, facts, effects or occurrences negatively and disproportionately adversely affect
Parent and its Subsidiaries, taken as whole, in relation to other Persons in the principal industries of Parent and its Subsidiaries.
“Parent Permits” shall have the meaning set forth in Section 4.9.
“Parent SEC Documents” shall have the meaning set forth in Section 4.7(a).
“Parent-Related Fraud” shall mean fraud by Parent or by any of Parent’s Subsidiaries (or by any agent, employee, officer or director of Parent or any of its Subsidiaries at the time of such fraud) with respect to omissions or misstatements, representations and warranties, misrepresentations or conduct; provided, however, that in no event shall the Company or Surviving Company be considered a Subsidiary of Parent for purposes of this definition.
“Patents” shall have the meaning set forth in Section 3.19(a).
“PBGC” shall have the meaning set forth in Section 3.12(c).
“Per Option Merger Consideration” shall mean with respect to each Option that is not an Underwater Option, an amount in cash equal to the Per Share Common Stock Merger Consideration, minus the per share exercise price of such Option. For the avoidance of doubt, the Per Option Merger Consideration for any Underwater Option shall be zero.
“Per Share Accredited Preferred Stock Merger Consideration” shall mean (a) an amount in cash equal to the quotient of (i) the Aggregate Accredited Cash Merger Consideration, divided by (ii) the Accredited Investor Shares, and (b) a number of shares of Parent Common Stock equal to the quotient of (i) the Aggregate Accredited Equity Merger Consideration divided by (ii) the Accredited Investor Shares. Such amounts shall be set forth in the Merger Consideration Table.
“Per Share Common Stock Merger Consideration” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, in cash equal to the quotient of (a) the Aggregate Participating Amount, divided by (b) the Fully Diluted Outstanding Stock immediately prior to the Effective Time.
“Per Share Preferred Stock Liquidation Preference Amount” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, equal to the sum of (i) $2.50 (as adjusted for stock dividends, stock splits, recapitalizations, and the like) and (ii) an amount equal to the product of (A) 0.06 and (B) the quotient of (i) the number of days that such share of Preferred Stock has been outstanding and (ii) 365, for such share of Preferred Stock, which amount is set forth in the Merger Consideration Table.
“Per Share Preferred Stock Merger Amount” shall mean an amount, which amount shall be set forth in the Merger Consideration Table, equal to the sum of (a) the Per Share Preferred Stock Liquidation Preference Amount, plus (b) the product of the Per Share Common Stock Merger Consideration, multiplied by 1.140977.
“Per Share Preferred Stock Merger Consideration” shall mean, with respect to each share of Preferred Stock issued and outstanding immediately prior to the Effective Time that is:
(a)(i) held by a Stockholder that is not an Accredited Investor, or (ii) otherwise Beneficially Owned by any Person that is not an Accredited Investor, an amount of cash equal to the Per Share Preferred Stock Merger Amount, provided that the same share of Preferred Stock shall not be double counted to the extent such share is covered by both clauses (i) and (ii); or
(b)(i) held by a Stockholder that is an Accredited Investor, or (ii) otherwise Beneficially Owned by any Person that is an Accredited Investor, the Per Share Accredited Preferred Stock Merger Consideration, provided that the same share shall not be double counted to the extent such share is covered by both clauses (i) and (ii).
“Permits” shall have the meaning set forth in Section 3.11(a).
“Permitted Liens” shall mean (a) Liens for Taxes, assessments and governmental charges or levies not yet delinquent or that are being contested in good faith through appropriate proceedings and for which adequate reserves are reflected on the Latest Company Balance Sheet (or in the case of Parent, the latest balance sheet included in the Parent SEC Documents), in accordance with GAAP, (b) materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens, any statutory Liens arising in the ordinary course of business by operation of applicable Laws with respect to a liability that is not yet delinquent or being contested in good faith through appropriate proceedings and for which adequate reserves are reflected on the Latest Company Balance Sheet (or in the case of Parent, the latest balance sheet included in the Parent SEC Documents), in accordance with GAAP, (c) pledges or deposits to secure obligations under workers’ compensation laws, unemployment insurance, social security, retirement or similar legislation or to secure public or statutory obligations, (d) deposits to secure the performance of Company Leases, Parent Leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business consistent with past practice, (e) all covenants, conditions, restrictions, easements, title defects and other similar matters of record affecting title to the Company Leased Real Property or the Parent Leased Property, as applicable, and which would be disclosed by an accurate survey of the Company Leased Real Property or the Parent Leased Property, as applicable, which do not and would not reasonably be expected to, individually or in the aggregate, interfere in any material respects with the present use of such Company Leased Real Property by the Company and its Subsidiaries (or the present use of the such Parent Leased Real Property by the Parent and its Subsidiaries) or the continued use thereof by the Surviving Company and its Subsidiaries, or by the Parent and its Subsidiaries, as applicable, in either case in the ordinary course of business consistent with past practice, (f) all applicable zoning, entitlement, conservation restrictions, building and similar codes and regulations and other land use regulations, none of which interferes adversely and in any material respect with the present use of, such Company Leased Real Property or such Parent Leased Real Property, as applicable, and (g) Liens on goods in transit incurred pursuant to documentary letters of credit.
“Person” shall mean an individual, corporation, partnership, joint venture, trust, association, estate, joint stock company, limited liability company, Governmental Authority or any other organization or entity of any kind.
“PMAs” shall have the meaning set forth in Section 3.11(c).
“Post-Closing Tax Period” means any taxable period beginning immediately after the Closing Date, and, with respect to any taxable period beginning before and ending after the Closing, means the portion of such taxable period commencing immediately after the Closing Date.
“Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion through the end of the Closing Date for any Straddle Period.
“Preferred Stock” shall have the meaning set forth in Section 3.2(a).
“Preferred Stockholder” shall mean a holder of Preferred Stock.
“Pro Rata Share” shall mean, (1) with respect to any payments or calculations made to, from or with respect to the Administrative Expense Fund, the Indemnification Escrow Account and the Adjustment Reserve (including any positive purchase price adjustments pursuant to Section 2.10), a fraction, expressed as a percentage equal to (a) the sum of (i) a value equal to (x) the total number of shares of Common Stock held by such Holder as of immediately prior to the Effective Time (on an as-converted basis, assuming all shares of Preferred Stock held thereby as of immediately prior to the Effective Time were converted at such time into shares of Common Stock pursuant to the exercise of “Conversion Rights”, as defined in Section C.4 of Article Fourth of the Certificate of Incorporation) multiplied by (y) the Per Share Common Stock Merger Consideration, plus (ii) a value equal to (x) the total number of shares of Common Stock subject to the exercise of Options that are held by such Holder as of immediately prior to the Effective Time multiplied by (y) the Per Share Common Stock Merger Consideration; provided, however, that any Underwater Option shall be disregarded for purposes of this definition, plus (iii) a value equal to the total amount payable to such Holder from the Transaction Bonus Pool Amount, divided by (b) the sum of (i), (ii) and (iii) of clause 1(a) of this definition for all Holders, and (2) (a) if necessary to fully fund the Expense Fund, the Adjustment Reserve and the Indemnification Escrow Account (to the extent of the shortfall in the applicable amount after using the methodology in clause 1(a) of this definition), and (b) with respect to any calculations of amounts payable to or by a Holder which are not limited to the Expense Fund, the Adjustment Reserve (including any positive purchase price adjustments pursuant to Section 2.10) or the Indemnification Escrow Account, the fraction expressed as a percentage, equal to the portion of the Total Proceeds payable to such Holder relative to the Total Proceeds payable to all Holders, in each case assuming all of the Total Proceeds are paid to the Holders, which percentage shall be set forth in the Merger Consideration Table next to such Holder’s name for such Holder’s share of the Expense Fund, the Adjustment Reserve, the Indemnification Escrow Account and for the purposes of clauses 2(a) and 2(b) of this definition.
“PTO” shall have the meaning set forth in Section 5.12(d).
“Purchase Price” shall mean an amount equal to $130,000,000.
“Quarterly Financials” shall have the meaning set forth in Section 5.11.
“Reference Price” shall mean $10.53.
“Registration Rights Agreement” shall have the meaning set forth in Section 2.2(b)(v).
“Registration Statement” shall have the meaning set forth in Section 2.2(b)(v).
“Related Party” shall have the meaning set forth in Section 3.23.
“Release” shall mean any releasing, disposing, discharging, injecting, spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying or seeping into or upon, any land, soil, surface water, groundwater or air, or otherwise entering into the outdoor environment.
“Released Holder Claims” shall have the meaning set forth in Section 5.15.
“Representative Expenses” shall have the meaning set forth in Section 10.12(i).
“Representative Group” shall have the meaning set forth in Section 10.12(i).
“Representatives” shall have the meaning specified in Section 5.11.
“Response Action” shall mean any action taken by any Person to investigate, xxxxx, monitor, remediate, remove, mitigate or otherwise address any violation of Environmental Law by the Company or any of its Subsidiaries, any Contamination of Company Leased Real Property or any actual or threatened Release of Hazardous Substances, including any such action that would be a “response” as defined by the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 (25).
“Restricted Cash” means cash underlying uncleared checks, drafts and wire transfers, in each case by the Company or any of its Subsidiaries.
“Restricted Shares” means all shares of Parent Common Stock issuable hereunder, other than shares of Parent Common Stock (a) the offer and sale of which have been registered under a registration statement pursuant to the Securities Act and sold thereunder, (b) with respect to which a sale or other disposition has been made in reliance on and in accordance with Rule 144 (or any successor provision) under the Securities Act, or (c) with respect to which the holder thereof shall have delivered to Parent either (i) an opinion of counsel in form and substance reasonably satisfactory to Parent, or (ii) a “no action” letter from the SEC, in either case to the effect that subsequent transfers of such shares of Parent Common Stock may be effected without registration under the Securities Act.
“Rule 501” means Rule 501 under Regulation D of the Securities Act.
“Runoff D&O Insurance” shall have the meaning set forth in Section 5.8(b).
“SEC” shall mean the U.S. Securities and Exchange Commission.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.
“Significant Option Holders” shall mean the individuals set forth on Section 1.1(b) of the Company Disclosure Letter.
“Significant Stockholders” shall mean Xxxx Royalty Fund, L.P., PTV Sciences II, L.P., and the Persons set forth on Section 1.1(b) of the Company Disclosure Letter.
“Single Holder Claim” shall have the meaning set forth in Section 9.4(f).
“Standstill Agreements” shall have the meaning set forth in Section 2.2(b)(iv).
“Stockholder Indemnitees” shall have the meaning set forth in Section 9.2.
“Stockholders” shall mean, collectively, the Common Stockholders and Preferred Stockholders.
“Stockholders’ Representative” shall have the meaning set forth in the Preamble.
“Straddle Period” shall have the meaning set forth in Section 5.14(b).
“Subsidiary” shall mean any corporation, partnership, limited liability company or other Person of which another Person, either alone or together with one or more Subsidiaries (a) directly or indirectly owns or purports to own, beneficially or of record securities or other interests representing more than 50% of the outstanding equity, voting power, or financial interests of such Person or (b) is entitled, by Contract or otherwise, to elect, appoint or designate directors constituting a majority of the members of such Person’s board of directors or other governing body.
“Surviving Company” shall have the meaning set forth in the Recitals.
“Takeover Law” shall mean any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti‑takeover Laws of any jurisdiction or other applicable Laws that purport to limit or restrict business combinations or the ability to limit or restrict business combinations or the ability to acquire or to vote shares.
“Target Working Capital” means an amount equal to $13,100,000.
“Tax” shall mean all U.S. federal, state, local or foreign taxes, imposts, levies or other assessments, including any net income, capital gains, gross income, gross receipts, sales, use, transfer, ad valorem, franchise, profits, license, capital, withholding, payroll, estimated, employment, excise, goods and services, severance, stamp, occupation, premium, property, social security,
environmental (including Section 59A of the Code), alternative or add‑on, value added, registration, occupancy, capital stock, unincorporated business, unemployment, disability, workers compensation, accumulated earnings, personal holding company, annual reports, windfall profits or other taxes, duties, charges, fees, levies or other assessments of any nature whatsoever imposed by any Governmental Authority, together with all interest, penalties or additions to tax imposed with respect thereto.
“Tax Proceeding” shall mean any audit, examination, investigation, claim, contest, dispute, litigation or other proceeding with respect to Taxes or by or against any Taxing Authority.
“Tax Returns” shall mean any report, return (including any information return), declaration, claim for refund or other document filed or required to be filed with any Taxing Authority or jurisdiction with respect to Taxes, including any attachment thereto and any amendment thereof.
“Taxing Authority” shall mean any Governmental Authority having or purporting to exercise jurisdiction with respect to any Tax.
“Termination Date” shall have the meaning set forth in Section 8.1(b).
“Threshold Amount” shall have the meaning set forth in Section 9.4(a)(iv).
“Third Party Claim” shall have the meaning set forth in Section 9.3(b)(i).
“Total Proceeds” shall mean the sum of amounts payable by Parent pursuant to this Agreement with respect to Company Capital Stock and Options plus the Transaction Bonus Pool Amount.
“Trade Secrets” shall have the meaning set forth in Section 3.19(a).
“Transaction Bonus Pool” shall mean the Benefit Plan identified on Section 1.1(c) of the Company Disclosure Letter.
“Transaction Bonus Pool Amount” shall mean an amount equal to the aggregate amount payable by or on behalf of the Company in connection with the Merger under the Transaction Bonus Pool.
