AGREEMENT AND PLAN OF MERGER by and among PRA INTERNATIONAL, GG HOLDINGS I, INC. and GG MERGER SUB I, INC. Dated as of July 24, 2007
EXHIBIT
(d) (1)
by and among
GG HOLDINGS I, INC.
and
GG MERGER SUB I, INC.
Dated as of July 24, 2007
TABLE OF CONTENTS
Page | ||||||
ARTICLE I |
||||||
DEFINITIONS |
||||||
Section 1.01 |
Definitions | 2 | ||||
Section 1.02 |
Interpretation and Rules of Construction | 10 | ||||
ARTICLE II |
||||||
THE MERGER |
||||||
Section 2.01 |
The Merger | 11 | ||||
Section 2.02 |
Charter and Bylaws | 11 | ||||
Section 2.03 |
Merger Effective Time | 11 | ||||
Section 2.04 |
Closing | 12 | ||||
Section 2.05 |
Directors and Officers of the Surviving Corporation | 12 | ||||
ARTICLE III |
||||||
EFFECTS OF THE MERGER |
||||||
Section 3.01 |
Effects of the Merger on Company Securities | 12 | ||||
Section 3.02 |
Effects of the Merger on Merger Sub Securities | 13 | ||||
Section 3.03 |
Payment of Merger Consideration; Stock Transfer Books | 13 | ||||
Section 3.04 |
Company Dissenting Shares | 15 | ||||
Section 3.05 |
Withholding Taxes | 16 | ||||
ARTICLE IV |
||||||
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
||||||
Section 4.01 |
Organization and Qualification; Subsidiaries; Authority | 17 | ||||
Section 4.02 |
Organizational Documents | 17 | ||||
Section 4.03 |
Capitalization | 18 | ||||
Section 4.04 |
Authority Relative to this Agreement, Validity and Effect of Agreements | 19 | ||||
Section 4.05 |
No Conflict; Required Filings and Consents | 19 | ||||
Section 4.06 |
Permits; Compliance with Laws | 20 | ||||
Section 4.07 |
SEC Filings; Financial Statements | 21 | ||||
Section 4.08 |
Absence of Certain Changes or Events | 22 | ||||
Section 4.09 |
Absence of Litigation | 22 | ||||
Section 4.10 |
Employee Benefit Plans | 22 | ||||
Section 4.11 |
Information Supplied | 25 | ||||
Section 4.12 |
Intellectual Property | 25 | ||||
Section 4.13 |
Taxes | 26 | ||||
Section 4.14 |
Environmental Matters | 27 | ||||
Section 4.15 |
Compliance with Healthcare Laws | 27 | ||||
Section 4.16 |
Material Contracts | 28 | ||||
Section 4.17 |
Customers and Backlog | 29 |
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Page | ||||||
Section 4.18 |
Interested Party Transactions | 30 | ||||
Section 4.19 |
Brokers | 30 | ||||
Section 4.20 |
Opinion of Financial Advisor | 30 | ||||
Section 4.21 |
Amendment of Rights Plan; State Takeover Statute | 30 | ||||
ARTICLE V |
||||||
REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES |
||||||
Section 5.01 |
Organization | 31 | ||||
Section 5.02 |
Ownership of Merger Sub; No Prior Activities | 31 | ||||
Section 5.03 |
Power and Authority | 31 | ||||
Section 5.04 |
No Conflict; Required Filings and Consents | 31 | ||||
Section 5.05 |
Information Supplied | 32 | ||||
Section 5.06 |
Absence of Litigation | 32 | ||||
Section 5.07 |
Available Funds; Limited Guaranty | 32 | ||||
Section 5.08 |
No Ownership of Company Capital Stock | 33 | ||||
Section 5.09 |
Other Agreements or Understandings | 34 | ||||
Section 5.10 |
Brokers | 34 | ||||
Section 5.11 |
No Additional Representations | 34 | ||||
ARTICLE VI |
||||||
CONDUCT OF BUSINESS PENDING THE MERGER |
||||||
Section 6.01 |
Conduct of Business by the Company Pending the Merger | 35 | ||||
Section 6.02 |
Conduct of Business by Buyer Parties Pending the Merger | 38 | ||||
Section 6.03 |
Merger Sub | 38 | ||||
ARTICLE VII |
||||||
ADDITIONAL AGREEMENTS |
||||||
Section 7.01 |
Company Proxy Statement; Other Filings; Stockholders’ Meeting | 38 | ||||
Section 7.02 |
Access to Information; Confidentiality | 40 | ||||
Section 7.03 |
Solicitation | 41 | ||||
Section 7.04 |
Employee Benefits Matters | 44 | ||||
Section 7.05 |
Directors’ and Officers’ Indemnification and Insurance of the Surviving Corporation | 46 | ||||
Section 7.06 |
Financing; Cooperation with Financing | 49 | ||||
Section 7.07 |
Further Action; Commercially Reasonable Efforts | 51 | ||||
ARTICLE VIII |
||||||
CONDITIONS TO THE MERGER |
||||||
Section 8.01 |
Conditions to the Obligations of Each Party | 54 | ||||
Section 8.02 |
Conditions to the Obligations of Parent and Merger Sub | 54 | ||||
Section 8.03 |
Conditions to the Obligations of the Company | 55 | ||||
Section 8.04 |
Frustration of Conditions | 55 |
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Page | ||||||
ARTICLE IX |
||||||
TERMINATION, AMENDMENT AND WAIVER |
||||||
Section 9.01 |
Termination | 56 | ||||
Section 9.02 |
Effect of Termination | 57 | ||||
Section 9.03 |
Fees and Expenses | 57 | ||||
Section 9.04 |
Waiver | 60 | ||||
ARTICLE X |
||||||
GENERAL PROVISIONS |
||||||
Section 10.01 |
Non-Survival of Representations and Warranties | 61 | ||||
Section 10.02 |
Notices | 61 | ||||
Section 10.03 |
Severability | 62 | ||||
Section 10.04 |
Amendment | 62 | ||||
Section 10.05 |
Entire Agreement; Assignment | 62 | ||||
Section 10.06 |
Performance Guaranty | 63 | ||||
Section 10.07 |
Parties in Interest | 63 | ||||
Section 10.08 |
Governing Law; Forum | 63 | ||||
Section 10.09 |
Waiver of Jury Trial | 63 | ||||
Section 10.10 |
Headings | 64 | ||||
Section 10.11 |
Counterparts | 64 | ||||
Section 10.12 |
Waiver | 64 |
iii
EXHIBITS
Exhibit A |
Form of Limited Guaranty | |
Exhibit B |
Form of Voting Agreement | |
Exhibit C |
Form of FIRPTA Certificate |
iv
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 24, 2007 (this “Agreement”), is by
and among PRA International, a Delaware corporation (the “Company”), GG Holdings I, Inc., a
Delaware corporation (“Parent”), and GG Merger Sub I, Inc., a Delaware corporation and a
wholly-owned subsidiary of Parent (“Merger Sub” and, together with Parent, the “Buyer
Parties”).
RECITALS
WHEREAS, the parties intend that Merger Sub will be merged with and into the Company (the
“Merger”) on the terms and subject to the conditions set forth in this Agreement, with the
Company surviving the Merger as a wholly-owned subsidiary of Parent in accordance with the General
Corporation Law of the State of Delaware (the “DGCL”);
WHEREAS, the Special Committee (as hereinafter defined) has (i) determined that this Agreement
and the transactions contemplated hereby, including the Merger, are advisable and fair to, and in
the best interests of, the Company and its stockholders, (ii) approved and declared advisable this
Agreement and the transactions contemplated hereby, including the Merger, and resolved to recommend
to the board of directors of the Company (the “Company Board”) that it approve and declare
advisable this Agreement and the transactions contemplated hereby, including the Merger, (iii)
recommended that the Company Board recommend adoption of this Agreement by the Company’s
stockholders and (iv) directed that this Agreement be submitted to the Company Board for its
approval and recommendation that the Company’s stockholders adopt this Agreement;
WHEREAS, the Company Board (upon the recommendation of the Special Committee) has (i)
determined that this Agreement and the transactions contemplated hereby, including the Merger, are
advisable and fair to, and in the best interests of, the Company and its stockholders, (ii)
approved this Agreement and the transactions contemplated hereby, including the Merger, (iii)
directed that this Agreement be submitted to the Company’s stockholders for their adoption and (iv)
resolved to recommend that the Company’s stockholders adopt this Agreement;
WHEREAS, the board of directors of Merger Sub has unanimously approved this Agreement and the
board of directors of Parent, and Parent, as the sole stockholder of Merger Sub, in each case, has
approved and adopted this Agreement and the transactions contemplated hereby, including the Merger;
WHEREAS, the Company, Parent and Merger Sub desire to make certain representations,
warranties, covenants and agreements in connection with the Merger and also to prescribe certain
conditions to the Merger, as set forth herein;
WHEREAS, concurrently with the execution of this Agreement, Genstar Capital Partners V, L.P.,
an affiliate of Parent and Merger Sub (“Guarantor”), has entered into a Limited Guaranty
(the “Limited Guaranty”), substantially in the form attached as
Exhibit A to this Agreement in favor of the Company with respect to certain of the
obligations of Parent and Merger Sub arising under, or in connection with, this Agreement; and
WHEREAS, concurrently with the execution of this Agreement, the Company, Genstar Capital
Partners III, L.P. and Stargen III, L.P. have entered into a voting agreement (the “Voting
Agreement”), substantially in the form attached as Exhibit B to this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties,
covenants and agreements contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
(a) For purposes of this Agreement:
“Acceptable Confidentiality Agreement” means a confidentiality and standstill
agreement that contains provisions that are no less favorable in the aggregate to the Company than
those contained in the Confidentiality Agreement and shall not prohibit the Company from providing
information to Parent which the Company is required to provide pursuant to Section 7.03.
“Action” means any claim, action, suit, proceeding, arbitration, mediation or
investigation as to which written notice has been provided to the applicable party.
“Affiliate” or “affiliate” of a specified person means a person who, directly
or indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with, such specified person.
“beneficial owner” or “beneficial ownership”, with respect to any Company
Common Shares, has the meaning ascribed to such term under Rule 13d-3(a) of the Exchange Act.
“Business Day” or “business day” means any day on which the principal offices
of the SEC in Washington, D.C. are open to accept filings and on which banks are not required or
authorized to close in New York, New York.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Acquisition Proposal” means any proposal or offer for, whether in one
transaction or a series of related transactions, any (a) merger, consolidation or similar
transaction involving the Company or any Company Subsidiary that would constitute a “significant
subsidiary” (as defined in Rule 1-02 of Regulation S-X, but substituting 20% for references to 10%
therein), (b) sale or other disposition,
2
directly or indirectly, by merger, consolidation, share exchange or any similar transaction,
of any assets of the Company or the Company Subsidiaries representing 20% or more of the
consolidated assets of the Company and the Company Subsidiaries, (c) issue, sale or other
disposition by the Company of (including by way of merger, consolidation, share exchange or any
similar transaction) securities (or options, rights or warrants to purchase, or securities
convertible into, such securities) representing 20% or more of the votes associated with the
outstanding voting equity securities of the Company, (d) tender offer or exchange offer in which
any Person or “group” (as such term is used under the Exchange Act) offers to acquire beneficial
ownership, or the right to acquire beneficial ownership, of 20% or more of the outstanding Company
Common Shares, or (e) transaction which is similar in form, substance or purpose to any of the
foregoing transactions; provided, however, that the term “Company Acquisition
Proposal” shall not include (i) the Merger or any of the other transactions contemplated by this
Agreement, or (ii) any merger, consolidation, business combination, reorganization,
recapitalization or similar transaction solely among the Company and one or more Company
Subsidiaries or among Company Subsidiaries.
“Company Bylaws” means the Amended and Restated Bylaws of the Company, as in effect
immediately prior to the Merger Effective Time.
“Company Charter” means the Restated Certificate of Incorporation of the Company, as
amended.
“Company Common Shares” means the shares of common stock, par value $0.01 per share,
of the Company.
“Company Disclosure Schedule” means the disclosure schedule delivered by the Company
to Parent concurrently with the execution of this Agreement.
“Company Superior Proposal” means a bona fide Company Acquisition Proposal (on its
most recently amended and modified terms, if amended and modified), but for purposes of this
definition, references to 20% in the definition of “Company Acquisition Proposal” shall be deemed
to be references to 50%, made by a Third Party that the Company Board determines in its good faith
judgment (after consultation with its financial and legal advisors) to be (i) more favorable to the
stockholders of the Company from a financial point of view than the Merger and (ii) reasonably
capable of being completed taking into account all financial, legal, regulatory and other aspects
of such Company Acquisition Proposal as the Company Board shall consider relevant.
“control” (including the terms “controlled by” and “under common control
with”) 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 voting
securities, as trustee or executor, by contract or credit arrangement or otherwise.
“Disclosure Schedules” means, collectively, the Company Disclosure Schedule and the
Parent Disclosure Schedule.
3
“Employee Stock Purchase Plan” means the Company’s 2005 Employee Stock Purchase Plan.
“Environmental Law” means any Law relating to the environment, natural resources, or
safety or health of human beings or other living organisms, including the manufacture, distribution
in commerce and use or Release of Hazardous Substances.
“GAAP” means generally accepted accounting principles as applied in the United States.
“Go-Shop Termination Fee” means $7,900,000.00.
“Governmental Authority” means any national, state, provincial, municipal or local
government, governmental, regulatory or administrative authority, agency, instrumentality or
commission or any court, tribunal, or judicial or arbitral body.
“Hazardous Substances” means any pollutant, contaminant, hazardous substance,
hazardous waste, medical waste, special waste, toxic substance, petroleum or petroleum-derived
substance, waste or additive, radioactive material, or other compound, element, material or
substance in any form whatsoever (including products) regulated, restricted or addressed by or
under any applicable Environmental Law.
“Intellectual Property” means (i) patents, patent applications and invention
registrations of any type, (ii) trademarks, service marks, trade dress, logos, trade names,
corporate names and other source identifiers, and registrations and applications for registration
thereof, (iii) copyrightable works, copyrights, and registrations and applications for registration
thereof, and (iv) confidential and proprietary information, including trade secrets and know-how.
“knowledge of the Company” or “knowledge” when used in reference to the
Company means the actual knowledge of those individuals listed on Section 1.01(a) of the Company
Disclosure Schedule.
“Law” means any United States national, state, provincial, municipal or local statute,
law, ordinance, regulation, rule, code, executive order, injunction, judgment, decree or other
order.
“Liens” means with respect to any asset (including any security), any mortgage, claim,
lien, pledge, charge, security interest or encumbrance of any kind in respect to such asset.
“Management Stock Purchase Plan” means the Company’s Management Stock Purchase Plan.
“Marketing Period” shall mean the first period of 20 consecutive business days during
and at the end of which (A) Parent and its financing sources shall have the Required Information,
(B) nothing has occurred and no condition exists that would cause any of the conditions set forth
in Sections 8.02(a) and 8.02(b) (other than the receipt of
4
the certificates referred to in Section 8.02(c)) to fail to be satisfied assuming the Closing
were to be scheduled for any time during such 20-consecutive-business-day period, and (C) the
conditions set forth in Section 8.01 shall be satisfied; provided, that (x) the Marketing
Period shall end on any earlier date that is the date on which the debt financing is consummated;
(y) for purposes of calculating such 20-consecutive-business-day period, August 17 through
September 3 and December 15 through January 8 shall not be counted or taken into account; and (z)
the Marketing Period shall not be deemed to have commenced if, prior to the completion of the
Marketing Period, (1) the Company’s independent registered accounting firm shall have withdrawn its
audit opinion with respect to any financial statements contained in the Required Information, in
which case the Marketing Period shall not be deemed to commence any earlier than the time at which
a new audit opinion in customary form is issued with respect to the consolidated financial
statements for the applicable periods by the Company’s independent registered accounting firm or
another independent registered accounting firm reasonably acceptable to Parent, (2) the Company
shall have publicly announced any intention to restate any of its financial information, in which
case the Marketing Period shall not be deemed to commence any earlier than the time at which such
restatement has been completed and the Company SEC Reports have been amended or the Company has
announced that it has concluded that no restatement shall be required in accordance with GAAP, (3)
the Company shall have failed to file any report with the SEC by the date required under the
Exchange Act (provided that any filing that is deemed timely filed pursuant to Rule 12b-25 under
the Exchange Act shall be deemed timely filed), in which case the Marketing Period shall not be
deemed to commence any earlier than the time at which all such reports have been filed or (4) the
financial statements included in the Required Information that is available to Parent on the first
day of any such 20-consecutive-business-day period would not be sufficiently current on any day
during such 20-consecutive-business-day period to permit (a) a registration statement using such
financial statements to be declared effective by the SEC on the last day of the
20-consecutive-business-day period or (b) the Company’s independent registered accounting firm to
issue a customary comfort letter to purchasers (in accordance with its normal practices and
procedures) on the last day of the 20-consecutive-business-day period, then a new
20-consecutive-business-day period shall commence upon Parent receiving updated Required
Information that would be sufficiently current to permit the actions described in (a) and (b) on
the last day of such 20-consecutive-business-day period.
“Material Adverse Effect” means, with respect to the Company, (i) an effect, event,
development or change that is materially adverse to the business, results of operations and
financial condition of the Company and the Company Subsidiaries, taken as a whole, other than any
effect, event, development or change arising out of or resulting from (a) a decrease in the market
price of Company Common Shares (but not any effect, event, development or change underlying such
decrease to the extent that such effect, event, development or change would otherwise constitute a
Material Adverse Effect), (b) changes in conditions in the U.S. or global economy or capital or
financial markets generally, including changes in interest or exchange rates (except to the extent
such effect, event, development or change affects the Company or the Company subsidiaries in a
materially disproportionate manner as compared to other similarly situated enterprises), (c)
changes in general legal, tax, regulatory, political or business conditions that, in each
5
case, generally affect the contract research organization industry in which the Company and
the Company Subsidiaries conduct their business (except to the extent such effect, event,
development or change affects the Company or the Company Subsidiaries in a materially
disproportionate manner as compared to other persons or participants in such industry), (d) changes
in GAAP, (e) the negotiation, execution, announcement, pendency or performance of this Agreement or
the transactions contemplated hereby or the consummation of the transactions contemplated by this
Agreement, including the impact thereof on relationships, contractual or otherwise, with customers,
suppliers, vendors, lenders, investors, venture partners or employees, (f) acts of war, armed
hostilities, sabotage or terrorism, or any escalation or worsening of any such acts of war, armed
hostilities, sabotage or terrorism threatened or underway as of the date of this Agreement, (g)
earthquakes, hurricanes, floods, or other natural disasters, or (h) any action taken by the Company
at the request or with the consent of any of the Buyer Parties (other than with respect to the
obligation of the Company to obtain any consents or approvals hereunder), or (ii) any event,
circumstance, change or effect that would reasonably be expected to prevent, or materially hinder
or delay, the Company from consummating the Merger or any of the other transactions contemplated by
this Agreement.
“Other Filings” means any document, other than the Proxy Statement, to be filed with
the SEC in connection with this Agreement.
“Parent Disclosure Schedule” means the disclosure schedule delivered by Parent and
Merger Sub to the Company concurrently with the execution of this Agreement.
“Parent Material Adverse Effect” means any event, circumstance, change or effect that
would reasonably be expected to prevent, or materially hinder or delay Parent or Merger Sub from
consummating the Merger or any of the other transactions contemplated by this Agreement.
“Parent Termination Fee” means $23,700,000.00.
“person” or “Person” means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including a “person” as defined in
Section 13(d)(3) of the Exchange Act), trust, association or entity or Governmental Authority, but
shall exclude Company Subsidiaries and Significant Company Subsidiaries.
“Release” means any release, pumping, pouring, emptying, injecting, escaping,
leaching, migrating, dumping, seepage, spill, leak, flow, discharge or emission.
