EXHIBIT 99.4
AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 17, 2008
BY AND AMONG
MISYS HEALTHCARE SYSTEMS, LLC,
ALLSCRIPTS HEALTHCARE SOLUTIONS INC.,
and
PATRIOT MERGER COMPANY, LLC
Table of Contents
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ARTICLE I
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DEFINITIONS
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Section 1.1 Defined Terms |
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2 |
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Section 1.2 Interpretation |
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17 |
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ARTICLE II
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THE MERGER
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Section 2.1 The Merger |
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18 |
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Section 2.2 Closing |
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18 |
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Section 2.3 Effective Time |
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18 |
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Section 2.4 Effects of the Merger |
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19 |
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Section 2.5 Constituent Documents |
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19 |
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Section 2.6 Directors |
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19 |
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Section 2.7 Officers |
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19 |
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Section 2.8 Structural Change |
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19 |
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ARTICLE III
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CONVERSION OF SECURITIES AND CERTAIN CLOSING MATTERS
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Section 3.1 Conversion of Interests and Shares |
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20 |
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Section 3.2 Issuance and Purchase of Receiver Common Stock |
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20 |
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Section 3.3 Payment of Receiver Extraordinary Dividend |
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21 |
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Section 3.4 Withholding Rights |
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22 |
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Section 3.5 Amendments to Constituent Documents |
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22 |
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES
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Section 4.1 Representations and Warranties of Receiver and Merger Sub |
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22 |
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Section 4.2 Representations and Warranties Regarding Safety and Parent |
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45 |
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ARTICLE V
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COVENANTS RELATING TO CONDUCT OF BUSINESS
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Section 5.1 Conduct of Business by Receiver |
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64 |
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Section 5.2 Conduct of Business by Safety |
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68 |
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Section 5.3 Advice of Changes |
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71 |
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Section 5.4 Control of Operations |
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71 |
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Section 5.5 No Solicitation by Receiver; Recommendation |
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71 |
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Section 5.6 No Solicitation by Parent or Safety; Recommendation |
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75 |
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Table of Contents
(continued)
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ARTICLE VI
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ADDITIONAL AGREEMENTS
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Section 6.1 Preparation of the Proxy Statement; Receiver Stockholders Meeting |
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78 |
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Section 6.2 Parent Shareholders Meeting |
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80 |
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Section 6.3 Access to Information; Confidentiality |
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82 |
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Section 6.4 Transition Planning |
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83 |
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Section 6.5 Efforts; Notification |
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83 |
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Section 6.6 Transition Services Agreement |
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85 |
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Section 6.7 Indemnification, Exculpation and Insurance |
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85 |
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Section 6.8 Fees and Expenses |
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87 |
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Section 6.9 Termination of Intercompany Accounts; Intercompany Agreements; Further Assurances |
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87 |
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Section 6.10 Benefits Matters |
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88 |
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Section 6.11 Tax Matters |
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91 |
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Section 6.12 Public Announcements |
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97 |
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Section 6.13 Stockholder Litigation |
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97 |
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Section 6.14 Financial Statements |
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97 |
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Section 6.15 Insurance |
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98 |
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Section 6.16 Working Capital |
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98 |
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Section 6.17 Receiver Board of Directors |
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98 |
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Section 6.18 Subsidiaries |
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98 |
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Section 6.19 Software License Agreement |
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99 |
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ARTICLE VII
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CONDITIONS PRECEDENT
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Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger |
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99 |
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Section 7.2 Conditions to Obligations of Parent and Safety |
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100 |
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Section 7.3 Conditions to Obligation of Receiver |
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101 |
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Section 7.4 Frustration of Closing Conditions |
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102 |
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ARTICLE VIII
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TERMINATION, AMENDMENT AND WAIVER
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Section 8.1 Termination |
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102 |
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Section 8.2 Effect of Termination |
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104 |
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Section 8.3 Termination Fee |
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105 |
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Section 8.4 Amendment |
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107 |
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Section 8.5 Extension; Waiver |
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108 |
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Table of Contents
(continued)
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ARTICLE IX
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GENERAL PROVISIONS
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Section 9.1 Nonsurvival of Representations and Warranties |
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108 |
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Section 9.2 Notices |
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108 |
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Section 9.3 Severability |
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109 |
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Section 9.4 Counterparts |
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110 |
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Section 9.5 Entire Agreement; No Third Party Beneficiaries |
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110 |
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Section 9.6 Governing Law |
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110 |
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Section 9.7 Assignment |
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110 |
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Section 9.8 Enforcement |
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110 |
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Exhibits
Exhibit A Employment Contract Parties
Exhibit B Form of Charter and By-Laws Amendments
Exhibit C Form of Additional Charter and By-Laws Amendments
Exhibit D Board of Directors of Surviving Company
Exhibit E Transition Services
Exhibit F Form of Trademark and Trade Name License Agreement
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AGREEMENT AND PLAN OF MERGER, dated as of March 17, 2008 (this “
Agreement”), by and
among
Misys plc, a public limited company incorporated under the laws of England
(“
Parent”), Misys Healthcare Systems, LLC, a North Carolina limited liability company and a
wholly-owned indirect subsidiary of Parent (“
Safety”), Allscripts Healthcare Solutions,
Inc., a Delaware corporation (“
Receiver”), and Patriot Merger Company, LLC, a North
Carolina limited liability company and a wholly-owned subsidiary of Receiver (“
Merger
Sub”).
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent and Receiver and the respective sole
members of Safety and Merger Sub have approved and declared advisable and in the best interests of
their respective corporations and shareholders or limited liability companies, as applicable, that
the parties hereto consummate the transactions contemplated herein; and
WHEREAS, in furtherance thereof, the Boards of Directors of each of Parent and Receiver and
the respective sole members of Safety and Merger Sub have adopted and approved this Agreement and
the merger of Merger Sub with and into Safety, with Safety continuing as the Surviving Company upon
the terms and subject to the conditions set forth in this Agreement and in accordance with the
applicable provisions of the North Carolina Limited Liability Company Act (the “LLC Act”);
and
WHEREAS, the Board of Directors of Parent has determined to recommend to its shareholders the
approval and adoption of this Agreement and the Merger; and
WHEREAS, the Board of Directors of Receiver has determined to recommend to its stockholders
the issuance of shares of Receiver Common Stock in connection with the Merger, the Charter and
By-Laws Amendments and the Additional Charter and By-Laws Amendments; and
WHEREAS, subject to clause (ii) of Section 2.8, the Merger is intended to qualify as a
reorganization under section 368(a) of the Code and the Board of Directors of Receiver and the
respective sole members of Safety and Merger Sub have approved and adopted this Agreement as a plan
of reorganization within the meaning of Treasury Regulations § 1.368-2(g); and
WHEREAS, concurrently with the execution hereof, in order to induce Receiver to enter into
this Agreement, each of ValueAct Capital Master Fund L.P. and ValueAct Capital Master Fund III,
L.P. (the “Shareholders”) have entered into a Voting Agreement dated as of the date hereof
(each a “Voting Agreement”), which Voting Agreements provide, among other things, that,
subject to the terms and conditions thereof, each of such Shareholders will vote its shares of
Parent in favor of the Merger and the approval and adoption of this Agreement; and
WHEREAS, concurrently with the execution hereof, and as partial consideration for the issuance
of Receiver Common Stock to Parent in connection with the Merger, Parent and Receiver are entering
into a Relationship Agreement (the “Relationship Agreement”) dated as of the date hereof
and which shall become effective upon consummation of the Merger and the issuance of Receiver
Common Stock to Parent in connection therewith; and
WHEREAS, concurrently with the execution hereof, in order to induce Parent and Safety to enter
into this Agreement, the Persons listed on Exhibit A are each entering into an employment
agreement, dated as of the date hereof, between himself or herself and Receiver, which shall become
effective upon consummation of the Merger.
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. The terms defined in this Article I, whenever used herein,
shall have the following meanings for all purposes of this Agreement:
“Accounting Arbitrator” has the meaning set forth in Section 6.11(h);
“Acquisition Agreement” has the meaning set forth in Section 5.5(c);
“Additional Charter and By-Laws Amendments” has the meaning set forth in Section
4.1(d)(i);
“Additional Receiver Stockholder Approval” has the meaning set forth in Section
4.1(d)(i);
“Affected Employees” has the meaning set forth in Section 6.10(a);
“Affiliate” means, with respect to any Person, another Person that, at the time of
determination, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such first Person,
whether by contract, possession (directly or indirectly) of power to direct or
cause the direction of the management or policies of a Person or the ownership
(directly or indirectly) of securities or other interests in such Person,
provided that, after the Effective Time, (i) neither Receiver nor
any of its Subsidiaries shall be treated as Affiliates of Parent or any of its
Subsidiaries and (ii) neither Parent nor any of its
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Subsidiaries shall be treated as Affiliates of Receiver or any of its
Subsidiaries;
“Agreed Proportion” means, with respect to Parent, the number of shares of
Receiver Common Stock that Parent or its designee would have received pursuant to
Section 3.2 if the Merger had been consummated, divided by the number of shares of
Receiver Common Stock that Parent and its Subsidiaries would have received
pursuant to Section 3.1 and Section 3.2 if the Merger had been consummated (the
“Parent Ratio”), and, with respect to Safety, one minus the Parent Ratio;
“Agreement” has the meaning set forth in the preliminary statements hereto;
“Average Share Price” means the amount obtained by subtracting (i) the Per
Share Dividend Amount from (ii) the average closing price of Receiver
Common Stock as reported on Nasdaq during the 15 Business Day period ending on the
fifth Business Day prior to the Closing Date;
“Business” means, with respect to any Person, the business and operations of
such Person and its Subsidiaries as currently conducted or as conducted at the
Effective Time;
“Business Day” means any day other than a Saturday, a Sunday, a legal holiday in
Xxx Xxxx, Xxx Xxxx xx Xxxxxx, Xxxxxx Xxxxxxx or other day on which banking
institutions or trust companies are authorized or obligated by law to close in Xxx
Xxxx, Xxx Xxxx xx Xxxxxx, Xxxxxx Xxxxxxx;
“Certificate of Merger” has the meaning set forth in Section 2.3;
“Change in the Parent Recommendation” has the meaning set forth in Section 6.2;
“Change in the Receiver Recommendation” has the meaning set forth in Section
6.1(b);
“Charter and By-Laws Amendments” has the meaning set forth in Section 4.1(d)(i);
“Circular” has the meaning set forth in Section 6.2;
“Claim” means any suit, action, cause of action, proceeding, claim, complaint,
grievance, arbitration proceeding, demand, citation, summons, subpoena, cease and
desist letter, injunction, notice of violation or
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irregularity, review or investigation (whether civil, criminal, regulatory or
otherwise and whether at law or in equity, before or by any Governmental Entity or
before any arbitrator);
“Closing” has the meaning set forth in Section 2.2;
“Closing Date” has the meaning set forth in Section 2.2;
“Code” means the Internal Revenue Code of 1986, as amended from time to time;
“Confidentiality Agreement” means the letter agreement dated as of October 9, 2007
between Parent and Receiver LLC, as amended by the joinder of Receiver dated as of
the date hereof;
“Consolidated or Combined Return” means any Tax Return that includes or included
Safety or items therefrom on the one hand, and DGP (or any of its Affiliates other
than Safety) or items therefrom on the other hand;
“Constituent Documents” means with respect to any entity, the certificate or
articles of incorporation, certificate of formation, limited liability company
agreement, by-laws, minute books, or any similar charter or other organizational
documents of such entity;
“Continuation Period” has the meaning set forth in Section 6.10(a);
“Convertible Debentures” has the meaning set forth in Section 4.1(c)(i);
“CSA” has the meaning set forth in Section 4.1(w)(i);
“DGCL” means the Delaware General Corporate Law, as may be amended from time to
time;
“DGP” means DGP, a Delaware general partnership;
“Dividend Declaration” has the meaning set forth in Section 4.1(d)(i);
“Effective Time” has the meaning set forth in Section 2.3;
“Election Notice” means a written notice from Parent to Receiver delivered on or
prior to the Restructure Notice Date exercising Parent’s right to require the
structural changes described in Section 2.8(ii) and instructing Receiver to not
elect, and to cause Merger Sub to not elect, to treat Merger Sub as an association
taxable as a corporation for U.S. federal income tax purposes;
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“Environmental Law” means any applicable foreign, federal, state or local law,
treaty, statute, rule, regulation, order, ordinance, decree, injunction or any
other requirement of law (including common law) regulating or relating to the
protection of occupational health and safety, natural resources or the
environment, including laws relating to pollution, contamination or the use,
generation, management, handling, transport, treatment, disposal, storage,
exposure to, Release or threatened Release of Hazardous Substances;
“ERISA” has the meaning set forth in Section 4.1(o)(i);
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder;
“Extraordinary Dividend” has the meaning set forth in Section 3.3(a);
“FDA” has the meaning set forth in Section 4.1(w)(i);
“FDCA” has the meaning set forth in Section 4.1(w)(i);
“Federal and Consolidated Income Tax Liabilities” means income Taxes imposed on
Safety, or for which Safety may otherwise be liable, (i) relating to U.S.
federal income Taxes attributable to any Pre-Closing Period, (ii) relating
to income Taxes other than U.S. federal income Taxes with respect to which Safety
or any predecessor of Safety joins, has joined or was required to have joined in
filing a consolidated, combined or unitary Tax Return with any Safety Group or
(iii) as a result of Safety or any predecessor of Safety being or having
been a member of any Safety Group (including under Treasury Regulation § 1.1502-6
or any provision of state, local or foreign Law similar to Treasury Regulation
§ 1.1502-6), including any such Taxes imposed as a result of Safety ceasing to be
a member of any Safety Group;
“Fully Diluted Shares” means, as of a certain date, the sum of (i) all
issued and outstanding shares of Receiver Common Stock and (ii) all shares
of Receiver Common Stock that are or will become issuable upon conversion or
exchange of any security outstanding on such date, other than shares of Receiver
Common Stock issuable upon conversion or exchange of any Receiver stock options
(with shares of Receiver Common Stock issuable upon conversion or exchange of any
Receiver stock options being treated as set forth in the proviso to this
definition), taking into account, with respect to any date following the Effective
Time, any adjustments resulting from the declaration of the Extraordinary Dividend
and the consummation of the other transactions contemplated hereby;
provided,
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however, that (x) each Receiver stock option as to which
(1) the exercise price less the Per Share Dividend Amount (the
“Adjusted Exercise Price”) exceeds (2) the Average Share Price (an
“Out-of-the-Money Option”) shall not be included in the calculation of
Fully Diluted Shares and (y) each Receiver stock option with an Adjusted
Exercise Price equal to or less than the Average Share Price shall be included in
the calculation of Fully Diluted Shares in an amount equal to (1) the
number of shares of Receiver Common Stock subject to such Receiver stock option
minus (2) the number of shares of Receiver Common Stock equal to
(A) the Adjusted Exercise Price of such Receiver stock option multiplied
by the number of shares of Receiver Common Stock subject to such Receiver stock
option divided by (B) the Average Share Price (it being understood that,
in the case of clause (y), if the Adjusted Exercise Price is zero or negative,
then, with respect to the applicable options, the calculation contemplated by
clause (y) shall be appropriately modified to include adjustments increasing the
number of shares of Receiver Common Stock subject to such options with the goal of
preserving the intrinsic value of such options);
“GAAP” means United States generally accepted accounting principles;
“Governmental Entity” means any domestic or foreign (whether national, federal,
state, provincial, local or otherwise) government or any court, administrative
agency or commission or other governmental or regulatory authority or agency,
domestic, foreign or supranational;
“Guaranteed Obligations” has the meaning set forth in Section 8.3(e);
“Hazardous Substances” means any substance or material that is defined, listed or
identified under any Environmental Law as a “hazardous waste,” “hazardous
substance,” “toxic substance,” pollutant, contaminant or words of similar import
thereunder, including petroleum and petroleum byproducts and wastes;
“HIPAA” means the Health Insurance Portability and Accountability Act;
“HSR Act” has the meaning set forth in Section 4.1(e)(ii);
“IFRS” means the International Financial Reporting Standards promulgated from time
to time by the International Accounting Standards Board and as adopted by the
European Union;
“Indebtedness” means, with respect to any Person, without duplication,
(i) all obligations of such Person for borrowed money, or with respect to
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deposits or advances of any kind, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (iii) all
obligations of such Person upon which interest charges are customarily paid (other
than trade payables incurred in the ordinary course of business consistent with
past practices), (iv) all obligations of such Person under conditional
sale or other title retention agreements relating to any property purchased by
such Person, (v) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (excluding obligations of such
Person to creditors for supplies incurred in the ordinary course of business
consistent with past practices), (vi) all lease obligations of such Person
capitalized on the books and records of such Person, (vii) all obligations
of others secured by a Lien on property or assets owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed,
(viii) all obligations of such Person under interest rate, currency or
commodity derivatives or hedging transactions, (ix) all letters of credit
or performance bonds issued for the account of such Person (excluding
(a) letters of credit issued for the benefit of suppliers to support
accounts payable to suppliers incurred in the ordinary course of business
consistent with past practices, (b) standby letters of credit relating to
workers’ compensation insurance and surety bonds and (c) surety bonds and
customs bonds) and (x) all guarantees and arrangements having the economic
effect of a guarantee of such Person of any Indebtedness of any other Person;
“Intellectual Property” shall mean all trademarks, service marks, trade names,
trade dress, including all goodwill associated with the foregoing, domain names,
copyrights, Software and Internet websites, and registrations and applications to
register or renew the registration of any of the foregoing, patents and patent
applications and Trade Secrets;
“Intercompany Agreements” has the meaning set forth in Section 6.9(b);
“Interim Financials” has the meaning set forth in Section 6.14(b);
“Interim Period” has the meaning set forth in Section 6.14(b);
“Intervening Event” means, with respect to any Person, an event or circumstance
material to such Person and its Subsidiaries, taken at a whole (other than an
increase in the market price of such Person’s common stock or shares, as the case
may be, or any event or circumstance resulting from a breach of this Agreement by
such Person or its subsidiaries), that was neither known to the Board of Directors
of such Person at such time nor anticipated as of the date hereof, which event or
circumstance becomes known to or by the Board of Directors of Receiver prior to
the Receiver
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Stockholder Approval or the Board of Directors of Parent prior to the Parent
Shareholder Approval and which causes the Board of Directors of such Person to
conclude in good faith, after consultation with its outside legal counsel and a
financial advisor of internationally recognized reputation (such as Xxxxxxx Xxxxx
& Co., Xxxxxx Brothers or JPMorganCazenove), that its failure to effect a Change
in the Receiver Recommendation or a Change in the Parent Recommendation, as
applicable, would be inconsistent with its fiduciary duties (or, in the case of
Parent, statutory duties) to the stockholders of Receiver or the shareholders of
Parent, as applicable, under applicable Law; provided, however,
that in no event shall the receipt, existence or terms of a Takeover Proposal or
any matter relating thereto or consequence thereof constitute an Intervening
Event;
“IRS” has the meaning set forth in Section 4.1(m)(iii);
“JPMorgan Consent” means the Consent and Waiver, dated March 17, 2008, between
Receiver and certain Subsidiaries thereof and the Required Lenders (as such term
is defined in the Credit Agreement, dated as of December 31, 2007, among Receiver
and certain Subsidiaries thereof as borrowers, JPMorgan Chase Bank, N.A., as
administrative agent, X.X. Xxxxxx Securities Inc, as lead arranger, and the
lenders from time to time party thereto);
“Knowledge” means, with respect to (i) Receiver, the actual knowledge of
any of the Persons set forth in Schedule 1.1 of the Receiver Disclosure Letter and
(ii) Parent or Safety, the actual knowledge of any of the Persons set
forth in Section 1.1 of the Safety Disclosure Letter;
“Law” (and with the correlative meaning “Laws”) means rule, regulation, statute,
order, ordinance, guideline, code (including the UK Takeover Code) or other
legally enforceable requirement, including, but not limited to common law, state
and federal laws or securities laws and laws, rules and regulations of foreign
jurisdictions;
“Liens” has the meaning set forth in Section 4.1(b)(i);
“LLC Act” has the meaning set forth in the recitals hereto;
“Material Adverse Effect” means, with respect to any Person, any state of facts,
change, development, effect, condition or occurrence that would reasonably be
expected to be material and adverse to the (A) business,
(B) assets, (C) properties, (D) financial condition or
(E) results of operations of such Person and its Subsidiaries, in each
case, taken as a
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whole; provided, however, that to the extent any state of facts,
change, development, effect, condition or occurrence is caused by or results from
any of the following, it shall not be taken into account in determining whether
there has been a “Material Adverse Effect” with respect to the applicable Person
and its Subsidiaries, taken as a whole: (1) the adoption, proposal,
implementation or change in Laws or interpretations thereof by any Governmental
Entity; (2) changes in global, national or regional political conditions
(including any outbreak, escalation or diminishment of hostilities, war or any act
of terrorism); (3) any change, event or circumstance in the industry of
such Person generally; (4) changes affecting the United States or United
Kingdom financial or securities markets or the economy in general;
(5) changes in GAAP or IFRS regulatory accounting requirements applicable
to such Person or its Subsidiaries or the interpretations thereof; (6)
except with respect to the representations and warranties set forth in Section
4.1(e) or Section 4.2(d), the announcement of the execution of or existence of
this Agreement, the Merger and the transactions contemplated hereby (including
losses or threatened losses of relationships with employees, customers,
distributors or suppliers), or actions taken by such Person or any of its
Subsidiaries that are required pursuant to this Agreement; or (7) any
change in the market price or trading volume of the equity securities of Receiver
or Parent on or after the date hereof, except the events underlying changes,
effects and circumstances described in the foregoing clause (7) are not included
within the scope of such clause, and, unless, with respect to clauses (2), (3) and
(4) above, and only to the extent that, such event, change, circumstance, or
effect has a materially disproportionate effect on such Person and its
Subsidiaries, taken as a whole, compared with other comparable companies operating
in the same industry;
“Merger” has the meaning set forth in Section 2.1;
“Merger Sub” has the meaning set forth in the preliminary statements hereto;
“Merger Tax Opinion” has the meaning set forth in Section 6.11(l);
“Nasdaq” means the NASDAQ National Market;
“New Plan” has the meaning set forth in Section 6.10(b);
“Non-Election Notice” means a written notice from Parent to Receiver delivered on
or prior to the Restructure Notice Date forgoing Parent’s right to require the
structural changes described in Section 2.8(ii), accompanied by an IRS Form 8832,
completed by Safety but not signed,
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pursuant to which Merger Sub elects to be treated as an association taxable as a
corporation for U.S. federal income tax purposes and instructing Receiver to sign
such IRS Form 8832;
“Nonqualified Deferred Compensation Plan” has the meaning set forth in Section
4.1(o)(x);
“Non-Safety Participants” has the meaning set forth in Section 6.10(f);
“Outside Date” has the meaning set forth in Section 8.1(b)(i);
“Parent” has the meaning set forth in the preliminary statements hereto;
“Parent Guarantee” has the meaning set forth in Section 6.9(d);
“Parent Guaranteed Obligation” has the meaning set forth in Section 8.3(e);
“Parent Recommendation” has the meaning set forth in Section 4.2(d)(iii);
“Parent Shareholder Approval” has the meaning set forth in Section 4.2(d)(i);
“Parent Shareholders Meeting” has the meaning set forth in Section 6.2;
“Parent Tax Counsel” has the meaning set forth in Section 6.11(l);
“Permitted Liens” means (i) any Liens for Taxes not yet due or which are
being contested in good faith by appropriate proceedings; (ii) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens;
(iii) leases or subleases (other than capital leases and leases underlying
sale and leaseback transactions); (iv) pledges or deposits in connection
with workers’ compensation, unemployment insurance, and other social security
legislation; (v) easements, rights-of-way and other restrictions or
encumbrances incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and which do not in any case materially detract from
the value of the property subject thereto; (vi) Liens the existence of
which are disclosed in a consolidated balance sheet or the notes thereto included
in any SEC filing made prior to the date of this Agreement; and (vii)
Liens that, individually or in the aggregate, do not and would not reasonably be
expected to, materially detract from the value of any property, rights or assets
subject to such Lien or, materially interfere with the use thereof as currently
used;
“Per Share Dividend Amount” has the meaning set forth in Section 3.3(b);
10
“Person” means an individual, corporation, partnership, joint venture,
association, trust, limited liability company, Governmental Entity, unincorporated
organization or other entity;
“PHSA” has the meaning set forth in Section 4.1(w)(i);
“Pre-Closing Period” means any Tax year or period (or portion thereof) ending on
or prior to the Closing Date;
“Proxy Statement” has the meaning set forth in Section 6.1(a)
“QB Holdings” means Misys Holdings, Inc., a Delaware corporation, a wholly-owned
indirect Subsidiary of Parent;
“Receiver” has the meaning set forth in the preliminary statements hereto;
“Receiver Common Stock” means the common stock, par value $0.01, of Receiver;
“Receiver Common Stock Unit” means a notional unit representing the right to
receive a share of Receiver Common Stock pursuant to a Receiver Stock Plan;
“Receiver Contract” has the meaning set forth in Section 4.1(v);
“Receiver Disclosure Letter” has the meaning set forth in Section 4.1;
“Receiver Employee Plans” has the meaning set forth in Section 4.1(o)(i);
“Receiver Employees” has the meaning set forth in Section 4.1(o)(i);
“Receiver Equity Award” has the meaning set forth in Section 4.1(h)(vii);
“Receiver Financial Statement Delivery Date” means the date on which Receiver
delivers the financial information to Parent pursuant to Section 6.14(c);
“Receiver Lease” has the meaning set forth in Section 4.1(n)(iii);
“Receiver Leased Real Property” has the meaning set forth in Section 4.1(n)(ii);
“Receiver Licenses” has the meaning set forth in Section 4.1(s)(ii);
11
“Receiver Maximum Premium” has the meaning set forth in Section 6.7(b);
“Receiver Owned Intellectual Property” has the meaning set forth in Section
4.1(s)(i);
“Receiver Owned Real Property” has the meaning set forth in Section 4.1(n)(i);
“Receiver Permits” has the meaning set forth in Section 4.1(j)(ii);
“Receiver Preferred Stock” has the meaning set forth in Section 4.1(c)(i);
“Receiver Recommendation” has the meaning set forth in Section 6.1(b);
“Receiver SEC Documents” has the meaning set forth in Section 4.1(f)(i);
“Receiver Stockholder Approval” has the meaning set forth in Section 4.1(d)(i);
“Receiver Stockholders Meeting” has the meaning set forth in Section 6.1(b);
“Receiver Stock Plans” means the Amended and Restated Receiver 1993 Stock
Incentive Plan and the Receiver 2001 Non-Statutory Stock Plan;
“Receiver Tax Counsel” has the meaning set forth in Section 6.11(l);
“Receiver Termination Fee” means $14,281,883;
“Record Date” has the meaning set forth in Section 3.3(a);
“Regulatory Law” has the meaning set forth in Section 6.5(f);
“Relationship Agreement” has the meaning set forth in the recitals hereto;
“Release” means any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like, including without
limitation, the moving of any materials through, into or upon, any land, soil,
surface water, groundwater or air, or otherwise entering into the indoor or
outdoor environment;
“Representatives” means, with respect to any Person, its and its Subsidiaries’
directors, officers or employees, or any investment banker,
12
financial advisor, accountant, attorney or other advisor, agent or representative
retained by it or any of its Subsidiaries;
“Requisite Approvals” has the meaning set forth in Section 6.5(f);
“Restructure Notice Date” means the date that is ten (10) Business Days prior to
the Closing Date;
“Safety” has the meaning set forth in the preliminary statements hereto;
“Safety 2008 Audited Financial Statements” has the meaning set forth in Section
6.14(a);
“Safety Audited Financial Statements” has the meaning set forth in Section
6.14(a);
“Safety Contract” has the meaning set forth in Section 4.2(u);
“Safety Disclosure Letter” has the meaning set forth in Section 4.2;
“Safety Employee Plans” has the meaning set forth in Section 4.2(o)(i);
“Safety Employees” has the meaning set forth in Section 4.2(o)(i);
“Safety Financial Statement Delivery Date” means the date on which Parent delivers
the Safety Audited Financial Statements to Receiver pursuant to Section 6.14;
“Safety Financial Statements” has the meaning set forth in Section 4.2(f)(i);
“Safety Foreign Benefit Plan” means any material employee benefit plan, program or
arrangement provided by Safety or any Affiliate of Safety, or to which Safety or
any of its Affiliates is a party, that covers any current or former non-U.S.
employee, director or consultant, that is in effect on the date hereof, and as to
which Safety has or the Surviving Company may have in the future any liability;
“Safety Group” means any group that files or has filed income Tax Returns on a
combined, consolidated or unitary basis that includes, has included or was
required to have included Safety or any predecessor of Safety at any time at or
before the Effective Time but, for the avoidance of doubt, not including any group
that includes Receiver or any Subsidiary of Receiver;
13
“Safety Guarantee” has the meaning set forth in Section 6.9(c);
“Safety Guaranteed Obligation” has the meaning set forth in Section 8.3(e);
“Safety Lease” has the meaning set forth in Section 4.2(n)(iii);
“Safety Leased Real Property” has the meaning set forth in Section 4.2(n)(ii);
“Safety Licenses” has the meaning set forth in Section 4.2(r)(ii);
“Safety LLC Agreement” means the Amended and Restated Operating Agreement of Misys
Physician Systems, LLC, effective as of January 24, 2002, adopted by Kirsty, Inc.,
as may be amended from time to time;
“Safety Maximum Premium” has the meaning set forth in Section 6.7(c);
“Safety Owned Intellectual Property” has the meaning set forth in
Section 4.2(r)(i);
“Safety or Parent Equity Award” has the meaning set forth in Section 4.2(h)(vii);
“Safety Permits” has the meaning set forth in Section 4.2(j)(ii);
“Safety Termination Fee” means GBP£7,136,657;
“Xxxxxxxx-Xxxxx Act” has the meaning set forth in Section 4.1(f)(iii);
“SEC” means the Securities and Exchange Commission;
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder;
“Settlement Date” has the meaning set forth in Section 3.3(a);
“Share Issuance” has the meaning set forth in Section 4.1(d)(i);
“Shareholder” has the meaning set forth in the recitals hereto;
“Significant Business Transaction” means, with respect to any Person, a merger,
consolidation, business combination, share exchange, share acquisition, share
tender offer, reorganization, recapitalization, liquidation, dissolution, or
similar transaction involving such Person;
14
“Software” means all computer software, including application software, operating
system software and firmware including, all source code and object code versions
thereof, in any and all forms and media, and all related documentation;
“Software Agreement” has the meaning set forth in Section 6.19;
“Subsidiary” means, with respect to any Person, another Person of which 50% or
more of any class of capital stock, voting securities, other voting ownership or
voting partnership interests (or, if there are no such voting interests, 50% or
more of the equity interests) are owned or controlled, directly or indirectly, by
such first Person, provided that, after the Effective Time, neither
Receiver nor any of its Subsidiaries shall be treated as Subsidiaries of Parent;
“Superior Proposal” means, with respect to any Person, any bona fide written
proposal or offer made by a Third Party in respect of a Significant Business
Transaction (other than a Significant Business Transaction solely involving the shares of Parent) involving, or any transaction involving the purchase or
acquisition, directly or indirectly, of, (i) at least 60% of the voting
power of such Person’s capital stock or other equity interests or (ii) at
least 60% of the consolidated assets of such Person and its Subsidiaries, which
transaction such Person’s Board of Directors or, if the Person is Safety, the
Board of Directors of Parent or such Person’s other governing body determines in
good faith, after consultation with its outside counsel and a financial advisor of
internationally recognized reputation (such as Xxxxxxx Sachs & Co., Xxxxxx
Brothers or JPMorganCazenove), would be, if consummated, more favorable to the
shareholders of such Person (or, if such Person is Safety, the shareholders of
Parent) than the Merger taking into account all of the terms and conditions of
such proposal and of this Agreement (including any proposal to amend the terms of
this Agreement) and all financial, regulatory, legal and other aspects of such
proposal;
“Surviving Company” has the meaning set forth in Section 2.1;
“Takeover Proposal” means, with respect to any Person, any proposal or offer in
respect of (i) a Significant Business Transaction (other than a
Significant Business Transaction solely involving the shares of Parent) with any
Third Party in which the shareholders of the Third Party or such Third Party
itself will own, directly or indirectly, more than 20% of such Person’s
outstanding capital stock immediately following such Significant Business
Transaction, including pursuant to the issuance by such Person of more than 20% of
any class of its voting equity securities, or (ii) any
15
direct or indirect acquisition (other than an acquisition of the shares of
Parent), whether by tender or exchange offer or otherwise, by any Third Party of
20% or more of any class of capital stock of such Person or of 20% or more of the
consolidated assets of such Person and its Subsidiaries, in a single transaction
or a series of related transactions;
“Tax” (and with the correlative meaning “Taxes”) means (i) income, gross
receipts, franchise, sales, use, ad valorem, property, payroll, withholding,
excise, severance, transfer, employment, estimated, alternative or add-on minimum,
stamp, occupation, premium, environmental or windfall profits taxes, and other
taxes, charges, fees, levies, imposts, customs, duties, licenses or other
assessments, together with any interest and any penalties (including penalties for
failure to file or late filing of any return, report or other filing, and any
interest in respect of such penalties and additions), additions to tax or
additional amounts imposed by any federal, state, local, foreign or other taxing
authority, (ii) any liability for payment of amounts described in
clause (i), whether as a result of transferee liability, of being a member of an
affiliated, consolidated, combined or unitary group for any period, or otherwise
through operation of law and (iii) any liability for the payment of
amounts described in clauses (i) or (ii) as a result of any tax sharing, tax
indemnity or tax allocation agreement or any other express or implied agreement to
indemnify any other Person;
“Tax Dispute” has the meaning set forth in Section 6.11(h);
“Tax Matters” has the meaning set forth in Section 6.11(f)(i);
“Tax Return” means any declaration, statement, report, return, information return
or claim for refund relating to Taxes (including information required to be
supplied to a Governmental Entity in respect of such report or return) including,
if applicable, any combined or consolidated return for any group of entities;
“Taxing Authority” means, with respect to any Tax, the Governmental Entity that
imposes such Tax, and the agency (if any) charged with the collection of such Tax
for such Governmental Entity;
“Third Party” means, (i) with respect to Parent or Safety, any Person
other than Parent, Safety or any controlled Affiliate thereof, and (ii)
with respect to Receiver, any Person other than Receiver or any controlled
Affiliate thereof;
“Trademark Agreement” shall mean the Trademark and Trade Name License Agreement,
to be entered into as of the Closing Date by Safety
16
and Parent substantially in the form attached hereto as Exhibit F with such
changes as the parties may agree prior to the Closing Date;
“Trade Secrets” shall mean all inventions, processes, designs, formulae, trade
secrets, know-how, ideas, research and development, data, databases and
confidential information;
“Transition Services Agreement” has the meaning set forth in Section 6.6;
“Transfer Taxes” means all transfer, value-added, documentary, sales, use,
registration and other similar Taxes (including all applicable real estate
transfer taxes) imposed on Safety, the Surviving Company or Merger Sub in
connection with the Merger;
“Transferee Deferred Compensation Plan” has the meaning set forth in Section
6.10(f);
“Voting Agreement” has the meaning set forth in the recitals hereto.
Section 1.2 Interpretation. In this Agreement, except to the extent that context
otherwise requires:
(a) When a reference is made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article, Section or Exhibit of this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement.
(c) Whenever the words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”. The term “or” is not exclusive.
(d) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement.
(e) The definitions contained in this Agreement are applicable to the singular as well as the
plural forms of such terms.
(f) Any agreement or instrument defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement or instrument as from time to time
amended, modified or supplemented, except as otherwise specified herein.
17
(g) References to a Person are also to its permitted successors and assigns.
(h) Any matter disclosed in any section or subsection of any Disclosure Letter shall be
disclosed for the purposes of the specific Articles or Sections or subsections of this Agreement to
which such section relates and shall be deemed disclosed in each other section or subsection hereof
or thereof to which the relevance of such information is reasonably apparent on its face.
(i) All references to “dollars” or “$” or any similar references or designations contained
herein mean United States Dollars.
(j) All references to a statute or regulation mean such statute or regulation as amended from
time to time and include any successor legislation thereto and any rules or regulations promulgated
thereunder.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, at the Effective Time, in accordance with the LLC Act, Merger Sub shall be merged
with and into Safety (the “Merger”). As a result of the Merger and at the Effective Time,
the separate limited liability company existence of Merger Sub shall cease, and Safety shall
continue as the surviving company (the “Surviving Company”) and shall succeed to and assume
all the rights, privileges, immunities, powers and purposes and be liable for all of the
liabilities, obligations and penalties of Safety and Merger Sub in accordance with the LLC Act.
Section 2.2
Closing. The closing of the Merger (the “
Closing”) shall take
place at 10:00 a.m.,
New York City time, on the fourth Business Day after the satisfaction or
waiver of the conditions set forth in Article VII (other than those conditions that by their terms
cannot be satisfied until the time of the Closing, but subject to the fulfillment or waiver of
those conditions), at the offices of Debevoise & Xxxxxxxx LLP, 919 Third Avenue,
New York,
New
York, or at such other time, date or place agreed to in writing by Parent and Receiver. The date
on which the Closing occurs is referred to in this Agreement as the “
Closing Date”.
Section 2.3 Effective Time. Prior to the Closing, the parties hereto shall prepare,
and on the Closing Date, shall file a certificate of merger as contemplated by the LLC Act with the
Secretary of State of the State of North Carolina, together with any required related certificates
and in such form as required by, and executed in accordance with, the LLC Act (the “Certificate
of Merger”). The Merger shall become effective at such time as the Certificate of Merger has
been duly filed with the Secretary of State of the State of North Carolina, or at such subsequent
time or date as Parent and Receiver
18
shall agree and specify in such Certificate of Merger. The time at which the Merger becomes
effective is referred to in this Agreement as the “Effective Time.”
Section 2.4 Effects of the Merger. At the Effective Time, the Merger shall have the
effects set forth in this Agreement and in the applicable provisions of the LLC Act.
Section 2.5 Constituent Documents.
(a) The certificate of formation of Safety, as in effect immediately prior to the Effective
Time, shall be the certificate of formation of the Surviving Company, until thereafter changed or
amended as provided therein or by applicable Law.
(b) The Safety LLC Agreement in effect immediately prior to the Effective Time shall be the
limited liability company agreement of the Surviving Company until thereafter changed or amended as
provided therein or by applicable Law.
Section 2.6 Directors. All members of Safety’s Board of Directors shall resign
therefrom effective at the Effective Time, and the Persons designated in Exhibit D shall be
appointed to the Surviving Company’s Board of Directors, each to hold office in accordance with the
Surviving Company’s Constituent Documents.
Section 2.7 Officers. The officers of Safety as of the Effective Time shall be the
officers of the Surviving Company, each to hold office in accordance with the Surviving Company’s
Constituent Documents.
Section 2.8 Structural Change. Prior to the Restructure Notice Date, Parent shall
deliver to Receiver either the Election Notice or the Non-Election Notice (but not both). Without
the consent of Receiver or any other party hereto and notwithstanding any other provisions hereof,
(i) upon ten (10) Business Days’ prior notice to Receiver describing such transfer, Parent
may cause some or all of the limited liability company interests of Safety to be transferred to
Parent or one or more Affiliates of Parent prior to the Closing Date and (ii) upon delivery
by Parent to Receiver of an Election Notice not later than the Restructure Notice Date, (a)
as a modification to the purchase price and number of shares of Receiver Common Stock set forth in
Section 3.2(a) and (b), the number of shares of Receiver Common Stock to be purchased by Parent or
its designee pursuant to Section 3.2(a) shall be 18,957,142 and the aggregate purchase price for
those shares shall be $331,750,000.00, pursuant to Section 3.2(b)(i) Receiver shall deliver to
Parent or its designee 18,957,142 shares of Receiver Common Stock and pursuant to Section
3.2(b)(ii) Parent shall pay or cause to be paid to Receiver $331,750,000.00, (b) the
computation pursuant to Section 3.1(a) of the number of shares of Receiver Common Stock into which
the limited liability company interests of Safety that are outstanding immediately prior to the
Effective Time are to be converted shall reflect the changes to the number of Shares of Receiver
Common Stock to be purchased by Parent or its
19
designee, as described in the preceding clause (a), and in addition to such shares of Receiver
Common Stock, such limited liability company interests in Safety shall also be converted into the
right to receive $1,750,000 in cash, which on or prior to the Closing Date shall be contributed by
Receiver to Merger Sub and shall, immediately following the Effective Time, be paid by the
Surviving Company to the holder of the limited liability company interests in Safety immediately
prior to the Effective Time and (c) the parties shall treat the Merger as a taxable sale of
the limited liability interests in Safety, and not as a reorganization under Section 368(a) of the
Code, for U.S. federal income tax purposes. If an Election Notice is delivered in no event shall
Parent cause the limited liability company interests of Safety to be transferred to any Person
pursuant to this Section 2.8, nor shall Parent designate a Person to be the purchaser of shares of
Receiver Common Stock pursuant to Section 3.2, if as a result of doing so for U.S. federal income
tax purposes the beneficial owner of the limited liability company interests of Safety immediately
prior to the Effective Time would be the same Person as the Person that is the purchaser of shares
of Receiver Common Stock pursuant to Section 3.2(a). In the event Parent elects the actions
described in clause (i) or (ii) of this Section 2.8, the provisions of this Agreement shall be
applied consistently with such election.
ARTICLE III
CONVERSION OF SECURITIES AND CERTAIN CLOSING MATTERS
Section 3.1 Conversion of Interests and Shares. As of the Effective Time, by virtue
of the Merger and without any further action on the part of Safety, Receiver or Merger Sub, or the
respective holders of any of their securities:
(a) Interests of Safety. The limited liability company interests of Safety that are
outstanding immediately prior to the Effective Time shall be cancelled and be converted into the
right to receive that number of newly issued shares of Receiver Common Stock that, together with
the shares of Receiver Common Stock to be purchased by Parent or a designee thereof pursuant to
Section 3.2, shall equal 54.5% of the aggregate number of Fully-Diluted Shares.
(b) Interests of Merger Sub. The limited liability company interests of Merger Sub
that are outstanding immediately prior to the Effective Time shall be converted into the right to
receive all limited liability company interests of the Surviving Company.
Section 3.2 Issuance and Purchase of Receiver Common Stock.
(a) Issuance and Purchase of Shares. Subject to the terms and conditions hereof,
immediately following the Effective Time, Receiver shall issue and Parent or its Affiliate designee
shall purchase 18,857,142 shares of Receiver Common Stock for an aggregate purchase price of
$330,000,000.
20
(b) Closing Procedure. Immediately following the Effective Time:
(i) Pursuant to Section 3.2(a), and in consideration for the purchase price delivered
pursuant to Section 3.2(b)(ii), Receiver shall deliver to Parent or its Affiliate designee
one or more certificates representing 18,857,142 shares of Receiver Common Stock, made out
in favor of Parent or its Affiliate designee; and
(ii) Pursuant to Section 3.2(a), and in consideration for the shares of Receiver
Common Stock delivered pursuant to Section 3.2(b)(i), Parent shall pay or cause to be paid
to Receiver, by wire transfer of immediately available funds, to a Receiver account an
amount equal to $330,000,000; and
(iii) Pursuant to Section 3.1(a), Receiver shall deliver to the holder of the limited
liability company interests in Safety immediately prior to the Effective Time one or more
certificates representing the number of shares of Receiver Common Stock into which such
limited liability interests in Safety are converted into the right to receive as a result
of the Merger, made out in favor of such holder.
Each party hereto agrees to, and to cause its Affiliates to, report the allocation of the
consideration provided for in this Section 3.2(b) consistent with its terms for all purposes,
including federal, state, local and other Tax purposes.
Section 3.3 Payment of Receiver Extraordinary Dividend.
(a) Declaration of Dividend. Subject to the terms and conditions of this Agreement
and applicable Law, Receiver shall declare a special cash dividend (the “Extraordinary
Dividend”) per share of Receiver Common Stock with a record date one Business Day prior to the
Effective Time (the “Record Date”) and a settlement date five (5) Business Days after the
Effective Time (the “Settlement Date”).
(b) Dividend Amount. The amount of the Extraordinary Dividend per outstanding share
of Receiver Common Stock (the “Per Share Dividend Amount”) shall be equal to (i)
$330,000,000 divided by (ii) the number of shares of Receiver Common Stock issued and
outstanding as of the Record Date (other than such shares owned by Parent or any of its Affiliates
or held in the treasury of Receiver).
(c) Payment of Dividend. Receiver shall on the Settlement Date distribute to each
holder of record of shares of Receiver Common Stock (other than Parent, Parent’s Affiliates or
Receiver) on the Record Date an amount equal to the Extraordinary Dividend multiplied by the number
of such shares held by such holder of record as of the Record Date.
21
(d) Conditions to the Payment of Dividend. The obligation of Receiver to pay the
Extraordinary Dividend shall be subject to the satisfaction of the following conditions:
(i) the Effective Time shall have occurred; and
(ii) the distribution of the Extraordinary Dividend shall not violate applicable Law.
Section 3.4 Withholding Rights. Each of Parent, Safety, Receiver and the Surviving
Company shall be entitled to deduct and withhold any applicable Taxes required to be deducted and
withheld by any provision of federal, state, local or foreign Law from any amounts payable by it
pursuant to this Agreement to any Person. To the extent that amounts are so deducted and withheld
and paid over to the appropriate Taxing Authority by Parent, Safety, Receiver and the Surviving
Company, such deducted and withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Person in respect of which such deduction and withholding was made by
Parent, Safety, Receiver or the Surviving Company.
Section 3.5 Amendments to Constituent Documents. On the Closing Date, Receiver shall
file with the Secretary of State of the State of Delaware the amendments to the Certificate of
Incorporation of Receiver contained in the Charter and By-Laws Amendments, if approved, or, if
approved by the requisite shareholders of Receiver Common Stock, the amendments to the Certificate
of Incorporation of Receiver contained in the Additional Charter and By-Laws Amendments.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties of Receiver and Merger Sub. Except
(i) as otherwise disclosed in the corresponding sections or subsections of the letter (the
“Receiver Disclosure Letter”) delivered to Parent and Safety by Receiver and Merger Sub
upon or prior to the execution of this Agreement or (ii) as expressly permitted or required
by this Agreement or any agreement contemplated hereby, each of Receiver and Merger Sub represents
and warrants to Parent and Safety as follows:
(a) Organization, Standing and Power. Each of Receiver and its Subsidiaries is a
corporation or other legal entity duly organized, validly existing and in good standing (with
respect to jurisdictions that recognize such concept) under the laws of the jurisdiction in which
it is organized and has the requisite corporate or other power, as the case may be, and authority
to enable it to own, lease or otherwise hold its properties and assets and to conduct its
Businesses in the manner in which it is currently being conducted, except where the failure to be
so organized, existing and in good standing or
22
to have such power and authority, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect on Receiver. Each of Receiver and its Subsidiaries is
duly qualified or licensed to do business in each jurisdiction where the nature of its Business or
the ownership or leasing of its properties make such qualification or licensing necessary, except
where the failure to be so qualified or licensed, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Receiver. Receiver has made available
to Parent prior to the execution of this Agreement true and complete copies of the certificate of
incorporation of Receiver, as amended to the date of this Agreement, and the by-laws of Receiver,
as amended to the date of this Agreement.
(b) Subsidiaries.