“Transaction Costs” shall mean all attorneys’, financial advisors’, accountants’, consultants’ or brokers’ charges, fees or expenses accrued or incurred, prior to or upon the Effective Time, by the Company or the Company’s (a) Affiliates, (b) Subsidiaries or (c) equityholders and for which the Company or any of its Subsidiaries is obligated to pay, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other agreements, certificates and other documents contemplated hereby and the consummation of the transactions contemplated hereby and thereby, including the Merger. Transaction Costs shall also include (x) the items set forth on Section 1.1(d) of the Company Disclosure Letter, (y) the Transaction Bonus Pool Amount and (z) any unpaid employee bonuses (which for the avoidance of doubt shall exclude unpaid
ordinary course sales commissions and related sales bonus payments pursuant to pre-existing sales compensation arrangements provided that such amounts are included as current liabilities in the definition of Working Capital). Notwithstanding anything to the contrary in this definition of Transaction Costs, Transaction Costs shall not include the third party professional fees of KPMG, LLP and Xxxxxxx, Xxxxxxxxxx & Co. to the extent they arise from services rendered pursuant to the obligations pursuant to Section 5.5(c) and Section 5.5(d) (including up to $75,000 for costs incurred prior to the date hereof) to review and make any necessary revisions to the Company Financial Statements (and to any financial statements delivered pursuant to Section 5.5(c) and Section5.5(d)) that are necessary to ensure that such financial statements meet the requirements of Regulation S-X under the Exchange Act.
“Transfer Taxes” shall have the meaning set forth in Section 5.14(e).
“True Up Calculations” shall have the meaning set forth in Section 2.10(b).
“True Up Date” shall have the meaning set forth in Section 2.10(b).
“True Up Price Deduction” shall have the meaning set forth in Section 2.10(d).
“Underwater Option” shall mean any Option with an exercise price equal to or in excess of the Per Share Common Stock Merger Consideration.
“Worker Safety Laws” shall have the meaning set forth in Section 3.13(e).
“Working Capital” shall mean when measured (i) all current assets (which shall consist of accounts receivable, inventories, prepaid expenses, and other current assets, but shall exclude (a) deferred Tax assets, (b) Cash on Hand, (c) any Affiliate receivables, (d) prepaid expenses relating to Transaction Costs of the Company and its Subsidiaries), minus (ii) all current liabilities (which shall consist of accounts payable and accrued and other current liabilities, but shall exclude (a) deferred Tax liabilities, (b) deferred revenue, (c) Indebtedness of the Company and its Subsidiaries, and (d) Transaction Costs), in each case with respect to such current assets and current liabilities, as determined in accordance with GAAP and, to the extent consistent with GAAP, the accounting policies and methods of the Company used in the preparation of the Latest Company Balance Sheet.
“Working Capital Adjustment” shall have the meaning set forth in Section 2.10(c).
Merger. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, Merger Sub shall be merged with and into the Company in accordance with the terms of, and subject to the conditions set forth in, this Agreement and the DGCL. Following the
Merger, the Company shall continue as the Surviving Company and the separate corporate existence of Merger Sub shall cease.
Closing.
|
(b) At or prior to the Closing, the Company and, as applicable, the Stockholders’ Representative shall deliver the following to Parent: |
|
(iv) the Lockup Agreements, in form attached hereto as Exhibit G (the “Lockup Agreements”), duly executed by each of Xxxx Royalty Fund, L.P. and PTV Sciences II, L.P.; |
|
(ix) a statement setting forth each of the matters required to be set forth pursuant to Section 2.10(a); |
|
(x) evidence reasonably satisfactory to Parent that the Contracts set forth in Section 2.2(b)(x) of the Company Disclosure Letter, if any, shall have been terminated; |
|
(xii) resignation letters executed and delivered by the directors and corporate officers of the Company and its Subsidiaries set forth on Section 2.2(b)(xii) of the Company Disclosure Letter. |
|
(i) to the Company, a certificate, dated the Closing Date, of a senior executive officer of Parent certifying the matters set forth in Section 7.1, Section 7.2 and Section 7.6; |
|
(ii) to the Company and to the Stockholders’ Representative, the Escrow Agreement, duly executed by Parent and the Escrow Agent; |
|
(viii) to the Escrow Agent, via a wire transfer of immediately available funds, the Escrow Amount and the Adjustment Reserve; and |
|
(ix) to the Stockholders’ Representative, via a wire transfer of immediately available funds, the Administrative Expense Amount. |
. Contemporaneously with the Closing, the parties hereto shall cause a certificate of merger meeting the requirements of Section 251 of the DGCL (the “Certificate of Merger”) to be properly executed and filed with the Secretary of State of the State of Delaware in accordance with the terms and conditions of the DGCL. The Merger shall become effective at 11:59:59 p.m. on the Closing Date, or at such other time which the parties hereto shall have agreed and designated in the Certificate of Merger as the effective time of the Merger (the “Effective Time”).
Effects of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL and the Certificate of Merger. Without limiting the generality of the foregoing and subject thereto, at the Effective Time, except as provided by Section 10.20, all the property, rights, privileges, powers and franchises of the Company and Merger Sub shall vest in the Surviving Company, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities and duties of the Surviving Company.
Certificate of Incorporation and Bylaws. The certificate of incorporation of Merger Sub in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Company in the Merger as of the Effective Time, and the bylaws of Merger Sub in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Company in the Merger as of the Effective Time, until amended in accordance with applicable Laws.
Directors and Officers. Until duly removed or until successors are duly elected or appointed and qualified, the directors of Merger Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Company as of the Effective Time, and the officers of Merger Sub immediately prior to the Effective Time shall be the initial officers of the Surviving Company as of the Effective Time.
Conversion of Shares and Options; Payment of Transaction Bonus Pool Amount. At the Effective Time, by virtue of the Merger and without any action on the part of any party:
|
(i) Subject to receipt by Parent of an executed Joinder Agreement by the respective Holder by the Effective Time, and pursuant to and subject to the requirements and conditions of Section 2.9, each Holder shall receive the applicable portion of the Transaction Bonus Pool Amount, subject to and reduced by the Escrowed Amounts being withheld and paid at the time of distribution of the Indemnification Escrow Account in accordance with the terms of this Agreement and the Escrow Agreement and, if applicable, reduced by the indemnification obligations in Article IX and less applicable withholding, and the Transaction Bonus Pool and all rights therein shall be canceled and shall cease to exist (any amounts paid to participants in the Transaction Bonus Pool from the Escrowed Amounts to be paid in a manner intended to comply with Section 409A of the Code, and such amounts to be reduced by any applicable withholding or other Taxes required by applicable Laws to be withheld or otherwise paid by the Company or the Surviving Company, including any fringe benefit tax, which amounts so withheld shall be paid to the applicable Taxing Authority and shall be treated for all purposes of this Agreement as having been delivered and paid to such Persons in respect of which such deduction and withholding and was made). |
. Notwithstanding any other provision of this Agreement to the contrary, shares of Common Stock and Preferred Stock that are issued and outstanding immediately prior to the Effective Time and which are held by stockholders who shall have (a) not voted in favor of the Merger or consented thereto in writing, and (b) otherwise perfect such Stockholder’s appraisal rights in accordance with and as contemplated by Section 262 of the DGCL (collectively, the “Dissenting Shares”) shall not be converted into or represent the right to receive the Per Share
Common Stock Merger Consideration or the applicable Per Share Preferred Stock Merger Consideration. Such stockholders instead shall only be entitled to such rights are as granted by Section 262 of the DGCL, except that all Dissenting Shares held by stockholders who shall have failed to perfect, withdrawn or otherwise lost, the right to appraisal of such shares under Section 262 of the DGCL shall thereupon be deemed to have been canceled and, subject to and reduced by the Escrowed Amounts, subject to and, if applicable, reduced by the indemnification obligations in Article IX, converted into and to have become exchangeable, as of the Effective Time, for the right to receive, without any interest thereon, the Per Share Common Stock Merger Consideration or the Per Share Preferred Stock Merger Consideration (as applicable) upon surrender in the manner provided in Section 2.9. The Company shall (i) give Parent prompt notice of any notice or demand for appraisal or payment for shares of Common Stock and Preferred Stock or any withdrawals of such demands received by the Company, (ii) give Parent the opportunity to participate in all negotiations and proceedings with respect to any such demands and (iii) not, without the prior written consent of Parent, make any payment with respect to, or settle or offer to settle any such demands.
Payment of Merger Consideration.
the Escrowed Amounts being withheld and paid or applied at a later time in accordance with the terms of this Agreement and the Escrow Agreement), in each case in accordance with the procedures set forth in Sections 2.9(b) and (c) and in the Letter of Transmittal. In addition, at the Effective Time, Parent shall pay cash to the Surviving Company sufficient for payment to (x) subject to receipt by Parent of an executed Option Cancellation Agreement by the respective holder of each Option, each holder of Options (excluding Underwater Options), the Per Option Merger Consideration for each outstanding and unexercised Option (less the Pro Rata Share of the Escrowed Amounts that are attributable to the Options), and (y) subject to receipt by Parent of an executed Joinder Agreement by the respective participant in the Transaction Bonus Pool, each recipient of a portion of the Transaction Bonus Pool Amount, the amount payable thereto as set forth on identified on the Merger Consideration Table (less the Pro Rata Share of the Escrowed Amounts that are attributable to the Transaction Bonus Pool Amount), no later than the Company’s first payroll run following the Effective Time. In addition, on the Closing Date, Parent shall deposit, or cause to be deposited, via a wire transfer of immediately available funds, (A) to the Escrow Agent, the Escrow Amount and the Adjustment Reserve, and (B) to the Stockholders’ Representative, the Administrative Expense Amount. |
requirements and conditions in, and pursuant to the terms of, Section 2.7 and Section 2.9, pay the holder of such shares of Company Capital Stock the Per Share Common Stock Merger Consideration or Per Share Preferred Stock Merger Consideration, as applicable, less a cash amount equal to such Holder’s respective Pro Rata Share of the Escrowed Amounts being withheld and paid or applied at a later time in accordance with the terms of this Agreement and the Escrow Agreement, in consideration therefor, and such shares of Company Capital Stock and any related Certificate shall be marked as canceled. Until so surrendered, each such Certificate (other than Certificates representing Canceled Shares) shall represent solely the right, subject to the satisfaction of the requirements and conditions in, and pursuant to the terms of, Section 2.7 and Section 2.9, to receive the Per Share Common Stock Merger Consideration or Per Share Preferred Stock Merger Consideration, as applicable, relating thereto. |
|
(l) The following provisions shall be applicable to payment of the Per Share Preferred Stock Merger Consideration: |
|
(ii) The certificates representing the shares of Parent Common Stock to be issued and delivered hereunder shall bear the following legend: |
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SUCH ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OR AN EXEMPTION FROM SUCH REGISTRATION UNDER SUCH ACT AND SUCH LAWS. THE ISSUER OF THESE SHARES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH OFFER, SALE OR OTHER TRANSFER OTHERWISE COMPLIES WITH THE SECURITIES ACT AND ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.”
|
(iv) Subject to the terms and conditions of the Registration Rights Agreement, during the time that any such shares of Parent Common Stock are Restricted Shares, a
|
holder of such shares shall not transfer (including through a distribution in kind to any limited partners of such holder or otherwise to any Beneficial Owner) such shares of Parent Common Stock without first delivering to Parent a written opinion of counsel in form and substance reasonably satisfactory to Parent, that such transfer is being effected in a transaction exempt from registration under the Securities Act that otherwise complies with any applicable securities Laws of any state or other jurisdiction and that would not in any way invalidate or interfere with Parent’s state or federal securities offering exemptions utilized in issuing Parent Common Stock in the Merger. Any transferee of a holder of Parent Common Stock acquired hereby shall take such Parent Common Stock subject to the restrictions set forth herein. |
|
(m) Notwithstanding any provision to the contrary in this Agreement, if the Estimated Purchase Price is less than $39,000,000, (i) the Aggregate Cash Merger Consideration shall be equal to zero, (ii) the Estimated Purchase Price shall consist solely of the Aggregate Equity Amount, (iii) the Aggregate Equity Amount will be reduced below $39,000,000 to an amount equal to the Estimated Purchase Price, and (iv) the Escrowed Amounts will be funded with shares of Parent Common Stock otherwise issuable to Accredited Investors pursuant to Section 2.9(c) on a pro rata basis based on the Reference Price and the relative number of shares of Parent Common Stock otherwise issuable to the Accredited Investors. |
.
