AMENDMENT TO AGREEMENT AND PLAN OF MERGER
Exhibit 10.34
AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this “Amendment”) dated June 21, 2011
is among (i) H&R BLOCK, INC., a Missouri corporation (the “Acquiror”), (ii) HRB ISLAND
ACQUISITION, INC., a Delaware corporation and an indirect wholly owned subsidiary of the Acquiror
(“Sub”), (iii) 2SS HOLDINGS, INC., a Delaware corporation (the “Company”), (iv) TA
Associates Management, L.P. solely in its capacity as Stockholder Representative, and (v) Xxxxx
Xxxx solely in his capacity as Stockholder Representative.
WHEREAS, reference is hereby made to that certain Agreement and Plan of Merger among the
parties hereto dated as of October 13, 2010 (the “Merger Agreement”);
WHEREAS, Section 7.1 of the Merger Agreement contains a condition to Closing that no
Governmental Authority shall have instituted any Action challenging or seeking to restrain or
prohibit the consummation of the Merger;
WHEREAS, on October 26, 2010, the parties filed Premerger Notification and Report Forms under
and in compliance with the HSR Act with the Federal Trade Commission and the U.S. Department of
Justice (“DOJ,” and together with any other appropriate Governmental Authority designated
by Law to receive such filings, an “Antitrust Authority”) with respect to the transactions
contemplated by the Merger Agreement and have filed such other notifications, applications, filings
or other information with the DOJ as the parties deemed necessary or desirable in connection with
the Merger under applicable Antitrust Law (collectively, the “Antitrust Filings”);
WHEREAS, on May 23, 2011, the DOJ instituted an Action seeking to prevent the Merger in a case
styled United States of America, U.S. Department of Justice, Antitrust Division v. H&R Block, Inc.
et al, Case No. 1:11-cv-00948 (the “DOJ Action”) and the parties wish to oppose the DOJ
Action;
WHEREAS, the Acquiror has to date borne a larger portion of the costs and expenses of all
parties relating to the Antitrust Filings and the parties desire to change the manner in which the
parties divide costs going forward regarding the Antitrust Filings and DOJ Action, as set forth
herein; and
WHEREAS, Section 10.2 of the Merger Agreement provides for the amendment of the terms of the
Merger Agreement upon the written agreement of the parties, and the parties desire to amend the
Merger Agreement as set forth herein.
NOW, THEREFORE, in consideration of the above premises, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. Defined Terms. All capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Merger Agreement.
2. Satisfaction of Prior Obligations.
2.1 As of the date hereof, each party hereby acknowledges and agrees that each other party
hereto has fulfilled any and all obligations under Section 5.6 of the Merger Agreement applicable
to such other party through the date hereof, whether express or implied.
2.2 Each party hereby acknowledges and agrees that as of the date hereof, no party has failed
to fulfill any obligation under the Merger Agreement prior to the date hereof that has caused the
Merger not to be consummated on or prior to the date hereof, and further acknowledges and agrees
that either the Company or the Stockholder Representatives, acting together, or the Acquiror has
had the right to terminate the Merger Agreement since May 31, 2011, subject to the terms of this
Amendment.
3. No Waiver of Closing Conditions. Each party hereby acknowledges and agrees that
the approval and execution of this Amendment shall not be deemed to be a waiver of any of the
conditions to Closing set forth in Article VII of the Merger Agreement.
4. Section 1.1.
4.1 The definitions of “Escrow Agent” and “Merger Consideration” in Section
1.1 of the Merger Agreement shall be deleted and replaced in their entirety with the following:
“Escrow Agent” means SunTrust Bank, a Georgia banking corporation, or
its successor under the Escrow Agreement.
“Merger Consideration” means the sum of (i) $287,500,000, plus (ii) the
Estimated Net Working Capital Amount set forth in the Net Working Capital Amount
Schedule, plus (iii) the Reimbursement Amount (as defined in Section 5.6), minus
(iv) the unpaid Transaction Expenses set forth in the Schedule of Expenses.
4.2 A new clause (iv) shall be added at the end of the first sentence of the definition of
“Transaction Expenses” in Section 1.1 as follows: “and (iv) the Antitrust Action Expenses (as
defined in Section 5.6).”
