Attached files
| file | filename |
|---|---|
| 8-K - MERRIMAC INDUSTRIES INC | v169825_8-k.htm |
| EX-4.1 - MERRIMAC INDUSTRIES INC | v169825_ex4-1.htm |
| EX-99.1 - MERRIMAC INDUSTRIES INC | v169825_ex99-1.htm |
| EX-10.1 - MERRIMAC INDUSTRIES INC | v169825_ex10-1.htm |
AGREEMENT
AND PLAN OF MERGER
dated
as of
December
23, 2009
by
and among
CRANE
CO.,
CRANE
MERGER CO.
and
MERRIMAC
INDUSTRIES, INC.
TABLE
OF CONTENTS
Page
|
ARTICLE
ONE -- THE TENDER OFFER
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2
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1.1.
The Offer
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2
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1.2.
Company Action
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5
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1.3.
Top-Up Option
|
6
|
|
1.4.
Directors
|
8
|
|
ARTICLE
TWO – THE MERGER
|
9
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2.1.
The Merger
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9
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2.2.
Closing
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9
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2.3.
Effective Time
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9
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2.4.
Effect of the Merger
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10
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2.5.
Certificate of Incorporation; Bylaws
|
10
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2.6.
Directors and Officers
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10
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2.7.
Merger Without Meeting of Stockholders
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10
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2.8.
Conversion of Securities
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10
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2.9.
Surrender of Shares; Stock Transfer Books
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12
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2.10.
No Further Ownership Rights in Company Capital Stock
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13
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2.11.
Lost, Stolen or Destroyed Certificates
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13
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2.12.
Termination of Payment Account, Escheat, etc.
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13
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2.13.
Company Equity Plans
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14
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ARTICLE
THREE -- REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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15
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3.1.
Organization and Standing; Subsidiaries
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16
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3.2.
Capitalization
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16
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3.3.
Authorization
|
18
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|
3.4.
Non-Contravention; Governmental Authorities and Consents
|
19
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|
3.5.
Compliance
|
20
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|
3.6.
Litigation
|
21
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|
3.7.
SEC Filings; Company Financial Statements
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21
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3.8.
No Undisclosed Liabilities
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23
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3.9
Absence of Certain Changes or Events
|
24
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3.10.
Taxes
|
24
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|
3.11.
Title to Property and Assets
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26
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3.12.
Intellectual Property
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27
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|
3.13.
Insurance
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30
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3.14.
Contracts
|
30
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3.15.
Permits; Compliance
|
33
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3.16.
Compliance with the U.S. Foreign Corrupt Practices Act and Other
Applicable Anti-Corruption Laws
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34
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3.17.
Employment Matters
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35
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i
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3.18.
Environmental Matters
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36
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3.19.
Employee Benefits
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38
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3.20.
Real Property
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40
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3.21.
Interested Party Transactions
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41
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3.22.
Top-Up Option
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41
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3.23.
Schedule 14D-9; Offer Documents; Proxy Statement
|
42
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3.24.
Section 203
|
42
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|
3.25.
Takeover Laws
|
42
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|
3.26.
Opinion of Financial Advisor
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42
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3.27.
Tender Agreements
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42
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3.28.
Brokers’ and Finders’ Fees
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42
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3.29.
No Reliance
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42
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ARTICLE
FOUR -- REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER
SUB
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43
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4.1.
Organization and Standing
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43
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4.2.
Authorization
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43
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4.3.
Governmental Authorities and Consents
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44
|
|
4.4.
Company Disclosure Documents; Proxy Statement; Other
Information
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44
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4.5.
Sufficient Funds
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44
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4.6.
Ownership of Shares
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44
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4.7.
Litigation
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44
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4.8.
Ownership of Merger Sub; No Prior Activities
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45
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4.9.
No Reliance
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45
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4.10.
Rule 14d-10(d)
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45
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ARTICLE
FIVE – ADDITIONAL AGREEMENTS
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46
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5.1.
Proxy Statement; Stockholders Meeting
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46
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5.2.
Access to Information; Confidentiality; Financial
Statements
|
47
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|
5.3.
No Solicitation of Transactions
|
47
|
|
5.4.
Governmental Filings; Effort
|
51
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5.5.
Certain Notices
|
52
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5.6.
Public Announcements
|
53
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|
5.7.
Conduct of Business of the Company
|
53
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5.8.
Actions Requiring Parent’s Consent
|
53
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5.9.
Indemnification of Directors and Officers
|
58
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|
5.10.
Employee Matters
|
59
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|
5.11.
Takeover Laws
|
60
|
|
5.12.
Section 16 Matters
|
60
|
|
5.13.
Rule 14d-10(d)
|
61
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5.14.
Stockholder Litigation
|
61
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5.15.
Stock Exchange Delisting
|
61
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5.16.
Environmental Matters
|
62
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5.17.
Closing Conditions
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62
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ii
|
ARTICLE
SIX – CONDITIONS TO THE MERGER
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62
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6.1.
Conditions to Each Party’s Obligation to Effect the Merger
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62
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ARTICLE
SEVEN – TERMINATION, AMENDMENT AND WAIVER
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63
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7.1.
Termination
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63
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7.2.
Effect of Termination
|
64
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7.3.
Fees and Expenses
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65
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7.4.
Extension; Waiver
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67
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7.5.
Amendment
|
67
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ARTICLE
EIGHT – GENERAL PROVISIONS
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67
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8.1.
Non-Survival of Representations and Warranties
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67
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8.2.
Parent Guarantee
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67
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8.3.
Notices
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68
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8.4.
Severability
|
68
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8.5.
Entire Agreement
|
69
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8.6.
Assignment
|
69
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8.7.
Parties in Interest
|
69
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8.8.
Specific Performance
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69
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8.9.
Governing Law
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69
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8.10.
Jurisdiction
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69
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8.11.
Waiver of Jury Trial
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70
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8.12.
Headings
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70
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8.13.
Interpretation
|
70
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8.14.
Counterparts
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70
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Annexes and
Exhibit
Annex
A – Index of Defined Terms
Annex
B – Tender Offer Conditions
Exhibit
A – Certificate of Incorporation
iii
AGREEMENT AND PLAN OF
MERGER
THIS AGREEMENT AND PLAN OF MERGER (this
“Agreement”) is
entered into as of December 23, 2009 by and among Crane Co., a Delaware
corporation (“Parent”), Crane
Merger Co., a Delaware corporation and a direct, wholly owned subsidiary of
Parent (“Merger
Sub”), and Merrimac Industries, Inc., a Delaware corporation (the “Company”). Each
of Parent, Merger Sub and the Company are sometimes referred to herein as a
“Party” and
collectively as the “Parties.” An index of
terms defined in this Agreement is set forth on Annex A attached
hereto.
WHEREAS, the Parties intend that Merger
Sub be merged with and into the Company (the “Merger”), with the
Company surviving the Merger as a direct, wholly owned subsidiary of Parent
pursuant to the provisions of the General Corporation Law of the State of
Delaware (the “DGCL”) and upon the
terms and subject to the conditions set forth herein;
WHEREAS, on the terms and subject to
the conditions set forth herein, including Annex B hereto,
Parent shall cause Merger Sub to, and Merger Sub shall commence (within the
meaning of Rule 14d-2 promulgated under the Exchange Act), an offer (the “Offer”) to purchase
for cash all of the issued and outstanding shares of the Company’s Common Stock,
par value $.01 per share (the “Common Stock”),
together with the associated common stock purchase rights (the “Rights”) issued
pursuant to the Rights Agreement, dated as of March 19, 1999, between the
Company and American Stock Transfer & Trust Company, LLC, as Rights Agent,
as amended as of June 9, 1999, April 7, 2000, October 26, 2000, February 21,
2001, February 28, 2002, September 18, 2002, December 13, 2004, March 14, 2007,
March 19, 2009 and December 23, 2009 (the “Rights Agreement”),
to the extent that the Rights Agreement is then in effect, at a price of $16.00
per share of Common Stock, or any higher price per share of Common Stock paid by
Merger Sub pursuant to the terms of the Offer for shares of Common Stock
tendered pursuant to the Offer;
WHEREAS, following consummation of the
Offer, Merger Sub shall merge with and into the Company in the Merger and each
share of Common Stock that is issued and outstanding immediately prior to the
Effective Time (other than shares of Common Stock held in treasury of the
Company and shares of Common Stock owned, directly or indirectly, by Parent or
Merger Sub or held by the Company or any Subsidiary of the Company, which will
be canceled with no consideration issued in exchange therefor, and shares of
Common Stock as to which appraisal rights have been perfected pursuant to the
DGCL) will be canceled and converted into the right to receive cash in an amount
equal to the Per Share Amount, all upon the terms and conditions set forth
herein;
WHEREAS, concurrently with the
execution of this Agreement, and as a condition and material inducement to
Parent’s and Merger Sub’s willingness to enter into this Agreement, Parent,
Merger Sub, the Company and certain officers, directors and principal
stockholders of the Company listed in Section 3.27 of the
disclosure letter delivered by the Company to Parent prior to the execution and
delivery of this Agreement (the “Company Disclosure
Letter”) have entered into Tender and Voting Agreements (collectively,
the “Tender
Agreements”);
1
WHEREAS, the board of directors of the
Company (the “Board of
Directors”) has, subject to the terms and conditions of this Agreement,
(a) determined that the terms of the Offer, the Merger and the other
transactions contemplated by this Agreement are in the best interests of the
Company and its stockholders, (b) approved and declared this Agreement advisable
in accordance with the DGCL and (c) determined to recommend that the Company’s
stockholders accept the Offer and tender their shares of Common Stock to Merger
Sub pursuant thereto and, to the extent applicable, to adopt this
Agreement;
WHEREAS, the board of directors of
Merger Sub has approved the execution and delivery of this Agreement;
and
WHEREAS, the board of directors of
Parent and Merger Sub have each approved this Agreement and declared it
advisable for Parent and Merger Sub, respectively, to enter into this
Agreement.
NOW, THEREFORE, in consideration of the
premises and of representations, warranties, covenants and agreements contained
herein, and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE
ONE
THE
TENDER OFFER
1.1. The Offer.
(a) Within ten business days
(as such term is defined in Rule 14d-1(g)(3) promulgated under the Exchange Act,
“Business
Days”) after the date hereof, Merger Sub shall, and Parent shall cause
Merger Sub to, (and the Company shall cooperate with Merger Sub to) commence
(within the meaning of Rule 14d-2 promulgated under the Exchange Act) an offer
to purchase all outstanding shares of Common Stock of the Company at the
purchase price of $16.00 per share of Common Stock (such price, or any higher
price per share of Common Stock paid by Merger Sub pursuant to the terms of the
Offer, the “Per Share
Amount”) and shall, on the date of commencement of the Offer but after
affording the Company and its counsel reasonable opportunity to review and
comment thereon and giving reasonable and good faith consideration to any
comments made thereby, file a Tender Offer Statement on Schedule TO (together
with all amendments and supplements thereto, including the exhibits thereto, the
“Schedule TO”)
and all other necessary documents with the Securities and Exchange Commission
(the “SEC”) and
cause such documents to be disseminated to holders of shares of Common Stock, as
required by Rule 14d-4 promulgated under the Exchange Act, in each case in
connection with the Offer (the “Offer Documents”),
and shall consummate the Offer, subject to the terms and conditions hereof and
thereof. The Offer Documents will comply in all material respects
with the provisions of all applicable Federal securities
Laws. Subject to the terms and conditions of this Agreement and to
the satisfaction or waiver of the conditions set forth in Annex B hereto (the
“Tender Offer
Conditions”), Parent shall cause Merger Sub to, and Merger Sub shall,
upon the expiration of the Offer, accept for payment, and pay for (after giving
effect to any required withholding or stock transfer Tax), all shares of Common
Stock validly tendered pursuant to the Offer and not validly withdrawn on the
Acceptance Date. The obligation of Merger Sub to accept for payment
and to pay for any shares of Common Stock validly tendered shall be subject
solely to the satisfaction or waiver by Merger Sub of the Tender Offer
Conditions. The Per Share Amount shall be net to the seller in cash,
without interest, subject to reduction for any applicable withholding or stock
transfer Taxes payable by such seller. No shares of Common Stock held
by the Company or its Subsidiaries shall be tendered pursuant to the
Offer.