(i) Schedule 4.1(b) of the Receiver Disclosure Letter lists each Subsidiary of
Receiver and its jurisdiction of organization. All of the outstanding shares of capital
stock of, or other equity interests in, each Subsidiary of Receiver have been, if
applicable, validly issued and are fully paid and nonassessable and are owned by Receiver,
by a wholly-owned Subsidiary of Receiver or by Receiver and one or more wholly-owned
Subsidiaries of Receiver, free and clear of all pledges, liens, charges, mortgages,
encumbrances and security interests of any kind or nature whatsoever, except for those
imposed by federal or state security laws (collectively, “Liens”). Receiver does
not own, directly or indirectly, any capital stock, membership interest, partnership
interest, joint venture interest or other equity interest in any other Person.
(ii) Merger Sub was formed solely for the purposes of engaging in the transactions
contemplated hereby and has engaged in no business other than in connection with the
transactions contemplated hereby. Receiver is and at all times will be the sole member of
Merger Sub.
(c) Capital Structure.
(i) The authorized capital stock of Receiver consists of 150,000,000 shares of
Receiver Common Stock, par value $0.01 per share, and 1,000,000 shares of preferred stock,
par value $0.01 per share (“Receiver Preferred Stock”). As of March 16, 2008,
(i) 56,926,477 shares of Receiver Common Stock were issued and outstanding,
(ii) no shares of Receiver Preferred Stock were issued or outstanding,
(iii) no shares of Receiver Common Stock were held in treasury by Receiver,
(iv) 3,333 shares of Receiver Common Stock were reserved for issuance upon exercise
of outstanding warrants, (v) 3,513,394 shares of Receiver Common Stock were
reserved for issuance upon the exercise of outstanding stock option awards under Receiver
Stock Plans, (vi) 1,398,933 additional shares of Receiver Common Stock were
reserved and available for issuance pursuant to future awards granted under Receiver Stock
Plans, (vii) 401,446 shares of
23
unvested restricted Receiver Common Stock were issued and outstanding and 899,269
Receiver Common Stock Units were outstanding, in each case under Receiver Stock Plans,
(viii) 7,329,424 shares of Receiver Common Stock were reserved for issuance upon
conversion of Receiver’s outstanding 3.50% convertible senior debentures (the
“Convertible Debentures”) and (ix) 197,300 shares of Receiver Common Stock
remain available for sale under Receiver’s employee stock purchase plan. Schedule
4.1(c)(i) of the Receiver Disclosure Letter contains a true and complete schedule as of the
date of this Agreement setting forth (as applicable) the holder, number, exercise or
reference price, number of shares for which it is exercisable, vesting date and expiration
date of each outstanding option to purchase Receiver Common Stock, other than options
granted pursuant to Receiver’s employee stock purchase plan. Except as set forth above, no
shares of capital stock of Receiver are, as of the date hereof, issued, reserved for
issuance or outstanding. All issued and outstanding shares of Receiver Common Stock are,
and all shares of Receiver Common Stock which may be issued pursuant to the exercise of an
option to purchase Receiver Common Stock will be, when issued in accordance with the terms
thereof, duly authorized, validly issued, fully paid and nonassessable.
(ii) The shares of Receiver Common Stock to be issued pursuant to Article III shall
be, when issued and paid for in accordance with the terms of Article III, validly issued,
fully paid and nonassessable.
(iii) There are no preemptive or similar rights on the part of any holder of any class
of securities of Receiver or any Subsidiary of Receiver. Except as otherwise set forth in
this Section 4.1(c) and for the Convertible Debentures, neither Receiver nor any Subsidiary
of Receiver has outstanding any bonds, debentures, notes or other obligations the holders
of which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of Receiver or any such
Subsidiary of Receiver on any matter submitted to stockholders or a separate class of
holders of capital stock. Except as otherwise set forth in this Section 4.1(c) and for the
Convertible Debentures, there are not, as of the date hereof, and except as permitted
pursuant to Section 5.1, as of the Effective Time there will not be, any options, warrants,
restricted stock, restricted stock units, calls, rights, convertible or exchangeable
securities, “phantom” stock rights, stock appreciation rights, stock-based performance
units, commitments, contracts, arrangements or undertakings of any kind to which Receiver
or any Subsidiary of Receiver is a party or by which any of them is bound
(i) obligating Receiver or any Subsidiary of Receiver to issue, deliver, sell or
transfer or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold
or transferred or repurchased, redeemed or otherwise acquired, any shares of the capital
stock of Receiver or any Subsidiary of Receiver, any additional shares of capital stock of,
or other equity interests in, or
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any security exchangeable or exercisable for or convertible into any capital stock of,
or other equity interest in, Receiver or any Subsidiary of Receiver,
(ii) obligating Receiver or any Subsidiary of Receiver to issue, grant, extend or
enter into any such option, warrant, call, right, security, commitment, contract,
arrangement or undertaking, (iii) obligating Receiver or any Subsidiary of Receiver
pursuant to any right of first offer, right of first negotiation, right of first refusal,
co-sale or similar provisions, or (iv) giving any Person the right to receive any
economic benefit or right similar to or derived from the economic benefits and rights
accruing to holders of capital stock of, or other equity interests in, Receiver or any
Subsidiary of Receiver. As of the date hereof there are no outstanding contractual
obligations of Receiver or any Subsidiary of Receiver to sell, repurchase, redeem or
otherwise acquire or to register any shares of capital stock of, or other equity interests
in, Receiver or any Subsidiary of Receiver. There are no proxies, voting trusts or other
agreements or understandings to which Receiver or any Subsidiary of Receiver is a party or
is bound with respect to the voting of the capital stock of, or other equity interests in,
Receiver or any Subsidiary of Receiver. No Receiver Common Stock is held by any
wholly-owned Subsidiary of Receiver.
(d) Authority for Agreements.
(i) Each of Receiver and Merger Sub has all requisite corporate or limited liability
company power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and, subject to (i) the approval of the share issuance
pursuant to Section 3.1(a) and Section 3.2(a) by the holders of a majority of the shares of
Receiver Common Stock entitled to vote thereon (the “Share Issuance”) represented
in person or by proxy assuming a quorum is present in person or by proxy in accordance with
the DGCL, Receiver’s Constituent Documents and applicable Nasdaq rules and regulations,
(ii) (x) the approval of the amendment of the Certificate of Incorporation of
Receiver by the holders of a majority of the outstanding shares of Receiver Common Stock
entitled to vote in accordance with the DGCL and Receiver’s Constituent Documents and (y)
the approval of the amendment of the By-Laws of Receiver by the holders of a majority of
the shares of Receiver Common Stock represented at such meeting and entitled to vote in
accordance with the DGCL and Receiver’s Constituent Documents, in each case as set forth in
Exhibit B (the “Charter and By-Laws Amendments”) (clauses (i) and (ii),
collectively, the “Receiver Stockholder Approval”) and (iii) the approval
of those certain additional amendments of the Certificate of Incorporation and By-Laws of
Receiver included in Exhibit C that require the approval of holders of at least 80%
of the outstanding shares of Receiver Common Stock (the “Additional Charter and By-Laws
Amendments”) by the holders of at least 80% of the outstanding shares of Receiver
Common Stock entitled to vote in accordance with the DGCL and
25
Receiver’s Constituent Documents (the “Additional Receiver Stockholder
Approval”), (iv) the declaration of the Extraordinary Dividend out of funds
lawfully available therefor by the Board of Directors of Receiver (the “Dividend
Declaration”) and (v) the accuracy of Parent’s and Safety’s representations and
warranties in Section 4.2(y), to consummate the Merger and the other transactions
contemplated hereby. The execution, delivery and performance of this Agreement by Receiver
and Merger Sub and the consummation by Receiver and Merger Sub of the Merger and the other
transactions contemplated hereby have been duly and validly authorized by all necessary
corporate or limited liability company action, as applicable, and no other corporate or
limited liability company proceedings on the part of Receiver and Merger Sub, respectively,
are necessary for them to authorize this Agreement or to consummate the transactions
contemplated hereby, except for the Dividend Declaration, the Receiver Stockholder Approval
and with respect to the Additional Charter and By-Laws Amendments, the Additional Receiver
Stockholder Approval. This Agreement has been duly and validly executed and delivered by
Receiver and Merger Sub and, assuming due authorization, execution and delivery by Parent
and Safety, is a legal, valid and binding obligation of each of Receiver and Merger Sub,
enforceable against them in accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting or relating to the enforcement of creditors’ rights generally and
(ii) is subject to general principles of equity (regardless of whether considered
in a proceeding in equity or at law).
(ii) The Board of Directors of Receiver, at a meeting duly called and held, duly
adopted resolutions (i) approving this Agreement, the Merger and the other
transactions contemplated hereby, (ii) recommending that Receiver’s stockholders
approve the Share Issuance, the Charter and By-Laws Amendments and the Additional Charter
and By-Laws Amendments, (iii) resolving to submit the Additional Charter and
By-Laws Amendments to a vote of the holders of shares of Receiver Common Stock at the
annual Receiver stockholders’ meeting subsequent to the Receiver Stockholders Meeting with
such recommendation that the Additional Charter and By-Laws Amendments be approved by
Receiver’s stockholders (if approval of the Additional Charter and By-Laws Amendments is
not obtained at the Receiver Stockholder Meeting), (iv) declaring that this
Agreement, the Share Issuance, the Charter and By-Laws Amendments and the Additional
Charter and By-Laws Amendments are advisable and in the best interests of Receiver and its
stockholders and (v) assuming that Parent’s and Safety’s representations and
warranties in Section 4.2(y) are accurate in all respects, rendering restrictions on
business combinations contained in Section 203 of the DGCL thereby inapplicable to this
Agreement and the transactions contemplated by this Agreement.
26
(e) Consents and Approvals; No Violations.
(i) Assuming compliance with the matters set forth in Section 4.1(e)(ii) and Section
4.1(e)(iii), the accuracy of Parent’s and Safety’s representations in Section 4.2(y) and
the receipt of Receiver Stockholder Approval and with respect to the Additional Charter and
By-Laws Amendments, the Additional Receiver Stockholder Approval, the execution and
delivery of this Agreement by Receiver and Merger Sub does not, and the performance by
Receiver and Merger Sub of their respective obligations hereunder, including the
consummation of the transactions contemplated hereby will not, (A) conflict with
any provision of Receiver’s Constituent Documents or the Constituent Documents of any
Subsidiary of Receiver; (B) result (with or without the giving of notice or the
lapse of time or both) in any violation of or default or loss of a benefit under, or permit
the acceleration, amendment or termination of any obligation under, any mortgage,
indenture, lease, permit, concession, grant, franchise, license, agreement or other
instrument or obligation to which Receiver or its Subsidiaries is a party or by which any
of them or any of their properties, assets or rights are bound; (C) violate any Law
binding upon or applicable to Receiver or its Subsidiaries; (D) result in the
creation or imposition of any Lien upon any properties, assets or rights of Receiver or any
Subsidiary of Receiver or (E) cause the suspension or revocation of any permit,
license, governmental authorization, consent or approval under which Receiver and the
Subsidiaries of Receiver conduct Receiver’s business, except in the case of clauses (B),
(C), (D) and (E) above, which would not reasonably be expected (x) to have, individually or
in the aggregate, a Material Adverse Effect on Receiver or (y) prevent or materially impede
the ability of Receiver or Merger Sub to consummate the transactions contemplated hereby.
(ii) Except for (A) the Receiver Shareholder Approval and with respect to the
Additional Charter and By-Laws Amendments, the Additional Receiver Stockholder Approval,
(B) such consents or approvals listed in Section 4.1(e)(ii) of the Receiver
Disclosure Letter, (C) those consents or approvals the failure of which to be
obtained would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Receiver and (D) the JPMorgan Consent, which remains in
full force and effect, no consent or approval of any other Person (other than any
Governmental Entity) is required to be obtained by Receiver or Merger Sub for the
execution, delivery or performance of this Agreement by Receiver and Merger Sub, the
performance by Receiver and Merger Sub of their respective obligations hereunder or the
consummation by Receiver and Merger Sub of the transactions contemplated hereby.
(iii) Except for those consents, approvals, orders, authorizations, declarations,
registrations or filings the failure of which to be made or obtained
27
would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Receiver or prevent or materially impede the ability of Receiver or
Merger Sub to consummate the transactions contemplated hereby, no consent, approval, order
or authorization of, or declaration, registration or filing with, or notice to, any
Governmental Entity is required to be made or obtained by Receiver or any Subsidiary of
Receiver in connection with the execution or delivery of this Agreement by Receiver or the
consummation by Receiver of the transactions contemplated hereby, except for
(x) compliance by Receiver with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended (the “HSR Act”); (y) the filing of the applicable
Certificate of Merger with the Secretary of State of the State of Delaware and the
Secretary of State of the State of North Carolina in accordance with the DGCL and the LLC
Act, respectively; and (z) the filings with the SEC of (A) the Proxy
Statement in accordance with Regulation 14A promulgated under the Exchange Act and
(B) such reports under and such other compliance with the Exchange Act, the
Securities Act and state securities or “blue sky” laws and the rules and regulations
thereunder as may be required in connection with this Agreement and the transactions
contemplated hereby.
(f) SEC Reports; Receiver Financial Statements.
(i) Receiver has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC since January 1, 2005 under the Securities Act or
the Exchange Act (the “Receiver SEC Documents”). As of its respective date (or, if
amended prior to the date of this Agreement, as of the respective filing and effective
dates of such amendment), each Receiver SEC Document complied in all material respects with
the requirements of Nasdaq and the Exchange Act or the Securities Act applicable to such
Receiver SEC Document as in effect on the date so filed or amended, and did not, contain
any untrue statement of a material fact or omit to state a material fact required to be
stated therein necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(ii) The financial statements of Receiver included in the Receiver SEC Documents (if
amended prior to the date of this Agreement, as amended) complied as of their respective
dates in all material respects with the then applicable accounting requirements and the
published rules and regulations of the SEC and Nasdaq with respect thereto, have been
prepared in accordance with GAAP (except in the case of the unaudited statements, as
permitted by Form 10-Q under the Exchange Act) applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto) and present fairly, in
all material respects, the consolidated financial position of Receiver and its consolidated
Subsidiaries as at the dates thereof and the consolidated results of their operations and
their consolidated cash flows for the periods then ended, in each case in
28
conformity with GAAP (subject, in the case of unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein, which will not be
material in amount).
(iii) Since January 1, 2005, Receiver has complied in all material respects with the
applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the related rules and
regulations promulgated under such Act (the “Xxxxxxxx-Xxxxx Act”). Except as
permitted by the Exchange Act, since the enactment of the Xxxxxxxx-Xxxxx Act, neither
Receiver nor any of its Affiliates has directly or indirectly extended or maintained
credit, arranged for the extension of credit, renewed an extension of credit or materially
modified an extension of credit in the form of personal loans to any executive officer or
director (or equivalent thereof) of Receiver or any Receiver Subsidiaries in violation of
Section 402 of the Xxxxxxxx-Xxxxx Act.
(iv) Receiver’s system of internal accounting controls provides reasonable assurance:
(x) that transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP; (y) that receipts and expenditures are made
only in accordance with management’s general or specific authorization; and (z)
regarding prevention or timely detection of the unauthorized acquisition, use or
disposition of Receiver’s assets that could materially affect Receiver’s financial
statements. Receiver has disclosed, based on its most recent evaluation of such disclosure
controls and procedures prior to the date hereof to its independent auditors and the audit
committee of its Board of Directors (A) any significant deficiencies and material
weaknesses in the design or operation of Receiver’s internal controls over financial
reporting that are reasonably likely to adversely affect in any material respect Receiver’s
ability to record, process, summarize and report financial information and (B) any
fraud, whether or not material, that involves management or other employees of Receiver who
have a significant role in Receiver’s internal controls over financial reporting. Receiver
has provided to Parent any such disclosure made by management to Receiver’s independent
auditors and the audit committee of Receiver’s Board of Directors.
(v) Receiver’s “disclosure controls and procedures” (as defined in Rules 13a-15(e) and
15d-15(e) under the Exchange Act) are reasonably designed to ensure that (A)
material information (both financial and non-financial) required to be disclosed by
Receiver in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the rules and forms
of the SEC and (B) all such information is accumulated and communicated to
Receiver’s management as appropriate to allow timely decisions regarding disclosure and to
make the certifications of the
29
principal executive officer and principal financial officer of Receiver required under
the Exchange Act with respect to such reports.
(g) Proxy Statement.
(i) The Proxy Statement will, at the time mailed to stockholders of Receiver, at the
time of the Receiver Stockholders Meeting or at the time it is amended or supplemented, 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, and the Proxy Statement will
comply as to form in all material respects with the provisions of the Exchange Act, except
that no representation or warranty is made by Receiver with respect to statements made
therein based on information supplied by Parent or Safety or any of their representatives
specifically for inclusion therein.
(ii) None of the information supplied or to be supplied by Receiver specifically for
inclusion in the Circular will, at the time of being so supplied, 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.
(h) Absence of Certain Changes or Events. From December 31, 2007 through the date
hereof, there has not been any state of facts, change, development, effect, condition or occurrence
that, individually or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Receiver. From December 31, 2007 through the date hereof, Receiver and its Subsidiaries,
taken as a whole, have conducted their Businesses in all material respects only in the ordinary
course of business consistent with past practice and there has not been:
(i) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of Receiver’s or any
of its Subsidiaries’ capital stock or other equity or voting interests, except for
dividends by a wholly-owned Subsidiary of Receiver to its parent;
(ii) any purchase, redemption or other acquisition of any shares of capital stock of,
or other equity or voting interests in, Receiver or any of its Subsidiaries or any options,
warrants, calls or rights to acquire such shares or other interests, except as permitted by
Receiver stock plans and award agreements thereunder;
(iii) any amendments, changes or other modifications to the Constituent Documents of
Receiver or any of its Subsidiaries;
30
(iv) any split, combination or reclassification of any of Receiver’s or any of its
Subsidiaries’ capital stock or other equity or voting interests or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of or in
substitution for shares of capital stock of, or other equity or voting interests in,
Receiver or any of its Subsidiaries;
(v) any incurrence of material Indebtedness;
(vi) except as required to comply with applicable Law, any contract existing on the
date hereof, any provision of any Receiver Employee Plan, or Receiver’s compensation
policies as in effect on the date hereof, (A) any granting by Receiver or any of
its Subsidiaries to any current or former director or executive officer of any material
increase in compensation, bonus or other benefits or (B) any granting to any
current or former director or executive officer of the right to receive any material
severance or termination pay, or material increases therein;
(vii) except (A) as expressly required under any Receiver Employee Plan or
award agreement thereunder existing on December 31, 2007, (B) as required to comply
with applicable Law or (C) payments or grants to any non-executive officer,
(i) any compensatory grant of Receiver Common Stock or other award the value of
which is measured by reference to Receiver Common Stock (including outstanding stock
options or Receiver Common Stock Units) (each, a “Receiver Equity Award”), or
(ii) any settlement of any Receiver Equity Award (whether for cash or shares of
Receiver Common Stock), or (iii) the removal or modification of any restrictions
with respect to any Receiver Equity Award (including any discretionary vesting of any
Receiver Equity Award);
(viii) except to the extent required to comply with applicable Law (including
amendments to the extent necessary or deemed reasonably advisable by Receiver to bring
Receiver Employee Plans into compliance with Section 409A of the Code without material
increase in costs to Receiver of such plans, as amended) and for terminations, adoptions
and amendments of broad-based Receiver Employee Plans or non-executive officer Receiver
Employee Plans in the ordinary course of business consistent with past practice,
(A) any termination, adoption, or amendment or any agreement to terminate, adopt or
amend in each case in any material respect any Receiver Employee Plan (including any such
plan that would constitute an Receiver Employee Plan if it were to be adopted and including
any related trust agreement or other operative agreement relating to a Receiver Employee
Plan), (B) any material change or agreement to materially change any actuarial or
other assumption used to calculate funding obligations with respect to any Receiver
Employee Plan, (C) any material change in the timing or manner in which
contributions to any Receiver Employee Plan are made or the basis on which such
contributions are determined or (D) any acceleration of
31
the vesting of benefits or awards, or other material changes to the timing or manner
in which benefits or awards vest under any Receiver Employee Plan;
(ix) any material change in financial or tax accounting methods, principles or
practices by Receiver or any of its Subsidiaries, except insofar as may have been required
by a change in GAAP or applicable Law;
(x) any revaluation by Receiver or any of its Subsidiaries of any assets that are
material to Receiver and its Subsidiaries, taken as a whole;
(xi) any consummation of, or entrance into any agreement for, any acquisition, by
means of merger or otherwise, of any material properties, rights, assets or securities or
any sale, lease, license, encumbrance or other disposition of material assets, property
rights or securities, in each case involving the payment or receipt of consideration of
$675,000 or more (inclusive of assumed debt), except for purchases, sales or licensing
arrangements made in the ordinary course of business and consistent with past practice;
(xii) any institution, settlement or agreement to settle any material litigation,
action or proceeding before any Governmental Entity;
(xiii) any resignation or termination, or, to the Knowledge of Receiver, written
notice of any pending resignation or termination, of any executive officer of Receiver; or
(xiv) any material increase or decrease in the aggregate number of Persons employed by
Receiver and its Subsidiaries, taken as a whole, except increases or decreases in the
ordinary course of business consistent with past practice.
(i) Litigation. Except as set forth in the most recent Annual Report on Form 10-K
filed by Receiver prior to the date hereof, as of the date hereof, there is (i) no material
Claim pending or, to the Knowledge of Receiver, threatened in writing against or involving Receiver
or any Subsidiary of Receiver, or their respective assets, properties or rights, or, to the
Knowledge of Receiver, any of their officers, employees or directors in their capacity as such and
(ii) no material order of any Governmental Entity or arbitrator is outstanding against
Receiver or any Subsidiary of Receiver.
(j) Compliance with Laws and Regulations.
(i) (A) Each of Receiver and the Receiver Subsidiaries is and, since January 1, 2005
has been, in compliance with all applicable Laws (including Laws relating to HIPAA and
other applicable federal and state privacy and data protection Laws) and (B) to the
Knowledge of Receiver, is not under investigation
32
with respect to, and since January 1, 2005 has not been threatened in writing to be
charged with or given notice of any material violation of, any Law, except, in the case of
(A) or (B), for any violations or non-compliance that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on Receiver.
Notwithstanding anything contained in this Agreement to the contrary, no representation or
warranty shall be deemed to be made in this Section 4.1(j) to the extent otherwise covered
by representations and warranties contained in Section 4.1(f) (SEC Reports; Receiver
Financial Statements), Section 4.1(k) (Environmental Matters), Section 4.1(m) (Taxes),
Section 4.1(o) (Employee Benefit Plans), Section 4.1(u) (Labor Matters) or Section 4.1(w)
(Healthcare Law Compliance).
(ii) Each of Receiver and the Receiver Subsidiaries possesses all federal, state,
local and foreign governmental licenses, authorizations, consents, permits, registrations
and approvals, and has otherwise satisfied all applicable legal or regulatory requirements,
necessary for it to own, lease or operate its properties and assets and to carry on its
Business as now conducted (collectively, “Receiver Permits”), and no default has
occurred under any such Receiver Permit, except where such failure or default thereunder
would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Receiver. Neither Receiver nor any Subsidiary of Receiver has received
since January 1, 2005 written notification from any Governmental Entity of any intent to
revoke or terminate any such Receiver Permit, except for any such revocation or termination
which, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on Receiver.
(k) Environmental Matters. Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Receiver, (i) Receiver and its
Subsidiaries, taken as a whole, are, and since January 1, 2005, have been, in compliance with all
applicable Environmental Laws, (ii) there are no pending or, to the Knowledge of Receiver,
threatened, Claims alleging a violation of or liability under any Environmental Law by Receiver and
its Subsidiaries, taken as a whole, and (iii) no Releases of Hazardous Substances have
occurred at, on, above, under or from any properties currently or formerly owned, leased, operated
or used by Receiver, any Subsidiary of Receiver or any predecessors in interest that have resulted
or that are reasonably likely to result in any investigation or remediation by Receiver or any
Subsidiary of Receiver under any Environmental Law. Receiver has made available to Parent or
Safety a copy of all material environmental reports in Receiver’s possession relating to
environmental conditions at any property currently owned or leased by Receiver. This Section
4.1(k) and Section 4.1(o) and Section 4.1(u) set forth the sole representations and warranties of
Receiver with respect to environmental or occupational health or safety matters, including all
matters arising under Environmental Laws.
33
(l) Absence of Undisclosed Liabilities. Receiver and its Subsidiaries do not have any
liabilities, known or unknown, contingent or otherwise that are of a nature that would be required
to be disclosed on a consolidated balance sheet of Receiver and its Subsidiaries or in the
footnotes thereto prepared in accordance with GAAP, except for liabilities (a) set forth in
the consolidated financial statements (or the notes thereto) included in the most recent Annual
Report on Form 10-K or most recent Quarterly Report on Form 10-Q filed by Receiver prior to the
date hereof, (b) incurred in the ordinary course of business consistent with past practice
since the date of such financial statements, which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Receiver, (c) which would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on
Receiver or (d) expressly permitted and contemplated by this Agreement.
(m) Taxes.
(i) Receiver and each Subsidiary of Receiver have (A) duly and timely filed
with the appropriate Taxing Authorities all material Tax Returns required to be filed by
them in respect of any Taxes, which Tax Returns were true, correct and complete in all
material respects, (B) duly and timely paid or withheld all material Taxes that are
due and payable by them, whether or not such Taxes were shown as due on any Tax Returns and
(C) complied in all material respects with all Laws applicable to the withholding
of Taxes and have timely withheld and paid over to the respective proper Taxing Authorities
all material amounts required to be so withheld and paid over.
(ii) There (A) is no material deficiency, claim, audit, suit, proceeding,
request for information or investigation now pending or outstanding, or to the Knowledge of
Receiver threatened, against or with respect to Receiver or any Subsidiary of Receiver in
respect of any Taxes or Tax Returns and (B) are no closing agreements, private
letter rulings, technical advice memoranda or similar agreements or rulings entered into or
issued by any Taxing Authority with or to Receiver or any Subsidiary of Receiver that
affected or could reasonably be expected to affect, to a material extent, the taxable
income or loss of Receiver or any of its Subsidiaries for a taxable year beginning on or
after January 1, 2000 in the case of U.S. federal income Taxes or on or after January 1,
2003 in the case of other Taxes (in the case of U.S. federal income Taxes without taking
into account any net operating losses carried over from a taxable year beginning prior to
January 1, 2000, and in the case of other Taxes without taking into account any net
operating losses carried over from a taxable year beginning prior to January 1, 2003) and
no such agreement or ruling has been applied for and is currently pending.
(iii) The U.S. federal income Tax Returns of Receiver and each Subsidiary of Receiver
have been examined by the Internal Revenue Service (the
34
“IRS”) (or the applicable statutes of limitation for the assessment of federal
income Taxes for such periods have expired) for all periods through and including December
31, 2003. Neither Receiver nor any Subsidiary of Receiver has, in writing, granted any
requests, agreements, consents or waivers to extend the statutory period of limitations
applicable to the assessment of any Taxes with respect to any Tax Returns of Receiver or
any Subsidiary of Receiver which is currently in effect.
(iv) Since January 1, 2000, neither Receiver nor any Subsidiary of Receiver has
constituted either a “distributing corporation” or a “controlled corporation” (within the
meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify
for tax-free treatment under Section 355 of the Code.
(v) Neither Receiver nor any Subsidiary of Receiver has agreed to make or is required
to make any material adjustment under Section 481(a) of the Code by reason of a change in
accounting method that affected or could reasonably be expected to affect, to a material
extent, the taxable income or loss of Receiver or any of its Subsidiaries for a taxable
year beginning on or after January 1, 2000 in the case of U.S. federal income Taxes or on
or after January 1, 2003 in the case of other Taxes (in the case of U.S. federal income
Taxes without taking into account any net operating losses carried over from a taxable year
beginning prior to January 1, 2000, and in the case of other Taxes without taking into
account any net operating losses carried over from a taxable year beginning prior to
January 1, 2003).
(vi) Neither Receiver nor any Subsidiary of Receiver has been a member of any
affiliated group within the meaning of Section 1504(a) of the Code, or any similar
affiliated, combined, consolidated or unitary group for tax purposes under state, local or
foreign Law (in all cases other than a group the common parent of which is Receiver or any
Subsidiary of Receiver), or has any liability (including pursuant to any tax sharing
agreement, as transferee or successor or otherwise) for the Taxes of any Person (other than
Receiver and the Receiver Subsidiaries) under Treasury Regulations Section 1.1502-6 or any
similar provision of state, local or foreign Law.
(vii) Neither Receiver nor any Subsidiary of Receiver has participated in any “listed
transaction” or “transaction of interest” (within the meaning of Treasury Regulations
§§1.6011-4(c)(3)(i)(A) and (E)) that affected or could reasonably be expected to affect, to
a material extent, the U.S. federal taxable income or loss of Receiver or any of its
Subsidiaries for a taxable year beginning on or after January 1, 2000 (without taking into
account any net operating losses carried over from a taxable year beginning prior to
January 1, 2000).
35
(viii) Subject to clause (ii) of Section 2.8, neither Receiver nor any Subsidiary of
Receiver has taken or agreed to take any action (nor is any of them aware of any agreement,
plan or circumstance) that to the Knowledge of Receiver is reasonably likely to prevent the
Merger from being treated as a reorganization under Section 368(a) of the Code.
(ix) As of December 31, 2007, Receiver and its Subsidiaries had net operating loss
carryforwards of at least $180 million for U.S. federal income tax purposes.
(n) Real Property; Title to Properties; Absence of Liens.
(i) Schedule 4.1(n)(i) of the Receiver Disclosure Letter sets forth, as of the date
hereof, a true and complete list of all material real property owned by Receiver or its
Subsidiaries or in which any of them has an ownership interest (collectively, the
“Receiver Owned Real Property”). Receiver or one of its Subsidiaries, as
applicable, has good title to the Receiver Owned Real Property, free and clear of all Liens
except Permitted Liens.
(ii) Schedule 4.1(n)(ii) of the Receiver Disclosure Letter sets forth, as of the date
hereof, a true and complete list of all material real property leased or subleased to or by
Receiver or any Subsidiary of Receiver or in which any of them has an interest
(collectively, the “Receiver Leased Real Property”). Receiver or one of the
Receiver Subsidiaries has a valid leasehold interest, in all material respects, in all
Receiver Leased Real Property leased by Receiver or any Subsidiary of Receiver free and
clear of all Liens except Permitted Liens.
(iii) With respect to the Receiver Leased Real Property (A) each of the
agreements by which Receiver or any Subsidiary of Receiver has obtained a leasehold
interest in such Receiver Leased Real Property (each, a “Receiver Lease”) is, to
the Knowledge of Receiver, in full force and effect in accordance with its respective
terms, (B) to the Knowledge of Receiver, there exists no default under any Receiver
Lease and no circumstance exists which, with or without the giving of notice, the passage
of time or both, would constitute or result in such a default and (C) to the
Knowledge of Receiver, there are no leases, subleases, licenses, concessions or any other
contracts granting to any Person other than Receiver or any Subsidiary of Receiver any
right to the possession, use, occupancy or enjoyment of any Receiver Leased Real Property
or any portion thereof, except in the case of clauses (A) through (C) as
would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Receiver.
(iv) Each of Receiver and its Subsidiaries has good and valid title to, or, in the
case of leased properties and assets, valid leasehold interests in, all of its
36
tangible assets and properties, in each case free and clear of all Liens, except where
failure to have such good and valid title or a valid leasehold interest, would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect
on Receiver.
(v) The properties, assets and rights presently owned, leased or licensed by Receiver
and its Subsidiaries, taken as a whole, include all properties, assets and rights necessary
to permit Receiver and its Subsidiaries, taken as a whole, to conduct Receiver’s Businesses
in all material respects in the same manner as such Business is being conducted as of the
date of this Agreement.
(o) Employee Benefit Plans.
(i) Schedule 4.1(o)(i) of the Receiver Disclosure Letter contains as of the date
hereof a true and complete list of all material Receiver Employee Plans. “Receiver
Employee Plans” means all “employee benefit plans” (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including
multiemployer plans within the meaning of Section 3(37) of ERISA) and all employment,
consulting, severance, change-in-control or similar contracts, plans or policies and other
plans (written or oral) providing for compensation, bonuses, profit-sharing, stock option
or other stock or equity related rights, incentive or deferred compensation, insurance
(including any self-insured arrangements), health or medical benefits, vacation, fringe
benefits, severance benefits or post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits), (A) under which
any current or former employee, director or consultant of Receiver or its Subsidiaries
(“Receiver Employees”) has any present or future right to benefits and that is
maintained or contributed to by Receiver or any of its Subsidiaries or (B) that is
maintained or contributed to by Receiver or any of its Subsidiaries and that Receiver or
the Surviving Company or any of their respective Subsidiaries have any present or future
liability, other than benefit arrangements required by applicable Law.
(ii) With respect to each material Receiver Employee Plan (and, if applicable, related
trusts, funding agreements or insurance policies), Receiver has made available to Parent
and Safety a current and complete copy thereof and all amendments thereto, and to the
extent applicable, (i) for the three most recent plan years (A) annual
actuarial valuation reports, (B) Forms 5500 (including all schedules thereto) and
Forms 990 and (C) audited financial reports, prepared in connection with any
Receiver Employee Plan or related trust, (ii) the most recent determination letter,
if applicable, (iii) the most recent summary plan description and other material
written communications by Receiver or its Subsidiaries to Receiver Employees and
(iv) a summary of any material amendments or changes scheduled to be made to the
Receiver Employee Plan during the twelve months
37
immediately following the date hereof, other than amendments or changes to reflect a
change in applicable Law.
(iii) (A) Each Receiver Employee Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from the IRS to
the effect that such Receiver Employee Plan is qualified and exempt from U.S. federal
income Taxes under Sections 401(a) and 501(a), respectively, of the Code, or has pending
with the IRS an application for such letter, or is entitled to rely on an opinion letter
from the IRS, and all terms and conditions of each determination letter or opinion letter,
as appropriate, have been complied with; (B) no such determination letter has been
revoked or denied nor, to the Knowledge of Receiver, has revocation or denial been
threatened, and no event has occurred, and no condition exists, that would reasonably be
expected to result in the revocation or denial of any determination letter; (C)
each Receiver Employee Plan has been established and maintained in material compliance with
its terms and with the requirements of Law, including ERISA and the Code, that are
applicable to such Receiver Employee Plan; (D) there are no pending, or, to the
Knowledge of Receiver, threatened or anticipated claims (other than routine claims for
benefits) involving a Receiver Employee Plan which could reasonably be expected to result
in any material liability to Receiver or its Subsidiaries and (E) all contributions
or other amounts payable by Receiver or its Subsidiaries as of the date hereof with respect
to each Receiver Employee Plan have been paid or accrued in accordance with GAAP (other
than with respect to amounts not yet due).
(iv) Neither Receiver nor any Subsidiary of Receiver has any obligations for
post-employment health or life benefits for retired, former or current employees of
Receiver or any Subsidiary of Receiver, except as required by Law.
(v) The consummation of the Merger and the other transactions contemplated hereby will
not, alone or in connection with any other events, result in any payment or deemed payment
that could reasonably be construed to constitute an “excess parachute payment” for purposes
of Section 280G or 4999 of the Code. Except as set forth in Section 4.1(o)(v) of the
Receiver Disclosure Letter, no person is entitled to receive any additional payment from
Receiver or any of its Subsidiaries as a result of the imposition of the excise tax under
Section 4999 of the Code.
(vi) Except as specifically provided herein, the consummation of the Merger and the
other transactions contemplated hereby will not (x) entitle any current or former
director, officer or employee of Receiver or any of its Subsidiaries to severance pay,
(y) accelerate the time of payment or vesting or trigger any payment or funding
(whether through a grantor trust or otherwise) of
38
compensation or benefits under, increase the amount allocable or payable or trigger
any other material obligation pursuant to, any of the Receiver Employee Plans or
(z) result in any breach or violation of, or any default under, any of the Receiver
Employee Plans.
(vii) No Receiver Employee Plan is subject to Title IV of ERISA, and Receiver has no
liability of any kind whatsoever, whether direct, indirect, contingent or otherwise, under
Section 412 of the Code or Title IV of ERISA. Neither Receiver nor any of its Affiliates
has, at any time during the last six years, contributed to or been obligated to contribute
to any “multiemployer plan”, as defined in Section 3(37) of ERISA, or any employee benefit
plan, program or arrangement that is subject to Title IV of ERISA or Section 412 of the
Code.
(viii) There is no pending or, to the Knowledge of Receiver, threatened material
litigation, investigation, action, suit, audit or proceeding relating to any Receiver
Employee Plan by or before any Governmental Entity.
(ix) Neither Receiver nor any Subsidiary of Receiver maintains, contributes to or is
a party to any material employee benefit plan, program or arrangement that covers any
current or former non-U.S. employee, director or consultant, that is in effect on the date
hereof, and as to which the Surviving Company may have in the future any liability.
(x) Each Receiver Employee Plan that is a “nonqualified deferred compensation plan”
within the meaning of Section 409A(d)(1) of the Code and subject to Section 409A of the
Code (a “Nonqualified Deferred Compensation Plan”) and any award thereunder has
been operated since January 1, 2005 based upon a good faith, reasonable interpretation of
Section 409A of the Code and any authority required or permitted to be relied upon
thereunder, including, without limitation, (x) the proposed regulations issued
thereunder, (y) the final regulations issued thereunder or (z) IRS Notice
2005-1.
(p) Voting Requirements. The Receiver Stockholder Approval and, with respect to the
Additional Charter and By-Laws Amendments, the Additional Receiver Stockholder Approval, in each
case at the Receiver Stockholders Meeting are the only votes of the holders of any class or series
of Receiver’s capital shares necessary to approve or adopt this Agreement, the Merger and the other
transactions contemplated hereby.
(q) Brokers; Schedule of Fees and Expenses. Except for Xxxxxxx Xxxxx & Co., the fees
and expenses of which shall be paid by Receiver, neither Receiver nor any of its Subsidiaries has
engaged any investment banker, broker or finder in connection with the transactions contemplated by
this Agreement who might be entitled to any fee or
39
any commission in connection with or upon consummation of the Merger or the other transactions
contemplated hereby.
(r) Opinion of Financial Advisor. The Board of Directors of Receiver has received the
opinion of Xxxxxxx, Sachs & Co. to the effect that, as of the date of such opinion and based upon
and subject to the assumptions, qualifications and limitations discussed in such opinion, the
consideration to be paid by Receiver pursuant to this Agreement is fair, from a financial point of
view, to Receiver, a signed copy of which will be delivered to Parent solely for informational
purposes after receipt thereof by Receiver.
(s) Intellectual Property.
(i) Owned Intellectual Property. Schedule 4.1(s)(i) of the Receiver
Disclosure Letter lists as of the date hereof all Intellectual Property owned by Receiver
or any Subsidiary of Receiver (the “Receiver Owned Intellectual Property”) that is
registered or subject to an application for registration and that is material to the
Business of Receiver and its Subsidiaries, taken as a whole. Receiver or one of the
Receiver Subsidiaries is the exclusive owner of the Receiver Owned Intellectual Property
set forth in Schedule 4.1(s)(i) of the Receiver Disclosure Letter and, to the Knowledge of
Receiver, of the Trade Secrets owned by Receiver or any of the Receiver Subsidiaries, in
each case free and clear of any Liens other than Permitted Liens. To the Knowledge of
Receiver, the Receiver Owned Intellectual Property is subsisting, valid and enforceable.
(ii) Licenses and Other Agreements. Schedule 4.1(s)(ii) of the Receiver
Disclosure Letter lists as of the date hereof all material agreements to which Receiver or
any Subsidiary of Receiver is a party or by which any of them is otherwise bound that
relate to Intellectual Property that Receiver reasonably anticipates will involve aggregate
payments or consideration furnished by or to Receiver or any or its Subsidiaries of more
than $1,000,000 in any year (the “Receiver Licenses”), other than the Receiver
Contracts that are set forth on Schedule 4.1(v), including (i) material licenses of
Intellectual Property to Receiver or any Subsidiary of Receiver by any other Person,
(ii) material licenses of Intellectual Property to any other Person by Receiver or
any Subsidiary of Receiver, (iii) material agreements otherwise granting or
restricting the right to use Intellectual Property and (iv) material agreements
transferring, assigning, indemnifying with respect to or otherwise relating to Intellectual
Property used or held for use in the Business of Receiver and the Receiver Subsidiaries.
The representations in Section 4.1(v) (Contracts) shall apply to the Receiver Licenses,
provided, however, that the representations in Section 4.1(v) shall not be
interpreted to require disclosure of a Receiver Contract or Receiver License solely for the
reason of Receiver or a Subsidiary of Receiver being prohibited from
40
soliciting employees or personnel of a party to a Receiver Contract or Receiver
License to the extent that such party’s employees or personnel are providing services to
Receiver or a Subsidiary of Receiver in the normal course of the business of Receiver or a
Subsidiary of Receiver if disclosure of such Receiver Contract or Receiver License would
not otherwise be called for.
(iii) No Infringement. To the Knowledge of Receiver, except as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect
on Receiver, the conduct of the Businesses conducted by Receiver and the Receiver
Subsidiaries does not infringe or otherwise conflict with the rights of any Person in
respect of any Intellectual Property, and neither Receiver nor any Subsidiary of Receiver
has received any written notice alleging the foregoing, or challenging the ownership or
validity of any Receiver Owned Intellectual Property (including any cancellation,
opposition, or other action before an intellectual property registry). To the Knowledge of
Receiver, none of the Receiver Owned Intellectual Property is being infringed or otherwise
used or being made available for use by any Person without a license or permission from
Receiver or a Subsidiary of Receiver, as applicable.
(iv) Protection of Intellectual Property. Receiver or one of the Receiver
Subsidiaries has taken commercially reasonable actions to ensure protection of the Receiver
Owned Intellectual Property under applicable Law (including making and maintaining in full
force and effect all necessary filings, registrations and issuances). Each of Receiver and
the Receiver Subsidiaries has taken commercially reasonable actions to maintain the secrecy
of all confidential Intellectual Property used in the Business of Receiver and the Receiver
Subsidiaries. To the Knowledge of Receiver, none of Receiver or any Subsidiary of Receiver
is using any material Receiver Owned Intellectual Property in a manner that would
reasonably be expected to result in the cancellation or unenforceability of such Receiver
Owned Intellectual Property.
(v) Assignment; Privacy. Each employee of Receiver or the Receiver
Subsidiaries or other Person who has created any Intellectual Property to be owned by
Receiver or any Subsidiary of Receiver has validly and irrevocably assigned all of his, her
or its rights in such Intellectual Property to Receiver or one of the Receiver
Subsidiaries, as applicable. Each of Receiver and the Receiver Subsidiaries is in
compliance with all applicable contractual and legal requirements pertaining to information
privacy and security, including, without limitation, any privacy policy concerning the
collection and use of personally-identifiable information, except where such failure would
not reasonably be expected to have a Material Adverse Effect on Receiver.
(t) Insurance. Receiver and its Subsidiaries maintain policies of insurance in such
amounts and against such risks as are reasonably customary in the industries in
41
which Receiver and its Subsidiaries operate (taking into account the cost and availability of
such insurance). Except as would not reasonably be expected to have a Material Adverse Effect on
Receiver, all such insurance policies are in full force and effect and will not terminate or lapse
by reason of the consummation of the transactions contemplated hereby.
(u) Labor Matters. Receiver is not a party to or subject to, or currently negotiating
in connection with entering into, any collective bargaining agreement or other contract with a
labor union or organization. Since January 1, 2005, there has not occurred nor, to the Knowledge
of Receiver has there been threatened, any material strike, slowdown, picketing, work stoppage,
concerted refusal to work overtime, lockout or other similar labor activity or organizing campaign
or activity with respect to any employees of Receiver or its Subsidiaries. There are no material
labor disputes currently subject to any grievance, arbitration, litigation or other Claim and there
is no representation, decertification or other labor-related petition or election pending or, to
the Knowledge of Receiver, threatened with respect to any employee of Receiver or its Subsidiaries.
Receiver and its Subsidiaries are in compliance with all applicable Laws relating to the
employment of the Receiver Employees, including Laws relating to wages, employee and independent
contractor classification, hours, collective bargaining, discrimination, civil rights, safety and
health, worker notification requirements, immigration, workers’ compensation, layoffs and the
collection and payment of withholding Taxes and similar Taxes, except for such noncompliance,
individually or in the aggregate, as would not reasonably be expected to have a Material Adverse
Effect on Receiver.
(v) Contracts. Except as listed in Section 4.1(v) of the Receiver Disclosure Letter
or as filed as exhibits to the Receiver SEC Documents, as of the date hereof, neither Receiver nor
any Subsidiary of Receiver is a party to or bound by any of the following which is currently in
effect with ongoing obligations of Receiver or such Subsidiary of Receiver (each such contract or
agreement referenced in subparts (i) through (x) below or Section 4.1(s)(ii), a “Receiver
Contract”):
(i) any agreement relating to direct or indirect Indebtedness of Receiver or any
Subsidiary of Receiver in excess of $1,000,000, other than agreements among direct or
indirect wholly-owned Receiver Subsidiaries and ordinary course trade payables and accrued
expenses;
(ii) any joint venture, partnership, limited liability company or other similar
agreements or arrangements relating to the formation, creation, operation, management or
control of any partnership or joint venture material to Receiver and its Subsidiaries,
taken as a whole;
(iii) any agreement or series of related agreements, including any option agreement,
relating to the acquisition or disposition of any Business or
42
material real property (whether by merger, sale of stock, sale of assets or
otherwise);
(iv) any agreement entered into with (A) any Person directly or indirectly
owning, controlling or holding the power to vote, 5% or more of the outstanding voting
securities of Receiver, (B) any Person (other than a Subsidiary of Receiver) 5% or
more of the outstanding voting securities of which are directly or indirectly owned,
controlled or held with power to vote by Receiver or any Subsidiary of Receiver or
(C) any current director or executive officer of Receiver or any “associates” or
members of the “immediate family” (as such terms are respectively defined in Rule 12b-2 and
Rule 16a-1 of the Exchange Act) of any such director or executive officer;
(v) any agreement (including any exclusivity agreement) that purports to limit or
restrict in any material respect either the type of business in which Receiver or its
Subsidiaries may engage or the manner or locations in which any of them may so engage in
any business (including any covenant not to compete) or which would require the disposition
of any material assets or line of business of Receiver or its Subsidiaries;
(vi) any sales, distribution, agency, commission-based or other similar agreement with
third parties (x) providing for the sale by Receiver or any Subsidiary of Receiver of such
Person’s products or services, or (y) providing for the sale by third parties of products
of Receiver or any Subsidiary of Receiver, in each case, involving annual payments in the
2007 fiscal year or reasonably expected in the 2008 fiscal year to or by Receiver or any
Subsidiary of Receiver in excess of $1,000,000 in the aggregate;
(vii) any material agreement with any U.S. federal or non-U.S. Governmental Entity;
(viii) any agreement that, to the Knowledge of Receiver, provides for continuing
material indemnification obligations of Receiver or any of its Subsidiaries (other than
indemnification obligations contained in (x) customer contracts or (y) contracts listed or
referred to in Section 4.1(v) of the Receiver Disclosure Letter);
(ix) any “take-or-pay” agreements or agreements with “most-favored nations” terms; or
(x) any agreement otherwise required to be filed as an exhibit to an Annual Report on
Form 10-K, as provided by Item 601 of Regulation S-K promulgated under the Exchange Act.