5. Section 3.6. The Company represents and warrants to the Acquiror and Sub that a
true and complete copy of the unaudited consolidated statement of income of the Company and its
Subsidiaries as at April 30, 2011 has been delivered to the Acquiror. Effective from and after the
date of this Amendment, the definition of “Unaudited Financial Statements” set forth in
Section 3.6 of the Merger Agreement shall be deemed to include the unaudited consolidated statement
of income of the Company and its Subsidiaries as at April 30, 2011.
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6. Section 3.23(a). A new sentence shall be added at the end of Section 3.23(a), as
follows:
Schedule 3.23(a)(i) of the Disclosure Schedules sets forth the information the
Company and its Subsidiaries retain regarding the number of clients served in the
12-month period ended April 30, 2011, including, but not limited to, percentages of
such customers using free services versus paid services, online versus desktop,
professional versus nonprofessional, etc., excluding any such information which, if
disclosed to Acquiror, would constitute Competitively Sensitive Information of the
Company or its Subsidiaries.
7. Section 5.1(i). Section 5.1(i) of the Merger Agreement shall be deleted and
replaced in its entirety with the following:
(i) authorize, or make any commitment with respect to, any single capital expenditure that
is in excess of $250,000 or capital expenditures that are, in the aggregate, in excess of
$1,000,000 for the Company and its Subsidiaries taken as a whole, or enter into any lease or
sublease of real or personal property or any renewals thereof;
8. Section 5.6. Effective from and after the date of this Amendment, Section 5.6 of
the Merger Agreement shall be deleted and replaced in its entirety with the following:
Section 5.6 Efforts.
(a) The parties agree that the external costs and expenses of all parties that
are incurred in connection with the DOJ Action after the date hereof, including but
not limited to attorney fees and costs, all costs associated with experts, witnesses
and potential witnesses, all document production costs, and all costs awarded by the
court to the DOJ (the “Antitrust Action Expenses”), shall be the
responsibility of the Company; provided, however, that “Antitrust Action
Expenses” shall not include (i) the attorney fees and expenses of Xxxxxxx Xxxx &
Xxxxxxxxx LLP or the Acquiror’s internal legal counsel, (ii) travel costs for the
Acquiror’s employees, or (iii) any costs or expenses that the Acquiror chooses to
incur without the consent of the Company or the Company’s outside counsel. If the
Closing occurs in accordance with the terms of this Agreement, as amended, or as the
Acquiror may otherwise agree in writing, then in connection with the Closing the
Acquiror shall reimburse the Company an amount equal to the Antitrust Action
Expenses, up to a maximum of five million dollars ($5,000,000) (the
“Reimbursement Amount”).
(b) The parties shall each cooperate with one another in connection with
opposing the DOJ Action, subject to the parties’ termination rights set forth in
Section 9.1. In connection with such collaboration, each of the parties shall act
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in good faith, reasonably, and as promptly as practicable. Subject to applicable
Laws relating to the exchange of information and the preservation of any
applicable attorney-client privilege, work-product doctrine, self-audit privilege or
other similar privilege (collectively, “Legal Privilege”), each party shall
(i) promptly inform the other party of any substantive written or oral communication
received from any Antitrust Authority or the court before which the DOJ Action is
pending relating to the DOJ Action, its Antitrust Filing or the Merger and other
transactions contemplated hereby (and if in writing, furnish the other party with a
copy of such communication); (ii) provide to the other party, and permit the other
party to review and comment upon in advance of submission, all proposed substantive
correspondence, filings, and written communications regarding the DOJ Action or to
any Antitrust Authority with respect to the Merger and other transactions
contemplated hereby; and (iii) not participate in any substantive meeting or
discussion in respect of any filings, investigation or inquiry concerning the DOJ
Action or the Merger and other transactions contemplated hereby unless it consults
with the other party in advance and, except as prohibited by applicable Law or
Governmental Authority, gives the other party the opportunity to attend and
participate thereat; provided, however, that any exchange of Competitively Sensitive
Information shall be limited to the other party’s outside antitrust counsel.
Without in any way limiting the foregoing, the parties will consult and cooperate
with each other, and consider in good faith the views of one another, in connection
with any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions and proposals made or submitted by or on behalf of any party in connection
with proceedings under or relating to any Antitrust Law (including the DOJ Action),
except as may be prohibited or restricted by Law.
(c) Notwithstanding anything in this Agreement to the contrary, the Acquiror
shall have the sole and exclusive right, to propose, negotiate, offer to commit and
effect, by consent decree, hold separate order or otherwise, the Divestiture of such
assets of the Acquiror, the Company, or their respective Subsidiaries or otherwise
offer to take or offer to commit (and if such offer is accepted, commit to and
effect) to take any action as may be required to resolve the DOJ Action.
