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AGREEMENT AND PLAN OF MERGER
among
INTERNET COMMERCE CORPORATION,
JETS ACQUISITION SUB, INC.
and
EASYLINK SERVICES CORPORATION
Dated as of May 3, 2007
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TABLE OF CONTENTS
Page
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ARTICLE I THE MERGER..................................................... 1
SECTION 1.01. The Merger.............................................. 1
SECTION 1.02. Closing................................................. 1
SECTION 1.03. Effective Time.......................................... 2
SECTION 1.04. Effects of the Merger................................... 2
SECTION 1.05. Certificate of Incorporation and By-Laws................ 2
SECTION 1.06. Directors............................................... 2
SECTION 1.07. Officers................................................ 3
ARTICLE II EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS; EXCHANGE OF CERTIFICATES..................... 3
SECTION 2.01. Effect on Capital Stock................................. 3
SECTION 2.02. Exchange of Certificates................................ 4
SECTION 2.03. Taking of Necessary Action; Further Action.............. 6
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................ 6
SECTION 3.01. Organization............................................ 6
SECTION 3.02. Stock and Options....................................... 7
SECTION 3.03. Authority............................................... 8
SECTION 3.04. Consents and Approvals; No Violations................... 9
SECTION 3.05. SEC Reports and Financial Statements.................... 9
SECTION 3.06. Absence of Certain Changes or Events.................... 12
SECTION 3.07. Information Supplied.................................... 14
SECTION 3.08. Benefit Plans........................................... 14
SECTION 3.09. Litigation.............................................. 17
SECTION 3.10. Compliance with Applicable Law.......................... 18
SECTION 3.11. Tax Matters............................................. 18
SECTION 3.12. State Takeover Statutes................................. 20
SECTION 3.13. Brokers; Fees and Expenses.............................. 20
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SECTION 3.14. Opinion of Financial Advisor............................ 20
SECTION 3.15. Intellectual Property................................... 20
SECTION 3.16. Labor Relations and Employment.......................... 22
SECTION 3.17. Change of Control....................................... 23
SECTION 3.18. Environmental Matters................................... 23
SECTION 3.19. Material Contracts...................................... 26
SECTION 3.20. Property................................................ 28
SECTION 3.21. Title to Properties..................................... 28
SECTION 3.22. Insurance............................................... 28
SECTION 3.23. Customers and Suppliers................................. 29
SECTION 3.24. No Other Representations and Warranties................. 29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB.............. 29
SECTION 4.01. Organization............................................ 29
SECTION 4.02. Authority............................................... 29
SECTION 4.03. Consents and Approvals; No Violations................... 30
SECTION 4.04. Information Supplied.................................... 30
SECTION 4.05. Interim Operations of Sub............................... 30
SECTION 4.06. Funds and Commitment.................................... 31
SECTION 4.07. Brokers................................................. 31
ARTICLE V COVENANTS...................................................... 31
SECTION 5.01. Conduct of Business of the Company...................... 31
SECTION 5.02. No Solicitation......................................... 34
SECTION 5.03. Other Actions........................................... 36
SECTION 5.04. Notice of Certain Events................................ 36
ARTICLE VI ADDITIONAL AGREEMENTS......................................... 37
SECTION 6.01. Stockholder Approvals; Preparation of Proxy Statements.. 37
SECTION 6.02. Access to Information................................... 37
SECTION 6.03. Reasonable Efforts...................................... 38
SECTION 6.04. Options and Restricted Shares........................... 38
SECTION 6.05. SEC Filings............................................. 42
SECTION 6.06. Indemnification; Insurance.............................. 42
SECTION 6.07. Employees............................................... 42
SECTION 6.08. Transfer Taxes.......................................... 44
ARTICLE VII CONDITIONS................................................... 44
SECTION 7.01. Conditions to Each Party's Obligation to Effect the
Merger.................................................. 44
SECTION 7.02. Conditions to Obligation of Parent and Sub.............. 44
SECTION 7.03. Conditions to Obligation of the Company................. 45
SECTION 7.04. Frustration of Closing Conditions....................... 46
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER........................... 47
SECTION 8.01. Termination............................................. 47
SECTION 8.02. Effect of Termination................................... 48
SECTION 8.03. Amendment............................................... 49
SECTION 8.04. Extension; Waiver....................................... 49
ARTICLE IX MISCELLANEOUS................................................. 49
SECTION 9.01. Nonsurvival of Representations and Warranties........... 49
SECTION 9.02. Assumption of Obligations............................... 49
SECTION 9.03. Notices................................................. 50
SECTION 9.04. Interpretation.......................................... 51
SECTION 9.05. Counterparts............................................ 51
SECTION 9.06. Entire Agreement; Third Party Beneficiaries............. 51
SECTION 9.07. Governing Law........................................... 52
SECTION 9.08. Publicity............................................... 52
SECTION 9.09. Assignment.............................................. 52
SECTION 9.10. Enforcement............................................. 52
SECTION 9.11. Fees and Expenses....................................... 52
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of May 3,
2007, is among Internet Commerce Corporation, a Delaware corporation ("Parent"),
Jets Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary
of Parent ("Sub"), and EasyLink Services Corporation, a Delaware corporation
(the "Company"). "Parties" means Parent, Sub and the Company, and each shall be
considered a "Party."
WHEREAS, the respective boards of directors of Parent, Sub and the Company
deem it advisable and in the best interests of each corporation and its
respective stockholders to consummate the acquisition of the Company by Parent
on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the respective boards of directors of Parent, Sub and the Company
have each approved the merger of Sub into the Company, upon the terms and
subject to the conditions set forth in this Agreement (the "Merger"), whereby
each issued and outstanding share of Class A common stock, par value $0.01 per
share, of the Company (the "Company Common Stock"), other than shares of Company
Common Stock owned directly or indirectly by Parent or the Company and
Dissenting Shares (as defined in Section 2.01(d)), will be converted into the
right to receive the Merger Consideration (as defined in Section 2.01(c));
WHEREAS, the board of directors of the Company (the "Company Board"), has
recommended that each holder of Company Common Stock (the "Company
Stockholders") approve the Merger and this Agreement; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various terms and conditions to the Merger;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Sub and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law, as amended (the "DGCL"), Sub shall be merged with and into the Company at
the Effective Time (as defined in Section 1.03). Following the Effective Time,
the separate corporate existence of Sub shall cease and the Company shall
continue as the surviving corporation (the "Surviving Corporation") and shall
succeed to and assume all the rights and obligations of Sub in accordance with
the DGCL.
SECTION 1.02. Closing. The closing of the Merger (the "Closing") will take
place at 10:00 a.m. (New York City time) on a date to be specified by the
Parties, which shall be no later than the second Business Day after satisfaction
or waiver of the conditions set forth in Article VII (the "Closing Date"), at
the offices of Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP, 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx, unless another Closing Date, time or place is agreed to
in writing by the Parties. For purposes of this Agreement "Business Day" means
any day other than Saturday, Sunday, and any day which is a legal holiday or a
day on which banking institutions in New York or New Jersey are authorized or
required by Law (as defined in Section 2.02(d)) or other action of a
Governmental Entity (as defined in Section 3.04) to close.
SECTION 1.03. Effective Time. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the Parties shall file with
the Secretary of State of the State of Delaware a certificate of merger or other
appropriate documents as provided in Section 251 of the DGCL (in any such case,
the "Certificate of Merger") executed in accordance with the relevant provisions
of the DGCL and shall make all other filings or recordings required under the
DGCL to effectuate the Merger. The Merger shall become effective at such time as
the Certificate of Merger is duly filed with the Secretary of State of the State
of Delaware, or at such other time as Sub and the Company shall agree should be
specified in the Certificate of Merger (the time the Merger becomes effective
being hereinafter referred to as the "Effective Time").
SECTION 1.04. Effects of the Merger. The Merger shall have the effects set
forth in Section 259 of the DGCL.
SECTION 1.05. Certificate of Incorporation and By-Laws. (a) The certificate
of incorporation of the Company shall be amended in the Merger to be the same as
the certificate of incorporation of Sub, as in effect immediately prior to the
Effective Time, except that the corporate name of the Company shall remain the
corporate name of the Surviving Corporation, until thereafter changed or amended
as provided therein or by applicable Legal Requirements (as defined in Section
3.02(c)).
(b) The by-laws of Sub as in effect immediately prior to the Effective
Time shall become the by-laws of the Surviving Corporation, until thereafter
changed or amended as provided therein or by applicable Legal Requirements.
SECTION 1.06. Directors. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected or appointed or qualified, or until their earlier death,
resignation or removal in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation.
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SECTION 1.07. Officers. The officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected or appointed or qualified, or until their earlier death,
resignation or removal in accordance with the certificate of incorporation and
by-laws of the Surviving Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. Effect on Capital Stock. As of the Effective Time, by virtue
of the Merger and without any action on the part of Parent, Sub, the Company or
the holder of any shares of Company Common Stock or any shares of capital stock
of Sub:
(a) Capital Stock of Sub. Each issued and outstanding share of capital
stock of Sub shall be converted into and become one fully paid and nonassessable
share of common stock, par value $0.01 per share, of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Stock. Each share
of Company Common Stock that is owned by the Company or any Company Subsidiary
(as defined in Section 3.01(b)) and each share of Company Common Stock that is
owned by Parent, Sub or any other subsidiary of Parent shall automatically be
canceled and retired and shall cease to exist, and no consideration shall be
delivered in exchange therefor.
(c) Conversion of Company Common Stock. Each share of Company Common
Stock issued and outstanding as of the Effective Time (other than shares of
Company Common Stock to be canceled in accordance with Section 2.01(b) and any
Dissenting Shares (as hereinafter defined)) shall be converted into the right to
receive from the Surviving Corporation $5.80 in cash, without interest (the
"Merger Consideration") upon delivery of the certificate representing such
shares of Company Common Stock or such other appropriate documents (in the case
of Uncertificated Shares, as defined below) in the manner provided in Section
2.02(b) (or in the case of a lost, stolen or destroyed certificate, upon
delivery of an affidavit (and bond, if required) in the manner provided in
Section 2.02(f)). As of the Effective Time, all such shares of Company Common
Stock shall no longer be outstanding and shall automatically be canceled and
retired and shall cease to exist, and (x) each holder of a certificate
representing any such Company Common Stock (a "Certificate") and (y) each holder
of Company Common Stock not represented by a Certificate (an "Uncertificated
Share"), in each case shall cease to have any rights with respect thereto,
except the right to receive the Merger Consideration, without interest.
(d) Shares of Dissenting Stockholders. Notwithstanding anything in
this Agreement to the contrary, any issued and outstanding shares of Company
Common Stock held by a Person (as defined in Section 5.02) (a "Dissenting
Stockholder") who complies with all the provisions of Section 262 of the DGCL
concerning the right of holders of Company Common Stock to dissent from the
Merger and require appraisal of their shares of Company Common Stock
("Dissenting Shares") shall not be converted as described in Section 2.01(c) but
shall become the right to receive such consideration as may be determined to be
due to such
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Dissenting Stockholder pursuant to Section 262 of the DGCL. If, after the
Effective Time, such Dissenting Stockholder withdraws his demand for appraisal
or fails to perfect or otherwise loses his right of appraisal, in any case
pursuant to the DGCL, his shares of Company Common Stock shall be deemed to be
converted as of the Effective Time into the right to receive the Merger
Consideration, without interest. The Company shall give Parent (i) prompt notice
of any written demands, and withdrawals of any such demands, for appraisal of
shares of Company Common Stock received by the Company and (ii) the opportunity
to participate in all negotiations and proceedings with respect to any such
demands. The Company shall not, without the prior written consent of Parent,
make any payment with respect to, or settle, offer to settle or otherwise
negotiate, any such demands.
(e) Withholding Tax. Parent shall be entitled to deduct and withhold
from the Merger Consideration otherwise payable pursuant to this Agreement to
any holder of shares of Company Common Stock outstanding immediately prior to
the Effective Time such amounts as may be required to be deducted and withheld
with respect to the making of such payment under the Internal Revenue Code of
1986, as amended (the "Code"), or any provision of state, local 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
the shares of Company Common Stock outstanding immediately prior to the
Effective Time in respect of which such deduction and withholding was made.
SECTION 2.02. Exchange of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall designate a federally insured bank or trust company
reasonably acceptable to the Company to act as paying agent in the Merger (the
"Paying Agent"), and, from time to time on, prior to or after the Effective
Time, Parent shall make available, or cause the Surviving Corporation to make
available, to the Paying Agent funds in amounts and at the times necessary for
the payment of the Merger Consideration upon surrender or exchange of
Certificates or Uncertificated Shares, as applicable, as part of the Merger
pursuant to Section 2.01 (it being understood that any and all interest earned
on funds made available to the Paying Agent pursuant to this Agreement shall be
turned over to Parent).
(b) Exchange Procedure. As soon as reasonably practicable after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of one or more shares of Company Common Stock, (i) a letter of
transmittal in a form mutually agreed upon by Parent and the Surviving
Corporation, which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates or Uncertificated Shares shall pass, only
upon delivery of the Certificates to the Paying Agent or in the case of
Uncertificated Shares, such other documents as may reasonably be required by the
Paying Agent and (ii) instructions for use in effecting the surrender or
exchange of the Certificates or Uncertificated Shares in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying
Agent or to such other agent or agents as may be appointed by Parent, together
with such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent or in the case of Uncertificated
Shares, such other documents as may reasonably be required by the Paying Agent,
Parent or the Surviving Corporation shall pay or cause to be paid to the holder
of such Certificate or Uncertificated Share in exchange therefor the amount of
cash into which the shares of Company Common Stock theretofore represented by
such Certificate or Uncertificated Share shall have been converted pursuant to
Section 2.01, and
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the Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of Company Common Stock that is not registered
in the transfer records of the Company, payment may be made to a person other
than the person in whose name the Certificate so surrendered is registered, if
such Certificate shall be properly endorsed or otherwise be in proper form for
transfer and the person requesting such payment shall pay any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of such Certificate or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not applicable. Until surrendered
or exchanged as contemplated by this Section 2.02, each Certificate or
Uncertificated Share shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender or exchange the amount
of cash, without interest, into which the shares of Company Common Stock
theretofore represented by such Certificate or Uncertificated Share shall have
been converted pursuant to Section 2.01. No interest will be paid or will accrue
on the cash payable upon the surrender or exchange of any Certificate or
Uncertificated Share.
(c) No Further Ownership Rights in Company Common Stock. All cash paid
upon the surrender or exchange of Certificates or Uncertificated Shares in
accordance with the terms of this Article II shall be deemed to have been paid
in full satisfaction of all rights pertaining to the shares of Company Common
Stock. At the Effective Time, the stock transfer books of the Company shall be
closed, and there shall be no further registration of transfers on the stock
transfer books of the Surviving Corporation of the shares of Company Common
Stock that were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
the Paying Agent for any reason, they shall be canceled and exchanged as
provided in this Article II.
(d) Termination of Fund; No Liability. At any time after the first
anniversary of the Effective Time, the Surviving Corporation shall be entitled
to require the Paying Agent to deliver to the Surviving Corporation any funds
(including any interest received with respect thereto) which had been made
available to the Paying Agent and which have not been disbursed to holders of
Company Common Stock, and thereafter such holders shall be entitled to look to
the Surviving Corporation (subject to abandoned property, escheat or other
similar laws) only as general creditors thereof with respect to the Merger
Consideration payable with respect to the shares of Company Common Stock,
without any interest thereon. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Paying Agent shall be liable to any holder of
Company Common Stock for Merger Consideration delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law. If any
Certificate has not been surrendered or Uncertificated Share exchanged prior to
the fifth anniversary of the Effective Time (or immediately prior to such
earlier date on which Merger Consideration in respect of such Company Common
Stock would otherwise escheat to or become the property of any Governmental
Entity (as defined in Section 3.04), any such shares, cash, dividends or
distributions in respect of such Company Common Stock shall, to the extent
permitted by applicable Law, become the property of the Surviving Corporation,
free and clear of all claims or interest of any Person previously entitled
thereto. For purposes of this Agreement, "Law" means any statute, law (including
common law), treaty, order, judgment, decree, directive, code, ordinance, rule,
regulation, or similar issuance by a Governmental Entity having the effect of
law.
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(e) Investment of Fund. The Paying Agent shall invest any funds made
available to the Paying Agent, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(f) Lost, Stolen or Destroyed Certificates. In the event that any
Certificates shall have been lost, stolen or destroyed, the Paying Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration; provided, however; that Parent may, in its discretion and as a
condition precedent to the payment of the Merger Consideration, require such
owner of a lost, stolen or destroyed Certificates to deliver a bond in such sum
as it may reasonably direct as indemnity against any claim that may be made
against Parent, the Surviving Corporation or the Paying Agent with respect to
the Certificates alleged to have been lost, stolen or destroyed.