2
(b) Parent on behalf of
Merger Sub expressly reserves the right from time to time, subject to Section 1.1(c) and
Section 1.1(d),
in its sole discretion, to waive any Tender Offer Condition, to increase the Per
Share Amount or to make any other changes in the terms and conditions of the
Offer; provided, that
without the prior written consent of the Company, Merger Sub shall not (i)
decrease the Per Share Amount or change the form of consideration payable in the
Offer (other than by adding consideration), (ii) decrease the number of shares
of Common Stock to be purchased in the Offer, (iii) amend or waive satisfaction
of the Minimum Condition (as defined in Annex B), (iv) impose
additional conditions to the Offer or modify any conditions to the Offer in a
manner adverse to the holders of shares of Common Stock, (v) make any change in
the Offer that would require an extension or delay of the then current
Expiration Date; provided, however, that this
clause (v)
shall not limit the right of Parent and Merger Sub to extend the Expiration Date
as required or permitted by Section 1.1(d), (vi)
modify or amend the Tender Offer Conditions (other than to waive such Tender
Offer Conditions, except for the Minimum Condition) or (vii) modify or amend any
other term of the Offer, in the case of clauses (vi) and
(vii), in any
manner adverse to the holders of shares of Common Stock in their capacities as
holders of shares of Common Stock.
(c) No agreement or
representation hereby is made or shall be made by Parent or Merger Sub with
respect to information supplied by the Company expressly for inclusion in, or
with respect to Company information derived from the Company SEC Filings that is
included or incorporated by reference in, the Offer
Documents. Parent, Merger Sub and the Company each agrees promptly to
correct any information provided by it for use in the Offer Documents if and to
the extent that it shall have become false or misleading in any material
respect. Parent and Merger Sub shall cause the Schedule TO, as so
corrected or supplemented, to be filed with the SEC and the Offer Documents, as
so corrected or supplemented, to be promptly disseminated to the Company’s
stockholders, in each case as and to the extent required by applicable Federal
securities Laws. The Company and its counsel shall be given a
reasonable opportunity to review and comment on any Offer Documents (including
each amendment or supplement thereto) before they are filed with the
SEC. Parent and Merger Sub shall give reasonable and good faith
consideration to any comments or other additions, deletions or changes made by
the Company and its counsel with respect to any Offer
Documents. Parent and Merger Sub shall provide the Company with (in
writing, if written), and shall consult with the Company regarding, any comments
(written or oral) that may be received by Parent, Merger Sub or their counsel
from the SEC or its staff with respect to the Offer Documents promptly after
receipt thereof. The Company and its counsel shall be given a
reasonable opportunity to review and comment upon any proposed responses before
they are filed with the SEC.
3
(d) The initial expiration
date of the Offer shall be at midnight, New York City time, on the 20th
Business Day following the commencement of the Offer (determined using Rules
14d-1(g)(3) and 14d-2 promulgated under the Exchange Act) (such date, or such
subsequent date to which the expiration of the Offer is extended pursuant to and
in accordance with the terms of this Agreement, the “Expiration
Date”). Merger Sub shall not terminate or withdraw the Offer
other than in connection with the effective termination of this Agreement in
accordance with Section 7.1
hereof. Notwithstanding the foregoing, unless this Agreement is
terminated in accordance with ARTICLE SEVEN, Merger
Sub, without Parent or Merger Sub obtaining the consent of the Company, (i)
shall extend the Expiration Date for any period required by the rules and
regulations of the SEC or the NYSE AMEX (“NYSE AMEX”)
applicable to the Offer, including in connection with an increase in the Per
Share Amount, (ii) shall extend the Expiration Date if, on any then scheduled
Expiration Date, any of the Tender Offer Conditions is not satisfied or waived
by Parent, for such periods of up to ten Business Days at a time (or such other
period as shall be approved by the Company) which such period of time as Merger
Sub may deem reasonably necessary, but, except as provided in Section 1.1(d)(iii)
or as required by the rules and regulations of the SEC or NYSE AMEX applicable
to the Offer (including in connection with an increase in the Per Share Amount),
in no event may the Expiration Date be extended pursuant to this clause (ii) to a date
later than the Outside Date, and (iii) may extend the Expiration Date beyond the
Outside Date for up to a period not to exceed the 13th
Business Day after the last to occur of any date on which (w) the Company shall
have publicly announced the receipt of an Acquisition Proposal in the event such
announcement is made less than ten Business Days prior to the Outside Date, (x)
the Company publicly announces its reaffirmation of its approval or
recommendation of the Offer following the public announcement of the receipt of
any Acquisition Proposal in the event that such reaffirmation or announcement is
made less than ten Business Days prior to the Outside Date, (y) an Adverse
Recommendation Change has occurred less than ten Business Days prior to the
Outside Date or (z) the Company advises Parent of an Acquisition Proposal in
accordance with Section 5.3(d) if
such advisement is received by Parent less than ten Business Days prior to the
Outside Date. Except as expressly provided in this Section 1.1(d),
Parent shall not extend the Offer if all of the Tender Offer Conditions are
satisfied or waived and it is permitted under applicable Law to accept for
payment and pay for validly tendered shares of Common Stock that are not validly
withdrawn. Nothing in this Section 1.1(d) shall
affect any termination rights in ARTICLE
SEVEN.
(e) In the event the
Acceptance Date occurs but Merger Sub does not acquire a sufficient number of
shares of Common Stock to enable a Short-Form Merger to occur pursuant to Section 2.7 hereof,
Merger Sub may (in its sole discretion), until the Outside Date, provide a
“subsequent offering period” for a number of days to be determined by Parent but
not less than three nor more than 20 Business Days in accordance with Rule
14d-11 promulgated under the Exchange Act.
(f) Promptly upon the
satisfaction or waiver by Merger Sub of the Tender Offer Conditions in
accordance with Section 1.1(b),
Parent shall cause Merger Sub to, and Merger Sub shall, (i) as soon as
practicable after the Expiration Date, accept for payment and pay for all shares
of Common Stock validly tendered and not properly withdrawn pursuant to the
Offer (the date of acceptance for payment, the “Acceptance Date”),
which acceptance may be by oral notice to the Paying Agent, (ii) on the
Acceptance Date, deposit or cause to be deposited with the Paying Agent, cash in
U.S. dollars sufficient to pay the aggregate Per Share Amount for all such
accepted shares of Common Stock and (iii) as soon as practicable following such
deposit, cause the Paying Agent to pay for all shares of Common Stock so
accepted for payment. Parent shall provide or cause to be provided to
Merger Sub on a timely basis the funds necessary to purchase any shares of
Common Stock that Merger Sub becomes obligated to purchase pursuant to the
Offer.
4
(g) Promptly after the
Acceptance Date, the Company shall take all action requested by Parent necessary
to elect to be treated as a “controlled company” as defined by Section 801(a) of
the NYSE AMEX Company Guide and make any necessary filings and disclosures
associated with such status.
1.2. Company Action.
(a) Subject to Section 5.3, the
Company hereby consents to the Offer and to the inclusion of the Recommendation
in the Offer Documents.
(b) The Company shall file
with the SEC, concurrently with the filing by Parent and Merger Sub of the
Schedule TO with respect to the Offer, or as promptly as reasonably practicable
thereafter, a Tender Offer Solicitation/ Recommendation Statement on Schedule
14D-9 (together with any amendments or supplements thereto, the “Schedule 14D-9”) that
will comply in all material respects with the provisions of all applicable
Federal securities Laws. The Company agrees to cause such Schedule
14D-9 to be disseminated to the stockholders of the Company along with the Offer
Documents promptly after the commencement of the Offer (provided that Parent and
Merger Sub shall use commercially reasonable efforts to cause the Schedule 14D-9
to be disseminated concurrently with, and in the same mailing envelope as, the
Offer Documents, if requested by the Company). Subject to Section 5.3 and to
any Adverse Recommendation Change in accordance with this Agreement, the
Schedule 14D-9 and the Offer Documents shall contain the
Recommendation. The Company agrees to promptly correct the Schedule
14D-9 if and to the extent that it shall have become false or misleading in any
material respect (and each of Parent and Merger Sub, with respect to written
information supplied by it, shall promptly notify the Company of any required
corrections of such information and cooperate with the Company with respect to
correcting such information) and to supplement the information contained in the
Schedule 14D-9 to include any information that shall become necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, and the Company shall cause the Schedule 14D-9 as so
corrected or supplemented to be filed with the SEC and promptly disseminated to
the Company’s stockholders, in each case as and to the extent required by
applicable Federal securities Laws. Parent and its counsel shall be
given a reasonable opportunity to review and comment on the Schedule 14D-9
before it is filed with the SEC. The Company shall give reasonable
and good faith consideration to any comments made by Parent and its
counsel. The Company shall provide Parent and Merger Sub (in writing,
if written), and consult with Parent and Merger Sub regarding, any comments
(written or oral) that the Company or its counsel may receive from the SEC or
its staff with respect to the Schedule 14D-9 promptly after receipt of such
comments. Parent and Merger Sub and their counsel shall be given a
reasonable opportunity to review and comment on any proposed responses before
they are filed with the SEC, and the Company shall give reasonable and good
faith consideration to any comments made by Parent and its counsel.
(c) In connection with the
Offer, the Company shall promptly furnish, or cause its transfer agent to
furnish, Parent and Merger Sub with mailing labels, security position listings,
non-objecting beneficial owner lists and all reasonably available listings and
computer files containing the names and addresses of the record holders of the
Common Stock as of the most recent practicable date and shall furnish, or cause
its transfer agent to furnish, Parent and Merger Sub with such additional
available stockholder information and assistance (including updated lists of
stockholders and their addresses, mailing labels and lists of security positions
and non-objecting beneficial owner lists as they become available) and such
other assistance as Parent and Merger Sub or their agents may reasonably request
in communicating the Offer to the record and beneficial holders of Common
Stock. In connection with the Offer, the Company shall furnish Parent
with such information and assistance as Parent or its officers, employees,
accountants, counsel and other representatives may reasonably request in
connection with the preparation of the Offer and Offer Documents and
communicating the Offer to the record and beneficial holders of shares of Common
Stock, and Parent and Merger Sub shall furnish the Company with such information
as the Company or its officers, employees, accountants, counsel and other
representatives may reasonably request in connection with the preparation of the
Schedule 14D-9 and communicating the Schedule 14D-9 to the record and beneficial
holders of shares of Common Stock.
5
1.3. Top-Up Option.
(a) The
Company hereby grants to Parent and Merger Sub an irrevocable option (the “Top-Up Option”) to
purchase, at a price per share equal to the Per Share Amount (the “Per Common Share
Price”), up to that number of newly issued shares of Common Stock (the
“Top-Up Option
Shares”) not to exceed 19.9% of the number of shares of Common Stock
outstanding on the Acceptance Date such that the sum of (A) the number of shares
of Common Stock owned, directly or indirectly, by Parent or Merger Sub at the
time of exercise of the Top-Up Option (excluding shares of Common Stock tendered
in the Offer pursuant to guaranteed delivery procedures as to which delivery has
not been completed as of the time of exercise of the Top-Up Option) and (B) such
number of Top-Up Option Shares equals one share of Common Stock more than 90% of
the sum of (x) the total number of shares of Common Stock outstanding
immediately after the issuance of the Top-Up Option Shares and (y) the total
number of shares of Common Stock that are issuable within ten Business Days
after the issuance of the Top-Up Option Shares upon the vesting, conversion or
exercise of all outstanding options, warrants, convertible or exchangeable
securities and similar rights, regardless of the conversion or exercise price or
other terms and conditions thereof but not giving effect to any shares of Common
Stock reserved for issuance pursuant to the Rights, to the extent the Rights
Agreement is then in effect. The Top-Up Option may be exercised once
during the 20 Business Day period following the Acceptance Date; provided, however, that the
obligation of the Company to deliver Top-Up Option Shares upon the exercise of
the Top-Up Option is subject to the conditions that (i) no provision of any
applicable Law shall prohibit the exercise of the Top-Up Option or the delivery
of the Top-Up Option Shares in respect of such exercise, (ii) the issuance of
Top-Up Option Shares pursuant to the Top-Up Option would not require approval by
the Company’s stockholders under applicable Law, (iii) immediately after the
exercise of the Top-Up Option and issuance of the Top-Up Option Shares, the
number of shares of Common Stock owned, directly or indirectly, by Parent or
Merger Sub (excluding shares of Common Stock tendered in the Offer pursuant to
guaranteed delivery procedures as to which delivery has not been completed as of
the time of exercise of the Top-Up Option) constitutes one share of Common Stock
more than 90% of the total outstanding shares of Common Stock and (iv) the
number of Top-Up Option Shares issued pursuant to the Top-Up Option shall in no
event exceed the number of authorized and unissued shares of Common Stock not
otherwise reserved for issuance for outstanding Company Stock Options or other
obligations of the Company. The Parties shall cooperate to ensure
that the issuance of the Top-Up Option Shares is accomplished consistent with
all applicable Laws, including compliance with an applicable exemption from
registration of the Top-Up Option Shares under the Securities Act of 1933, as
amended (the “Securities
Act”). Parent and Merger Sub acknowledge that the shares of
Common Stock that Merger Sub may acquire upon exercise of the Top-Up Option will
not be registered under the Securities Act and will be issued in reliance upon
an exemption thereunder for transactions not involving a public
offering. Parent and Merger Sub each agree that the Top-Up Option and
the Top-Up Option Shares are being and will be acquired by Merger Sub for its
own account, for the purpose of investment and not with a view to, or for resale
in connection with, any distribution thereof (within the meaning of the
Securities Act).
