SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER
EXHIBIT
2.1
SECOND
AMENDMENT TO
This
Second Amendment to Agreement and Plan of Merger (this
"Amendment") is
made and entered into as of June 20, 2009 by and among Xxxxxxx IT Solutions,
Inc., a Delaware corporation (the "Company"), Hebron
LLC, a Delaware limited liability ("Parent"), Desert
Mountain Acquisition Co., a Delaware corporation and a wholly owned subsidiary
of Parent ("MergerSub") and Xxxxx
X. Xxxxxxx, XX, an individual ("Buyer"). Capitalized
terms used in this Amendment and not otherwise defined herein shall have the
meaning ascribed to such terms in that certain Agreement and Plan of Merger
dated as of May 19, 2009, as amended by the First Amendment to Agreement and
Plan of Merger dated June 8, 2009 (collectively, the "Merger Agreement") by
and among Parent, Merger Sub, the Company and with respect to Sections 7.01(c),
7.08, 7.10, 9.03(e) and 9.03(f) only, Buyer.
Recitals
A. Parent,
Merger Sub, the Company and Buyer previously entered into the Merger
Agreement.
B. Parent,
Merger Sub, the Company and Buyer now desire to further amend the Merger
Agreement as set forth herein.
C. The
Merger Agreement may be amended pursuant to Section 10.04 thereof by the parties
thereto by action taken by their respective boards of directors (or similar
governing body or entity) at any time prior to the Effective Time.
Agreement
In
consideration of the premises and mutual agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree to amend the
Merger Agreement as follows:
1. Amendment to the First Whereas
Paragraph. The first Whereas paragraph shall be amended such
that the reference to "$5.02 per share" contained in Subsection (ii) of the
first Whereas paragraph is hereby deleted in its entirety and replaced with
"$6.00 per share".
2. Amendment to Section
1.01. Section 1.01 of the Merger Agreement shall be amended
such that the following definition of "ESPP" is hereby
inserted:
""ESPP" means the
Company's 1998 Employee Stock Purchase Plan, as amended."
3. Amendment to Section
1.01. Section 1.01 of the Merger Agreement shall be amended
such that the definition of "Expenses" is hereby
deleted in its entirety and replaced with the following:
""Expenses"
shall mean all out-of-pocket expenses, including all fees and expenses of
accountants, investment bankers, legal counsel, financing sources and
consultants incurred by a party or on its behalf in connection with or related
to the transactions contemplated by this Agreement and any amendment thereto,
Acquisition Proposal, Superior Proposal or Company Adverse Recommendation
Change."
4. Amendment to Section
3.01(e). Section 3.01(e) of the Merger Agreement shall be
amended such that it is hereby deleted in its entirety and replaced with the
following:
(e) Each
share of Company Restricted Stock that is vested or becomes vested as of the
Effective Time shall be considered an outstanding share of Company Common Stock
for all purposes of this Agreement, including the right to receive the Company
Common Stock Merger Consideration. The term "Company Restricted
Stock" shall mean any outstanding share awards that were granted pursuant
to each of the Company's 2002 Amended and Restated Stock Incentive Plan, 2002
Amended and Restated Outside Directors' Stock Option Plan and ESPP
(collectively, the "Incentive
Plans"). Each share of Company Restricted Stock that is not
vested as of the Effective Time shall be forfeited and cancelled.