SECTION 2.03. Taking of Necessary Action; Further Action. If, at any time
after the Effective Time, any further action is necessary or desirable to carry
out the purposes of this Agreement and to vest the Surviving Corporation with
full right, title and possession to all assets, property, rights, privileges,
powers and franchises of Company and Sub, the officers and directors of Company
and Sub will take all such lawful and necessary action.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the schedules dated as of the date hereof and
delivered by the Company to Parent in connection with the execution of this
Agreement (the "Company Disclosure Schedules"), the Company represents and
warrants to Parent and Sub as set forth below. The Company Disclosure Schedules
will be arranged in sections corresponding to sections of this Agreement to be
modified by such Company Disclosure Schedules.
SECTION 3.01. Organization. (a) The Company and each Company Subsidiary is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing would not have a
Material Adverse Effect (as defined in Section 9.04) on the Company or such
Company Subsidiary. The Company and each Company Subsidiary is duly qualified or
licensed to do business and in good standing in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except in such
jurisdictions where the failure to be so duly qualified or licensed and in good
standing would not have a Material Adverse Effect on the Company or prevent or
materially delay the consummation of the Merger. The Company has provided Parent
with complete copies of the certificate (or articles) of incorporation and
bylaws of the Company and the organizational documents of each Company
Subsidiary with the minutes and written consents of the boards of directors,
board committees (other than the Special Committee of the Board created in
December of 2006) and stockholders of the Company and the comparable documents
for each Company Subsidiary (the "Corporate Documents"). Except as disclosed in
Schedule 3.01(a), the Corporate Documents are true and complete in all material
respects, as in effect as of the date of this Agreement and accurately reflect
all amendments thereto.
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(b) Schedule 3.01(b) lists each subsidiary of the Company (each a
"Company Subsidiary"). All the outstanding shares of capital stock of, or other
equity interests in, each Company Subsidiary have been duly and validly issued
and are fully paid and nonassessable under applicable Legal Requirements of the
jurisdiction in which such Company Subsidiary is incorporated or organized and
are, except as set forth on Schedule 3.01(b), owned directly or indirectly by
the Company, free and clear of all mortgages, pledges, claims, liens, charges,
encumbrances, claims, restrictions, options and security interests of any kind
or nature whatsoever, including any restriction on the right to vote, sell or
otherwise dispose of such capital stock or other ownership interests, except for
restrictions imposed by applicable securities laws (collectively, "Liens").
SECTION 3.02. Stock and Options. (a) Capitalization. The authorized capital
stock of the Company consists of 500,000,000 shares of Company Common Stock,
10,000,000 Shares of class B Common Stock, par value $0.01 per share, and
60,000,000 shares of undesignated preferred stock, par value $0.01 per share
(the "Preferred Shares"). As of April 30, 2007, (i) 11,006,505 shares of Company
Common Stock were issued and outstanding, (ii) no shares of class B Common Stock
or Preferred Shares were issued and outstanding, (iii) no shares of Company
Common Stock were held by the Company in its treasury and (iv) except as set
forth on Schedule 3.02, 953,437 shares of Company Common Stock were reserved for
issuance upon exercise of outstanding Options (as defined in Section 6.04).
Except as set forth above, or on Schedule 3.02, and except for shares of Company
Common Stock issued upon the exercise of Options, as of the date of this
Agreement, no shares of capital stock or other voting securities of the Company
were issued, reserved for issuance or outstanding. There are no 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 matters on which Company Stockholders may vote. Except as set forth
above, or on Schedule 3.02, as of the date of this Agreement, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any Company
Subsidiary is a party or by which any of them is bound obligating the Company or
any Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of the Company or any Company Subsidiary or obligating the Company or any
Company Subsidiary to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
Except as set forth in Section 6.04(a) in respect of Options and as set forth on
Schedule 3.02, as of and following the Effective Time, the Surviving Corporation
will not have any obligations under or otherwise in respect of any options,
warrants, preemptive or other rights (including convertible or exchangeable
securities) issued, granted, awarded or otherwise agreed to by the Company
before the Effective Time for the purchase or other acquisition of Company
Common Stock or other securities of the Company, including obligations in
respect of any such options, warrants, preemptive or other rights for the
payment of money or issuance of new or successor options, warrants, preemptive
or other rights to purchase or otherwise acquiring capital stock or other
securities of the Surviving Corporation. As of the date of this Agreement, there
are not any outstanding contractual obligations of the Company or any Company
Subsidiary to repurchase, redeem or otherwise acquire any shares of capital
stock of the Company.
(b) Schedule 3.02(b) sets forth the following information with respect
to each Option outstanding as of the date of this Agreement: (i) the name of the
optionee; (ii) the
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number of shares of the Company Common Stock subject to each such Option; (iii)
the exercise price of such Option; (iv) the date on which such Option was
granted; (v) the vesting schedule of such Option, and (vi) the date on which
such Option expires. The Company has made available to Parent an accurate and
complete copy of each Stock Option Plan (as defined in Section 6.04) and the
forms of all stock option agreements evidencing Options. There are no Options
outstanding to purchase shares of the Company Common Stock (or any other capital
stock of the Company) other than (1) pursuant to the Stock Option Plans and (2)
as disclosed in the Company's Form 10-K for the fiscal year ended December 31,
2006.
(c) All outstanding shares of the Company Common Stock, all
outstanding Options, and all outstanding shares of capital stock of each Company
Subsidiary have been issued and granted in compliance with (i) all applicable
federal, state and foreign securities laws and other applicable Legal
Requirements and (ii) except as disclosed in the Company Filed SEC Documents (as
defined in Section 3.06)), all requirements set forth in applicable agreements
or instruments. For the purposes of this Agreement, "Legal Requirements" means
any federal, state, local, municipal, foreign or other law, statute,
constitution, principle of common law, resolution, ordinance, code, edict,
decree, judgment, injunction, order, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into effect
by or under the authority of any Governmental Entity.
(d) Except as set forth on Schedule 3.02(d), the Company is not a
party to or bound by any agreement with respect to the voting (including voting
trusts, proxies, "poison pill" anti-takeover plans) registration under the
Securities Act, or sale or transfer (including agreements related to pre-emptive
rights, rights of first refusal, co-sale rights or "drag-along" rights but
excluding restrictions required by the Securities Act in connection with private
placements of securities) of any securities of the Company.
SECTION 3.03. Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby (other than, with respect to the Merger, the
approval and adoption of the terms of this Agreement by the holders of a
majority of the outstanding shares of Company Common Stock in accordance with
the DGCL and applicable securities laws (the "Company Stockholder Approval")).
The execution, delivery and performance of this Agreement and the consummation
by the Company of the Merger and of the other transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated in each case, other than, with respect to the Merger, the Company
Stockholder Approval. The Board of Directors of the Company, at a meeting duly
called and held at which all directors of the Company were present in accordance
with the By-laws of the Company, duly adopted resolutions (a) approving and
declaring advisable this Agreement, the Merger and the other transactions
contemplated hereby, (b) declaring that it is advisable and making a
determination that it is in the best interest of the Company and the Company's
stockholders that the Company enter into this Agreement and consummate the
Merger on the terms and subject to the conditions set forth in this Agreement,
(c) making a determination that this Agreement is fair to the Company and the
Company's stockholders, (d) directing that this Agreement be submitted to a vote
for adoption at a meeting of the Company's stockholders to be held as promptly
as practicable as set forth in Section 6.01
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and (e) recommending that the Company's stockholders adopt and approve this
Agreement, the Merger and the other transactions contemplated hereby, which
resolutions have not been subsequently rescinded, modified or withdrawn in any
way. This Agreement has been duly executed and delivered by the Company and,
assuming this Agreement constitutes a valid and binding obligation of Parent and
Sub, constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
SECTION 3.04. Consents and Approvals; No Violations. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (including the filing with the Securities and
Exchange Commission (the "SEC") of the proxy statement relating to the Company
Stockholder Approval of this Agreement (the "Company Proxy Statement")), the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act")
or as may be required under any foreign anti-trust or competition law or
regulation, Section 203 of the DGCL, foreign laws and as set forth on Schedule
3.04, neither the execution, delivery or performance of this Agreement by the
Company nor the consummation by the Company of the transactions contemplated
hereby will (i) conflict with or result in any breach of any provision of the
certificate of incorporation or by-laws of the Company or any Company
Subsidiary, (ii) require any filing with, or permit, authorization, consent or
approval of, any federal, state or local government or any court, tribunal,
administrative agency or commission or other governmental or other regulatory
authority or agency, domestic, foreign or supranational (a "Governmental
Entity") (except where the failure to obtain such permits, authorizations,
consents or approvals or to make such filings would not have a Material Adverse
Effect on the Company or any Company Subsidiary, or prevent or materially delay
the consummation of the Merger), (iii) except as set forth on Schedule 3.04,
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any Company
Subsidiary is a party or by which any of them or any of their properties or
assets may be bound, or (iv) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Company or any Company Subsidiary,
or any of their properties or assets, except in the case of clauses (iii) or
(iv) for violations, breaches or defaults that would not have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Merger.
SECTION 3.05. SEC Reports and Financial Statements. (a) The Company has
filed with the SEC all forms, reports, schedules, statements and other documents
required to be filed by it since December 31, 2004, pursuant to the Exchange Act
or the Securities Act of 1933, as amended (the "Securities Act") (such forms,
reports, schedules, statements and other documents, including any financial
statements or schedules included therein, are referred to as the "Company SEC
Documents"). The Company SEC Documents, at the time filed, (i) did not contain
any untrue statement of a material fact or omit to state a 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 and (ii) complied in all material respects with the
9
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the applicable rules and regulations of the SEC thereunder. Except
to the extent revised or superseded by a subsequently filed Company SEC
Document, the Company SEC Documents, as of their respective dates, do not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated or incorporated by reference therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading (it being understood that the foregoing does not cover
future events resulting from public announcement of the Merger). The financial
statements of the Company included in the Company SEC Documents comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except as
may be indicated in the notes thereto or, in the case of the unaudited
statements, as permitted by Forms 10-Q and 8-K of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments) the consolidated financial position of the Company as at the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended.
(b) Since December 31, 2005, there have been no comment letters or
other correspondence received by the Company from the SEC (excluding letters
related to confidential treatment applications and orders of effectiveness) or
responses to such comment letters or other correspondence by or on behalf of the
Company that have not been provided to Parent, and the copies of such letters
and responses delivered or made available to Parent were true, correct and
complete. The Company maintains disclosure controls and procedures required by
Rule13a 15 or 15d 15 under the Exchange Act, and such controls and procedures
are sufficient to provide reasonable assurance that material information
relating to the Company, including Company Subsidiaries, required to be
disclosed in the reports it files or submits under the Exchange Act is
accumulated and communicated to the Company's principal executive officer and
principal financial officer to allow timely decisions regarding financial
disclosure. No Company Subsidiary is required to file with the SEC any report,
schedule, form, statement or other document. The Company currently is in
compliance with the requirements applicable to securities that are traded on the
Nasdaq Capital Market and since December 31, 2006, has not received any notice
from the Nasdaq Capital Market asserting any non compliance with such
requirements.
(c) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Documents (the
"Company Financials"), (i) complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto then in effect at the same time as such filing,
(ii) was prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be indicated therein or in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act) and (iii) fairly
presented in all material respects the consolidated financial position of the
Company and the Company Subsidiaries that are required by GAAP to be
consolidated therein and fairly reflects its investment in any unconsolidated
Subsidiary as of the respective dates thereof and the consolidated results of
their operations and cash flows for the periods indicated, except that the
unaudited interim financial statements may not contain
10
footnotes and were or are subject to normal and recurring year-end adjustments.
All Company Subsidiaries that are required by GAAP to be consolidated in the
Company Financials have been so consolidated. The balance sheet of the Company
contained in Company SEC Documents as of December 31, 2006 is hereinafter
referred to as the "Company Balance Sheet." All accounts receivable of the
Company that are reflected on the financial statements in the Company SEC
Documents represented valid obligations arising from sales actually made or
services actually performed by the Company in the ordinary course of business.
Unless paid prior to the Closing Date, such accounts receivable are reasonably
anticipated to be collectible net of the allowances or reserves shown on such
financial statements. Except as disclosed in the Company Balance Sheet, neither
the Company nor any Company Subsidiary has any liabilities required under GAAP
to be set forth on a balance sheet which are, individually or in the aggregate,
material to the business, results of operations or financial condition of the
Company and the Company Subsidiaries taken as a whole, except for liabilities
incurred since the date of the Company Balance Sheet in the ordinary course of
business consistent with past practices and liabilities incurred in connection
with this Agreement. Since December 31, 2005, neither the Company nor any
Company Subsidiary nor, to the Company's knowledge, any director, officer,
employee, auditor, accountant or representative of the Company or the Company
Subsidiaries has received or otherwise had or obtained knowledge of any written
complaint, allegation, assertion or claim regarding the accounting or auditing
practices, procedures, methodologies or methods of the Company or Company
Subsidiaries or their respective internal accounting controls, including any
complaint, allegation, assertion or claim that the Company or the Company
Subsidiaries has engaged in questionable accounting or auditing practices
(solely for purposes of this sentence, "knowledge" shall be deemed to include
the actual knowledge of the Company's primary contact with the provider of the
Company's Ethics and Compliance Hotline). Since January 1, 2006, the Company's
auditors have not performed any non-audit services for the Company and the
Company Subsidiaries. Since December 31, 2005, no attorney representing the
Company or any Company Subsidiary, regardless whether employed by the Company or
the Company Subsidiaries, has reported evidence of a violation of securities
laws, breach of fiduciary duty or similar violation by the Company or any of its
officers, directors, employees or agents to the Company's Board of Directors or
any committee thereof or to any director or officer of the Company.
(d) Neither the Company nor any Company Subsidiary is a party to, or
has any commitment to become a party to, any joint venture, partnership
agreement or any similar contract or agreement (including any Contract relating
to any transaction, arrangement or relationship between or among the Company or
any Company Subsidiary, on the one hand, and any unconsolidated Affiliate,
including any structured finance, special purpose or limited purpose Person, on
the other hand) where the purpose or intended effect of such arrangement is to
avoid disclosure of any transaction involving the Company or any Company
Subsidiary in the Company Financial Statements. For purposes of this Agreement,
"Affiliate" means any other Person directly or indirectly controlling or
controlled by, or under common control with that Person; for purposes of this
definition, "control"(including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of management and polices of that Person, whether through
the ownership of voting securities, by contract or otherwise.