shall be permitted to review Parent’s working papers and underlying accounting records reasonably related to the preparation, and reasonably related to the Stockholders’ Representative review and confirmation, of the True Up Calculations and Parent’s determination of the Final Adjustment. Parent shall reasonably cooperate and provide prompt and reasonable access during normal business hours to the Company’s books and records and relevant personnel (including third party consultants and accountants), in each case as reasonably requested by the Stockholders’ Representative and its third party consultants and accountants) in connection with the Stockholders’ Representative’s review and dispute, if any, of the True Up Calculations. If the Stockholders’ Representative gives written notice to Parent of an objection to the True Up Calculations within thirty (30) days after receipt of the True Up Calculations (the “Dispute Notice”), Parent and the Stockholders’ Representative shall attempt to resolve their differences. If Parent and the Stockholders’ Representative are able to resolve their differences, the True Up Calculations, as modified to reflect the resolution of the differences between Parent and the Stockholders’ Representative, shall be used for the calculation of the Final Adjustment, as agreed by Parent and the Stockholders’ Representative in writing. If Parent and the Stockholders’ Representative, however, are unable to resolve their differences, Parent and the Stockholders’ Representative shall submit any disputed items to the Dallas, Texas office of PricewaterhouseCoopers LLP (the “Independent Accountant”) for a resolution of the dispute. The determination of the Independent Accountant shall be binding on Parent and the Stockholders’ Representative, and the True Up Calculations, as modified to reflect (i) those differences, if any, that Parent and the Stockholders’ Representative were able to resolve, and (ii) the Independent Accountant’s determination with regard to the remaining disputed items, shall be used for the Final Adjustment. The adjustments in this Section 2.10 shall be made without regard to materiality. The Independent Accountant shall only decide the specific items under dispute pursuant to this Section 2.10 by the parties to this Agreement, and its decision for each disputed amount must be within the range of values assigned to each such item in the True Up Statement and the Dispute Notice, respectively. The Stockholders’ Representative, for and on behalf of the Common Stockholders and the Preferred Stockholders, shall pay a portion of the fees and expenses of the Independent Accountant equal to the quotient of (x) the difference between the Independent Accountant’s determination and the Stockholders’ Representative’s determination, divided by (y) the difference between the Parent’s determination and the Stockholders’ Representative’s determination. Parent shall pay that portion of the fees and expenses of the Independent Accountant that the Stockholders’ Representative is not required to pay hereunder. |
|
(p) If the True Up Calculations (as finally determined pursuant to Section 2.10(b)) indicate that the Final Working Capital is: |
|
(ii) less than or equal to the sum of (A) the Target Working Capital plus (B) the Collar Amount, and is greater than or equal to the result of (x) the Target Working Capital minus (y) the Collar Amount, then the “Working Capital Adjustment” shall be equal to zero; and |
|
(iii) less than (A) the Target Working Capital minus (B) the Collar Amount, then (x) the Final Working Capital minus (y) (1) the Target Working Capital minus (2) the Collar Amount, which shall be a negative number, shall be the “Working Capital Adjustment.” |
|
(q) If the True Up Calculations (as finally determined pursuant to Section 2.10(b)) indicate that the Final Price Deduction: |
|
(i) exceeds the Estimated Price Deduction, then the “True Up Price Deduction” shall be equal to the Final Price Deduction minus the Estimated Price Deduction, which amount shall be a positive number; |
|
(ii) is equal to the Estimated Price Deduction, then the “True Up Price Deduction” shall be equal to zero; and |
|
(iii) is less than the Estimated Price Deduction, then the “True Up Price Deduction” shall be equal to the Final Price Deduction minus the Estimated Price Deduction, which amount shall be a negative number. |
|
(r) The sum of the Working Capital Adjustment and the True Up Price Deduction shall be equal to the Final Adjustment. Once the Final Adjustment has been determined, |
|
(i) if the Final Adjustment is a positive number, then (A) Parent and the Stockholders’ Representative shall promptly (and in any event within five (5) Business Days) direct the Escrow Agent in writing to distribute the Adjustment Reserve in immediately available funds either to the Exchange Agent (in the case of holders of Company Capital Stock) or to Parent’s or the Surviving Company’s, as applicable, payroll administrator (in the case of holders of Company Options and participants in the Transaction Bonus Pool), for further distribution to the Holders in accordance with their Pro Rata Shares and subject to prior compliance with the requirements, conditions and procedures set forth in Section 2.9 and (B) Parent shall promptly deliver an amount in immediately available funds equal to the amount of the Final Adjustment, either to the Exchange Agent (in the case of holders of Company Capital Stock) or to Parent’s or the Surviving Company’s, as applicable, payroll administrator (in the case of holders of Company Options and participants in the Transaction Bonus Pool), for further distribution to the Holders in accordance with their Pro Rata Shares and subject to prior compliance with the requirements, conditions and procedures set forth in Section 2.9; |
|
(ii) if the Final Adjustment is equal to zero, then (A) Parent and the Stockholders’ Representative shall promptly (and in any event within five (5) Business Days) direct the Escrow Agent in writing to distribute the Adjustment Reserve in immediately available funds either to the Exchange Agent (in the case of holders of Company Capital Stock) or to Parent’s or the Surviving Company’s, as applicable, payroll administrator (in the case of holders of Company Options and participants in the Transaction Bonus Pool), for further distribution to the Holders in accordance with their Pro Rata Shares and subject to prior compliance with the requirements, conditions and procedures set forth in Section 2.9; |
. If, during the Interim Period (and as permitted by Section 5.2), the outstanding shares of Company Capital Stock or Parent Common Stock shall have been changed into a different number of shares or a different class of shares by reason of any stock dividend, subdivision, reorganization, reclassification, recapitalization, stock split, reverse stock split, combination or exchange of shares, or any similar event shall have occurred, then the Per Share Common Stock Merger Consideration, the Per Share Preferred Stock Merger Consideration and the Per Option Merger Consideration shall be equitably adjusted, without duplication, to proportionally reflect such change; provided that nothing in this Section 2.11 shall be construed to permit the Company or Parent to take any action with respect to its securities that is prohibited by the terms of this Agreement.
Maximum Obligation. Notwithstanding any provision in this Agreement to the contrary, the maximum aggregate consideration payable by Parent pursuant to this Agreement shall
in no event exceed the Estimated Purchase Price, as adjusted, if applicable, pursuant to Section 2.10, plus cash in lieu of fractional shares pursuant to Section 2.9(b)(viii).
Except as disclosed in the disclosure schedules delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Letter”), the Company represents and warrants to Parent and Merger Sub as follows:
Organization, Standing and Power.
.
of Common Stock were reserved for issuance pursuant to Benefit Plans (of which 1,302,154 shares of Common Stock were subject to Options or other Company Stock Awards (as defined below)). All the outstanding shares of capital stock of the Company are, and all shares reserved for issuance as noted in clause (iii) above will be, when issued in accordance with the terms thereof, duly authorized, validly issued, fully paid and nonassessable and not subject to any preemptive rights. Neither the Company nor any of its Subsidiaries has outstanding any bonds, debentures, notes or other obligations having the right to vote (or convertible into, or exchangeable or exercisable for, securities having the right to vote) with the stockholders of the Company or such Subsidiary on any matter. Except as set forth in this Section 3.2(a) or Sections 3.2(a) or 3.2(c) of the Company Disclosure Letter, there are no outstanding (A) shares of capital stock or other securities or equity interests of the Company or any of its Subsidiaries, (B) securities of the Company or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock of the Company or any of its Subsidiaries or other securities or equity interests of the Company or any of its Subsidiaries, (C) stock appreciation rights, “phantom” stock rights, performance units, interests in or rights to the ownership or earnings of the Company or any of its Subsidiaries or other equity equivalent or equity‑based award or right, (D) subscriptions, options, warrants, calls, commitments, Contracts or other rights to acquire from the Company or any of its Subsidiaries, or obligations of the Company or any of its Subsidiaries to issue, any shares of capital stock of the Company or any of its Subsidiaries, securities, equity interests or securities convertible into or exchangeable or exercisable for capital stock or other securities or equity interests of the Company or any of its Subsidiaries or rights or interests described in clause (C), or (E) obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any such securities or to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, any such securities. |
. Section 3.3 of the Company Disclosure Letter sets forth a true and complete list of each Subsidiary of the Company, including its jurisdiction of incorporation or formation. Except for the capital stock of, or other equity or interests in, its Subsidiaries, and except as set forth in Section 3.3 of the Company Disclosure Letter, the Company does not own, directly or indirectly, any equity, membership interest, partnership interest, joint venture interest, or other equity or interest in, or any interest convertible into, exercisable or exchangeable for any of the foregoing, nor is it under any current or prospective obligation to form or participate in, provide funds to, make any loan, capital contribution, guarantee, credit enhancement or other investment in, or assume any liability or obligation of, any Person.
Authority|
(g) The Company’s board of directors, at a meeting duly called and held and at which a quorum was present, having carefully considered the following, duly adopted resolutions for
|
|
(i) The Company and its Subsidiaries have the authority to consummate the Merger and the other transactions contemplated in this Agreement and are not subject to a right of first offer, right of first refusal, right to match or right of notice to invest in the Company or acquire the assets or securities of the Company. |
.
other legally enforceable requirements (collectively, “Laws”) applicable to the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries or any of their respective properties or assets may be bound; or (ii) adversely affect the use (or result in any loss of any right to use) by the Surviving Company and its Subsidiaries from and after the Effective Time of those properties, assets and rights that have been used or are held for or available for use by the Company and its Subsidiaries in connection with the ownership, operation and management of their respective businesses prior to the Effective Time. |
.
. Except to the extent disclosed in the Company Financial Statements, neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature, whether accrued, absolute, contingent or otherwise, known or unknown, whether due, or to become due that are required to be recorded or reflected on a balance sheet under GAAP, except for (i) the Transaction Costs (including such costs paid prior to the Effective Time), (ii) executory obligations under this Agreement or in connection with the transactions contemplated hereby, (iii) Indebtedness of the Company and each of its Subsidiaries (other than intercompany Indebtedness owing between or among the Company and its Subsidiaries) as of the date of this Agreement, in an amount in excess of $50,000, as set forth on Section 3.7 of the Company Disclosure Letter, and (iv) liabilities and obligations incurred in the ordinary course of business consistent with past practice.
. None of the information supplied or to be supplied by or on behalf of the Company specifically for inclusion in (a) the information statement and consent solicitation statement in connection with the Merger and (b) the information statement provided pursuant to Section 280G of the Code as it relates to payments by the Company (together, the “Information Statements”) contain or, to the extent supplied after the date hereof, will, at the time they are first published, sent or given to the Stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to statements included or incorporated by reference in the Information Statements or any other similar document provided to Holders in connection with the transactions contemplated hereby based on information supplied or to be supplied by or on behalf of Parent or Merger Sub specifically for inclusion in the Information Statements.
Absence of Certain Changes or Events. Except as and to the extent disclosed in the Company Financial Statements and as set forth in Section 3.9 of the Company Disclosure Letter, from the date of the Latest Company Balance Sheet and through the date of this Agreement: (a) the Company and its Subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practice; (b) there has not been any change, event or development or prospective change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect; (c) neither the Company nor any of its Subsidiaries has suffered any loss, damage, destruction or other casualty affecting any of its material properties or material assets, whether or not covered by insurance; and (d) none of the Company or any of its Subsidiaries has taken any action since the date of the Latest Company Balance Sheet that, if taken after the date of this Agreement, would constitute a breach of any of the covenants set forth in Section 5.2.
Litigation. Except as set forth on Section 3.10 of the Company Disclosure Letter, (a) there is no Litigation pending against or affecting the Company or any of its Subsidiaries, any of their respective properties or assets, (b) to the Knowledge of the Company, there is no reasonable basis for any Litigation against or affecting the Company or any of its Subsidiaries, any of their respective properties or assets, and (c) to the Knowledge of the Company, there is no Litigation threatened against or affecting the Company or any of its Subsidiaries, any of their respective properties or assets. To the Knowledge of the Company, there is no filed Litigation against any present or former officer, director or employee of the Company or any of its Subsidiaries in such individual’s capacity as such. Neither the Company nor any of its Subsidiaries nor any of their respective properties or assets is subject to any outstanding judgment, order, injunction, rule or decree of any Governmental Authority. There is no pending, or overtly threatened, Litigation, that in any case would reasonably be expected to (i) prohibit, prevent, make illegal, delay or otherwise interfere with the consummation of any of the transactions contemplated by this Agreement or any of the ancillary agreements, (ii) cause any of the transactions contemplated by this Agreement or any of the ancillary agreements to be rescinded following consummation, (iii) affect adversely the right of Parent to control the Surviving Company and the Subsidiaries of the Company, or (iv) affect
materially and adversely the right of Parent or any of its Subsidiaries to own their respective assets and to operate their respective businesses.
Compliance with Laws and Permits.
|
(ii) the Company and each of its Subsidiaries are in compliance in all material respects with the terms of such applicable export licenses or other approvals; |
|
(iii) there are no pending or, to the Knowledge of the Company, threatened claims against the Company or any of its Subsidiaries with respect to such export licenses or other approvals; and |
|
(iv) the Company and each of its Subsidiaries have in place adequate controls and systems to ensure compliance in all material respects with applicable Laws pertaining to
|
import and export control in each of the jurisdictions in which the Company or any of its Subsidiaries currently does business. |
.
|
(i) each Benefit Plan has been established and administered in accordance with its terms and in compliance with the applicable provisions of ERISA, the ACA and the Code, |
|
(iii) all contributions required to be made by the Company and its ERISA Affiliates under the terms of any Benefit Plan have been timely made; |
the loss of such qualification or exemption or the imposition of any tax, interest or penalty with respect thereto. |
2013 54) or (ii) health reimbursement arrangement (HRA) that is not integrated with an employer group health plan that satisfies all applicable ACA requirements. |
.
assets or operations, there are no past, present or reasonably anticipated future events, conditions, circumstances, activities, practices, incidents, actions or plans of the Company or any of its Subsidiaries that may interfere with or prevent compliance or continued material compliance with applicable Worker Safety Laws. |
.
.
|
(ddd) There are no material Liens on the assets of the Company or any of its Subsidiaries relating to or attributable to Taxes, other than Permitted Liens. |
.
without limitation, all amendments, addendums, exhibits, modifications or similar changes to the same have been made available to Parent. “Material Contracts” means any of the following contracts, agreements or arrangements (other than purchase or sales orders entered into in the ordinary course), whether written or oral, currently in effect and binding: |
|
(ii) any Contract with respect to the formation, creation, operation, management or control of a joint venture, partnership, limited liability or other similar agreement or arrangement; |
|
(iii) any Contract governing or securing Indebtedness of the Company or its Subsidiaries that provides for payments in excess of $100,000; |
|
(v) any Contract that by its terms calls for aggregate payment or receipt by the Company or any of its Subsidiaries under such Contract of more than $100,000 over the remaining term of such Contract; |
|
(ix) any Contract that obligates the Company or any of its Subsidiaries to make any capital commitment, loan or expenditure in an amount in excess of $100,000; |
|
(x) any Contract between the Company or any of its Subsidiaries, on the one hand, and any Affiliate thereof other than any Subsidiary of the Company of more than $100,000; |
|
(xii) any agreements with group purchasing organizations (GPOs) or integrated delivery networks (IDNs); |
|
(xiii) any agreement that involves annual amounts in excess of $50,000 with the Veterans Administration or Federal Supply Administration; |
Section 3.16(a) of the Company Disclosure Letter identifies any Material Contract that requires consent to or otherwise contains a provision relating to a “change of control,” or that could or could reasonably be expected to prevent, delay or impair the consummation of the transactions contemplated by this Agreement.
constitutes, or, after notice or lapse of time or both, would constitute, a material default on the part of the Company or any of its Subsidiaries or, to the Knowledge of the Company, any other party thereto under any such Material Contract, nor has the Company or any of its Subsidiaries received any notice of any such default, event or condition. |
. Section 3.17 of the Company Disclosure Letter sets forth, as of the date hereof, a true and complete list of all insurance policies issued in favor of the Company or any of its Subsidiaries, or pursuant to which the Company or any of its Subsidiaries is a named insured or otherwise a beneficiary, as well as any historic occurrence‑based policies still in force (other than such policies with respect to Benefit Plans offered to individuals who are employed or co-employed by the Company or its Affiliates in the ordinary course of business). With respect to each such insurance policy, (a) such policy is in full force and effect and all premiums due thereon have been paid, and (b) neither the Company nor any of its Subsidiaries is in breach or default, or has taken any action or failed to take any action which (with or without notice or lapse of time, or both) would constitute such a breach or default, or would permit cancellation or termination of, any such policy. No notice of cancellation or termination has been received with respect to any such policy.
