Exhibit 10.2
EXECUTION COPY
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
RETALIX LTD.,
RETALIX HOLDINGS INC.,
RTLX LLC
SURVIVOR RTLX LLC
AND
TCI SOLUTIONS, INC.
DATED AS OF APRIL 1, 2005
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 1, 2005 (this
"Agreement"), by and among Retalix, Ltd., an Israeli corporation ("Parent"),
Retalix Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of
Parent ("Holdings"), Survivor RTLX LLC, a Delaware limited liability company of
which Holdings is the single member ("LLC Merger Sub"), RTXL LLC, a Delaware
limited liability company of which Holdings is the sole member ("Acquisition
Sub") and TCI Solutions, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, each of the boards of directors or equivalent bodies of
Parent, Holdings, LLC Merger Sub, Acquisition Sub and the Company has determined
that it is advisable and in the best interests of its stockholders or members,
as the case may be, for the parties to enter into a business combination upon
the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, each of the boards of
directors or equivalent bodies of Parent, Holdings, LLC Merger Sub, Acquisition
Sub and the Company has approved the merger (the "Merger") of Acquisition Sub
with and into the Company (with the Company surviving) followed immediately by
the merger of the Company with and into LLC Merger Sub (with LLC Merger Sub
surviving) (the "Subsequent Merger," and together with the Merger, the
"Mergers"), all in accordance with the applicable provisions of the General
Corporation Law of the State of Delaware ("DGCL") and upon the terms and subject
to the conditions set forth herein;
WHEREAS, upon consummation of the Subsequent Merger the separate
existence of the Company will cease;
WHEREAS, the board of directors of the Company has unanimously
recommended that the stockholders of the Company approve and adopt this
Agreement and the Merger;
WHEREAS, for United States federal income tax purposes, this Agreement,
together with the Stock Purchase Agreement (as defined below), is intended to
constitute a "plan of reorganization" within the meaning of Section 1.368-2(g)
and 1.368-3(a) of the Treasury Regulations and the acquisition of Shares (as
defined in the Stock Purchase Agreement) and the Mergers taken together are
intended to be an integrated transaction for purposes of Rev. Rul. 2001-26,
2001-1 CB 1297, and Rev. Rul. 2001-46, 2001-2 CB 321, that will qualify as a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Parent's, Holding's, Acquisition Sub's and
LLC Merger Sub's willingness to enter into this Agreement, certain stockholders
of the Company are entering into a Stock Purchase Agreement with Holdings and
Parent (the "Stock Purchase Agreement"), in the form attached as Exhibit A
hereto, pursuant to which, among other things, each of such stockholders are
selling all of their shares of capital stock in the Company to Holdings;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. Common Definitions. Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement that are defined in the Stock Purchase
Agreement shall have the meanings assigned to them in the Stock Purchase
Agreement, and the rules of construction and documentary conventions set forth
in the Stock Purchase Agreement shall apply to this Agreement.
1.02. Additional Definitions. The following terms, as used herein, have
the following meanings:
"Company Capital Stock" means the Company Common Stock and Company
Preferred Stock.
"Company Common Stock" means the common stock, par value $0.001 per
share, of the Company.
"Company Preferred Stock" means the Company's Series A Preferred Stock
and Series B Preferred Stock.
"Membership Interest" the limited liability membership interests of LLC
Merger Sub.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" means the Series A Non-Redeemable
Convertible Participating Preferred Stock, par value $0.001 per share, of the
Company.
"Series B Preferred Stock" means the Series B Non-Redeemable
Convertible Participating Preferred Stock, par value $0.001 per share, of the
Company.
ARTICLE II
THE MERGERS
2.01. The Mergers. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with DGCL, at the Effective Time (as
defined below), Acquisition Sub shall be merged with and into the Company. As a
result of the Merger, the separate existence of Acquisition Sub shall cease and
the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation") and shall succeed to and assume all the
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rights and obligations of Acquisition Sub in accordance with DGCL. Immediately
following the Effective Time of the Merger, upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with DGCL, the Company
shall be merged with and into LLC Merger Sub, and the separate corporate
existence of the Company shall cease. LLC Merger Sub shall continue as the
surviving entity in the Subsequent Merger (the "Surviving LLC") and shall
succeed to and assume all of the rights and obligations of the Company in
accordance with DGCL. Unless this Agreement has been terminated and the
transactions herein contemplated have been abandoned pursuant to Article VIII,
and subject to the satisfaction or waiver of the conditions set forth in Article
IX, the consummation of the Mergers (the "Closing") will take place as promptly
as practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article IX, at the offices of Xxxxxxxx &
Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx XX 00000, unless another date,
time or place is agreed to in writing by Parent and the Company (the "Closing
Date").
2.02. Effective Time. As promptly as practicable after the satisfaction
or waiver of the conditions set forth in Article IX, the parties hereto shall
file a certificate of merger for the Merger (the "Certificate of Merger") with
the Secretary of State of the State of Delaware, in such form as required by,
and executed in accordance with the relevant provisions of, DGCL and shall make
all other filings or recordings required under DGCL. The Merger shall become
effective at such time as the Certificate of Merger is duly filed with such
Secretary of State, or at such other time as Parent and the Company shall agree
and specify in the Certificate of Merger (the time the Merger becomes effective
being the "Effective Time"). Immediately following the Effective Time, the
parties shall file a certificate of merger for the Subsequent Merger with the
Secretary of State of the State of Delaware, in such form as required by, and
executed in accordance with the relevant provisions of, DGCL and shall make all
other filings or recordings required under DGCL. The Subsequent Merger shall
become effective at such time as such certificate of merger is filed with the
Secretary of State of the State of Delaware.