11
SECTION 3.06. Absence of Certain Changes or Events. Except as disclosed in
the Company SEC Documents filed and publicly available prior to the date of this
Agreement (the "Company Filed SEC Documents") or on Schedule 3.06, since
December 31, 2006, the Company has conducted its business only in the ordinary
course consistent with past practice, and there has not been any Material
Adverse Change with respect to the Company. Except as disclosed in the Company
Filed SEC Documents or on Schedule 3.06, since December 31, 2006, there has not
been:
(a) any granting by the Company or any Company Subsidiary to any
officer of the Company or any Company Subsidiary of any increase in
compensation, except in the ordinary course of business consistent with past
practice (ordinary course of business shall include in connection with
promotions);
(b) any granting by the Company or any of it subsidiaries to any
officer thereof of any increase in severance or termination pay, except as part
of a standard employment package to any person promoted or hired;
(c) except for employment arrangements in the ordinary course of
business consistent with past practice with employees other than any executive
officer of the Company or any Company Subsidiary, any entry by the Company or
any Company Subsidiary into any employment, severance or termination agreement
with any such employee or executive officer;
(d) any increase in or establishment of any bonus, insurance, deferred
compensation, pension, retirement, profit-sharing, stock option (including the
granting of stock options, stock appreciation rights, performance awards or
restricted stock awards or the amendment of any existing stock options, stock
appreciation rights, performance awards or restricted stock awards), stock
purchase or other employee benefit plan or agreement or arrangement, except in
the ordinary course of business consistent with past practice;
(e) any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or is reasonably expected
to have a Material Adverse Effect on the Company;
(f) any sale, assignment, lease, or other transfer of any material
properties of the Company or any Company Subsidiary other than in the ordinary
course of business consistent with past practice;
(g) any incurrence, assumption or guarantee by the Company or any
Company Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business consistent with past practice;
(h) (A) any disposition or impairment of or permitting to lapse of any
Intellectual Property that would be material and adverse to the Company or
outside the ordinary course of business, (B) disposition of or disclosure
(except as necessary in the conduct of its business) to any Person other than
representatives of Parent any trade secret or other Intellectual Property Rights
not theretofore a matter of public knowledge to any party that is not subject to
a nondisclosure or similar agreement, or (C) any change to the Company's or any
Company Subsidiary's rights to use Intellectual Property Rights licensed from a
third party, except, in the
12
case of (A) through (C) in the aggregate, as would not have a Material Adverse
Effect on the Company and the Company Subsidiaries, taken as a whole;
(i) any creation or other incurrence of any Lien on any asset other
than in the ordinary course of business consistent with past practice and other
than for Taxes not yet due and payable or being contested in good faith;
(j) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Company or any Company Subsidiary which,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on the Company;
(k) any change in any method of accounting or accounting practice by
the Company or revaluation of any material assets of the Company or any Company
Subsidiary except as required by GAAP;
(l) any cancellation of debts owed to or material claims held by the
Company or any Company Subsidiary, except in the ordinary course of business
consistent with past practice;
(m) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of the
Company's capital stock;
(n) any split, combination or reclassification of any of the Company's
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of the
Company's capital stock or other securities of the Company (other than shares of
Company Common Stock issued or issuable upon exercise of outstanding stock
options under the Stock Option Plans as defined in Section 6.04 or in connection
with the restricted stock agreements entered into prior to the date of this
Agreement and listed on Schedule 3.06(n) or in connection with matching
contributions under the Company's 401(k) plan in accordance with such 401(k)
plan as of the date of this Agreement);
(o) any Tax election made or changed, any annual tax accounting period
changed, any method of tax accounting adopted or changed, any material amended
returns or claims for material Tax refunds filed, any closing agreement entered
into, any Tax claim, audit or assessment settled, or any right to claim a tax
refund, offset or other reduction in Tax liability surrendered, or consent or
waiver of the statutory period of limitation applicable to any material Tax
claim;
(p) any material write-down of the value of any assets or any material
write-off as uncollectible of any accounts receivable;
(q) any loans or advances by the Company or any Company Subsidiary to,
material guarantees by the Company or any Company Subsidiary for the benefit of,
or material investment by the Company or any Company Subsidiary in any other
Person; or
13
(r) any arrangement or commitment by the Company to do any of the
action referenced above in this Section 3.06.
SECTION 3.07. Information Supplied. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in the
Company Proxy Statement or specifically provided in writing for inclusion or
incorporation by reference in the Financing Proxy Statement, will, at the time
the Company Proxy Statement or Financing Proxy Statement (as defined in Section
6.01(e)), as applicable, is first mailed to the Company Stockholders or Parent
stockholders, as applicable, or at the time of the Company Stockholders Meeting
(as defined in Section 6.01(a)) or Parent Stockholders Meeting (as defined in
Section 6.01(d)), as applicable, 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 Company Proxy Statement will comply as to
form in all material respects with the requirements of the Exchange Act and the
rules and regulations thereunder, except that no representation or warranty is
made by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub specifically for
inclusion or incorporation by reference therein.
SECTION 3.08. Benefit Plans. Except as set forth on Schedule 3.08, and
except to the extent that the failure of the following to be true would not
reasonably be expected to have a Material Adverse Effect: (a) Each "employee
pension benefit plan" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (a "Pension Plan"), each
"employee welfare benefit plan" (as defined in Section 3(1) of ERISA) (a
"Welfare Plan") or other arrangement providing medical, vision, dental, life or
other welfare benefits, (iii) all "specified fringe benefit plans" as defined in
Section 6039D of the Code, (iv) all "nonqualified deferred compensation plans"
as defined in Sections 409A(d)(1) or 3121(v)(2)(C) of the Code, (v) all
"multiemployer plans" as defined in Sections 3(37) or 4001(a)(3) of ERISA, and
(vi) all other agreements, plans, policies or arrangements relating to
employment, stock options, compensation, phantom stock, profit-sharing, employee
stock ownership, stock appreciation rights, deferred compensation, incentive
compensation, bonuses, retainer, retirement, savings, severance, change of
control benefits, fringe benefits or any other employee benefits, or providing
any remuneration or compensation, in each case entered into, maintained or
contributed to, or required to be maintained or contributed to, by the Company
or any Company Subsidiary or for which the Company or any Company Subsidiary
could have any liability, which benefit any present or former employee, officer,
independent contractor, shareholder or director or any spouse, child or other
dependent of such individuals (each of the foregoing, a "Benefit Plan") has been
administered in all material respects in accordance with its terms and
provisions. Each Benefit Plan, as well as the Company and the Company Subsidiary
with respect to the Benefit Plan, are (i) in compliance in all material respects
with the applicable provisions of ERISA, the Code, and all other applicable
Legal Requirements and (ii) operated and funded in such a manner as to qualify,
where appropriate, under applicable Legal Requirements, for income tax
exclusions as to its participants, the generation of tax-exempt income for its
funding vehicle, and the allowance of deductions and credits with respect to
contributions thereto. Schedule 3.08 sets forth a complete list of each Benefit
Plan and identifies which Benefit Plans are maintained by the Company or its
subsidiaries in the United States, and which Benefit Plans are maintained by the
Company or its subsidiaries in a foreign jurisdiction.
14
Schedule 3.08 also identifies any unwritten Benefit Plan, including a
description of any material terms of such plan, both as maintained by the
Company or the Company Subsidiaries in the United States, as well as each such
plan maintained by the Company or the Company Subsidiaries in a foreign
jurisdiction.
(a) No option granted under any of the Company's Stock Option Plans
was granted with an exercise price less than the fair market value of a share of
Company Common Stock on such option's actual grant date (as determined under the
applicable Stock Option Plan).
(b) Neither the Company nor any Commonly Controlled Entity (as defined
below) maintains or contributes to any retirement arrangement on behalf of
employees situated at a foreign office of Company or the Company Subsidiaries.
No Pension Plan is subject to Title IV of ERISA or Section 412 of the Code), no
Benefit Plan is a multiple employer plan within the meaning of Section 413(c) of
the Code, and no Benefit Plan is a multiple employer welfare arrangement within
the meaning of Section 3(40)A of ERISA. None of the Company or any other Person
that, together with the Company, is treated as a single employer under Section
414(b), (c), (m) or (o) of the Code (each, including the Company, a "Commonly
Controlled Entity"): (i) currently has an obligation to contribute to, or during
any time during the last six years had an obligation to contribute to, a Pension
Plan subject to Title IV of ERISA or Section 412 of the Code, or (ii) has
incurred any liability to the Pension Benefit Guaranty Corporation, which
liability has not been fully paid. All contributions and other payments required
to be made by the Company to any Pension Plan with respect to any period ending
before the Closing Date have been made or reserves adequate for such
contributions or other payments have been or will be set aside therefore and
have been or will be reflected in financial statements.
(c) Neither the Company nor any Commonly Controlled Entity is required
to contribute to any "multiemployer plan" (as defined in Section 4001(a)(3) of
ERISA) or has withdrawn from any multiemployer plan where such withdrawal has
resulted or would result in any "withdrawal liability" (within the meaning of
Section 4201 of ERISA) that has not been fully paid.
(d) Each Benefit Plan (and its related trust) that is intended to be
qualified under Section 401(a) of the Code has been determined by the United
States Internal Revenue Service to qualify under such section (and the related
trust, if any, has been determined to be exempt under Section 501(a) of the
Code) and, to the knowledge of the Company, nothing has occurred to cause the
loss of such qualified status.
(e) The Company has heretofore made available to Parent correct and
complete copies of each of the following:
(i) Each Benefit Plan and all amendments thereto; the trust
instrument and/or insurance contracts, if any, forming a part of such
Benefit Plan and all amendments thereto;
(ii) If applicable, the most recently filed Form 5500 and all
schedules thereto, if any;
(iii) The most recent determination letter issued by the United
States Internal Revenue Service regarding the qualified status of each such
Benefit Plan that is a Pension Plan;
15
(iv) The most recent accountant's report for each Benefit Plan,
if any;
(v) The most recent summary plan description for each Benefit
Plan, if any; and
(vi) Any summary of material modifications which relates to any
Benefit Plan.
(f) Except as provided in Section 6.04, the consummation of the
transactions contemplated by this Agreement will not accelerate the time of
payment or vesting, or increase the amount of compensation (including amounts
due under Benefit Plans) due to any employee, officer, former employee or former
officer of the Company or Company Subsidiary. No Benefit Plan, by its terms or
in effect, could reasonably be expected to require any payment or transfer of
money, property or other consideration on account of or in connection with the
transactions contemplated by this Agreement or any subsequent termination of
employment which payment could reasonably be expected to constitute an "excess
parachute payment" within the meaning of Section 280G of the Code. No amounts
payable under any Benefit Plan will fail to be deductible for federal income tax
purposes by virtue of 162(m) of the Code.
(g) As of the date of this Agreement, there are no actions, suits,
investigations or claims pending or, to the knowledge of the Company, threatened
with respect to any Benefit Plan, or the assets thereof (other than routine
claims for benefits), and to the knowledge of the Company, there are no facts
which could reasonably give rise to any material liability, action, suit,
investigation, or claim against any Benefit Plan, any fiduciary or plan
administrator or other Person dealing with any Benefit Plan or the assets
thereof.
(h) To the knowledge of the Company, no Person has entered into any
nonexempt "prohibited transaction," as such term is defined in ERISA and the
Code, with respect to any Benefit Plan that could result in a material tax or
penalty being imposed pursuant to either Section 4975 of the Code or Section 406
of ERISA.
(i) Each Benefit Plan may be amended, terminated, modified or
otherwise revised by the Company, on and after the Closing Date, without further
liability to the Company.
(j) No Benefit Plan provides medical, health, life insurance or other
welfare-type benefits to retirees or former employees or former independent
contractors or individuals who terminate (or have terminated) employment with
any of the Company or any Commonly Controlled Entity, or the spouses or
dependents of any of the foregoing (except for limited continued medical benefit
coverage for former employees, their spouses and other dependents as required to
be provided under Section 4980B of the Code or Part 6 of Subtitle B of Title I
of ERISA ("COBRA") or applicable similar Laws).
(k) Neither the Company nor any Company Subsidiary has, since October
3, 2004, (A) granted to any Person an interest in a nonqualified deferred
compensation plan (as defined in Section 409A(d)(1) of the Code) which interest
has been or, upon the lapse of a substantial risk of forfeiture with respect to
such interest, will be subject to the tax imposed by Sections 409A(a)(1)(B) or
(b)(4)(A) of the Code, or (B) modified the terms of any nonqualified deferred
compensation plan in a manner that could reasonably be expected to cause an
interest
16
previously granted under such plan to become subject to the tax imposed by
Sections 409A(a)(1)(B) or (b)(4) of the Code. Each Benefit Plan that is a
"nonqualified deferred compensation plan" as defined in Section 409A of the Code
either has been operated and administered in good faith compliance with Section
409A of the Code since January 1, 2005, or is not subject to Section 409A of the
Code.
(l) The transactions contemplated hereby will not constitute a
nonexempt prohibited transaction (as described in Section 406 of ERISA and
Section 4975 of the Code).
(m) No Benefit Plan is or is funded by a Voluntary Employees'
Beneficiary Association within the meaning of Section 501(c)(9) of the Code.
(n) With respect to each Benefit Plan maintained by the Company or
any Commonly Controlled Entity of the Company or any Company Subsidiary for the
benefit of, or relating to, any present or former employee, consultant or
director of the Company or Company Subsidiary who performs services outside of
the United States (each, an "International Benefit Plan"): (i) each
International Benefit Plan is in compliance with the applicable provisions of
the laws and regulations regarding employee benefits, mandatory contributions
and retirement plans of each jurisdiction in which each such International
Benefit Plan is maintained, to the extent those laws are applicable to such
International Benefit Plan; (ii) each International Benefit Plan has been
administered at all times in accordance with its terms; (iii) to the knowledge
of the Company, there are no pending investigations by any governmental body
involving any International Benefit Plan, and no pending claims (except for
claims for benefits payable in the normal operation of the International Benefit
Plans), suits or proceedings against any International Benefit Plan or asserting
any rights or claims to benefits under any International Benefit Plan; and (iv)
the transactions contemplated by this Agreement will not, by themselves or in
conjunction with any other agreements, events or occurrences, create or
otherwise result in any liability, accelerated payment or any enhanced benefits
with respect to any International Benefit Plan.
SECTION 3.09. Litigation. As of the date of this Agreement, except as
disclosed in Schedule 3.09, there is no suit, claim, action, proceeding or
investigation pending before any Governmental Entity against the Company or any
Company Subsidiary that could reasonably be expected to have a Material Adverse
Effect on the Company and to the Company's knowledge none of the foregoing has
been threatened. Neither the Company nor any Company Subsidiary is subject to
any outstanding order, writ, injunction or decree that could reasonably be
expected to have a Material Adverse Effect on the Company. Except where such
matter would not reasonably be expected to have a Material Adverse Effect on the
Company, there has not been since December 31, 2006 nor are there currently any
internal material investigations or inquiries being conducted by the Company or
any Company Subsidiary, the Company Board or to the knowledge of the Company,
any third Person or Governmental Entity or at the request of any of the
foregoing concerning any financial, accounting, Tax, conflict of interest,
self-dealing, breach of fiduciary duty, fraudulent or deceptive conduct or other
misfeasance or malfeasance issues.
SECTION 3.10. Compliance with Applicable Law. Except as set forth on
Schedule 3.10, the Company and each Company Subsidiary hold all permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities necessary for the lawful conduct of its business (the "Company
Permits"), except for failures to hold such permits, licenses, variances,
exemptions, orders and approvals that would not have a Material Adverse Effect
on the Company. Except as set forth on Schedule 3.10, the Company Permits are in
full force and effect and the Company and the Company Subsidiaries are in
compliance with the terms of the Company Permits, except where the failure to be
in full force and effect or so to comply would not have a Material Adverse
Effect on the Company or any Company Subsidiary, taken as a whole. Except as
disclosed in the Company Filed SEC Documents and except as set forth on Schedule
3.10, to the knowledge of the Company, the business of the Company and the
Company Subsidiaries is not being conducted in violation of any Legal
Requirements, except for possible violations that would not have a Material
Adverse Effect on the Company or prevent or materially delay the consummation of
the Merger. Except as set forth on Schedule 3.10, as of the date of this
Agreement, no investigation or review by any Governmental Entity with respect to
the Company or any Company Subsidiary is pending or, to the knowledge of the
Company, threatened, nor has any Governmental Entity indicated an intention to
conduct any such investigation or review, other than, in each case, those the
outcome of which would not be reasonably expected to have a Material Adverse
Effect on the Company or prevent or materially delay the consummation of the
Merger. Except as disclosed in the Company Filed SEC Documents, since December
31, 2004, the Company has complied in all material respects with the applicable
rules, regulations and policies of the Nasdaq Capital Market.
17
SECTION 3.11. Tax Matters. Except as set forth on Schedule 3.11, and except
to the extent that the failure of the following to be true would not reasonably
be expected to have a Material Adverse Effect:
(a) The Company and each Company Subsidiary has timely filed, or has
caused to be timely filed on its behalf, all Tax Returns required to be filed by
it, and all such Tax Returns are true, complete and accurate. All Taxes whether
or not shown to be due on such Tax Returns, have been, or will be, timely paid.
(b) The Company Financials reflect an adequate reserve for all Taxes
payable by the Company or any Company Subsidiary for all Taxable periods and
portions thereof through the date of such financial statements, and such Tax
reserve has been established in accordance with generally accepted accounting
principles, consistently applied. No deficiency with respect to any Taxes has
been proposed, asserted or assessed against the Company, and no requests for
waivers of the time to assess any such Taxes are pending.
(c) Except as disclosed on Schedule 3.11, none of the Tax Returns of
Company or any Company Subsidiary have ever been audited by the Internal Revenue
Service or any other Governmental Entity. No examination of any Tax Return of
the Company or any Company Subsidiary is currently in progress, and neither the
Company nor any Company Subsidiary has received written notice of any (i)
pending or proposed audit or examination or (ii) request for information
regarding Tax matters. The statutory period for examinations of the Federal
Income Tax Returns of the Company and the Company Subsidiaries consolidated in
such Returns for all years through 2002 have expired except to the extent that
the utilization of tax net operating losses in future years could subject such
closed years to examination by the United States Internal Revenue Service.
(d) There are no Liens for material Taxes (other than liens for
current Taxes not yet due and payable) on the assets of the Company.