6
(b) Upon the exercise of the
Top-Up Option in accordance with Section 1.3(a),
Merger Sub shall so notify the Company and shall set forth in such notice (i)
the number of shares of Common Stock expected to be owned, directly or
indirectly, by Parent or Merger Sub immediately preceding the purchase of the
Top-Up Option Shares and (ii) a place and time selected by Merger Sub for the
closing of the purchase of the Top-Up Option Shares with the time for the
closing being not more than five Business Days after the exercise of the Top-Up
Option. The Company shall, as soon as practicable following receipt
of such notice, notify Merger Sub of the sum of (1) the number of shares of
Common Stock then outstanding and (2) the total number of shares of Common Stock
that are issuable within ten Business Days after the scheduled closing of the
purchase of the Top-Up Option Shares upon the vesting, conversion or exercise of
all outstanding options, warrants, convertible or exchangeable securities and
similar rights, regardless of the conversion or exercise price or other terms
and conditions thereof. At the closing of the purchase of the Top-Up
Option Shares, Merger Sub shall pay the Company the aggregate purchase price
payable for the Top-Up Option Shares pursuant to this Section 1.3, and the
Company shall cause to be issued to Merger Sub a certificate representing the
Top-Up Option Shares. The aggregate purchase price payable for the
Top-Up Option Shares may be paid either (i) entirely in cash or (ii) at the
election of Merger Sub or Parent, by paying in cash an amount equal to not less
than the aggregate par value of the Top-Up Option Shares and by Merger Sub
executing and delivering to the Company an unsecured promissory note having a
principal amount equal to the balance of the aggregate purchase price for the
Top-Up Option Shares. Any such promissory note shall bear interest at
the rate of interest of 5.0% per annum and shall mature on the first anniversary
of the date of execution and delivery of such promissory note and may be prepaid
at any time and from time to time, in whole or in part, without premium or
penalty.
(c) In the event of any
change in the number of shares of outstanding Common Stock by reason of any
stock dividend, stock split, recapitalization, combination, exchange of shares,
merger, consolidation, reorganization or the like or any other change in the
corporate or capital structure of the Company that would have the effect of
diluting Merger Sub’s rights under the Top-Up Option, the number of Top-Up
Option Shares and the Per Common Share Price shall be adjusted appropriately so
as to restore Merger Sub to its rights hereunder with respect to the Top-Up
Option; provided, however, that nothing
in this Section
1.3 shall be construed as permitting the Company to take any action or
enter into any transaction otherwise prohibited by this Agreement.
7
1.4. Directors.
(a) Subject to compliance
with applicable Law and after the Acceptance Date, Parent shall be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors equal to the product of (i) the total number of directors on
the Board of Directors (giving effect to the directors designated by Parent and
elected or appointed to the Board pursuant to this sentence and including
directors continuing to serve as directors of the Company) multiplied by (ii)
the percentage (the “Board Percentage”)
that the aggregate number of shares of Common Stock beneficially owned by
Parent, Merger Sub or any of their affiliates (including, for purposes of such
percentage, the shares of Common Stock that are accepted for payment pursuant to
the Offer and that the Per Share Amount has been deposited for) bears to the
aggregate number of shares of Common Stock then outstanding; provided, that
following the time directors designated by Parent are elected or appointed to
the Board of Directors, and prior to the Effective Time, the Board of Directors
shall always have at least two directors who are directors of the Company on the
date hereof and who are neither officers of the Company nor designees,
affiliates or associates (within the meaning of the Federal securities Laws) of
Parent (each, an “Independent
Director”); provided, further, that if
there are in office fewer than two Independent Directors, the Company shall take
all actions necessary to cause a person or, if there are two vacancies, two
persons to fill such vacancy(ies) who shall be neither an officer of the Company
nor a designee, affiliate or associate of Parent, and each such person(s) shall
be deemed to be an Independent Director for purposes of this Agreement, or, if
no Independent Directors remain, the other directors shall designate three
persons to fill the vacancies who shall be neither an officer of the Company nor
a designee, affiliate or associate of Parent, and each such person shall be
deemed to be an Independent Director for purposes of this
Agreement. At each such time, the Company shall, subject to any
limitations imposed by applicable Law or NYSE AMEX rules, also cause (x) each
committee of the Board of Directors, (y) if requested by Parent, the board of
directors of each of the Company’s Subsidiaries and (z) if requested by Parent,
each committee of such board of directors of each of the Company’s Subsidiaries
to include persons designated by Parent constituting the Board Percentage of
each such committee or board as Parent’s designees constitute on the Board of
Directors. The Company shall, upon request by Parent, secure the
resignations of such number of directors as necessary to enable Parent’s
designees to be elected or appointed to the Board of Directors in accordance
with the terms of this Section 1.4(a) and
shall cause Parent’s designees to be so elected or appointed. The
Company shall promptly amend, or cause to be amended, the Bylaws, if necessary,
to comply with the obligations of the Company pursuant to this Section
1.4. The Company shall promptly take, at the Company’s
expense, any lawful action necessary to effect any such election, including
mailing to its stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder (provided, that Parent
has provided the information described in the following sentence), unless such
information has previously been provided to the Company’s stockholders in the
Schedule 14D-9. Parent shall supply to the Company in writing and be
solely responsible for any information with respect to itself and its nominees,
directors and affiliates required by Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder.
(b) Notwithstanding anything
in this Agreement to the contrary, following the time directors designated by
Parent are elected or appointed to the Board of Directors and prior to the
Effective Time, the affirmative vote of a majority of the Independent Directors
shall be required to (i) authorize any Contract between the Company and any of
its Subsidiaries, on the one hand, and Parent, Merger Sub and any of their
affiliates (other than the Company and any of its Subsidiaries), on the other
hand, (ii) amend or terminate this Agreement on behalf of the Company, (iii) use
or waive any of the Company’s rights or remedies hereunder, (iv) extend the time
for performance of Parent’s or Merger Sub’s obligations hereunder or (v) take
any other action by the Company in connection with this Agreement or the
transactions contemplated hereby required to be taken by the Board of
Directors. The Independent Directors shall have the authority to
retain such counsel (which may include current counsel to the Company) and other
advisors at the expense of the Company as determined appropriate by the
Independent Directors and shall have the authority to institute any action on
behalf of the Company to enforce the performance of this Agreement.
8
ARTICLE
TWO
THE
MERGER
2.1. The
Merger. Upon
the terms and subject to the satisfaction or, to the extent permitted by
applicable Law, the waiver of the conditions set forth in this Agreement, and in
accordance with the DGCL, Merger Sub shall merge with and into the Company at
the Effective Time. As a result of the Merger, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation of the Merger (the “Surviving
Corporation”).
2.2. Closing. Subject
to the provisions of ARTICLE SIX, the
closing of the Merger (the “Closing”) shall take
place at the offices of K&L Gates LLP, 599 Lexington Avenue, New York, New
York 10022 on the date (the “Closing Date”) that
is the second Business Day after the satisfaction or waiver (to the extent
permitted by applicable Law) of the conditions set forth in ARTICLE SIX (other
than those conditions that by their nature are to be satisfied by actions to be
taken at the Closing, but subject to the satisfaction or waiver of such
conditions), or at such other place, date and time as the Company and Parent may
agree in writing; provided, however, that if, as
of or immediately following the Acceptance Date, the expiration of any
“subsequent offering period” pursuant to Section 1.1(e) or the
purchase of the Top-Up Option Shares, Parent determines that a Short-Form Merger
is available pursuant to Section 2.7 and
Section 253 of the DGCL, the Closing shall, subject to the satisfaction or
waiver of the conditions set forth in ARTICLE SIX, occur no
later than the second Business Day immediately following the Acceptance Date,
the expiration of such “subsequent offering period” or the purchase of the
Top-Up Option Shares, as applicable.
2.3. Effective
Time. Subject to the provisions of this Agreement, at the
Closing, the Parties will cause a certificate of merger or a certificate of
ownership and merger, as applicable (the “Certificate of
Merger”), to be filed with the Secretary of State of the State of
Delaware in accordance with Section 251 of the DGCL (or to the extent provided
in Section 2.7
hereof, Section 253 of the DGCL). The Merger will become effective at
such time as the Certificate of Merger has been duly filed with the Secretary of
State of the State of Delaware or at such later date or time as may be agreed by
the Company and Merger Sub in writing and specified in the Certificate of Merger
in accordance with the DGCL (the effective time of the Merger being hereinafter
referred to as the “Effective
Time”).
9
2.4. Effect of the
Merger. At the Effective Time, the effect of the Merger shall
be as provided in the applicable provisions of the DGCL.
2.5. Certificate of Incorporation;
Bylaws.
(a) The certificate of
incorporation of the Company as in effect immediately prior to the Effective
Time shall be amended in its entirety in the Merger to read as set forth in
Exhibit A
hereto, and as so amended, shall be the certificate of incorporation of the
Surviving Corporation until thereafter amended in accordance with applicable
Law.
(b) At the Effective Time,
the bylaws of the Company shall be amended and restated in its entirety to read
as the bylaws of Merger Sub in effect immediately prior to the Effective Time,
except that the name of the Surviving Corporation shall be the name of the
Company.
2.6. Directors and
Officers. Each of the Parties shall take all necessary action
to cause the directors of Merger Sub immediately prior to the Effective Time to
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, and the officers of Merger Sub immediately prior to the Effective
Time to be the initial officers of the Surviving Corporation, in each case
retaining their respective positions, and until the earlier of their death,
resignation or removal or until their respective successors are duly elected or
appointed and qualified.
2.7. Merger Without
Meeting of Stockholders. Notwithstanding anything in this
Agreement to the contrary, but subject to ARTICLE SIX, if, as
of immediately following the Acceptance Date, the expiration of any “subsequent
offering period” pursuant to Section 1.1(e), the
purchase, if applicable, of the Top-Up Option Shares, and, if necessary, the
expiration of the period for guaranteed delivery of shares of Common Stock in
the Offer, Parent or any direct or indirect Subsidiary of Parent, taken
together, shall own at least 90% of the total outstanding shares of Common
Stock, the Parties shall, subject to ARTICLE SIX hereof,
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the satisfaction of such threshold,
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL (such Merger, a “Short-Form
Merger”).
2.8. Conversion of
Securities. At and as of the Effective Time, by virtue of the
Merger and without any action on the part of Parent, Merger Sub, the Company or
its stockholders:
(a) Each of the shares of
Common Stock (except as provided in Section 2.8(b) or
Section 2.8(c)
below), together with the associated Rights, to the extent that the Rights
Agreement is then in effect, shall be converted into the right to receive in
cash the Per Share Amount (the “Merger
Consideration”) payable to the holder thereof, without interest, in the
manner provided in Section 2.9, less any
required withholding Taxes; provided, that it
shall be a condition to the receipt by a stockholder of the Company of any
Merger Consideration with respect to any share of Common Stock that the
certificate representing such share immediately prior to the Effective Time (the
“Certificates”)
shall have first been delivered to the Paying Agent pursuant to Section 2.9(c), duly
endorsed in blank or accompanied by a duly executed stock
power. Except as otherwise provided in Section 2.8(b), all
shares of Common Stock, together with the associated Rights, to the extent that
the Rights Agreement is then in effect, outstanding immediately prior to the
Effective Time shall no longer be outstanding upon the Effective Time and shall
automatically be cancelled and shall cease to exist, and each such certificate
which immediately prior to the Effective Time represented any shares of Common
Stock shall thereafter only represent the right to receive the Merger
Consideration therefor.
