AGREEMENT AND PLAN OF MERGER
EXECUTION
COPY
AGREEMENT
AND PLAN OF MERGER
BY
AND AMONG
VH
ACQUISITIONCO, INC.,
VH
MERGERSUB, INC.
AND
GUITAR
CENTER, INC.
DATED
AS OF
JUNE
27, 2007
TABLE
OF CONTENTS
| Article 1. Defined Terms and Interpretation |
1
|
||||
|
Section
1.1
|
Certain
Definitions
|
1
|
|||
|
Section
1.2
|
Terms
Defined Elsewhere
|
4
|
|||
|
Section
1.3
|
Interpretation
|
7
|
|||
| Article 2. The Merger |
8
|
||||
|
Section
2.1
|
The
Merger
|
8
|
|||
|
Section
2.2
|
Closing
|
8
|
|||
|
Section
2.3
|
Effective
Time
|
8
|
|||
|
Section
2.4
|
Effect
of the Merger
|
8
|
|||
|
Section
2.5
|
Certificate
of Incorporation; Bylaws
|
9
|
|||
|
Section
2.6
|
Directors
and Officers
|
9
|
|||
| Article 3. Conversion of Securities; Exchange of Certificates |
9
|
||||
|
Section
3.1
|
Conversion
of Securities
|
9
|
|||
|
Section
3.2
|
Exchange
of Certificates
|
10
|
|||
|
Section
3.3
|
Dissenters’
Rights
|
12
|
|||
|
Section
3.4
|
Stock
Transfer Books
|
12
|
|||
|
Section
3.5
|
Company
Options and Stock-Based Awards
|
13
|
|||
| Article 4. Representations and Warranties of the Company |
14
|
||||
|
Section
4.1
|
Organization
and Qualification; Subsidiaries
|
14
|
|||
|
Section
4.2
|
Capitalization;
Subsidiaries
|
15
|
|||
|
Section
4.3
|
Authority
|
16
|
|||
|
Section
4.4
|
No
Conflict; Required Filings and Consents
|
17
|
|||
|
Section
4.5
|
Compliance
with Laws
|
18
|
|||
|
Section
4.6
|
SEC
Filings; Financial Statements
|
19
|
|||
|
Section
4.7
|
Affiliate
Transactions
|
20
|
|||
|
Section
4.8
|
Absence
of Certain Changes or Events
|
20
|
|||
|
Section
4.9
|
Benefit
Plans; Employees and Employment Practices
|
20
|
|||
|
Section
4.10
|
Material
Contracts; Indebtedness
|
22
|
|||
|
Section
4.11
|
Litigation
|
24
|
|||
|
Section
4.12
|
Environmental
Matters
|
24
|
|||
|
Section
4.13
|
Intellectual
Property
|
24
|
|||
|
Section
4.14
|
Taxes
|
25
|
|||
|
Section
4.15
|
Insurance
|
27
|
|||
i
|
Section
4.16
|
Real
Estate
|
27
|
|||
|
Section
4.17
|
Proxy
Statement
|
27
|
|||
|
Section
4.18
|
Fairness
Opinion
|
28
|
|||
|
Section
4.19
|
Brokers
|
28
|
|||
|
Section
4.20
|
No
Other Representations or Warranties
|
28
|
|||
|
Section
4.21
|
Takeover
Statutes
|
28
|
|||
| Article 5. Representations and Warranties of Parent and Merger Sub |
29
|
||||
|
Section
5.1
|
Organization
and Qualification
|
29
|
|||
|
Section
5.2
|
Authority
|
29
|
|||
|
Section
5.3
|
No
Conflict; Required Filings and Consents
|
29
|
|||
|
Section
5.4
|
Litigation
|
30
|
|||
|
Section
5.5
|
Ownership
of Merger Sub; No Prior Activities
|
30
|
|||
|
Section
5.6
|
Financing
|
30
|
|||
|
Section
5.7
|
Limited
Guarantee
|
31
|
|||
|
Section
5.8
|
Vote
Required
|
31
|
|||
|
Section
5.9
|
Brokers
|
31
|
|||
|
Section
5.10
|
Ownership
of Company Common Stock
|
32
|
|||
|
Section
5.11
|
Solvency
of the Surviving Corporation
|
32
|
|||
|
Section
5.12
|
Proxy
Statement
|
32
|
|||
|
Section
5.13
|
No
Other Information
|
33
|
|||
|
Section
5.14
|
Access
to Information; Disclaimer
|
33
|
|||
| Article 6. Covenants |
33
|
||||
|
Section
6.1
|
Conduct
of Business Pending the Closing
|
33
|
|||
|
Section
6.2
|
Proxy
Statement; Company Stockholders’ Meeting
|
36
|
|||
|
Section
6.3
|
Access
to Information; Confidentiality
|
37
|
|||
|
Section
6.4
|
No
Solicitation of Transactions
|
38
|
|||
|
Section
6.5
|
Further
Action; Reasonable Best Efforts
|
40
|
|||
|
Section
6.6
|
Certain
Notices
|
42
|
|||
|
Section
6.7
|
Public
Announcements
|
42
|
|||
|
Section
6.8
|
Employee
Matters
|
43
|
|||
|
Section
6.9
|
Indemnification
of Directors and Officers
|
44
|
|||
|
Section
6.10
|
State
Takeover Statutes
|
45
|
|||
|
Section
6.11
|
Section
16 Matters
|
45
|
|||
|
Section
6.12
|
Solvency
of the Surviving Corporation
|
46
|
|||
|
Section
6.13
|
Financing
|
47
|
|||
|
Section
6.14
|
Cooperation
in Securing Financing
|
48
|
|||
ii
| Article 7. Closing Conditions |
49
|
||||
|
Section
7.1
|
Conditions
to Obligations of Each Party Under This Agreement
|
49
|
|||
|
Section
7.2
|
Additional
Conditions to Obligations of Parent and Merger Sub
|
49
|
|||
|
Section
7.3
|
Additional
Conditions to Obligations of the Company
|
50
|
|||
|
Section
7.4
|
Frustration
of Closing Conditions
|
51
|
|||
| Article 8. Termination, Amendment and Waiver |
51
|
||||
|
Section
8.1
|
Termination
|
51
|
|||
|
Section
8.2
|
Effect
of Termination
|
53
|
|||
|
Section
8.3
|
Fees
and Expenses
|
53
|
|||
|
Section
8.4
|
Company
Termination Fee
|
53
|
|||
|
Section
8.5
|
Parent
Termination Fee
|
55
|
|||
|
Section
8.6
|
Extension;
Waiver
|
56
|
|||
|
Section
8.7
|
Amendment
|
56
|
|||
| Article 9. General Provisions |
56
|
||||
|
Section
9.1
|
Non-Survival
of Representations and Warranties; Agreements
|
56
|
|||
|
Section
9.2
|
Notices
|
56
|
|||
|
Section
9.3
|
Headings
|
58
|
|||
|
Section
9.4
|
Severability
|
58
|
|||
|
Section
9.5
|
Entire
Agreement; Parties in Interest
|
58
|
|||
|
Section
9.6
|
Assignment
|
58
|
|||
|
Section
9.7
|
Mutual
Drafting
|
58
|
|||
|
Section
9.8
|
Governing
Law; Consent to Jurisdiction; Enforcement; Waiver of Trial by
Jury
|
58
|
|||
|
Section
9.9
|
Counterparts
|
60
|
|||
|
-
Certificate of Incorporation of the Surviving
Corporation
|
||
|
EXHIBIT
B
|
-
Bylaws of the Surviving
Corporation
|
iii
AGREEMENT
AND PLAN OF MERGER,
dated
as of June 27, 2007, by and among VH AcquisitionCo, Inc., a Delaware corporation
(“Parent”),
VH
MergerSub, Inc., a Delaware corporation and a wholly-owned direct Subsidiary
of
Parent (“Merger
Sub”),
and
Guitar Center, Inc., a Delaware corporation (the “Company”).
Each
of Parent, Merger Sub and the Company are referred to herein as a “Party”
and
together as “Parties.”
RECITALS
WHEREAS,
the
Board of Directors of the Company
(the
“Company
Board”)
has
determined that it is in the best interests of the Company
and
its
stockholders, and has declared it advisable, to enter into this Agreement
and
Plan
of Merger
(this
“Agreement”)
with
Parent
and
Merger
Sub providing
for the merger (the “Merger”)
of
Merger
Sub with
and
into the Company
in
accordance with the General Corporation Law of the State of Delaware
(the
“DGCL”),
and
the Company
Board has
approved this Agreement,
upon
the terms and subject to the conditions set forth herein,
and
recommended adoption of this Agreement
by
the
stockholders of the Company;
WHEREAS,
the
Board
of
Directors of
Merger
Sub has
unanimously approved and declared advisable this Agreement;
WHEREAS,
Parent,
on its
own behalf and as the sole stockholder of Merger
Sub,
has
adopted this Agreement
and
approved the
Merger and the other transactions contemplated hereby;
WHEREAS,
concurrently with the execution of this Agreement, and as a condition to the
willingness of the Company to enter into this Agreement, Xxxx Capital Fund
IX,
L.P. (the “Sponsor”)
has
entered into (a) an Equity Commitment Letter (the “Equity
Commitment Letter”)
pursuant to which the Sponsor has, among other matters, and
subject to the terms thereof, committed
to
provide equity financing to Parent in connection with the transactions
contemplated by this Agreement and (b) a Limited Guarantee (the
“Limited
Guarantee”)
in
favor of the Company pursuant to which the Sponsor has, among other matters,
and
subject to the terms thereof, guaranteed
certain obligations of Parent and Merger Sub in connection with this Agreement;
and
WHEREAS,
Parent, Merger Sub and the Company wish to make certain representations,
warranties, covenants and agreements in connection with the Merger and also
to
prescribe certain conditions to the Merger, as set forth herein.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the respective representations,
warranties, covenants and agreements set forth in this Agreement and intending
to be legally bound hereby, the Parties agree as follows:
Article
1.
Defined
Terms and Interpretation
Section
1.1 Certain
Definitions.
For
purposes of this Agreement, the term:
1
“Affiliate”
shall
mean, as to any Person, any other Person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” (including
the terms “controlled by” and “under common control with”), when used with
respect to a specific Person, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies
of
such Person, whether through the ownership of voting securities, by Contract
or
otherwise.
“Business
Day”
shall
mean any day that is not a Saturday, Sunday, or a legal holiday under the Laws
of the State of New York or the State of California.
“Company
Material Adverse Effect”
shall
mean any event, change or occurrence,
individually or in the aggregate with any other events, changes or occurrences,
that has had or could reasonably be expected to have
a
material adverse effect on the business, results of operations or financial
condition of the Company
and
the
Company
Subsidiaries taken
as
a whole; provided,
that in
no event shall any of the following events, changes, or occurrences alone or
in
combination (or the reasonably
foreseeable effects
or consequences thereof) constitute a “Company
Material Adverse Effect”
or
be
considered in determining whether a “Company
Material Adverse Effect”
has
occurred or is likely or expected to occur: (a)
any
change in and
of
itself (as distinguished from any change or event giving rise or contributing
to
such change) in the
market price or trading volume of the Company
Common Stock,
(b)
the
public
announcement or pendency of this Agreement
or
any of
the transactions contemplated herein,
including the impact thereof on the relationships of the Company
or
the
Company
Subsidiaries with
customers, suppliers, distributors, consultants, employees or independent
contractors or other Third
Parties with
whom
the
Company or any Company Subsidiary has
any
relationship, (c)
any
failure in
and of
itself (as distinguished from any change or event giving rise or contributing
to
such failure) by
the
Company
to
meet
any projections or forecasts for any period, (d)
changes
in and
of themselves (as distinguished from any change or event giving rise or
contributing to such changes)
in any
analyst’s recommendations, any credit rating or any other recommendations or
ratings as to
the
Company or any Company Subsidiary,
(e)
changes
or developments generally affecting the
retail industry generally or affecting the economy or financial or securities
markets generally, (f)
acts
of
God, calamities, national or international political or social conditions,
including the engagement by any country in hostilities (whether commenced before
or after the date hereof,
and
whether or not pursuant to the declaration of a national emergency or war),
or
the occurrence of any military or terrorist attack, (g)
changes
in Law
or
GAAP
(or
any
interpretation thereof) or (h)
any
actions taken or required to be taken by the Company
or
the
Company
Subsidiaries in
order
to
obtain
any approval or authorization for the consummation of the Merger
under
applicable antitrust or competition Laws;
provided,
however,
that
clauses (e),
(f),
and
(g)
shall
not
include, and thus the determination of “Company
Material Adverse Effect”
shall
not exclude, such events, changes, or occurrences that have a materially
disproportionate negative effect on the Company
and
the
Company
Subsidiaries,
taken
as a whole, as compared to other companies that operate in the same industries
in which the Company
and
the
Company
Subsidiaries operate.
“Equity
Interest”
shall
mean any share, capital stock, partnership, membership, unit or similar interest
in any entity and any option, warrant, right or security convertible,
exchangeable or exercisable therefore.
2
“Knowledge”
shall
mean (a) in the case of the Company, the actual knowledge of the Persons
listed in Section 1.1 of the Company Disclosure Schedule and (b) in the
case of Parent, Merger Sub or any other member of the Parent Group, the actual
knowledge of the Persons listed in Section 1.1 of the Parent Disclosure
Schedule.
“Law”
shall
mean any domestic or foreign law, statute, code, ordinance, rule, regulation
or
Order.
“Person”
shall
mean an individual, corporation, limited liability company, partnership,
association, trust, unincorporated organization or other entity.
“Subsidiary”
or
“Subsidiaries”
of
the
Company, the Surviving Corporation, Parent, Merger Sub or any other Person
shall
mean any corporation, limited liability company, partnership or other legal
entity of which the Company, the Surviving Corporation, Parent, Merger Sub
or
such other Person, as the case may be (either alone or through or together
with
any other Subsidiary), owns, directly or indirectly, a majority of the stock
or
other Equity Interests, the holders of which are generally entitled to vote
for
the election of the board of directors or other governing body of such
corporation or other legal entity.
“Superior
Proposal”
shall
mean a bona fide Takeover Proposal (for this purpose, substituting “50 percent”
for each reference to “20 percent” in the definition of Takeover
Proposal) which the Company Board determines in good faith (after
consultation with its outside legal counsel and financial advisors) (a) is
reasonably likely to be consummated and (b) if consummated, would result in
a transaction more favorable from a financial point of view to the holders
of
Company Common Stock than
the
transactions provided for in this Agreement
(including
any adjustment to the terms and conditions of this Agreement
proposed
by Parent
in
response to such Takeover
Proposal),
in
each case
with
respect to clauses (a) and (b), taking into account such factors as the
Company Board deems appropriate, including the Third Party making such Takeover
Proposal and the legal, financial, regulatory, and other aspects of such
Takeover Proposal, including any conditions relating to financing, regulatory
approvals or other events or circumstances (and, for the avoidance of doubt,
a
Superior Proposal may be a transaction where the consideration per share to
be
received by the holders of Company Common Stock is comprised of cash and/or
other property or securities).
“Takeover
Proposal”
shall
mean any inquiry, proposal or offer, in each case made in writing, from any
Third Party, relating to, in a single transaction or series of related
transactions, (a) a merger, reorganization, consolidation, share exchange,
business combination, recapitalization, spin-off, split-off, liquidation,
dissolution or similar transaction involving a direct or indirect acquisition
of
the Company (or any Company Subsidiary whose business constitutes 20 percent
or
more of the net revenues, net income or assets (based on fair market value)
of
the Company and the Company Subsidiaries, taken as a whole) or (b) the
acquisition (including by way of tender or exchange offer) in any manner,
directly or indirectly, of over 20 percent of (i) the Company Common Stock
or (ii) the consolidated total assets (based on fair market value) of the
Company and the Company Subsidiaries, in each case other than the
Merger.
3
“Third
Party”
shall
mean any Person or “group” (within the meaning of Section 13(d)(3) of
the Exchange Act) other than the Company, the Company Subsidiaries, the Parent
Group or any Person in the Parent Group.
Section
1.2 Terms
Defined Elsewhere.
The
following terms are defined elsewhere in this Agreement, as indicated
below:
|
“Agreement”
|
Recitals
|
|
“Alternative
Financing”
|
Section
6.13
|
|
“Antitrust
Division”
|
Section
6.5.1
|
|
“Bankruptcy
and Equity Exceptions”
|
Section
4.3.1
|
|
“Book-Entry
Shares”
|
Section
3.2.2
|
|
“Certificate
of Merger”
|
Section
2.3
|
|
“Certificates”
|
Section
3.2.2
|
|
“Closing”
|
Section
2.2
|
|
“Closing
Date”
|
Section
2.2
|
|
“COBRA”
|
Section
4.9.5
|
|
“Code”
|
Section
3.2.7
|
|
“Commitments”
|
Section
5.6
|
|
“Company”
|
Preamble
|
|
“Company
Adverse Recommendation Change”
|
Section
6.4.2
|
|
“Company
Benefit Plan”
|
Section
4.9.1
|
|
“Company
Board”
|
Recitals
|
|
“Company
Bylaws”
|
Section
4.4.1
|
|
“Company
Certificate”
|
Section
4.4.1
|
|
“Company
Common Stock”
|
Section
3.1.1
|
|
“Company
Disclosure Schedule”
|
Article
4
|
|
“Company
ESPP”
|
Section
3.5.2
|
|
“Company
ESPP Right”
|
Section
3.5.2
|
|
“Company
Expenses”
|
Section
6.14
|
|
“Company
Financial Advisors”
|
Section
4.18
|
|
“Company
Financial Statements”
|
Section
4.6.2
|
|
“Company
Leased Premises”
|
Section
4.16
|
|
“Company
Material Contract”
|
Section
4.10.1
|
|
“Company
Options”
|
Section
3.5.1
|
4
|
“Company
Owned Properties”
|
Section
4.16
|
|
“Company
Permits”
|
Section
4.5
|
|
“Company
Preferred Stock”
|
Section
4.2.1
|
|
“Company
Properties”
|
Section
4.16
|
|
“Company
Recommendation”
|
Section
4.3.2
|
|
“Company
Representatives”
|
Section
6.3.1
|
|
“Company
SEC Filings”
|
Section
4.6.1
|
|
“Company
Stock-Based Award”
|
Section
3.5.1
|
|
“Company
Stockholders’ Meeting”
|
Section
6.2.2
|
|
“Company
Stock Plans”
|
Section
3.5.1
|
|
“Company
Subsidiary”
|
Section
4.1
|
|
“Company
Termination Fee”
|
Section
8.4.1
|
|
“Confidentiality
Agreement”
|
Section
6.3.2
|
|
“Continuing
Employee”
|
Section
6.8.1
|
|
“Contract”
|
Section
4.4.1
|
|
“D&O
Insurance”
|
Section
6.9.3
|
|
“Debt
Commitment Letters”
|
Section
5.6
|
|
“DGCL”
|
Recitals
|
|
“Dissenting
Shares”
|
Section
3.1.1
|
|
“Dissenting
Stockholders”
|
Section
3.1.1
|
|
“Effective
Time”
|
Section
2.3
|
|
“Environmental
Laws”
|
Section
4.12
|
|
“Equity
Commitment Letter”
|
Recitals
|
|
“ERISA”
|
Section
4.9.2
|
|
“ERISA
Affiliate”
|
Section
4.9.4
|
|
“Exchange
Act”
|
Section
4.4.2
|
|
“Exchange
Fund”
|
Section
3.2.1
|
|
“Executive
Officers”
|
Section
6.1.1(i)
|
|
“FTC”
|
Section
6.5.1
|
|
“GAAP”
|
Section
4.6.2
|
|
“Governmental
Entity”
|
Section
3.2.7
|
|
“HSR
Act”
|
Section
4.4.2
|
5
|
“Indebtedness”
|
Section
4.10.1
|
|
“Indemnified
Parties”
|
Section
6.9.2
|
|
“Intellectual
Property”
|
Section
4.13
|
|
“IRS”
|
Section
4.9.1
|
|
“Liens”
|
Section
4.2.4
|
|
“Limited
Guarantee”
|
Recitals
|
|
“LTIPs”
|
Section
4.2.1
|
|
“Marketing
Period”
|
Section
6.13
|
|
“Merger”
|
Recitals
|
|
“Merger
Consideration”
|
Section
3.1.1
|
|
“Merger
Sub”
|
Preamble
|
|
“NASDAQ”
|
Section
4.4.2
|
|
“Option
Payments”
|
Section
3.5.1
|
|
“Order”
|
Section
4.11
|
|
“Outside
Date”
|
Section
8.1(b)(ii)
|
|
“Parent”
|
Preamble
|
|
“Parent
Disclosure Schedule”
|
Article
5
|
|
“Parent
Expenses”
|
Section
8.4.1
|
|
“Parent
Group”
|
Section
5.3.1
|
|
“Parent
Related Parties”
|
Section
8.5.2
|
|
“Parent
Representatives”
|
Section
6.3.1
|
|
“Parent
Termination Fee”
|
Section
8.5.1
|
|
“Party”
and “Parties”
|
Preamble
|
|
“Paying
Agent”
|
Section
3.2.1
|
|
“Permitted
Liens”
|
Section
4.2.4
|
|
“Proxy
Statement”
|
Section
6.2.1
|
|
“Purchaser
Welfare Benefit Plan”
|
Section
6.8.3
|
|
“Real
Property Leases”
|
Section
4.16
|
|
“Regulatory
Approvals”
|
Section
6.5.1
|
|
“Representative”
|
Section
6.3.1
|
|
“Required
Financial Information”
|
Section
6.14
|
|
“SEC”
|
Article
4
|
6
|
“Securities
Act”
|
Section
4.6.1
|
|
“Solvency
Opinion”
|
Section
6.12
|
|
“Solvent”
|
Section
5.11
|
|
“Special
Committee”
|
Section
4.3.2
|
|
“Sponsor”
|
Recitals
|
|
“Stockholder
Approval”
|
Section
4.3.1
|
|
“Surviving
Corporation”
|
Section
2.1
|
|
“Surviving
Corporation Benefit Plan”
|
Section
6.8.1
|
|
“Taxes”
|
Section
4.14.9
|
|
“Tax
Return”
|
Section
4.14.12
|
|
“Tolling
Period”
|
Section
6.2.1
|
|
“WARN
Act”
|
Section
4.9.7
|
Section
1.3 Interpretation.
In this
Agreement, unless otherwise specified, the following rules of interpretation
apply:
(a) references
to Sections, Schedules, Exhibits, Clauses and Parties are references to sections
or subsections, schedules, exhibits and clauses of and parties to, this
Agreement;
(b) references
to any Person include references to such Person’s successors and permitted
assigns;
(c) words
importing the singular include the plural and vice versa;
(d) words
importing one gender include the other gender;
(e) references
to the word “including” do not imply any limitation;
(f) references
to months are to calendar months;
(g) the
words
“hereof,” “herein” and “hereunder” and words of similar import, when used in
this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;
(h) references
to “$” or “dollars” refer to U.S. dollars;
(i) to
the
extent this Agreement refers to information or documents to be made available
(or delivered or provided) to Parent or Merger Sub, the Company shall be deemed
to have satisfied such obligation if the Company or any Company Representative
has made such information or document available by
(i)
posting such information or document at least one day prior to the date of
this
Agreement to the
“data
room” maintained by the Company through Intralinks, Inc. for purposes of the
transactions contemplated by this Agreement, or (ii) delivering such information
or document to any member of the Parent Group or any Parent Representative
on or
prior to the date of this Agreement;
7
(j) a
defined
term has its defined meaning throughout this Agreement and in each Exhibit
and
Schedule to this Agreement, regardless of whether it appears before or after
the
place where it is defined; and
(k) references
to any specific provision of any Law shall also be deemed to be references
to
any successor provisions or amendments thereof and to any rules or regulations
promulgated thereunder.