43
Each Receiver Contract is a valid and binding agreement of Receiver or the Subsidiary of Receiver
party thereto, as the case may be, and is in full force and effect, enforceable against Receiver or
the Subsidiary of Receiver, as applicable, and, to the Knowledge of Receiver, the counterparty
thereto in accordance with its terms, except to the extent that the failure to be valid and binding
and in full force and effect and enforceable, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Receiver and its Subsidiaries taken as
a whole. None of Receiver or any Subsidiary of Receiver party thereto or, to the Knowledge of
Receiver, any other party thereto is in default or breach under the terms of, or has provided any
written notice of any intention to terminate, any such Receiver Contract, and, to the Knowledge of
Receiver, no event or circumstance has occurred, or will occur by reason of this Agreement or the
consummation of any of the transactions contemplated hereby, that, with or without notice or lapse
of time or both, would constitute an event of default thereunder or would give rise to a right of
termination, acceleration or material amendment thereof, except to the extent that the such
default, breach, termination, event or circumstance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Receiver. True, correct and complete
copies of (i) each Receiver Contract (including all material modifications and amendments
thereto) and (ii) all form contracts, agreements or instruments used in and material to
Receiver and the Receiver Subsidiaries, taken as a whole, have been made available to Parent or
Safety.
(w) Healthcare Law Compliance.
(i) Each of the products distributed, produced or sold by Receiver or its Subsidiaries
that is subject to the jurisdiction of the FDA and the Drug Enforcement Administration
through the Food, Drug and Cosmetic Act of 1938, as amended (the “FDCA”), the
Public Health Service Act, as amended (the “PHSA”), the Controlled Substances Act,
as amended (the “CSA”), and the regulations promulgated thereunder, is in
compliance with all applicable requirements under the FDCA, the PHSA, the CSA and the
regulations promulgated thereunder, except for any noncompliance that would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect
on Receiver.
(ii) Neither Receiver nor any of its Subsidiaries has knowingly committed any
violation of the rules and regulations of the Food and Drug Administration (the
“FDA”), which has not been cured by Receiver or its Subsidiaries or waived by the
FDA, except for any violations as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect on Receiver.
(iii) Neither Receiver nor any of its Subsidiaries has received written notice from a
Governmental Entity that any product being distributed, processed
44
or sold by Receiver or any of its Subsidiaries are the subject of any warning letter,
notice of violation, seizure, injunction, regulatory enforcement action, or criminal action
issued, initiated, or, threatened by the FDA, or any comparable state, federal or foreign
governmental entity during the three (3)-year period prior to the date hereof, except for
any such notices as would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect on Receiver.
(iv) Neither Receiver nor any of its Subsidiaries has received any written notice from
the FDA or any other comparable state, federal or foreign Governmental Entity that it has
commenced, any action to withdraw approval, place sales or marketing restrictions on or
request the recall of any product distributed, processed or sold by Receiver or any of its
Subsidiaries, or that it has commenced any action to enjoin or place restrictions on the
production of any product distributed or sold by Receiver or any of its Subsidiaries,
except for any actions as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Receiver.
(v) To the Knowledge of Receiver, no officer, employee or agent of Receiver or of its
Subsidiaries has made an untrue statement of a material fact or fraudulent statement to the
FDA or any other comparable Governmental Entity, failed to disclose a material fact
required to be disclosed to the FDA or any other comparable Governmental Entity, or
committed an act, made a statement, or failed to make a statement that, at the time such
disclosure was made, would reasonably be expected to provide a basis for the FDA or any
other comparable Governmental Entity to invoke its policy respecting “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56 Federal
Register 46191 (September 10, 1991) or any similar policy, except, in each case, as would
not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect on Receiver.
Section 4.2 Representations and Warranties Regarding Safety and Parent. Except as
otherwise disclosed in the corresponding sections or subsections of the letter (the “Safety
Disclosure Letter”) delivered to Receiver by Parent and Safety upon or prior to the execution
of this Agreement, or as expressly permitted or required by this Agreement or any agreement
contemplated hereby, Safety and Parent jointly and severally represent and warrant to Receiver and
agree as follows:
(a) Organization, Standing and Power. Each of Parent and Safety is a corporation or
other legal entity duly organized, validly existing and in good standing (with respect to
jurisdictions that recognize such concept) under the laws of the jurisdiction in which it is
organized and has the requisite corporate or other power, as the case may be, and authority to
enable it to own, lease or otherwise hold its properties and assets and to conduct its Businesses
in the manner in which it is currently being conducted, except where the failure to be so
organized, existing and in good standing or
45
to have such power and authority, individually or in the aggregate, would not be reasonably
expected to have a Material Adverse Effect on Safety or Parent, as the case may be. Each of Parent
and Safety is duly qualified or licensed to do business in each jurisdiction where the nature of
its Business or the ownership or leasing of its properties make such qualification or licensing
necessary, except where the failure to be so qualified or licensed, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on Safety or Parent.
Safety and Parent have made available to Receiver prior to the execution of this Agreement true and
complete copies of the Articles of Organization of Safety, the limited liability company agreement
of Safety, the memorandum of association and articles of association of Parent, in each case as
amended to the date of this Agreement.
(b) Subsidiaries. All of the outstanding shares of capital stock of, or other equity
interests in, Safety are owned, directly or indirectly, by Parent, free and clear of all Liens.
Safety does not have any Subsidiaries and does not own, directly or indirectly, any capital stock,
membership interest, partnership interest, joint venture interest or other equity interest in any
other Person.
(c) Capital Structure.
(i) All limited liability interests in Safety are held by QB Holdings.
(ii) There are no preemptive or similar rights on the part of any holder of any class
of securities of Safety. Safety does not have outstanding any bonds, debentures, notes or
other obligations the holders of which have the right to vote (or which are convertible
into or exercisable for securities having the right to vote) with the sole member of Safety
on any matter submitted to shareholders or a separate class of holders of capital stock.
There are not, as of the date hereof, and as of the Effective Time there will not be any
options, warrants, restricted stock, restricted stock units, calls, rights, convertible or
exchangeable securities, “phantom” stock rights, stock appreciation rights, stock-based
performance units, commitments, contracts, arrangements or undertakings of any kind to
which Safety or any of its Affiliates is a party or by which Safety or any of its
Affiliates is bound (i) obligating Safety to issue, deliver, sell or transfer or
repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or
transferred or repurchased, redeemed or otherwise acquired, any equity interest in Safety,
or any security exchangeable or exercisable for or convertible into any shares of the
capital stock of, or other equity interest in Safety, (ii) obligating Safety to
issue, grant, extend or enter into any such option, warrant, call, right, security,
commitment, contract, arrangement or undertaking, (iii) obligating Safety pursuant
to any right of first offer, right of first negotiation, right of first refusal, co-sale or
similar provisions or (iv) giving any Person the right to receive any economic
benefit or right similar to or derived from the economic benefits and rights accruing to
holders of capital stock of, or other equity interests in Safety.
46
As of the date hereof, there are no outstanding contractual obligations of Safety to
sell, repurchase, redeem or otherwise acquire or to register any shares of capital stock
of, or other equity interests in, Safety. There are no proxies, voting trusts or other
agreements or understandings to which Safety is a party or is bound with respect to the
voting of the capital stock of, or other equity interests in, Safety.
(d) Authority for Agreements.
(i) Each of Parent and Safety has all requisite corporate power or other power and
authority to execute and deliver this Agreement, to perform its obligations hereunder and,
subject to the approval of this Agreement and the Merger by the holders of a majority of
the outstanding shares of Parent stock entitled to vote in accordance with applicable Law
and Parent’s Constituent Documents (the “Parent Shareholder Approval”), to
consummate the Merger and the other transactions contemplated hereby. The execution,
delivery and performance of this Agreement by each of Parent and Safety and the
consummation by each of Parent and Safety of the Merger and the other transactions
contemplated hereby have been duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Safety and Parent are necessary
for them to authorize this Agreement or to consummate the transactions contemplated hereby,
except for Parent Shareholder Approval. This Agreement has been duly and validly executed
and delivered by each of Parent and Safety and, assuming due authorization, execution and
delivery by Receiver, is a legal, valid and binding obligation of each of Parent and
Safety, enforceable against each of Parent and Safety in accordance with its terms, except
that such enforceability (i) may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting or relating to the enforcement of
creditors’ rights generally and (ii) is subject to general principles of equity
(regardless of whether considered in a proceeding in equity or at law).
(ii) QB Holdings, as sole member of Safety, duly and unanimously adopted resolutions
(A) approving this Agreement, the Merger and the other transactions contemplated
hereby, (B) determining that the terms of the Merger and the other transactions
contemplated hereby are fair to and in the best interests of Safety and QB Holdings and
(C) rendering restrictions on business combinations, if any, contained in the LLC
Act hereby inapplicable to this Agreement, the transactions contemplated by this Agreement
and to Receiver and its Subsidiaries.
(iii) The Board of Directors of Parent, at a meeting duly called and held, duly
adopted resolutions (A) approving this Agreement, the Merger and the other
transactions contemplated hereby, (B) resolving that this Agreement would promote
the success of the Parent and would be in the best interests of its shareholders as a
whole, (C) resolving to recommend that Parent’s shareholders
47
approve this Agreement, the Merger and the other transactions contemplated hereby in
the manner required by LR13.3.1R(5) of the Listing Rules of the Financial Service Authority
(the “Parent Recommendation”) and to take all steps necessary to obtain such
approval (including the preparation and posting to the Parent’s shareholders of a Circular)
and (D) rendering any restrictions on business combinations inapplicable to this
Agreement, the transactions contemplated by this Agreement and Receiver and its
Subsidiaries.
(e) Consents and Approvals; No Violations.
(i) Assuming compliance with the matters set forth in Section 4.2(e)(ii) and Section
4.2(e)(iii) and the receipt of Parent Shareholder Approval, the execution and delivery of
this Agreement by each of Parent and Safety does not, and the performance by each of Parent
and Safety of its respective obligations hereunder, including the consummation of the
transactions contemplated hereby will not, (A) conflict with any provision of
Safety’s or Parent’s Constituent Documents; (B) result (with or without the giving
of notice or the lapse of time or both) in any violation of or default or loss of a benefit
under, or permit the acceleration, amendment or termination of any obligation under, any
mortgage, indenture, lease, permit, concession, grant, franchise, license, agreement or
other instrument or obligation to which Parent or Safety is a party or by which Parent or
Safety or any of their respective properties, assets or rights are bound;
(C) violate any Law binding upon or applicable to Parent or Safety;
(D) result in the creation or imposition of any Lien upon any properties, assets or
rights of Parent or Safety or (E) cause the suspension or revocation of any permit,
license, governmental authorization, consent or approval under which Parent or Safety
conducts its business, except in the case of clauses (B), (C), (D)
and (E) above, which would not either (x) prevent or materially impede the ability
of Parent or Safety to consummate (or cause the consummation) the transactions contemplated
hereby or (y) reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Safety.
(ii) Except for (A) Parent Shareholder Approval, (B) such consents or
approvals listed in Section 4.2(e)(ii) of the Safety Disclosure Letter and (C)
those consents or approvals the failure of which to be obtained would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on Safety, no
consent or approval of any other Person (other than any Governmental Entity) is required to
be obtained by Safety for the execution, delivery or performance of this Agreement by
Safety, the performance by Safety of its obligations hereunder or the consummation by
Safety of the transactions contemplated hereby.
(iii) Except with respect to those consents, approvals, orders, authorizations,
declarations, registrations or filings the failure of which to be
48
made or obtained would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Safety or prevent or materially impede the ability
of Parent or Safety to consummate (or cause the consummation of) the transactions
contemplated hereby, no consent, approval, order or authorization of, or declaration,
registration or filing with, or notice to, any Governmental Entity is required to be made
or obtained by Safety or Parent in connection with the execution or delivery of this
Agreement by Safety and Parent or the consummation by Safety and Parent of the transactions
contemplated hereby, except for (i) compliance by Safety with the HSR Act and
(ii) the filing of the applicable Certificate of Merger with the Secretary of State
of the State of North Carolina and the Secretary of State of Delaware in accordance with
the LLC Act and the DGCL, respectively.
(f) Financial Statements.
(i) Section 4.2(f) of the Safety Disclosure Letter sets forth true and complete copies
of unaudited financial statements of Safety at and for the periods ended May 31, 2005, May
31, 2006 and May 31, 2007 and all subsequent unaudited interim financial statements at and
for the period ended November 31, 2007, in each case prepared on a consistent basis and in
accordance with GAAP (subject, in the case of such interim financial statements, to normal
year-end adjustments, which will not be material to Safety) (together, the “Safety
Financial Statements”). The Safety Financial Statements present fairly, in all
material respects, the financial position, results of operations and cash flows of Safety
at and for the respective periods indicated, in each case in conformity with GAAP and have
been prepared in accordance with the books and records of Safety.
(ii) The Safety Audited Financial Statements will, when delivered, (x) be
prepared in accordance with GAAP applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and (y) present fairly, in all
material respects, the financial position of Safety as at the dates thereof and the results
of its operations and its cash flows for the periods then ended, in each case in conformity
with GAAP.
(iii) Safety’s system of internal accounting controls provides reasonable assurance:
(x) that transactions are recorded as necessary to permit preparation of financial
statements in accordance with IFRS; (y) that receipts and expenditures are made
only in accordance with management’s general or specific authorization; and (z)
regarding prevention or timely detection of the unauthorized acquisition, use or
disposition of Safety’s assets that could materially affect Safety’s financial statements.
Safety has disclosed, based on its most recent evaluation of such internal controls and
procedures prior to the date hereof to its independent auditors and its member (A)
any significant deficiencies and material weaknesses in the design or operation of Safety’s
internal controls
49
over financial reporting that are reasonably likely to adversely affect in any
material respect Safety’s ability to record, process, summarize and report financial
information and (B) any fraud, whether or not material, that involves management or
other employees of Safety who have a significant role in Safety’s internal controls over
financial reporting. Safety has provided to Receiver any such disclosure made by
management to Safety’s independent auditors and its member.
(g) Parent Controls. The system of internal control of the Parent and its
Subsidiaries, so far as it relates to Safety and the business carried on by Safety, is as described
on pages 47 and 48 of the annual report of Parent for the year ended 31 May 2007, (ii) Parent and
its Subsidiaries operate an internal system of controls which is sufficient to facilitate
compliance by Parent with all applicable Laws (including the Listing Rules and Disclosure and
Transparency Rules of the Financial Services Authority) in relation to the making of announcements
and public filings in connection with Safety and the business carried on by Safety and (iii) Parent
has complied with all such Laws in relation to the making of all such announcements and public
filings.
(h) Absence of Certain Changes or Events. From November 30, 2007 through the date
hereof, there has not been any state of facts, change, development, effect, condition or occurrence
that, individually or in the aggregate, would reasonably be expected to have a Material Adverse
Effect on Safety. From November 30, 2007 through the date hereof, Safety has conducted its
Business in all material respects only in the ordinary course of business consistent with past
practice and there has not been:
(i) any declaration, setting aside or payment of any dividend on, or other
distribution (whether in cash, stock or property) in respect of, any of Safety’s capital
stock, equity or voting interests;
(ii) any purchase, redemption or other acquisition of any equity or voting interests
in Safety or any options, warrants, calls or rights to acquire such interests;
(iii) any amendments, changes or other modifications to the Constituent Documents of
Safety;
(iv) any incurrence of material Indebtedness;
(v) any split, combination or reclassification of any of Safety’s capital stock or
other equity or voting interests or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares of capital
stock of, or other equity or voting interests in, Safety;
(vi) except as required to comply with applicable Law, any contract existing on the
date hereof, any provision of any Safety Employee Plan, or
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Safety’s compensation policies as in effect on the date hereof, (A) any
granting by Safety to any current or former director or executive officer of any material
increase in compensation, bonus or other benefits or (B) any granting to any
current or former director or executive officer of the right to receive any material
severance or termination pay, or material increases therein;
(vii) except (A) as expressly required under any Safety Employee Plan or award
agreement thereunder existing on December 31, 2007, (B) as required to comply with
applicable Law or (C) payments or grants to any non-executive officer,
(i) any compensatory grant of Safety limited liability interests or Parent stock or
other award the value of which is measured by reference to Safety limited liability
interests or Parent stock and for which Safety could have any liability or obligation
(each, a “Safety or Parent Equity Award”), (ii) any settlement of any
Safety or Parent Equity Award (whether for cash or Safety limited liability interests or
Parent stock) or (iii) the removal or modification of any restrictions with respect
to any Safety or Parent Equity Award (including any discretionary vesting of Safety or
Parent Equity Award);
(viii) except (x) to the extent required to comply with applicable Law
(including amendments to the extent necessary or deemed reasonably advisable by Safety to
bring Safety Employee Plans into compliance with Section 409A of the Code without material
increase in costs to Receiver of such plans, as amended), (y) for terminations,
adoptions and amendments of broad-based Safety Employee Plans or non-executive officer
Safety Employee Plans in the ordinary course of business consistent with past practice and
(z) for terminations, adoptions, or amendments which relate to similarly situated
employees of Parent and its Subsidiaries and for which Parent will at all times be solely
liable, (A) any termination, adoption, or amendment or any agreement to terminate,
adopt or amend in each case in any material respect any Safety Employee Plan (including any
such plan that would constitute a Safety Employee Plan if it were to be adopted and
including any related trust agreement or other operative agreement relating to a Safety
Employee Plan), (B) any material change or agreement to materially change any
actuarial or other assumption used to calculate funding obligations with respect to any
Safety Employee Plan (C) any material change in the timing or manner in which
contributions to any Safety Employee Plan are made or the basis on which such contributions
are determined or (D) any acceleration of the vesting of benefits or awards, or
other material changes to the timing or manner in which benefits or awards vest under any
Safety Employee Plan;
(ix) any material change in financial or tax accounting methods, principles or
practices by Safety, except insofar as may have been required by a change in IFRS or
applicable Law or regulations;
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(x) any revaluation by Safety of any assets that are material to Safety;
(xi) any consummation of, or entrance into any agreement for, any acquisition, by
means of merger or otherwise, of any material properties, rights, assets or securities or
any sale, lease, license, encumbrance or other disposition of material assets, property
rights or securities, in each case involving the payment or receipt of consideration of
$675,000 or more (inclusive of assumed debt), except for purchases, sales or licensing
arrangements made in the ordinary course of business and consistent with past practice;
(xii) any institution, settlement or agreement to settle any material litigation,
action or proceeding before any Governmental Entity;
(xiii) any resignation or termination, or, to the Knowledge of Safety, written notice
of any pending resignation or termination, of any executive officer of Safety; or
(xiv) any material increase or decrease in the aggregate number of Persons employed by
Safety, taken as a whole, except increases or decreases in the ordinary course of business
consistent with past practice.
(i) Litigation. As of the date hereof, there is (i) no material Claim pending
or, to the Knowledge of Safety, threatened in writing, against or involving Safety or Parent, or
Safety’s respective assets, properties or rights, or, to the Knowledge of Safety, any of Safety’s
officers, employees or directors in their capacity as such and (ii) no material order of
any Governmental Entity or arbitrator is outstanding against Safety.
(j) Compliance with Laws and Regulations.
(i) (A) Safety is and, since January 1, 2005 has been, in compliance with all
applicable Laws (including Laws relating to HIPAA and other applicable federal and state
privacy and data protection Laws) and, (B) to the Knowledge of Safety, is not under
investigation with respect to, and since January 1, 2005 has not been threatened to be
charged with or given notice of any material violation of, any Law, except, in the case of
(A) or (B), for any violations or non-compliance that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect on Safety.
Notwithstanding anything contained in this Agreement to the contrary, no representation or
warranty shall be deemed to be made in this Section 4.2(j)(i) to the extent otherwise
covered by representations and warranties contained in Section 4.2(f) (Safety Financial
Statements), Section 4.2(k) (Environmental Matters), Section 4.2(m) (Taxes), Section 4.2(o)
(Employee Benefit Plans) or Section 4.2(t) (Labor Matters).
52
(ii) Safety possesses all federal, state, local and foreign governmental licenses,
authorizations, consents, permits, registrations and approvals, and has otherwise satisfied
all applicable legal or regulatory requirements, necessary for it to own, lease or operate
its properties and assets and to carry on its Business as now conducted (collectively,
“Safety Permits”), and no default has occurred under any such Safety Permit, except
where such failure or default thereunder would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Safety. Safety has not
received since January 1, 2006 written notification from any Governmental Entity of any
intent to revoke or terminate any such Safety Permit, except for any such revocation or
termination which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect on Safety.
(k) Environmental Matters. Except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on Safety, (i) Safety is, and
since January 1, 2005 has been, in compliance with all applicable Environmental Laws,
(ii) there are no pending or, to the Knowledge of Safety, threatened, Claims alleging a
violation of or liability under any Environmental Law by Safety and (iii) no Releases of
Hazardous Substances have occurred at, on, above, under or from any properties currently or
formerly owned, leased, operated or used by Safety or any predecessors in interest that have
resulted or are reasonably likely to result in any investigation or remediation by Safety under any
Environmental Law. Safety has made available to Receiver a copy of all material environmental
reports in Safety’s possession relating to environmental conditions at any property currently owned
or leased by Safety. This Section 4.2(k) and Section 4.2(o) and Section 4.2(t) set forth the sole
representations and warranties of Safety with respect to environmental or occupational health or
safety matters, including all matters arising under Environmental Laws.
(l) Absence of Undisclosed Liabilities. Safety does not have any liabilities, known
or unknown, contingent or otherwise that are of a nature that would be required to be disclosed by
IFRS, except for liabilities (a) set forth in the books and records of Safety used to
prepare the Safety Financial Statements, (b) incurred in the ordinary course of business
consistent with past practice since the date of such financial statements which would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on
Safety, (c) which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Safety or (d) expressly permitted and contemplated
by this Agreement.
(m) Taxes.
(i) Safety has (A) duly and timely filed with the appropriate Taxing
Authorities all material Tax Returns required to be filed by Safety in respect of any
Taxes, which Tax Returns were true, correct and complete in all material respects,
(B) duly and timely paid or withheld all material Taxes that are due and
53
payable by Safety, whether or not such Taxes were shown as due on any Tax Returns and
(C) complied in all material respects with all Laws applicable to the withholding
of Taxes and has timely withheld and paid over to the respective proper Taxing Authorities
all material amounts required to be so withheld and paid over.
(ii) There (A) is no material deficiency, claim, audit, suit, proceeding,
request for information or investigation now pending or outstanding, or to the Knowledge of
Safety threatened, against or with respect to Safety in respect of any Taxes or Tax Returns
and (B) are no closing agreements, private letter rulings, technical advice
memoranda or similar agreements or rulings entered into or issued by any Taxing Authority
with or to Safety that affected or could reasonably be expected to affect, to a material
extent, the taxable income or loss of Safety for a taxable year beginning on or after
January 1, 2000 in the case of U.S. federal income Taxes or on or after January 1, 2003 in
the case of other Taxes (in the case of U.S. federal income Taxes without taking into
account any net operating losses carried over from a taxable year beginning prior to
January 1, 2000, and in the case of other Taxes without taking into account any net
operating losses carried over from a taxable year beginning prior to January 1, 2003).
(iii) The consolidated U.S. federal income Tax Returns which include Safety have been
examined by the IRS (or the applicable statutes of limitation for the assessment of U.S.
federal income Taxes for such periods have expired) for all periods through and including
May 31, 2005. Safety has not granted, in writing, any requests, agreements, consents or
waivers to extend the statutory period of limitations applicable to the assessment of any
Taxes with respect to any such Tax Returns of Safety which is currently in effect.
(iv) Since January 1, 2000, Safety has not constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of
the Code) in a distribution of stock intended to qualify for tax-free treatment under
Section 355 of the Code.
(v) Safety has not agreed to make and is not required to make any material adjustment
under Section 481(a) of the Code by reason of a change in accounting method that affected
or could reasonably be expected to affect, to a material extent, the taxable income or loss
of Safety for a taxable year beginning on or after January 1, 2000 in the case of U.S.
federal income Taxes or on or after January 1, 2003 in the case of other Taxes (in the case
of U.S. federal income Taxes without taking into account any net operating losses carried
over from a taxable year beginning prior to January 1, 2000, and in the case of other Taxes
without taking into account any net operating losses carried over from a taxable year
beginning prior to January 1, 2003).
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(vi) Safety has not been a member of any affiliated group within the meaning of
Section 1504(a) of the Code, or any similar affiliated, combined, consolidated or unitary
group for tax purposes under state, local or foreign Law (in all cases, other than a group
the common parent of which is DGP or any Subsidiary of DGP) and does not have any liability
(including pursuant to any tax sharing agreement, as transferee or successor or otherwise)
for the Taxes of any Person (other than DGP and its Subsidiaries) under Treasury
Regulations Section 1.1502-6 or any similar provision of state, local or foreign Law.
(vii) Safety has not participated in any “listed transaction” or “transaction of
interest” (within the meaning of Treasury Regulations §§1.6011-4(c)(3)(i)(A)) and (E)) that
affected or could reasonably be expected to affect, to a material extent, the U.S. federal
taxable income or loss of Safety for a taxable year beginning on or after January 1, 2000
(without taking into account any net operating losses carried over from a taxable year
beginning prior to January 1, 2000).
(viii) Subject to clause (ii) of Section 2.8, Safety has not taken or agreed to take
any action (nor is it aware of any agreement, plan or circumstance) that to the Knowledge
of Safety is reasonably likely to prevent the Merger from being treated as a reorganization
under Section 368(a) of the Code.
(ix) Safety is not, nor has Safety been at any time during the period described in
Section 897(c)(1)(A)(ii) of the Code, a “United States real property holding corporation”
within the meaning of Section 897 of the Code.
(n) Real Property; Title to Properties; Absence of Liens.
(i) Safety does not have an ownership interest in any real property.
(ii) Section 4.2(n) of the Safety Disclosure Letter sets forth, as of the date hereof,
a true and complete list of all material real property leased or subleased to or by Safety
or in which Safety has an interest (collectively, the “Safety Leased Real
Property”). Safety has a valid leasehold interest, in all material respects, in all
Safety Leased Real Property leased by Safety free and clear of all Liens except Permitted
Liens.
(iii) With respect to the Safety Leased Real Property, (A) each of the
agreements by which Safety has obtained a leasehold interest in such Safety Leased Real
Property (each, a “Safety Lease”) is, to the Knowledge of Safety, in full force and
effect in accordance with its respective terms, (B) to the Knowledge of Safety,
there exists no default under any Safety Lease and no circumstance exists which, with or
without the giving of notice, the passage of time or both, would constitute or result in
such a default and (C) to the Knowledge of Safety,
55
there are no leases, subleases, licenses, concessions or any other contracts granting
to any Person other than Safety any right to the possession, use, occupancy or enjoyment of
any Safety Leased Real Property or any portion thereof,.
(iv) Safety has good and valid title to, or, in the case of leased properties and
assets, valid leasehold interests in, all of its tangible assets and properties, in each
case free and clear of all Liens, except where failure to have such good and valid title or
a valid leasehold interest, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Safety.
(v) The properties, assets and rights presently owned, leased or licensed by Safety
include all properties, assets and rights necessary to permit Safety to conduct its
Business in all material respects in the same manner as its Business is being conducted as
of the date of this Agreement after giving effect to the actions contemplated by Section
6.9(a) and Section 6.9(b) and the execution and delivery of the Trademark Agreement and the
Software Agreement as of the Effective Time.
(o) Employee Benefit Plans.
(i) Section 4.2(o)(i) of the Safety Disclosure Letter contains as of the date hereof a
true and complete list of all material Safety Employee Plans. “Safety Employee
Plans” means all “employee benefit plans” (as defined in Section 3(3) ERISA, including
multiemployer plans within the meaning of Section 3(37) of ERISA) and all employment,
consulting, severance, change-in-control or similar contracts, plans or policies and other
plans (written or oral) providing for compensation, bonuses, profit-sharing, stock option
or other stock or equity related rights, incentive or deferred compensation, insurance
(including any self-insured arrangements), health or medical benefits, vacation, fringe
benefits, severance benefits or post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits), (A) under which
any current or former employee, manager, director or consultant of Safety (“Safety
Employees”) has any present or future right to benefits and that is maintained or
contributed to by Safety or Parent or any of its Subsidiaries or (B) that is
maintained or contributed to by Safety and that Safety or the Surviving Company or any of
their respective Subsidiaries will have any present or future liability, other than benefit
arrangements required by applicable Law.
(ii) With respect to each material Safety Employee Plan (and, if applicable, related
trusts, funding agreements or insurance policies), Safety has made available to Receiver a
current and complete copy thereof and all amendments thereto, and to the extent applicable,
(w) for the three most recent
56
plan years (A) annual actuarial valuation reports, (B) Forms 5500
(including all schedules thereto) and Forms 990 and (C) audited financial reports,
prepared in connection with any Safety Employee Plan or related trust, (x) the most
recent determination letter, if applicable, (y) the most recent summary plan
description and other material written communications by Parent or Safety to Safety
Employees and (z) a summary of any material amendments or changes scheduled to be
made to the Safety Employee Plan during the twelve months immediately following the date
hereof, other than amendments or changes to reflect a change in applicable Law.
(iii) (A) Each Safety Employee Plan that is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from the IRS to
the effect that such Safety Employee Plan is qualified and exempt from U.S. federal income
Taxes under Sections 401(a) and 501(a), respectively, of the Code, or has pending with the
IRS an application for such letter, or is entitled to rely on an opinion letter from the
IRS, and all terms and conditions of each determination letter or opinion letter, as
appropriate, have been complied with; (B) no such determination letter has been
revoked or denied nor, to the Knowledge of Safety, has revocation or denial been
threatened, and no event has occurred, and no condition exists, that would reasonably be
expected to result in the revocation or denial of any determination letter; (C)
each Safety Employee Plan has been established and maintained in material compliance with
its terms and with the requirements of Law, including ERISA and the Code, that are
applicable to such Safety Employee Plan; (D) there are no pending, or, to the
Knowledge of Safety, threatened or anticipated claims (other than routine claims for
benefits) involving a Safety Employee Plan which could reasonably be expected to result in
any material liability to Safety and (E) all contributions or other amounts payable
by Safety as of the date hereof with respect to each Safety Employee Plan have been paid or
accrued in accordance with IFRS (other than with respect to amounts not yet due).
(iv) Safety does not have any obligations for post-employment health or life benefits
for retired, former or current employees of Safety, except as required by Law.
(v) The consummation of the Merger and the other transactions contemplated hereby will
not, alone or in connection with any other events, result in any payment or deemed payment
that could reasonably be construed to constitute an “excess parachute payment” for purposes
of Section 280G or 4999 of the Code. Except as set forth in Section 4.2(o)(v) of the
Safety Disclosure Letter, no person is entitled to receive any additional payment from
Safety as a result of the imposition of the excise tax under Section 4999 of the Code.
57
(vi) Except as specifically provided herein, the consummation of the Merger and the
other transactions contemplated hereby will not (A) entitle any current or former
director, officer, manager or employee of Safety to severance pay, (B) accelerate
the time of payment or vesting or trigger any payment or funding (whether through a grantor
trust or otherwise) of compensation or benefits under, increase the amount allocable or
payable or trigger any other material obligation pursuant to, any of the Safety Employee
Plans or (C) result in any breach or violation of, or any default under, any of the
Safety Employee Plans.
(vii) No Safety Employee Plan is subject to Title IV of ERISA, and Safety has no
liability of any kind whatsoever, whether direct, indirect, contingent or otherwise, under
Section 412 of the Code or Title IV of ERISA. Neither Safety nor any of its Affiliates
has, at any time during the last six years, contributed to or been obligated to contribute
to any “multiemployer plan”, as defined in Section 3(37) of ERISA, or any employee benefit
plan, program or arrangement that is subject to Title IV of ERISA or Section 412 of the
Code.
(viii) There is no pending or, to the Knowledge of Safety, threatened material
litigation, investigation, action, suit, audit or proceeding relating to the Safety
Employee Plans by or before any Governmental Entity.
(ix) Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Safety, (A) all Safety Foreign Benefit
Plans are in compliance with applicable foreign law and (B) any such Safety Foreign
Benefit Plan required to be registered under applicable Law has been so registered and has
been maintained in good standing with all applicable regulatory authorities.
(x) Each Safety Employee Plan that is a Nonqualified Deferred Compensation Plan and
any award thereunder has been operated since January 1, 2005 based upon a good faith,
reasonable interpretation of Section 409A of the Code and any authority required or
permitted to be relied upon thereunder, including, without limitation, (x) the
proposed regulations issued thereunder, (y) the final regulations issued thereunder
or (z) Internal Revenue Service Notice 2005-1.
(p) Voting Requirements. (i) Parent Shareholder Approval at a Parent
Shareholders Meeting is the only vote of the holders of any class or series of Parent’s capital
shares and (ii) the approval of QB Holdings, as sole member of Safety, which approval has
been obtained, is the only approval of the holders of any equity interests in Safety, in each case
necessary to approve or adopt this Agreement, the Merger and the other transactions contemplated
hereby.
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(q) Brokers; Schedule of Fees and Expenses. Except for Xxxxxx Brothers, Deutsche Bank
and JPMorganCazenove, the costs and expenses of which shall be paid by Parent or Safety, as the
case may be, Safety and Parent have not engaged any investment banker, broker or finder in
connection with the transactions contemplated by this Agreement who might be entitled to any fee or
any commission in connection with or upon consummation of the Merger or the other transactions
contemplated hereby.
(r) Intellectual Property.
(i) Owned Intellectual Property. Schedule 4.2(r)(i) of the Safety Disclosure
Letter lists as of the date hereof all Intellectual Property owned by Safety (the
“Safety Owned Intellectual Property”) that is registered or subject to an
application for registration and that is material to the Business of Safety. Safety is the
exclusive owner of the Safety Owned Intellectual Property set forth in Schedule 4.2(r)(i)
of the Safety Disclosure Letter and, to the Knowledge of Safety, of the Trade Secrets owned
by Safety free and clear of any Liens other than Permitted Liens. To the Knowledge of
Safety, the Safety Owned Intellectual Property is subsisting, valid and enforceable.
(ii) Licenses and Other Agreements. Schedule 4.2(r)(ii) of the Safety
Disclosure Letter lists as of the date hereof all material agreements to which Safety is a
party or by which any of them is otherwise bound that relate to Intellectual Property that
Safety reasonably anticipates will involve aggregate payments or consideration furnished by
or to Safety of more than $1,000,000 in any year (the “Safety Licenses”), other
than the Safety Contracts that are set forth on Schedule 4.2(u), including (A)
material licenses of Intellectual Property to Safety by any other Person,
(B) material licenses of Intellectual Property to any other Person by Safety,
(C) material agreements otherwise granting or restricting the right to use
Intellectual Property and (D) material agreements transferring, assigning,
indemnifying with respect to or otherwise relating to Intellectual Property used or held
for use in the Business of Safety. The representations in Section 4.2(u) shall apply to
the Safety Licenses, provided, however, that the representations in Section
4.2(u) shall not be interpreted to require disclosure of a Safety Contract or Safety
License solely for the reason of Safety being prohibited from soliciting employees or
personnel of a party to a Safety Contract or Safety License to the extent that such party’s
employees or personnel are providing services to Safety in the normal course of the
business of Safety if disclosure of such Safety Contract or Safety License would not
otherwise be called for.
(iii) No Infringement. To the Knowledge of Safety, except as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect
on Safety, the conduct of the Businesses conducted by Safety does not infringe or otherwise
conflict with the rights of any Person in respect of any Intellectual Property, and Safety
has not received any written notice alleging the
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foregoing, or challenging the ownership or validity of any Safety Owned Intellectual
Property (including any cancellation, opposition, or other action before an intellectual
property registry). To the Knowledge of Safety, none of the Safety Owned Intellectual
Property is being infringed or otherwise used or being made available for use by any Person
without a license or permission from Safety.
(iv) Protection of Intellectual Property. Safety has taken commercially
reasonable actions to ensure protection of the Safety Owned Intellectual Property under
applicable Law (including making and maintaining in full force and effect all necessary
filings, registrations and issuances). Safety has taken commercially reasonably actions to
maintain the secrecy of all confidential Intellectual Property used in the Business of
Safety. To the Knowledge of Safety, Safety is not using any material Safety Owned
Intellectual Property in a manner that would reasonably be expected to result in the
cancellation or unenforceability of such Safety Owned Intellectual Property.
(v) Assignment; Privacy. Each employee of Safety or other Person who has
created any Intellectual Property to be owned by Safety has validly and irrevocably
assigned all of his, her or its rights in such Intellectual Property to Safety. Safety is
in compliance with all applicable contractual and legal requirements pertaining to
information privacy and security, including, without limitation, any privacy policy
concerning the collection and use of personally-identifiable information, except where such
failure would not reasonably be expected to have a Material Adverse Effect on Safety.
(s) Insurance. Safety maintains policies of insurance in such amounts and against
such risks as are reasonably customary in the industries in which Safety operates (taking into
account the cost and availability of such insurance). Except as would not reasonably be expected
to have a Material Adverse Effect on Safety, all such insurance policies are in full force and
effect and will not terminate or lapse by reason of the consummation of the transactions
contemplated hereby.
(t) Labor Matters. Safety is not a party to or subject to, or currently negotiating
in connection with entering into, any collective bargaining agreement or other contract with a
labor union or organization. Since January 1, 2005, there has not occurred nor, to the Knowledge
of Safety has there been threatened, any material strike, slowdown, picketing, work stoppage,
concerted refusal to work overtime, lockout or other similar labor activity or organizing campaign
or activity with respect to any employees of Safety. There are no material labor disputes
currently subject to any grievance, arbitration, litigation or other Claim and there is no
representation, decertification or other labor-related petition or election pending or, to the
Knowledge of Safety, threatened with respect to any employee of Safety. Safety is in compliance
with all applicable Laws relating to the employment of the Safety Employees, including Laws
relating to wages, employee and independent contractor classification, hours, collective
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bargaining, discrimination, civil rights, safety and health, worker notification requirements,
immigration, workers’ compensation, layoffs and the collection and payment of withholding Taxes and
similar Taxes, except for such noncompliance, individually or in the aggregate, as would not
reasonably be expected to have a Material Adverse Effect on Safety. There are and at Closing,
there will be no Persons on the payroll of or otherwise employed by Safety who principally perform
duties or services for Parent or any Affiliate of Parent (other than Safety) or other Person.
(u) Contracts. Except as listed in Schedule 4.2(u) of the Safety Disclosure Letter,
as of the date hereof, Safety is neither a party to nor bound by any of the following which is
currently in effect with ongoing obligations of Safety (each such contract or agreement referenced
in subparts (i) through (xii) below, or Schedule 4.2(r)(ii), a “Safety Contract”):
(i) any agreement relating to direct or indirect Indebtedness of Safety in excess of
$1,000,000, other than ordinary course trade payables and accrued expenses;
(ii) any joint venture, partnership, limited liability company or other similar
agreements or arrangements relating to the formation, creation, operation, management or
control of any partnership or joint venture material to Safety;
(iii) any agreement or series of related agreements, including any option agreement,
relating to the acquisition or disposition of any Business or material real property
(whether by merger, sale of stock, sale of assets or otherwise);
(iv) any agreement entered into with (A) any Person directly or indirectly
owning, controlling or holding the power to vote, 5% or more of the outstanding voting
securities of Safety, (B) any Person 5% or more of the outstanding voting
securities of which are directly or indirectly owned, controlled or held with power to vote
by Safety or (C) any current director or executive officer of Safety or any
“associates” or members of the “immediate family” (as such terms are respectively defined
in Rule 12b-2 and Rule 16a-1 of the Exchange Act) of any such director or executive
officer;
(v) any agreement (including any exclusivity agreement) that purports to limit or
restrict in any material respect either the type of business in which Safety (or, after the
Effective Time, the Surviving Company) may engage or the manner or locations in which any
of them may so engage in any business (including any covenant not to compete) or which
would require the disposition of any material assets or line of business of Safety or,
after the Effective Time, the Surviving Company;
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(vi) any sales, distribution, agency, commission-based or other similar agreement with
third parties (x) providing for the sale by Safety of such Person’s products or services or
(y) providing for the sale by third parties of products of Safety, in each case involving
annual payments in the 2007 fiscal year or reasonably expected during the 2008 fiscal year
to or by Safety in excess of $1,000,000 in the aggregate;
(vii) any material agreement with any U.S. federal or non-U.S. Governmental Entity;
(viii) any agreement that, to the Knowledge of Safety, provides for continuing
material indemnification obligations of Safety (other than indemnification obligations
contained in (x) customer contracts or (y) contracts listed or referred to in Section
4.2(u) of the Safety Disclosure Letter);
(ix) any “take-or-pay” agreements or agreements with “most-favored nations” pricing
terms;
(x) any contract, understanding or agreement (whether or not in
writing) between Safety, on the one hand, and Parent and its Subsidiaries (other than
Safety), on the other hand;
(xi) any guarantees, indemnification obligations, letters of credit, letters of
comfort, bid bonds or performance or surety bonds or cash or other collateral relating to
the Business of Parent and its Subsidiaries (other than the Business of Safety); or
(xii) any agreement that would have been required to be filed as an exhibit to an
annual report on Form 10-K as provided by Item 601 of Regulation S-K promulgated under the
Exchange Act, if Safety was subject to the reporting requirement thereof;
Each Safety Contract is a valid and binding agreement of Safety and is in full force and effect,
enforceable against Safety, and, to the Knowledge of Safety, the counterparty thereto in accordance
with its terms, except to the extent that the failure to be valid and binding and in full force and
effect and enforceable, individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect on Safety. Neither Safety nor, to the Knowledge of Safety, any other
party thereto is in default or breach under the terms of, or has provided any written notice of any
intention to terminate, any such Safety Contract and, to the Knowledge of Safety, no event or
circumstance has occurred, or will occur by reason of this Agreement or the consummation of any of
the transactions contemplated hereby, that, with or without notice or lapse of time or both, would
constitute an event of default thereunder or would give rise to a right of termination,
acceleration or material amendment thereof, except to the extent that such
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default, breach, termination, event or circumstance would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect on Safety. True, correct and complete
copies of (i) each Safety Contract (including all material modifications and amendments
thereto) and (ii) all form contracts, agreements or instruments used in and material to
Safety have been made available to Receiver.
(v) Information Supplied. None of the information supplied or to be supplied by
Parent or Safety specifically for inclusion in the Proxy Statement will, at the time of being so
supplied 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, and Parent and Safety will update such
information in a timely manner to the extent that any previously supplied information may, with the
passage of time, 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.
(w) Affiliate Transactions. Since January 1, 2006, Safety has not engaged in any
transaction that would have been required to be disclosed pursuant to Item 404 of Regulation S-K
promulgated under the Securities Act and Exchange Act if Safety were subject to the reporting
requirements thereof during such period.
(x) Assets and Properties. After giving effect to the actions contemplated by Section
6.9(a), Section 6.9(b) and Section 6.9(e) and the execution and delivery of the Trademark Agreement
and the Software Agreement, the assets and properties (including Intellectual Property) owned,
leased or licensed by Safety constitute all of the assets and properties (including Intellectual
Property) used or held for use by Parent or any of Parent’s Subsidiaries or Affiliates in
connection with Parent’s healthcare business division other than (a) assets that, individually or
in the aggregate, are not material to such Business and (b) assets identified in Section 4.2(x) of
the Safety Disclosure Letter.
(y) Lack of Ownership of Receiver Common Stock. Neither Parent nor any of its
Subsidiaries or Affiliates beneficially owns or, since January 1, 2005 has beneficially owned,
directly or indirectly, any shares of Receiver Common Stock or other securities convertible into,
exchangeable into or exercisable for shares of Receiver Common Stock (other than, for the avoidance
of doubt, any shares of Receiver Common Stock that may be held in any mutual fund offered by a
Parent- or Safety-sponsored pension plan). There are no voting trusts or other agreements or
understandings to which Parent or any of its Subsidiaries or Affiliates is a party with respect to
the voting of the capital stock or other equity interest of Receiver or any of Receiver’s
Subsidiaries.
(z) Absence of Arrangements with the Surviving Company. Other than the Relationship
Agreement, the Trademark Agreement, the Transition Services Agreement and the Software Agreement,
as of the Effective Time, there will be no contracts,
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undertakings, commitments, agreements, obligations or understandings between Parent and its
Affiliates, on the one hand, and Receiver or any of its Subsidiaries or their respective Boards of
Directors, on the other hand.