Properties.
.
current or former employees, consultants and contractors of the Company or any of its Subsidiaries who have participated in the creation of any Company IP or Company Technology have entered into customary proprietary information, confidentiality and assignment agreements in favor of the Company or its Subsidiaries, as applicable (true, correct and complete copies of all such agreements having previously been provided to Parent), which such agreements effectively and irrevocably assign to the Company or its Subsidiary, as applicable, all right, title, and interest in and to all Company IP and Company Technology. |
has been validly and irrevocably assigned or licensed to the Company or its Subsidiaries, as applicable, by written agreement. |
. Since the date of the Latest Company Balance Sheet, neither the Company nor any of its Subsidiaries, nor, to the Knowledge of the Company, any distributor of the Company or any of its Subsidiaries, has received a claim for or based upon (i) breach of product or service warranty or guaranty or similar claim, (ii) strict liability in tort, (iii) negligent design of product, negligent provision of services or (iv) any other complaint or allegation of liability, including or arising from the materials, design, testing, manufacture, packaging, labeling (including instructions for use), or sale of its products or from the provision of services, in each case that would result in material liability to the Company and its Subsidiaries in excess of the warranty reserve reflected on the Company’s financial statements.
Accounts Receivable. All of the accounts receivable of the Company and each of its Subsidiaries reflected on the Latest Company Balance Sheet: (i) represent sales actually made or transactions actually effected in the ordinary course of business for goods or services delivered or rendered to unaffiliated customers in bona fide arm’s length transactions, and (ii) constitute valid claims (in each case net of the applicable reserves reflected on the Latest Company Balance Sheet).
Inventories. All inventories of the Company and each of its Subsidiaries, including without limitation any inventories on consignment, consist of items of merchantable quality and quantity usable or saleable (free of any material defect or deficiency) in the ordinary course of business, conform to the specifications established therefor, and have been manufactured in accordance with applicable regulatory requirements. No material portion of the inventories, materials and supplies of the Company and each of its Subsidiaries are obsolete, damaged, slow-moving, defective or excessive.
Related Party Transactions. Except as set forth on Section 3.23 of the Company Disclosure Letter, no present or former director, executive officer, stockholder owning five percent (5%) or more of the shares of Company Capital Stock, or Affiliate of the Company or any of its Subsidiaries, nor, to the Knowledge of the Company, any of such Person’s Affiliates or immediate family members (each of the foregoing, a “Related Party”), is a party to any Contract with or binding upon the Company or any of its Subsidiaries or any of their respective material properties or assets or has engaged in any transaction with any of the foregoing within the last twelve (12) months or that has continuing obligations and in which any Related Party had, has or will have a direct or indirect material interest, other than ownership of Company Capital Stock, employment or equity-incentive compensation and benefits payable to directors, executive officers and employees of the Company and its Subsidiaries. To the Knowledge of the Company, no Related Party of the Company or any of its Subsidiaries owns, directly or indirectly, on an individual or joint basis, any interest in any material respect, or serves as an officer or director or in another similar capacity of,
any supplier or other independent contractor of the Company or any of its Subsidiaries, or any organization which has a Material Contract with the Company or any of its Subsidiaries.
Brokers. No broker, investment banker, financial advisor or other Person, other than Xxxxx Xxxxxxx & Co., the fees and expenses of which will be paid by the Company, 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 or any of its Affiliates.
Exclusivity of Representations and Warranties. Except as expressly set forth in this Agreement, neither the Company nor any of its Affiliates or representatives is making any representation or warranty on behalf of the Company of any kind or nature whatsoever, oral or written, express or implied (including, but not limited to, any relating to financial condition, results of operations, prospects, assets or liabilities of the Company and its Subsidiaries), and, except as expressly set forth in this Agreement, the Company hereby disclaims any and all such other representations and warranties and any liability based thereon; provided, however, that with respect to claims for Company-Related Fraud, the limitation with respect to the representations and warranties on behalf of the Company and the disclaimer with respect representations and warranties and any liability based thereon that are set forth in the preceding portion of this Section 3.25 or elsewhere in this Agreement shall not apply, shall have no effect and shall be disregarded as if it had been deleted from this Agreement.
Except as disclosed in the disclosure schedules delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”), Parent and Merger Sub jointly and severally represent and warrant to the Company that:
Organization, Standing and Power. Each of Parent and Merger Sub (a) is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation and (b) has the requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted, except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect.
Authority. Each of Parent and Merger Sub has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The execution, delivery and performance of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Parent and Merger Sub and no other corporate proceedings on the part of Parent or Merger Sub are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery by the Company, constitutes a valid and binding obligation of each of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms (except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity).
No Conflict; Consents and Approvals.
.
17, 2015, there are (i) outstanding employee stock options to purchase an aggregate of 1,898,351 shares of Parent Common Stock (of which options to purchase an aggregate of 1,303,517 are exercisable), (ii) restricted stock unit awards with respect to an aggregate of 103,563 shares of Parent Common Stock and (iii) performance stock unit awards with respect to an aggregate of 134,929 shares of Parent Common Stock. All of the issued and outstanding shares of Parent Common Stock are duly authorized, validly issued and fully paid and nonassessable and all shares of Parent Common Stock that may be issued pursuant to any stock option will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued and fully paid, and, in each case, are and will be free and clear of any preemptive rights, restrictions on transfer (other than restrictions under applicable federal, state and other securities laws) or Liens (other than Permitted Liens). |
. On or prior to the date hereof, Parent has delivered to the Company a debt commitment letter from its current Financing Sources (the “Debt Commitment Letter”) for the Financing in amounts that, together with Parent’s cash and cash equivalents, are sufficient to fund the payment of the cash portion of the Estimated Purchase Price and deductions therefrom required to be paid or otherwise funded by Parent at the Closing, and the payment of all fees and expenses incurred in connection therewith. As of the date hereof, the Debt Commitment Letter remains in full force and effect, without modification or amendment, and Parent has not received any written notice of any Financing Source’s intent to terminate, modify or amend the Debt Commitment Letter. The Debt Commitment Letter constitutes valid and binding obligations of Parent and Merger Sub and, to the Knowledge of Parent, each other party thereto, enforceable against such party in accordance with its terms (except to the extent that enforceability may be limited by applicable bankruptcy, insolvency, moratorium, reorganization or similar Laws affecting the enforcement of creditors’ rights generally or by general principles of equity, and further limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies). As of the date hereof, no event has occurred which, with or without notice, lapse of time or both, would or would reasonably be expected to (1) constitute a default or breach of any provision of the Debt Commitment Letter on the part of Parent or Merger Sub or, to the Knowledge of Parent, any other party thereto, (2) to the Knowledge of Parent, result in a failure of any condition to the Financing, or (3) to the Knowledge of Parent, otherwise result in any portion of the Financing being unavailable at the Closing. As of the date hereof, and other than as set forth on Section 4.5 of the Parent Disclosure Letter, there are no side letters or other agreements, Contracts or arrangements to which Parent or any of its Affiliates is a party related to the funding of the full amount of the Financing that could materially and adversely affect the availability of the Financing.
Vote/Approval Required. No vote or consent of the holders of any class or series of capital stock of Parent is necessary to approve this Agreement or the Merger or the other transactions contemplated hereby. The vote or consent of Parent as the sole stockholder of Merger Sub (which
shall have occurred prior to the Effective Time) is the only vote or consent of the holders of any class or series of capital stock of Merger Sub necessary to approve this Agreement and the Merger.
SEC Reports.
control over financial reporting which are reasonably likely to adversely affect Parent’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s internal control over financial reporting. |
. Except as and to the extent set forth in Section 4.8 of the Parent Disclosure Letter and before the date hereof, since the date of the latest balance sheet included in the Parent SEC Documents and through the date of this Agreement: (a) the Parent and its Subsidiaries have conducted their respective businesses only in the ordinary course consistent with past practice; (b) there has not been any change, event or development or prospective change, event or development that, individually or in the aggregate, has had or would reasonably be expected to have a Parent Material Adverse Effect; and (c) neither the Parent nor any of its Subsidiaries has suffered any loss, damage, destruction or other casualty affecting any of its material properties or material assets, whether or not covered by insurance.
Compliance with Laws and Permits. The Parent and each of its Subsidiaries have in effect all permits, licenses, variances, exemptions, authorizations, operating certificates, franchises, orders, approvals and similar authorizations (collectively, “Parent Permits”) of all Governmental Authorities necessary for them to own, lease or operate their properties and assets and to carry on their businesses and operations as now conducted, except where the failure to maintain in effect such Parent Permits would not reasonably be expected to have a Parent Material Adverse Effect, and no suspension, cancellation or other lapse of any such Parent Permit is pending by or at the behest of any Governmental Authority or other Person, or to the knowledge of the Parent, threatened. All of such Parent Permits are currently in full force and effect, except where the failure to maintain such Parent Permits in full force and effect would not reasonably be expected to have a Parent Material Adverse Effect. Since January 1, 2012, neither Parent nor any of its Subsidiaries has been in violation of (i) any Parent Permits or (ii) any applicable Law, except for such violations as would not reasonably be expected to have a Parent Material Adverse Effect.
Intellectual Property. Except as and to the extent set forth in Section 4.10 of the Parent Disclosure Letter, Parent and its Subsidiaries own or possess adequate rights to use all material Intellectual Property necessary for the conduct of their respective businesses, and Parent has not received any written notice or claim asserting that any Intellectual Property owned by Parent infringes, misappropriates, dilutes or violates any Intellectual Property owned by any third party or constitutes unfair competition or unfair trade practices under any applicable Law, except for such matters as would not reasonably be expected to have a Parent Material Adverse Effect.
Taxes. To the Knowledge of Parent, and except as would not reasonably be expected to result in a Parent Material Adverse Effect, (a) each of Parent and its Subsidiaries (i) has timely filed (or has had timely filed on its behalf) all material Tax Returns required to be filed by it (after giving effect to any filing extension properly granted by a Governmental Authority having authority to do so) and all such Tax Returns are accurate and complete in all material respects or has established adequate reserves with respect to Taxes due and payable pursuant to such Tax Returns, (ii) has paid (or Parent has paid on its behalf) or established adequate reserves for all material Taxes
of it (whether or not shown on any Tax Return) that are due and payable, (b) neither Parent nor any Subsidiary of Parent has been notified of any pending audit, examination, or other proceeding in respect of material Taxes, (c) no requests for waivers of the time to assess any such Taxes have been agreed to or are pending, (d) no claim has been made by any Tax authority, in a jurisdiction where Parent or any Subsidiaries of Parent do not file a Tax Return, stating that any such entity is or may be subject to taxation by that jurisdiction for Taxes that would be covered by the subject of such Tax Return, (e) there are no Liens for Taxes (other than for current Taxes not yet due and payable or Taxes the validity or amount of which being contested in good faith by appropriate proceedings) on any assets of Parent or any Subsidiary of Parent and (f) neither Parent nor any of its Subsidiaries has engaged in any transaction that has given rise to or would reasonably be expected to give rise to a disclosure obligation as a “listed transaction” under Section 6011 of the Code and the regulations promulgated thereunder.
Brokers. Except for Canaccord Genuity Inc., no broker, investment banker, financial advisor or other Person, the fees and expenses of which will be paid by the 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 Parent or any of its Affiliates.
Issuance of Parent Common Stock. The shares of Parent Common Stock to be issued pursuant to Article II of this Agreement upon consummation of the Merger (the “Share Issuance”) have been duly authorized and when issued in accordance with the terms of this Agreement will have been validly issued and will be fully paid and non-assessable and the issuance thereof will not be subject to any preemptive rights. The Share Issuance does not require the vote or approval of the shareholders of Parent under the rules of NYSE.
Private Placement. Assuming the accuracy of the factual representations made in the Joinder Agreements and in the Accredited Investor Questionnaires delivered to Parent by each holder of Preferred Stock that is an Accredited Investor, no registration under the Securities Act is required for the offer and issuance of the Parent Common Stock by Parent as contemplated hereby. The issuance and sale of the Parent Common Stock hereunder does not and will not contravene the rules and regulations of the NYSE.
Registration Rights. Parent has not granted or agreed to grant to any Person any rights (including “piggy back” registration rights) to have any securities of the Parent registered with the SEC or any other governmental authority that would be superior to or otherwise conflict with the registration rights granted by Parent pursuant to the Registration Rights Agreement.
Listing Requirements. Parent’s Common Stock is registered pursuant to Section 12(b) of the Exchange Act and the Parent Common Stock to be issued hereunder will be listed on the NYSE upon issuance thereof, and Parent has not taken any action designed to result in the termination of the registration of Parent’s Common Stock under the Exchange Act or the delisting of Parent’s Common Stock from the NYSE. Parent is in compliance with the applicable listing rules of the NYSE and has not received any notice from the NYSE asserting any non-compliance with such rule which has not been resolved prior to the date of this Agreement.
. Parent’s accounting firm is a registered public accounting firm as required by the Exchange Act. There are no disagreements presently existing between Parent or any of its Subsidiaries and its independent auditing firms that would be required to be publicly disclosed.
Application of Takeover Protections. Parent and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under Parent’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or would become applicable as a result of the Parent’s issuance of the Parent Common Stock issuable pursuant to this Agreement.