Article
2.
The
Merger
Section
2.1 The
Merger.
At the
Effective Time, upon the terms and subject to satisfaction or valid waiver
of
the conditions set forth in this Agreement, and in accordance with the DGCL,
Merger Sub shall be merged with and into the Company. As a result of the Merger,
the separate corporate existence of Merger Sub shall cease and the Company
shall
continue as the corporation surviving the Merger (the “Surviving
Corporation”).
Section
2.2 Closing.
Subject
to the terms and conditions of this Agreement, the closing of the Merger (the
“Closing”)
shall
take place on a day that is a Business Day (a) at the offices of Xxxxxx
& Xxxxxxx LLP, 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx
00000 at 10:00 a.m. (New York City time), no later than the second Business
Day following the satisfaction of the conditions set forth in Article 7 (other
than (i) those conditions that are waived in accordance with the terms of
this Agreement by the Party or Parties for whose benefit such conditions exist
and (ii) any such conditions that, by their terms, are not capable of being
satisfied until the Closing) or (b) at such other place, time and/or date
as the Parties may otherwise agree; provided,
however,
that,
notwithstanding the satisfaction or waiver of the conditions set forth in
Article 7, the Parties shall not be required to effect the Closing until the
earlier of (x) a date during the Marketing Period specified by Parent on no
less than five Business Days’ notice to the Company and (y) the final day
of the Marketing Period; provided,
further,
that
this Agreement may be terminated pursuant to and in accordance with Section
8.1
such that the Parties shall not be required to effect the Closing, regardless
of
whether the final day of the Marketing Period shall have occurred before such
termination. The date upon which the Closing shall occur is referred to herein
as the “Closing
Date.”
Section
2.3 Effective
Time.
At the
Closing, the Parties shall cause the Merger to be consummated by filing a
certificate of merger (the “Certificate
of Merger”)
with
the Secretary of State of the State of Delaware, in such form as required by,
and properly executed in accordance with, the DGCL. 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 is agreed
upon by the Parties and specified as the Effective Time in the Certificate
of
Merger (the “Effective
Time”).
Section
2.4 Effect
of the Merger.
At the
Effective Time, the effect of the Merger shall be as provided in this Agreement
and the applicable provisions of the DGCL. Without limiting the generality
of
the foregoing, at the Effective Time, all the property, rights, privileges,
immunities, powers and franchises of the Company and Merger Sub shall vest
in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
8
Section
2.5 Certificate
of Incorporation; Bylaws.
At the
Effective Time, the Company Certificate and the Company Bylaws shall be amended
in their entirety so as to read as set forth in Exhibit
A
and
Exhibit
B
hereto,
respectively, and, as so amended, shall be the Certificate of Incorporation
and
Bylaws of the Surviving Corporation until thereafter amended in accordance
with
their terms and to the extent permitted in this Agreement and as provided by
applicable Law, in each case in accordance with the obligations set forth in
Section 6.9.1.
Section
2.6 Directors
and Officers.
The
directors of Merger Sub immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation. The officers of the Company immediately prior to the Effective
Time
shall be the initial officers of the Surviving Corporation, each to hold office
in accordance with the Certificate of Incorporation and Bylaws of the Surviving
Corporation.
Article
3.
Conversion
of Securities; Exchange of Certificates
Section
3.1 Conversion
of Securities.
At the
Effective Time, by virtue of the Merger and without any action on the part
of
Parent, Merger Sub, the Company or any of their stockholders, the following
shall occur.
Section
3.1.1 Conversion
Generally.
Each
share of common stock of the Company, par value $0.01 per share (“Company
Common Stock”),
issued and outstanding immediately prior to the Effective Time (other than
any
shares of Company Common Stock to be canceled pursuant to Section 3.1.2 and
any
shares of Company Common Stock (“Dissenting
Shares”)
which
are held by stockholders exercising appraisal rights in accordance with Section
262 of the DGCL (“Dissenting
Stockholders”)),
shall be converted into the right to receive $63.00 in cash, payable to the
holder thereof, without interest (the “Merger
Consideration”).
All
shares of Company Common Stock that have been converted into the right to
receive the Merger Consideration as provided in this Section 3.1.1 shall as
of
the Effective Time no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each Certificate and each Book-Entry
Share which immediately prior to the Effective Time represented such shares
shall thereafter represent only the right to receive the Merger Consideration
therefor. Certificates and Book-Entry Shares previously representing shares
of
Company Common Stock (other than any shares of Company Common Stock to be
canceled pursuant to Section 3.1.2) shall be exchanged for the Merger
Consideration, without interest, upon the surrender of such Certificates or
Book-Entry Shares in accordance with the provisions of Section 3.2.
Section
3.1.2 Cancellation
of Certain Shares.
Each
share of Company Common Stock held by Parent, Merger Sub, any Subsidiary of
Parent or Merger Sub, in the treasury of the Company or by any Company
Subsidiary immediately prior to the Effective Time shall be canceled and retired
and shall cease to exist without any conversion thereof and no payment shall
be
made with respect thereto.
9
Section
3.1.3 Merger
Sub.
Each
share of common stock, par value $0.01 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into
and
become one newly and validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation. From and after the Effective Time,
all certificates representing the common stock of Merger Sub shall be deemed
for
all purposes to represent the number of shares of common stock of the Surviving
Corporation into which they were converted in accordance with the immediately
preceding sentence.
Section
3.1.4 Change
in Shares.
If
between the date of this Agreement and the Effective Time the outstanding shares
of Company Common Stock, or securities convertible or exchangeable into or
exercisable for shares of Company Common Stock, shall have been changed into
a
different number of shares or a different class, by reason of any stock
dividend, subdivision, reclassification, recapitalization, split, reverse split,
combination, exchange of shares or any other similar transaction, the Merger
Consideration shall be correspondingly adjusted to reflect such stock dividend,
subdivision, reclassification, recapitalization, split, reverse split,
combination, exchange of shares or other similar transaction.
Section
3.2 Exchange
of Certificates.
Section
3.2.1 Paying
Agent.
At the
Closing, Parent shall deposit, or shall cause to be deposited, with a bank
or
trust company designated by Parent and reasonably satisfactory to the Company
to
act as agent for Parent (the “Paying
Agent”),
for
the benefit of the holders of shares of Company Common Stock, for exchange
in
accordance with this Article 3, cash in U.S. dollars in an amount sufficient
to
pay the aggregate amount of the Merger Consideration (such cash being
hereinafter referred to as the “Exchange
Fund”)
payable pursuant to Section 3.1 in exchange for outstanding shares of Company
Common Stock. The Paying Agent shall, pursuant to irrevocable instructions,
deliver the Merger Consideration contemplated to be paid pursuant to Section
3.1
out of the Exchange Fund. The Exchange Fund shall be invested by the Paying
Agent as reasonably directed by Parent; provided,
however,
that:
(a) no such investment or losses thereon shall affect the Merger
Consideration payable to the holders of Company Common Stock and following
any
losses Parent shall promptly provide additional funds to the Paying Agent for
the benefit of the holders of the shares of the Company Common Stock in the
amount of any such losses and (b) such investments shall be in obligations
of or guaranteed by the United States of America or any agency or
instrumentality thereof and backed by the full faith and credit of the United
States of America, in commercial paper obligations rated A-1 or P-1 or better
by
Xxxxx’x Investors Service, Inc. or Standard & Poor’s Corporation,
respectively, or in certificates of deposit, bank repurchase agreements or
banker’s acceptances of commercial banks with capital exceeding $10,000,000,000
(based on the most recent financial statements of such bank that are then
publicly available). Any net profit resulting from, or interest or income
produced by, such investments shall be payable to the Surviving Corporation
or
Parent, as Parent directs. The Exchange Fund shall not be used for any other
purpose.
Section
3.2.2 Exchange
Procedures.
Promptly following the Effective Time (but in no event later than two Business
Days following the Effective Time), the Surviving Corporation shall cause the
Paying Agent to mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Time represented outstanding shares
of
Company Common Stock (the “Certificates”)
or of
non-certificated shares of Company Common Stock represented by
book-entry
(“Book-Entry
Shares”)
(a) a
letter of transmittal in customary form, which shall be subject to the
reasonable approval of the Company prior to the Effective Time and
(b) instructions for use in effecting the surrender of Certificates (or
affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the
Merger Consideration. After the Effective Time, upon surrender of Certificates
(or affidavits of loss in lieu thereof), or in the case of Book-Entry Shares,
upon adherence to the applicable procedures set forth in the letter of
transmittal, for cancellation to the Paying Agent together with such letter
of
transmittal, properly completed and duly executed in accordance with the
instructions thereto, and such other documents as may be reasonably required
by
the Paying Agent or pursuant to such instructions, the holder of such
Certificates or Book-Entry Shares shall be entitled to receive in exchange
therefor the Merger Consideration which such holder has the right to receive
in
respect of the shares of Company Common Stock formerly represented by such
Certificates or Book-Entry Shares, and the Certificates or Book-Entry Shares
so
surrendered shall forthwith be canceled. No interest will be paid or accrued
on
any Merger Consideration payable to holders of Certificates or Book-Entry
Shares. In the event of a transfer of ownership of shares of Company Common
Stock which is not registered in the transfer records of the Company, the Merger
Consideration may be issued to a transferee if the Certificate representing
such
shares of Company Common Stock is presented to the Paying Agent (or in the
case
of Book-Entry Shares, upon adherence to the applicable procedures set forth
in
the letter of transmittal), accompanied by all documents required to evidence
and effect such transfer and by evidence that any applicable stock transfer
Taxes have been paid. Until surrendered as contemplated by this Section 3.2,
each Certificate and each Book-Entry Share shall be deemed at any time after
the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration or the right to demand to be paid the “fair value” of the
shares represented thereby as contemplated by Section 3.3.
10
Section
3.2.3 Further
Rights in Company Common Stock.
All
Merger Consideration paid in accordance with the terms hereof shall be deemed
to
have been paid in full satisfaction of all rights pertaining to such shares
of
Company Common Stock.
Section
3.2.4 Termination
of Exchange Fund.
Any
portion of the Exchange Fund (including any interest received with respect
thereto) which remains undistributed to the holders of Company Common Stock
on
the first anniversary of the Effective Time shall be delivered to the Surviving
Corporation upon demand, and any holders of Company Common Stock who have not
theretofore complied with this Article 3 shall thereafter look only to the
Surviving Corporation (subject to abandoned property, escheat or other similar
Laws) for payment of the Merger Consideration, without any interest thereon.
The
Surviving Corporation shall pay all charges and expenses, including those of
the
Paying Agent, in connection with the exchange of shares of Company Common Stock
for the Merger Consideration.
Section
3.2.5 No
Liability.
None of
Parent, the Company, the Surviving Corporation or the Paying Agent shall be
liable to any holder of shares of Company Common Stock entitled to payment
of
the Merger Consideration under this Article 3 for any cash from the Exchange
Fund properly delivered to a public official pursuant to any abandoned property,
escheat or similar Law.
11
Section
3.2.6 Lost
Certificates.
If any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed in the form required by the Paying Agent and, if required
by
Parent, the posting by such Person of a bond, in such reasonable and customary
amount as Parent may direct, as indemnity against any claim that may be made
with respect to such lost, stolen or destroyed Certificate, the Paying Agent
will issue in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration without any interest thereon.
Section
3.2.7 Withholding.
Parent,
the Surviving Corporation and the Paying Agent shall be entitled to deduct
and
withhold from the consideration otherwise payable pursuant to this Agreement
to
any holder of Company Common Stock, holder of Company Options, holder of a
Company Stock-Based Award or holder of a Company ESPP Right such amounts as
Parent, the Surviving Corporation or the Paying Agent are required to deduct
and
withhold under the United States Internal Revenue Code of 1986, as amended
(the
“Code”),
or
any applicable provision of state, local or foreign Tax Law, with respect to
the
making of such payment. To the extent that amounts are so withheld by Parent,
the Surviving Corporation or the Paying Agent and paid over to the applicable
domestic or foreign governmental, administrative, judicial or regulatory
authority (each, a “Governmental
Entity”),
such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of Company Common Stock, holder of Company Options,
holder of a Company Stock-Based Award or holder of a Company ESPP Right in
respect of whom such deduction and withholding was made by Parent, the Surviving
Corporation or the Paying Agent, as the case may be.
Section
3.3 Dissenters’
Rights.
Notwithstanding anything in this Agreement to the contrary, if any Dissenting
Stockholder shall demand to be paid the “fair value” of its Dissenting Shares,
as provided in Section 262 of the DGCL, such Dissenting Shares shall not be
converted into or exchangeable for the right to receive the Merger Consideration
(except as provided in this Section 3.3) and shall entitle such Dissenting
Stockholder only to be paid the “fair value” of such Dissenting Shares, in
accordance with Section 262 of the DGCL, unless and until such Dissenting
Stockholder (a) withdraws (in accordance with Section 262(k) of the
DGCL) or (b) effectively loses the right to dissent and receive the “fair
value” of such Dissenting Shares under Section 262 of the DGCL. The Company
shall not, except with the prior written consent of Parent, voluntarily make
any
payment with respect to, or settle or offer to settle, any such demand for
payment of “fair value” of Dissenting Shares prior to the Effective Time. The
Company shall give Parent prompt notice of any demand by a Dissenting
Stockholder to be paid the “fair value” of its Dissenting Shares prior to the
Effective Time,
any
attempted withdrawals of such demands and any other instruments received by
the
Company relating to stockholders’ rights of appraisal,
and
Parent shall have the right to participate at its own expense in all
negotiations and proceedings with respect to any such demands. If any Dissenting
Stockholder shall have effectively withdrawn (in accordance with Section
262(k) of the DGCL) or otherwise lost its right to dissent and receive the
“fair value” of its Dissenting Shares, then as of the later of the Effective
Time or the occurrence of such event, the Dissenting Shares held by such
Dissenting Stockholder shall be cancelled and converted into and represent
solely the right to receive the Merger Consideration,
without
interest thereon,
pursuant
to Section 3.1.
Section
3.4 Stock
Transfer Books.
At the
Effective Time, the stock transfer books of the Company shall be closed and
thereafter there shall be no further registration of transfers of shares of
Company Common Stock outstanding on the records of the Company prior to the
Effective Time. From and after the Effective Time, the holders of Certificates
and Book-Entry Shares shall cease to have any rights with respect to the shares
of Company Common Stock represented thereby except as otherwise provided herein
or by Law. From and after the Effective Time, any Certificates presented to
the
Paying Agent, Parent or the Surviving Corporation for transfer or any other
reason shall be cancelled and exchanged for the applicable Merger Consideration,
without interest thereon, as provided in, and in accordance with, this Article
3.
12
Section
3.5 Company
Options and Stock-Based Awards.
Section
3.5.1 Prior
to
the Effective Time, the Company Board (or, if appropriate, any committee
thereof) shall take any actions necessary, including adopting appropriate
resolutions, to provide that, concurrent with the Effective Time: (a) each
outstanding, unexpired and unexercised option to purchase Company Common Stock
(the “Company
Options”)
granted under the stock plans of the Company or under any individual consultant,
employee or director agreement (the “Company
Stock Plans”),
whether or not then exercisable, conditioned or vested, shall fully vest and
be
deemed to be exercised and cancelled and each holder of a Company Option shall
receive at the Effective Time (or as soon as practicable thereafter), in
consideration of the deemed exercise and cancellation of such Company Option,
a
payment by the Surviving Corporation (or, at Parent’s option, Parent) in
cash (subject to any applicable withholding or other Taxes required to be
withheld by applicable Law), without interest, in an amount equal to the product
of (x) the total number of shares of Company Common Stock subject to such
Company Option (assuming such Company Option is fully vested and currently
exercisable) and (y) the excess, if any, of the Merger Consideration
over the exercise price per share of Company Common Stock subject to such
Company Option (such amounts payable hereunder being referred to as the
“Option
Payments”)
and
(b) each right of any kind, contingent or accrued, to receive shares of
Company Common Stock or benefits measured by the value of a number of shares
of
Company Common Stock, and each award of any kind consisting of shares of Company
Common Stock, granted under Company Stock Plans (including restricted stock,
restricted stock units, deferred stock and performance awards), other than
Company Options and Company ESPP Rights (each, a “Company
Stock-Based Award”),
whether or not then vested, shall vest on the terms set forth in the applicable
Company Stock Plan (or, if such Company-Stock Based Awards would not otherwise
vest, the Company Board shall cause such Company-Stock Based Awards to vest
in
accordance with the applicable Company Stock Plan), and shall be cancelled
and
each beneficiary of a Company Stock-Based Award providing for such beneficiary
to receive shares of Company Common Stock shall, in lieu thereof, be entitled
to, and shall be paid pursuant to Section 3.2, the Merger
Consideration,
without
interest and less any required withholding Taxes,
payable
pursuant to Section 3.1.1 in respect of such shares of Company Common Stock.
At
and after the Effective Time, each Company Option and each Company Stock-Based
Award shall be cancelled and shall only entitle the holder thereof to payment
as
described in this Section 3.5.
Section
3.5.2 With
respect to the Company’s Employee Stock Purchase Plan (the “Company
ESPP”)
pursuant to which the Company has granted rights to purchase Company Common
Stock (each such right, a “Company
ESPP Right”),
each
Company ESPP Right outstanding as of June 30, 2007 shall automatically be
exercised on such date in accordance with the Company ESPP, unless such Company
ESPP Right is terminated prior to such exercise in accordance with the Company
ESPP. The Company shall take such actions as are reasonably necessary to provide
that no offering period shall commence under the Company ESPP for the period
beginning July 1, 2007, and ending on December 31, 2007 or for any subsequent
period unless this Agreement is terminated in accordance with Section
8.1
prior to
the beginning of such subsequent period. The Company shall cause the
Company ESPP to terminate at the Effective Time and no further Company ESPP
Rights shall be granted or exercised under the Company ESPP
thereafter.
13
Section
3.5.3 The
provisions of this Section 3.5 shall survive the consummation of the Merger
and
are intended to be for the benefit of, and shall be enforceable by, each holder
of any Company Options or Company ESPP Rights and each beneficiary of a Company
Stock-Based Award, and their respective heirs, beneficiaries and
representatives.
Article
4.
Representations
and Warranties of the Company
Subject
to (a) any information contained, or incorporated
by reference, in the Company’s
Annual Report on
Form
10-K
for
the fiscal year ended December
31,
2006,
the Company’s
Current Reports on
Form
8-K filed since December
31,
2006,
and the Company’s
Quarterly Report on
Form
10-Q
for
the quarterly period ended March
31,
2007
(other than disclosures in the “Risk Factors” sections of any such filings and
any other disclosures included in such filings that are predictive or
forward-looking in nature) filed with
the
United
States Securities and Exchange Commission (the
“SEC”)
by the
Company
and
publicly available prior to the date hereof (other
than with respect to the representations and warranties of the Company
set
forth
in Sections 4.2.1,
4.2.2, and 4.2.3) and
(b)
such exceptions as are disclosed in the disclosure schedule
(the
“Company
Disclosure Schedule”)
delivered by the Company to Parent concurrently with the execution and delivery
of this Agreement (it being expressly understood and agreed that
(i) the
disclosure of any fact or item in any section of the Company Disclosure Schedule
shall be deemed disclosure with respect to any other Section or subsection
of
this Agreement or the Company Disclosure Schedule to
the
extent that it is reasonably apparent that such fact or item is relevant to
such
other Section, subsection or schedule
and
(ii) the disclosure of any matter or item in the Company Disclosure
Schedule shall not be deemed to constitute an acknowledgement that such matter
or item is required to be disclosed therein or is material to a representation
or warranty set forth in this Agreement and shall not be used as a basis for
interpreting the terms “material,” “materially,” “materiality” or “Company
Material Adverse Effect” or any word or phrase of similar import and does not
mean that such matter or item would, alone or together with any other matter
or
item, reasonably be expected to have a Company Material Adverse Effect), the
Company represents and warrants to Parent and Merger Sub as follows:
Section
4.1 Organization
and Qualification; Subsidiaries.