(e) Neither the Company nor any Company Subsidiary (i) has been a
member of an affiliated group filing a consolidated federal Income Tax Return
(other than a group the common parent of which was the Company), (ii) has any
liability for Taxes of any Person (other than the Company or any Company
Subsidiary) under Treasury Regulations section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise or (iii) has been a party to any joint venture,
partnership or other agreement that could be treated as a partnership for Tax
purposes.
(f) The Company and each Company Subsidiary have collected all sales,
use, goods and services or other commodity Taxes required to be collected and
remitted or will remit the same to the appropriate Tax authority within the
prescribed time periods.
(g) The Company has not engaged in a transaction that is the same as
or substantially similar to one of the types of transactions that the Internal
Revenue Service has determined to be a tax avoidance transaction and identified
by notice, regulation, or other form of published guidance as a listed
transaction, as set forth in U.S. Treas. Reg. Section 1.6011-4(b)(2).
18
(h) Neither the Company nor any Company Subsidiary has constituted
either a "distributing corporation" or a "controlled corporation" in a
distribution of stock intended or purported to be governed by Section 355 or
Section 361 of the Code.
(i) Neither the Company nor any Company Subsidiary will be required to
include any item of income in, or exclude any item of deduction from, taxable
income for any taxable period (or portion thereof) ending after the Closing Date
as a result of any of the following:
(i) change in method of accounting for a taxable period ending on
or prior to the Closing Date;
(ii) "closing agreement" as described in Code section 7121 (or
any corresponding or similar provision of state, local or foreign income
Tax law) executed on or prior to the Closing Date;
(iii) intercompany transactions or any excess loss account
described in Treasury Regulations under Code section 1502 (or any
corresponding or similar provision of state, local or foreign income Tax
law);
(iv) installment sale or open transaction disposition made on or
prior to the Closing Date; or
(v) prepaid amount received on or prior to the Closing Date
except for implementation, development and software maintenance fees
deferred in accordance with the Company's standard accounting policies.
(j) For purposes of this Agreement:
"Taxes" includes all forms of taxation, whenever created or imposed,
and whether of the United States or elsewhere, and whether imposed by a
local, municipal, governmental, state, foreign, Federal or other
Governmental Entity, or in connection with any agreement with respect to
Taxes, including all interest, penalties and additions imposed with respect
to such amounts.
"Tax Return" means all Federal, state, local, provincial and foreign
Tax returns, declarations, statements, reports, schedules, forms and
information returns and any amended Tax return relating to Taxes.
SECTION 3.12. State Takeover Statutes. The Company Board has approved the
Merger and this Agreement and such approval is sufficient to render inapplicable
to the Merger, this Agreement and the transactions contemplated by this
Agreement the provisions of Section 203 of the DGCL. To the knowledge of the
Company without investigation, no other state takeover statute or similar
statute or regulation applies or purports to apply to the Merger, this
Agreement, or any of the transactions contemplated by this Agreement.
SECTION 3.13. Brokers; Fees and Expenses. Except as set forth in Schedule
3.13, no broker, investment banker, financial advisor or other person, other
than America's Growth
19
Capital and Pharus Advisors, LLC, is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company and no other bonuses or payments will be required to be
made by the Company as a result of or in connection with the consummation of the
Merger. The Company has provided Parent true and correct copies of all
agreements between the Company and America's Growth Capital and Pharus Advisors,
LLC relating to any fee arrangement.
SECTION 3.14. Opinion of Financial Advisor. The Company has received the
respective opinions of America's Growth Capital and Pharus Advisors, LLC to the
effect that, as of the date of this Agreement, the consideration to be received
by the holders of the outstanding shares of Company Common Stock pursuant to the
Merger is fair to such holders from a financial point of view, and complete and
correct signed copies of such opinions have been, or promptly upon receipt
thereof will be, delivered to Parent.
SECTION 3.15. Intellectual Property. (a) Schedule 3.15(a) sets forth a
correct and complete list of all (i) registered trademarks, service marks and
domain names, and applications to register the foregoing, (ii) copyright
registrations, and (iii) patents and patent applications, in each case which are
currently owned by the Company and the Company Subsidiaries Each item listed on
Schedule 3.15(a) has been duly registered or applied for with the U.S. Patent
and Trademark Office or other applicable governmental authority and are, to the
knowledge of the Company, valid and subsisting. All Intellectual Property owned
by the Company and the Company Subsidiaries is owned free and clear of any Liens
except for such Liens that would not reasonably be expected to materially and
adversely affect the Company's use of the affected Intellectual Property. There
is no pending or, to the knowledge of the Company, threatened opposition,
interference or cancellation proceeding before any court or registration
authority in any jurisdiction against the registrations and applications listed
in Schedule 3.15(a). All such items of Intellectual Property are (i) to the
knowledge of the Company, valid, subsisting, enforceable, in full force and
effect, and (ii) have not been or are not, as applicable, canceled, expired,
abandoned or otherwise terminated, and payment of all renewal and maintenance
fees in respect thereof, and all filings related thereto, have been duly made.
(b) Schedule 3.15(b) sets forth a correct and complete list of all
licenses with respect to the Intellectual Property under which the Company or
any Company Subsidiary is a licensor, licensee, distributor or reseller ("IP
Licenses"). The Company and the Company Subsidiaries have complied with the
terms and conditions of the IP Licenses in all material respects. To the
knowledge of the Company, all of the IP Licenses are valid, enforceable and in
full force and effect (subject to (i) applicable bankruptcy, insolvency,
fraudulent transfer and conveyance, moratorium, reorganization, receivership and
similar laws relating to or affecting the enforcement of the rights and remedies
of creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law)). Except as set
forth in Schedule 3.15(b), the transactions contemplated by this Agreement will
not result in the termination of, or otherwise require the consent, approval or
other authorization of any party to, any IP License. Except as set forth and
quantified in Schedule 3.15(b), neither the Company nor any Company Subsidiary
is a party to or bound by any license or other contract requiring the payment by
the Company or any Company Subsidiary of any royalty or license payment.
20
(c) To the knowledge of the Company, (i) none of the Company or any
Company Subsidiary has infringed upon, misappropriated or otherwise come into
conflict with any Intellectual Property of any other Person or (ii) there is no
basis for such a claim by any third party, in each case except for such
infringements, misappropriations or conflicts that would not reasonably be
expected to have a Material Adverse Effect on the Company. Except as disclosed
in Schedule 3.15(c), none of the Company or any Company Subsidiary has received
in writing since January 1, 2005, any charge, complaint, claim, demand or notice
alleging any such infringement, misappropriation or other conflict that has not
been settled or otherwise fully resolved. None of the Company or any Company
Subsidiary is party to or the subject of any pending or, to the knowledge of the
Company, threatened, suit, claim, action, investigation or proceeding with
respect to any such infringement, misappropriation or conflict, that has not
been settled or otherwise fully resolved. To the knowledge of the Company, no
other Person has infringed upon, misappropriated or otherwise come into conflict
with any Intellectual Property owned by the Company or any Company Subsidiary.
None of the Company or any Company Subsidiary has brought any action, suit or
proceeding for infringement of any Intellectual Property of the Company or any
Company Subsidiary, or for breach of any license or agreement involving any of
such Intellectual Property, against any party since January 1, 2004.
(d) Each of the Company and the Company Subsidiaries has taken all
commercially reasonable action to protect (i) the proprietary nature and value
of the Company Intellectual Property and (ii) the secrecy, confidentiality and
value of their trade secrets.
(e) Except as disclosed in Schedule 3.15(e), to the knowledge of the
Company, none of the Software products owned by the Company or any Company
Subsidiary incorporates or is comprised of or distributed with any "open source"
or similar third party license agreement that (i) requires the distribution of
source code in connection with the distribution of such software in object code
form; (ii) materially limits the Company's and the Company Subsidiaries' freedom
to seek full compensation in connection with marketing, licensing, and
distributing such software products; or (iii) allows a customer or requires that
a customer have the right to decompile, disassemble or otherwise reverse
engineer the software.
(f) For purposes of this Agreement:
(i) "Intellectual Property" means all intellectual property,
including (A) inventions (whether patentable or unpatentable and whether or
not reduced to practice), ideas, research and techniques, technical
designs, discoveries and specifications, improvements, modifications,
adaptations, and derivations thereto, and patents, patent applications,
models, industrial designs, inventor's certificates, and patent
disclosures, together with reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof
(the "Patents"), (B) trademarks, all service marks, logos, trade dress,
brand names and trade names, assumed names, corporate names and other
indications of origin (whether registered or unregistered), (C) copyrights
(whether registered or unregistered and any applications for registration
therefor, including any modifications, extensions or renewals thereof), (D)
trade secrets, know-how and confidential business information, (F)
Software, and (G) internet domain names.
21
(ii) "Software" means any and all (A) computer programs,
including any and all software implementations of algorithms, models and
methodologies, whether in source code or object code, (B) databases and
compilations, including any and all data and collections of data, whether
machine readable or otherwise, (C) descriptions, schematics, flow-charts
and other work product used to design, plan, organize and develop any of
the foregoing and (D) all documentation, including user manuals and
training materials, relating to any of the foregoing.
SECTION 3.16. Labor Relations and Employment. (a) To the knowledge of the
Company, the Company and Company Subsidiaries have complied in all material
respects with all applicable Legal Requirements related to the employment of
labor, including provisions thereof relating to wages, hours, equal employment
opportunity, collective bargaining, non-discrimination, and withholding and
payment of social security and other Taxes. There are no complaints, charges,
lawsuits, arbitrations or other proceedings pending, or to the Company's
knowledge, threatened by or on behalf of any present or former employee of the
Company or any Company Subsidiary alleging any claim for material damages
including breach of any express or implied contract of employment, wrongful
termination, infliction of emotional distress or violation of any federal, state
or local statutes or regulations concerning terms and conditions of employment,
including wages and hours, employee safety, termination of employment and/or
workplace discrimination and harassment. Since January 1, 2005, neither the
Company nor any Company Subsidiary has retaliated against any employee (i) who
had previously submitted to his or her supervisor or anyone else in a position
of authority with the Company or Company Subsidiary any written, or to the
knowledge of the Company, oral complaint, concern or allegation regarding any
alleged unlawful conduct by any of the Company, the Company Subsidiaries or
their employees relating to accounting, internal accounting controls or auditing
matters, or (ii) who, to the knowledge of the Company, has provided information
to, or otherwise assisted any investigation by, any law enforcement, regulatory
or other governmental authority or a member of the United States Congress.
Except as set forth on Schedule 3.16, (x) there has been no labor union
organizing or, to Company's knowledge, attempting to organize any employees of
Company or any Company Subsidiary into one or more collective bargaining units,
(y) there is no labor strike, slowdown, stoppage or lockout actually pending,
or, to the knowledge of the Company, threatened against the Company or any
Company Subsidiary and (z) neither the Company nor any Company Subsidiary is not
a party to or bound by any collective bargaining or similar agreement with any
labor organization.
(b) Since December 31, 2005, neither the Company nor any Company
Subsidiary has effectuated (i) a "plant closing" as defined in the WARN Act,
affecting any site of employment or one or more facilities or operating units
within any site of employment or facility of the Company or any Company
Subsidiary, in each case in the United States or (ii) a "mass layoff" (as
defined in the WARN Act) affecting any site of employment or facility of the
Company or any Company Subsidiary in the United States; nor has the Company or
any Company Subsidiary engaged in layoffs or employment terminations sufficient
in number to trigger application of any similar state, or local law or
regulation similar to the WARN Act that is applicable to the Company or any
Company Subsidiary operating in the United States. To the Company's knowledge,
neither the Company's nor any Company Subsidiary's employees in the United
States has suffered an "employment loss" (as defined in the WARN Act) in the
ninety (90) days prior to the date of this Agreement.
(c) Except as set forth on Schedule 3.16(c), the employment of each
employee of the Company and its subsidiaries is terminable at will by the
Company and it subsidiaries without penalty, liability or severance obligation
incurred by the Company or any Company Subsidiary, except for statutory
obligations or such severance obligations incurred in the ordinary course of
business, and each independent contractor of the Company or any Company
Subsidiary has been correctly classified as such, and the Company and any
Company Subsidiary can have no liability as a result of any employee of such
entity incorrectly being classified as an independent contractor or otherwise.
22
SECTION 3.17. Change of Control. Except as set forth on Schedule 3.17, the
transactions contemplated by this Agreement will not require the consent from or
the giving of notice to a third party, permit a third party to terminate or
accelerate vesting, repayment or repurchase rights, or create any other
detriment under the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, lease, contract, agreement or other instrument or obligation
to which the Company or any Company Subsidiary is a party or by which any of
them or any of their properties or assets may be bound, except where the adverse
consequences resulting from such change of control or where the failure to
obtain such consents or provide such notices would not, individually or in the
aggregate, have a Material Adverse Effect on the Company or prevent or delay the
consummation of the Merger.
SECTION 3.18. Environmental Matters. (a) Except as disclosed on Schedule
3.18, to the knowledge of the Company, the Company is in compliance in all
material respects with all applicable Environmental Laws (as this term and the
other terms in this Section 3.18 are defined below).
(b) Except as specifically identified on Schedule 3.18, the Company
has provided to Parent copies of all environmental investigations, studies,
audits, tests, reviews, and reports, in draft or final form relating to the
Business, which are in the possession or control of the Company or any Company
Subsidiary.
(c) Except as set forth on Schedule 3.18, to the knowledge of the
Company, the Company and the Company Subsidiaries possess all required material
Environmental Permits; all such Environmental Permits are in full force and
effect; and the Company and the Company Subsidiaries are in compliance in all
respects with all terms and conditions thereof, except where the failure to
possess or comply with such Environmental Permits or the failure for such
Environmental Permits to be in full force and effect would not, individually or
in the aggregate, have a Material Adverse Effect on the Company.
(d) Except as disclosed on Schedule 3.18, and for such matters that
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company, to the knowledge of the Company, neither the Company nor any
Company Subsidiary has received any written notification that the Company or any
Company Subsidiary as a result of any of the current or past operations of the
Business, or any property currently or formerly owned or leased or used in
connection with the Business, is or may be adversely affected by any proceeding,
investigation, claim, lawsuit or order by any Governmental Entity or other
Person relating to (i) any Remedial Action that is or may be needed to respond
to a Release or threat of Release of Hazardous Materials or (ii) any other
alleged liability or obligation arising under any Environmental Laws;
(e) Except as disclosed on Schedule 3.18 and except for Environmental
Permits, neither the Company nor any Company Subsidiary has entered into any
Contract with any Person, including any Governmental Entity, by which the
Company has assumed the responsibility to implement or pay for any Remedial
Action, or to reimburse costs incurred by third parties with respect to any
Remedial Action;
23
(f) Except as disclosed on Schedule 3.18, to the knowledge of the
Company, there is not now and has not been at any time in the past, any
circumstance, including any Release in connection with the current or former
conduct of the Business for which the Company or any Company Subsidiary is
required or is reasonably likely to be required to implement or pay for any
Remedial Action, or to reimburse costs incurred by third parties with respect to
any Remedial Action, or other alleged liability or obligation arising under any
Environmental Law.
(g) The Company is not aware of any facts or circumstances likely to
delay or prevent implementation of this Agreement and the Merger, or to require
any Remedial Action, pursuant to property transfer statutes or requirements,
including the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K and
N.J.A.C. 7:26B or other Environmental Laws.
(h) For purposes hereof:
(i) "Business" means the current and former businesses of the
Company or its current and former subsidiaries or any predecessors thereto.
(ii) "Environmental Laws" means all applicable national, state,
provincial or local laws, statutes, rules, regulations, or ordinances
(including without limitation those promulgated by any Governmental Entity
in the United States, the United Kingdom, India, the United Arab Emirates,
France and Germany) relating to the protection of human health or safety,
or the environment, including any emission, discharge, generation,
distribution, use, processing, storage, treatment, disposal, abatement,
Release, threatened Release, permitting, investigation, cleanup,
mitigation, remediation, transportation, or other handling of Hazardous
Materials, and other orders, decrees, judgments, directives or other
requirements of any Governmental Entity relating to or imposing liability
or standards of conduct (including disclosure or notification) concerning
protection of human health or the environment or Hazardous Materials or any
activity involving Hazardous Materials, including the following federal
laws and their state counterparts (i) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.
("CERCLA"); (ii) the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901, et seq.; (iii) the Clean Water Act, 33 U.S.C. Sections 1251,
et seq.; (iv) the Oil Pollution Act of 1990, 33 U.S.C. Sections 2701, et
seq.; (v) the Clean Air Act, 42 U.S.C. Sections 7401, et seq.; (vi) the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Sections
11001, et seq.; (vii) the Hazardous Substances Transportation Act 49 U.S.C.
Sections 1801 et seq.; and (viii) the Toxic Substances Control Act, 15
U.S.C. Sections 2601, et. seq.
