EXHIBIT 1
OPTION AND SUPPORT AGREEMENT
This OPTION AND SUPPORT AGREEMENT (this "Agreement"), is dated as of
March 5, 2007 by and between Rocket Software, Inc., a Delaware corporation
("Parent"), and ComVest Investment Partners II LLC, a Delaware limited liability
company ("Stockholder").
W I T N E S S E T H:
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, CorVu Corporation, a Minnesota corporation (the "Company"),
and Rocket Software Minnesota, Inc., a Minnesota corporation and a wholly owned
subsidiary of Parent ("Newco"), are entering into an Agreement and Plan of
Merger (as the same may be modified or amended from time to time, the "Merger
Agreement"), providing for, among other things, the Merger and the other
transactions contemplated thereby, on the terms and subject to the conditions
set forth therein (capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Merger Agreement);
WHEREAS, as of the date hereof, Stockholder beneficially and of record
owns the type and number of shares of voting stock of the Company as are set
forth on Attachment A hereto (the "Owned Shares");
WHEREAS, as a condition to Parent's willingness to enter into and
perform its obligations under the Merger Agreement, Parent has required that
Stockholder agree, and Stockholder desires to agree (i) to vote, or cause to be
voted, in person or by proxy at least 8,633,782 of the Owned Shares or such
greater or lesser number of shares as represents 17.02% of the Common Stock
outstanding (such number of the Owned Shares, the "Voting Shares"), in favor of
(a) adoption of the Merger Agreement, (b) approval of the Merger and the other
transactions contemplated thereby and (c) any other matter that is required by
applicable Law or by any governmental authority (as defined in the Merger
Agreement) to be approved by stockholders of the Company to consummate the
Merger and the other transactions contemplated by the Merger Agreement, and
against any Competing Transaction; (ii) to grant Parent a proxy to vote the
Voting Shares on behalf and in the name of Stockholder; (iii) to grant Parent
the right to purchase from Stockholder all or any portion of the Voting Shares
in accordance with the terms and conditions set forth herein; and (iv) to take
the other actions, or to refrain from taking certain enumerated actions, as
further described herein; and
WHEREAS, Stockholder desires to express its support for the Merger and
the other transactions contemplated by the Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
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1. Agreement to Vote; Non-Solicit; Irrevocable Proxy.
1.1 Agreement to Vote. Subject to Section 1.4 below, Stockholder hereby
agrees that, during the time this Agreement is in effect, at any meeting of
the stockholders of the Company, however called, or any adjournment or
postponement thereof, and in response to any request for any written consent of
the stockholders of the Company Stockholder shall be present (in person or by
proxy) and vote (or cause to be voted) all of its Voting Shares (a) in favor of
(i) adoption of the Merger Agreement, (ii) approval of the Merger and the other
transactions contemplated thereby, and (ii) approval of any other matter that is
required by applicable Law or a governmental authority (as defined in the Merger
Agreement) to be approved by the stockholders of the Company to consummate the
Merger and the transactions contemplated by the Merger Agreement; and (b)
against (i) any Competing Transaction, (ii) any liquidation or winding up of the
Company, (iii) any extraordinary dividend by the Company, (iv) any change in the
capital structure of the Company (other than any change in capital structure
resulting from the Merger) and (v) any other action that could reasonably be
expected to (A) impede, interfere with, delay, postpone or attempt to discourage
or have the effect of discouraging the consummation of the Merger and the other
transactions contemplated by the Merger Agreement, (B) constitute or result in a
breach of any of the representations, warranties covenants, or other obligations
or agreements of the Company under the Merger Agreement that would reasonably be
expected to have a material adverse effect on the Company or its business or (C)
impair or adversely affect the respective abilities of the Company, Parent and
Newco to consummate the Merger and the other transactions contemplated by the
Merger Agreement.