The
Company is a corporation duly organized, validly existing and in good standing
under the Laws of the State of Delaware. Each Subsidiary of the Company (each,
a
“Company
Subsidiary”)
has
been duly organized, and is validly existing and in good standing under the
Laws
of the jurisdiction of its incorporation or organization, as the case may be,
except to the extent the failure of any such Company Subsidiary to be in good
standing would not, individually or in the aggregate, reasonably be expected
to
have a Company Material Adverse Effect. Section 4.1 of the Company Disclosure
Schedule contains a complete list of all of the Company Subsidiaries. The
Company and each Company Subsidiary has the requisite corporate or similar
power
and authority to own, lease and operate its properties and to carry on its
business as it is now being conducted. The Company and each Company Subsidiary
is duly qualified to do business, and is in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or good standing necessary,
except for such failures to be so qualified or in good standing that would
not,
individually or in the aggregate, reasonably be expected to have a Company
Material Adverse Effect. The Company has heretofore made available to Parent
complete and correct copies of the Company Certificate and Company Bylaws and
the certificate of incorporation and bylaws or similar organizational or
governing documents of each Company Subsidiary, and all amendments thereto,
as
currently in effect. Neither the Company nor any Company Subsidiary is in
violation of its organizational or governing documents.
14
Section
4.2 Capitalization;
Subsidiaries.
Section
4.2.1 The
authorized capital stock of the Company consists of 100,000,000 shares of
Company Common Stock and 5,000,000 shares of preferred stock, par value $0.01
per share (the “Company
Preferred Stock”).
As of
June 26, 2007 there are, and as of the Effective Time there will be,
(a) 29,574,800 shares of Company Common Stock issued and outstanding,
(b) no shares of Company Common Stock held in the treasury of the Company,
(c) 2,668,923 shares of Company Common Stock issuable upon exercise of
outstanding Company Options having a weighted average exercise price of $35.0985
(subject to modifications due to potential issuances of options identified
in
Section 6.1.1(b) of the Company Disclosure Schedule), (d) 58,657 shares of
Company Common Stock issuable pursuant to Company Stock-Based Awards (41,096
deferred share awards and 17,561 restricted share awards) other than performance
awards (assuming consummation of the Merger and acceleration of such Company
Stock-Based Awards as of such date), (e) a number of shares of Company
Common Stock set forth on Section 4.2.1 of the Company Disclosure Schedule
that
are issuable pursuant to awards of performance shares under the Company’s 2005
and 2006 Long Term Incentive Plans (the “LTIPs”)
(assuming consummation of the Merger and acceleration of such awards of
performance shares as of such date) of which 120,111 shares shall be issued
at
Closing (assuming the Closing takes place on or prior to December 31, 2007),
(f) 213,889 shares of Company Common Stock reserved
for future issuance under the Company ESPP (of which the Company’s good faith
estimate of the number of shares issuable thereunder as of the end of the
Company ESPP’s purchase period ending on June 30, 2007 is set forth on Section
4.2.1 of the Company Disclosure Schedule), and (g) no shares of Company
Preferred Stock issued and outstanding. Notwithstanding the foregoing, it is
agreed and understood that the representation contained in clause (c) of the
immediately preceding sentence shall be deemed modified to the extent any
Company Options terminate, expire or are forfeited without being exercised
by
the holder thereof or additional Company Options are issued as contemplated
by
such clause (c), and the representation contained in clause (a) of the
immediately preceding sentence shall be deemed modified to the extent of
issuances of Company Common Stock as a result of (w) the exercise of Company
Options described in clause (c), (x) the delivery of Company Common Stock to
satisfy Company Stock-Based Awards as contemplated by clause (d), (y) the
delivery of Company Common Stock to satisfy performance share awards under
the
LTIP’s as contemplated by clause (e), and (z) the delivery of Company Common
Stock under the Company ESPP relating to the purchase period thereunder ending
June 30, 2007 as contemplated by clause (f). Section 4.2.1 of the Company
Disclosure Schedule sets forth, as of June 26, 2007, the aggregate amount of
contributions made under the Company ESPP during the then current purchase
period through such date and the aggregate amount of contributions that are
permitted to be made by all employees to the Company ESPP through the end of
the
current purchase period.
15
Section
4.2.2 Section
4.2.2 of the Company Disclosure Schedule sets forth as of June 26, 2007, a
list
of the holders of Company Options and/or Company Stock-Based Awards, including
(to the extent applicable) the date on which each such Company Option or Company
Stock-Based Award was granted, the number of shares of Company Common Stock
subject to such Company Option or Company Stock-Based Award, the expiration
date
of such Company Option or Company Stock-Based Award, the price at which such
Company Option or Company Stock-Based Award may be exercised under an applicable
Company Stock Plan and the vesting schedule/status of each such Company Option
or Company Stock-Based Award.
Section
4.2.3 All
of
the outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable and free of preemptive
rights. Except as set forth in Section 4.2.2, there are no options, warrants
or
other rights, agreements, arrangements or commitments of any character to which
the Company or any Company Subsidiary is a party or by which the Company or
any
Company Subsidiary is bound relating to the issued or unissued Equity Interests
of the Company, or securities convertible into or exchangeable for such Equity
Interests, or obligating the Company to issue or sell any shares of its capital
stock or other Equity Interests, or securities convertible into or exchangeable
for such capital stock of, or other Equity Interests in, the Company. There
are
no outstanding contractual obligations of the Company or any Company Subsidiary
affecting the voting rights of or requiring the repurchase, redemption or
disposition of, any Equity Interests in the Company. Except as set forth in
Section 4.2.2, from June 262007 through the date of this Agreement, the Company
has not issued any shares of its capital stock, or securities convertible into
or exchangeable for such capital stock or any other Equity Interests in the
Company.
Section
4.2.4 Each
outstanding share of capital stock or other Equity Interest of each Company
Subsidiary is duly authorized, validly issued, fully paid, nonassessable and
free of preemptive rights and is held by the Company or a Company Subsidiary
free and clear of all pledges, liens, charges, mortgages, encumbrances or
security interests of any kind whatsoever (collectively, “Liens”),
except for Liens permissible
under Contracts
governing Indebtedness of the Company and the Company Subsidiaries and
Liens, whether or not of record, which in the aggregate do not materially affect
the continued use of the Company’s
assets or properties
for the
purposes for which they are currently being used (collectively, “Permitted
Liens”).
There
are no subscriptions, options, warrants, rights, calls, contracts or other
commitments, understandings, restrictions or arrangements relating to the
issuance or sale of any shares of capital stock or other ownership interests
of
any Company Subsidiary.
Section
4.3 Authority.
Section
4.3.1 The
Company has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly 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 contemplated hereby, other than (a) the
affirmative vote of holders of a majority of outstanding shares of Company
Common Stock to adopt this Agreement (the “Stockholder
Approval”)
and
(b) the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware in accordance with the DGCL. This Agreement has been
duly
authorized and validly executed and delivered by the Company and, assuming
this
Agreement is a valid and binding obligation of Parent and Merger Sub, this
Agreement constitutes a legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms, subject to the effect
of
bankruptcy, insolvency (including all Laws relating to fraudulent transfers),
reorganization, moratorium and similar Laws relating to or affecting creditors’
rights or remedies and the effect of general principles of equity, whether
considered in a proceeding in equity or at law (including the possible
unavailability of specific performance or injunctive relief), concepts of
materiality, reasonableness, good faith and fair dealing and the discretion
of
the court before which a proceeding is brought (the “Bankruptcy
and Equity Exceptions”).
16
Section
4.3.2 Subject
to Section 6.4, (a) a committee (the “Special
Committee”)
of the
Board of Directors of the Company (the “Company
Board”)
formed
for the purpose of evaluating, and making a recommendation to the Company Board
with respect to, a sale of all or a portion of the Company, by resolutions
duly
adopted at a meeting duly called and held, has unanimously (i) determined
that this Agreement and the transactions provided for herein are fair to and
in
the best interest of the Company and the holders of Company Common Stock and
(ii) recommended that the Company Board approve and declare advisable this
Agreement and the transactions contemplated hereby, including the Merger and
(b) based in part on the recommendation of the Special Committee, the
Company Board, by resolutions duly adopted at a meeting duly called and held,
has unanimously (with
one
director absent) (i) determined
that this Agreement and the transactions provided for herein are fair to and
in
the best interest of the Company and the holders of Company Common Stock,
(ii) approved and declared advisable this Agreement and the transactions
contemplated hereby, including the Merger and (iii) resolved to recommend
in accordance with applicable Law that the holders of Company Common Stock
vote
in favor of the adoption of this Agreement (the “Company
Recommendation”).
Section
4.4 No
Conflict; Required Filings and Consents.
Section
4.4.1 The
execution, delivery and performance by the Company of this Agreement do not,
and
the consummation by the Company of the transactions contemplated hereby will
not, (a) assuming the Stockholder Approval is obtained, conflict with or
violate any provision of the Restated Certificate of Incorporation of the
Company, as originally filed with the Secretary of State of the State of
Delaware on October 11, 1996, and as amended May 1, 2006 (the “Company
Certificate”),
or
the Amended and Restated Bylaws of the Company dated March 14, 2005 (the
“Company
Bylaws”),
or
any equivalent organizational or governing documents of any Company Subsidiary,
(b) assuming that all consents, approvals and authorizations described in
Section 4.4.2 have been obtained prior to the Effective Time and all filings
and
notifications described in Section 4.4.2 have been made and any waiting periods
thereunder have terminated or expired prior to the Effective Time, conflict
with
or violate any Law applicable to the Company or any Company Subsidiary or by
which any property or asset of the Company or any Company Subsidiary is bound
or
(c) require any consent or approval under, result in any breach of or any
loss of any benefit under, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of any Liens (except for Permitted Liens)
on
any
property or asset of the Company or any Company Subsidiary pursuant to, any
note, bond, mortgage, indenture, lease, license, permit, concession, franchise,
contract, agreement or other instrument or obligation (each, a “Contract”)
to
which the Company or any Company Subsidiary is a party or by which any of their
respective properties or assets are bound, except, with respect to clauses
(b) and (c), for matters that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect.
17
Section
4.4.2 The
execution, delivery and performance of this Agreement by the Company do not,
and
the consummation of the transactions contemplated hereby will not, require
the
Company to obtain any consent, approval or authorization of, or make any filing
with or notification to, any Governmental Entity, except (a) under the
United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (the “Exchange
Act”)
(including the filing of the Proxy Statement), any applicable state securities,
takeover or “blue sky” Laws, the rules and regulations of the Global Select
Market of the National Association of Securities Dealers, Inc. (“NASDAQ”),
(b)
pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the “HSR
Act”),
(c) the filing and recordation of the Certificate of Merger as required by
the DGCL or (d) where the failure to obtain such consents, approvals or
authorizations, or to make such filings or notifications would not
(i) prevent or materially delay or impede performance by the Company of any
of its obligations under this Agreement or (ii) individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
Section
4.5 Compliance
with Laws.
Except
(a) with respect to benefits and employee matters (which are addressed
exclusively in Section 4.9), environmental matters (which are addressed
exclusively in Section 4.12), intellectual property (which is addressed
exclusively in Section 4.13) and Tax matters (which are addressed exclusively
in
Section 4.14) and (b) for matters that would not, individually or in the
aggregate, reasonably be expected to have a Company Material Adverse Effect,
(i) the Company and the Company Subsidiaries hold all permits, licenses,
franchises, approvals, registrations, qualifications, rights, variances,
certificates, certifications and consents granted by Governmental Entities
that
are material to the conduct of the business of the Company and the Company
Subsidiaries, as currently conducted (collectively, “Company
Permits”)
necessary for the ownership, use and operation of their assets and properties,
and such Company Permits are in full force and effect and (ii) neither the
Company nor any of the Company Subsidiaries is in violation of any Law
applicable to the Company or such Company Subsidiary.
18
Section
4.6 SEC
Filings; Financial Statements.
Section
4.6.1 Company
SEC Filings.
The
Company has filed all reports, schedules, forms, statements or other documents
required to be filed by it under the United States Securities Act of 1933,
as
amended, and the rules and regulations promulgated thereunder (the “Securities
Act”),
or
the Exchange Act, as the case may be, since January 1, 2005 (collectively,
the
“Company
SEC Filings”).
Each
Company SEC Filing (a) as of its date, complied as to form in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act, as the case may be, as in effect on the date so filed and (b) did not,
at the time it was filed (or, if subsequently amended or supplemented, at the
time of such amendment or supplement), 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 made therein, in the light of the
circumstances under which they were made, not misleading. As of the date of
this
Agreement, no Company Subsidiary is separately subject to the periodic reporting
requirements of the Exchange Act. As
of the
date hereof, there are no outstanding or unresolved comments received by the
Company from the SEC staff with respect to any of the Company SEC
Filings.
Section
4.6.2 Financial
Statements.
Each of
the consolidated financial statements (including, in each case, any notes and
Form 10-K schedules thereto) of the Company contained in the Company SEC
Filings (collectively, the “Company
Financial Statements”)
was
prepared in accordance with United States generally accepted accounting
principles (“GAAP”),
applied (except as may be indicated in the notes thereto and, in the case of
unaudited quarterly financial statements, as permitted by Form 10-Q under the
Exchange Act) on a consistent basis during the periods indicated (except as
may be indicated in the Company SEC Filings), and each of the Company Financial
Statements presents fairly, in all material respects, the consolidated financial
position of the Company as of the respective dates thereof and the consolidated
statements of income, stockholder’s equity and cash flows of the Company for the
respective periods indicated therein (subject, in the case of unaudited
financial statements, to normal period end adjustments).
Section
4.6.3 No
Undisclosed Liabilities.
Neither
the Company nor any of its Subsidiaries has any liabilities or obligations
of a
nature (whether accrued, absolute, contingent or otherwise) that would be
required by GAAP to be reflected on a consolidated balance sheet of the Company
(or in the notes thereto), except for liabilities or obligations (a) that
were incurred after March 31, 2007 in the ordinary course of business,
(b) that were incurred under this Agreement or in connection with the
transactions contemplated hereby, (c) that were disclosed or reserved
against in the Company Financial Statements (including the notes thereto) or
(d) that represent no more than $20,000,000 in the aggregate.
Section
4.6.4 Internal
Controls.
Since
January 1, 2006, the Company has disclosed, based on its most recent evaluation
prior to the date hereof, to the Company’s auditors and the audit committee of
the Company Board (a) any significant deficiencies and material weaknesses
in the design or operation of its internal control over financial reporting
that
are reasonably likely to adversely affect in any material respect the Company’s
ability to record, process, summarize and report financial information and
(b) any fraud, or to the Knowledge of the Company, alleged fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company’s internal controls over financial reporting.
The Company maintains disclosure controls and procedures and internal control
over financial reporting (as such terms are defined in paragraph (e) and
(f) of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under
the Exchange Act. The
Company has not identified any material weaknesses in the design or operation
of
its internal controls over financial reporting, and the Company is not aware
of
any fraud or allegation of fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal controls over financial reporting. Since
January 1, 2006, the Company has been in compliance in all material respects
with (a) the applicable provisions of the United States Xxxxxxxx-Xxxxx Act
of 2002, as amended, and the rules and regulations promulgated by the SEC
thereunder and (b) the applicable listing and corporate governance rules
and regulations of NASDAQ.
19
Section
4.7 Affiliate
Transactions.
To
the
Knowledge
of
the
Company,
no
executive officer or director of
the
Company or any Company Subsidiary or
any
Person who beneficially owns five percent or more of the Company
Common Stock is
a
party
to
any
Contract
with
or
binding upon
the
Company or any Company Subsidiary or
any of
their respective properties or assets or has any material interest in any
material property owned by the Company
or
any of
the Company
Subsidiaries or
has
engaged in any material transaction with any of the foregoing within the 12
month period preceding the date of this Agreement,
in each
case, that is of the type that would be required to be disclosed under Item
404
of Regulation S-K under the Securities
Act.
Section
4.8 Absence
of Certain Changes or Events.
From
December
31,
2006
through
the date of this Agreement,
except
for the
transactions contemplated hereby or
related hereto, (a) the Company
has
conducted its business in all material respects in the ordinary course
consistent with past practice, (b) there
has
not been any Company Material Adverse Effect,
(c) the
Company has not adopted or amended any material Company Benefit Plan and (d)
neither the Company nor any of its Subsidiaries has taken any action set forth
in Sections 6.1.1(a), (c), (d), (e)(i)-(ii) or (k) that if taken after the
date
hereof would require the consent of Parent pursuant to Section 6.1.1.
Section
4.9 Benefit
Plans; Employees and Employment Practices.
Section
4.9.1 Section
4.9.1 of the Company Disclosure Schedule contains a true, correct and complete
list of each “employee
benefit plan” as defined in Section 3(3) of ERISA and
each
other
material
employment, consulting, severance, termination, retirement, profit sharing,
bonus, incentive or deferred compensation, retention or transaction bonus or
change in control agreement, pension, stock option, restricted stock or other
equity-based benefit, profit sharing, savings, retirement, life, health,
disability, accident, medical, insurance, vacation, paid time off, long term
care, or other material
compensation or benefit plan, program, arrangement, agreement, fund or
commitment
(i)
for the
benefit or welfare of any director, officer or employee of the Company or any
Company Subsidiary
and
maintained or contributed to by the Company or any Company
Subsidiary,
or (ii)
with respect to which the Company or any Company Subsidiary has any material
liability or obligation (each
such plan or agreement, a “Company
Benefit Plan”).
The
Company has made available to Parent or its agents or representatives copies
of
(a) each Company Benefit Plan other than any Company Benefit Plan that is
maintained on behalf of employees outside of the United States, (b) the most
recent annual report (Form 5500), if any, filed with the U.S. Department of
Labor with respect to each such Company Benefit Plan, including schedules and
financial statements attached thereto, (c) the most recent summary plan
description for each such Company Benefit Plan for which a summary plan
description is required, together with any summary of material modifications
thereto, (d) each trust agreement and any other material agreement relating
to a
Company Benefit Plan and (e) the most recent determination letter issued by
the
U.S. Internal Revenue Service (“IRS”)
with
respect to any such Company Benefit Plan that is intended to be qualified under
Section 401(a) of the Code.
20
Section
4.9.2 Except
for such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, each Company Benefit
Plan
has been
maintained, funded and administered
in
compliance with its
terms, any
applicable provisions of the Employee Retirement Income Security Act of 1974,
as
amended (“ERISA”)
and/or
the Code and any other applicable Laws. With respect to the Company Benefit
Plans, all payments, premiums, contributions, and reimbursements for all periods
ending prior to or as of the Effective Time shall have been made or have been
accrued for on the financial statements of the Company or the applicable Company
Subsidiary (including the Company Financial Statements). There are no audits,
claims, suits, investigations, inquiries
or proceedings pending or, to the Knowledge of the Company, threatened by the
IRS or any other Governmental Entity or
any
other Person with
respect to any Company Benefit Plan (other than routine claims for benefits
in
the ordinary course of business)
nor to
the Knowledge of the Company is there any basis for any such audits, claims,
suits, investigations, inquiries or proceedings. To the Knowledge of the
Company, there has been no non-exempt “prohibited transaction” (as defined in
Section 4975 of the Code or Section 406 of ERISA) with respect to any Company
Benefit Plan.
Section
4.9.3 Each
Company Benefit Plan that is intended to be qualified under Section 401(a)
of
the Code has received a determination letter from the IRS that it is so
qualified, and, to the Company’s Knowledge, no fact or event has occurred
that
would
reasonably be expected to
adversely affect the qualified status of any such Company Benefit
Plan.
Section
4.9.4 None
of
the
Company,
any
Company Subsidiary or
any
trade or business that, together with the Company
or any
Company Subsidiary,
would
be deemed a single employer within the meaning of Section 4001 of ERISA (an
“ERISA
Affiliate”)
maintains or contributes to any “multiemployer plan” (within the meaning of
Section 3(37) or 4001(a)(3) of ERISA) or any “defined benefit plan” (within the
meaning of Section 3(35) of ERISA) subject to Title IV of ERISA,
and
neither the Company nor any Company Subsidiary has any current or potential
liability or obligation under Title IV of ERISA or Section 412 of the
Code.
Section
4.9.5 Neither
the Company nor any Company Subsidiary maintains, contributes to or has any
obligation or liability with respect to, the provision of any health or life
insurance or other welfare-type benefits for current or future retired or
terminated directors, officers, employees or contractors (or any spouse or
other
dependent thereof) other than in accordance with Part 6 of Subtitle B of Title
I
of ERISA and Section 4980B of the Code (“COBRA”).
The
Company, the Company Subsidiaries and the ERISA Affiliates have complied and
are
in compliance in all material respects with the requirements of
COBRA.
21
Section
4.9.6 Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in conjunction with
any
other event) constitute an event under a Company Benefit Plan that will or
may
result in, cause the accelerated vesting, funding or delivery of, or increase
the amount or value of, any payment or benefit to any Person.
Section
4.9.7 Neither
the Company nor any Company Subsidiary is a party to any collective bargaining
or other labor union contracts and no collective bargaining agreement is being
negotiated by the Company or any Company Subsidiary. There is no pending labor
dispute, strike or work stoppage,
slowdowns, lockouts, material arbitrations or material grievances, or other
material labor disputes
against
the Company or any Company Subsidiary,
and no
such disputes have occurred during the past three years. None of the Company
or
any of
the
Company Subsidiaries
is
subject to any outstanding labor or employment-related order, settlement,
judgment, writ, stipulation, award, injunction, decree, arbitration award or
finding of any Governmental Entity.
There
is no pending charge or complaint against the Company or any Company Subsidiary
by the National Labor Relations Board or any comparable state
agency,
and no
material charges or complaints have been brought against the Company during
the
past three years. Within
the past three years, to
the
extent that
the
Company or
any of
the Company Subsidiaries has implemented any plant closing or layoff of
employees that implicated the Worker Adjustment and Retraining Notification
Act
of 1988, as amended, or any similar foreign, state or local law, regulation
or
ordinance (collectively, the “WARN Act”),
such
plant closing or layoff of employees complied with the WARN Act in all material
respects.