(iii) "Environmental Permits" means any permit, license,
registration, consent, order, administrative consent order, certificate,
approval, waiver, or other authorization necessary for the conduct of the
Business as currently conducted, and wherever it is currently conducted,
under any applicable Environmental Law.
(iv) "Hazardous Materials" means any substance that (x) is
defined, listed, identified or otherwise regulated under any Environmental
Law (including "hazardous", "toxic" or "solid" substances and wastes,
radioactive substances including radon gas, polychlorinated-biphenyls,
asbestos, mold, petroleum and petroleum
24
derivatives, compounds, and products) or (y) requires investigation,
remediation, or other protective measures under applicable Environmental
Law.
(v) "Release" means any releasing, spilling, pouring, abandoning,
discarding, emitting, leaking, pumping, dumping, injecting, depositing,
disposing, discharging, dispersing, leaching, migrating or other placement
or movement of Hazardous Materials into or through the environment
(including air, soil, subsurface, surface water, groundwater, property,
indoors or outdoors).
(vi) "Remedial Action" means all actions required by any
Governmental Entity pursuant to Environmental Law or otherwise taken as
necessary to comply with Environmental Law to (x) contain, immobilize,
mitigate, clean up, remove, treat or in any other way remediate any
Hazardous Materials; (y) prevent the release or threatened release of
Hazardous Materials so that they do not migrate or endanger or threaten to
endanger public health or welfare or the environment; or (z) perform
studies, investigations or monitoring in respect of any such matter.
Anything in this Agreement to the contrary notwithstanding, this Section
3.18 is the sole representation with respect to environmental matters.
SECTION 3.19. Material Contracts. (a) The Company has provided or made
available to Parent true and complete copies of the following ("Material
Contracts") to the extent still in force and effect as of the date of this
Agreement:
(i) all contracts, agreements, obligations, promises,
commitments, arrangements or undertakings (whether written or oral and
whether express or implied) that are legally binding (collectively,
"Contracts") of the Company or any Company Subsidiary with customers of the
Company involving payments to the Company or any Company Subsidiary in
excess of $100,000 during 2006 or anticipated to involve payments to the
Company or any Company Subsidiary in excess of $100,000 in 2007;
(ii) all Contracts of the Company or any Company Subsidiary with
any vendor or supplier of the Company or any Company Subsidiary involving
payments by or to the Company or the Company Subsidiaries in excess of (a)
$100,000 during 2006, (b) $100,000 in anticipated payments in 2007, or (c)
$250,000 in the aggregate;
(iii) all Contracts of the Company or any Company Subsidiary that
(x) contain most favored customer pricing provisions with any third party
or (y) grants any exclusive rights, rights of first refusal, rights of
first negotiation or similar rights to any Person or (z) that restrict the
ability of the Company or any Affiliate to compete in any business or area;
(iv) all material Contracts of the Company or any Company
Subsidiary with any Affiliate, director, officer of the Company, other than
Contracts which do not vary in any material respect from the standard form
of such contracts provided to Parent;
(v) all Contracts of the Company or any Company Subsidiary
pursuant to which the Company or such Company Subsidiary is granted rights
in Intellectual
25
Property of any third Person, other than (x) end user license Contracts
entered into in the ordinary course of business consistent with past
practice, which did not involve payments by the Company or the Company
Subsidiaries in excess of $35,000 during 2006 or anticipated in 2007, (y)
Contracts pursuant to which independent contractors assign Intellectual
Property to the Company in the ordinary course of business consistent with
past practice or (z) Contracts pursuant to which the Company or a Company
Subsidiary is granted rights in Intellectual Property, the absence of which
would not be material to the Company;
(vi) all Contracts of the Company or any Company Subsidiary
pursuant to which the Company or such Company Subsidiary is granted rights
in the Intellectual Property of any third Person, other than Contracts
consisting of "shrink wrap" or similar widely available commercial end user
licenses, for (x) the distribution or sublicense by Company or any Company
Subsidiary to any third Person as part of a value-added reseller or other
similar arrangement; (y) use by Company or any Company Subsidiary in the
provision of on-line services; or (z) for incorporation into any Software
licensed by Company or any Company Subsidiary to any third Person;
(vii) all Contracts of the Company or any Company Subsidiary
pursuant to which the Company or such Company Subsidiary grants material
rights in Intellectual Property to any third Person, other than
non-exclusive end user license agreements entered into in the ordinary
course of business consistent with past practice;
(viii) all joint venture, partnership or other similar Contracts
to which the Company or any Company Subsidiary is a party;
(ix) all Contracts relating to the borrowing of money or
extension of credit (collectively, "Debt Obligations") pursuant to which
any material indebtedness of the Company or any Company Subsidiary is
outstanding or may be incurred and all material guarantees of or by the
Company or any Company Subsidiary of any Debt Obligations of any other
Person, other than standard form invoices relating to accounts payable of
the Company or any Company Subsidiary disclosed in the SEC Financial
Statements or incurred in the ordinary course of business consistent with
past practice since December 31, 2006; and
(x) all Contracts, not otherwise described in the foregoing,
which are material to the Business or the Company.
(b) Each Material Contract is in full force and effect (except for
those Contracts that have expired in accordance with their terms and conditions)
and constitutes a legal, valid and binding agreement of the Company or the
Company Subsidiaries, as applicable, enforceable in accordance with its terms
and conditions (subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer and conveyance, moratorium, reorganization, receivership and similar
laws relating to or affecting the enforcement of the rights and remedies of
creditors generally and (ii) principles of equity (regardless of whether
considered and applied in a proceeding in equity or at law)), and except as
disclosed in the Company Filed SEC Documents, the Company or the Company
Subsidiaries, as applicable, have performed in all material respects
26
all of their obligations under, and are not in material violation or breach of
or default under, any such Material Contract. To the knowledge of the Company,
the other parties to any Material Contract have performed all of their
obligations under, and are not in material violation or breach of or default
under, any such Material Contract, and other than in the ordinary course of
business consistent with past practice, have not notified the Company of any
intention to terminate such Material Contract or to require any amendment or
waiver of the terms thereof as a condition of renewing or not terminating such
Material Contract.
(c) The execution of this Agreement and the consummation of the
transactions contemplated hereby will not conflict with or cause a breach of any
Material Contract, or require the approval of, or consent to be received from,
any party to any Material Contract in order for such Material Contract to remain
in full force and effect after the consummation of the Merger.
(d) Except as set forth on Schedule 3.19, no officer or director of
the Company or any Company Subsidiary, no stockholder of the Company related to
any such officer or director, and no "associate" (as defined in Rule 14a-1 under
the Exchange Act) of any of them, has any interest in any material Contract of,
or other business arrangement with, the Company or any Company Subsidiary, or in
any material property (including any real property and any material personal
property, tangible or intangible), used in or pertaining to the business of the
Company or any Company Subsidiary.
SECTION 3.20. Property. Schedule3.20 accurately identifies all real
property, leases and other rights in real property, structures and other
buildings of the Company as of the date of this Agreement. All properties and
assets of the Company, real and personal, material to the conduct of its
business are, except for changes in the ordinary course of business consistent
with past practice since December 31, 2006, reflected in the balance sheet, and
except as set forth on Schedule 3.20, the Company has good and marketable title
to its real and personal property reflected on the balance sheet or acquired by
it since the date of the balance sheet, free and clear of all mortgages, liens,
pledges, encumbrances, charges, agreements, claims, restrictions and defects of
title. Except as set forth on Schedule 3.20, all real property, structures and
other buildings and material equipment of the Company is currently used in the
operation of the business of the Company and the Company Subsidiaries, are
adequately maintained and are in satisfactory operating condition and repair for
the requirements of the business of the Company and the Company Subsidiaries as
presently conducted.
SECTION 3.21. Title to Properties. (a) Each of the Company and the Company
Subsidiaries has marketable and legal title to, or valid leasehold interests in,
all of its material properties and assets and, other than properties and assets
in which the Company or any Company Subsidiary has a leasehold interest, except
for defects in title, easements, restrictive covenants and similar Liens and
encumbrances that would not reasonably be expected to have a Material Adverse
Effect on the Company.
(b) Each of the Company and the Company Subsidiaries has complied in
all material respects with the terms of all real property leases to which it is
a party, and all such real property leases are in full force and effect. The
Company and the Company Subsidiaries enjoy peaceful and undisturbed possession
under all such leases.
27
SECTION 3.22. Insurance. All material physical assets of the Company and
the Company Subsidiaries carried for value on the Company Financial Statements
are covered by fire and other insurance against such risks and in such amounts
as are reasonable for prudent owners of comparable assets, and true and complete
copies of all such insurance policies have been delivered or made available to
Parent. Neither the Company nor any Company Subsidiary is in default with
respect to any of the provisions contained in any such policies of insurance or
has failed to give any notice or pay any premium or present any claim under any
such insurance policy, except for such defaults or failures that would not
reasonably be expected to have a Material Adverse Effect on the Company.. The
Company has no knowledge of and neither the Company nor any Company Subsidiary
has received written notice that any of such insurance policies will not be
renewed by the insurer upon the scheduled expiry of the policy or will be
renewed by the insurer only on the basis that there will be a material increase
in the premiums payable in respect of the policy.
SECTION 3.23. Customers and Suppliers. Neither the Company nor any Company
Subsidiary has any agreements or arrangements establishing, creating or relating
to any rebate, promotion or other allowance that involves any obligation or
liability to any customer that is material or outside the ordinary course of
business.
SECTION 3.24. No Other Representations and Warranties. Except for the
representations and warranties contained in this Article III, none of the
Company, any Affiliate of the Company or any other Person makes any
representations or warranties, and the Company hereby disclaims any other
representations or warranties, whether made by the Company, any affiliate of the
Company, or any of their officers, directors, employees, agents or
representatives, with respect to the negotiation, execution and delivery of this
Agreement or the transactions contemplated hereby, notwithstanding the delivery
or disclosure, in writing or orally, to Parent, Sub or any of their officers,
directors, employees, agents or representatives of any documentation or other
information.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the Company
as follows:
SECTION 4.01. Organization. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted, except where the
failure to be so organized, existing and in good standing would not be
reasonably expected to prevent or materially delay the consummation of the
Merger.
SECTION 4.02. Authority. Parent and Sub have requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
Sub and no other corporate proceedings on
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the part of Parent and Sub are necessary to authorize this Agreement or to
consummate such transactions. No vote of Parent stockholders is required to
execute this Agreement or (except as set forth in the next sentence with respect
to the Financing (as defined in Section 4.06(b)) enter into the transactions
contemplated hereby. The Company acknowledges (for purposes of this Section 4.02
and Section 4.03) that the Financing will require Parent Stockholder Approval
(as defined below), provided, it being expressly understood that consummation of
the Financing is not a condition precedent to Parent's and its subsidiaries
obligations hereunder, and the failure to consummate the Financing for any
reason (including, without limitation, the failure to obtain the Parent
Stockholder Approval) will not limit Parent's and its subsidiaries liabilities
hereunder for breach of the representations and warranties in Article IV
including without limitation Section 4.06. For purposes of this Agreement,
"Parent Stockholder Approval" means the approval and adoption by the holders of
a majority of the issued and outstanding shares of Parent's common stock, par
value $0.01 per share ("Parent Common Stock"), in accordance with the DGCL and
the Nasdaq Capital Market listing requirements, of (a) the issuance of the
shares of Parent Common Stock (the "Conversion Shares") issuable upon conversion
of the convertible notes contemplated by the Commitment and (b) the amendment to
Parent's certificate of incorporation (the "Parent Charter Amendment") to
increase the number of authorized shares of Common Stock by a number of shares
not less than the number of Conversion Shares. This Agreement has been duly
executed and delivered by Parent and Sub, as the case may be, and, assuming this
Agreement constitutes a valid and binding obligation of the Company, constitutes
a valid and binding obligation of each of Parent and Sub enforceable against
them in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally and (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies.
SECTION 4.03. Consents and Approvals; No Violations. Except as otherwise
stated on Schedule4.03 and for filings, permits, authorizations, consents and
approvals as may be required under, and other applicable requirements of, the
Exchange Act, the HSR Act or as may be required under any foreign anti-trust or
competition law or regulation and the DGCL, neither the execution, delivery or
performance of this Agreement by Parent and Sub nor the consummation by Parent
and Sub of the transactions contemplated hereby will (i) conflict with or result
in any breach of any provision of the respective certificate of incorporation or
by-laws of Parent and Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not be reasonably expected to prevent or materially delay the
consummation of the Merger), (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, lease, contract, agreement or other instrument or obligation
to which Parent or its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
subsidiaries or any of their properties or assets, except in the case of clauses
(iii) and (iv) for violations, breaches or defaults which would not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the Merger.
29
SECTION 4.04. Information Supplied. None of the information supplied or to
be supplied by Parent or Sub in writing specifically for inclusion or
incorporation by reference in the Company Proxy Statement will, at the time the
Company Proxy Statement is first mailed to the Company Stockholders or 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
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
SECTION 4.05. Interim Operations of Sub. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
SECTION 4.06. Funds and Commitment. (a) Parent or Sub has or will have at
the Effective Time funds sufficient to consummate the Merger and make the
required payments pursuant to Section 9.11(a)(1).
(b) Without limiting Section 4.06(a), Parent has a binding written
commitment, pursuant to a securities purchase agreement dated as of May 3, 2007,
by and among Parent and the each of the purchasers identified on the signature
pages thereto, a true and complete copy of which has been furnished to the
Company (the "Commitment") to obtain the financing necessary, together with the
other funds to be provided by Parent to pay all amounts required to be paid by
Parent or Sub to consummate the Merger and make the required payments pursuant
to Section 9.11(a) (collectively the "Financing"). There are no conditions
precedent or other contingencies related to the Financing other than as set
forth in the Commitment. As of the date of this Agreement, Parent does not have
knowledge or any reason to believe that any of the conditions to the Commitment
will not be satisfied or that the Financing will not be available to Parent or
Sub on a timely basis to consummate the Merger.
SECTION 4.07. Brokers. Except for the use of Xxxxxxxxxxx & Co. Inc. by
Parent, none of Parent, Sub, or any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for any
broker or finder in connection with the transactions contemplated herein.
