AGREEMENT AND PLAN OF MERGER BY AND AMONG AMICAS, INC., MERGE HEALTHCARE INCORPORATED AND PROJECT READY CORP. Dated as of february 28, 2010
BY
AND AMONG
AMICAS,
INC.,
MERGE
HEALTHCARE INCORPORATED
AND
PROJECT
READY CORP.
Dated
as of february 28, 2010
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THE
OFFER AND THE MERGER
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2
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Section
1.1
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The
Offer
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2
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Section
1.2
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Company
Actions
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4
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Section
1.3
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The
Merger
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5
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Section
1.4
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Closing
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5
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Section
1.5
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Effective
Time
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5
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Section
1.6
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Conversion
of the Shares
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5
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Section
1.7
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Organizational
Documents
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6
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Section
1.8
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Directors
and Officers of the Surviving Corporation
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6
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Section
1.9
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Company
Options and Stock-Based Awards
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7
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Section
1.10
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Dissenter
Shares
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8
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Section
1.11
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Option
to Acquire Additional Shares
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8
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Section
1.12
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Initial
Payment
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9
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Section
1.13
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Escrow
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9
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Article
II
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EXCHANGE
OF CERTIFICATES
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10
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Section
2.1
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Paying
Agent
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10
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Section
2.2
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Exchange
Procedures
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10
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Section
2.3
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Further
Rights in Company Common Stock
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11
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Section
2.4
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Termination
of Exchange Fund
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11
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Section
2.5
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No
Liability
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12
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Section
2.6
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Lost,
Stolen or Destroyed Certificates
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12
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Section
2.7
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No
Further Dividends
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12
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Section
2.8
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Withholding
of Tax
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12
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Article
III
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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12
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Section
3.1
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Organization
and Good Standing; Charter Documents
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13
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Section
3.2
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Authority
for Agreement
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13
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Section
3.3
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Capitalization
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14
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Section
3.4
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Company
Subsidiaries
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15
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Section
3.5
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No
Conflict; Required Filings and Consents
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16
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Section
3.6
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Compliance
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17
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Section
3.7
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Litigation
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19
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i
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Section
3.8
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Company
Reports; Financial Statements
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19
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Section
3.9
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Absence
of Certain Changes or Events
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22
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Section
3.10
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Taxes
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22
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Section
3.11
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Title
to Personal Properties; Real Property
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24
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Section
3.12
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Officers,
Directors, Employees and Affiliates
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26
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Section
3.13
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Employee
Benefit Plans
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27
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Section
3.14
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Labor
Relations
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28
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Section
3.15
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Contracts
and Commitments
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29
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Section
3.16
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Intellectual
Property
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31
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Section
3.17
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Insurance
Policies
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35
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Section
3.18
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Brokers
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36
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Section
3.19
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Company
Financial Advisor Opinion
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36
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Section
3.20
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Rights
Agreement; Anti-Takeover Provisions
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36
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Section
3.21
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Environmental
Matters
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36
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Section
3.22
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Information
Supplied
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37
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Section
3.23
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Product
Warranties
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37
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Section
3.24
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Termination
of Prior Merger Agreement
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37
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Article
IV
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REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
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38
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Section
4.1
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Organization
and Good Standing
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38
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Section
4.2
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Authority
for Agreement
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38
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Section
4.3
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No
Conflict; Required Filings and Consents
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38
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Section
4.4
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Litigation
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39
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Section
4.5
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Availability
of Funds
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39
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Section
4.6
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Guarantee
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40
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Section
4.7
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Brokers
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40
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Section
4.8
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Merger
Sub
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40
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Section
4.9
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Information
Supplied
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41
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Section
4.10
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Management
Arrangements
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41
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Section
4.11
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Solvency
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41
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Section
4.12
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Section 203
of the DGCL
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42
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Article
V
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COVENANTS
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42
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Section
5.1
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Conduct
of Business by the Company Pending the Merger
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42
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ii
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Section
5.2
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Access
to Information and Employees
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45
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Section
5.3
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Reasonable
Best Efforts; Notification
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45
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Section
5.4
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Proxy
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47
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Section
5.5
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Approval
Of Merger
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49
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Section
5.6
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No
Solicitation of Transactions
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50
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Section
5.7
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Public
Announcements
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54
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Section
5.8
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Litigation
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54
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Section
5.9
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Directors’
and Officers’ Indemnification and Insurance
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54
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Section
5.10
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Conveyance
Taxes
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55
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Section
5.11
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Delisting
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56
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Section
5.12
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Financing.
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56
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Section
5.13
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Employee
Matters
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57
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Section
5.14
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Release
of Liens
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57
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Section
5.15
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Directors
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58
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Section
5.16
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Rights
Agreement; Consequences if Rights Triggered
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59
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Article
VI
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CONDITIONS
PRECEDENT
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59
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Section
6.1
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Conditions
to Each Party’s Obligation to Effect the Merger
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59
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Section
6.2
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Additional
Condition to Obligations of Parent and Merger
Sub59
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Section
6.3
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Frustration
of Closing Conditions
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60
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Article
VII
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TERMINATION,
AMENDMENT AND WAIVER
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60
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Section
7.1
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Termination
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60
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Section
7.2
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Expenses;
Company Termination Fee
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62
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Section
7.3
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Effect
of Termination
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63
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Section
7.4
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Amendment
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64
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Section
7.5
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Extension;
Waiver
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64
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Article
VIII
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GENERAL
PROVISIONS
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64
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Section
8.1
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Nonsurvival
of Representations and Warranties
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64
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Section
8.2
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Notices
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64
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Section
8.3
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Interpretation
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65
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Section
8.4
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Counterparts
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65
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Section
8.5
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Entire
Agreement; No Third-Party Beneficiaries
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66
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Section
8.6
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Governing
Law
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66
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Section
8.7
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Assignment
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66
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iii
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Section
8.8
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Severability
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66
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Section
8.9
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Consent
to Jurisdiction; Venue
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66
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Section
8.10
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Waiver
of Trial by Jury
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67
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Article
IX
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CERTAIN
DEFINITIONS
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67
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iv
EXHIBITS
A. Form
of Stockholder Agreement
B. Equity
Commitment Letters
C. Guarantee
D. FIRPTA
Certificate
E. Amended
and Restated Certificate of Incorporation
F. Form
of Escrow Agreement
ANNEX
A. Conditions
to the Offer
THIS
AGREEMENT AND PLAN OF MERGER (together with all annexes, letters, schedules and
exhibits hereto, this “Agreement”), dated as
of February 28, 2010, is by and among Merge Healthcare Incorporated, a Delaware
corporation (“Parent”), Project
Ready Corp., a Delaware corporation and wholly-owned direct subsidiary of Parent
(“Merger Sub”),
and AMICAS, Inc., a Delaware corporation (the “Company”). Certain
capitalized terms used in this Agreement are defined in Article IX, and
Article IX
includes an index of all capitalized terms used in this Agreement.
RECITALS
WHEREAS,
Parent proposes to cause Merger Sub to make a tender offer (as it may be amended
from time to time as permitted under this Agreement, the “Offer”) to purchase
all the outstanding shares of common stock, par value $0.001 per share, of the
Company (the “Company
Common Stock”), including the associated Rights (as defined below) at a
price per share of Company Common Stock (including the associated Right) of
$6.05 (such amount, or any other amount per share paid pursuant to the Offer and
this Agreement, the “Offer Price”), net to
the seller in cash, on the terms and subject to the conditions set forth in this
Agreement.
WHEREAS,
the Company, Parent and Merger Sub each have determined that it is advisable,
fair to and in the best interests of its stockholders to effect the merger (the
“Merger”) of
Merger Sub with and into the Company pursuant to the Delaware General
Corporation Law (the “DGCL”) upon the terms
and subject to the conditions set forth in this Agreement, pursuant to which
each outstanding share of Company Common Stock (including the associated Rights)
not owned by Parent, Merger Sub or the Company shall be converted into the right
to receive cash, as set forth herein, all upon the terms and subject to the
conditions of this Agreement.
WHEREAS,
the board of directors of the Company (the “Company Board of
Directors”) has unanimously (i) concluded that the Offer, the Merger
and the transactions contemplated by this Agreement constitute a Superior
Proposal (as such term is defined in the Agreement and Plan of Merger dated
December 24, 2009 by and among Amicas, Inc., Project Alta Merger Corp. and
Project Alta Holdings Corp. (the “Prior Merger
Agreement”)) to the merger and transactions contemplated in the Prior
Merger Agreement (ii) determined that the Offer, the Merger and the other
transactions contemplated hereby, taken together, are at a price and on terms
that are fair to, advisable and in the best interests of the Company and its
stockholders (the “Company Common
Stockholders”), (iii) withdrawn its recommendation of the Prior
Merger Agreement and the transactions contemplated thereby, (iv) approved this
Agreement, the Merger and the other transactions contemplated hereby,
(v) approved resolutions recommending the approval and adoption of this
Agreement by the Company Common Stockholders, (vi) approved resolutions
recommending that the Company Common Stockholders accept the Offer and tender
their Company Common Stock pursuant to the Offer (the recommendations set forth
in clauses (v) and (vi) being the “Company
Recommendations”), and (vii) taken all necessary action to render the
Company’s Rights Agreement, dated as of December 5, 2002, between the Company
(f/k/a VitalWorks, Inc.) and StockTrans, Inc. as rights agent (the “Rights Plan”) and the
rights to purchase Series B Junior Preferred Stock (each, a “Right”) outstanding
thereunder, inapplicable to the Offer, this Agreement, the Merger and the other
transactions contemplated hereby.
WHEREAS,
the Company Board of Directors has deemed the Offer and the Merger as
contemplated by this Agreement to be a “Superior Proposal” (as such term is
defined in the Prior Merger Agreement) and therefore, immediately prior to
execution of this Agreement by Company, the Company terminated the Prior Merger
Agreement in accordance with its terms and has paid the Company Termination Fee
pursuant thereto.
WHEREAS,
simultaneously with the execution and delivery of this Agreement, certain
Company Common Stockholders have entered into stockholder agreements in the form
attached hereto as Exhibit A (the “Stockholder
Agreements”), dated as of the date hereof, with Parent.
WHEREAS,
as a condition to the willingness of the Company to enter into this Agreement,
concurrently with the execution and delivery of this Agreement, certain entities
have issued the Equity Commitment Letters attached as Exhibit B hereto (the
“Equity Commitment
Letters”) to Parent and the Sponsor has entered into the Guarantee, dated
as of the date hereof (the “Guarantee”), in the
form attached as Exhibit C hereto,
pursuant to which the Sponsor is guaranteeing certain obligations of Parent and
Merger Sub in connection with this Agreement, on the terms and subject to the
conditions set forth therein.
WHEREAS,
as a condition to the willingness of the Company to enter into this Agreement,
concurrently with the execution and delivery of this Agreement, Parent and the
Company have entered into an Escrow Agreement with Bank of New York Mellon as
escrow agent thereunder in the form attached as Exhibit F hereto (the
“Escrow
Agreement”), pursuant to which the Parent has caused the Escrow Amount
(as defined below) to be placed into escrow for the benefit of the Company in
the event that the Parent Termination Fee becomes payable
hereunder.
AGREEMENT
NOW
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties hereby agree as
follows:
ARTICLE
I
THE
OFFER AND THE MERGER
Section
1.1 The
Offer.
(a) Subject
to the conditions of this Agreement, as promptly as practicable but in no event
later than ten (10) Business Days after the date that the Company executes this
Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, commence the
Offer within the meaning of the applicable rules and regulations of the Exchange
Act. The obligations of Merger Sub to, and of Parent to cause Merger
Sub to, commence the Offer and accept for payment, and pay for, any shares of
Company Common Stock tendered pursuant to the Offer are subject only to the
conditions set forth in Annex A
hereto. The initial expiration date of the Offer shall be the 20th
Business Day following the commencement of the Offer (determined using Rule
14d-1(g)(3) of the SEC).
Merger
Sub expressly reserves the right to waive any condition to the Offer or modify
the terms of the Offer, except that, without the consent of the Company, Merger
Sub shall not (i) reduce the number of shares of Company Common Stock
subject to the Offer, (ii) reduce the Offer Price, (iii) waive or
modify the Minimum Tender Condition (as defined in Annex A) to the
extent that Merger Sub or Parent would purchase 50% or less of the Fully Diluted
Shares or to increase the Minimum Tender Condition, (iv) add to the conditions
set forth in Annex A or
modify any condition set forth in Annex A in any
manner adverse to the Company Common Stockholders, (v) extend the Offer, or
(vi) modify the form of consideration payable in the
Offer. Notwithstanding the foregoing, Merger Sub may, without the
consent of the Company, (i) extend the Offer, if at the scheduled
expiration date of the Offer any of the conditions (other than the
Minimum Tender Condition) to Merger Sub’s obligation to purchase shares of
Company Common Stock are not satisfied, until such time as such conditions are
satisfied or waived, including, without limitation, HSR Clearance, (ii) extend
the Offer for a period of not more than ten (10) Business Days beyond the
initial expiration date of the Offer, if on the date of such extension less than
90% of the outstanding shares of Company Common Stock have been validly tendered
and not properly withdrawn pursuant to the Offer, (iii) extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer and (iv) extend the Offer,
one time only, for any reason for a period of not more than fifteen (15)
Business Days beyond the latest expiration date that would otherwise be
permitted under clause (i), (ii) or (iii) of this sentence. In
addition if at the otherwise scheduled expiration date of the Offer any
condition to the Offer is not satisfied, Merger Sub shall, and Parent shall
cause Merger Sub to, extend the Offer at the request of the Company for one
period of not more than twenty (20) Business Days. In addition,
Merger Sub may make available a “subsequent offering period,” in accordance with
Rule 14d-11 of the SEC, of not less than ten (10) Business Days. On
the terms and subject to the conditions of the Offer and this Agreement, Merger
Sub shall, and Parent shall cause Merger Sub to, (A) as soon as practicable
after becoming obligated to purchase shares of Company Common Stock pursuant to
the Offer, accept for payment and pay for all shares of Company Common Stock
validly tendered and not withdrawn pursuant to the Offer (the date of acceptance
for payment, the “Acceptance Date”),
which acceptance may be by oral notice to the Paying Agent, (B) on the closing
date of the Offer (which shall be not more than five (5) Business Days following
the Acceptance Date), deposit or cause to be deposited with the Paying Agent,
cash in U.S. dollars sufficient to pay the aggregate Offer Price for all such
accepted shares of Company Common Stock and (C) as soon as practicable following
such deposit, cause the Paying Agent to pay for all shares of Company Common
Stock so accepted for payment.
(b) On the
date of commencement of the Offer, Parent and Merger Sub shall file with the SEC
and deliver to the Company and its counsel a Tender Offer Statement on Schedule
TO with respect to the Offer, which shall contain an offer to purchase and a
related letter of transmittal and summary advertisement (such Schedule TO and
the documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the “Offer
Documents”). Each of Parent, Merger Sub and the Company shall
promptly correct any information provided by it for use in the Offer Documents
if and to the extent that such information shall have become false or misleading
in any material respect, and each of Parent and Merger Sub shall take all steps
necessary to amend or supplement the Offer Documents and to cause the Offer
Documents as so amended or supplemented to be filed with the SEC and to be
disseminated to the Company Common Stockholders, in each case as and to the
extent required by applicable Federal securities laws. To the extent
practicable, the Company and its counsel shall be given a reasonable opportunity
to review and comment on the Offer Documents each time before any such document
is filed with the SEC, and Parent and Merger Sub shall give reasonable and good
faith consideration to any comments made by the Company and its counsel. Parent
and Merger Sub shall provide the Company and its counsel as promptly as
practicable with copies of any correspondence that Parent, Merger Sub or their
counsel may receive from time to time from the SEC or its staff with respect to
the Offer Documents as promptly as practicable after receipt of those
comments.
(c) Parent
shall provide or cause to be provided to Merger Sub on a timely basis the funds
necessary to purchase any shares of Company Common Stock that Merger Sub becomes
obligated to purchase pursuant to the Offer.
(d) Subject
to Section 5.1 of this Agreement, if, between the date of this Agreement and the
Acceptance Date, the outstanding shares of Company Common Stock shall have been
changed into a different number of shares or a different class, solely by reason
of any stock dividend, subdivision, reclassification, recapitalization, split,
reverse split, combination or exchange of shares or any other similar
transaction, the Offer Price shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split, reverse
split, combination or exchange of shares or any other similar transaction and to
provide to the Company Common Stockholders the same economic effect as
contemplated by this Agreement prior to such action.
Section
1.2 Company
Actions.
(a) The
Company hereby approves of and consents to the Offer, the Merger and the other
transactions contemplated by the Transaction Documents (collectively, the “Transactions”).
(b) On the
date the Offer Documents are filed with the SEC, the Company shall file with the
SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to
the Offer (such Schedule 14D-9, as amended from time to time, the “Schedule 14D-9”)
describing the Company Recommendations and shall mail the Schedule 14D-9 to the
Company Common Stockholders. Each of the Company, Parent and Merger
Sub shall promptly correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall take all
steps necessary to amend or supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the SEC and
disseminated to the Company Common Stockholders, in each case as and to the
extent required by applicable Federal securities laws. To the extent
practicable, the Parent and its counsel shall be given a reasonable opportunity
to review and comment on the Schedule 14D-9 each time before such document is
filed with the SEC, and the Company shall give reasonable and good faith
consideration to any comments made by the Parent and its counsel. The Company
shall provide the Parent and its counsel as promptly as practicable with copies
of any correspondence that the Company or its counsel may receive from time to
time from the SEC or its staff with respect to the Schedule 14D-9 as promptly as
practicable after receipt of those comments.
(c) In
connection with the Offer, the Company shall cause its transfer agent to furnish
Merger Sub promptly with mailing labels containing the names and addresses of
the record holders of Company Common Stock as of a recent date and of those
persons becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings and computer files and all
other information in the Company’s possession or control regarding the
beneficial owners of Company Common Stock, and shall furnish to Merger Sub such
information and assistance (including updated lists of stockholders, security
position listings and computer files) as Parent may reasonably request in
communicating the Offer to the Company Common Stockholders. Subject
to the requirements of applicable Law and except for such steps as are necessary
to disseminate the Offer Documents and any other documents necessary to
consummate the Transactions, Parent and Merger Sub shall hold in confidence the
information contained in any such labels, listings and files, shall use such
information only in connection with the Offer and the Merger and, if this
Agreement shall be terminated, shall, upon written request, deliver to the
Company (or, at the Company’s option, destroy) all copies of such information
then in their possession.
Section
1.3 The
Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time: (a) Merger Sub shall be merged with and into
the Company and the separate corporate existence of Merger Sub shall thereupon
cease, (b) the Company shall be the successor or surviving corporation in the
Merger and shall continue to be governed by the laws of the State of Delaware,
and (c) the separate corporate existence of the Company with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger. The Merger shall have the effects set forth in the
DGCL.
Section
1.4 Closing. Subject
to the terms and conditions of this Agreement, the Closing of the Merger will
take place at 10:00 a.m., local time, as promptly as practicable but in no
event later than the second Business Day after the satisfaction or waiver of the
conditions (other than those conditions that by their nature are to be satisfied
at the Closing, but subject to the fulfillment or waiver of those conditions)
set forth in Article VI (the
“Closing
Date”), at the offices of XxXxxxxxx Will & Xxxxx LLP, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, unless another time, date or place is agreed to
in writing by the parties.
Section
1.5 Effective
Time. On the Closing Date and subject to the terms and
conditions hereof, the Certificate of Merger shall be delivered for filing with
the Delaware Secretary. The Merger shall become effective at the
Effective Time. If the Delaware Secretary requires any changes in the
Certificate of Merger as a condition to filing or issuing a certificate to the
effect that the Merger is effective, the Company shall execute any necessary
revisions incorporating such changes, provided such changes are not inconsistent
with and do not result in any material change in the terms of this
Agreement.
Section
1.6 Conversion of the
Shares. At the Effective Time, by virtue of the Merger and
without any action on the part of Parent, Merger Sub, the Company or the holders
of any of the following securities:
(a) Except as
provided in Section 1.6(d) or Section 1.6(b) herein, each share of Company
Common Stock (including the associated Rights) issued and outstanding
immediately prior to the Effective Time (excluding Dissenter Shares) shall by
virtue of the Merger and without any action on the part of the holder thereof be
converted automatically into the right to receive the Offer Price in cash,
without interest (the “Merger
Consideration”). All such shares of Company Common Stock, when
so converted, shall no longer be outstanding and each holder of a certificate
theretofore representing such shares of Company Common Stock shall cease to have
any rights with respect thereto, except the right to receive the Merger
Consideration into which such shares of Company Common Stock have been
converted, as provided herein.
(b) Each
share of Company Common Stock that is owned by the Company (or any Subsidiary of
the Company) as treasury stock or otherwise and each share of Company Common
Stock owned by Parent or Merger Sub shall be canceled and retired and cease to
exist and no payment or distribution shall be made with respect
thereto.
(c) Each
share of common stock of Merger Sub issued and outstanding immediately prior to
the Effective Time shall be converted into and become one validly issued, fully
paid and nonassessable share of common stock, par value $0.01 per share, of
the Surviving Corporation.
(d) If
between the Acceptance Date and the Effective Time the outstanding shares of
Company Common Stock shall have been changed into a different number of shares
or a different class, solely by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, reverse split, combination or
exchange of shares or any other similar transaction, the Merger Consideration
shall be correspondingly adjusted to reflect such stock dividend, subdivision,
reclassification, recapitalization, split, reverse split, combination or
exchange of shares or any other similar transaction and to provide to the
Company Common Stockholders the same economic effect as contemplated by this
Agreement prior to such action.
Section
1.7 Organizational
Documents.
(a) At the
Effective Time, the Certificate of Incorporation of the Company shall be amended
in its entirety to read as set forth on Exhibit E hereto and
as so amended shall be the Certificate of Incorporation of the Surviving
Corporation until thereafter amended in accordance with its terms and as
provided by Law.
(b) At the
Effective Time, the Bylaws of Merger Sub as in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation (except that all
references to Merger Sub in the Bylaws of the Surviving Corporation shall be
amended to refer to “AMICAS, Inc.”). Thereafter, as so amended, the
Bylaws of the Surviving Corporation may be amended or repealed in accordance
with their terms and the Certificate of Incorporation of the Surviving
Corporation and as provided by Law.
Section
1.8 Directors and Officers of
the Surviving Corporation. The Company shall cause to be
delivered to Parent, at Closing, resignations of all the directors of the
Company to be effective upon the consummation of the Merger. At the
Effective Time, the directors and officers of Merger Sub shall be the directors
and officers of the Surviving Corporation, and such directors and officers shall
hold office in accordance with and subject to the Certificate of Incorporation
and Bylaws of the Surviving Corporation.
Section
1.9 Company
Options and Stock-Based Awards.
(a) Equity Award
Waivers. Prior to the Effective Time, the Company shall use
its best efforts to obtain all necessary waivers, consents or releases, in form
and substance reasonably satisfactory to Parent, from holders of Company Common
Stock Options and other equity awards under the Company Option Plans and take
all such other action, without incurring any liabilities in connection
therewith, as Parent may deem to be necessary to give effect to the transactions
contemplated by this Section 1.9,
including, but not limited to, satisfaction of the requirements of Rule 16b-3(e)
under the Exchange Act. Prior to the Effective Time, the Company
Board of Directors (or, if appropriate, any committee thereof administering the
Company Option Plans) shall adopt such resolutions or take such other actions as
are required to give effect to the transactions contemplated by this Section
1.9.
(b) Termination of Company
Option Plans. Except as otherwise agreed to by the parties,
(i) the Company Option Plans shall terminate as of the Effective Time and
the provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company or any Subsidiary thereof shall be canceled as of the Effective Time and
(ii) the Company shall ensure that following the Effective Time no
participant in the Company Option Plans or other plans, programs or arrangements
shall have any right thereunder to acquire any equity securities of the Company,
the Surviving Corporation or any Subsidiary thereof.
(c) Company Common Stock
Options. At the Effective Time, each then-outstanding Company
Common Stock Option, whether vested or unvested, shall be cancelled in
accordance with the terms of the applicable Company Option Plan. It
is the intent of the parties that the cancellation of a Company Common Stock
Option as provided in the immediately preceding sentence shall be deemed a full
and complete satisfaction of any and all rights the holder thereof had or may
have had in respect of such Company Common Stock Option. Prior to the
Effective Time, the Company shall deliver to the holders of Company Common Stock
Options notices, in form and substance reasonably acceptable to Parent, setting
forth such holders’ rights pursuant to this Agreement.
(d) Employee Stock Purchase
Plan. Prior to the date of this Agreement, the Company Board
of Directors (or, if appropriate, any committee administering the Company’s 2007
Employee Stock Purchase Plan, dated as of August 1, 2007 (the “ESPP”)) has adopted
such resolutions and taken such other actions as are required to provide that,
with respect to the ESPP: (i) no Offerings (as defined in the ESPP)
are in progress as of the date of this Agreement; (ii) the most recent offering
under the ESPP (the “Final Offering”)
ended on January 31, 2010; (iii) each ESPP participant’s accumulated
contributions under the ESPP were used to purchase shares of Company Common
Stock in accordance with the terms of the ESPP as of the end of the Final
Offering; and (iv) the ESPP terminated immediately following the end of the
Final Offering and no further rights have been, or shall be, granted or
exercised under the ESPP thereafter.
(e) Company Restricted
Stock. At the Effective Time, each share of Company Restricted
Stock, whether vested or unvested, that is outstanding immediately prior thereto
shall become fully vested and all restrictions and repurchase rights thereon
shall lapse and shall be converted automatically into the right to receive at
the Effective Time an amount in cash in U.S. dollars equal to the Merger
Consideration.
Section
1.10 Dissenter
Shares. Notwithstanding anything in this Agreement to the
contrary, if any Dissenting Stockholder shall demand to be paid the “fair value”
of its Dissenter Shares, as provided in Section 262 of the DGCL, such Dissenter
Shares shall not be converted into or exchangeable for the right to receive the
Merger Consideration (except as provided in this Section 1.10) and
shall entitle such Dissenting Stockholder only to payment of the fair value of
such Dissenter Shares, in accordance with Section 262 of the DGCL, unless and
until such Dissenting Stockholder withdraws (in accordance with Section 262(k)
of the DGCL) or effectively loses the right to dissent. The Company
shall not, except with the prior written consent of Parent, voluntarily make (or
cause or permit to be made on its behalf) any payment with respect to, or settle
or offer to settle, any such demand for payment of fair value of Dissenter
Shares prior to the Effective Time. The Company shall give Parent
prompt notice of any such demands prior to the Effective Time and Parent shall
have the right to participate in all negotiations and proceedings with respect
to any such demands. If any Dissenting Stockholder shall have
effectively withdrawn (in accordance with Section 262(k) of the DGCL) or lost
the right to dissent, then as of the later of the Effective Time or the
occurrence of such event, the Dissenter Shares held by such Dissenting
Stockholder shall be converted into and represent the right to receive the
Merger Consideration pursuant to Section
1.6.
Section
1.11 Option to Acquire Additional
Shares.
(a) The
Company hereby grants to Parent and Merger Sub an irrevocable option (such
options together the “Additional Share
Option”), to purchase from the Company up to that number of newly issued
and treasury shares of Company Common Stock (the “Additional Shares”)
equal to the number of shares of Company Common Stock that, when added to the
number of shares of Company Common Stock owned by Parent and Merger Sub
immediately following the consummation of the Offer shall constitute one share
more than 90% (after giving effect to the issuance of the Additional Shares) of
the Fully Diluted Shares (such threshold, the “Short-Form
Threshold”) for a consideration per Additional Share equal to the Offer
Price (such consideration, in the aggregate, the “Additional Share Option
Consideration”). For the avoidance of doubt, the Additional
Share Option shall terminate immediately upon termination of this
Agreement.