Section
4.9.8 Neither
the Company nor any Company Subsidiary will have as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, any obligation to reimburse any employee, officer, or
director of the Company or any Company Subsidiary for any Tax payable as a
result of the receipt by any such person of an “excess parachute payment” as
defined in Section 280G(b)(1) of the Code (or any corresponding provision of
state, local, or foreign Tax law).
Section
4.10 Material
Contracts; Indebtedness.
Section
4.10.1 None
of
the Company or any Company Subsidiary is a party to or bound by any
Contract:
(i) which,
as
of the date hereof, is a “material contract” (as such term is defined in Item
601(b)(10) of Regulation S-K promulgated by the SEC);
(ii) with
respect to any joint venture or partnership arrangements that are material
to
the Company and the Company Subsidiaries, taken as a whole;
(iii) pursuant
to which any Indebtedness of the Company or any Company Subsidiary in an
aggregate principal amount in excess of $10,000,000 is outstanding or may be
incurred, other than any Contract between or among the Company and/or
wholly-owned Company Subsidiaries;
22
(iv) relating
to a guarantee by the Company or any Company Subsidiary of indebtedness of
any
Third Party in excess of $1,000,000;
(v) relating
to any pending acquisition or disposition by the Company or any of the Company
Subsidiaries of properties or assets, except for acquisitions and dispositions
of properties, assets and inventory in the ordinary course of business; or
(vi) which
contains covenants limiting the ability of the Company or any Company Subsidiary
to engage in any of its material lines of business, or to compete with any
Person or operate at any geographic location with respect to any of its material
lines of business, in each case that could reasonably be expected to be material
to the Company and the Company Subsidiaries, taken as a whole, except for any
Real Property Leases.
Each
Contract of the type described in this Section 4.10.1, whether or not set forth
in Section 4.10.1 of the Company Disclosure Schedule (including Contracts which
would be required to be set forth in Section 4.10.1 of the Company Disclosure
Schedule if such Contracts were not filed as exhibits to, or otherwise included
in, the Company SEC Filings, but excluding any Real Property Leases, which
are
addressed exclusively in Section 4.16), is referred to herein as a “Company
Material Contract.”
As
of
the date of this Agreement, the aggregate Indebtedness of the Company and the
Company Subsidiaries is $183,304,948. “Indebtedness”
means,
without duplication, any (a) indebtedness of the Company and the Company
Subsidiaries for borrowed money, (b) obligations under any note, bond or other
debt security, (c) capitalized lease obligations of the Company and the Company
Subsidiaries as determined in accordance with GAAP, (d) outstanding obligations
(e.g., unreimbursed draws) of the Company and the Company Subsidiaries with
respect to letters of credit of the Company and the Company Subsidiaries,
(e) obligations relating to interest, currency, and other hedging contracts
and arrangements, and (f) guarantees of the Company and the Company
Subsidiaries with respect to any of the foregoing, and, with respect to clause
(a), any prepayment premiums contemplated thereby (assuming prepayment as of
June 26, 2007).
Section
4.10.2 Except
for matters that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, (a) each Company
Material Contract is a valid and binding obligation of the Company or a Company
Subsidiary, as applicable, in full force and effect and enforceable against
the
Company or a Company Subsidiary in accordance with its terms, subject to the
Bankruptcy and Equity Exceptions, (b) to the Company’s Knowledge, each
Company Material Contract is a valid and binding obligation of the counterparty
thereto, in full force and effect and enforceable against such counterparty
in
accordance with its terms, subject to the Bankruptcy and Equity Exceptions,
(c) the Company and each of the Company Subsidiaries, and, to the Knowledge
of the Company, each other party thereto, has performed all obligations required
to be performed by it under each Company Material Contract (excluding
performance obligations not yet due) and (d) neither the Company nor any
Company Subsidiary has received written notice of a default under any Company
Material Contract or of any event or condition which, after notice or lapse
of
time or both, will constitute a default on the part of the Company or a Company
Subsidiary under any Company Material Contract. As of the date hereof, true
and
correct copies of all Company Material Contracts (as amended or modified) are
either publicly filed with the SEC or
the
Company has made available to Parent copies of such Contracts. For the avoidance
of doubt, this Section 4.10 does not relate to Real Property Leases, which
are
addressed exclusively in Section 4.16.
23
Section
4.11 Litigation.
Except
for matters that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect, there are no claims,
actions, suits, proceedings or investigations pending or, to the Knowledge
of
the Company, threatened against the Company or any Company Subsidiary. To the
Company’s Knowledge, none of the Company or any of the Company Subsidiaries is
subject to any material outstanding order, judgment, writ, stipulation, award,
injunction (whether temporary, preliminary, permanent or otherwise), decree,
arbitration award or finding of any Governmental Entity (“Order”).
Section
4.12 Environmental
Matters.
Except
for matters that would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect: (a) to
the
Knowledge
of
the
Company,
the
Company
and
each
Company
Subsidiary is
and
has been in compliance with all applicable Laws
(including applicable common law) relating
to the protection of the environment or to occupational health and safety
(“Environmental
Laws”),
(b) to
the
Knowledge
of
the
Company,
the
Company
and
each
Company
Subsidiaries possess
all Company
Permits issued
pursuant to Environmental
Laws that
are
required to conduct the business of the Company and each Company Subsidiary
as
it is currently conducted, (c) to
the
Knowledge
of
the
Company,
there
has been no release of any
oil,
petroleum, waste, material or substance defined as a “hazardous substance,”
“hazardous material,” or “hazardous waste” or otherwise regulated under any
applicable Environmental Law into
the
environment as a result of the operations or activities of
the
Company or any Company Subsidiary at
any of
the Company
Properties or
any
properties formerly owned or operated by
the
Company or any Company Subsidiary,
in each
case that would reasonably be expected to result in any liability under any
Environmental
Law and
(d) to
the Knowledge of the Company, none
of
the
Company or any Company Subsidiary has
received any written claim or notice of violation from any Governmental
Entity alleging
that
the
Company or any Company Subsidiary is
in
violation of, or liable under, any Environmental
Law. To the Knowledge of the Company, the Company has furnished to Parent all
material environmental reports and other material environmental, health and
safety documentation prepared since January 1, 2006, by or on behalf of the
Company or any Company Subsidiary with respect to the current and former
properties and operations of the Company and the Company
Subsidiaries.
Section
4.13 Intellectual
Property.
Section
4.13 of the Company Disclosure Schedule sets forth a list of all
(a) registered trademarks and applications for registration of trademarks
and (b) material internet domain name registrations in each case that are
owned by the Company or a Company Subsidiary, including for each item listed
in
clause (a), the owner, the jurisdiction, the serial/application number, the
registration number, the filing date, and the issuance or registration date.
Except for matters that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect: (a) the Company and
the Company Subsidiaries own or possess valid rights to use all intellectual
property necessary to conduct the business of the Company and the Company
Subsidiaries as it is currently conducted, free
and
clear of any Liens (other than Permitted Liens), (b) to the Company’s Knowledge,
neither the Company nor any Company Subsidiary is infringing, misappropriating,
or conflicting with the intellectual property rights of any Third Party, and
(c)
to the
Company’s Knowledge, no Third Party is currently infringing or misappropriating
any material intellectual property owned by the Company or any Company
Subsidiary. The Company and the Company Subsidiaries are taking all actions
that
they reasonably believe are necessary to maintain and protect each material
item
of intellectual property that they own,
each
material information technology system utilized in
their
respective businesses, and
all
customer data
that is
material to the business of the Company and the Company Subsidiaries, taken
as a
whole.
24
Section
4.14 Taxes.
Section
4.14.1 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, all Tax Returns required
to be filed by or with respect to the Company or any Company Subsidiary have
been timely filed (taking into account any extension of time within which to
file) and all such Tax Returns are true, correct, and complete in all
respects.
Section
4.14.2 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, all Taxes of the Company
and the Company Subsidiaries (whether
or not shown to be due
and
payable on
any
Tax Return) have
been
timely paid (other than Taxes being contested in good faith
by
appropriate proceedings and for which adequate reserves have been established
in
accordance with GAAP).
Subject to such exceptions that would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect, the unpaid
Taxes of the Company and the Company Subsidiaries did not, as of the date of
the
most recent Company Financial Statements, exceed the reserve for Tax liabilities
(excluding any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the balance
sheet (rather than in any notes thereto) contained in such Company Financial
Statements.
Section
4.14.3 No
deficiency for any amount of Taxes has been proposed, asserted or assessed
in
writing by any Governmental Entity against the Company or any Company Subsidiary
that remains unpaid, subject to exceptions for deficiencies (a) being contested
in good faith by appropriate proceedings or (b) with respect to which the
failure to pay would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect. There are no audits,
suits,
proceedings, investigations, claims, examinations
or other administrative or judicial proceedings currently ongoing or pending
with respect to any Taxes of the Company or any Company Subsidiary, subject
to
exceptions for proceedings that, if resolved in a manner unfavorable to the
Company or any Company Subsidiary, would not, individually or in the aggregate,
reasonably be expected to have a Company Material Adverse Effect. There are
no
waivers
or extensions of any statute of limitations currently in effect with respect
to
Taxes of the Company or any Company Subsidiary.
Section
4.14.4 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, all Taxes required to
be
withheld or collected by the Company and each Company Subsidiary have been
withheld and collected and, to the extent required by Law, timely paid to the
appropriate Governmental Entity.
25
Section
4.14.5 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, there are no Liens for
Taxes upon any property or assets of the Company or any Company Subsidiary,
except for Liens for current Taxes not yet due and payable that
may
thereafter be paid without interest or penalty, and
Liens
for Taxes being contested in good faith by appropriate proceedings.
Section
4.14.6 Since
January 1, 2005, neither the Company nor any Company Subsidiary has been a
party
to any transaction treated by the parties as a distribution to which Code
Section 355 applies.
Section
4.14.7 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, 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) or (ii)
is
liable
for the Taxes of any other Person (other than the Company or any Company
Subsidiary) under Treasury Regulation §1.1502-6 or any similar provision of
state, local or foreign Tax Law
or as a
transferee or successor, or pursuant to any indemnification, allocation or
sharing agreement.
Section
4.14.8 The
Company has not been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) during the applicable period described
in
Code Section 897(c)(1)(A)(ii).
Section
4.14.9 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, since January 1, 2006,
no
claim in writing has been made by any Governmental Entity in a jurisdiction
in
which the Company and the Company Subsidiaries do not file Tax Returns that
the
Company or the Company Subsidiaries is or may be subject to taxation by the
jurisdiction.
Section
4.14.10 Subject
to such exceptions that would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, neither the Company
nor
any of the Company Subsidiaries is a party to any agreement, contract,
arrangement or plan that has resulted or could result, separately or in the
aggregate, in the payment of any amount that will not be fully deductible as
a
result of Section 162(m) of the Code (or any corresponding provision of state,
local or foreign Tax law).
Section
4.14.11 Neither
the Company nor any of the Company Subsidiaries has engaged in any “listed
transaction” within the meaning of Treasury Regulation Section
1.6011-4(b)(2).
Section
4.14.12 As
used
in this Agreement, (a) “Taxes”
shall
mean any and all taxes, assessments, levies, duties, tariffs, imposts and other
charges in the nature of a tax (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed
by
any Governmental Entity, including income, estimated
franchise, windfall or other profits, gross receipts, property, sales, use,
net
worth, capital stock, payroll, employment, social security, workers’
compensation, unemployment compensation, excise, withholding, ad valorem, stamp,
custom
duties, environmental, alternative or add-on minimum, transfer
and value-added taxes
together
with any interest, penalty, or addition thereto,
and (b)
“Tax
Return”
shall
mean any return (including any information return), report, statement, schedule,
notice, form, election, estimated Tax filing, claim for refund or other document
(including any attachments thereto and amendments thereof) required to be filed
with any Governmental Entity with respect to any Tax,
including any schedule or attachment thereto, and including any amendment
thereof.
26
Section
4.15 Insurance.
Except
as would not, individually or in the aggregate, reasonably be expected have
a
Company Material Adverse Effect, all material insurance policies of the Company
and the Company Subsidiaries (a) are in full force and effect and provide
insurance in such amounts and against such risks as is sufficient to comply
with
applicable Law, (b) neither the Company nor any Company Subsidiary is in
breach or default, and neither the Company nor any Company Subsidiary has taken
any action or failed to take any action which, with notice or the lapse of
time,
would constitute such a breach or default under, or permit termination or
modification of, any of such insurance policies,
and (c)
to the Knowledge of the Company, no notice of cancellation or termination has
been received by the Company or any of its Subsidiaries with respect to any
such
policy.
Section
4.16 Real
Estate.
Except
as would not, individually or in the aggregate, reasonably be expected to have
a
Company Material Adverse Effect, the Company or a Company Subsidiary
owns
fee
simple title to all
of
its owned real property (the
“Company
Owned Properties”)
and
has
valid leasehold interests in all of its leased real property (the
“Company
Leased Premises,”
and
together with the Company
Owned Properties,
the
“Company
Properties”),
in each
case sufficient to conduct their respective businesses as currently conducted
and free and clear of all Liens (except for Permitted Liens) assuming the timely
discharge of all obligations owing under or related to the Company Properties.
Except as would not, individually or in the aggregate, reasonably be expected
to
have a Company Material Adverse Effect, (a) all leases under which the Company
or any Company Subsidiary leases any real property (the “Real
Property Leases”)
are
valid and in full force and effect and constitute binding obligations of the
Company or the Company Subsidiary party thereto and, to the Company’s Knowledge,
the counterparties thereto, in accordance with their respective terms, (b)
there
is not any existing default by the Company or any Company Subsidiary under
any
of the Real Property Leases that would give the lessor under such Real Property
Lease the right to terminate such Real Property Lease or amend or modify such
Real Property Lease in a manner adverse to the Company or the Company Subsidiary
party thereto, as applicable, and (c) to the Knowledge of the Company, no event
has occurred which, after notice or lapse of time or both, would constitute
a
default by the Company or a Company Subsidiary under any Real Property Lease
where such default would give the lessor under such Real Property Lease the
right to terminate such Real Property Lease or amend or modify such Real
Property Lease in a manner adverse to the Company or the Company Subsidiary
party thereto, as applicable.
Section
4.17 Proxy
Statement.
The
Proxy
Statement will not at the time of the mailing of the Proxy Statement to the
holders of Company Common Stock, at the time of the Company Stockholder’s
Meeting, or at the time of filing or mailing any amendments thereof or
supplements thereto, contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary in order
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading; provided
that no
representation is made by the Company with respect to information supplied
by or
related to, or the sufficiency of disclosures related to, Parent, Merger Sub
or
any other Person in the Parent Group.
At the
time of the Company Stockholder’s Meeting, the
Proxy
Statement will comply as to form in all material respects with the requirements
of the Exchange Act.
27
Section
4.18 Fairness
Opinion.
Each
of
Xxxxxxx, Xxxxx & Co. and Xxxxx X. Xxxxxxx Company, L.P. (together,
the “Company
Financial Advisors”),
has
delivered to the Special Committee and the Company Board its written opinion
(or
an oral opinion to be confirmed in writing), dated as of the date of this
Agreement, that, as of such date, the Merger Consideration to be received by
the
holders of Company Common Stock is fair, from a financial point of view, to
the
holders of Company Common Stock.
Section
4.19 Brokers.
Other
than the Company Financial Advisors (the fees and expenses of which will be
paid
by the Company), no broker, finder, financial advisor, investment banker or
other Person is entitled to any brokerage, finder’s, financial advisor’s or
other similar fee or commission in connection with the Merger based upon
arrangements made by or on behalf of the Company or any Company Subsidiary.
Section
4.20 No
Other Representations or Warranties.
Except
for the representations and warranties contained in this Article 4, each of
Parent and Merger Sub acknowledges that neither the Company nor any other Person
on behalf of the Company makes any other express or implied representation
or
warranty with respect to the Company or any of the Company Subsidiaries or
their
respective businesses, or with respect to any other information provided to
any
member of the Parent Group or any Parent Representative and the Company hereby
disclaims any other representations or warranties made by the Company, any
Company Subsidiary or any Company Representative with respect to the execution
and delivery of this Agreement or the Merger or the other transactions
contemplated hereby (other than, for the avoidance of doubt, as set forth in
Article 4 of this Agreement). Neither the Company nor any other Person will
have
or be subject to any liability or indemnification obligation to Parent, Merger
Sub or any other Person resulting from the distribution to, or use by, any
member of the Parent Group or any Parent Representative of any information
provided to any member of the Parent Group or any Parent Representative by
the
Company, the Company Subsidiaries or any Company Representative, including
any
information, documents, projections, forecasts, business plans or other material
made available in the “data room,” any confidential information memoranda or any
management presentations in expectation of the transactions contemplated by
this
Agreement, unless such information is expressly set forth in a representation
or
warranty contained in Article 4 of this Agreement.
Section
4.21 Takeover
Statutes.
The
Company Board has taken all necessary action so that no “fair price,”
“moratorium,” “control share acquisition” or other anti-takeover Law (including
the interested stockholder provisions codified in Section 203 of the DGCL)
or
any anti-takeover provision in the Company Certificate or Company Bylaws is
applicable to this Agreement, the Merger and the transactions contemplated
by
this Agreement.
28
Article
5.
Representations
and Warranties of Parent and Merger Sub
Subject
to such exceptions as are disclosed in the disclosure schedule (the
“Parent
Disclosure Schedule”)
delivered by Parent to the Company concurrently with the execution and delivery
of this Agreement (it being expressly understood and agreed that (a) the
disclosure of any fact or item in any section of the Parent Disclosure Schedule
shall be deemed disclosure with respect to any other Section or subsection
of
this Agreement or the Parent Disclosure Schedule to the extent that it is
reasonably apparent that such fact or item is relevant to such other Section,
subsection or schedule and (b) disclosure of any matter or item in the
Parent Disclosure Schedule shall not be deemed to constitute an acknowledgement
that such matter or item is required to be disclosed therein or is material
to a
representation or warranty set forth in this Agreement and shall not be used
as
a basis for interpreting the terms “material,” “materially” or “materiality” or
any word or phrase of similar import), Parent and Merger Sub jointly and
severally represent and warrant to the Company as follows:
Section
5.1 Organization
and Qualification.
Each of
Parent and Merger Sub is a corporation, duly organized, validly existing and in
good standing under the Laws of the State of Delaware. Each of Parent and Merger
Sub has the requisite corporate power and authority to own, lease and operate
its properties and to carry on its business as it is now being conducted. Each
of Parent and Merger Sub is duly qualified to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or good standing necessary. Parent has heretofore made available to the Company
complete and correct copies of the certificate of incorporation and bylaws
of
Parent and Merger Sub, and all amendments thereto, as currently in effect.
Neither Parent nor Merger Sub is in violation of its certificate of
incorporation or bylaws.
Section
5.2 Authority.
Each of
Parent and Merger Sub has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery
of
this Agreement by each of Parent and Merger Sub and the consummation by Parent
and Merger Sub of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of Parent
and
Merger Sub and no other corporate proceedings on the part of Parent or Merger
Sub are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby, other than the filing of the Certificate of Merger with
the
Secretary of State of the State of Delaware. This Agreement has been duly
authorized and validly executed and delivered by Parent and Merger Sub and,
assuming this Agreement is a valid and binding obligation of the Company, this
Agreement constitutes a legal, valid and binding obligation of Parent and Merger
Sub, enforceable against each of them in accordance with its terms, subject
to
the Bankruptcy and Equity Exceptions.
Section
5.3 No
Conflict; Required Filings and Consents.
Section
5.3.1 The
execution, delivery and performance by Parent and Merger Sub of this Agreement
do not, and the consummation by Parent and Merger Sub of the transactions
contemplated hereby will not, (a) conflict with or violate any provision of
the certificate of incorporation or bylaws of Parent or Merger Sub,
(b) assuming that all consents, approvals and authorizations described in
Section 5.3.2 have been obtained prior to the Effective Time and all filings
and
notifications described in Section 5.3.2 have been made and any waiting periods
thereunder have terminated or expired prior to the Effective Time, conflict
with
or violate any Law applicable to Parent and its Affiliates (collectively, the
“Parent
Group”)
or by
which any property or asset of any member of the Parent Group is bound or
(c) require any consent or approval under, result in any breach of or any
loss of any benefit under, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any right of termination, amendment, acceleration or cancellation of, or result
in the creation of any Liens on any property or asset of Parent or Merger Sub
pursuant to, any Contract to which Parent or Merger Sub is a party or by which
any of their respective properties or assets are bound.
29
Section
5.3.2 The
execution, delivery and performance of this Agreement by Parent and Merger
Sub
do not, and the consummation of the transactions contemplated hereby will not,
require Parent or Merger Sub to obtain any consent, approval, or authorization
of, or make any filing with or notification to, any Governmental Entity, except
(a) under the Exchange Act, any applicable state securities, takeover or
“blue sky” Laws, (b) pursuant to the HSR Act, (c) the filing and
recordation of the Certificate of Merger as required by the DGCL or
(d) where the failure to obtain such consents, approvals or authorizations,
or to make such filings or notifications would not prevent or materially delay
or impede performance by Parent or Merger Sub of any of their material
obligations under this Agreement.
Section
5.4 Litigation.
There
are (a) no claims, actions, suits, proceedings or investigations pending or
to the Knowledge of Parent, threatened, against Parent or Merger Sub which
seek
to, or would reasonably be expected to, restrain, enjoin or delay the
consummation of the Merger or any of the other transactions provided for herein
or which seek damages in connection therewith and (b) no Order has been
entered or issued which restrains, enjoins or delays, or would reasonably be
expected to restrain, enjoin or delay, the consummation of the Merger or any
of
the other transactions provided for herein.