ARTICLE V
COVENANTS
SECTION 5.01. Conduct of Business of the Company. Except as contemplated by
this Agreement or as expressly agreed to in writing by Parent, during the period
from the date of this Agreement until the Effective Time, the Company will, and
cause each Company Subsidiary to, conduct its operations according to its
ordinary and usual course of business and consistent with past practice and,
subject to its obligations under Section 6.04, use its commercially reasonable
efforts to preserve intact its current business organization, keep available the
services of its current officers and employees and preserve its relationships
with customers, suppliers, licensors, licensees, advertisers, distributors and
others having business dealings with it and to preserve goodwill. Without
limiting the generality of the foregoing, and except as (x) otherwise expressly
provided in this Agreement, (y) required by Law, or (z) set forth on Schedule
5.01, the
30
Company will not and shall not permit any Company Subsidiary, in each case
without the consent of Parent, which shall not be unreasonably withheld, to:
(i) adopt or amend in any material respect any bonus, profit
sharing, compensation, severance, termination, stock option, stock
purchase, stock appreciation right, pension, retirement, employment or
other employee benefit agreement, trust, plan or other arrangement for the
benefit or welfare of any director, officer or employee of the Company or
any Company Subsidiary or increase in any manner the compensation or fringe
benefits of any director, officer or employee of the Company or any Company
Subsidiary (except, in each case, for normal annual increases and cost of
living increases for the benefit of officers and employees of the Company
and the Company Subsidiaries) or pay any benefit not required by any
existing agreement or place any assets in any trust for the benefit of any
director, officer or employee of the Company (in each case, except in the
ordinary course of business consistent with past practice);
(ii) incur any indebtedness for borrowed money in excess of its
current line of credit;
(iii) expend funds for individual capital expenditures in excess
of $100,000 or $1,000,000 in the aggregate for any 12-month period
commencing after the date hereof;
(iv) sell, lease, license, mortgage or otherwise encumber or
subject to any lien or otherwise dispose of any of its properties or assets
other than immaterial properties or assets (including without limitation
Intellectual Property) (or immaterial portions of properties or assets),
except in the ordinary course of business consistent with past practice;
(v) (x) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock, (y) split,
combine or reclassify any of its capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(vi) other than pursuant to the terms of currently outstanding
Options listed in Schedule 3.02, issuances in connection with the
restricted stock agreements listed in Schedule 3.06(m) or in connection
with matching contributions under the Company's 401(k) plan as in effect on
the date of this Agreement (and consistent with past practice), authorize
for issuance, issue, deliver, sell, modify or amend (including without
limitation accelerating vesting of any existing rights thereunder) or agree
or commit to issue, sell, deliver (whether through the issuance or granting
of options, warrants, commitments, subscriptions, rights to purchase or
otherwise), pledge or otherwise encumber any shares of its capital stock,
any other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares,
31
voting securities or convertible securities or any other securities or
equity equivalents (including without limitation stock appreciation
rights);
(vii) amend its certificate of incorporation or by-laws or other
organizational documents;
(viii) not including any expenditures otherwise permitted by
Section 5.01(iii), make or agree to make any acquisition of assets which is
material to the Company, taken as a whole, except for (x) purchases of
equipment or services in the ordinary course of business consistent with
past practice or (y) pursuant to purchase orders entered into in the
ordinary course of business consistent with past practice which do not call
for payments in excess of $100,000 individually;
(ix) settle or compromise any shareholder derivative suits
arising out of the transactions contemplated hereby or any other material
litigation (whether or not commenced prior to the date of this Agreement)
or settle, pay or compromise any material claims not required to be paid;
(x) adopt a plan of complete or partial liquidation, dissolution,
consolidation, restructuring or recapitalization of the Company or any
Company Subsidiary or otherwise permit the corporate existence of the
Company or any Company Subsidiary to be suspended, lapsed or revoked;
(xi) directly or indirectly, sell, lease, sell and leaseback,
mortgage or otherwise encumber or subject to any Lien or otherwise dispose
of any of its material properties or assets or any interest therein, other
than (i) the sale or distribution of personal property (including
intangibles) held for such sale or distribution to customers in the
ordinary course of business consistent with past practice, (ii) pursuant to
existing contracts or commitments, (iii) any Liens for Taxes not yet due
and payable or being contested in good faith and (iv) such mechanics' and
similar Liens, if any, as do not materially detract from the value of any
such properties or assets;
(xii) (i) repurchase, prepay or incur any indebtedness (other
than pursuant to the Company's existing line of credit facility) or assume,
guarantee or endorse any indebtedness of another Person or issue or sell
any debt securities or options, warrants, calls or other rights to acquire
any debt securities of the Company or any Company Subsidiary, or (ii) make
any loans, advances or capital contributions to, or investments in, any
other Person, other than to the Company or any direct or indirect
wholly-owned Company Subsidiary of the Company in the ordinary course of
business consistent with past practice;
(xiii) enter into, modify, amend or terminate, or waive, release
or assign any material rights under, any Contract, except for any new
contracts or any modifications, amendments, or terminations or waivers,
releases or assignments to existing contracts in the ordinary course of
business consistent with past practice which would not (i) impair in any
material respect the ability of the Company to perform its
32
obligations under this Agreement or (ii) prevent or delay the consummation
of the transactions contemplated by this Agreement;
(xiv) (i) except as otherwise contemplated by this Agreement or
as required to comply with applicable Law or any contract or Benefit Plans
existing on the date of this Agreement, waive any material rights of the
Company under or grant or pay any material benefit not provided for as of
the date of this Agreement under any contract or Benefit Plan except as
specifically provided in this Agreement, or (ii) enter into, modify, amend
or terminate any Benefit Plan, or (iii) adopt or enter into any collective
bargaining agreement or other labor union contract applicable to the
employees of the Company or any Company Subsidiary;
(xv) permit to be canceled or terminated, or cancel or terminate,
any insurance policy naming it as a beneficiary or loss payee, unless such
policy is replaced by a policy with comparable coverage, or otherwise fail
to maintain insurance at less than current levels or otherwise in a manner
consistent with past practices in all material respects;
(xvi) except as required by GAAP, revalue any of its material
assets or make any material changes in accounting methods, principles or
practices;
(xvii) except in the ordinary course of business consistent with
past practices, (i) disclose to any Person, other than Company employees
and representatives of Parent, that is not subject to a nondisclosure
agreement, any material trade secret; (ii) transfer, modify or terminate
any agreement pursuant to which the Company has licensed Intellectual
Property Rights from any Person except which would be immaterial to the
business of the Company; or (iii) disclose any source code to any third
party except in the ordinary course of business consistent with past
practices and only if such third party has executed an enforceable
non-disclosure and invention assignment agreement;
(xviii) (x) enter into any material strategic alliance, material
joint development or joint marketing agreement, or (y) enter into any
agreement pursuant to which Parent or the Surviving Corporation or any
Parent Subsidiary, or the Company or any Company Subsidiary will be subject
to any exclusivity, noncompetition, nonsolicitation, most favored nations
or other similar restriction or requirement on their respective businesses
following the Closing;
(xix) (x) commence any litigation, except actions commenced (1)
in the ordinary course of business against third parties or (2) pursuant to
or in connection with this Agreement or (y) except in the ordinary course
of business consistent with past practices or as required by applicable
Law, seek a judicial order or decree (except in each case, pursuant to or
in connection with this Agreement);
(xx) take any action that would make any representations and
warranty of the Company hereunder inaccurate in any material respect at, or
as of any time prior to, the Effective Time or omit to take any action
necessary to prevent any such representations or warranty from being
inaccurate in any respect at any such time;
33
(xxi) make or change any material Tax election, change any annual
tax accounting period, adopt or change any method of tax accounting, file
any material amended Tax Returns or claims for material Tax refunds, enter
into any closing agreement, settle any Tax claim, audit or assessment, or
surrender any right to claim a material Tax refund or offset or other
material reduction in Tax liability; or
(xxii) fail to file any material federal or state income Tax
return or an extension thereof.
SECTION 5.02. No Solicitation. (a) From the date hereof until the Closing,
the Company shall not, and shall not permit any of its officers, directors,
employees, representatives, agents or affiliates (including, without limitation,
any investment banker, attorney or accountant retained by the Company) to: (i)
solicit, initiate or encourage or take any action in furtherance of any
discussions or negotiations with, any corporation, partnership, limited
liability company, person or other entity or group (each, a "Person"), other
than Parent, concerning any offer or proposal which constitutes or is reasonably
likely to lead to any Acquisition Proposal (as defined below) or (ii) furnish
any non-public information to any Person regarding the Company or an Acquisition
Proposal; provided, however, that the Company may furnish information with
respect to the Company to any Person making such Acquisition Proposal and
participate in discussions or negotiations regarding such Acquisition Proposal,
in response to an unsolicited Acquisition Proposal received subsequent to the
date hereof, if the Company Board determines in the good-faith exercise of its
fiduciary duties that such Acquisition Proposal is reasonably likely to result
in a Superior Proposal (as defined below). Any information furnished to any
Person in connection with an Acquisition Proposal shall be provided pursuant to
a confidentiality agreement in customary form.
(b) The Company will promptly (but any event within 24 hours after its
receipt thereof) notify Parent orally and in writing if any proposal is made, or
any information is requested by any Person with respect to any Acquisition
Proposal or which could lead to an Acquisition Proposal, and shall provide
Parent the material terms of any such Acquisition Proposal in writing.
(c) For purposes of this Agreement, "Acquisition Proposal" means any
inquiry, proposal or offer from any Person (other than Parent) relating to any
direct or indirect acquisition or purchase of any shares of any class of equity
securities of the Company constituting 50% or more of the outstanding equity
securities of the Company, any tender offer or exchange offer that if
consummated would result in any Person beneficially owning 50% or more of any
class of equity securities of the Company, any merger, consolidation, business
combination, sale of all or substantially all of the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company, other
than the transactions contemplated by this Agreement.
(d) For purposes of this Agreement, "Superior Proposal" means any
written proposal made by a third party to consummate a tender offer, exchange
offer, merger, consolidation or similar transaction which would result in such
third party (or its stockholders) owning, directly or indirectly, a majority of
the shares of Company Common Stock then outstanding (or of the surviving entity
in a merger) or all or substantially all of the assets of the
34
Company and its subsidiaries, taken as a whole, and otherwise on terms which the
Company Board determines to be more favorable to the Company's stockholders,
from a financial point of view, than the transactions contemplated by this
Agreement. In reaching such determination, the Company Board shall give
consideration to all the terms and conditions, including without limitation
whether any such third party proposal includes definitive financing, the
likelihood of completion of such proposed transactions and applicable fees
payable to Parent hereunder, and the financial, regulatory, legal and other
aspects of such proposal for which financing to the extent required, is then
fully committed or reasonably determined by the Company Board to be available.
(e) Upon having received an Acquisition Proposal that the Company
Board concludes if consummated would be a Superior Proposal, the Company Board
shall promptly notify Parent in writing of such determination, and four (4)
Business Days following Parent's receipt of such notification may withdraw or
modify its approval or recommendation of this Agreement or the Merger, approve
or recommend the Superior Proposal or terminate this Agreement pursuant to
Section 8.01(c); provided, that during such four (4) Business Day period, at the
option of Parent, the Company shall negotiate with Parent in good-faith to make
adjustments to the terms and conditions of this Agreement as would enable the
Company to proceed with the Merger on such adjusted terms.
(f) Nothing contained in this Section 5.02 shall prohibit the Company
from complying with Rules 14d-9 and 14e-2 promulgated under the Exchange Act or
from making any disclosure to the Company Stockholders if, in the good faith
judgment of the Company Board, failure so to disclose would be inconsistent with
its obligations under applicable Law.
SECTION 5.03. Other Actions. The Company shall not take any action that
would, or that could reasonably be expected to, result in (i) any of the
representations and warranties of the Company set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in any
material respect or (iii) the Merger not being consummated (subject to the
Company's right to take actions specifically permitted by Section 5.02).
SECTION 5.04. Notice of Certain Events. The Company and Parent shall
promptly notify each other of:
(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
Entity in connection with the transactions contemplated by this Agreement;
(iii) any action, suits, claims, investigations or proceedings
commenced or, to the actual knowledge of the executive officers of the
notifying Party, threatened against, relating to or involving or otherwise
affecting such party, which would reasonably be expected to have a Material
Adverse Effect on the Company;
35
(iv) an administrative or other order or notification relating to
any material violation or claimed material violation of law;
(v) the occurrence or non-occurrence of any event the occurrence
or non occurrence of which would cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material
respect at or prior to the Closing Date; and
(vi) any material failure of any Party to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to
this Section 5.04 shall not limit or otherwise affect the remedies
available hereunder to the Party receiving such notice.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholder Approvals; Preparation of Proxy Statements. (a)
The Company will as soon as practicable following the date of this Agreement,
duly call, give notice of, convene and hold a meeting of the Company
Stockholders (the "Company Stockholders Meeting") for the purpose of obtaining
the Company Stockholder Approval. Subject to the Company's right to take actions
specifically permitted by Section 5.02, the Company shall, through the Company
Board, (i) recommend to the Company Stockholders that the Company Stockholder
Approval be given, (ii) use its reasonable best efforts to solicit from its
stockholders proxies in favor of the adoption and approval of this Agreement,
the approval of the Merger and any other approvals reasonably related thereto,
(iii) include in the Company Proxy Statement a statement to the effect that the
Board of Directors of the Company has recommended that Company's stockholders
vote in favor of and adopt and approve this Agreement and the Merger at the
Stockholders' Meeting and (iv) neither the Board of Directors of the Company nor
any committee thereof shall withdraw, amend or modify, or resolve to withdraw,
amend or modify in a manner adverse to Parent, the recommendation of the Board
of Directors of the Company that the Company's stockholders vote in favor of and
adopt and approve this Agreement and the Merger.
(b) The Company shall, as soon as practicable following the date of
this Agreement, prepare and file a preliminary Company Proxy Statement with the
SEC and will use its reasonable efforts to respond to any comments of the SEC or
its staff and to cause the Company Proxy Statement to be mailed to the Company
Stockholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. The Company will notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Company Proxy Statement or for
additional information and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Company Proxy Statement or
the Merger. If at any time prior to the Company Stockholders Meeting there shall
occur any event that should be set forth in an amendment or supplement to the
Company Proxy Statement, the Company will promptly prepare
36
and mail to the Company Stockholders such an amendment or supplement. The
Company will not mail any Company Proxy Statement, or any amendment or
supplement thereto, to which Parent reasonably objects.
(c) Parent agrees to cause all shares of Company Common Stock owned by
Parent or any subsidiary of Parent to be voted in favor of the Company
Stockholder Approval.
(d) Parent will as soon as practicable following the date of this
Agreement, duly call, give notice of, convene and hold a meeting of Parent's
stockholders (the "Parent Stockholders Meeting") for the purpose of obtaining
the approval and adoption of the terms of the Financing by the holders of a
majority of the outstanding shares of common stock of Parent in accordance with
the DGCL and applicable securities laws (the "Parent Stockholder Approval").
Parent shall, through Parent's board of directors, recommend to Parent's
stockholders that the Parent Stockholder Approval be given.
(e) Parent shall, as soon as practicable following the date of this
Agreement, prepare and file a preliminary Financing Proxy Statement with the SEC
with respect to the Financing (the "Financing Proxy Statement") and will use its
reasonable efforts to respond to any comments of the SEC or its staff and to
cause the Financing Proxy Statement to be mailed to Parent's stockholders as
promptly as practicable after responding to all such comments to the
satisfaction of the staff. Parent will notify the Company promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Financing Proxy Statement or
for additional information and will supply the Company with copies of all
correspondence between Parent or any of its representatives, on the one hand,
and the SEC or its staff, on the other hand, with respect to the Financing Proxy
Statement or the Merger. If at any time prior to the Parent Stockholders Meeting
there shall occur any event that should be set forth in an amendment or
supplement to the Financing Proxy Statement, Parent will promptly prepare and
mail to Parent's stockholders such an amendment or supplement. Parent will not
mail any Financing Proxy Statement, or any amendment or supplement thereto, to
which the Company reasonably objects to any disclosure related to the Company,
any Company Subsidiary or the transactions contemplated hereby.
SECTION 6.02. Access to Information. From the date hereof until the
Closing, the Company shall give Parent and Sub, their counsel, financial
advisors, auditors and other authorized representatives reasonable access to the
offices, properties, books and records of the Company and the Company
Subsidiaries during normal business hours, will furnish to Parent and Sub, their
counsel, financial advisors, financial institutions, auditors and other
authorized representatives such financial and operating data and other
information as such may be reasonably requested upon reasonable notice and will
instruct the employees of the Company and the Company Subsidiaries, its counsel
and financial advisors to cooperate with Parent and Sub in their investigation
of the business of the Company and the Company Subsidiaries; provided, however,
that the Company may restrict the foregoing access to the extent that (a) in the
reasonable judgment of the Company, any law, treaty, rule or regulation of any
Governmental Entity applicable to the Company requires the Company or the
Company Subsidiaries to restrict or prohibit access to any such properties or
information, (b) disclosure of such information would breach the express
provisions of a confidentiality Contract between the Company and a third Person,
or (c) disclosure of any such information or document could result
37
in the loss of attorney-client privilege; provided, however, that with respect
to this clause (c), the Company and/or its counsel shall use their reasonable
efforts to enter into such joint defense agreements or other arrangements, as
appropriate, so as to avoid the loss of attorney-client privilege, and provided,
further, that any information provided to Parent and/or Sub pursuant to this
Section 6.02 shall be subject to the confidentiality agreement, dated as of
February 12, 2007, (the "Confidentiality Agreement"), the terms of which shall
continue to apply, except as otherwise agreed by the Company notwithstanding
termination of this Agreement. In the event of any conflict between the terms of
this Section 6.02 and the terms of the Confidentiality Agreement, the terms of
the Confidentiality Agreement shall control. As reasonably requested from time
to time by Parent, the Company will cooperate with, and provide related
assistance to, Parent in developing Parent's post-Closing integration plan for
the Company.
SECTION 6.03. Reasonable Efforts. (a) Each of the Company, Parent and Sub
agree to use all reasonable efforts to take, or cause to be taken, all actions
necessary to make all such filings and registrations and comply promptly with
all legal requirements which may be imposed on itself with respect to the Merger
(which actions shall include furnishing all information required under the HSR
Act and under similar other anti-trust, competition or trade law or other
similar laws of foreign Governmental Entities, and in connection with approvals
of or filings with any other Governmental Entity) and will promptly cooperate
with and furnish information to each other in connection with any such
requirements imposed upon any of them or any of their subsidiaries in connection
with the Merger. Each of the Company, Parent and Sub will, and will cause its
subsidiaries to, use its reasonable efforts to take all reasonable actions
necessary to obtain (and will cooperate with each other in obtaining) any
consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Sub, the Company or any of their subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement, except that no Party need waive any substantial rights, agree
to any material restriction on the conduct of it and its Affiliates' business or
agree to any substantial limitation on its operations or to dispose of any
assets, including assets of the Company; provided, however that such exception
shall not apply to a request for, or an undertaking to, hold assets separate
pending completion of an investigation pursuant to a voluntary competition law.