(aa) Opinion of Financial Advisor. The Board of Directors of Parent has received the
opinion of Xxxxxx Brothers to the effect that, as of the date of such opinion, the value to be
received by Parent in connection with this Merger and the transactions contemplated hereby are
fair, from a financial point of view, to Parent, a signed copy of which opinion will be delivered
to Receiver solely for informational purposes after receipt thereof by Parent.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by Receiver. From the date of this Agreement until
the Effective Time, unless Parent shall otherwise consent in writing or except as set forth in
Schedule 5.1 of the Receiver Disclosure Letter or as otherwise expressly provided for in this
Agreement, Receiver shall, and shall cause each of the Receiver Subsidiaries to, conduct its
Business in a commercially reasonable manner consistent with industry practice, and shall use its
commercially reasonable efforts to preserve intact its business organization and goodwill and
relationships with customers, suppliers and others having business dealings with it, to keep
available the services of its current officers and key employees and to maintain its current rights
and franchises, in each case, consistent with industry practice. In addition to and without
limiting the generality of the foregoing, except as set forth in Schedule 5.1 of the Receiver
Disclosure Letter or as otherwise expressly permitted or required by this Agreement or as required
by applicable Law or by a Governmental Entity of competent jurisdiction, from the date hereof until
the Effective Time, without the prior written consent of Parent (which consent shall not be
unreasonably withheld, conditioned or delayed), Receiver shall not, and shall not permit any
Subsidiary of Receiver to:
(a) adopt or propose any change in the Constituent Documents of Receiver or any of its
Subsidiaries;
(b) (i) other than the Extraordinary Dividend, declare, set aside, make or pay any
dividend or other distribution (whether in cash, stock or property) in respect of any of its
capital stock except for the declaration and payment of cash dividends or distributions by any
direct or indirect wholly-owned Subsidiary of Receiver, (ii) split, combine or reclassify
any of its capital stock or issue or propose or authorize the issuance of any other securities
(including options, warrants or any similar security exercisable for, or convertible into, such
other security) in respect of, in lieu of, or in substitution for, shares of its capital stock
except for any transaction by a direct or indirect wholly-owned Subsidiary of Receiver which
remains a direct or indirect wholly-owned Subsidiary of
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Receiver after consummation of such transaction or (iii) repurchase, redeem or
otherwise acquire any shares of the capital stock of Receiver or any Subsidiary of Receiver, or any
other equity interests or any rights, warrants or options to acquire any such shares or interests,
other than pursuant to the Receiver Stock Plans and award agreements thereunder or other than for
such actions that are only in respect of shares of any direct or indirect wholly-owned Subsidiary
of Receiver;
(c) issue, sell, grant, pledge or otherwise encumber any shares of its capital stock or other
securities (including any options, warrants or any similar security exercisable for or convertible
into such capital stock or similar security) other than (i) issuances of Receiver Common
Stock pursuant to the exercise of options outstanding on the date hereof, issuances of Receiver
Common Stock in settlement of restricted stock units outstanding on the date hereof, issuances
required by employee stock purchase plans and other equity-based securities outstanding on the date
hereof, (ii) issuances by a wholly-owned Subsidiary of Receiver of capital stock to such
Subsidiary of Receiver’s parent or another wholly-owned Subsidiary of Receiver, (iii)
issuances pursuant to the Convertible Debentures and (iv) in accordance with Schedule 5.1
of the Receiver Disclosure Schedule;
(d) merge or consolidate with any Person (other than Receiver or a wholly-owned Subsidiary of
Receiver) or acquire a material amount of the assets or equity of any other Person (other than
Receiver or a wholly-owned Subsidiary of Receiver), other than (i) acquisitions disclosed
on the Schedule 5.1 of the Receiver Disclosure Letter and (ii) acquisitions the fair market
value of the total consideration (including the value of indebtedness acquired or assumed) for
which does not exceed $10,000,000 for any individual acquisition, or $20,000,000 in the aggregate;
(e) sell, lease, license, subject to a Lien, other than a Permitted Lien, encumber or
otherwise surrender, relinquish or dispose of any material assets, property or rights (including
capital stock of a Subsidiary of Receiver) except (i) pursuant to existing written
contracts or commitments, (ii) in an amount not in excess of $10,000,000 in the aggregate,
or (iii) pursuant to non-exclusive licensing agreements in the ordinary course of business
consistent with past practice;
(f) (i) make any loans, advances or capital contributions to, or investments in, any
other Person other than (x) by Receiver or any Subsidiary of Receiver to or in Receiver or
any Subsidiary of Receiver or (y) pursuant to any contract or other legal obligation
existing at the date of this Agreement or (ii) create, incur, guarantee or assume any
Indebtedness, issuances of debt securities, guarantees, loans or advances not in existence as of
the date of this Agreement, except Indebtedness not to exceed $10,000,000 in the aggregate and
obtained on customary commercial terms for a valid business purpose, Indebtedness in replacement of
existing Indebtedness on customary commercial terms, and guarantees by Receiver of Indebtedness of
wholly-owned
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Subsidiaries of Receiver or guarantees by the Receiver Subsidiaries of Indebtedness of
Receiver;
(g) subject to Section 6.10(e), amend or otherwise modify benefits under any Receiver Employee
Plan in any material respect, accelerate the payment or vesting of benefits or amounts payable or
to become payable under any Receiver Employee Plan as currently in effect on the date hereof in any
material respect, fail to make any required contribution to any Receiver Employee Plan in any
material respect, merge or transfer any Receiver Employee Plan or the material assets or
liabilities of any Receiver Employee Plan, change the sponsor of any Receiver Employee Plan, or
terminate or establish any material Receiver Employee Plan, except in each case as reasonably
appropriate to reflect changes in applicable Law or GAAP;
(h) grant any increase in the compensation or benefits of directors, officers, employees or
consultants of Receiver or any Subsidiary of Receiver other than (i) increases in the
compensation of employees (other than executive officers or directors of Receiver) or consultants
in the ordinary course of business consistent with past practice, (ii) benefits increases
that are not material and that apply to all similarly situated employees or (iii) as
required by any Receiver Employee Plan or by Law;
(i) subject to Section 6.10(e), enter into or amend or modify in any material respect any
severance, consulting, retention, collective bargaining agreement or employment agreement, plan,
program or arrangement, except, in each case, (i) in the ordinary course of business
consistent with past practice (except for officers with a yearly base salary in excess of $175,000
or directors of Receiver), (ii) as required by the terms of such agreement, plan, program or
arrangement, or (iii) to comply with applicable Law;
(j) hire or terminate the employment or contractual relationship of any officer, employee or
consultant of Receiver or any Subsidiary of Receiver, as the case may be, other than hirings or
terminations in the ordinary course consistent with past practice;
(k) settle or compromise any Claim or enter into any consent decree, injunction or similar
restraint or form of equitable relief in settlement of any material Claim other than (i)
such settlements and compromises that (A) relate to Taxes (which are the subject of Section
5.1(l)), (B) are in the ordinary course consistent with past practice or (C) do not
require payments by Receiver in excess of $1,000,000, net of any insurance proceeds or coverage,
and (ii) such consent decrees, injunctions or similar restraints or forms of equitable
relief that, individually or in the aggregate, are not material to Receiver and the Receiver
Subsidiaries, taken as a whole;
(l) (i) make or rescind any material election relating to Taxes, (ii) settle
or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes, (iii) make a request for a
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written ruling of a Taxing Authority relating to Taxes, other than any request for a
determination concerning qualified status of any Receiver Employee Plan intended to be qualified
under Code Section 401(a), (iv) enter into a written and legally binding agreement with a
Taxing Authority relating to material Taxes, (v) amend any material Tax Return or
(vi) except as required by Law, change in any material respect any of its methods of
reporting income or deductions for U.S. federal income Tax purposes from those employed in the
preparation of its U.S. federal income Tax returns for the taxable year ending December 31, 2006;
(m) other than in the ordinary course of business consistent with past practice, (i)
adversely modify or amend in any material respect or terminate any Receiver Contract or
(ii) enter into any successor agreement to an expiring Receiver Contract that changes the
terms of the expiring Receiver Contract in a way that is materially adverse to Receiver or any
Receiver Subsidiary;
(n) enter into or renew or extend any material agreements or arrangements that limit or
otherwise restrict Receiver or any Receiver Subsidiary or any of their respective Affiliates or any
successor thereto, or that could, after the Effective Time, limit or restrict Parent or Receiver or
any of their respective Subsidiaries or, in each case, any successors thereto, from engaging or
competing in any line of business or in any geographic area, which agreements or arrangements,
individually or in the aggregate, would reasonably be expected to be materially adverse to Parent
or Receiver, taken as a whole with their respective Subsidiaries, after giving effect to the
Merger;
(o) make or agree to make any capital expenditure or expenditures (which for the avoidance of
doubt does not include capitalized software), or enter into any agreements or arrangements
providing for payments for capital expenditures, other than capital expenditures set forth in the
budget previously provided to Parent or in Schedule 5.1(o) of the Receiver Disclosure Letter or
otherwise in an aggregate amount not to exceed $1,000,000 or increase the research and development
budget by an amount greater than $10,000,000;
(p) change any method of accounting or accounting principles or practices by Receiver or any
Subsidiary of Receiver in any material respect, except for any such change required by a change in
GAAP, Law or by a Governmental Entity;
(q) terminate or cancel, or amend or modify in any material respect, any material insurance
policies maintained by covering Receiver or the Receiver Subsidiaries or their respective
properties which is not replaced by a comparable amount of insurance coverage;
(r) adopt or implement a plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization of Receiver or any Receiver Subsidiary; or
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(s) agree or commit to do any of the foregoing.
Section 5.2 Conduct of Business by Safety. From the date of this Agreement until the
Effective Time, unless Receiver shall otherwise consent in writing or except as set forth in
Section 5.2 of the Safety Disclosure Letter or as otherwise expressly provided for in this
Agreement, Safety shall (and Parent shall cause Safety to) conduct its Business in a commercially
reasonable manner consistent with industry practice, and shall use its commercially reasonable
efforts to preserve intact its business organization and goodwill and relationships with customers,
suppliers and others having business dealings with it, to keep available the services of its
current officers and key employees and to maintain its current rights and franchises, in each case,
consistent with industry practice. In addition to and without limiting the generality of the
foregoing, except as set forth in Section 5.2 of the Safety Disclosure Letter or as otherwise
expressly permitted or required by this Agreement or as required by applicable Law or by a
Governmental Entity of competent jurisdiction, from the date hereof until the Effective Time,
without the prior written consent of Receiver (which consent shall not be unreasonably withheld,
conditioned or delayed), Safety shall not (and Parent shall cause Safety to not):
(a) adopt or propose any change in the Constituent Documents of Safety;
(b) (i) declare, set aside, make or pay any dividend or other distribution (whether in
cash, stock or property) in respect of any of its equity interests, (ii) split, combine or
reclassify any of its equity interests or issue or propose or authorize the issuance of any other
securities (including options, warrants or any similar security exercisable for, or convertible
into, such other security) in respect of, in lieu of, or in substitution for, any of its equity
interests or (iii) repurchase, redeem or otherwise acquire any of its equity interests, or
any rights, warrants or options to acquire any such interests;
(c) issue, sell, grant, pledge or otherwise encumber any of its equity interests or other
securities (including any options, warrants or any similar security exercisable for or convertible
into such equity interests or similar security);
(d) merge or consolidate with any Person or acquire a material amount of the assets or equity
of any other Person, other than (i) acquisitions disclosed in Section 5.2(d) of the Safety
Disclosure Letter and (ii) acquisitions the fair market value of the total consideration
(including the value of indebtedness acquired or assumed) for which does not exceed $10,000,000 for
any individual acquisition, or $20,000,000 in the aggregate;
(e) sell, lease, license, subject to a Lien, other than a Permitted Lien, encumber or
otherwise surrender, relinquish or dispose of any material assets, property or rights except
(i) pursuant to existing written contracts or commitments, (ii) in an amount
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not in excess of $10,000,000 in the aggregate or (iii) pursuant to non-exclusive
licensing agreements in the ordinary course of business consistent with past practice;
(f) (i) make any loans, advances or capital contributions to, or investments in, any
other Person other than pursuant to any contract or other legal obligation existing at the date of
this Agreement or (ii) create, incur, guarantee or assume any Indebtedness, issuances of
debt securities, guarantees, loans or advances not in existence as of the date of this Agreement,
except Indebtedness not to exceed $10,000,000 in the aggregate, and obtained on customary
commercial terms for a valid business purpose. Indebtedness in replacement of existing
Indebtedness on customary commercial terms;
(g) amend or otherwise modify benefits under any Safety Employee Plan in any material respect,
accelerate the payment or vesting of benefits or amounts payable or to become payable under any
Safety Employee Plan as currently in effect on the date hereof in any material respect, fail to
make any required contribution to any Safety Employee Plan in any material respect, merge or
transfer any Safety Employee Plan or the material assets or liabilities of any Safety Employee
Plan, change the sponsor of any Safety Employee Plan, or terminate or establish any material Safety
Employee Plan, except in each case as reasonably appropriate to reflect changes in applicable Law
or IFRS, for any changes for which Parent will be solely liable, or as would relate to similarly
situated employees of Parent and its Subsidiaries;
(h) grant any increase in the compensation or benefits of directors, officers, managers,
employees or consultants of Safety other than (i) increases in the compensation of
employees (other than executive officers or directors of Safety) or for consultants in the ordinary
course of business consistent with past practice, (ii) benefits increases that are not
material and that apply to all similarly situated employees, (iii) as required by any
Safety Employee Plan or by Law or (iv) except for any increases for which Parent will be
solely liable;
(i) enter into or amend or modify in any material respect any severance, consulting,
retention, collective bargaining agreement or employment agreement, plan, program or arrangement of
Safety, except, in each case, (i) in the ordinary course of business consistent with past
practice (except for officers with a yearly base salary in excess of $175,000 or managers or
directors of Safety), (ii) as required by the terms of such agreement, plan, program or
arrangement, or (iii) to comply with applicable Law;
(j) hire or terminate the employment or contractual relationship of any officer, employee or
consultant of Safety, as the case may be, other than hirings or terminations in the ordinary course
consistent with past practice;
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(k) settle or compromise any Claim or enter into any consent decree, injunction or similar
restraint or form of equitable relief in settlement of any material Claim other than (i)
such settlements and compromises that (A) relate to Taxes (which are the subject of Section
5.2(l)), (B) are in the ordinary course consistent with past practice or (C) do not
require payments by Safety in excess of $1,000,000, net of any insurance proceeds or coverage, and
(ii) such consent decrees, injunctions or similar restraints or forms of equitable relief
that, individually or in the aggregate, are not material to Safety;
(l) (i) make or rescind any material election relating to Taxes, (ii) settle
or compromise any material claim, action, suit, litigation, proceeding, arbitration, investigation,
audit or controversy relating to Taxes, (iii) make a request for a written ruling of a
Taxing Authority relating to Taxes, other than any request for a determination concerning qualified
status of any Safety Employee Plan intended to be qualified under Code Section 401(a),
(iv) enter into a written and legally binding agreement with a Taxing Authority relating to
material Taxes, (v) amend any material Tax Return or (vi) except as required by
Law, change in any material respect any of its methods of reporting income or deductions for U.S.
federal income Tax purposes from those employed in the preparation of its U.S. federal income Tax
returns for the taxable year ending May 31, 2007;
(m) other than in the ordinary course of business consistent with past practice, (i)
adversely modify or amend in any material respect or terminate any Safety Contract or
(ii) enter into any successor agreement to an expiring Safety Contract that changes the
terms of the expiring Safety Contract in a way that is materially adverse to Safety;
(n) enter into or renew or extend any material agreements or arrangements that limit or
otherwise restrict Safety or any of its respective Affiliates or any successor thereto, or that
could, after the Effective Time, limit or restrict Parent or Receiver or any of their respective
Subsidiaries or, in each case, any successors thereto, from engaging or competing in any line of
business or in any geographic area, which agreements or arrangements, individually or in the
aggregate, would reasonably be expected to be materially adverse to Parent or Receiver, taken as a
whole with their respective Subsidiaries, after giving effect to the Merger;
(o) make or agree to make any capital expenditure or expenditures (which for the avoidance of
doubt does not include capitalized software), or enter into any agreements or arrangements
providing for payments for capital expenditures, other than capital expenditures set forth in the
budget previously provided to Receiver or in Schedule 5.2(o) of the Safety Disclosure Letter or
increase the research and development budget by an amount greater than $10,000,000;
70
(p) change any method of accounting or accounting principles or practices by Safety in any
material respect, except for any such change required by a change in IFRS, Law or by a Governmental
Entity;
(q) terminate or cancel, or amend or modify in any material respect, any material insurance
policies maintained by Safety covering Safety or Safety’s properties which is not replaced by a
comparable amount of insurance coverage;
(r) adopt or implement a plan of complete or partial liquidation, dissolution, restructuring,
recapitalization or other reorganization of Safety; or
(s) agree or commit to do any of the foregoing.
Section 5.3 Advice of Changes. Subject to applicable Laws relating to the exchange of
information, Receiver shall promptly advise Parent, and Parent or Safety shall promptly advise
Receiver orally and in writing of any state of facts, change, development, effect, condition or
occurrence that, individually or in the aggregate, has had or would reasonably be expected to have
a Material Adverse Effect on such advising party.
Section 5.4 Control of Operations.
(a) Nothing contained in this Agreement will give Parent or Safety, directly or indirectly,
the right to control or direct Receiver’s operations prior to the Effective Time. Prior to the
Effective Time, Receiver will exercise, consistent with the terms and conditions of this Agreement,
complete control and supervision over its operations. Notwithstanding anything to the contrary set
forth in this Agreement, no consent of Parent or Safety shall be required with respect to any
matter set forth in Section 5.1 or elsewhere in this Agreement to the extent that the requirement
of such consent would, upon advice of outside counsel, violate applicable Law.
(b) Nothing contained in this Agreement will give Receiver, directly or indirectly, the right
to control or direct Safety’s operations prior to the Effective Time. Prior to the Effective Time,
Safety will exercise, consistent with the terms and conditions of this Agreement, complete control
and supervision over its operations. Notwithstanding anything to the contrary set forth in this
Agreement, no consent of Receiver shall be required with respect to any matter set forth in Section
5.2 or elsewhere in this Agreement to the extent that the requirement of such consent would, upon
advice of outside counsel, violate applicable Law.
Section 5.5 No Solicitation by Receiver; Recommendation.
(a) Receiver shall not, nor shall it authorize or permit any of the Receiver Subsidiaries to,
and Receiver shall use its commercially reasonable efforts to
71
cause its and its Subsidiaries’ respective Representatives not to, directly or indirectly
(
i) initiate, solicit or knowingly encourage any inquiry or the making of any proposal that
constitutes a Takeover Proposal with respect to Receiver, (
ii) enter into any letter of
intent, memorandum of understanding,
merger agreement or other agreement relating to a Takeover
Proposal with respect to Receiver or (
iii) continue or otherwise participate in any
discussions or negotiations regarding a Takeover Proposal or furnish to any Person that has made
or, to the Knowledge of Receiver, has considered making or is reasonably likely to make a Takeover
Proposal with respect to Receiver, any information or data with respect to, or otherwise take any
other action to knowingly encourage any proposal that constitutes a Takeover Proposal with respect
to Receiver. Notwithstanding the foregoing, prior to the receipt of Receiver Stockholder Approval,
Receiver may, in response to a
bona fide written Takeover Proposal with respect to Receiver that
was not solicited after execution of this Agreement and did not otherwise result from a breach of
this Section 5.5(a), and subject to compliance with Section 5.5(b):
(x) furnish information with respect to Receiver and the Receiver Subsidiaries to the
Person making such Takeover Proposal and its Representatives pursuant to and in accordance
with a confidentiality agreement containing terms and conditions no less restrictive in the
aggregate than those contained in the Confidentiality Agreement, provided that such
confidentiality agreement shall not contain any provisions that would prevent Receiver from
complying with its obligation to provide the required disclosure to Parent pursuant to
Section 5.5(b), and provided, further that all such information provided to
such Person has previously been provided to Parent or is provided to Parent prior to or
substantially concurrently with the time it is provided to such Person; and
(y) participate in discussions or negotiations with such Person or its Representatives
regarding such Takeover Proposal;
provided, in each case, that the Board of Directors of Receiver determines in good faith
after consultation with its outside legal counsel and a financial advisor of internationally
recognized reputation (such as Xxxxxxx Xxxxx & Co., Xxxxxx Brothers or JPMorganCazenove) that
(i) the failure to furnish such information or participate in such discussions or
negotiations would be inconsistent with its fiduciary duties under applicable Law and (ii)
that such Takeover Proposal could reasonably be expected to lead to a Superior Proposal. Receiver
shall (A) immediately cease and cause to be terminated any existing activities, discussions
or negotiations with any Persons or their Representatives conducted prior to the date of this
Agreement with respect to any Takeover Proposal with respect to Receiver and will request the
prompt return of any confidential information previously furnished to such Persons in connection
therewith and (B) use its commercially reasonable efforts promptly to inform its
Representatives of the obligations undertaken in this Section 5.5. Without limiting the foregoing,
any violation of the restrictions set forth in this Section 5.5 by any Representative of Receiver
72
or any of its Subsidiaries, other than a director of Receiver who shall have voted against or
abstained from voting in favor of the resolution described in Section 4.1(d)(ii), shall be deemed
to be a breach of this Section 5.5 by Receiver.
(b) As promptly as practicable after the receipt by Receiver of any Takeover Proposal or any
inquiry with respect to, or that could reasonably be expected to lead to, any Takeover Proposal,
and in any case within 24 hours after the receipt thereof, Receiver shall provide oral and, as
promptly as practicable thereafter, written notice to Parent of (i) such Takeover Proposal
or inquiry, (ii) the identity of the Person making any such Takeover Proposal and
(iii) the material terms and conditions of any such Takeover Proposal or inquiry (including
any amendments or modifications thereto). Receiver shall keep Parent reasonably informed on a
reasonably current basis of the status of any such Takeover Proposal, including any material
changes to the terms and conditions thereof, and promptly provide Parent with copies of all written
Takeover Proposals with respect to Receiver (and material modifications thereof) and related
agreements, draft agreements and material modifications thereof.
(c) Neither the Board of Directors of Receiver nor any committee thereof shall, directly or
indirectly, (
i) effect a Change in the Receiver Recommendation with respect to Receiver or
(
ii) approve or cause or permit Receiver to enter into any letter of intent, memorandum of
understanding,
merger agreement or other similar agreement providing for a Takeover Proposal (an
“
Acquisition Agreement”) with respect to Receiver. Notwithstanding the foregoing, at any
time prior to the Receiver Stockholder Approval, the Board of Directors of Receiver may, in
response to a Superior Proposal with respect to Receiver, effect a Change in the Receiver
Recommendation or, if, prior to or on the later of forty-five (45) days after the date hereof and
the Safety Financial Statement Delivery Date, a Takeover Proposal is determined to be a Superior
Proposal, cause Receiver to terminate this Agreement, and if it so chooses, to enter into an
Acquisition Agreement concerning such Superior Proposal with respect to Receiver;
provided
that the Board of Directors of Receiver determines in good faith, after consultation with its
outside legal counsel and a financial advisor of internationally recognized reputation (such as
Xxxxxxx Xxxxx & Co., Xxxxxx Brothers or JPMorganCazenove), that the failure to do so would be
inconsistent with its fiduciary duties under applicable Law, and
provided,
further,
that the Board of Directors of Receiver may not effect such a Change in the Receiver
Recommendation, termination of this Agreement or entering into an Acquisition Agreement concerning
a transaction that constitutes a Superior Proposal with respect to Receiver unless (
x) the
Board of Directors of Receiver shall have first provided prior written notice to Parent that it is
prepared to effect a Change in the Receiver Recommendation in response to a Superior Proposal with
respect to Receiver, which notice shall attach the most current version of any written agreement or
other document relating to the transaction that constitutes such Superior Proposal and
(
y) Parent does not make, within three Business Days after the receipt of such notice (or,
in the event of a Takeover Proposal with respect to Receiver that has
73
been materially revised or modified, within two Business Days of such modification, if later),
a proposal that the Board of Directors of Receiver determines in good faith, after consultation
with a financial advisor of internationally recognized reputation (such as Xxxxxxx Xxxxx & Co.,
Xxxxxx Brothers or JPMorganCazenove), is at least as favorable to the stockholders of Receiver as
such Superior Proposal. During the three Business Day period prior to its effecting a Change in
the Receiver Recommendation, Receiver and its Representatives shall negotiate in good faith with
Parent and its Representatives regarding any revisions to the terms of the transaction contemplated
by this Agreement proposed by Parent. Notwithstanding any Change in the Receiver Recommendation
Parent shall have the option, exercisable within five Business Days after such Change in the
Receiver Recommendation, to cause the Board of Directors of Receiver to submit this Agreement to
the shareholders of Receiver for the purpose of approving the Share Issuance; provided,
however, that such option shall not be available if immediately prior to exercise thereof
Receiver was entitled to terminate this Agreement pursuant to this Section 5.5(c). If Parent
exercises such option, Parent shall not be entitled to terminate this Agreement pursuant to Section
8.1(c)(iii) and shall not be entitled to the Receiver Termination Fee under Section 8.3(a)(iv). If
Parent fails to exercise such option, Receiver may terminate this Agreement, and if it so chooses,
enter into an Acquisition Agreement concerning a transaction that constitutes a Superior Proposal
with respect to Receiver.
(d) In addition, and notwithstanding the foregoing, at any time prior to the Receiver
Stockholders Meeting, the Receiver Board of Directors may, in connection with an Intervening Event,
make a Change in the Receiver Recommendation; provided, however, that the Receiver
Board of Directors shall not be entitled to exercise its right to make a Change in the Receiver
Recommendation pursuant to this sentence unless Receiver (i) has provided Parent with
written information describing such Intervening Event in reasonable detail as soon as reasonably
practicable after becoming aware of it, (ii) keeps Parent reasonably informed of
developments with respect to such Intervening Event and (iii) has provided to Parent at
least three Business Days’ prior written notice advising Parent that the Receiver Board of
Directors intends to take such action and specifying the reasons therefor in reasonable detail and
Parent does not make, within three Business Days after the receipt of such notice, a proposal that
results in there no longer being an Intervening Event. During the three Business Day period prior
to its effecting a Change in the Receiver Recommendation, Receiver and its Representatives shall
negotiate in good faith with Parent and its Representatives regarding any revisions to the terms of
the transactions contemplated by this Agreement proposed by Parent. Notwithstanding any Change in
the Receiver Recommendation, Parent shall have the option, exercisable within five Business Days
after such Change in the Receiver Recommendation, to cause the Board of Directors of Receiver to
submit this Agreement to the shareholders of Receiver for the purpose of approving the Share
Issuance. If Parent exercises such option, Parent shall not be entitled to terminate this
Agreement pursuant to Section 8.1(c)(iii) and shall not be entitled to the Receiver Termination Fee
74
under Section 8.3(a)(iv). If Parent fails to exercise such option, Receiver may terminate
this Agreement.
(e) Nothing contained in this Section 5.5 shall prohibit Receiver from (i) complying
with Rule 14a-9, Rule 14d-9 and Rule 14e-2 promulgated under the Exchange Act or (ii)
making any other disclosure to the stockholders of Receiver if, in the case of clause (ii), the
Board of Directors of Receiver determines in good faith, after consultation with its outside
counsel, that the failure to make such disclosure would be inconsistent with its fiduciary duties
to the stockholders of Receiver under applicable Law, provided, however that
neither the Board of Directors of Receiver nor any committee thereof shall, except as expressly
permitted by Section 5.5(c) and Section 5.5(d), effect a Change in the Receiver Recommendation or
approve or recommend, or publicly propose to approve or recommend, a Takeover Proposal with respect
to Receiver.
(f) All information which may be provided by Receiver to Parent under this Section 5.5 shall
be deemed to be “Confidential Information” for purposes of the Confidentiality Agreement and Parent
shall by bound by the terms of the Confidentiality Agreement with respect thereto.
Section 5.6 No Solicitation by Parent or Safety; Recommendation.
(a) Neither Parent nor Safety shall, and each shall use its commercially reasonable efforts to
cause its Representatives not to, directly or indirectly (
i) initiate, solicit or knowingly
encourage any inquiry or the making of any proposal that constitutes a Takeover Proposal with
respect to Safety, (
ii) enter into any letter of intent, memorandum of understanding,
merger agreement or other agreement relating to a Takeover Proposal with respect to Safety or
(
iii) continue or otherwise participate in any discussions or negotiations regarding a
Takeover Proposal or furnish to any Person that has made or, to the Knowledge of Parent, is
considering making or is reasonably likely to make a Takeover Proposal with respect to Safety, any
information or data with respect to, or otherwise cooperate with or take any other action to
knowingly encourage any proposal that constitutes a Takeover Proposal with respect to Safety.
Notwithstanding the foregoing, prior to the receipt of Parent Shareholder Approval, Parent and
Safety may, in response to a
bona fide written Takeover Proposal with respect to Safety that was
not solicited after execution of this Agreement and did not otherwise result from a breach of this
Section 5.6(a), and subject to compliance with Section 5.6(b):
(x) furnish information with respect to Safety to the Person making such Takeover
Proposal and its Representatives pursuant to and in accordance with a confidentiality
agreement containing terms and conditions no less restrictive in the aggregate than those
contained in the Confidentiality Agreement, provided that such confidentiality
agreement shall not contain any provisions that would prevent Safety from complying with
its obligation to provide the required
75
disclosure to Receiver pursuant to Section 5.6(b), and provided
further that all such information provided to such Person has previously been
provided to Receiver or is provided to Receiver prior to or substantially concurrently with
the time it is provided to such Person; and
(y) participate in discussions or negotiations with such Person or its Representatives
regarding such Takeover Proposal;
provided, in each case, that the Board of Directors of Parent or Safety determines in good
faith after consultation with its outside legal counsel and a financial advisor of internationally
recognized reputation (such as Xxxxxxx Xxxxx & Co., Xxxxxx Brothers or JPMorganCazenove) that
(i) the failure to furnish such information or participate in such discussions or
negotiations would be inconsistent with its fiduciary and/or statutory duties under applicable Law
and (ii) such Takeover Proposal could reasonably be expected to lead to a Superior Proposal
with respect to Safety. Safety shall (A) immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Persons or their Representatives
conducted prior to the date of this Agreement with respect to any Takeover Proposal with respect to
Safety and will request the prompt return of any confidential information previously furnished to
such Persons in connection therewith and (B) use its commercially reasonable efforts
promptly to inform its Representatives of the obligations undertaken in this Section 5.6. Without
limiting the foregoing, any violation of the restrictions set forth in this Section 5.6 by any
Representative of Safety, shall be deemed to be a breach of this Section 5.6 by Safety.
(b) As promptly as practicable after the receipt by Safety of any Takeover Proposal with
respect to Safety or any inquiry with respect to, or that could reasonably be expected to lead to,
any such Takeover Proposal, and in any case within 24 hours after the receipt thereof, Safety shall
provide oral and, as promptly as practicable thereafter, written notice to Receiver of
(i) such Takeover Proposal or inquiry, (ii) the identity of the Person making any
such Takeover Proposal or inquiry and (iii) the material terms and conditions of any such
Takeover Proposal or inquiry (including any amendments or modifications thereto). Safety shall keep
Receiver reasonably informed on a reasonably current basis of the status of any such Takeover
Proposal, including any material changes to the terms and conditions thereof, and promptly provide
Receiver with copies of written all Takeover Proposals with respect to Safety (and material
modifications thereof) and related agreements, draft agreements and material modifications thereof.
(c) Neither the Board of Directors of Parent nor any committee thereof shall, directly or
indirectly, (i) effect a Change in the Parent Recommendation with respect to Safety or
(ii) approve or cause or permit Safety to enter into any Acquisition Agreement with respect
to Safety. Notwithstanding the foregoing, at any time prior to Parent Shareholder Approval, the
Board of Directors of Parent may, in response to a Superior Proposal with respect to Safety, effect
a Change in the Parent Recommendation
76
or, if, prior to or on the later of forty-five (45) days after the date hereof and the
Receiver Financial Statement Delivery Date, a Takeover Proposal is determined to be a Superior
Proposal, cause Parent to terminate this Agreement, and if it so chooses, to enter into an
Acquisition Agreement concerning such Superior Proposal with respect to Safety; provided
that the Board of Directors of Parent determines in good faith, after consultation with its outside
legal counsel and a financial advisor of internationally recognized reputation (such as Xxxxxxx
Xxxxx & Co., Xxxxxx Brothers or JPMorganCazenove), that the failure to do so would be inconsistent
with its fiduciary duties and/or statutory duties under applicable Law, and provided,
further, that the Board of Directors of Parent may not effect such a Change in the Parent
Recommendation unless (x) the Board of Directors of Parent shall have first provided prior
written notice to Receiver that it is prepared to effect a Change in the Parent Recommendation in
response to a Superior Proposal with respect to Safety, which notice shall attach the most current
version of any written agreement or other document relating to the transaction that constitutes
such Superior Proposal and (y) Receiver does not make, within three Business Days after the
receipt of such notice (or, in the event of a Takeover Proposal with respect to Safety that has
been materially revised or modified, within two Business Days after the receipt of such notice of
such modification, if later), a proposal that the Board of Directors of Parent determines in good
faith, after consultation with a financial advisor of internationally recognized reputation (such
as Xxxxxxx Xxxxx & Co., Xxxxxx Brothers or JPMorganCazenove), is at least as favorable to the
shareholders of Parent as such Superior Proposal. During the three Business Day period prior to
its effecting a Change in the Parent Recommendation, Parent and Safety and their respective
Representatives shall negotiate in good faith with Receiver and its Representatives regarding any
revisions to the terms of the transaction contemplated by this Agreement proposed by Receiver.
Notwithstanding any Change in the Parent Recommendation Receiver shall have the option, exercisable
within five Business Days after such Change in the Parent Recommendation, to cause the Board of
Directors of Parent to submit this Agreement to the shareholders of Parent for the purpose of
approving this Agreement and the Merger; provided, however, that such option shall
not be available if immediately prior to exercise thereof Parent was entitled to terminate this
Agreement pursuant to this Section 5.6(c). If Receiver exercises such option, Receiver shall not
be entitled to terminate this Agreement pursuant to Section 8.1(d)(iii) and shall not be entitled
to the Safety Termination Fee under Section 8.3(c)(iv). If Receiver fails to exercise such option,
Parent may terminate this Agreement and if it so chooses, enter into an Acquisition Agreement
concerning a transaction that constitutes a Superior Proposal with respect to Safety.
(d) In addition, and notwithstanding the foregoing, at any time prior to the Parent
Shareholders Meeting, the Parent Board of Directors may, in connection with an Intervening Event,
make a Change in the Parent Recommendation; provided, however, that the Parent
Board of Directors shall not be entitled to exercise its right to make a Change in the Parent
Recommendation pursuant to this sentence unless Parent (i) has provided Receiver with
written information describing such Intervening Event in
77
reasonable detail as soon as reasonably practicable after becoming aware of it, (ii)
keeps Receiver reasonably informed of developments with respect to such Intervening Event and
(iii) has provided to Receiver at least three Business Days’ prior written notice advising
Receiver that the Parent Board of Directors intends to take such action and specifying the reasons
therefor in reasonable detail and Receiver does not make, within three Business Days after the
receipt of such notice a proposal that results in there no longer being an Intervening Event.
During the three Business Day period prior to its effecting a Change in the Parent Recommendation,
Parent and Safety and their respective Representatives shall negotiate in good faith with Receiver
and its Representatives regarding any revisions to the terms of the transaction contemplated by
this Agreement proposed by Receiver. Notwithstanding any Change in the Parent Recommendation,
Receiver shall have the option, exercisable within five Business Days after such Change in the
Parent Recommendation, to cause the Board of Directors of Parent to submit this Agreement to the
shareholders of Parent for the purpose of approving this Agreement and the Merger. If Receiver
exercises such option, Receiver shall not be entitled to terminate this Agreement pursuant to
Section 8.1(d)(iii) and shall not be entitled to the Safety Termination Fee under Section
8.3(c)(iv). If Receiver fails to exercise such option, Parent may terminate this Agreement.
(e) Nothing contained in this Section 5.6 shall prohibit Parent from complying with applicable
disclosure rules under applicable Law in respect of any Takeover Proposal with respect to Safety or
making any disclosure to the shareholders of Parent if the Board of Directors of Parent determines
in good faith, after consultation with its outside counsel, that the failure to make such
disclosure would be inconsistent with its fiduciary duties and/or statutory duties to the
shareholders of Parent under applicable Law or a breach of any applicable rule or regulation of any
regulatory body to which it is subject, provided, however that neither the Board of
Directors of Parent nor any committee thereof shall, except as expressly permitted by Section
5.6(c) or (d), effect a Change in the Parent Recommendation or approve or recommend, or publicly
propose to approve or recommend, a Takeover Proposal with respect to Safety.
(f) All information which may be provided by Parent to Receiver under this Section 5.6 shall
be deemed to be “Confidential Information” for purposes of the Confidentiality Agreement and
Receiver shall by bound by the terms of the Confidentiality Agreement with respect thereto.
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Preparation of the Proxy Statement; Receiver Stockholders Meeting.
78
(a) Receiver shall use its commercially reasonable efforts to prepare and file with the SEC
the proxy statement relating to the Receiver Stockholder Meeting (together with any amendments or
supplements thereto, the “Proxy Statement”) in preliminary form as promptly as reasonably
practicable following the Safety Financial Statement Delivery Date. Receiver shall use its
commercially reasonable efforts to respond as promptly as reasonably practicable to any comments of
the SEC with respect thereto, to prepare and file with the SEC the definitive Proxy Statement
(which, subject to Section 6.1(b), shall contain the Receiver Recommendation) as promptly as
practicable thereafter and to cause the definitive Proxy Statement to be mailed to Receiver’s
stockholders as promptly as reasonably practicable after the filing of the definitive Proxy
Statement. Receiver 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 and shall provide Parent with copies of all correspondence between Receiver and its
Representatives, on the one hand, and the SEC and its staff, on the other hand. Parent shall use
its commercially reasonable efforts to cooperate with Receiver and to promptly provide any
information or responses to comments or other assistance reasonably requested in connection with
the foregoing, including all information in order for Receiver to prepare all necessary pro-forma
financial information. If at any time prior to the Receiver Stockholders Meeting there shall occur
any event (including discovery of any fact, circumstance or event) that should be set forth in an
amendment or supplement to the Proxy Statement, Receiver shall promptly prepare and mail to its
stockholders such an amendment or supplement, in each case to the extent required by applicable
Law. Prior to filing or mailing the Proxy Statement (or any amendment or supplement thereto) or
responding to any comments of the SEC with respect thereto, Receiver (i) shall provide Parent a
reasonable opportunity to review and comment on such document or response and (ii) shall give
reasonable consideration to all comments proposed by Parent. Parent shall perform its review and
provide its comments to Receiver as promptly as reasonably practicable.
(b) Receiver shall, as promptly as reasonably practicable following the Safety Financial
Statement Delivery Date pursuant to Section 6.14 of this Agreement, establish a record date (which
will be as promptly as reasonably practicable following such receipt) (in accordance with
applicable Law and Receiver’s Constituent Documents) for, duly call, give notice of, convene and
hold a meeting of its stockholders (the “Receiver Stockholders Meeting”) for the purpose of
obtaining the Receiver Stockholder Approval and the Additional Receiver Stockholder Approval and,
provided that there has been no change in the Receiver Recommendation, soliciting stockholder
approval of the Share Issuance, the Charter and By-Laws Amendments and the Additional Charter and
By-Laws Amendments. Subject to the following sentence, the Board of Directors of Receiver shall
recommend approval of the Share Issuance, the Charter and By-Laws Amendments and the Additional
Charter and By-Laws Amendments and the other transactions contemplated thereby by the stockholders
of Receiver (the “Receiver Recommendation”). Neither the Board of Directors of Receiver
nor any committee
79
thereof shall withdraw, modify or qualify in any manner adverse to Parent (or publicly propose
or resolve to withdraw, modify or qualify in any manner adverse to Parent) the Receiver
Recommendation or adopt a third party Takeover Proposal with respect to Receiver (or publicly
propose to approve, recommend or adopt a third party Takeover Proposal with respect to Receiver) or
fail to make the Receiver Recommendation in the Proxy Statement (collectively, a “Change in the
Receiver Recommendation”); provided that the Board of Directors of Receiver may make a
Change in the Receiver Recommendation pursuant to and in accordance with Section 5.5. Without
limiting the generality of the foregoing, Receiver agrees that its obligations pursuant to this
Section 6.1(b) shall not be affected by the commencement, public proposal, public disclosure or
communication to Receiver or any other Person of any Takeover Proposal or by any action taken
pursuant to Section 5.5 (including any Change in the Receiver Recommendation) other than
termination of this Agreement, and, subject to the following sentence and Section 5.5, Receiver
shall remain obligated to call, give notice of, convene and hold the Receiver Stockholders Meeting.
Notwithstanding anything to the contrary and for avoidance of doubt, at any time prior to the
Receiver Stockholder Approval, Receiver may adjourn or postpone the Receiver Stockholders Meeting
following a Change in the Receiver Recommendation, or upon notification to Parent of the occurrence
of an Intervening Event or in response to a Takeover Proposal which the Board of Directors of
Receiver (or any committee thereof) determines in good faith after consultation with its outside
counsel has a reasonable likelihood of leading to a Superior Proposal, and that failure to take
such action would be inconsistent with its fiduciary duties under applicable Law or, in any event,
if this Agreement is terminated before the Receiver Stockholders Meeting is held. Receiver shall
not submit to the vote of its stockholders any Takeover Proposal, or propose to do so, until after
the termination of this Agreement.
Section 6.2
Parent Shareholders Meeting. As promptly as reasonably practicable
following the date of this Agreement, the Board of Directors of Parent or a duly appointed
committee thereof will duly adopt resolutions at meetings duly called and held at which directors
of Parent constituting a quorum are present (
i) directing that the Merger be submitted for
approval to a vote at a general meeting of Parent’s shareholders, (
ii) approving the form
of the circular to be posted to the shareholders of Parent in connection with the Parent
Shareholders Meeting (as defined below), which shall include a notice of general meeting setting
out the shareholder resolution(s) approving the entry into by Parent and Safety of the
Merger
Agreement, the Merger and the other matters contemplated by the
Merger Agreement to be proposed to
the shareholders of Parent at the Parent Shareholders Meeting and the Parent Recommendation and
shall be in compliance with LR13.3.1 of the Listing Rules of the Financial Services Authority (the
“
Circular”) and (
iii) approving the posting of the Circular to the shareholders of
Parent. Neither the Board of Directors of Parent nor any committee thereof shall withdraw, modify
or qualify in any manner adverse to Receiver (or publicly propose to withdraw, modify or qualify in
any manner adverse to Receiver) the Parent Recommendation or
80
approve, recommend or adopt a third party Takeover Proposal with respect to Safety (or
publicly propose to approve, recommend or adopt a third party Takeover Proposal with respect to
Safety) or fail to make the Parent Recommendation (collectively, a “Change in the Parent
Recommendation”); provided that the Board of Directors of Parent may make a Change in
the Parent Recommendation pursuant to and in accordance with Section 5.6. Parent shall, as
promptly as reasonably practicable following the date of this Agreement, duly call, give notice of,
convene and hold a general meeting of its shareholders or any adjournment or postponement thereof
(the “Parent Shareholders Meeting”) for the purpose of obtaining the Parent Shareholder
Approval. Receiver shall use its commercially reasonable efforts to cooperate with Parent and to
promptly provide any information or responses to comments or other assistance reasonably requested
by Parent in connection with the foregoing. Parent shall prepare and post the Circular to the
shareholders of Parent as promptly as reasonably practicable following the date of this Agreement.
Prior to mailing the Circular (or any amendment or supplement thereto) to Parent Shareholders,
Parent (i) shall provide Receiver a reasonable opportunity to review such document and
(ii) shall give reasonable consideration to all comments proposed by Receiver. If at any
time prior to the Parent Shareholder Meeting there shall occur any event (including discovery of
any fact, circumstance or event) that should be set forth in an amendment or supplement to the
Circular, Parent shall promptly prepare and mail to its shareholders such an amendment or
supplement or issue a press release or take other corrective action, in each case to the extent
required by applicable Law. Without limiting the generality of the foregoing, Parent agrees that
its obligations pursuant to this Section 6.2 shall not be affected by the commencement, public
proposal, public disclosure or communication to Parent or any other Person of any Takeover Proposal
with respect to Safety or by any action taken pursuant to Section 5.6 (including any Change in the
Parent Recommendation) other than termination of this Agreement and, subject to the following
sentence, Parent shall remain obligated to call, give notice of, convene and hold the Parent
Shareholders Meeting. Notwithstanding anything to the contrary and for avoidance of doubt, at any
time prior to the Parent Shareholder Approval, Parent may adjourn or postpone the Parent
Shareholders Meeting following a Change in the Parent Recommendation, or upon notification to
Receiver of the occurrence of an Intervening Event or in response to a Takeover Proposal which the
Board of Directors of Parent (or any committee thereof) determines in good faith after consultation
with its outside counsel has a reasonable likelihood of leading to a Superior Proposal and that the
failure to take such action would be inconsistent with its fiduciary and/or statutory duties under
applicable Law or, in any event, if this Agreement is terminated before the Parent Shareholders
Meeting is held. Parent shall not submit to the vote of its shareholders any Takeover Proposal
with respect to Safety, or propose to do so, until after the termination of this Agreement.
81
Section 6.3 Access to Information; Confidentiality.
(a) Upon reasonable notice and subject to applicable Laws relating to the exchange of
information, Receiver shall, and shall cause each of its Subsidiaries to, afford to Parent, its
Subsidiaries and Affiliates and to their respective Representatives, reasonable access at
reasonable times and during normal business hours during the period prior to the Effective Time or
the termination of this Agreement in a manner that does not unreasonably disrupt or interfere with
the Business of Receiver, to all their respective properties, assets, books, contracts,
commitments, personnel and records, and, during such period, Receiver shall, and shall cause each
of its Subsidiaries to, make available to Parent (i) access to each report, schedule, form,
statement and other document filed or received by it during such period pursuant to the
requirements of any Regulatory Law and (ii) all other information concerning its business,
properties and personnel as Parent may reasonably request, provided that Receiver shall not
be required to provide access to or disclose information where such access or disclosure would in
the reasonable good faith judgment of Receiver (w) result in invasive testing of any of
Receiver’s or its Subsidiaries’ real property, (x) jeopardize attorney-client privilege,
(y) cause competitive harm to Receiver or its Affiliates if the transactions contemplated
by this Agreement are not consummated or (z) contravene any Law or any agreement with any
third party. All requests for such access shall be made exclusively to the Representatives of
Receiver as Receiver shall designate, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder. Neither Parent nor any of Parent’s Representatives
shall contact any of the employees, customers or suppliers of Receiver, whether in person or by
telephone, mail or other means of communication, without the specific prior written authorization
of such Representatives of Receiver as Receiver may designate. Any information that is obtained
pursuant to this Section 6.3(a) or any other provision of this Agreement shall be subject to the
applicable provisions of the Confidentiality Agreement.
(b) Upon reasonable notice and subject to applicable Laws relating to the exchange of
information, Safety shall afford to Receiver, its Subsidiaries and Affiliates and to their
respective Representatives, reasonable access at reasonable times and during normal business hours
during the period prior to the Effective Time or the termination of this Agreement in a manner that
does not unreasonably disrupt or interfere with the Business of Safety to all of its properties,
assets, books, contracts, commitments, personnel and records, and, during such period, Safety shall
make available to Receiver (i) access to each report, schedule, form, statement and other
document filed or received by it during such period pursuant to the requirements of any Regulatory
Law and (ii) all other information concerning its business, properties and personnel as
Receiver may reasonably request, provided that Safety shall not be required to provide
access to or disclose information where such access or disclosure would in the reasonable good
faith judgment of Safety, (w) result in invasive testing of any of Safety’s real property
(x) jeopardize attorney-client privilege, (y) cause competitive harm to Parent or
Safety or
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their Affiliates if the transactions contemplated by this Agreement are not consummated or
(z) contravene any Law or agreement with any third party. All requests for such access
shall be made exclusively to the representatives of Safety as Safety shall designate, who shall be
solely responsible for coordinating all such requests and all access permitted hereunder. Neither
Receiver nor any of Receiver’s Representatives shall contact any of the employees, customers or
suppliers of Safety, whether in person or by telephone, mail or other means of communication,
without the specific prior written authorization of such Representatives of Safety as Safety may
designate. Any information that is obtained pursuant to this Section 6.3(b) or any other provision
of this Agreement shall be subject to the applicable provisions of the Confidentiality Agreement.
Section 6.4 Transition Planning. Subject to applicable Laws relating to the exchange
of information, each of the parties agrees to use its commercially reasonable effort to, and shall
cause each of its respective Subsidiaries to, reasonably cooperate to obtain an orderly transition
and integration process in connection with the Merger in order to minimize the disruption to, and
preserve the value of, the Business of Receiver and its Subsidiaries during the period from and
after the Effective Time.
Section 6.5 Efforts; Notification.
(a) Subject to the terms and conditions set forth in this Agreement (including provisions
relating to the fiduciary and/or statutory duties of the directors of the parties), each of the
parties agrees to use its commercially reasonable efforts to take, or cause to be taken, in good
faith, all actions that are necessary, proper or advisable under applicable Laws, to consummate and
make effective the Merger and the other transactions contemplated hereby, including using its
commercially reasonable efforts to accomplish the following as promptly as reasonably practicable
following the date of this Agreement: (i) the taking of all reasonable acts necessary to
cause the conditions precedent set forth in Article VII to be satisfied, (ii) the obtaining
of all necessary actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations and filings and the taking
of all reasonable steps as may be necessary to obtain any necessary approvals or waivers from any
Governmental Entity, (iii) the obtaining of all material consents, approvals or waivers
from third parties and (iv) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated hereby and to fully carry out the purposes of
this Agreement. In connection with and without limiting the foregoing, Receiver, Parent and their
respective Boards of Directors shall, if any state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement, the Merger or any of the other transactions
contemplated hereby, use its commercially reasonable efforts to ensure that the Merger and the
other transactions contemplated hereby may be consummated as promptly as practicable on the terms
contemplated by this Agreement and otherwise to minimize the effect of such statute or regulation
on this Agreement, the Merger and the other transactions contemplated hereby.
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(b) In furtherance and not in limitation of the foregoing, each party agrees (i) to
make required filings with the U.S. Federal Trade Commission and the Antitrust Division of the
Department of Justice and in any applicable foreign jurisdiction with the appropriate Governmental
Entity, the notification and report form required under the HSR Act or the antitrust and
competition laws of any such foreign jurisdiction, with respect to the transactions contemplated by
this Agreement as promptly as practicable after the date of this Agreement and to supply as
promptly as practicable any additional information and documentary material that may be requested
pursuant to the HSR Act or the antitrust and competition laws of any such foreign jurisdiction, and
to use its commercially reasonable efforts to cause the expiration or termination of the applicable
waiting periods under the HSR Act and the antitrust and competition laws of any such foreign
jurisdiction and (ii) to cooperate with the other parties to this Agreement in making such
filings and other filings and disclosures in respect of the Merger and the other transactions
contemplated by this Agreement as may be necessary or advisable.