Operations of Merger Sub. Merger Sub was formed solely for the purpose of engaging in the Merger. Merger Sub has engaged in no other business activities and has conducted its operations only as contemplated by this Agreement.
Information Statements. None of the information supplied or to be supplied by or on behalf of Parent or Merger Sub specifically for inclusion in the Information Statements or any other similar document provided to Holders in connection with the transactions contemplated hereby, including without limitation information provided pursuant to Section 280G of the Code as it relates to payments by Parent, will, at the time it is first published, sent or given to the Stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. Notwithstanding the foregoing, Parent makes no representation or warranty with respect to statements included or incorporated by reference in the Information Statements based on information supplied by or on behalf of the Company or its Subsidiaries specifically for inclusion in the Information Statements.
Exclusivity of Representations and Warranties. Except as expressly set forth in this Agreement, neither Parent, Merger Sub, nor any of their respective Affiliates or representatives is making any representation or warranty on behalf of Parent or Merger Sub of any kind or nature whatsoever, oral or written, express or implied (including, but not limited to, any relating to financial condition, results of operations, prospects, assets or liabilities of the Parent or Merger Sub), and, except as expressly set forth in this Agreement, each of Parent and Merger Sub hereby disclaims any and all such other representations and warranties and any liability based thereon; provided, however, that with respect to claims for Parent-Related Fraud, the limitation with respect to the representations and warranties on behalf of Parent and the disclaimer with respect representations and warranties and any liability based thereon that are set forth in the preceding portion of this Section 4.21 or elsewhere in this Agreement shall not apply, shall have no effect and shall be disregarded as if it had been deleted from this Agreement.
. From the date of this Agreement until the earlier of the Effective Time or the date this Agreement is terminated (the “Interim Period”), the Company shall, and shall cause its Subsidiaries to, give Parent and Merger Sub and Parent’s and Merger Sub’s representatives reasonable access during normal business hours to the offices, facilities, books and records of the Company and each of its Subsidiaries, and shall make the officers and employees of the Company and each of its Subsidiaries available to Parent and Merger Sub and their representatives, in a manner so as to not unreasonably interfere with the normal business operations of the Company or its Subsidiaries, as Parent, Merger Sub and their representatives shall from time to time reasonably request; provided, however, that nothing herein shall require the Company to provide access or to disclose any information to Parent if such access or disclosure would be in violation of applicable Laws (provided that the Company make alternative arrangements, to the extent permissible, to provide such access or disclosure in a way that does not violate applicable Laws). If any of the information or material furnished pursuant to this Section 5.1 includes material or information subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or threatened Litigation or governmental investigations, each party hereto understands and agrees that the parties hereto have a commonality of interest with respect to such matters and it is the desire, intention and mutual understanding of the parties hereto that the sharing of such material or information is not intended to, and shall not, waive or diminish in any way the confidentiality of such material or information or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege. All such information provided by the Company that is entitled to protection under the attorney-client privilege, work product doctrine or other applicable privilege shall remain entitled to such protection under these privileges, this Agreement and the joint defense doctrine. Any information disclosed pursuant to this Section 5.1 shall be subject to the terms of the Confidentiality Agreements.
Preservation of Company Business. During the Interim Period, except (a) as required or expressly permitted by this Agreement, (b) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed), (c) as required by applicable Law, or (d) as set forth in Section 5.2 of the Company Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries to, be operated only in the ordinary course of business and consistent with past practice, and preserve intact their respective businesses and the assets, including, but not limited to: (1) maintaining its material assets and properties in the ordinary course of business in substantially the same manner historically maintained, reasonable wear and tear, damage by fire and other casualty excepted; (2) promptly repairing, restoring or replacing all material assets and properties in the ordinary course of business consistent with past practice; (3) upon any damage, destruction or loss to any of its material assets or properties, applying any and all insurance proceeds, if any, received with respect thereto to the prompt repair, replacement and restoration thereof as reasonably necessary for the operation of the business of the Company and its Subsidiaries, subject to the terms of any Leases and agreements governing the Indebtedness of the Company and its Subsidiaries; (4) complying in all material respects with all applicable Laws; (5) taking all actions necessary to be in compliance in all material respects with all Material Contracts and to maintain the effectiveness of all Permits; (6) notifying Parent in writing of the commencement of any Litigation by or against the Company or any of its Subsidiaries; and (7) paying all accounts payable and pursuing collection of its accounts receivable in the ordinary course
of business, consistent with past practices. Furthermore, during the Interim Period, the Company shall not, and shall cause its Subsidiaries not to, except (i) as required or expressly permitted by this Agreement, (ii) with the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed, except as provided in Section 5.2(k)), (iii) as required by applicable Law, or (iv) as set forth in in one or more corresponding subsections of Section 5.2 of the Company Disclosure Letter:
|
(f) create or incur any Lien on any assets of the Company or any of its Subsidiaries, other than Permitted Liens; |
|
(g) declare, set aside or pay any dividend or other distribution (whether in cash, assets, capital stock or otherwise) with respect to the capital stock of the Company; |
|
(m) acquire or dispose of any real property or any direct or indirect interest in any real property; |
|
(n) make any material change to its accounting methods, policies or practices with respect to the maintenance of books of account and records, except as required by GAAP or applicable Law; |
. During the Interim Period, other than as required or expressly permitted by this Agreement, with the prior written consent of the Company, as required by applicable Law, as set forth in Section 5.3 of the Parent Disclosure Letter, or as would not reasonably be expected to result in a Parent Material Adverse Effect, Parent shall operate, and shall cause its Subsidiaries to be operated, in the ordinary course of business and consistent with past practice, and preserve intact their businesses and their assets. Furthermore, during the Interim Period, Parent shall not, and shall cause its Subsidiaries not to, other than as otherwise required or expressly permitted by this Agreement, with the prior written consent of the Company, as required by applicable Law or as set forth in Section 5.3 of the Parent Disclosure Letter:
|
(aa) amend or otherwise change its Organizational Documents, except as would not reasonably be expected to result in a Parent Material Adverse Effect; |
. During the Interim Period, except as otherwise provided herein, the Company and its Affiliates shall not, and shall cause their Subsidiaries and their respective Representatives not to, directly or indirectly, solicit, initiate, knowingly encourage or assist, or respond to the submission of any proposal or offer from any Person relating, with respect to the Company or any of its Subsidiaries, to any (i) liquidation, dissolution or recapitalization, (ii) merger or consolidation, (iii) acquisition or purchase of all or a significant portion of the assets of, or any equity interest in, the Company or any of its Subsidiaries or (iv) similar transaction or business combination (a “Competing Transaction”), nor participate in any or continue any ongoing discussions or negotiations regarding, or furnish to any other Person any information with respect to, or otherwise cooperate in any way with, or assist or participate in, or knowingly facilitate or encourage, any effort or attempt by any Person to pursue or effect a Competing Transaction or enter into any agreement with respect to a Competing Transaction. The Company shall, and shall instruct all Representatives acting on its and its Affiliates’ behalf to immediately cease any existing activities, discussions and negotiations with any Persons with respect to any of the foregoing. Immediately upon the commencement of the Interim Period, the Company shall instruct each Person (other than Parent, Merger Sub and their representatives) in possession of confidential information about the Company or any of its Subsidiaries that was furnished pursuant to a confidentiality agreement within the prior twelve (12) months in connection with any actual or potential Competing Transaction or other proposal by such Person to acquire the Company or any of its Subsidiaries (or any portion thereof) to promptly return or destroy all such information, subject to the terms of such confidentiality agreement.
Efforts; Consents; Updated Financial Statements.
Subsidiaries or reasonably incurred by Parent, in each case pursuant to the terms of existing agreements, to obtain consents set forth on Section 2.2(b)(vii) of the Company Disclosure Letter shall be Transaction Costs. |
. The parties hereto agree to use their reasonable best efforts (and take all reasonable actions as may be required) to minimize the amount of “parachute payments” (within the meaning of Section 280G of the Code and the regulations thereunder) with respect to the Merger. Prior to the Closing Date, the Company shall submit to a vote of the Stockholders of the Company for their determination all payments or benefits that in the absence of such a vote could reasonably be viewed as “parachute payments” to the extent such payments exceed 2.99 times the applicable “disqualified individual’s” “base amount” (each within the meaning of Section 280G of the Code and the regulations thereunder) (such excess above the base amount, the “Excess Amounts”) made to any such disqualified individuals with respect to the Company and its Subsidiaries (the “280G Vote”). Prior to the 280G Vote, the Company and its Subsidiaries shall obtain waivers as to the right to receive or retain Excess Amounts from the applicable disqualified individuals. Such 280G Vote shall be carried out pursuant to the procedures and requirements of Section 280G(b)(5)(B) of the Code and the regulations thereunder, including disclosure satisfying the requirements of Section 280G(b)(5)(B)(ii) of the Code and any regulations promulgated thereunder, which disclosure shall be distributed in a manner consistent with Section 280G of the Code to all Stockholders eligible to participate in the 280G Vote.
.
.
. No later than two (2) Business Days after the date of the execution of this Agreement, the Company shall prepare and mail (i) the Information Statements to all Stockholders of record and (ii) an appraisal notice pursuant to Section 262 of the DGCL to any holder of Company Capital Stock that has not consented to this Agreement and the Merger that complies with applicable Laws, in a form reasonably acceptable to Parent.
Financing. Parent and Merger Sub shall use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably necessary, proper or advisable to arrange and obtain the Financing described in the Debt Commitment Letter at or prior to the Closing on the terms and conditions described therein including using reasonable best efforts (i) to maintain in effect the Debt Commitment Letter until the consummation of the transactions contemplated hereby, (ii) to negotiate and enter into definitive agreements with respect to the Debt
Commitment Letter (collectively, the “Financing Agreements”) on the terms and conditions contained in the Debt Commitment Letter or, if available, on other terms (to the extent they are less favorable to Parent) that are acceptable to Parent and would not adversely affect the ability of Parent and Merger Sub to consummate the transactions contemplated herein and (iii) to satisfy on a timely basis all conditions to funding in the Debt Commitment Letter (other than any condition where the failure to be so satisfied is a direct result of the Company’s failure to comply with its obligations under Section 5.11), and to consummate the Financing at or prior to the Closing. Parent and Merger Sub shall not agree to any amendments or modifications to, or grant any waivers of, any condition or other provision under the Debt Commitment Letter without the prior written consent of the Company to the extent such amendments, modifications or waivers would reasonably be expected to (A) reduce the aggregate amount of cash proceeds available from the Financing to fund the amounts required to be paid by Parent or Merger Sub under this Agreement below the amount of Parent’s cash and cash equivalents and Cash on Hand at the Company which, in the aggregate, is sufficient for Merger Sub and the Surviving Company to, on and after the date of the Closing, pay the aggregate Common Per Share Cash Amount, or (B) impose new or additional conditions or otherwise be reasonably likely to prevent or delay or impair the ability of Parent or Merger Sub to consummate the Merger and the other transactions contemplated by this Agreement or adversely impact the ability of Parent or Merger Sub to enforce its rights (including through litigation) against the other parties to the Debt Commitment Letter or the Financing Agreements. Without limiting the generality of the foregoing, Parent and Merger Sub shall give the Company prompt notice (x) of any actual or alleged breach or default by any party to the Debt Commitment Letter or the Financing Agreements, (y) of the receipt of any written notice or other written communication from any Financing Source with respect to any actual or alleged breach, default, termination or repudiation by any party to the Debt Commitment Letter or the Financing Agreements or any provisions of the Debt Commitment Letter or any Financing Agreement, or (z) if Parent and Merger Sub determine in good faith that they will not be able to satisfy any of the obligations to, or otherwise be able to obtain, some or any portion of the Financing prior to the Termination Date. Upon the occurrence of any circumstance referred to in clause (x), (y) or (z) of the immediately preceding sentence or if any portion of the Financing otherwise becomes unavailable, and such portion is reasonably required to fund the cash portion of the Estimated Purchase Price, Parent and Merger Sub shall use their reasonable best efforts to arrange and obtain in replacement thereof alternative financing from the same or alternative sources in an amount that, when combined with the amount of Parent’s cash and cash equivalents, is sufficient for Parent, Merger Sub and the Surviving Company to, on and after the date of the Closing, pay the Estimated Purchase Price on terms and conditions not materially less favorable, in the aggregate, to the Company or Parent than the terms set forth in the Debt Commitment Letter (including the flex provisions thereof). Any reference in this Agreement to (1) the “Financing” shall also include any such alternative financing, (2) the “Debt Commitment Letter” shall also include the definitive agreements with respect to any such alternative financing, (3) the “Financing Agreements” shall also include the definitive agreements with respect to any such alternative financing and (4) the “Financing Sources” shall also include the financing institutions contemplated to provide any such alternative financing.