10
(b) Notwithstanding anything
in this Agreement to the contrary, shares of Common Stock, together with the
associated Rights, that are outstanding immediately prior to the Effective Time
and that are held by any Person who has not voted in favor of the Merger and is
entitled to demand and properly demands appraisal of such shares of Common Stock
(“Appraisal
Shares”) pursuant to, and who complies in all respects with, Section 262
of the DGCL (“Section
262”) shall not be converted into the right to receive the Merger
Consideration as provided in Section 2.8(a), but
rather the holders of such Appraisal Shares shall be entitled to payment of the
fair value of such Appraisal Shares in accordance with Section 262 (and at the
Effective Time such Appraisal Shares shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and such holders shall
cease to have any right with respect thereto, except the right to receive the
fair value of such Appraisal Shares in accordance with Section 262); provided, however, that if any
such holder shall fail to perfect or otherwise shall waive, withdraw or lose the
right to appraisal under Section 262, then the right of such holder to be paid
the fair value of such holder’s Appraisal Shares shall cease and such Appraisal
Shares shall be deemed to have been converted as of the Effective Time into, and
to have become exchangeable solely for the right to receive, the Merger
Consideration therefor as provided in Section 2.8(a). The
Company shall give Parent (i) prompt notice of any demands for appraisal
received by the Company, withdrawals of such demands, and any other instruments
served pursuant to DGCL and received by the Company and (ii) opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under DGCL.
(c) Each share of Common
Stock held in the treasury of or reserved for issuance by the Company and each
share of Common Stock owned by Parent, Merger Sub or any direct or indirect
wholly owned subsidiary or affiliate of Parent or the Company immediately prior
to the Effective Time shall be cancelled and extinguished without any conversion
thereof, and no portion of the Merger Consideration shall be allocated or paid
thereto.
(d) Each share of the Merger
Sub’s common stock, par value $0.01 per share, issued and outstanding
immediately prior to the Effective Time shall be converted into one validly
issued, fully paid and nonassessable share of the Surviving Corporation’s common
stock, par value $0.01 per share.
(e) The Merger Consideration
shall be adjusted to reflect any change in the number of shares of Common Stock
issued and outstanding as of the Effective Time by reason of any stock dividend,
stock split, recapitalization, combination, exchange of shares, merger,
consolidation, reorganization or the like or any other change in the corporate
or capital structure; provided, however, that nothing
in this Section
2.8(e) shall be construed as permitting the Company to take any action or
enter into any transaction otherwise prohibited by this Agreement.
11
2.9. Surrender of Shares; Stock Transfer
Books.
(a) Prior
to the Effective Time, Parent or Merger Sub will designate a bank, trust company
or transfer agent reasonably acceptable to the Company to act as paying agent
(the “Paying
Agent”) to facilitate the receipt by the Company’s stockholders of the
Per Share Amount in connection with the Offer and the Merger Consideration in
connection with the Merger.
(b) At or before the
Effective Time, Parent shall cause the Merger Consideration to be delivered
(other than any portion thereof allocable to any Appraisal Shares, which shall
be withheld by Parent or the Surviving Corporation to satisfy related appraisal
or dissenters rights matters and the costs thereof) by wire transfer of
immediately available funds to an account designated in writing by the Paying
Agent (the “Payment
Account”). The Paying Agent shall, pursuant to irrevocable
instructions, deliver the Merger Consideration contemplated to be paid pursuant
to Section
2.8(a) out of the Payment Account. The Payment Account shall
be invested by the Paying Agent as directed by Parent; provided, however, that 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 Moody’s Investors Service, Inc. or Standard &
Poor’s Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker’s acceptances of commercial banks with capital exceeding $1
billion (based on the most recent financial statements of such bank that are
then publicly available). Any net profit resulting from, or interest
or income produced by, such investments shall be payable to Parent or an
affiliate of Parent as Parent directs; provided, however, that any net
loss resulting from such investments shall be promptly reimbursed by Parent to
the Payment Account. The Payment Account shall not be used for any
purpose other than as set forth in this Section
2.9(b).
(c) Promptly after the
Effective Time, Parent shall cause the Paying Agent to mail to each holder of
record of a Certificate whose shares of Common Stock were converted into the
right to receive the Merger Consideration pursuant to Section 2.8(a) and
cause to be furnished promptly to any record holder upon request thereby after
the Effective Time, a letter of transmittal, which shall (i) specify that
delivery of the Certificates shall be effected, and risk of loss and title to
the Certificates shall pass, only upon proper delivery of the Certificates to
the Paying Agent and (ii) provide instructions for the holders of the
Certificates to use in effecting the surrender of the Certificates pursuant to
such letter of transmittal. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal, duly completed and
validly executed in accordance with the instructions contained therein, and
along with such other documents as may be required pursuant to such
instructions, including those documents set forth in Section 2.8(a) (or,
if such shares of Common Stock are held in book-entry or other uncertificated
form, upon the entry through a book-entry transfer agent of the surrender of
such shares on a book-entry account statement (it being understood that any
references herein to “Certificates” shall
be deemed to include references to book-entry account statements relating to the
ownership of shares of Common Stock)), the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration which such
holder has the right to receive in respect of the shares of Common Stock
formerly represented by such Certificate, together with the associated Rights,
and the Certificate so surrendered shall forthwith be canceled. No
interest will be paid or accrued on any Merger Consideration payable to holders
of Certificates. In the event of a transfer of ownership of shares of
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 is presented to the Paying Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 2.9(c), each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger
Consideration.
12
(d) Each of the Paying
Agent, Parent and the Surviving Corporation shall be entitled to deduct and
withhold from any consideration payable or otherwise deliverable pursuant to
this Agreement to any holder or former holder of Common Stock such amounts as
are required to be deducted or withheld therefrom under the Code or under any
provision of state, local or foreign tax Law or under any other applicable
Law. To the extent such amounts are so deducted or withheld, such
amounts shall be treated for all purposes under this Agreement as having been
paid to the Person to whom such amounts would otherwise have been paid. As used
in this Agreement, “Code” means the
Internal Revenue Code of 1986, as amended.
2.10. No Further
Ownership Rights in Company Capital Stock. All amounts paid
upon the surrender or exchange of shares of Common Stock, together with the
associated Rights, in accordance with the terms hereof shall be deemed to have
been paid in full satisfaction of all rights pertaining to such shares of Common
Stock and Rights, and there shall be no further registration of transfers on the
records of the Surviving Corporation of shares of Common Stock that were
outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be forwarded to the Paying Agent where they shall be
cancelled and exchanged as provided in Section
2.9.
2.11. Lost, Stolen or
Destroyed Certificates. In the event any Certificate shall
have been lost, stolen or destroyed, the Paying Agent shall issue in exchange
for such lost, stolen or destroyed Certificate, upon the making of an affidavit
of that fact by the holder thereof, such amounts as may be required pursuant to
Section 2.9
with respect to the number of shares of Common Stock represented by such
Certificate; provided, however, that Parent
may, in its discretion and as a condition precedent to the payment thereof,
require the owner of such lost, stolen or destroyed Certificate to indemnify
Parent, the Surviving Corporation and the Paying Agent against any claim that
may be made against Parent, the Surviving Corporation or the Paying Agent, as
the case may be, with respect to the Certificate alleged to have been lost,
stolen or destroyed.
2.12. Termination of
Payment Account, Escheat, etc. Any portion of the Payment
Account which remains undistributed to the holders of Common Stock for one year
after the Effective Time shall be delivered to Parent upon demand, and any
holders of certificates formerly representing shares of Common Stock who have
not theretofore complied with the exchange procedures set forth above shall
thereafter look only to Parent (subject to abandoned property, escheat or
similar Laws, as general creditors thereof) for the Merger Consideration,
without any interest thereon. None of Parent, the Paying Agent, the
Surviving Corporation or any party hereto shall be liable to any Person for any
amount properly paid to a public official pursuant to any applicable abandoned
property, escheat, or similar Law.
13
2.13. Company Equity
Plans.
(a) Except as set forth in
Section 2.13(c)
and except for any option to purchase Common Stock pursuant to the ESPP (defined
below), each option to purchase Common Stock (collectively, the “Company Stock Option
Awards”) granted under any equity based compensation plan of the Company
(collectively, the “Company Stock Plans”)
that is outstanding under a Company Stock Plan immediately prior to the
Effective Time will vest (if not previously vested) and be cancelled subject to
and immediately following the Effective Time, and the holder of such Company
Stock Option Awards will, in full settlement of such Company Stock Option
Awards, receive from or on behalf of Merger Sub an amount (subject to any
applicable Tax withholding) in cash equal to the product of (x) the excess, if
any, of the Merger Consideration over the exercise price or base price, as
applicable, per share of such Company Stock Option Award, multiplied by (y) the
total number of shares of Common Stock subject to such Company Stock Option
Award (the aggregate amount of such cash hereinafter referred to as the “Option Award
Consideration”). The Surviving Corporation shall pay or cause
to be paid to holders of the Company Stock Option Awards the Option Award
Consideration as soon as administratively practicable following the Effective
Time.
(b) Except as set forth in
Section
2.13(c), each restricted stock unit (including any restricted stock
award, phantom restricted stock award, deferred stock unit, whether
performance-based, time-based or otherwise) (the “Company Restricted Stock
Units”) that is outstanding under any Company Stock Plan immediately
prior to the Effective Time, will become vested or earned (if not previously
vested or earned) and be cancelled subject to and immediately following the
Effective Time and converted into the right to receive an amount (subject to any
applicable Tax withholding) in cash equal to the product of (x) the Merger
Consideration multiplied by (y) the total number of shares of Common Stock
subject to such Company Restricted Stock Unit (the aggregate amount of such cash
hereinafter referred to as the “Restricted Stock Unit
Consideration”). The Surviving Corporation shall pay or cause
to be paid to holders of the Company Restricted Stock Units the Restricted Stock
Unit Consideration as soon as practicable following the Effective
Time.
(c) The Company shall take
such action as may be necessary to (i) establish the end of the purchase period
in effect as of the date hereof under the Company’s 2001 Employee Stock Purchase
Plan (the “ESPP”) no later than
the last day of the offering period ending immediately after the commencement of
the Offer with respect to any offering otherwise then in effect (the “ESPP Exercise Date”),
(ii) suspend any subsequent purchase periods that would otherwise arise after
the close of the purchase period currently in effect and prior to the Effective
Time and (iii) terminate the ESPP as of the Effective Time or such earlier date
as determined by the Company to be administratively reasonable. Each
ESPP participant’s accumulated payroll contributions as of the ESPP Exercise
Date that are not withdrawn as of such date shall be applied toward the purchase
of shares of Common Stock in accordance with the terms of the
ESPP. As promptly as reasonably practicable following the ESPP
Exercise Date, following the application of accumulated payroll contributions
toward the purchase of shares of Common Stock in accordance with the preceding
sentence, Parent shall cause or permit the Company or the Merger Sub, as
applicable, to return to participants any of their respective accumulated
payroll contributions not applied to the purchase of shares of Common Stock
under the ESPP, if any.
14
(d) At the Effective Time,
Parent shall assume the obligations and succeed to the rights of the Company
under the Company Stock Plans with respect to the Company Stock Option Awards
and the Company Restricted Stock Units (the “Company Equity
Awards”). Prior to the Effective Time, the Company and Parent
shall take all action required to reflect the transactions contemplated by this
Section 2.13 to
ensure that, following the Effective Time, no Person other than Parent and its
Subsidiaries shall have any right (i) to acquire equity securities of the
Company or any Subsidiary thereof or (ii) to receive any payment in respect of
any equity based compensatory award other than with respect to the payment of
the Option Award Consideration and the Restricted Stock Unit Consideration as
provided in Sections
2.13(a) and 2.13(b). From
and after the Effective Time, all references to the Company (other than any
references relating to a “change in control” of the Company) in each Company
Stock Plan and in each agreement evidencing any award of Company Equity Awards
shall be deemed to refer to Parent. Nothing in this Section 2.13 is
intended to release any employee or service provider to the Company from any
provisions relating to any non-competition, non-solicitation, or confidentiality
provisions of any Company Equity Award and any associated damages or forfeitures
(the “Equity Award
Restrictive Covenants”), which shall survive the Effective
Time. The Company shall take such action as may be necessary to
insure the survival of the Equity Award Restrictive Covenants and the succession
of Parent to the benefits of the Equity Award Restrictive
Covenants.