“Representatives” means the respective officers, directors, employees, consultants,
agents, advisors, affiliates and other representatives of the applicable person.
“Required Information” means all financial statements, pro forma financial
information, financial data, audit reports and other information of the type required by Regulation
S-X and Regulation S-K under the Securities Act and the other accounting rules and regulations of
the SEC as may reasonably be requested by Parent of
6
the type and form customarily included in private placement memoranda pursuant to Rule 144A
under the Securities Act.
“Special Committee” means a committee of the Company Board, the members of which are
not affiliated with Parent or Merger Sub and are not members of the Company’s management, formed
for the purpose of, among other things, evaluating, and making a recommendation to the full Company
Board with respect to, this Agreement and the Merger.
“subsidiary” or “subsidiaries” of the Company, Parent or any other person
means a corporation, limited liability company, partnership, joint venture or other organization of
which: (a) such party or any other subsidiary of such party is a general partner; (b) voting power
to elect a majority of the board of directors or others performing similar functions with respect
to such organization is held by such party or by any one or more of such party’s subsidiaries; or
(c) at least 50% of the equity interests is controlled by such party.
“Tax” or “Taxes” means any federal, state, local, or foreign income, gross
receipts, license, stamp, premium, windfall profits, environmental, customs duties, capital stock,
franchise, profits, real property, personal property, transfer, registration, or other tax of any
kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
“Tax Return” means any return, declaration, report, claim for refund, or information
return or statement relating to Taxes, including any amendment thereof and any schedule or
attachment thereto.
“Termination Fee” means $23,700,000.00, except (i) in the event that this Agreement is
terminated by the Company pursuant to Section 9.01(h) in order to enter into a definitive agreement
with an Excluded Party (whether before or after the Go-Shop Period End Date), or (ii) in the event
that this Agreement is terminated by Parent pursuant to Section 9.01(g) in a circumstance in which
the event giving rise to the right by Parent to receive a termination fee is based on the
submission to the Company of a Company Acquisition Proposal by an Excluded Party, in which cases
the Termination Fee shall mean the Go-Shop Termination Fee.
“Third Party” means any Person other than the Company or any of its subsidiaries.
“Voting Debt” shall mean bonds, debentures, notes or other indebtedness having the
right to vote (or convertible into, or exchangeable for, securities having the right to vote) on
any matters on which holders of equity interests in the Company or any Company Subsidiary may vote.
(b) The following terms have the meaning set forth in the Sections set forth below:
7
Defined Term | Location of Definition | |
Agreement |
Preamble | |
Benefits Continuation Period |
§ 7.04(a) | |
Buyer Parties |
Preamble | |
Capital Expenditures |
§ 6.01(i) | |
Certificate of Merger |
§ 2.03 | |
Claim |
§ 7.05(a) | |
Closing |
§ 2.04 | |
Closing Date |
§ 2.04 | |
Company |
Preamble | |
Company Board |
Recitals | |
Company Change in Recommendation |
§ 7.01(c) | |
Company Common Share Certificates |
§ 3.03(b) | |
Company Dissenting Shares |
§ 3.04(a) | |
Company Employees |
§ 7.04(a) | |
Company Expenses |
§ 9.03(e) | |
Company Financial Advisor |
§ 4.19 | |
Company Intellectual Property |
§ 4.12 | |
Company Material Contract |
§ 4.16 | |
Company Option Consideration |
§ 3.01(c) | |
Company Preferred Shares |
§ 4.03(a) | |
Company Recommendation |
§ 7.01(c) | |
Company SEC Reports |
§ 4.07(a) | |
Company Stock Awards |
§ 4.03(b) | |
Company Stockholder Approval |
§ 4.04(a) | |
Company Stockholders’ Meeting |
§ 7.01(c) | |
Company Stock-Based Awards |
§ 3.01(d) | |
Company Stock Options |
§ 3.01(c) | |
Company Subsidiary |
§ 4.01(b) | |
Confidentiality Agreement |
§ 7.02(b) | |
Contract |
§ 4.16(a) | |
Corporation |
§ 2.02(a) | |
Debt Commitment Letter |
§ 5.07(b) | |
Debt Financing |
§ 5.07(b) | |
Delaware Courts |
§ 10.08(b) | |
DGCL |
Recitals | |
Environmental Permits |
§ 4.14(a) | |
Equity Funding Letter |
§ 5.07(b) | |
ERISA |
§ 4.10(a) | |
ERISA Affiliate |
§ 4.10(f) | |
Exchange Act |
§ 4.05(b) | |
Excluded Party |
§ 7.03(b) | |
Excluded Stockholders |
§ 4.20 | |
Expenses |
§ 7.05(a) | |
FDA |
§ 4.06(a) | |
Financing |
§ 5.07(b) |
8
Defined Term | Location of Definition | |
Financing Commitments |
§ 5.07(b) | |
Foreign Antitrust Laws and Approvals |
§ 8.01(b) | |
Go-Shop Period End Date |
§ 7.03(a) | |
Governmental Order |
§ 9.01(c) | |
Guarantor |
Recitals | |
Health Care Laws |
§ 4.15(a) | |
HSR Act |
§ 4.05(b) | |
Incentive Plans |
§ 3.01(c) | |
Indemnified Parties |
§ 7.05(a) | |
IRS |
§ 4.10(a) | |
Lenders |
§ 5.07(b) | |
Limited Guaranty |
Recitals | |
Major Customer |
§ 4.17(a) | |
Merger |
Recitals | |
Merger Consideration |
§ 3.01(b) | |
Merger Effective Time |
§ 2.03 | |
Merger Shares |
§ 3.01(b) | |
Merger Sub |
Preamble | |
Multiemployer Plan |
§ 4.10(c) | |
Nasdaq |
§ 4.05(b) | |
New Plans |
§ 7.04(b) | |
Non-U.S. Plans |
§ 4.10(a) | |
Old Plans |
§ 7.04(b) | |
Open Contract |
§ 4.17(a) | |
Outside Date |
§ 9.01(b) | |
Parent |
Preamble | |
Parent Expenses |
§ 9.03(b)(iii) | |
Paying Agent |
§ 3.03(a) | |
Permits |
§ 4.06(a) | |
Proxy Statement |
§ 4.05(b) | |
Regulatory Law |
§ 7.07(e) | |
Rights Agreement |
§ 4.21(a) | |
SEC |
§ 4.05(b) | |
Section 16 |
§ 7.04(d) | |
Securities Act |
§ 4.03(c)(iv) | |
Significant Company Subsidiary |
§ 4.01(b) | |
Solicited Person |
§ 7.03(a) | |
Surviving Corporation |
§ 2.01 | |
Surviving Corporation Bylaws |
§ 2.02(b) | |
Surviving Corporation Charter |
§ 2.02(a) | |
Surviving Corporation Fund |
§ 3.03(a) | |
Terminated Company Acquisition Proposal |
§ 7.03(b) | |
Termination Date |
§ 9.01 | |
U.S. Plans |
§ 4.10(a) | |
Voting Agreement |
Recitals |
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Section 1.02 Interpretation and Rules of Construction.
(a) In this Agreement, except to the extent otherwise provided or that the context otherwise
requires:
(i) when a reference is made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference is to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated;
(ii) the table of contents and headings for this Agreement are for reference purposes
only and do not affect in any way the meaning or interpretation of this Agreement;
(iii) whenever the words “include,” “includes” or “including” are used in this
Agreement, they are deemed to be followed by the words “without limitation”;
(iv) the words “hereof,” “herein” and “hereunder” and words of similar import, when
used in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(v) references to any statute, rule or regulation are to the statute, rule or
regulation as amended, modified, supplemented or replaced from time to time (and, in the
case of statutes, include any rules and regulations promulgated under said statutes) and to
any section of any statute, rule or regulation include any successor to said section;
(vi) all terms defined in this Agreement have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto, unless otherwise defined
therein;
(vii) the definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms;
(viii) references to a person are also to its successors and permitted assigns;
(ix) the use of “or” is not intended to be exclusive unless expressly indicated
otherwise;
(x) references to monetary amounts are to the lawful currency of the United States;
(xi) words importing the singular include the plural and vice versa and words
importing gender include all genders;
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(xii) time is of the essence in the performance of the parties’ respective
obligations; and
(xiii) time periods within or following which any payment is to be made or act is to
be done shall be calculated by excluding the day on which the period commences and
including the day on which the period ends and by extending the period to the next Business
Day following if the last day of the period is not a Business Day.
(b) The inclusion of any information in the Company Disclosure Schedule or the Parent
Disclosure Schedule will not be deemed an admission or acknowledgment, in and of itself and solely
by virtue of the inclusion of such information in such Disclosure Schedule, that such information
is required to be listed therein or that any such items are material to the Company and its
Subsidiaries or to Parent and Merger Sub, as the case may be. The headings, if any, of the
individual sections of each such Disclosure Schedule are inserted for convenience only and will not
be deemed to constitute a part thereof or a part of this Agreement.
ARTICLE II
THE MERGER
Section 2.01 The Merger. On the terms and subject to the conditions set forth in this
Agreement, and in accordance with the DGCL, at the Merger Effective Time the separate corporate
existence of Merger Sub will cease and the Company will continue its corporate existence under
Delaware law as the surviving corporation in the Merger (the “Surviving Corporation”).
Section 2.02 Charter and Bylaws.
(a) At the Merger Effective Time, the Company Charter shall be amended so as to contain the
provisions, and only the provisions, contained immediately prior to the Merger Effective Time in
the Certificate of Incorporation of Merger Sub, except for Article FIRST of the Company Charter,
which shall read “The name of the corporation is PRA International (the “Corporation”)”
and, as so amended, such Certificate of Incorporation shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter further amended as provided therein or by Law (the
“Surviving Corporation Charter”).
(b) At the Merger Effective Time, the Company Bylaws shall be amended so as to contain the
provisions, and only the provisions contained immediately prior to the Merger Effective Time in the
Bylaws of Merger Sub and shall be the Bylaws of the Surviving Corporation until thereafter amended
as provided by law, by the Company Charter or by such Bylaws (the “Surviving Corporation
Bylaws”).
Section 2.03 Merger Effective Time. Subject to the provisions of this Agreement, as
soon as practicable on the Closing Date, the parties shall file a certificate of merger as
contemplated by the DGCL (the “Certificate of Merger”), together with any required related
certificates, with the Secretary of State of the State of Delaware, in such
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form as required by, and executed in accordance with the relevant provisions of, the DGCL.
The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware or at such later date and time as the Company and Parent may
agree upon and as is set forth in such Certificate of Merger (such time, the “Merger Effective
Time”).
Section 2.04 Closing. Unless this Agreement shall have been terminated in accordance
with Section 9.01, the closing of the Merger (the “Closing”) shall occur as promptly as
practicable, but in no event later than the third (3rd) Business Day, following the satisfaction,
or waiver by the party entitled to the benefit of the same, of the conditions set forth in Article
VIII (other than conditions which by their terms are required to be satisfied or waived at the
Closing, but subject to the satisfaction or waiver of such conditions) that is the earlier of (x)
any Business Day during the Marketing Period as may be specified by Parent on no less than three
(3) Business Days’ prior notice to the Company and (y) the final day of the Marketing Period, or at
such other time and on a date as agreed to by the parties (the “Closing Date”). The
Closing shall take place at the offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other place as agreed to by the parties hereto.
Section 2.05 Directors and Officers of the Surviving Corporation. From and after the
Merger Effective Time, (i) the directors of Merger Sub immediately prior to the Merger Effective
Time, as set forth on a schedule delivered by Parent to the Company prior to the Merger Effective
Time, shall be the directors of the Surviving Corporation and (ii) the officers of the Company
immediately prior to the Merger Effective Time shall be the officers of the Surviving Corporation,
in each case, until their respective successors have been duly elected or appointed and qualified
or until their earlier death, resignation or removal.
ARTICLE III
EFFECTS OF THE MERGER
Section 3.01 Effects of the Merger on Company Securities. At the Merger Effective
Time, by virtue of the Merger and without any action on the part of the Company, Parent, Merger Sub
or the holder of any capital stock of the Company or Merger Sub:
(a) Each Company Common Share held in treasury and not outstanding and each Company Common
Share that is owned by Parent or Merger Sub immediately prior to the Merger Effective Time shall be
cancelled and retired and shall cease to exist, without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(b) Each Company Common Share issued and outstanding immediately prior to the Merger Effective
Time (other than Company Dissenting Shares and Company Common Shares to be cancelled in accordance
with Section 3.01(a)), shall be converted and exchanged automatically into the right to receive an
amount in cash equal to $30.50 per Company Common Share (the “Merger Consideration”),
payable to
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the holder thereof in accordance with Section 3.03. The Company Common Shares that are to be
so converted into the right to receive the Merger Consideration are referred to herein as the
“Merger Shares”.
(c) Immediately prior to the Merger Effective Time, each outstanding qualified or nonqualified
option to purchase Company Common Shares and each stock appreciation right with respect to Company
Common Shares (collectively, the “Company Stock Options”) under any employee or director
share option or compensation plan or arrangement of the Company (collectively, “Incentive
Plans”), shall become fully vested and exercisable or payable, as the case may be (whether or
not then vested or subject to any performance condition that has not been satisfied, and regardless
of the exercise price thereof). At the Merger Effective Time, each Company Stock Option not
theretofore exercised shall be cancelled in exchange for the right to receive an amount in cash
equal to the excess, if any, of (i) the Merger Consideration over (ii) the exercise or base price
per share, as applicable, of such Company Stock Option, multiplied by the total number of Company
Common Shares subject to such Company Stock Option (the “Company Option Consideration”),
without interest. Payment of the Company Option Consideration shall be made as soon as practicable
after the Merger Effective Time but in any event within three (3) Business Days following the
Merger Effective Time, subject to applicable Taxes required to be withheld with respect to such
payment.
(d) At the Merger Effective Time, each right of any kind, contingent or accrued, to receive
Company Common Shares or benefits measured in whole or in part by the value of a number of Company
Common Shares granted under the Incentive Plans or otherwise (including performance shares,
restricted stock, restricted stock units, phantom units, deferred stock units and dividend
equivalents) other than Company Stock Options (each, other than Company Stock Options, “Company
Stock-Based Awards”), whether vested or unvested, which is outstanding immediately prior to the
Merger Effective Time shall cease to represent a right or award with respect to Company Common
Shares, shall become fully vested and free of any forfeiture or holding restrictions or performance
or other conditions and shall entitle the holder thereof to receive, at the Merger Effective Time,
an amount in cash equal to the Merger Consideration in respect of each Company Common Share
underlying a particular Company Stock-Based Award, subject to applicable Taxes required to be
withheld with respect to such payment.
Section 3.02 Effects of the Merger on Merger Sub Securities. At the Merger Effective
Time, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding
immediately prior to the Merger Effective Time shall be converted into one newly issued, fully paid
and nonassessable share of common stock of the Surviving Corporation.
Section 3.03 Payment of Merger Consideration; Stock Transfer Books.
(a) Prior to the Merger Effective Time, Parent shall appoint as paying agent a bank or trust
company reasonably satisfactory to the Company (the “Paying Agent”). Immediately following
completion of the Merger and the cancellation of the
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Company Stock Options and Company Stock Based Awards, Parent shall deposit or cause the
Surviving Corporation to deposit, or cause to be deposited, with the Paying Agent, for the benefit
of the holders of Merger Shares, Company Stock Options, and Company Stock-Based Awards, cash in an
amount sufficient to pay the aggregate Merger Consideration required to be paid (such cash being
hereinafter referred to as the “Surviving Corporation Fund”), and to cause the Paying Agent
to make, and the Paying Agent shall make, payments of the Merger Consideration out of the Surviving
Corporation Fund to the holders of Merger Shares, Company Stock Options, and Company Stock-Based
Awards in accordance with this Agreement. The Surviving Corporation Fund shall be invested by the
Paying Agent in (i) direct obligations of the United States of America, (ii) obligations for which
the full faith and credit of the United States of America is pledged to provide for payment of all
principal and interest or (iii) commercial paper obligations receiving the highest rating from
either Xxxxx’x Investor Services, Inc. or Standard & Poor’s, a division of The McGraw Hill
Companies, or a combination thereof, as directed by and for the benefit of the Surviving
Corporation; provided, however, that no gain or loss thereon shall affect the
amounts payable to the holders of Merger Shares, Company Stock Options, and Company Stock-Based
Awards following completion of the Merger pursuant to this Article III. Any and all interest and
other income earned on the Surviving Corporation Fund shall promptly be paid to the Surviving
Corporation.
(b) As promptly as practicable after the Merger Effective Time, Parent and the Surviving
Corporation shall cause the Paying Agent to mail to each person who was, as of immediately prior to
the Merger Effective Time, a holder of record of the Merger Shares: (i) a letter of transmittal
(which shall be in customary form and shall specify that delivery shall be effected, and risk of
loss and title to the certificates representing the Merger Shares (the “Company Common Share
Certificates”) shall pass, only upon proper delivery of the Company Common Share Certificates
to the Paying Agent) and (ii) instructions for effecting the surrender of the Company Common Share
Certificates in exchange for the Merger Consideration. Upon surrender to the Paying Agent of
Company Common Share Certificates for cancellation, together with such letter of transmittal, duly
completed and validly executed in accordance with the instructions thereto, and such other
documents as may be required pursuant to such instructions, the holder of such Company Common Share
Certificate shall be entitled to receive in exchange therefor, in cash, the Merger Consideration in
respect thereof, and the Company Common Share Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of Merger Shares that is not registered in the
transfer records of the Company, payment of the Merger Consideration in respect of the applicable
Merger Shares may be made to a person other than the person in whose name the Company Common Share
Certificate so surrendered is registered if such Company Common Share Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting such payment shall
pay any transfer or other taxes required by reason of the payment of the Merger Consideration in
respect thereof or establish to the reasonable satisfaction of the Surviving Corporation that such
tax has been paid or is not applicable. Until surrendered as contemplated by this Section 3.03,
each Company Common Share Certificate shall be deemed at all times after the Merger Effective Time
to represent only the right to receive upon such surrender the Merger
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Consideration. No interest shall be paid or will accrue on any cash payable to holders of
Company Common Share Certificates pursuant to the provisions of this Article III.
(c) Any portion of the Surviving Corporation Fund deposited with the Paying Agent pursuant to
Section 3.03(a) to pay for Merger Shares that become Company Dissenting Shares shall be delivered
to the Surviving Corporation upon demand; provided, however, that the Surviving
Corporation shall remain liable for payment of the Merger Consideration in respect of Company
Common Shares held by any stockholder who shall have failed to perfect or who otherwise shall have
withdrawn or lost such stockholder’s rights to appraisal of such shares under the DGCL.
(d) Any portion of the Surviving Corporation Fund that remains undistributed to the holders of
Merger Shares for six (6) months after the Merger Effective Time shall be delivered to the
Surviving Corporation, upon demand, and any holders of Merger Shares who have not theretofore
complied with this Article III shall thereafter look only to the Surviving Corporation for, and the
Surviving Corporation shall remain liable for, payment of their claim for the Merger Consideration.
Any portion of the Surviving Corporation Fund remaining unclaimed by holders of Merger Shares as
of a date which is immediately prior to such time as such amounts would otherwise escheat to or
become property of any Governmental Authority shall, to the extent permitted by applicable Law,
become the property of the Surviving Corporation free and clear of any claims or interest of any
person previously entitled thereto. None of Parent, the Paying Agent or the Surviving Corporation
shall be liable to any holder of Merger Shares for any such shares (or dividends or distributions
with respect thereto), or cash delivered to a public official pursuant to any abandoned property,
escheat or similar Law.
(e) If any Company Common Share Certificate shall have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming such Company Common Share
Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such person of a bond, in such reasonable amount as the Surviving Corporation may
direct, as indemnity against any claim that may be made against it with respect to such Company
Common Share Certificate, the Paying Agent shall pay in respect of Merger Shares to which such
lost, stolen or destroyed Company Common Share Certificate relate the Merger Consideration to which
the holder thereof is entitled.