Financing Assistance. The Company shall, and shall cause its Subsidiaries to, and shall use commercially reasonable efforts to cause its and its Subsidiaries’ officers, directors,
employees, agents, and other representatives (collectively, “Representatives”) to, provide all cooperation that is reasonably requested by Parent to assist Parent and Merger Sub in the arrangement and consummation of the financing contemplated by the Debt Commitment Letter for the purpose of funding the payment of the Purchase Price (the “Financing”), including but not limited to (i) promptly furnishing to Parent and the Financing Sources such financial, marketing and other information and materials relating to the Company and each of its Subsidiaries that is customary or necessary for the completion of the Financing, or for the preparation of offering or information documents to be used in connection with the same; (ii) cooperating with the marketing efforts of Parent and the Financing Sources, including participation in meetings with, and delivering management reports to, the Persons acting as lead arrangers or agents for the prospective lenders and purchasers of the Financing, and attending presentations, roadshows, due diligence sessions, drafting sessions and sessions with rating agencies in connection with the Financing; (iii) delivering (A) audited consolidated balance sheets and related audited statements of comprehensive income (loss), stockholders’ equity and cash flows of the Company and its Subsidiaries (the “Audited Annual Financials”) for each of the two most recently ended fiscal years that have ended at least ninety (90) days prior to the Closing Date, and (B) unaudited consolidated balance sheets and related unaudited statements of comprehensive income (loss) and cash flows of the Company and its Subsidiaries (the “Quarterly Financials”) for each fiscal quarter beginning with the quarter ended September 30, 2015 and for any subsequent fiscal quarter that ends forty-five (45) or more calendar days prior to the Closing Date; (iv) causing the Company’s independent accountants to provide reasonable assistance to Parent consistent with their customary practice (including to consent to the use of their audit reports on the consolidated financial statements of the Company and its Subsidiaries in any materials relating to the Financing); (v) using reasonable best efforts to assist Parent in connection with the preparation of pro forma financial information and financial statements necessary or reasonably required by the Financing Sources; (vi) upon reasonable request of Parent and to the extent the same become necessary or advisable in connection with the Financing, assisting Parent to obtain waivers, consents, estoppels and approvals from other parties to material leases, encumbrances and contracts relating to the Company and its Subsidiaries (including by arranging discussions among Parent, the Company and the Financing Sources and their respective representatives with other parties to such material leases, encumbrances and contracts; provided, that such documents will not take effect until, and will be conditioned upon the occurrence of, the Effective Time); and (vii) to the extent that the Company or any of its Subsidiaries are to be party to the Financing following the occurrence of the Effective Time, (A) using reasonable best efforts to obtain customary legal opinions and executing and delivering customary closing certificates and documents at or prior to the Closing as may be reasonably requested by Parent in connection with the Financing; provided, that such documents will not take effect until, and will be conditioned upon the occurrence of, the Effective Time; (B) using reasonable best efforts to facilitate the execution and delivery at or prior to the Closing of definitive documents (including loan agreements, customary guarantee documentation (if applicable) and other applicable loan documents) related to the Financing; provided, that such documents will not take effect until, and will be conditioned upon the occurrence of, the Effective Time; and (C) to the extent requested reasonably in advance, providing to the Financing Sources, at least five (5) Business Days prior to the Closing Date, all customary and reasonable documentation and other information required by regulatory authorities with respect to the Company and each of its Subsidiaries under applicable “know your customer” and anti‑money laundering rules and
regulations, including without limitation the USA PATRIOT Act of 2001, as amended. Nothing in this Section 5.11 shall require such cooperation to the extent it would (i) require the Company to agree to pay any fees, reimburse any expenses or give any indemnities, (ii) require the Company to incur any other liability or obligation prior to the Effective Time, (iii) cause any representation or warranty in this Agreement to be breached, or (iv) cause any condition to Closing set forth in Article VI to fail to be satisfied or otherwise cause any breach of this Agreement. Parent agrees, promptly upon request, to reimburse the Company and its Subsidiaries for all of their reasonable, documented, out‑of‑pocket costs, fees and expenses (including fees and disbursements of counsel) actually incurred in connection with the Financing promptly following the incurrence thereof (limited, in the case of any costs, fees and expenses for preparing the consolidated financial statements of the Company and its Subsidiaries described in clause (iii) of the immediately preceding sentence, to the incremental costs, fees and expenses for preparing the Audited Annual Financials and Quarterly Financials in excess of the costs, fees and expenses of preparing the corresponding financial statements of the Company and its Subsidiaries for the most recent fiscal year and most recent fiscal quarter ended prior to the date hereof). The Company, its Affiliates and their respective representatives shall be indemnified and held harmless by Parent for and against any and all liabilities, losses, damages, claims, costs, expenses, interest, awards, judgments and penalties suffered or incurred by them in connection with the arrangement of the Financing (other than arising out of or resulting from Company-Related Fraud, gross negligence of the Company or any of its Subsidiaries or the Company’s breach of or failure to perform a covenant in this Agreement or breach or inaccuracy of a representation or warranty of the Company in this Agreement) to the fullest extent permitted by applicable Laws and with appropriate contribution to the extent such indemnification is not available. The Company hereby consents to the use of its and its Subsidiaries’ logos in connection with the Financing, provided such logos are used in a customary manner that is not intended to harm or disparage the Company or any of its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries. Notwithstanding anything to the contrary provided herein or in the Confidentiality Agreements, Parent shall be permitted to share all information subject to such agreements with its potential financing sources, subject to customary confidentiality undertakings by such potential financing sources with respect thereto.
Certain Employment and Benefits Matters.
remainder of such period ending September 30, 2016 in such plans on the same terms as in effect as of the Closing Date, provided, however, that in the event that such participation cannot be continued or is discontinued, Parent or one or more of its Affiliates shall use commercially reasonable efforts to facilitate participation by Company Employees (and their eligible dependents) in such health and welfare benefit plans as Parent or such Affiliate makes available to its other U.S. based employees. |
. No later than five (5) Business Days prior to the Closing the Company shall deliver to Parent and the Exchange Agent for their review and approval (which approval shall not be unreasonably withheld, conditioned or delayed), the Merger Consideration Table, which shall be deemed final upon approval of the same by Parent and the Exchange Agent. The Company retains responsibility at all times for ensuring the accuracy of such Merger Consideration Table and the review and approval by Parent and the Exchange Agent shall not constitute a representation to any Person by Parent or the Exchange Agent that the information provided by the Company in the Merger Consideration Table is accurate.
Tax Matters.
Period shall be determined based on the actual date of such event or transaction, and (iii) the amount of other Taxes of the Company or any of its Subsidiaries for a Straddle Period which relate to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in such Straddle Period. Any credits relating to a Straddle Period shall be taken into account as though the relevant taxable period ended on the Closing Date. For any taxable period ending on or prior to the Closing Date, the entire amount of Taxes payable by or on behalf of the Company or any of its Subsidiaries with respect to such period shall be allocable to the Pre-Closing Tax Period. All determinations necessary to give effect to the foregoing allocations shall be made in a manner consistent with the prior practices of the Company or any of its Subsidiaries, as applicable, unless a different treatment is required by applicable Laws. |
. Effective as of the Effective Time, in consideration for Parent’s acceptance of the limitations on Parent’s right to indemnification pursuant to Section 9.4, each Holder, for itself and on behalf of its Affiliates, agents, representatives, attorneys, successors, assigns, dependents, heirs, executors, and administrators, hereby irrevocably and unconditionally forever releases, acquits and discharges the Company, its Subsidiaries, the Surviving Company and Parent (and any of their respective predecessors, successors, managers, directors, officers, employees, agents, representatives, attorneys, assigns, dependents, heirs, executors, and administrators) from any and all claims, rights, demands, actions, suits, damages, losses, expenses, liabilities, indebtedness, and causes of action, of whatever kind or nature that existed or arose from the beginning of time through the Effective Time, regardless of whether known or unknown, and regardless of whether asserted to date (excluding the claims that are not released pursuant to the following sentence, the “Released Holder Claims”). The foregoing shall not constitute a release of
claims with respect to (i) payments to such Holder of any portion of the Per Share Common Stock Merger Consideration, the Per Share Preferred Stock Merger Consideration, the Per Option Merger Consideration, or portion of the Transaction Bonus Plan, as applicable, to which such Holder is expressly entitled pursuant to the terms and conditions of this Agreement, (ii) if such Holder is a Covered Person, any claims that such Holder may have for indemnification under (A) the Runoff Insurance Policy or any similar “tail” insurance policy, (B) the Company’s or any Subsidiary’s Organizational Documents, (C) any indemnification agreement with the Company or any of its Subsidiaries relating to such Holder’s service as an officer, director, employee or agent of the Company or its Subsidiaries, or (D) Section 5.8 of this Agreement, other than indemnification agreements or arrangements with the Company or any of its Subsidiaries providing indemnification of such Holder in its capacity as a stockholder of the Company, as to which the foregoing release shall constitute a release of claims, (iii) if such Holder is an employee of the Company or any Subsidiary, any claims for compensation for services actually provided by such Holder during the most recent pay period prior to the Closing, including salary, benefits and reimbursements of expenses incurred and otherwise reimbursable in accordance with the Company’s or any of its Subsidiaries’ policies during such period, (iv) to the extent that such Holder is an employee of the Company or any Subsidiary, any claims for compensation payable or benefits due with respect to any offer letter, employment agreement or arrangement, or any equity incentive plan or agreement. Such Holder further agrees and covenants not to participate in any action or proceeding against the Company or the Surviving Company based upon any of the Released Holder Claims, and (v) claims arising under or in connection with this Agreement or the transactions contemplated hereby or claims related to ownership of Parent Common Stock or which may not otherwise be released as a matter of applicable Laws. Each Holder (a) understands that the release contained in this Section 5.15 is binding on such Holder and its Affiliates, agents, representatives, attorneys, assigns, dependents, heirs, executors, and administrators, (b) represents and warrants that (i) it has had the opportunity to consult with counsel of its choice, (ii) it is fully informed of the nature and contents of this release and (iii) it has entered into this release freely and without any threat or coercion whatsoever and (c) further agrees and covenants not to participate in any action or proceeding against the Company, its Subsidiaries, the Surviving Company or the Parent based upon any of the Released Holder Claims.
The obligations of Parent and Merger Sub to complete the Closing and effect the Merger under Article II of this Agreement are subject to the satisfaction (or written waiver by Parent to the extent permitted by Law) of the following conditions precedent on or before the Effective Time:
Accuracy of Warranties. Each of the representations and warranties of the Company set forth herein that (a) are qualified by Company Material Adverse Effect, “materiality” or similar
qualifiers shall be true and correct in all respects as so qualified at and as of the date hereof and at and as of the Effective Time with the same effect as though made as of the Effective Time (except to the extent such representations and warranties are made as of an earlier date (in which case, as of such earlier date)); and (b) are not qualified by Company Material Adverse Effect, “materiality” or similar qualifiers shall be true and correct in all material respects at and as of the date hereof and at and as of the Effective Time with the same effect as though made as of the Effective Time (except to the extent such representations and warranties are made as of an earlier date (in which case, as of such earlier date)).
Compliance with Agreements and Covenants. The Company shall have duly performed and complied with, in all material respects, all of the covenants, obligations and agreements contained in this Agreement to be performed and complied with by it at or prior to the Effective Time.
No Prohibition. No temporary restraining order, preliminary or permanent injunction or other Order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the Merger shall be in effect, nor shall any action have been taken by any Governmental Authority seeking any of the foregoing, and no statute, rule, regulation or Order shall have been enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger illegal.
Company Stockholder Approval. The Company Stockholder Approval shall have been obtained.
Dissenting Shares. Not more than five percent (5%) of the shares of Company Capital Stock issued and outstanding as of immediately prior to the Effective Time (calculated on an as-converted basis, assuming all shares of Preferred Stock were converted at such time into shares of Common Stock pursuant to the exercise of “Conversion Rights”, as defined in Section C.4 of Article Fourth of the Certificate of Incorporation) shall have elected to become Dissenting Shares.
Listing Approval. The shares of Parent Common Stock issuable in connection with the Merger shall have been approved for trading on the New York Stock Exchange, subject to official notice of issuance.
Release of Certain Liens. Parent and Merger Sub shall have received payoff letters or similar customary documents, in form and substance reasonably satisfactory to Parent and Merger Sub, from the lenders identified on Section 6.7 of the Company Disclosure Letter, evidencing the aggregate amount of Indebtedness of the Company and its Subsidiaries outstanding and owing to such lenders as of the Closing Date (including any interest accrued thereon and any prepayment or similar penalties and expenses associated with the prepayment of such Indebtedness on the Closing Date) and confirming that, if such aggregate amount so identified is paid to such lender on the Closing Date, such Indebtedness shall be repaid in full, that all Liens affecting any real or personal property of the Company and its Subsidiaries shall be released.
. Parent and Merger Sub shall have received payoff letters or similar customary documents, in form and substance reasonably satisfactory to Parent and Merger Sub, from each of the service providers of the Company or any of its Subsidiaries, including Xxxxxxx Xxxxx LLP, KPMG, LLP and Xxxxxxx, Stratemann & Co., with respect to all fees and expenses payable to them by the Company, evidencing the aggregate amount of Transaction Costs and other fees and expenses payable to them and confirming that, if such aggregate amount so identified is paid to such service provider on the Closing Date, such Transaction Costs and other fees and expenses shall be paid in full, then such service provider shall release the Parent, Merger Sub, and the Company and its Subsidiaries of any further payment obligations relating to pre-Closing service. Such payoff letters shall include a statement of account with respect to all fees for the services rendered by such Service Providers setting forth the amounts which Parent shall be obligated to pay pursuant to Sections 5.5(c) and 5.5(d) hereof.
Amendment of Certificate of Incorporation. Parent and Merger Sub shall have received evidence of the effectiveness of the amendment to the Certificate of Incorporation in the form attached hereto as Exhibit J.
Closing Deliveries. The Company and the Stockholders’ Representative shall have complied with the provisions of Section 2.2(b).
Joinder Agreements and Option Cancellation Agreements. The Joinder Agreements and the Option Cancellation Agreements signed by the Significant Stockholders and Significant Optionholders, shall remain in full force and effect.
Absence of Litigation. There is no pending, or overtly threatened, Litigation, that in any case would reasonably be expected to (i) prohibit, prevent, make illegal, delay or otherwise interfere with the consummation of any of the transactions contemplated by this Agreement or any of the ancillary agreements, (ii) cause any of the transactions contemplated by this Agreement or any of the ancillary agreements to be rescinded following consummation, (iii) affect adversely the right of Parent to control the Surviving Company and the Subsidiaries of the Company, or (iv) affect materially and adversely the right of Parent or any of its Subsidiaries to own their respective assets and to operate their respective businesses.
Company Material Adverse Effect. Since the date of this Agreement, the Company and its Subsidiaries shall not have suffered or incurred any Company Material Adverse Effect.
Termination of Company 401(k) Plan. The Company shall have provided evidence satisfactory to Parent as to the termination of the Company 401(k) Plan, with such termination contingent upon the Closing.