(b) The
number of shares of Company Common Stock issuable upon exercise of the
Additional Share Option shall be reduced to the extent that (i) the number of
shares of Company Common Stock subject thereto (as determined immediately after
the consummation of the Offer) exceeds the number of shares of Company Common
Stock held in treasury by the Company plus the number of authorized shares of
Company Common Stock available for issuance, or (ii) any provision of any
applicable Law shall prohibit the exercise of the Additional Share Option or the
delivery of the Additional Shares in respect of such exercise. The
Additional Share Option shall not be exercisable until Merger Sub has accepted
for payment all shares of Company Common Stock validly tendered and not
withdrawn in the Offer.
(c) In the
event Parent or Merger Sub wish to exercise the Additional Share Option, Parent
or Merger Sub shall give the Company one day prior written notice specifying the
number of shares of Company Common Stock that are or will be owned by Parent and
Merger Sub immediately following consummation of the Offer and specifying a
place and a time for the closing of the Additional Share Option and specifying
the number of Additional Shares to be purchased pursuant to the Additional Share
Option and the Additional Share Option Consideration. The
closing of the Additional Share Option shall occur immediately after the closing
of the Offer. Parent and Merger Sub shall pay the Additional Share
Option Consideration at the closing of the Additional Share
Option. The Additional Share Option Consideration may be paid, at the
option of Parent, in whole or in combination, by (a) cash by wire transfer or
cashier’s check or (b) a promissory note (w) having a principal amount equal to
the amount of the Additional Share Option Consideration not paid in cash by wire
transfer or cashier’s check, (x) bearing interest at the rate of interest that
would be payable by Parent on similar bank borrowing as of the date of the
promissory note, (y) maturing on the first anniversary of the date of execution
and delivery of such promissory note, and (z) which may be prepaid at any time
and from time to time, in whole or in part, without premium or
penalty.
(d) Parent
and Merger Sub acknowledge that the Additional Shares which Parent or Merger Sub
may acquire upon exercise of the Additional Share Option shall not be registered
under the Securities Act, and shall be issued in reliance upon an exemption for
transactions not involving a public offering. Parent and Merger Sub agree that
the Additional Share Option, and the Additional Shares to be acquired upon
exercise of the Additional Share Option, if any, are being and shall be acquired
by Merger Sub for the purpose of investment and not with a view to, or for
resale in connection with, any distribution thereof (within the meaning of the
Securities Act).
Section
1.12 Initial
Payment. As a material inducement to the Company entering into
this Agreement, contemporaneous with the execution and delivery of this
Agreement by the Company, Parent shall deliver to the Company the sum of
$4,300,000 by wire transfer of immediately available funds to an account
designated by the Company (the “Initial Funding
Amount”). The Initial Funding Amount shall be retained by the
Company, even if this Agreement is terminated, regardless of the circumstances
of such termination, except as expressly provided in Section
7.2(b).
Section
1.13 Escrow. On the next
Business Day immediately following the date that the Company accepts, in
accordance with the terms of the Offer Letter, the offer of Parent for the
acquisition of all of the outstanding shares of Company Common Stock set forth
in a letter dated February 28, 2010 to the Company from Parent (the “Offer Letter”),
Parent shall deposit into an escrow account pursuant to the Escrow Agreement,
Twenty-Five Million Seven Hundred Thousand United States Dollars ($25,700,000)
in cash by wire transfer of immediately available funds (the “Escrow Amount”), to
be used to fund the purchase of Company Common Stock pursuant to the
Offer. The Escrow Amount shall be available to fund the purchase of
Company Common Stock pursuant to the Offer and the Merger or to satisfy the
Parent Termination Fee payable to the Company by Parent under the terms of this
Agreement; provided, that in the event that the Parent Termination Fee is
payable to the Company, Parent shall have the right, at its election, to fund
the Parent Termination Fee from other financing sources (including its own
working capital) as long as such alternative financing does not delay the
payment of such fee; provided, further, that if the Offer is consummated or this
Agreement is terminated in circumstances where the Parent Termination Fee is not
payable to the Company, the Escrow Amount shall be released directly to, or as
directed by, Parent.
ARTICLE
II
EXCHANGE
OF CERTIFICATES
Section
2.1 Paying
Agent. At the Closing, Parent shall deposit, or shall cause to
be deposited, with a bank or trust company designated by Parent and reasonably
satisfactory to the Company (the “Paying Agent”), for
the benefit of the holders of shares of Company Common Stock, for exchange in
accordance with this Article II, through
the Paying Agent, cash in U.S. dollars in an amount sufficient to pay the
aggregate amount of the Merger Consideration (such cash being hereinafter
referred to as the “Exchange Fund”)
payable pursuant to Article I in exchange
for outstanding shares of Company Common Stock (but not, for the avoidance of
doubt, for payments in respect of Company Common Stock Options, which Parent
shall pay, or cause the Surviving Corporation to pay through its payroll system,
to the holders of Company Common Stock Options in accordance with Section
1.9(c)). In the event that the Surviving Corporation has
insufficient cash to make such payments for the Company Common Stock Options,
Parent shall pay such amounts or provide to the Surviving Corporation sufficient
cash to pay such amounts. The Paying Agent shall deliver the Merger
Consideration contemplated to be paid pursuant to Article I in exchange
for outstanding shares of Company Common Stock out of the Exchange
Fund. The Exchange Fund shall be invested by the Paying Agent as
directed by Parent; provided, however, that: (i) no
such investment or losses thereon shall affect the Merger Consideration payable
to the holders of Company Common Stock; and (ii) such investments shall be in
obligations of or guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit of the United
States of America, in commercial paper obligations rated A-1 or P-1 or better by
Xxxxx’x Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital exceeding $1 billion
(based on the most recent financial statements of such bank that are then
publicly available). Any net profit resulting from, or interest or
income produced by, such investments shall be payable to the Surviving
Corporation or Parent, and any amounts in excess of the amounts payable pursuant
to Article I
shall be promptly returned to the Surviving Corporation or Parent, in each case
as directed by Parent. The Exchange Fund shall not be used for any
other purpose.
Section
2.2 Exchange
Procedures.
(a) Exchange of
Certificates. Promptly following the Effective Time (but in no
event later than three (3) Business Days following the Effective Time), Parent
shall cause the Paying Agent to mail to each holder of record of a Certificate
or Certificates which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the “Certificates”, it
being understood that any references herein to “Certificates” shall
be deemed to include references to book-entry account statements relating to the
ownership of shares of Company Common Stock) and whose shares of Company Common
Stock have been converted into the right to receive Merger Consideration
pursuant to Article
I (i) a letter of transmittal in customary form (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates shall
pass, only upon proper delivery of the Certificates, or appropriate affidavits
of loss in lieu thereof as provided below, to the Paying Agent) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Consideration. Upon surrender of a Certificate for
cancellation (or, subject to Section 2.6 below, an
appropriate affidavit of loss in lieu thereof) to the Paying Agent together with
such letter of transmittal, properly completed and duly executed, and such other
documents as may be reasonably required pursuant to such instructions (or, if
such shares are held in book-entry or other uncertificated form, upon the entry
through a book-entry transfer agent of the surrender of such shares on a
book-entry account statement), the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration which such holder has
the right to receive in respect of the shares of Company Common Stock formerly
represented by such Certificate, and the Certificate so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on any
Merger Consideration payable to holders of Certificates. In the event
of a transfer of ownership of shares of Company Common Stock which is not
registered in the transfer records of the Company, the Merger Consideration may
be issued to a transferee if the Certificate representing such shares of Company
Common Stock is presented to the Paying Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer Taxes have been paid. Until surrendered as
contemplated by this Article II, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration or the
right to demand to be paid the “fair value” of the shares represented thereby as
contemplated by Article
I.
(b) Special Payment Procedures
for DTC. Prior to the Effective Time, Parent and the Company shall
cooperate to establish procedures with the Paying Agent and the Depository Trust
Company (“DTC”)
to ensure that (x) if the Closing occurs at or prior to 11:30 am (New York
time) on the Closing Date, the Paying Agent will transmit to DTC or its nominee
on the Closing Date an amount in cash in immediately available funds equal to
the number of Shares held of record by DTC or such nominee immediately prior to
the Effective Time multiplied by the Per Share Merger Consideration (such
amount, the “DTC
Payment”), and (y) if the Closing occurs after 11:30 am (New York
time) on the Closing Date, the Paying Agent will transmit to DTC or its nominee
on the first Business Day after the Closing Date an amount in cash in
immediately available funds equal to the DTC Payment.
Section
2.3 Further Rights in Company
Common Stock. All Merger Consideration paid in accordance with
the terms hereof shall be deemed to have been issued in full satisfaction of all
rights pertaining to such shares of Company Common Stock.
Section
2.4 Termination of Exchange
Fund. Any portion of the Exchange Fund which remains
undistributed to the former holders of Company Common Stock twelve (12) months
after the Effective Time shall be delivered to the Surviving Corporation upon
demand, and any former holders of Company Common Stock who have not theretofore
complied with this Article II shall
thereafter look only to the Surviving Corporation for the Merger Consideration,
without any interest thereon.
Section
2.5 No
Liability. None of Parent, the Company or the Surviving
Corporation shall be liable to any holder of shares of Company Common Stock for
any cash from the Exchange Fund required to be delivered, to the extent so
delivered, to a public official pursuant to any abandoned property, escheat or
similar Law.
Section
2.6 Lost, Stolen or Destroyed
Certificates. If any Certificate shall have been lost, stolen
or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Certificate to be lost, stolen or destroyed and, if required by
Parent, the posting by such Person of a bond, in reasonable and customary
amount, as indemnity against any claim that may be made against it with respect
to such lost, stolen or destroyed Certificate, the Paying Agent will issue in
exchange for such lost, stolen or destroyed Certificate the Merger Consideration
without any interest thereon.
Section
2.7 No Further
Dividends. No dividends or other distributions with respect to
capital stock of the Surviving Corporation with a record date on or after the
Effective Time shall be paid to the holder of any unsurrendered
Certificates.
Section
2.8 Withholding of
Tax. Parent, the Surviving Corporation, any Affiliate thereof
or the Paying Agent shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock and or Company Common Stock Options such amount
as Parent, the Surviving Corporation, any Affiliate thereof or the Paying Agent
is required to deduct and withhold with respect to the making of such payment
under the Code or any provision of state, local or foreign Tax
Law. To the extent that amounts are so withheld by the Surviving
Corporation or the Paying Agent, such withheld amounts shall be (a) paid
over to the applicable Governmental Entity in accordance with applicable Law or
Order and (b) treated for all purposes of this Agreement as having been
paid to the former holder of a Certificate or Company Common Stock Option in
respect of which such deduction and withholding was made.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as
disclosed in the Company Disclosure Letter delivered by the Company to Parent
prior to the execution of this Agreement (as to which a disclosure in one
section of the Company Disclosure Letter shall be deemed disclosed in each other
section where it is reasonably apparent on its face that the matter disclosed is
responsive to the representations and warranties in such section), and except as
set forth in the filed Company Reports (to the extent it is reasonably apparent
that any such disclosure set forth in the filed Company Reports would qualify
the representations and warranties contained herein and other than, in each
case, any matters required to be listed for purposes of Section 3.3
(Capitalization), Section 3.13
(Employee Benefit Plans) and Section 3.16
(Intellectual Property) of this Agreement which matters shall be specifically
listed in Sections
3.3, 3.13 and 3.16 of the Company
Disclosure Letter, respectively, and further excluding from the Company Reports
(1) any items included therein that are incorporated by reference to Company
Reports filed prior to December 31, 2007 and (2) any risk factor disclosures or
other similarly generic cautionary, predictive or forward-looking disclosures
contained therein), the Company represents and warrants to each of the other
parties hereto as follows:
Section
3.1 Organization and Good
Standing; Charter Documents.
(a) The
Company and each of its Subsidiaries (i) is a corporation or other entity
duly organized, validly existing and in corporate or other entity good standing
(with respect to jurisdictions that recognize such concept) under the Laws of
its jurisdiction of incorporation, (ii) has full corporate (or, in the case
of any Subsidiary that is not a corporation, other) power and authority to own,
lease and operate its properties and assets and to conduct its business as
presently conducted, and (iii) is duly qualified or licensed to do business
as a foreign corporation or other entity and is in corporate or other entity
good standing (with respect to jurisdictions that recognize such concept) in
each jurisdiction where the character of the properties owned, leased or
operated by it or the nature of its business makes such qualification or
licensing necessary, except where the failure to be so qualified or licensed
would not reasonably be expected to have a Company Material Adverse
Effect.
(b) The
Company has made available to Parent (or included as an exhibit to the Company
10-K) complete and correct copies of the Company Certificate of Incorporation
and the Company Bylaws, each as amended to date, and each as so made available
or included is in full force and effect. Except as would not
reasonably be expected to have a Company Material Adverse Effect, the Company
has made available to Parent (or included as an exhibit to the Company 10-K)
complete and correct copies of the certificate of incorporation and by-laws (or
similar organizational documents) of each of the Company's Subsidiaries, each as
amended to date, and each as so made available or included is in full force and
effect. The Company is not in violation in any material respect of
any of the provisions of the Company Certificate of Incorporation or the Company
Bylaws. The Company has made available to Parent true and complete
copies of the minute books of the Company from January 1, 2006 and through the
date of this Agreement (except for minutes and consents of the Company Board of
Directors or any committee thereof relating to the evaluation of the
transactions contemplated hereby and the consideration of strategic alternatives
relating to the Company), and such copies are true and correct in all material
respects.
Section
3.2 Authority for
Agreement. The Company has all necessary corporate power and
authority to execute and deliver this Agreement and, subject to the adoption of
this Agreement by the Company Common Stockholders (if the Merger is not
consummated pursuant to Section 253 of the DGCL), to perform its obligations
hereunder and to consummate the Merger and the other transactions contemplated
by this Agreement. This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery by Parent
and Merger Sub, constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited against the Company by (i) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other Laws of
general application relating to or affecting the enforcement of creditors’
rights, general equitable principles or remedies in general as from time to time
in effect or (ii) the exercise by courts of equity powers (the “Bankruptcy and Equity
Exception”). The Company Board of Directors has duly and
validly approved and taken all corporate action required to be taken by the
Company Board of Directors to grant the Additional Share Option, to reserve for
issuance and to issue the Additional Shares to the extent such shares are
unissued (solely to the extent of the Company’s authorized and otherwise
unissued) and to sell any Additional Shares held in treasury, and to issue
Additional Shares upon the exercise thereof. The Additional Shares,
if and when issued in accordance with the terms of this Agreement, and paid for
by Merger Sub in accordance with this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable and free and clear of any
Encumbrances imposed upon the holder thereof by the Company.
Section
3.3 Capitalization.
(a) The
authorized capital stock of the Company consists of 200,000,000 shares of
Company Common Stock and 2,000,000 shares of preferred stock. As of
the date hereof, (i) no shares of Series A Preferred, (ii) no shares of Series B
Preferred, (iii) 36,760,573 shares of Company Common Stock including shares of
Company Restricted Stock (but excluding shares held in the Company's treasury),
are issued and outstanding and (iv) 16,357,854 shares of Company Common Stock
and no shares of the Company’s preferred stock are held in the Company’s
treasury. All outstanding shares of Company Common Stock are, and any
additional shares of Company Common Stock issued after the date hereof and prior
to the Effective Time will be, duly authorized and validly issued, fully paid
and nonassessable, free of any Encumbrances imposed upon the holder thereof by
the Company, and issued in compliance in all material respects with all
applicable federal and state securities Laws. The Company has at
least 156,225,509 shares of Company Common Stock either authorized and
unreserved or held in the Company’s treasury, and all of such shares are
available as Additional Shares to be issued pursuant to the Additional Share
Option. Such amount plus the shares needed to satisfy the
Minimum Tender Condition are a sufficient number of shares of Company Common
Stock to satisfy the Short-Form Threshold, assuming that the Minimum Tender
Condition is satisfied if over sixty percent (60%) of the Fully Diluted Shares
are validly tendered and not withdrawn in the Offer.
(b) Section 3.3(b) of the
Company Disclosure Letter sets forth a list of the holders of Company Common
Stock Options and/or Company Common Stock-Based Awards as of the date hereof,
including (to the extent applicable) the date on which each such Company Common
Stock Option or Company Common Stock-Based Award was granted, the number of
shares of Company Common Stock subject to such Company Common Stock Option or
Company Common Stock-Based Award, the expiration date of such Company Common
Stock Option or Company Common Stock-Based Award and the price at which such
Company Common Stock Option or Company Common Stock-Based Award may be exercised
(if any). All shares of Company Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable and issued in compliance in all
material respects with all applicable federal and state securities
Laws. There has not been any illegal backdating of any Company Common
Stock Options. Except as set forth above and other than the Rights,
as of the date of this Agreement, there are no Company Common Stock
Rights. The copies of the Company Option Plans that are filed as
exhibits to the Company 10-K or incorporated by reference therein are complete
and correct copies thereof in all material respects as in effect on the date
hereof.
(c) Except as
set forth in Sections
3.3(a) and 3.3(b) and except for
the Rights that have been issued pursuant to the Rights Plan, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound relating to the issued or
unissued Equity Interests of the Company, or securities convertible into or
exchangeable for such Equity Interests, or obligating the Company to issue or
sell any shares of its capital stock or other Equity Interests, or securities
convertible into or exchangeable for such capital stock of, or other Equity
Interests in, the Company. Except as set forth in Sections 3.3(a) and
3.3(b), there
are no outstanding contractual obligations of the Company or any of its
Subsidiaries affecting the voting rights of or requiring the repurchase,
redemption, issuance, creation or disposition of, any Equity Interests in the
Company. There are no outstanding bonds, debentures, notes or other
Indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matter on which
the Company Common Stockholders may vote.
(d) Except as
set forth above, there are no outstanding contractual obligations of the Company
to repurchase, redeem or otherwise acquire any shares of Company Common Stock or
to pay any dividend or make any other distribution in respect
thereof. As of the date hereof, except for the Stockholder
Agreements, there are no stockholder agreements, voting trusts, proxies or other
agreements or understandings to which the Company is a party or by which it is
bound with respect to the voting or registration of Company Common Stock or
capital stock of any its Subsidiaries or preemptive rights with respect
thereto.
(e) There are
no accrued and unpaid dividends with respect to any outstanding shares of
capital stock of the Company or any of its Subsidiaries.
(f) There are
no Company-granted preemptive rights of first refusal, co-sale rights,
“drag-along” rights or registration rights granted by the Company with respect
to the Company’s capital stock and in effect as of the date hereof.
(g) Except
for the Company’s repurchase rights with respect to unvested shares issued under
the Company Option Plans and with respect to Company Restricted Stock, there are
no rights or obligations, contingent or otherwise (including rights of first
refusal in favor of the Company), of the Company or any of its Subsidiaries, to
repurchase, redeem or otherwise acquire any shares of capital stock of the
Company or any of its Subsidiaries or to provide funds to or make any investment
(in the form of a loan, capital contribution or otherwise) in any such
Subsidiary or any other Person.
Section
3.4 Company
Subsidiaries. Section 3.4 of the Company Disclosure Letter
contains a correct and complete list of all of the Subsidiaries of the Company
and the ownership interest of the Company (or one or more of its other
Subsidiaries) in each Subsidiary. The Company or one of its Subsidiaries is the
record and beneficial owner of all outstanding shares of capital stock (or
similar equity or voting interest), of each Subsidiary of the Company and all
such shares are duly authorized, validly issued, fully paid and
nonassessable. All of the outstanding shares of capital stock of each
Subsidiary of the Company are owned by the Company free and clear of all
Encumbrances. Except for the capital stock of, or other equity or
voting interests in, the Subsidiaries set forth on Section 3.4 of the Company
Disclosure Letter, the Company does not own or have the right or obligation to
acquire, directly or indirectly, any Equity Interest in, any
Person.
Section
3.5 No Conflict; Required
Filings and Consents.
(a) The
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company and the consummation of the Offer,
the Merger (the Merger being subject to the approval of this Agreement by the
Company Required Vote) and the other transactions contemplated by this Agreement
will not, (i) conflict with or violate any provision of the Company
Certificate of Incorporation or Company Bylaws, or the equivalent charter
documents of any Subsidiary of the Company, (ii) assuming that the
applicable waiting period, and any extension thereof, under the HSR Act shall
have expired or been terminated, conflict with or violate any Law applicable to
the Company or its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected, or (iii) subject to the
receipt of the consents set forth on Section 3.5 of the Company Disclosure
Letter, result in a breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, give to others
(immediately or with notice or lapse of time or both) any right of termination,
consent, amendment, acceleration or cancellation of, result (immediately or with
notice or lapse of time or both) in triggering any payment or other obligations,
or result (immediately or with notice or lapse of time or both) in the creation
of an Encumbrance (other than Permitted Encumbrances) on any property or asset
of the Company or its Subsidiaries pursuant to, any Company Material Contract,
except in the case of clauses (ii) and (iii) above for any that would not
reasonably be expected to have a Company Material Adverse Effect.
(b) Assuming
the accuracy of the representations and warranties set forth in Section 4.11 below,
the affirmative vote of the holders of a majority of the outstanding shares of
Company Common Stock as of the record date to be established for the Company
Common Stockholders Meeting, voting as a single class, at the Company Common
Stockholders Meeting, in favor of approving this Agreement is the only corporate
proceeding or vote of the holders of any class or series of the Company’s
capital stock necessary to approve and adopt this Agreement, the Merger and the
other transactions contemplated hereby, other than the completed actions set
forth in Section
3.5(c) below. The affirmative vote of the holders of Company
Common Stock is not necessary (i) to consummate the Offer or any transaction
contemplated hereby other than the Merger and (ii) to approve this Agreement if
the Merger is consummated pursuant to Section 253 of the DGCL.
(c) The
Company Board of Directors has unanimously (i) concluded that the Offer,
the Merger and the transactions contemplated by this Agreement constitute a
Superior Proposal to the merger and transactions contemplated in the Prior
Merger Agreement (ii) determined that the Offer, the Merger and the other
transactions contemplated hereby, taken together, are at a price and on terms
that are fair to, advisable and in the best interests of the Company and the
Company Common Stockholders, (iii) withdrawn its recommendation of the Prior
Merger Agreement and the transactions contemplated thereby, (iv) approved this
Agreement, the Offer, the Merger and the other transactions contemplated hereby,
(v) approved resolutions recommending the approval and adoption of this
Agreement by the Company Common Stockholders, (vi) approved resolutions
recommending that the Company Common Stockholders accept the Offer and tender
their Company Common Stock pursuant to the Offer, and (vii) taken all
necessary action to render the Rights Plan and the Rights outstanding thereunder
inapplicable to the Offer, this Agreement, the Merger and the other transactions
contemplated hereby, (ix) amended the Rights Plan so that (A) none of the
Offer, the execution, delivery or performance of this Agreement or the
Stockholder Agreements or the commencement or consummation of the Offer or the
Merger will cause the Rights to become exercisable and (B) the Rights will
expire immediately prior to the consummation of the Offer without any payment
being made or shares of the Company’s capital stock being issued in respect
thereof.
(d) No
consent, approval, Order or authorization of, or registration, declaration or
filing with, or notice to, any Governmental Entity, is required to be made or
obtained by the Company or any of its Subsidiaries in connection with the Offer,
the execution and delivery of this Agreement by the Company or the consummation
by the Company of the Merger or the transactions contemplated hereby or
compliance with the provisions hereof, except for (A) (i) the filing of a
premerger notification and report form by the Company under the HSR Act, and any
applicable filings and approvals under any other Antitrust Law, (ii) the filing
with the SEC of the Offer Documents, the Proxy Statement and compliance with
federal and state securities laws, as may be required in connection with this
Agreement, the Offer, the Merger and the other transactions contemplated hereby,
(iii) any filings or notifications required under the rules and regulations of
Nasdaq of the transactions contemplated hereby, and (iv) the filing of the
Certificate of Merger with the Delaware Secretary and appropriate documents with
the relevant authorities of other states in which the Company or any of its
Subsidiaries is qualified to do business and (B) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications would not prevent or materially delay the Offer or the Merger or
reasonably be expected to be, individually or in the aggregate, material and
adverse to the Company.
Section
3.6 Compliance.
(a) Compliance with Laws;
Permits. The Company and its Subsidiaries hold all Company
Permits, except where the failure to hold such Company Permits would not
reasonably be expected to have a Company Material Adverse Effect. All
such Company Permits are in full force and effect and the Company and its
Subsidiaries are in compliance with the terms of the Company Permits and all
applicable Laws, except where the failure to so maintain such Company Permits or
to so comply would not be reasonably expected to have a Company Material Adverse
Effect. The Company and its Subsidiaries have been and are in
compliance in all material respects with all applicable Laws or Orders and
applicable listing, corporate governance and other rules and regulations of the
Nasdaq. The Company has not received any written (or, to the
Company's Knowledge, oral) notice to the effect that the Company or any of its
Subsidiaries is not in material compliance with the terms of such Company
Permits or any such Laws. No material Company Permit shall cease to be effective
as a result of the transactions contemplated by this Agreement. To the Knowledge
of the Company, no investigation or review by any Governmental Entity with
respect to the Company or any of its Subsidiaries or their respective businesses
is pending or threatened.
(b) Prohibited
Payments. Except for matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect, neither the
Company, any Subsidiary of the Company, nor, to the Knowledge of the Company,
any director, officer, agent, employee or other Person acting on behalf of the
Company or any Subsidiary of the Company has, in the course of its actions for,
or on behalf of, any of them (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated any provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended (including the rules and regulations promulgated thereunder, the “FCPA”); or (iv) made
any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or
employee. During the last three (3) years, neither the Company nor
any Subsidiary of the Company has received any written (or, to the Knowledge of
the Company, oral) communication that alleges that the Company or any Subsidiary
of the Company, or any Representative thereof is in violation of, or has any
material liability under, the FCPA which has not been resolved.
(c) FDA
Compliance. The Company and its Subsidiaries are not now
subject (and have not been subject during the previous five years) to any
adverse inspection finding, recall, investigation, penalty assessment, audit or
other compliance or enforcement action by the U.S. Food & Drug
Administration (“FDA”) or any other
Governmental Entity having responsibility for the regulation of the Company’s
and its Subsidiaries’ current and/or proposed products, except for such matters
as would not be reasonably likely to have a Company Material Adverse
Effect. The Company and its Subsidiaries have obtained all material
necessary approvals and authorizations from the FDA and other authorities for
their current and past business activities. The Company and its
Subsidiaries have not made any material false statements or material false
omissions in their applications or other submissions to the FDA or other
authorities and the Company and its Subsidiaries have not made or offered any
payments, gratuities, or other things of value that are prohibited by any law or
regulation to personnel of the FDA or other authorities. The Company
and its Subsidiaries are in compliance with all regulations and requirements of
the FDA and other authorities, including but not limited to any applicable
labeling requirements, testing requirements and protocols, record keeping and
reporting requirements, monitoring requirements, except as would not be
reasonably likely to have a Company Material Adverse Effect.
(d) Import/Export
Compliance. Except as would not have a Company Material
Adverse Effect, the Company and each of its Subsidiaries has at all times
conducted its export transactions in accordance with (a) all applicable
U.S. export and reexport controls, including the United States Export
Administration Act and Regulations and Foreign Assets Control Regulations and
(b) all other applicable import/export controls in other countries in which
the Company conducts business, except for any instances of noncompliance that
would not have a Company Material Adverse Effect. Without limiting
the foregoing and except in each case as would not have a Company Material
Adverse Effect: (i) the Company and each of its Subsidiaries have
obtained all material export licenses, license exceptions and other consents,
notices, waivers, approvals, orders, authorizations, registrations,
declarations, classifications and filings with any Governmental Entity required
for (y) the export and reexport of products, services, software and
technologies and (z) releases of technologies and software to foreign
nationals located in the United States and abroad (“Export Approvals”);
(ii) the Company and each of its Subsidiaries are in compliance with the terms
of all applicable Export Approvals; (iii) there are no pending or, to the
Company’s Knowledge, threatened claims against the Company or any Subsidiary
with respect to such Export Approvals; (iv) to the Company’s Knowledge, there
are no actions, conditions or circumstances pertaining to the Company’s or any
Subsidiary’s export transactions that may give rise to any future claims; and
(v) no Export Approvals for the transfer of export licenses to Parent or the
Surviving Corporation are required, or such Export Approvals can be obtained
expeditiously without material cost.