(b) Parent hereby agrees to use commercially reasonable efforts to
arrange and complete the Financing on terms substantially the same as set forth
in the Commitment including, without limitation, to (i) negotiate definitive
agreements with respect thereto, and (ii) satisfy all conditions applicable to
Parent and Sub in such definitive agreements. Parent will keep the Company
informed at all times with respect to the status of its efforts to arrange and
complete the Financing, including, without limitation, with respect to the
occurrence of any event which Parent believes may have a materially adverse
effect on the ability of Parent to obtain the Financing. The Company hereby
agrees to use its reasonable best efforts to assist Parent to arrange and
complete the Financing, including the satisfaction of all conditions applicable
to the Company in connection therewith, all at Parent's sole cost and expense,
so that the Company shall not be obligated to incur any monetary obligations or
expenditures in connection with such assistance not otherwise payable by Parent.
SECTION 6.04. Options and Restricted Shares. (a) The Company shall amend,
or cause to be amended, to the extent necessary to accomplish the actions
contemplated by this
38
Section 6.04, any stock option plan and any other program or arrangement
pursuant to which there are holders of options to purchase shares granted by the
Company or stock appreciation rights with respect to shares of Company Common
Stock (each, an "Option") (collectively, the "Stock Option Plans") to provide
that, at the Effective Time, each director of the Company who is a holder of an
Option with an exercise price per share that is less than the Merger
Consideration (a "Director In-the-Money Option") (whether or not vested) shall
receive from the Surviving Corporation, in settlement of such Option, a "Cash
Amount" (less any applicable withholding taxes) equal to the product of (i) the
amount by which the Merger Consideration exceeds the Option exercise price, and
(ii) the number of underlying shares with respect to which the Option had not
been exercised prior to the Effective Time. The Aggregate of all such Cash
Amounts is referred to herein as the "Aggregate Option Consideration". The
Company shall cause the Stock Option Plans and any other related documents
pursuant to which Options have been granted to be amended so that, without cost
or expense to the Company, each Option held by a director shall terminate as of
the Effective Time.
(b) The Company shall provide notice to participants in the Stock
Option Plans and other holders of Options to purchase shares of Company Common
Stock granted by the Company that the Company proposes to merge into another
corporation; that the participant under the plans or programs may exercise his
vested Options in full with respect to shares not theretofore purchased by him
prior to the Effective Time; and that the plans and programs have been amended
to provide that to the extent a participant does not exercise his vested Options
prior to the Effective Time, such Options (other than Options terminated
pursuant to Section 6.04(a)) shall be replaced by Parent with a substitute
option to purchase shares of Parent Common Stock (a "Substitute Option") as set
forth in Section 6.04(c).
(c) At the Effective Time, each then outstanding Option that is not
held by a director shall be replaced by Parent with a Substitute Option, in an
amount and at an exercise price as determined in accordance with this Section
6.04(c). Parent shall, in its sole discretion, either (i) file with the SEC a
registration statement on Form S-8 or other appropriate form (the "Stock Plan
Registration Statement") to register the shares of Parent Common Stock issuable
upon the exercise of the Substitute Options and use its reasonable efforts to
cause the Stock Plan Registration Statement to be effective at the Effective
Time, or (ii) issue shares of Parent Common Stock under an existing registration
statement upon the exercise of the Substitute Options. Each Substitute Option by
which any Option is replaced pursuant to this Section 6.04(c) shall be subject
to, and exercisable and vested on, comparable terms and conditions as such
Option was in effect immediately prior to the Effective Time (provided, however,
that vesting will be fully accelerated if the Surviving Corporation terminates
the employment of such Substitute Option holder for any reason other than for
Cause (as defined in Section 6.04(e)), or if the holder terminates his
employment with the Surviving Corporation for Good Reason (as defined in Section
6.04(e)), except that each Substitute Option shall be exercisable for that
number of shares of Parent Common Stock (rounded down to the nearest number of
shares of Parent Common Stock on a holder-by-holder basis) equal to the number
of shares of Company Common Stock subject to such Option multiplied by the
Exchange Ratio (as defined below), at an exercise price (rounded up to the
nearest whole xxxxx) per share of Parent Common Stock equal to the per share
exercise price specified in such Option divided by the Exchange Ratio. The
conversion of Options provided for in this Section 6.04(c) with respect to any
Options which are intended to be "incentive stock options" (as such term is
defined in Section 422 of the Code)
39
shall be effected in a manner consistent with Section 424(a) of the Code and
Treas. Reg. 1.409A-1(b)(5)(v)(D). "Exchange Ratio" shall mean the quotient
obtained by dividing (a) the Merger Consideration by (b) the Volume Weighted
Average Price. "Volume Weighted Average Price" means the quotient obtained by
dividing (i) the sum of the product, calculated with respect to each of the
trades of Parent Common Stock made on the Nasdaq Capital Market during the 10
consecutive Trading Days immediately preceding the Effective Time, of (x) the
price at which the shares of Parent Common Stock are bought and sold in such
trade and (y) the number of shares of Parent Common Stock bought and sold in
such trade, by (ii) the aggregate number of shares of Parent Common Stock bought
and sold in all such trades. "Trading Day" means a day during which trading in
securities generally occurs on the Nasdaq Capital Market.
(d) Except as may be otherwise agreed to in writing by Parent or Sub
and the Company, the Company's Stock 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 shall be terminated as of the Effective Time.
(e) The restricted shares of Company Common Stock set forth on
Schedule 6.04(e) with respect to which vesting restrictions have not lapsed as
of the Effective Time ("Restricted Stock") shall be converted into restricted
shares of Parent Common Stock (the "Substitute Restricted Stock"). Schedule
6.04(e) sets forth the name of each holder of Restricted Stock, his or her title
with the Company, the number of shares of Restricted Stock held and the
applicable vesting schedule. Each holder of Restricted Stock shall receive a
number of shares of Substitute Restricted Stock equal to (i) the product of the
Merger Consideration and the number of shares of Restricted Stock held by such
holder, (ii) divided by the Volume Weighted Average Price. Each share of
Substitute Restricted Stock by which any Restricted Stock is replaced pursuant
to this Section 6.04(e) shall be subject to the same vesting restrictions as
applied to such Restricted Stock immediately prior to the Effective Time,
provided, however, that all vesting restrictions shall lapse (and vesting will
be fully accelerated) if the Surviving Corporation terminates the employment of
such holder of Restricted Stock for any reason other than for Cause, or if the
holder terminates his employment with the Surviving Corporation for Good Reason.
For purposes of this Section 6.04, "Cause" shall have the meaning provided to
such term under an employment, severance or similar agreement applicable to such
holder or, in the absence of such a definition, shall mean the occurrence of any
of the following events: (i) the willful failure by the holder to follow lawful
directions communicated to him or her by the Board of Directors of the Company;
(ii) the willful engaging by the holder in conduct which is materially injurious
to the Company, monetarily or otherwise; (iii) a conviction of, a plea of nolo
contendere, a guilty plea or confession by the holder to an act of fraud,
misappropriation or embezzlement or to a felony; (iv) the holder's habitual
drunkenness or use of illegal substances; (v) a material breach by the holder of
his or her employment agreement; or (vi) an act of gross neglect or gross
misconduct which the Company deems to be good and sufficient cause; provided,
however, that the Company shall not be deemed to have Cause pursuant to the
foregoing clauses (i), (ii), (iv), (v) or (vi) unless the Company gives the
holder written notice that the specified conduct or event has occurred and the
holder fails to cure the conduct or event within thirty (30) days after receipt
of such notice. For purposes of this Section 6.04, "Good Reason" shall have the
meaning provided to such term under an employment, severance or similar
agreement applicable to such holder or, in the absence of such a definition,
shall mean the
40
occurrence of any of the following events, in each case which is not remedied
within ten (10) Business Days after the holder provides notice of such event to
Parent: (w) any material diminution in the holder's duties, responsibilities,
reporting relationship or authorities; (x) any reduction in the holder's base
salary or target annual bonus opportunity; (y) the relocation of the holder's
principal place of employment to a location more than fifty (50) miles from his
principal place of employment immediately prior to the Effective Time; or (z)
any breach by Parent or Surviving Corporation of any material provision of any
employment, severance or similar agreement applicable to the holder.
(f) All vesting restrictions with respect to Company Common Stock held
in the Company's 401(k) plan shall lapse (and vesting will be fully accelerated)
as of the Effective Time.
(g) The Company Board shall, prior to the Effective Time, take
appropriate action to approve, for purposes of exempting those transactions from
the short-swing liability provisions of Section 16(b) of the Exchange Act, the
conversion of Company Common Stock held by executive officers into the right to
receive the Merger Consideration, the conversion of Director In-the-Money
Options into the right to receive the Cash Amount which shall be effected as of
the Effective Time pursuant to the provisions of Sections 2.01(c) and 6.04(a),
the exchange of Options for Substitute Options described in Sections 6.04(c),
and the exchange of shares of Restricted Stock of Company Common Stock for
Substitute Restricted Stock described in Section 6.04(e). Parent's board of
directors shall take appropriate action to approve, for purposes of exempting
those transactions from the short-swing liability provisions of Section 16(b) of
the Exchange Act, the grant of Substitute Options and Substitute Restricted
Stock described in Sections 6.04(c) and (e).
SECTION 6.05. SEC Filings. (a) From the date hereof until the Effective
Time, the Company shall file on a timely basis all Company SEC Documents
required to be filed with the SEC pursuant to the Exchange Act or the Securities
Act. Such Company SEC Documents, at the time filed, (i) will not contain any
untrue statement of a material fact or omit to state a 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 and (ii) will
comply in all material respects with the applicable requirements of the Exchange
Act and the Securities Act, as the case may be, and the applicable rules and
regulations of the SEC thereunder.
(b) Each of the Company Financials filed after the date hereof shall
(i) comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto then in effect at the same time as such filing, (ii) be prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated therein or in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act) and (iii) fairly
present in all material respects the consolidated financial position of the
Company and the Company Subsidiaries that are required by GAAP to be
consolidated therein and fairly reflect its investment in any unconsolidated
Subsidiary as of the respective dates thereof and the consolidated results of
their operations and cash flows for the periods indicated, except that the any
unaudited interim Company Financials may not contain footnotes and may be
subject to normal and recurring year-end adjustments.
41
SECTION 6.06. Indemnification; Insurance. (a) Parent and Sub agree that all
rights to indemnification for acts or omissions occurring prior to the Effective
Time now existing in favor of the current or former directors, officers,
employees, fiduciaries or agents of the Company and its subsidiaries (the
"Indemnified Parties"), including, without limitation, as provided in its
certificate of incorporation or by-laws (or similar organizational documents) or
existing indemnification contracts or existing employment agreements, shall
survive the Merger, shall become the obligation of Parent and the Surviving
Corporation, and shall continue in full force and effect in accordance with
their terms.
(b) Until the sixth anniversary of the Effective Time, Parent and the
Surviving Corporation shall maintain in effect the Company's current directors'
and officers' liability insurance (or policies of at least substantially the
same coverage and amounts containing terms that are no less advantageous to the
insured parties) covering those individuals who are currently covered by the
Company's directors' and officers' liability insurance policy (a copy of which
has been heretofore delivered to Parent).
(c) This Section 6.06 shall survive the consummation of the Merger at
the Effective Time, is intended to benefit the Company, Parent, the Surviving
Corporation and the Indemnified Parties, and shall be binding on all successors
and assigns of Parent and the Surviving Corporation.
(d) If the Company or the Surviving Corporation or any of their
respective successors or assigns (i) consolidates with or merges into any other
Person and shall not be the continuing or surviving corporation of such
consolidation or merger, or (ii) transfers all or substantially all of its
properties to any Person, then, and in each case, proper provision shall be made
so that the successors and assigns of the Company and the Surviving Corporation,
as the case may be, shall assume the obligations set forth in this Section 6.06.
(e) The provisions contained in this Section 6.06 shall not be deemed
to limit, in any way, any of the now existing rights of the Indemnified Parties
pursuant to any indemnification, employment or other agreements or Company
documents.
SECTION 6.07. Employees. (a) Until December 31, 2007, Parent shall
maintain, or shall cause the Surviving Corporation and its subsidiaries to
maintain, the Company's Benefit Plans as in effect as of the Effective Time;
provided, however, that the agreements listed on Schedule 6.07(a) (the
"Severance Agreements") shall remain in full force and effect on and after
December 31, 2007, pursuant to their respective terms. After December 31, 2007,
should Parent terminate one or more of the Company's Benefit Plans (other than
the Severance Agreements, which shall remain in full force and effect on and
after December 31, 2007 pursuant to their respective terms), then Parent shall
at that time include the employees of the Company and the Company Subsidiaries
("Affected Employees") in the corresponding employee benefit plans of Parent or
its subsidiaries on substantially the same basis and terms as Parent's similarly
situated employees participate.
(b) Parent shall, or shall cause the Surviving Corporation to, honor
all vacation, holiday, sickness and personal days accrued by Affected Employees
and, to the extent applicable, former employees of the Company as of the
Effective Time.
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(c) Parent shall, or shall cause the Surviving Corporation to, give all Affected
Employees full credit for purposes of eligibility and vesting under any
employee benefit plan arrangement maintained by Parent or the Surviving
Corporation or any subsidiary thereof which is an employee pension benefit plan
(as defined in Section 3(2) of ERISA) for such Affected Employees' service with
the Company (or any prior employer) to the same extent recognized by the Company
or any comparable Benefit Plan immediately prior to the Effective Time;
provided, however, in no event shall any such credit be given if it would
detrimentally affect the tax-qualified status of a plan under Section 401(a) of
the Code or violate any applicable laws.
(d) Parent shall, or shall cause the Surviving Corporation (i) with
respect to any life, health or long-term disability insurance plan, to waive all
limitations as to preexisting conditions, exclusions and waiting periods with
respect to participation and coverage requirements under any welfare benefit
plan established to replace any Benefit Plan in which Affected Employees may be
eligible to participate after the Effective Time, other than limitations or
waiting periods that are already in effect with respect to such Affected
Employees and that have not been satisfied as of the Effective Time under any
Welfare Plan maintained for the Affected Employees immediately prior to the
Effective Time, (ii) with respect to any health insurance plan, to obtain credit
for any co-payments and deductibles paid prior to the Effective Time in
satisfying any applicable deductible or out-of-pocket requirements under any
such plan that such Affected Employees are eligible to participate in after the
Effective Time and (iii) with respect to any life or long-term disability plan,
to waive any medical certification otherwise required in order to assure the
continuation of coverage at a level not less than that in effect immediately
prior to the implementation of such plan (but subject to any overall limit on
the maximum amount of coverage under such plans).
(e) Without limiting the generality of Section 9.06, this Section 6.07
shall not create any rights to continued employment in favor of any employee of
the Company.
SECTION 6.08. Transfer Taxes. All stock transfer, real estate transfer,
documentary, stamp, recording and other similar Taxes (including interest,
penalties and additions to any such Taxes) ("Transfer Taxes") incurred in
connection with the transactions contemplated by this Agreement shall be paid by
either Sub or the Surviving Corporation, and the Company shall cooperate with
Sub and Parent in preparing, executing and timely filing any Tax Returns with
respect to such Transfer Taxes.
ARTICLE VII
CONDITIONS
SECTION 7.01. Conditions to Each Party's Obligation to Effect the Merger.
The respective obligation of each Party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:
(a) Company Stockholder Approval. The Company Stockholder Approval
shall have been obtained.
(b) No Injunctions or Restraints. No statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent jurisdiction or other
Governmental Entity or other legal restraint or
43
prohibition restricting, preventing or prohibiting the consummation of the
Merger shall be in effect; provided, however, that each of the parties shall
have used reasonable efforts to prevent the entry of any such injunction or
other order and to appeal as promptly as possible any injunction or other order
that may be entered.
(c) Parent Stockholder Approval. The Parent Stockholder Approval shall
have been obtained.
SECTION 7.02. Conditions to Obligation of Parent and Sub. The obligations
of Parent and Sub to effect the Merger are further subject to the satisfaction
or waiver, on or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Company contained herein that are qualified as to materiality shall be
true and correct and the representations and warranties of the Company contained
herein that are not qualified by materiality shall be true and correct in all
material respects, in each case as though made as of the Closing Date such that
the aggregate effect of any inaccuracies in such representations and warranties
would not have a Material Adverse Effect on the Company, except that the
accuracy of representations and warranties that by their terms speak as of a
specified date will be determined as of such date.