(f) At the Merger Effective Time, the stock transfer books of the Company shall be closed and
there shall be no further registration of transfers of Merger Shares thereafter on the records of
the Company. From and after the Merger Effective Time, the holders of Company Common Share
Certificates representing Merger Shares shall cease to have any rights with respect to such Shares,
except as otherwise provided in this Agreement, the certificate of incorporation of the Surviving
Corporation, or by Law.
Section 3.04 Company Dissenting Shares.
(a) Notwithstanding any provision of this Agreement to the contrary, if required by the DGCL
(but only to the extent required thereby), Company Common
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Shares that are issued and outstanding immediately prior to the Merger Effective Time (other
than Company Common Shares to be canceled pursuant to Section 3.01(a)) and that are held by holders
of such Company Common Shares who have not voted in favor of the adoption of this Agreement or
consented thereto in writing and who have properly exercised appraisal rights with respect thereto
in accordance with, and who have complied with, Section 262 of the DGCL (the “Company
Dissenting Shares”) will not be convertible into the right to receive the Merger Consideration,
and holders of such Company Dissenting Shares will be entitled to receive payment of the fair value
of such Company Dissenting Shares in accordance with the provisions of such Section 262 unless and
until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal
and payment under the DGCL. If, after the Merger Effective Time, any such holder fails to perfect
or effectively withdraws or loses such right, such Company Dissenting Shares will thereupon be
treated as if they had been converted into and have become exchangeable for, at the Merger
Effective Time, the right to receive the Merger Consideration, without any interest thereon, and
the Surviving Corporation shall remain liable for payment of the Merger Consideration for such
Company Common Shares. At the Merger Effective Time, any holder of Company Dissenting Shares shall
cease to have any rights with respect thereto, except the rights provided in Section 262 of the
DGCL and as provided in the previous sentence.
(b) The Company will give Parent (i) notice of any demands or withdrawals of such demands
received by the Company for appraisals of Company Common Shares and (ii) the opportunity to
participate in all negotiations and proceedings with respect to such notices and demands for
appraisal. The Company shall not, except with the prior written consent of Parent, make any
payment or agree to make any payment with respect to any demands for appraisal or offer to settle
or settle any such demands.
Section 3.05 Withholding Taxes. Parent, Merger Sub and the Surviving Corporation
shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this
Agreement to any Person such amounts as may be required to be deducted and withheld with respect to
the making of such payment under the Code or under any provision of state, local or foreign Tax
law. To the extent that amounts are so withheld and paid over to the appropriate taxing authority,
such withheld amounts shall be treated for all purposes of this Agreement as having been paid to
such Person in respect of which such deduction and withholding was made.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Company Disclosure Schedule or the Company SEC Reports filed with
or furnished to and publicly available from the SEC prior to the date of this Agreement, other than
any forward-looking disclosures set forth in any risk factor section of the Company SEC Reports to
the extent such disclosures are primarily cautionary or speculative in nature (it being understood
and agreed that any information set forth in one section of the Company Disclosure Schedule will be
deemed to apply to each other section or subsection of this Agreement to the extent such disclosure
is made
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in a way as to make its relevance to such other section or subsection reasonably apparent),
the Company hereby represents and warrants to the Buyer Parties as follows:
Section 4.01 Organization and Qualification; Subsidiaries; Authority.
(a) The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware and has all requisite corporate power and authority to own,
operate, lease and encumber its properties and carry on its business as now conducted. The Company
is duly qualified or licensed to do business as a foreign corporation and is in good standing under
the laws of any other jurisdiction in which the character of the properties owned, leased or
operated by it therein or in which the transaction of its business makes such qualification or
licensing necessary, except where the failure to be so qualified, licensed or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(b) Each of the Company’s subsidiaries (a “Company Subsidiary”, and each of the
Company Subsidiaries that is a “significant subsidiary,” as such term is defined in Rule 1-02 of
Regulation S-X under the Exchange Act, a “Significant Company Subsidiary”), together with
the jurisdiction of organization of each such subsidiary, the percentage of the outstanding equity
of each such subsidiary owned by the Company and each other subsidiary of the Company, is set forth
on Section 4.01(b) of the Company Disclosure Schedule. Each Company Subsidiary is a corporation,
partnership, limited liability company or trust duly incorporated or organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization,
except where the failure to be so incorporated, organized, validly existing or in good standing
would not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect. Each of the Significant Company Subsidiaries has the requisite corporate, limited
partnership, limited liability company or similar power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted, except where the failure to
have such power and authority would not, individually or in the aggregate, be reasonably expected
to have a Material Adverse Effect. Each of the Company Subsidiaries is duly qualified or licensed
to do business, and is in good standing (to the extent applicable), in each jurisdiction where the
character of the properties owned, leased or operated by it or the conduct or nature of its
business makes such qualification or licensing necessary, except for jurisdictions in which the
failure to be so qualified, licensed or in good standing would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except as set forth in
Section 4.01(b) of the Company Disclosure Schedule, each of the Company Subsidiaries is a direct or
indirect wholly-owned subsidiary of the Company.
Section 4.02 Organizational Documents. The Company Charter and Company Bylaws as most
recently filed as exhibits to the Company SEC Reports are in full force and effect and no
dissolution, revocation or forfeiture proceedings regarding the Company have been commenced.
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Section 4.03 Capitalization.
(a) The authorized capital stock of the Company consists of 36,000,000 Company Common Shares
and 4,000,000 shares of preferred stock, par value $0.01 per share, of the Company (“Company
Preferred Shares”). As of July 13, 2007, (i) 24,604,112 Company Common Shares were issued and
outstanding, all of which are validly issued, fully paid and nonassessable and (ii) 17,716 Company
Common Shares were held in the treasury of the Company. As of the date of this Agreement, no
Company Preferred Shares are issued and outstanding.
(b) As of July 13, 2007, 3,628,814 Company Common Shares were reserved for future issuance
pursuant to outstanding Company Stock Options, and Company Stock-Based Awards (collectively, the
“Company Stock Awards”).
(c) Except as set forth in Section 4.03(c) of the Company Disclosure Schedule:
(i) each outstanding share of capital stock of, or other equity interest in, a Company
Subsidiary owned by the Company or by another Company Subsidiary is owned free and clear of
all Liens;
(ii) except as set forth in the Company Charter, there are no options, warrants or
other rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or any Company Subsidiary or obligating the
Company or any Company Subsidiary to issue or sell any shares of capital stock of, or other
equity interests in, the Company or any Company Subsidiary;
(iii) there are no outstanding contractual obligations of, or other equity interest
in, the Company to repurchase, redeem or otherwise acquire any shares of capital stock of
the Company;
(iv) the Company is under no obligation, contingent or otherwise, by reason of any
agreement to register the offer and sale or resale of any of its securities under the
Securities Act of 1933, as amended (the “Securities Act”);
(v) except as set forth in the Company Charter and the Voting Agreement, there are no
agreements or understandings to which the Company or any Company Subsidiary is a party with
respect to the voting of any shares of capital stock of the Company or which restrict the
transfer of any such shares, nor does the Company have knowledge of any third party
agreements or understandings with respect to the voting of any such shares or which
restrict the transfer of any such shares;
(vi) there are no accrued or unpaid dividends with respect to any Company Common
Shares; and
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(vii) there is no Voting Debt of the Company or any Company Subsidiary outstanding.
Section 4.04 Authority Relative to this Agreement, Validity and Effect of Agreements.
(a) The Company has all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions contemplated by
this Agreement. Except for the approvals described in the following sentence, the execution,
delivery and performance by the Company of this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly and validly authorized by all necessary corporate
action on behalf of the Company. No other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions contemplated by this
Agreement other than (i) the approval of this Agreement by the holders of at least a majority of
the outstanding Company Common Shares entitled to vote in accordance with the DGCL (the
“Company Stockholder Approval”) and (ii) the filing and recordation of the Company
Certificate of Merger and other appropriate merger documents as required by the DGCL. This
Agreement has been duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by each of Parent and Merger Sub, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and similar Laws of general applicability relating to or affecting creditors’
rights or by general equity principles.
(b) The Company Board, by resolutions duly adopted at meetings duly called and held, has duly
(i) determined that this Agreement and the Merger are fair to and in the best interests of the
Company and its stockholders, (ii) approved this Agreement and declared its advisability, (iii)
recommended that the stockholders of the Company adopt this Agreement, and (iv) directed that this
Agreement be submitted for consideration by the stockholders of the Company at the Company
Stockholders’ Meeting. The Company has previously provided or made available to Parent true and
correct copies of such resolutions.
Section 4.05 No Conflict; Required Filings and Consents.
(a) The execution and delivery by the Company of this Agreement do not, and the performance of
its obligations hereunder and thereunder will not, (i) conflict with or violate the Company Charter
or Company Bylaws, (ii) assuming that all consents, approvals, authorizations and other actions
described in subsection (b) of this Section 4.05 have been obtained and all filings and obligations
described in subsection (b) of this Section 4.05 have been made, conflict with or violate any Law
applicable to the Company or any Company Subsidiary or by which any property or asset of the
Company or any Company Subsidiary, is bound, or (iii) require any consent or result in any
violation or breach of or constitute (with or without notice or lapse of time or both) a default
(or give to others any right of termination, amendment, acceleration or
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cancellation) under, or result in the triggering of any payments or result in the creation of
a Lien or other encumbrance on any property or asset of the Company or any Company Subsidiary
pursuant to, any of the terms, conditions or provisions of a Company Material Contract to which the
Company or any Company Subsidiary is a party or by which it or any of its respective properties or
assets may be bound, except, with respect to clauses (ii) and (iii) such triggering of payments,
Liens, encumbrances, filings, notices, permits, authorizations, consents, approvals, violations,
conflicts, breaches or defaults which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) The execution and delivery by the Company of this Agreement does not, and the performance
of its obligations hereunder will not, require any consent, approval, authorization of, or filing
with or notification to, any Governmental Authority, except (i) for (A) applicable requirements, if
any, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), (B) if
applicable, the pre merger notification requirements of the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended (the “HSR Act”) or other applicable Law, (C) the
filing with the Securities and Exchange Commission (the “SEC”) of a proxy statement
relating to the Merger to be sent to the Company’s stockholders (as amended or supplemented from
time to time, the “Proxy Statement”) and other written communications that may be deemed
“soliciting materials” under Rule 14a-12, (D) any filings required under the rules and regulations
of Nasdaq (“Nasdaq”), and (E) the filing of the appropriate merger documents as required by
the DGCL, or (ii) where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 4.06 Permits; Compliance with Laws.
(a) Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (i) the Company and Company Subsidiaries are in possession of all
franchises, grants, authorizations, licenses, permits, consents, certificates, approvals,
registrations and orders of any Governmental Authority, including all those that may be required by
the United States Food and Drug Administration (the “FDA”), the Drug Enforcement
Administration or any other federal, state, local or foreign agencies or bodies engaged in the
regulation of pharmaceuticals, medical devices, biologics, cosmetics or biohazardous materials,
that are necessary for them to own, lease and operate their properties or to carry on their
business as it is now being conducted (collectively, the “Permits”), and all such Permits
are valid and in full force and effect, and (ii) to the knowledge of the Company, neither the
Company nor any Company Subsidiary has violated or is in default of any such Permit in any material
respect. To the knowledge of the Company, neither the Company nor any Company Subsidiary has
received any notice or communication from any Governmental Authority regarding (i) any actual
alleged violation of any Permit or any actual or alleged failure to comply with the requirements of
any Permit, or (ii) an actual or threatened revocation, withdrawal, cancellation, material
modification or termination of any Permit.
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(b) None of the Company or any Company Subsidiary is, and since January 1, 2005 none of the
Company or any Company Subsidiary has been, in violation of any Laws or Permits applicable to the
Company or any Company Subsidiary, or by which any property or asset of the Company or any Company
Subsidiary is bound, except for any such violations which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Section 4.07 SEC Filings; Financial Statements.
(a) The Company has filed all forms, reports, registration statements, proxy statements and
documents (including all exhibits) required to be filed by it with the SEC since December 31, 2004
(the “Company SEC Reports”). The Company SEC Reports (i) filed prior to the date of this
Agreement were, as of their respective dates, or, if amended or superseded by a subsequent filing,
as of the date of the last amendment or superseding filing prior to the date hereof, and (ii) filed
on or after the date hereof, will be, as of their respective dates, or, if amended or superseded by
a subsequent filing, as of the date of the last such amendment or superseding filing, in each case,
prepared in all material respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations promulgated thereunder. The
Company SEC Reports (x) filed prior to the date of this Agreement did not as of their respective
dates, or, if amended or superseded by a subsequent filing, as of the date of the last such
amendment or superseding filing prior to the date hereof, and (y) filed on or after the date hereof
will not as of their respective dates, or if amended or superseded by a subsequent filing, as of
the date of the last such amendment or superseding filing, in each case, contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the circumstances under
which they were made, not misleading. To the knowledge of the Company, as of the date hereof,
there are no material unresolved SEC comments.
(b) Each of the consolidated financial statements (including, in each case, any notes thereto)
contained in the Company SEC Reports, each as amended prior to the date hereof, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods indicated (except as may
be indicated in the notes thereto) and each fairly presented, in all material respects, the
consolidated financial position, results of operations and cash flows of the Company and its
consolidated Company Subsidiaries as of the respective dates thereof and for the respective periods
indicated therein except as otherwise noted therein (subject, in the case of unaudited statements,
to normal and recurring year end adjustments). Except for matters reflected or reserved against in
the consolidated balance sheet of the Company as of March 31, 2007 (or the notes thereto) included
in the Company SEC Reports, neither the Company nor any of the Company Subsidiaries has any
liabilities or obligations (whether absolute, accrued, contingent, fixed or otherwise) of any
nature that would be required under GAAP, as in effect on the date of this Agreement, to be
reflected on a consolidated balance sheet of the Company (including the notes thereto), except
liabilities and obligations that (i) were incurred since March 31, 2007 in the ordinary course of
business consistent with past practice, (ii) are incurred in connection with the transactions
contemplated by this Agreement or (iii) have
21
not had and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(c) The Company and its subsidiaries have devised and maintain a system of internal accounting
controls sufficient to provide reasonable assurances regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with
GAAP. Each of the Company and its subsidiaries (1) has designed disclosure controls and procedures
(within the meaning of Rules 13a-15(e) and 15d-15(e) of the Exchange Act) to ensure that material
information relating to such entity and its subsidiaries is made known to the management of such
entity (or its general partner) by others within those entities as appropriate to allow timely
decisions regarding required disclosure and to make the certifications required by the Exchange Act
with respect to the Company SEC Reports, and (2) has disclosed, based on its most recent evaluation
prior to the date of this Agreement, to its auditors and the audit committee of its Board of
Directors (A) any significant deficiencies in the design or operation of internal controls which
could adversely affect in any material respect its ability to record, process, summarize and report
financial data and have disclosed to its auditors any material weaknesses in internal controls and
(B) any fraud, whether or not material, that involves management or other employees who have a
significant role in its internal controls.
(d) The Company is in compliance in all material respects with the provisions of the
Xxxxxxxx-Xxxxx Act of 2002 that are applicable to the Company.
Section 4.08 Absence of Certain Changes or Events. Since December 31, 2006, (a) the
Company has conducted its business in the ordinary course consistent with past practice and (b)
there has not been an event, occurrence, effect or circumstance that has resulted or would
reasonably be expected to result in a Material Adverse Effect.
Section 4.09 Absence of Litigation. There is no Action pending or, to the knowledge
of the Company, threatened against the Company or any Company Subsidiaries or any of its or their
respective properties or assets except as would not, individually or in the aggregate, (x) prevent
or materially delay consummation of the Merger and the other transactions contemplated by this
Agreement or (y) have or reasonably be expected to have a Material Adverse Effect. None of the
Company or any of the Company Subsidiaries is subject to any order, judgment, writ, injunction or
decree, except as would not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect.
Section 4.10 Employee Benefit Plans.
(a) Section 4.10(a) of the Company Disclosure Schedule lists all material employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”)) and all material bonus, stock option, stock purchase, restricted stock,
stock appreciation right, restricted stock unit, phantom equity, incentive, deferred compensation,
retiree medical or life insurance, supplemental retirement, severance or other benefit plans,
programs or arrangements, and
22
all material employment, termination, severance or other contracts or agreements to which the
Company or any Company Subsidiary is a party, with respect to which the Company or any Company
Subsidiary has any obligation or which are maintained, contributed to or sponsored by the Company
or any Company Subsidiary for the benefit of any current or former employee, officer, director or
consultant of the Company or any Company Subsidiary other than any such benefit plans, programs,
arrangements, contracts or agreements maintained outside of the United States primarily for the
benefit of current or former employees, officers, directors or consultants of the Company or any
Company Subsidiary working outside of the United States or who worked outside of the United States
and which is subject to the laws of any jurisdiction outside of the United States (such plans
hereinafter being referred to as “Non-U.S. Plans”) (collectively, the “U.S.
Plans”). Neither Company, any Subsidiary nor, to the knowledge of the Company, any other
person or entity, has made any express or implied commitment, whether legally enforceable or not,
to modify, change or terminate any U.S. Plan or Non-U.S. Plan. The Company has made available to
Parent copies, which are correct and complete in all material respects, of the following: (i) the
U.S. Plan and Non-U.S. Plan documents (and all amendments thereto), (ii) the annual report (Form
5500) filed with the Internal Revenue Service (“IRS”) for the last two plan years, (iii)
the most recently received IRS determination letter, if any, relating to a U.S. Plan, (iv) the most
recently prepared actuarial report or financial statement, if any, relating to a U.S. Plan, (v) the
most recent summary plan description for such U.S. Plan (or other descriptions of such U.S. Plan
provided to employees) and all material modifications thereto, and (vi) all filings made with any
Governmental Authority, including any filings under the Voluntary Compliance Resolution or Closing
Agreement Program or the Department of Labor Delinquent Filer Program.
(b) Each U.S. Plan has been operated in all material respects in accordance with its terms and
the requirements of all applicable Laws, including ERISA and the Code. Each U.S. Plan that is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of the Code has
received a favorable determination letter from the IRS, or is entitled to rely on a favorable
opinion issued by the IRS, and to the knowledge of the Company no fact or event has occurred since
the date of such determination letter or letters from the IRS to adversely affect the qualified
status of any such U.S. Plan or the exempt status of any such trust. There has been no non-exempt
“prohibited transaction” (and there will be none as a result of the transactions contemplated
hereby) within the meaning of Section 4975(c) of the Code or Section 406 of ERISA involving the
assets of any U.S. Plan.
(c) Neither the Company nor any Company Subsidiary sponsors or has sponsored any U.S. Plan
that provides for any post-employment or post-retirement health or medical or life insurance
benefits for retired, former or current employees of the Company or any Company Subsidiary, except
as required by Section 4980B of the Code. Neither the Company, any of its Subsidiaries or any ERISA
Affiliate of the Company is or was during the preceding six years obligated to contribute to any
multiemployer plan as defined in Section 4001(a)(3) of ERISA (a “Multiemployer Plan”) and
none of the Company, any of its Subsidiaries, or any ERISA Affiliate of the Company has assumed
23
any obligation of any predecessor of the Company, any of its Subsidiaries or any ERISA
Affiliate of the Company with respect to any Multiemployer Plan.
(d) Full payment has been made, or otherwise properly accrued on the books and records of the
Company and any Company Subsidiary, of all amounts that the Company and any Company Subsidiary are
required under the terms of the U.S. Plans to have paid as contributions to such Plans on or prior
to the date hereof (excluding any amounts not yet due).
(e) Except as set forth in Section 4.10(e) of the Company Disclosure Schedule, no U.S. Plan,
either individually or collectively, provides for any payment by the Company or any Company
Subsidiary that would constitute a “parachute payment” within the meaning of Section 280G of the
Code after giving effect to the transactions contemplated by this Agreement.