5. Amendment to Section
6.01(c). Section 6.01(c) of the Merger Agreement shall be
amended such that it is hereby deleted in its entirety and replaced with the
following:
(c) (i)
except as set forth in Section 6.01(c) of the Disclosure Schedule, authorize for
issuance, issue or sell or agree or commit to issue or sell any shares of any
class of capital stock of the Company or any Subsidiary or any options,
warrants, convertible securities or other rights of any kind to acquire any
shares of such capital stock, or any other ownership interest, of the Company or
any Subsidiary, other than the issuance of Company Common Stock upon exercise of
Company Stock Options or vesting of Company Restricted Stock outstanding on the
date of this Agreement or Company Common Stock issued pursuant to the ESPP with
respect to the six-month offering period beginning January 1, 2009; (ii) adopt
any new incentive plan or any equity based compensation plan; (iii) repurchase,
redeem or otherwise acquire any securities or equity equivalents except in
connection with the exercise of Company Stock Options or the vesting of Company
Restricted Stock or the lapse of restrictions on Company Restricted Stock; (iv)
reclassify, combine, split, or subdivide any stock of the Company or any
Subsidiary; or (v) set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to any of the
capital stock of the Company or any Subsidiary;
6. Amendment to Article
VI. Article VI of the Merger Agreement shall be amended such
that the following new Section 6.02 is hereby inserted:
"Section
6.02 ESPP. With respect to the ESPP, the Company (i) shall not permit
any new offering periods under such plan to be initiated after the date hereof,
(ii) shall take such actions as permitted under such plan to cause accumulated
payroll deductions to purchase Company Common Stock and any open offering period
to terminate on June 30, 2009 and (iii) shall cause such plan to be terminated
as of the Effective Time. The Company Board (or, if appropriate, any committee
thereof administering the ESPP) shall adopt such resolutions or take such other
actions as may be required to effect the foregoing within 3 business days after
the date hereof."
2
7. Amendment to Section
7.01(b). The first sentence of Section 7.01(b) of the Merger
Agreement shall be amended such that it is hereby deleted in its entirety and
replaced with the following:
"(b) As
soon as reasonably practicable following the date of this Agreement, the Company
shall (i) prepare and file with the SEC the preliminary Proxy Statement and
Schedule 13E-3, which filing shall be no later than June 30, 2009, (ii) mail to
its stockholders the Proxy Statement a sufficient time prior to the Company
Stockholders Meeting, which shall be held no later than 45 days after the date
that the Company is able to file its definitive Proxy Statement with the SEC,
and (iii) otherwise comply in all material respects with all legal requirements
applicable to the Company Stockholders Meeting."
8. Amendment to Section
7.11. Section 7.11 of the Merger Agreement shall be amended
such that it is hereby deleted in its entirety and replaced with the
following:
"Section
7.11 Company's
Expenses and Obligations. The Company agrees that on or before
the Closing it will have paid all of the Company's expenses resulting from the
process followed by the Company to make the determination to enter into this
Agreement and any amendment thereto, including but not limited any and all
expenses related to any Acquisition Proposal, Superior Proposal or any Company
Adverse Recommendation Change, and any obligations to any third party arising
from the Company's entry into this Agreement and any amendment thereto, and the
consummation of the Merger and the other transactions contemplated by this
Agreement and any amendment thereto, including but not limited to, the change in
control bonus payments required by the Special Control Bonus Agreements (which
may be deposited into escrow in accordance with Section 14 of the Special Change
in Control Bonus Agreements), the expenses of the attorneys of the Special
Committee of the Company Board, accounting expenses associated with the Merger
and the other transactions contemplated thereby, including the Proxy Statement,
the Schedule 13E-3 and respective amendments thereto, the Company Financial
Advisor and other representatives of or advisors to the Company (collectively
"Company Closing
Obligations and Expenses"). After payment of the Company
Closing Obligations and Expenses, the aggregate book value of the Company's cash
and cash equivalents, certificates of deposit, other marketable securities, and
trade accounts receivable shall not be less than $90.0 million (excluding any
proceeds the Company receives upon the exercise of Company Stock Options
exercised between the date hereof and the Effective Time)."