(e) Prior to the Effective
Time, the Board of Directors, or, where appropriate, the Compensation Committee
of the Board of Directors or the applicable administrative committee under each
of the Company Stock Plans, shall take all actions necessary and appropriate
(including the adoption of any necessary resolutions, plan amendments, and/or
the obtaining of any necessary consents), and all actions as Parent may
reasonably request, to make such adjustments and amendments to, or make such
determinations with respect to, the Company Stock Plans and Company Stock Option
Awards and Company Restricted Stock Unit Awards to implement the foregoing
provisions of this Section 2.13,
including the cancellation, subject to and effective on and as of the Effective
Time, of all Company Stock Option Awards and Restricted Stock Unit Awards
without further obligation of the Company or Parent, or any of their respective
Subsidiaries (other than payment of the Option Award Consideration and the
Restricted Stock Unit Consideration, as applicable, pursuant to this Section
2.13).
ARTICLE
THREE
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as
disclosed or reflected in the Company SEC Filings (including, in each case, to
the extent included in any document filed or incorporated by reference as an
exhibit thereto, but excluding any information set forth in any section of a
Company SEC Filing entitled “Risk Factors” or “Forward Looking Statements”) and
except as set forth in the Company Disclosure Letter (provided, however, that any
disclosure contained in any Section of the Company Disclosure Letter relating to
one Section of this Agreement shall be deemed to be disclosed with respect to
any other Section of this Agreement to the extent that it is reasonably apparent
that such disclosure is applicable to such other Section of this Agreement) the
Company represents and warrants to Parent and Merger Sub that the following
statements are true and correct in all material respects as of the date
hereof:
15
3.1. Organization and
Standing; 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 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. Section 3.1 of the
Company Disclosure Letter contains a complete list of every Subsidiary of the
Company and the jurisdiction of each such Subsidiary’s incorporation or
organization, as the case may be. The Company and each of its
Subsidiaries are duly qualified to conduct business and are in good standing to
do business in each jurisdiction where such qualification or good standing is
required except where the failure to be so qualified would not have a Company
Material Adverse Effect. The Company and each of its Subsidiaries
have all requisite power and authority and all authorizations, licenses and
permits necessary to own, lease and operate their respective properties and
other assets, to conduct their respective businesses as presently conducted and
as proposed to be conducted except where the failure to have such
authorizations, licenses and permits would not have a Company Material Adverse
Effect. The copies of the Company’s certificate of incorporation (the
“Certificate of
Incorporation”) and bylaws (the “Bylaws”) that are
filed as exhibits to the Company’s Annual Report on Form 10-K for its fiscal
year ended January 3, 2009 (the “Company Form 10-K”)
are complete and correct copies thereof as in effect on the date
hereof. The Company has delivered or made available to Parent true
and complete copies of the certificate of incorporation and bylaws (or similar
organizational documents) of each Subsidiary of the Company, each as amended to
date and currently in effect (the “Subsidiary Charter
Documents”). The Company is not in violation of any provision
of the Certificate of Incorporation or the Bylaws. No Subsidiary of
the Company is in violation of any provision of its Subsidiary Charter
Documents. For purposes of this agreement, the term “Subsidiary” means,
with respect to a Party, any corporation, more than 50% of the outstanding
voting securities of which are owned or controlled, directly or indirectly, by
such Party or any Subsidiary of such Party, or a partnership, limited liability
company, trust, association or other business entity in which such Party or any
Subsidiary of such Party is a general partner, manager or trustee or owns or
controls, directly or indirectly, interests entitling it to receive more than
50% of the profits or losses of such entity. As used in this
Agreement, “Law” shall mean any
foreign or domestic law, statute, code, ordinance, rule, regulation, or
Order.
3.2. Capitalization.
(a) The authorized capital
stock of the Company consists of: (i) 20,000,000 shares of Common
Stock; and (ii) 1,000,000 shares of preferred stock, par value $.01 per share
(“Preferred
Stock”). As of the close of business on December 22, 2009, (x)
2,997,456 shares of Common Stock were issued (and not held in the treasury of
the Company) and outstanding, (y) 362,905 shares
of Common Stock were issued and held in the treasury of the Company and (z) no
shares of Preferred Stock were issued and outstanding or held in the treasury of
the Company. Since December 22, 2009 through the date hereof, no
shares of Common Stock or shares of Preferred Stock have been issued other than
the issuance of shares of Common Stock upon the exercise or settlement of
Company Equity Awards. As of the close of business on December 22,
2009, an aggregate of 526,518 shares of Common Stock were subject to and
reserved for issuance upon (1) exercise of Company Stock Option Awards or (2)
lapse of restrictions of Company Restricted Stock Units or director deferred
shares granted under the 2006 Non-Employee Directors’ Stock Plan, and since
December 22, 2009 and through the date hereof, no Company Equity Awards have
been granted, and no additional shares of Common Stock have become subject to
issuance under the Company Stock Plans. Section 3.2(a) of the
Company Disclosure Letter sets forth as of the close of business on December 22,
2009 each outstanding Company Equity Award granted under the Company Stock Plans
and (i) the name of the holder of such Company Equity Award, (ii) the number of
shares of Common Stock subject to such outstanding Company Equity Award, (iii)
the exercise price or base price of such Company Equity Award, (iv) the date on
which such Company Equity Award was granted or issued, (v) the applicable
vesting schedule, and the extent to which such Company Equity Award is vested
and exercisable as of the date hereof, and (vi) with respect to Company Stock
Options, the date on which such Company Stock Option expires. All
shares of Common Stock subject to issuance under the Company Stock Plans, upon
issuance in accordance with the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable.
16
(b) All of the issued and
outstanding shares of Common Stock have been duly authorized, validly issued and
are fully paid and nonassessable and are not subject to any preemptive rights or
rights of first refusal created by statute, the Certificate of Incorporation or
Bylaws or any Contract to which the Company is a party or by which it is
bound. Except as set forth in Section 3.2(b) of the
Company Disclosure Letter, pursuant to this Agreement and other than the Top-Up
Option, (i) no subscription, warrant, option, conversion, exchange or other
right (contingent or otherwise) to purchase or otherwise acquire any shares of
capital stock of the Company is authorized or outstanding, (ii) the Company has
no obligation, contract or commitment (contingent or otherwise) to issue any
subscription, warrant, option, conversion, exchange or other such right or to
issue, transfer, deliver, sell or cause to be outstanding, directly or
indirectly, any shares of its capital stock or any evidences of indebtedness of
the Company and (iii) the Company has no obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof. No debt securities of the Company are issued and
outstanding.
(c) Each outstanding share
of capital stock or other equity interest of each Subsidiary of the Company is
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights and is held, directly or indirectly, by the Company or another
Subsidiary of the Company free and clear of all Encumbrances. There
are no subscriptions, options, warrants, rights, calls, contracts or other
commitments, understandings, restrictions or arrangements relating to the
issuance or sale with respect to any shares of capital stock or other ownership
interests of any Subsidiary of the Company, including any right of conversion or
exchange under any outstanding security, instrument or Contract. No
Subsidiary of the Company has any obligation (contingent or otherwise) to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein. Except for each Subsidiary, the Company does not
own or control, directly or indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, joint venture, limited liability
company or similar third party business enterprise or Person, nor does the
Company have the right to acquire, directly or indirectly, any outstanding
capital stock of, or other equity interests in, any other entity or
Person. No Subsidiary of the Company owns any capital stock of the
Company.
17
3.3. Authorization. The
execution, delivery and performance by the Company of this Agreement, the Tender
Agreements and all other agreements contemplated hereby and thereby to be
executed by the Company in connection with the transactions contemplated by this
Agreement, and the consummation by the Company of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
corporate action (other than, in the case of the Merger, (a) the adoption of
this Agreement by the holders of at least a majority of the total outstanding
shares of Common Stock (the “Company Stockholder
Approval”) (if required under the DGCL) and (b) the filing with the
Secretary of State of the State of Delaware the Certificate of Merger as
required by the DGCL). This Agreement, the Tender Agreements and each
other agreement contemplated hereby and thereby to be executed by the Company in
connection with the transactions contemplated by this Agreement have been duly
and validly executed and delivered by the Company and constitute legal, valid
and binding obligations of the Company enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization
and other Laws relating to creditors’ rights and to general principles of
equity. The Board of Directors, at a duly called and held meeting,
has (by all directors present) adopted the Board Actions. In the
event that Section 253 of the DGCL is inapplicable and unavailable to effectuate
the Merger, the only vote of the stockholders required to adopt this Agreement
and approve the transactions contemplated hereby is the Company Stockholder
Approval. For purposes of this Agreement, the “Board Actions” means
the adoption by the Board of Directors, at a duly called and held meeting (by
all directors present), of resolutions: (i) determining that the
terms of the Offer, the Merger and the other transactions contemplated by this
Agreement are fair to and in the best interests of the Company and its
stockholders, and declaring the Agreement advisable; (ii) approving the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, including the Tender Agreements, the Offer
and the Merger; (iii) recommending that the stockholders of the Company accept
the Offer, tender their shares of Common Stock to Merger Sub pursuant to the
Offer and, if applicable, approve and adopt this Agreement and the Merger (the
actions in this clause
(iii), the “Recommendation”);
(iv) rendering the restrictions on business combinations contained in Section
203 of the DGCL inapplicable to the Tender Agreements, the Offer, this Agreement
and the other transactions contemplated hereby, including the Merger; (v)
rendering the Rights Agreement inapplicable to the Tender Agreements, the Offer,
this Agreement and the other transactions contemplated hereby, including the
Merger; (vi) resolving to make the Recommendation to the stockholders of the
Company and directing that, to the extent required by the DGCL, this Agreement
be submitted for adoption by the stockholders of the Company at the Company
Meeting and (vii) electing that the Offer and the Merger, to the extent of the
Board of Directors’ power and authority and to the extent permitted by Law, not
be subject to any “moratorium,” “control share acquisition,” “business
combination,” “fair price” or other form of anti-takeover Laws (collectively,
“Takeover
Laws”) of any jurisdiction that may purport to be applicable to this
Agreement.
18
3.4. Non Contravention; Governmental
Authorities and Consents.