(f) Neither the Company nor any ERISA Affiliate sponsors or has sponsored in the past six
years any U.S. Plan (or United States based pension plan in the case of an ERISA Affiliate) that is
subject to Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code. For purposes of
this Section 4.10, an entity is an “ERISA Affiliate” of the Company if it would have ever
been considered a single employer with the Company under 4001(b) of ERISA or part of the same
controlled group as the Company for purposes of Section 302(d)(8)(C) of ERISA.
(g) Except as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, each U.S. Plan that constitutes a nonqualified deferred compensation plan
for purposes of Section 409A of the Code has been operated in good faith compliance with Section
409A of the Code and all applicable guidance from the Internal Revenue Service.
(h) Section 4.10(h) of the Company Disclosure Schedule contains a list of each material
Non-U.S. Plan. Except as set forth on Section 4.10(h) of the Company Disclosure, each Non-U.S.
Plan: (i) has been operated in all material respects in accordance with its terms and the
requirements of all applicable Laws, (ii) if such Non-U.S. Plan is intended to qualify for special
tax treatment, the Non-U.S. Plan meets all requirements for such treatment, provided that failure
to qualify for such treatment would reasonably be expected to have a Material Adverse Effect, (iii)
if such Non-U.S. Plan is intended to be funded and/or book-reserved, then such Non-U.S. Plan is
funded and/or book reserved, as appropriate and required by applicable Laws, based upon reasonable
actuarial assumptions under applicable Law of the jurisdiction in which such Non-U.S. Plan is
maintained, and (iv) no material liability exists or reasonably could be imposed upon the assets of
the Company or any Company Subsidiary with respect to any such Non-U.S. Plan. As of the date
hereof, there is no pending or, to the knowledge of the Company, threatened material litigation
relating to any Non-U.S. Plan.
(i) Except as set forth in Section 4.10(i) of the Company Disclosure Schedule, neither the
Company nor any Subsidiary is a party to any collective bargaining agreement, and as of the date
hereof, there have been no organizational or
24
representational activities or attempts. There are no unresolved unfair labor practice or
labor arbitration proceedings, and no suits, charges, grievances or attorney demand letters,
pending or threatened against the Company or any Subsidiary before the National Labor Relations
Board, or, to the knowledge of the Company, threatened against the Company or any Subsidiary.
There has been no material work stoppage, strike or other concerted action by employees of the
Company or any Subsidiary during the past three years. Neither the Company nor any Subsidiary is
currently engaged in any material unfair labor practice. The Company and each Subsidiary is in
compliance in all material respects with all applicable Laws, Contracts, and employment policies,
relating to employment practices, wages, hours, and other terms and conditions of employment,
employment standards, human rights, occupational safety, workers’ compensation, immigration, and
plant closings. The Company and each Subsidiary has withheld all amounts required by Law or by
agreement to be withheld from the wages, salaries and other payments to its employees, and is not
liable in any material respect for any arrears of wages or any taxes or any penalty for failure to
comply with any of the foregoing. Neither the Company nor any Subsidiary is liable for any payment
to any trust or other fund or to any Governmental Authority with respect to unemployment
compensation benefits, social security or other benefits or obligations for employees (other than
routine payments to be made in the normal course of business and consistent with past practice).
There are no material pending claims against the Company or any Subsidiary under any workers’
compensation plan or policy or for long term disability.
Section 4.11 Information Supplied. The information supplied by the Company in writing
relating to the Company and Company Subsidiaries to be contained in the Proxy Statement or Other
Filings will not, in the case of the Proxy Statement, at the date it is first mailed to the
Company’s stockholders and at the time of the Company Stockholders’ Meeting and at the time of any
amendment or supplement thereto, and in the case of the Other Filings, at the date it is first
mailed to the Company’s stockholders or at the date it is first filed with the SEC, will not,
contain any untrue statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading, except that no representation is made (or omitted to be
made) by the Company or any Company Subsidiary with respect to statements made or incorporated by
reference therein based on information supplied by Parent or Merger Sub in connection with the
preparation of the Proxy Statement for inclusion or incorporation by reference therein. All
documents that the Company is responsible for filing with the SEC in connection with the Merger, or
the other transactions contemplated by this Agreement, will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the rules and
regulations thereunder and the Exchange Act and the rules and regulations thereunder.
Section 4.12 Intellectual Property. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, either the Company or a
Company Subsidiary owns, or is licensed or otherwise possesses legally enforceable rights to use,
all Intellectual Property used in their respective businesses as currently conducted (collectively,
the “Company Intellectual Property”). Except as would not have, individually or in the
aggregate, a Material Adverse Effect, (a) as of the
25
date hereof, there are no pending or, to the knowledge of the Company, threatened claims by
any person alleging infringement of any material Intellectual Property rights of any person by the
Company or any Company Subsidiaries for their use of the Company Intellectual Property, (b) to the
knowledge of the Company, the conduct of the business of the Company and the Company Subsidiaries
does not infringe any Intellectual Property rights of any person, (c) as of the date hereof,
neither the Company nor any Company Subsidiary has made any claim of a violation or infringement by
others of its rights to or in connection with the Company Intellectual Property, and (d) to the
knowledge of the Company, no person is infringing any Company Intellectual Property.
Section 4.13 Taxes. Except as set forth in Section 4.13 of the Company Disclosure
Schedule or as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect:
(a) all Tax Returns required to be filed by or with respect to the Company or any of its
subsidiaries have been duly and timely filed (except those under valid extension) and such Tax
Returns are complete, accurate and correct. All Taxes due and payable by the Company or any of its
subsidiaries (whether or not shown on such Tax Returns) have been paid. No claim in writing has
been received by the Company from a Tax authority in a jurisdiction where the Company or any of its
subsidiaries does not file Tax Returns that it is or may be subject to taxation by that
jurisdiction.
(b) Neither the Company nor any of its subsidiaries has received written notice of any
examination, proceeding or audit against, or with respect to any Taxes of, the Company or any of
its subsidiaries that is currently pending or proposed.
(c) Neither the Company nor any of its subsidiaries has granted any extension or waiver of the
limitation period applicable to any Tax Returns that is currently in effect.
(d) Neither the Company nor any of its subsidiaries is a party to or is bound by any Tax
sharing, allocation, or indemnification agreement (other than any such agreement exclusively
between or among the Company and any of the Company Subsidiaries). Neither the Company nor any of
its subsidiaries has ever been a member of an “affiliated group” as defined in Section 1504 of the
Code (or any analogous combined, consolidated or unitary group defined under state, local or
foreign income Tax Law) other than an affiliated group the common parent of which is the Company.
(e) The Company and its subsidiaries have timely withheld, collected, deposited or paid all
Taxes required to have been withheld, collected, deposited or paid, as the case may be, in
connection with amounts paid or owing to any employee, independent contractor, creditor or
stockholder.
(f) True, correct and complete copies of all filed U.S. federal Tax Returns for the Company
and its subsidiaries with respect to the taxable years commencing on or after December 31, 2003
have been made available to Parent.
26
(g) Neither the Company nor any of its subsidiaries has been a party to a transaction that
gives rise to (i) a registration obligation with respect to any Person under Section 6111 of the
Code or the Treasury Regulations thereunder; (ii) a list maintenance obligation with respect to any
Person under Section 6112 of the Code or the Treasury Regulations thereunder; or (iii) a disclosure
obligation as a “reportable transaction” under Section 6011 of the Code and the Treasury
Regulations thereunder.
Section 4.14 Environmental Matters. Except as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect:
(a) the Company and the Company Subsidiaries (i) are in compliance with all Environmental
Laws, (ii) hold all permits, approvals, identification numbers, licenses and other authorizations
required under any Environmental Law to own or operate their assets as currently owned and operated
(“Environmental Permits”) and (iii) are in compliance with their respective Environmental
Permits;
(b) there has been no Release or threatened Release of any Hazardous Substance at, on, under
or from any real property real property owner or leased by the Company or the Company Subsidiaries
or any other location;
(c) neither the Company nor any Company Subsidiary has received any written notice alleging
that the Company or any Company Subsidiary may be in violation of, or liable under any other
Environmental Law; and
(d) notwithstanding any other provision of this Agreement, this Section 4.14 sets forth the
Company’s sole and exclusive representations and warranties with respect to Hazardous Substances,
Environmental Laws or other environmental matters.
Section 4.15 Compliance with Healthcare Laws. Without limiting the generality of
Section 4.06(b) hereof and except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect:
(a) The Company and each Company Subsidiary is, and since January 1, 2005 has been, in
compliance with all applicable Health Care Laws. For purposes of this Section 4.15(a), “Health
Care Laws” means the U.S. Food, Drug and Cosmetic Act (21 U.S.C. § 321 et seq.), the Controlled
Substances Act (21 U.S.C. § 801 et seq.), the Health Insurance Portability and Accountability Act
of 1996 (42 U.S.C. § 1320d et seq.), the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)),
the civil False Claims Act (31 U.S.C. § 3729 et seq.), the administrative False Claims Law (42
U.S.C. § 1320a-7b(a)), the regulations promulgated pursuant to such Laws, and comparable state,
local and foreign Laws in any jurisdiction where the Company or the Company Subsidiaries conducts
business. To the knowledge of the Company, neither the Company nor any Company Subsidiary has
received any notice or information from any Governmental Authority to the effect that the Company
or any Company Subsidiary is not in compliance with, or is in violation of, any applicable Health
Care Law, or indicated to the
27
Company its intention to conduct an investigation or review of the Company or any Company
Subsidiary.
(b) To the knowledge of the Company, all preclinical and clinical trials directly conducted or
supervised by the Company or the Company Subsidiaries have been conducted or supervised by the
Company or the Company Subsidiaries in compliance with the required experimental protocols,
procedures and controls pursuant to all applicable Health Care Laws. To the knowledge of the
Company, in no clinical trial directly conducted or supervised by the Company or any Company
Subsidiary, or in which the Company or any Company Subsidiary has participated, has FDA,
Institutional Review Board or equivalent approval, to the extent such approval is required to be
obtained or maintained by the Company or such Company Subsidiary, ever been suspended or terminated
due to actions and/or failure to act of the Company or any Company Subsidiaries.
Section 4.16 Material Contracts. Other than any “material contract” (as such term is
defined in Item 601(b)(10) of Regulation S-K under the Securities Act) filed as an exhibit to the
Company SEC Reports filed prior to the date hereof, Section 4.16 of the Company Disclosure Schedule
lists each of the following written contracts and agreements to which the Company or any Company
Subsidiary is a party or by which any of their respective properties or assets are bound as of the
date hereof (each such agreement and contract, including any contract filed as an exhibit to the
Company SEC Reports filed prior to the date hereof being a “Company Material Contract”):
(a) any note, bond, mortgage, indenture, contract (written or oral), agreement, lease,
license, permit, franchise or other binding commitment, instrument or obligation (each, a
“Contract” (other than among consolidated Company Subsidiaries or any lease for real
property) relating to (i) indebtedness for borrowed money and having an outstanding principal
amount in excess of $5.5 million or (ii) conditional sale arrangements, obligations secured by a
Lien, or interest rate or currency hedging activities, in each case in connection with which the
aggregate actual or contingent obligations of the Company and the Company Subsidiaries under such
Contract are greater than $5.5 million, in each case, other than customer service agreements
entered into in the ordinary course of business;
(b) any Contract that purports to limit the right of the Company or the Company Subsidiaries
(i) to engage or compete in any line of business or (ii) to compete with any person or operate in
any location, in the case of each of (i) and (ii), in any respect material to the business of the
Company and the Company Subsidiaries, taken as a whole; and
(c) any Contract for the acquisition or disposition, directly or indirectly (by merger or
otherwise), of assets or capital stock or other equity interests of another person for aggregate
consideration under such Contract in excess of $5.5 million.
Notwithstanding anything in this Section 4.16, “Company Material Contract” shall not include
any Contract that (i) is terminable by the Company or a
28
Company Subsidiary upon one hundred and twenty (120) days’ or less notice without a penalty
premium, (ii) will be fully performed or satisfied as of or prior to Closing, or (iii) is solely
between the Company and one or more wholly-owned Company Subsidiaries or is solely between
wholly-owned Company Subsidiaries.
Except as would not reasonably be expected to have a Material Adverse Effect, (i) neither the
Company nor any Company Subsidiary is and, to the knowledge of the Company, no other party is in
breach or violation of, or default under, any Company Material Contract, (ii) none of the Company
or any Company Subsidiary has received any claim of default under any such agreement, and (iii) no
event has occurred which would result in a breach or violation of, or a default under, any Company
Material Contract (in each case, with or without notice or lapse of time or both). Except as would
not reasonably be expected to have a Material Adverse Effect, each Company Material Contract is
valid, binding and enforceable in accordance with its terms and is in full force and effect with
respect to the Company or Company Subsidiaries, as applicable, and, to the knowledge of the
Company, with respect to the other parties hereto.
Section 4.17 Customers and Backlog.
(a) Section 4.17 of the Company Disclosure Schedule, sets forth a true, complete and accurate
list of (i) all customers to whom the Company or any Company Subsidiary has provided services with
an annual value equal to or greater than $6.5 million in the twelve month period preceding June 30,
2007 (each a “Major Customer”) and (ii) each contract or agreement of the Company or any
Company Subsidiary which, as of June 30, 2007, involved backlog in excess of $6.5 million in
respect of services to be provided by the Company or any Company Subsidiary that have not been
completed or have not yet commenced as of such date (each, an “Open Contract”). As of the
date of this Agreement, to the Knowledge of the Company, none of the Company or Company
Subsidiaries has received any written communication from any Major Customer of any intention to
terminate or materially reduce services from the Company or any Company Subsidiary or from any
Person regarding an intention to terminate, cancel to reduce payment to the Company or any Company
Subsidiary under any Open Contract.
(b) Except as would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect, (i) to the knowledge of the Company, each Open Contract is valid
(assuming due authorization, execution and delivery by the other parties thereto) and in full force
and effect, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar Laws or by general equity principles
and except as may be cancelled or terminated by a customer in accordance with the terms thereof;
and (ii) as of the date of this Agreement, neither the Company nor any of the Company Subsidiaries
is in material breach or default thereunder, and, to the knowledge of the Company, no other party
to any such agreement is in material breach or default hereunder and, to the knowledge of the
Company, no event has occurred which with notice or lapse of time would reasonably be expected to
constitute a material breach or default, or permit termination, modification, or acceleration,
under the agreement.
29
Section 4.18 Interested Party Transactions. Except as set forth in Section 4.18 of
the Company Disclosure Schedule or in Company SEC Reports, each as amended to the date hereof,
there are no Company Material Contracts, agreements or loans, and since January 1, 2005, there have
not been any transactions between the Company or any Company Subsidiary, on the one hand, and (a)
any officer or director of the Company, (b) any record or beneficial owner of five percent (5%) or
more of the voting securities of the Company, or (c) any affiliate of any such officer, director or
record or beneficial owner, on the other hand.
Section 4.19 Brokers. Except as provided under the letter agreement, dated April 6,
2007, between Credit Suisse Securities (USA) LLC and the Company (the “Company Financial
Advisor”), no broker, finder or investment banker or other Person (other than the Company
Financial Advisor) is entitled to any brokerage, finder’s or other 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 Company Subsidiary.
Section 4.20 Opinion of Financial Advisor. The Company has received an opinion of the
Company Financial Advisor to the effect that, as of the date of the opinion, the Merger
Consideration to be received by the holders of Company Common Shares is fair from a financial point
of view to such holders other than Parent, Merger Sub, members of the Company’s management that
will retain or acquire a direct or indirect equity interest in the Company following the Merger and
their respective affiliates (collectively, the “Excluded Stockholders”); it being agreed
that neither Parent nor Merger Sub shall have any right to rely on such opinion.
Section 4.21 Amendment of Rights Plan; State Takeover Statute.
(a) The Rights Agreement, dated as of March 23, 2007, between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agreement”), has been amended so
that (i) each of Parent and Merger Sub is exempt from the definition of “Acquiring Person” (as
defined in the Rights Agreement); (ii) no “Stock Acquisition Date” or “Distribution Date” (as such
terms are defined in the Rights Agreement) will occur as a result of the execution of this
Agreement or the consummation of the Merger pursuant to this Agreement; and (iii) the Rights
Agreement will expire immediately prior to the Merger Effective Time. The Rights Agreement, as
amended in accordance with the preceding sentence, has not been further amended or modified.
Copies of all such amendments to the Rights Agreement have been previously provided to Parent.
(b) Assuming the accuracy of the representation set forth in Section 5.08 as of the date
hereof and the Merger Effective Time, no action is required by the Company Board or its
stockholders of the Company to render inapplicable any anti-takeover statute or regulation, in each
case under the DGCL or other applicable Law of the State of Delaware.
30
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER PARTIES
Parent and Merger Sub hereby jointly and severally represent and warrant to the Company as
follows:
Section 5.01 Organization. Each of the Buyer Parties has been duly organized and is
validly existing and in good standing under the laws of the jurisdiction of its formation and has
all requisite corporate power and authority to own, operate, lease and encumber its properties and
to carry on its business as it is now being conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority and governmental approvals would not
have a Parent Material Adverse Effect.
Section 5.02 Ownership of Merger Sub; No Prior Activities. Each of Parent and Merger
Sub was formed solely for the purpose of engaging in the transactions contemplated by this
Agreement and has not engaged in any business activities or conducted any operations other than in
connection with the transactions contemplated by this Agreement. All the issued and outstanding
shares of capital stock of Merger Sub are, and as of the Closing Date will be, owned of record and
beneficially by Parent.
Section 5.03 Power and Authority. Each of the Buyer Parties has all necessary
corporate power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by each of the Buyer Parties and the consummation by the Buyer Parties
of the transactions contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of the Buyer Parties are
necessary to authorize this Agreement or to consummate the transactions contemplated by this
Agreement. This Agreement has been duly and validly executed and delivered by the Buyer Parties
and, assuming due authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of the Buyer Parties enforceable against each of the Buyer Parties
in accordance with its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer and similar Laws or by general equity
principles.
Section 5.04 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by each of the Buyer Parties do not, and the
performance of each of the Buyer Parties’ obligations hereunder will not, (i) conflict with or
violate the articles of incorporation or bylaws of Parent or the articles of incorporation or
bylaws of Merger Sub, (ii) assuming that all consents, approvals, authorizations and other actions
described in subsection (b) of this Section 5.04 have been obtained and all filings and obligations
described in subsection (b) of this Section 5.04 have been made, conflict with or violate any Law
applicable to any of the Buyer Parties, or by which any of its properties or assets is bound, or
(iii) result in any breach of, or constitute a default (or an event which, with notice or lapse of
time or both,
31
would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien or other encumbrance on any of
its properties or assets pursuant to, any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which it is a party or by
which it or any of its properties or assets is bound, except, with respect to clauses (ii) and
(iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not
prevent or delay consummation of the Merger or otherwise prevent it from performing its obligations
under this Agreement.
(b) The execution and delivery of this Agreement by each of the Buyer Parties does not, and
the performance of each of the Buyer Parties’ obligations hereunder and thereunder will not,
require any consent, approval, authorization or permit of, or filing with, or notification to, any
Governmental Authority, except (i) for (A) applicable requirements, if any, of the Exchange Act and
state take-over Laws, (B) if applicable, filings under the rules and regulations of the Nasdaq, (C)
if applicable, the pre-merger notification requirements of the HSR Act or other applicable Law, (D)
the filing with the SEC of the Proxy Statement, and (E) the filing and recordation of appropriate
merger documents as required by the DGCL, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications, would not prevent
or delay consummation of the Merger, or otherwise prevent Parent from performing its obligations
under this Agreement.