2.03. Effect of the Mergers. At and after the Effective Time, (a) the
effect of the Merger shall be as provided in this Agreement, the Certificate of
Merger and the applicable provisions of DGCL; (b) the certificate of
incorporation of the Surviving Corporation shall be the certificate of
incorporation of the Company immediately prior to the Effective Time (and the
Certificate of Merger shall so provide), (c) the by-laws of the Surviving
Corporation shall be the by-laws of the Company immediately prior to the
Effective Time, (d) the directors of the Surviving Corporation shall be the
directors of the Company immediately prior to the Effective Time, to hold office
in accordance with the by-laws of the Surviving Corporation, and (e) the
officers of the Surviving Corporation shall be the officers of the Company
immediately prior to the Effective Time, to hold office in accordance with the
by-laws of the Surviving Corporation. At and after the effective time of the
Subsequent Merger, (a) the effect of the Subsequent Merger shall be as provided
in this Agreement, the certificate of merger for the Subsequent Merger and the
applicable provisions of DGCL; (b) the certificate of formation of the Surviving
LLC shall be the certificate of formation of LLC Merger Sub immediately prior to
the effective time of the Subsequent Merger (and the Certificate of Merger shall
so provide), (c) the limited liability company operating agreement of the
Surviving LLC shall be the limited liability company operating agreement of LLC
Merger Sub immediately prior to the effective time of the
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Subsequent Merger, and (d) the manager of the Surviving LLC shall be the manager
of the LLC Merger Sub immediately prior to the effective time of the Subsequent
Merger.
2.04. Effect on Membership Interests of Acquisition Sub. At the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any limited liability membership interest of Acquisition Sub, each
outstanding limited liability membership interest of Acquisition Sub issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of common stock, par value $.001 per share, of the Surviving Corporation.
2.05. Effect on Company Capital Stock. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
the capital stock of the Company:
(a) Cancellation of Shares of Company Capital Stock. Each share
of Company Capital Stock owned by Parent, Holdings, LLC Merger Sub or
the Company immediately prior to the Effective Time shall automatically
be canceled and retired and cease to exist, and no consideration or
payment shall be delivered therefor or in respect thereof.
(b) Conversion of Shares of Company Capital Stock. Subject to
Section 2.07(d) hereof, or as provided in Section 2.08 with respect to
Company Capital Stock as to which appraisal rights have been exercised:
(i) each share of Company Common Stock issued and
outstanding immediately prior to the Effective Time (other than
shares referred to in Section 2.05(a)) shall be cancelled and
extinguished and thereafter shall represent the right to receive
$0.132 in cash per share;
(ii) each share of Series A Preferred Stock of the Company,
issued and outstanding immediately prior to the Effective Time
(other than shares referred to in Section 2.05(a)) shall be
cancelled and extinguished and thereafter shall represent the
right to receive $0.8409 (on an as converted basis including all
shares issuable under the PIK dividend) in cash per share;
(iii) each share of Series B Preferred Stock of the Company
issued and outstanding immediately prior to the Effective Time
(other than shares referred to in Section 2.05(a)) shall be
cancelled and extinguished and thereafter shall represent the
right to receive $0.7573 in cash per share;
(iv) Fractional shares of Company Capital Stock, issued and
outstanding immediately prior to the Effective Time (other than
shares referred to in Section 2.05(a)) shall be cancelled and
extinguished and, subject to Section 2.07(d), thereafter shall
represent the right to receive cash in lieu thereof.
(c) Stock Options and Warrants. At the Effective Time, none of
Parent, Holdings, Acquisition Sub or LLC Merger Sub shall assume the
Company's obligations
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under any of the stock options or warrants of the Company, which remain
unexercised and outstanding as of the Effective Time, and the Company
shall cause all such options and warrants to terminate at the Effective
Time, without liability to Parent, Holdings, Acquisition Sub or LLC
Merger Sub.
(d) Merger Consideration. The aggregate cash issuable or reserved
for issuance pursuant to Sections 2.05(b) are referred to collectively
as the "Merger Consideration."
2.06. Conversion of Capital Stock in Subsequent Merger. By virtue of
the Subsequent Merger and without any further action on the part of Parent,
Holdings, Surviving Corporation or Surviving LLC, (i) each Membership Interest
then outstanding shall remain outstanding and each certificate therefore, if
any, shall continue to evidence one limited liability company membership
interest of the Surviving LLC, and (ii) each share of common stock of the
Surviving Corporation then outstanding shall be converted into a limited
liability company membership interest of Surviving LLC.
2.07. Exchange of Certificates.
(a) Promptly after the Closing, each holder of Company Capital
Stock shall surrender to Parent, or a paying agent appointed by Parent,
the stock certificates evidencing their shares of Company Capital
Stock, together with such other documents as may reasonably be required
by Parent, the holder of such Certificate shall be entitled to receive
in exchange therefore such holder's pro rata share of the Merger
Consideration. In the event of a transfer of ownership of Company
Capital Stock which is not registered in the transfer records of the
Company, and cash issued in exchange therefor pursuant to Section
2.05(b) shall be paid to a person other than the person in whose name
the certificate so surrendered is registered, if such certificate is
presented to the Parent, 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 Section 2.07(a), each certificate shall be deemed at any time
after the Effective Time to represent only the right to receive upon
such surrender the cash as contemplated in Section 2.05(b).