(b) Performance of Obligations of the Company. The Company shall have
performed any covenants or obligations required to be performed by it under this
Agreement at or prior to the Closing Date in all material respects, and Parent
shall have received a certificate signed on behalf of the Company by the chief
executive officer or the chief financial officer of the Company to such effect.
(c) Status Certificates. The Company shall have delivered to Parent a
good standing certificate relating to the Company from the Secretary of State of
Delaware and each jurisdiction in which it is qualified to conduct the business.
(d) Secretary's Certificate. The Company shall have delivered to
Parent a Secretary's Certificate of the Company attesting to the incumbency of
the officers executing this Agreement, resolutions authorizing the transaction
and other certificates and agreements delivered by or on behalf of the Company
at Closing.
(e) Option Termination. The Company shall have provided to Parent
evidence, reasonably satisfactory to Parent, that all Stock Option Plans and all
Options and have been terminated and cancelled as of the Effective Time;
provided that, with respect to Director In-the-Money Options, such termination
shall not effect Parent's obligations to pay the Aggregate Option Consideration
to such former holders thereof.
(f) No Material Adverse Effect. Since the date of this Agreement,
there shall have occurred no Material Adverse Effect on the Company.
(g) HSR Approvals. The applicable waiting periods under the HSR Act
shall have expired or been terminated and any stay or application process as may
be required under any foreign anti-trust or competition law or regulation shall
have been completed or terminated.
44
(h) FIRPTA. The Company shall have delivered to Parent a certification
pursuant to Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c), signed by
the Company and dated not more than 30 days prior to the Effective Time to the
effect that the Company is not nor has it been within five (5) years of the date
of the certification a "United States real property holding corporation" as
defined in Section 897 of the Code.
(i) Dissenting Shares. Dissenting Shares shall not represent more than
15% of the outstanding Company Common Stock.
SECTION 7.03. Conditions to Obligation of the Company. The obligation of
the Company to effect the Merger is further subject to the satisfaction or
waiver, on or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Parent and Sub contained herein that are qualified as to materiality shall be
true and correct and the representations and warranties of the Parent and Sub
contained herein that are not qualified by materiality shall be true and correct
in all material respects, in each case as though made as of the Closing Date
such that the aggregate effect of any inaccuracies in such representations and
warranties would not have a Material Adverse Effect on the Company, except that
the accuracy of representations and warranties that by their terms speak as of a
specified date will be determined as of such date.
(b) Performance of Obligations of Parent and Sub. Parent and Sub shall
have performed any covenants or obligations required to be performed by them
under this Agreement at or prior to the Closing Date in all material respects
and the Company shall have received a certificate signed on behalf of Parent and
Sub by the chief executive officer or chief financial officer of Parent and Sub
to such effect.
(c) Secretary's Certificate. Each of Parent and Sub shall have
delivered to the Company a Secretary's Certificate attesting to the incumbency
of the officers executing this Agreement, resolutions authorizing the
transaction and other certificates and agreements delivered by or on behalf of
Parent and Sub, respectively, at Closing;
(d) Substitute Options and Substitute Restricted Stock. Parent shall
have provided to the Company evidence, reasonably satisfactory to the Company,
of the availability of the Substitute Options and the Substitute Restricted
Stock;
(e) HSR Approvals. The applicable waiting periods under the HSR Act
shall have expired or been terminated and any stay or application process as may
be required under any foreign anti-trust or competition law or regulation shall
have been completed or terminated; and
(f) Consents. Parent shall have procured all of the consents,
approvals and waivers of third parties or any regulatory body or authority
referred to in Section 4.03.
(g)
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SECTION 7.04. Frustration of Closing Conditions. None of Parent, Sub or the
Company may rely on the failure of any condition set forth in Section 7.01,
Section 7.02 and Section 7.03, as applicable, to be satisfied if such failure
was caused by such Party's failure to use reasonable efforts to consummate the
Merger, as required by and subject to Section 6.03.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
by the Company Stockholders:
(a) by mutual written consent of Parent and the Company, by action of
their respective boards of directors.
(b) by either the Company or Parent, if:
(i) any Governmental Entity, the taking of action by which is a
condition to the obligations of either the Company or Parent to consummate
the transactions contemplated hereby, shall have determined not to take
such action and all appeals of such determination shall have been taken and
have been unsuccessful, or any court of competent jurisdiction or other
competent Governmental Entity shall have issued an order, decree or ruling
or taken any other action making illegal or otherwise restricting,
preventing or prohibiting the Merger and such order shall have become final
and nonappealable; provided, however, that the Party seeking to terminate
this Agreement shall have used its reasonable efforts to remove or lift
such order, decree, ruling or other action;
(c) by the Company, if, prior to the Closing, any Person has made a
proposal relating to an Acquisition Proposal, or has commenced a tender or
exchange offer for the shares of Company Common Stock, and the Company Board
concludes that such proposal or tender or exchange offer if consummated would be
a Superior Proposal;
(d) by Parent, if, prior to the Closing, the Company Board or any
committee thereof shall have (i) failed to recommend to the Company Stockholders
that they approve and adopt this Agreement (the "Stockholder Acceptance"), (ii)
withdrawn or materially modified its approval or recommendation of this
Agreement or the Merger, (iii) approved or recommended a Superior Proposal or
(iv) resolved to effect any of the foregoing;
(e) by Parent, if, prior to consummation of the Merger, there has been
a material violation or breach by the Company (or, where qualified by
materiality, any violation or breach by the Company) of any representation,
warranty, covenant or agreement contained in this Agreement that (i) would give
rise to the failure of a condition set forth in Section 7.02 and (ii) cannot be
cured by the Company within thirty (30) days after written notice reasonably
describing such breach);
46
(f) by the Company, if, prior to the consummation of the Merger, there
has been a material violation or breach by Parent or Sub (or, where qualified by
materiality, any violation or breach by Parent or Sub) of any representation,
warranty, covenant or agreement contained in this Agreement (which violation or
breach is not cured by Parent or Sub within ten (10) days after written notice
reasonably describing such breach);
(g) by Parent or the Company, if the Merger shall not have been
consummated on or before the 120th day after the date hereof; provided, that the
right to terminate this Agreement under this Section 8.01(g) shall not be
available to any Party whose failure to satisfy a material obligation hereunder
has been the cause of, or resulted in, the failure of the Closing to occur on or
before such date;
(h) by Parent or the Company, if the Company Stockholders Meeting is
held and the Company fails to obtain the Company Stockholder Approval or the
Company Stockholder Approval is not obtained after an adjournment thereof; or
(i) by Parent or the Company, if the Parent Stockholders Meeting is
held and Parent fails to obtain the Parent Stockholder Approval or the Parent
Stockholder Approval is not obtained after an adjournment thereof.
SECTION 8.02. Effect of Termination. (a) In the event of a termination of
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
null and void and there shall be no liability or obligation on the part of
Parent, Sub or the Company or their respective officers or directors, except
with respect to Section 3.13, the terms of the Confidentiality Agreement
discussed in the last clause of the first sentence of Section 6.02, this Section
8.02 and Article IX; provided, however, that nothing herein shall relieve any
Party for liability for any breach hereof (including, without limitation, any
representation and warranty in Section 4.06).
(b) The Company shall pay to Parent a termination fee of $2,500,000
(the "Termination Fee") in the event that (i) this Agreement is validly
terminated pursuant to Section 8.01(c), or (ii) this Agreement is validly
terminated pursuant to Section 8.01(h) and after the date hereof but prior to
the Company Stockholders Meeting an event specified in Section 8.01(c) shall
have occurred and such proposal or tender or exchange offer shall not have been
rejected, withdrawn or terminated prior to the Company Stockholders Meeting or
the termination of this Agreement.
(c) Any amounts payable pursuant to Section 8.02(b) shall be payable
as promptly as practicable following the earlier of execution of the definitive
agreement regarding a Business Combination or, as the case may be, the
consummation of any such Business Combination in immediately available funds by
wire transfer to an account designated by Parent.
(d) For the purposes of this Section 8.02, "Business Combination"
means, with respect to the Company, a transaction with a party other than
Parent, Sub or one of Parent's subsidiaries involving (i) a merger,
reorganization, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution, or similar transaction involving
such party as a result of which either (A) the Company's stockholders prior to
such transaction in the
47
aggregate cease to own at least 50% of the voting securities of the entity
surviving or resulting from such transaction (or the ultimate parent entity
thereof) or, regardless of the percentage of voting securities held by such
stockholders, if any Person shall beneficially own, directly or indirectly, at
least 50% of the voting securities of such ultimate parent entity or (B) the
individuals comprising the Company Board prior to such transaction do not
constitute a majority of the board of directors of such ultimate parent entity,
(ii) a sale, lease, exchange, transfer or other disposition of all or
substantially all of the assets of the Company and the Company Subsidiaries,
taken as a whole, in a single transaction or a series of related transactions,
or (iii) the acquisition, directly or indirectly, by a Person of beneficial
ownership of 50% or more of the outstanding shares of Company Common Stock
whether by merger, consolidation, share exchange, business combination, tender
or exchange offer or otherwise (other than a merger, reorganization,
consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction upon the consummation of which
the Company's stockholders would in the aggregate beneficially own greater than
50% of the voting securities of such Person).
(e) In the event that this Agreement is validly terminated pursuant to
Section 8.01(i), Parent or Sub shall pay to the Company the Termination Fee. For
the avoidance of doubt, in no event shall this Section 8.02(e) limit or be
deemed to limit any and all remedies the Company has to assert any claim or
pursue any remedy for damages in excess of the Termination Fee against Parent or
Sub resulting from the breach of Section 4.06.
(f) Any amounts payable pursuant to Section 8.02(e) shall be payable
as promptly as practicable in immediately available funds by wire transfer to an
account designated by the Company.
SECTION 8.03. Amendment. This Agreement may be amended by the Parties, by
action taken or authorized by their respective boards of directors, at any time
before or after obtaining the Company Stockholder Approval, but, after any such
approval, no amendment shall be made which by law requires further approval by
such shareholders without obtaining such further approval. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the Parties.
SECTION 8.04. Extension; Waiver. At any time prior to the Effective Time,
the Parties, by action taken or authorized by their respective boards of
directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other Parties, (ii)
waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto or (iii) waive compliance with the
agreements or conditions for the benefit of such Party contained herein. Any
agreement on the part of a Party to any such extension or waiver shall be valid
only if set forth in a written instrument signed on behalf of such Party. The
failure of any Party to assert any of its rights hereunder or otherwise shall
not constitute a waiver of those rights.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Nonsurvival of Representations and Warranties. The
representations and warranties in this Agreement or in any instrument delivered
pursuant hereto shall terminate at the Effective Time, unless the survival
thereof is provided for by their terms.
SECTION 9.02. Assumption of Obligations. Effective upon the Closing, Parent
unconditionally assumes all obligations of the Company under the letter
agreement between America's Growth Capital and the Company, dated as of December
22, 2006 and the letter agreement between Pharus Advisors, LLC and the Company,
dated as of February 15, 2007.
SECTION 9.03. Notices. All notices, approvals, consents, waivers and other
communications hereunder shall be in writing and shall be deemed given if
delivered personally, telecopied (which is confirmed), sent by overnight courier
(providing proof of delivery) or mailed by registered or certified mail (return
receipt requested) to the parties at the following addresses (or at such other
address for a Party as shall be specified by like notice):
(a) if to Parent or Sub, to:
Internet Commerce Corporation
0000 Xxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxx LLP
1600 Atlanta Financial Center
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxxx
Telecopy No.: (000) 000-0000
and
(b) if to the Company, to:
EasyLink Services Corporation
00 Xxxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
49
Attention: Xxxxxx X. Xxxxxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx Xx., Esq.
Telecopy No.: (000) 000-0000
SECTION 9.04. Interpretation. When a reference is made in this Agreement to
an Article, Schedule or a Section, such reference shall be to an Article,
Schedule or a Section, respectively, of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". The phrase "made available" in this Agreement
shall mean that the information referred to has been made available if requested
by the party to whom such information is to be made available. As used in this
Agreement, the term "subsidiary" of any Person means another Person, an amount
of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its board of directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
Person. As used in this Agreement, "Material Adverse Change" or "Material
Adverse Effect" means, when used in connection with the Company, any change,
development, event, occurrence or effect that, individually or in the aggregate,
has or would reasonably be expected to have a material and adverse effect on the
business, liabilities (including contingent liabilities), financial condition,
results of operations or assets of the Company and the Company Subsidiaries
taken as a whole or the ability of the Company to perform its obligations
hereunder or to consummate the Merger or other transactions contemplated hereby.
Notwithstanding the foregoing, a Material Adverse Change or Material Adverse
Effect shall not include any material adverse change or material adverse effect
caused by (i) any adverse change resulting from the Merger, or the announcement
or pendancy of or any costs or expenses associated with the Merger, including a
decline in the trading price of Company Common Stock, (ii) any adverse changes
in general market and economic conditions, (iii) any adverse changes affecting
the Company's industry generally, (iv) any adverse regulatory or legislative
changes affecting the Company or companies in general, (v) any adverse change
relating to changes in generally accepted accounting principles in the United
States of America and (vi) hurricanes, earthquakes or similar catastrophes, or
acts of war (whether declared or undeclared), sabotage, terrorism, military
action or any escalation or worsening thereof. As used in this Agreement, the
term "material" refers to the Company and the Company Subsidiaries taken as a
whole. As used in this Agreement, "knowledge" means, with respect to matters
relating to the Company or any subsidiary thereof, the actual knowledge of the
Chief Executive Officer, President, Chief Financial Officer, Executive Vice
President and
50
General Manager, Senior Vice President Business Development, Vice President and
Managing Director, EasyLink International, Controller and Vice President of
Sales.
SECTION 9.05. Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two or more counterparts have been signed by each of
the parties and delivered to the other parties, including delivery by facsimile,
it being understood that all parties need not sign the same counterpart.
SECTION 9.06. Entire Agreement; Third Party Beneficiaries. This Agreement
(including the documents and schedules attached hereto) (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and (b) except as provided in Section 6.06, is not intended to confer upon any
Person other than the Parties any rights or remedies hereunder.
SECTION 9.07. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law.
SECTION 9.08. Publicity. Except as otherwise required by law or by
obligations pursuant to the rules of any listing exchange, for so long as this
Agreement is in effect, neither the Company nor Parent shall, or shall permit
any of its subsidiaries to, issue or cause the publication of any press release
or other public announcement with respect to the transactions contemplated by
this Agreement without the consent of the other party, which consent shall not
be unreasonably withheld. In addition, the Parties will consult with each other
before issuing, and provide each other the opportunity to review and comment
upon any such press release or other public statement. Notwithstanding anything
in this Section 9.08 to the contrary, in no event shall any of the foregoing
result in any filing required by law or pursuant to the rules of any listing
exchange to be delayed beyond the required filing date.
SECTION 9.09. 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, except that Sub may assign, in its sole discretion, any or
all of its rights, interests and obligations hereunder to any direct or indirect
wholly owned subsidiary of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
SECTION 9.10. Enforcement. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York or Delaware or in a New York or Delaware state
court, this being in addition to any other remedy to which they are entitled at
law or in equity. In addition, each of the Parties hereto (i) consents to submit
to the personal jurisdiction of any Federal court located in the States of New
York or Delaware or any New York or Delaware state court in the
51
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such Party will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, (iii) agrees that such Party will not bring any action relating to
this Agreement or any of the transactions contemplated hereby in any court other
than a Federal court sitting in the State of New York or Delaware or a New York
or Delaware state court and (iv) waives any right to trial by jury with respect
to any claim or proceeding related to or arising out of this Agreement or any of
the transactions contemplated hereby.
SECTION 9.11. Fees and Expenses. (a) Except as otherwise specifically
provided for herein, (1) if the Merger is consummated, all costs and expenses
(including change of control payments, the executive sales bonus and the fees
and expenses of any accounting firms, investment bankers, financial advisors and
attorneys) incurred in connection with this Agreement and the transactions
contemplated by this Agreement and the Company's obligations for certain
indebtedness shall be paid by Parent to the Company (for immediate payment) at
or prior to Closing and (2) if the Merger is not consummated, all such costs and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the Party incurring such
expenses.
(b) The prevailing Party in any legal action undertaken to enforce
this Agreement or any provision hereof shall be entitled to recover from the
other Party the costs and expenses (including attorneys' and expert witness fees
and expenses) incurred in connection with such action.
[signatures follow immediately on next page]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.
INTERNET COMMERCE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
JETS ACQUISITION SUB, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------------
Title: Chief Executive Officer
---------------------------------
EASYLINK SERVICES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Chairman, President and
Chief Executive Officer
---------------------------------
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