Section 5.05 Information Supplied. None of the information supplied by the Buyer
Parties or any affiliate of Parent in writing for inclusion or incorporation by reference in the
Proxy Statement or the Other Filings will, in the case of the Proxy Statement, at the date it is
first mailed to the Company’s stockholders or at the time of the Company Stockholders’ Meeting or
at the time of any amendment or supplement thereto, and in the case of any Other Filing, at the
date it is first mailed to the Company’s stockholders or at the date it is first filed with the
SEC, contain any untrue statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. No representation is made by the Buyer
Parties with respect to statements made or incorporated by reference therein based on information
supplied by the Company in connection with the preparation of the Proxy Statement.
Section 5.06 Absence of Litigation. There is no Action pending or, to the knowledge
of Parent, threatened against Parent or any of its subsidiaries or any of its or their respective
properties or assets except as would not, individually or in the aggregate, have or reasonably be
expected to have a Parent Material Adverse Effect. None of Parent or its subsidiaries is subject
to any order, judgment, writ, injunction or decree, except as would not, individually or in the
aggregate, have or reasonably be expected to have a Parent Material Adverse Effect.
Section 5.07 Available Funds; Limited Guaranty.
(a) Parent will have sufficient funds at the Closing to satisfy all of its obligations under
this Agreement, including to (i) pay the aggregate Merger
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Consideration payable hereunder, (ii) refinance all Company indebtedness and (iii) pay any and
all of its and Merger Sub’s fees and expenses in connection with the Merger and the financing
thereof.
(b) Parent has provided to the Company a true, complete and correct copy of (i) an executed
commitment letter from Genstar Capital Partners V, L.P. to provide Parent with equity financing in
an aggregate amount of up to $391,260,000 (the “Equity Funding Letter”), and (ii) an
executed commitment letter (the “Debt Commitment Letter”, and together with the Equity
Funding Letter, each as may be modified or amended, the “Financing Commitments”) from UBS
Loan Finance LLC, UBS Securities LLC and Jefferies Finance LLC (collectively, the
“Lenders”) pursuant to which, and subject to the terms and conditions thereof, the Lenders
have committed to provide Parent with financing in an aggregate amount of $465 million (the
“Debt Financing”, and together with the financing referred to in clause (i) being
collectively referred to as the “Financing”). As of the date hereof, the Financing
Commitments, in the form so delivered, are valid (assuming due authorization, execution and
delivery by the other parties thereto) and in full force and effect, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
and similar Laws or by general equity principles. Except for the payment of customary fees, there
are no conditions precedent or other contingencies related to the funding of the full amount of the
Financing, other than as set forth in or contemplated by the Financing Commitments. Parent and
Merger Sub have fully paid any and all commitment fees or other fees required by the Financing
Commitments to be paid by them on or prior to the date of this Agreement and shall in the future
pay any such fees as they become due. As of the date hereof, no event has occurred which, with or
without notice, lapse of time or both, would constitute a default or breach on the part of Parent
or Merger Sub, and to the knowledge of Parent, any other parties thereto, under the Financing
Commitments. As of the date of this Agreement, neither Parent nor Merger Sub has any reason to
believe that any of the conditions to the Financing contemplated by the Financing Commitments will
not be satisfied or that any portion of the Financing to be made thereunder will not otherwise be
made available to Parent or Merger Sub on the Closing Date. Parent will provide to the Company any
modifications or amendments to the Equity Funding Letter and the Debt Commitment Letter, or any
material notices given in connection therewith, as promptly as possible (but in any event within
twenty-four (24) hours).
(c) Concurrently with the execution of this Agreement, Parent has delivered to the Company the
Limited Guaranty executed by the Guarantor. The Limited Guaranty is in full force and effect and
is a legal, valid and binding obligation of the related Guarantor, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar Laws or by general equity principles.
Section 5.08 No Ownership of Company Capital Stock. Except as set forth in Section
5.08 of the Parent Disclosure Schedule, neither Parent nor any of its subsidiaries (including
Merger Sub) owns any Company Common Shares or other securities of the Company or any of the Company
Subsidiaries. Section 5.08 of the
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Parent Disclosure Schedule also sets forth the dates of acquisition of any Company Common
Shares set forth therein.
Section 5.09 Other Agreements or Understandings. Parent has disclosed to the Company
all contracts, arrangements or understandings (and, with respect to those that are written, Parent
has furnished to the Company correct and complete copies thereof) between or among Parent, Merger
Sub, or any affiliate of Parent, on the one hand, and any member of the management of the Company.
Neither Parent, Merger Sub or any affiliate of Parent is a party to any contract, arrangement or
understanding between or among Parent, Merger Sub, or any affiliate of Parent, on the one hand, and
any person that owns 5% or more of the shares or of the outstanding capital stock of the Company
(other than Genstar Capital Partners III, L.P., Stargen III, L.P. or any of their respective
partners, partners or members or such partners or the respective affiliates of any of the
foregoing), on the other hand, with respect to the voting, acquisition or disposition of the shares
of outstanding capital stock of the Company or otherwise with respect to the assets or business of
the Company or any Company Subsidiary.
Section 5.10 Brokers. No broker, finder or investment banker (other than UBS
Securities LLC) is entitled to any brokerage, finder’s or other fee or commission in connection
with financial advice regarding the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Parent, Merger Sub or any of their subsidiaries.
Section 5.11 No Additional Representations.
(a) Parent acknowledges that it and its Representatives have received access to such books and
records, facilities, equipment, contracts and other assets of the Company which it and its
Representatives have desired or requested to review, and that it and its Representatives have had
full opportunity to meet with the management of the Company and to discuss the business and assets
of the Company.
(b) Parent acknowledges that neither the Company nor any person has made any representation or
warranty, express or implied, as to the accuracy or completeness of any information regarding the
Company furnished or made available to Parent and its Representatives except as expressly set forth
in Article IV (which includes the Company Disclosure Schedule and the Company SEC Reports), and
neither the Company nor any other person shall be subject to any liability to Parent or any other
person resulting from the Company’s making available to Parent or Parent’s use of such information,
or any information, documents or material made available to Parent in the due diligence materials
provided to Parent, including in the “data room,” management presentations (formal or informal) or
in any other form in connection with the transactions contemplated by this Agreement. Without
limiting the foregoing, the Company makes no representation or warranty to Parent with respect to
any financial projection or forecast relating to the Company or any of its Subsidiaries.
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ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
CONDUCT OF BUSINESS PENDING THE MERGER
Section 6.01 Conduct of Business by the Company Pending the Merger. The Company
agrees that, between the date of this Agreement and the Merger Effective Time, except as required,
permitted or otherwise contemplated by this Agreement or as set forth in Section 6.01 of the
Company Disclosure Schedule and except with the prior written consent of Parent, provided
that Parent shall not unreasonably withhold or delay its consent, the businesses of the Company and
the Company Subsidiaries shall be conducted in, and the Company and the Company Subsidiaries shall
not take any action except in, the ordinary course of business consistent with past practice; and
the Company shall use its commercially reasonable efforts to preserve substantially intact the
business organization of the Company and the Company Subsidiaries and to preserve the current
relationships of the Company and the Company Subsidiaries with any persons with which the Company
or any Company Subsidiary has significant business relations. Except as required, permitted or
otherwise contemplated by this Agreement or as set forth in Section 6.01 of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary shall, between the date of this Agreement
and the Merger Effective Time, do any of the following without the prior written consent of Parent,
which consent shall not be unreasonably withheld or delayed:
(a) amend or otherwise change any provision of the Company Charter or Company Bylaws, or
similar organizational or governance documents;
(b) (i) authorize for issuance, issue, sell, pledge, dispose of, grant or transfer or agree or
commit to issue, sell, pledge, dispose of, grant or transfer any shares of any class of capital
stock of the Company or any Company Subsidiary or any options, warrants, convertible securities or
other rights of any kind to acquire any shares of such capital stock, or any other ownership
interest, of the Company or any Company Subsidiary, other than the issuance of Company Common
Shares issuable pursuant to Company Stock Awards outstanding on the date hereof; (ii) repurchase,
redeem or otherwise acquire directly or indirectly any securities or equity equivalents except in
connection with the exercise of Company Stock Options, the vesting of Company Stock-Based Awards,
or the lapse of restrictions on Company Stock-Based Awards; (iii) declare, set aside or pay any
dividends on, or make any other actual, constructive or deemed distributions (whether in cash,
shares, property or otherwise) in respect of, any shares of the Company’s capital stock or the
shares of stock or other equity interests in any Company Subsidiary that is not directly or
indirectly wholly owned by the Company, except for (A) dividends by any direct or indirect wholly
owned Company Subsidiary to the Company or any other directly or indirectly wholly owned Company
Subsidiary, and (B) dividend equivalents already accrued as of the date hereof and paid with
respect to Company Stock-Based Awards outstanding on the date hereof; or (iv) split, combine or
reclassify any shares, stock or other equity interests of the Company or any Company Subsidiary or
issue or authorize the issuance of any securities in respect of, in lieu of or in substitution for
shares of such shares, stock or other equity interests;
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(c) except as set forth in Section 6.01(c) of the Company Disclosure Schedule, acquire (by
merger, consolidation, acquisition of equity interests or assets, or any other business
combination) any corporation, partnership, limited liability company, joint venture or other
business organization (or division thereof) or any property (other than any property acquired in
the ordinary course of business consistent with past practice) exceeding $7.0 million, or merge or
consolidate the Company or any of the Company Subsidiaries with any other Person, except for any
such transactions among wholly owned Company Subsidiaries, or restructure, reorganize or completely
or partially liquidate, or make any loans, advances or capital contributions to or investments in
any Person (other than the Company or any direct or indirect wholly owned Subsidiary of the
Company) in excess of $5.5 million in the aggregate;
(d) except as set forth in Section 6.01(d) of the Company Disclosure Schedule, incur any
indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of any person (other than a
Company Subsidiary) for borrowed money, except for indebtedness for borrowed money incurred in the
ordinary course of business (which shall be deemed to include, without limitation, draws under the
Company’s line of credit facility or other similar lines of credit as in effect on the date
hereof);
(e) except as set forth in Section 6.01(e) of the Company Disclosure Schedule, materially
amend or terminate any Company Material Contract or enter into any new contract or agreement that,
if entered into prior to the date of this Agreement, would have been required to be listed in
Section 4.16 of the Company Disclosure Schedule as a Company Material Contract or filed as an
exhibit to the Company SEC Reports pursuant to Regulation S-K;
(f) except as set forth in Section 6.01(f) of the Company Disclosure Schedule or except as
required by the terms of U.S. Plans or Non-U.S. Plans (in each case, as in effect on the date of
this Agreement) or by applicable Law, (i) increase the compensation or benefits payable to its
directors, officers or employees (except for increases in salaries to employees (other than
executive officers) in the ordinary course of business consistent with past practice), (ii) other
than with respect to newly hired officers and employees in the ordinary course of business, grant
to any director, officer or employee of the Company or of any Company Subsidiary any new severance,
change of control or termination pay, grant any increase in, or otherwise alter or amend, any right
to receive any severance, change of control or termination pay or benefits or establish, adopt,
enter into or amend to materially increase benefits any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, loan, retention, consulting, indemnification, termination, severance or
other similar plan, agreement, trust, fund, policy or arrangement with any director, officer or
employee, (iii) accelerate the vesting or payment of any compensation payable or benefits provided
or to become payable or provided to any employee or (iv) terminate or materially amend any
existing, or adopt any new, U.S. Plan or Non-U.S. Plan (other than changes made in the ordinary
course of business consistent with past practice that do not materially increase the costs of any
such Plans or as may be necessary to comply with applicable Laws);
36
(g) pre-pay any long-term debt, except in the ordinary course of business (which shall be
deemed to include, without limitation, pre-payments or repayments of lines of credit facilities or
other similar lines of credit or payments made in respect of any termination or settlement of any
interest rate swap or other similar hedging instrument relating thereto) in an amount not to exceed
$5.5 million in the aggregate for the Company and its subsidiaries taken as a whole, or pay,
discharge or satisfy any material claims, liabilities or obligations (absolute, accrued, contingent
or otherwise), except in the ordinary course of business consistent with past practice and in
accordance with their terms;
(h) except as required by the SEC or changes in GAAP which become effective after the date of
this Agreement, or as recommended by the Company’s audit committee or independent auditors, in
which case the Company shall notify the Parent, materially change any of its accounting policies
(whether for financial accounting or Tax purposes);
(i) authorize, or enter into any commitment for, any new material capital expenditure (such
authorized or committed new capital expenditures being referred to hereinafter as the “Capital
Expenditures”) other than (i) Capital Expenditures identified in the Company’s 2007 budget
materials provided to the Buyer Parties and (ii) Capital Expenditures in the ordinary course of
business and consistent with past practice as reasonably determined by the Company to be necessary;
(j) waive, release, assign, settle or compromise any pending or threatened litigation or claim
(i) where the amounts paid or to be paid are greater than $7.0 million, (ii) which entails
obligations that would impose any material restrictions on the business or operations of the
Company or any Company Subsidiary or (iii) that is brought by any current, former or purported
holder of any capital stock or debt securities of the Company or any Company Subsidiary in its own
right or allegedly on or behalf of the Company relating to the transactions contemplated by this
Agreement;
(k) except in the ordinary course of business and in accordance with past practices, make or
change any material Tax election or material Tax accounting method, settle or compromise any
material Tax liability, file any material Tax Return; enter into any material Tax allocation
agreement, material Tax sharing agreement, material Tax indemnity agreement or closing agreement
relating to any material Tax, or agree to an extension or waiver of the statute of limitations with
respect to the assessment or determination of material Taxes;
(l) transfer, sell, lease, license, mortgage, pledge, surrender, encumber, divest, cancel,
abandon or otherwise dispose of any material assets or businesses of the Company or any Company
Subsidiary, other than assets in the ordinary course of business consistent with past practice; and
(m) announce an intention, enter into any agreement or otherwise make a commitment, to do any
of the foregoing.
37
Section 6.02 Conduct of Business by Buyer Parties Pending the Merger. The Buyer
Parties agree that, between the date of this Agreement and the Merger Effective Time, except as
contemplated by this Agreement, they shall not, directly or indirectly, without the prior written
consent of the Company, take or cause to be taken any action that (a) could be expected to
materially delay or impair the consummation of the transactions contemplated by this Agreement, or
propose, announce an intention, enter into any agreement or otherwise make a commitment to take any
such action, or (b) would cause any of the representations or warranties of the Buyer Parties
contained herein to become inaccurate in any material respect or any of the covenants of the Buyer
Parties to be breached in any material respect or result in the failure to be satisfied of any of
the conditions set forth in Section 8.03.
Section 6.03 Merger Sub. Parent will take all action necessary to cause Merger Sub to
perform its obligations under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement.
ARTICLE VII
ADDITIONAL AGREEMENTS
ADDITIONAL AGREEMENTS
Section 7.01 Company Proxy Statement; Other Filings; Stockholders’ Meeting.
(a) As promptly as reasonably practicable following the date of this Agreement, the Company
shall prepare and, after consultation with Parent, file with the SEC the preliminary Proxy
Statement and each of the Company and Parent shall, or shall cause their respective affiliates to,
prepare and, after consultation with each other, file with the SEC all Other Filings that are
required to be filed by such party in connection with the transactions contemplated hereby. Each
of the Company and Parent shall furnish all information concerning itself and its affiliates that
is required to be included in the Proxy Statement or, to the extent applicable, the Other Filings,
or that is customarily included in proxy statements or such Other Filings prepared in connection
with transactions of the type contemplated by this Agreement. Each of the Company and Parent shall
use its commercially reasonable efforts to respond as promptly as practicable to any comments of
the SEC with respect to the Proxy Statement or the Other Filings, and the Company shall use its
commercially reasonable efforts to cause the definitive Proxy Statement to be cleared by the SEC
and mailed to the Company’s stockholders as promptly as reasonably practicable following clearance
from the SEC. The Company shall promptly notify Parent upon the receipt of any comments from the
SEC or its staff or any request from the SEC or its staff for amendments or supplements to the
Proxy Statement or the Other Filings and shall promptly provide Parent with copies of all
correspondence between the Company and its Representatives, on the one hand, and the SEC and its
staff, on the other hand, relating to the Proxy Statement or the Other Filings.
(b) If at any time prior to the Company Stockholders’ Meeting, any information relating to the
Company or the Buyer Parties or any of their respective affiliates, officers, members or directors,
should be discovered by the Company or Parent, which should be set forth in an amendment or
supplement to the Proxy Statement or the
38
Other Filings, so that the Proxy Statement or the Other Filings shall not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances under which they
are made, not misleading, the party which discovers such information shall promptly notify the
other parties, and an appropriate amendment or supplement describing such information shall be
filed with the SEC and, to the extent required by applicable Law, disseminated to the stockholders
of the Company. Prior to filing or mailing the Proxy Statement or filing the Other Filings (or any
amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, the
Company shall provide Parent, or Parent shall provide the Company, as the case may be, a reasonable
opportunity to review and comment on such document or response and will in good faith consider such
comments, and to the extent practicable, the Company will provide Parent, and Parent will provide
the Company, as the case may be, with the opportunity to participate in any substantive calls
between the Company, or any of its Representatives, or Parent, or any of its Representatives, and
the SEC concerning the Proxy Statement, the Other Filings and such comments and responses. For the
avoidance of doubt, the existence of the Go-Shop Period shall not affect the obligations of the
Company and Parent to comply with this Section 7.01 (except as set forth in the first proviso of
Section 7.01(c)).
(c) The Company shall duly call, give notice of, convene and hold a meeting of its
stockholders (the “Company Stockholders’ Meeting”), as promptly as reasonably practicable
after the Proxy Statement has been cleared with the SEC, for the purpose of voting upon the
adoption of this Agreement in accordance with applicable Law, the Company Charter, and the Company
Bylaws; provided that the Company shall not be required to mail the Proxy Statement to
stockholders of the Company prior to the Go-Shop Period End Date; and provided
further that the parties desire to distribute to holders of Company Common Shares the Proxy
Statement as soon as practicable after the Go-Shop Period End Date, and each will use its
commercially reasonable efforts to ensure such timely distribution. Subject to the following
sentence, (i) the Company Board shall recommend to holders of the Company Common Shares that they
adopt this Agreement (the “Company Recommendation”), and (ii) the Company will use
commercially reasonable efforts to solicit from its stockholders proxies in favor of the adoption
of this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company Board
may determine (1) not to make or to withdraw, modify or change such recommendation, or (2) propose
publicly to approve or recommend any Company Acquisition Proposal (any of the actions referred to
in the foregoing clauses (1) or (2), whether taken by the Company Board or a committee thereof, a
“Company Change in Recommendation” and (3) in the case of either of the events described in
clauses (1) or (2), not to solicit proxies in favor of the adoption of this Agreement: provided
that in the case of a determination referred to in clause (1) made after receipt of a Company
Acquisition Proposal and/or in the case of a determination referred to in clause (2), the Company
has complied in all respects with its obligations under Section 7.03, and in the case of the
determinations referred to in each of clauses (1), (2) and (3), the Company Board has determined in
good faith, after consultation with its outside legal counsel, that failure to take such action
would likely be inconsistent with its fiduciary duties under applicable Law. Notwithstanding
anything in this Agreement to the contrary, the
39
Company may, if it receives an unsolicited Company Acquisition Proposal, delay the filing and
mailing of the Proxy Statement or the holding of the Company Stockholders’ Meeting, in each case,
for such reasonable period as would provide a reasonable opportunity for the Company Board to
consider such Company Acquisition Proposal and to determine the effect, if any, on the Company
Recommendation.
Section 7.02 Access to Information; Confidentiality.