The obligations of the Company to complete the Closing and effect the Merger under Article II of this Agreement are subject to the satisfaction (or written waiver by the Company to the extent permitted by Law) of the following conditions precedent on or before the Effective Time:
Accuracy of Warranties. Each of the representations and warranties of Parent and Merger Sub set forth herein that (a) are qualified by Parent Material Adverse Effect, “materiality” or similar qualifiers shall be true and correct in all respects as so qualified at and as of the date hereof and at and as of the Effective Time with the same effect as though made as of the Effective Time (except to the extent such representations and warranties are made as of an earlier date (in which case, as of such earlier date)); and (b) are not qualified by Parent Material Adverse Effect, “materiality” or similar qualifiers shall be true and correct in all material respects at and as of the date hereof and at and as of the Effective Time with the same effect as though made as of the Effective Time (except to the extent such representations and warranties are made as of an earlier date (in which case, as of such earlier date)).
Compliance with Agreements and Covenants. Parent and Merger Sub shall have duly performed and complied with, in all material respects, all of their covenants, obligations and agreements contained in this Agreement to be performed and complied with by them at or prior to the Effective Time.
No Prohibition. No temporary restraining order, preliminary or permanent injunction or other Order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition preventing the consummation of the Merger shall be in effect, nor shall any action have been taken by any Governmental Authority seeking any of the foregoing, and no statute, rule, regulation or Order shall have been enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger illegal.
Listing Approval. The shares of Parent Common Stock issuable in connection with the Merger shall have been approved for trading on the New York Stock Exchange, subject to official notice of issuance.
Closing Deliveries. The Parent and Merger Sub shall have complied with the provisions of Section 2.2(c).
Parent Material Adverse Effect. Since the date of this Agreement, Parent and its Subsidiaries shall not have suffered or incurred any Parent Material Adverse Effect.
Termination. This Agreement may be terminated at any time on or prior to the Effective Time, whether before or after the Company Stockholder Approval has been received:
Notwithstanding anything else contained in this Agreement, the right to terminate this Agreement under this Section 8.1 shall not be available to any party whose breach of its representations or warranties set forth herein or whose failure to fulfill its obligations or to comply with its covenants under this Agreement has been the primary cause of, or primarily resulted in, the failure to satisfy any condition to the obligations of the other party hereunder.
. If the Merger is not consummated and except as otherwise provided in this Agreement or the other transaction documents to be entered into in connection with this Agreement and the transactions contemplated hereby, all expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.
Effect of Termination. In the event of termination of this Agreement by either the Company or Parent as provided in Section 8.1, this Agreement will forthwith become void and have no further force or effect, without any Liability (other than with respect to fraud, intentional misrepresentation or a willful breach or as set forth in Section 8.2 or this Section 8.3) on the part of Parent, Merger Sub or the Company. The provisions of Section 8.2, this Section 8.3, Section 10.7, Section 10.11, Section 10.12, Section 10.15 and Section 10.16 and will survive any termination hereof.
Specific Performance. The parties hereto agree that irreparable damage, for which monetary damages, even if available, would not be an adequate remedy, would occur if any provision of this Agreement were not performed in accordance with the terms hereof and that, except as set forth in Section 9.3 or as specified elsewhere in this Agreement, the parties hereto shall be entitled to an injunction or injunctions, specific performance and other equitable remedies to prevent and restrain breaches or threatened breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof in any court specified in Section 10.15, in addition to any other remedy to which they are entitled at law or in equity. The parties hereto hereby waive, in any action for specific performance, the defense of adequacy of a remedy at law and the necessity of demonstrating damages or posting any bond or other security in connection therewith.
Indemnification by the Holders. Subject to the terms of this Article IX, and in addition to all other indemnification obligations contained elsewhere herein, from and after the Effective Time, the Holders, severally in accordance with such Holder’s Pro Rata Share, shall indemnify Parent and its Affiliates (including the Surviving Company), and its and their respective employees, officers, directors, successors and assigns (collectively, the “Parent Indemnitees”) and defend (but only to the extent provided in Section 9.3), reimburse and hold them harmless from and against, and in respect of, on a dollar for dollar basis, all claims, liabilities, damages, payments, obligations, losses, costs and expenses (including reasonable attorneys’ fees, court costs, expert witness fees, transcripts costs and other expenses of Litigation) and judgments (at law or in equity) (collectively, “Losses”) incurred or suffered by any of them and arising out of or resulting from any of the following:
|
(h) unpaid Indebtedness of the Company or any of its Subsidiaries (to the extent not included in the Final Adjustment pursuant to Section 2.10); |
|
(i) unpaid Transaction Costs (to the extent not included in the Final Adjustment pursuant to Section 2.10); and |
Notwithstanding the foregoing, (i) the Holders shall be liable for Taxes or Losses with respect to Taxes only to the extent that such Taxes were not (A) included as liabilities in calculating Working Capital and (B) taken into account in determining the amount of the Purchase Price
adjustments pursuant to Section 2.10, (ii) the Holders shall have no liability for any Taxes or Losses with respect to Taxes that are attributable to any transaction outside the ordinary course of business of the Company entered into by Parent or its Affiliates or at the direction of Parent or its Affiliates that occurs on the Closing Date after the Closing, and (iii) the Holders shall have no liability to Parent for any Losses attributable to Taxes with respect to any Post-Closing Tax Period, except for any Losses attributable to any breach of any representation or warranty of the Company or its Subsidiaries pursuant to Sections 3.15(k), 3.15(o), 3.15(q), as applicable, or breach of a covenant by the Company or its Subsidiaries, in each case, with respect to any Pre-Closing Tax Period.
Indemnification by the Parent. Subject to the terms of this Article IX, from and after the Effective Time, Parent hereby agrees to indemnify each Holder and their respective employees, officers, directors, successors and assigns (collectively, the “Stockholder Indemnitees”) and agrees to defend, reimburse and hold them harmless from and against all Losses incurred or suffered by any of them and arising out of or resulting from any of the following:
.
to the Holders in accordance with their Pro Rata Shares and subject to prior compliance with the procedures set forth in Section 2.9 and the limitations specified in Section 9.4, the amount of such claim. |
liability hereunder (except to the extent the Indemnifying Party has suffered actual prejudice thereby). |
settling or compromising any such Third Party Claim, Parent shall obtain the written consent of the Stockholders’ Representative. The Stockholders’ Representative shall not withhold, condition or delay such consent unreasonably. If Parent effects any such settlement or compromise of such Third Party Claim with the written consent of the Stockholders’ Representative, the cash amount payable pursuant to such settlement or compromise plus the related indemnifiable Losses, if any, specified in such consent shall, if requested by Parent in its sole discretion, be released from the Indemnification Escrow Account. |
|
(3) Notwithstanding anything to the contrary in this Agreement, the consent of Parent to any settlement or compromise of a Third Party Claim may be withheld by Parent in its sole discretion; provided that Parent’s consent shall not be unreasonably withheld, conditioned or delayed in the event any such settlement is on exclusively monetary terms to be fully funded from the Indemnification Escrow Account and includes an unconditional release of Parent and its Affiliates from all liability arising out of such Third Party Claim. |
Section 2.9, that portion of the Indemnification Escrow Account then remaining in the Indemnification Escrow Account, if any, in excess of any amounts in the Indemnification Escrow Account reserved in respect of pending and unresolved claims pursuant to this Agreement, including for indemnification which have been submitted pursuant to this Article IX. The Escrow Agent shall continue to hold any amounts remaining in the Indemnification Escrow Account following such distribution in accordance with the Escrow Agreement until the claims underlying the amounts held in the Indemnification Escrow Account are resolved in accordance with the procedures set forth in this Section 9.3, and shall distribute any amounts remaining in the Indemnification Escrow Account in accordance with this paragraph upon final resolution of such claims. |
.
|
(p) Notwithstanding any other provisions of this Agreement to the contrary, the indemnification obligations of the Holders hereunder shall be limited as follows: |
claims for indemnification pursuant to this Agreement, shall any Parent Indemnitee be permitted to recover any such indemnified Losses from the Holders directly (which in any event shall be allocated severally in accordance with each Holder’s respective Pro Rata Share); provided, however, that for Losses arising out of or resulting from claims pursuant to Sections 9.1(f) or 9.1(g), (x) subject to clause (y) of this sentence, the Parent Indemnitees shall look first to the Indemnification Escrow Account for the satisfaction of only the first $200,000 of the aggregate indemnified Losses pursuant to Sections 9.1(f) and 9.1(g) (collectively, the “Threshold Amount”) and the Parent Indemnitees shall be permitted to recover any indemnified Losses in excess of the Threshold Amount from the Holders directly (which in any event shall be allocated severally in accordance with each Holder’s respective Pro Rata Share), and (y) to the extent the Parent Indemnitees are not able to recover the Threshold Amount from the Indemnification Escrow Account because it has been exhausted or contains less than the Threshold Amount in funds that are not otherwise subject to claims for indemnification pursuant to this Agreement, the Parent Indemnitees shall be permitted to recover any such indemnified Losses from the Holders directly (which in any event shall be allocated severally in accordance with each Holder’s respective Pro Rata Share); and |
|
(q) Notwithstanding any other provisions of this Agreement to the contrary, the indemnification obligations of the Parent hereunder shall be limited as follows: |
. All materiality qualifications contained in the representations and warranties of the parties to this Agreement set forth in this Agreement (however they may be phrased and including the term “Company Material Adverse Effect”, “Parent Material Adverse Effect”, and otherwise) shall be taken into account for purposes of this Article IX solely for purposes of determining whether a breach of, or inaccuracy in, such representation and warranty has occurred and, if such breach or inaccuracy has occurred, all such materiality qualifications shall be ignored and not given any effect for purposes of determining the amount of Losses arising out of,
resulting from or relating to such breach of, or inaccuracy in, such representation and warranty, for purposes of this Article IX.
Exclusive Remedy. Except with respect to an action based upon an allegation of fraud or with respect to which equitable relief or specific performance is sought or as otherwise expressly provided in this Agreement, the provisions of this Article IX constitute the exclusive remedy of the parties hereto with respect to the matters covered under Sections 9.1 and 9.2.
Tax Treatment of Indemnity Payments. The parties hereto agree to treat any indemnity payment made pursuant to this Agreement as an adjustment to the Purchase Price for all Tax purposes, unless otherwise required by applicable Laws.
Survival. The representations and warranties contained in this Agreement shall survive the Effective Time for the following periods: (a) Sections 3.5 through Section 3.11, Section 3.13, and Sections 3.16 through Section 3.23 shall survive until the first anniversary of the Closing Date (b) Section 3.12 (Benefit Plans), Section 3.14 (Environmental Matters) and Section 3.15 (Taxes) shall survive until the sixth (6th) anniversary of the Closing Date, and (c) Section 3.1 (Organization; Standing and Power), Section 3.2 (Capital Stock), Section 3.3 (Subsidiaries), Section 3.4 (Authority) and Section 3.24 (Brokers) (the representations and warranties in this clause (c), collectively, the “Company Fundamental Representations”) and Section 4.1 (Organization; Standing and Power) and Section 4.2 (Authority) (the representations and warranties in Section 4.1 and 4.2, collectively, the “Parent Fundamental Representations”) shall survive until the fourth (4th) anniversary of the Closing Date; provided, however, that (i) if there is a breach or inaccuracy of a representation and warranty arising out of or resulting from Company-Related Fraud or Parent-Related Fraud, with respect to a claim based on such Company-Related Fraud or Parent-Related Fraud, as applicable, the applicable representation and warranty shall survive solely with respect to such fraud beyond the applicable survival periods specified in clauses (a), (b) and (c) of this Section 10.1 until such fraud is discovered and the claims for Losses arising out of or resulting from such fraud are resolved and the related indemnification obligations under this Agreement, if any, and other payment obligations, if any, are fulfilled, and (ii) if a Notice of Claim under this Agreement for a breach or inaccuracy of a representation or warranty in this Agreement is submitted in accordance with this Agreement prior to the expiration of the applicable survival periods in clauses (a), (b) and (c) of this Section 10.1, solely with respect to the claims included in such Notice of Claim, the survival period for the applicable representations and warranties shall survive beyond the applicable survival periods specified in clauses (a), (b) and (c) of this Section 10.1 until such claims specified in such Notice of Claim are resolved and the related indemnification obligations under this Agreement, if any, are fulfilled. The covenants contained in Sections 5.1, 5.2, 5.3, 5.4, 5.5, 5.6, 5.9, 5.10, 5.11 and 5.13 of this Agreement shall terminate at the Closing; provided that the right of a party to seek indemnification for breaches of or failure to perform any such covenants shall survive until the
fourth (4th) anniversary of the Closing; provided, however, that if a Notice of Claim under this Agreement for a breach of or failure to perform any such covenant is submitted in accordance with this Agreement on or prior to the fourth (4th) anniversary of the Closing, solely with respect to the claims included in such Notice of Claim, the survival period for the applicable covenants shall survive beyond the fourth (4th) anniversary of the Closing until such claims specified in such Notice of Claim are resolved and the related indemnification obligations under this Agreement, if any, are fulfilled. All other covenants contained in this Agreement and the related indemnification obligations for breaches of or failure to perform such covenants shall survive the Closing and remain in full force and effect in perpetuity after the Closing Date, other than those that terminate earlier in accordance with their express terms (the “Expiring Covenants”). The Expiring Covenants will terminate on such termination date as is expressly provided in such terms (the “Expiration Date”); provided that the right of a party to seek indemnification for breaches of or failure to perform any Expiring Covenants shall survive until the later of (x) the Expiration Date and (y) the fourth (4th) anniversary of the Closing; provided, however, that if a Notice of Claim under this Agreement for a breach of or failure to perform any Expiring Covenant is submitted in accordance with this Agreement on or prior to such later date, solely with respect to the claims included in such Notice of Claim, the survival period for the applicable Expiring Covenants shall survive beyond such later date until such claims specified in such Notice of Claim are resolved and the related indemnification obligations under this Agreement, if any, are fulfilled.