(b) No Further Ownership Rights in Company Capital Stock. All the
cash issued upon the surrender for exchange of certificates in
accordance with the terms hereof shall be deemed to have been paid in
full satisfaction of all rights pertaining to such shares of Company
Capital Stock, and from and after the Effective Time there shall be no
further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of Company Capital Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates are presented to the Surviving Corporation
or Parent for any reason, they shall be cancelled in exchange for the
Merger Consideration as provided in this Article II.
(c) No Liability. To the extent permitted by applicable law, none
of Parent, Holdings, Surviving LLC, or the Surviving Corporation shall
be liable to any holder of
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shares of Company Capital Stock or shares of Parent Common Stock, as
the case may be, for any Merger Consideration (or dividends or
distributions with respect thereto) delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(d) Withholding Rights. Each of Parent, Holdings, Surviving LLC
and the Surviving Corporation shall be entitled to deduct and withhold
from the Merger Consideration otherwise payable pursuant to this
Agreement to any holder of Company Capital Stock such amounts as it is
required to deduct and withhold with respect to the making of such
payment under the Code or any provision of state, local, provincial or
foreign tax law. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of Company Capital Stock in respect of
which such deduction and withholding was made.
(e) Lost, Stolen or Destroyed Certificates. If any certificate
shall have been lost, stolen or destroyed, Parent shall issue in
exchange for such lost, stolen or destroyed Certificate, upon the
making of an affidavit of that fact by the holder thereof, such Merger
Consideration as may be required pursuant to Section 2.05(b); provided,
however, that Parent may, in its sole discretion and as a condition
precedent to the issuance and delivery thereof, require the owner of
such lost, stolen or destroyed certificate to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may
be made against the Parent with respect to the certificate alleged to
have been lost, stolen or destroyed.
2.08. Dissenting Shares. Notwithstanding Section 2.05(b), shares of
Company Capital Stock outstanding immediately prior to the Effective Time and
held by a holder who has not voted in favor of the Merger or consented thereto
in writing and who has demanded appraisal for such shares in accordance with
Section 262 of DGCL ("Dissenting Shares") shall not be converted into a right to
receive the applicable portion of the Merger Consideration, unless such holder
fails to perfect or withdraws or otherwise loses its right to appraisal. If
after the Effective Time, any such holder fails to perfect or withdraws or loses
its right to appraisal, such Dissenting Shares shall be treated as if they had
been converted as of the Effective Time into the right to receive the Merger
Consideration to which such holder is entitled, without interest thereon. The
Company shall give Parent prompt notice of any demands received by the Company
for appraisal of Company Capital Stock, and, prior to the Effective Time, Parent
shall have the right to participate in all negotiations and proceedings with
respect to such demands. Prior to the Effective Time, the Company shall not,
except with the prior written consent of Parent, make any payment with respect
to, or settle or offer to settle, any such demands.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedules dated as of the date
hereof and delivered herewith to Parent (which disclosure schedules identify the
section and subsection to which each
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disclosure therein relates), the Company hereby represents and warrants to
Parent, Holdings, Acquisition Sub and LLC Merger Sub as of the date hereof and
as of the Closing Date that:
3.01. Corporate Existence and Power. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not Adversly Affect the Company. The Company
has heretofore delivered to Parent true and complete copies of the corporate
charter and bylaws of the Company as currently in effect.
3.02. Corporate Authorization. The execution, delivery and performance
by the Company of this Agreement and each Ancillary Agreement to which the
Company is a party, and the consummation by the Company of the transactions
contemplated hereby and thereby, are within the Company's corporate powers and
except for the required approval by the Company's stockholders, have been duly
authorized by all necessary corporate action on the part of the Company. Each of
this Agreement and each Ancillary Agreement to which the Company is a party has
been duly executed and delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in accordance with its terms.
3.03. SEC Disclosure Documents. None of the information supplied or to
be supplied by the Company or representatives for inclusion or incorporation by
reference in (i) the proxy statement or information statement relating to the
Company Stockholders' Meeting (such proxy statement or information statement as
amended or supplemented from time to time being hereinafter referred to as the
"Proxy Statement") or (ii) any required Schedule 13E-3, will, at the respective
times filed with the SEC, stock exchange or any other regulatory agency, on the
date mailed to the holders of Company Capital Stock and at the time of the
Company Stockholders' Meeting (as defined in Section 5.05 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. If at any time
prior to the Effective Time any event relating to the Company or any of its
subsidiaries, affiliates, officers or directors should be discovered by the
Company which is required to be set forth in a supplement to the Proxy Statement
or an amendment to Schedule 13E-3, the Company shall promptly inform Parent. The
Proxy Statement will comply as to form in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
thereunder. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any statements made or to be made or to be
incorporated by reference in any of the foregoing documents based on information
supplied by Parent, Holdings, Acquisition Sub or LLC Merger Sub expressly for
inclusion or incorporation by reference thereof.
3.04. Fairness Opinion. The Company has received the opinion of The
Mentor Group to the effect that, as of the date thereof, the Merger
Consideration to be received by holders of Company Common Stock in the Merger is
fair from a financial point of view to the holders of
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Company Common Stock, and signed, true and complete copies of which opinions
have been delivered to Parent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT, HOLDINGS, ACQUISITION
SUB AND LLC MERGER SUB
Parent, Holdings, Acquisition Sub and LLC Merger Sub hereby represent
and warrant to the Company that:
4.01. Organization and Existence. Parent is a corporation duly
incorporated, validly existing and in good standing under the laws of Israel and
has all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Holdings is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, is recently organized and has
conducted no business activities, other than as contemplated by this Agreement.