(e) Privacy. The Company
complies in all material respects with all relevant laws and its own policies
with respect to the privacy of all users and customers (and customers or
patients of customers), and any of their personally identifiable information,
except for such non-compliance as would not have a Company Material Adverse
Effect, and no claims have been asserted or, to the Company’s Knowledge,
threatened against the Company by any Person alleging a material violation of
any of the foregoing.
Section
3.7 Litigation.
There are
no claims, actions, suits, or proceedings (each an “Action”), and to the
Knowledge of the Company no governmental investigations, inquiries or subpoenas
pending against the Company or any of its Subsidiaries, or to the Knowledge of
the Company any current or former supervisory employee of the Company or any of
its Subsidiaries with respect to any acts or omissions in connection with their
employment with the Company or any of its Subsidiaries, or any properties or
assets of the Company or of any of its Subsidiaries, and, to the Knowledge of
the Company, there are no threatened Actions against the Company or any of its
Subsidiaries, or any current or former supervisory employee of the Company or
any of its Subsidiaries with respect to any acts or omissions in connection with
their employment with the Company or any of its Subsidiaries, or any properties
or assets of the Company or of any of its Subsidiaries. Neither the
Company nor any Subsidiary of the Company is subject to any material outstanding
Order naming the Company or any material FDA Order binding upon the
Company. There is not currently any material internal investigation
or inquiry being conducted by the Company, the Company Board of Directors or, to
the Knowledge of the Company, any third party or Governmental Entity at the
request of any of the foregoing concerning any financial, accounting, Tax,
conflict of interest, self dealing, fraudulent or deceptive conduct or other
misfeasance or malfeasance issues.
Section
3.8 Company Reports; Financial
Statements.
(a) The
Company has timely filed all Company Reports required to be filed with the SEC
on or prior to the date hereof and will (subject to any extensions permitted
pursuant to, and in compliance with, Rule 12b-25 of the Exchange Act) timely
file all Company Reports required to be filed with the SEC after the date hereof
and prior to the Effective Time. No Subsidiary of the Company is
subject to the reporting requirements of Section 13(a) or 15(d) of the Exchange
Act. As of their respective dates, or, if amended or restated, as of
the date of the last such amendment or restatement, the Company Reports complied
or will comply in all material respects with the requirements of the Securities
Act or the Exchange Act, as the case may be, and the applicable rules and
regulations promulgated thereunder, and none of the Company Reports at the time
they were filed, or if such Company Reports were amended or restated, at the
time of the last such amendment or restatement, contained or will contain any
untrue statement of a material fact or omitted or omits or will omit, as the
case may be, to state a material fact required to be stated or incorporated by
reference therein or necessary to make the statements therein, in the light of
the circumstances under which they were or are made, not
misleading.
(b) Each of
the Chief Executive Officer and Chief Financial Officer has made all
certifications required by Rules 13a-14 and 15d-14 under the Exchange Act and
Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act with respect to the applicable
Company Reports filed prior to the date hereof (collectively, the “Certifications”) and
the statements contained in such Certifications are accurate in all material
respects as of the filing thereof.
(c) The
Company has made available (including via the SEC’s XXXXX system, as applicable)
to Parent all of the Company Financial Statements and all material
correspondence (if such correspondence has occurred since December 31, 2006)
between the SEC on the one hand, and the Company and any of the Company's
Subsidiaries, on the other hand (provided that with respect to the Company's
Subsidiaries, the Company has only made available such correspondence as has
been determined to be responsive after reasonable inquiry (provided further that
there is no correspondence between the SEC and any of the Company's Subsidiaries
that has not been made available to Parent that describes any matter that could
reasonably be expected to cause a Company Material Adverse Effect)). As of the
date hereof, there are no outstanding or unresolved comments in comment letters
from the SEC staff with respect to any of the Company Reports. To the
Knowledge of the Company, as of the date hereof, none of the Company Reports is
the subject of ongoing SEC review, outstanding SEC comment or outstanding SEC
investigation. All of the Company Financial Statements comply in all
material respects with applicable requirements of the Exchange Act and have been
prepared in accordance with GAAP (except, in the case of the unaudited
statements, as permitted by the rules of the SEC for quarterly statements on
Form 10-Q) applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes thereto) and fairly present in all material
respects the consolidated financial position of the Company at the respective
dates thereof and the consolidated results of its operations and changes in cash
flows for the periods indicated (subject, in the case of unaudited statements,
to normal year end audit adjustments consistent with GAAP). As of the date
hereof, the books and records of Company and its Subsidiaries have been
maintained in all material respects in accordance with GAAP (and any other
applicable legal and accounting requirements). As of the date hereof, BDO
Xxxxxxx LLP has not resigned or been dismissed as independent public accountants
of Company as a result of or in connection with any disagreements with Company
on a matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
(d) The
Company and its Subsidiaries have implemented and maintain a system of internal
accounting controls sufficient to provide reasonable assurances regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with GAAP. Such internal controls are sufficient to provide
reasonable assurance regarding the reliability of the Company’s financial
reporting and the preparation of Company financial statements for external
purposes in accordance with GAAP. Since January 1, 2006 and through
the period ended on September 30, 2009, the Company’s Chief Executive Officer
and its Chief Financial Officer have disclosed to the Company’s auditors and the
audit committee of the Company Board of Directors all known significant
deficiencies and material weaknesses in the design or operation of internal
controls over financial reporting that are reasonably likely to adversely affect
the Company’s ability to record, process, summarize and report financial
information, and the Company has provided to Parent copies of, or access to, any
material written materials relating to the foregoing. Since January
1, 2006, the Company’s Chief Executive Officer and its Chief Financial Officer
have disclosed to the Company’s auditors and the audit committee of the Company
Board of Directors any known fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls over financial reporting, and the Company has provided to
Parent copies of, or access to, any material written materials relating to the
foregoing. The Company has implemented and maintains disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed in
all material respects to ensure that information relating to the Company,
including its consolidated Subsidiaries, required to be disclosed in the reports
the Company files or submits under the Exchange Act is made known to the Chief
Executive Officer and the Chief Financial Officer of the Company by others
within those entities. The Chief Executive Officer and the Chief
Financial Officer of the Company have concluded that such disclosure controls
and procedures are effective at the reasonable assurance level in timely
alerting the Company’s Chief Executive Officer and its Chief Financial Officer
to material information required to be included in the Company’s periodic
reports required under the Exchange Act.
(e) The
records, systems, controls, data and information of Company and its Subsidiaries
are recorded, stored, maintained and operated under means (including any
electronic, mechanical or photographic process, whether computerized or not)
that are under the exclusive ownership and direct control of Company or its
Subsidiaries or their accountants (including all means of access thereto and
therefrom), except for any non-exclusive ownership and non-direct control that
would not have a material adverse effect on Company’s system of internal
accounting controls.
(f) The
Company is, and since enactment of the Xxxxxxxx-Xxxxx Act has been, in
compliance in all material respects with the applicable provisions of the
Xxxxxxxx-Xxxxx Act.
(g) The
Company has adopted a code of ethics, as defined by Item 406(b) of Regulation
S-K promulgated under the Exchange Act, for senior financial officers,
applicable to its principal financial officer, comptroller or principal
accounting officer, or persons performing similar functions. The
Company has disclosed, by filing a Form 8-K, any change in or waiver of the
Company’s code of ethics, to the extent required by Section 406(b) of
Xxxxxxxx-Xxxxx Act. To the Knowledge of the Company, there have been
no material violations of provisions of the Company’s code of
ethics.
(h) There are
no Liabilities of the Company or any of its Subsidiaries that are material to
the Company, are required by GAAP to be set forth on the Company Financial
Statements and are not set forth on the Company Financial Statements, other than
(i) Liabilities incurred on behalf of the Company under this Agreement and
(ii) Liabilities incurred in the ordinary course of business consistent
with past practice since December 31, 2008, none of which would reasonably be
expected to have a Company Material Adverse Effect.
Section
3.9 Absence of Certain Changes
or Events. Since September 30, 2009, except as disclosed in
the Company Reports since September 30, 2009 through to the date of this
Agreement, and except as specifically contemplated by, or as disclosed in, this
Agreement, the Company and its Subsidiaries have conducted their businesses in
the ordinary course consistent with past practice and, since such date, there
has not been, with respect to either the Company or any of its Subsidiaries,
(i) any action that, if taken during the period from the date of this
Agreement through the Effective Time, would constitute a breach of Section 5.1 or
(ii) any Company Material Adverse Effect.
Section
3.10 Taxes.
(a) The
Company and each of its Subsidiaries has timely filed and will timely file with
the appropriate Governmental Entities all income and other Tax Returns that are
required to be filed by it prior to the Effective Time. All such Tax
Returns were correct and complete in all material respects and, in the case of
Tax Returns to be filed, will be correct and complete in all material
respects. All income and other Taxes due and owing by the Company and
each of its Subsidiaries (whether or not shown on such Tax Returns) have been
timely paid and, in the case of Tax Returns to be filed, will be timely
paid. Neither the Company nor any of its Subsidiaries currently is
the beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made in writing by an authority in a
jurisdiction where the Company does not file Tax Returns that the Company or any
of its Subsidiaries is or may be subject to material taxation in that
jurisdiction except as would not be material to the Company. There
are no security interests or other liens on any of the assets of the Company or
its Subsidiaries that arose in connection with any failure (or alleged failure)
to pay any Tax, other than liens for Taxes not yet due and payable.
(b) The
Company and its Subsidiaries have in all material respects timely withheld and
paid to the appropriate Governmental Entity all income and other Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder or other Third
Party.
(c) There is
no material dispute concerning any Tax Liability of the Company or any of its
Subsidiaries raised by any Governmental Entity in writing to the Company or any
of its Subsidiaries that remains unpaid, and neither the Company nor any of its
Subsidiaries has received written notice of any threatened audits or
investigations relating to any Taxes or otherwise has any Knowledge of any
material threatened audits or investigations relating to any Taxes, in each case
for which the Company or any of its Subsidiaries may become directly or
indirectly liable.
(d) Neither
the Company nor any of its Subsidiaries has waived any statute of limitations in
respect of material Taxes or agreed to, or requested, any extension of time with
respect to a material Tax assessment or deficiency.
(e) The
unpaid Taxes of the Company and its Subsidiaries did not, as of December 31,
2008, exceed in any material respect the reserve for Tax Liability (rather than
any reserve for deferred Taxes established to reflect timing differences between
book and Tax income) set forth on the face of the balance sheet set forth in the
Company Financial Statements as of such date (disregarding any notes
thereto). Neither the Company nor any of its Subsidiaries has
incurred any material Tax Liability since December 31, 2008 other than a Tax
Liability incurred in the ordinary course of business.
(f) The
Company has made available to Parent complete and accurate copies of all Tax
Returns filed by the Company and any of its Subsidiaries on or prior to the date
hereof for all tax periods beginning on or after December 31,
2006.
(g) There are
no agreements relating to the allocating or sharing of Taxes to which the
Company or any of its Subsidiaries is a party.
(h) Neither
the Company nor any of its Subsidiaries has been a member of an affiliated group
of corporations within the meaning of Section 1504 of the Code or within
the meaning of any similar provision of law to which the Company or any of its
Subsidiaries may be subject, other than the affiliated group of which the
Company is the common parent.
(i) Neither
the Company nor any of its Subsidiaries has constituted either a “distributing
corporation” or a “controlled corporation” within the meaning of
Section 355(a)(1)(A) of the Code. Neither the Company nor any of
its Subsidiaries has been a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code at any time during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code, and
Parent is not required to withhold tax on the purchase of the Company by reason
of Section 1445 of the Code. Neither the Company nor any of its
Subsidiaries has constituted either an “expatriated entity” within the meaning
of Section 7874(a)(2)(A) of the Code or a “surrogate foreign corporation”
within the meaning of Section 7874(a)(2)(B) of the Code.
(j) Neither
the Company nor any of its Subsidiaries has agreed, or is required, to make any
material adjustments pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by it or any other relevant party, and the IRS has not proposed
any such adjustment or change in accounting method in writing nor, to the
Knowledge of the Company, otherwise proposed any material adjustment or change
in accounting method, nor does the Company or any of its Subsidiaries have any
application pending with any Governmental Entity requesting permission for any
changes in accounting methods that relate to the business or assets of the
Company or any of its Subsidiaries.
(k) No
closing agreement pursuant to Section 7121 of the Code (or any predecessor
provision) or any similar provision of any state, local or foreign Tax Law has
been entered into by or with respect to the Company or any of its
Subsidiaries.
(l) Neither
the Company nor any of its Subsidiaries has participated in a “reportable
transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(1).
(m) Neither
the Company nor any of its Subsidiaries is a party to any agreement, contract,
arrangement or plan that has resulted or would result, separately or in the
aggregate, in the payment of any “excess parachute payment” within the meaning
of Section 280G of the Code (or any corresponding provision of state, local or
foreign Tax law) arising out of the transactions contemplated by this
Agreement.
Section
3.11 Title to Personal
Properties; Real Property.
(a) Each of
the Company and its Subsidiaries has good and marketable title to, or a valid
leasehold interest in, all of its tangible personal properties and assets
reflected in the Company 10-K or acquired after December 31, 2008 (other
than assets disposed of since December 31, 2008 in the ordinary course of
business consistent with past practice), in each case free and clear of all
Encumbrances, except Permitted Encumbrances. The tangible personal
property and assets of the Company and its Subsidiaries are in good operating
condition and in a state of good maintenance and repair, ordinary wear and tear
excepted, except as would not reasonably be expected to have a Company Material
Adverse Effect. Each of the Company and its Subsidiaries either owns,
or has valid leasehold interests in, all tangible personal properties and assets
used by it in the conduct of its business, except where the absence of such
ownership or leasehold interest would not reasonably be expected to have a
Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has any legal obligation, absolute or contingent, to any other
Person to sell or otherwise dispose of any of its tangible personal properties
or assets (other than the sale of the Company’s products and services in the
ordinary course of business and other than equipment to be returned under
equipment leases) with an individual value in excess of $250,000 or an aggregate
value in excess of $500,000. For the avoidance of doubt, the term
“tangible personal property” as used herein shall not include Intellectual
Property, Software or Information Systems (other than hardware).
(b) Section 3.11 of the
Company Disclosure Letter sets forth the address and description of each Owned
Real Property. Except for matters that, individually or in the
aggregate, would not have a Company Material Adverse Effect, with respect to
each Owned Real Property: (i) the Company or one of its Subsidiaries (as the
case may be) has good and marketable title to such Owned Real Property, free and
clear of all Encumbrances, except for Permitted Encumbrances, (ii) except as set
forth in Section
3.11 of the Company Disclosure Letter, neither the Company nor any of its
Subsidiaries has leased or otherwise granted to any Person the right to use or
occupy such Owned Real Property or any material portion thereof, (iii) other
than the right of Parent and Merger Sub pursuant to this Agreement, there are no
outstanding options, rights of first offer or rights of first refusal to
purchase such Owned Real Property or any portion thereof or interest
therein. Neither the Company nor any of its Subsidiaries is a party
to any agreement or option to purchase any real property or interest
therein.
(c) The
leased real property (the “Leased Property”),
collectively with the Owned Real Property identified pursuant to Section 3.11(b), and
subject to the leases (the “Leases”) identified
in Section 3.11 of the Company Disclosure Letter, comprise all of the real
property used in the Company’s business, and is occupied by the Company pursuant
to the Leases. Each of the Company and its Subsidiaries has complied in all
material respects with the terms of all Leases, and all Leases are in full force
and effect, except for such non-compliances or failures to be in full force and
effect that, individually or in the aggregate, could not reasonably be expected
to have a Company Material Adverse Effect. The Company has made available to
Parent and Merger Sub a true and complete copy of each Lease document. The
Company’s or its applicable Subsidiary’s possession and quiet enjoyment of the
Leased Property has not been disturbed in any material respect and, to the
Knowledge of the Company, there are no disputes with respect to such Leases that
could have or reasonably be expected to have a Company Material Adverse
Effect. No material security deposit or portion thereof deposited
with respect to any Lease has been applied in respect of a breach or default
under any Lease which has not been redeposited in full. The other party to each
of the Leases is not an Affiliate of, and otherwise does not have any economic
interest in, the Company or any of its Subsidiaries.
(d) Section 3.11 of the
Company Disclosure Letter sets forth a true and complete list of all Leased Real
Property Subleases (including all amendments, extensions, renewals, guaranties
and other agreements with respect thereto) (collectively, the “Landlord Leases”),
including the date and name of the parties to such Landlord
Lease. The Company has delivered to Parent a true and complete copy
of each such Landlord Lease and, in the case of any oral agreement, a written
summary of the material terms of such agreement. Except for matters
that, individually or in the aggregate, would not have a Company Material
Adverse Effect, with respect to each of the Landlord Leases: (i) such Landlord
Lease is legal, valid, binding, enforceable and in full force and effect, (ii)
neither the Company or any of its Subsidiaries nor, to the Knowledge of the
Company, any other party to such Landlord Lease is in breach or default
thereunder, and to the Knowledge of the Company no event has occurred or
circumstance exists which, with the delivery of notice, the passage of time or
both, would constitute such a breach or default thereunder, (iii) no material
security deposit or portion thereof deposited with respect to such Landlord
Lease has been applied in respect of a breach or default under such Landlord
Lease which has not been redeposited in full, (iv) neither the Company nor any
Company Subsidiary owes, or will owe in the future, any material brokerage
commissions or finder’s fees with respect to such Landlord Lease, (v) the other
party to such Landlord Lease is not an Affiliate of, and otherwise does not have
any economic interest in, the Company or any Company Subsidiary, (vi) to the
Knowledge of the Company the other party to such Landlord Lease has not
subleased, licensed or otherwise granted any Person the right to use or occupy,
the premises demised thereunder or any portion thereof, (vii) the other party to
such Landlord Lease has not collaterally assigned or granted any other security
interest in such Landlord Lease, and (viii) there are no Encumbrances, other
than Permitted Encumbrances, on the estate or interest created by Company with
respect to such Landlord Lease.
Section
3.12 Officers, Directors,
Employees and Affiliates.
(a) Neither
the Company nor any of its Subsidiaries is a party to or bound by any Employment
Agreement and, except as required by applicable law or as otherwise contemplated
by Section 1.9, no
severance or other payment will become due or benefits or compensation will
increase or accelerate as a result of the transactions contemplated by this
Agreement, solely or together with any other event, including a subsequent
termination of employment. The Company (acting through its Board of
Directors or its Compensation Committee) has taken all steps
necessary to cause any employment compensation, severance or employee benefit
arrangements that have been entered into by the Company, Parent or any of their
respective Affiliates with current or future directors, officers or employees of
the Company and its Affiliates on or prior to the date of this Agreement to be
exempt under amended Rule 14d-10(c) promulgated under the Exchange Act and to
insure that any such arrangements fall within the safe harbor provisions of such
rule. On or prior to the Acceptance Date, the Company shall have
taken all steps necessary to cause any employment compensation, severance or
employee benefit arrangements that have been entered into by the Company, Parent
or any of their respective Affiliates after the date of this Agreement with
current or future directors, officers or employees of the Company and its
Affiliates to be exempt under amended Rule 14d-10(c) promulgated under the
Exchange Act and to insure that any such arrangements fall within the safe
harbor provisions of such rule.
(b) Except
for compensation and benefits received in the ordinary course of business as an
employee or director of the Company or its Subsidiaries, no director, officer or
other Affiliate or Associate of the Company or any entity in which, to the
Knowledge of the Company, any such director, officer or other Affiliate or
Associate owns any beneficial interest (other than a beneficial interest in a
publicly held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market and less than 5% of the stock of
which is beneficially owned by any such Persons) is currently a party to or has
any interest in (i) any partnership, joint venture, contract, arrangement
or understanding with, or relating to, the business or operations of the Company
or its Subsidiaries in which the amount involved exceeds $100,000 per annum,
(ii) any agreement or contract for or relating to Indebtedness of the
Company or its Subsidiaries, or (iii) any property (real, personal or
mixed), tangible or intangible, used or currently intended to be used in the
business or operations of the Company or its Subsidiaries. To the Knowledge of
the Company, there are no transactions, or series of related transactions,
agreements, arrangements or understandings, nor are there any currently proposed
transactions, or series of related transactions, that would be required to be
disclosed under Item 404 of Regulation S-K promulgated under the Securities Act
that have not been disclosed in the Company Reports filed prior to the date
hereof.
Section
3.13 Employee Benefit
Plans.
(a) Section 3.13(a)
of the Company Disclosure Letter sets forth a true and complete list of each
Company Benefit Plan.
(b) With
respect to each Company Benefit Plan, a complete and correct copy of each of the
following documents (if applicable) has been made available to Parent:
(i) the most recent plan documents and all amendments thereto and all
related trust agreements or documentation pertaining to other funding vehicles;
(ii) the most recent summary plan description, and all related summaries of
material modifications thereto; (iii) the IRS Forms 5500 (including
schedules and attachments) and financial statements as filed for the past three
(3) years; and (iv) the most recent IRS determination or opinion
letter.
(c) None of
the Company or any of its Subsidiaries maintains, sponsors, contributes to or is
required to contribute to or has any Liability under or with respect to any (i)
“multiemployer plan” as defined in Section 3(37) of ERISA, (ii) “employee
pension benefit plan” (as such term is defined in Section 3(2) of ERISA) subject
to the funding requirements of Section 412 of the Code or Title IV of
ERISA, (iii) “multiple employer plan” (within the meaning of Section 210 of
ERISA or Section 413(c) of the Code), (iv) “multiple employer welfare
arrangement” (as such term is defined in Section 3(40) of ERISA), or (v) plan,
program, arrangement or agreement that provides for post-retirement or
post-termination health, life insurance or other welfare-type benefits other
than as required by Subtitle B of Title I of ERISA, Section 4980B of the Code or
any similar state Law.
(d) Each
Company Benefit Plan that is intended to qualify under Section 401 of the Code
has received a current favorable determination or opinion letter from the IRS
and nothing has occurred that is reasonably likely to adversely affect the
qualification of such Company Benefit Plan.
(e) The
Company Benefit Plans have been maintained, funded and administered in
accordance with their terms and applicable Laws in all material respects. With
respect to each Company Benefit Plan, all material required or recommended
payments, premiums, contributions, distributions, reimbursements or accruals for
all periods (or partial periods) through the date hereof have been made or
accrued in accordance with GAAP.
(f) There
have been no material “prohibited transactions” (as defined in Section 406 of
ERISA and Section 4975 of the Code) with respect to any Company Benefit Plan.
None of the Company, any of its Subsidiaries, or to the Knowledge of the Company
any other “fiduciary” (as defined in Section 3(21) of
ERISA) has any material Liability for breach of fiduciary duty or any
other failure to act or comply in connection with the administration or
investment of the assets of any Company Benefit Plan. There are no pending or,
to the Knowledge of the Company, threatened suits, actions, disputes, claims
(other than routine claims for benefits), arbitrations, audits, investigations,
administrative or other proceedings relating to any Company Benefit Plan and, to
the Knowledge of the Company, there is no basis for any such suit, action,
dispute, claim, arbitration, audit, investigation, administrative or other
proceeding.
(g) The
Company and its Subsidiaries have complied in all material respects with the
health care continuation requirements of Part 6 of Subtitle B of Title I of
ERISA, Section 4980B of the Code and any similar state Law in all material
respects. Except as set forth on Section 3.13(g) of the Company Disclosure
Letter or Section
1.9 of this Agreement, the transactions contemplated by this Agreement
will not cause the acceleration of vesting in, or payment of, any benefits or
compensation under any Company Benefit Plan and will not otherwise accelerate or
increase any Liability under any Company Benefit Plan.
Section
3.14 Labor
Relations.
(a) The
Company and its Subsidiaries are in compliance in all material respects with all
applicable Laws and Orders governing or concerning conditions of employment,
employment discrimination and harassment, wages, hours or occupational safety
and health, including the Labor Laws, except where the failure to so comply
would not reasonably be expected to have a Company Material Adverse
Effect.
(b) The
employees of the Company and its Subsidiaries currently are not
represented by a labor organization or group that was either certified or
voluntarily recognized by any labor relations board, including the NLRB, or
certified or voluntarily recognized by any other Governmental Entity and there
is not, to the Knowledge of the Company, any attempt to organize any employees
of the Company or its Subsidiaries. There currently does not exist
nor, to the Knowledge of the Company, is there threatened, any material strike,
slowdown, picketing or work stoppage by the employees of the Company or its
Subsidiaries.
(c) No claim,
complaint, charge or investigation for unpaid wages, bonuses, commissions,
employment withholding taxes, penalties, overtime or other compensation,
benefits, child labor or record-keeping violations, which could reasonably be
expected to have a Company Material Adverse Effect, is pending or, to the
Knowledge of the Company, has been filed or threatened against the Company or
any of its Subsidiaries under the FLSA, the Xxxxx-Xxxxx Act,
the Xxxxx-Xxxxxx Act or the Service Contract Act, or any other applicable
Law. No discrimination, illegal harassment and/or retaliation claim,
complaint, charge or investigation, which could reasonably be expected to have a
Company Material Adverse Effect, is pending or, to the Knowledge of the Company,
has been filed or threatened against the Company or Company Subsidiary under the
1964 Civil Rights Acts, the Equal Pay Act, the ADEA, the ADA, the FMLA, the
FLSA, ERISA or any other federal Law or comparable state fair employment
practices act or foreign Law, including any provincial Law regulating
discrimination in the workplace. No wrongful discharge, retaliation,
libel, slander or other claim, complaint, charge or investigation that arises
out of the employment relationship between the Company and its Subsidiaries and
its and their respective employees, which could reasonably be expected to have a
Company Material Adverse Effect, is pending or, to the Knowledge of the Company,
has been filed or threatened against the Company or any of its Subsidiaries
under any applicable Law. To the Knowledge of the Company, no employee of the
Company or any of its Subsidiaries is in violation, in any material respect, of
any term of any lawful employment contract, non-disclosure agreement,
non-competition agreement, or any restrictive covenant to a former employer
relating to the right of any such employee to be employed by the Company or any
of its Subsidiaries because of the nature of the business conducted or presently
proposed to be conducted by the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has engaged in any unfair labor practices
within the meaning of the National Labor Relations Act that could reasonably be
expected to have a Company Material Adverse Effect.
Section
3.15 Contracts and
Commitments.