Section
5.5 Ownership
of Merger Sub; No Prior Activities.
Parent
owns 100 percent of the issued and outstanding Equity Interests of Merger Sub
and no other Person has any right to acquire any capital stock or other Equity
Interests of Merger Sub or any option, warrant, right or security convertible,
exchangeable or exercisable therefor. Each of Parent and Merger Sub was formed
solely for the purpose of consummating the Merger and engaging in the other
transactions contemplated by this Agreement. Except for obligations or
liabilities incurred in connection with its formation and the transactions
contemplated by this Agreement (including the Commitments), neither Parent
nor
Merger Sub has, and, as of the Closing Date, will not have, incurred, directly
or indirectly, through any Subsidiary or Affiliate, any obligations or
liabilities or engaged in any business activities of any type or kind whatsoever
or entered into any agreements or arrangements with any Person.
Section
5.6 Financing.
Parent
has delivered to the Company true, complete and correct signed
counterpart(s) of (a) the Equity Commitment Letter, and (b) the
debt commitment letter(s) (together with copies of any provisions relating
to
“market flex” with respect to the financing contemplated by such debt commitment
letter(s)), each dated as of the date hereof, by and among JPMorgan Chase Bank,
N.A., X.X. Xxxxxx Securities Inc., Parent and Merger Sub, pursuant to which
the
lenders party thereto have committed, subject to the terms and conditions set
forth therein, to provide or cause to be provided, debt financing to Parent
(which may include up to $640,000,000 in bridge financing to be utilized in
the
event that the placement of high yield securities in a comparable amount is
not
consummated) in connection with the transactions provided for herein (the
“Debt
Commitment Letters”
and,
with the Equity Commitment Letter, the “Commitments”).
None
of the Commitments has been amended or modified prior to the date of this
Agreement and the respective commitments contained in the Commitments have
not
been withdrawn or rescinded prior to the date of this Agreement. As
of the
date of this Agreement, the
Commitments are in full force and effect and constitute the legal, valid and
binding obligations of each of Parent and Merger Sub and, to the Knowledge
of
Parent, the other parties thereto. The Commitments are subject to no
contingencies or conditions of any kind whatsoever related to the funding of
the
full amount of the financing
set forth in the Commitments
(including any “flex provisions”), other than as set forth in the signed copies
thereof (and in the copy of the “market flex” provision excerpted from the
related fee letter) delivered to the Company on or prior to the date hereof.
As
of the date of this Agreement, no event has occurred which, with or without
notice, lapse of time or both, would result in a breach or violation of or
constitute a default on the part of Parent or Merger Sub under any term or
condition of the Commitments. Assuming
the satisfaction of the conditions set forth in Section 7.1 and Section 7.2,
as
of the date of this Agreement, neither
Parent
nor Merger Sub has any reason to believe that it or any other party to the
Commitments will be unable to satisfy on a timely basis any of the conditions
of
Closing that is required to be satisfied by it or such other party as a
condition of the Commitments or that any portion of the financing contemplated
by the Commitments will not be made available to Parent or Merger Sub on the
Closing Date. Parent has fully paid any and all commitment fees and other fees
required by the Commitments to be paid as of the date hereof. Subject to the
terms and conditions of the Commitments set forth therein and this Agreement,
the aggregate proceeds to be disbursed pursuant to the agreements contemplated
by the Commitments would provide Parent with financing at the Effective Time
sufficient to (a) consummate the Merger upon the terms contemplated by this
Agreement, including the payment of the Merger Consideration, (b) effect
any other repayment or refinancing of debt contemplated in connection with
the
Merger or the Commitments and (c) pay all related fees and expenses.
30
Section
5.7 Limited
Guarantee.
Parent
has delivered to the Company a true, complete and correct signed copy of the
Limited Guarantee, pursuant to which the Sponsor has, among other matters,
guaranteed certain obligations of Parent and Merger Sub in connection with
this
Agreement, subject to the terms and limitations set forth therein. The Limited
Guarantee, in the form so delivered, is in full force and effect and is a legal,
valid and binding obligation of the Sponsor.
Section
5.8 Vote
Required.
No vote
of the holders of any class or series of capital stock or other Equity Interests
of Parent or Merger Sub (other than the vote of Parent as the sole stockholder
of Merger Sub, which shall have occurred prior to the Effective
Time)
is
necessary to approve or adopt this Agreement or the transactions contemplated
hereby.
Section
5.9 Brokers.
No
broker, finder, financial advisor, investment banker or other Person is entitled
to any brokerage, finder’s, financial advisor’s or other similar fee or
commission in connection with the Merger based upon arrangements made by or
on
behalf of Parent or Merger Sub, except for Persons whose fees and expenses
will
be paid by Parent.
31
Section
5.10 Ownership
of Company Common Stock.
Neither
Parent nor Merger Sub is, nor at any time during the last three years has been,
an “interested stockholder” of the Company as defined in Section 203 of the
DGCL.
Section
5.11 Solvency
of the Surviving Corporation.
As of
the Effective Time, immediately after giving effect to the transactions
contemplated by this Agreement and actions taken in connection with the
financing of these transactions, and
assuming (a) satisfaction of the conditions set forth in Section 7.1 and
Section 7.2, (b) the accuracy in all material respects of the
representations and warranties of the Company set forth in Article 4 hereof
(assuming accuracy in all material respects without regard to any materiality
or
“Company Material Adverse Effect” qualification set forth therein), (c) that any
estimates, projections or forecasts with respect to the Company and its
Subsidiaries provided by the Company or any Company Representatives have been
prepared in good faith and are based upon reasonable assumptions, and (d) that
all financial information concerning the Company and its Subsidiaries provided
to Parent by the Company or any Company Representative (whether before or after
the date hereof) fairly presents in all material respects the consolidated
financial condition of the Company and its Subsidiaries as at the end of the
periods covered thereby and the consolidated results of operations of the
Company and its Subsidiaries for the periods covered thereby,
the
Surviving Corporation shall be Solvent. For purposes of this Agreement, the
Surviving Corporation will
be
deemed to be “Solvent”
so
long, as of any date of determination: (a) each
of
the Surviving
Corporation and
its
Subsidiaries
will
not
have incurred,
or be
expected to incur, indebtedness
(including
contingent and other liabilities)
beyond
its ability to pay such
indebtedness
as
it
matures
or
becomes
due,
(b) the
then
present fair salable value of the assets of the Surviving
Corporation and
its
Subsidiaries,
taken
as a whole, exceeds, as of such date, the amount that will be required to pay
(x) all
liabilities of the Surviving
Corporation and
its
Subsidiaries
(including
the amount necessary to provide for contingent liabilities) and
(y) all
existing indebtedness
of
the
Surviving
Corporation and
its
Subsidiaries
(including
the amount necessary to provide for contingent liabilities) as such indebtedness
becomes
absolute and matures and
(c) each
of
the Surviving
Corporation and
its
Subsidiaries
will
not
have an unreasonably small
amount
of capital to carry on their respective business, either (i) as
presently conducted or (ii) as
intended by Parent
to
be
conducted. No transfer of property is being made and no obligation is being
incurred in connection with the transactions contemplated by this Agreement
with
the
intent to hinder, delay or defraud any present or future creditors of the
Surviving
Corporation and
its
Subsidiaries.
Section
5.12 Proxy
Statement.
None of
the information supplied or to be supplied by Parent or Merger Sub for inclusion
or incorporation by reference in the Proxy Statement will at the time of the
filing or mailing of the Proxy Statement to holders of Company Common Stock,
at
the time of the Company Stockholder’s Meeting, or at the time of filing or
mailing any amendments thereof or supplements thereto, contain any untrue
statement of a material fact or omit to state any material fact required to
be
stated therein or necessary in order to make the statements therein, in light
of
the circumstances under which they were made, not misleading. Parent and Merger
Sub will use their reasonable best efforts to supply information necessary
for
the preparation of the Proxy Statement (or any amendment thereof or supplement
thereto) as promptly as practicable.
32
Section
5.13 No
Other Information.
Each of
Parent and Merger Sub acknowledges and agrees that the Company makes no
representation or warranty as to any matter whatsoever, except as expressly
set
forth in Article 4. The representations and warranties set forth in Article
4 are made
solely by the Company, and no Company Representative, Company Subsidiary or
Affiliate of the Company shall have any responsibility or liability related
thereto.
Section
5.14 Access
to Information; Disclaimer.
Each of
Parent and Merger Sub acknowledges and agrees that it (a) has had an
opportunity to discuss the business of the Company and the Company Subsidiaries
with the management of the Company, (b) has had reasonable access to
(i) the books and records of the Company and the Company Subsidiaries and
(ii) the “data room” maintained by the Company through Intralinks, Inc. for
purposes of the transactions contemplated by this Agreement, (c) has been
afforded the opportunity to ask questions of and receive answers from the
management of the Company, (d) has conducted its own independent
investigation of the Company and the Company Subsidiaries, their respective
businesses and the Merger and the other transactions contemplated hereby, and
neither Parent nor Merger Sub has relied on any representation, warranty or
other statement by any Person on behalf of the Company or any Company
Subsidiary, other than the representations and warranties of the Company
expressly contained in Article 4, and (e) any and all representations and
warranties made by or on behalf of the Company, any Company Subsidiary or any
Company Representatives, other than the representations and warranties of the
Company expressly contained in Article 4, are specifically
disclaimed.
It is
agreed and acknowledged that nothing in this Section 5.14 shall in any way
diminish or affect the validity of the Company’s representations and warranties
set forth in Article 4 of this Agreement.
Article
6.
Covenants
Section
6.1 Conduct
of Business Pending the Closing.
Section
6.1.1 Conduct
of Business of the Company.
The
Company agrees that, between the date of this Agreement and the Effective Time,
except as set forth in the Company Disclosure Schedule, as otherwise permitted
or contemplated by this Agreement (including this Section 6.1), as required
by
applicable Law or as consented to in writing by Parent (such consent not to
be
unreasonably conditioned, delayed or withheld), the Company will, and will
cause
each Company Subsidiary to, in all material respects (it being understood that
in no event shall the Company’s participation in the negotiation (including
activities related to due diligence), execution, delivery, public announcement
or pendency of this Agreement or any of the transactions contemplated herein
or
any actions taken in compliance herewith or otherwise with the consent of Parent
(including the impact thereof on the relationships of the Company or the Company
Subsidiaries with customers, suppliers, distributors, consultants, employees
or
independent contractors or other Third Parties with whom the Company or any
Company Subsidiary has any relationship), be considered a breach of any of
the
provisions of this Section 6.1), conduct its business substantially in the
ordinary course consistent with past practice. Without limiting the foregoing,
except as set forth in the Company Disclosure Schedule, as otherwise permitted
or contemplated by this Agreement (including this Section 6.1), as required
by
applicable Law or as consented to in writing by Parent (such consent not to
be
unreasonably conditioned, delayed or withheld), the Company shall not, and
shall
not permit any Company Subsidiary to, between the date of this Agreement and
the
Effective Time, directly or indirectly, do, or agree to do, any of the
following:
(a) amend
or
otherwise change the Company Certificate, the Company Bylaws or any material
provision of the equivalent organizational or governing documents of the Company
Subsidiaries;
33
(b) issue,
deliver, sell, pledge or encumber, or authorize, propose or agree to the
issuance, delivery, sale, pledge or encumbrance of, any shares of the capital
stock of the Company or any Company Subsidiary, or securities convertible into
or exchangeable for, or options, warrants, calls, commitments or rights of
any
kind to acquire, any shares of any class or series of the capital stock of
the
Company or any Company Subsidiary (other than (i) pursuant to the requirements
of Contracts of the Company or any Company Subsidiary and of the Company Benefit
Plans, in each case as in existence on the date hereof (including the Company
ESPP and the LTIPs) and as identified in Section 6.1.1(b) of the Company
Disclosure Schedule, and (ii) pursuant to the vesting and/or exercise of Company
Options, Company Stock-Based Awards, Company ESPP Rights, warrants, conversion
rights and other contractual rights that are (A) in existence on the date hereof
or (B) granted or issued after the date hereof pursuant to clause (i) of this
parenthetical);
(c) declare,
set aside, make or pay any dividend or other distribution (whether payable
in
cash, stock, property or a combination thereof) with respect to any of its
capital stock (other than dividends paid by a wholly-owned Company Subsidiary
to
the Company or to any other wholly-owned Company Subsidiary);
(d) reclassify,
combine, split, subdivide or redeem, purchase or otherwise acquire, directly
or
indirectly, any of its capital stock;
(e) (i)
acquire (including by merger, consolidation, or acquisition of stock or assets)
or make any investment, outside of the ordinary course of business, in any
Equity Interest in any Person or any assets, loans or debt securities
thereof,
(ii)
sell or otherwise dispose of (whether by merger, consolidation, or acquisition
of stock or assets or otherwise) any business organization or division thereof
or any assets, in each case, which are material to the Company and its
Subsidiaries taken as a whole, other than sales or dispositions of inventory
and
other assets in the ordinary course of business or pursuant to existing
Contracts, (iii) abandon, fail to maintain or allow to expire, or sell or
exclusively license to any Person, any material Intellectual Property of the
Company or the Company Subsidiaries or (iv) authorize any material new capital
expenditures, in the aggregate, in excess of 110% of the Company’s budgeted
capital expenditures;
(f) incur
any
Indebtedness or issue any debt securities or assume, guarantee or endorse,
or
otherwise as an accommodation become responsible for, the Indebtedness of any
Person (other than a wholly-owned Company Subsidiary), except for
(i) Indebtedness incurred under the Company’s existing credit facilities or
renewals or any refinancing thereof, (ii) Indebtedness in a principal
amount not in excess of $10,000,000 in the aggregate for the Company and the
Company Subsidiaries taken as a whole, (iii) Indebtedness owing by any
wholly-owned Company Subsidiary to the Company or any other wholly-owned Company
Subsidiary and (iv) Indebtedness incurred to refinance any existing
Indebtedness in an amount not to exceed, and on terms no less favorable in
the
aggregate than, such existing Indebtedness;
34
(g) grant
any
Lien in any of its material assets to secure any Indebtedness for borrowed
money, except in connection with Indebtedness permitted under Section
6.1.1(f);
(h) enter
into any new line of business outside of its existing business segments that
is
material to the Company and the Company Subsidiaries, taken as a
whole;
(i) adopt
or
amend any material Company Benefit Plan, increase the compensation or fringe
benefits of any director, officer or employee of the Company or pay any benefit
not provided for by any existing Company Benefit Plan, in each case except
(i) as reasonably necessary to comply with applicable Law, (ii) in
the ordinary course of business (excluding any director or any executive officer
of the Company or Company Subsidiaries identified on Schedule 6.1.1(i) of the
Company Disclosure Schedule (the "Executive
Officers"))
(except to address the requirements of written agreements or Contracts of the
Company
or any
Company Subsidiary in existence on the date hereof), (iii) in connection
with entering into or extending any employment or other compensatory agreements
with individuals in the ordinary course of business (excluding any director
or
Executive Officer), (iv) general salary increases in the ordinary course of
business (excluding any director or Executive Officer), (v) the termination
or amendment of any Company Benefit Plan that may be subject to Code Section
409A consistent with Code Section 409A and any guidance issued thereunder and
(vi) that do not materially increase the cost to the Company or any Company
Subsidiary of maintaining the applicable Company Benefit Plan (excluding any
director or Executive Officer);
(j) pay,
discharge, settle or satisfy any material claims, liabilities or obligations
(absolute, accrued, contingent or otherwise), other than (i) performance of
contractual obligations in accordance with their terms, (ii) payment,
discharge, settlement or satisfaction in the ordinary course of business,
(iii) payment, discharge, settlement or satisfaction in accordance with
their terms, of claims, liabilities or obligations that have been
(A) disclosed in the most recent Company Financial Statements (or the notes
thereto) included in the Company SEC Filings filed prior to the date hereof
or
contemplated by documents made available to Parent prior to the date hereof
or
(B) incurred since the date of such financial statements in the ordinary
course of business or in connection with the transactions contemplated by this
Agreement, or (iv) settlement or satisfaction of any outstanding claim or
litigation identified in Section 6.1.1(j) of the Company Disclosure Schedule,
except to the extent (notwithstanding any other exceptions to this Section
6.1.1(j)) that the amount paid in settlement or satisfaction of all such claims
and litigations does not exceed $5,000,000 in the aggregate;
(k) adopt
or
enter into a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any Company Subsidiary (other than the Merger or among wholly-owned
Subsidiaries);
(l) other
than in the ordinary course of business consistent with past practice or as
required by applicable Law, make or change or rescind any material Tax election,
change an annual Tax accounting period, adopt or change any material accounting
method for Taxes, file any material amended Tax Return, enter into any closing
agreement related to a material amount of Taxes, settle any material Tax claim
or assessment relating to the Company or any Company Subsidiary, surrender
any
right to claim a refund of a material amount of Taxes or consent to any
extension or waiver of the limitation period applicable to any material Tax
claim or assessment relating to the Company or any Company Subsidiary;
or
35
(m) knowingly
commit or agree to take any of the actions described in Sections
6.1.1(a) through 6.1.1(l) above or any action which would reasonably
be expected to result in any of the conditions to the Merger set forth in
Article 7 not being satisfied.
Section
6.1.2 Conduct
of Business of Parent and Merger Sub.
Each of
Parent and Merger Sub agrees that, between the date of this Agreement and the
Effective Time, it shall not, directly or indirectly, take any action that
would, or would reasonably be expected to, individually or in the aggregate,
materially delay or impede the consummation of the Merger or the other
transactions contemplated hereby (including the consummation of the financing
contemplated by the Commitments).
Section
6.1.3 No
Control of Other Party’s Business.
Nothing
contained in this Agreement shall give Parent or Merger Sub, directly or
indirectly, the right to control or direct the Company’s or any Company
Subsidiary’s operations prior to the Effective Time, and nothing contained in
this Agreement shall give the Company, directly or indirectly, the right to
control or direct Parent’s or Merger Sub’s operations prior to the Effective
Time. Prior to the Effective Time, each of the Company, Parent and Merger Sub
shall exercise, consistent with the terms and conditions of this Agreement,
complete and independent control and supervision over its and its Subsidiaries’
respective operations.
Section
6.2 Proxy
Statement; Company Stockholders’ Meeting.
Section
6.2.1 Proxy
Statement.
Subject
to the terms and conditions of this Agreement, as promptly as reasonably
practicable after the date hereof, the Company shall prepare and file with
the
SEC a proxy statement to be sent to the holders of shares of Company Common
Stock in connection with the Company Stockholders’ Meeting (together with any
amendments thereof or supplements thereto, the “Proxy
Statement”).
The
Company, after consultation with Parent, will use reasonable best efforts to
respond promptly to any comments made by the SEC with respect to the Proxy
Statement. Without
limiting the generality of the foregoing, (a) prior to filing the Proxy
Statement (or any amendment or supplement thereto) with the SEC or responding
to
any comments of the SEC with respect thereto, the Company shall (i) give Parent
a reasonable opportunity to review and comment on such document or response
and
(ii) include in such document or response comments reasonably proposed by
Parent, and (b) Parent
and Merger Sub shall furnish all information
relating
to Parent, Merger Sub
and
their respective Affiliates as the Company may reasonably request (or as may
be
required to be included in the Proxy Statement) in connection with such actions
and the preparation of the Proxy Statement. Subject to the terms and conditions
of this Agreement and applicable Law, as promptly as reasonably practicable
after the clearance of the Proxy Statement by the SEC (but in any event within
ten Business Days thereafter), the Company shall mail the Proxy Statement to
the
holders of shares of Company Common Stock (provided
that
such ten Business Day period shall be tolled during (a) the pendency of any
Order that prohibits the mailing of the Proxy Statement in the form cleared
by
the SEC or otherwise or the calling or holding of the Company Stockholder’s
Meeting, (b) any period during which the Company reasonably and in good
faith determines that distributing the Proxy Statement would violate Rule 14a-9
promulgated under the Exchange Act due to material misstatements or omissions
contained therein, and (c) any period required for the revision or amendment
and
resubmission of the Proxy Statement to the SEC, and the subsequent clearance
thereof by the SEC, in compliance with any Order or the settlement of any
stockholder litigation relating to this Agreement or the transactions
contemplated hereby (any such period in clause (a), (b) or (c), a “Tolling
Period”)).
Subject to and without limiting the rights of the Company Board pursuant to
Section 6.4.2, the Proxy Statement shall include the Company Recommendation.
The
Company will advise Parent, as promptly as reasonably practicable, after it
receives notice thereof, of any request by the SEC for amendment of the Proxy
Statement or comments thereon and responses thereto or requests by the SEC
for
additional information. If at any time prior to the Effective Time, any
information, event or circumstance relating to any Party hereto, or their
respective officers, directors, Affiliates or Representatives, should be
discovered by any Party hereto which should be set forth in an amendment or
a
supplement to the Proxy Statement so that the Proxy Statement does not contain
any untrue statement of material fact, or omit to state any material fact
required to be stated therein in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, the Party
discovering such information, event or circumstance shall promptly inform the
other Parties hereto and, to the extent required by Law, an appropriate
amendment or supplement describing such information, event or circumstance
shall
be promptly prepared and filed by the Company with the SEC and, if required,
disseminated to the holders of shares of Company Common Stock.
36
Section
6.2.2 Stockholders’
Meeting.
Unless
this Agreement has been terminated in accordance with Section 8.1,
the
Company
shall call and hold a meeting of the holders of Company Common Stock (the
“Company
Stockholders’ Meeting”)
as
promptly as reasonably practicable following the date on which the Proxy
Statement is cleared by the SEC (but taking into account any advance notice
or
other requirements under applicable Law),
and in
any event shall hold the Company Stockholders’ Meeting within seventy-five days
after such date (provided
that
such seventy-five day period shall be tolled during any Tolling Period and
that
such seventy-five day period shall be deemed to have expired on the first
Business Day following the seventy-fourth calendar day after such date (giving
full effect to any Tolling Period)),
for the
purpose of obtaining the Stockholder Approval. Provided
this Agreement is not otherwise terminated pursuant to Section 8.1, the
Company’s obligations pursuant to this Section 6.2.2 shall not be affected by
the public announcement or public disclosure of, or the communication to the
Company of, any Takeover Proposal, or by a Company Adverse Recommendation
Change.