Acquisition Sub and LLC Merger Sub are limited liability companies duly
organized, validly existing and in good standing under the laws of the State of
Delaware, are each recently organized and neither has conducted business
activities, other than as contemplated by this Agreement.
4.02. Corporate Authorization. The execution, delivery and performance
by Parent, Holdings, Acquisition Sub and LLC Merger Sub of this Agreement and
any other Ancillary Agreement to which they are parties, the issuance and
delivery of shares of the Parent Common Stock, and the consummation by Parent,
Holdings, Acquisition Sub and LLC Merger Sub of the transactions contemplated in
this Agreement and the Ancillary Agreements are within the corporate, limited
liability company or other powers of Parent, Holdings, Acquisition Sub and LLC
Merger Sub and have been duly authorized by all necessary corporate or limited
liability company action on the part of Parent, Holdings, Acquisition Sub and
LLC Merger Sub. Each of this Agreement and such Ancillary Agreements to which
Parent, Holdings, Acquisition Sub or LLC Merger Sub are parties have been duly
executed and delivered by Parent, Holdings, Acquisition Sub and LLC Merger Sub,
as applicable, and constitute a valid and binding agreement of Parent, Holdings,
Acquisition Sub and LLC Merger Sub, as applicable. The shares of Parent Common
Stock, when issued and delivered in accordance with the terms of this Agreement
will validly issued, fully paid and nonassessable.
ARTICLE V
COVENANTS OF THE COMPANY
5.01. Conduct of the Company. From the date hereof until the Closing
Date, the Company shall conduct its businesses in the ordinary course consistent
with past practices and shall use its best efforts to preserve intact their
business organizations and relationships with third parties and to keep
available the services of their present officers and employees. Without limiting
the generality of the foregoing, from the date hereof until the Closing Date,
the Company will not:
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(i) adopt or propose any change in their corporate charter or
bylaws;
(ii) merge or consolidate with any other Person or acquire a
material amount of assets of any other Person;
(iii) sell, lease, license, mortgage, encumber or otherwise
dispose of any material assets or property except (A) pursuant to
existing contracts or commitments and (B) in the ordinary course
consistent with past practices;
(iv) effect any direct or indirect redemption, purchase or
other acquisition of any securities of the Company, or declare,
set aside or pay any dividend or make any other distribution of
assets of any kind whatsoever with respect to any securities of
the Company;
(v) issue any securities of the Company or amend any term of
any Company option plan or any outstanding Option;
(vi) incur any indebtedness for money borrowed or guarantee
any indebtedness of any other Person or release or cancel any
material indebtedness or claim;
(vii) settle any claim, action or proceeding, except in the
ordinary course of business consistent with prior practice; or
(viii) agree or commit to do any of the foregoing.
(b) During such time as Parent or Holdings Affiliates do not
control the Board of Directors, the Company will not (i) take or agree
or commit to take any action that would make any representation and
warranty made by the Company under this Agreement or by Sellers under
the Stock Purchase Agreement on the date of its execution and delivery
inaccurate in any respect at, or as of any time prior to, the Closing
Date or (ii) omit or agree or commit to omit to take any action
necessary to prevent any such representation or warranty from being
inaccurate in any respect at any such time.
5.02. Access to Information. From the date hereof until the Closing
Date, the Company shall (a) give Parent, its counsel, financial advisors,
financing sources, auditors and other authorized representatives full access to
the offices, properties, books and records of the Company, (b) furnish to
Parent, its counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information relating
to the Company as such Persons may reasonably request and (c) instruct the
employees, counsel and financial advisors of the Company to cooperate with
Parent in its investigation of the Company.
5.03. Notices of Certain Events; Continuing Disclosure. (a) The Company
will promptly notify Parent of:
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(i) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the
transactions contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the Company's knowledge, threatened
against, or relating to or involving or otherwise affecting the
Company or that relate to the consummation of the transactions
contemplated by this Agreement.
(b) Until the Closing Date, the Company shall have the continuing
obligation promptly to advise Parent with respect to any matter
hereafter arising or discovered that, if existing or known at the date
of this Agreement, would have been required to be set forth or
described in a schedule to this Agreement, or that constitutes a breach
or prospective breach of this Agreement by the Company.
5.04. Compensation. Except as set forth in Schedule 5.04, the Company
will not enter into or modify any consulting, employment or severance contracts,
increase the salaries, wage rates or fringe benefits of its officers, directors
or employees or pay bonuses or other remuneration except for current salaries,
severance and other remuneration for which the Company is obligated under
arrangements existing on the date hereof.
5.05. Consents. The Company will use commercially reasonable efforts to
obtain all third party consents required to consummate the Merger, and make all
filings with governmental entities, required with respect to the consummation of
the Merger.
5.06. Stockholder Approval. (a) The Company will take all action
necessary in accordance with DGCL, the Company's certificate of incorporation,
as amended, and its by-laws to convene a meeting of Stockholders of the Company
(the "Company Stockholders' Meeting") as promptly as possible following the date
hereof to consider and vote upon the Merger, this Agreement and the transactions
contemplated hereby.
(b) The Proxy Statement shall include a statement that the
Company's Board of Directors recommend approval and adoption of this
Agreement and the Merger by the holders of Company Common Stock.