(a) Neither
the Company nor any of its Subsidiaries is a party to, is bound or affected by,
or receives any benefits under, any agreement, contract or legally binding
understanding, whether oral or written: (i) except for those
referenced in clause (viii) below, providing for (A) aggregate noncontingent
payments by or to the Company or any of its Subsidiaries in excess of $500,000
annually or (B) potential payments by or to the Company or any of its
Subsidiaries reasonably expected to exceed $500,000 annually; (ii) limiting the
freedom of the Company to engage in any material line of business or sell,
supply or distribute any service or product, or to compete with any entity or to
conduct business in any geography; (iii) that after the Effective Time would
have the effect of limiting in any material respect the freedom of Parent or any
of its Subsidiaries (other than the Company and its Subsidiaries) to engage in
any material line of business or sell, supply or distribute any service or
product, or to compete with any entity or to conduct business in any geography;
(iv) involving any joint venture, partnership or similar arrangement for the
sharing of profits and/or losses; (v) involving the creation, incurrence, or
assumption of material Indebtedness; (vi) containing material severance or
termination pay Liabilities related to termination of employment; (vii)
involving procurement of goods or services (except for any Company contracts in
which either the aggregate noncontingent payments to or by the Company are not
in excess of $500,000 annually or the potential payments to or by the Company
are not expected to exceed $500,000 annually); (viii) relating to the
acquisition, transfer, in-bound licensing, out-bound licensing, development,
co-development, or sharing of any Intellectual Property material to the
operations of the Company or any other agreement material to the operations of
the Company or any of its Subsidiaries (except for: (1) any Company contracts
pursuant to which any Company Software is licensed by the Company or any of its
Subsidiaries in the ordinary course of business;(2) any third party software
license generally available to the public (excluding the Open Source Software
required to be disclosed pursuant to Section 3.16(g)) for
which the aggregate noncontingent payments by the Company are not in excess of
$200,000 annually or the potential payment by the Company is not expected to be
in excess of $200,000 annually; (3) non-negotiated licenses of third party
Intellectual Property embedded in equipment or fixtures that are used by the
Company or any of its Subsidiaries for internal purposes only); (ix) which
provide for indemnification by the Company of any officer, director or employee
of the Company; (x) pursuant to which the Company or any Subsidiary of the
Company has any obligations or liabilities as guarantor, surety, co signer,
endorser, or co maker in respect of any obligation of any Person, or any capital
maintenance, keep well or similar agreements or arrangements in any such case
which, individually is in excess of $250,000 annually; (xi) involving the lease
of real property with aggregate annual rent payments in excess of $250,000
annually; (xii) would prohibit or materially delay the commencement
or consummation of the Offer or the Merger or otherwise materially impair the
ability of the Company to perform its obligations hereunder; (xiii) prohibits
the payment of dividends or distributions in respect of the capital stock of the
Company or any of the Company Subsidiaries, prohibits the pledging of the
capital stock of the Company or any of its Subsidiaries or prohibits the
issuance of guarantees by any of the Company's Subsidiaries; (xiv) relates to
any acquisition of another business by the Company or its Subsidiaries pursuant
to which the Company or any of its Subsidiaries has continuing indemnification,
“earn-out” or other contingent payment or guarantee obligations in excess of
$500,000; (xv) involves any directors, executive officers (as such term is
defined in the Exchange Act) or 5% stockholders of the Company or any of their
Affiliates (other than the Company or any of its Subsidiaries) or immediate
family members; (xvi) contains any covenant granting “most favored nation”
status that, following the Offer or the Merger, would apply to or be affected by
actions taken by Parent, the Surviving Corporation and/or their respective
Subsidiaries or Affiliates; (xvii) involves any exchange-traded or
over-the-counter swap, forward, future, option, cap, floor or collar financial
contract, or any other interest-rate , commodity price, equity value or foreign
currency protection contract; (xviii) contains a put, call or similar right
pursuant to which the Company or any of its Subsidiaries could be required to
purchase or sell, as applicable, any Equity Interests of any Person or assets;
or (xix) is otherwise required to be filed as an exhibit to an Annual Report on
Form 10 K, as provided by Rule 601 of Regulation S K promulgated under the
Exchange Act. Each contract of the type described in the immediately
preceding sentence is referred to herein as a “Company Material
Contract.” The Company has heretofore made available to Parent a
complete and correct copy of each Company Material Contract, including any
amendments or modifications thereto.
(b) Each
Company Material Contract is valid and binding on the Company or its Subsidiary
party thereto and, to the Knowledge of the Company, each other party thereto,
and is in full force and effect, and is enforceable against the Company in
accordance with its terms and, to the Knowledge of the Company, against each
other party thereto (in each case, subject to the Bankruptcy and Equity
Exception), and the Company and each of its Subsidiaries have performed in all
material respects all obligations required to be performed by them under each
Company Material Contract and, to the Knowledge of the Company, each other party
to each Company Material Contract has performed in all material respects all
obligations required to be performed by it under such Company Material Contract,
except, in each case, as would not reasonably be expected to have a Company
Material Adverse Effect. Neither the Company nor any of its
Subsidiaries knows of, or has received notice of, any violation or default under
(or any condition that with the passage of time or the giving of notice, or
both, would cause such a violation of or default under) any Company Material
Contract or any other agreement or contract to which it is a party or by which
it or any of its properties or assets is bound, except for violations or
defaults that would not reasonably be expected to have a Company Material
Adverse Effect.
(c) To the
Knowledge of the Company, no event has occurred, and no circumstance or
condition exists, that (with or without notice or lapse of time), would
reasonably be expected to: (i) result in a material violation or breach of any
provision of any Company Material Contract; (ii) give any Person the right to
declare a default or exercise any remedy under any Company Material Contract;
(iii) give any person the right to receive or require a material rebate,
chargeback, penalty or change in delivery schedule under any Company Material
Contract; (iv) give any Person the right to accelerate the maturity or
performance of any Company Material Contract; or (v) give any Person the right
to cancel terminate or modify any Company Material Contract, in each case, in a
manner that would reasonably be expected to have a Company Material Adverse
Effect.
Section
3.16 Intellectual
Property. The representations and warranties made in Section
3.11 are not intended to cover Software, Intellectual Property and Information
Systems (other than hardware). The representations and warranties in
this Section 3.16, and in clauses (b) and (c) of Section 3.15, shall control
over any other representations and warranties elsewhere in the Agreement, to the
extent that any of such other representations and warranties, or any part of any
of them, are inconsistent with or contradict the representations and warranties
in this Section 3.16 and in clauses (b) and (c) of Section 3.15, or any part of
any of them.
(a) The
Company or the relevant Subsidiary owns, has a license to, or otherwise
possesses sufficient rights to, the Intellectual Property used by the Company or
such Subsidiary, as the case may be, to conduct its respective business as
currently conducted in all material respects.
(b) Section 3.16(b)
of the Company Disclosure Letter sets forth a complete and correct list of: (i)
all patented or registered Company Intellectual Property; (ii) all pending
patent applications, all trademark applications, or other applications for
registration of Company Intellectual Property; (iii) all material unregistered
trademarks, trade names and service marks, all registered copyrights, and all
material domain names owned by the Company, including, to the extent applicable
for registered or issued Intellectual Property, the jurisdictions in which each
such Company Intellectual Property has been issued or registered or in which any
application for such issuance and registration has been filed; and (iv) major
releases of all Software owned by the Company and any Subsidiary of the Company
marketed or supported by the Company or any Subsidiary of the Company. All
registration, maintenance and renewal fees in connection with the material
registered Company Intellectual Property which have come due have been paid and,
to the Knowledge of the Company, all necessary documents and certificates in
connection with the foregoing have been filed with the relevant patent,
copyright, trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of perfecting, prosecuting,
and maintaining the foregoing. To the Knowledge of the Company, there are no
actions that are required to be taken by Company within 120 days of the date of
this Agreement with respect to any of the foregoing, except as set out in Section 3.16(b) of
the Company Disclosure Letter. Section 3.16(b) of
the Company Disclosure Letter lists all License Agreements under which the
Company is the licensee of third party Software that is embedded, integrated,
bundled with, or otherwise distributed with the Company products or is used to
provide the Company products on a software-as-a-service, web-based application,
or service basis, that: (i) requires aggregate noncontingent payments by the
Company in excess of $200,000 annually or potentially requires payment by the
Company expected to be in excess of $200,000 annually; or (ii) (A) is not
generally available to the public, or (B) has no functional equivalent that is
generally commercially available, in each case the absence of which would
materially impair the Company’s products or services (“Material Embedded
Software”). Neither the Company nor any of its Subsidiaries
nor, to the Knowledge of the Company, any Third Party, is in material violation
of any license, sublicense or agreement for Material Embedded
Software. Except as otherwise described in Section 3.16(b)
of the Company Disclosure Letter, the execution and delivery of this Agreement
by the Company and the commencement and consummation of the Offer or the Merger
contemplated hereby will not: (A) cause the Company or any of its
Subsidiaries to be in material violation or material default under any material
license, sublicense or agreement for either Company Intellectual Property or
Material Embedded Software; (B) result in the termination or modification
of, or entitle any other party to, any material license, sublicense or agreement
for Company Intellectual Property or Material Embedded Software to terminate or
modify such license, sublicense or agreement for Company Intellectual Property
or Material Embedded Software; or (C) entitle any Third Party to claim any
right to use or practice under any material Company Intellectual
Property. The Company is the owner of all right, title and interest
in and to the Company Intellectual Property free and clear of all Encumbrances
other than Permitted Encumbrances and, has sole and exclusive rights to the use
thereof (subject to fair use exceptions) in connection with the services or
products in respect of which the material Company Intellectual Property is being
used by the Company or any of its Subsidiaries, subject to any license
agreements to which the Company or any of its Subsidiaries is a party pursuant
to which the Company or any of its Subsidiaries licenses others to use any such
Company Intellectual Property in the ordinary course of business. The
foregoing representations are subject to ownership and use rights in third
parties relating to unregistered Company Intellectual Property (except
copyrights) where the third party has without infringing or misappropriating any
rights of the Company or any of its Subsidiaries developed or obtained such
Intellectual Property independently.
(c) To the
Knowledge of the Company, there is no unauthorized use, disclosure, infringement
or misappropriation of any Company Intellectual Property rights by any Third
Party, including any employee or former employee of the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries has
entered into any agreement to indemnify any other Person against any charge of
infringement of any Intellectual Property, other than indemnification
obligations arising in the ordinary course of business.
(d) All
issued patents and registered trademarks and service marks held by the Company
or any of its Subsidiaries are valid, and existing. To the Knowledge of the
Company, there is no material loss or expiration of any of the Company
Intellectual Property threatened or pending, except for the expiration dates of
patents and with respect to trademarks and service marks which are not being
used. To the Knowledge of the Company, there is no assertion or claim
pending challenging the ownership, use, validity or enforceability of any
Company Intellectual Property. Neither the Company nor any of its
Subsidiaries is a party to any suit, action or proceeding that involves a claim
of infringement or misappropriation by the Company or any of its Subsidiaries of
any Intellectual Property of any Third Party nor, to the Knowledge of the
Company has any such suit, action or proceeding been threatened against the
Company or any of its Subsidiaries nor, to the Knowledge of the Company, has the
Company or any of it Subsidiaries received any demands or unsolicited offers to
license any Intellectual Property from any Third Party. The conduct
of the business of the Company and each of its Subsidiaries has not infringed or
misappropriated and is not infringing or misappropriating any Intellectual
Property of any Third Party in a manner which would reasonably be expected to
have a Company Material Adverse Effect. No Third Party has notified
the Company that it is challenging the ownership or use by the Company or any of
its Subsidiaries, or the validity of, any of the Company Intellectual Property
in a manner which would reasonably be expected to have a Company Material
Adverse Effect. Neither the Company nor any of its Subsidiaries has
brought or is bringing or has threatened any action, suit or proceeding for
infringement or misappropriation of the Company Intellectual Property or breach
of any license or agreement involving Company Intellectual Property against any
Third Party. To the Knowledge of the Company, there are no pending or
threatened interference, re-examinations, or oppositions involving any material
patents, patent applications, or trademarks of the Company or any of its
Subsidiaries.
(e) The
Company or its Subsidiaries have taken commercially reasonable steps to protect
and preserve the confidentiality of all Trade Secrets and confidential
information deemed material by the Company or its
Subsidiaries. Without limiting the foregoing, each of the Company and
its Subsidiaries have instituted policies requiring each employee, consultant
and independent contractor exposed to Trade Secrets or such Confidential
Information to execute proprietary information and confidentiality agreements
substantially in the Company’s standard forms, which forms have been made
available to Parent.
(f) Except as
set forth in
Section 3.16(f) of the Company Disclosure Letter, the material
Intellectual Property owned by the Company in Software used in the Company’s
products or any of its Subsidiaries was: (i) developed by employees of the
Company or its Subsidiaries within the scope of their employment:
(ii) developed by independent contractors who have assigned their rights
(including Intellectual Property rights) to the Company or its Subsidiaries
pursuant to written agreements; or (iii) otherwise acquired by the Company
or its Subsidiaries from a Third Party pursuant to written
agreements.
(g) Section 3.16(g)
of the Company Disclosure Letter lists all material Open Source Software that is
incorporated into, combined with, distributed with, or made available with, any
Company product whether distributed or provided on a software-as-a-service,
web-based application, or other service basis. Neither the Company
nor any of Subsidiaries have modified any of the Open Source Software identified
in Section 3.16(g) of the Company Disclosure Letter. Neither the
Company nor any of its Subsidiaries have used any Open Source Software in a
manner that would require the Company or any of its Subsidiaries to disclose
source code for any Company products, grants rights to redistribute the
Company’s products to any Third Party, grant patent non-asserts or
patent licenses to any Third Party, or otherwise grant any right not
specifically granted in the Company’s or any of its Subsidiary’s license
agreement with any Third Party.
(h) Except as
set forth in Section 3.16(h) of the Company Disclosure Letter, neither the
Company nor any of its Subsidiaries has disclosed or delivered to any Third
Party, agreed to disclose or deliver to any Third Party, or permitted the
disclosure or delivery to any escrow agent of, any source code that is Company
Intellectual Property and the confidentiality of which is material to the
Company. No event has occurred, and no circumstance or condition
exists, that (with or without notice or lapse of time, or both) will, or would
reasonably be expected to, result in a requirement that any such source code be
disclosed or delivered to any Third Party by the Company, any of its
Subsidiaries or any person acting on their behalf.
(i) All
products of the Company and its Subsidiaries are free of any material third
party disabling codes or instructions, timer, copy protection device, clock,
counter or other limiting design or routing and any “back door,” “time bomb,”
“Trojan horse,” “worm,” “drop dead device,” “virus” or other similar programs,
software routines or hardware components that permit unauthorized access or the
unauthorized disablement or erasure of such Company product (or any part
thereof) or data or other Software of users or otherwise cause them to be
incapable of being used in the full manner for which they were designed, in each
case except as would reasonably be expected not to have a Company Material
Adverse Effect.
(j) The
computer Software, computer firmware, computer hardware (whether general purpose
or special purpose), electronic data processing, information, record keeping,
communications, telecommunications, third party Software, networks, peripherals
and computer systems, including any outsourced systems and processes, and other
similar or related items of automated, computerized and/or Software systems that
are used or relied on by the Company and its Subsidiaries (collectively, “Information
Systems”), have, together with other Company assets and personnel,
generated the results reflected in the financial statements of the Company and
the Company and its Subsidiaries have purchased a sufficient number of license
seats for all Software used by the Company and its Subsidiaries in such
operations.
(k) With
respect to the Information Systems: (i) to the Knowledge of the Company there
have been no successful unauthorized intrusions or breaches of the security of
the Information Systems; (ii) there has not been any material malfunction that
has not been remedied or replaced in all material respects or any unplanned
downtime or service interruption lasting more than 60 minutes in the period
beginning twenty-four (24) months prior to the date hereof through the date
hereof; (iii) the Company and its Subsidiaries have implemented or are in the
process of implementing (or in the exercise of reasonable business judgment have
determined that implementation is not yet in the best interest of the Company
and its Subsidiaries) in a timely manner any and all security patches or
security upgrades that are generally available for the Company’s and its
Subsidiaries’ Information Systems; and (iv) no Third Party providing services to
the Company and its Subsidiaries has failed to meet any service obligations in
any material respect.
(l) Except as
set forth in Section 3.16(l) of the Company Disclosure Letter, no government
funding, facilities or resources of a university, college, other educational
institution or research center or funding from third parties was used in the
development of any material Company Intellectual Property and no governmental
entity, university, college, other educational institution or research center
has any claim or right in or to such material Company Intellectual
Property. To the Company’s Knowledge, no current or former employee,
consultant or independent contractor of the Company or any of its Subsidiaries
who was involved in, or who contributed to, the creation or Intellectual
Property owned or used by the Company or its Subsidiaries, has performed
services for the government, a university, college or other educational
institution, or a research center, during a period of time during which such
employee, consultant or independent contractor was also performing services for
the Company or any of its Subsidiaries.
(m) The
Company and its Subsidiaries are in possession of the source code and object
code for all material elements of the Software owned by the Company or any of
its Subsidiaries.
Section
3.17 Insurance
Policies. Section 3.17 of the
Company Disclosure Letter sets forth a list of all material insurance policies
maintained by the Company and its Subsidiaries. All such insurance
policies and bonds with respect to the business and assets of the Company and
its Subsidiaries are in full force and effect (and were in full force and effect
during the periods of time such insurance policies were purported to be in
effect) and will be maintained by the Company and its Subsidiaries in full force
and effect as they apply to any matter, action or event relating to the Company
or its Subsidiaries occurring through the Effective Time, and the Company and
its Subsidiaries have not reached or exceeded their policy limits for any
insurance policies in effect at any time during the past five years. Neither the
Company nor any Company Subsidiary is in breach or default of any of such
insurance policies, and neither the Company nor any Company Subsidiary has taken
any action or failed to take any action which, with notice or the lapse of time,
would constitute such a material breach or default or permit termination or
modification of any of such insurance policies. Since December 31,
2008, the Company has not received any written notice or to the Knowledge of the
Company any other written communication regarding any actual or threatened:
(a) cancellation or invalidation of any insurance policy; (b) refusal or
denial of any material coverage, material reservation of rights or rejection of
any material claim under any insurance policy; or (c) material adjustment
in the amount of the premiums payable with respect to any insurance
policy.
Section
3.18 Brokers. No
broker, finder or investment banker (other than the Company Financial Advisor
whose brokerage, investment banking, finders and financial advisory fees shall
be paid by the Company) is entitled to any brokerage, finder’s or other fee or
commission in connection with this Agreement, the Offer, the Merger or the other
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any of its Subsidiaries.
Section
3.19 Company Financial Advisor
Opinion. The Company Financial Advisor has delivered to the
Company Board of Directors its opinion to the effect that, as of the date of
such opinion, the consideration to be received by the holders (other than Parent
and its Affiliates) of shares of Company Common Stock pursuant to the Offer and
the Merger is fair, from a financial point of view, to such holders (the “Fairness
Opinion”). The Company shall provide a complete and correct
signed copy of such opinion to Parent solely for informational purposes as soon
as practicable after the date of this Agreement. The Company shall
also include in the Schedule 14D-9 related to the Offer, in its entirety, the
Fairness Opinion, together with a summary thereof in such form as the Company
Financial Advisor shall provide or approve in writing in accordance with Item
1015(b) of Regulation M-A under the Exchange Act (regardless of whether Item
1015(b) is applicable).
Section
3.20 Rights Agreement;
Anti-Takeover Provisions.
(a) The
entering into of this Agreement and the Stockholder Agreements, and the
consummation of the transactions contemplated hereby and thereby, including the
Offer and the Merger, do not and will not, (i) result in any Person being deemed
to have become an Acquiring Person (as defined in the Rights Plan), (ii) result
in the ability of any Person to exercise any Rights under the Rights Plan, (iii)
enable or require the Rights to separate from the shares of Company Common Stock
to which they are attached or to be triggered or become exercisable or (iv)
enable the Company to exchange any Rights for shares of the Company’s capital
stock, pursuant to the Rights Plan. No triggering or similar event
has occurred or will occur by reason of (1) the Offer, (2) the adoption,
approval, execution or delivery of this Agreement and the Stockholder
Agreements, (3) the public announcement of such adoption, approval, execution or
delivery or (4) the consummation of the transactions contemplated hereby and
thereby.
(b) Assuming
the truth of the representation set forth in Section 4.11, on or
prior to the date that the Company executes this Agreement, the Company Board of
Directors shall have taken all other necessary action so that the restrictions
in Section 203 of the DGCL and any other takeover, anti-takeover, moratorium,
“fair price,” “control share,” or similar Law applicable to the Company do
not, and will not, apply to the Offer, this Agreement, the Merger or the other
transactions contemplated hereby.
Section
3.21 Environmental
Matters. Except for such matters that individually or in the
aggregate have not had and could not reasonably be expected to have a Company
Material Adverse Effect: (a) each of the Company and its Subsidiaries is and, to
the Knowledge of the Company, has been in compliance with all applicable
Environmental Laws and possesses and is and, to the Knowledge of the Company,
has been in compliance with all required Environmental Permits; (b) to the
Knowledge of the Company, there are no Environmental Claims pending or
threatened against the Company or any of its Subsidiaries, (c) none of the
Company or any of its Subsidiaries or any of their predecessors has caused any
Release or threatened Release of Hazardous Materials at any property currently
owned or operated by the Company or any of its Subsidiaries, which could
reasonably be expected to result in an Environmental Claim and (d) neither the
Company nor any Company Subsidiary has received any written (or, to the
Knowledge of the Company, oral) claim or notice of violation from any
Governmental Entity alleging that the Company or any Company Subsidiary is in
violation of, or liable under, any Environmental Law, or regarding any Hazardous
Materials. All environmental reports, assessments and audits in the possession
or control of the Company or any of its Subsidiaries, containing information
that could reasonably be expected to be material to the Company or any of its
Subsidiaries, have been made available to the Parent. The
representations and warranties made in this Section 3.21 are the
exclusive representations and warranties of the Company relating to
environmental matters.
Section
3.22 Information
Supplied. Neither the written information supplied, or to be
supplied, by or on behalf of the Company for inclusion or incorporation by
reference into (i) the Offer Documents, the Schedule 14D-9 or any information
statement to be filed by the Company in connection with the Offer pursuant to
Rule 14f-1 under the Exchange Act (the “Information
Statement”) or any other documents to be filed by Parent, Merger Sub or
the Company with the SEC or any other Governmental Entity in connection with the
Offer, the Merger and the other transactions contemplated hereby will, on the
date of its filing and at the date it is mailed to the Company Common
Stockholders, 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 were
made, not misleading or (ii) the Proxy Statement will, at the date it is
first mailed to the Company Common Stockholders or at the time of the Company
Common Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Schedule 14D-9, the Information
Statement, the Proxy Statement and all other documents filing with the SEC by
the Company will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub that is contained in any of the foregoing documents.
Section
3.23 Product
Warranties. There are no pending or, to the Company’s
Knowledge, threatened Actions against either the Company or any Subsidiary in
respect of injury to person or property of its employees or any third parties,
arising from or relating to the sale or license of any product or performance of
any service by the Company or any Subsidiary, including claims arising out of
the defective or unsafe nature of the products or services.
Section
3.24 Termination of Prior Merger
Agreement. The Board of Directors of the Company has
determined that the Offer, the Merger and the transactions contemplated hereby
constitute a Superior Proposal (as such term is defined under the Prior Merger
Agreement) compared to the merger and transactions contemplated by the Prior
Merger Agreement. The termination of the Prior Merger Agreement was
duly authorized by the Company, and the Company shall have duly terminated the
Prior Merger Agreement prior to executing this Agreement, in full compliance
with the terms of the Prior Merger Agreement and without breach
thereunder. On and after the date that the Company executes this
Agreement, no further action is necessary to terminate the Prior Merger
Agreement. On and after the date that the Company executes this
Agreement, all liabilities and obligations of the Company under the Prior Merger
Agreement (including any amounts owed) shall have been satisfied in full and the
Company shall have no further obligations or liabilities with respect to the
Prior Merger Agreement and the transactions contemplated thereby.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Subject
to such exceptions as are disclosed in the Parent Disclosure Letter delivered by
Parent to the Company prior to the execution of this Agreement, Parent and
Merger Sub jointly and severally represent and warrant to the Company as
follows:
Section
4.1 Organization and Good
Standing. Each of Parent and Merger Sub is a corporation duly
organized, validly existing and in good standing (with respect to jurisdictions
that recognize such concept) under the Laws of its jurisdiction of
incorporation.
Section
4.2 Authority for
Agreement. Each of Parent and Merger Sub has all necessary
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Merger and the other
transactions contemplated by this Agreement. The execution, delivery
and performance by Parent and Merger Sub of this Agreement, and the consummation
by Parent and Merger Sub of the Offer, Merger and the other transactions
contemplated by this Agreement, have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of Parent or
Merger Sub, and no other votes or approvals of any class or series of capital
stock of Parent or Merger Sub (other than the vote of Parent as the sole
stockholder of Merger Sub in the event the Merger is not consummated pursuant to
Section 253 of the DGCL), are necessary to authorize this Agreement or to
consummate the Offer, the Merger or the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by Parent
and Merger Sub and, assuming the due authorization, execution and delivery by
the Company, constitutes a legal, valid and binding obligation of Parent and
Merger Sub enforceable against Parent and Merger Sub in accordance with its
terms, subject the Bankruptcy and Equity Exception.
Section
4.3 No Conflict; Required
Filings and Consents.
(a) The
execution and delivery of this Agreement by Parent and Merger Sub do not, and
the performance of this Agreement by Parent and Merger Sub and the commencement
and consummation of the Offer and the Merger and the other transactions
contemplated by this Agreement will not, (i) conflict with or violate
Parent’s Amended and Restated Certificate of Incorporation or Parent Bylaws, or
the equivalent charter documents of Merger Sub, (ii) conflict with or
violate any Law applicable to Parent or its Subsidiaries or by which any
material property or asset of Parent or any of its Subsidiaries is bound or
affected, or (iii) result in a breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
give to others (immediately or with notice or lapse of time or both) any right
of termination, amendment, acceleration or cancellation of, result (immediately
or with notice or lapse of time or both) in triggering any payment or other
obligations, or result (immediately or with notice or lapse of time or both) in
the creation of an Encumbrance, other than Permitted Encumbrances, on any
material property or asset of Parent or its Subsidiaries pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
Subsidiaries is a party or by which Parent or any of its Subsidiaries, or any
material property or asset of Parent or any of its Subsidiaries, is bound or
affected, except in the case of clauses (ii) and (iii) above for any such
conflicts, violations, breaches, defaults or other occurrences that would not
reasonably be expected to have a Parent Material Adverse Effect.
(b) The
execution and delivery of this Agreement by Parent and Merger Sub do not, and
the performance of this Agreement by Parent and Merger Sub (including the
commencement and consummation of the Offer) will not, require any consent,
approval, authorization or permit of, or filing with or notification to, or
registration or qualification with, any Governmental Entity, except for
applicable requirements, if any, of the Securities Act, the Exchange Act, or
state securities laws or “blue sky” laws and the HSR Act.
Section
4.4 Litigation. There
are no suits, actions or proceedings pending or, to the knowledge of Parent,
threatened against Parent or any of its Subsidiaries, including Merger Sub, that
would reasonably be expected to have a Parent Material Adverse
Effect.
Section
4.5 Availability of
Funds.
(a) Parent
has provided the Company with true and complete copies of (i) the commitment
letter, dated as of the date hereof, from Xxxxxx Xxxxxxx Senior Funding, Inc.
(the “Debt Financing
Commitment”), regarding the amounts set forth therein for the purposes of
financing the Offer and the Merger and the other transactions contemplated by
this Agreement and related fees and expenses (the “Debt Financing”) and
(ii) the Equity Commitment Letters (together with the Debt Financing Commitment,
the “Financing
Commitments”), regarding the proposed equity investments set forth
therein (the “Equity
Financing” and together with the Debt Financing, the “Financing”). The
Financing Commitments are in full force and effect as of the date hereof and are
the legal, valid and binding obligations of Parent and, to the Knowledge of
Parent, of the other parties thereto, in accordance with the terms and
conditions thereof, subject to the Bankruptcy and Equity
Exception. Parent and Merger Sub will have at the closing of the
Offer funds sufficient to pay all of the amounts payable under Article I of this
Agreement or otherwise in connection with or as a result of the Offer and the
Merger and the other transactions contemplated hereby and all fees and expenses
associated therewith. Each Financing Commitment has not been amended
or modified, and the commitments set forth in each Financing Commitment have not
been withdrawn or rescinded in any respect. Each Financing Commitment, in the
form so delivered to the Company on the date hereof, is in full force and
effect. There are no conditions precedent or other contingencies related to the
funding of (i) the full amount of the Equity Financing at the closing of the
Offer other than the conditions set forth in Annex A and (ii)
the Debt Financing at the closing of the Offer other than the conditions set
forth in the Debt Financing Commitment. No event has occurred which,
with or without notice, lapse of time or both, would constitute a default or
breach on the part of Parent under any term or condition of the Financing
Commitments. Parent has no reason to believe that any of the
conditions to any of the Financings will not be satisfied or that all of the
Financings will not be available to Parent on the closing of the Offer. Parent
has fully paid any and all commitment and other fees that have been incurred and
are due and payable on or prior to the date hereof in connection with each
Financing Commitment. Notwithstanding anything to the contrary
contained herein, Parent’s obligation to consummate the transactions
contemplated hereby is not contingent on Parent’s ability to obtain any
financing prior to consummating the Merger.