1.2 Non-Solicit. Subject to Section 1.4 below, Stockholder hereby agrees
that, during the time this Agreement is in effect and except as otherwise
expressly permitted by the Merger Agreement, neither it nor any of its
subsidiaries, nor any of the officers, directors or employees of it or its
subsidiaries shall, and that it shall cause its and its subsidiaries'
representatives not to, directly or indirectly, (a) initiate, solicit or
knowingly encourage or facilitate any inquiries with respect to, or the making
of, a Competing Transaction, (b) engage in any negotiations concerning, or
provide any confidential information or data to, or have any discussions with,
any Person relating to a Competing Transaction, (c) approve or recommend or
propose publicly to approve or recommend, any Competing Transaction or (d)
approve or recommend, or propose publicly to approve or recommend, or execute or
enter into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or other similar agreement relating to
any Competing Transaction or propose publicly or agree to do any of the
foregoing relating to any Competing Transaction.
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1.3 Irrevocable Proxy. Solely with respect to the matters described in
Section 1.1, and subject to Section 1.4 below, if Stockholder has not taken
a Qualifying Action (as defined below) on or prior to the fifth business day
prior to the Shareholders Meeting (including any adjournments or postponements
thereof) or any other meeting, date or event upon which stockholders of the
Company will be asked to vote with respect to the matters described in Section
1.1 (such meeting, date or event, the "Voting Event"), Stockholder hereby
irrevocably appoints Parent as its proxy with full power of substitution (which
proxy is irrevocable and which appointment is coupled with an interest,
including for purposes of all applicable provisions of the Minnesota Business
Corporation Act) to vote in its discretion all Voting Shares owned by
Stockholder beneficially and of record solely on the matters described in
Section 1.1 effective from and after such third business day prior to the Voting
Event and until the six months after the date of the applicable Voting Event.
Stockholder agrees to execute any further agreement or form reasonably necessary
or appropriate to confirm and effectuate the grant of the proxy contained
herein. "Qualifying Action" means either (a) the delivery by each Stockholder to
Parent of a copy of such Stockholder's duly executed and valid proxy (and any
amendment of such proxy) with respect to the Shareholders Meeting or other
Voting Event, provided the votes reflected in such proxy or amendment thereof
are consistent with Stockholder's voting obligations under this Agreement with
respect to the matter(s) in question or (b) the delivery by Stockholder to
Parent of a written certificate by one of its duly authorized individuals
certifying that Stockholder shall attend the Shareholders Meeting or other
Voting Event in person (if a meeting of stockholders) and vote its Voting Shares
in accordance with Section 1.1 hereof, provided that in the event that a
Qualifying Action is subsequently rescinded, revoked or modified in any manner
inconsistent with the requirements of Section 1.1, or if Stockholder does not
attend and vote as required hereunder at any Voting Event, Stockholder shall be
deemed to have affirmed as of the time of the Voting Event the proxy with
respect to the Voting Shares granted in this Section (notwithstanding any other
action take since the date hereof) and Parent (or its designee) shall be
entitled to the proxy and vote the Voting Shares in its discretion at or in
connection with the applicable Voting Event.
1.4 Termination of Voting and Non-Solicitation Covenants and Proxy.
Notwithstanding the foregoing provisions, the voting and non-solicitation
covenants and obligations of Stockholder set forth in Sections 1.1 and 1.2, and
the proxy granted to Parent with respect to the Voting Shares in Section 1.3,
automatically shall terminate and be of no further force or effect from and
after any termination of the Merger Agreement pursuant to the terms thereof as a
result of which Parent is entitled to receive and is paid the Termination Fee
(as defined and provided in Section 8.5 of the Merger Agreement); provided,
however, that any such termination of such voting and non-solicitation
obligations or the proxy with respect to the Voting Shares shall in no way
affect or impair Parent's independent rights to purchase the Voting Shares (or
an equivalent number of shares of Owned Shares of Stockholder) as provided in
Section 2 below.