(c) Notwithstanding the foregoing, if any objections are asserted with respect to the Merger
or any other transaction contemplated hereby under any Regulatory Law, or if any suit is threatened
to be instituted, by any Governmental Entity challenging the Merger or any other transaction
contemplated hereby or brought otherwise by any Governmental Entity under any Regulatory Law that
would prohibit or materially impair or materially delay the consummation of the Merger or any other
transaction contemplated hereby, each of Parent, Safety and Receiver agrees to take actions that
may be commercially reasonably necessary to resolve any objections as may be asserted by any
Governmental Entity under such Regulatory Law with respect to the Merger.
(d) Upon the Knowledge of Receiver, Receiver shall give prompt notice to Parent of any
representation or warranty made by it contained in this Agreement becoming untrue or inaccurate
such that the condition set forth in Section 7.2(a) would not be satisfied; provided,
however, that no such notification shall affect the representations, warranties, covenants
or agreements of the parties or the conditions to the obligations of the parties under this
Agreement.
(e) Upon the Knowledge of Parent or Safety, Parent shall give prompt notice to Receiver of any
representation or warranty made by it or Safety contained in this Agreement becoming untrue or
inaccurate such that the condition set forth in Section 7.3(a) would not be satisfied;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the obligations of the
parties under this Agreement.
(f) Each of Receiver, Safety and Parent shall, in connection with the efforts referenced in
Section 6.5(a) to obtain the approvals and authorizations (the “Requisite Approvals”) for
the transactions contemplated by this Agreement under the HSR Act and any other Regulatory Law, use
its commercially reasonable efforts to cooperate in all respects with each other in connection with
any filing or submission and in connection
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with any investigation or other inquiry, including any proceeding initiated by a private
party, and to promptly inform the other party of any communication received by such party from, or
given by, such party. In connection with the foregoing, each party will (i) promptly
notify the other party in writing of any communication received by that party or its Affiliates
from any Governmental Entity, and, unless the disclosure is of commercially sensitive, confidential
or proprietary information of Parent or Receiver, or its respective Affiliates and subject to any
Regulatory Law, provide the other party with a copy of any such written communication (or summary
of any oral communication), and (ii) not participate in any substantive meeting or
discussion with any Governmental Entity (other than telephone calls initiated by the Governmental
Entity without advance notice) in respect of any filing, investigation or inquiry concerning the
transactions contemplated by this Agreement unless it consults with the other party in advance, and
to the extent permitted by such Governmental Entity, gives the other party the opportunity to
attend and participate. Each of Parent and Receiver will have the right to review in advance, and
to the extent practicable each will consult with the other, in each case subject to any applicable
Laws relating to the exchange of information, with respect to all material written information
submitted to any third party or any Governmental Entity in connection with the Requisite Approvals.
In exercising the foregoing right, each of Parent and Receiver will act reasonably and promptly.
Each of Parent and Receiver agrees that it will consult with the other party with respect to
obtaining all Requisite Approvals and each will keep the other party apprised of the status of
material matters relating to completion of the transactions contemplated by this Agreement. For
purposes of this Agreement, “Regulatory Law” means the Xxxxxxx Act, the Xxxxxxx Act, the
HSR Act, the Federal Trade Commission Act, in each case as amended and the rules and regulations
thereunder, and all other federal, state and foreign, if any, statutes, rules, regulations, orders,
decrees, administrative and judicial doctrines and other laws that are designed or intended to
prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint
of trade or lessening of competition, whether in any particular industry or otherwise through
merger or acquisition.
Section 6.6 Transition Services Agreement. Parent and Receiver shall use commercially
reasonable efforts to negotiate and enter into a mutually acceptable transition services agreement
(the “Transition Services Agreement”) at or prior to the Closing, which shall cover the
services set forth on Exhibit E and be on terms no less favorable to Receiver than could be
obtained from a third-Person.
Section 6.7 Indemnification, Exculpation and Insurance.
(a) All rights to indemnification and exculpation from liabilities for acts or omissions
occurring at or prior to the Effective Time existing as of the date of this Agreement in favor of
the current or former directors or officers of Receiver and its Subsidiaries and Safety in each
case as provided in their respective certificates of incorporation or by-laws (or similar
organizational documents) and any indemnification
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agreements (x) of Receiver set forth in Schedule 6.7(a) of the Receiver Disclosure
Letter or disclosed in the Receiver SEC Documents or (y) of Safety set forth in Section
6.7(a) of the Safety Disclosure Letter shall survive the Effective Time and shall continue in full
force and effect in accordance with their terms from the Effective Time until the expiration of the
applicable statute of limitations with respect to any claims against such directors or officers
arising out of such acts or omissions.
(b) For six years after the Effective Time, Receiver shall maintain in effect Receiver’s
current directors’ and officers’ liability insurance covering each Person currently covered by
Receiver’s directors’ and officers’ liability insurance policy for acts or omissions occurring
prior to the Effective Time on terms with respect to such coverage and amounts no less favorable in
any material respect to such directors and officers than those of such policy as in effect on the
date of this Agreement; provided that Receiver may substitute therefor policies of a
reputable insurance company the material terms of which, including coverage and amount, are no less
favorable in any material respect to such directors and officers than the insurance coverage
otherwise required under this Section 6.7(b); provided, however, that in no event
shall Receiver be required to pay aggregate annual premiums for insurance under this Section 6.7(b)
in excess of $870,000 (the “Receiver Maximum Premium”), which Receiver represents and
warrants is equal to 300% of the annual premiums paid as of the date hereof by Receiver for such
insurance; provided that, if such premium exceeds the Receiver Maximum Premium, Receiver
shall nevertheless be obligated to provide the most advantageous coverage as may be obtained for
such Receiver Maximum Premium.
(c) Receiver shall obtain and maintain for six years after the Effective Time directors’ and
officers’ liability insurance covering each Person currently a director or officer of Safety for
acts or omissions of such Persons occurring prior to the Effective Time on terms with respect to
such coverage and amounts no less favorable in any material respect to such directors and officers
than those of the current policy for such Persons as in effect on the date of this Agreement;
provided, that in no event shall Receiver be required to pay aggregate annual
premiums for insurance under this Section 6.7(c) in excess of $870,000 (the “Safety Maximum
Premium”); provided that, if such premium exceeds the Safety Maximum Premium, Receiver
shall nevertheless be obligated to provide the most advantageous coverage as may be obtained for
such Safety Maximum Premium. Notwithstanding the foregoing, Receiver may obtain a six-year “tail”
policy, with coverage and terms as set forth in the immediately prior sentence in full satisfaction
of its obligations under this Section 6.7(c).
(d) If Receiver or any of its successors or assigns (i) consolidates with or merges
into any other Person and shall not be the continuing or Surviving Company or entity in such
consolidation or merger or (ii) transfers all or substantially all of its properties and
assets to any Person, then, and in either such case, proper provision shall be made so that the
successors and assigns of Receiver shall assume the obligations of
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Receiver set forth in this Section 6.7. The rights of each indemnified party hereunder shall
be in addition to any other rights such indemnified party may have under the Receiver or Safety
Constituent Documents, any applicable Law, agreement or otherwise.
(e) Receiver shall pay all reasonable expenses, including reasonable attorney’s fees, incurred
by any indemnified party in connection with successfully enforcing the indemnity and other
obligations provided in this Section 6.7.
(f) The provisions of this Section 6.7 shall survive the consummation of the Merger and (if
the Effective Time occurs) are expressly intended to benefit each of the indemnified parties, their
heirs and Representatives.
Section 6.8 Fees and Expenses. Except as set forth in Section 8.3, all fees and
expenses incurred by Receiver in connection with this Agreement, the Merger and the other
transactions contemplated hereby shall be paid by Receiver, whether or not the Merger is
consummated. Except as set forth in Section 8.3, all fees and expenses incurred by Parent or
Safety in connection with this Agreement, the Merger and other transactions contemplated hereby
shall be paid by Parent, whether or not the Merger is consummated; provided,
however, that, upon consummation of the Merger and the other transactions contemplated
hereby, the Surviving Company shall, as directed by Safety prior to the Effective Time, pay up to
$5,000,000 of the fees and expenses of Parent and Safety (except fees and expenses incurred by
Parent in connection with any financing of the transactions contemplated hereby, all of which shall
be paid by Parent) incurred in connection with the Merger.
Section 6.9 Termination of Intercompany Accounts; Intercompany Agreements; Further
Assurances.
(a) Prior to the Closing, Parent shall release, cancel, terminate or otherwise settle all
intercompany accounts among Parent and its Subsidiaries (other than Safety and its Subsidiaries),
on the one hand, and Safety, on the other hand. Parent shall take all necessary action to ensure
that Safety and its Subsidiaries have no Indebtedness as of the Effective Time.
(b) All rights and obligations of Parent and its Subsidiaries, on the one hand, and of Safety,
on the other hand, under any agreements or other binding arrangements (other than the Relationship
Agreement, the Trademark Agreement, the Software Agreement (if entered into) and the Transition
Services Agreement (if entered into) (the “Intercompany Agreements”) shall terminate or
otherwise be released as of the Effective Time. Following the Effective Time, the Surviving
Company and its Subsidiaries shall have no obligation or liability to Parent or its Subsidiaries
with respect to the Intercompany Agreements.
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(c) With respect to any obligations of Safety under any guarantees, indemnification
obligations, letters of credit, letters of comfort, bid bonds or performance or surety bonds or
cash or other collateral obtained or given by Safety relating to the Business of Parent and its
Subsidiaries (other than the Business of Safety) (collectively, the “Safety Guarantees”),
Parent shall use commercially reasonable efforts to cause Safety to be fully released effective as
promptly as practicable after the Effective Time, in respect of all obligations of Safety under any
such Safety Guarantees. If Parent is unable to effect such a substitution and release with respect
to any Safety Guarantee, Parent shall indemnify Receiver and its Subsidiaries against any and all
losses and expenses arising from such Safety Guarantee.
(d) With respect to any obligations of Parent under any guarantees, indemnification
obligations, letters of credit, letters of comfort, bid bonds or performance or surety bonds or
cash or other collateral obtained or given by Parent relating solely to the Business of Safety and
set forth in Section 6.9(d) of the Safety Disclosure Letter (collectively, the “Parent
Guarantees”), Safety and Receiver shall use commercially reasonable efforts to cause Parent to
be fully released effective as promptly as practicable after the Effective Time, in respect of all
obligations of Parent under any such Parent Guarantees. If Safety is unable to effect such a
substitution and release with respect to any Parent Guarantee, Receiver shall indemnify Parent and
its Subsidiaries against any and all losses and expenses arising from such Parent Guarantee.
(e) With respect to any liability or obligation under the contracts and agreements listed in
Section 6.9(e) of the Safety Disclosure Letter, Parent shall indemnify, defend and hold harmless
Receiver and its Subsidiaries (including the Surviving Company) against any and all losses
(including punitive, special, consequential and opportunity cost damages of any kind and the loss
of anticipated or future business or profits) and expenses relating to, in connection with or
arising under such contracts and agreements and agrees to pay and discharge any losses and expenses
thereunder and, to the extent Receiver or its Subsidiaries (including the Surviving Company) makes
any payment thereunder, to reimburse Receiver for any such payments; provided, that such
indemnification obligation claims shall be subject to the limitation set forth in Section 6.9(e) of
the Safety Disclosure Letter.
(f) On and after the Effective Time, at the request of Receiver, Parent shall use commercially
reasonable efforts to transfer to the Surviving Company or its Subsidiaries any assets, properties
or rights relating primarily to the Business of Safety that have not previously been so
transferred.
Section 6.10 Benefits Matters.
(a) Until the 12-month anniversary of the Effective Time (the “Continuation Period”),
Receiver shall provide, or cause to be provided to, Receiver Employees and Safety Employees (the
“Affected Employees”) total compensation and employee benefits
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that are substantially comparable in the aggregate to those currently provided by Receiver or
Safety (or their respective Subsidiaries), as applicable, to such employees pursuant to the
Receiver Employee Plans or the Safety Employee Plans, as applicable, it being understood that the
particular elements of compensation and benefits provided after the Effective Time may be different
from the particular elements of compensation and benefits provided before the Effective Time.
(b) For all purposes (including purposes of vesting, eligibility to participate and level of
benefits) under any employee benefit plans, programs or arrangements of Receiver or the Surviving
Company or their respective Subsidiaries that provide benefits to the Affected Employees (the
“New Plans”) and any employee benefit plan, program or arrangement of Parent in which any
Affected Employee participates, each Affected Employee shall be credited with his or her years of
service with, as applicable, Receiver or Safety (and their respective Subsidiaries and
predecessors) before the Effective Time, to the same extent as such Receiver or Safety employee was
entitled, before the Effective Time, to credit for service under any similar employee benefit plan
of Receiver, the Surviving Company, Parent or any of their respective Subsidiaries, as applicable,
in which such employee participated or was eligible to participate immediately prior to the
Effective Time, provided that the foregoing shall not apply with respect to benefit accrual
under any defined benefit pension plan or retiree medical benefit 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 Affected Employee shall be immediately eligible to
participate, without any waiting time, in any and all New Plans, except to the extent such employee
would not have been eligible to participate under comparable plans of Receiver or Safety (or their
respective Subsidiaries), as applicable, immediately prior to the Effective Time and
(ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision
benefits to any Affected Employee, Receiver or the Surviving Company shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to be waived for such
employee and his or her covered dependents to the extent that such conditions would be waived under
the comparable plans of Receiver and its Subsidiaries or Safety and its Subsidiaries, as
applicable, in which such employee participated immediately prior to the Effective Time and
Receiver or the Surviving Company shall cause any eligible expenses incurred by such employee and
his or her covered dependents during the portion of the plan year of the Receiver Employee Plans or
Safety Employee Plans, as applicable, in which such Affected Employee participated immediately
before the consummation of the Merger 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 but only to the extent such expenses were incurred before the
date such employees participation in the corresponding New Plan is effective. For the avoidance of
doubt, to the extent any Affected Employee participates, or is eligible to participate in, the same
employee benefit plan, program or arrangement
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before and after the Effective Time, this paragraph shall not affect such Affected Employee.
(c) For purposes of determining the number of vacation days to which each Affected Employee
shall be entitled, Receiver shall honor or shall cause to be honored all vacation days earned but
not yet taken by such Affected Employee under the vacation program of Safety or Receiver, as
applicable, covering such Affected Employee immediately prior to the Effective Time;
provided, that nothing herein shall prohibit or restrict Receiver from implementing or
applying a “use it or lose it” or similar vacation policy with respect to any and all Affected
Employees after the Effective Time as long as all such Affected Employees are given a reasonable
opportunity following the Effective Time in which to use any vacation that they have earned as of
the Effective Time.
(d) From and after the Closing Date, Receiver shall honor, pay, perform and satisfy or shall
cause to be honored, paid, performed and satisfied any and all of Safety’s liabilities, obligations
and responsibilities to, or in respect of, each Safety Employee arising under the terms of any
Safety Employee Plan, in accordance with the terms of such Safety Employee Plan; provided,
that with respect to any Safety Employee Plan that is not maintained by Safety, Receiver shall only
honor or cause to be honored Safety’s liabilities, obligations and responsibilities to the extent
such liabilities, obligations and responsibilities are administrative in nature and non-material
(it being understood that all other liabilities, obligations and responsibilities related to such
plans shall be addressed in the Transition Services Agreement). Nothing herein shall be deemed to
be a guarantee of employment for any employee of Safety, Receiver or their respective Subsidiaries,
or to restrict the right of the Receiver, Safety, or their respective Subsidiaries, to terminate or
cause to be terminated any employee at any time for any or no reason with or without notice.
Notwithstanding the foregoing provisions of this Section 6.10, nothing contained herein, whether
express or implied, (i) shall be treated as an amendment or other modification of any
Receiver Employee Plan, Safety Employee Plan or any other employee benefit plan, program or
arrangement or the establishment of any employee benefit plan, program or arrangement or
(ii) shall limit the right of Receiver or any of its Subsidiaries to amend, terminate or
otherwise modify (or cause to be amended, terminated or otherwise modified) any Receiver Employee
Plan, Safety Employee Plan or any other employment benefit plan, program or arrangement following
the Closing Date in accordance with its terms. Parent, Receiver and Safety acknowledge and agree
that all provisions contained in this Section 6.10 with respect to Affected Employees are included
for the sole benefit of Parent, Receiver and Safety, and that nothing herein, whether express or
implied, shall create any third party beneficiary or other rights (i) in any other person,
including any employees, former employees, any participant in any employee benefit plan, program or
arrangement (or any dependent or beneficiary thereof), of Safety, Receiver or their respective
Affiliates or (ii) to continued employment with Parent, Receiver, or any of their
respective Affiliates or continued participation in any employee benefit plan, program or
arrangement.
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(e) Effective prior to the Record Date, Receiver shall take all actions reasonably necessary
to allow for the exercise of outstanding stock options under the Receiver Stock Plans and the
payment of withholding taxes through the withholding of shares of Receiver Common Stock in
connection with stock options under such Plans. Receiver shall use commercially reasonable efforts
to notify all holders of the opportunity for such exercise and to participate in the Extraordinary
Dividend. To the extent an option is not exercised prior to the record date, Receiver shall take
appropriate action to adjust such options to take into account the Extraordinary Dividend pursuant
to the terms of the Receiver Stock Plans and in compliance with Section 409A of the Code and
Treasury Regulation §1.409A-1(b)(5)(v). Receiver shall take all action necessary to accelerate and
settle all restricted stock units outstanding prior to the date hereof under the Receiver Stock
Plans effective as of the Record Date.
(f) Effective as of the Closing Date, Parent shall cause one of its U.S. Subsidiaries other
than Safety to establish a deferred compensation plan (the “Transferee Deferred Compensation
Plan”). Effective as of the Closing Date, (i) the Transferee Deferred Compensation Plan shall
assume and be solely responsible for all liabilities for or relating to participants who are not
current or former employees of Safety or any of its Subsidiaries (“Non-Safety
Participants”) under the Safety Executive Deferred Compensation Plan, (ii) Safety shall cause
the accounts (including any unvested amounts) of the Non-Safety Participants under the Safety
Executive Deferred Compensation Plan as of such date to be transferred to the Transferee Deferred
Compensation Plan, and (iii) Parent shall cause such transferred accounts and assets to be accepted
by such plan. Notwithstanding anything in the Safety Executive Deferred Compensation Plan to the
contrary, (i) no distribution of account balances shall be made to any participant under the Safety
Executive Deferred Compensation Plan or the Transferee Deferred Compensation Plan as a result of
the Closing, and (ii) both the Surviving Company and Parent shall cause there to be a continuation
of earnings on participants’ accounts under the Safety Executive Deferred Compensation Plan and the
Transferee Deferred Compensation Plan, as applicable, substantially identical to Section 5.1 of the
Safety Executive Deferred Compensation Plan, and shall provide all applicable representations and
warranties, and there shall be a continuation of the distribution elections under each of the
corresponding Plans in each case as required under Section VI of the Safety Executive Deferred
Compensation Plan.
Section 6.11 Tax Matters.
(a) Federal and Consolidated Income Tax Liabilities. Parent shall be responsible for
and shall pay or cause to be paid when due, and shall indemnify and hold harmless, on an after-tax
basis, Receiver and its Subsidiaries (including, after the Effective Time, the Surviving Company)
from and against (i) all Federal and Consolidated Income Tax Liabilities, (ii) all Taxes
imposed on Safety as a result of the distribution by Safety of the assets described in item (1) of
Schedule 5.2(e) of the Safety
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Disclosure Letter, (iii) all Taxes imposed on Safety to the extent such Taxes would
not have been imposed but for the transactions effected pursuant to Section 2.8(i) and (iv)
all Taxes imposed on or in connection with the transactions effected pursuant to this Agreement to
the extent such Taxes would not have been imposed but for the transactions effected pursuant to
Section 2.8(i) (provided that, for the avoidance of doubt, any effect on the basis that Receiver
may have in the limited liability company interests in Safety at any time for purposes of any Tax
shall not give rise to indemnification hereunder) including in all cases any out-of-pocket expenses
incurred in connection therewith. Notwithstanding the foregoing, Parent shall not be responsible
for or pay or cause to be paid or indemnify or hold harmless Receiver and its Subsidiaries
(including, after the Effective Time, the Surviving Company) from and against (and Receiver shall
be responsible for and pay or cause to be paid and indemnify and hold harmless Parent and its
Subsidiaries, on an after-tax basis, from and against any Taxes, including any out-of-pocket
expenses incurred in connection therewith, resulting from the Surviving Company undertaking
activity on the Closing Date after the Effective Time outside the ordinary course of business in
the same manner heretofore conducted excluding, in all cases, any transactions contemplated by this
Agreement.
(b) Tax Liabilities Other than Federal and Consolidated Income Tax Liabilities. After
the Effective Time, Receiver shall be responsible for, and shall pay or cause to be paid when due,
and shall indemnify and hold harmless, on an after-tax basis, Parent and its other Subsidiaries
from and against, all Taxes imposed on Safety or the Surviving Company, including any out-of-pocket
expenses incurred in connection therewith, excluding Tax liabilities for which Parent is
responsible under Section 6.11(a). For the avoidance of doubt, references to Parent and its
Subsidiaries in this Section 6.11(b) shall not include Parent and its Subsidiaries in their
capacities as direct or indirect owners of Receiver Common Stock on or after the Effective Time.
(c) Indemnity Payments. If Parent or Receiver (each a “party” for the purposes of
this Section 6.11(c)), as the case may be, or their respective Subsidiaries, incurs any liability
for Taxes or expenses that are the responsibility of the indemnifying party in accordance with the
terms of this Section 6.11, within a reasonable time prior thereto, or if no notice can be given
prior thereto, within a reasonable time thereafter, the indemnified party shall give written notice
to the indemnifying party of the Taxes or expenses so payable and the amount which is the liability
of the indemnifying party, although failure to do so will not relieve the indemnifying party of its
liability hereunder except to the extent the indemnifying party is actually prejudiced. The
indemnifying party shall pay such amount on the later to occur of (i) the date payment is
made of the Taxes or expenses and (ii) five Business Days after receipt of written notice
thereof.
(d) Tax Sharing Agreements. On or prior to the Effective Time, Parent shall cause to
be terminated all tax sharing agreements between Safety on the one hand and Parent (or any of
Parent’s Subsidiaries other than Safety) on the other hand.
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(e) Tax Returns, Elections, etc.
(i) Safety shall join, to the extent permitted by Law for all Pre-Closing Periods, in
(A) the consolidated U.S. federal income Tax Returns for the affiliated group of
which DGP is the common parent and (B) each other Consolidated or Combined Return
and each Tax Return of a Safety Group. To the extent not previously filed, Parent shall
cause to be filed (i) all Tax Returns set forth in the immediately preceding
sentence and (ii) all other Tax Returns that are required to be filed by or with
respect to Safety on or before the Closing Date. With respect to items of Safety, all Tax
Returns described in the immediately preceding sentence shall, to the extent permitted by
applicable Law, be prepared on a basis consistent with the last previous such Tax Returns
filed on or before the date hereof in respect of Safety to the extent the failure to do so
could reasonably be expected to materially increase Taxes for which Receiver is responsible
under Section 6.11(b).
(ii) Receiver shall file, or cause to be filed, all Tax Returns (other than
Consolidated or Combined Returns or any Tax Return of a Safety Group) relating to the
business or assets of Safety, the Surviving Company, Receiver and their Subsidiaries
required to be filed after the Closing Date.
(iii) If Parent delivers a Non-Election Notice pursuant to Section 2.8, so long as the
accompanying IRS Form 8832 was completed by Parent in a manner reasonably satisfactory to
Receiver, Receiver shall promptly sign such Form and deliver it to Parent by overnight
delivery service at the address designated by Parent in the Non-Election Notice, and by
such delivery Receiver and Merger Sub authorize Parent to submit such Form to the IRS.
Receiver shall cooperate in good faith with Parent to effect the election described in the
Non-Election Notice; provided, that Receiver shall have no responsibility for the
preparation, correctness or filing of any forms or other documentation required to effect
the election, or the effectiveness of the election, described in the Non-Election Notice,
except for the execution and delivery of forms pursuant to the preceding sentence. If the
IRS Form accompanying the Non-Election Notice was completed in a manner that is not
reasonably satisfactory to Receiver, Receiver shall promptly notify Parent. Provided
Receiver shall have delivered an executed IRS Form 8832 to Parent as contemplated by this
Section 6.11(e)(iii), Parent shall timely file such election. Receiver represents and
warrants that as of the date of this Agreement neither Receiver nor Merger Sub has made an
election with respect to the classification of Merger Sub for U.S. federal income tax
purposes, and, unless Parent delivers a Non-Election Notice, Receiver shall not make, and
shall cause Merger Sub not to make, an election to treat Merger Sub as an association
taxable as a corporation for U.S. federal income tax purposes.
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(iv) Parent represents and warrants that Safety is properly treated for U.S. federal
income tax purposes as an association taxable as a corporation, and neither Parent, Safety
nor any Affiliate thereof shall make an election inconsistent with such treatment.
(f) Tax Audits, Assistance and Cooperation.
(i) Parent or Receiver, as the case may be, shall notify the other party within twenty
(20) days upon receipt by such party or any of its Subsidiaries of notice of any pending or
threatened Tax audits, examinations, notices of deficiency or other adjustments,
assessments or redeterminations (“Tax Matters”) that could reasonably be expected
to increase Taxes for which such other party may be responsible under this Section 6.11,
although failure to do so will not relieve the indemnifying party of its liability
hereunder except to the extent the indemnifying party is actually prejudiced by such
failure.
(ii) Parent shall have the sole right to control, contest, resolve and defend against
any Tax Matters relating to Taxes for which Parent is responsible under Section 6.11(a) and
to employ counsel of its own choice at its own expense; provided, however,
that with respect to any Tax Matter that could reasonably be expected to materially
increase Taxes for which Receiver is responsible under Section 6.11(b), (A) Parent
shall keep Receiver reasonably informed with respect to the commencement, status and nature
of any such Tax Matter, notify Receiver of significant developments with respect to such
Tax Matter and consult with Receiver with respect to such Tax Matter, and (B)
neither Parent nor any Subsidiary of Parent shall enter into any settlement of, or
otherwise compromise, any such Tax Matter to the extent that any such settlement or
compromise could reasonably be expected to materially increase Taxes for which Receiver is
responsible under Section 6.11(b) without Receiver’s prior written consent, which consent
shall not be unreasonably withheld or delayed. If the parties disagree as to the
settlement or compromise of any such Tax Matter, such disagreement shall be resolved
pursuant to Section 6.11(h).
(iii) Receiver shall have the sole right to control all Tax Matters not controlled by
Parent pursuant to Section 6.11(f)(ii) and to employ counsel of its choice at its own
expense.
(iv) Subject to Section 6.11(g), nothing herein shall be construed to impose on
Receiver any obligation to defend Safety in any Tax audit or administrative or court
proceeding.
(g) Assistance and Cooperation. After the Effective Time, each of Parent, Receiver and
the Surviving Company shall (and shall cause its respective Subsidiaries to):
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(i) assist the other party in preparing any Tax Returns which such other party is
responsible for preparing and/or filing in accordance with Section 6.11(e);
(ii) maintain and make available to the other party, at such other party’s reasonable
request, copies of any and all information, books and records necessary to prepare and/or
file any Tax Return or to respond to accountants performing financial statement audits and
any Taxing Authorities, for the full period of the applicable statute of limitations,
including any extensions thereof, with respect to the relevant Taxes;
(iii) promptly furnish the other party with copies of all correspondence received from
any Taxing Authority in connection with any Tax Matter or information request with respect
to any Taxes for which the other party may have a liability under this Section 6.11; and
(iv) timely provide to the other party powers of attorney or similar authorizations
reasonably necessary to carry out the purposes of this Section 6.11(g).
(h) Disputes. If the parties disagree as to the calculation of any amount relating to
Taxes governed by this Section 6.11, the parties shall promptly consult with each other and
endeavor in good faith, for a period of 30 days, to resolve any such disagreements (each
disagreement not so resolved, a “Tax Dispute”). Thereafter, either party may submit the
resolution of any Tax Disputes to a mutually agreed upon internationally recognized accounting firm
(the “Accounting Arbitrator”) to resolve the dispute. The Accounting Arbitrator shall be
instructed to resolve the Tax Disputes and such resolution shall be made in accordance with this
Agreement, and shall be final, binding and conclusive on the parties on the date of delivery of
such resolution. Any expenses relating to the engagement of the Accounting Arbitrator shall be
shared equally by the parties.
(i) Refunds and Tax Credits. (i) Parent shall be entitled to retain, or
Parent shall be entitled to receive immediate payment from Receiver of, any refund or credit with
respect to Taxes, plus any interest received with respect thereto (net of any net Tax cost arising
out of such receipt and payment) from the applicable Taxing Authorities, relating to Safety or the
Surviving Company that are the responsibility of Parent under Section 6.11(a) (including any such
refund or credit attributable to the carryback of losses, credits or similar items from a taxable
year or period that begins after the Closing Date and is attributable to the Surviving Company or
its Subsidiaries) and (ii) Receiver shall be entitled to retain, or shall be entitled to
receive immediate payment from Parent of, any other refund or credit with respect to Taxes, plus
any interest received with respect thereto (net of any net Tax cost arising out of such receipt and
payment) from the applicable Taxing Authorities, relating to Safety or the Surviving Company.
Parent and
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Receiver shall cooperate, and shall cause their respective Subsidiaries to cooperate, with
respect to claiming any refund or credit with respect to Taxes referred to in this Section 6.11(i).
The party that is to enjoy the economic benefit of a refund under this Section 6.11(i) shall bear
the reasonable out-of-pocket expenses of the other party incurred in seeking such refund. Any
dispute regarding a party’s entitlement to a payment in respect of a refund shall be resolved
pursuant to the Tax Dispute resolution mechanism in Section 6.11(h).
(j) Carrybacks. To the extent permitted by Law, Receiver and the Surviving Company
shall elect to use currently or carry forward any net operating losses, net capital losses, unused
tax credits and other deductible or creditable tax attributes arising in a period beginning after
the Effective Time, rather than carry any such items back to a consolidated, combined or unitary
Tax Return of Parent or any Subsidiary of Parent for any Pre-Closing Period.
(k) Transfer Taxes. Subject to Section 6.11(a), but otherwise notwithstanding any
provision of this Agreement to the contrary, if the Closing occurs, all Transfer Taxes shall be
borne by the Surviving Company. Receiver shall file, or shall cause to be filed, to the extent
permitted by applicable law, all Tax Returns, as may be required to comply with the provisions of
any applicable Laws relating to Transfer Taxes. Parent shall cooperate with Receiver in connection
with all such filings and shall cause to be filed any Tax Returns relating to transfer Taxes that
Receiver is not permitted to file.
(l) Tax Opinion. Parent, on the one hand, and Receiver, on the other hand, shall
cooperate with each other in obtaining, and shall use their respective commercially reasonable
efforts to obtain, a written opinion of their respective tax counsel, Debevoise & Xxxxxxxx LLP in
the case of Parent (“Parent Tax Counsel”), and Sidley Austin LLP in the case of Receiver
(“Receiver Tax Counsel”), in form and substance reasonably satisfactory to Parent and
Receiver, respectively (each such opinion, a “Merger Tax Opinion”), dated as of the
Effective Time, to the effect that, on the basis of the facts, representations and assumptions set
forth in such opinion, the Merger will be treated as a reorganization under Section 368(a) of the
Code. Each of Parent and Receiver shall deliver to Parent Tax Counsel and Receiver Tax Counsel for
purposes of the Merger Tax Opinions customary representations and covenants, including those
contained in certificates of Parent and Receiver, reasonably satisfactory in form and substance to
Parent Tax Counsel and Receiver Tax Counsel. Each of Parent, Safety and Receiver agrees to use its
commercially reasonable efforts to cause the Merger to be treated as a reorganization under Section
368(a) of the Code. The agreements of the parties in this Section 6.11(l) are subject to clause
(ii) of Section 2.8.
(m) Survival of Obligations. Notwithstanding anything to the contrary in this
Agreement, and notwithstanding Section 9.1 of this Agreement, the obligations of the parties set
forth in this Section 6.11 shall remain in effect without limitation as to time.
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Section 6.12 Public Announcements. The initial press release issued by Parent, Safety
and Receiver concerning this Agreement, the Merger and the other transactions contemplated hereby
shall be a joint press release and thereafter Parent, Safety and Receiver shall consult with each
other before issuing any press release or otherwise making any public statements with respect to
the transactions contemplated by this Agreement and shall not issue any such press release or make
any such public statement prior to such consultation, except as may be agreed by the other parties
or as such party may determine is required by applicable Law, court process or rule or regulation
of any stock exchange or regulatory body.
Section 6.13 Stockholder Litigation. Receiver agrees that it shall not settle or
offer to settle any litigation commenced after the date hereof against Receiver or any of its
directors or executive officers by any stockholder of Receiver relating to this Agreement, the
Merger or any other transaction contemplated hereby without the prior written consent of Parent
(not to be unreasonably withheld, delayed or conditioned).
Section 6.14 Financial Statements.
(a) As promptly as practicable following the date of this Agreement, but in no event later
than nine weeks thereafter, Parent and Safety shall deliver to Receiver audited financial
statements of Safety and its Subsidiaries for the years ended May 31, 2005, 2006 and 2007
(containing combined balance sheets of Safety and its Subsidiaries as of May 31, 2005, 2006 and
2007 and combined statements of operations and cash flows of Safety and its Subsidiaries for the
years ended May 31, 2005, 2006 and 2007), prepared in accordance with GAAP, together with all
related notes and schedules thereto, accompanied by an audit report of PWC without qualification or
exception (the “Safety Audited Financial Statements”). Receiver’s obligations’ under
Section 6.1(a) and 6.1(b) shall be extended to account for the delivery of the Safety Audited
Financial Statements. Parent and Safety shall also use commercially reasonable efforts to deliver,
as promptly as practicable but in no event later than July 31, 2008, to Receiver audited financial
statements of Safety and its Subsidiaries for the year ended May 31, 2008 (containing combined
balance sheets of Safety and its Subsidiaries as of May 31, 2006, 2007 and 2008 and statements of
operations and cash flows of Safety and its Subsidiaries for the years then ended), prepared in
accordance with GAAP, together with all related notes and schedules thereto, accompanied by an
audit report of PWC without qualification or exception (the “Safety 2008 Audited Financial
Statements”). The “Safety Audited Financial Statements” shall include the Safety 2008 Audited
Financial Statements for all purposes of this Agreement, it being understood that, for purposes of
Section 5.5(c), the delivery of the Safety 2008 Audited Financial Statements shall not affect the
determination of the Safety Financial Statement Delivery Date, unless at the time the Safety
Audited Financial Statements (other than the Safety 2008 Audited Financial Statements) were
delivered to Receiver, such Safety Audited Financial Statements were stale for purposes of filing
the preliminary Proxy Statement.
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(b) Parent and Safety shall deliver to Receiver when available, for the three month period
ending on February 29, 2008 and each three month period thereafter (each, an “Interim
Period”) until the Closing Date, an unaudited combined balance sheet of Safety and its
Subsidiaries at the end of the applicable Interim Period and unaudited combined statements of
operations and cash flows of Safety and its Subsidiaries for such Interim Period, together with all
related notes and schedules thereto, prepared in accordance with GAAP (the “Interim
Financials”). Parent and Safety shall deliver the Interim Financials to Receiver as promptly
as practicable following the end of the applicable Interim Period, but in no event later than
thirty days thereafter.
(c) As promptly as practicable following the date of this Agreement, but in no event later
than nine weeks thereafter, Receiver shall deliver to Parent a reconciliation from GAAP to IFRS of
Receiver’s consolidated balance sheet and income statement for the years ended December 31, 2005,
2006 and 2007 for inclusion in the Circular.
Section 6.15 Insurance. Receiver shall, in consultation with Parent, take such
actions as may be commercially reasonable to maintain or, if necessary, obtain insurance coverage,
effective as of the Effective Time, in such amounts and against such risks as are reasonably
customary in the industries in which Receiver and its Subsidiaries shall operate as of the
Effective Time.
Section 6.16 Working Capital. Parent shall cause the Working Capital Amount
immediately prior to the Effective Time to be an amount consistent with past practice and in an
amount necessary to meet the requirements of the business of Safety immediately prior to the
Effective Time. For purposes of this Section 6.16, “Working Capital Amount” shall mean current
assets of Safety less current liabilities of Safety and shall be determined on a basis consistent
with and using the same methods used in preparing the Safety Audited Financial Statements.
Section 6.17 Receiver Board of Directors. Receiver shall use commercially reasonable
efforts to cause:
(a) An increase in the total number of directors serving on the Board of Directors of Receiver
to ten;
(b) The resignation of the members of the Board of Directors of Receiver other than
(i) the chief executive officer of Receiver and (ii) three members of Board of
Directors of Receiver; and
(c) The appointment by the remaining members of six additional Persons designated by Parent to
the Board of Directors of Receiver, each to hold office in accordance with Receiver’s Constituent
Documents.
Section 6.18 Subsidiaries. On or prior to the Effective Time:
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(a) Safety shall and Parent shall cause Safety to take such actions as are necessary to amend
the Safety LLC Agreement to the extent necessary and as Receiver may reasonably request to allow
for the direct control of Safety by Receiver pursuant to such policies and subject to such
resolutions as may be promulgated by the Board of Directors of Receiver; and
(b) Receiver shall take such actions as are necessary to amend the Constituent Documents of
its Subsidiaries to the extent necessary and as Parent may reasonably request to allow for the
direct control of such Subsidiaries by Receiver pursuant to such policies and subject to such
resolutions as may be promulgated by the Board of Directors of Receiver.
Section 6.19 Software License Agreement. Parent and Receiver shall use commercially
reasonable efforts to negotiate a software license agreement (the “Software Agreement”) on
mutually acceptable terms at or prior to the Closing which shall grant Safety a royalty-free,
worldwide license, on an open-source basis, to continue to use the assets identified in item (1) of
Schedule 5.2(e) of the Safety Disclosure Letter.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party’s Obligation to Effect the Merger. The
obligation of each party to effect the Merger is subject to the satisfaction or waiver by such
party on or prior to the Closing Date of the following conditions:
(a) Receiver Stockholder Approval. The Receiver Stockholder Approval shall have been
obtained.
(b) Parent Shareholder Approval. The Parent Shareholder Approval shall have been
obtained.
(c) Antitrust.
(i) Any applicable waiting periods, together with any extensions thereof, under the
HSR Act shall have expired or been terminated.
(ii) To the extent that any other antitrust or merger control clearances, consents or
approvals are required for the Merger or local implementation according to the law of any
other jurisdiction, such clearances, consents or approvals shall have been granted (or have
been deemed in accordance with the relevant law to have been granted) by the relevant
authority.
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(d) No Order. No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree, judgment, injunction or
other order (whether temporary, preliminary or permanent), in any case which is in effect and which
prevents or prohibits consummation of the Merger.
(e) Tax Matters. Subject to clause (ii) of Section 2.8, Parent shall have received a
Merger Tax Opinion from Parent Tax Counsel, in form and substance reasonably satisfactory to
Parent, and Receiver shall have received a Merger Tax Opinion from Receiver Tax Counsel, in form
and substance reasonably satisfactory to Receiver.
Section 7.2 Conditions to Obligations of Parent and Safety. The obligations of Parent
and Safety to effect the Merger are further subject to the satisfaction or waiver by them on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties of Receiver
contained in Section 4.1(a), Section 4.1(b)(ii), Section 4.1(c) and Section 4.1(d) shall be true
and correct in all material respects as of the date hereof and at and as of the Effective Time as
if made at and as of such time (except to the extent that any such representation and warranty
expressly speaks as of an earlier date, in which case such representation and warranty shall be
true and correct in all material respects as of such earlier date). The other representations and
warranties of Receiver contained in this Agreement shall be true and correct (without giving effect
to any limitation as to materiality or Material Adverse Effect set forth therein) as of the date
hereof and at and as of the Effective Time (except to the extent that any such representation and
warranty expressly speaks as of an earlier date, in which case such representation and warranty
shall be true and correct as of such earlier date), except where the failure of such
representations and warranties to be so true and correct would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on Receiver. Parent shall have
received a certificate signed on behalf of Receiver by the Chief Executive Officer and the Chief
Financial Officer of Receiver to such effect.
(b) Performance of Obligations of Receiver. Receiver shall have performed in all
material respects all obligations required to be performed by it under this Agreement at or prior
to the Closing Date, and Parent shall have received a certificate signed on behalf of Receiver by
the chief executive officer and the chief financial officer of Receiver to such effect.
(c) Absence of Material Adverse Effect on Receiver. Since the date of this Agreement,
there shall not have been any Material Adverse Effect with respect to Receiver.
(d) Ancillary Agreement. Receiver shall (i) have duly and validly executed and
delivered to Parent the Relationship Agreement and (ii) not have revoked or rescinded such
agreement.
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(e) Board of Directors.
(i) The Board of Directors of Receiver shall have been increased to ten members;
(ii) all members of the Board of Directors of Receiver shall have tendered their
resignation, effective at the Effective Time, other than the chief executive officer of
Receiver and three independent members of the Board of Directors of Receiver; and
(iii) the members of the Board of Directors of Receiver shall have appointed the six
directors designated by Parent pursuant to Section 6.17(b) to serve on the Board of
Directors of Receiver effective as of the Effective Time, each to hold office in accordance
with Receiver’s Constituent Documents.
Section 7.3 Conditions to Obligation of Receiver. The obligation of Receiver to
effect the Merger is further subject to the satisfaction or waiver on or prior to the Closing Date
of the following conditions:
(a) Representations and Warranties. The representations and warranties of Parent and
Safety contained in Section 4.2(a), Section 4.2(c), Section 4.2(d), Section 4.2(f)(i) and Section
4.2(y) shall be true and correct in all material respects as of the date hereof and at and as of
the Effective Time as if made at and as of such time (except to the extent that any such
representation and warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct in all material respects as of such earlier
date). The other representations and warranties of Safety and Parent in this Agreement shall be
true and correct (without giving effect to any limitation as to materiality or material adverse
effect set forth therein) as of the date hereof and at and as of the Effective Time (except to the
extent that any such representation and warranty expressly speaks as of an earlier date, in which
case such representation and warranty shall be true and correct as of such earlier date), except
where the failure of such representations and warranties to be so true and correct would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on
Safety. Receiver shall have received a certificate signed on behalf of Parent by the Chief
Executive Officer and Chief Financial Officer of Parent to such effect.
(b) Performance of Obligations of Parent and Safety. Parent and Safety shall have
performed in all material respects all obligations required to be performed by them under this
Agreement at or prior to the Closing Date, and Receiver shall have received a certificate signed on
behalf of Parent by the Chief Executive Officer and Chief Financial Officer of Parent to such
effect.
(c) Absence of Material Adverse Effect on Safety. Since the date of this Agreement,
there shall not have been any Material Adverse Effect with respect to Safety.
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(d) Ancillary Agreements. Parent shall have (i) duly and validly executed and
delivered to Receiver each of the Relationship Agreement, the Software Agreement and the Trademark
Agreement and (ii) not have revoked or rescinded any such agreements.
(e) Parent Election Under 2.8(i). In the event Parent exercised its right to cause a
transfer of some or all of the limited liability company interests of Safety pursuant to Section
2.8(i), Receiver shall not have determined, in good faith, that such transfer would be reasonably
likely to be material and adverse to Receiver’s enterprise value, after taking into account any
indemnification provided to Receiver pursuant to this Agreement or otherwise offered by Parent;
provided, that any effect of such transfer on the basis that Receiver may have in the
limited liability company interests in Safety at any time for purposes of any Tax shall not be
taken into account.
Section 7.4 Frustration of Closing Conditions. None of Receiver, Parent or Safety may
rely on the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3, as the
case may be, to be satisfied if such failure was caused by such party’s failure to comply with its
obligations under Section 6.5, subject to the limitations and restrictions set forth therein.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated, and the Merger
contemplated hereby may be abandoned, at any time prior to the Effective Time, whether before or,
subject to the terms hereof, after Receiver Stockholder Approval or Parent Shareholder Approval has
been obtained:
(a) by mutual written consent of Parent and Receiver;
(b) by either Parent or Receiver if:
(i) the Merger shall not have been consummated by October 31, 2008, provided,
that if, as of October 31, 2008, the conditions set forth in Section 7.1(c) have not been
satisfied, the termination date may be extended from time to time by Parent or Receiver
until the earlier of December 31, 2008 and four Business Days after the date the conditions
to Closing set forth in Section 7.1(c) have been satisfied (such date, including any such
permitted extensions thereof, the “Outside Date”) and provided,
further, that the right to terminate the Agreement pursuant to this Section
8.1(b)(i) shall not be available to any party whose failure to perform any obligation or
other breach under this Agreement has been the cause of, or resulted in, the failure of the
Merger to be consummated by such time;
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(ii) any Governmental Entity issues an order, decree or ruling or takes any other
action permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other action shall have
become final and nonappealable, provided, however, that the right to
terminate this Agreement pursuant to this Section 8.1(b)(ii) shall not be available to any
party who has not used its commercially reasonable efforts to (a) cause such order,
decree or ruling to be lifted or (b) take such action as is required to comply with
Section 6.5;
(iii) Receiver Stockholder Approval shall not have been obtained at the Receiver
Stockholders Meeting or any adjournment or postponement thereof; or
(iv) Parent Shareholder Approval shall not have been obtained at the Parent
Shareholders Meeting or any adjournment or postponement thereof.
(c) by Parent, if:
(i) (x) Receiver shall have breached any of its representations, warranties or
covenants contained in this Agreement, which breach, either individually or in the
aggregate, (i) would result in, if occurring or continuing on the Closing Date,
the failure of a condition set forth in Section 7.2(a) or 7.2(b) and (ii) has not
been or is incapable of being cured by Receiver within 20 Business Days after its receipt
of written notice thereof from Parent; or (y) between the date hereof and the Closing Date
(A) there occurs any state of facts, change, development, effect, condition or occurrence
that, individually or in the aggregate, would reasonably be expected to have a Material
Adverse Effect on Receiver and (B) such state of facts, change, development, effect,
condition or occurrence is incapable of being cured by the Outside Date; provided,
that, in the case of clause (x) or (y), neither Safety nor Parent is then in breach of any
representation, warranty, covenant or agreement contained in this Agreement such that a
condition set forth in Section 7.3(a) or Section 7.3(b) would not be satisfied;
(ii) Receiver shall have breached or, pursuant to the last sentence of Section 5.5(a),
be deemed to have breached, in each case, in any material respect, its obligations under
Section 5.5(a) through (c);
(iii) subject to the penultimate sentences of Section 5.5(c) and Section 5.5(d), the
Board of Directors of Receiver shall have effected a Change in the Receiver Recommendation
or, in the case of a Takeover Proposal with respect to Receiver made by way of a tender
offer or exchange offer, failed to recommend that Receiver’s stockholders reject such
tender offer or exchange offer within the ten Business Day period specified in
Section 14e-2(a) under the Exchange Act; or
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(iv) pursuant to Section 5.6(c) or Section 5.6(d), Parent is entitled to terminate
this Agreement.