(b) The
following provision is not intended to imply that the Financing Commitments are
a condition to consummation of the transactions contemplated
hereby. Any of the Debt Financing Commitment and the Equity
Commitments Letters may, in accordance with the provisions of this Agreement, be
superseded at the option of Parent after the date of this Agreement by
instruments (the “Alternative Financing
Commitments”) replacing the then existing Debt Financing Commitment and
Equity Commitment Letters, provided that there shall remain in Escrow
an amount equal to the Parent Termination Fee. In such event, (x) the
term “Financing
Commitments” as used herein shall be deemed to include the Financing
Commitments that are not so superseded at the time in question and the
Alternative Financing Commitments to the extent then in effect, and (y) the term
“Debt
Financing” as used herein shall mean the debt financing contemplated by
the Financing Commitments as modified pursuant to the foregoing clause
(x).
Section
4.6 Guarantee. The
Sponsor has delivered the Guarantee to the Company. The Guarantee is
in full force and effect and no event has occurred which, with or without
notice, lapse of time or both, would constitute a default or breach on the part
of either Parent or the Sponsor under any term or condition of any
Guarantee.
Section
4.7 Brokers. No
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with this Agreement, the Offer, the Merger
or the other transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Merger Sub or any of their respective
directors, officers or employees, for which the Company may become
liable.
Section
4.8 Merger
Sub. Merger Sub was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement, is wholly-owned directly and
beneficially by Parent and, prior to the Effective Time, Merger Sub will have
engaged in no business and have no Liabilities or obligations other than in
connection with the transactions contemplated by this Agreement.
Section
4.9 Information
Supplied. Neither the written information supplied, or to be
supplied, by or on behalf of Parent or Merger Sub for inclusion or incorporation
by reference into (i) the Offer Documents, the Schedule 14D-9 or the
Information Statement or any other documents to be filed by Parent, Merger Sub
or the Company with the SEC or any other Governmental Entity in connection with
the Offer, the Merger and the other transactions contemplated hereby, will, on
the date of its filing or at the date it is mailed to Company Common
Stockholders, 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 were
made, not misleading or (ii) the Proxy Statement will, at the date it is
first mailed to the Company Common Stockholders or at the time of the Company
Common Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents, the Information
Statement, the Proxy Statement and all other documents filed with the SEC will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder. If at any time prior to
the Effective Time any event with respect to Parent or Merger Sub shall occur
which is required to be described in the Proxy Statement or Schedule 14D-9,
Parent shall promptly disclose such event to the
Company. Notwithstanding the foregoing, Parent makes no
representation or warranty with respect to any information supplied by the
Company that is contained in any of the foregoing documents.
Section
4.10 Management
Arrangements. As of the date hereof, except as previously
disclosed to the Company Board, there are no contracts or any other binding
arrangements between Parent, Merger Sub or any of their respective Affiliates,
on the one hand, and any director or officer of the Company, on the other hand,
relating to this Agreement, the Offer, the Merger or any other transactions
contemplated by this Agreement (including as to any investments to be made in,
or contributions to be made to, Parent or Merger Sub), or to the Surviving
Corporation or any of its Subsidiaries, businesses or operations (including as
to continuing employment) from and after the Closing.
Section
4.11 Solvency. As
of the Acceptance Date and immediately after giving effect to all of the
transactions contemplated by this Agreement, including the Offer and the Merger
and all payments contemplated by this Agreement in connection with the Offer and
the Merger (including payment of all amounts payable under Article I of this
Agreement in connection with or as a result of the Offer and the Merger) and
payment of all related fees and expenses of Parent, Merger Sub, the Company and
their respective Subsidiaries in connection therewith, and assuming the accuracy
as of the Acceptance Date in all material respects of those representations and
warranties of the Company set forth in Article III that
relate to the subject matter of clauses (i) through (iii) of this Section 4.11
(including Section
3.8): (i) the amount of the “fair saleable value” of the assets of each
of Merger Sub, the Company and its Subsidiaries will exceed (A) the value of all
liabilities of Merger Sub, the Company and such Subsidiaries, including
contingent and other liabilities, and (B) the amount that will be required to
pay the probable liabilities of the Merger Sub, the Company and such
Subsidiaries on their existing debts as such debts become absolute and matured,
(ii) each of Merger Sub, the Company and its Subsidiaries will not have an
unreasonably small amount of capital for the operation of the businesses in
which it is engaged or proposed to be engaged, and (iii) each of Merger Sub, the
Company and its Subsidiaries will be able to pay its liabilities, including
contingent and other liabilities, as they mature. For purposes of the foregoing,
“not have an unreasonably small amount of capital for the operation of the
businesses in which it is engaged or proposed to be engaged” and “able to pay
its liabilities, including contingent and other liabilities, as they mature”
means that such Person will be able to generate enough cash from operations,
asset dispositions or refinancing, or a combination thereof, to meet its
obligations as they become due.
Section
4.12 Section 203 of the
DGCL. As of the date hereof, neither Parent nor Merger Sub nor
any of their “affiliates” or “associates” is, and at no time during the last
three years has been, an “interested stockholder” of the Company as defined in
Section 203 of the DGCL, and neither Parent nor Merger Sub “owns” any
shares of capital stock of the Company as defined in Section 203 of the
DGCL.
ARTICLE
V
COVENANTS
Section
5.1 Conduct of Business by the
Company Pending the Merger.
(a) The
Company covenants and agrees that between the date of this Agreement and the
Acceptance Date, unless Parent shall otherwise consent in writing, which consent
shall not be unreasonably withheld, delayed or conditioned (and except as set
forth in Section 5.1 of
the Company Disclosure Letter or as otherwise expressly contemplated, permitted
or required by this Agreement), the Company shall and shall cause each of its
Subsidiaries to, (i) maintain its existence in good standing under
applicable Law, (ii) subject to the restrictions and exceptions set forth
in Section 5.1(b)
or elsewhere in this Agreement, conduct its business and operations only in the
ordinary and usual course of business and in a manner consistent with prior
practice, and (iii) use commercially reasonable efforts to (A) preserve
intact its assets, properties, contracts or other legally binding
understandings, licenses and business organizations, (B) generally keep
available the services of its current officers and key employees as determined
by the Company's Chief Executive Officer in consultation with Parent and (C)
preserve the current relationships of the Company and its Subsidiaries with
customers, suppliers, distributors, lessors, licensors, licensees, creditors,
employees, contractors and other Persons with which the Company or any of its
Subsidiaries has business relations.
(b) Without
limiting the foregoing, the Company covenants and agrees that between the date
of this Agreement and the Acceptance Date, the Company shall not and shall cause
each of its Subsidiaries not to (except as expressly contemplated, permitted or
required by this Agreement, including Section 1.7 hereof, as set forth on the
applicable subsection of Schedule 5.1(b)
of the Company Disclosure Letter or with the prior written approval of Parent,
which approval shall not be unreasonably withheld, delayed or conditioned (other
than, with respect to such approval being not unreasonably withheld, delayed or
conditioned, in the case of clauses (i), (ii) and (iii) below):
(i) declare, set aside, establish a record date for, make or pay any
dividends or other distributions (whether in cash, stock or property) in respect
of any of its capital stock or, except as permitted by Section 5.6, enter
into any agreement with respect to the voting of its capital stock;
(ii) adjust, split, combine or reclassify any of its capital stock or that
of its Subsidiaries or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or that of its Subsidiaries; (iii) repurchase, redeem or
otherwise acquire, directly or indirectly, any shares of its or its
Subsidiaries’ capital stock or any Company Common Stock Rights or Subsidiary
Stock Rights (except pursuant to restricted stock award agreements outstanding
on the date hereof); (iv) issue, deliver or sell, pledge or encumber any
shares of its or its Subsidiaries’ capital stock, or any Company Common Stock
Rights (other than the issuance of shares of Company Common Stock upon the
exercise of Company Common Stock Options or pursuant to the ESPP solely with
respect to the Final Offering Period) (v) take any action the intended and
actual result of which is to prevent the Company from consummating the Merger in
accordance with the terms hereof other than any action otherwise required or
permitted to be taken hereunder; (vi) amend the Company Certificate of
Incorporation or Company Bylaws or equivalent organizational documents of the
Company’s Subsidiaries; (vii) incur, create, assume or otherwise become
liable for any Indebtedness or assume, guaranty, endorse or otherwise become
liable or responsible for the Indebtedness of any other Person; (viii) make
any loans, advances or capital contributions to or investments in any other
Person (other than loans, advances, capital contributions, or investments made
to the Company's Subsidiaries or loans or advances made to other Persons,
including customer financing and installment payment arrangements, in the
ordinary course of business consistent with past practice); (ix) merge or
consolidate with any other entity or adopt a plan of complete or partial
liquidation, dissolution, recapitalization or other reorganization or otherwise
permit its corporate existence to be suspended, lapsed or revoked;
(x) change its Tax accounting methods, principles or practices, except as
required by GAAP or applicable Laws; (xi) alter, amend or create any
obligations with respect to compensation, severance, benefits, change of control
payments or any other payments to present or former employees, directors or
Affiliates of the Company, other than alterations or amendments (A) made
with respect to non-officers and non-directors in the ordinary course of
business consistent with past practice that, in the aggregate, do not result in
a material increase in benefits or compensation expense to the Company,
(B) as expressly contemplated by Section 1.7 of
this Agreement or (C) required under applicable Laws; (xii) hire any new
employees other than non-officer employees in the ordinary course of business
consistent with past practice; (xiii) sell, license, mortgage, transfer,
lease, pledge or otherwise subject to any Encumbrance, other than Permitted
Encumbrances, or otherwise dispose of any material properties or assets
(including stock or other ownership interests of its Subsidiaries), other than
in the ordinary course of business consistent with prior practice;
(xiv) acquire any material business, assets or securities other than in the
ordinary course of business consistent with past practice; (xv) make any
Tax election not consistent with prior practice or settle or compromise any
material income Tax Liability or fail to file any material Tax Return when due
or fail to cause such Tax Returns when filed to be complete and accurate in all
material respects or file any materially amended Tax Return; (xvi) incur or
commit to incur any unbudgeted capital expenditures, or any obligations or
liabilities in connection therewith that individually or in the aggregate, are
in excess of $250,000, except in the ordinary course of business consistent with
past practices or materially delay any material capital expenditures; (xvii)
pay, discharge, settle or satisfy any Liabilities, other than the payment,
discharge or satisfaction of Liabilities in the ordinary course of business,
consistent with past practice, as required by any applicable Law, as accrued for
in the Company Financial Statements or as required by the terms of any contract
of the Company, as in effect on the date of this Agreement; (xviii) waive,
release, grant or transfer any right of material value, other than in the
ordinary course of business, consistent with past practice, or waive any
material benefits of, or agree to modify in any material adverse respect, or,
subject to the terms hereof, fail to enforce, or consent to any material matter
with respect to which its consent is required under, any material
confidentiality, standstill or similar agreement to which the Company or any of
its Subsidiaries is a party (other than to permit a Person to present an
Acquisition Proposal or take any other action permitted under Section 5.6); (xix)
enter into, modify, amend or terminate (A) any contract which if so entered
into, modified, amended or terminated could be reasonably likely to (x) have a
Company Material Adverse Effect, (y) impair in any material respect the ability
of the Company to perform its obligations under this Agreement or (z) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or (B) except in the ordinary course of business, any Company
Material Contract; (xx) terminate any officer or key employee of the Company
except as determined by the Company’s Chief Executive Officer in consultation
with Parent; (xxi) maintain insurance at less than current levels or otherwise
in a manner inconsistent with past practice; (xxii) except as required by GAAP,
revalue any of its material assets or make any changes in accounting methods,
principles or practices; (xxiii) enter into any transaction that could give rise
to a disclosure obligation as a “reportable transaction” under Section 6011
of the Code and the regulations thereunder; (xxiv) engage in any transaction
with, or enter into any agreement, arrangement or understanding with any
Affiliate of the Company or other Person covered by Item 404 of Regulation S-K
promulgated under the Exchange Act that would be required to be disclosed under
such Item 404; (xxv) compromise, release, waive or settle any Action (A)
directly relating to or affecting the Company’s Intellectual Property, (B)
having a value or in an amount in excess of $250,000 or (C) that is brought by
any current, former or purported holder of any capital stock or debt securities
of the Company or any of its Subsidiaries relating to the transactions
contemplated by this Agreement; (xxvi) effectuate a “plant closing” or “mass
layoff,” as those terms are defined in WARN, affecting in whole or in part any
site of employment, facility, operating unit or employee of the Company or any
of its Subsidiaries; (xxvii) grant any material refunds, credits, rebates or
other allowances by the Company to any end user, customer, reseller or
distributor, in each case, other than in the ordinary course of business;
(xxviii) abandon or allow to lapse or expire any registration or application for
material Company Intellectual Property; (xxix) enter into any new line of
business outside of its existing business segments; (xxx) engage in Company-wide
communication with employees of the Company or any of its Subsidiaries regarding
the compensation, benefits or other treatment that they will receive in
connection with the Offer or the Merger, unless any such communications are
substantially consistent with prior directives, guidelines or other
documentation provided to the Company by Parent; or (xxxi) except as permitted
by Section 5.6
hereof, agree to take or enter into any letter of intent or similar agreement or
arrangement with respect to any of the actions described in this Section 5.1(b).
(c) Nothing
contained in this Agreement is intended to give Parent, directly or indirectly,
the right to control or direct the operations of the Company or any of its
Subsidiaries prior to the Acceptance Date. Prior to the Acceptance
Date, each of Parent and Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its
Subsidiaries’ respective operations.
Section
5.2 Access to Information and
Employees.
(a) From the
date hereof to the Effective Time, the Company shall, and shall cause the
Representatives of the Company to, afford the Representatives of Parent and
Merger Sub reasonable access during normal business hours to the officers,
employees, agents (including outside accountants), properties, offices and other
facilities, books and records of the Company and, during such period, the
Company shall, and shall cause each of its Subsidiaries to, furnish, to the
extent prepared by the Company in the ordinary course of business, for the
period beginning after the date of this Agreement and ending at the Effective
Time, as soon as practicable after the end of each month, a copy of the monthly
internally prepared financial statements of the Company, including statements of
financial condition, results of operations, and statements of cash flow, and all
other information concerning its business, properties and personnel as Parent
may reasonably request.
(b) During
the period between the date hereof and the Effective Time, the Company
shall provide, and shall cause its Subsidiaries and its and their
Representatives to provide, to Parent and to the Representatives of Parent,
reasonable cooperation that may be reasonably requested by Parent in connection
with the Financing to be incurred by Parent in order to consummate the
transactions contemplated hereby, including but not limited to using
commercially reasonable efforts to cause its advisors to provide financial
statements and comfort letters that may be reasonably requested and are
otherwise customary for such Financing.
(c) No
investigation pursuant to this Section 5.2
shall affect any representation or warranty in this Agreement of any party
hereto or any condition to the obligations of the parties hereto.
(d) The
Company acknowledges that, prior to the Effective Time, Parent or its
Representatives may make available to the Company or its Representatives certain
information that is confidential, proprietary or otherwise not publicly
available including analyses, forecasts, plans, summaries and/or studies and
that all such confidential material given by or on behalf of Parent to the
Company will not be disclosed, reproduced, disseminated, quoted or referred by
the Company or any of its Subsidiaries or Representatives to any
Person.
Section
5.3 Reasonable Best Efforts;
Notification.
(a) Subject
to the conditions set forth in this Agreement, each of Parent, Merger Sub and
the Company agrees to use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things necessary, proper or advisable to
fulfill all conditions applicable to such party pursuant to this Agreement and
to consummate and make effective, in the most expeditious manner practicable,
the Offer, the Merger and the other transactions contemplated by the Transaction
Documents, including (i) the taking of all commercially reasonable acts
necessary to cause the conditions set forth in Annex A or Article VI to be
satisfied, (ii) obtaining all necessary, proper or advisable actions or
non-actions, waivers, consents, qualifications and approvals from Governmental
Entities and making all necessary, proper or advisable registrations, filings
and notices and taking all reasonable steps as may be necessary to obtain an
approval, waiver or exemption from any Governmental Entity (including, without
limitation, under the HSR Act, and including any Request for Additional
Information and Documentary Material thereunder (a “Second Request”));
(iii) obtaining all necessary, proper or advisable consents,
qualifications, approvals, waivers or exemptions from the non-governmental Third
Parties; (iv) executing and delivering any additional documents or
instruments necessary, proper or advisable to consummate the transactions
contemplated by, and to fully carry out the purposes of, the Transaction
Documents; and (iv) exercising the Additional Share Option.
(b) Without
limiting the foregoing, (i) each of the Company, Parent and Merger Sub
shall use its commercially reasonable efforts to make promptly any required
submissions under the HSR Act (including any required submissions under a Second
Request) and any other Antitrust Laws which the Company or Parent determines
should be made, in each case with respect to the Offer and the Merger and the
transactions contemplated hereby and (ii) Parent, Merger Sub and the
Company shall cooperate with one another (A) in promptly determining
whether any filings are required to be or should be made or consents, approvals,
permits or authorizations are required to be or should be obtained under any
other federal, state or foreign Law or regulation or whether any consents,
approvals or waivers are required to be or should be obtained from other parties
to loan agreements or other contracts or instruments material to the Company’s
business in connection with the consummation of the transactions contemplated by
this Agreement and (B) in promptly making any such filings, furnishing
information required in connection therewith and seeking to obtain timely any
such consents, permits, authorizations, approvals or waivers. Each of
the Company and Parent shall (1) give the other party prompt notice of the
commencement or threat of commencement of any suit, claim, action, investigation
or proceeding by or before any Governmental Entity with respect to the Offer or
the Merger or any of the other transactions contemplated by this Agreement, (2)
keep the other party informed as to the status of any such suit, claim, action,
investigation, proceeding or threat, (3) promptly inform the other party of any
material communication concerning the HSR Act or other Antitrust Laws to or from
any Governmental Entity regarding the Offer or the Merger and (4) furnish to the
other party such information and assistance as the other may reasonably request
in connection with any filing or other act undertaken in compliance with the HSR
Act and any other Antitrust Laws. Except as may be prohibited by any
Governmental Entity, the Company and Parent will consult and cooperate with one
another, and will consider in good faith the views of one another, in connection
with any analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any suit, claim,
action, investigation or proceeding under or relating to the HSR Act or any
other Antitrust Law. Each of the Company and Parent will permit
authorized Representatives of the other party to be present at each meeting or
conference relating to any such legal proceeding and to have access to and be
consulted in connection with any document, opinion or proposal made or submitted
to any Governmental Entity in connection with any such legal
proceeding.
(c) Each of
the Company, on the one hand, and Parent and Merger Sub, on the other, shall
promptly (and in any event within five (5) Business Days) notify the other party
in writing if it believes that such party has breached any representation,
warranty, covenant or agreement contained in this Agreement that could,
individually or in the aggregate, result in a failure of a condition set forth
in Annex A
hereto.
(d) If any
Antitakeover Laws are or may become applicable to the Merger or any of the other
transactions contemplated by this Agreement, the Company and the Company Board
of Directors shall promptly grant such approvals and use commercially reasonable
efforts to take such other lawful actions as are necessary so that such
transactions may be consummated as promptly as practicable on the terms
contemplated by this Agreement, the Offer or the Merger, as the case may be, and
otherwise take such other commercially reasonable and lawful actions to
eliminate or minimize the effects of such statute, and any regulations
promulgated thereunder, on such transactions.
(e) Prior to
the Acceptance Date, the Company (acting through its Board of Directors or its
Compensation Committee) shall take all steps necessary to cause any employment
compensation, severance or employee benefit arrangements that have been entered
into by the Company, Parent or any of their respective Affiliates with current
or future directors, officers or employees of the Company and its Affiliates to
be exempt under amended Rule 14d-10(c) promulgated under the Exchange Act and to
insure that any such arrangements fall within the safe harbor provisions of such
rule.
Section
5.4 Proxy.
(a) Proxy
Statement. If the adoption of this Agreement by the Company
Common Stockholders is required by Law, the Company shall, at Parent’s request,
prepare preliminary proxy materials which shall constitute the Proxy Statement
and the Company shall cause such Proxy Statement to be filed with the SEC as
soon as practicable after the expiration of the Offer, and shall use its
reasonable best efforts to cause such filing to occur no later than the date
that is two (2) Business Days following such date. Parent and Merger
Sub shall furnish all information as the Company may reasonably request in
connection with such actions and the preparation of the Proxy
Statement. Subject to and without limiting the rights of the Company
Board of Directors pursuant to Section 5.6, the
Proxy Statement shall include the Company Recommendation.
(b) SEC
Comments. As promptly as practicable after comments are
received from the SEC thereon and after the furnishing by the Company and Parent
of all information required to be contained therein, the Company shall, in
consultation with the Parent, prepare and the Company shall file any required
amendments to, and the definitive, Proxy Statement with the SEC. The
Company will advise Parent, promptly after it receives notice thereof, of any
request by the SEC for amendment of the Proxy Statement or comments thereon and
responses thereto or requests by the SEC for additional information and will
promptly supply Parent with copies of all correspondence between the Company or
any of the Company Representatives, on the one hand, and the SEC or its staff,
on the other hand, with respect to the Proxy Statement. Prior to
filing or mailing the Proxy Statement or filing any other required filings (or,
in each case, any amendment or supplement thereto) or responding to any comments
of the SEC with respect thereto, the Company shall provide Parent with an
opportunity to review and comment on such document or response and shall give
due consideration to including in such document or response comments reasonably
and timely proposed by Parent. As promptly as practicable after the
clearance of the Proxy Statement by the SEC (the “SEC Clearance Date”),
the Company shall mail the Proxy Statement and all other proxy materials to the
Company Common Stockholders and, if necessary in order to comply with applicable
securities Laws, after the Proxy Statement shall have been so mailed, promptly
circulate amended, supplemental or supplemented proxy material, and, if required
in connection therewith, re-solicit proxies. If the SEC has failed to
affirmatively notify the Company within ten (10) days after the filing of the
Proxy Statement with the SEC that it will not be reviewing the Proxy Statement,
then the Company shall use its reasonable best efforts to obtain such
affirmative clearance of the Proxy Statement from the SEC and the date on which
the Company receives such affirmative clearance shall be the “SEC Clearance
Date”.
(c) Information
Supplied. Each of Parent, Merger Sub and the Company agrees,
as to it and its Affiliates, directors, officers, employees, agents or
Representatives, that none of the information supplied or to be supplied by
Parent, Merger Sub or the Company, as applicable, expressly for inclusion or
incorporation by reference in the Proxy Statement or any other documents filed
or to be filed with the SEC in connection with the transactions contemplated
hereby, will, as of the time such documents (or any amendment thereof or
supplement thereto) are mailed to the holders of shares of Company Common Stock
and at the time of the Company Stockholders Meeting, contain any untrue
statement of a material fact, or omit to state any material fact required to be
stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Each of
Parent, Merger Sub and the Company further agrees that all documents that such
Party is responsible for filing with the SEC in connection with the Merger will
comply as to form and substance in all material respects with the applicable
requirements of the Exchange Act and any other applicable Laws and will not
contain any untrue statement of a material fact, or omit to state any material
fact required to be stated therein in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading. If at any time prior to the Effective Time, any event or
circumstance relating to Parent or Merger Sub, or their respective officers or
directors, should be discovered by Parent or Merger Sub which should be set
forth in an amendment or a supplement to the Proxy Statement so that the Proxy
Statement, would not include any misstatement of a material fact or omit to
state any material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, Parent shall promptly notify the Company and, to the extent
required by the Exchange Act and any other applicable Laws, the Company shall
amend or supplement the Proxy Statement promptly to disclose such event or
circumstance. If at any time prior to the Effective Time, any event
or circumstance relating to the Company or any Company Subsidiary, or their
respective officers or directors, should be discovered by the Company which
should be set forth in an amendment or a supplement to the Proxy Statement so
that the Proxy Statement, would not include any misstatement of a material fact
or omit to state any material fact required to be stated therein in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, the Company shall promptly notify Parent and, to the
extent required by the Exchange Act and any other applicable Laws, the Company
shall amend or supplement the Proxy Statement promptly to disclose such event or
circumstance.
Section
5.5 Approval of
Merger.
(a) If the
adoption of this Agreement by the Company Common Stockholders is required by
Law:
(i) The
Company shall duly call, give notice of and hold a meeting of its stockholders
for the purpose of considering and voting upon the adoption of this Agreement
(the “Company
Stockholders Meeting”) as promptly as practicable following the date on
which the Proxy Statement is mailed to the Company Common Stockholders; provided, that
without the prior written consent of Parent, (i) the Company shall use its
reasonable best efforts to cause the Company Stockholders Meeting to be held not
later than thirty (30) calendar days after the SEC Clearance
Date, and (ii) the Company may not adjourn or postpone the Company Stockholders
Meeting;
(ii) The
Company shall establish a record date for purposes of determining stockholders
entitled to notice of and vote at the Company Stockholders Meeting (the “Record Date”), which
record date shall not be prior to the Acceptance Date. Once the
Company has established the Record Date, the Company shall consult with Parent
prior to changing the Record Date or establishing a different record date for
the Company Stockholders Meeting, unless required to do so by applicable
Law.
(iii) Subject
to Section 5.6
and Article
VII, at the Company Stockholders Meeting, the Company shall, through the
Company Board of Directors, make the Company Recommendation unless there has
been a Company Adverse Recommendation Change (which cannot occur after the
Acceptance Date). Prior to any Company Adverse Recommendation Change,
the Company shall take all reasonable lawful action to solicit the Company
Required Vote. Notwithstanding any Company Adverse Recommendation Change, unless
this Agreement is validly terminated pursuant to, and in accordance with Article VII, this
Agreement shall be submitted to the Company Common Stockholders for the purpose
of obtaining the Company Required Vote. The Company shall, upon the
reasonable request of Parent, use its reasonable best efforts to advise Parent
during the last ten (10) Business Days prior to the date of the Company
Stockholders Meeting, as to the aggregate tally of the proxies received by the
Company with respect to the Company Required Vote. Without the prior
written consent of Parent, the adoption of this Agreement and the transactions
contemplated hereby (including the Merger) shall be the only matter (other than
procedure matters) which the Company shall propose to be acted on by the
stockholders of the Company at the Company Stockholders Meeting.
(iv) Parent
shall cause all shares of Company Common Stock purchased pursuant to the Offer
and all other shares of Company Common Stock owned by Parent, Merger Sub or any
other subsidiary of Parent to be voted in favor of the adoption of this
Agreement.
(b) If,
following the Acceptance Date and, if exercised, the closing of the Additional
Share Option, Parent, Merger Sub, and any other subsidiary of Parent shall own,
in the aggregate, at least 90% of the outstanding shares of Company Common
Stock, Merger Sub shall, and Parent shall cause Merger Sub to, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer or exercise of the Additional
Share Option, as applicable, without a Company Stockholders Meeting in
accordance with Section 253 of the DGCL, including, for the avoidance of doubt,
(i) causing the transfer to Merger Sub of any Company Common Stock owned by
Parent and any other subsidiary of Parent and (ii) executing, acknowledging and
filing with the Delaware Secretary a Certificate of Ownership and
Merger.
Section
5.6 No Solicitation of
Transactions.
(a) Except as
expressly permitted by this Section 5.6, the
Company and its officers and directors shall, and the Company shall instruct and
cause its Representatives and Subsidiaries and their Representatives to,
immediately from the date hereof until the Effective Time or, if earlier, the
termination of this Agreement in accordance with Article VII,
not:
(i) initiate,
solicit, propose, encourage (including by providing information) or take any
action to facilitate any inquiries or the making of any proposal or offer that
constitutes, or may reasonably be expected to lead to, an Acquisition
Proposal;
(ii) engage in
or otherwise participate in any discussions or negotiations regarding, or
provide any information or data concerning the Company or any of its
Subsidiaries to any Person relating to, any Acquisition Proposal or any proposal
or offer that could reasonably be expected to lead to an Acquisition Proposal,
or provide any information or data concerning the Company or any of its
Subsidiaries to any Person pursuant to any commercial arrangement, joint venture
arrangement, or other existing agreement or arrangement if it is reasonably
likely that the Person receiving the confidential information could use such
information for purposes of evaluating or developing an Acquisition
Proposal;
(iii) grant any
waiver, amendment or release under any standstill or confidentiality agreement,
the Rights Agreement or Takeover Statutes;
(iv) approve,
endorse, recommend, or execute or enter into any letter of intent, agreement in
principle, merger agreement, acquisition agreement or other similar agreement
relating to an Acquisition Proposal or any proposal or offer that could
reasonably be expected to lead to an Acquisition Proposal, or that contradicts
this Agreement or requires the Company to abandon this Agreement;
or
(v) resolve,
propose or agree to do any of the foregoing.