2. Right to Purchase Voting Shares
2.1 Right to Purchase Shares. Stockholder hereby grants to Parent
the right and option to purchase (the "Option") all or any portion of the
Voting Shares (or an equivalent number of shares of Owned Shares of
Stockholder), in the event that there shall occur a Designated Event (as defined
below). Parent may exercise the Option by notifying Stockholder within nine (9)
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months following any Designated Event, in accordance with Section 2.2 hereof, of
Parent's intent to exercise the Option in whole or in part (the "Option
Notice"). The Option Notice, shall specify the number of Voting Shares (or an
equivalent number of shares of Owned Shares of Stockholder) Parent desires to
purchase from Stockholder, and the date by which the closing of Stockholder's
sale and Parent's purchase of such number of Voting Shares shall occur, which
shall be no later than five business days after delivery of the Option Notice.
Parent may deliver only one Option Notice and shall include in such Option
Notice the total number of Voting Shares (or an equivalent number of shares of
Owned Shares of Stockholder) Parent desires to purchase from Stockholder. A
"Designated Event" shall be deemed to have occurred upon any of the following:
(a) Stockholder breaches or fails to observe or perform any agreement or
obligation set forth in this Agreement; (b) the Board of Directors or the
Special Committee withdraws or modifies or changes its respective recommendation
to the stockholders of the Company that such stockholders adopt and approve the
Merger Agreement or the Merger, (c) the Board of Directors or the Special
Committee approves or recommends a Competing Transaction or (d) the Company
shall breach its obligations to duly call and hold the Shareholders Meeting
pursuant to Section 6.4 of the Merger Agreement or the Company Shareholder
Approval shall not have been received at the Shareholders Meeting duly called
and held at which a quorum was present or any adjournment or postponement
thereof.
2.2 Purchase Price. The purchase price payable by Parent to
purchase shares pursuant to the Option (the "Purchased Shares") shall be
$0.40 per share (the "Per Share Price," and the total amount payable for all
Purchased Shares so purchased, the "Purchase Price"). At the closing of the
purchase and sale of the Purchased Shares, Parent shall pay Stockholder the
aggregate Purchase Price by wire transfer of immediately available funds to an
account designated by Stockholder (or in such other manner as Stockholder shall
instruct Parent) against delivery by Stockholder to Parent of all original stock
certificate(s) evidencing the Purchased Shares, duly endorsed or with duly
executed stock powers. The Per Share Price shall be appropriately adjusted for
any stock splits, stock dividends, recapitalizations, reclassifications, or any
similar events affecting the number of outstanding shares of capital stock of
the Company.
3. Representations and Warranties of Stockholder. Stockholder hereby
represents and warrants to Parent as follows:
3.1 Due Organization. Stockholder is duly organized, is validly existing
and is in good standing under the laws of the State of Delaware.
3.2 Power; Due Authorization; Binding Agreement. Stockholder has full
limited liability company power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Stockholder and constitutes a valid and binding
agreement of Stockholder, enforceable against Stockholder in accordance with its
terms, except that enforceability may be subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors rights generally and to
general principles of equity.
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3.3 Ownership of Shares. The Owned Shares set forth opposite Stockholder's
name on Attachment A hereto are owned of record and beneficially by
Stockholder in the manner reflected thereon and include all of the Voting Shares
owned of record or beneficially by Stockholder. All Owned Shares are held free
and clear of any Liens and no proxy has been granted with respect thereto (other
than pursuant to this Agreement) and will be held free and clear of any Liens
and the Voting Shares will not be subject to any proxies (other than pursuant to
this Agreement) as of the date of the Shareholders Meeting or any other
applicable Voting Event. As of the date hereof, Stockholder has, and as of the
date of the Shareholders Meeting or other Voting Event, Stockholder will have
(except as otherwise permitted or required by this Agreement), sole voting power
and sole dispositive power with respect to all of the Owned Shares.