(a) Subject to applicable Law and the Confidentiality Agreement, from the date hereof until
the Merger Effective Time, the Company shall, and shall cause its subsidiaries and the officers,
directors, employees, auditors and agents of the Company and its subsidiaries to afford Parent and
its Representatives, following notice from Parent to the Company in accordance with this Section
7.02, reasonable access during normal business hours to the officers, employees, agents,
properties, offices, plants and other facilities, books and records of the Company and its
subsidiaries, and all other financial, operating and other data and information and to provide
Parent and its Representatives, following notice from Parent to the Company in accordance with this
Section 7.02, access to inspect and make copies of the books, records, Tax Returns, work papers and
other documents and information relating to the Company and its subsidiaries, in each case as
Parent may reasonably request. Notwithstanding the foregoing, neither Parent nor any of its
Representatives shall (i) contact or have any discussions with any of the Representatives of the
Company or Company Subsidiary, unless in each case Parent obtains the prior consent of the Company,
which shall not be unreasonably withheld, delayed or conditioned, (ii) contact or have any
discussions with any customers of the Company or their respective subsidiaries, unless in each case
Parent obtains the prior written consent of the Company, which shall
not be unreasonably withheld, delayed or conditioned, (iii) damage any property or any portion thereof, or (iv) collect or
analyze any environmental samples (including building materials, indoor and outdoor air, surface
and ground water, and surface and subsurface soils. Parent shall schedule and coordinate all such
access and inspections with the Company and shall give the Company reasonable notice thereof. The
Company shall be entitled to have Representatives present at all times during any such discussions
and inspections. Notwithstanding the foregoing, neither the Company nor any of their respective
subsidiaries shall be required to provide access to or to disclose information where such access or
disclosure would jeopardize the attorney-client privilege of the Company or any of their respective
subsidiaries or contravene any Law or binding agreement entered into prior to the date of this
Agreement. The relevant parties shall make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply. Notwithstanding the
foregoing, affiliates of Parent who are directors of the Company may have such access as they
reasonably request in the exercise of their fiduciary duties as directors, other than any
information related to, and any materials prepared by the Company or its Representatives in
connection with, the transactions contemplated by this Agreement.
(b) Prior to the Merger Effective Time, all information obtained by Parent pursuant to this
Section 7.02 shall be kept confidential in accordance with the
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confidentiality agreement dated July 6, 2007 between an affiliate of Parent and the Company
(the “Confidentiality Agreement”).
Section 7.03 Solicitation.
(a) Notwithstanding any other provision of this Agreement to the contrary, during the period
beginning on the date of this Agreement and continuing until 11:59 p.m., New York City time, on the
fiftieth (50th) day following the date hereof (the “Go-Shop Period End Date”), the Company
and Company Subsidiaries and their respective Representatives shall have the right (acting under
the direction of the Special Committee) to directly or indirectly: (i) initiate, solicit and
encourage Company Acquisition Proposals, including by way of public disclosure and by way of
providing access to non-public information to any Person (each a “Solicited Person”)
pursuant to (but only pursuant to) one or more Acceptable Confidentiality Agreements;
provided, that the Company shall provide to Parent any material non-public information
concerning the Company or Company Subsidiaries that it has provided to any Solicited Person given
such access which was not previously provided to Parent; and (ii) enter into and maintain
discussions or negotiations with respect to Company Acquisition Proposals or otherwise cooperate
with, assist or participate in, facilitate, or take any other action in connection with any such
inquiries, proposals, discussions or negotiations. Within 48 hours following the Go-Shop Period
End Date, the Company shall notify Parent of the material terms and conditions of the Company
Acquisition Proposal (including any amendments or modifications thereof) received from any Excluded
Party and the identity thereof. The Company shall immediately cease any discussions with any
Person (other than Parent and any Excluded Party) that are ongoing as of the Go-Shop Period End
Date and that relate, or may reasonably be expected, to lead to a Company Acquisition Proposal,
except as otherwise expressly provided in Sections 7.03(b) and 7.03(c).
(b) Subject to Section 7.03(c) from the Go-Shop Period End Date until Company Stockholder
Approval is obtained or, if earlier, the termination of this Agreement in accordance with Article
IX, none of the Company, Company Subsidiaries or any of their respective Representatives or
affiliates shall, directly or indirectly, (i) initiate, solicit or knowingly encourage (including
by way of providing information) the submission of any inquiries, proposals or offers or any other
efforts or attempts that constitute or may reasonably be expected to lead to, any Company
Acquisition Proposal or engage in any discussions or negotiations with respect thereto or otherwise
knowingly cooperate with or knowingly assist or participate in, or knowingly facilitate any such
inquiries, proposals, discussions or negotiations, or (ii) approve or recommend, or publicly
propose to approve or recommend, a Company Acquisition Proposal or (iii) enter into any agreement
providing for or relating to a Company Acquisition Proposal (other than an Acceptable
Confidentiality Agreement entered into in accordance with the provisions of Section 7.03(c)).
Notwithstanding the foregoing, the Company may take and continue to take any of the actions
described in clause (i) above and, subject to Section 7.03(d), clauses (ii) and (iii) above, from
and after the Go-Shop Period End Date with respect to any Solicited Person that, prior to the
Go-Shop Period End Date, has made a bona fide Company Acquisition Proposal that the Company Board
(following the recommendation of the Special Committee if such committee still exists) determines
in
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good faith no later than the Go-Shop Period End Date, after consultation with its independent
financial advisors and outside counsel, constitutes or would reasonably be expected to result in a
Company Superior Proposal (each such Solicited Person, an “Excluded Party”);
provided that, for purposes of qualifying as an Excluded Party, the references to “20%” in
the definition of Company Acquisition Proposal shall be deemed to be references to “50%.”
Notwithstanding anything contained in this Section 7.03 to the contrary, any Excluded Party shall
cease to be an Excluded Party for all purposes under this Agreement immediately at such time as the
Company Acquisition Proposal made by such party is withdrawn, is terminated or expires, or the
Company Board (following the recommendation of the Special Committee if such committee still
exists) determines in good faith that such Company Acquisition Proposal ceases to constitute, or
ceases to be reasonably likely to lead to, a Company Superior Proposal (a “Terminated Company
Acquisition Proposal”). At the Go-Shop Period End Date, other than with respect to Persons who
at the Go-Shop Period End Date are Excluded Parties, and at any subsequent time with respect to any
Person (including a formerly Excluded Party) that has made a Company Acquisition Proposal that
becomes a Terminated Company Acquisition Proposal, the Company shall immediately cease and cause to
be terminated any solicitation, encouragement, discussion or negotiation with such Person conducted
theretofore by the Company, any of the Company Subsidiaries or any of their respective
Representatives with respect to any Company Acquisition Proposal and cause to be returned or
destroyed all confidential information provided or made available to such Person on behalf of the
Company or any of Company Subsidiaries. The Company shall not, and shall cause the Company
Subsidiaries to not, waive any terms of an Acceptable Confidentiality Agreement or any other
standstill or similar agreement to which the Company or any Company Subsidiary is party.
(c) Notwithstanding anything to the contrary contained in Section 7.03(b), if at any time
following the Go-Shop Period End Date and prior to obtaining the Company Stockholder Approval, (i)
the Company has received a written Company Acquisition Proposal from a Third Party (including any
Excluded Party) that the Company Board (following the recommendation of the Special Committee if
such committee still exists) believes in good faith to be bona fide, (ii) the Company Board
(following the recommendation of the Special Committee if such committee still exists) determines
in good faith, after consultation with its independent financial advisors and outside counsel, that
such Company Acquisition Proposal constitutes or would reasonably be expected to result in a
Company Superior Proposal, and (iii) neither the Company nor any Representative of any of the
Company or any Company Subsidiary shall have breached any of the restrictions set forth in this
Section 7.03 in a manner that resulted in the submission of any Company Acquisition Proposal, then
the Company may (A) furnish information with respect to the Company and the Company Subsidiaries to
the Person making such Company Acquisition Proposal and (B) participate in discussions or
negotiations with the Person making such Company Acquisition Proposal; provided that the
Company (x) will not, and will not allow its Representatives to, disclose any non-public
information to such Person without entering into an Acceptable Confidentiality Agreement, (y) will
provide to Parent any non-public information concerning the Company or Company Subsidiaries
provided to such other Person which was not previously provided to Parent and (z) at such time as
the Company Acquisition Proposal
42
made by such Person becomes a Terminated Company Acquisition Proposal, the Company shall
immediately cease and cause to be terminated any such discussions or negotiations with any such
Person and cause to be returned or destroyed all confidential information provided or made
available to such Person on behalf of the Company or any of Company Subsidiaries. From and after
the Go-Shop Period End Date, the Company shall promptly (and in any event within 48 hours) notify
Parent in the event it receives a Company Acquisition Proposal from a Person or group of related
Persons (including an Excluded Party in the case of a revised Company Acquisition Proposal) or any
material revisions thereto, including the identity and material terms and conditions thereof.
Without limiting the foregoing, the Company shall promptly (and in any event within 48 hours)
notify Parent if it determines to begin providing information or to engage in negotiations
concerning a Company Acquisition Proposal from a Person or group of related Persons (other than an
Excluded Party) pursuant to this Section 7.03(c).
(d) Notwithstanding anything in this Agreement to the contrary, if, at any time prior to
obtaining the Company Stockholder Approval, the Company receives a Company Acquisition Proposal
which the Company Board (following the recommendation of the Special Committee, if such committee
still exists) determines in good faith (after consultation with its independent financial advisors
and outside counsel) constitutes a Company Superior Proposal, the Company Board may (A) effect a
Company Change in Recommendation and/or (B) terminate this Agreement and concurrently enter into a
definitive agreement with respect to such Company Superior Proposal, in each case, if the Company
Board determines in good faith, after consultation with outside counsel, that failure to take such
action would likely be inconsistent with its fiduciary duties under applicable law;
provided, however that the Company shall not enter into a definitive agreement with
respect to such Company Superior Proposal or terminate this Agreement pursuant to the foregoing
clause (B), and any purported termination pursuant to the foregoing clause (B) shall be void and of
no force or effect, unless the Company pays the Termination Fee
payable pursuant to
Section 9.03(b)(i) within two (2) Business Days following such termination.
Section 9.03(b)(i) within two (2) Business Days following such termination.
(e) Nothing in this Section 7.03 or elsewhere in this Agreement shall prevent the Company
Board from disclosing any information required to be disclosed under applicable Law or from
complying with Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act with respect to a
Company Acquisition Proposal; provided, however, that neither the Company nor the
Company Board (or any committee thereof) shall be permitted to recommend that the Company
stockholders tender any securities in connection with any tender or exchange offer (or otherwise
approve, endorse or recommend any Company Acquisition Proposal), unless in each case, in connection
therewith, the Company Board effects a Company Change in Recommendation in compliance with the
provisions of this Section 7.03. In addition, nothing in this Section 7.03 or this Agreement shall
prohibit the Company from taking any action that any court of competent jurisdiction orders the
Company to take.
43
Section 7.04 Employee Benefits Matters.
(a) From and after the Merger Effective Time, Parent shall honor and shall cause the Surviving
Corporation to honor all Plans (other than the Management Stock Purchase Plan and the Employee
Stock Purchase Plan) and compensation arrangements and agreements and employment agreements in
accordance with their terms as in effect immediately before the Merger Effective Time. For a
period of one year following the Merger Effective Time (the “Benefits Continuation
Period”), Parent shall provide, or shall cause to be provided, to each current and former
employee of the Company and its subsidiaries (“Company Employees”) (i) compensation
(including, without limitation, cash incentive compensation, but excluding any equity-based
compensation) no less favorable than the compensation provided to Company Employees (including
without limitation incentive compensation) immediately before the Merger Effective Time and (ii)
benefits that are no less favorable, in the aggregate, than the benefits provided to Company
Employees immediately before the Merger Effective Time. During the Benefits Continuation Period,
Parent shall honor, fulfill and discharge the Company’s and the Company Subsidiaries’ obligations
under, the severance plans listed on Section 7.04(a) of the Company Disclosure Schedule without any
amendment or change that is adverse to the Company Employees. During the Benefits Continuation
Period, severance benefits offered to Company Employees shall be determined without taking into
account any reduction after the Merger Effective Time in compensation paid to Company Employees and
used to determine severance benefits.
(b) For all purposes (including purposes of vesting, eligibility to participate and level of
benefits) under the employee benefit plans of Parent and its subsidiaries providing benefits to any
Company Employees after the Merger Effective Time (the “New Plans”), each Company Employee
shall subject to applicable Law and applicable tax qualification requirements be credited with his
or her years of service with the Company and its subsidiaries and their respective predecessors
before the Merger Effective Time, to the same extent as such Company Employee was entitled, before
the Merger Effective Time, to credit for such service under any similar Company employee benefit
plan in which such Company Employee participated or was eligible to participate immediately prior
to the Merger Effective Time; provided that the foregoing shall not apply with respect to
benefit accrual under any defined benefit pension plan or to the extent that its application would
result in a duplication of benefits. In addition, and without limiting the generality of the
foregoing, (i) each Company Employee shall be immediately eligible to participate, without any
waiting time, in any and all New Plans to the extent coverage under such New Plan is comparable to
a Company Benefit Plan in which such Company Employee participated immediately before the
consummation of the Merger (such plans, collectively, the “Old Plans”), and (ii) for
purposes of each New Plan providing medical, dental, pharmaceutical or vision benefits to any
Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work
requirements of such New Plan to be waived for such Company Employee and his or her covered
dependents, unless such conditions would not have been waived under the comparable plans of the
Company or its subsidiaries in which such Company Employee participated immediately prior to the
Merger Effective Time and Parent shall cause any eligible expenses incurred by such employee and
his or her covered dependents during
44
the portion of the plan year of the Old Plan ending on the date such employee’s participation
in the corresponding New Plan begins to be taken into account under such New Plan for purposes of
satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such
employee and his or her covered dependents for the applicable plan year as if such amounts had been
paid in accordance with such New Plan.
(c) All annual bonus plans for Company Employees for fiscal year 2007 will be continued in
accordance with their terms, and all annual bonus plans for Company Employees for fiscal year 2006
will be paid in accordance with their terms; provided that the bonus plans for fiscal years
2006 and 2007 shall be calculated without taking into account any expenses or costs associated with
or arising as a result of transactions contemplated by this Agreement (including any expenses or
costs related to actions undertaken in anticipation of the transactions contemplated by this
Agreement) or any non-recurring charges that would not reasonably be expected to have been incurred
had the transactions contemplated by this Agreement not been anticipated or occurred, and bonus
amounts for the 2006 and 2007 fiscal years shall not be subject to negative discretion by the
administrator for the bonus plans.
(d) Prior to the Merger Effective Time, the Company Board, or an appropriate committee of
non-employee directors thereof, shall adopt a resolution consistent with the interpretive guidance
of the SEC so that the disposition by any officer or director of the Company who is a covered
person of the Company for purposes of Section 16 of the Exchange Act and the rules and regulations
thereunder (“Section 16”) of Company Common Shares or Company Stock Options to acquire
Company Common Shares (or Company Common Shares acquired upon the vesting of any Company
Stock-Based Awards) pursuant to this Agreement and the Merger shall be an exempt transaction for
purposes of Section 16.
(e) The parties acknowledge and agree that all provisions contained in this Section 7.04 and
Section 4.10 with respect to Company Employees are included for the sole benefit of the Company,
Parent and Merger Sub, and that nothing herein, whether express or implied, shall create any third
party beneficiary or other rights (i) in any other person, including without limitation, any
Company Employees, former Company Employees, any participant in any U.S. Plan or Non-U.S. Plan, or
any dependent or beneficiary thereof, or (ii) to continued employment with Parent, Company or any
of their respective Affiliates.
(f) Nothing in this Agreement shall be interpreted to establish or amend any “employee benefit
plan” within the meaning of Section 3(3) of ERISA and no provision shall be construed to prevent
Parent or the Company from terminating or modifying to any extent or in any respect any benefit
plan that Parent or the Company may establish or maintain.
45
Section 7.05 Directors’ and Officers’ Indemnification and Insurance of the Surviving
Corporation.
(a) Without limiting any additional rights that any director, officer, trustee, employee,
agent, or fiduciary may have under any employment or indemnification agreement or under the Company
Charter, Company Bylaws or this Agreement or, if applicable, similar organizational documents or
agreements of any of the Company Subsidiaries, from and after the Merger Effective Time, Parent and
the Surviving Corporation shall: (i) indemnify and hold harmless each person who is at the date
hereof or during the period from the date hereof through the Closing Date serving as a director,
officer, trustee, employee, agent, or fiduciary of the Company or Company Subsidiaries or as a
fiduciary under or with respect to any employee benefit plan (within the meaning of Section 3(3) of
ERISA) (collectively, the “Indemnified Parties”) to the fullest extent authorized or
permitted by applicable law, as now or hereafter in effect, in connection with any Claim and any
judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of such judgments, fines, penalties
or amounts paid in settlement) resulting therefrom; and (ii) promptly pay on behalf of or, within
thirty (30) days after any request for advancement, advance to each of the Indemnified Parties, to
the fullest extent authorized or permitted by applicable law, as now or hereafter in effect, any
Expenses incurred in defending, serving as a witness with respect to or otherwise participating in
any Claim in advance of the final disposition of such Claim, including payment on behalf of or
advancement to the Indemnified Party of any Expenses incurred by such Indemnified Party in
connection with enforcing any rights with respect to such indemnification or advancement, in each
case without the requirement of any bond or other security; provided the Person to whom
expenses are advanced provides an undertaking to repay such advances if it is ultimately determined
that such Person is not entitled to indemnification. The indemnification and advancement
obligations of Parent and the Surviving Corporation pursuant to this Section 7.05(a) shall extend
to acts or omissions occurring at or before the Merger Effective Time and any Claim relating
thereto (including with respect to any acts or omissions occurring in connection with the approval
of this Agreement and the consummation of the transactions contemplated hereby, including the
consideration and approval thereof and the process undertaken in connection therewith and any Claim
relating thereto), and all rights to indemnification and advancement conferred hereunder shall
continue as to a person who continues to be or who has ceased to be a director, officer, trustee,
employee, agent, or fiduciary of the Company or the Company Subsidiaries after the date hereof and
shall inure to the benefit of such person’s heirs, executors and personal and legal
representatives. As used in this Section 7.05: (A) the term “Claim” means any threatened,
asserted, pending or completed Action, suit or proceeding, or any inquiry or investigation, whether
instituted by any party hereto, any Governmental Authority or any other party, that any Indemnified
Party in good faith believes might lead to the institution of any such Action, suit or proceeding,
whether civil, criminal, administrative, investigative or other, including any arbitration or other
alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to
such Indemnified Party’s duties or service as a director, officer, trustee, employee, agent, or
fiduciary of the Company, any of the Company Subsidiaries, or any employee benefit plan (within the
meaning of Section 3(3)
46
of ERISA) maintained by any of the foregoing or any other person at or prior to the Merger
Effective Time at the request of the Company or any of Company Subsidiaries; and (B) the term
“Expenses” means reasonable attorneys’ fees and all other reasonable costs, expenses and
obligations (including, without limitation, experts’ fees, travel expenses, court costs, retainers,
transcript fees, duplicating, printing and binding costs, as well as telecommunications, postage
and courier charges) paid or incurred in connection with investigating, defending, being a witness
in or participating in (including on appeal), or preparing to investigate, defend, be a witness in
or participate in, any Claim for which indemnification is authorized pursuant to this Section
7.05(a), including any Action relating to a claim for indemnification or advancement brought by an
Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under Section 7.05(a), upon
learning of any such Claim, shall promptly notify Parent and the Surviving Corporation thereof, but
the failure to so notify shall not relieve Parent or the Surviving Corporation of any liability it
may have to such Indemnified Party if such failure does not actually and materially prejudice
Parent or the Surviving Corporation. In the event of any such Claim, (i) the Surviving Corporation
shall have the right to assume the defense thereof and the Surviving Corporation shall not be
liable to such Indemnified Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the defense thereof, except
that if the Surviving Corporation elects not to assume such defense in a timely manner or counsel
for the Indemnified Parties advises that there are issues which raise conflicts of interest between
the Surviving Corporation and the Indemnified Parties, the Indemnified Parties may retain counsel
satisfactory to them, and Parent and the Surviving Corporation shall jointly and severally pay all
reasonable fees and expenses of such counsel for the Indemnified Parties promptly; provided
that Parent and the Surviving Corporation shall be obligated pursuant to this Section 7.05(b) to
pay for only one firm of counsel (in addition to one local counsel) for all Indemnified Parties in
any jurisdiction, (ii) the Indemnified Parties will cooperate in the defense of any such matter,
and (iii) Parent and the Surviving Corporation shall not be liable for any settlement effected
without their prior written consent (which consent shall not be unreasonably withheld, conditioned
or delayed). Neither Parent nor the Surviving Corporation shall settle, compromise or consent to
the entry of any judgment in any Claim in respect of which indemnification has been or could be
sought by such Indemnified Party hereunder unless such settlement, compromise or judgment includes
an unconditional release of such Indemnified Party from all liability arising out of such Claim or
such Indemnified Party otherwise consents thereto. No Indemnified Party shall settle, compromise
or consent to the entry of any judgment in any Claim in respect of which indemnification has been
or could be sought by such Indemnified Party hereunder unless the Parent and Surviving Corporation
consent to such settlement, compromise or judgment (which consent shall not be unreasonably
withheld, conditioned or delayed).