The
Company will, and will cause its Representatives to, promptly cease and cause to
be terminated, any existing activities, discussions or negotiations with any
Persons conducted heretofore with respect to any Acquisition Proposal, and will
promptly request the return of all confidential information provided by or on
behalf of the Company to any and all Persons (including Project Alta Merger
Corp., Project Alta Holdings Corp., their sponsors and any of their affiliates
or representatives) who have had such discussions or negotiations or who have
entered into confidentiality agreements with the Company pertaining to an
Acquisition Proposal or similar transaction.
(b) Notwithstanding
anything to the contrary contained in Section 5.6(a) or
elsewhere in this Agreement, but subject to the penultimate sentence of this
Section 5.6(b),
at any time following the date hereof and prior to, but not after, the
Acceptance Date, the Company may, subject to compliance with this Section
5.6:
(i) provide
information in response to a request therefor to a Person who has made an
unsolicited written Acquisition Proposal after the date of this Agreement if and
only if, prior to providing such information, the Company has received from the
Person so requesting such information an executed Acceptable Confidentiality
Agreement, provided that the
Company shall promptly make available to Parent any material information
concerning the Company and its Subsidiaries that is provided to any Person
making such Acquisition Proposal that is given such access and that was not
previously made available to Parent or the Parent Representatives;
or
(ii) engage or
participate in any discussions or negotiations with any Person who has made such
an unsolicited written Acquisition Proposal;
provided, that prior
to taking any action described in Section 5.6(b)(i) or
Section
5.6(b)(ii) above, (A) the Company Board of Directors shall have
determined in good faith, after consultation with outside legal counsel, that
failure to take such action would violate the directors’ fiduciary duties under
applicable Laws, and (B) the Company Board of Directors shall have determined in
good faith, based on the information then available and after consultation with
its independent financial advisor and outside legal counsel, that such
Acquisition Proposal either constitutes a Superior Proposal or is reasonably
likely to result in a Superior Proposal. Without modifying the
generality of the foregoing, prior to engaging in substantive discussions or
negotiations with a Person submitting an unsolicited written Acquisition
Proposal, the Company, after consultation with its Representatives shall make a
determination that, to the best of the Company’s Knowledge: (x) such Person is
reasonably likely to have adequate sources of financing or adequate funds to
consummate such Acquisition Proposal and (y) such Person has stated in writing
that it does not propose obtaining financing as a condition to its obligation to
consummate such Acquisition Proposal. The Company shall not provide
any such Person with access to non-public information until the preceding
criteria are satisfied. The Company shall require any Person
submitting an unsolicited Acquisition Proposal to include any proposed changes
to the terms of this Agreement.
(c) Except as
expressly provided by Section 5.6(d), at
any time after the date hereof, neither the Company Board of Directors nor any
committee thereof shall:
(i) (A)
withhold, withdraw (or not continue to make), qualify or modify (or publicly
propose or resolve to withhold, withdraw (or not continue to make), qualify or
modify), in a manner adverse to Parent or the Merger Sub, the Company
Recommendation with respect to the Offer or the Merger, (B) adopt, approve or
recommend or propose to adopt, approve or recommend (publicly or otherwise) an
Acquisition Proposal, (C) fail to publicly reaffirm the Company Recommendation
within ten (10) Business Days after Parent so requests in writing (provided that
Parent may make such request no more than two (2) times) or at a time when an
Acquisition Proposal has been made and not withdrawn, (D) fail to recommend
against any Acquisition Proposal subject to Regulation 14D under the Exchange
Act in a Solicitation/Recommendation Statement on Schedule 14D-9 within twenty
(20) Business Days after the commencement of such Acquisition Proposal or (E)
fail to include the Company Recommendation in the Schedule 14D-9 related to the
Offer and the Proxy Statement (any action described in clauses (A) through (E),
a “Company Adverse
Recommendation Change”); or
(ii) cause or
permit the Company or any of its Subsidiaries to enter into any Acquisition
Agreement relating to any Acquisition Proposal.
(d) Notwithstanding
anything to the contrary set forth in this Agreement (i) at any time prior to
the Effective Time, the Company Board (or any committee thereof) may effect a
Company Adverse Recommendation Change if the Company Board determines in good
faith, after consultation with its outside legal counsel, that the failure to do
so is reasonably likely to violate the directors’ fiduciary duties under
applicable laws, and (ii) at any time prior to the Acceptance Date, if the
Company has received a written Acquisition Proposal from any Person that is not
withdrawn and that the Company Board of Directors concludes constitutes a
Superior Proposal, the Company Board of Directors may authorize the Company to
terminate this Agreement to enter into an Acquisition Agreement with respect to
such Superior Proposal, provided, however, that the Company may take the action
provided for in this clause (ii), if and only if:
(A) the
Company shall have complied with its obligations under this Section 5.6 in all
material respects;
(B) the
Company shall have provided prior written notice to Parent at least five (5)
Business Days in advance (the “Notice Period”), to
the effect that the Company Board has received a written Acquisition Proposal
that is not withdrawn and that the Company Board of Directors concludes
constitutes a Superior Proposal and, absent any revision to the terms and
conditions of this Agreement, the Company Board of Directors has resolved to
terminate this Agreement pursuant to this Section 5.6(d), which
notice shall specify the basis for such termination, including the identity of
the party making the Superior Proposal and the material terms thereof;
and
(C) prior
to effecting such termination, the Company shall, and shall cause their
financial and legal advisors to, during the Notice Period, negotiate with Parent
and the Parent Representatives in good faith (to the extent Parent desires to
negotiate) to make such adjustments in the terms and conditions of this
Agreement, so that such Acquisition Proposal would cease to constitute a
Superior Proposal; provided, that in the
event of any material revisions to the Acquisition Proposal that the Company
Board of Directors has determined to be a Superior Proposal, the Company shall
be required to deliver a new written notice to Parent and to comply with the
requirements of this Section 5.6
(including this Section 5.6(d)) with
respect to such new written notice.
(e) Nothing
contained in this Section 5.6 shall be
deemed to prohibit the Company or the Company Board of Directors from (i)
complying with its disclosure obligations under U.S. federal or state Law with
regard to an Acquisition Proposal, including taking and disclosing to its
shareholders a position contemplated by Rule 14d-9 or Rule 14e-2(a) under the
Exchange Act (or any similar communication to stockholders), or (ii) making any
“stop-look-and-listen” communication or similar communication of the type
contemplated by Rule 14d-9(f) under the Exchange Act. Notwithstanding
anything in this Section 5.6 to the
contrary, the Company and the Company Board of Directors may not take, agree or
resolve to take any action that would result in the Company Common Stockholders
no longer being capable under Delaware Law of validly adopting this
Agreement.
(f) From and
after the date hereof, the Company agrees that it will promptly (and, in any
event, within two days) notify Parent if any proposals or offers with respect to
an Acquisition Proposal (including any material amendments thereto) are received
by, any non-public information is requested from, or any discussions or
negotiations are sought to be initiated or continued with, the Company or any of
its Representatives indicating, in connection with such notice, the identity of
the Person or group of Persons making such offer or proposal and the material
terms and conditions of any proposals or offers (subject to any pre-existing
confidentiality agreements binding upon the Company). Neither Parent
nor Merger Sub shall communicate with any Person who has made an Acquisition
Proposal with respect to such Acquisition Proposal or any related matter during
the term of this Agreement.
(g) The
Company agrees that in the event any of its Representatives takes any action
which, if taken by the Company, would constitute a breach of this Section 5.6, then the
Company shall be deemed to be in breach of this Section
5.6.
Section
5.7 Public
Announcements. The Company and Parent shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to this Agreement or any of the transactions contemplated by the
Transaction Documents and shall not issue any such press release or make any
such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed; provided, however, that a
party may, without the prior consent of the other party, issue such press
release or make such public statement as may be required by Law or Order or the
applicable rules of Nasdaq or any listing agreement if it has used its
commercially reasonable efforts to consult with the other party and to obtain
such party’s consent but has been unable to do so prior to the time such press
release or public statement is so required to be issued or made.
Section
5.8 Litigation. Each
of Parent, Merger Sub and the Company agrees to use its commercially reasonable
efforts to defend any lawsuits or other legal proceedings, whether judicial or
administrative, challenging, or seeking damages or other relief as a result of,
the Offer, the Merger, this Agreement or the transactions contemplated by the
Transaction Documents, including seeking to have any Order adversely affecting
the ability of the parties to consummate the transactions contemplated by the
Transaction Documents entered by any court or other Governmental Entity promptly
vacated or reversed.
Section
5.9 Directors’ and Officers’
Indemnification and Insurance.
(a) For a
period of six years from and after the Effective Time, Parent and the Surviving
Corporation shall indemnify, advance expenses to, and hold harmless all past and
present officers and directors of the Company (“Indemnified Persons”)
to the fullest extent permitted by law and the same extent and in the same
manner such persons are indemnified as of the date of this Agreement by the
Company pursuant to the DGCL, the Company Certificate of Incorporation and the
Company Bylaws for acts or omissions occurring at or prior to the Effective
Time; provided, however, in the case of advancement of expenses, any person to
whom expenses are advanced provides an undertaking, to the extent required by
the DGCL, to repay such advance if it is ultimately determined that such person
is not entitled to indemnification. The Certificate of Incorporation
and the Bylaws of the Surviving Corporation will contain provisions with respect
to exculpation, advancement and indemnification that are at least as favorable
to the Indemnified Persons as those contained in the Company Certificate of
Incorporation and the Company Bylaws as in effect on the date hereof, which
provisions will not be amended, repealed or otherwise modified for a period of
not less than six years from the Effective Time in any manner that would
adversely affect the rights thereunder of individuals who, immediately prior to
the Effective Time, were directors, officers, employees or agents of the
Company, unless such a modification is required by Law.
(b) The
Company shall negotiate and purchase “tail” insurance coverage from the
Company’s existing directors and officers liability insurers, or from other
insurers, that provides for a period of six (6) years that is no less favorable
in both amount and terms and conditions of coverage than the Company’s existing
directors and officers liability insurance programs, or if substantially
equivalent insurance coverage is not available, the best available coverage
(“D&O
Insurance”); provided however that the aggregate cost for the purchase of
such D&O Insurance (for the entire six (6) year tail coverage period) shall
not exceed more than 250% of the aggregate premium paid by the Company for the
existing directors and officers liability and fiduciary liability insurance
program, provided, further, that should the cost of D&O Insurance exceed the
250% cap, the Company shall instead purchase the best available coverage for
250% of the aggregate premium paid by the Company for the existing directors and
officers liability and fiduciary liability insurance program.
(c) If the
Surviving Corporation or any of its successors or assigns shall (i) consolidate
with or merge into any other Person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii) transfer all or
substantially all of its properties and assets to any Person, then, and in each
such case, proper provisions shall be made so that the successors and assigns of
the Surviving Corporation shall assume all of the obligations of the Surviving
Corporation set forth in this Section 5.9.
(d) The
obligations set forth in this Section 5.9 shall not
be terminated, amended or otherwise modified in any manner that adversely
affects any Indemnified Person or any other person who is a beneficiary under
the D&O Insurance (and their heirs and representatives) without the prior
written consent of such affected Indemnified Person or other person who is a
beneficiary under the D&O Insurance (and their heirs and representatives).
Each of the Indemnified Persons or other persons who are beneficiaries under the
D&O Insurance (and their heirs and representatives) are intended to be third
party beneficiaries of this Section 5.9, with
full rights of enforcement against the Surviving Corporation and Parent as if a
party thereto. The rights of the Indemnified Persons and other persons who are
beneficiaries under the D&O Insurance (and their heirs and representatives)
under this Section
5.9 shall be in addition to, and not in substitution for, any other
rights that such persons may have under the charters, bylaws or other equivalent
organizational documents, any and all indemnification agreements of or entered
into by the Company or any of its Subsidiaries, or applicable law (whether at
law or in equity).
(e) Nothing
in this Agreement is intended to, shall be construed to or shall release, waive
or impair any rights to directors’ and officers’ insurance claims under any
policy that is or has been in existence with respect to the Company or any of
its Subsidiaries for any of their respective directors, officers or other
employees, it being understood and agreed that the indemnification provided for
in this Section
5.9 is not prior to or in substitution for any such claims under such
policies.
Section
5.10 Conveyance
Taxes. The Company and Parent shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated by this Agreement that are
required or permitted to be filed on or before the Effective Time.
Section
5.11 Delisting. Each
of the parties agrees to cooperate with each other in taking, or causing to be
taken, all actions necessary to delist the Company Common Stock from Nasdaq and
terminate registration under the Exchange Act, provided that such delisting and
termination shall not be effective until or after the Effective
Time. After the Effective Time, the Company shall also, upon Parent’s
request, take all action necessary to elect to be treated as a “controlled
company” as defined by Nasdaq Marketplace Rule 5615(c) and make all necessary
filings and disclosures associated with such status.
Section
5.12 Financing.
(a) Parent
shall use its reasonable best efforts to (a) negotiate definitive agreements
with respect to the Financings on the terms and conditions contemplated by the
Financing Commitments or, to the extent the Financing Commitments are not
available to Parent, on other terms not materially less favorable, in the
aggregate, to Parent (as determined in the reasonable judgment of Parent) and
(b) satisfy on a timely basis all conditions set forth in such Financing
Commitments applicable to Parent and Merger Sub that are within their
control. If any portion of the Financing Commitments becomes
unavailable on the terms and conditions contemplated in the Financing
Commitments, Parent shall use its reasonable best efforts to arrange to obtain
alternative financing from alternative sources on terms not materially less favorable, in the
aggregate, to Parent (as determined in the reasonable judgment of Parent) as
promptly as practicable following the occurrence of such event; provided, that
consummating the Financings is not a condition to consummation of the Offer or
the Merger and Parent shall draw down each Financing Commitment in full and
without condition in order to consummate the Offer and the Merger and the other
transactions contemplated hereby. Parent shall give the Company
prompt notice of any material breach by any party to any Financing Commitment,
of which Parent becomes aware, or any termination of any Financing
Commitment. The Company shall use reasonable efforts to cooperate,
and to cause its Subsidiaries and Representatives to cooperate, with Parent and
Representatives of Parent in connection with obtaining the Financing, including,
without limitation, participating in the preparation of any pro forma financial
statements, the preparation of rating agencies presentations, the preparation of
any comfort letters and offering memoranda and
registration statements, and, at Parent’s request and expense,
marketing efforts conducted in connection with the Financings.
(b) Parent
and Merger Sub shall use reasonable best efforts to take (or cause to be taken)
all actions, and do (or cause to be done) all things necessary or advisable to
obtain the Financing contemplated by each Financing Commitment and, subject to
Section 4.5, to fully enforce each Financing Commitment, including but not
limited to (i) maintaining in effect each Financing Commitment without any
amendment, alteration, or waiver that impairs Parent’s ability to provide the
funds necessary to complete the Offer and the Merger, (ii) satisfying on a
timely basis all conditions applicable to Parent and Merger Sub set forth in
each Financing Commitment that are material to the completion of the Financings
and (iii) consummating the Financings contemplated by each Financing Commitment
(or any alternative financing contemplated by an Alternative Financing
Commitment) at or prior to the Acceptance Date.
Section
5.13 Employee
Matters.
(a) After the
Effective Time and through the end of the fiscal year of the Company in which
the Effective Time occurs, the Surviving Corporation shall provide to Company
Employees employee benefits (other than any bonus or incentive plans, and
individual employment agreements) that will, in the aggregate, be substantially
similar to those provided by the Company and its Subsidiaries to its employees
as of the Effective Time.
(b) With
respect to the benefit plans in which the Company’s employees participate
following the Effective Time (other than any bonus or incentive plans, and
individual employment agreements), Parent agrees that it shall (i) recognize all
service performed for the Company prior to the Effective Time for eligibility
and vesting purposes, (ii) waive any pre-existing condition exclusions (other
than pre-existing conditions that, as of the Effective Time, have not been
satisfied under any Company Benefit Plan) and (iii) provide that any deductible,
coinsurance or out-of-pocket expenses incurred on or before the Effective Time
during the plan year in which the Effective Time occurs under any applicable
Company Benefit Plan providing health benefits will be taken into account for
purposes of satisfying applicable deductible, coinsurance and maximum
out-of-pocket provisions.
(c) Nothing
in this Section
5.13 or any other provision of this Agreement shall create any
third-party beneficiary right for the benefit of any Person other than the
parties to this Agreement, or any right to employment or continued employment or
to a particular term or condition of employment with Parent, the Surviving
Corporation or any of their respective Subsidiaries or
Affiliates. Nothing in this Section 5.13 or any
other provision of this Agreement (i) shall be construed to establish, amend, or
modify any benefit or compensation plan, program, agreement or arrangement, or
(ii) shall limit the ability of Parent or any of its Affiliates (including,
following the Closing, the Surviving Corporation or any of its Subsidiaries) to
amend, modify or terminate any benefit or compensation plan, program, agreement
or arrangement at any time assumed, established, sponsored or maintained by any
of them.
(d) Between
the date of this Agreement and the Acceptance Date, the Company shall use
reasonable efforts to cause any employee involved in product development at the
Company or at any of its Subsidiaries who has not executed an Intellectual
Property assignment and confidentiality agreement to execute such an agreement
in the form reasonably approved by the Parent.
Section
5.14 Release of
Liens. Between the date of this Agreement and the Acceptance
Date, upon the request of Parent the Company shall use its reasonable best
efforts to obtain the release of any liens on its tangible or intangible
assets.
Section
5.15 Directors. Promptly
upon the acceptance for payment of, and payment by Merger Sub for, shares of
Company Common Stock pursuant to the Offer, the parties hereto shall use best
efforts such that Merger Sub may designate such number of members of the Company
Board of Directors as will give Merger Sub, subject to compliance with Section
14(f) of the Exchange Act, representation on the Company Board of Directors
equal to at least that number of directors, rounded up to the next whole number,
which is the product of (a) the total number of directors on the Company Board
of Directors (giving effect to the directors elected pursuant to this sentence)
multiplied by (b) the percentage that (i) such number of shares of Company
Common Stock so accepted for payment and paid for by Merger Sub plus the number
of shares of Company Common Stock otherwise owned by Parent, Merger Sub or any
other subsidiary of Parent bears to (ii) the number of such shares outstanding;
provided, however, that in the
event that Merger Sub’s designees are appointed or elected to the Company Board
of Directors, then until the Effective Time the Company shall use best efforts
to cause the Company Board of Directors to have at least two (2) directors who
are (i) directors on the date of this Agreement and (ii) independent directors
for purposes of the continued listing requirements of the Nasdaq (such
directors, the “Independent
Directors”); provided, further, that if any
Independent Director is unable to serve due to death or disability or any other
reason, the parties hereto shall use best efforts such that the remaining
Independent Directors may elect or designate another individual (or individuals)
who serve(s) as a director (or directors) on the date of this Agreement
(provided that such individual is an independent director for purposes of the
continued listing requirements of the Nasdaq) to fill the vacancy, and such
director (or directors) shall be deemed to be an Independent Director (or
Independent Directors) for purposes of this Agreement. If no Independent
Director remains prior to the Acceptance Date, the parties hereto shall use best
efforts such that a majority of the members of the Board of Directors of the
Company at the time of the execution of this Agreement shall be entitled to
designate two (2) individuals to fill such vacancies who shall not be employees
of or otherwise affiliated with the Company, Parent or Merger Sub, and such
individuals shall be deemed Independent Directors for purposes of this
Agreement. Following the election or appointment of Parent’s
designees to the Company Board of Directors pursuant to this Section 5.15, and
until the Effective Time, the approval of a majority of the Independent
Directors shall be required to authorize: (a) any amendment or
termination of this Agreement, (b) any amendment to the Certificate of
Incorporation of the Company or the Bylaws of the Company (except for the
Merger), (c) any extension by the Company of the time for the performance
of any of the obligations of Merger Sub or Parent, (d) waiver of any of the
Company’s rights under this Agreement or any other action adversely affecting
the rights of the Company Common Stockholders (other than Parent or Merger Sub),
and (e) any other consent of the Company or the Company Board of Directors
with respect to this Agreement, the Offer or the Merger or any other transaction
contemplated thereby or in connection therewith. To the fullest
extent permitted by law, the authorization of any such matter by a majority of
the Independent Directors shall constitute the authorization of such matter by
the Company Board of Directors, and no other action on the part of the Company
or any other director of the Company shall be required to authorize such
matter. Following the Acceptance Time and prior to the Effective
Time, neither Parent nor Merger Sub shall take any action to remove any
Independent Director unless the removal shall be for cause. Subject
to applicable Law, the Company shall take all action requested by Parent
necessary to effect any such election, including mailing to its stockholders the
Information Statement containing the information required by Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, and the Company shall
make such mailing with the mailing of the Schedule 14D-9 (provided that Merger
Sub shall have provided to the Company on a timely basis all information
required to be included in the Information Statement with respect to Merger
Sub’s designees). In connection with the foregoing, the Company shall
promptly, at the option of Merger Sub, either increase the size of the Company
Board or obtain the resignation of such number of its current directors as is
necessary to enable Merger Sub’s designees to be elected or appointed to the
Company Board of Directors as provided above.
Section
5.16 Rights Agreement;
Consequences if Rights Triggered. The Company Board shall take
all action requested in writing by Parent in order to render the Rights
inapplicable to the Offer, the Merger and the Transactions. Except as
approved in writing by Parent, the Company Board of Directors shall not (i)
waive or amend any provision of the Rights Plan, (ii) redeem the Rights or (iii)
take any action with respect to, or make any determination under, the Rights
Plan. If any Distribution Date, Share Acquisition Date or Triggering
Event occurs under the Rights Plan at any time during the period from the date
of this Agreement to the Effective Time, the Company and Parent shall make such
adjustment to the Offer Price and the Merger Consideration as the Company and
Parent shall mutually agree so as to preserve the economic benefits that the
Company and Parent each reasonably expected on the date of this Agreement to
receive as a result of the consummation of the Offer, the Merger and the other
Transactions.
ARTICLE
VI
CONDITIONS
PRECEDENT
Section
6.1 Conditions to Each Party’s
Obligation to Effect the Merger. The obligations of the
parties to effect the Merger on the Closing Date are subject to the satisfaction
or waiver on or prior to the Closing Date of the following
conditions:
(a) Company Common Stockholder
Approval. If the Merger cannot be consummated pursuant to
Section 253 of the DGCL, the Company Required Vote shall have been
obtained.
(b) No
Order. No Governmental Entity of competent jurisdiction shall
have (i) enacted a law that is in effect and renders the Merger illegal in the
United States or any State thereof, or (ii) formally issued an injunction that
is in effect and prohibits the Merger in the United States or any State
thereof.
(c) HSR
Act. The applicable waiting periods, together with any
extensions thereof, under the HSR Act shall have expired or been
terminated.
Section
6.2 Additional Condition to
Obligations of Parent and Merger Sub. The obligations to
Parent and Merger Sub to effect the Merger on the Closing Date are also subject
to the condition that Merger Sub shall have accepted the Company Common Stock
validly tendered and not withdrawn pursuant to the Offer.
Section
6.3 Frustration of Closing
Conditions. None of the Company, Parent or Merger Sub may rely
upon the failure of any condition set forth in Sections 6.1 or 6.2 to be satisfied
if such failure was caused by, or materially contributed to, such party’s breach
of any provision of this Agreement.
ARTICLE
VII
TERMINATION,
AMENDMENT AND WAIVER
Section
7.1 Termination. This
Agreement may be terminated and the Merger (and the other transactions
contemplated by the Transaction Documents) may be abandoned at any time prior to
the Effective Time (notwithstanding if the Company Required Vote has been
obtained or Parent has adopted this Agreement as the sole stockholder of Merger
Sub):
(a) by the
mutual written consent of the Company and Parent;
(b) by the
Company or Parent, in the event that any Governmental Entity of competent
jurisdiction shall have (i) enacted a law that is in effect at the time of
such termination and renders the Merger or the Offer illegal in the United
States or any State thereof at the time of such termination, or
(ii) formally issued a permanent, final and non-appealable injunction,
ruling, decree or order that prohibits the Merger or the Offer in the United
States or any State thereof; provided, however, that the
party seeking to terminate this Agreement pursuant to this clause (b) shall not
have initiated such proceeding or taken any action in support of such
proceeding;
(c) by the
Company, prior to the Acceptance Date, in order to enter into an Acquisition
Agreement for a Superior Proposal; provided, however, that this
Agreement may not be so terminated unless (i) the Company Board of
Directors shall have complied with the procedures set forth in Sections 5.6 and
(ii) contemporaneously the payment required by Section 7.2(b)
has been made in full to Parent;
(d) by Parent
(i) prior to the Acceptance Date if (A) there shall have been a Company
Adverse Recommendation Change, (B) the Company shall have materially
breached any of its obligations under Section 5.6, or (C)
any member of the Company Board of Directors shall have issued a press release
or other writing broadly disseminated to the public stating that such member
opposes the Merger, or any member of the Company Board of Directors shall have
required the inclusion in the Offer Materials, the Proxy Statement or any other
filing made by the Company or Parent with the SEC a statement to the effect that
such director opposes the Merger, or (ii) following the Acceptance Date if any
Independent Director shall have issued a press release or other writing broadly
disseminated to the public stating that such Independent Director opposes the
Merger, or any Independent Director shall have required the inclusion in the
Proxy Statement or any other filing made by the Company or Parent with the SEC a
statement to the effect that such Independent Director opposes the
Merger;
(e) by either
Parent or the Company, if the Acceptance Date shall not have occurred on or
prior to August 2, 2010 (the “Outside Termination
Date”); provided, however, that the
Outside Termination Date shall automatically be extended to October 1, 2010 if
as of the original Outside Termination Date any waiting period (and any
extension thereof) applicable to the consummation of the Offer under the HSR Act
shall not have expired or been terminated; provided, further, that
(i) the right to terminate this Agreement pursuant to this Section 7.1(e)
shall not be available at any time during which any Action is pending between
the Company and Parent (or any of its Affiliates) in connection with this
Agreement or any of the transactions contemplated hereby, (ii) the right to
terminate this Agreement pursuant to this Section 7.1(e)
shall not be available to any party hereto whose actions or omissions have been
the cause of, or resulted in, either (A) the failure to satisfy the
conditions to the obligations of the terminating party to consummate the Merger
set forth in Article
VI prior to the Outside Termination Date, or (B) the failure of the
Acceptance Date to have occurred prior to the Outside Termination Date and (iii)
the right to terminate this Agreement pursuant to this Section 7.1(e) shall
not be available after Merger Sub accepts shares of Company Common Stock validly
tendered and not withdrawn pursuant to the Offer;
(f) by Parent
prior to the Acceptance Date by written notice to the Company, if (i) there
shall have been any breach of any representation or warranty of the Company
hereunder, or any such representation and warranty shall have become untrue and
incapable of being cured prior to the Acceptance Date, or any breach of any
covenant or agreement of the Company hereunder, such that a condition in Section 6.1 or Section
6.2 would not be satisfied (which for the avoidance of doubt
shall include the existence of a condition set forth in clauses (c) or (d) of
Annex A) which breach is not curable or, if curable, shall not have been
remedied within thirty (30) days after receipt by the Company of notice in
writing from Parent, specifying the nature of such breach, or (ii) there shall
have occurred a Company Material Adverse Effect, which Company Material Adverse
Effect is not curable or, if curable, shall not have been remedied within thirty
(30) days after receipt by the Company of notice in writing from Parent,
specifying the nature of such Company Material Adverse Effect, and requesting
that it be remedied or Parent shall not have received reasonable assurance of a
cure of such breach within such thirty (30) day period;
(g) by the
Company prior to the Acceptance Date by written notice to Parent, if (i) there
shall have been any breach of any representation or warranty of Parent or Merger
Sub, or any such representation and warranty shall have become untrue and
incapable of being cured prior to the Acceptance Date, or any breach of any
covenant or agreement of Parent or the Merger Sub hereunder, and as a result
Parent and/or Merger Sub will not, or will not be able to, complete the Offer
prior to the Outside Termination Date, or (ii) there shall have occurred a
Parent Material Adverse Effect, which is not curable or, if curable, shall not
have been remedied in all other instances, within thirty (30) days after receipt
by Parent of notice in writing from the Company, specifying the nature of such
Parent Material Adverse Effect and requesting that it be remedied or the Company
shall not have received reasonable assurance of a cure of such breach within
such thirty (30) day period;
(h) by the
Company by written notice to Parent, if Parent and/or Merger Sub shall have
failed to commence the Offer within ten (10) Business Days of the date that the
Company executes this Agreement and the Parent does not cure such failure within
five (5) Business Days of receipt of written notice from the Company identifying
such failure and its intent to terminate this Agreement under this provision;
provided that the Company will not have the right to terminate the Agreement
under this provision (i) if the Company’s actions or omissions have been the
cause of, or resulted in, the failure of the Offer to have been commenced in the
time period specified, or (ii) if the delay in the commencement of the Offer is
the result of the existence of one of the conditions to the Offer set
forth in clauses (a), (b), (c), (d), (g), (h) or (k) of Annex A to this
Agreement not being satisfied; or
(i) By Parent
if, as the result of the failure of any of the conditions set forth in Annex A to this
Agreement, the Offer shall have terminated or expired in accordance with its
terms without Merger Sub having become obligated to purchase any shares of
Company Common Stock pursuant to the Offer.