(c) The Company's Board of Directors shall (i) cause the Company
to use its reasonable best efforts (through its agents or otherwise) to
solicit from the holders of the Company Common Stock proxies in favor
of the Merger, this Agreement and the transactions contemplated hereby
and (ii) cause the Company to use its reasonable best efforts to secure
stockholder approval of the Merger, this Agreement and the transactions
contemplated hereby.
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(d) The Company shall prepare a preliminary Proxy Statement
relating to the Company Stockholders' Meeting and forms of proxy for
use at the Company Stockholders' Meeting relating to the vote of the
holders of the Company Capital Stock with respect to the Merger, this
Agreement and the transactions contemplated hereby. The Company shall
cause the preliminary Proxy Statement to be filed with the SEC at the
earliest practicable date following the date hereof. Parent and the
Company shall cooperate with each other in the preparation of the Proxy
Statement, and the Company shall notify Parent of the receipt of any
comments of the SEC with respect to the preliminary Proxy Statement and
of any requests by the SEC for any amendment or supplement thereto or
for additional information and shall promptly provide to Parent copies
of all correspondence between the Company or any representative of the
Company and the SEC. As promptly as practicable after comments are
received from the SEC with respect to the preliminary Proxy Statement,
the Company shall use its reasonable best efforts to respond to the
comments of the SEC and, to the extent comments of the SEC relate to
Parent, Holdings, Acquisition Sub or LLC Merger Sub, Parent, Holdings,
Acquisition Sub and LLC Merger Sub shall use their reasonable best
efforts to respond to the comments of the SEC. The Company shall give
Parent and its counsel the opportunity to review all amendments and
supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments of the SEC prior to
their being filed with or sent to the SEC and Parent, Holdings,
Acquisition Sub and LLC Merger Sub shall provide the Company with such
information about them as may be required to be included in the Proxy
Statement or as may be reasonably required to respond to any comment of
the SEC. After all the comments received from the SEC have been cleared
by the SEC staff and all information required to be contained in the
Proxy Statement has been included therein by the Company, the Company
shall file with the SEC the definitive Proxy Statement and the Company
shall use its reasonable best efforts to have the Proxy Statement
cleared by the SEC as soon thereafter as practicable. The Company shall
cause the Proxy Statement to be mailed to record holders of Company
Capital Stock as promptly as practicable after clearance by the SEC.
5.07. Acquisition Proposals. (a) Subject to Section 5.06(b), from the
date hereof until the Effective Time or termination of this Agreement in
accordance with Article VIII hereof, whichever is earlier, Company shall not,
nor shall the Company authorize or permit any of its or their officers,
directors, employees, investment bankers, attorneys, accountants, consultants or
other agents or advisors to, directly or indirectly, (i) solicit, initiate or
knowingly take any action to facilitate or encourage any Acquisition Proposal
(as defined below) or any inquiries or the making of any proposal that
constitutes or could reasonably be expected to lead to an Acquisition Proposal,
(ii) enter into, continue or participate in any discussions or negotiations
with, furnish any information relating to the Company or afford access to the
business, properties, assets, books or records of the Company to, otherwise
cooperate in any way with, or assist, participate in, facilitate or encourage
any effort by any third party to do or seek to make, or that has made an
Acquisition Proposal, (iii) approve, endorse or recommend any Acquisition
Proposal or (iv) enter into any letter of intent or similar document or any
contract, agreement or commitment contemplating or otherwise relating to any
Acquisition Proposal.
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(b) Notwithstanding the foregoing, the Board of Directors of the
Company, directly or indirectly through advisors, agents or other
intermediaries, may (i) engage in negotiations or discussions with any
third party that has made (and not withdrawn) a bona fide Acquisition
Proposal that the Board of Directors of the Company reasonably
determines (after consultation with the Company's financial advisor)
constitutes a Superior Proposal, (ii) furnish to such third party
nonpublic information relating to the Company or any of its
subsidiaries pursuant to a confidentiality agreement with terms no less
favorable to the Company than those contained in the existing
confidentiality agreement with Parent, (iii) take and disclose to its
stockholders a position contemplated by Rules 14d-9 and 14e-2(a) under
the Exchange Act or otherwise make disclosure to them, (iv) following
receipt of such an Acquisition Proposal, withdraw, modify in a manner
adverse to Parent, or fail to make a recommendation as to the
advisability of the Merger, and/or (v) take any action ordered to be
taken by the Company by any court of competent jurisdiction if, in each
case (1) neither the Company nor any representative of Company shall
have -- violated any of the restrictions set forth in this Section
5.06, (2) the Board of Directors of the Company determines in good
faith (after consultation with its outside legal counsel) that the
failure to take such action would be reasonably likely to result in a
breach of its fiduciary obligations to the Company's stockholders under
applicable law, (3) prior to furnishing any such nonpublic information
to, or entering into any such discussions with, such person or group,
the Company gives Parent written notice of the identity of such person
or group and all of the material terms and conditions of such
Acquisition Proposal and of the Company's intention to furnish
nonpublic information to, or enter into discussions with, such person
or group, and the Company receives from such person or group an
executed confidentiality agreement containing terms at least as
restrictive with regard to the Company's confidential information as
the confidentiality agreement executed with Parent, (4) gives Parent
prompt advance notice of its intent to furnish such nonpublic
information or enter into such discussions (which notice shall in no
event be given less than one (1) business day prior to furnishing such
information or entering into such discussions), and (5)
contemporaneously with furnishing any such nonpublic information to
such person or group, the Company furnishes such nonpublic information
to Parent (to the extent such nonpublic information has not been
previously furnished by the Company to Parent). The Company will
immediately cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal, and shall use its reasonable best efforts to
cause any such parties in possession of confidential information about
the Company that was furnished by or on behalf of the Company to return
or destroy all such information in the possession of any such party or
in the possession of any agent or advisor of any such party. Without
limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding two sentences by any officer,
director or employee of the Company or any of its subsidiaries or any
investment banker, attorney or other advisor or representative of the
Company or any of its subsidiaries shall be deemed to be a breach of
this Section 5.06 by the Company.