3.4 No Conflicts. The execution and delivery of this Agreement by
Stockholder does not, and the performance of the terms of this Agreement by
Stockholder will not, (a) require Stockholder to obtain the consent or approval
of, or make any filing with or notification to, any Governmental Authority, (b)
require the consent or approval of any other person pursuant to any agreement,
obligation or instrument binding on Stockholder or its properties and assets,
(c) conflict with or violate any organizational document or any Law applicable
to Stockholder or pursuant to which any of its or its affiliates' respective
properties or assets are bound or (d) violate any other agreement to which
Stockholder or any of its affiliates is a party including any voting agreement,
stockholders agreement, irrevocable proxy or voting trust, except for any
consent, approval, filing or notification which has been obtained as of the date
hereof or the failure of which to obtain, make or give would not, or any
conflict or violation which would not, impair in any material respect
Stockholder's ability to perform its obligations under this Agreement or in any
event impair Stockholder's ability to perform its obligations under Section 1.1
hereof. Except for this Agreement, the Voting Shares are not, with respect to
the voting or transfer thereof, subject to any other agreement or third party
rights, including any voting agreement, stockholders agreement, irrevocable
proxy or voting trust.
3.5. Acknowledgment. Stockholder understands and acknowledges
that each of Parent and Newco is entering into the Merger Agreement in reliance
upon such Stockholder's execution, delivery and performance of this Agreement.
4. Certain Covenants of Stockholder. Stockholder hereby covenants and
agrees with Parent as follows:
4.1 Restriction on Transfer, Proxies and Non-Interference. Stockholder
hereby agrees, while this Agreement is in effect, not to (a) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding other than this Agreement
with respect to the sale, transfer, pledge, encumbrance, assignment or other
disposition of, or limitation on the voting rights of, any of the Voting Shares,
(b) grant any proxies or powers of attorney, deposit any Voting Shares into a
voting trust or enter into a voting agreement with respect to any Voting Shares
(or attempt or purport to revoke or supersede the proxy granted to Parent
hereunder), (c) take any action that reasonably could cause any representation
or warranty of Stockholder contained herein to become untrue or incorrect or
have the effect of preventing or disabling Stockholder from performing its
covenants or other
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obligations under this Agreement or (d) commit or agree to take any of the
foregoing actions. Any transfer of any Voting Shares in violation of this
provision shall be null and void. If any involuntary transfer of any of the
Voting Shares shall occur (including a sale by Stockholder's trustee in any
bankruptcy, or a sale to a purchaser at any creditor's or court sale), the
transferee (which term, as used herein, shall include any and all transferees
and subsequent transferees of the initial transferee) shall take and hold such
Voting Shares subject to all of the restrictions, liabilities and rights under
this Agreement, which shall continue in full force and effect until the earlier
of (i) the date on which such restrictions, liabilities and rights terminate
pursuant to this Agreement and (ii) a valid termination of this Agreement.
4.2 No Limitations on Actions. Stockholder signs this Agreement solely in
its capacity as the record and/or beneficial owner, as applicable, of the
Voting Shares; this Agreement shall not limit or otherwise affect the actions of
Stockholder or any affiliate, employee or designee of such Stockholder or any of
its affiliates with respect to any of the other Owned Shares or in any other
capacity, including such person's capacity, if any, as an officer of the Company
or a member of the board of directors of the Company; and nothing herein shall
limit or affect the Company's rights available at law or in equity in connection
with the Merger Agreement.
4.3 Further Assurances. From time to time, at the request of Parent and
without further consideration, Stockholder shall execute and deliver such
additional documents and instruments and take all such further action as may be
reasonably requested by Parent to effectuate or evidence the purpose and intent
of this Agreement.
4.4 Stop Transfer Order; Legend. In furtherance of this Agreement, and
concurrently herewith, Stockholder shall and hereby does authorize the Company
or the Company's counsel, and the Company hereby does covenant and agree, to
notify the Company's transfer agent that there is a stop transfer order with
respect to all of the Voting Shares. Stockholder and/or the Company shall cause
to be provided to Parent evidence of such stop transfer order as promptly as
reasonably practicable after the date hereof.
6. Miscellaneous.
6.1 Entire Agreement; Assignment. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. This Agreement shall not be assigned by operation of law or
otherwise and shall be binding upon and inure solely to the benefit of each
party hereto; provided, however, that Parent shall be permitted to assign this
Agreement and any of its rights, interests or obligations under this Agreement
to an affiliate of Parent to whom the Merger Agreement shall have been assigned
pursuant to the proviso of Section 8.9 of the Merger Agreement (it being
understood and agreed by each of the parties hereto that such assignment shall
not be deemed to be a breach by Parent of any of its representations and
warranties set forth herein, shall not be deemed to result in any such
representation or warranty becoming untrue or inaccurate and shall not be deemed
to be a breach by Parent of any covenant or agreement contained herein).