The party
desiring to terminate this Agreement pursuant to subsection (b), (c), (d), (e), (f), (g), (h), or (i) of this Section 7.1
shall give written notice of such termination to the other party in accordance
with Section 8.2,
specifying the provision or provisions hereof pursuant to which such termination
is effected. The right of any party hereto to terminate this
Agreement pursuant to this Section 7.1
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any party hereto, or any of their
respective Affiliates or Representatives, whether prior to or after the
execution of this Agreement.
Section
7.2 Expenses; Company
Termination Fee.
(a) Expense
Allocation. Except as otherwise specified in this Section 7.2 or
agreed in writing by the parties, all out-of-pocket costs and expenses incurred
in connection with the Transaction Documents, the Offer, the Merger and the
other transactions contemplated hereby shall be paid by the party incurring such
cost or expense.
(b) Company Termination
Fee. Subject to the last sentence of this Section 7.2(b), if
this Agreement is terminated (i) by the Company pursuant to Section 7.1(c),
or (ii) by Parent pursuant to Sections 7.1(d),
7.1(f), or
7.1(i) (if,
with respect to Section 7.1(i), the
failure of the Offer to be consummated is the result of the existence of any of
the conditions set forth in clauses (a), (c), (d), (g) or (i) of Annex A to this
Agreement), then the Company shall promptly, and in any event within five (5)
Business Days after the date of such termination (except as provided in the
proviso below), pay Parent the Company Termination Fee by wire transfer of
immediately available funds. Subject to the last sentence of this
Section 7.2(b), if this Agreement is terminated (i) by Parent pursuant to
Section 7.1(d)
or Section 7.1(f) or by the
Company pursuant to Section 7.1(c), or (ii) by Parent or the Company
pursuant to Section 7.1(e) or by Parent
pursuant to Section 7.1(i) in each case
only if the failure of the Acceptance Date to have occurred prior to the date of
such termination is the result of (x) the failure to satisfy the Minimum Tender
Condition Threshold or (y) the existence of any of the conditions to the Offer
set forth in clauses (a), (c), (d), (e), (f), (g), (h) or (i) of Annex A, then the
Company shall promptly, and in any event within five (5) Business Days after the
date of such termination, repay to Parent the Initial Funding Amount by wire
transfer of immediately available funds. Notwithstanding anything to
the contrary contained herein, if Merger Sub extends the Offer pursuant to
clause (ii) or clause (iv) of the fifth sentence of Section 1.1(a) of this
Agreement when all of the conditions to the Offer have been met then,
notwithstanding a subsequent termination of this Agreement, under no
circumstances shall the Company be obligated to pay the Company Termination Fee
or to repay the Initial Funding Amount to Parent if such obligation arises only
from events that occur after the Offer is extended, provided, that this
restriction shall not apply if the Company shall have willfully failed to
perform any obligation to be performed by it under this Agreement at
such time of termination and the failure of such performance has resulted in the
termination of this Agreement.
(c) Expense
Reimbursement. In the event this Agreement is terminated pursuant to
Section 7.1(e)
or Section
7.1(i) in each case only if the failure of the Acceptance Date to have
occurred prior to the date of such termination is the result of the
failure to satisfy the Minimum Tender Condition in circumstances where the
Company Termination Fee is not required to be paid without giving effect to the
final sentence of Section 7.2(b), then the Company shall,
following receipt of an invoice therefor, promptly (in any event within two (2)
Business Days) pay all of Parent’s reasonably documented out-of-pocket fees and
expenses (including reasonable legal fees and expenses) incurred by Parent and
its Affiliates on or prior to the termination of this Agreement in connection
with the transactions contemplated by this Agreement (including the Financing)
in an amount not to exceed $3,000,000 (the “Parent Expenses”), by
wire transfer of same day funds to one or more accounts designated by Parent;
provided, the
Company shall not be obligated to pay any Parent Expenses if Parent and Merger
Sub have not performed in all material respects all obligations to be performed
by them under this Agreement at such time of termination and the failure of such
performance has resulted in the termination of this Agreement.
(d) Parent Termination
Fee. If (i) this Agreement is terminated pursuant to Section 7.1(e)
(but not if the failure of the Acceptance Date to have occurred prior to the
date of such termination is the result of (x) the failure to satisfy the Minimum
Tender Condition, (y) the existence of any of the conditions set
forth in Annex
A to this Agreement (other than as a result of the existence of the
condition set forth in clause (k) of Annex A to this
Agreement), or (z) the failure to receive the HSR Clearance prior to the Outside
Termination Date), Section 7.1(g)
or Section 7.1(h),
or (ii) Merger Sub has extended the Offer pursuant to clause (ii) or clause (iv)
of the fifth sentence of Section 1.1(a) of this Agreement at a time when the
Minimum Tender Condition and HSR Clearance are met and none of the conditions
set forth in clauses (a) through (j) of Annex A to this
Agreement are in existence, and this Agreement is subsequently terminated as a
result of events that occur after the Offer is extended, then Parent shall
promptly (but in any event within 2 Business Days) pay to the Company the Parent
Termination Fee by wire transfer of same day funds to one or more accounts
designated by the Company; provided, however, that if
Parent does not promptly pay such amount to the Company, then the Company may
cause the Escrowed Funds to be paid to the Company pursuant to the Escrow
Agreement.
(e) Acknowledgment. The
parties acknowledge that (i) the agreements contained in this Section 7.2 are an
integral part of the transactions contemplated in this Agreement, (ii) the
damages resulting from termination of this Agreement under circumstances where a
Company Termination Fee or Parent Termination Fee is payable are uncertain and
incapable of accurate calculation and therefore, the amounts payable pursuant
Section 7.2(b) and Section 7.2(d) are not a penalty but rather constitute
liquidated damages in a reasonable amount that will compensate Parent and the
Company, respectively, for the efforts and resources expended and opportunities
foregone while negotiating this Agreement and in reliance on this Agreement and
on the expectation of the consummation of the transactions contemplated hereby,
and (iii) without the agreements contained in this Section 7.2, the
parties would not have entered into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to Section 7.2(b) or Parent
fails to promptly pay the amount due pursuant to Section 7.2(d), and, in
order to obtain such payment, Parent or Merger Sub, on the one hand, or the
Company, on the other hand, commences a suit that results in a judgment against
the Company for the amount set forth in Section 7.2(b) or any portion
thereof or a judgment against Parent for the amount set forth in Section 7.2(d)
or any portion thereof, the Company shall pay to Parent or Merger Sub, on the
one hand, or Parent shall pay to the Company, on the other hand, its costs and
expenses (including attorneys’ fees) in connection with such suit, together with
interest on the amount of such amount or portion thereof at the prime rate of
Citibank N.A. in effect on the date such payment was required to be made through
the date of payment. Parent agrees that notwithstanding anything in
this Agreement to the contrary, in the event that the Company Termination Fee is
paid in accordance with this Section 7.2, the payment of such Company
Termination Fee shall be the sole and exclusive remedy of the Parent, its
Subsidiaries, shareholders, Affiliates, officers, directors, employees and
Representatives against the Company or any of its Representatives or Affiliates
for, and in no event will the party being paid any Company Termination Fee or
any other such person seek to recover any other money damages or seek any other
remedy based on a claim in law or equity with respect to (1) any loss suffered,
directly or indirectly, as a result of the failure of the Merger to be
consummated, (2) the termination of this Agreement, (3) any liabilities or
obligations arising under this Agreement or (4) any claims or actions arising
out of or relating to any breach, termination or failure of or under this
Agreement, and upon payment of any Company Termination Fee in accordance with
this Section 7.2, neither the party paying such fee, nor any Representative or
Affiliate of such party shall have any further liability or obligation to the
other party relating to or arising out of this Agreement or the transactions
contemplated hereby. The Company agrees that notwithstanding anything
in this Agreement to the contrary, in the event that the Parent Termination Fee
is paid in accordance with this Section 7.2, the payment of such Parent
Termination Fee (and up to an additional $24,300,000 of liability, if damages
incurred exceed $25,700,000) shall be the sole and exclusive remedy of the
Company, its Subsidiaries, shareholders, Affiliates, officers, directors,
employees and Representatives against Parent and Merger Sub for, and in no event
will the party being paid any Parent Termination Fee or any other such person
seek to recover any other money damages or seek any other remedy based on a
claim in law or equity with respect to (1) any loss suffered,
directly or indirectly, as a result of the failure of the Merger to be
consummated, (2) the termination of this Agreement, (3) any liabilities or
obligations arising under this Agreement or (4) any claims or actions arising
out of or relating to any breach, termination or failure of or under this
Agreement in an aggregate amount in excess of Fifty Million Dollars (which
amount shall include the amount of any Parent Termination Fee paid), and upon
payment of such amount, neither the Parent or Merger Sub shall have any further
liability or obligation to the Company relating to or arising out of this
Agreement or the transactions contemplated hereby. The Company agrees
that notwithstanding anything in this Agreement to the contrary, in the event of
a termination of this Agreement, or obligation of Merger Sub or Parent to pay
the Parent Termination Fee, in no event shall any of the Representatives or
Affiliates of Parent or Merger Sub be liable to the Company for any damages or
amounts owed to the Company under this Agreement, and in no event will the
Company seek to recover from any such Representatives any money damages or seek
any other remedy based on a claim in law or equity with respect to (1) any loss
suffered, directly or indirectly, as a result of the failure of the Merger to be
consummated, (2) the termination of this Agreement, (3) any liabilities or
obligations arising under this Agreement or (4) any claims or actions arising
out of or relating to any breach, termination or failure of or under this
Agreement.
Section
7.3 Effect of
Termination. In the event of termination of this Agreement by
either the Company or Parent as provided in Section 7.1,
this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of Parent and Merger Sub or the Company,
except that (a) the provisions of Section 7.1,
Section 7.2,
this Section 7.3 and
Article VIII
shall survive such termination and (b) nothing herein shall relieve any party
from liability for specific performance or damages for any material breach of
this Agreement or for fraud in connection with this Agreement.
Section
7.4 Amendment. This
Agreement may be amended by the parties in writing at any time before or after
the Company Required Vote has been obtained and prior to the filing of the
Certificate of Merger with the Delaware Secretary; provided, however, that, after
the Company Required Vote shall have been obtained, no such amendment,
modification or supplement shall be made which by Law requires the further
approval of the Company Common Stockholders without such further
approval. This Agreement may not be amended, changed or
supplemented or otherwise modified except by an instrument in writing signed on
behalf of all of the parties.
Section
7.5 Extension;
Waiver. At any time prior to the Effective Time, each of the
Company, Parent and Merger Sub may (a) extend the time for the performance
of any of the obligations or other acts of the other party, (b) waive any
inaccuracies in the representations and warranties of the other party contained
in this Agreement or in any document delivered pursuant to this Agreement, or
(c) subject to the provisions of Section 7.4,
waive compliance with any of the agreements or conditions of the other parties
contained in this Agreement. 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 such party. The failure of any party
to this Agreement to assert any of its rights under this Agreement or otherwise
shall not constitute a waiver of those rights.
ARTICLE
VIII
GENERAL
PROVISIONS
Section
8.1 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 8.1
shall not limit any covenant or agreement of the parties in this Agreement that
by its terms contemplates performance after the Effective Time.
Section
8.2 Notices. All
notices, requests, claims, demands and other communications under this Agreement
shall be in writing (and made orally if so required pursuant to any section of
this Agreement) and shall be deemed given (and duly received) if delivered
personally, sent by overnight courier (providing proof of delivery and
confirmation of receipt by telephonic notice to the applicable contact person)
to the parties or sent by fax (providing proof of transmission and confirmation
of transmission by telephonic notice to the applicable contact person) at the
following addresses or fax numbers (or at such other address or fax number for a
party as shall be specified by like notice):
if to
Parent, to
Merge
Healthcare Incorporated
0000 Xxxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx,
XX 00000
Attn: Chief
Executive Officer
Phone: (000)
000-0000
Fax: (000)
000-0000
with a
copy to:
XxXxxxxxx
Will & Xxxxx LLP
000 Xxxx
Xxxxxx Xxxxxx
Xxxxx
0000
Xxxxxxx,
Xxxxxxxx 00000
Attn: Xxxx
X. Xxxxxx
Phone: (000)
000-0000
Fax: (000)
000-0000
if to the
Company, to
AMICAS,
Inc.
00 Xxxxx
Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Facsimile
No.: (000) 000-0000
Attn:
President and Chief Executive
Officer and Chief Financial
Officer
with a
copy to:
Mintz
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C.
Xxx
Xxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Telephone: (000)
000-0000
Facsimile: (000)
000-0000
Attention: Xxxx
X. Xxxxxxxxx, Esq.
Section
8.3 Interpretation. When
a reference is made in this Agreement to an Article or a Section, such reference
shall be to an Article or a Section of this Agreement unless otherwise
indicated. The table of contents, headings and index of defined terms
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 word “include,” “includes” or “including” is used in this Agreement, it
shall be deemed to be followed by the words “without limitation.” The
words “hereof,” “herein” and “hereby” refer to this Agreement. The
Company Disclosure Letter, as well as any schedules thereto and any exhibits
hereto, shall be deemed part of this Agreement and included in any reference to
this Agreement. The phrases “made available to Parent” or “furnished
to Parent” or similar phrases as used in this Agreement will mean that the
subject documents were posted to the on-line data room at the Uniform Resource
Locator (URL) set forth in Section 8.3 of the Company Disclosure Letter prior to
the date of this Agreement, or were available as exhibits to any of the Company
Reports filed after December 31, 2007.
Section
8.4 Counterparts. This
Agreement may be executed in one or more counterparts, 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.
Section
8.5 Entire Agreement; No
Third-Party Beneficiaries. This Agreement (including the
documents and instruments referred to herein, including the Confidentiality
Agreement) (a) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties, or any
of them, with respect to the subject matter of this Agreement and (b) is
not intended to and does not confer upon any Person other than the parties
hereto any rights or remedies hereunder, other than the Indemnified Persons
intended to benefit from the provisions of Section 5.9, who
shall have the right to enforce such provisions
directly. Notwithstanding the foregoing, the provisions of Section
7.2(e) and Section 8.9(c) shall be enforceable by each Financing Source and its
successors and assigns.
Section
8.6 Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section
8.7 Assignment. Neither
this Agreement nor any of the rights, interests or obligations hereunder shall
be assigned by any of the parties (whether by operation of law or otherwise)
without the prior written consent of the other parties hereto; provided, however, that prior
to the Closing, Parent and Merger Sub may assign this Agreement (in whole but
not in part) to Parent or any of its Affiliates and/or to any parties providing
the Financing pursuant to the terms thereof (including for purposes of creating
a security interest herein or otherwise assign as collateral in respect of such
Financing). No assignment by any Party shall relieve such Party of
any of its obligations hereunder. Subject to the foregoing, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and permitted assigns.
Section
8.8 Severability. Any
term or provision of this Agreement that is invalid or unenforceable shall not
affect the validity or enforceability of the remaining terms and provision
hereof. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid, illegal or unenforceable,
the parties hereto agree that the court making such determination shall have the
power to limit the term or provision, to delete specific words or phrases, or to
replace any invalid, illegal or unenforceable term or provision with a term or
provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the invalid, illegal or unenforceable term or
provision, and this Agreement shall be enforceable as so modified. In the event
such court does not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid, illegal or unenforceable term or
provision with a valid, legal and enforceable term or provision that will
achieve, to the extent possible, the economic, business and other purposes of
such invalid, illegal or unenforceable term.
Section
8.9 Consent to Jurisdiction;
Venue.
(a) Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the
Court of Chancery of the State of Delaware and to the jurisdiction of the United
States District Court for the District of Delaware for the purpose of any action
arising out of or relating to this Agreement and the Confidentiality Agreement,
and each of the parties hereto irrevocably agrees that all claims in respect to
such action may be heard and determined exclusively in the Court of Chancery of
the State of Delaware or any federal court sitting in the State of
Delaware. Each of the parties hereto agrees that a final judgment in
any action shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Each of
the parties hereto irrevocably consents to the service of any summons and
complaint and any other process in any other action relating to the Merger, on
behalf of itself or its property, by the personal delivery of copies of such
process to such party. Nothing in this Section 8.9
shall affect the right of any party hereto to serve legal process in any other
manner permitted by Law.
(c) Each of
the parties hereto agrees that it will not bring or support any action, cause of
action, claim, cross-claim or third-party claim of any kind or description,
whether in law or in equity, whether in contract or in tort or otherwise,
against the Financing Source in any way relating to this Agreement or any of the
transactions contemplated by this agreement, including, but not limited to any
dispute arising out of or reliant in any way to the Financing Commitments or the
performance thereof, in any forum other than the Court of Chancery of the State
of Delaware, or, if under applicable law exclusive jurisdiction is vested in
Federal courts, the United States District Court for the District of
Delaware.
Section
8.10 Waiver of Trial by
Jury. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY 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 TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (B) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS
SECTION 8.10.
ARTICLE
IX
CERTAIN
DEFINITIONS
“Acceptable Confidentiality
Agreement” shall mean an agreement that is either (i) in effect as of the
execution and delivery of this Agreement or (ii) executed, delivered and
effective after the execution, delivery and effectiveness of this Agreement, in
either case containing provisions no less favorable to the Company than the
terms of the Confidentiality Agreement; provided however that if the terms of
such Acceptable Confidentiality Agreement are less favorable to the Company than
the terms of the Confidentiality Agreement, then notwithstanding the foregoing,
such agreement will be deemed an “Acceptable Confidentiality Agreement” if the
Company offers to amend the Confidentiality Agreement so as to make the
Confidentiality Agreement no more restrictive to the Parent than the
confidentiality agreement signed by such counterparty(ies).
“Acquisition
Agreement” shall mean any letter of intent, agreement in principle,
merger agreement, stock purchase agreement, asset purchase agreement,
acquisition agreement, option agreement or similar agreement relating to an
Acquisition Proposal.
“Acquisition Proposal”
shall mean any inquiry, proposal or offer relating to (i) the acquisition of
twenty-five (25) percent or more of the Equity Interests in the Company (by vote
or by value) by any Person, (ii) any merger, consolidation, business
combination, reorganization, share exchange, sale of assets, recapitalization,
equity investment, joint venture, liquidation, dissolution or other transaction
which would result in any Person acquiring assets (including capital stock of or
interest in any Subsidiary or Affiliate of the Company) representing, directly
or indirectly, twenty-five (25) percent or more of the consolidated net
revenues, consolidated net income or consolidated assets of the Company and its
Subsidiaries, taken as a whole, (iii) the acquisition (whether by merger,
consolidation, equity investment, share exchange, joint venture or otherwise) by
any Person, directly or indirectly, of any Equity Interest in any entity that
holds assets representing, directly or indirectly, twenty-five (25) percent or
more of the net revenues, net income or assets of the Company and its
Subsidiaries, taken as a whole, (iv) any tender offer or exchange offer, as such
terms are defined under the Exchange Act, that, if consummated, would result in
any Person beneficially owning twenty-five (25) percent or more of the
outstanding shares of Company Common Stock and any other voting securities of
the Company, or (v) any combination of the foregoing. For the
purposes of Section
7.2(b) of this Agreement, the number “51” shall be substituted for “25”
in this definition.
“ADA” shall mean the
Americans with Disabilities Act.
“ADEA” shall mean the
Age Discrimination in Employment Act.
“Affiliate” of any
Person shall mean another Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control
with, such first Person.
“Antitakeover Laws”
shall mean any “moratorium,” “control share,” “fair price,” “affiliate
transaction,” “business combination” or other antitakeover laws and regulations
of any state or other jurisdiction, including the provisions of any statute or
regulation under the DGCL.
“Antitrust Laws” shall
mean any other antitrust, unfair competition, merger or acquisition
notification, or merger or acquisition control Laws under any applicable
jurisdictions, whether federal, state or local.
“Associate” of any
Person shall have the meaning assigned thereto by Rule 12b-2 under the
Exchange Act.
“Business Day” shall
mean any day other than a Saturday, Sunday or a day on which banking
institutions in New York, New York are authorized or obligated by Law or
executive order to be closed.
“Certificate” shall
mean each certificate representing one or more shares of Company Common Stock
or, in the case of uncertificated shares of Company Common Stock, each entry in
the books of the Company representing uncertificated shares of Company Common
Stock.
“Certificate of
Merger” shall mean the Certificate of Merger or Certificate of Ownership
and Merger, as applicable, with respect to the Merger, containing the provisions
required by, and executed in accordance with, the DGCL.
“Closing” shall mean
the closing of the Merger, as contemplated by Section 1.2.
“Code” shall mean the
Internal Revenue Code of 1986, as amended.
“Company Benefit Plan”
shall mean each “employee benefit plan,” as defined in Section 3(3) of
ERISA, and each other benefit or compensation plan, policy, program,
arrangement or agreement sponsored, maintained or contributed or required to be
contributed to by the Company or any of its Subsidiaries or with respect to
which the Company or any of its Subsidiaries has any Liability.
“Company Bylaws” shall
mean the Bylaws of the Company, as in effect as of the date hereof, including
any amendments.
“Company Certificate of
Incorporation” shall mean the Company’s Certificate of Incorporation as
in effect as of the date hereof.
“Company Closing Cash”
shall mean, as of the Acceptance Date, cash, cash equivalents and marketable
securities of the Company and its Subsidiaries (as such amounts are calculated
and reflected in the balance sheet line items “Cash and Cash Equivalents” and
“Marketable Securities” presented in the Company’s consolidated audited
financial statements included in the Company SEC Reports).
“Company Common Stock-Based
Award” shall mean each right of any kind to receive shares of Company
Common Stock or benefits measured by the value of a number of shares of Company
Common Stock, and each award of any kind consisting of shares of Company Common
Stock, granted under Company Common Stock Plans (including stock appreciation
rights, restricted stock, restricted stock units, deferred stock units and
dividend equivalents), other than Company Common Stock Options.
“Company Common Stock
Option” shall mean each outstanding option to purchase shares of Company
Common Stock under the Company Option Plans.
“Company Common Stock
Plans” shall mean all employee and director stock plans of the Company
and all individual consultant, employee, director or other Contracts that
provide for any Company Common Stock-Based Award, in each case set forth on
Section 3.3(b) of the Company Disclosure Letter.
“Company Common Stock
Rights” shall mean any options, warrants, convertible securities,
subscriptions, stock appreciation rights, voting interest, phantom stock plans
or stock equivalents or other rights, agreements, arrangements or commitments
(contingent or otherwise) obligating the Company to issue or sell any shares of
capital stock of, or options, warrants, convertible securities, subscriptions or
other equity interests in, the Company or which would otherwise alter the
capitalization of the Company.
“Company Disclosure
Letter” shall mean the Company Disclosure Schedule dated the date hereof
and delivered by the Company to Parent prior to the execution of this
Agreement.
“Company Employees”
shall mean employees of the Company who remain with the Surviving
Corporation.
“Company Financial
Advisor” shall mean Xxxxxxx Xxxxx & Associates.
“Company Financial
Statements” shall mean all of the financial statements of the Company and
its Subsidiaries included in the Company Reports.
“Company Intellectual
Property” shall mean Intellectual Property that is used in, or forms part
of, the business of the Company or any of its Subsidiaries as currently
conducted by the Company or any of its Subsidiaries in each case as to which the
Company or any of its Subsidiaries claims rights by virtue of ownership of title
to such Intellectual Property, provided that the confidential and proprietary
information described in item (vi) in the definition of Intellectual Property
shall only be considered Company Intellectual Property to the extent deemed
material by the Company.
“Company Knowledge
Person” shall mean the Persons set forth on Schedule 9.1 to
the Company Disclosure Letter.
“Company Material Adverse
Effect” shall mean, with respect to the Company, any effect, change,
event, occurrence, circumstance or development that is or would reasonably be
expected to become materially adverse to the business, financial condition or
results of operations of the Company and its Subsidiaries, taken as a whole;
provided, however, that in no event shall any of the following, alone or in
combination, or any effect, change, event, occurrence, circumstance or
development to the extent any of the foregoing directly or indirectly results
from, arises out of, is attributable to, or related to any of the following, be
deemed to constitute, or be taken into account in determining whether there has
been or will be, a Company Material Adverse Effect: (1) changes in the Company
Common Stock price or trading volume, in and of itself; (2) any failure by the
Company to meet published revenue or earnings projections, in and of itself
(provided, however, that the exception in this clause and in clause (1) above
shall not in any way prevent or otherwise affect a determination that any
change, event, circumstance, development or effect underlying such changes has
resulted in, or contributed to, a Material Adverse Effect); (3) changes in
general economic conditions in the United States or any other country or region
in the world, or changes in conditions in the global economy generally (to the
extent such changes in each case do not disproportionately affect the Company
relative to other companies in its industry); (4) changes in conditions in the
financial markets, credit markets or capital markets in the United States or any
other country or region in the world, including (A) changes in interest rates in
the United States or any other country and changes in exchange rates for the
currencies of any countries and (B) any suspension of trading in securities
(whether equity, debt, derivative or hybrid securities) generally on any
securities exchange or over-the-counter market operating in the United States or
any other country or region in the world; (5) changes in conditions in the
industries in which the Company and its Subsidiaries conduct business, including
changes in conditions in the software industry generally or the information
security industry generally (to the extent such changes in each case do not
disproportionately affect the Company relative to other companies in its
industry); (6) changes in political conditions in the United States or any
other country or region in the world; (7) acts of war, sabotage or
terrorism (including any escalation or general worsening of any such acts of
war, sabotage or terrorism) in the United States or any other country or region
in the world; (8) earthquakes, hurricanes, tsunamis, tornadoes, floods,
mudslides, wild fires or other natural disasters or weather conditions in the
United States or any other country or region in the world; (9) the announcement
of this Agreement or the Prior Merger Agreement or the pendency or consummation
of the transactions contemplated hereby or thereby; (10) compliance with the
terms of, or the taking of any action required or contemplated by, this
Agreement, or the failure to take any action prohibited by this Agreement; (11)
any actions taken, or failure to take action, in each case, to which Parent has
in writing expressly approved, consented to or requested; (12) changes in law,
regulation or other legal or regulatory conditions (or the interpretation
thereof) (to the extent such changes do not disproportionately affect the
Company relative to other companies in its industry); (13) changes in GAAP or
other accounting standards (or the interpretation thereof); (14) any legal
proceedings made or brought by any of the current or former stockholders of the
Company (on their own behalf or on behalf of the Company) against the Company
arising out of the Offer, the Merger or in connection with any other
transactions contemplated by this Agreement or the Prior Merger Agreement; and
(15) any matters expressly set forth in the Company Disclosure Letter; provided, however, that for
purposes of this clause (15) the mere inclusion of a list of items such as
contracts, option grants, customers, suppliers or intellectual property shall
not be deemed to be disclosure of any issues under or liabilities with respect
to the items on such list.