(d) by Receiver, if:
(i) (x) Parent or Safety shall have breached any of its representations, warranties or
covenants contained in this Agreement, which breach, either individually or in the
aggregate (i) would result in, if occurring or continuing on the Closing Date, the
failure of a condition set forth in Section 7.3(a) or 7.3(b) and (ii) has not been
or is incapable of being cured by Parent or Safety, as applicable, within 20 Business Days
after its receipt of written notice thereof from Receiver; or (y) between the date hereof
and the Closing Date (A) there occurs any state of facts, change, development, effect,
condition or occurrence that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect on Safety and (B) such state of facts, change,
development, effect, condition or occurrence is incapable of being cured by the Outside
Date; provided, that, in the case of clause (x) or (y), Receiver is not then in
breach of any representation, warranty, covenant or agreement contained in this Agreement
such that a condition set forth in Section 7.2(a) or Section 7.2(b) would not be satisfied;
(ii) Parent or Safety shall have breached or, pursuant to the last sentence of Section
5.6(a), be deemed to have breached, in each case, in any material respect, their respective
obligations under Section 5.6(a) through (c);
(iii) subject to the penultimate sentences of Section 5.6(c) and Section 5.6(d), the
Board of Directors of Parent shall effect a Change in the Parent Recommendation;
(iv) pursuant to Section 5.5(c) or Section 5.5(d), Receiver is entitled to terminate
this Agreement; or
(v) Parent and Safety do not deliver the Safety Audited Financial Statements when
required pursuant to Section 6.14.
Section 8.2 Effect of Termination. In the event of termination of this Agreement by
either Receiver or Parent as provided in Section 8.1, this Agreement shall forthwith become void
and have no effect, without any liability or obligation on the part of Parent, Safety or Receiver,
or any of its Affiliates, directors, officers, shareholders, except that Parent, Safety or
Receiver, as the case may be, may have liability or obligations set forth in Section 6.8, this
Section 8.2, Section 8.3 and Article IX; provided, however, that no such
termination shall relieve any party hereto from any liability for a willful and material breach by
such party of any of its representations, warranties or covenants and agreements set forth in this
Agreement and all rights and remedies of such non-breaching party under this Agreement in the case
of any such breach, at law or in
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equity, shall be preserved. The Confidentiality Agreement shall survive any termination of
this Agreement and shall apply to all information and material delivered by any party hereunder, in
each case in accordance with its terms.
Section 8.3 Termination Fee.
(a) If this Agreement is terminated pursuant to any of the following provisions, Receiver
shall pay to Parent and Safety (in the Agreed Proportion) a fee in the aggregate equal to the
Receiver Termination Fee, which Receiver Termination Fee shall be Parent’s and Safety’s sole remedy
in respect of termination of this Agreement except in the case of any willful and material breach
of this Agreement by Receiver:
(i) Section 8.1(c)(ii), provided that within twelve months after the date of
such termination, Receiver enters into a definitive agreement to consummate, or
consummates, a Takeover Proposal with respect to Receiver; and provided,
further, that, solely for purposes of this Section 8.3(a)(i), the term “Takeover
Proposal” shall have the meaning ascribed thereto in Section 1.1, except that all
references to 20% shall be changed to 50.1%;
(ii) Section 8.1(c)(iii);
(iii) Section 8.1(d)(iv); or
(iv) except where Parent exercised the option set forth in the penultimate sentences
of Section 5.5(c) or Section 5.5(d), Section 8.1(b)(iii), provided that after the
date hereof and prior to the Receiver Stockholders Meeting, (x) a bona fide Takeover
Proposal with respect to Receiver shall have been made to Receiver or publicly to its
stockholders which has not been withdrawn prior to the Receiver Stockholders Meeting or (y)
any Person shall have publicly announced its specific intention to make a bona fide
Takeover Proposal with respect to Receiver, which shall not have been withdrawn prior to
the Receiver Stockholders Meeting, and, in the case of (x) or (y), within twelve months
after the date of such termination, Receiver enters into a definitive agreement to
consummate, or consummates, a Takeover Proposal with respect to Receiver; and
provided, further, that, solely for purposes of this Section 8.3(a)(iv),
the term “Takeover Proposal” shall have the meaning ascribed thereto in Section 1.1, except
that all references to 20% shall be changed to 50.1%.
(b) If Receiver is required to pay a Receiver Termination Fee, such Receiver Termination Fee
(i) shall be payable to each of Parent and Safety based on the Agreed Proportion and
(ii) shall be payable immediately prior to, or concurrently with, termination of this
Agreement in the event of termination by Receiver, and not later than one Business Day after the
receipt by Receiver of a notice of termination from Parent in the event of termination by Parent,
in each case by wire transfer of immediately available
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funds to the accounts designated by Parent (except that, (x) in the case of
termination pursuant to Section 8.1(b)(iii), such payment shall be made on the date of the first to
occur of the events referred to in the first proviso to Section 8.3(a)(iv), or (y) in the
case of a termination pursuant to 8.1(c)(ii), such payment shall be made on the date of the first
to occur of the events referred to in the first proviso to Section 8.3(a)(i)).
(c) If this Agreement is terminated pursuant to any of the following provisions, Parent and
Safety shall pay to Receiver (in the Agreed Proportion) a fee equal in the aggregate to the Safety
Termination Fee, which Safety Termination Fee shall be Receiver’s sole remedy in respect of
termination of this Agreement except in the case of any willful and material breach of this
Agreement by Parent or Safety:
(i) Section 8.1(d)(ii), provided, that within twelve months after the
date of such termination, Safety enters into a definitive agreement to consummate, or
consummates, a Takeover Proposal with respect to Safety; and provided,
further, that, solely for purposes of this Section 8.3(c)(i), the term “Takeover
Proposal” shall have the meaning ascribed thereto in Section 1.1, except that all
references to 20% shall be changed to 50.1%;
(ii) Section 8.1(d)(iii);
(iii) Section 8.1(c)(iv); or
(iv) Except where Receiver has exercised the option set forth in the penultimate
sentences of Section 5.6(c) or Section 5.6(d), Section 8.1(b)(iv), provided that
after the date hereof and prior to the Parent Shareholders Meeting, (x) a bona fide
Takeover Proposal with respect to Safety shall have been made to Safety, Parent or Parent’s
shareholders which has not been withdrawn prior to the Parent Shareholders Meeting or (y)
any Person shall have publicly announced its specific intention to make a bona fide
Takeover Proposal with respect to Safety which has not been withdrawn prior to the Parent
Shareholders Meeting, and, in the case of (x) or (y), within twelve months after the date
of such termination, Safety enters into a definitive agreement to consummate, or
consummates, a Takeover Proposal with respect to Safety; and provided,
further, that, solely for purposes of this Section 8.3(c)(iv), the term “Takeover
Proposal” shall have the meaning ascribed thereto in Section 1.1, except that all
references to 20% shall be changed to 50.1%; or
(d) If Parent and Safety are required to pay Receiver a Safety Termination Fee, each shall pay
its Agreed Portion of such Safety Termination Fee, immediately prior to, or concurrently with,
termination of this Agreement in the event of termination by Parent, and not later than one
Business Day after the receipt by Parent of a notice of termination from Receiver in the event of
termination by Receiver, in each case by wire transfer of immediately available funds to an account
designated by Receiver (except
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that, (x) in the case of termination pursuant to Section 8.1(b)(iv), such payment
shall be made on the date of the first to occur of the events referred to in the first proviso to
Section 8.3(c)(iv), or (y) in the case of a termination pursuant to 8.1(d)(ii), such
payment shall be made on the date of the first to occur of the events referred to in the first
proviso to Section 8.3(c)(i)).
(e) Parent irrevocably and unconditionally guarantees to Receiver the due and punctual payment
of Safety’s Agreed Proportion of the Safety Termination Fee (the “Safety Guaranteed
Obligation”). Safety irrevocably and unconditionally guarantees to Receiver the due and
punctual payment of Parent’s Agreed Proportion of the Safety Termination Fee (the “Parent
Guaranteed Obligation”), and together with the Safety Guaranteed Obligation, the
“Guaranteed Obligations”). This is a guaranty of full and punctual performance and payment
and not merely a guaranty of collection. If the Safety Guaranteed Obligation is not punctually
performed or paid when due the Parent shall immediately pay the Safety Guaranteed Obligation to
Receiver. If the Parent Guaranteed Obligation is not punctually performed or paid when due Safety
shall immediately pay the Parent guaranteed Obligation to Receiver. This is an absolute,
unconditional, irrevocable and continuing guaranty and will remain in full force and effect until
the Guaranteed Obligations have been indefeasibly paid in full or such obligations are no longer
payable under this Agreement.
(f) The parties each agree that the agreements contained in this Section 8.3 are an integral
part of the transaction contemplated by this Agreement, and that, without these agreements, they
would not enter into this Agreement; accordingly, if either Receiver, on the one hand, or Parent on
the other hand, fails promptly to pay any amounts due under this Section 8.3 and, in order to
obtain such payment, Parent or Receiver commences a suit that results in a judgment against either
Receiver or Parent, as applicable, for such amounts, such judgment party shall pay interest on such
amounts from the date payment of such amounts were due to the date of actual payment at the base
rate of Citibank, N.A. in effect on the date such payment was due, together with the costs and
expenses (including reasonable legal fees and expenses) in connection with such suit.
Section 8.4 Amendment. This Agreement may be amended by the parties hereto at any
time, whether before or after the Receiver Stockholder Approval or the Parent Shareholder Approval
has been obtained; provided, however, that after the Receiver Stockholder Approval
or the Parent Shareholder Approval has been obtained, there shall be made no amendment that by
applicable Law or the rules of any relevant stock exchange or regulatory body requires further
approval by the stockholders or shareholders of Receiver or Parent, respectively, without the
further approval of such stockholders or shareholders; provided, further,
however, that following the Effective Time, any amendment of this Agreement shall only be
effected if the audit committee of the Board of Directors of Receiver approves such action by a
majority vote of the
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members of such committee then in office. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
Section 8.5 Extension; Waiver. At any time prior to the Effective Time and to the
extent legally permitted, the parties may (a) extend the time for the performance of any of
the obligations or other acts of the other parties (except to the extent prohibited by applicable
Law), (b) waive any inaccuracies in the representations and warranties of the other parties
contained herein or in any document delivered pursuant hereto or (c) waive compliance with
any of the agreements or conditions contained herein; provided, however, that after
the Receiver Stockholder Approval or Parent Shareholder Approval has been obtained, there shall be
made no waiver that by law or the rules of any relevant stock exchange requires further approval by
such respective approving stockholders or shareholders without the further approval of such
stockholders or shareholders; provided, further, however, that following
the Effective Time, any waiver of this Agreement shall only be effected if the audit committee of
the Board of Directors of Receiver approves such action by a majority vote of the members of such
committee then in office. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of the party or
parties to be bound thereby. The failure or delay by any party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of such rights nor shall
any single or partial exercise by any party to this Agreement of any of its rights under this
Agreement preclude any other or further exercise of such rights or any other rights under this
Agreement.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 9.1 shall not limit any covenant or
agreement of the parties that by its terms contemplates performance after the Effective Time and
the covenants contained in Section 6.9 and 6.16, which shall survive after the Effective Time.
Section 9.2 Notices. All notices, requests, claims, demands and other communications
under this Agreement shall be in writing and shall be deemed given (a) on the date of
delivery, upon delivery in person or if sent by facsimile (receipt of which is confirmed),
(b) on the day after delivery, by registered or certified mail (postage prepaid, return
receipt requested), or (c) one Business Day after having been sent by express mail through
an internationally recognized overnight courier, in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like notice):
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if to Parent or Safety, to: |
Misys plc
000 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx X0 0XX
Xxxxxx Xxxxxxx
Attention: Group General Counsel & Company Secretary
Fax: x00 (0)00 0000-0000
with a copy (which copy shall not constitute notice) to:
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Bab, Esq.
Fax: x0 000 000-0000
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if to Receiver or Merger Sub, to: |
Allscripts Healthcare Solutions, Inc.
000 Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: x0 000 000-0000
with a copy (which copy shall not constitute notice) to:
Sidley Austin LLP
Xxx Xxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
and Xxxx X. Xxxxxxxx
Fax: x0 000 000-0000
Section 9.3 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule or law, or public policy, all other
terms and provisions of this Agreement shall nevertheless remain in full force and effect so long
as the economic and legal substance of the transactions contemplated hereby are not affected in any
manner materially adverse to any party. 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 an acceptable manner to the end that the transactions contemplated hereby are fulfilled
to the extent possible.
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Section 9.4 Counterparts. This Agreement may be executed in one or more counterparts,
each of which when executed shall be deemed an original document and all of which shall be
considered one and the same agreement and shall become effective when one or more counterparts have
been signed by each of the parties and delivered to the other parties. Until and unless each party
has received a counterpart hereof signed by the other parties hereto, this Agreement shall have no
effect and no party shall have any right or obligation hereunder (whether by virtue of any other
oral or written agreement or other communication).
Section 9.5 Entire Agreement; No Third Party Beneficiaries. This Agreement (together
with the Receiver Disclosure Letter and Safety Disclosure Letter) (a) constitutes the
entire agreement, and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement, except that the
Confidentiality Agreement, the Transition Services Agreement (if entered into), the Relationship
Agreement, Trademark Agreement, Software Agreement (if entered into) and the Voting Agreement will
continue in accordance with their terms, and (b) except for the provisions of Section 6.7
(and only in that case after the Effective Time), is not intended to confer upon any Person other
than the parties hereto (and their respective successors and assigns) any rights or remedies. For
the avoidance of doubt, no other provision of this Agreement, including Section 6.10 or any other
provision relating to employee benefits or compensation, shall be deemed to confer third party
beneficiary rights on any Person, notwithstanding any principle of contractual interpretation that
would otherwise confer such rights.
Section 9.6 Governing Law. This Agreement (and any claims or disputes arising out of
or related thereto or to the transactions contemplated thereby or to the inducement of any party to
enter therein, whether for breach of contract, tortious conduct or otherwise and whether predicated
on common law, statute or otherwise) shall in all respects be governed by and construed in
accordance with the laws of the State of Delaware, including all matters of construction, validity
and performance, in each case without reference to any conflict of law rules that might lead to the
application of the laws of any other jurisdiction.
Section 9.7 Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned or delegated, in whole or in part (except by operation of
law), by any of the parties hereto without the prior written consent of the other parties hereto.
Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties hereto and their respective successors and assigns.
Section 9.8 Enforcement.
(a) The parties agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
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specific terms or were otherwise breached. It is accordingly agreed that the parties shall be
entitled to seek an injunction or injunctions or other appropriate equitable relief to prevent
breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement
in the Delaware Court of Chancery (unless such court shall lack subject matter jurisdiction, in
which case, in any state or federal court located in Delaware), this being in addition to any other
remedy to which they are entitled at law or in equity, and the parties hereby waive in any such
proceeding the defense of adequacy of a remedy at law and any requirement for the securing or
posting of any bond or any other security related to such equitable relief. In addition, each of
the parties hereto (a) submits to the personal jurisdiction of the Delaware Court of
Chancery (unless such court shall lack subject matter jurisdiction, in which case, in any state or
federal court located in Delaware) in the event any dispute (whether in contract, tort or
otherwise) arises out of this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any such court,
(c) agrees that it will not bring any action relating to this Agreement in the Delaware
Court of Chancery (unless such court shall lack subject matter jurisdiction, in which case, in any
state or federal court located in Delaware), and (d) irrevocably waives any and all right
to trial by jury with respect to any action related to or arising out of this Agreement or the
transactions contemplated hereby.
(b) Notwithstanding any other provision of this Agreement or any agreement contemplated hereby
to the contrary, in the event that, after the Effective Time (a) there is any action, suit,
proceeding, litigation or arbitration between Receiver or any of its Subsidiaries, on the one hand,
and Parent or any Affiliate of Parent, on the other hand, or (b) there is any disputed
claim or demand (including any claim or demand relating to enforcing any remedy under this
Agreement or any agreement contemplated hereby) by Receiver or any of its Subsidiaries against
Parent (or an Affiliate of Parent), or by Parent (or an Affiliate of Parent) against Receiver or
any of its Subsidiaries, all determinations of Receiver and any of its Subsidiaries relating to
such action, suit, proceeding, litigation, arbitration, claim, demand (including all determinations
by Receiver or any of its Subsidiaries whether to institute, compromise or settle any such action,
suit, proceeding, litigation, arbitration, claim or demand and all determinations by Receiver or
any of its Subsidiaries relating to the prosecution or defense thereof), shall be made by Receiver
in accordance with the directions of the audit committee of its Board of Directors.
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IN WITNESS WHEREOF, Parent, Safety, Receiver and Merger Sub have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the date first written
above.
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Misys plc
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By: |
/s/ J. Xxxxxxx Xxxxxx
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Name: |
J. Xxxxxxx Xxxxxx |
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Title: |
Chief Executive Officer |
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Misys Healthcare Systems, LLC
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By: |
/s/ Xxxxxx Xxxxxxxx
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Name: |
Xxxxxx Xxxxxxxx |
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Title: |
Chief Financial Officer |
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Allscripts Healthcare Solutions, Inc.
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By: |
/s/ Xxxx X. Xxxxxxx
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Name: |
Xxxx X. Xxxxxxx |
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Title: |
Chief Executive Officer |
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Patriot Merger Company, LLC
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By: |
/s/ Xxx Xxxxxxx
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Name: |
Xxx Xxxxxxx |
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Title: |
President |
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Exhibit A
Employment Contract Parties
Xxxx X. Xxxxxxx
Xxx Xxxxxxx
Xxxxxxx X. Xxxxx
Exhibit B
FORM OF SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the Corporation formerly known as Allscripts Healthcare Solutions, Inc. is
hereby amended to be ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC. (the “Corporation”).
2. The Corporation was originally incorporated under the name [ ] by the filing of a
Certificate of Incorporation with the Secretary of State of the State of Delaware on July 11, 2000.
An Amended and Restated Certificate of Incorporation changing the name of the Corporation from
Allscripts Holding, Inc., to Allscripts Healthcare Solutions, Inc., was filed with the Secretary of
State of the State of Delaware on [January 9, 2001].
3. The Corporation’s Amended and Restated Certificate of Incorporation is hereby amended and
restated pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware,
so as to read in its entirety in the form attached hereto as Exhibit A and incorporated herein by
this reference (Exhibit A and this Certificate collectively constituting the Corporation’s Second
Amended and Restated Certificate of Incorporation).
4. This amendment and restatement of the Amended and Restated Certificate of Incorporation of
the Corporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of
the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation
having adopted resolutions setting forth such amendment and restatement, declaring its
advisability, and directing that it be submitted to the stockholders of the Corporation for their
approval; and the holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted having consented to the adoption of such amendment and
restatement.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Second
Amended and Restated Certificate of Incorporation of the Corporation on the [ ]th day
of [ ], 2008.
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ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. |
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By:
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[
]
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Name:
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[ ] |
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Title:
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[ ] |
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SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Certificate of Incorporation”)
FIRST. The name of the corporation is ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Corporation”).
SECOND. The address of the Corporation’s registered office in the State of Delaware
is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County of New Castle. The name of the
Corporation’s registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business and the objects and purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware, provided that the
Corporation shall not have the power to issue shares of capital stock in the Corporation, or any
bonds, notes, debentures or other obligations or securities convertible or exchangeable into or
exercisable for any such shares, in violation of Section 9 of the Relationship Agreement, dated as
of March 17, 2008 (as may be amended from time to time, the “Relationship Agreement”), between the
Corporation and
Misys plc (“Misys”) for so long as such Section 9 of the Relationship Agreement is
in effect.
FOURTH.
1. Authorized Shares. The total number of shares of stock of all classes which the
Corporation shall have authority to issue is two-hundred million (200,000,000), of which one
million (1,000,000) shall be shares of Preferred Stock with a par value of $0.01 per share
(“Preferred Stock”), and one hundred and ninety-nine million (199,000,000) shall be shares of
Common Stock with a par value of $0.01 per share (“Common Stock”).
2. Preferred Stock.
(a) The Preferred Stock shall be issuable in series, and in connection with the
issuance of any series of Preferred Stock and to the extent now or hereafter permitted by
the laws of the State of Delaware, the designation of each series, the stated value of the
shares of each series, the dividend rate or rates of each series (which rate or rates may
be expressed in terms of a formula or other method by which such rate or rates shall be
calculated from time to time) and the date or dates and other provisions respecting the
payment of dividends, the provisions, if
any, for a sinking fund for the shares of each series, the preferences of the shares
of each series in the event of the liquidation or dissolution of the Corporation, the
provisions, if any, respecting the redemption of the shares of each series and, subject to
requirements of the laws of the State of Delaware, the voting rights (except that such
shares shall not have more than one vote per share), the terms, if any, upon which the
shares of each series shall be convertible into or exchangeable for any other shares of
stock of the Corporation and any other relative, participating, optional or other special
rights, preferences, powers, and qualifications, limitations or restrictions thereof, of
the shares of each series, shall, in each case, be fixed by resolution of the Board of
Directors.
(b) Preferred Stock of any series redeemed, converted, exchanged, purchased, or
otherwise acquired by the Corporation shall constitute authorized but unissued Preferred
Stock.
(c) All shares of any series of Preferred Stock, as between themselves, shall rank
equally and be identical (except that such shares may have different dividend provisions);
and all series of Preferred Stock, as between themselves, shall rank equally and be
identical except as set forth in the resolutions authorizing the issuance of such series.
3. Common Stock.
(a) After dividends to which the holders of Preferred Stock may then be entitled under
the resolutions creating any series thereof have been declared and after the Corporation
shall have set apart the amounts required pursuant to such resolutions for the purchase or
redemption of any series of Preferred Stock, the holders of Common Stock shall be entitled
to have dividends declared in cash, property, or other securities of the Corporation out of
any profits or assets of the Corporation legally available therefor, if, as and when such
dividends are declared by the Corporation’s Board of Directors upon an affirmative vote of
a majority of the entire Board of Directors.
(b) In the event of the liquidation or dissolution of the Corporation’s business and
after the holders of Preferred Stock shall have received amounts to which they are entitled
under the resolutions creating such series, the holders of Common Stock shall be entitled
to receive ratably the balance of the Corporation’s assets available for distribution to
stockholders.
(c) Each share of Common Stock shall be entitled to one vote upon all matters upon
which stockholders have the right to vote, but shall not be entitled to vote for the
election of any directors who may be elected by vote of the Preferred
4
Stock voting as a class if so provided in the resolution creating such Preferred Stock
pursuant to Section 2(a) of this Article FOURTH.
4. Preemptive Rights. Except as expressly agreed in writing by the Corporation,
including, without limitation, the Relationship Agreement, no stockholder of any shares of the
Corporation by reason of such stockholder holding shares of any class or series of capital stock of
the Corporation shall have any preemptive right to subscribe for or to acquire any additional
shares of the Corporation of the same or of any other class whether now or hereafter authorized or
any options or warrants giving the right to purchase any such shares, or any bonds, notes,
debentures or other obligations convertible into any such shares.
FIFTH. The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
SEVENTH: Except as may otherwise be fixed by resolution of the Board of Directors
pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of
Preferred Stock to elect directors as a class, the number of directors of the Corporation shall be
fixed from time to time by or pursuant to the By-Laws of the Corporation. The directors, other than
those who may be elected by the holders of Preferred Stock, shall be classified, with respect to
the time for which they severally hold office, into three classes, as nearly equal in number as
possible. The first class shall be initially elected for a term expiring at the next ensuing annual
meeting, the second class shall be initially elected for a term expiring one year thereafter, and
the third class shall be elected for a term expiring two years thereafter, with each member of each
class to hold office until his successor is elected and qualified. At each annual meeting of the
stockholders of the Corporation held after the initial classification and election of directors,
the successors of the class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in the third year
following the year of their election.
Advance notice of stockholder nominations for the election of directors shall be given in the
manner provided in the By-Laws of the Corporation.
Except as may otherwise be fixed by resolution of the Board of Directors pursuant to the provisions
of Article FOURTH hereof relating to the rights of the holders of Preferred Stock to elect
directors as a class, newly created directorships resulting from any increase in the number of
directors and any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or any other cause shall be filled by the affirmative vote of a majority
of the remaining directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the
5
preceding sentence shall hold office for the remainder of the full term of the class of directors
in which the new directorship was created (subject to the requirements of this Article SEVENTH that
all classes be as nearly equal in number as possible) or in which the vacancy occurred and until
such director’s successor shall have been elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of an incumbent director.
Subject to any rights of the holders of Preferred Stock to elect directors as a class, a director
may be removed only for cause and only by the affirmative vote of the holders of 80% of the
combined voting power of the then outstanding shares of stock entitled to vote generally in the
election of directors, voting together as a single class.
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is
expressly authorized:
1. To adopt, amend and repeal the By-Laws of the Corporation. Any By-Laws adopted by the
directors under the powers conferred hereby may be amended or repealed by the directors or by the
stockholders. Notwithstanding the foregoing or any other provision in this Certificate of
Incorporation or the By-Laws of the Corporation to the contrary, Article 11, Sections 3 and 7 and
Article III, Sections 1, 2 and 3 of the By-Laws shall not be amended or repealed and no provision
inconsistent therewith shall be adopted without the affirmative vote of the holders of at least 80%
of the voting power of all the shares of the Corporation entitled to vote generally in the election
of directors, voting together as a single class.
2. To fix and determine, and to vary the amount of, the working capital of the Corporation,
and to determine the use or investment of any assets of the Corporation, to set apart out of any of
the funds of the Corporation available for dividends a reserve or reserves for any proper purpose
and to abolish any such reserve or reserves.
3. To authorize the purchase or other acquisition of shares of stock of the Corporation or any
of its bonds, debentures, notes, scrip, warrants or other securities or evidence of indebtedness.
4. Except as otherwise provided by law, to determine the places within or without the State of
Delaware, where any or all of the books of the Corporation shall be kept.
5. To authorize the sale, lease or other disposition of any part or parts of the properties of
the Corporation and to cease to conduct the business connected therewith or again to resume the
same, as it may deem best.
6. To authorize the borrowing of money, the issuance of bonds, debentures and other
obligations or evidences of indebtedness of the Corporation, secured or unsecured,
6
and the inclusion of provisions as to redeemability and convertibility into shares of stock of the
Corporation or otherwise; and the mortgaging or pledging, as security for money borrowed or bonds,
notes, debentures or other obligations issued by the Corporation, of any property of the
Corporation, real or personal, then owned or thereafter acquired by the Corporation.
7. To authorize the negotiation and execution on behalf of the Corporation of agreements with
officers and other employees of the corporation relating to the payment of severance compensation
to such officers or employees.
In addition to the powers and authorities herein or by statute expressly conferred upon it,
the Board of Directors may exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation, subject, nevertheless, to the provisions of the laws of the
State of Delaware, of this Certificate of Incorporation and of the By-Laws of the Corporation.
Subject to any limitation in the By-Laws, the members of the Board of Directors shall be
entitled to reasonable fees, salaries, or other compensation for their services, as determined from
time to time by the Board of Directors, and to reimbursement for their expenses as such members.
Nothing herein contained shall preclude any director from serving the Corporation or its
subsidiaries or affiliates in any other capacity and receiving compensation therefor.
Notwithstanding anything contained in this Amended and Restated Certificate of Incorporation to the
contrary, the affirmative vote of the holders of at least 80% of the voting power of all shares of
the Corporation entitled to vote generally in the election of directors, voting together as a
single class, shall be required to alter, amend, adopt any provision inconsistent with or repeal
this Article SEVENTH.
EIGHTH: Both stockholders and directors shall have power, if the By-Laws so provide,
to hold their meetings and to have one or more offices within or without the State of Delaware.
Except as may otherwise be fixed by resolution of the Board of Directors pursuant to the provisions
of Article FOURTH hereof relating to the rights of the holders of Preferred Stock, any action
required or permitted to be taken by the stockholders of the Corporation may be effected at a duly
called annual or special meeting of such holders and may not be effected by any consent in writing
by such holders. Except as otherwise required by law and subject to the rights of the holders of
Preferred Stock, special meetings of stockholders may be called only by the Chairman, if any, on
his own initiative, the President on his own initiative or by the Board of Directors pursuant to a
resolution approved by a majority of the entire Board of Directors. Notwithstanding anything
7
contained in this Amended and Restated Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting together as a single
class, shall be required to alter, amend, adopt any provision inconsistent with or repeal this
Article EIGHTH.
NINTH: The Board of Directors is expressly authorized to adopt, amend or repeal the
By-Laws of the Corporation by the affirmative vote of a majority of the entire Board of Directors;
provided that Articles III, IV, V and VIII of the By-Laws may only be amended by the Board of
Directors by the vote of both a majority of the entire Board of Directors and a majority of the
Members of the Audit Committee, in addition to such other amendment requirements as are set forth
herein.
TENTH:
1. The Board of Directors may, pursuant to this Certificate of Incorporation, the By-Laws or
by resolution approved by the majority of the Board of Directors, designate one or more committees,
which, to the extent provided in this Certificate of Incorporation, the By-Laws or by resolution,
to the fullest extent permitted by law, shall have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the Corporation and may authorize the
seal of the Corporation to be affixed to all papers which may require it. These committees shall
include, but are not limited to, an Independent Nominating Committee, an Audit Committee, a
Nominating and Governance Committee, a Compensation Committee and such other committees as
determined by the Board of Directors (collectively, the “Committees”).
(a) Each Committee must consist of two (2) or more of the directors of the
Corporation, one (1) of which must be a member of the Independent Nominating Committee.
(b) The Board of Directors, by resolution approved by a majority of the entire board,
shall designate members for each Committee in compliance with specific membership
requirements set forth herein and in any resolutions establishing such Committees.
(c) The Committees shall have such names as set forth herein or as may be determined
from time to time by resolution approved by a majority of the Board of Directors.
(d) Each Committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
8
(e) All of the members of a Committee or Subcommittee shall constitute a quorum for
the transaction of business at any meeting of such Committee or Subcommittee. The Act of
the majority of the members of a Committee or Subcommittee at a meeting at which a quorum
is present shall be the act of such Committee or Subcommittee, unless otherwise set forth
herein or in the charter to such Committee or Subcommittee.
2. The Audit Committee shall consist of three (3) Receiver directors (as hereinafter defined),
one (1) of which must be a financial expert. The Audit Committee shall have such powers and
responsibilities as set forth herein and as determined in the audit committee charter, to be
approved by the majority of the entire board, which include, but are not limited to the authority
to supervise auditors and make decisions regarding accounting matters.
For the purposes of this Article V:
(a) an independent director will be an individual who, in accordance with Rule 4350
of the National Association of Securities Dealers Automated Quotations (“Nasdaq”), would be
eligible for membership on an Audit Committee of a corporation listed on Nasdaq, and
(b) a financial expert will be an individual fulfilling the requirements of the
definition set forth the Securities and Exchange Commission in Item 407 of Regulation S-K.
3. The Nominating Committee shall consist five (5) directors, comprised of (i) three (3)
directors initially designated as Receiver directors by the Board of Directors as of [ ],
2008 and each other person nominated for election or appointment to the Board of Directors by the
Independent Nominating Subcommittee pursuant to this subclause 3 (excluding the chief executive
officer, the “Receiver directors”) and (ii) two (2) other directors designated as members of such
Nominating Committee as of [ ], 2008 and each other person designated as a member of the
Nominating and Governance Subcommittee (other than any Receiver directors) by the majority of the
entire board resulting from any vacancies therein (the “Quarterback directors”). The Nominating
Committee shall have such powers and responsibilities as determined in the nominating committee
charter, to be approved by the majority of the entire board, which shall include, but are not
limited to, (x) the sole authority to nominate directors to stand for election by stockholders in
accordance with this Certificate of Incorporation and the By-Laws of the Corporation, (y) the sole
authority to nominate directors to stand for election by the Board of Directors to fill any
vacancies on the Board of Directors of independent directors and the chief executive officer,
resulting from death, resignation, disqualification, removal or other cause and (z) the authority
to establish governance principles. The Nominating Committee shall delegate its authority to the
Independent
9
Nominating Subcommittee and the Nominating and Governance Subcommittee, to be comprised and with
such powers as set forth below:
(a) The Independent Nominating Subcommittee. The Independent Nominating
Committee shall consist of the Receiver directors and shall have:
(i) the sole authority to nominate to the Board of Directors independent
directors for directorships previously held by independent directors (but in no
event more than three (3)), and the chief executive officer to stand for election
by stockholders in accordance with this Certificate of Incorporation and the
By-Laws of the Corporation, and
(ii) the sole authority to nominate to the Board of Directors replacements
for vacancies on the Board of Directors of independent directors and the chief
executive officer, resulting from death, resignation, disqualification, removal or
other cause, provided that any such nominations for replacement of the directorship
previously held by a chief executive officer shall be the then-serving chief
executive officer having been designated as set forth in the By-Laws.
(b) The Nominating and Governance Subcommittee. The Nominating and
Governance Subcommittee shall consist of the three (3) directors designated as members of
such subcommittee as of [ ], 2008 and each other person designated by the Nominating
Committee as a member of the Nominating and Governance Subcommittee resulting from any
vacancies therein, two (2) of whom shall be Quarterback directors and one (1) of whom shall
be a Receiver director, and shall have:
(i) The sole authority to nominate to the Board of Directors directors for
directorships previously held by directors other than the chief executive officer
or independent directors (but in no event more than six (6)), to stand for election
by stockholders in accordance with this Certificate of Incorporation and the
By-Laws;
(ii) the sole authority to nominate replacements for vacancies of directors
previously nominated by the Nominating and Governance Committee, resulting from
death, resignation, disqualification, removal or other cause; and
(iii) the authority to establish governance principles.
4. The Compensation Committee shall consist of three (3) members selected by the majority of
the entire Board of Directors, two (2) of whom shall be Receiver
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Directors and one (1) of whom shall be the Chairman. The Compensation Committee shall have
such powers and responsibilities as determined in the Compensation Committee charter, which shall
be approved by the majority of the entire Board of Directors. The powers and responsibilities of
the Compensation Committee shall include, but not be limited to, approving all executive officer
compensation matters, including salary levels, bonus levels, grants and issuances of new securities
under existing stock plans, and recommending the adoption of new incentive plans to the Board of
Directors, which shall in each case be subject to the further approval of the majority of the
entire Board of Directors; provided, that, with respect to any award intended to constitute
“performance-based compensation” within the meaning of Section 162(m) of the U.S. Internal Revenue
Code and the regulations promulgated thereunder, the Compensation Committee charter shall provide
for the delegation of its authority to a subcommittee of the Compensation Committee consisting
solely of two “outside directors” within the meaning of such Section of the U.S. Internal Revenue
Code and the regulations promulgated thereunder.
5. The following actions must be approved by the Audit Committee and the majority of the
entire board:
(a) Any action intended to result in the de-listing of the common stock of the
Corporation from Nasdaq or any other exchange upon which such stock is listed for trading;
(b) Any commercial or other transaction including, without limitation, any
squeeze-out of other stockholders effected by merger, reverse stock split or otherwise or
any arrangement involving a management fee payable to Misys or its subsidiaries (other than
the Corporation and its subsidiaries) and agreements between the Corporation or any of its
subsidiaries, on the one hand, and Misys or any of its subsidiaries (other than the
Corporation and its subsidiaries), on the other hand, other than transactions pursuant to
the current terms of agreements entered into on or prior to the date hereof, or replacement
agreements (so long as the terms of such replacement agreements are not less favorable to
the Corporation); and
[(c) Any change or modification to the audit committee charter in effect on [
], 2008.]1
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1 |
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This clause (c) shall only be included if prior to the
approval of this Certificate of Incorporation, the audit committee charter
shall have been amended to remove the phrase “as the Committee deems
appropriate, or” from the section entitled “Other Responsibilities as
Appropriate” and provided that as of closing, no other amendments to this
charter shall have been made |
11
ELEVENTH:
1. A director of the Corporation, including a member of the Independent Nominating Committee
or the Governance and Nominating Committee, shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability (a) for any breach of the director’s duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) under Section 174 of the General Corporation Law of the State of
Delaware or (d) for any transaction from which the director derived an improper personal benefit.
If the General Corporation Law of the State of Delaware, or any other applicable law, is amended to
authorize corporation action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, or any other applicable
law, as so amended. Any repeal or modification of this Section 1. by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
2. (a) Each person who has been or is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit plans (hereinafter
an “Indemnitee”), whether the basis of such proceeding is an alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the General Corporation Law of the State of
Delaware, or any other applicable law, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expenses, liability and loss
(including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts
paid or to be paid in settlement) reasonably incurred or suffered by such Indemnitee in
connection therewith and such indemnification shall continue as to an Indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the benefit of his
or her heirs, executors and administrators; provided, however, that except as provided in
paragraph (b) of this Section (2) with respect to proceedings seeking to enforce rights to
indemnification, the Corporation shall indemnify any such
12
Indemnitee seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred in this
Section (2) shall be a contract right. In addition to the right of indemnification, an
Indemnitee shall have the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided, however, that
if the General Corporation Law of the State of Delaware, or any other applicable law,
requires, the payment of such expenses incurred by an Indemnitee in his or her capacity as
a director or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding shall be made
only upon delivery to the Corporation of an undertaking by or on behalf of such Indemnitee
to repay all amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section (2) or otherwise.
(b) If a claim under paragraph (a) of this Section (2) is not paid in full by the
Corporation within thirty days after a written claim has been received by the Corporation,
the claimant may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the claimant
has not met the standard of conduct which make it permissible under the General Corporation
Law of the State of Delaware, or any other applicable law, for the Corporation to indemnify
the claimant for the amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of Directors,
stockholders or independent legal counsel) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the State of Delaware, or any other applicable law, nor an
actual determination by the Corporation (including its Board of Directors, stockholders or
independent legal counsel) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
(c) The right to indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in this Section (b) shall not be
exclusive of any other right which any person may have or
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hereafter acquire under any statute, provision of this Certificate of Incorporation,
By-Laws, agreement, vote of stockholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the General Corporation Law of the State of Delaware,
or any other applicable law.
(e) The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its final disposition, to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Section (2) with respect to the indemnification and advancement of expenses of directors
and officers of the Corporation.
(f) Any repeal or modification of this Section (2) shall not adversely affect any
right or protection of a director, officer, employee or agent of the Corporation existing
at the time of such repeal or modification.
TWELFTH. As used in this Certificate of Incorporation, the term the “majority of the
entire Board of Directors” means the majority of the total number of directors which the
Corporation would have if there were no vacancies, and the Term “majority of the Board of
Directors” means the majority of the directors present and voting.
THIRTEENTH. The Corporation elects not to be governed by Section 203 of the General
Corporation Law of the State of Delaware, “Business Combinations With Interested Stockholders”, as
permitted under and pursuant to subsection (b)(3) of Section 203 of the DGCL.
FOURTEENTH. Except as otherwise provided in this Certificate of Incorporation or as
set forth in the By-Laws, the Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed
by statute; provided; however, that no amendment, alteration, modification, waiver
or change to Article NINTH, Article TENTH, this Article FOURTEENTH or the first, third or seventh
paragraphs of Article SEVENTH may be made without the prior written approval of the Corporation’s
Audit Committee; provided; further, however, that Misys shall not propose
or vote in favor of any amendment, alteration, modification, change in or waiver from this
Certificate of Incorporation that would be inconsistent with the By-Laws or the Relationship
Agreement.
14
Exhibit B.1
FORM OF BY-LAWS
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “By-Laws”)
As amended and restated on [___], 2008
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of Allscripts-Misys Healthcare
Solutions, Inc. (the “Corporation”) shall be in Wilmington, New Castle County, Delaware.
Section 2. Principal Office. The Corporation shall have its principal office at 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx, and it may also have offices at such other places as the
board of directors of the Corporation (the “board of directors”) may from time to time determine.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of stockholders for the election of the
members of the board of directors (the “directors” and each a “director”) and for the transaction
of such other business as may properly come before the meeting shall be held each year, at such
place, if any, and on such date and at such time, as may be fixed from time to time by resolution
approved by a majority of the board of directors and set forth in the notice or waiver of notice of
the meeting.
(a) At an annual meeting of stockholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (1) specified in the notice of meeting, or any supplement
thereto, given by or at the direction of the
board of directors, (2) otherwise properly brought before the meeting by or at the
direction of the board of directors, or (3) otherwise properly brought before the meeting
by a stockholder.
(b) For business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the secretary of the
Corporation not less than one hundred and twenty (120) days prior to the anniversary date
of the immediately preceding annual meeting nor more than one hundred and fifty (150) days
prior to the anniversary date of the immediately preceding annual meeting. A stockholder’s
notice to the secretary of the Corporation shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (1) a brief description of the
business desired to be brought before the annual meeting, (2) the name and address, as they
appear on the Corporation’s stockholder records, of the stockholder proposing such
business, (3) the class and number of shares of the Corporation which are beneficially
owned by the stockholder, and (4) any material interest of the stockholder in such
business.
(c) Irrespective of anything in these By-Laws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set forth in this
Section 1 of Article II. The presiding officer of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly brought before
the meeting in accordance with the provisions of this Section 1 of Article II, and if it is
so determined, shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
Section 2. Special Meetings. Special meetings of the stockholders may be called only
by the chairman of the Board (the “Chairman”), the president or the board of directors pursuant to
a resolution approved by a majority of the board of directors.
Section 3. Stockholder Action; How Taken. Any action required or permitted to be
taken by the stockholders of the Corporation must be effected at a duly called annual or special
meeting of such holders and may not be effected by any consent in writing by such holders.
Section 4. Place of Meeting; Participation in Meetings by Remote Communication.
(a) The board of directors may designate any place, either within or without Delaware,
as the place of meeting for any annual or special meeting. In the absence of any such
designation, the place of meeting shall be the principal office of the Corporation
designated in Section 2 of Article I of these By-Laws.
2
(b) The board of directors, acting in its sole discretion, may establish guidelines
and procedures in accordance with applicable provisions of the General Corporation Law of
the State of Delaware (the “DGCL”) and any other applicable law for the participation by
stockholders and proxyholders in a meeting of stockholders by means of remote
communications, and may determine that any meeting of stockholders will not be held at any
place but will be held solely by means of remote communication. Stockholders and
proxyholders complying with such procedures and guidelines and otherwise entitled to vote
at a meeting of stockholders shall be deemed present in person and entitled to vote at a
meeting of stockholders, whether such meeting is to be held at a designated place or solely
by means of remote communication.
Section 5. Notice of Meetings. Notice stating the place, if any, day and hour of the
meeting, the means of remote communication, if any, by which proxyholders and stockholders may be
deemed to be present and vote at such meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given not less than ten nor more than sixty days
before the date of the meeting, or in the case of a merger or consolidation, if required by
applicable law, not less than twenty nor more than sixty days before the date of the meeting, by or
at the direction of the Chairman or the chief executive officer, or the secretary, or the officer
or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United States mails in a
sealed envelope addressed to the stockholder at his address as it appears on the records of the
Corporation with postage thereon prepaid.
Section 6. Record Date. For the purpose of determining (a) stockholders entitled to
notice of or to vote at any meeting of stockholders, or (b) stockholders entitled to receive
payment of any dividend, or (c) stockholders for any other purpose other than by written consent,
the board of directors may fix in advance a date as the record date for any such determination of
stockholders, such date in any case to be not more than sixty days and not less than ten days
before the date of the meeting or, with respect to any other action hereinbefore described in
clauses (b) and (c), not more than sixty days prior to the date on which the particular action
requiring such determination of stockholders is to be taken.
Section 7. Quorum. The holders of not less than one-third of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute, by the certificate of incorporation or by these
By-laws. If, however, such quorum shall not be present or represented at any meeting of the
stockholders, the chairman of the meeting shall have the power to adjourn the meeting from time to
time, without notice other than
3
announcement at the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
When a quorum is present at any meeting, the vote of the holders of a majority of the stock
having voting power present in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express provision of the statutes or
of the certificate of incorporation or of these by-laws, a different vote is required in which case
such express provision shall govern and control the decision of such question.
Section 8. Procedure. The order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the chairman of the meeting. The board of
directors shall appoint one or more inspectors of election to serve at every meeting of
stockholders at which directors are to be elected.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Terms. Except as otherwise fixed pursuant to the
provisions of Article Fourth of the certificate of incorporation relating to the rights of the
holders of any class or series of stock having a preference over the common stock as to dividends
or upon liquidation to elect additional directors under specified circumstances, the number of
directors shall be a minimum of three and fixed from time to time by the board of directors. The
directors, other than those who may be elected by the holders of any class or series of stock
having a preference over the common stock as to dividends or upon liquidation, shall be classified,
with respect to the time for which they severally hold office, into three classes, as near equal in
number as possible, as determined by the board of directors, one class to hold office initially for
a term expiring at the annual meeting of stockholders to be held in 2001, another class to hold
office initially for a term expiring at the annual meeting of stockholders to be held in 2002 and
another class to hold office initially for a term expiring at the annual meeting of stockholders to
be held in 2003, with the members of each class to hold office until their successors are elected
and qualified. At each annual meeting of stockholders, the successors of the class of directors
whose term expires at that meeting shall be elected to hold office for a term expiring at the
annual meeting of stockholders held in the third year following the year of their election.
The term the “entire board” as used in these by-laws means the total number of directors which
the Corporation would have if there were no vacancies.
4
Subject to the rights of holders of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for the election of directors may be
made by the board of directors or a committee appointed by the board of directors or by any
stockholder entitled to vote in the election of directors generally. However, any stockholder
entitled to vote in the election of directors generally may nominate one or more persons for
election as directors at a meeting only if written notice of such stockholder’s intent to make such
nomination or nominations has been given, either by personal delivery or by United States mail,
postage prepaid, to the secretary of the Corporation not later than (a) with respect to an election
to be held at an annual meeting of stockholders, one hundred twenty (120) days nor earlier than one
hundred fifty (150) days prior to the anniversary date of the immediately preceding annual meeting,
and (b) with respect to an election to be held at a special meeting of stockholders for the
election of directors, the close of business on the tenth day following the date on which notice of
such meeting is first given to stockholders. Each such notice shall set forth: (a) the name and
address of the stockholder who intends to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any other person or
persons, naming such person or persons, pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission; and (e) the consent of each nominee to serve as a
director of the Corporation if so elected. The chairman of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the foregoing procedure.
Section 2. Newly Created Directorships and Vacancies. Except as otherwise fixed
pursuant to the provisions of Article Fourth of the certificate of incorporation relating to the
rights of the holders of any class or series of stock having a preference over the common stock as
to dividends or upon liquidation to elect directors under specified circumstances, newly created
directorships resulting from any increase in the number of directors and any vacancies on the board
of directors resulting from death, resignation, disqualification, removal or other cause shall be
filled solely by the affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the board of directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the class of directors
to which such director’s predecessor shall have been elected and qualified. No decrease in the
number of directors constituting the board of directors shall shorten the term of any incumbent
director.
5
Section 3. Removal. Subject to the rights of any class or series of stock having a
preference over the common stock as to dividends or upon liquidation to elect directors under
specified circumstances, any director may be removed from office only for cause and only by the
affirmative vote of the holders of 80% of the combined voting power of the then outstanding shares
of stock entitled to vote generally in the election of directors, voting together as a single
class.
Section 4. Chairman. The board of directors, by the affirmative vote of the majority
of the entire board, shall elect a director to serve as Chairman promptly following each election
of the board of directors at each annual meeting of stockholders.
Section 5. Regular Meetings. The board of directors shall hold quarterly meetings on
the first business day on or after each of June 1, September 1, December 1 and March 1 or on such
alternate dates within each of the Corporation’s fiscal quarter as may be called by or at the
request of the Chairman or the chief executive officer or by an officer of the Corporation upon the
request of the majority of the entire board, and at such times and places as the board of directors
may from time to time determine.
Section 6. Special Meetings. Special meetings of the board of directors may be called
by or at the request of the Chairman or the chief executive officer or by an officer of the
Corporation upon the request of the majority of the entire board. The person or persons authorized
to call special meetings of the board of directors may fix any place, either within or without
Delaware, as the place for holding any special meeting of the board of directors called by them.