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6.2 Savings Clause. Notwithstanding anything to the contrary contained
herein, in the event that the number of Voting Shares, when aggregated with
the number of shares subject to other Option and Support Agreements or other
voting support agreements, by and between Parent and other holders of the voting
stock of the Company dated as of the date hereof (collectively, the "Other
Support Agreements") would exceed 19.9% of the voting power of the
then-outstanding shares of capital stock of the Company, this Agreement shall
deem to apply only to the maximum number of shares subject hereto as would not
result in the total shares with voting power subject to this Agreement and the
Other Support Agreements exceeding such 19.9% maximum amount, with any resulting
adjustment in the amount of shares subject to this Agreement and the Other
Support Agreements to be allocated pro rata among such agreements based on the
relative numbers of shares (calculated on an as-converted to Common Stock basis)
subject to such agreements.
6.3 Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by each of the parties hereto.
6.4 Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly received if so given) by hand delivery, by facsimile transmission or
by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express, providing proof
of delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses:
If to Stockholder to:
ComVest Investment Partners II LLC
Xxxxxxx X. Xxxx, Managing Partner
Xxx Xxxxx Xxxxxxxx--Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Managing Partner
Facsimile No.: (000) 000-0000
If to Parent:
Rocket Software, Inc.
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxxx Gedda
Facsimile No.: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxxxxx XxXxxxxxx LLP
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.7 Governing Law.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Minnesota, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any
federal court sitting in the State of Minnesota in any action arising out of or
relating to this Agreement, and hereby irrevocably agrees that all claims in
respect of such action may be heard and determined in such Minnesota state or
federal court. Each party hereto hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum to the
maintenance of such action or proceeding. The parties hereto further agree, to
the extent permitted by law, that final and unappealable judgment against any of
them in any action or proceeding contemplated above shall be conclusive and may
be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified copy of which shall be conclusive evidence of
the fact and amount of such judgment.
(c) To the extent that any party hereto has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, each
party hereto hereby irrevocably waives such immunity in respect of its
obligations with respect to this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by
applicable laws, any right it may have to a trial by jury in respect of any
action, suit or proceeding arising out of or relating to this Agreement. Each
party hereto certifies that it has been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications set forth above in
this Section.
6.8 Remedies. The parties agree that irreparable damage would occur in the
event that any provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties hereto shall be entitled to an injunction or
injunctions to prevent breaches or threatened breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement, this being in
addition to any other remedy to which they may be entitled under any applicable
Law or in equity.
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6.9 Counterparts. This Agreement may be executed by facsimile or PDF
signature and in two or more counterparts, each of which shall be deemed to
be an original, but all of which when taken together shall constitute one and
the same Agreement.
6.10 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
6.11 Interpretation. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement unless otherwise
indicated. The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes," or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
6.12 No Presumption Against Drafter. Each of the parties hereto has jointly
participated in the negotiation and drafting of this Agreement. In the event of
an ambiguity or a question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party hereto by virtue
of the authorship of any of the provisions of this Agreement.
[Signature Page Follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
COMVEST INVESTMENT PARTNERS II LLC
By:
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Partner
ROCKET SOFTWARE, INC.
--------------------------------
Name:
Title:
ATTACHMENT A
VOTING SHARES OWNED OF RECORD AND/OR BENEFICIALLY BY STOCKHOLDER
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SHARES OWNED OF SHARES OWNED TYPE OF SHARES
RECORD BENEFICIALLY BUT NOT OF
RECORD
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22,000,000* Common Stock
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* * Does not include 3,400,000 shares subject to immediately exercisable warrant
at $0.50 per share or 2,000,000 shares subject to the ComVest Protective Warrant
exercisable at $0.50 per share.