3
9. Amendment to Section
9.01(i). Section 9.01(i) of the Merger Agreement shall be
amended such that it is hereby deleted in its entirety and replaced with the
following:
"(i) by
Parent, if any of the following occur: (A) the number of outstanding shares of
Company Common Stock as of the Effective Time (after giving effect to the
acceleration of vesting of Company Restricted Stock immediately before the
Effective Time and the forfeiture of the unvested shares of Company Restricted
Stock at the Effective Time, but excluding (x) the number of shares of
Company Common Stock issued upon the exercise of Company Stock Options exercised
between the date hereof and the Effective Time and (y) Company Common Stock
issued pursuant to the ESPP with respect to the six-month offering period
beginning January 1, 2009) exceeds 9,760,000 shares; (B) the sum of (x) the
number of outstanding shares of Company Common Stock as of the Effective Time
(after giving effect to the acceleration of vesting of Company Restricted Stock
immediately before the Effective Time and the forfeiture of the unvested shares
of Company Restricted Stock at the Effective Time, but excluding Company Common
Stock issued pursuant to the ESPP with respect to the six-month offering period
beginning January 1, 2009) plus (y) the number of shares of Company Common Stock
issued upon exercise of all Company Stock Options with an exercise price equal
or less than the Company Common Stock Merger Consideration exceeds 10,170,000
shares; (C) no more than 80,000 shares of Company Common Stock shall have been
issued pursuant to the ESPP during the six-month offering period beginning
January 1, 2009, (D) as of the date within five (5) days prior to the Effective
Time that the Company provides supporting documentation for the following
calculation, the aggregate book value of the Company's cash and cash
equivalents, certificates of deposit, other marketable securities, and trade
accounts receivable, excluding the amount of any proceeds the Company receives
upon the exercise of Company Stock Options exercised between the date hereof and
the Effective Time, is less than $90,000,000; (E) a Significant Customer
identified on Exhibit
C informs the Company in writing, or any of the individuals on Exhibit A orally,
that it will not be purchasing more than an insignificant amount of products or
services from the Company for the foreseeable future (provided that the
foregoing shall not apply to notification from any such customer that it intends
to defer purchases from the Company to a later period); or (F) the Company loses the ability to purchase
through an authorized channel products branded by a supplier identified on Exhibit
D.
10. Amendment to Section
9.03(d). Section 9.03(d) of the Merger Agreement shall be
amended such that it is hereby deleted in its entirety and replaced with the
following:
"(d)
For purposes of this Agreement, "Company Termination
Fee" means an amount equal to $2,145,844; provided, however, that if (i)
the Company terminates this Agreement pursuant to Section 9.01(h) in favor of an
Acquisition Proposal with an Excluded Party, or (ii) if Parent terminates this
Agreement pursuant to Section 9.01(f)(i) because of a Company Adverse
Recommendation Change related to an Acquisition Proposal with an Excluded Party,
then in each case the Company Termination Fee means an amount equal to
$979,178.
11. Disclosure Schedule. All
references in the Agreement to the Disclosure Schedule shall refer to the
Disclosure Schedule delivered by the Company to Parent concurrently with the
execution of this Amendment.
12. Effect of
Amendment. Except as and to the extent expressly modified by
this Amendment, the Merger Agreement shall remain in full force and
effect.
13. Counterparts. This
Amendment may be executed and delivered in two or more original, facsimile or
..PDF counterparts, and by the different parties hereto 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.
[SIGNATURE
PAGE FOLLOWS]
4
IN
WITNESS WHEREOF, Parent, MergerSub, Buyer and the Company have caused this
Amendment to be executed as of the date first written above by their respective
officers thereunto duly authorized.
|
Hebron
LLC, a Delaware limited liability company
|
||
|
By
|
/s/
Xxxxx X. Xxxxxxx, XX
|
|
|
Title:
Member
|
||
|
Desert
Mountain Acquisition Co., a Delaware corporation
|
||
|
By
|
/s/
Xxxxx X. Xxxxxxx, XX
|
|
|
Title:
President
|
||
|
Xxxxxxx
IT Solutions, Inc., a Delaware corporation
|
||
|
By
|
/s/
Xxxxxxxxxxx X. Xxxxxx
|
|
|
Title:
President and Chief Executive Officer
|
||
|
Xxxxx
X. Xxxxxxx, XX
|
||
|
/s/
Xxxxx X. Xxxxxxx, XX
|
||
5