Section
6.3 Access
to Information; Confidentiality.
Section
6.3.1 Access
to Information.
Subject
to Section 6.3.2, from the date of this Agreement to the Effective Time or
the
earlier termination of this Agreement pursuant to Section 8.1, the Company
shall, and shall instruct each Company Subsidiary and each of its and their
respective directors, officers, employees, accountants, consultants, legal
counsel, advisors, and agents and other representatives (collectively,
“Company
Representatives”)
to:
(a) provide to Parent and Merger Sub and each of their respective officers,
directors, employees, accountants, consultants, legal counsel, advisors, debt
financing sources, agents and other representatives (collectively, “Parent
Representatives,”
and,
each, together with each of the Company Representatives, a “Representative”)
reasonable access at reasonable times and upon reasonable prior notice to the
Company, to the officers, employees, agents, properties, offices and other
facilities of the Company or Company Subsidiary and to the books and records
thereof and (b) furnish, or cause to be furnished, (i)
such
reasonably available information concerning the business, properties, Contracts,
assets, liabilities, personnel and other aspects of the Company and the Company
Subsidiaries as Parent, Merger Sub or the Parent Representatives may reasonably
request
and (ii)
to Parent, with respect to each fiscal month ending after the date of this
Agreement, unaudited monthly consolidated balance sheets of the Company and
its
Subsidiaries for each fiscal month then ended and related consolidated
statements of earnings and cash flows (which the Company shall furnish
to
Parent
substantially contemporaneously with the time
such
information is
furnished on a monthly basis to
the
Company
Board
in
the ordinary course of business).
Notwithstanding the foregoing, neither the Company nor any Company Subsidiary
shall be required to provide access to or disclose information where such access
or disclosure would (a) interfere in any significant manner with the
operation or business of the Company or any Company Subsidiary,
(b) jeopardize the attorney-client privilege of the Company or any Company
Subsidiary or (c) contravene any Law, binding Contract to which the Company
or any Company Subsidiary is party or any privacy policy applicable to the
Company’s or any Company Subsidiary’s customer information,
it
being acknowledged that the parties shall use their reasonable best efforts
(which, for the avoidance of doubt, shall not require obtaining the consent,
approval or authorization of any Third Party or Governmental Entity) to cause
such information to be provided in a manner that does not so interfere,
jeopardize or contravene as contemplated by clauses (a), (b) and (c)
above.
37
Section
6.3.2 Confidentiality
and Restrictions.
With
respect to any information disclosed or provided by the Company, any Company
Subsidiary or any Company Representative to any member of the Parent Group
or
any Parent Representative pursuant to, or in accordance with, this Agreement,
Parent and Merger Sub shall comply with, and shall cause the Parent
Representatives to comply with, that certain confidentiality letter agreement,
dated as of April 10, 2007, between the Company and Xxxx Capital Partners,
LLC
(as such agreement may be amended from time to time, the “Confidentiality
Agreement”).
The
Confidentiality Agreement shall continue in full force and effect in accordance
with its terms until the earlier of (a) the Effective Time or (b) the
expiration of the Confidentiality Agreement according to its terms, and shall
survive any termination of this Agreement.
Section
6.4 No
Solicitation of Transactions.
Section
6.4.1 The
Company shall, and shall cause each Company Subsidiary and the Company
Representatives to, immediately cease and cause to be terminated any discussions
or negotiations with any Third Parties (other than the Parent Representatives)
that may be ongoing as of the date hereof with respect to an actual or potential
Takeover Proposal. The Company shall use its reasonable best efforts to obtain,
in accordance with the terms of any applicable
confidentiality agreement,
the
return or destruction of
any
confidential information previously furnished to any such Person by the Company,
any Company Subsidiary or any Company Representative. In addition,
the
Company
shall not, and shall cause each Company Subsidiary and the Company
Representatives not to, (a) directly or indirectly, solicit, initiate, or
knowingly encourage or
facilitate (including by way of furnishing non-public information or providing
access to its properties, books, records or personnel) any inquiries regarding,
or the making of any proposal or offer that constitutes, or could reasonably
be
expected to result in, a
Takeover
Proposal, (b) enter into any agreement or agreement in principle with
respect to a Takeover Proposal or (c) engage in any negotiations or
discussions regarding, or furnish or disclose to any Third Party any information
with respect to, any Takeover Proposal; provided,
however,
that at
any time prior to obtaining the Stockholder Approval, in response to a bona
fide
Takeover Proposal received by the Company after the date hereof that was not
solicited in violation of this Section 6.4.1 and that the Company Board
determines in good faith (after consultation with its outside legal counsel
and
financial advisors) constitutes, or could reasonably be expected to lead to,
a
Superior Proposal, and,
that
the failure to take the actions set forth in clauses (x) or (y) below with
respect to such Takeover Proposal would be inconsistent with its fiduciary
duties under applicable law, then the Company may, in response to such Takeover
Proposal,
subject
to compliance with Section 6.4.2 and Section 6.4.3, (x) provide access to
its properties, Contracts, personnel, books and records and furnish information,
data and/or draft agreements with respect to the Company and the Company
Subsidiaries to the Person making such Takeover Proposal (and its officers,
directors, employees, accountants, consultants, legal counsel, advisors, agents
and other representatives) and (y) participate in discussions or
negotiations with the Person making such Takeover Proposal (and its officers,
directors, employees, accountants, consultants, legal counsel, advisors, agents
and other representatives) regarding such Takeover Proposal;
provided,
that,
prior to furnishing such information to or entering into discussions or
negotiations with such Person, the Company shall receive from such Person an
executed confidentiality agreement, the terms of which shall be substantially
similar to, and not materially less favorable to the Company than, in the
aggregate, those contained in the Confidentiality Agreement; provided,
further
that the
Company shall promptly provide to Parent any non-public information concerning
the Company or any of its Subsidiaries not previously provided to Parent or
the
Parent Representatives that is provided to the Person making such Takeover
Proposal.
38
Section
6.4.2 Notwithstanding
any provision of this Section 6.4 or Section 6.2 to the contrary, prior
to
obtaining
the
Stockholder Approval,
the
Company Board may (a) withdraw (or not continue to make) or modify, or
publicly propose to withdraw (or not continue to make) or modify the Company
Recommendation, (b) approve, recommend or adopt, or publicly propose to
approve, recommend or adopt, a Superior Proposal (any action described in the
foregoing clause (a) or this clause (b), a “Company
Adverse Recommendation Change”)
and/or
(c) enter into an agreement regarding a Superior Proposal, if (x) in
the case of an action described in clause (a), clause (b) or clause
(c) above, the Company Board has determined in good faith (after
consultation with its outside legal counsel) that the failure to take such
action would be inconsistent with the fiduciary duties of the members of the
Company Board to the holders of shares of Company Common Stock under applicable
Law, (y) in the case of an action described in clause (b) or clause
(c) above, (A) the Company has given Parent five days prior written
notice of its intention to take such action (it
being
understood and agreed that any change to the consideration offered or other
material terms of such Superior Proposal shall require an additional notice
to
Parent and a new five day notice period) and
(B) the Company Board shall have considered in good faith (after
consultation with its outside legal counsel and financial advisors) any changes
or revisions to this Agreement proposed in writing by Parent and shall not
have
determined that the Superior Proposal would no longer constitute a Superior
Proposal if such changes were to be given effect and (z) in the case of an
action described in clause (c) above, (A) the Company has complied in
all material respects with its obligations under this Section 6.4 and
(B) the Company shall have terminated this Agreement in accordance with the
provisions of Section 8.1(c)(ii) hereof and the Company pays Parent the
Company Termination Fee in accordance with Section 8.4.1.
39
Section
6.4.3 The
Company shall
promptly
(and in any event within three Business Days)
advise
Parent orally
and in writing of the receipt of any Takeover Proposal, along with the identity
of the Person making any such Takeover Proposal and the Company shall provide
Parent with a copy or a written summary of the material terms of any such
Takeover Proposal. The Company shall keep Parent reasonably informed of the
status (including any change to the material terms) of any such Takeover
Proposal.
Following determination by the Company Board that a Takeover Proposal
constitutes a Superior Proposal, the Company shall deliver to Parent a written
notice advising it that the Company Board has made such determination and
specifying the material terms of such Superior Proposal.
The
Company agrees that it shall not, and shall cause the Company Subsidiaries
not
to, enter into any confidentiality agreement or other agreement with any Person
subsequent to the date of this Agreement which prohibits the Company from
providing such information to Parent. The Company agrees that neither it nor
any
of its Subsidiaries shall terminate, waive, amend or modify any provision or
any
existing standstill or confidentiality agreement to which it or any of its
Subsidiaries is a party, unless failure by the Company Board to take such action
would be inconsistent with its fiduciary duties under applicable Law (in which
case, such termination, waiver, amendment or modification shall also apply
to
the Confidentiality Agreement, to the extent applicable).
Section
6.4.4 Notwithstanding
anything to the contrary contained herein, nothing in this Section 6.4 shall
prohibit or restrict the Company or the Company Board from (a) taking
and/or disclosing to the stockholders of the Company a position contemplated
by
Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act or (b) making
any disclosure to the stockholders of the Company if, in the good faith judgment
of the Company Board, such disclosure would be reasonably necessary under
applicable Law (including Rule 14d-9 and Rule 14e-2 promulgated under the
Exchange Act); provided,
however,
that in
no event shall this Section 6.4.4 affect the obligations of the Company
specified in Section 6.4.2.
Section
6.5 Further
Action; Reasonable Best Efforts.
Section
6.5.1 Subject
to the terms and conditions of this Agreement, including Section 6.4, each
Party
shall use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other Parties in doing, all things necessary, proper or advisable under
applicable Laws to consummate and make effective the Merger and the other
transactions contemplated hereby, including using reasonable best efforts to
accomplish the following: (a) preparing and filing as soon as practicable
(but in no event later than 10 Business Days after the date of this Agreement
in
respect of any such filings required in connection with the HSR Act) all forms,
registrations and notices relating to antitrust, competition, trade or other
regulatory matters that are required by applicable Law to be filed in order
to
consummate the Merger and the other transactions contemplated hereby and the
taking of such actions as are reasonably necessary to obtain any requisite
approvals, consents, Orders, exemptions or waivers by, or to avoid an action
or
proceeding by, a Governmental Entity relating to antitrust, competition, trade
or other regulatory matters (collectively, “Regulatory
Approvals”),
including (i) filings pursuant to the HSR Act, with the United States
Federal Trade Commission (“FTC”)
and
with the Antitrust Division of the United States Department of Justice
(“Antitrust
Division”)
and
(ii) preparing and filing, as soon as practicable, any form or report
required by any other Governmental Entity relating to any Regulatory Approval,
(b) taking all actions necessary to cause all conditions set forth in
Article 7 (including the prompt termination of any waiting period under the
HSR
Act (including any extension of the initial 30 day waiting period thereunder))
to be satisfied as soon as practicable, (c) defending any lawsuits or other
legal, regulatory or other proceedings to which it is a party challenging or
affecting this Agreement or the consummation of Merger and the other
transactions contemplated hereby and (d) executing and delivering any
additional instruments necessary to consummate the Merger and to fully carry
out
the purposes of this Agreement.
40
Section
6.5.2 Each
Party shall furnish all information required to be included in any application
or other filing to be made pursuant to the rules and regulations of any
Governmental Entity in connection with the Merger and the other transactions
contemplated hereby. Subject to applicable Law, Parent and the Company shall
have the right to review in advance, and, to the extent reasonably practicable,
each will consult the other on, all the information relating to the other and
each of their respective Subsidiaries and Affiliates that appears in any filing
made with, or written materials submitted to, any Governmental Entity in
connection with the Merger and the other transactions contemplated
hereby.
Section
6.5.3 Each
Party shall (a) subject to Section 6.5.4 below, respond as promptly as
reasonably practicable to any inquiries received from the FTC or the Antitrust
Division and to all inquiries and requests received from any State Attorney
General or other Governmental Entity in connection with Regulatory Approvals
and
antitrust matters, (b) not extend any waiting period or agree to refile
under the HSR Act (except with the prior written consent of the other Parties
hereto, which consent shall not be unreasonably withheld or delayed) and
(c) not enter into any agreement with the FTC or the Antitrust Division
agreeing not to consummate the Merger and the transactions contemplated by
this
Agreement.
Section
6.5.4 In
connection with and without limiting the foregoing, each Party shall, subject
to
applicable Law and except as prohibited by any applicable representative of
any
applicable Governmental Entity: (a) promptly notify the other Parties of
any written communication to that Party from the FTC, the Antitrust Division,
any State Attorney General or any other Governmental Entity, including
regulatory authorities, and permit the other Parties to review in advance (and
to consider any comments made by the other Parties in relation to) any proposed
written communication to any of the foregoing, (b) not participate in or
agree to participate in any substantive meeting or discussion with any
Governmental Entity in respect of any filings, investigation or inquiry
concerning this Agreement, the Merger or the other transactions contemplated
hereby unless it consults with the other Parties in advance and, to the extent
permitted by such Governmental Entity, gives the other Parties the opportunity
to attend and participate thereat and (c) furnish the other Parties with
copies of all correspondence, filings, and written communications (and memoranda
setting forth the substance thereof) between them and its Affiliates and their
respective representatives on the one hand, and any Governmental Entity,
including any regulatory authority, or members or their respective staffs on
the
other hand, with respect to this Agreement, the Merger and the other
transactions contemplated hereby.
41
Section
6.6 Certain
Notices.
From
and after the date of this Agreement until the earlier of the Effective Time
or
the termination of this Agreement pursuant to Section 8.1, the Company shall
give prompt written notice to Parent, and Parent shall give prompt written
notice the Company, of (a) any material notice or other material
communication received by such Party from any Governmental Entity in connection
with this Agreement, the Merger or the other transactions contemplated hereby
or
from any Person alleging that the consent of such Person is or may be required
in connection with this Agreement, the Merger or the other transactions
contemplated hereby, (b) any material claims, actions, suits, proceedings
or investigations commenced or, to such Party’s knowledge, threatened against,
relating to or involving or otherwise affecting such Party or any of its
Subsidiaries which relate to this Agreement, the Merger or the other
transactions contemplated hereby and (c) any fact, event or circumstance
known to such Party that would cause or constitute, or would reasonably be
expected to cause or constitute, a breach in any material respect of any such
Party’s representations, warranties, covenants or agreements contained herein or
would prevent, delay or impede, or would reasonably be expected to prevent,
delay or impede, the consummation of the Merger or any other transaction
contemplated by this Agreement; provided,
however,
that
the delivery of any notice pursuant to this Section 6.6 shall not limit or
otherwise affect any remedies available to the Party receiving such notice
or
prevent or cure any misrepresentations, breach of warranty or breach of covenant
or failure to satisfy the conditions to the obligations of the Parties under
this Agreement. This Section 6.6 shall not constitute a covenant or agreement
for purposes of Sections 7.2.2 or 7.2.3.
Section
6.7 Public
Announcements.
The
initial press release with respect to this Agreement, the Merger and the other
transactions contemplated hereby shall be a joint release mutually agreed upon
by the Company and Parent. Thereafter, none of the Parties shall (and each
of
the Parties shall cause its Representatives and, in the case of Parent, the
other members of the Parent Group, if applicable, not to) issue any press
release or make any public announcement concerning this Agreement, the Merger
or
the other transactions contemplated hereby without obtaining the prior written
consent of (a) the Company, in the event the disclosing party is Parent,
Merger Sub, any other member of the Parent Group, if applicable, or any Parent
Representative or (b) Parent, in the event the disclosing party is the
Company, any Company Subsidiary or any Company Representative, in each case,
with such consent not to be unreasonably conditioned, delayed or withheld;
provided,
however,
that if
a Party determines, based upon advice of counsel, that a press release or public
announcement is required by, or reasonably necessary in order to comply with,
applicable Law (or, in the case of the Company, required by, or reasonably
necessary in order to comply with, the rules or regulations of NASDAQ), such
Party may make such press release or public announcement, in which case the
disclosing Party shall use its reasonable best efforts to provide the other
Parties reasonable time to comment on such release or announcement in advance
of
such issuance.
42
Section
6.8 Employee
Matters.
Section
6.8.1 Obligations
with Respect to Continuing Employees.
Parent
hereby agrees that, for the period immediately following the Effective Time
through and including the 18 month anniversary of the Effective Time, it shall,
or it shall cause the Surviving Corporation and its Subsidiaries to, provide
(a) a level of base salary and wages to each Person who is actively
employed by the Company or any Company Subsidiary as of the Effective Time
(each
such Person, a “Continuing
Employee”)
and
(b) benefit plans for the benefit or welfare of any Continuing Employee,
whether maintained by Parent, the Surviving Corporation or any of their
Subsidiaries (each such plan, a “Surviving
Corporation Benefit Plan”),
that
are no less favorable in the aggregate than the base salary, wages and benefits
(except for equity-based compensation or equity based benefits) provided to
the
Continuing Employees immediately prior to the Effective Time. From and after
the
Effective Time, Parent shall, or it shall cause the Surviving Corporation and
its Subsidiaries to, honor in accordance with their terms (including terms
which
provide for amendment or termination) all material Contracts, agreements,
arrangements, programs, policies, plans and commitments of the Company and
the
Company Subsidiaries that have been made available to Parent and that are
applicable to any current or former employees or directors of the Company or
any
Company Subsidiary, including the severance plans and policies adopted by the
Company Board (or any committee thereof). Nothing herein shall be deemed to
be a
guarantee of employment for any Continuing Employee, or to restrict the right
of
the Surviving Corporation or its Subsidiaries or Affiliates to terminate any
Continuing Employee at any time and for any or no reason.
Section
6.8.2 Credit
for Service.
Continuing Employees shall receive credit for all purposes (including for
purposes of eligibility to participate, vesting, benefit accrual and eligibility
to receive benefits) under any Surviving Corporation Benefit Plan under which
each Continuing Employee may be eligible to participate on or after the
Effective Time
(other
than any equity-based plan or arrangement) to
the
same extent recognized by the Company or any of the Company Subsidiaries under
comparable Company Benefit Plans immediately prior to the Effective Time;
provided,
however,
that
such crediting of service shall not operate to duplicate any benefit or the
funding of any such benefit.
Section
6.8.3 Welfare
Plans.
With
respect to any Surviving Corporation Benefit Plan that is a welfare benefit
plan, program or arrangement (a “Purchaser
Welfare Benefit Plan”)
and in
which a Continuing Employee may be eligible to participate on or after the
Effective Time
and in
the plan year in which the Effective Time occurs,
Parent
shall, or it shall cause the Surviving Corporation and its Subsidiaries to,
(a) waive, or use reasonable efforts to cause its insurance carrier to
waive, all limitations as to pre-existing, waiting period or actively-at-work
conditions, if any, with respect to participation and coverage requirements
applicable to each Continuing Employee under such Purchaser Welfare Benefit
Plan
to the same extent waived under a comparable Company Benefit Plan and
(b) provide credit to each Continuing Employee (and such Continuing
Employee’s beneficiaries) for any co-payments, deductibles and
out-of-pocket expenses paid by such Continuing Employee (and such Continuing
Employee’s beneficiaries) under the comparable Company Benefit Plan during the
relevant plan year, up to and including the Effective Time.
43
Section
6.8.4 Interpretation.
Nothing
in this Section 6.8 or any other provision of this Agreement shall be construed
to modify, amend, or establish any benefit plan, program, agreement or
arrangement or in any way affect the ability of the Parties or any other Person
to modify, amend or terminate any of its benefit plans, programs, agreements
or
arrangements. This Section 6.8 is not intended to, and shall not be construed
to, confer upon any Person other than the Parties to this Agreement any rights
or remedies hereunder.
Section
6.9 Indemnification
of Directors and Officers.
Section
6.9.1 The
Certificate of Incorporation and Bylaws of the Surviving Corporation and the
comparable organizational or governing documents of its Subsidiaries shall
contain provisions no less favorable with respect to indemnification,
advancement of expenses and exculpation of former or present directors,
officers, employees and agents than are set forth in the Company Certificate
and
the Company Bylaws (or the equivalent organizational or governing documents
of
the relevant Company Subsidiary) as in effect on the date hereof, which
provisions shall not be amended, repealed or otherwise modified for a period
of
six years from the Effective Time in any manner that would adversely affect
the
rights thereunder of any such Persons; provided,
however,
that in
the event any claim is asserted against any Person entitled to the protections
of such provisions within such six year period, such provisions shall not be
modified until the final disposition of any such claim.
Section
6.9.2 From
and
after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, indemnify and hold harmless, to the fullest extent permitted
under the applicable Law of the relevant state of organization, and, without
limiting the foregoing, as required pursuant to any indemnity agreements of
the
Company or any Company Subsidiary entered into prior to the date hereof and
made
available to Parent, each present and former director, officer, employee or
agent of the Company and each Company Subsidiary (collectively, the
“Indemnified
Parties”)
against any costs or expenses (including attorneys’ fees and expenses),
judgments, inquiries, fines, losses, claims, settlements, damages or liabilities
incurred in connection with any actual or threatened claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of or pertaining to (a) the fact that the
Indemnified Party is or was an officer, director, employee, fiduciary or agent
of the Company or any Company Subsidiary and (b) any and all matters
pending, existing or occurring at or prior to the Effective Time (including
this
Agreement, the Merger and the other transactions contemplated hereby), whether
asserted or claimed prior to, at or after the Effective Time. In the event
of
any such claim, action, suit, proceeding or investigation, (w) each
Indemnified Party will be entitled to advancement of out-of-pocket expenses
(including attorneys’ fees) incurred in the defense of such claim, action,
suit proceeding or investigation from Parent or the Surviving Corporation within
10 Business Days after receipt by Parent of a written request for such advance
(accompanied by invoices or other relevant documentation); provided,
that
any Person to whom expenses are advanced provides an undertaking in a reasonable
and customary form to repay such advances if it is ultimately determined that
such Person is not entitled to indemnification, (x) neither Parent nor the
Surviving Corporation shall settle, compromise or consent to the entry of any
judgment in any actual or threatened claim, action, suit, proceeding, or
investigation in which indemnification could be sought by such Indemnified
Party
hereunder, unless such settlement, compromise or consent includes an
unconditional release of such Indemnified Party from all liability arising
out
of such claim, action, suit, proceeding or investigation or such Indemnified
Party otherwise consents to such settlement or compromise or the entry of such
judgment and (y) the Surviving Corporation shall cooperate in the defense
of any such matter with any Indemnified Parties affected thereby and their
respective representatives (including their attorneys).