(a) Except as set forth in
Section 3.4(a)
of the Company Disclosure Letter, the execution, delivery and performance by the
Company of this Agreement, the Tender Agreements and the other agreements
contemplated hereby and thereby to be executed by the Company in connection with
the transactions contemplated by this Agreement, and the consummation of the
transactions contemplated hereby and thereby, will not violate any provision of
applicable Law (subject to compliance with the requirements set forth in clauses (i) through
(iii) of Section 3.4(b) and,
in the case of the consummation of the Merger, obtaining the Company Stockholder
Approval (if required under the DGCL)) and will not violate or conflict with,
result in the breach of any of the terms, conditions or provisions of,
constitute a default under, create in any party the right to terminate, enforce
or modify, accelerate payment or create or impose a lien pursuant to, or require
a filing, consent or waiver under, (i) the Certificate of Incorporation or
Bylaws or any Subsidiary Charter Documents (each as amended to date), (ii) any
written or oral contract, subcontract, understanding, bond, option, warranty,
purchase order, sublicense, insurance policy, mortgage, indenture, lease,
license, note, agreement, right of Intellectual Property or other legally
binding instrument or arrangement to which the Company or any of its
Subsidiaries is a party or by which it or any of their respective properties or
assets is bound (each, a “Contract”) or (iii)
any permit, decree, judgment, Order, injunction, statute, rule, regulation or
other restriction applicable to the Company, any of its Subsidiaries or their
respective properties, in the case of clauses (ii) and
(iii) other
than any such violation, conflict, breach, default or right to terminate,
enforce, modify, accelerate payment or create or impose a lien, or requirement
of a filing, consent or waiver that, individually or in the aggregate with all
other such violations, conflicts, breaches, defaults or rights, would not have a
Company Material Adverse Effect. As used in this Agreement, “Order” shall mean any
order, judgment, writ, stipulation, award, injunction, decree, arbitration award
or finding of any Governmental Authority, arbitrator or mediator. As
used in this Agreement, the term “Company Material Adverse
Effect” means any circumstance, event, change or effect that,
individually or in the aggregate with all other circumstances, events, changes
and effects, (a) is or will be materially adverse to the assets, business,
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole, or (b) would prevent or materially impair the
ability of the Company to perform its obligations under this Agreement or
consummate the transactions contemplated hereby; provided, however, that, for
the purposes of clauses (a) and (b), no event, change
or effect to the extent arising out of, resulting from or attributable to the
following shall be deemed to constitute a Company Material Adverse Effect or
shall be taken into account when determining whether a Company Material Adverse
Effect has occurred: (i) general industry, economic, market or
political conditions or the securities, credit or financial markets worldwide;
(ii) any acts of war (whether or not declared), sabotage, terrorism, military
actions or the escalation thereof; (iii) the announcement or pendency of this
Agreement or the transactions contemplated hereby; (iv) any failure, in and of
itself, by the Company to meet any internal or published projections,
predictions, estimates or expectations (whether such projections, predictions,
estimates or expectations were made by the Company or independent third parties)
for any period ending on or after the date of this Agreement; (v) any changes in
GAAP, applicable Law or the interpretation thereof; (vi) the taking of any
specific action at the direction of Parent; (vii) any Proceeding made or brought
by any holder of Common Stock (on the holder’s behalf, or on behalf
of the Company) arising out of or relating to this Agreement, the Offer or the
Merger or any of the transactions contemplated hereby; or (viii) a decline in
the market price, or a change in the trading volume, of the shares of Common
Stock (it being understood that any cause of any such decline or change may be
taken into consideration when determining whether a Company Material Adverse
Effect has occurred); provided further,
however, that
any circumstance, event, change or effect referred to in clauses (i), (ii) or (v) immediately above
shall be taken into account in determining whether a Company Material Adverse
Effect has occurred to the extent (but only to the extent) that such event,
change or effect has a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, compared to other participants in the industries
in which the Company and its Subsidiaries conduct their businesses.
19
(b) No consent, approval,
Order, or authorization of, or registration, qualification, designation,
declaration, or filing with, any Governmental Authority is required on the part
of the Company or any of its Subsidiaries in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) applicable requirements of the
Securities Exchange Act of 1934 (the “Exchange Act”)
(including the filing of the Schedule 14D-9 in connection with the Offer and the
Proxy Statement, if applicable, in connection with the Company Stockholder
Approval), applicable requirements of Antitrust Laws, competition or merger
control consents, and state securities, takeover and “blue sky” Laws, (ii) the
applicable requirements of NYSE AMEX, (iii) the filing with the Secretary of
State of the State of Delaware of the Certificate of Merger as required by the
DGCL, (iv) compliance with the requirements of the New Jersey Industrial Site
Recovery Act, N.J.S.A. 13:1K-6 et seq. (“ISRA”), as further
set forth in Section
5.16, to the extent that ISRA is applicable, and (v) where the failure to
obtain such consents, approvals, Orders, authorizations, registrations,
qualifications, designations, declarations or to make such filings would not
have a Company Material Adverse Effect. As used in this Agreement,
“Antitrust
Laws” means (i) the Sherman Act of 1890, as amended, (ii) the Clayton
Antitrust Act of 1914, as amended, (iii) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or (iv) any other Laws that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade or significant impediments or
lessening of competition or creation or strengthening of a dominant position
through merger or acquisition and any other Law requiring parties to submit a
filing to a Governmental Authority and observe a waiting period under any of the
foregoing Laws. As used in this Agreement, “Governmental
Authority” means any governmental or quasi-governmental body of the
United States, or any other country, including any state, province, county, city
or other political subdivision thereof, or any authority, agency, court,
instrumentality or statutory or regulatory body of any of the
foregoing.
3.5. Compliance.
(a) The Company and each of
its Subsidiaries is and, since January 1, 2007, has been in compliance in all
material respects with all Laws or Orders applicable to the Company or any of
its Subsidiaries or by which the Company or any of its Subsidiaries or any of
their respective businesses or properties is bound, except for such
non-compliance that would not have a Company Material Adverse
Effect. No Governmental Authority has issued any notice or
notification stating that the Company or any of its Subsidiaries is not in
compliance with any Law, except where such non-compliance would not have a
Company Material Adverse Effect.
(b) Except as disclosed in
Section 3.5 of
the Company Disclosure Letter, the Company and each of its Subsidiaries has not,
since January 1, 2007, violated in any material respect any applicable U.S.
Export and Import Laws, or made a voluntary disclosure with respect to any
violation in any material respect of such Laws. The Company and each
of its Subsidiaries has been and is in compliance with all applicable Foreign
Export and Import Laws since January 1, 2007 and the Company and each of its
Subsidiaries has prepared, applied for and obtained all import and export
licenses required by U.S. Export and Import Laws and Foreign Export and Import
Laws for the conduct of its business except where such failure to comply would
not have a Company Material Adverse Effect. The Company and each of
its Subsidiaries have at all times been in compliance with all applicable Laws
relating to trade embargoes and sanctions, and no product, service or financing
provided by it has been, directly or, to the Company’s knowledge, indirectly,
provided to, sold to or performed for or on behalf of any country or Person
against whom the United States maintains economic sanctions or an arms embargo
in violation of any Law or Order. As used in this Agreement, (i)
“Foreign Export and
Import Laws” means the Laws and regulations of a foreign government
regulating exports, imports or re-exports to or from the foreign country,
including the export or re-export of any goods, services or technical data and
(ii) “U.S. Export and
Import Laws” means the Arms Export Control Act (22 U.S.C. 2778), the
International Traffic in Arms Regulations (ITAR) (22 CFR 120-130), the Export
Administration Act of 1979, as amended (50 U.S.C. 2401-2420), the Export
Administration Regulations (EAR) (15 CFR 730-774), the Foreign Assets Control
Regulations (31 CFR Parts 500-598), the Laws and regulations administered by
Customs and Border Protection (19 CFR Parts 1-199) and all other Laws of the
United States and regulations regulating exports, imports or re-exports to or
from the United States, including the export or re-export of goods, services or
technical data from the United States. For the purposes of this
Agreement, the “knowledge” of the Company means the actual knowledge, after
reasonable inquiry, of the persons listed in Section 3.5 of the
Company Disclosure Letter.
20
(c) There is no export or
import related Proceeding pending, or to the knowledge of the Company,
threatened against either the Company or any of its Subsidiaries or any of their
respective officers or directors (in their capacity as an officer or director)
by or before (or, in the case of a threatened matter, that would come before)
any Governmental Authority which, if determined adversely to the Company or any
of its Subsidiaries, would have a Company Material Adverse Effect.
3.6. Litigation. Except
as disclosed in Section 3.6 of the
Company Disclosure Letter, as of the date of this Agreement there is no action,
suit, mediation, arbitration, claim, complaint or proceeding, or any
governmental action, proceeding, inquiry or investigation (collectively, “Proceeding”) pending
or, to the knowledge of the Company, threatened, against the Company, any
Subsidiary of the Company, or any of its or their respective properties or
assets in or before any Governmental Authority or before any mediator or
arbitrator. As of the date of this Agreement, the Company is not
subject to or bound by any Order that would obligate the Company to pay $100,000
or more.
3.7. SEC Filings; Company Financial
Statements.
(a) The Company has filed or
furnished each form, report, statement, schedule, document, certification,
registration statement, prospectus and definitive proxy statement (including all
exhibits, amendments and supplements thereto and all information incorporated by
reference) required to be filed or furnished by the Company with the SEC under
the Securities Act or the Exchange Act (as such filings have been amended,
modified or superceded as of the date of this Agreement, the “Company SEC Filings”)
since January 1, 2006. The Company SEC Filings (i) were prepared in
accordance and 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 and
(ii) did not at the time they were filed (and if amended or superseded by a
filing prior to the date of this Agreement then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of the date of this Agreement, there is no Proceeding
pending or, to the knowledge of the Company, threatened, against the Company or
any Subsidiary of the Company at or before the SEC. The Company has
made available to Parent copies of all comment letters received from the SEC
since January 1, 2006 and relating to the Company SEC Filings, together with all
written responses of the Company thereto provided or made available to the SEC,
in each case to the extent such comment letters and responses are not available
on the SEC’s EDGAR database. As of the date of this Agreement, the
Company has not received any notice from the SEC that any Company SEC Filing is
the subject of any ongoing review by the SEC. No Subsidiary of the
Company is required to file or furnish any reports or other documents with the
SEC.
21
(b) Each set of consolidated
financial statements (including, in each case, any related notes thereto)
contained in the Company SEC Filings (including each of the Company SEC Filings
filed or furnished after the date hereof until the Acceptance Date) (as such
financial statements have been amended, restated, modified or superceded as of
the date of this Agreement, the “Company Financial
Statements”): (i) complied (and will comply) as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto in effect at the time of
such filing; (ii) was prepared (and will be prepared) in accordance with United
States generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods involved (except as may be indicated in
the notes thereto or, in the case of unaudited statements, may not contain
footnotes or as otherwise permitted by the rules and regulations of the SEC) and
(iii) fairly presented (and will fairly present) in all material respects the
consolidated financial position of the Company and its consolidated Subsidiaries
at the respective dates thereof and the consolidated results of the Company’s
and its Subsidiaries’ operations and cash flows for the periods indicated,
subject, in the case of unaudited interim financial statements, to normal
year-end adjustments. Except as reflected in the Company Financial
Statements or as otherwise disclosed in the Company SEC Filings, neither the
Company nor any of its Subsidiaries is a party to any material off-balance sheet
arrangement (as defined in Item 303 of Regulation S-K promulgated under the
Securities Act (“Regulation
S-K”)).
(c) The Company has
established and maintains “disclosure controls and procedures” (as such term is
defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act); such
disclosure controls and procedures are reasonably designed to ensure that all
information (both financial and non-financial) relating to the Company and its
Subsidiaries required to be disclosed in the Company’s reports required to be
filed with or submitted to the SEC pursuant to the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC, and that all such information is accumulated and
communicated to the Company’s management as appropriate to allow timely
decisions regarding required disclosure and to make the certifications of the
principal executive officer and principal financial officer of the Company
required under the Exchange Act with respect to such reports.
(d) The Company maintains a
system of “internal control over financial reporting” (as defined in Rules
13a-15(f) and 15(d)-15(f) of the Exchange Act) as required under Rules 13a-15(a)
and 15d-15(a) under the Exchange Act, and such system is designed to provide
reasonable assurance regarding the reliability of financial reporting and
preparation of financial statements in accordance with GAAP and that
transactions of the Company are being made only in accordance with
authorizations of management and the Board of Directors.
22
(e) Except as set forth in
Section 3.7(e)
of the Company Disclosure Letter, each of the “principal executive officer” of
the Company (as defined in the Sarbanes-Oxley Act of 2002 (“SOX”)) and the
“principal financial officer” of the Company (as defined in SOX) has made all
certifications required by Sections 302 and 906 of SOX and any related rules and
regulations promulgated by the SEC and NYSE AMEX and the rules and regulations
promulgated thereunder with respect to the Company SEC Filings and the
statements contained in any such certifications were true and accurate as of the
date such certifications were made and have not been modified or
withdrawn. Neither the Company nor any of its executive officers has
received notice from any Governmental Authority challenging or questioning the
accuracy, completeness, form or manner of filing of the certifications required
by SOX and made by its principal executive officer and principal financial
officer.
(f) J.H. Cohn LLP, which has
expressed its opinion with respect to the Company Financial Statements,
currently is and has been “independent” (under applicable rules then in effect)
with respect to the Company and each Subsidiary of the Company within the
meaning of Regulation S-X since the appointment of J.H. Cohn LLP in that
capacity. As of the date hereof, the Company has not received any
notice from the SEC or NYSE AMEX asserting any non-compliance with such rules
and regulations.
3.8. No Undisclosed
Liabilities. None of the Company or any Subsidiary of the
Company has any undisclosed liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on a balance sheet or in notes thereto prepared in accordance with
GAAP, except for liabilities or obligations (a) reflected or reserved against in
the Company Financial Statements (including any related notes), (b) incurred in
the ordinary course of business and consistent with practices since the date of
the Latest Balance Sheet, (c) incurred or arising under this Agreement or in
connection with the transactions contemplated hereby, (d) disclosed in
Section 3.8 of
the Company Disclosure Letter and (e) which individually or in the aggregate
would not have a Company Material Adverse Effect. For purposes of
this Agreement, “Latest Balance Sheet”
means the consolidated balance sheet of the Company and its Subsidiaries as of
October 3, 2009, which is included in the Company Form 10-Q.