(c) In addition to the obligations of the Company set forth in
paragraph (a) of this Section 5.06, the Company as promptly as
reasonably practicable shall advise Parent
12
orally and in writing of any Acquisition Proposal, or any inquiry with
respect to or which the Company reasonably should believe would lead to
any Acquisition Proposal, the material terms and conditions of such
Acquisition Proposal or inquiry, and the identity of the person or
group making any such Acquisition Proposal or inquiry. The Company will
keep Parent informed as promptly as reasonably practicable of any
amendments of any such Acquisition Proposal or inquiry.
For purposes of this Agreement, "Acquisition Proposal" shall mean any
written offer or proposal by a third party, other than Parent, Holdings,
Acquisition Sub, LLC Merger Sub or any affiliate thereof, relating to: (A) any
acquisition or purchase from the Company by any person or "group" (as defined
under Section 13(d) of the Exchange Act and the rules and regulations
thereunder) of more than a 15% interest in the outstanding voting securities of
the Company or any tender offer or exchange offer that if consummated would
result in any person or "group" (as defined under Section 13(d) of the Exchange
Act and the rules and regulations thereunder) beneficially owning 15% or more of
the outstanding voting securities of the Company or any merger, consolidation,
business combination or similar transaction involving the Company pursuant to
which the stockholders of the Company immediately preceding such transaction
would hold less than 85% of the equity interests in the surviving or resulting
entity of such transaction; (B) any sale, lease, exchange, transfer, license,
acquisition, or disposition of more than 15% of the consolidated assets of the
Company; (C) any liquidation or dissolution of the Company or (D) any other
transaction the consummation of which would or could reasonably be expected to
impede, interfere with, prevent or materially delay the consummation of the
transactions contemplated hereby.
For purpose of this Agreement, "Superior Proposal" means any bona fide,
unsolicited written Acquisition Proposal for at least a majority of the
outstanding shares of Company Common Stock on terms that the Board of Directors
of Company determines in good faith by a majority vote, after taking into
account all the terms and conditions of the Acquisition Proposal, are more
favorable to the Company's stockholders than as provided hereunder.
5.08. Confidentiality. The Company will hold, and will use its best
efforts to cause its Affiliates, officers, directors, employees, accountants,
counsel, consultants, advisors and agents to hold, in confidence, unless
compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning
Parent, Holdings, Acquisition Sub, LLC Merger Sub or their Affiliates furnished
to the Company or its Affiliates (or their respective advisors), in connection
with the transactions contemplated by this Agreement and the Ancillary
Agreements, except to the extent that such information can be shown to have been
(i) previously known on a nonconfidential basis by the Company, (ii) in the
public domain through no fault of the Company or (iii) later lawfully acquired
by the Company from sources other than Parent; provided that the Company may
disclose such information to its respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with the
transactions contemplated by this Agreement so long as such persons are informed
by the Company of the confidential nature of such information and are directed
by the Company to treat such information confidentially in accordance with this
Agreement. The obligation of the Company and their Affiliates, to hold any such
information in confidence shall be satisfied if they exercise the same care with
respect to such information as they would take to
13
preserve the confidentiality of their own similar information. If this Agreement
is terminated, the Company and its Affiliates, will, and will use their best
efforts to cause their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to Parent, upon
request, all tangible documents and other materials, and all copies thereof,
obtained by the Company or its Affiliates, or on their behalf concerning Parent,
Holdings, Acquisition Sub, LLC Merger Sub or their Affiliates in connection with
this Agreement that are subject to such confidence.
ARTICLE VI
COVENANTS OF PARENT, HOLDINGS, ACQUISITION SUB AND LLC MERGER SUB
6.01. Continuing Director and Officer Indemnification. From and after
the Effective Time, the Surviving LLC (or its successors or assigns) shall
fulfill and honor the obligations of the Company pursuant to the indemnification
provisions in the Company's certificate of incorporation and by-laws existing as
in effect on the date hereof with respect to the Company's directors and
officers.