(d) Notwithstanding anything in this Agreement to the contrary, the Company
shall be prohibited from agreeing to any settlement or other concessions with the
DOJ regarding the DOJ Action (other than the offers or concessions set forth in the
written offer made by the parties to the DOJ prior to the commencement of the DOJ
Action) without the express written consent of the Acquiror, including but not
limited to an agreement to take any of the following actions (each and collectively
a “Divestiture”): (i) extend any such waiting period or agree with any
Antitrust Authority not to consummate the transactions contemplated hereby, (ii)
negotiate, commit to or effect, by consent decree, hold separate order or otherwise,
the sale, divestiture, license or other disposition of
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any or all of the capital stock, assets, rights, products or businesses of the
Company or the Acquiror and its Subsidiaries or any other restrictions on the
activities of the Company or the Acquiror and its Subsidiaries, (iii) terminate,
amend or assign existing relationships or contractual rights or obligations, or (iv)
amend, assign or terminate existing licenses or other agreements or enter into new
licenses or other agreements.
9. Section 8.4(c). The date “July 31, 2010” in Section 8.4(c) of the Merger Agreement
shall be deleted and replaced in its entirety with the date “July 31, 2012.”
10. Section 9.1. Section 9.1(c) of the Merger Agreement shall be deleted and
replaced in its entirety with the following:
(c) by either the Company or the Stockholder Representatives, acting together,
or the Acquiror, if the Merger shall not have been consummated on or before the
earlier of October 15, 2011 or the date on which an applicable court in the DOJ
Action enters a preliminary or permanent injunction that prohibits the closing of
the Merger; provided that the right to terminate this Agreement under this
Section 9.1(c) shall not be available if the failure of the party requesting
termination to fulfill any obligation under this Agreement prior to such date shall
have been the cause of the failure of the Merger to be consummated on or prior to
such date; provided further that the act itself of properly exercising this
termination right shall not alone be considered a cause for the failure to
consummate for purposes of this Section 9.1(c); or
11. Section 10.1. Section 10.1 of the Merger Agreement shall be deleted and replaced
in its entirety with the following
Section 10.1. Fees and Expenses. Except to the extent provided in
Section 5.6(a), all fees and expenses incurred in connection with or related to this
Agreement and the Ancillary Agreements and the transactions contemplated hereby and
thereby shall be paid by the party incurring such fees or expenses, whether or not
such transactions are consummated; provided, however, that if the Merger is
consummated, all Transaction Expenses shall be paid as provided in this Agreement.
12. Section 10.5. The first notice address set forth in Section 10.5 for the Company
or the Stockholder Representatives shall be deleted and replaced in its entirety with the
following:
2SS Holdings, Inc.
c/o Second Story Software, Inc
0000 00xx Xxxxxx XX, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
c/o Second Story Software, Inc
0000 00xx Xxxxxx XX, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
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13. Exhibit A — Form of Escrow Agreement. Exhibit A to the Merger Agreement
shall be deleted and replaced in its entirety with an Escrow Agreement substantially in the form
attached hereto as Exhibit A.
14. Effect on Merger Agreement. Except as provided in this Amendment, the Merger
Agreement shall remain in full force and effect and unmodified.
15. Governing Law. This Amendment and all disputes or controversies arising out of or
relating to this Amendment or the transactions contemplated hereby shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware, without regard to the
laws of any other jurisdiction that might be applied because of the conflicts of laws principles of
the State of Delaware.
16. Counterparts. This Amendment may be executed in two or more counterparts, all of
which shall be considered one and the same instrument and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other parties.
17. Facsimile Signature. This Amendment may be executed by facsimile signature and a
facsimile signature shall constitute an original for all purposes.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date first
written above by their respective officers thereunto duly authorized.
H&R BLOCK, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
HRB ISLAND ACQUISITION, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| 2SS HOLDINGS, INC. |
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| By: | ||||
| Name: | ||||
| Title: | ||||
TA ASSOCIATES MANAGEMENT, L.P. (solely in its capacity as a Stockholder Representative) |
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| By: | ||||
| Name: | ||||
| Title: | ||||
| Xxxxx Xxxx | ||||
| (Solely in his capacity as a Stockholder Representative) |
||||
Signature Page to Amendment to Merger Agreement
Schedule 3.23(a)(i)
See attached.
Exhibit A
See attached.
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