44
Section
6.9.3 At
or
prior to the Effective Time, the Company shall purchase a six year prepaid
(or
“tail”) policy that is no less favorable in terms of amount, terms and
conditions of coverage than those contained in the current policies of
directors’ and officers’ liability insurance maintained by the Company and the
Company Subsidiaries (the “D&O
Insurance”)
and in
effect on the date of this Agreement;
provided,
however,
that
the cost of any such policy shall not exceed 300% of the annual premium
currently paid by the Company for such insurance.
Section
6.9.4 If
Parent
or the Surviving Corporation or any of their respective successors or assigns
shall (a) consolidate with or merge into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger or (b) transfer all or substantially all of its properties and
assets to any Person, then, in each such case, proper provisions shall be made
so that the successors and assigns of Parent or the Surviving Corporation (or
acquirer of such assets), as the case may be, shall assume all of the
obligations of Parent or the Surviving Corporation set forth in this Section
6.9.
Section
6.9.5 The
rights of each Indemnified Party under this Section 6.9 shall be in addition
to
any right such Person might have under the Company Certificate and the Company
Bylaws, the Certificate of Incorporation and the Bylaws of the Surviving
Corporation or any comparable organizational or governing documents of their
respective Subsidiaries, or under any agreement of any Indemnified Party with
the Company, the Surviving Corporation or any of their respective Subsidiaries.
The provisions of this Section 6.9 shall survive the consummation of the Merger
and are intended to be for the benefit of, and shall be enforceable by, each
of
the Indemnified Parties and their respective heirs and
representatives.
Section
6.9.6 The
Company will give Parent reasonable opportunity to consult with counsel to
the
Company with respect to, but not control, the defense of any stockholder
litigation against the Company and its directors relating to the transactions
contemplated by this Agreement. The Company will not settle any such stockholder
litigation without the prior written consent of Parent, which consent will
not
be unreasonably withheld or delayed.
Section
6.10 State
Takeover Statutes.
If any
state takeover statute or similar statute becomes applicable to this Agreement
(including the Merger and the other transactions contemplated hereby), each
of
Parent, Merger Sub, the Company and their respective Boards of Directors shall
take all reasonable action necessary so that such transactions may be
consummated as promptly as practicable on the terms contemplated hereby or
otherwise act to eliminate or minimize the effect of such statute or regulation
on this Agreement or the transactions contemplated hereby.
Section
6.11 Section
16 Matters.
Prior
to the Effective Time, the Company shall, and shall be permitted to, take all
such steps as may reasonably be necessary to cause the transactions contemplated
by this Agreement, including any dispositions of shares of Company Common Stock
(including any derivative securities with respect to such shares of Company
Common Stock) by each Person who is or will be subject to the reporting
requirements of Section 16(a) of the Exchange Act with respect to the
Company, to be exempt under Rule 16b-3 promulgated under the Exchange
Act.
45
Section
6.12 Solvency
of the Surviving Corporation.
If
Parent or any of its Affiliates obtains
(on
behalf or for the benefit of themselves or any other Person) an opinion from
an
independent expert opining or supporting the conclusion that, after giving
effect to all of the transactions contemplated by this Agreement and actions
taken in connection with the financing (or any Alternative Financing) thereof,
Parent, the Surviving Corporation and/or any of their Subsidiaries will be
Solvent (or shall achieve or retain any similar or equivalent financial status)
(such opinion, the “Solvency
Opinion”),
Parent shall cause such independent expert to include the Company as an
additional addressee with respect to the Solvency Opinion entitled to rely
thereon and shall provide an executed copy of any such Solvency Opinion to
the
Company as
promptly as reasonably practicable after the issuance thereof, but in any event
prior to the Effective Time. Each of Parent and the Company shall, in connection
with any such Solvency Opinion, subject to execution of a customary
confidentiality agreement with the Company by such independent expert, use
their
reasonable best efforts to (a) make available their respective officers,
agents and other Representatives on a customary basis and upon reasonable notice
and (b) provide or make available such information concerning the business,
properties, Contracts, assets and liabilities of the Company as may reasonably
be requested in connection with the issuance and delivering of any such Solvency
Opinion.
46
Section
6.13 Financing.
Each of
Parent and Merger Sub shall, and shall cause each of the Parent Representatives
to, use its reasonable best efforts to take, or cause to be taken, all actions,
and use its reasonable best efforts to do, or cause to be done, all things
necessary, proper or advisable to arrange, and close concurrently with the
Closing, debt financing on terms and conditions described in the Debt Commitment
Letters and/or any Alternative Financing (including obtaining rating agency
approvals, maintaining in effect the Commitments, satisfying on a timely basis
all conditions applicable to Parent and Merger Sub to obtaining the financing
contemplated by the Commitments (including by consummating the financing
contemplated by the Equity Commitment Letter at or prior to the Closing),
negotiating and entering into definitive agreements with respect to the Debt
Commitment Letters on terms and conditions contained therein or with respect
to
any Alternative Financing, satisfying all conditions applicable to Parent and
Merger Sub in such definitive agreements that are within their respective
control and, if necessary, borrowing pursuant to the Debt Commitment Letters
in
the event any “flex” provisions are exercised). Parent shall keep the Company
Board informed on a reasonably current basis in reasonable detail of the status
of its efforts to arrange the terms of, and satisfy the conditions contemplated
by, the financing contemplated by the Commitments in accordance with this
Section 6.13 and shall not, and shall not permit Merger Sub to, agree or permit
any cancellation, amendment, supplement or other modification to be made to,
or
any waiver of any provision or remedy under, the Commitments without obtaining
the prior written consent of the Company Board (other than any amendment,
supplement or other modification to the Debt Commitment Letters (x) adding
additional lenders thereto or (y) resulting in terms that are no less beneficial
to Parent or Merger Sub (including with respect to conditionality) and that
would not reasonably be expected to prevent, delay or impede the consummation
of
the financing contemplated by the Commitments or the transactions contemplated
by this Agreement; provided
that no
such amendment, supplement or waiver reduces the amount of the financing
available thereunder).
Parent
shall give the Company Board prompt notice (and in any event within three
Business Days) of any material breach by any party to the Commitments, any
termination of any of the Commitments or any other circumstance, event or
condition that would reasonably be likely to prevent, delay or impede the
consummation of the financing contemplated by the Commitments, to the extent
it
becomes aware of such breach, termination, circumstance, event or condition.
In
the event that all or any portion of the debt financing contemplated by the
Debt
Commitment Letters becomes unavailable on the terms and conditions set forth
in
the Debt Commitment Letters, Parent shall use its reasonable best efforts to
arrange, as promptly as reasonably practicable following the occurrence of
such
event but no later than the last day of the Marketing Period, alternative
financing from alternative sources in an amount sufficient to consummate the
transactions contemplated by this Agreement on terms that are no less beneficial
to Parent or Merger Sub (including with respect to conditionality) and on terms
that would not reasonably be expected to prevent, delay or impede the
consummation of any remaining financing contemplated by the Commitments or
the
transactions contemplated by this Agreement (the “Alternative
Financing”).
In
the event that on the last day of the Marketing Period (a) all or any
portion of the high yield debt financing described in the Debt Commitment
Letters has not been consummated, (b) all of the closing conditions
contained in Article 7 shall have been satisfied or waived (other than those
conditions that by their nature will not be satisfied until the
Closing) and (c) the bridge financing described in the Debt Commitment
Letters (or any Alternative Financing obtained in accordance with this Section
6.13) is available on the terms and conditions described in the Debt Commitment
Letters (or such Alternative Financing), then Parent shall borrow under and
use,
or shall cause Merger Sub to borrow under and use, the proceeds of such bridge
financing (or such Alternative Financing), in lieu of the high yield financing
described in the Debt Commitment Letters no later than the last day of the
Marketing Period. For the avoidance of doubt, if the financing provided for
by
the Commitments has not been or cannot be obtained, Parent and Merger Sub shall
continue to be obligated to consummate the Merger on the terms contemplated
by
this Agreement and subject only to the satisfaction or waiver of the conditions
set forth in Sections 7.1 and 7.2 of this Agreement (other than those conditions
that by their nature will not be satisfied until the Closing) and to Parent’s
rights under Section 8.1 and the provisions of Section 8.5, regardless of
whether Parent and Merger Sub have complied with all of their other obligations
under this Agreement (including their obligations under this Section 6.13).
For
purposes of this Agreement, “Marketing
Period”
shall
mean the first period of 20
consecutive days ending on a Business Day following the Stockholder
Approval throughout
which
(i)
Parent has
received
the Required
Financial Information,
provided
that if
the financial statements contained in the Required
Financial Information available
to Parent
on
the
first day of any such 20-day period are as
of a
date that is equal to the number of days specified in paragraph (g) of
Rule 3-12 of Regulation S-X
with
respect to the Company, or
more,
prior
to any
date during such 20-day period, then the Marketing
Period shall
not
commence until Parent
has
received Required
Financial Information containing financial
statements
that
are
as
of a
date that is less than the number of days specified in paragraph (g) of
Rule 3-12 of Regulation S-X
with
respect to the Company on each date during such 20-day period, and (ii) the
conditions
set forth in Sections
7.1 shall
be
satisfied and
nothing
has occurred and no condition exists such that the closing conditions
set forth in Section 7.2 (other
than the receipt of the certificates
or
affidavit referred to in Section 7.2.3
and
Section 7.2.4)
would
fail to be satisfied as of any day (assuming such day were the Closing
Date)
during
such period.
In no
event shall the Marketing Period commence prior to September 4,
2007.
47
Section
6.14 Cooperation
in Securing Financing.
From
the
date of this Agreement
until the earlier of (i) termination of this Agreement in accordance with
Section 8.1 and (ii) the Closing Date, and subject
to
Section 6.3,
the
Company
shall,
and shall cause each Company
Subsidiary and
shall
instruct their respective officers, employees, consultants, advisors (including
legal and accounting advisors) and other representatives
to, use
reasonable best efforts to provide such cooperation as may be reasonably
requested by Parent
(provided
that
such requested cooperation does not interfere in any significant respect with
the ongoing operations of
the
Company or any Company Subsidiary)
in
connection with obtaining the financing contemplated by the Debt
Commitment Letters (or
commitments
for
any
Alternative
Financing obtained
in accordance with Section 6.13),
including (a)
participation
in meetings, presentations
(including management presentations),
roadshows, drafting
sessions, due
diligence sessions and sessions with rating agencies, including
one or more meetings with prospective lenders, (b)
assistance
with the preparation of rating agency presentations, bank information memoranda
(including execution and delivery of customary representation letters reasonably
satisfactory in form and substance to the Company in connection with bank
information memoranda), offering documents and similar marketing documents
required in connection with the debt financing contemplated by the Debt
Commitment Letters (or
commitments
from
any
Alternative
Financing),
(c)
permitting
lenders involved in the debt financing contemplated by the Debt Commitment
Letters (including any Alternative
Financing)
to
(i)
evaluate
the Company’s
current assets, cash management and accounting systems, policies and procedures
relating thereto for the purpose of establishing collateral arrangements and
(ii)
establish
bank and other accounts and blocked account agreements and lock box arrangements
in connection with the foregoing; provided
that no
right of any lender or any obligation of the Company
or
any of
its Subsidiaries
thereunder
shall be effective until the Effective
Time,
(d)
furnishing
Parent
and
its
debt financing sources with financial statements and financial data regarding
the Company of a type customarily included in private placement memoranda
relating to private placements under Rule 144A promulgated under the
Securities
Act,
including all financial statements and financial data of the type required
by
Regulation S-X and Regulation S-K under the Securities
Act (other than Rule 3-10 of Regulation S-X) (all
such
information in this clause (d),
the
“Required
Financial Information”),
(e)
facilitating
the pledging of collateral (including facilitating collateral field examinations
and appraisals) and execution and delivery of definitive financing documents
and
other deliverables contemplated by the Debt
Commitment Letters;
provided
that no
obligation of
the
Company or any Company Subsidiary under
any
such pledge or document shall be effective until the Effective
Time and
(f)
using
its
reasonable best efforts to obtain customary accountants’ comfort letters,
accountants’ consent letters, legal opinions,
and
officer’s certificates
(including a customary solvency certificate of the chief financial officer
of
the Company) and
other
customary documentation and items contemplated by the Debt
Commitment Letters (including
any Alternative
Financing);
provided,
however,
that
notwithstanding the foregoing, (w)
no
officer, director or employee of
the
Company or any Company Subsidiary shall be required to execute
any documents, including any registration statement to be filed with the
SEC,
any
pledge or security documents or any other definitive financing documents
that
will
be effective prior
to
the Effective
Time,
(x)
neither
the
Company nor any Company Subsidiary shall be required to pay
any
commitment or other similar fee or incur any other liability in connection
with
the financing contemplated by the Commitments
prior
to
the Effective
Time,
(y)
neither
the
Company nor any Company Subsidiary shall be required to issue
any
private placement memoranda or prospectus (and no such private placement
memoranda or prospectus shall reflect
the Company or any Company Subsidiary as
the
issuer with
respect to any time prior to the Effective Time)
and
(z)
none
of
the
Company nor any Company Subsidiary shall be required to indemnify
any Person
in
connection with the financing contemplated by the Commitments
prior to the Effective Time.
Parent
shall reimburse the Company for all reasonable and documented out of pocket
costs, fees and expenses incurred by the Company or any Company Subsidiary
in
connection with such cooperation (the “Company
Expenses”)
to the
extent provided in Section 8.5. Subject to the immediately preceding
sentence, Parent
and
Merger
Sub shall,
on
a joint and several basis, indemnify and hold harmless the Company,
each
Company
Subsidiary and
the
Company
Representatives from
and
against any and all liabilities, losses, damages, claims, costs, expenses,
interest, awards, judgments and penalties suffered or incurred by them in
connection with the arrangement of the financing contemplated by the
Commitments
and
any
information utilized in connection therewith
(other
than information provided by the Company,
its
Subsidiaries or
the
Company
Representatives).
Notwithstanding anything to the contrary contained in this Agreement,
the
closing condition set forth in Section 7.2.2 of this Agreement,
as it
applies to the Company’s
obligations under this Section 6.14,
shall
be deemed satisfied unless the financing contemplated by the Debt
Commitment Letters has
not
been obtained as a result of the Company’s
material
breach of its obligations under this Section 6.14.
48
Article
7.
Closing
Conditions
Section
7.1 Conditions
to Obligations of Each Party Under This Agreement.
The
respective obligations of each Party to effect the Merger and the other
transactions contemplated hereby shall be subject to the satisfaction, or
waiver, at or prior to the Closing of the following conditions:
Section
7.1.1 Stockholder
Approval.
The
Stockholder Approval shall have been obtained.
Section
7.1.2 HSR
Act.
All
filing and waiting periods applicable (including any extensions thereof) to
the consummation of the Merger under the HSR Act shall have expired or been
terminated.
Section
7.1.3 No
Injunctions or Restraints.
No Law
or Order issued by any court or other Governmental Entity of competent
jurisdiction preventing the consummation of the Merger or any other transaction
contemplated by this Agreement shall be in effect; provided,
however,
that
the right to assert that this condition has not been satisfied shall not be
available to any Party who has not used its reasonable best efforts to resist,
appeal, obtain consent under, resolve or lift, as applicable, such Law or Order
or who has not complied in all material respects with its obligations under
Section 6.5.
Section
7.2 Additional
Conditions to Obligations of Parent and Merger Sub.
The
obligations of Parent and Merger Sub to effect the Merger and the other
transactions contemplated hereby are also subject to the satisfaction of the
following conditions, any one or more of which may be waived in writing by
Parent in accordance with Section 8.6.
49
Section
7.2.1 Representations
and Warranties.
The
representations and warranties of the Company set forth in Article 4
(disregarding for these purposes any exception in such representations and
warranties relating to materiality or a Company Material Adverse Effect) shall
be true and correct as of the date of this Agreement and as of the Closing
as if
made at and as of the Closing (except for those representations and warranties
which address matters only as of an earlier date which shall have been true
and
correct as of such earlier date), except for such failures to be true and
correct which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect;
provided,
however,
that
the representations and warranties of the Company set forth in Section 4.2.1,
Section 4.2.2 and Section 4.2.3 (disregarding any exception in such
representations and warranties relating to materiality or a Company Material
Adverse Effect) shall be true and correct as of the date of this Agreement
and
as of the Closing as if made at and as of the Closing (except for those
representations and warranties which address matters only as of an earlier
date
which shall be true and correct as of such earlier date); provided
further,
that, in
any event, the condition set forth in the immediately preceding proviso of
this
Section 7.2.1 with respect to the representations and warranties set forth
in
Section 4.2.1, Section 4.2.2 and Section 4.2.3 shall be deemed to have been
satisfied so long as any breach thereof or inaccuracy therein would not
reasonably be expected to result in an aggregate increase in the Merger
Consideration or consideration otherwise payable pursuant to any repurchase
or
cancellation of any Company Options, Company Stock-Based Awards or any other
Company Equity Interest by more than $3,150,000.00 in the
aggregate.
Section
7.2.2 Agreements
and Covenants.
The
Company shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or complied
with by the Company at or prior to the Closing.
Section
7.2.3 Officer’s
Certificate.
Parent
shall have received a certificate of an officer of the Company confirming the
satisfaction of the conditions set forth in Sections 7.2.1, 7.2.2 and
7.2.5.
Section
7.2.4 FIRPTA
Affidavit.
The
Company shall deliver to Parent an affidavit, under penalties of perjury,
stating that the Company is not, and has not been since January 1, 2000, a
“United States real property holding corporation”, dated as of the Closing Date
and in form and substance required under Treasury Regulation Section
1.897-2(h).
Section
7.2.5 No
Company Material Adverse Effect. Since
December 31, 2006, there shall not have occurred any event, change or
occurrence, individually or in the aggregate, that has had or could reasonably
be expected to have a Company Material Adverse Effect.
Section
7.3 Additional
Conditions to Obligations of the Company.
The
obligation of the Company to effect the Merger and the other transactions
contemplated hereby are also subject to the satisfaction of the following
conditions, any one of which may be waived in writing by the Company in
accordance with Section 8.6.
Section
7.3.1 Representations
and Warranties.
The
representations and warranties of Parent and Merger Sub set forth in Article
5
(disregarding for these purposes any exception in such representations and
warranties relating to materiality) shall be true and correct as of the date
of
this Agreement and as of the Closing as if made at and as of the Closing (except
for those representations and warranties which address matters only as of an
earlier date which shall have been true and correct as of such earlier date),
except for such failures to be true and correct which do not, individually
or in
the aggregate, have a material adverse effect on the ability of Parent or Merger
Sub to perform its obligations hereunder or which would not prevent the
consummation of the Merger.
50
Section
7.3.2 Agreements
and Covenants.
Parent
and Merger Sub shall have performed or complied in all material respects with
all agreements and covenants required by this Agreement to be performed or
complied with by Parent and/or Merger Sub, as applicable, at or prior to the
Closing.
Section
7.3.3 Officer’s
Certificate.
The
Company shall have received a certificate of an officer of Parent confirming
the
satisfaction of the conditions set forth in Sections 7.3.1 and
7.3.2.
Section
7.4 Frustration
of Closing Conditions.
None
of
the Company,
Parent
or
Merger
Sub may
rely
on the failure of any condition set forth in Article 7
to
be
satisfied if such failure was caused by such Party’s
failure to comply
with its
obligations set forth in this
Agreement
to
consummate and make effective the transactions provided for herein,
as
required by and subject to Section 6.5.
Article
8.