6.02. Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, Parent, Holdings, Acquisition Sub and Merger Sub
will hold, and will use their best efforts to cause their respective Affiliates,
officers, directors, employees, accountants, counsel, consultants, advisors and
agents to hold, in confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all confidential
documents and information concerning the Company and its Subsidiaries furnished
to Parent, Holdings, Acquisition Sub, LLC Merger Sub or their Affiliates (and
their respective advisors) in connection with the transactions contemplated by
this Agreement, except to the extent that such information can be shown to have
been (i) previously known on a nonconfidential basis by Parent , Holdings,
Acquisition Sub or LLC Merger Sub, (ii) in the public domain through no fault of
Parent, Holdings, Acquisition Sub or LLC Merger Sub or (iii) later lawfully
acquired by Parent, Holdings, Acquisition Sub or LLC Merger Sub from sources
other than the Company or its Subsidiaries; provided that Parent, Holdings,
Acquisition Sub and LLC Merger Sub may disclose such information to its
officers, directors, employees, accountants, counsel, consultants, advisors and
agents in connection with the transactions contemplated by this Agreement so
long as such Persons are informed by Parent, Holdings, Acquisition Sub or LLC
Merger Sub of the confidential nature of such information and are directed by
Parent, Holdings, Acquisition Sub or LLC Merger Sub to treat such information
confidentially in accordance with this Agreement. The obligation of Parent,
Holdings, Acquisition Sub and LLC Merger Sub to hold any such information in
confidence shall be satisfied if they exercise the same care with respect to
such information as they would take to preserve the confidentiality of their own
similar information. If this Agreement is terminated, Parent, Holdings,
Acquisition Sub and LLC Merger Sub will, and will use their best efforts to
cause their respective Affiliates, officers, directors, employees, accountants,
counsel, consultants, advisors and agents to, destroy or deliver to the Company,
upon request, all tangible documents and other materials, and all copies
thereof, obtained by Parent, Holdings, Acquisition Sub, LLC Merger Sub or their
Affiliates or on their behalf
14
concerning the Company and its Subsidiaries in connection with this Agreement
that are subject to such confidence.
6.03. Vote. At the Company's Stockholder Meeting, Holdings shall vote
all of its shares of Company Capital Stock in favor of the Merger.
ARTICLE VII
COVENANTS OF ALL PARTIES
In addition to the foregoing, Parent, Holdings, Acquisition Sub, LLC
Merger Sub and the Company each covenant and agree as follows.
7.01. Cooperation. It shall cooperate fully with the other parties
hereto in furnishing any information or performing any action reasonably
requested by any such party, which information or action is necessary to the
successful consummation of the transactions contemplated by this Agreement.
Subject to its further rights under this Agreement, it shall use commercially
reasonable efforts to cause the Closing to occur at the earliest practicable
time.
7.02. Additional Agreements. In case at any time after the Effective
Time any further action is reasonably necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving LLC with full title to all
properties, assets, rights, approvals, immunities and franchises of the Company,
the proper officers and directors of each corporation which is a party to this
Agreement will take all such necessary action.
7.03. Public Announcements. Neither Parent nor the Company will
disseminate any press release or other announcement concerning this Agreement or
the transactions contemplated herein to any third party (except to the
directors, officers and employees of the parties to this Agreement whose direct
involvement is necessary for the consummation of the transactions contemplated
under this Agreement, to the attorneys, advisors and accountants of the parties
hereto, or except as Parent determines in good faith to be required by
applicable law after consultation with the Company) without the prior written
agreement of Parent and the Company.
7.04. Tax-Free Reorganization. Each of the parties shall use its
reasonable best efforts through the effective time of the Subsequent Merger to
cause the acquisition of Shares (as defined in the Stock Purchase Agreement) and
the Mergers taken together to be treated as a reorganization within the meaning
of Section 368(a) of the Code. No party will take any position on any federal,
state or local income or franchise Tax Return, or take any other tax reporting
position, that is inconsistent with the treatment of the acquisition of Shares
(as defined in the Stock Purchase Agreement) and the Mergers taken together as a
reorganization within the meaning of Section 368(a) of the Code, unless
otherwise required by applicable tax law (and then only to the extent required
by such applicable tax law).
15
ARTICLE VIII
TERMINATION
8.01. Grounds for Termination. This Agreement may be terminated at any
time prior to the Effective Time:
(a) by written agreement of the Company, the Sellers' Committee
and Parent;
(b) by either the Company or Parent if there shall be any law or
regulation that makes consummation of the transactions contemplated
hereby illegal or otherwise prohibited or if consummation of the
transactions contemplated hereby would violate any nonappealable final
order, decree or judgment of any court or governmental body having
competent jurisdiction.
(c) by the Company, if, prior to the adoption of this Agreement
at the Company Stockholders' Meeting, the Board of Directors of the
Company shall have approved, and the Company shall enter into, a letter
of intent, term sheet or a definitive agreement providing for the
implementation of a Superior Proposal; but only if prior to termination
under this subsection (c) (i) the Company is not then in breach of
Section 5.06, (ii) the Company's Board of Directors shall have
authorized the Company, subject to complying with the terms of this
Agreement, to enter into a letter of intent, term sheet or definitive
agreement concerning a transaction that constitutes a Superior Proposal
and the Company shall have notified the Parent in writing that it
intends to enter into such a letter of intent, term sheet or definitive
agreement , (iii) during the ten (10) business day period after the
Company's notice: (A) the Company shall have offered to negotiate with,
and, if accepted, negotiated in good faith with, Parent to attempt to
make such adjustments in the terms and conditions of this Agreement as
would enable the Company to proceed with the Mergers and (B) the Board
of Directors of the Company shall have concluded, after considering the
results of such negotiations and the revised proposals made by the
Parent, if any, that any Superior Proposal giving rise to the Company's
notice continues to be a Superior Proposal; (iv) such termination is
within five (5) business days following the ten (10) business day
period referred to above, and (v) no termination pursuant to this
Section 8.01(c) shall be effective unless the Company shall
simultaneously make the payment of the termination fee required by
Section 8.04.
(d) by Parent, if the Company's Board of Directors (i) shall have
withdrawn or modified in a manner adverse to Parent, Holdings,
Acquisition Sub or LLC Merger Sub its approval or recommendation of the
Merger Agreement or the transactions contemplated thereby, (ii) shall
have recommended an Acquisition Proposal or (iii) shall have adopted
any resolution to effect any of the foregoing.