23
3.9. Absence of
Certain Changes or Events. Since October 3, 2009 until the
date of this Agreement, except as otherwise required by this Agreement and as
set forth in Section
3.9 of the Company Disclosure Letter, there has not been, occurred or
arisen: (a) a Company Material Adverse Effect; (b) any making,
declaration, setting aside or payment of any dividend on, or other distribution
(whether in cash, stock or property) in respect of, any of the Company’s or any
Subsidiary of the Company’s capital stock, or any purchase, redemption or other
acquisition by the Company or any of its Subsidiaries of the Company’s capital
stock or any other securities of the Company or any Subsidiary of the Company,
except for (i) the making, declaration, setting aside or payment of cash
dividends by any wholly owned Subsidiary of the Company to its parent, or (ii)
the acquisition of shares of Common Stock by the Company in satisfaction by
holders of any options or rights granted under the Company Stock Plans or the
applicable exercise price or withholding taxes; (c) any split, combination or
reclassification of any of the Company’s or any Subsidiary of the Company’s
capital stock; (d) any granting by the Company or any Subsidiary of the Company
of any material increase in compensation or fringe benefits to any employee or
director (except for increases in the ordinary course of business consistent
with past practice), or any payment by the Company or any Subsidiary of the
Company of any material bonus (except for bonuses made in the ordinary course of
business consistent with past practice), or any entry by the Company or any
Subsidiary of the Company into any contract (or amendment of an existing
contract) to grant or provide severance, acceleration of vesting, termination
pay or other similar benefits, except in the ordinary course of business
consistent with past practice; (e) any change by the Company in its accounting
methods, principles or practices (including any change in depreciation or
amortization policies or rates or revenue recognition policies), except as
required by concurrent changes in GAAP or by the SEC; (f) any revaluation by the
Company or any Subsidiary of the Company of any of their respective assets,
including writing off notes or accounts receivable or any sale of assets of the
Company or any Subsidiary of the Company other than in the ordinary course of
business consistent with past practice or less than $100,000; (g) any material
change by the Company or any Subsidiary of the Company in its Tax elections or
Tax accounting methods, or any closing agreement, settlement or compromise of
any material claim or assessment, in each case in respect of Taxes, or consent
to any extension or waiver of any statute of limitation period with respect to
any material claim or assessment for Taxes; (h) any notice from NYSE AMEX with
respect to any potential delisting of shares of Common Stock; (i) any sale,
transfer or other disposition outside of the ordinary course of business of any
material property or material assets (whether real, personal or mixed, tangible
or intangible) by the Company or any of its Subsidiaries; and (j) any commitment
or agreement described in the preceding clauses (a) through
(i). Since
the date of the Latest Balance Sheet, except as contemplated by this Agreement,
the Company and each of its Subsidiaries have conducted its respective business
in the ordinary course of business as consistent with past
practices. As used in this Agreement, the term “Encumbrance” means,
with respect to any asset of the Company or any Subsidiary of the Company, any
mortgage, deed of trust, lien, pledge, charge, security interest, or other
security arrangement, collateral assignment, charge, adverse claim of title,
ownership or right to use, restriction or other encumbrance of any kind in
respect of such asset (including any restriction on (a) the voting of any
security or the transfer of any security or other asset, (b) the receipt of any
income derived from any asset, (c) the use of any asset and (d) the possession,
exercise or transfer of any other attribute of ownership of any asset), in each
case except for such restrictions of general application under the Securities
Act and applicable “blue sky” Laws. The terms “encumber” and “encumbering” (whether
or not capitalized) have meanings correlative to the foregoing.
3.10. Taxes. Except
as would not reasonably be expected to have a Company Material Adverse
Effect:
(a) (i)
All Tax Returns which were required to be filed by or with respect to the
Company and each Subsidiary of the Company have been duly and timely filed, (ii)
all such Tax Returns as so filed were true, correct and complete in all
respects, (iii) all Taxes owed by the Company and each Subsidiary of the Company
which are or have become due have been paid in full except for any such Taxes
for which adequate reserves have been established in accordance with GAAP on the
most recent financial statements of the Company, (iv) all Tax withholding and
deposit requirements imposed on or with respect to the Company and each
Subsidiary of the Company have been satisfied, except for any such Taxes for
which adequate reserves have been established in accordance with GAAP on the
most recent financial statements of the Company, and (v) there are no
Encumbrances on any of the assets of the Company or any Subsidiary of the
Company that arose in connection with any failure (or alleged failure) to pay
any Tax, except for any such Taxes that are being contested in good faith or for
which adequate reserves have been established in accordance with GAAP on the
most recent financial statements of the Company.
24
(b) There is no proceeding
now pending or, to the knowledge of the Company, threatened against or with
respect to the Company or any of its Subsidiaries regarding Taxes. No
unresolved written claim has been received by the Company or any of its
Subsidiaries from any authority in a jurisdiction where the Company or a
Subsidiary of the Company, as the case may be, does not file Tax Returns that it
is or may be subject to taxation in that jurisdiction.
(c) There
is not as of the date of this Agreement in force any waiver or agreement for any
extension of time for the assessment or payment of any Tax of or with respect to
the Company or any Subsidiary of the Company.
(d) There
are no outstanding requests for income Tax rulings with any Taxing Authority
submitted by the Company and/or its Subsidiaries that, if issued, would be
binding on or could impact the Company and/or its Subsidiaries after the Closing
Date.
(e) The
Company’s Costa Rican Subsidiary is currently entitled to a tax holiday, which
exempts 100% of the income of this Subsidiary through August 31, 2010 from Costa
Rican Tax and 50% of the income of this Subsidiary through August 31, 2014 from
Costa Rican Tax. Neither the Company nor its Costa Rican Subsidiary
has taken any action to invalidate the Costa Rican Tax holiday.
(f) With the exception of
any affiliated, consolidated, combined or unitary group of which the Company is
the parent, neither the Company nor any Subsidiary of the Company has any
liability for the Taxes of any Person other than the Company or any of its
Subsidiaries under Treas. Reg. § 1.1502-6 (or any similar provision of state,
local or foreign Law), as a transferee or successor, by contract (including any
obligation providing for the allocation or sharing of Taxes with any Person
other than the Company or any of its Subsidiaries) or otherwise.
(g) To the knowledge of the
Company, neither the Company nor any Subsidiary of the Company is a party to any
joint venture, partnership or other arrangement or contract which is treated as
a partnership by a Taxing Authority.
(h) To the knowledge of the
Company, neither the Company nor any Subsidiary of the Company has participated
in an international boycott within the meaning of Section 999 of the
Code.
(i) Neither the Company nor
any Subsidiary of the Company has made an election, nor is required, to treat
any of its assets as owned by another entity pursuant to the provisions of
former Section 168(f) of the Code or as tax-exempt bond financed property or tax
exempt use property within the meaning of Section 168 of the Code.
(j) Neither the Company nor
any Subsidiary of the Company has acquired or owned any assets that directly or
indirectly secure any debt the interest on which is tax exempt under Section
103(a) of the Code.
25
(k) Neither the Company nor
any Subsidiary of the Company has made a consent dividend election under Section
565 of the Code.
(l) Neither
the Company nor any Subsidiary of the Company will be required to include under
Section 481(a) of the Code any item of income in, or exclude any item of
deduction from, taxable income pursuant to an adjustment under Code Section
481(a) for any taxable period (or portion thereof) ending after the Closing Date
as a result of any change in method of accounting for a taxable period ending on
or prior to the Closing Date or other action or transaction effected by the
Company or any of its Subsidiaries in a taxable period ending on or prior to the
Closing Date.
(m) Neither the Company nor
any Subsidiary of the Company has participated (within the meaning of Treasury
Regulations § 1.6011-4(c)(3)) in any “listed transaction” within the meaning of
Treasury Regulations § 1.6011-4(b)(2) (and all predecessor
regulations). To the knowledge of the Company, neither the Company
nor any Subsidiary of the Company has participated (within the meaning of
Treasury Regulations § 1.6011-4(c)(3)) in any “reportable transaction” within
the meaning of Treasury Regulations § 1.6011-4(b)(1)-(4) for any taxable period
for which the Company has not yet filed an income Tax Return.
(n) For purposes of this
Agreement (i) “IRS” means the United States Internal Revenue Service, (ii)
“Person” means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization or other entity, (iii)
“Tax” or “Taxes” means any taxes, assessments, fees and other governmental
charges imposed by any Governmental Authority, including, without limitation,
income, profits, gross receipts, net proceeds, alternative or add-on minimum, ad
valorem, value added, turnover, sales, use, property, personal property
(tangible and intangible), environmental, stamp, leasing, lease, user, excise,
duty, franchise, capital stock, transfer, registration, license, withholding,
social security (or similar), unemployment, disability, payroll, employment,
fuel, excess profits, occupational, premium, windfall profit, severance,
estimated, or similar charge of any kind whatsoever, including any interest,
penalty, or addition thereto, (iv) “Tax Return” means any return, declaration,
report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof, and (v) “Taxing Authority” means, with respect to any Tax, the
Governmental Authority or political subdivision thereof that imposes such Tax,
and the agency (if any) charged with the collection of such Tax for such entity
or subdivision, including any Governmental Authority or quasi-Governmental
Authority or agency that imposes, or is charged with collecting, social security
or similar charges or premiums.
3.11.
Title to
Property and Assets. Except (a) with respect to matters
related to Intellectual Property (which are addressed in Section 3.12) and
real property (which are addressed in Section 3.20) and (b)
as would not have a Company Material Adverse Effect, the Company and each
Subsidiary of the Company has good, valid and marketable title to, or a valid
leasehold interest in, all of the properties and assets owned or leased by them,
in each case, free and clear of all Encumbrances other than (i) liens for Taxes
not yet due and payable or liens for Taxes being contested in good faith by any
appropriate proceedings for which adequate reserves have been established, (ii)
such imperfections of title or liens as do not and will not materially detract
from or interfere with the use of the properties subject thereto or affected
thereby, (iii) liens securing debt reflected in the Company Financial
Statements, (iv) liens of landlords and mechanic’s, workman’s, carrier’s,
warehousemen’s, materialmen’s, repairman’s or other like liens arising in the
ordinary course of business, (v) statutory liens claimed or held by any
Governmental Authority that are related to obligations that are not due or
delinquent, (vi) liens on leases of real property arising from the provisions of
such leases, including any agreements and/or conditions imposed on the issuance
of land use permits, zoning, business licenses, use permits or other
entitlements of various types issued by any Governmental Authority, necessary or
beneficial to the continued use and occupancy of such leased real property or
the continuation of the business conducted by the Company or its Subsidiaries,
(vii) pledges or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance and other types of social
security, (viii) liens incurred in connection with the performance of Contracts
(other than for borrowed money), leases, statutory obligations and other
obligations of a like nature incurred in the ordinary course of business, and
(ix) any other liens or imperfections that are not material in amount, do not
materially interfere with, and are not materially violated by, the consummation
of the Offer, the Merger and the other transactions contemplated by this
Agreement, and do not impair the marketability of, or materially detract from
the value of or materially impair the existing use of, the property affected by
such lien or imperfection (clauses (i) through
(ix)
collectively referred to as “Permitted
Encumbrances”).
26
3.12.
Intellectual
Property.
(a) Section 3.12(a) of
the Company Disclosure Letter sets forth a true and complete list, as of the
date hereof, of the following Intellectual Property of the Company or any
Subsidiary of the Company: (i) all patents and patent applications;
(ii) all registered trademarks, tradenames, service marks, and logos;
(iii) all registered copyrights; and (iv) all Internet domain names; in each
case listing the name of the current owner and showing the jurisdictions in
which each such Intellectual Property right has been issued or registered and
the application or registration number. The foregoing items of
Intellectual Property are hereafter referred to as “Owned Registered
Intellectual Property.” All items of Owned Registered
Intellectual Property are valid and subsisting, except where the failure to be
so valid and subsisting would not have a Company Material Adverse
Effect.