Amendment. Prior to the Effective Time, subject to Applicable Laws (including the DGCL) and Section 10.4, this Agreement may be amended or modified only by a written agreement executed and delivered by duly authorized officers of Parent, Merger Sub, the Company and the Stockholders’ Representative. After the Effective Time, subject to Applicable Laws (including the DGCL), this Agreement may be amended or modified only by written agreement executed and delivered by duly authorized officers of Parent and the Stockholders’ Representative. This Agreement may not be modified or amended except as provided in the immediately preceding two sentences.
Notices. Any notice, request, instruction or other document or other communication to be given hereunder by a party hereto shall be in writing and shall be deemed to have been given (i) when received if given in person or by courier or a courier service (providing proof of delivery), (ii) on the date of transmission if sent by confirmed facsimile, (iii) on the next Business Day if sent by an overnight delivery service (providing proof of delivery), or (iv) five (5) Business Days after being deposited in the U.S. mail, certified or registered mail, postage prepaid; provided that with respect to notices delivered to the Stockholders’ Representative, such notices must be delivered solely via confirmed facsimile:
On-X Life Technologies Holdings, Inc.
0000 X Xxxxxxxx Xxxx Xxxxxxxx X
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx, President and Chief Executive Officer
Facsimile No.: (000) 000-0000
with copies (which shall not constitute notice) to:
Xxxxxxx Xxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: J. Xxxxxxx Xxxxx, Esq.
Fortis Advisors LLC
Notice Department
with copies (which shall not constitute notice) to:
Xxxxxxx Xxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: J. Xxxxxxx Xxxxx
CryoLife, Inc.
0000 Xxxxxxx Xxxx., XX
Xxxxxxxx, XX 00000
Attention:Xxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation
900 South Capital of Texas Highway
Las Cimas IV, Fifth Floor
Austin, Texas 78746
Attention: Xxxx X. Xxxxxx
or to such other individual or address as a party hereto may designate for itself by notice given as herein provided.
. At any time prior to the Closing, the Company may (a) extend the time for the performance of any of the obligations or other acts of Parent or Merger Sub contained herein, (b) waive any inaccuracies in the representations and warranties of Parent or Merger Sub contained herein or in any document, certificate or writing delivered by Parent or Merger Sub pursuant hereto or (c) waive compliance by Parent or Merger Sub with any of the agreements or conditions contained herein. At any time prior to the Closing, Parent may (i) extend the time for the performance of any of the obligations or other acts of the Company or the Holders contained herein, (ii) waive any inaccuracies in the representations and warranties of the Company contained herein or in any document, certificate or writing delivered by the Company or Holders pursuant hereto or (iii) waive compliance by the Company and the Holders with any of the agreements or conditions contained herein. Any agreement on the part of any party 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 a party hereto at any time or times to require performance of any provision hereof shall in no manner affect its right at a later time to enforce the same. No waiver by a party of any condition or of any breach of any term, covenant, representation or warranty contained in this Agreement shall be effective unless in writing, and no waiver in any one or more instances shall be deemed to be a further or continuing waiver of any such condition or breach in other instances or a waiver of any other condition or breach of any other term, covenant, representation or warranty.
Counterparts. This Agreement may be executed in counterparts, and such counterparts may be delivered in electronic format (including by fax and email). Such delivery of counterparts shall be conclusive evidence of the intent to be bound hereby, and each such counterpart and copies produced therefrom shall have the same effect as an original. To the extent applicable, the foregoing constitutes the election of the parties hereto to invoke any Laws authorizing electronic signatures.
Interpretation. The headings preceding the text of Articles and Sections included in this Agreement are for convenience only and shall not be deemed part of this Agreement or be given any effect in interpreting this Agreement; provided, however, that the headings and section references in the Company Disclosure Letter and Parent Disclosure Letter shall be deemed a part of this Agreement and be given effect in interpreting this Agreement. As such, the representations and warranties are solely for the benefit of the parties to this Agreement. The use of the masculine, feminine or neuter gender herein shall not limit any provision of this Agreement. The use of the terms “including” or “include” shall in all cases herein mean “including, without limitation” or “include, without limitation,” respectively. References to Articles, Sections or Exhibits without attribution to another document shall refer to those portions of this Agreement. Any singular term in this Agreement shall be deemed to include the plural, and any plural term in this Agreement the singular. “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic format) in a visible form. If any action under this Agreement is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter. The words “hereby”, “hereof”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Any capitalized term used in any Exhibit, the Company Disclosure Letter or the Parent
Disclosure Letter but not otherwise defined therein shall have the meaning given to such term in this Agreement. All references to dollars or to “$” shall be references to United States dollars. The word “will” shall be construed to have the same meaning as the word “shall.” The phrase “to the extent” shall mean the extent or degree to which a subject or thing extends, and shall not simply be construed to mean the word “if.” For purposes of this Agreement, references to the term “delivered by the Company,” “delivered to Parent,” “furnished to Parent,” “made available to Parent” or similar expressions will mean that the Company has posted true, complete and accurate copies of such materials to the electronic data room maintained by the Company at xxxx://xxx.xxxxxxxxxxx.xxx and has given Parent and its representatives access to the materials so posted not less than 72 hours prior to the execution and delivery of this Agreement; provided, however, that the disclosure of officers, employees and consultants of the Company and the Subsidiaries contemplated by Section 3.13(d) hereof may be updated via email to Parent or its designated representative less than 72 hours, but in no event less than 24 hours prior to the execution of this Agreement.
APPLICABLE LAWS. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OF ANY JURISDICTION. NOTWITHSTANDING THE FOREGOING, EACH OF THE PARTIES TO THIS AGREEMENT AGREES THAT THE DEBT COMMITMENTS AND THE FINANCING AGREEMENTS, AND ALL DISPUTES, CONTROVERSIES, CLAIMS OR ACTIONS OF ANY KIND OR DESCRIPTION (WHETHER AT LAW, IN CONTRACT OR IN TORT) THAT MAY BE BASED UPON, ARISE OUT THEREOF OR RELATE THERETO, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE THEREOF, SHALL, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED THEREIN, BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT REGARD OR GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF SUCH STATE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN SUCH STATE.
Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.
Assignment. This Agreement and all of the provisions hereof shall be binding upon and shall inure to the benefit of and be enforceable by the parties hereto and their respective heirs, successors and permitted assigns; provided that Merger Sub may assign (in whole but not in part) its rights and obligations under this Agreement to another wholly owned Subsidiary of Parent; provided, further, that any assignment pursuant to the preceding proviso shall not relieve Parent and Merger Sub of any obligation under this Agreement; and provided further, that Parent may collaterally assign its rights (but not its obligations) under this Agreement to any lender (including any Financing Source) providing financing to Parent or Merger Sub or otherwise in connection with the transactions contemplated hereby. Any purported assignment in contravention of this Section 10.9 shall be null and void.
. This Agreement is solely for the benefit of the parties hereto (and their successors, permitted assignees, and heirs, executors and administrators) and, except for Section 5.8, Article IX, Section 10.11 and the immediately following proviso, no provision of this Agreement shall be deemed to confer upon any Person that is not a party to this Agreement, either express or implied, any remedy, claim, liability, reimbursement, cause of action or other right; provided, however, that each member of the Financing Group is an intended third-party beneficiary of (i) any liability cap or other limitation on remedies or damages in this Agreement that are for the benefit of Parent, Merger Sub or the Surviving Company, and (ii) the provisions of Section 8.3 (Effect of Termination), Section 8.4 (Specific Performance), Section 10.7 (Applicable Laws), this Section 10.10 (Third Party Beneficiaries), Section 10.11 (Certain Limitations on Remedies), Section 10.14 (Entire Understanding), Section 10.15 (Jurisdiction of Disputes) and Section 10.16 (Waiver of Jury Trial), and each such Section will be enforceable by each member of the Financing Group, and none of such Sections may be amended, modified or supplemented without the express written consent of a majority in interest of the Financing Sources.
No Recourse; Certain Limitations on Remedies.
.
|
(iv) to engage attorneys, accountants and other advisors, at the Holders’ expense (such expenses to be paid pursuant to Section 10.12(j)); and |
Notwithstanding the foregoing, the Stockholders’ Representative shall have no obligation to act on behalf of the Holders, except as expressly provided herein and in the Escrow Agreement, and for purposes of clarity, there are no obligations of the Stockholders’ Representative in any other ancillary agreement, schedule, exhibit or the Company Disclosure Letter.
|
(l) All of the immunities and powers granted to the Representative Group under this Agreement shall survive the Closing and the termination of this Agreement and the Escrow Agreement. |
without gross negligence or willful misconduct. The Holders appointing the Stockholders’ Representative do hereby severally (in accordance with their Pro Rata Share) agree to indemnify, defend and hold the Representative Group harmless from and against any and all Liability, claim, loss, cost, damage, judgment, fine, amount paid in settlement, fee or expense (including fees, disbursements and costs of attorneys and other skilled professionals and in connection with seeking recovery from insurers) (collectively, the “Representative Expenses”) reasonably incurred or suffered as a result of the performance of such Stockholders’ Representative’s duties under this Agreement or the Escrow Agreement except for any such Liability arising out of the gross negligence or willful misconduct of the Stockholders’ Representative. Such Representative Expenses may be recovered first, from the Expense Fund, second, from any consideration being distributed to the Holders from the Indemnification Escrow Account and the Adjustment Reserve, and third, directly from the Holders. The Holders acknowledge that the Stockholders’ Representative shall not be required to expend or risk its own funds or otherwise incur any financial liability in the exercise or performance of any of its powers, rights, duties or privileges or administration of its duties. Furthermore, the Stockholders’ Representative shall not be required to take any action unless the Stockholders’ Representative has been provided with funds, security or indemnities which, in its determination, are sufficient to protect the Stockholders’ Representative against the costs, expenses and liabilities which may be incurred by the Stockholders’ Representative in performing such actions. The immunities and rights to indemnification shall survive the resignation or removal of the Stockholders’ Representative or any member of the Advisory Group and the Closing and/or any termination of this Agreement and the Escrow Agreement. |
. Upon the reasonable request of Parent or the Surviving Company, each party will, on and after the Closing Date, execute and deliver to the other parties such other documents, assignments and other instruments as may be reasonably required to effectuate the Merger and to effect and evidence the provisions of this Agreement and the transactions contemplated hereby.
Entire Understanding. The Exhibits, the Company Disclosure Letter and the Parent Disclosure Letter identified in this Agreement are incorporated in this Agreement by reference and made a part this Agreement. This Agreement and the Confidentiality Agreements set forth the entire agreement and understanding of the parties hereto and thereto with respect to the subject matter hereof and thereof and supersede any and all prior agreements, arrangements and understandings among the parties hereto and thereto with respect to the subject matter hereof and thereof.
JURISDICTION OF DISPUTES.
OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (INCLUDING THE FINANCING), INCLUDING ANY DISPUTE, CONTROVERSY, CLAIM OR ACTION ARISING OUT OF OR RELATING TO THE FINANCING OR THE PERFORMANCE THEREOF, IN ANY FORUM OTHER THAN THE SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NEW YORK, OR IF UNDER APPLICABLE LAWS EXCLUSIVE JURISDICTION IS VESTED IN THE FEDERAL COURTS, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (AND THE APPELLATE COURTS THEREOF). EACH OF THE PARTIES TO THIS AGREEMENT (I) IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF EACH SUCH COURT IN ANY SUCH DISPUTE, CONTROVERSY, CLAIM OR ACTION, (II) WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO VENUE OR TO AN INCONVENIENT FORUM, (III) AGREES THAT ALL SUCH DISPUTES, CONTROVERSIES, CLAIMS AND ACTIONS SHALL BE HEARD AND DETERMINED ONLY IN SUCH COURTS AND (IV) WAIVES ANY RIGHT TO TRIAL BY JURY IN RESPECT OF ANY SUCH DISPUTE, CONTROVERSY, CLAIM OR ACTION. |
. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES OF FACT AND LAW, AND THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY OTHERWISE HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE NEGOTIATION, EXPLORATION, DUE DILIGENCE WITH RESPECT TO OR ENTERING INTO OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER KNOWINGLY AND VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.16.
Disclosure Letters. Disclosure in any section or subsection of the Company Disclosure Letter or the Parent Disclosure Letter shall apply only to the indicated Section of this Agreement, except to the extent that it is reasonably apparent on the face of such disclosure that such disclosure is applicable to or relevant to another Section of this Agreement. The inclusion of information in the Company Disclosure Letter or the Parent Disclosure Letter shall not be construed as an admission that such information is material to any of the Company or its Subsidiaries or to any of Parent or its Subsidiaries, as applicable. In addition, matters reflected in the Company Disclosure Letter or the Parent Disclosure Letter are not necessarily limited to matters required by this Agreement to be reflected in the Company Disclosure Letter or the Parent Disclosure Letter. Such additional matters are set forth for informational purposes only and do not necessarily include other matters of a similar nature. Neither the specifications of any dollar amount in any representation,
warranty or covenant contained in this Agreement nor the inclusion of any specific item in the Company Disclosure Letter or the Parent Disclosure Letter is intended to imply that such amount, or higher or lower amounts, or the item so included or other items, are or are not material, and shall not be construed as an admission of liability or responsibility under any Law or in any dispute or controversy.
Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction specified in Section 10.15 declares that any term or provision hereof is invalid or unenforceable, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible to the fullest extent permitted by applicable Laws in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, the language shall be construed as mutually chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party. Any reference to any federal, state, local or foreign statute or Laws shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.
Attorney‑Client Privilege.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.
ON-X LIFE TECHNOLOGIES HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Chief Executive Officer and President
CRYOLIFE, INC.
By: /s/ D. Xxxxxx Xxx
Name: D. Xxxxxx Xxx
Title: Executive Vice President, Chief Operating
Officer and Chief Financial Officer
CAST ACQUISITION CORPORATION
By: /s/ D. Xxxxxx Xxx
Name: D. Xxxxxx Xxx
Title: President and Chief Financial Officer
Stockholders’ Representative
FORTIS ADVISORS LLC
By: /s/ Xxxx Xxxx
Name: Xxxx Xxxx
Title: CEO & Managing Director