8.02. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 8.01, written notice thereof shall forthwith be
given to the other party or parties specifying the provision hereof pursuant to
which such termination is made, and this Agreement, except as provided in
Section 10.01, shall forthwith become void and there shall be no liability
16
on the part of any party hereto or any of its affiliates, directors, officers or
stockholders except (i) as set forth in Section 8.03 and 8.04 hereof, and (ii)
nothing herein shall relieve any party from liability for any breach hereof. The
provisions of Sections 6.02 and 7.03 shall survive any termination hereof
pursuant to Section 8.01.
8.03. Fees and Expenses. Except as provided below, each party will bear
its own costs and expenses (including legal, accounting and investment banking
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
8.04. Termination Fee. The Company shall pay Parent $2,000,000 if this
Agreement is terminated by the Company pursuant to Section 8.01(c) or by Parent
pursuant to Section 8.01(d). Any payment due under Section 8.04 shall be made
concurrently with the termination of this Agreement pursuant to Section 8.01(c)
or 8.01(d), as the case may be, by wire transfer of immediately available funds
to an account designated by Parent or, if no wire transfer instructions have
been provided to the Company by Parent, by check.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE MERGER
The obligations of Company, Parent and Merger Sub to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) approval of the holders of a majority of outstanding Company
Common Stock and Company Preferred Stock (voting on an as-converted to
Common Stock basis) at the Company Stockholders' Meeting shall have
been obtained in compliance with the Company's certificate of
incorporation and by-laws and the DGCL.
(b) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Mergers.
(c) The Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it on or prior
to the Closing Date and Parent shall have received a certificate signed
by the Chief Executive Officer of the Company to the foregoing effect.
(d) Parent, Holdings, Acquisition Sub and LLC Merger Sub shall
have performed in all material respects all of its obligations
hereunder required to be performed by it on or prior to the Closing
Date and the Company shall have received a certificate signed by the
Chief Executive Officer or Manager, as applicable, of each of Parent,
Holdings, Acquisition Sub and LLC Merger Sub to the foregoing effect.
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ARTICLE X
MISCELLANEOUS
10.01. Effectiveness of Representations, Warranties and Agreements.
Except as otherwise provided in this Section 10.01, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time.
10.02. Notices. All notices, requests, demands or other communications
that are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given: (i) on the date of
delivery, if personally delivered by hand, (ii) upon the third day after such
notice is deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, (iii) upon the date
scheduled for delivery after such notice is sent by a nationally recognized
overnight express courier or (iv) by fax upon written confirmation (including
the automatic confirmation that is received from the recipient's fax machine) of
receipt by the recipient of such notice:
if to Parent, Holdings, Acquisition Sub with a copy to:
or LLC Merger Sub, to:
Xxxxxx X. Xxxxx, Esq.
Xxxxx Moshaioff Xxxxxxxx & Worcester LLP
Retalix, Ltd. One Post Office Square
10 Zarhin Street, Corex House Boston, MA 02109
43000, Ra'anana, Israel Telecopy: (000) 000-0000
Telecopy: x000-0-000-0000
if to the Company, to: with a copy to:
Xxxxx Xxxxxx Xxxxxxx X. Xxxxxxx, Esq.
TCI Solutions, Inc. Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
00000 Xxxxxxx Xxxxxx 000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxx 000 Xxxxx Xxxx, XX 92629
Xxxxxx, XX 00000 Telecopy: (000) 000-0000
Telecopy: (000) 000-0000
Such information may be changed, from time to time, by means of a
notice given in the manner provided in this Section 10.02.
18
10.03. Waiver. Parent may, with respect to the Company or any
stockholder of the Company, and the Company may, with respect to Parent,
Holdings, Acquisition Sub or LLC Merger Sub, (a) extend the time for the
performance of any of its obligations or other acts, (b) waive any inaccuracies
in its representations and warranties contained herein or in any document
delivered pursuant hereto or (c) waive compliance with any of its agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
10.04. Entire Agreement; Amendment. This Agreement (including any
exhibits and schedules hereto), the Ancillary Agreements and the Confidentiality
Agreement between Company and Parent constitute the entire agreement among the
parties hereto and supersede all prior and contemporaneous agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. This Agreement may be amended only by an
instrument in writing signed by Parent and the Company stating that it
constitutes an amendment to this Agreement.
10.05. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF DELAWARE.
10.06. Specific Performance and Injunctive Relief. The parties hereto
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached or threatened to be breached. It is
accordingly agreed that the parties shall be entitled to a preliminary and
permanent injunction or injunctions to prevent breaches, or threatened breaches,
of this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, without the
need to post bond or other security, this being in addition to any other remedy
to which they are entitled at law or in equity.
[Remainder of Intentionally Left Blank]
19
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
RETALIX, LTD.
By /s/ Xxxxx Xxxxxx
-------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
RETALIX HOLDINGS INC.
By /s/ Xxxxx Xxxxxx
-------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
RTLX LLC
By /s/ Xxxxx Xxxxxx
-------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer:
SURVIVOR RTLX LLC
By /s/ Xxxxx Xxxxxx
-------------------
Name: Xxxxx Xxxxxx
Title: President and Chief Executive Officer
TCI SOLUTIONS, INC.
By /s/ Xxxxx X. Xxxxxx
-------------------
Name: Xxxxx X. Xxxxxx
Title: President & CEO
TCI SOLUTIONS, INC.
By /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Chief Financial Officer
20