(c) Without limiting the foregoing, Parent and Merger Sub agree that all rights to
indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the
Merger Effective Time now existing in favor of the current or former directors, officers, trustees,
employees, agents, or fiduciaries of the Company or any of the Company Subsidiaries as provided in
the Company Charter and Company
47
Bylaws (or, as applicable, the charter, bylaws, partnership agreement, limited liability
company agreement, or other organizational documents of any of the Subsidiaries) and
indemnification agreements of the Company or any of the Company Subsidiaries identified on Section
7.05(c) of the Company Disclosure Schedule shall be assumed by the Surviving Corporation in the
Merger, without further action, at the Merger Effective Time and shall survive the Merger and shall
continue in full force and effect in accordance with their terms.
(d) For a period of six (6) years from the Merger Effective Time, the organizational documents
of the Surviving Corporation shall contain provisions no less favorable with respect to
indemnification than are set forth in the Company Charter and Company Bylaws, which provisions
shall not be amended, repealed or otherwise modified for a period of six (6) years from the Merger
Effective Time in any manner that would affect adversely the rights thereunder of individuals who,
at or prior to the Merger Effective Time, were directors, officers, trustees, employees, agents, or
fiduciaries of the Company or any of Company Subsidiaries, unless such modification shall be
required by Law and then only to the minimum extent required by Law.
(e) The Surviving Corporation shall maintain for a period of at least six (6) years the
current policies of directors’ and officers’ liability insurance maintained by the Company and the
Company Subsidiaries with respect to claims arising from facts or events that occurred on or before
the Merger Effective Time, including, without limitation, in respect of the transactions
contemplated by this Agreement; provided, that (i) that the Surviving Corporation may
substitute therefor policies of at least the same coverage and amounts containing terms and
conditions which are, in the aggregate, no less advantageous to the insured; provided that
such substitution shall not result in gaps or lapses of coverage with respect to matters occurring
before the Merger Effective Time; (ii) in no event shall the Surviving Corporation be required to
expend pursuant to this Section 7.05(e) more than an amount per year of coverage equal to three
hundred percent (300%) of the current annual premiums paid by the Company for such insurance. In
the event that, but for the proviso to the immediately preceding sentence, the Surviving
Corporation would be required to expend more than three hundred percent (300%) of the current
annual premiums paid by the Company, the Surviving Corporation shall obtain the maximum amount of
such insurance obtainable by payment of annual premiums equal to three hundred percent (300%) of
the current annual premiums paid by the Company. Notwithstanding the foregoing, the Surviving
Corporation may fulfill its obligation to provide insurance under this Section 7.05(e) by obtaining
a prepaid “tail” policy on terms and conditions no less favorable than the existing directors’ and
officers’ insurance policy maintained by the Company, and shall maintain such “tail” policy in full
force and effect for six (6) years. Parent shall, and shall cause the Surviving Corporation or its
successors or assigns to, maintain such policies in full force and effect, and continue to honor
all obligations thereunder.
(f) If the Surviving Corporation or any of its respective successors or assigns (i)
consolidates with or merges with or into any other person and shall not be the continuing or
surviving limited liability company, partnership or other entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties
48
and assets to any person, then, and in each such case, proper provision shall be made so that
the successors and assigns of the Surviving Corporation assume the obligations set forth in this
Section 7.05.
(g) This Section 7.05 is intended for the irrevocable benefit of, and to grant third party
rights to, the Indemnified Parties and shall be binding on all successors and assigns of the
Company, Parent and the Surviving Corporation. Each of the Indemnified Parties shall be entitled
to enforce the covenants contained in this Section 7.05.
Section 7.06 Financing; Cooperation with Financing.
(a) Each of Parent and Merger Sub shall use, and shall cause their Affiliates to use, their
commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable to arrange and obtain the proceeds of the
Financing on the terms and conditions described in the Financing Commitments, including using
commercially reasonable efforts to (i) negotiate and enter into the definitive agreements with
respect thereto on the terms and conditions contained in the Financing Commitments or on other
terms reasonably acceptable to Parent that would not adversely impact in any material respect the
ability of Parent or Merger Sub to consummate the transactions contemplated hereby and (ii) satisfy
(or cause its Affiliates to satisfy) on a timely basis all conditions applicable to the Buyer
Parties (or their Affiliates) in such definitive agreements; provided that Parent and Merger Sub
may replace or amend the Debt Financing Commitment to add lenders, lead arrangers, bookrunners,
syndication agents or similar entities which had not executed the Debt Financing Commitment as of
the date hereof, or otherwise so long as such replacement or amendment would not adversely impact
or delay in any material respect the ability of Parent or Merger Sub to consummate the transactions
contemplated hereby or the likelihood of the consummation of the transactions contemplated hereby).
In the event any portion of the Financing becomes unavailable on the terms and conditions
contemplated in the Financing Commitments, Parent and Merger Sub shall promptly notify the Company
and shall use their commercially reasonable efforts to arrange to obtain any such portion from
alternative sources as promptly as practicable following the occurrence of such event on terms not
materially less beneficial to Parent and Merger Sub in an amount sufficient to consummate the
transactions contemplated by this Agreement. Parent shall deliver to the Company true and complete
copies of all agreements pursuant to which any such alternative source shall have committed to
provide Parent and Merger Sub with any portion of the Financing. Parent shall give the Company
prompt notice of any material breach by any party of the Financing Commitments or any termination
of the Financing Commitments. Each of Parent and Merger Sub shall refrain (and shall use its
commercially reasonable efforts to cause its Affiliates to refrain) from taking, directly or
indirectly, any action that would reasonably be expected to result in a failure of any of the
conditions contained in the Financing Commitments or in any definitive agreement related to the
Financing. Parent shall keep the Company informed on a reasonably current basis in reasonable
detail of the status of its efforts to arrange the Financing. Neither Parent nor Merger Sub shall
agree to or permit any material amendment, supplement or other modification to be made to, or any
waiver of any material provision
49
or remedy under, the Financing Commitments or the definitive agreements relating to the
Financing that would or would be reasonably expected to materially and adversely affect or delay in
any material respect Parent’s ability to consummate the transactions contemplated by this
Agreement, without first obtaining the Company’s prior written consent. For the avoidance of
doubt, the Buyer Parties’ failure to obtain the Financing (or any alternative financing) shall not
relieve the Buyer Parties from the obligation to consummate the Merger on the terms contemplated by
this Agreement, subject only to the satisfaction or waiver of the conditions set forth in Sections
8.01 and 8.02 of this Agreement.
(b) The Company agrees to provide, and shall cause the Company Subsidiaries and its and their
respective Representatives to provide, reasonable cooperation in connection with the arrangement of
the Financing as may be reasonably requested by Parent (provided that such requested
cooperation does not unreasonably interfere with the ongoing operations of the Company and Company
Subsidiaries), including (i) providing to Parent from time to time information regarding the
Company and its industry reasonably requested by the lenders providing the Financing and
identifying any portion of such information that constitutes material non-public information, (ii)
using commercially reasonable efforts to ensure that the efforts to syndicate the Financing benefit
from existing lending relationships of the Company, (iii) participating in a reasonable number of
meetings, presentations, road shows, due diligence sessions with prospective lenders and sessions
with rating agencies, (iv) assisting with the preparation of materials for rating agency
presentations, offering documents, business projections and similar marketing documents required in
connection with the Debt Financing, (v) furnishing Parent and its Debt Financing sources all
Required Information, (vi) cooperating in satisfying the conditions set forth in the Debt Financing
Commitments (to the extent the satisfaction of such condition requires the cooperation of the
Company), including (A) permitting the prospective lenders to evaluate the Company’s current
assets, cash management and accounting systems, policies and procedures relating thereto for the
purposes of establishing collateral arrangements and (B) establishing bank and other accounts and
blocked account agreements and lock box arrangements in connection with the foregoing, (vii)
issuing customary representation letters to auditors and using commercially reasonable efforts to
obtain (A) accountants’ comfort letters and consents to the use of accountants’ audit reports
relating to the Company, (B) legal opinions and (C) other documentation and items contemplated by
the Debt Financing Commitments, in each case, as reasonably requested by Parent, (viii) providing
monthly financial statements (excluding footnotes) to the extent available and prepared by the
Company in the ordinary course of business consistent with past practice, (ix) executing and
delivering, as of the Merger Effective Time, any pledge and security documents, other definitive
financing documents, or other certificates or documents contemplated by the Debt Financing
Commitments as may be reasonably requested by Parent (including a certificate of the Chief
Financial Officer of the Company or any Company Subsidiary with respect to solvency matters and
using commercially reasonable efforts to deliver consents of accountants for use of their reports
in any materials relating to the Debt Financing) and otherwise reasonably facilitating the pledging
of collateral (including obtaining releases, terminations, waivers, consents, estoppels and
approvals as may be required in connection therewith) contemplated by the
50
Debt Financing Commitments, and (x) as of the Merger Effective Time, taking all corporate
actions necessary to authorize the consummation of the Debt Financing. The Company will use
commercially reasonable efforts to periodically update any Required Information to be included in
an offering document to be used in connection with such Debt Financing so that Parent may ensure
that any such Required Information does not contain any untrue statement of material fact or omit
to state any material fact necessary in order to make the statements contained therein not
misleading.
(c) The Company hereby consents to the use of its and the Company Subsidiaries’ logos in
connection with the Debt Financing. Notwithstanding anything in this Agreement to the contrary,
none of the Company or any Company Subsidiary shall be required to pay any commitment or other
similar fee or incur any other liability in connection with the financing contemplated by the
Financing Commitments prior to the Merger Effective Time, and Parent shall, promptly upon request
by the Company, reimburse the Company for all reasonable out-of-pocket costs incurred by the
Company or the Company Subsidiaries in connection with any actions taken pursuant to this Section
7.06. Parent and Merger Sub shall, on a joint and several basis, indemnify and hold harmless the
Company, its Subsidiaries and their respective Representatives from and against any and all losses
or damages suffered or incurred by them in connection with the arrangement of the Financing and any
information utilized in connection therewith (other than information provided by the Company or the
Company Subsidiaries in accordance with the terms hereof).
Section 7.07 Further Action; Commercially Reasonable Efforts.
(a) Subject to the terms and conditions set forth in this Agreement, each of the parties
hereto shall use its commercially reasonable efforts (subject to, and in accordance with,
applicable Law) to take promptly, or cause to be taken, all actions, and to do promptly, or cause
to be done, and to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable under applicable Laws to consummate and make effective the Merger and the other
transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions
or nonactions, waivers, consents and approvals from Governmental Authorities and the making of all
necessary registrations and filings and the taking of all steps as may be necessary to obtain an
approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority, (ii)
the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or administrative,
challenging this Agreement or the consummation of the transactions contemplated by this Agreement
and (iv) the execution and delivery of any additional instruments necessary to consummate the
transactions contemplated by this Agreement.
(b) The Company shall use its commercially reasonable efforts to obtain any third party
consent to the consummation of the transactions contemplated hereby to the extent reasonably
determined by the parties hereto to be required pursuant to the terms of any Contract listed or
required to be listed in Company Disclosure Letter; provided that in no event shall the Company be
required to amend any such Contract or make any material payment to any counterparty thereto in
connection with obtaining such
51
consent, unless such amendment or payment is conditioned upon consummation of the Merger.
(c) Subject to the terms and conditions herein provided and without limiting the foregoing,
the Company and Parent shall (i) promptly make their respective filings and thereafter make any
other required submissions under the HSR Act or other applicable Law, (ii) use commercially
reasonable efforts to cooperate with each other in (A) determining whether any filings are required
to be made with, or consents, permits, authorizations, waivers or approvals are required to be
obtained from, any third parties or other Governmental Authorities in connection with the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby and (B)
timely making all such filings and timely seeking all such consents, permits, authorizations or
approvals, (iii) use commercially reasonable efforts to offer to take, or cause to be taken, all
other actions and do, or cause to be done, all other things necessary, proper or advisable to
consummate and make effective the transactions contemplated hereby, including taking all such
further action as reasonably may be necessary to resolve such objections, if any, as the United
States Federal Trade Commission, the Antitrust Division of the United States Department of Justice,
state antitrust enforcement authorities or competition authorities of any other nation or other
jurisdiction or any other person may assert under Regulatory Law (as hereinafter defined) with
respect to the transactions contemplated hereby, and to avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Authority with respect to the
Merger so as to enable the Closing to occur as soon as expeditiously possible (and in any event
shall use commercially reasonable efforts to cause the Closing to occur within six (6) months from
the date of this Agreement), including, without limitation (A) proposing, negotiating, committing
to and, subject to the Closing, effecting, by consent decree, hold separate order or otherwise, the
sale, divestiture or disposition of such assets or businesses of Parent or its subsidiaries or
affiliates or of the Company or its subsidiaries and (B) otherwise taking or committing to take
actions that after the Closing Date would limit the freedom of Parent or its subsidiaries’
(including the Surviving Corporation’s) or affiliates’ freedom of action with respect to, or its
ability to retain, one or more of its or its subsidiaries’ (including the Surviving Corporation’s)
businesses, product lines or assets, in each case as may be required in order to avoid the entry
of, or to effect the dissolution of, any injunction, temporary restraining order or other order in
any suit or proceeding which would otherwise have the effect of preventing or materially delaying
the Closing and (iv) subject to applicable legal limitations and the instructions of any
Governmental Authority, keep each other apprised of the status of matters relating to the
completion of the transactions contemplated thereby, including promptly furnishing the other with
copies of notices or other communications between the Company or Parent, as the case may be, or any
of their respective subsidiaries, and any Third Party or any Governmental Authority with respect to
such transactions. The Company and Parent shall permit counsel for the other party reasonable
opportunity to review in advance, and consider in good faith the views of the other party in
connection with, any proposed written communication to any Governmental Authority. Each of the
Company and Parent agrees not to participate in any substantive meeting or discussion, either in
person or by telephone, with any Governmental Authority in connection with the proposed
transactions unless it consults with the other party in advance and, to the extent not
52
prohibited by such Governmental Authority, gives the other party the opportunity to attend and
participate.
(d) In furtherance and not in limitation of the covenants of the parties contained in this
Section 7.07, if any administrative or judicial action or proceeding, including any proceeding by a
private party, is instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Regulatory Law (as hereinafter defined), each of
the Company and Parent shall cooperate in all respects with each other and shall use their
respective commercially reasonable efforts to contest and resist any such action or proceeding and
to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order,
whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or
restricts consummation of the transactions contemplated by this Agreement. Notwithstanding the
foregoing or any other provision of this Agreement, nothing in this Section 7.07 shall limit a
party’s right to terminate this Agreement pursuant to Section 9.01(b) or 9.01(c) so long as such
party has, prior to such termination, complied with its obligations under this Section 7.07.
(e) For purposes of this Agreement, “Regulatory Law” means the Xxxxxxx Act of 1890,
the Xxxxxxx Antitrust Act of 1914, the HSR Act, the Federal Trade Commission Act of 1914 and all
other federal, state or foreign statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other Laws, including without limitation any antitrust, competition or trade
regulation Laws, that are designed or intended to (i) prohibit, restrict or regulate actions having
the purpose or effect of monopolization or restraint of trade or lessening competition through
merger or acquisition, (ii) preserve or promote diversity of media ownership or (iii) protect the
national security or the national economy of any nation.
(f) Public Announcements. The parties hereto agree that no public release or
announcement concerning the transactions contemplated by this Agreement or the Merger shall be
issued by a party without the prior consent of the other parties (which consent shall not be
unreasonably withheld), except as such release or announcement may be required by Law or the rules
or regulations of any securities exchange, in which case the party required to make the release or
announcement shall use its commercially reasonable efforts to allow the other parties reasonable
time to comment on such release or announcement in advance of such issuance. The parties have
agreed upon the form of a joint press release announcing the Merger and the execution of this
Agreement.
(g) De-Listing. Prior to the Closing Date, the Company shall cooperate with Parent
and use commercially reasonable efforts to take, or cause to be taken, all actions, and do or cause
to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws
and rules and policies of Nasdaq and any other exchanges on which the common stock of the Company
is listed to enable the delisting by the Surviving Corporation of the Company Common Shares from
Nasdaq and any other exchanges on which the Company Common Shares is listed and the deregistration
of the Company Common Shares under the Exchange Act as promptly as practicable after the Merger
Effective Time.
53
(h) Stockholder Litigation. The Company shall give the Buyer Parties the opportunity
to participate in the defense or settlement of any stockholder litigation against the Company
and/or its directors relating to the transactions contemplated by this Agreement, and no such
settlement shall be agreed to without the Buyer Parties’ prior written consent (such consent not to
be unreasonably withheld, conditioned or delayed).
ARTICLE VIII
CONDITIONS TO THE MERGER
CONDITIONS TO THE MERGER
Section 8.01 Conditions to the Obligations of Each Party. The obligations of the
Company, Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver
in writing (where permissible) of the following conditions:
(a) The Company Stockholder Approval shall have been obtained by the Company.
(b) (i) Any applicable waiting period (and any extension thereof) under the HSR Act required
for the consummation of the Merger shall have expired or been terminated and (ii) any waiting
period under any antitrust or competition Laws of any other applicable jurisdiction required for
the consummation of the Merger shall have expired or been terminated and all other foreign
antitrust and competition approvals required to consummate the Merger shall have been obtained
(collectively, the “Foreign Antitrust Laws and Approvals”), but only if, in the case of
Foreign Antitrust Laws and Approvals, such Foreign Antitrust Laws and Approvals (A) if not expired,
terminated or obtained would have a material suspensory effect, (B) if not obtained would
reasonably be expected to result in material limitations on the ownership or operation by Parent of
the assets of Parent, its Subsidiaries or the Surviving Corporation or (C) if not obtained, would
subject Parent or Purchaser to the payment of a material fine or penalty.
(c) No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any
Law, injunction, order, decree or ruling (whether temporary, preliminary or permanent) which is
then in effect and has the effect of making consummation of the Merger illegal or prohibiting the
consummation of the Merger.
Section 8.02 Conditions to the Obligations of Parent and Merger Sub. The obligations
of Parent and Merger Sub to consummate the Merger are subject to the satisfaction or waiver in
writing of the following additional conditions:
(a) The representations and warranties of the Company contained in this Agreement that (i) are
not made as of a specific date shall be true and correct as of the date of this Agreement and as of
the Closing, as though made on and as of the Closing, and (ii) are made as of a specific date shall
be true and correct as of such date, in each case except where the failure of such representations
or warranties to be true and correct (without giving effect to any limitation as to “materiality”
or “Material Adverse Effect” set forth in such representations and warranties (other than the
representation in
54
clause (b) of Section 4.08) does not have and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(b) The Company shall have performed, in all material respects, all obligations and complied
with, in all material respects, its agreements and covenants to be performed or complied with by it
under this Agreement on or prior to the Merger Effective Time.