Section 7. Action by Telephonic Communications. Members of the board of directors
shall be entitled to participate in any meeting of the board of directors by means of conference
telephone or similar communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 8. Notice. (a) Notice of every regular and every special meeting of the
board of directors shall be given at least seventy-two (72) hours before the meeting by telephone,
by personal delivery, by commercial courier, by mail, by facsimile transmission or other means of
electronic transmission. Notice shall be given to each director at his usual place of business, or
at such other address as shall have been furnished by him for the purpose. Such notice need not
include a statement of the business to be transacted at, or the purpose of, any such meeting.
(b) Each meeting of the board of directors shall commence between the hours of 8 a.m. and 2
p.m. (local Chicago time) unless otherwise agreed by a majority of the members of the Audit
Committee.
6
Section 9. Quorum. Six (6) members of the board of directors shall constitute a
quorum for the transaction of business at any meeting of the board of directors, provided, that if
less than six (6) members of the board of directors are present at said meeting, a majority of the
directors present may adjourn the meeting from time to time until a quorum is obtained without
further notice. The act of the majority of the board of directors at a meeting at which a quorum
is present shall be the act of the board of directors unless the act of a greater number is
required by the Certificate of Incorporation or the By-Laws of the Corporation.
Section 10. Compensation. Directors who are also full time employees of the
Corporation or an affiliate thereof shall not receive any compensation for their services as
directors but they may be reimbursed for reasonable expenses of attendance. By resolution approved
by a majority of the board of directors all other directors may receive either an annual fee or a
fee for each meeting attended, or both, and expenses of attendance, if any, at each regular or
special meeting of the board of directors or of a committee of the board of directors; provided,
that nothing herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be the Chairman, a chief
executive officer, a president, a chief financial officer, an executive vice president (if elected
by the board of directors), one or more vice presidents (the number thereof to be determined by the
board of directors), a treasurer, a secretary and such other officers as may be elected in
accordance with the provisions of this Article IV.
Section 2. Election and Term of Office. The other officers of the Corporation shall
be designated annually by resolution approved by the majority of the entire board at the first
meeting of the board of directors held after each annual meeting of stockholders. If the election
of officers shall not be held at such meeting, such election shall be held as soon thereafter as
convenient. Vacancies may be filled or new offices created and filled at any meeting of the board
of directors. Each officer shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or shall have been removed in the
manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by resolution approved
by the majority of the entire board may be removed and replaced by resolution approved by the
majority of the entire board whenever in its judgment the best interests of the Corporation would
be served thereby, but such removal shall be without prejudice to the contract rights, if any, of
the person so removed.
7
Section 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by resolution approved by the majority of the
entire board for the unexpired portion of the term.
Section 5. Executive Chairman. The Chairman shall serve as executive chairman of the
Corporation and shall serve as the senior officer of the Corporation. He shall have such powers
and perform such other duties as may be prescribed by the board of directors and shall receive no
compensation for this position.
Section 6. Chief Executive Officer. The chief executive officer of the Corporation
shall be determined by the board of directors and shall report to the board of directors. The
chief executive officer shall provide overall direction and administration of the business of the
Corporation, establish basic policies within which the various corporate activities are carried
out, guide and develop long range planning and evaluate activities in terms of objectives. He may
sign with the secretary or any other proper officer of the Corporation thereunto authorized by the
board of directors, if such additional signature is necessary under the terms of the instrument
document being executed or under applicable law, stock certificates of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments except in cases where the signing and execution
thereof shall be required by law to be otherwise signed or executed, and he may execute proxies on
behalf of the Corporation with respect to the voting of any shares of stock owned by the
Corporation. The chief executive officer shall have the power to
(a) designate management committees of employees deemed essential in the operations of
the Corporation, its divisions or subsidiaries, and appoint members thereof, subject to the
approval of a majority of the board of directors;
(b) appoint certain employees of the Corporation as vice presidents of one or several
divisions or operations of the Corporation, subject to the approval of a majority of the
board of directors, provided however, that any vice president so appointed shall not be an
officer of the Corporation for any other purpose; and
(c) appoint such other agents and employees as in his judgment may be necessary or
proper for the transaction of the business of the Corporation and in general shall perform
all duties incident to the office of chief executive.
Section 7. President. The president shall in general be in charge of all operations
of the Corporation and shall direct and administer the activities of the Corporation in accordance
with the policies, goals and objectives established by the Chairman, the chief executive officer
and the board of directors. The president shall perform such other duties as may be prescribed by
the board of directors.
8
Section 8. Chief Financial Officer. Except as otherwise determined by the board of
directors, the chief financial officer shall be the chief financial officer of the Corporation.
The chief financial officer shall have the power to:
(a) charge, supervise and be responsible for the moneys, securities, receipts and
disbursements of the Corporation, and shall keep or cause to be kept full and accurate
records of all receipts of the Corporation;
(b) render to the board of directors, whenever requested, a statement of the
financial condition of the Corporation and of all his transactions as Chief Financial
Officer, and render a full financial report at the annual meeting of the stockholders, if
called upon to do so;
(c) require from all officers or agents of the Corporation reports or statements
giving such information as he may desire with respect to any and all financial transactions
of the Corporation; and
(d) perform, in general, all duties incident to the office of chief financial officer
and such other duties as may be specified in these By-Laws or as may be assigned to him
from time to time by the board of directors or the Chairman.
Section 9. Executive Vice President. The executive vice president (if elected by the
board of directors) shall report to either the chief executive officer or the president as
determined in the corporate organization plan established by the board of directors. The executive
vice president shall direct and coordinate such major activities as shall be delegated to him by
his superior officer in accordance with policies established and instructions issued by his
superior officer, the chief executive officer, or the board of directors.
Section 10. Vice President. The board of directors may elect one or several vice
presidents. Each vice president shall report to either the chief executive officer, the president
or the executive vice president as determined in the corporate organization plan established by the
board of directors. Each vice president shall perform such duties as may be delegated to him by his
superior officers and in accordance with the policies established and instructions issued by his
superior officer, the chief executive officer or the board of directors. The board of directors may
designate any vice president as a senior vice president and a senior vice president shall be senior
to all other vice presidents and junior to the executive vice president. In the event there is more
than one senior vice president, then seniority shall be determined by and be the same as the annual
order in which their names are presented to and acted on by the board of directors.
Section 11. The Treasurer. The treasurer shall (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; (b) receive and give
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receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all
such moneys in the name of the Corporation in such banks, trust companies or other depositories as
shall be selected by the Corporation; and (c) in general perform all the duties incident to the
office of treasurer and such other duties as from time to time may be assigned to him by the chief
executive officer, president or by the board of directors. If required by the board of directors,
the treasurer shall give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the board of directors shall determine.
Section 12. The Assistant Treasurer. The assistant treasurer (or, if more than one,
the assistant treasurers) shall, in the absence or disability of the treasurer, perform the duties
and exercise the powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
Section 13. The Secretary. The secretary shall: (a) keep the minutes of the
stockholders’ and the board of directors’ meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of the Corporation and
see that the seal of the corporation is affixed to all stock certificates prior to the issue
thereof and to all documents, the execution of which on behalf of the Corporation under its seal is
duly authorized in accordance with the provisions of these By-Laws or as required by law; (d) be
custodian of the corporate records and of the seal of the Corporation and see that the seal of the
Corporation is affixed to all stock certificates prior to the issue thereof and to all documents,
the execution of which on behalf of the Corporation under its seal is duly authorized in accordance
with the provisions of these By-Laws; (e) keep a register of the post office address of each
stockholder which shall be furnished to the secretary by such stockholder; (f) sign with the
Chairman, president, or a vice president, stock certificates of the Corporation, the issue of which
shall have been authorized by resolution approved by the majority of the board of directors; (g)
have general charge of the stock transfer books of the Corporation; and (h) in general perform all
duties incident to the office of secretary and such other duties as from time to time may be
assigned to him by the chief executive officer, president or by the board of directors.
Section 14. The Assistant Secretary. The assistant secretary (or, if more than one,
the assistant secretaries) shall in the absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
ARTICLE V
COMMITTEES
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Section 1. The Committees. The board of directors may, pursuant to these By-Laws or
by resolution approved by the majority of the board of directors, designate one or more committees,
which, to the extent provided in these By-Laws or by resolution, to the fullest extent permitted by
law, shall have and may exercise the powers of the board of directors in the management of the
business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it. These committees shall include, but are not limited to, an
Audit Committee, a Nominating Committee, a Compensation Committee and such other committees as
determined by the board of directors (collectively, the “Committees”).
(a) Each Committee must consist of two (2) or more of the directors of the
Corporation, one (1) of which must be a member of the Independent Nominating Subcommittee.
(b) The board of directors, by resolution approved by a majority of the entire board,
shall designate members for each Committee in compliance with specific membership
requirements set forth herein and in any resolutions establishing such Committees.
(c) The Committees shall have such names as set forth herein or as may be determined
from time to time by resolution approved by a majority of the board of directors.
(d) Each Committee shall keep regular minutes of its meetings and report the same to
the board of directors when required.
(e) All of the members of a Committee or Subcommittee shall constitute a quorum for
the transaction of business at any meeting of such Committee or Subcommittee. The Act of
the majority of the members of a Committee or Subcommittee at a meeting at which a quorum
is present shall be the act of such Committee or Subcommittee, unless otherwise set forth
herein or in the charter to such Committee or Subcomittee.
Section 2. The Audit Committee. The Audit Committee shall consist of three (3)
Receiver directors (as hereinafter defined), one (1) of which must be a financial expert. The
Audit Committee shall have such powers and responsibilities as set forth herein and as determined
in the audit committee charter, to be approved by the majority of the entire board, which include,
but are not limited to the authority to supervise auditors and make decisions regarding accounting
matters.
For the purposes of this Article V:
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(a) an independent director will be an individual who, in accordance with Rule 4350
of the National Association of Securities Dealers Automated Quotations (“Nasdaq”), would be
eligible for membership on an Audit Committee of a corporation listed on Nasdaq, and
(b) a financial expert will be an individual fulfilling the requirements of the
definition set forth the Securities and Exchange Commission in Item 407 of Regulation S-K.
Section 3. The Nominating Committee. The Nominating Committee shall consist five (5)
directors, comprised of (i) three (3) directors initially designated as Receiver directors by the
board of directors as of [ ], 2008 and each other person nominated for election or
appointment to the board of directors by the Independent Nominating Subcommittee pursuant to this
Section 3 (excluding the chief executive officer, the “Receiver directors”) and (ii) two (2) other
directors designated as members of such Nominating Committee as of [ ], 2008 and each other
person designated as a member of the Nominating and Governance Subcommittee (other than any
Receiver directors) by the majority of the entire board resulting from any vacancies therein (the
“Quarterback directors”). The Nominating Committee shall have such powers and responsibilities as
determined in the nominating committee charter, to be approved by the majority of the entire board,
which shall include, but are not limited to, (x) the sole authority to nominate directors to stand
for election by stockholders in accordance with the Certificate of Incorporation and the By-Laws of
the Corporation, (y) the sole authority to nominate directors to stand for election by the board of
directors to fill any vacancies on the board of directors of independent directors and the chief
executive officer, resulting from death, resignation, disqualification, removal or other cause and
(z) the authority to establish governance principles. The Nominating Committee shall delegate its
authority to the Independent Nominating Subcommittee and the Nominating and Governance
Subcommittee, to be comprised and with such powers as set forth below:
(a) The Independent Nominating Subcommittee. The Independent Nominating
Subcommittee shall consist of the Receiver directors and shall have:
(i) the sole authority to nominate to the board of directors up to three (3)
independent directors, each for directorships previously held by independent
directors, and the chief executive officer to stand for election by stockholders in
accordance with the Certificate of Incorporation and the By-Laws of the
Corporation, and
(ii) the sole authority to nominate to the board of directors replacements
for vacancies on the board of directors of independent directors and the chief
executive officer, resulting from death, resignation, disqualification, removal or
other cause, provided that any such
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nominations for replacement of the directorship previously held by a chief
executive officer shall be the then-serving chief executive officer having been
designated pursuant to Article IV.
(b) The Nominating and Governance Subcommittee. The Nominating and
Governance Subcommittee shall consist of the three (3) directors designated as members of
such subcommittee as of [ ], 2008 and each other person designated by the Nominating
Committee as a member of the Nominating and Governance Subcommittee resulting from any
vacancies therein, two (2) of whom shall be Quarterback directors and one (1) of whom shall
be a Receiver director, and shall have:
(a) The sole authority to nominate up to six (6) directors, each for directorships
previously held by directors other than the chief executive officer or an independent
director, to stand for election by stockholders in accordance with these By-Laws;
(b) the sole authority to nominate replacements for vacancies of directors previously
nominated by the Nominating and Governance Subcommittee, resulting from death, resignation,
disqualification, removal or other cause; and
(c) the authority to establish governance principles.
Section 4. The Compensation Committee. The Compensation Committee shall consist of
three (3) members selected by the majority of the entire Board of Directors, two (2) of whom shall
be Receiver Directors and one (1) of whom shall be the Chairman. The Compensation Committee shall
have such powers and responsibilities as determined in the Compensation Committee charter, which
shall be approved by the majority of the entire Board of Directors. The powers and
responsibilities of the Compensation Committee shall include, but not be limited to, approving all
executive officer compensation matters, including salary levels, bonus levels, grants and issuances
of new securities under existing stock plans, and recommending the adoption of new incentive plans
to the Board of Directors, which shall in each case be subject to the further approval of the
majority of the entire Board of Directors; provided, that, with respect to any award intended to
constitute “performance-based compensation” within the meaning of Section 162(m) of the U.S.
Internal Revenue Code and the regulations promulgated thereunder, the Compensation Committee
charter shall provide for the delegation of its authority to a subcommittee of the Compensation
Committee consisting solely of two “outside directors” within the meaning of such Section of the
U.S. Internal Revenue Code and the regulations promulgated thereunder.
Section 5. The Disclosure Committee. The board of directors, by resolution approved
by the majority of the entire board, shall create a Disclosure Committee to be
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composed of management and operations personnel employed by the Corporation, with such members
to be designated by the majority of the entire board. The Disclosure Committee shall be
responsible for:
(a) the approval of any material press release or other material disclosure by the
Corporation;
(b) informing the board of directors in advance of all planned disclosure and other
announcements by the Corporation;
(c) the responsibility for insuring that management reports all material developments
to the board of directors and for determining which developments should be reported to
Misys plc and its successors and permitted assigns or transferees (“Misys”) in connection
with its regulatory disclosure obligations;
(d) recommending to the board of directors any additional disclosure of other
announcements, in each case as may be required to permit the non-independent directors,
other than the chief executive officer, to fulfill their obligations under the Relationship
Agreement, as defined in the Certificate of Incorporation; and
(e) instituting protocols to address trading on material non-public information.
Section 6. Audit Committee and Board Approval. The following actions must be
approved by the Audit Committee and the majority of the entire board:
(a) Any action intended to result in the de-listing of the common stock of the
Corporation from Nasdaq or any other exchange upon which such stock is listed for trading;
(b) Any commercial or other transaction including, without limitation, any
squeeze-out of other stockholders effected by merger, reverse stock split or otherwise or
any arrangement involving a management fee payable to Misys or its subsidiaries (other than
the Corporation and its subsidiaries) and agreements between the Corporation or any of its
subsidiaries, on the one hand, and Misys or any of its subsidiaries (other than the
Corporation and its subsidiaries), on the other hand, other than transactions pursuant to
the current terms of agreements entered into on or prior to the date hereof, or replacement
agreements (so long as the terms of such replacement agreements are not less favorable to
the Corporation); and
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[(c) Any change or modification to the audit committee charter in effect on [ ], 2008.]1
ARTICLE VI
SEAL
The board of directors shall provide a corporate seal which shall be in the form of a circle
and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal,
Delaware”.
ARTICLE VII
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given under the provisions of these By-Laws
or under the provisions of the Certificate of Incorporation or under the provisions of the laws of
the State of Delaware, waiver thereof, given by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such
notice.
ARTICLE VIII
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation and the By-Laws, these By-Laws
may be altered, amended or repealed with the affirmative vote of the majority of the entire board;
provided, that Articles III, IV, V hereof and this Article VIII may only be amended, or waivers
therefrom granted, in the manner prescribed by statute with the consent of a majority of the
members of the Audit Committee and the majority of the entire board.
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This clause (c) shall only be included if prior to the
approval of these By-Laws, the audit committee charter shall have been amended
to remove the phrase “as the Committee deems appropriate, or” from the section
entitled “Other Responsibilities as Appropriate” and provided that as of
closing, no other amendments to this charter shall have been made. |
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Exhibit C
FORM OF SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the Corporation formerly known as Allscripts Healthcare Solutions, Inc. is
hereby amended to be ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC. (the “Corporation”).
2. The Corporation was originally incorporated under the name [___] by the filing of a
Certificate of Incorporation with the Secretary of State of the State of Delaware on July 11, 2000.
An Amended and Restated Certificate of Incorporation changing the name of the Corporation from
Allscripts Holding, Inc., to Allscripts Healthcare Solutions, Inc., was filed with the Secretary of
State of the State of Delaware on [January 9, 2001].
3. The Corporation’s Amended and Restated Certificate of Incorporation is hereby amended and
restated pursuant to Sections 242 and 245 of the General Corporation Law of the State of Delaware,
so as to read in its entirety in the form attached hereto as Exhibit A and incorporated herein by
this reference (Exhibit A and this Certificate collectively constituting the Corporation’s Second
Amended and Restated Certificate of Incorporation).
4. This amendment and restatement of the Amended and Restated Certificate of Incorporation of
the Corporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of
the General Corporation Law of the State of Delaware, the Board of Directors of the Corporation
having adopted resolutions setting forth such amendment and restatement, declaring its
advisability, and directing that it be submitted to the stockholders of the Corporation for their
approval; and the holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted having consented to the adoption of such amendment and
restatement.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed this Second
Amended and Restated Certificate of Incorporation of the Corporation on the [___]th day
of [___], 2008.
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ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. |
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By:
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Name:
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Title:
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SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Certificate of Incorporation”)
FIRST. The name of the corporation is ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “Corporation”).
SECOND. The address of the Corporation’s registered office in the State of Delaware
is 0000 Xxxxxx Xxxxxx, in the City of Wilmington, County of New Castle. The name of the
Corporation’s registered agent at such address is The Corporation Trust Company.
THIRD. The nature of the business and the objects and purposes to be conducted or
promoted by the Corporation are to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of the State of Delaware, provided that the
Corporation shall not have the power to issue shares of capital stock in the Corporation, or any
bonds, notes, debentures or other obligations or securities convertible or exchangeable into or
exercisable for any such shares, in violation of Section 9 of the Relationship Agreement, dated as
of March 17, 2008 (as may be amended from time to time, the “Relationship Agreement”), between the
Corporation and
Misys plc (“Misys”) for so long as such Section 9 of the Relationship Agreement is
in effect.
FOURTH.
1. Authorized Shares. The total number of shares of stock of all classes which the
Corporation shall have authority to issue is two hundred million (200,000,000), of which one
million (1,000,000) shall be shares of Preferred Stock with a par value of $0.01 per share
(“Preferred Stock”), and one hundred ninety-nine million (199,000,000) shall be shares of Common
Stock with a par value of $0.01 per share (“Common Stock”).
2. Preferred Stock.
(a) The Preferred Stock shall be issuable in series, and in connection with the
issuance of any series of Preferred Stock and to the extent now or hereafter permitted by
the laws of the State of Delaware, the designation of each series, the stated value of the
shares of each series, the dividend rate or rates of each series (which rate or rates may
be expressed in terms of a formula or other method by which such rate or rates shall be
calculated from time to time) and the date or dates and other provisions respecting the
payment of dividends, the provisions, if any, for a sinking fund for the shares of each
series, the preferences of the shares
of each series in the event of the liquidation or dissolution of the Corporation, the
provisions, if any, respecting the redemption of the shares of each series and, subject to
requirements of the laws of the State of Delaware, the voting rights (except that such
shares shall not have more than one vote per share), the terms, if any, upon which the
shares of each series shall be convertible into or exchangeable for any other shares of
stock of the Corporation and any other relative, participating, optional or other special
rights, preferences, powers, and qualifications, limitations or restrictions thereof, of
the shares of each series, shall, in each case, be fixed by resolution of the Board of
Directors.
(b) Preferred Stock of any series redeemed, converted, exchanged, purchased, or
otherwise acquired by the Corporation shall constitute authorized but unissued Preferred
Stock.
(c) All shares of any series of Preferred Stock, as between themselves, shall rank
equally and be identical (except that such shares may have different dividend provisions);
and all series of Preferred Stock, as between themselves, shall rank equally and be
identical except as set forth in the resolutions authorizing the issuance of such series.
3. Common Stock.
(a) After dividends to which the holders of Preferred Stock may then be entitled under
the resolutions creating any series thereof have been declared and after the Corporation
shall have set apart the amounts required pursuant to such resolutions for the purchase or
redemption of any series of Preferred Stock, the holders of Common Stock shall be entitled
to have dividends declared in cash, property, or other securities of the Corporation out of
any profits or assets of the Corporation legally available therefor, if, as and when such
dividends are declared by the Corporation’s Board of Directors upon an affirmative vote of
a majority of the entire Board of Directors.
(b) In the event of the liquidation or dissolution of the Corporation’s business and
after the holders of Preferred Stock shall have received amounts to which they are entitled
under the resolutions creating such series, the holders of Common Stock shall be entitled
to receive ratably the balance of the Corporation’s assets available for distribution to
stockholders.
(c) Each share of Common Stock shall be entitled to one vote upon all matters upon
which stockholders have the right to vote, but shall not be entitled to vote for the
election of any directors who may be elected by vote of the Preferred Stock voting as a
class if so provided in the resolution creating such Preferred Stock pursuant to Section
2(a) of this Article FOURTH.
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4. Preemptive Rights. Except as expressly agreed in writing by the Corporation,
including, without limitation, the Relationship Agreement, no stockholder of any shares of the
Corporation by reason of such stockholder holding shares of any class or series of capital stock of
the Corporation shall have any preemptive right to subscribe for or to acquire any additional
shares of the Corporation of the same or of any other class whether now or hereafter authorized or
any options or warrants giving the right to purchase any such shares, or any bonds, notes,
debentures or other obligations convertible into any such shares.
FIFTH. The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders shall not be subject to the payment
of corporate debts to any extent whatever.
SEVENTH:
1. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, the
number of directors of the Corporation shall be fixed at ten (10). At each annual meeting of the
stockholders of the Corporation, directors shall be elected to hold office for a term expiring at
the annual meeting of stockholders held in the immediately following year.
2. Advance notice of stockholder nominations for the election of directors shall be given in
the manner provided in the By-Laws of the Corporation.
3. Except as may otherwise be fixed by resolution pursuant to the provisions of Article FOURTH
hereof relating to the rights of the holders of Preferred Stock to elect directors as a class, in
accordance with Section 141(a) of the General Corporation Law of the State of Delaware (the
“DGCL”), and except as otherwise set forth above, the full and exclusive power and authority
otherwise conferred on the Board of Directors to evaluate director candidates and nominate persons
to stand for election to the Board or to fill any newly created directorships resulting from any
increase in the number of directors and any vacancies on the Board of Directors resulting from
death, resignation, disqualification, removal or any other cause shall be exercised and performed
by the persons comprising the Independent Nominating Committee or the Governance and Nominating
Committee, as the case may be, and as set forth in Section (7) of this Article SEVENTH. Any
director appointed in accordance with the preceding sentence shall hold office for a term expiring
at the annual meeting of the stockholders following such director’s appointment.
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4. Subject to any rights of the holders of Preferred Stock to elect directors as a class, a
director may be removed with or without cause by the affirmative vote of the holders of a majority
of the voting power present in person, by remote communication or represented by proxy at a meeting
of stockholders.
5. The Board of Directors, by the affirmative vote of the majority of the entire Board of
Directors, shall elect a director to serve as Chairman of the Board of Directors promptly following
each election of the Board of Directors at each annual meeting of stockholders.
6. In furtherance of the powers conferred by statute, the Board of Directors is expressly
authorized and shall have sole authority, by affirmative vote of the majority of the entire Board
of Directors to approve the annual operating budget and the capital budget, and any material
changes to either.
7. Committees.
(a). The Board of Directors may, pursuant to this Certificate of Incorporation, to the
By-Laws or by resolution approved by the majority of the Board of Directors, designate one or more
committees, which, to the extent provided in this Certificate of Incorporation, the By-Laws or by
resolution, to the fullest extent permitted by law, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the Corporation and may
authorize the seal of the Corporation to be affixed to all papers which may require it. These
committees shall include, but are not limited to, an Independent Nominating Committee, an Audit
Committee, a Nominating and Governance Committee, a Compensation Committee and such other
committees as determined by the Board of Directors (collectively, the “Committees”).
(i) Each Committee must consist of two (2) or more of the Directors of the
Corporation, one (1) of which must be a member of the Independent Nominating Committee.
(ii) The Board of Directors, by resolution approved by a majority of the entire Board
of Directors, shall designate members for each Committee in compliance with specific
membership requirements set forth herein and in any resolutions establishing such
Committees.
(iii) The Committees shall have such names as set forth herein or as may be
determined from time to time by resolution approved by a majority of the Board of
Directors.
(iv) Each Committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
6
(v) All of the members of a Committee shall constitute a quorum for the transaction
of business at any meeting of such Committee. The Act of the majority of the members of a
Committee at a meeting at which a quorum is present shall be the act of such Committee,
unless otherwise set forth herein or in the charter to such Committee.
(b) The Audit Committee shall consist of three (3) Receiver Directors (as hereinafter
defined), one (1) of which must be a financial expert. The Audit Committee shall have such powers
and responsibilities as set forth herein and as determined in the audit committee charter, to be
approved by the majority of the entire Board of Directors, which include, but are not limited to
the authority to supervise auditors and make decisions regarding accounting matters.
For the purposes of this subclause (b):
(i) an independent Director will be an individual who, in accordance with Rule 4350
of the National Association of Securities Dealers Automated Quotations (“Nasdaq”), would be
eligible for membership on an Audit Committee of a corporation listed on Nasdaq, and
(ii) a financial expert will be an individual fulfilling the requirements of the
definition set forth the Securities and Exchange Commission in Item 407 of Regulation S-K.
(c) The Independent Nominating Committee shall consist of three (3) directors initially
designated as Receiver Directors by the Board of Directors as of [___], 2008 and each other
person nominated to election or appointment to the Board of Directors pursuant to this subclause
(c) (the “Receiver Directors”) and shall have such powers and responsibilities as determined in the
independent nominating committee charter, to be approved by the majority of the entire Board of
Directors, which include, but are not limited to:
(i) the sole authority to nominate to the Board of Directors three (3) independent
Directors and the chief executive officer to stand for election by stockholders in
accordance with the Certificate of Incorporation and the By-Laws of the Corporation, and
(ii) the sole authority to appoint to the Board of Directors replacements for
vacancies of Receiver Directors and the directorship held by the chief executive officer,
resulting from death, resignation, disqualification, removal or other cause, provided that
any such appointment for replacement of the
7
directorship previously held by a chief executive officer shall be the then-serving
chief executive officer having been designated as set forth in the By-Laws.
(d) The Nominating and Governance Committee shall consist of (3) directors designated as
members of such committee as of [___], 2008 and each other person designated as a member of the
Nominating and Governance Committee resulting from any vacancies therein, two (2) of whom shall be
Directors having been nominated by the Nominating and Governance Committee and one (1) of whom
shall either be a Receiver Director or the chief executive officer, and shall have such powers and
responsibilities as determined in the nominating and governance committee charter, to be approved
by the majority of the entire Board of Directors, which include, but are not limited to:
(i) The sole authority to nominate six (6) Directors, other than those Directors
nominated by the Independent Nominating Committee, to stand for election by stockholders in
accordance with this Certificate of Incorporation and the By-Laws;
(ii) the sole authority to appoint replacements for vacancies of Directors previously
nominated by the Nominating and Governance Committee, resulting from death, resignation,
disqualification, removal or other cause; and
(iii) the authority to establish governance principles.
(e) The Compensation Committee shall consist of three (3) members selected by the majority of
the entire Board of Directors, two (2) of whom shall be Receiver Directors and one (1) of whom
shall be the Chairman. The Compensation Committee shall have such powers and responsibilities as
determined in the Compensation Committee charter, which shall be approved by the majority of the
entire Board of Directors. The powers and responsibilities of the Compensation Committee shall
include, but not be limited to, approving all executive officer compensation matters, including
salary levels, bonus levels, grants and issuances of new securities under existing stock plans, and
recommending the adoption of new incentive plans to the Board of Directors, which shall in each
case be subject to the further approval of the majority of the entire Board of Directors; provided,
that, with respect to any award intended to constitute “performance-based compensation” within the
meaning of Section 162(m) of the U.S. Internal Revenue Code and the regulations promulgated
thereunder, the Compensation Committee charter shall provide for the delegation of its authority to
a subcommittee of the Compensation Committee consisting solely of two “outside directors” within
the meaning of such Section of the U.S. Internal Revenue Code and the regulations promulgated
thereunder.
(f) The following actions must be approved by the Audit Committee and the majority of the
entire Board of Directors:
8
(i) Any action intended to result in the de-listing of the common stock of the
Corporation from Nasdaq or any other exchange upon which such stock is listed for trading;
(ii) Any commercial or other transaction including, without limitation, any
squeeze-out of other stockholders effected by merger, reverse stock split or otherwise or
any arrangement involving a management fee payable to Misys or its subsidiaries (other than
the Corporation and its subsidiaries) and agreements between the Corporation or any of its
subsidiaries, on the one hand, and Misys or any of its subsidiaries (other than the
Corporation and its subsidiaries), on the other hand, other than transactions pursuant to
the current terms of agreements entered into on or prior to the date hereof, or replacement
agreements (so long as the terms of such replacement agreements are not less favorable to
the Corporation); and
[(iii) Any change or modification to the audit committee charter in effect on [ ], 2008.]1
8. Subject to any limitation in the By-Laws, the members of the Board of Directors shall be
entitled to reasonable fees, salaries, or other compensation for their services, as determined from
time to time by the Board of Directors, and to reimbursement for their expenses as such members.
Nothing herein contained shall preclude any director from serving the Corporation or its
subsidiaries or affiliates in any other capacity and receiving compensation therefor.
EIGHTH: Both stockholders and directors shall have power, if the By-Laws so provide,
to hold their meetings and to have one or more offices within or without the State of Delaware.
Except as may otherwise be fixed by resolution approved by a majority of the Board of Directors
pursuant to the provisions of Article FOURTH hereof relating to the rights of the holders of
Preferred Stock, any action required or permitted to be taken by the stockholders of the
Corporation may be effected at a duly called annual or special meeting of such holders or may be
effected by consent in writing by such holders as may be provided in the By-Laws. Except as
otherwise required by law and subject to the rights
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This clause (iii) shall only be included if prior to
the approval of this Certificate of Incorporation, the audit committee charter
shall have been amended to remove the phrase “as the Committee deems
appropriate, or” from the section entitled “Other Responsibilities as
Appropriate” and provided that as of closing, no other amendments to this
charter shall have been made. |
9
of the holders of Preferred Stock, special meetings of stockholders may be called only by the
Chairman on his own initiative or by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors.
NINTH: The Board of Directors is expressly authorized to adopt, amend or repeal the
By-Laws of the Corporation by the affirmative vote of a majority of the entire Board of Directors;
provided, that Articles III, IV,V and VIII of the By-Laws may only be amended by the Board of
Directors by the vote of both a majority of the entire Board of Directors and a majority of the
members of the Audit Committee.
TENTH:
1. A director of the Corporation, including a member of the Independent Nominating Committee
or the Governance and Nominating Committee, shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a director, except for
liability (a) for any breach of the director’s duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (c) under Section 174 of the General Corporation Law of the State of
Delaware or (d) for any transaction from which the director derived an improper personal benefit.
If the General Corporation Law of the State of Delaware, or any other applicable law, is amended to
authorize corporation action further eliminating or limiting the personal liability of directors,
then the liability of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of the State of Delaware, or any other applicable
law, as so amended. Any repeal or modification of this Section 1. by the stockholders of the
Corporation shall not adversely affect any right or protection of a director of the Corporation
existing at the time of such repeal or modification.
2. (a) Each person who has been or is made a party or is threatened to be made a party to
or is involved in any action, suit or proceeding, whether civil, criminal, administrative
or investigative (hereinafter a “proceeding”), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or officer of
the Corporation or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit plans (hereinafter
an “Indemnitee”), whether the basis of such proceeding is an alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity while serving
as a director, officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the General Corporation Law of the State of
Delaware, or any other applicable law, as the same exists or may hereafter be amended (but,
in the case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification
10
rights than said law permitted the Corporation to provide prior to such amendment), against
all expenses, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith and such indemnification shall continue
as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of his or her heirs, executors and administrators; provided, however,
that except as provided in paragraph (b) of this Section (2) with respect to proceedings
seeking to enforce rights to indemnification, the Corporation shall indemnify any such
Indemnitee seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was authorized by the
Board of Directors of the Corporation. The right to indemnification conferred in this
Section (2) shall be a contract right. In addition to the right of indemnification, an
Indemnitee shall have the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided, however, that
if the General Corporation Law of the State of Delaware, or any other applicable law,
requires, the payment of such expenses incurred by an Indemnitee in his or her capacity as
a director or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition of a proceeding shall be made
only upon delivery to the Corporation of an undertaking by or on behalf of such Indemnitee
to repay all amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section (2) or otherwise.
(b) If a claim under paragraph (a) of this Section (2) is not paid in full by the
Corporation within thirty days after a written claim has been received by the Corporation,
the claimant may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the claimant
has not met the standard of conduct which make it permissible under the General Corporation
Law of the State of Delaware, or any other applicable law, for the Corporation to indemnify
the claimant for the amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of Directors,
stockholders or independent legal counsel) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set forth in the
General Corporation Law of the
11
State of Delaware, or any other applicable law, nor an actual determination by the
Corporation (including its Board of Directors, stockholders or independent legal counsel)
that the claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable standard of
conduct.
(c) The right to indemnification and the payment of expenses incurred in defending a
proceeding in advance of its final disposition conferred in this Section (b) shall not be
exclusive of any other right which any person may have or hereafter acquire under any
statute, provision of this Certificate of Incorporation, By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance, at its expense, to protect itself and any
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify such person against
such expense, liability or loss under the General Corporation Law of the State of Delaware,
or any other applicable law.
(e) The Corporation may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification, and rights to be paid by the Corporation the
expenses incurred in defending any proceeding in advance of its final disposition, to any
employee or agent of the Corporation to the fullest extent of the provisions of this
Section (2) with respect to the indemnification and advancement of expenses of directors
and officers of the Corporation.
(f) Any repeal or modification of this Section (2) shall not adversely affect any
right or protection of a director, officer, employee or agent of the Corporation existing
at the time of such repeal or modification.
ELEVENTH. As used in this Certificate of Incorporation, the term the “majority of the
entire Board of Directors” means the majority of the total number of directors which the
Corporation would have if there were no vacancies, and the Term “majority of the Board of
Directors” means the majority of the directors present and voting.
TWELFTH. The Corporation has elected to not be governed by Section 203 of the General
Corporation Law of the State of Delaware, as permitted under and pursuant to subsection (b)(3) of
Section 203 of the DGCL.
THIRTEENTH. Except as otherwise provided in this Certificate of Incorporation or as
set forth in the By-Laws, the Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed
by statute; provided; however, that no amendment, alteration,
12
modification, waiver or change to Article NINTH, Article TENTH, this Article THIRTEENTH or the
first, third or seventh paragraphs of Article SEVENTH may be made without the affirmative vote of
the members of the Audit Committee and the affirmative vote of a majority of the members of the
entire Board of Directors.
13
Exhibit C.1
FORM OF BY-LAWS
OF
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(the “By-Laws”)
As amended and restated on [ ], 2008
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of Allscripts-Misys Healthcare
Solutions, Inc. (the “Corporation”) shall be in Wilmington, New Castle County, Delaware.
Section 2. Principal Office. The Corporation shall have its principal office at 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx, and it may also have offices at such other places as the
board of directors of the Corporation (the “Board of Directors”) may from time to time determine.
ARTICLE II
STOCKHOLDERS
Section 1. Annual Meeting. The annual meeting of stockholders for the election of the
members of the Board of Directors (the “Directors” and each a “Director”) and for the transaction
of such other business as may properly come before the meeting shall be held each year, at such
place, if any, and on such date and at such time, as may be fixed from time to time by resolution
approved by a majority of the Board of Directors and set forth in the notice or waiver of notice of
the meeting.
(a) At an annual meeting of stockholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought before an
annual meeting, business must be (1) specified in the notice of meeting, or any supplement
thereto, given by or at the direction of the Board of Directors, (2) otherwise properly
brought before the meeting by or at the
direction of the Board of Directors, or (3) otherwise properly brought before the meeting
by a stockholder.
(b) For business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the secretary of the
Corporation not less than one hundred and twenty (120) days prior to the anniversary date
of the immediately preceding annual meeting nor more than one hundred and fifty (150) days
prior to the anniversary date of the immediately preceding annual meeting. A stockholder’s
notice to the secretary of the Corporation shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (1) a brief description of the
business desired to be brought before the annual meeting, (2) the name and address, as they
appear on the Corporation’s stockholder records, of the stockholder proposing such
business, (3) the class and number of shares of the Corporation which are beneficially
owned by the stockholder, and (4) any material interest of the stockholder in such
business.
(c) Irrespective of anything in these By-Laws to the contrary, no business shall be
conducted at an annual meeting except in accordance with the procedures set forth in this
Section 1 of Article II. The presiding officer of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly brought before
the meeting in accordance with the provisions of this Section 1 of Article II, and if it is
so determined, shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
Section 2. Special Meetings. Special meetings of the stockholders may be called only
by the chairman of the Board (the “Chairman”) or the Board of Directors pursuant to a resolution
approved by a majority of the Board of Directors.
Section 3. Stockholder Action by Written Consent.
(a) Any action required or permitted to be taken at an annual or special meeting of
the stockholders may be taken without a meeting, without prior notice and without a vote of
stockholders, if a consent or consents in writing or electronic transmission, setting forth
the action so taken, are: (i) given by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present and voted
(but not less than the minimum number of votes otherwise prescribed by law) and
(ii) delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of stockholders are
2
recorded within sixty (60) days of the earliest dated consent so delivered to the
Corporation. Notwithstanding anything contained herein to the contrary, stockholders may
not elect directors by written or electronic consent.
(b) If a stockholder action by written consent or electronic transmission is permitted
under these By-Laws and the Certificate of Incorporation, and the Board of Directors has
not fixed a record date for the purpose of determining the stockholders entitled to
participate in such consent to be given, then: (i) if the General Corporation Law
of the State of Delaware, as may be amended from time to time (the “DGCL”) does not require
action by the Board of Directors prior to the proposed stockholder action, the record date
shall be the first date on which a consent setting forth the action taken or proposed to be
taken is delivered to the Corporation at any of the locations referred to in Section
3(a)(ii) of Article II of these By-Laws; and (ii) if the DGCL requires action by
the Board of Directors prior to the proposed stockholder action, the record date shall be
at the close of business on the day on which the Board of Directors adopts the resolution
approved by a majority of the Board of Directors taking such prior action. Every written
consent to action without a meeting shall bear the date of signature of each stockholder
who signs the consent, and shall be valid if timely delivered to the Corporation at any of
the locations referred to in Section 3(a)(ii) of these By-Laws.
(c) The Secretary shall give prompt notice of the taking of an action without a
meeting by less than unanimous written consent to those stockholders who have not consented
in writing and who, if the action had been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that written
consents signed by a sufficient number of stockholders to take the action were delivered to
the Corporation in accordance with the DGCL.
Section 4. Place of Meeting; Participation in Meetings by Remote Communication.
(a) The Board of Directors may designate any place, either within or without Delaware,
as the place of meeting for any annual or special meeting. In the absence of any such
designation, the place of meeting shall be the principal office of the Corporation
designated in Section 2 of Article I of these By-Laws.
(b) The Board of Directors, acting in its sole discretion, may establish guidelines
and procedures in accordance with applicable provisions of the DGCL and any other
applicable law for the participation by stockholders and proxyholders in a meeting of
stockholders by means of remote communications, and may determine that any meeting of
stockholders will not be held at any place
3
but will be held solely by means of remote communication. Stockholders and proxyholders
complying with such procedures and guidelines and otherwise entitled to vote at a meeting
of stockholders shall be deemed present and entitled to vote at a meeting of stockholders,
whether such meeting is to be held at a designated place or solely by means of remote
communication.
Section 5. Notice of Meetings. Notice stating the place, if any, day and hour of the
meeting, the means of remote communication, if any, by which proxyholders and stockholders may be
deemed to be present and vote at such meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given not less than ten nor more than sixty days
before the date of the meeting, or in the case of a merger or consolidation, if required by
applicable law, not less than twenty nor more than sixty days before the date of the meeting, by or
at the direction of the Chairman or the chief executive officer, or the secretary, or the officer
or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United States mails in a
sealed envelope addressed to the stockholder at his address as it appears on the records of the
Corporation with postage thereon prepaid.
Section 6. Record Date. For the purpose of determining (a) stockholders entitled to
notice of or to vote at any meeting of stockholders, or (b) stockholders entitled to receive
payment of any dividend, or (c) stockholders for any other purpose other than by written consent,
the Board of Directors may fix in advance a date as the record date for any such determination of
stockholders, such date in any case to be not more than sixty days and not less than ten days
before the date of the meeting or, with respect to any other action hereinbefore described in
clauses (b) and (c), not more than sixty days prior to the date on which the particular action
requiring such determination of stockholders is to be taken.
Section 7. Quorum. The holders of not less than one-third in voting power of the
stock issued and outstanding and entitled to vote thereat, present in person, by remote
communication or represented by proxy, shall be requisite and shall constitute a quorum at all
meetings of the stockholders for the transaction of business except as otherwise provided by
statute, by the Certificate of Incorporation or by these By-Laws. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the chairman of the meeting shall
have the power to adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
When a quorum is present at any meeting, the affirmative vote of the holders of a majority in
voting power present in person, by remote communication or represented by
4
proxy shall be required to approve any question brought before such meeting, unless the question is
one upon which by express provision of the DGCL or of the Certificate of Incorporation or of these
By-Laws, a different vote is required in which case such express provision shall govern and control
the decision of such question.
Section 8. Procedure. The order of business and all other matters of procedure at
every meeting of stockholders shall be determined by the chairman of the meeting. The Board of
Directors shall appoint one or more inspectors of election to serve at every meeting of
stockholders at which Directors are to be elected.
ARTICLE III
DIRECTORS
Section 1. Number, Election and Terms. Except as otherwise fixed pursuant to the
provisions of Article Fourth of the Certificate of Incorporation relating to the rights of the
holders of any class or series of stock having a preference over the common stock as to dividends
or upon liquidation to elect additional Directors under specified circumstances, the number of
Directors shall be ten (10). At each annual meeting of the stockholders of the Corporation,
Directors shall be elected to hold office for a term expiring at the annual meeting of stockholders
held in the immediately following year.
As used in these By-Laws, the term the “majority of the entire Board of Directors” means the
majority of the total number of Directors which the Corporation would have if there were no
vacancies, and the term “majority of the Board of Directors” means the majority of the Directors
present and voting.
Subject to the rights of holders of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for the election of directors may be
made by the Independent Nominating Committee or the Nominating and Governance Committee as set
forth in Article V, or by any stockholder entitled to vote in the election of directors generally.
However, any stockholder entitled to vote in the election of directors generally may nominate one
or more persons for election as directors at a meeting only if written notice of such stockholder’s
intent to make such nomination or nominations has been given, either by personal delivery or by
United States mail, postage prepaid, to the secretary of the Corporation not later than (a) with
respect to an election to be held at an annual meeting of stockholders, one hundred twenty (120)
days nor earlier than one hundred fifty (150) days prior to the anniversary date of the immediately
preceding annual meeting, and (b) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to stockholders. Each such notice shall set
forth: (a) the name and address of the stockholder who intends to make the nomination and of the
person or persons to be
5
nominated; (b) a representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the notice; (c) a description of all
arrangements or understandings between the stockholder and each nominee and any other person or
persons, naming such person or persons, pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission; and (e) the consent of each nominee to serve as a
director of the Corporation if so elected. The chairman of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the foregoing procedure.
Subject to the rights of holders of any class or series of stock having a preference over the
common stock as to dividends or upon liquidation, nominations for the election of Directors shall
be made by the Independent Nominating Committee and the Nominating and Governance Committee, as set
forth in Article V, Sections 3 and 4.
Section 2. Newly Created Directorships and Vacancies. Except as may otherwise be
fixed by resolution approved by a majority of the Board of Directors pursuant to the provisions of
Article IV hereof relating to the rights of the holders of Preferred Stock to elect Directors as a
class, the Independent Nominating Committee and the Nominating and Governance Committee, shall, in
accordance with Article V, Sections 3 and 4, appoint persons to fill any newly created
directorships resulting from any increase in the number of Directors and any vacancies on the Board
of Directors resulting from death, resignation, disqualification, removal or any other cause. Any
Director appointed in accordance with the preceding sentence shall hold office for a term expiring
at the annual meeting of the stockholders following such Director’s appointment.
Section 3. Removal. Subject to the provisions in these By-Laws and the rights of any
class or series of stock having a preference over the common stock as to dividends or upon
liquidation to elect Directors under specified circumstances, any Director may be removed from
office with or without cause by the affirmative vote of the holders of a majority of the voting
power present in person, by remote communication or represented by proxy.
Section 4. Chairman. The Board of Directors, by the affirmative vote of the majority
of the entire Board of Directors, shall elect a Director to serve as Chairman promptly following
each election of the Board of Directors at each annual meeting of stockholders.
Section 5. Regular Meetings. The Board of Directors shall hold quarterly meetings on
the first business day on or after each of June 1, September 1, December 1 and March 1 or on such
alternate dates within each of the Corporation’s fiscal quarter as
6
may be called by or at the request of the Chairman or the chief executive officer or by an officer
of the Corporation upon the request of the majority of the entire Board of Directors, and at such
times and places as the Board of Directors may from time to time determine.
Section 6. Special Meetings. Special meetings of the Board of Directors may be called
by or at the request of the Chairman or the chief executive officer or by an officer of the
Corporation upon the request of the majority of the entire Board of Directors. The person or
persons authorized to call special meetings of the Board of Directors may fix any place, either
within or without Delaware, as the place for holding any special meeting of the Board of Directors
called by them.
Section 7. Action by Telephonic Communications. Members of the Board of Directors
shall be entitled to participate in any meeting of the Board of Directors by means of conference
telephone or similar communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this provision shall
constitute presence in person at such meeting.
Section 8. Notice; Time of Meeting. (a) Notice of every regular and every special
meeting of the Board of Directors shall be given at least seventy-two (72) hours before the meeting
by telephone, by personal delivery, by commercial courier, by mail, by facsimile transmission or
other means of electronic transmission. Notice shall be given to each Director at his usual place
of business, or at such other address as shall have been furnished by him for the purpose. Such
notice need not include a statement of the business to be transacted at, or the purpose of, any
such meeting.
(b) Each meeting of the Board of Directors shall commence between the hours of 8 a.m. and 2
p.m. (local Chicago time) unless otherwise agreed by a majority of the members of the Audit
Committee.
Section 9. Quorum. Six (6) members of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors, provided, that if
less than six (6) members of the Board of Directors are present at said meeting, a majority of the
Directors present may adjourn the meeting from time to time until a quorum is obtained without
further notice. The act of the majority of the Board of Directors at a meeting at which a quorum
is present shall be the act of the Board of Directors unless the act of a greater number is
required by the Certificate of Incorporation or the By-Laws of the Corporation.