“Company Option Plans”
shall mean the Company’s 1996 Stock Option Plan, 2000 Broad-Based Stock Plan,
Length-of-Service Nonqualified Stock Option Plan, 2006 Stock Incentive Plan, and
Amended and Restated Directors Stock Option Plan.
“Company Permits”
shall mean all authorizations, licenses, permits, certificates, approvals and
orders of all Governmental Entities necessary for the lawful conduct of the
businesses of the Company and its Subsidiaries.
“Company Reports”
shall mean all forms, reports, statements, information and other documents (as
supplemented and amended since the time of filing) filed or required to be filed
by the Company with the SEC since December 31, 2005.
“Company Required
Vote” shall mean the affirmative vote of the holders of a majority of the
outstanding shares of Company Common Stock entitled to vote on the approval of
this Agreement.
“Company Restricted
Stock” shall mean shares of Company Common Stock issued pursuant to any
Company Common Stock Plan that are subject to specified vesting
criteria.
“Company Termination
Fee” shall mean an amount in cash equal to four percent (4%) of the
aggregate consideration to be paid in the Offer and the Merger for all of the
outstanding Company Common Stock and all of the outstanding Company Stock
Options under Section 1.9 of this Agreement.
“Company 10-K”
shall mean the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2008.
“Confidentiality
Agreement” shall mean the Confidentiality Agreement between the Parent
and the Company, dated January 29, 2010.
“Delaware Secretary”
shall mean the Secretary of State of the State of Delaware.
“Dissenter Shares”
shall mean shares of Company Common Stock issued and outstanding immediately
prior to the Effective Time that are held by Dissenting
Stockholders.
“Dissenting
Stockholder” means any holder of shares of Company Common Stock who has
not voted such shares in favor of the Merger and who is entitled to assert and
properly asserts appraisal rights with respect to such shares pursuant to, and
who complies in all respects with, the provisions of Section 262 of the DGCL,
and who has not effectively withdrawn or lost the right to assert appraisal
rights under the provisions of Section 262 of the DGCL.
“Effective Time” shall
mean the effective time of the Merger, which shall be the time the Certificate
of Merger is duly filed with the Delaware Secretary, or at such later time as
the parties hereto agree shall be specified in such Certificate of
Merger.
“Employment
Agreements” shall mean any contracts, termination or severance
agreements, change of control agreements or any other agreements respecting the
terms and conditions of employment of any officer, employee or former
employee.
“Encumbrance” shall
mean any lien, mortgage, pledge, deed of trust, security interest, charge,
encumbrance or other adverse claim or interest.
“Environmental Claims”
shall mean any and all Actions, Orders, demands, directives, Encumbrances,
proceedings or notices of violation by any Governmental Entity or other Person
alleging potential responsibility or liability arising out of, based on or
related to (1) the presence, release or threatened release of, any Hazardous
Materials or (2) circumstances forming the basis of any violation or alleged
violation of any Environmental Law.
“Environmental Laws”
shall mean all Laws relating to pollution or protection of the environment or
human health.
“Environmental
Permits” shall mean all Permits required to be obtained by the Company in
connection with its business under applicable Environmental Laws.
“Equity Interest”
shall mean any share, capital stock, partnership, member or similar interest in
any entity and any option, warrant, right or security convertible, exchangeable
or exercisable therefor or other instrument or right the value of which is based
on any of the foregoing.
“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
“Financing Source”
means the entities that have committed to provide or otherwise entered into
agreements in connection with the Financing or other financings in connection
with the transactions contemplated hereby, including the parties to the
Financing Commitments and any joinder agreements, credit agreements, indentures
(or other definitive documentation) relating thereto.
“FLSA” shall mean the
Fair Labor Standards Act.
“FMLA” shall mean the
Family and Medical Leave Act.
“GAAP” shall mean
United States generally accepted accounting principles.
“Governmental Entity”
shall mean any United States federal, state or local government or any court of
competent jurisdiction, administrative or regulatory agency or commission or
other domestic governmental authority or agency.
“Hazardous Materials”
shall mean all hazardous, toxic, explosive or radioactive substances, wastes or
materials, including petroleum or petroleum distillates, asbestos,
polychlorinated biphenyls and radon gas regulated pursuant to any Environmental
Law.
“HIPAA” means the
Health Insurance Portability and Accountability Act of 1996, as the same may be
amended, modified or supplemented from time to time, any successor statute
thereto, any and all rules or regulations promulgated from time to time
thereunder, and any comparable state laws.
“HIPAA Compliant”
means that to the extent applicable, the Company or any Subsidiary (A) is in
material compliance with any and all of the applicable requirements of HIPAA and
(B) is not subject to, and could not reasonably be expected to become subject
to, any civil or criminal penalty or any investigation, claim or process that
could reasonably be expected to cause a Material Adverse Effect in connection
with any violation by the Company and its Subsidiaries of the then effective
requirements of HIPAA.
“HSR Act” shall mean
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, and the
rules and regulations thereunder.
“Indebtedness” means,
with respect to any Person, (a) any Liability of that Person (including any
principal, premium, accrued and unpaid interest, related expenses, prepayment
penalties, commitment and other fees, reimbursements and all other amounts
payable in connection therewith): (i) for borrowed money, (ii) evidenced by a
note, debenture or similar instrument (including a purchase money obligation)
given in connection with the acquisition of any property or assets, including
securities, (iii) for the deferred purchase price of property or services,
except trade accounts payable arising in the ordinary course of business, (iv)
under any lease or similar arrangement that would be required to be accounted
for by the lessee as a capital lease in accordance with GAAP, (v) arising from
cash/book overdrafts, (vi) under conditional sale or other title retention
agreements, (vii) arising out of interest rate and currency swap arrangements
and any other arrangements designed to provide protection against fluctuations
in interest or currency rates, (b) any guarantee by that Person of any
indebtedness of others described in the preceding clause (a); (c) the maximum
Liabilities of such person under any “Off Balance Sheet Arrangement” (as defined
in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act);
and (d) all Liabilities to reimburse any bank or other Person for amounts paid
under a letter of credit, surety bond, or bankers' acceptance.
“Intellectual
Property” shall mean all of the following in any jurisdiction throughout
the world: (i) all trademarks, trademark registrations, trademark
rights and renewals thereof, trade names, trade name rights, trade dress,
corporate names, logos, slogans, all service marks, service xxxx registrations
and renewals thereof, service xxxx rights, and all applications to register any
of the foregoing, together with the goodwill associated with each of the
foregoing; (ii) all issued patents, patent rights, and patent applications;
(iii) all registered and unregistered copyrights, copyright registrations,
renewals thereof, and applications to register the same; (iv) all Internet
domain names; (vi) all confidential and proprietary information including Trade
Secrets; and (vii) all other intellectual property recognized in the
jurisdictions where the Company or any of its Subsidiaries do
business.
“IRS” shall mean the
Internal Revenue Service.
“Knowledge,” or any
similar expression used with respect to the Company, shall mean the actual
knowledge of any Company Knowledge Person.
“Labor Laws” shall
mean ERISA, the Immigration Reform and Control Act of 1986, the National Labor
Relations Act, the Civil Rights Acts of 1866 and 1964, the Equal Pay Act, ADEA,
ADA, FMLA, WARN, the Occupational Safety and Health Act, the Xxxxx-Xxxxx Act,
the Xxxxx-Xxxxx Act, the Service Contract Act, Executive Order 11246, FLSA and
the Rehabilitation Act of 1973, and all regulations under such
acts.
“Law” shall mean any
federal, state or local statute, law, regulation, requirement, interpretation,
rule, ordinance, code, policy or rule of common law of any Governmental Entity,
including any judicial or administrative interpretation thereof.
“Leased Real Property
Subleases” means all subleases, licenses or other agreements pursuant to
which the Company or any of its Subsidiaries conveys or grants to any Person a
subleasehold estate in, or the right to use or occupy, any Leased Property or
portion thereof, including the right to all security deposits and other amounts
and instruments deposited with or on behalf of the Company or any Subsidiary
thereunder.
“Leasehold
Improvements” means all buildings, structures, improvements and fixtures
located on any Leased Real Property which are owned by Company or any of its
Subsidiaries, regardless of whether title to such buildings, structures,
improvements or fixtures are subject to reversion to the landlord or other third
party upon the expiration or termination of the Lease for such Leased Real
Property.
“Liabilities” shall
mean any and all debts, liabilities and obligations of any nature whatsoever,
whether accrued or fixed, absolute or contingent, matured or unmatured or
determined or determinable, including those arising under any Law, those arising
under any contract, agreement, commitment, instrument, permit, license,
franchise or undertaking and those arising as a result of any act or
omission.
“Minimum Closing Cash”
shall mean $42,000,000 minus all costs and expenses
of every kind and nature incurred or arising in connection with this transaction
or the transactions contemplated by the Prior Merger Agreement, and without duplication of the
foregoing, minus (A) (i) all fees and expenses paid or payable to
Xxxxxxx Xxxxx & Associates for its services rendered to the Company pursuant
to the engagement letter between such parties, (ii) all fees and expenses
paid or payable to the Company’s outside counsel, accountants and other third
parties in connection with the transactions contemplated by this Agreement or
the Prior Merger Agreement, (iii) all amounts paid or payable to Company
employees in respect of stock options in connection with the transactions
contemplated hereby, and all amounts paid or payable to Company employees in
respect of any and all change in control or transaction bonus, severance or
other similar obligations arising under Contracts between the Company and any
such employees set forth in the Company Disclosure Letter, (iv) all amounts
paid or payable by the Company in respect of any D&O Insurance that the
Company is permitted to purchase pursuant to Section 5.9(b),
(v) amounts payable to financial printers in connection with the preparation,
printing and mailing of the Proxy Statement and holding the Company Stockholders
Meeting (whether under the Prior Merger Agreement or this Agreement),
(vi) all fees and expenses paid or payable by the Company in respect of any
and all regulatory filings and in connection with the release of any and all
liens in connection with this Agreement or the Prior Agreement and the
consummation of the transactions contemplated hereby or thereby, (vii) all costs
and expenses of seeking to obtain lien releases pursuant to Section 5.14, (viii)
any Company Termination Fee (as defined in the Prior Merger Agreement) paid
pursuant to the Prior Merger Agreement net of the Initial
Funding Amount, and (ix) termination and severance amounts paid to employees
terminated as provided for in the Company Disclosure Letter, plus (B) (i) the net cash
proceeds to the Company from the exercise of any Company Common Stock Option
occurring between the date hereof and the Acceptance Date and (ii) the cash
contributed by participants pursuant to the ESPP (net of any portion of such
amounts refunded to such participants).
“Nasdaq” shall mean
The Nasdaq Capital Market, f.k.a. the Nasdaq SmallCap Market.
“NLRB” shall mean the
United States National Labor Relations Board.
“Open Source Software”
shall mean any Software that is subject to any open source license including the
GNU General Public License (GPL), the Lesser GNU Public License (LGPL), any
“copyleft” license or any other license that requires as a condition of use,
modification or distribution of such Software that such Software or other
Software combined or distributed with it be (i) disclosed or distributed in
source code form; (ii) licensed for the purpose of making derivative works;
(iii) redistributable at no charge; or (iv) licensed subject to a patent
non-assert or royalty-free patent license.
“Order” shall mean any
writ, judgment, injunction, consent, order, decree, stipulation, award or
executive order of or by any Governmental Entity.
“Owned Real Property”
means all land, together with all buildings, structures, improvements and
fixtures located thereon, including, without limitation, all electrical,
mechanical, plumbing and other building systems; fire protection, security and
surveillance systems; telecommunications, computer, wiring and cable
installations; utility installations; water distribution systems; and
landscaping and all easements and other rights and interests appurtenant
thereto, including, without limitation, air, oil, gas, mineral and water rights
currently owned by the Company or any of its Subsidiaries, or owned by the
Company or any of its Subsidiaries at any time in the previous 10
years.
“Parent Bylaws” shall
mean Parent’s Bylaws as in effect as of the date hereof.
“Parent Group” shall
mean, collectively, Parent, or any of its former, current or future directors,
officers, employees, agents, general or limited partners, managers, members,
stockholders, Affiliates or assignees or any former, current or future director,
officer, employee, agent, general or limited partner, manager, member,
stockholder, Affiliate or assignee of any of the foregoing.
“Parent Material Adverse
Effect” shall mean, with respect to Parent, any effect that, individually
or taken together with all other effects that have occurred prior to the date of
determination of the occurrence of the Parent Material Adverse Effect, would
prevent the performance by Parent of any of its obligations under this Agreement
or the consummation of the Offer.
“Parent Termination
Fee” shall mean an amount in cash equal to $25,700,000.
“Paying Agent” shall
mean shall mean the Company's transfer agent or any other paying agent mutually
acceptable to Parent and the Company.
“Permitted
Encumbrances” shall mean, (i) any statutory liens for current Taxes not
yet due and payable, being contested in good faith by appropriate proceedings
and for which adequate accruals or reserves have been established in accordance
with GAAP, (ii) with respect to any Real Property, such defects, imperfections
or irregularities in title, claims, liens, charges, security interests,
easements, covenants, restrictions and rights of way (unrecorded and of record)
and other similar matters or record affecting title, if any, that do not and
would not reasonably be expected to, individually or in the aggregate,
materially impair the use or occupancy of such Real Property in the operation of
the business as presently conducted or contemplated to be conducted thereon,
(iii) liens imposed or promulgated by Laws with respect to real property and
improvements, including zoning regulations and building or other similar codes
or restrictions which are imposed by a Governmental Authority having
jurisdiction over such Real Property and are not violated by the current use or
occupancy of such Real Property or the operation of the business conducted
thereon and which do not adversely effect in any material respect the current
use of the applicable property owned, leased, used or held for use by the
Company or any of its subsidiaries or otherwise materially impair the Company’s
or any of its subsidiaries’ operation of their business, (iv) liens arising
under worker’s compensation, unemployment insurance, social security, retirement
and similar legislation, (v) purchase money liens and statutory liens against
the Company’s personal property securing rental payments under leases, subleases
and licenses, (vi) mechanics’, carriers’, workmen’s, repairmen’s,
warehouseman’s, materialmen’s and similar statutory Liens, incurred in the
ordinary course of business for amounts which are not due and payable, and (vii)
other liens which are immaterial to the operation of the business and the value
of the Company and its Subsidiaries.
“Person” shall mean
any individual, corporation, partnership (general or limited), limited liability
company, limited liability partnership, trust, joint venture, joint-stock
company, syndicate, association, entity, unincorporated organization or
government, or any political subdivision, agency or instrumentality
thereof.
“Prior Merger
Agreement” shall mean the Agreement and Plan of Merger, dated as of
December 24, 2009, by and among the Company, Project Alta Merger Corp. and
Project Alta Holding Corp.
“Proxy Statement”
shall mean a definitive proxy statement, including the related preliminary proxy
statement and any amendment or supplement thereto, relating to the Merger and
this Agreement to be mailed to the Company Common Stockholders in connection
with the Company Common Stockholders Meeting.
“Release” shall mean
any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing into the
environment.
“Representatives”
shall mean, with respect to any person such person’s officers, directors,
employees, auditors, attorneys, financial advisors (including the Company
Financial Advisor), agents and representatives, including any investment banker,
financial advisor, Financing Source (in the case of Parent), attorney,
accountant or other advisor, agent, representative or controlled
Affiliate.
“SEC” shall mean the
Securities and Exchange Commission.
“Securities Act” shall
mean the Securities Act of 1933, as amended.
“Software” shall mean:
(A) any and all computer programs, including any and all software
implementations of algorithms, models and methodologies, whether in source code
or object code; and (B) any databases and compilations to the extent integrated
into, or implemented with, such computer programs.
“Sponsors” shall mean
Xxxxxxx RIS, LLC, a Delaware limited liability company.
“Subsidiary” of any
Person shall mean any corporation, partnership, limited liability company, joint
venture or other legal entity of which such Person (either directly or through
or together with another Subsidiary of such Person) owns more than 50% of the
voting stock or value of such corporation, partnership, limited liability
company, joint venture or other legal entity.
“Subsidiary Stock
Rights” shall mean any options, warrants, convertible securities,
subscriptions, stock appreciation rights, phantom stock plans or stock
equivalents or other rights, agreements, arrangements or commitments (contingent
or otherwise) of any character issued or authorized by the Company or any
Subsidiary of the Company relating to the issued or unissued capital stock of
the Subsidiaries of the Company or obligating the Company or any of its
Subsidiaries to issue or sell any shares of capital stock of, or options,
warrants, convertible securities, subscriptions or other equity interests in,
any Subsidiary of the Company.
“Superior Proposal”
shall mean a written Acquisition Proposal (with all of the percentages included
in the definition of Acquisition Proposal increased to 50%) and not solicited in
material violation of Section 5.6 which the
Company Board of Directors determines in good faith, after consultation with
independent financial advisor and outside legal counsel, (a) is for a price per
share higher than the Merger Consideration provided in this Agreement and (b)
would result in a transaction more favorable to the stockholders of the Company
after taking into account all relevant factors including the form of the
consideration, capital commitments (if any), timing of the proposed transaction,
and risks of non-consummation.
“Surviving
Corporation” shall mean the corporation surviving the
Merger.
“Tax” (and, with
correlative meaning, “Taxes”) shall mean
any federal, state, local or foreign income, gross receipts, property, sales,
use, license, excise, franchise, employment, payroll, premium, withholding,
alternative or added minimum, ad valorem, transfer or excise tax, or any other
tax of any kind whatsoever, together with any interest or penalty or addition
thereto, whether disputed or not, imposed by any Governmental
Entity.
“Tax Return” shall
mean any return, report or similar statement required to be filed with respect
to any Tax (including any attached schedules), including any information return,
claim for refund, amended return or declaration of estimated Tax.
“Third Party” shall
mean any Person or group (as defined in Section 13(d)(3) of the Exchange
Act) other than Company, Parent, Merger Sub or any Affiliates
thereof.
“Trade Secret” shall
mean information which gives the possessor of it a competitive advantage, which
advantage derives from the fact that such information is kept confidential.
through the use of reasonable security precautions.
“Transaction
Documents” shall mean this Agreement, the Stockholder Agreements and all
other agreements, instruments and documents to be executed by Parent, Merger Sub
and the Company in connection with the transactions contemplated by such
agreements.
“User Documentation”
shall mean explanatory and informational materials concerning the Company
products, in printed or electronic format, which the Company or any Subsidiary
has released for distribution to end users with such Company products, which may
include manuals, descriptions, user and/or installation instructions, diagrams,
printouts, listings, flow-charts and training materials, contained on visual
media such as paper or photographic film, or on other physical storage media in
machine readable form.
“WARN” shall mean the
United States Worker Adjustment and Retraining Notification Act.
|
Index
of Terms Defined Elsewhere
|
|
|
Defined Term
|
Location
|
|
Acceptance
Date
|
Section
1.1
|
|
Action
|
Section
3.7(a)
|
|
Agreement
|
Preamble
|
|
Alternative
Financing Commitments
|
Section
4.8
|
|
Assessments
|
Section
3.6(e)
|
|
Bankruptcy
and Equity Exception
|
Section
3.2
|
|
Certificates
|
Section
2.2
|
|
Certifications
|
Section
3.8(b)
|
|
Closing
Date
|
Section 1.2
|
|
Company
|
Preamble
|
|
Company
Adverse Recommendation Change
|
Section
5.6(d)(ii)(B)
|
|
Company
Arrangements
|
Section
3.12
|
|
Company
Board of Directors
|
Recitals
|
|
Company
Common Stock
|
Recitals
|
|
Company
Common Stockholders
|
Recitals
|
|
Company
Compensation Committee
|
Section
3.12
|
|
Company
Material Contract
|
Section
3.15(a)
|
|
Company
Real Property
|
Section
3.11(d)
|
|
Company
Recommendation
|
Section
3.5(a)
|
|
Company
Stockholders Meeting
|
Section
5.5
|
|
Covered
Securityholders
|
Section
3.12
|
|
Debt
Financing
|
Section
4.8
|
|
DGCL
|
Recitals
|
|
Equity
Commitment Letters
|
Recitals
|
|
Equity
Financing
|
Section
4.8
|
|
ESPP
|
1.9(d)
|
|
Exchange
Fund
|
Section 2.1
|
|
Export
Approvals
|
Section
3.6(c)
|
|
FCPA
|
Section
3.6(b)
|
|
FDA
|
Section
3.6(c)
|
|
Final
Offering Period
|
1.9(d)
|
|
Financing
|
Section
4.8
|
|
Financing
Commitments
|
Section
4.8
|
|
Fully
Diluted Shares
|
Annex
A
|
|
Guarantees
|
Recitals
|
|
HSR
Clearance
|
Annex
A
|
|
Indemnified
Persons
|
Section
5.9
|
|
Information
Statement
|
Section
1.1
|
|
Information
Systems
|
Section
3.16(k)
|
|
Landlord
Leases
|
Section
3.11(e)
|
|
Leases
|
Section
3.11(d)
|
|
Leased
Property
|
Section
3.11(d)
|
|
Merger
|
Recitals
|
|
Merger
Consideration
|
Section 1.4(a)
|
|
Merger
Sub
|
Preambles
|
|
Minimum
Tender Condition
|
Annex
A
|
|
Notice
Period
|
Section
5.6(e)(iii)
|
|
Offer
|
Recitals
|
|
Offer
Price
|
Recitals
|
|
Offer
Documents
|
Section
1.1
|
|
Offer
Letter
|
Section
1.13
|
|
Outside
Termination Date
|
Section
7.1(f)
|
|
Parent
|
Preamble
|
|
Parent
Expenses
|
Section
7.2(c)
|
|
Paying
Agent
|
Section
2.1
|
|
Record
Date
|
Section
5.5(b)
|
|
Right
|
Recitals
|
|
Rights
Plan
|
Recitals
|
|
SEC
Clearance Date
|
Section
5.4(b)
|
|
Second
Request
|
Section
5.3
|
|
Stockholder
Agreements
|
Recitals
|
* * * * *
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by
their respective officers thereunto duly authorized, all as of the date first
written above.
MERGE
HEALTHCARE INCORPORATED
Date: By: /s/ Xxxxxx
Xxxxxxxx
Name: Xxxxxx
Xxxxxxxx
Title:
CEO
PROJECT
READY CORP.
Date: By: /s/
Xxxxxx
Xxxxxxxx
Name: Xxxxxx
Xxxxxxxx
Title:
President
AMICAS,
INC.
Date: By:
Name:
Title:
ANNEX A
Conditions of the
Offer
Notwithstanding
any other term of the Offer or this Agreement, Merger Sub shall not be required
to accept for payment or, subject to any applicable rules and regulations of the
SEC, including Rule 14e-1(c) under the Exchange Act (relating to Merger Sub’s
obligation to pay for or return tendered shares of Company Common Stock promptly
after the termination or withdrawal of the Offer), to pay for any shares of
Company Common Stock tendered pursuant to the Offer unless (i) there shall have
been validly tendered and not withdrawn prior to the expiration of the Offer
that number of shares of Company Common Stock which would represent both (x) a
majority of the Fully Diluted Shares and (y) at least the number of shares
necessary for the Merger Sub to acquire in the Offer so that when added with the
amount of shares that the Merger Sub is able to purchase pursuant to the
Additional Share Option Merger Sub would own a sufficient number of shares of
Company Common Stock to satisfy the Short-Form Threshold as of the closing date
of the Offer (the “Minimum Tender
Condition”) and (ii) any waiting period under the HSR Act applicable to
the purchase of shares of Company Common Stock pursuant to the Offer shall have
expired or been terminated (“HSR
Clearance”). The term “Fully Diluted Shares”
means all outstanding securities entitled generally to vote in the election of
directors of the Company on a fully diluted basis, after giving effect to the
exercise or conversion of all options other than the option granted to Parent or
Merger Sub pursuant to Section 1.11 of this Agreement, rights and securities
exercisable or convertible into such voting securities, other than potential
dilution attributable to the Rights. Furthermore, notwithstanding any
other term of the Offer or this Agreement, Merger Sub shall not be required to
commence the Offer, accept for payment or to pay for any shares of Company
Common Stock not theretofore accepted for payment or paid for if, on or prior to
the acceptance of such Company Common Stock pursuant to the Offer, any of the
following conditions exists (it being understood that with respect to the
commencement of the offer, only the condition set forth in clauses (a), (b),
(c), (d), (g), (h) or (j) shall be applicable):
(a) a
Company Adverse Recommendation Change shall have occurred.
(b) a
Governmental Entity of competent jurisdiction shall have (i) enacted a law that
is in effect and renders the Offer or the Merger illegal in the United States or
any State thereof, or (ii) formally issued an injunction that is in effect and
prohibits the Offer or the Merger in the United States or any State
thereof.
(c) (i)
other than the representations and warranties set forth in Sections 3.1(a),
3.2, 3.3 and 3.20 the
representations and warranties of the Company set forth in this Agreement shall
not be true and correct (without giving effect to any materiality or Company
Material Adverse Effect qualifications set forth therein) as of the date of this
Agreement and as of such 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 not be true
and correct as of such earlier date), except for such failures to be true and
correct which, individually or in the aggregate, have not and would not have a
Company Material Adverse Effect; (ii) the representations and warranties set
forth in Sections
3.1(a), 3.2, 3.3 and 3.20 shall
not be true and correct in all material respects as of the date of this
Agreement and as of such 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); provided that with
respect to the representations and warranties set forth in Section 3.3(a), (b)
and (d), as long as, despite all such understatements in the aggregate, Parent
and Merger Sub are still able to exercise the Additional Share Option in an
amount sufficient to meet the Short-Form Threshold, the aggregate number of
shares of Company Common Stock outstanding or issuable upon exercise or
conversion of any outstanding Company Common Stock Rights as of the date hereof,
taken together, shall not be understated by more than 50,000 shares of Company
Common Stock (with each Company Common Stock Right being counted as a fraction
of a share of Company Common Stock equal to the result obtained by dividing the
excess, if any, of the Offer Price over the exercise price of such Company
Common Stock Right by the Offer Price) plus an additional number of shares equal
to (w) the amount of any cash reduction in the transaction Bonus Pool disclosed
by the Company on Section 3.13(a) of the Company Disclosure Letter divided by
(x) the Offer Price; plus an additional number of shares equal to (y) the
amount, if any, by which Company Closing Cash exceeds the Minimum Closing Cash
divided by (z) the per share Merger Consideration. Prior to the
acceptance of the shares in the Offer, Parent shall have received a certificate
of an executive officer of the Company on its behalf to certifying that this
condition does not exist as of the expiration of the Offer.
(d) the
Company shall not have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by it. Prior to the acceptance of the shares in the Offer,
Parent shall have received a certificate of an executive officer of the Company
on its behalf to certifying that this condition does not exist immediately prior
to the expiration of the Offer.
(e) the
Company Closing Cash is less than an amount equal to the Minimum Closing
Cash.
(f) Parent
shall not have received a certificate from the Company, in the form attached
hereto as Exhibit
D, to the effect that the Company is not a U.S. real property holding
company.
(g) there
shall have occurred a Company Material Adverse Effect that is
continuing.
(h) the
Company shall not have filed all Company Reports required to be filed with the
SEC prior to the expiration of the Offer.
(i) the
Company shall not have delivered to Parent evidence of the release of all the
liens in and to the assets of the Company and its Subsidiaries that are
reasonably requested by Parent and evidence of termination of all financing
statements filed with respect to such liens, except Permitted Encumbrances (for
this purpose clause (vii) of the definition of “Permitted Encumbrance” shall
mean other liens in an amount not more than $ 500,000 in the
aggregate.
(j) no
Person shall have become an Acquiring Person (as defined in the Rights
Plan).
(k) this
Agreement shall have been terminated in accordance with its terms.
The
foregoing conditions (other than the Minimum Tender Condition) are for the sole
benefit of Merger Sub and Parent and may be asserted by Merger Sub or Parent or
may be waived by Merger Sub and Parent in whole or in part at any time and from
time to time in their sole discretion. The failure by Parent, Merger Sub or any
other affiliate of Parent at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right, the waiver of any such right
with respect to particular facts and circumstances shall not be deemed a waiver
with respect to any other facts and circumstances and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to
time.