(c) The Company shall have delivered to Parent a certificate, dated the date of the Merger
Effective Time, signed by an officer of the Company, and certifying as to the satisfaction by the
Company, of the applicable conditions specified in Sections 8.02(a) and 8.02(b).
(d) The Company shall have furnished to Parent a certification in accordance with Treas. Reg.
§ 1.1445-2(c)(3) certifying that stock in the Company is not a United States real property interest
because the Company is not and has not been a United States real property holding corporation (as
defined in Section 897(c)(2) of the Code) during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code, substantially in the form attached hereto as Exhibit C.
Section 8.03 Conditions to the Obligations of the Company. The obligations of the
Company to consummate the Merger are subject to the satisfaction or waiver in writing (where
permissible) of the following additional conditions:
(a) The representations and warranties of Parent and Merger Sub in this Agreement that (i) are
not made as of a specific date shall be true and correct as of the date of this Agreement and as of
the Closing, as though made on and as of the Closing, and (ii) are made as of a specific date shall
be true and correct as of such date, in each case except where the failure of such representations
or warranties to be true and correct (without giving effect to any limitation as to “materiality”
or “Parent Material Adverse Effect” set forth in such representations and warranties) does not have
and would not reasonably be expected to have, individually or in the aggregate, a Parent Material
Adverse Effect.
(b) Parent shall have performed, in all material respects, all obligations and complied with,
in all material respects, its agreements and covenants to be performed or complied with by it under
this Agreement on or prior to the Merger Effective Time.
(c) Parent shall have delivered to the Company a certificate, dated the date of the Merger
Effective Time, signed by an officer of Parent and certifying as to the satisfaction of the
conditions specified in Sections 8.03(a) and 8.03(b).
Section 8.04 Frustration of Conditions. None of the Company, Parent or Merger Sub may
rely on the failure of any condition set forth in Section 8.01, Section 8.02 or Section 8.03, as
the case may be, to be satisfied if such failure was caused by such party’s failure to act in good
faith or to use its commercially reasonable efforts to consummate the Merger and the other
transactions contemplated by this Agreement, as required by and subject to Section 7.07.
55
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
TERMINATION, AMENDMENT AND WAIVER
Section 9.01 Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Merger Effective Time by action taken or authorized by the
Company Board, or members of the terminating party or parties, notwithstanding any requisite
approval of the Merger by the stockholders of the Company, and whether before or after the
stockholders of the Company have approved the Merger at the Company Stockholders’ Meeting, as
follows (the date of any such termination, the “Termination Date”):
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if the Merger Effective Time shall not have occurred on or
before February 25, 2008 (the “Outside Date”); provided that, if the Marketing
Period shall have commenced, but has not ended, on or before such date, then the Outside Date shall
be extended until the earlier of (x) the seventh (7th) Business Day after the final day of the
Marketing Period and (y) April 2, 2008; provided, however, that the right to
terminate this Agreement under this Section 9.01(b) shall not be available to a party whose failure
to fulfill any obligation under this Agreement materially contributed to the failure of the Merger
Effective Time to occur on or before such date;
(c) by either Parent or the Company if any Governmental Authority shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or ruling or taken any other action
(including the failure to have taken an action) which, in either such case, has become final and
non-appealable and has the effect of making consummation of the Merger illegal or otherwise
preventing or prohibiting consummation of the Merger (“Governmental Order”);
provided, however, that the terms of this Section 9.01(c) shall not be available to
any party unless such party shall have used its commercially reasonable efforts to oppose any such
Governmental Order or to have such Governmental Order vacated or made inapplicable to the Merger;
(d) by Parent if each of it and Merger Sub is not in material breach of its obligations under
this Agreement, and if (i) any of the representations and warranties of the Company herein are or
become untrue or incorrect such that the condition set forth in Section 8.02(a) would be incapable
of being satisfied by the Outside Date, or (ii) there has been a breach on the part of the Company
of its covenants or agreements herein such that the condition set forth in Section 8.02(b) would be
incapable of being satisfied by the Outside Date;
(e) by the Company if it is not in material breach of its obligations under this Agreement,
and if (i) any of the representations and warranties of Parent and Merger Sub herein are or become
untrue or inaccurate such that the condition set forth in Section 8.03(a) would be incapable of
being satisfied by the Outside Date; (ii) there has been a breach on the part of Parent and Merger
Sub or any of their respective covenants or agreements herein such that the conditions set forth in
Section 8.03(b) would be incapable of being satisfied by the Outside Date; or (iii) the conditions
set forth in
56
Section 8.01 and Section 8.02 have been satisfied (other than those conditions that are not
satisfied due to Parent’s or Merger Sub’s failure to satisfy its obligations under this Agreement)
but Parent has failed to obtain the Financing or consummate the Merger as contemplated by Section
2.04 by the third (3rd) Business Day after the final day of the Marketing Period;
(f) by the Company or Parent if the Company Stockholder Approval is not obtained at the
Company Stockholders’ Meeting;
(g) by Parent if the Company Board shall have (i) effected a Company Change in Recommendation,
(ii) publicly recommended or approved any Company Acquisition Proposal, (iii) failed to include in
the Proxy Statement the Company Recommendation or a statement to the effect that the Company Board
has determined and believes that the Merger is in the best interests of the Company’s stockholders,
or (iv) formally approved or recommended to the Company’s stockholders a Company Acquisition
Proposal other than as expressly permitted under Section 7.03; or
(h) by the Company in accordance with, and subject to the terms and conditions of Section
7.03.
The party desiring to terminate this Agreement shall give written notice of such termination
to the other parties.
Section 9.02 Effect of Termination. In the event of the termination of this Agreement
pursuant to Section 9.01, this Agreement shall forthwith become void, and there shall be no
liability under this Agreement on the part of any party hereto except that the Limited Guaranty
referred to in Section 5.07 and the provisions of Sections 7.02(b), this Section 9.02, Section 9.03
and Article IX shall survive any such termination); provided, however, that nothing
herein shall relieve any party hereto from liability for any breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement prior to such termination.
Section 9.03 Fees and Expenses.
(a) Except as otherwise set forth in this Section 9.03, all expenses incurred in connection
with this Agreement shall be paid by the party incurring such expenses, whether or not the Merger
is consummated.
(b) If this Agreement is terminated:
(i) by Parent pursuant to Section 9.01(g)(ii) or Section 9.01(g)(iv) or the Company
pursuant to Section 9.01(h), then the Company shall pay to Parent the Termination Fee
(unless the Termination Fee is the Go-Shop Termination Fee, in which case the Company shall
pay the Go-Shop Termination Fee); or
(ii) (A) (1) by Parent or the Company pursuant to Section 9.01(f) and, prior to the
Company Stockholders’ Meeting, a Company Acquisition
57
Proposal shall have been publicly announced and shall not have been publicly withdrawn
as of the date five (5) Business Days prior to the date of the Company Stockholders’
Meeting, or (2) by Parent pursuant to Section 9.01(d), Section 9.01(g)(i) or Section
9.01(g)(iii) and, at or prior to the date of termination, a Company Acquisition Proposal
shall have been publicly disclosed or announced, and not withdrawn, and (B) on or prior to
the one year anniversary of the date of the termination of this Agreement, the Company
enters into a definitive agreement to consummate, or consummates, a Company Acquisition
Proposal, then the Company shall pay to Parent the Termination Fee (unless the Termination
Fee is the Go-Shop Termination Fee, in which case the Company shall pay the Go-Shop
Termination Fee). (For purposes of this Section 9.03(b)(ii), references to “20%” in the
definition of “Company Acquisition Proposal” shall be deemed to be references to 50%); or
(iii) by Parent pursuant to Sections 9.01(d), (g) or (h), the Company shall pay to
Parent the aggregate amount of all reasonable and documented out-of-pocket fees and
expenses (including all attorneys’ fees, accountants’ fees, financial advisory fees and
filing fees) actually incurred by or on behalf of Parent on or prior to the date of such
termination in connection with the preparation and negotiation of this Agreement and
otherwise in connection with the Merger up to a maximum amount of $7,900,000.00 in the
aggregate (the “Parent Expenses”). Payment of the Parent Expenses shall be made
within three (3) Business Days after Parent provides the Company with appropriate
documentation of such fees and expenses.
(c) In the event of termination of this Agreement by Parent, the Termination Fee shall be paid
by the Company as directed by Parent in writing in immediately available funds within three (3)
Business Days after the date of the event giving rise to the obligation to make such payment. In
the event of termination of this Agreement by the Company, the Termination Fee shall be paid by the
Company within two (2) Business Days after the date of termination as directed by Parent in writing
in immediately available funds.
(d) If this Agreement is terminated by the Company pursuant to (i) Section 9.01(e)(i) or
Section 9.01(e)(ii) and at the time of such termination there is no state of facts or circumstances
that would reasonably be expected to cause the conditions in Section 8.01, Section 8.02(a) or
Section 8.02(b) not to be satisfied on the Outside Date, or (ii) Section 9.01(e)(iii), then Parent
shall pay to the Company the Parent Termination Fee within three (3) Business Days after the date
of termination.
(e) If this Agreement is terminated by the Company pursuant to Section 9.01(e), then Parent
shall pay to the Company the aggregate amount of all reasonable and documented out-of-pocket fees
and expenses (including all attorneys’ fees, accountants’ fees, financial advisory fees and filing
fees) actually incurred by or on behalf of the Company on or prior to the date of such termination
in connection with the preparation and negotiation of this Agreement and otherwise in connection
with the Merger up to a maximum amount of $7,900,000.00 in the aggregate (the “Company
58
Expenses”). Payment of the Company Expenses shall be made within three (3) Business
Days after the Company provides Parent with appropriate documentation of such fees and expenses.
(f) The parties agree and understand that payment of the Parent Termination Fee and/or the
Company Expenses (as the case may be) shall constitute liquidated damages in a reasonable amount
that will compensate the Company, and that payment of the Termination Fee and/or the Parent
Expenses (as the case may be) shall constitute liquidated damages in a reasonable amount that will
compensate the Buyer Parties, in each case, for the respective efforts and resources expended and
the opportunities foregone while negotiating this Agreement and in reliance on this Agreement and
on the expectation of the consummation of the transactions contemplated hereby, which amount would
otherwise be impossible to calculate with precision.
(i) Notwithstanding anything to the contrary in this Agreement, the Company’s right to
terminate and receive the Parent Termination Fee and/or Company Expenses (as the case may
be) shall be the sole and exclusive remedy of the Company against Parent, Merger Sub,
Guarantor and their respective Representatives (including their respective former, current
or future general or limited partners, stockholders, managers, members, directors,
officers, Affiliates or agents) for the loss or damage suffered as a result of the breach
of any representation, warranty, covenant or agreement contained in this Agreement by
Parent or Merger Sub and the failure of the transactions contemplated hereby to be
consummated, and upon payment of such amount, none of Parent, Merger Sub, Guarantor or any
of their respective Representatives (including their respective former, current or future
general or limited partners, stockholders, managers, members, directors, officers,
Affiliates or agents) shall have any further liability or obligation relating to or arising
out of this Agreement, the Limited Guaranty or the transactions contemplated hereby or
thereby. In no event, whether or not this Agreement shall have been terminated, shall the
Company be entitled to monetary damages in excess of $23,700,000.00 in the aggregate,
inclusive of the Parent Termination Fee, if applicable, for all losses and damages arising
from or in connection with breaches of this Agreement by Parent or Merger Sub or otherwise
relating to or arising out of this Agreement or the transactions contemplated by this
Agreement.
(ii) Upon the Parent Termination Fee becoming payable under this Section 9.03, the
amount of the Parent Termination Fee to be paid by Parent shall be reduced by any amounts
of Company Expenses previously paid by Parent to the Company.
(iii) Notwithstanding anything to the contrary in this Agreement, the Parent’s right
to terminate and receive the Parent Expenses and/or the Termination Fee, or, alternatively,
as applicable, the Go-Shop Termination Fee, (as the case may be) shall be the sole and
exclusive remedy of the Parent or Merger Sub against the Company and its respective
Representatives (including their respective former, current or future general or limited
partners, stockholders,
59
managers, members, directors, officers, Affiliates or agents) for the loss or damage
suffered as a result of the breach of any representation, warranty, covenant or agreement
contained in this Agreement by the Company and the failure of the transactions contemplated
hereby to be consummated, and upon payment of such amount, none of the Company or its
respective Representatives (including their respective former, current or future general or
limited partners, stockholders, managers, members, directors, officers, Affiliates or
agents) shall have any further liability or obligation relating to or arising out of this
Agreement or the transactions contemplated hereby or thereby. In no event, whether or not
this Agreement shall have been terminated, shall Parent be entitled to monetary damages in
excess of $23,700,000.00 in the aggregate, inclusive of the Termination Fee, or
alternatively, if applicable, the Go-Shop Termination Fee, if applicable, for all losses
and damages arising from or in connection with breaches of this Agreement by the Company or
otherwise relating to or arising out of this Agreement or the transactions contemplated by
this Agreement. Upon the Termination Fee, or, alternatively, if applicable, the Go-Shop
Termination Fee, becoming payable under this Section 9.03, the amount of the Termination
Fee or the Go-Shop Fee (as the case may be) to be paid by the Company shall be reduced by
any amounts of Parent Expenses previously paid by the Company to Parent.
(g) Each of the Company and Parent acknowledges that the agreements contained in this Section
9.03 are an integral part of the transactions contemplated by this Agreement. In the event that
the Company shall fail to pay the Termination Fee or the Parent Fees when due or Parent shall fail
to pay the Company Expenses or the Parent Termination Fee when due, and the Company or Parent, as
the case may be, shall reimburse the other party for all reasonable costs and expenses actually
incurred or accrued by such other party (including reasonable fees and expenses of counsel) in
connection with the collection under and enforcement of this Section 9.03. If payable, none of the
Termination Fee, the Company Expenses, the Parent Termination Fee or the Parent Expenses shall be
payable more that once pursuant to this Agreement.
Section 9.04 Waiver. At any time prior to the Merger Effective Time, the Company, on
the one hand, and Parent and Merger Sub, on the other hand, may (a) extend the time for the
performance of any obligation or other act of the other party, (b) waive any inaccuracy in the
representations and warranties of the other party contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any agreement of the other party or any condition to
its own obligations contained herein. Any such extension or waiver shall be valid if set forth in
an instrument in writing signed by the Company or Parent (on behalf of Parent and Merger Sub). The
failure of any party to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
60
ARTICLE X
GENERAL PROVISIONS
GENERAL PROVISIONS
Section 10.01 Non-Survival of Representations and Warranties. The representations and
warranties in this Agreement and in any certificate delivered pursuant hereto shall terminate at
the Merger Effective Time.
Section 10.02 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be deemed to have been
duly given upon receipt) by delivery in person, by prepaid overnight courier (providing proof of
delivery), by facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses or facsimile numbers (or at such
other address for a party as shall be specified in a notice given in accordance with this Section
10.02):
if to Parent or Merger Sub:
GG Holdings I, Inc.
x/x Xxxxxxx Xxxxxxx, X.X.
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Telecopier No: (000) 000-0000
Attention: Xxxx-Xxxxxx X. Xxxxx
x/x Xxxxxxx Xxxxxxx, X.X.
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Telecopier No: (000) 000-0000
Attention: Xxxx-Xxxxxx X. Xxxxx
with a copy to:
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
and
Xxxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
61
if to the Company:
PRA International
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx,
Chief Executive Officer
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxx,
Chief Executive Officer
with copies to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxx-Do Gong, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopier No: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxx-Do Gong, Esq.
Section 10.03 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public policy or the
application of this Agreement to any person or circumstance is invalid or incapable of being
enforced by any rule of law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or legal substance of
the transactions contemplated by this Agreement is not affected in any manner materially adverse to
any party. To such end, the provisions of this Agreement are agreed to be severable. 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 as closely as possible in a mutually acceptable manner in order that
the transactions contemplated by this Agreement be consummated as originally contemplated to the
fullest extent possible.
Section 10.04 Amendment. This Agreement may be amended by the parties hereto by
action taken by their respective board of directors (or similar governing body or entity) at any
time prior to the Merger Effective Time; provided, however, that, after approval of
the Merger by the stockholders of the Company, no amendment may be made without further stockholder
approval which, by Law or in accordance with the rules of the Nasdaq, requires further approval by
such stockholders. This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
Section 10.05 Entire Agreement; Assignment. This Agreement, together with the
Confidentiality Agreement, the Voting Agreement, the Limited Guaranty and the Disclosure Schedules,
constitute the entire agreement among the parties with respect to the subject matter hereof, and
supersede all prior agreements and undertakings, both written and oral, among the parties, or any
of them, with respect to the subject matter
62
hereof. This Agreement shall not be assigned (whether pursuant to a merger, by operation of
law or otherwise).
Section 10.06 Performance Guaranty. Parent hereby guarantees the due, prompt and
faithful performance and discharge by, and compliance with, all of the obligations covenants,
terms, conditions and undertakings of the Merger Sub under this agreement in accordance with the
terms hereof including any such obligations, covenants, terms, conditions and undertakings that are
required to be performed discharged or complied with following the Merger Effective Time.
Section 10.07 Parties in Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, other than the provisions of Article II and
Section 7.05 (which are intended to be for the benefit of the persons covered thereby or the
persons entitled to payment thereunder and may be enforced by such persons).
Section 10.08 Governing Law; Forum.
(a) All disputes, claims or controversies arising out of or relating to this Agreement, or the
negotiation, validity or performance of this Agreement, or the transactions contemplated hereby
shall be governed by and construed in accordance with the laws of the State of Delaware without
regard to its rules of conflict of laws.
(b) Except as set out below, each of the Company, Parent and Merger Sub hereby irrevocably and
unconditionally consents to submit to the sole and exclusive jurisdiction of the courts of the
State of Delaware or any court of the United States located in the State of Delaware (the
“Delaware Courts”) for any litigation arising out of or relating to this Agreement, or the
negotiation, validity or performance of this Agreement, or the transactions contemplated hereby
(and agrees not to commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the Delaware Courts and agrees not to
plead or claim in any Delaware Court that such litigation brought therein has been brought in any
inconvenient forum. Company, Parent and Merger Sub agree that mailing of process or other papers
in connection with any such action or proceeding in the manner provided in Section 10.02 or in such
other manner as may be permitted by law shall be valid and sufficient service thereof.
Section 10.09 Waiver of Jury Trial. Each of the parties hereto hereby waives to the
fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to
any litigation directly or indirectly arising out of, under or in connection with this Agreement or
the transactions contemplated by this Agreement. Each of the parties hereto (a) certifies that 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 that foregoing waiver and
(b) acknowledges that it and the other hereto have been induced to enter into this Agreement and
the transactions
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contemplated by this Agreement, as applicable, by, among other things, the mutual waivers and
certifications in this Section 10.09.
Section 10.10 Headings. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.11 Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in two or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
Section 10.12 Waiver. Except as provided in this Agreement, no action taken pursuant
to this Agreement, including, without limitation, any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be construed as a
waiver of any prior or subsequent breach of the same or any other provision hereunder.
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IN WITNESS WHEREOF, Parent, Merger Sub, and the Company have caused this Agreement to be
executed as of the date first written above by their respective officers thereunto duly authorized.
GG HOLDINGS I, INC. | ||||||
By | /s/ Xxxxxx X. Xxxxxxx
Title: Vice President, Secretary and Treasurer |
|||||
GG MERGER SUB I, INC. | ||||||
By | /s/ Xxxxxx X. Xxxxxxx | |||||
Name: Xxxxxx X. Xxxxxxx Title: Vice President, Secretary and Treasurer |
||||||
PRA INTERNATIONAL | ||||||
By | /s/ Xxxxxxx X. Xxxxxx | |||||
Name: Xxxxxxx X. Xxxxxx Title: Chief Executive Officer |