Section 10. Compensation. Directors who are also full time employees of the
Corporation or an affiliate thereof shall not receive any compensation for their services as
Directors but they may be reimbursed for reasonable expenses of attendance. By resolution approved
by a majority of the Board of Directors all other Directors may
7
receive either an annual fee or a fee for each meeting attended, or both, and expenses of
attendance, if any, at each regular or special meeting of the Board of Directors or of a committee
of the Board of Directors; provided, that nothing herein contained shall be construed to preclude
any Director from serving the Corporation in any other capacity and receiving compensation
therefor.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the Corporation shall be the Chairman, a chief
executive officer, a president, a chief financial officer, an executive vice president (if elected
by the Board of Directors), one or more vice presidents (the number thereof to be determined by the
Board of Directors), a treasurer, a secretary and such other officers as may be elected in
accordance with the provisions of this Article IV.
Section 2. Election and Term of Office. The other officers of the Corporation shall
be designated annually by resolution approved by the majority of the entire Board of Directors at
the first meeting of the Board of Directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be held as soon
thereafter as convenient. Vacancies may be filled or new offices created and filled at any meeting
of the Board of Directors. Each officer shall hold office until his successor shall have been duly
elected and shall have qualified or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by resolution approved
by the majority of the entire Board of Directors may be removed and replaced by resolution approved
by the majority of the entire Board of Directors whenever in its judgment the best interests of the
Corporation would be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be filled by resolution approved by the majority of the
entire Board of Directors for the unexpired portion of the term.
Section 5. Executive Chairman. The Chairman shall serve as executive chairman of the
Corporation and shall serve as the senior officer of the Corporation. He shall have such powers
and perform such other duties as may be prescribed by the Board of Directors and shall receive no
compensation for this position.
Section 6. Chief Executive Officer. The chief executive officer of the Corporation
shall be determined by the Board of Directors and shall report to the Board of Directors. The
chief executive officer shall provide overall direction and
8
administration of the business of the Corporation, establish basic policies within which the
various corporate activities are carried out, guide and develop long range planning and evaluate
activities in terms of objectives. He may sign with the secretary or any other proper officer of
the Corporation thereunto authorized by the Board of Directors, if such additional signature is
necessary under the terms of the instrument document being executed or under applicable law, stock
certificates of the Corporation, any deeds, mortgages, bonds, contracts, or other instruments
except in cases where the signing and execution thereof shall be required by law to be otherwise
signed or executed, and he may execute proxies on behalf of the Corporation with respect to the
voting of any shares of stock owned by the Corporation. The chief executive officer shall have the
power to
(a) designate management committees of employees deemed essential in the operations of
the Corporation, its divisions or subsidiaries, and appoint members thereof, subject to the
approval of a majority of the Board of Directors;
(b) appoint certain employees of the Corporation as vice presidents of one or several
divisions or operations of the Corporation, subject to the approval of a majority of the
Board of Directors, provided however, that any vice president so appointed shall not be an
officer of the Corporation for any other purpose; and
(c) appoint such other agents and employees as in his judgment may be necessary or
proper for the transaction of the business of the Corporation and in general shall perform
all duties incident to the office of chief executive.
Section 7. President. The president shall in general be in charge of all operations
of the Corporation and shall direct and administer the activities of the Corporation in accordance
with the policies, goals and objectives established by the Chairman, the chief executive officer
and the Board of Directors. The president shall perform such other duties as may be prescribed by
the Board of Directors.
Section 8. Chief Financial Officer. Except as otherwise determined by the Board of
Directors, the chief financial officer shall be the chief financial officer of the Corporation.
The chief financial officer shall have the power to:
(a) charge, supervise and be responsible for the moneys, securities, receipts and
disbursements of the Corporation, and shall keep or cause to be kept full and accurate
records of all receipts of the Corporation;
(b) render to the Board of Directors, whenever requested, a statement of the
financial condition of the Corporation and of all his transactions as Chief Financial
Officer, and render a full financial report at the annual meeting of the stockholders, if
called upon to do so;
9
(c) require from all officers or agents of the Corporation reports or statements
giving such information as he may desire with respect to any and all financial transactions
of the Corporation; and
(d) perform, in general, all duties incident to the office of chief financial officer
and such other duties as may be specified in these By-Laws or as may be assigned to him
from time to time by the Board of Directors or the Chairman.
Section 9. Executive Vice President. The executive vice president (if elected by the
Board of Directors) shall report to either the chief executive officer or the president as
determined in the corporate organization plan established by the Board of Directors. The executive
vice president shall direct and coordinate such major activities as shall be delegated to him by
his superior officer in accordance with policies established and instructions issued by his
superior officer, the chief executive officer, or the Board of Directors.
Section 10. Vice President. The Board of Directors may elect one or several vice
presidents. Each vice president shall report to either the chief executive officer, the president
or the executive vice president as determined in the corporate organization plan established by the
Board of Directors. Each vice president shall perform such duties as may be delegated to him by his
superior officers and in accordance with the policies established and instructions issued by his
superior officer, the chief executive officer or the Board of Directors. The Board of Directors may
designate any vice president as a senior vice president and a senior vice president shall be senior
to all other vice presidents and junior to the executive vice president. In the event there is more
than one senior vice president, then seniority shall be determined by and be the same as the annual
order in which their names are presented to and acted on by the Board of Directors.
Section 11. The Treasurer. The treasurer shall (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; (b) receive and give receipts for
moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys
in the name of the Corporation in such banks, trust companies or other depositories as shall be
selected by the Corporation; and (c) in general perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him by the chief executive
officer, president or by the Board of Directors. If required by the Board of Directors, the
treasurer shall give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
Section 12. The Assistant Treasurer. The assistant treasurer (or, if more than one,
the assistant treasurers) shall, in the absence or disability of the treasurer, perform the duties
and exercise the powers of the treasurer and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
10
Section 13. The Secretary. The secretary shall: (a) keep the minutes of the
stockholders’ and the Board of Directors’ meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the provisions of these By-Laws or as
required by law; (c) be custodian of the corporate records and of the seal of the Corporation and
see that the seal of the corporation is affixed to all stock certificates prior to the issue
thereof and to all documents, the execution of which on behalf of the Corporation under its seal is
duly authorized in accordance with the provisions of these By-Laws or as required by law; (d) be
custodian of the corporate records and of the seal of the Corporation and see that the seal of the
Corporation is affixed to all stock certificates prior to the issue thereof and to all documents,
the execution of which on behalf of the Corporation under its seal is duly authorized in accordance
with the provisions of these By-Laws; (e) keep a register of the post office address of each
stockholder which shall be furnished to the secretary by such stockholder; (f) sign with the
Chairman, president, or a vice president, stock certificates of the Corporation, the issue of which
shall have been authorized by resolution approved by the majority of the Board of Directors; (g)
have general charge of the stock transfer books of the Corporation; and (h) in general perform all
duties incident to the office of secretary and such other duties as from time to time may be
assigned to him by the chief executive officer, president or by the Board of Directors.
Section 14. The Assistant Secretary. The assistant secretary (or, if more than one,
the assistant secretaries) shall in the absence or disability of the secretary, perform the duties
and exercise the powers of the secretary and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
ARTICLE V
COMMITTEES
Section 1. The Committees. The Board of Directors may, pursuant to these By-Laws or
by resolution approved by the majority of the Board of Directors, designate one or more committees,
which, to the extent provided in these By-Laws or by resolution, to the fullest extent permitted by
law, shall have and may exercise the powers of the Board of Directors in the management of the
business and affairs of the Corporation and may authorize the seal of the Corporation to be affixed
to all papers which may require it. These committees shall include, but are not limited to, an
Independent Nominating Committee, an Audit Committee, a Nominating and Governance Committee, a
Compensation Committee and such other committees as determined by the Board of Directors
(collectively, the “Committees”).
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(a) Each Committee must consist of two (2) or more of the Directors of the
Corporation, one (1) of which must be a member of the Independent Nominating Committee.
(b) The Board of Directors, by resolution approved by a majority of the entire Board
of Directors, shall designate members for each Committee in compliance with specific
membership requirements set forth herein and in any resolutions establishing such
Committees.
(c) The Committees shall have such names as set forth herein or as may be determined
from time to time by resolution approved by a majority of the Board of Directors.
(d) Each Committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when required.
(e) All of the members of a Committee shall constitute a quorum for the transaction
of business at any meeting of such Committee. The Act of the majority of the members of a
Committee at a meeting at which a quorum is present shall be the act of such Committee,
unless otherwise set forth herein or in the charter to such Committee.
Section 2. The Audit Committee. The Audit Committee shall consist of three (3)
Receiver Directors (as hereinafter defined), one (1) of which must be a financial expert. The
Audit Committee shall have such powers and responsibilities as set forth herein and as determined
in the audit committee charter, to be approved by the majority of the entire Board of Directors,
which include, but are not limited to the authority to supervise auditors and make decisions
regarding accounting matters.
For the purposes of this Article V:
(a) an independent Director will be an individual who, in accordance with Rule 4350
of the National Association of Securities Dealers Automated Quotations (“Nasdaq”), would be
eligible for membership on an Audit Committee of a corporation listed on Nasdaq, and
(b) a financial expert will be an individual fulfilling the requirements of the
definition set forth the Securities and Exchange Commission in Item 407 of Regulation S-K.
Section 3. The Independent Nominating Committee. The Independent Nominating
Committee shall consist of three (3) directors initially designated as Receiver Directors by the
Board of Directors as of [ ], 2008 and each other person
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nominated to election or appointment to the Board of Directors pursuant to this Section 3 (the
“Receiver Directors”) and shall have such powers and responsibilities as determined in the
independent nominating committee charter, to be approved by the majority of the entire Board of
Directors, which include, but are not limited to:
(a) the sole authority to nominate to the Board of Directors three (3) independent
Directors and the chief executive officer to stand for election by stockholders in
accordance with the Certificate of Incorporation and the By-Laws of the Corporation, and
(b) the sole authority to appoint to the Board of Directors replacements for
vacancies of Receiver Directors and the directorship held by the chief executive officer,
resulting from death, resignation, disqualification, removal or other cause, provided that
any such appointment for replacement of the directorship previously held by a chief
executive officer shall be the then-serving chief executive officer having been designated
pursuant to Article IV.
Section 4. The Nominating and Governance Committee. The Nominating and Governance
Committee shall consist of (3) directors designated as members of such committee as of [ ],
2008 and each other person designated as a member of the Nominating and Governance Committee
resulting from any vacancies therein, two (2) of whom shall be Directors having been nominated by
the Nominating and Governance Committee and one (1) of whom shall either be a Receiver Director or
the chief executive officer, and shall have such powers and responsibilities as determined in the
nominating and governance committee charter, to be approved by the majority of the entire Board of
Directors, which include, but are not limited to:
(a) The sole authority to nominate six (6) Directors, other than those Directors
nominated by the Independent Nominating Committee, to stand for election by stockholders in
accordance with these By-Laws;
(b) the sole authority to appoint replacements for vacancies of Directors previously
nominated by the Nominating and Governance Committee, resulting from death, resignation,
disqualification, removal or other cause; and
(c) the authority to establish governance principles.
Section 5. The Compensation Committee. The Compensation Committee shall consist of
three (3) members selected by the majority of the entire Board of Directors, two (2) of whom shall
be Receiver Directors and one (1) of whom shall be the Chairman. The Compensation Committee shall
have such powers and responsibilities as determined in the Compensation Committee charter, which
shall be approved by the majority of the entire Board of Directors. The powers and
responsibilities of the Compensation
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Committee shall include, but not be limited to, approving all executive officer compensation
matters, including salary levels, bonus levels, grants and issuances of new securities under
existing stock plans, and recommending the adoption of new incentive plans to the Board of
Directors, which shall in each case be subject to the further approval of the majority of the
entire Board of Directors; provided, that, with respect to any award intended to constitute
“performance-based compensation” within the meaning of Section 162(m) of the U.S. Internal Revenue
Code and the regulations promulgated thereunder, the Compensation Committee charter shall provide
for the delegation of its authority to a subcommittee of the Compensation Committee consisting
solely of two “outside directors” within the meaning of such Section of the U.S. Internal Revenue
Code and the regulations promulgated thereunder.
Section 6. The Disclosure Committee. The Board of Directors, by resolution approved
by the majority of the entire Board of Directors, shall create a Disclosure Committee to be
composed of management and operations personnel employed by the Corporation, with such members to
be designated by the majority of the entire Board of Directors. The Disclosure Committee shall be
responsible for:
(a) the approval of any material press release or other material disclosure by the
Corporation;
(b) informing the Board of Directors in advance of all planned disclosure and other
announcements by the Corporation;
(c) the responsibility for insuring that management reports all material developments
to the Board of Directors and for determining which developments should be reported to
Misys plc and its successors and permitted assigns or transferees (“Misys”) in connection
with its regulatory disclosure obligations;
(d) recommending to the Board of Directors any additional disclosure of other
announcements, in each case as may be required to permit the non-independent Directors,
other than the chief executive officer, to fulfill their obligations under the Relationship
Agreement, as defined in the Certificate of Incorporation; and
(e) instituting protocols to address trading on material non-public information.
Section 7. Audit Committee and Board Approval. The following actions must be
approved by the Audit Committee and the majority of the entire Board of Directors:
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(a) Any action intended to result in the de-listing of the common stock of the
Corporation from Nasdaq or any other exchange upon which such stock is listed for trading;
(b) Any commercial or other transaction including, without limitation, any
squeeze-out of other stockholders effected by merger, reverse stock split or otherwise or
any arrangement involving a management fee payable to Misys or its subsidiaries (other than
the Corporation and its subsidiaries) and agreements between the Corporation or any of its
subsidiaries, on the one hand, and Misys or any of its subsidiaries (other than the
Corporation and its subsidiaries), on the other hand, other than transactions pursuant to
the current terms of agreements entered into on or prior to the date hereof, or replacement
agreements (so long as the terms of such replacement agreements are not less favorable to
the Corporation); and
[(c) Any change or modification to the audit committee charter in effect on [
], 2008.]1
ARTICLE VI
SEAL
The Board of Directors shall provide a corporate seal which shall be in the form of a circle
and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal,
Delaware”.
ARTICLE VII
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given under the provisions of these By-Laws
or under the provisions of the Certificate of Incorporation or under the provisions of the laws of
the State of Delaware, waiver thereof, given by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to the giving of such
notice.
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This clause (c) shall only be included if prior to the
approval of these By-Laws, the audit committee charter shall have been amended
to remove the phrase “as the Committee deems appropriate, or” from the section
entitled “Other Responsibilities as Appropriate” and provided that as of
closing, no other amendments to this charter shall have been made. |
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ARTICLE VIII
AMENDMENTS
Subject to the provisions of the Certificate of Incorporation and the By-Laws, these By-Laws
may be altered, amended or repealed with the affirmative vote of the majority of the entire Board
of Directors; provided, that Articles III, IV, V hereof and this Article VIII may only be amended,
or waivers therefrom granted, in the manner prescribed by statute with the consent of a majority of
the members of the Audit Committee and the majority of the entire Board of Directors.
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Exhibit D
Board of Directors of Surviving Company
Xxx Xxxxxxx
Exhibit E
Transition Services
Cooperation, provision of services and allocation of costs between Receiver and Parent
with respect to:
§ |
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research, development and support services (including with respect to facilities
in Bangalore, India and Manila, Philippines); |
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§ |
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Management services and related costs (including certain specified Parent overhead
costs), such services and costs to be reasonable and agreed to in good faith by the
respective chief financial officers of Parent and Receiver annually; provided, that
in no event shall the costs (including overhead costs and other allocations) exceed
$3,000,000 for any year; |
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Human resources services; |
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Procurement services; |
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Tax services; |
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Finance services (including SAP rollout); and |
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Other services to be mutually agreed. |
Exhibit F — Form of Trademark and Trade Name License Agreement
TRADEMARK AND TRADE NAME LICENSE AGREEMENT
This TRADEMARK AND TRADE NAME LICENSE AGREEMENT is dated as of
___, 2008 (the
“Agreement”), between
Misys plc, a public limited company organized under the laws of England,
having a principal place of business at 000 Xxxxxxxxxx Xxxx Xxxxxx, Xxxxxx X0 0XX, Xxxxxx Xxxxxxx
(“Licensor”), and Misys Healthcare Systems, LLC, a North Carolina limited liability company, having
its principal place of business at 0000 Xxx Xxxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000
(“Licensee”). Licensor and Licensee are referred to herein collectively as “Parties” and each
individually as a “Party”.
W I T N E S S E T H:
WHEREAS, Licensor is the owner of the trade name “MISYS” (the “Licensed Name”) and certain
trademarks and service marks consisting of or incorporating the designation “MISYS,” identified in
the schedule attached hereto as Schedule A, and has applied for and registered such trademarks and
service marks in the United States (the “Territory”) (such trademarks and service marks and such
registrations and applications, together with any and all common law rights pertaining thereto, are
referred to collectively as the “Licensed Marks”) for use in Licensor’s business;
WHEREAS, Licensor is the owner of the domain names listed on Schedule B hereto1
(the “Licensed Domain Names” and together with the Licensed Name and the Licensed Marks, the
“Licensed Property”);
WHEREAS, at the Closing (as defined in the Agreement and Plan of Merger, dated as of March 17,
2008, by and among Licensor, Licensee, Allscripts Healthcare Solutions Inc., a Delaware
corporation, having its principal place of business at 000 Xxxxxxxxxxx Xxxx, Xxxxx 0000, Xxxxxxx,
XX 00000 (“Allscripts”) and Patriot Merger Company, LLC, a North Carolina limited liability company
(the “
Merger Agreement”)), Licensor will own, directly or indirectly, 54.5% of the equity interests
in Receiver on a fully-diluted basis (as determined pursuant to the
Merger Agreement);
WHEREAS, Licensor previously licensed Licensee the right to use the Licensed Marks in
connection with Licensee’s healthcare information technology products and services, pursuant to the
Trademark License Agreement, effective as of May 7, 2004 between Licensor and Licensee (the
“Existing License”), and Patriot Merger Company, LLC, a wholly-owned subsidiary of Allscripts is
merging as of the date hereof with and into Licensee with Licensee as the surviving company (the
“Merger”);
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Domain Names to be transferred from Licensee to
Licensor between signing and Closing. |
WHEREAS, entering into this Agreement is a condition to effecting the Merger;
WHEREAS, in connection with the Merger, the Parties have decided to replace the Existing
License with this Agreement to more clearly set forth the rights and obligations of each Party;
WHEREAS, Licensee desires to use, and Licensor is willing to license Licensee to use, the
Licensed Marks in connection with Licensee’s healthcare information technology products and
services and such other products and services as the Parties may agree (such products and services
together with any permitted sublicensee’s healthcare information technology products and services,
the “Products and Services”), to use the Licensed Name in connection with Licensee’s business of
providing Licensee’s healthcare information technology products and services (the “Licensed
Business”), and to use the Licensed Domain Names in connection with the Licensed Business under the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties agree as follows:
1. Grant of License.
1.1. Grant of Trademark License. Subject to the terms and conditions contained
herein, Licensor hereby grants to Licensee, and Licensee hereby accepts, a nonexclusive,
nonassignable, royalty-free license to use the Licensed Marks in connection with the marketing,
promotion, advertisement, distribution and sale of the Products and Services of Licensee in the
Territory.
1.2. Grant of Trade Name License. Subject to the terms and conditions contained
herein, Licensor hereby grants to Licensee, and Licensee hereby accepts, a nonexclusive,
nonassignable, royalty-free license to use the Licensed Name in its corporate name and trade name
solely in the form of “Allscripts Misys” with or without one or more additional words (e.g.,
Allscripts Misys Healthcare Systems”) and a corporate-form identifier such as “Inc.” or “LLC”, as
applicable, in connection with the operation of the Licensed Business in the Territory.
(a) Grant of License to Domain Names. Subject to the terms and conditions contained
herein, Licensor hereby grants to Licensee a nonexclusive, nonassignable, royalty-free license to
use the Licensed Domain Names in connection with the operation of the Licensed Business in the
Territory. The Parties agree that the ability of a third party to access the websites operated
under the Licensed Domain Names from outside of the Territory shall not be deemed a breach of this
Agreement, provided such websites are not targeted to persons or entities outside of the Territory
and to the extent that a person or entity is identified as being outside of the Territory, Licensee
does not provide Products or Services and does not permit any Sublicensee to provide Products or
Services outside of the Territory. In the event of any doubt as to where such person or entity is
located, Licensee shall, and shall cause any Sublicensee to, obtain
2
written confirmation from such person or entity that it is located and operating in the
Territory. Licensor shall designate a person specified by Licensee as the “technical contact” for
each Licensed Domain Name to the extent necessary to permit access to the associated website.
1.3. Restrictions on Use.
(a) Except for use of Allscripts’ color scheme of red, black and grey, which may be used for
the Licensed Marks other than “Misys” used alone, “Misys” in combination with the “M” logo and the
“M” logo, Licensee shall not change or modify the Licensed Property, or create any design variation
of the Licensed Property, without the prior written consent of Licensor.
(b) Except for the word “Allscripts”, Licensee shall not join any name, xxxx or logo with the
Licensed Property so as to form a composite trade name or xxxx, without obtaining the prior written
consent of Licensor.
(c) Licensee shall not use any other name or xxxx that is confusingly similar to the Licensed
Property, provided, however, that use of the word “Allscripts” with the secondary
words in the Licensed Marks (e.g., Tiger), with or without the word “Misys”, will not be considered
confusingly similar.
1.4. Changes in Licensed Marks. Upon written notice to Licensee, Licensor may, from
time to time in its sole discretion, elect to (a) discontinue any Licensed Marks or
Licensed Domain Names and/or (b) replace any Licensed Marks or Licensed Domain Names with
or use new or different trademarks or service marks or domain names (“New Marks”) with respect to
the Products and Services or the Licensed Business. Upon such election, any such New Marks may be
designated Licensed Property by Licensor and if designated as such shall be subject to the terms of
this Agreement, and Schedule A shall be deemed amended automatically to include such New Marks. In
the event Licensor discontinues any Licensed Property or introduces a New Xxxx, Licensee shall have
a reasonable period of time, not to exceed six (6) months, to cease use of such discontinued
Licensed Property or begin use of such New Xxxx.
1.5. Sublicenses.
(a) Subject to the terms and conditions contained herein, Licensee may grant a sublicense of
its rights hereunder to any Affiliate (defined as any entity that, at the time of determination,
directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, Licensee, whether by contract, possession (directly or indirectly) of power to
direct or cause the direction of the management or policies of such entity or the ownership
(directly or indirectly) of securities or other interests in such entity) (each permitted
sublicensee, a “Sublicensee”) as follows:
(i) Licensee may grant a sublicense to each Sublicensee to use the Licensed Marks in
connection with such Sublicensee’s healthcare information technology products and services
in the Territory;
3
(ii) Licensee may grant to each Sublicensee a sublicense to use the Licensed Name
solely in the form(s) set forth on Schedule C as Schedule C may be amended from time to
time by mutual agreement of Licensor and Licensee and solely in connection with the
operation of such Sublicensee’s healthcare information technology products and services
business in the Territory (each, a “Sublicensee Business”);
(iii) Licensee may grant to each Sublicensee a sublicense to use the Licensed Domain
Names in connection with its Sublicensee Business in the Territory.
(iv) The grant of any sublicense hereunder shall be conditioned on such Sublicensee
having first executed a copy of the Sublicensee Acknowledgement set forth as Exhibit A.
(b) Any such sublicense shall be made on, and subject to, all applicable terms and conditions
of this Agreement with respect to the Licensed Property, including but not limited to the
following:
(i) Any such sublicense shall contain a provision that the sublicense will, at
Licensor’s choice, either (A) be deemed automatically assigned by Licensee to Licensor or
(B) terminate automatically upon any termination of this Agreement.
(ii) Licensee shall (A) notify Licensor promptly in writing upon becoming aware that
any Sublicensee’s use of the Licensed Property deviates from the Quality Standards in any
material respect, and (B) promptly undertake commercially reasonable efforts to cause such
defective or nonconforming use to be cured or, if not curable, discontinued.
(iii) Licensor shall be a third-party beneficiary of such sublicense.
(iv) Licensor shall have the right to enforce the terms and conditions of, and
terminate, such sublicense, whether as a party thereto or as a third-party beneficiary.
(c) In addition to the right to grant sublicenses pursuant to this Section 1.5, Licensee and
each Sublicensee shall be permitted to allow any reseller or distributor of the Products and
Services to use the Licensed Marks and Licensed Domain Names solely to the extent necessary to
perform its obligations under the relevant agreement with Licensee or such Sublicensee. Each such
agreement shall contain restrictions on the use of the Licensed Marks and Licensed Domain Names
consistent with the restrictions contained herein, including but not limited to those in Section
1.5(b) (other than (b)(i) and (b)(iv)). A copy of each such agreement shall be provided to
Licensor for review and approval prior to execution.
4
(d) Notwithstanding the grant of any sublicense hereunder, Licensee shall remain liable for
any breach or default of the applicable terms and conditions of this Agreement by any of its
Sublicensees, resellers or distributors with respect to the Licensed Property.
(e) No such Sublicensee, reseller or distributor shall be permitted to sublicense to any other
person or entity the rights granted to it with respect to the Licensed Property.
(f) A copy of each sublicense shall be provided to Licensor for review and approval prior to
execution.
1.6. Covenant. So long as this Agreement is effect, (i) Licensor will not use
the product marks included in the Licensed Marks (e.g., Misys Tiger) on healthcare information
technology products and services within the scope of the Licensed Business in the Territory and
(ii) other than with respect to activities of the Licensor’s open source division, Licensor
will not use the “Misys” xxxx or the “M” logo on healthcare information technology products and
services within the scope of the Licensed Business in the Territory. For the avoidance of doubt,
Licensor’s open source division may use the “Misys” xxxx, the “M” logo and other marks not included
in the Licensed Marks on healthcare information technology products and services within the scope
of the Licensed Business in the Territory.
2. Quality Standards and Control.
2.1. Quality Control. At all times, Licensee shall use and shall cause each
Sublicensee to use the Licensed Property only in accordance with such quality standards and
specifications as may be established by Licensor and communicated to Licensee in writing from time
to time (the “Quality Standards”), including but not limited to the Quarterback Trademark
Guidelines attached hereto as Exhibit B. Without limiting the foregoing, the Products and Services
shall always be manufactured or performed in a manner that reflects favorably on the Licensed
Property and does not tarnish them or the reputation of Licensor. With respect to the name and
xxxx “Misys” and the “M” logo, Licensor may establish additional Quality Standards that shall be
communicated to Licensee in writing from time to time.
2.2. Use of the Licensed Marks. All use of the Licensed Marks made hereunder shall
faithfully reproduce the design and appearance of the Licensed Marks as reflected on Schedule A.
2.3. Inspection and Approval. Licensor or its designated representative shall have
the right at any time during normal business hours to inspect and approve, which approval shall not
be unreasonably withheld, any and all uses of the Licensed Marks to confirm that such use is in
conformance with the terms of this Agreement. From time to time, upon Licensor’s reasonable
request in writing, Licensee shall, at Licensee’s expense, (a) provide Licensor with
representative samples of the ways in which the Licensed Marks are then being used (or photographs
depicting the same), and
5
(b) permit Licensor to inspect Licensee’s places of business where the Licensed Marks
are used, in each case for Licensor’s inspection and approval of such uses.
2.4. Deficiencies. If Licensor reasonably believes that the Licensed Business, a
Sublicensee Business or the business of a reseller or distributor using the Licensed Marks or
Licensed Domain Names is not being conducted in compliance with Licensor’s Quality Standards or if
an inspection of the Products and Services reveals that they do not comply with Licensor’s Quality
Standards, then Licensor shall promptly provide Licensee with written notice of such defects or
violations, and shall allow Licensee thirty (30) days from the date of such notice in which to cure
such defects or violations. Should the defects or violations not be remedied within such thirty
(30) days, Licensor may, in its reasonable discretion, terminate this Agreement in accordance with
Section 8.2 or bring an action to require specific performance. If such an action is brought and
is successful, then Licensee shall have thirty (30) days within which to comply with the order.
If, at the end of such thirty (30) days Licensee has not complied, this Agreement will terminate
automatically.
3. Compliance with Law. Licensee shall use the Licensed Property only in such manner
as will comply with the provisions of applicable laws and regulations relating to the Licensed
Property. Licensee shall affix to all materials that bear a Licensed Xxxx, including, but not
limited to, all stationery, labels, packaging, advertising and promotional materials, manuals,
invoices and all other printed materials, (a) notices in compliance with applicable
trademark laws and (b) such legend as Licensor may reasonably designate by written notice
and is required or otherwise reasonably necessary to allow adequate protection of the Licensed
Marks and the benefits thereof under applicable trademark laws from time to time. In connection
herewith, Licensee may use the following legend:
“MISYS” is a registered trademark owned by
Misys plc and is used
under license.”
4. Ownership and Maintenance.
4.1. Ownership. (a) Licensee acknowledges and admits the validity of the Licensed
Property and agrees that it will not, directly or indirectly, challenge the validity of the
Licensed Property, or any registrations thereof and/or applications therefor in any jurisdiction,
or the right, title and interest of Licensor therein and thereto, nor will it claim any ownership
or other interest in the Licensed Property in any jurisdiction, other than the rights expressly
granted hereunder.
(b) Licensee acknowledges that (i) the Licensed Property and the goodwill associated
therewith are and will remain the exclusive property of Licensor, (ii) all uses of the
Licensed Property shall inure solely to the benefit of Licensor, and (iii) Licensee has no
right, title or interest in any other trademarks, services marks, trade names or domain names
belonging to Licensor. Licensee shall not at any time do or suffer to be done any act or thing
that will in any way impair the rights of Licensor in and to the Licensed Property. Nothing in
this Agreement grants, nor shall Licensee acquire
6
hereby, any right, title or interest in or to the Licensed Property or any goodwill associated
therewith, other than those rights expressly granted hereunder. This Agreement shall not affect
Licensor’s right to enjoin or obtain relief against any acts by third parties of trademark
infringement or unfair competition.
(c) Licensee shall not at any time, without the prior written consent of Licensor, acquire a
registration or file and prosecute a trademark application or applications to register the Licensed
Property, or any component, variation or derivation thereof, or any name or xxxx confusingly
similar thereto, for any goods or services anywhere in the world. If Licensee at any time, without
the prior written consent of Licensor, files or causes to be filed, in its own name or otherwise on
its behalf, an application to register or otherwise takes steps under applicable laws to obtain
trademark or other protection of the Licensed Property in any country, territory or jurisdiction,
Licensee shall, at the direction of Licensor, either (i) assign and transfer to Licensor,
without further consideration, all right, title and interest in or to the Licensed Property in such
country, territory or jurisdiction, or (ii) surrender and abandon such registration or
application for registration.
4.2. Maintenance; Registrations; Filings. (a) Licensor shall be responsible for and
retain sole discretion over the filing, protection and maintenance of the Licensed Property.
Licensee shall execute all documents as are reasonably necessary or expedient to aid in, and shall
otherwise cooperate at Licensor’s expense with, Licensor’s efforts to prepare, obtain, file, record
and maintain all such registrations and applications. In particular, but without limitation, upon
Licensor’s request, Licensee shall furnish Licensor with information or materials which are
necessary or helpful to establish or evidence Licensor’s ownership of the Licensed Property, and
the nature and scope of its rights therein, including but not limited to information regarding the
Licensee’s first and subsequent dates of use, proof of such use dates, information regarding the
nature and extent of the Licensee’s use, and actual specimens of use made by Licensee in
advertising, printed materials or other materials which are used in connection with the promotion
of the Products and Services.
(b) Licensor shall have no further maintenance obligations as to the Licensed Property or any
registration thereof or application therefor upon giving written notice to Licensee that it does
not intend to continue such maintenance; provided, however, that, other than as provided in Section
1.4, Licensor shall maintain its registrations for all the Licensed Domain Names during the term of
this Agreement.
5. Infringement or Dilution. Licensee shall promptly notify Licensor upon becoming
aware of any infringement or dilution of the Licensed Property. Licensor has the exclusive right
to take, and shall take, such steps to stop such infringement or dilution as may be reasonably
necessary in its reasonable determination to protect the Licensed Property. Licensee shall
cooperate fully with Licensor to stop such infringement or dilution. Licensor shall have full
control over any such action, including without limitation the right to select counsel, to settle
on any terms it deems advisable in its discretion, to appeal any adverse decision rendered in any
court, to discontinue any action taken by it, and otherwise to make any decision in respect thereto
as it deems
7
advisable in its discretion. Licensor shall bear all expenses connected with the foregoing,
including for Licensee’s cooperation. To the extent Licensee has proven damages resulting from
such infringement or dilution, Licensee shall share in the amount recovered, if any, net of
Licensor’s expenses in connection with such action, pro-rata with Licensor’s damages in such
action.
6. Indemnification.
6.1. Licensor does not, by virtue of this Agreement or of Licensee’s use of the Licensed
Property, assume any liability with respect to the business of Licensee or the conduct thereof by
Licensee, and Licensee shall defend, indemnify and hold harmless Licensor and its affiliates,
successors and assigns, and its and their respective officers, directors, employees, agents,
attorneys and representatives, from and against any and all claims, causes of action, suits,
damages, losses, liabilities, costs and expenses (including but not limited to reasonable
attorneys’ fees and expenses) (collectively, “Losses”) resulting from or arising out of claims,
actions or proceedings brought by third parties against Licensor arising out of (a)
Licensee’s breach of this Agreement, (b) any use by Licensee of the Licensed Property,
(c) any misuse by Licensee of the Licensed Property including but not limited to use of the
Licensed Property in false advertising; and (d) defects in the Products and Services
offered by the Licensee or any Sublicensee under the Licensed Property.
6.2. Licensee does not, by virtue of this Agreement or of Licensee’s use of the Licensed
Property, assume any liability with respect to the business of Licensor or the conduct thereof by
Licensor, and Licensor shall defend, indemnify and hold harmless Licensee and its affiliates,
successors and assigns, and its and their respective officers, directors, employees, agents,
attorneys and representatives, from and against any and all Losses resulting from or arising out of
claims, actions or proceedings brought by third parties against Licensee arising out of Licensor’s
breach of this Agreement.
7. Representations and Warranties. Each Party represents and warrants that it has
executed this Agreement freely, fully intending to be bound by the terms and provisions contained
herein; that it has full corporate power and authority to execute, deliver and perform this
Agreement; that the person signing this Agreement on behalf of such Party has properly been
authorized and empowered to enter into this Agreement by and on behalf of such Party; that prior to
the date of this Agreement, all corporate action of such Party necessary for the execution,
delivery and performance of this Agreement by such Party has been duly taken; and that this
Agreement has been duly authorized and executed by such Party, is the legal, valid and binding
obligation of such Party, and is enforceable against such Party in accordance with its terms.
8. Term; Termination.
8.1. Term. The term of this agreement shall become effective as of the date hereof,
and shall continue in effect until terminated in accordance with the provisions of Section 8.2.
8
8.2. Termination. (a) Licensor may terminate this Agreement or a sublicense upon
written notice to Licensee or such Sublicensee, if:
(i) There is a change in control of Licensee or such Sublicensee.
(ii) Licensee or such Sublicensee breaches any provision of this Agreement and fails
to cure such breach within thirty (30) days after the date of Licensor’s written notice
thereof.
(iii) Licensee or such Sublicensee files, or consents to the filing against it of, a
petition for relief under any bankruptcy or insolvency laws, makes an assignment for the
benefit of creditors or consents to the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or other official with similar powers over a substantial
part of its property; or a court having jurisdiction over Licensee or such Sublicensee or
any of the property of Licensee or such Sublicensee shall enter a decree or order for
relief in respect thereof in an involuntary case under any bankruptcy or insolvency law, or
shall appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator or
official with similar powers over a substantial part of the property of Licensee or such
Sublicensee, or shall order the winding-up, liquidation or rehabilitation of the affairs of
Licensee or such Sublicensee, and such order or decree shall continue in effect for a
period of sixty (60) consecutive days.
(iv) Licensor provides such written notice of termination sixty (60) days in advance
of the date of termination.
(b) Notwithstanding anything to the contrary contained herein, termination of this Agreement
by either Party in whole or in part shall be without prejudice to any other remedy otherwise
available hereunder, under law or at equity, to such Party or the other Party.
(c) Notwithstanding anything to the contrary contained in this Agreement, the rights and
obligations of Licensor and Licensee pursuant to Sections 4.1, 6, 8.2, 8.3 and 9 shall survive
indefinitely regardless of any cancellation, expiration or termination of this Agreement.
8.3. Effects of Termination. Any termination of this Agreement in accordance with the
terms hereof shall be final. Upon the termination of this Agreement:
(a) all rights in the Licensed Property granted to Licensee or any Sublicensee hereunder shall
automatically revert to Licensor, and Licensee or any Sublicensee shall have no further rights in,
and shall immediately cease all use of, the Licensed Property, except that Licensee and any
Sublicensee shall have a thirty (30) day period after termination to transition away from use of
the Licensed Property;
(b) Licensee shall immediately destroy and cause any Sublicensee, reseller or distributor to
destroy all materials used for reproducing the Licensed Property
9
(including without limitation photographic negatives, printing plates and tooling), except
that Licensee and any Sublicensee shall have a thirty (30) day period after termination to
transition away from use of the Licensed Property; and shall, within thirty (30) days after such
destruction has taken place, provide Licensor with an affidavit executed by an officer of Licensee
attesting thereto;
(c) Licensee will use reasonable efforts to cease using the Licensed Property on buildings,
cars, trucks and other fixed assets as soon as possible but in any event within three months of
termination;
(d) Licensee shall and shall cause any Sublicensee to change its name to a name that does not
include any name, xxxx, domain name or other source indicator using any of the Licensed Property or
any name, xxxx, domain name or other source indicator that Licensor reasonably deems confusingly
similar thereto;
(e) Licensor shall, for a period of six months after the termination of this Agreement,
redirect Internet traffic seeking any of the Licensed Domain Names to such domain name or names as
Licensee shall specify in writing;
(f) Licensee shall and shall cause any Sublicensee to change the domain names on the websites
currently using the Licensed Domain Names to domain names that do not include any name, xxxx,
domain name or other source indicator using any of the Licensed Property or any name, xxxx, domain
name or other source indicator that Licensor reasonably deems confusingly similar thereto and shall
remove all references to the Licensed Property in the content on any such websites; and
(g) Licensee will not and will cause any Sublicensee not to use or do business under, or
assist any third party in using or doing business under, any name, xxxx, domain name or other
source indicator using any of the Licensed Property or any name, xxxx, domain name or other source
indicator that Licensor reasonably deems confusingly similar thereto.
9. Miscellaneous.
9.1. Assignment. Licensee shall not assign or attempt to assign its rights or
obligations hereunder without Licensor’s prior written consent. Licensor shall not assign or
attempt to assign its rights or obligations hereunder without Licensee’s prior written consent;
provided, however, that no such consent shall be required for an assignment by
Licensor in connection with (i) any assignment to an affiliate, (ii) any assignment or sale of all
or substantially all of the equity or similar interests of Allscripts that are owned by Licensor,
or (iii) any assignment or sale of all or substantially all of Licensor’s assets, or any merger,
consolidation or other business combination to which Licensor is a party, provided,
further, however, that Licensor agrees that it will not assign its rights or
obligations hereunder apart from all or substantially all of the equity or similar interests of
Allscripts that it owns and the Licensed Marks that are specific to Licensee’s Business, which, for
the avoidance of doubt, do not include the name and xxxx “Misys” or the “M” logo or any other name
and xxxx other than the Licensed
10
Marks. Any assignment or attempt to do so in violation of this Agreement shall be null and
void. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective heirs, successors and permitted assigns.
9.2. Entire Agreement. This Agreement constitutes the entire agreement between
Licensor and Licensee with respect to the subject matter hereof and supersedes and cancels all
prior agreements and understandings between Licensor and Licensee, whether written and oral, with
respect thereto (including the Existing License).
9.3. Amendment; Waivers. This Agreement shall not be amended, supplemented or
modified except in a writing executed by authorized representatives of the Parties. Waiver by a
Party of any breach of any provision of this Agreement by the other Party shall not operate, or be
construed, as a waiver of any subsequent or other breach.
9.4. No Agency. Licensor and Licensee are independent contractors with respect to
each other, and nothing herein shall create any association, partnership, joint venture or agency
relationship between them.
9.5. Further Assurances. Each of the Parties hereto agrees to execute all such
further instruments and documents and to take all such further action as the other Party may
reasonably require in order to effectuate the terms and purposes of this Agreement. The Parties
shall act in good faith in the performance of their obligations under this Agreement.
9.6. Severability. If any provision of this Agreement is inoperative or unenforceable
for any reason in any jurisdiction, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case, circumstance or jurisdiction,
or of rendering any other provision or provisions herein contained invalid, inoperative, or
unenforceable to any extent whatsoever. The invalidity of any one or more phrases, sentences,
clauses, Sections or subsections of this Agreement in any jurisdiction shall not affect the
remaining portions of this Agreement in such jurisdiction or in any other jurisdiction.
9.7. Waiver of Jury Trial. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER, (B) IT UNDERSTANDS AND HAS CONSIDERED THE
IMPLICATIONS OF THIS WAIVER, (C) IT MAKES THIS WAIVER VOLUNTARILY, AND (D) IT HAS
BEEN
11
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.7.
9.8.
Governing Law. This agreement shall be governed by and construed in accordance
with the laws of the State of
New York without giving effect to its principles or rules of conflict
of laws to the extent such principles or rules are not mandatorily applicable by statute and would
require or permit the application of the laws of another jurisdiction. For purposes of any claim,
suit, action or proceedings arising out of or in connection with this Agreement, each of the
parties hereby irrevocably submits to the exclusive jurisdiction of the federal and state courts
located in the County of
New York in the State of
New York.
9.9. Equitable Relief. Each Party hereto acknowledges that the other Party will
suffer irreparable harm as a result of the material breach by such Party of any covenant or
agreement to be performed or observed by such Party under this Agreement, and acknowledges that the
other Party shall be entitled to apply for and, if granted, receive from any court or
administrative body of competent jurisdiction a temporary restraining order, preliminary injunction
and/or permanent injunction, without any necessity of proving damages, enjoining Licensee from
further breach of this Agreement or further infringement or impairment of the rights of Licensor.
9.10. Notices. All notices, requests, demands and other communications made in
connection with this Agreement shall be in writing and shall be deemed to have been duly given
(a) if sent by first-class registered or certified mail, return receipt requested, postage
prepaid, on the fifth day following the date of deposit in the mail, (b) if delivered
personally, when received, or (c) if transmitted by facsimile or other telegraphic
communications equipment, when confirmed, in each case addressed as follows:
If to Licensor, to:
Misys plc
000 Xxxxxxxxxx Xxxx Xxxxxx
Xxxxxx X0 0XX
Xxxxxx Xxxxxxx
Telecopy: + 00 (0)00 0000-0000
Telephone:
Attention: Group General Counsel & Company Secretary
If to Licensee, to:
Misys Healthcare Systems, LLC
0000 Xxx Xxxxx Xxxx
00
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy:
Telephone:
Attention: General Counsel
or, in each case, to such other address or facsimile number or to the attention of such other
person as may be specified in writing by such Party to the other Party.
9.11. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original and all of which when taken together shall be one and the same
instrument.
9.12. Headings. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this Agreement.
9.13. Construction of this Agreement. In any construction of this Agreement, the
Agreement shall not be construed against any Party based upon the identity of the drafter of the
Agreement or any provision of it.
13
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above.
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MISYS PLC
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By: |
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Name: |
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Title: |
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MISYS HEALTHCARE SYSTEMS, LLC
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By: |
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Name: |
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Title: |
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Schedule A
Licensed Marks
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Registration |
|
Goods and Services |
Name of Xxxx |
|
Information |
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Associated with the Xxxx |
MISYS
|
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Reg. No. 3,177,341
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Computer software for
database management for
use in the fields of
finance, medicine and
healthcare, inter alia. |
|
M (and design)
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Reg. No. 3,256,754
|
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Computer software for
database management for
use in the fields of
finance, medicine and
healthcare, inter alia. |
MISYS EMR
|
|
Reg. No. 2,905,511
|
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
|
MISYS FIRSTHAND
|
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Reg. No. 2,905,512
|
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
|
MISYS TIGER
|
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Reg. No. 2,905,513
|
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
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MISYS VISION
|
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Reg. No. 2,904,102
|
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
|
MISYS VISION/OPTIMUM
|
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Reg. No. 2,905,514
|
|
Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
15
|
|
|
|
|
|
|
Registration |
|
Goods and Services |
Name of Xxxx |
|
Information |
|
Associated with the Xxxx |
MISYS VISION/ENABLED
|
|
Reg. No. 3,240,977
|
|
Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management |
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MISYS I-CLASS
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Reg. No. 2,904,104
|
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
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MISYS QUERY
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Reg. No. 2,904,111
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Computer programs and
software to manage
financial, e-commerce,
administrative,
accounting, clinical,
insurance and managed care
records for medical
practice management. |
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MISYS PRACTICE PULSE
|
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Reg. No. 3,199,674
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Computer software for
managing clinical and
administrative data for
healthcare. |
16
Schedule B
Licensed Domain Names
xxxxxxxxxxxxxxx.xxx
xxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxx.xxx
xxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxx.xxx
xxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
17
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxxxxxxxxx.xxx
xxxxxxxxxxxxxxx.xxx
18
Schedule C
[List of names of Licensee Affiliates that include the Misys Trade Name.]
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Existing Company Name |
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New Company Name |
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Allscripts Healthcare Solutions Inc.
|
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Allscripts Misys Healthcare Solutions Inc. |
19
Exhibit A
FORM OF SUBLICENSEE ACKNOWLEDGMENT
This sublicensee acknowledgement (“Sublicensee Acknowledgment”), dated as of ___,___, is made
by [Allscripts Healthcare Solutions Inc., a Delaware corporation]2 (the “Sublicensee”).
Reference is hereby made to the Trademark and Trade Name License Agreement, dated as of
___, 2008 (the “License Agreement”), between Misys plc, a public limited company
incorporated under the laws of England (“Licensor”), and Misys Healthcare Systems, LLC, a North
Carolina limited liability company (“Licensee”). Except as otherwise defined herein, capitalized
terms used herein and defined in the License Agreement shall be used herein as therein defined.
The Sublicensee hereby agrees as follows:
WHEREAS, Licensee and Sublicensee are entering into that certain Sublicense Agreement, dated
as of even date herewith (the “Sublicense”), providing for the use by Sublicensee of the Licensed
Property in accordance with the terms thereof and hereof;
NOW THEREFORE, the Sublicensee hereby agrees as follows:
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1. |
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The Sublicensee (i) confirms that it has received a copy of the
License Agreement, (ii) agrees to be bound by all of the terms and
conditions of the License Agreement (including, but not limited to, the restriction
against further sublicensing contained in Section 1.5(e) thereof) and (iii)
agrees to perform in accordance with their terms all of the obligations which by the
terms of the License Agreement are required to be performed by Licensee and
applicable to Sublicensee through the Sublicense. |
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2. |
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The Sublicensee hereby acknowledges that Licensor is an intended third
party beneficiary of the Sublicense. |
IN WITNESS WHEREOF, the Sublicensee has executed this Sublicensee Acknowledgment as of the
date first written above.
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[SUBLICENSEE]
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By: |
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Name: |
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Title: |
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2 |
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Each Sublicensee should execute an acknowledgment. |
20
Exhibit B
Misys Trademark Guidelines
21