Termination,
Amendment and Waiver
Section
8.1 Termination.
This
Agreement may be terminated, and the Merger contemplated hereby may be
abandoned, at any time prior to the Effective Time, by action taken or
authorized by the Board of Directors of the terminating Party, whether before
or
after the Stockholder Approval:
(a) by
mutual
written consent of Parent and the Company;
(b) by
either
Parent or the Company:
(i) if
the
Stockholder Approval is not obtained at the Company Stockholders’ Meeting or any
adjournment or postponement thereof at which adoption of this Agreement is
voted
upon;
(ii) if
the
Merger shall not have been consummated by December 31,
2007
(the “Outside
Date”);
provided,
however,
that,
if the Marketing Period has not ended on or prior to December 31, 2007, either
Parent or the Company may, at its option and at any time or from time to time
prior to the termination hereof, extend the Outside Date by up to one additional
one month period (and, if so extended, the term “Outside Date” as used in this
Agreement shall mean the “Outside Date” as so extended); and provided,
further,
that
the right to terminate this Agreement under this Section 8.1(b)(ii) shall
not be available to any Party if any action of such Party (including, in the
case of Parent, Merger Sub) or the failure by any Party (including, in the
case
of Parent, Merger Sub) to perform any of its obligations under this Agreement
has been the cause of, or resulted in, the failure of the Merger and the other
transactions contemplated by this Agreement to be consummated on or before
the
Outside Date; or
51
(iii) if
(A)
any Law prohibits or makes illegal the consummation of the Merger or (B) any
Order of any Governmental Entity having competent jurisdiction is entered
enjoining the Company, Parent or Merger Sub from consummating the Merger and
such Order has become final and nonappealable,
and, in
the case of clause (B),
the
right to terminate this Agreement
pursuant
to this Section 8.1(b)(iii)
shall
not be available to
the
Party who
has
not
used its
reasonable best efforts to resist, appeal, obtain consent under, resolve or
lift, as applicable, the Order
or
whose breach of any provision of this Agreement (including,
its
obligations under Section 6.5)
has been
the cause of, or resulted in, the imposition of any such Order or the failure
of
such Order to be resisted, resolved or lifted, as applicable;
(c) by
the
Company:
(i) if
(A) Parent or Merger Sub shall have breached any of the covenants or
agreements contained in this Agreement to be complied with by Parent or Merger
Sub such that the closing condition set forth in Section 7.3.2 would not be
satisfied or (B) there exists a breach of any representation or warranty of
Parent or Merger Sub contained in this Agreement such that the closing condition
set forth in Section 7.3.1 would not be satisfied, and, in the case of clause
(A) or clause (B), such breach is incapable of being cured or, if capable
of being cured, shall not have been cured prior to the earlier of (x) the
Outside Date and (y) 30 Business Days after Parent or Merger Sub receives
written notice of such breach from the Company; provided,
however,
that
the Company shall not have the right to terminate this Agreement pursuant to
this Section 8.1(c)(i) if the Company is then in material breach of any of
its covenants or agreements contained in this Agreement;
(ii) if,
prior
to obtaining the Stockholder Approval, (A) the Company Board has received a
Superior Proposal, (B) the Company Board has determined in good faith
(after consultation with outside legal counsel) that the failure to accept
such
Superior Proposal would be inconsistent with the fiduciary duties of the members
of the Company Board to the holders of shares of Company Common Stock under
applicable Law, (C) the Company has complied in all material respects with
Section 6.4 and (D) the Company pays the Company Termination Fee to Parent
in accordance with Section 8.4; or
(iii) at
any
time following the last day of the Marketing Period if (A) neither Parent
nor Merger Sub shall have received the proceeds of the debt financing
contemplated by the Debt Commitment Letters (or any commitments for any
Alternative Financing obtained in accordance with Section 6.13) and (B) as
of the date of such termination (1) the conditions set forth in Section 7.1
have been satisfied and (2) nothing has occurred and no condition exists
such that the closing conditions set forth in Section 7.2 (other than the
receipt of certificates referred to in Section 7.2.3 and receipt of the
affidavit referred to in Section 7.2.4) would fail to be satisfied (assuming
such date of termination were the Closing Date); or
52
(d) by
Parent:
(i) if
(A) the Company shall have breached any of the covenants or agreements
contained in this Agreement to be complied with by the Company such that the
closing condition set forth in Section 7.2.2 would not be satisfied or
(B) there exists a breach of any representation or warranty of the Company
contained in this Agreement such that the closing condition set forth in Section
7.2.1 would not be satisfied, and, in the case of clause (A) or clause (B),
such breach is incapable of being cured or, if capable of being cured, shall
not
have been cured prior to the earlier of (x) the Outside Date and
(y) 30 Business Days after the Company receives written notice of such
breach from Parent; provided,
however,
that
Parent shall not have the right to terminate this Agreement pursuant to this
Section 8.1(d)(i) if Parent or Merger Sub is then in material breach of any
of
its covenants or agreements contained in this Agreement; or
(ii) if
(A) a Company Adverse Recommendation Change shall have occurred,
(B) the Company has failed to include the Company Recommendation in the
Proxy Statement or (C) the Company Board approves, recommends or adopts, or
publicly proposes to approve, recommend or adopt, a Takeover Proposal or
approves or recommends that holders of Company Common Stock tender their shares
of Company Common Stock in any tender offer or exchange offer that is a Takeover
Proposal.
Section
8.2 Effect
of Termination.
Except
as otherwise set forth in this Section 8.2, in the event of a termination
of this Agreement by either the Company or Parent as provided in
Section 8.1, this Agreement shall forthwith become void and there shall be
no liability or obligation on the part of Parent, Merger Sub or the Company
(or
their respective Affiliates) hereunder; provided,
however,
that
the provisions of this Section 8.2, Sections 6.3.2, 8.3, 8.4, 8.5 and
Article 9 and the Confidentiality Agreement shall remain in full force and
effect and survive any termination of this Agreement; provided,
further,
that,
subject to the limitations set forth in Section 8.5, no Party shall be relieved
or released from any liabilities or damages arising out of its willful and
material breach of any provision of this Agreement. In no event shall any Party
be liable for punitive damages.
Section
8.3 Fees
and Expenses.
Except
as otherwise expressly set forth in this Agreement, all fees and expenses
incurred in connection herewith and the transactions contemplated hereby shall
be paid by the Party incurring, or required to incur, such expenses, whether
or
not the Merger is consummated.
Section
8.4 Company
Termination Fee.
Section
8.4.1 If
this
Agreement is terminated pursuant to Section 8.1(c)(ii) then the
Company shall pay to Parent (or as directed by Parent), by wire transfer of
same
day funds, $58,000,000 (the “Company
Termination Fee”);
provided,
however,
that
such termination shall not be effective until the Company pays the Company
Termination Fee. If this Agreement is terminated pursuant to Section 8.1(d)(ii)
then the Company shall pay to Parent (or as directed by Parent), by wire
transfer of same day funds, the Company Termination Fee as promptly as
reasonably practicable (and in any event within two Business Days following
such
termination). If this Agreement is terminated pursuant to
Section 8.1(b)(i), then, in the event that, (a) at any time after the
date of this Agreement and prior to such termination any Third Party shall
have
publicly made, proposed, communicated or disclosed an intention to make a bona
fide Takeover Proposal, which bona fide Takeover Proposal was not retracted
or
rescinded prior to such termination, and (b) within twelve months of the
termination of this Agreement, the Company or any Company Subsidiary enters
into
a definitive agreement with respect to a Takeover Proposal or any Takeover
Proposal is consummated, then the Company shall pay, or cause to be paid, to
Parent, by wire transfer of same day funds, the Company Termination Fee
(provided
that, in
the event that the Company Termination Fee is paid, the amount of the Company
Termination Fee shall be reduced dollar for dollar by the amount of any
previously paid Parent Expenses), such payment to be made upon the earlier
to
occur of the execution of a definitive agreement relating to, or consummation
of, such Takeover Proposal. In addition, if this Agreement is terminated
pursuant to Section 8.1(b)(i), then the Company shall reimburse Parent and
Merger Sub for the reasonable documented out-of-pocket costs, fees and expenses
incurred by Parent or Merger Sub in connection with this Agreement and the
Merger up to an amount not to exceed $11,500,000 in the aggregate (the
“Parent
Expenses”),
with
such reimbursement (i) payable by wire transfer of same day funds to Parent
(or
as directed by Parent) within two (2) Business Days following the date of
such termination and (ii) credited on a dollar-for-dollar basis against any
subsequent Company Termination Fee that may thereafter be payable to
Parent.
For
purposes of this Section 8.4.1, each reference in the definition of Takeover
Proposal to “20 percent” will be deemed to be references to “50
percent.”
53
Section
8.4.2 If
paid,
the Company Termination Fee (less
the
amount of any previously paid Parent Expenses) shall be the sole and exclusive
remedy of Parent, Merger Sub and their Affiliates against the Company, any
Company Subsidiary and any Company Representative for any loss or damage
suffered as a result of the breach of any representation, warranty or covenant
contained in this Agreement by the Company, any Company Subsidiary or any
Company Representative and the failure of the Merger to be consummated and,
upon
payment of the Company Termination Fee (less
the
amount of any previously paid Parent Expenses) in accordance with Section 8.4.1,
none of the Company, any Company Subsidiary or any Company Representative shall
have further liability or obligation to Parent, Merger Sub or any other Person
relating to or arising out of this Agreement or the transactions contemplated
by
this Agreement. For the avoidance of doubt, in no event shall the Company be
obligated to pay, or cause to be paid, the Company Termination Fee on more
than
one occasion and in no event shall the Company be obligated to reimburse Parent
or Merger Sub for any Parent Expenses in addition to paying the Company
Termination Fee.
Section
8.4.3 The
Company acknowledges that the agreements contained in this Section 8.4 are
an
integral part of the transactions contemplated by this Agreement and that,
without these agreements, Parent and Merger Sub would not enter into this
Agreement. If the Company fails to pay the Company Termination Fee or the Parent
Expenses when due, and, in order to obtain such payment Parent commences a
suit
which results in a judgment against the Company for all or any portion of the
Company Termination Fee or the Parent Expenses, the Company shall pay to Parent
its reasonable out-of-pocket costs and expenses (including reasonable attorneys’
fees) in connection with such suit.
54
Section
8.5 Parent
Termination Fee.
Section
8.5.1 Parent
Termination Fee.
If this
Agreement is terminated pursuant to Section 8.1(c)(iii), then Parent shall
pay
to the Company (or as directed by the Company), by wire transfer of same day
funds, (x) $58,000,000 (the “Parent
Termination Fee”)
plus
(y) an amount equal to the Company Expenses, in each case, as promptly as
reasonably practicable (and, in any event, within two Business Days following
such termination). If this Agreement is terminated pursuant to Section
8.1(c)(i), then Parent shall pay to the Company (or as directed by the Company)
as promptly as reasonably practicable (and, in any event, within two Business
Days following such termination) by wire transfer of same day funds, an amount
equal to the Company Expenses.
Section
8.5.2 If
(a) this Agreement is terminated pursuant to Section 8.1(c)(iii) and
(b) except for Parent’s breach of its obligation to deposit (or cause to be
deposited) the Exchange Fund to the Paying Agent in accordance with Section
3.2.1, (i) neither Parent nor Merger Sub are in breach of this Agreement
and (ii) the conditions set forth in Sections 7.3.1, 7.3.2 and 7.3.3 would
otherwise be satisfied, then payment of the Parent Termination Fee and the
Company Expenses to the Company (or as directed by the Company) in accordance
with Section 8.5.1 or in accordance with the Limited Guarantee shall be the
sole
and exclusive remedy of the Company and its Affiliates against Parent, Merger
Sub, their respective Affiliates (including, without limitation, Sponsor) and
any of their respective former, current or future general or limited partners,
stockholders, managers, members, directors, officers, Affiliates or agents
(including, without limitation,
any
Parent Representative)
(collectively, the “Parent
Related Parties”),
for any
loss or damage suffered as a result of the breach of any representation,
warranty or covenant contained in this Agreement by Parent, Merger Sub or any
Parent Representative and the failure of the Merger to be consummated, and
upon
payment of the Parent Termination Fee and the Company Expenses in accordance
with Section 8.5.1, none of the Parent Related Parties shall have any further
liability or obligation to the Company or any other Person relating to or
arising out of this Agreement or the transactions contemplated by this
Agreement. In no event, whether or not this Agreement has been terminated,
shall
the Parent Related Parties, either individually or in the aggregate, be subject
to any liability in excess of $100,000,000 in the aggregate (including the
Parent Termination Fee and the Company Expenses) for all losses or damages
relating to or arising out of this Agreement or the transactions contemplated
by
this Agreement, including breaches by Parent or Merger Sub of any
representations, warranties, covenants or agreements contained in this
Agreement. For the avoidance of doubt, in no event shall Parent be obligated
to
pay, or cause to be paid, the Parent Termination Fee or the Company Expenses
on
more than one occasion.
Section
8.5.3 Parent
acknowledges that the agreements contained in this Section 8.5 are an integral
part of the transactions contemplated by this Agreement, and that, without
these
agreements, the Company would not enter into this Agreement. If Parent fails
to
promptly pay the Parent Termination Fee or the Company Expenses when due and,
in
order to obtain any such payment, the Company commences a suit which results
in
a judgment against Parent for all or any portion of the Parent Termination
Fee
or the Company Expenses, Parent shall pay to the Company its reasonable
out-of-pocket costs and expenses (including reasonable attorneys’ fees) in
connection with such suit.
55
Section
8.6 Extension;
Waiver.
At
any
time prior to the Effective
Time,
Parent
or
the
Company
may,
to
the extent permitted by applicable Law,
(a) extend
the time for the performance of any of the obligations or other acts of the
other Party
under
this Agreement,
(b) waive
any
inaccuracies in the representations and warranties of the other Party
contained
herein
or
in any
instrument delivered pursuant hereto or (c) waive
compliance with any of the covenants or agreements of the other Party
or
conditions to the obligations of the waiving Party
contained
herein;
provided,
however,
that
after any approval of this Agreement
by
the
stockholders of the Company,
no
extension or waiver that, by Law
or
in
accordance with the rules of any relevant stock exchange, requires further
approval by such stockholders may be made without such stockholder
approval.
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 by such Party.
The
failure or delay of any Party
to
assert
any of its rights under this Agreement
or
otherwise shall not constitute a waiver of those rights, nor shall any single
or
partial exercise of any right under this Agreement
preclude
any other or further exercise of any rights hereunder.
Section
8.7 Amendment.
At
any
time prior to the Effective
Time,
this
Agreement
may
be
amended by the Parties
by
action
taken by or on behalf of their respective Boards of Directors; provided,
however,
that,
after approval of the Agreement
by
the
stockholders of the Company,
no
amendment that, by Law
or
in
accordance with the rules of any relevant stock exchange, requires further
approval by such stockholders may be made without such stockholder
approval.
This
Agreement
may
not
be amended except by an instrument in writing signed by Parent,
Merger Sub and
the
Company.
Article
9.
General
Provisions
Section
9.1 Non-Survival
of Representations and Warranties; Agreements.
None of
the representations and warranties of the Parties in this Agreement or in any
instrument delivered pursuant to this Agreement (or the Schedules of Exhibits
attached hereto) shall survive the Effective Time. None of the covenants or
agreements of the Parties in this Agreement shall survive the Effective Time,
other than (a) the covenants and agreements of the Parties contained in
this Article 9, in Article 3 and in Sections 6.8 and 6.9 and (b) those
other covenants and agreements contained herein that by their terms apply,
or
that are to be performed in whole or in part, after the Effective Time, which
shall survive the consummation of the Merger until fully performed.
Section
9.2 Notices.
Any
notices or other communications required or permitted under, or otherwise made
in connection with this Agreement,
shall
be in writing and shall be deemed to have been duly given (a) when
delivered in person,
(b) upon
confirmation of receipt when transmitted by facsimile transmission or by
electronic mail (but, in the case of electronic mail, only if followed by
transmittal by national overnight courier or hand for delivery on the next
Business
Day),
(c) upon
receipt after dispatch by registered or certified mail, postage prepaid or
(d) on
the
next Business
Day if
transmitted by national overnight courier (with confirmation of delivery),
in
each case, addressed as follows:
56
If
to
Parent or Merger Sub, addressed to it at:
c/o
Bain
Capital Partners, LLC
000
Xxxxxxxxxx Xxxxxx
Xxxxxx,
XX 00000
Attention:
Jordan
Hitch
Xxxx
Xxxxx
Xxxx
Xxxxx
Facsimile:
617.516.2010
with
a
mandated copy (which shall not constitute notice) to:
Xxxxxxxx
& Xxxxx LLP
000
Xxxx
Xxxxxxxx Xxxxx
Xxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx
X. Xxxxxxxxx, P.C.
Xxx
X.
Xxxxxx, P.C.
Facsimile:
312.861.2200
If
to the
Company, addressed to it at:
Guitar
Center, Inc.
0000
Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx
Xxxxxxx, XX 00000
Attention:
Xxxxxx
X.
Xxxxx
Facsimile:
818.735.4923
with
a
mandated copy (which shall not constitute notice) to:
Xxxxxx
& Xxxxxxx LLP
000
Xxxxx
Xxxxx
Xxxxx
Xxxx, XX 00000
Attention:
Xxxxxxx
X. Xxxxxxxx
Facsimile:
650.463.2600
and
Xxxxxxx
XxXxxxxxx LLP
000
Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxxxxx
X. Xxxxx
Facsimile:
213.830.8610
57
Section
9.3 Headings.
The
headings and table of contents contained in this Agreement
are
for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section
9.4 Severability.
If any
term or other provision of this Agreement is invalid, illegal or incapable
of
being enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any Party. Upon
a
determination that any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the greatest extent
possible.
Section
9.5 Entire
Agreement; Parties in Interest.
This
Agreement
(together
with the Exhibits,
Parent
Disclosure Schedule,
Company
Disclosure Schedule and
the
other instruments delivered pursuant hereto), the Commitments,
the
Limited
Guarantee and
the
Confidentiality
Agreement constitute
the entire agreement of the Parties
and
supersede all prior agreements and undertakings, both written and oral, among
the Parties,
or any
of them, with respect to the subject matter hereof
and
thereof. Nothing in this Agreement,
express
or implied, shall confer upon any other Person
any
rights, benefits or remedies of any nature whatsoever under or by reason of
this
Agreement;
provided
that the
provisions of Sections 3.5.1 and 6.9
shall
inure to the benefit of those Persons
benefiting
therefrom who are intended third-party
beneficiaries
thereof.
Section
9.6 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,
and any
such assignment shall be null and void; provided,
however,
that
Parent
and
Merger
Sub may
assign all or any of their rights (but not their obligations) hereunder
to
one or
more of their wholly-owned Affiliates
without
obtaining any such consent. No assignment by any Party
shall
relieve such Party
of
any of
its obligations hereunder.
Subject
to the foregoing, this Agreement
will
be
binding upon, inure to the benefit of and be enforceable by the Parties
and
their
respective successors and permitted assigns.
Section
9.7 Mutual
Drafting.
Each
Party has participated in the drafting of this Agreement, which each Party
acknowledges is the result of extensive negotiations between the
Parties.
Section
9.8 Governing
Law; Consent to Jurisdiction; Enforcement; Waiver of Trial by
Jury.
Section
9.8.1 This
Agreement, and all claims and causes of action arising out of, based upon,
or
related to this Agreement or the negotiation, execution or performance hereof,
shall be governed by, and construed, interpreted and enforced in accordance
with, the Laws of the State of Delaware, without regard to choice or conflict
of
law principles that would result in the application of any Laws other than
the
Laws of the State of Delaware.
58
Section
9.8.2 Any
legal
action, suit or proceeding arising out of, based upon or relating to this
Agreement or the transactions contemplated hereby shall be brought solely in
the
Chancery Court of the State of Delaware and any state appellate court therefrom
within the State of Delaware (or, if the Chancery Court of the State of Delaware
declines to accept jurisdiction over a particular matter, any state or federal
court within the State of Delaware and any direct appellate court
therefrom).
Each
Party hereby irrevocably submits to the exclusive jurisdiction of such courts
in
respect of any legal action, suit or proceeding arising out of, based upon
or
relating to this Agreement and the rights and obligations arising hereunder
and
agrees that it will not bring any action arising out of, based upon or related
to this Agreement in any other court. Each Party hereby irrevocably waives,
and
agrees not to assert as a defense, counterclaim or otherwise, in any legal
action, suit or proceeding arising out of, based upon or relating to this
Agreement, (a) any claim that it is not personally subject to the
jurisdiction of the above named courts for any reason other than the failure
to
serve process in accordance with Section 9.2, (b) any claim that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) and (c) to the fullest extent permitted
by applicable Law, any claim that (i) the suit, action or proceeding in
such court is brought in an inconvenient forum, (ii) the venue of such
suit, action or proceeding is improper or (iii) this Agreement, or the
subject mater hereof, may not be enforced in or by such courts. Each Party
agrees that notice or the service of process in any action, suit or proceeding
arising out of, based upon or relating to this Agreement or the rights and
obligations arising hereunder shall be properly served or delivered if delivered
in the manner contemplated by Section 9.2.
Section
9.8.3 The
Parties agree that irreparable damage would occur to Parent in the event that
any provision of this Agreement were not performed by the Company in accordance
with its specific terms or was otherwise breached by the Company. It is
accordingly agreed that Parent shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement by the Company and that Parent and Merger
Sub may enforce specifically the terms and provisions of this Agreement, with
all such matters to take place exclusively in the Chancery Court of the State
of
Delaware and any state appellate court therefrom within the State of Delaware
(or, if the Chancery Court of the State of Delaware declines to accept
jurisdiction over a particular matter, any state or federal court within the
State of Delaware), and any such injunction shall be in addition to any other
remedy to which any Party is entitled, at law or in equity. It is expressly
agreed and acknowledged that neither the Company, its Affiliates nor any other
Person (a) shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement by Parent or Merger Sub or (b) may specifically enforce the
provisions of this Agreement against Parent, Merger Sub or any of their
respective Affiliates.
Section
9.8.4 EACH
OF
THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY
LEGAL ACTION, SUIT OR PROCEEDING BETWEEN THE PARTIES HERETO ARISING OUT OF,
BASED UPON OR RELATING TO THIS AGREEMENT OR THE NEGOTIATION, EXECUTION OR
PERFORMANCE HEREOF.
59
Section
9.9 Counterparts.
This
Agreement
may
be
executed by facsimile and in one or more counterparts, and by the different
Parties
in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement, and which shall become effective when one or more counterparts have
been signed by each of the Parties
and
delivered (by facsimile or otherwise) to the other Parties.
(signature
page follows)
60
IN
WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement
to be executed and delivered as of the date first written above.
| VH ACQUISITIONCO, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxx | |
|
Name:
Xxxx Xxxxx
|
||
|
Title:
Managing Director
|
||
| VH MERGERSUB, INC. | ||
| |
|
|
| By: | /s/ Xxxx Xxxxx | |
|
Name:
Xxxx Xxxxx
|
||
|
Title:
Managing Director
|
||
|
GUITAR
CENTER, INC.
|
||
| |
|
|
| By: | /s/ Xxxx Albterson | |
|
Name:
Xxxxx Xxxxxxxxx
|
||
|
Title:
Chairman and Chief Executive
Officer
|
||