(b) As used in this
Agreement, “Intellectual
Property” will mean any or all of the following and all rights in,
arising out of or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
reexaminations, divisions, renewals, extensions, provisionals, continuations and
continuations in part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data, business methods and customer lists and
other data pertaining to customers and all documentation relating to any of the
foregoing; (iii) all copyrights, copyright registrations and applications
therefor and all other rights corresponding thereto throughout the world; (iv)
all industrial designs and methods and any registrations and applications
therefor throughout the world; (v) all tradenames, trademarks, service marks,
trade dress, logos, URLs (including domain names), and other indicia of source,
sponsorship, affiliation, or approval and the goodwill associated therewith,
including any registrations and applications therefor throughout the world; (vi)
all rights of publicity and privacy; (vii) all moral and economic rights of
authors and inventors, however denominated, throughout the world; (viii) all
software, including data files, source code, object code, application
programming interfaces, architecture, documentation, files, records, schematics,
verilog files, netlists, emulation and simulation reports, test vectors and
hardware development tools, computerized databases and other software-related
specifications and documentation (“Software”); and (ix)
any similar or equivalent rights to any of the foregoing anywhere in the world
including licenses providing any of the above intellectual property to the
Company or any Subsidiary of the Company.
27
(c) Section 3.12(c) of
the Company Disclosure Letter sets forth a true and complete list, as of the
date hereof, of the following (collectively, “Company IP
Agreements”): (i) all licenses, sublicenses and other
Contracts to which the Company or any Subsidiary of the Company is a party and
pursuant to which any Person is authorized to use any Intellectual Property of
the Company that is material to the Company or its Subsidiaries, and (ii) all
licenses, sublicenses and other Contracts to which the Company or any Subsidiary
of the Company is a party and pursuant to which the Company or any Subsidiary of
the Company is authorized to use any third party Intellectual Property that is
material to the Company or its Subsidiaries. Neither the Company nor
any of its Subsidiaries has granted any rights exclusively under any
Intellectual Property of the Company that are necessary for the conduct of the
business of the Company as currently conducted, or for the conduct of the
business of its Subsidiaries as currently conducted.
(d) To the Company’s
knowledge, the Company or a Subsidiary of the Company owns, is licensed or
otherwise possesses rights to use or exploit all Intellectual Property necessary
to conduct the business of the Company and each Subsidiary of the Company as
presently conducted. The Company and each of the Subsidiaries of the
Company has not licensed rights to, transferred ownership to or entered into
joint ownership regarding any of its Intellectual Property necessary for the
conduct of the business of the Company, or for the conduct of the business of
its Subsidiaries. All Intellectual Property of the Company and each
Subsidiary of the Company, including the Owned Registered Intellectual Property,
is free and clear of all Encumbrances, other than Permitted
Encumbrances.
(e) To the Company’s
knowledge, there is no, and there has not been since January 1, 2007, any
unauthorized use, disclosure, infringement or misappropriation, or other
violation, or any written allegation made thereof, of any Intellectual Property
rights of the Company or any Subsidiary of the Company by any Person, including
any employee or former employee of the Company or any Subsidiary of the
Company. The Company and each Subsidiary of the Company has not
entered into any Contract or other arrangement with any Person to limit the use
or exploitation of the Intellectual Property of the Company or any Subsidiary of
the Company.
(f) Neither the Company nor
any Subsidiary of the Company is or, as a result of the execution, delivery or
performance of this Agreement or the consummation of any transaction
contemplated by this Agreement, will be in breach of, any license, sublicense or
other Contract or agreement relating to the Intellectual Property of the
Company, except as would not have a Company Material Adverse
Effect. Except as set forth in Section 3.12(f) of
the Company Disclosure Letter, no current or former stockholder, partner,
director, officer, or employee of either Company will, after giving effect to
each of the transactions contemplated by this Agreement, own or retain any
rights in or to, have the right to receive any royalty or other payment with
respect to, any of the Intellectual Property used or owned by the Company or any
of its Subsidiaries.
28
(g) Neither the Company nor
any Subsidiary of the Company (i) has been sued in any action, suit or
proceeding that involves, nor has it otherwise been notified in writing of, an
unresolved claim of infringement or other violation of any of its Intellectual
Property or Intellectual Property right of any third party, (ii) has knowledge
that the manufacturing, marketing, licensing or sale of its products or service
offerings or the conduct of its business infringes, or is alleged in writing to
infringe, any valid Intellectual Property right of any third party or (iii) has
brought any action, suit or proceeding for infringement or other violation of
Intellectual Property of the Company or breach of any license or Contract
involving Intellectual Property against any third party.
(h) The Company and each of
its Subsidiaries have secured valid written assignments for good consideration
from all Persons, including former and current employees, consultants and
contractors, who contributed to the creation or development of the Intellectual
Property of the Company, to the extent such contributions are not already owned
by the Company by operation of Law. Section 3.12(h) of
the Company Disclosure Letter sets forth a true and complete list, as of the
date hereof of (i) the names of such Persons who contributed to the creation or
development of the Intellectual Property of the Company, (ii) each such Persons’
responsibilities with respect to their work for the Company, and (iii) a list
that identifies the title and execution date of each Intellectual Property
assignment or Intellectual Property related agreement executed by such Persons
with the Company.
(i) Except
as set forth in Section 3.12(i) of
the Company Disclosure Letter, no government funding, facilities or resources of
a university, college, other educational institution or research center or
funding from third parties was used in the development of the Intellectual
Property owned by the Company or any of its Subsidiaries, and no Governmental
Authority, university, college, other educational institution or research center
has any claim or right in or to such Intellectual Property.
(j) The Company and its
Subsidiaries have used reasonable best efforts to protect and preserve the
confidentiality of all confidential information or trade secret information that
comprises the Intellectual Property owned or used by the Company or any of its
Subsidiaries (collectively, “Confidential
Information”).
(k) Section 3.12(k) of
the Company Disclosure Letter sets forth a list of all Software owned by the
Company or one of its Subsidiaries necessary for the conduct of the business of
the Company, or for the conduct of the business of its
Subsidiaries. Except as would not have a Company Material Adverse
Effect, the Company and each of the Subsidiaries of the Company has not used
Open Source Software in such a way that creates, or purports to create,
obligations for the Company with respect to any Intellectual Property of the
Company or one of its Subsidiaries or grants, or purports to grant, to any third
party, any rights or immunities related to any such Intellectual Property,
except with respect to Software that the Company deliberately and publicly
released to the open source community in a manner that does not preclude the
Company’s continued use and exploitation of such Software. To the
Company’s knowledge, the Company and each of its Subsidiaries has fully complied
with all terms and conditions applicable to any Open Source Software used by
Company or any Subsidiary of the Company except where such failure to comply
would not have a Company Material Adverse Effect. “Open Source Software”
means any Software that is subject to the terms of any license agreement in a
manner that requires that such Software, or other Software incorporated into,
derived from or distributed with such Software, be (i) disclosed or distributed
in source code form; (ii) licensed for the purpose of making derivative works;
or (iii) redistributable at no charge.
29
(l) The Company and each of
its Subsidiaries own, lease or license all computer systems that are necessary
for the operations of their business as presently conducted. The
Company and the Subsidiaries of the Company have each taken commercially
reasonable steps to provide for the back up and recovery of data and information
and have reasonable disaster recovery plans, procedures and facilities and, as
applicable, has taken reasonable steps to implement such plans and
procedures. The Company and each of the Subsidiaries of the Company
has taken reasonable actions to protect the integrity and security of its
computer systems and the Software information stored thereon from unauthorized
use, access, or modification by third parties.
(m) The Company and each
Subsidiary of the Company has complied with all Contracts and applicable Laws
regarding personally identifiable information, including any data privacy laws,
consumer privacy laws and Contracts with third parties, in every jurisdiction
where the Company and each Subsidiary of the Company operates its business,
except as would not have a Company Material Adverse Effect.
3.13.
Insurance. The
Company and each Subsidiary of the Company maintains valid bonds or policies of
insurance with respect to its assets, properties and business. Section 3.13 of the
Company Disclosure Letter sets forth a list of all such bonds or policies. As of
the date of this Agreement, with respect to each such insurance policy, the
policy is in full force and effect.
3.14. Contracts.
(a) For purposes of this
Agreement, “Material
Contract” means the following to which, as of the date hereof, the
Company or any of its Subsidiaries is a party or any of their respective assets
or properties are bound (excluding any Contract that has expired or terminated
in accordance with its terms and under which no party has any continuing rights
or obligations):
(i) any “material contract”
(as such term is defined in Item 601(b)(10) of Regulation S-K promulgated under
the Securities Act), whether or not filed by the Company with the
SEC;
(ii) any employment,
independent contractor or consulting Contract (in each case with respect to
which the Company has continuing obligations as of the date hereof) with any
current (x) executive officer of the Company or any of its Subsidiaries, (y)
member of the Board of Directors or (z) employee, independent contractor who is
a natural person or consultant who is a natural person of the Company or any of
its Subsidiaries, in each case providing for an annual base compensation of more
than $75,000;
(iii) any Contract providing
for indemnification or any guaranty by the Company or any Subsidiary thereof
that is material to the Company and its Subsidiaries, taken as a whole (in each
case with respect to which the Company has continuing obligations as of the date
hereof), other than (x) a guaranty by the Company or any of its Subsidiaries of
any of the obligations of the Company or another Subsidiary of the Company that
was entered into in the ordinary course of business, and (y) any Contract
providing for indemnification of customers or other Persons pursuant to
Contracts entered into in the ordinary course of business;
30
(iv) any Contract containing
any covenant applicable to the Company or any of its Subsidiaries (or, at any
time after the consummation of the Offer, the Merger or the other transactions
contemplated by this Agreement, that would by its terms be applicable to Parent
or any of its Subsidiaries) prohibiting or otherwise materially limiting the
Company’s or any such Subsidiary’s right to engage or compete in any line of
business, to operate in any geographic area or distribution channel, other than
any such Contract that is terminable by the Company or the applicable Subsidiary
of the Company without material liability to the Company and its Subsidiaries,
taken as a whole;
(v) any Contract relating to
the disposition or acquisition by the Company or any of its Subsidiaries after
the date of this Agreement of assets with a fair market value of more than
$100,000, other than any such Contract entered into in the ordinary course of
business;
(vi) any business or asset
acquisition Contract pursuant to which the Company or any of its Subsidiaries
has “earn-out” or other contingent purchase price payment obligations, in each
case, that have not been paid prior to the date hereof and that would reasonably
be expected to result in payments by the Company or the applicable Subsidiary
after the date hereof of more than $100,000;
(vii) any joint marketing or
joint development Contract under which the Company or any of its Subsidiaries
have continuing minimum payment obligations or costs of more than $100,000 per
year that may not be canceled without material liability upon notice of 90 days
or less;
(viii) any Contract with a
customer, which represents at least 10% of the revenues generated by the Company
and its Subsidiaries in the fiscal year ended January 3, 2009 with respect to
such customer and its controlled affiliates;
(ix) any Contract that
contains any provision that requires the purchase of all of the Company’s or any
of its Subsidiaries’ requirements for a given product or service from a given
third party, which product or service is material to the Company and its
Subsidiaries, taken as a whole;
(x) any Contract that (A)
contains most favored customer pricing provisions which are material to the
Company and its Subsidiaries, taken as a whole, or (B) grants any exclusive
rights or rights of first refusal which are material to the Company and its
Subsidiaries, taken as a whole;
(xi) any Contract
establishing a partnership, joint venture or similar third party business
enterprise in which the Company or any of its Subsidiaries either (A) has an
equity interest or the right to acquire an equity interest or (B) where the
Company or any of its Subsidiaries has a capital commitment or other obligation
under such Contract that could reasonably be expected to require the
contribution of more than $250,000 to such partnership, joint venture or similar
third party business enterprise;
31
(xii) any mortgages,
indentures, guarantees, loans or credit agreements, security agreements or other
Contracts, in each case relating to indebtedness for borrowed money, whether as
borrower or lender, and whether secured or unsecured, of more than $250,000,
other than (x) accounts receivables and payables and (y) loans to direct or
indirect wholly owned Subsidiaries of the Company in the ordinary course of
business;
(xiii) any settlement
agreement entered into since January 1, 2009 in respect of any action, suit,
claim, charge, complaint or proceeding, any governmental action, inquiry or
investigation, which requires a payment of more than $100,000; or
(xiv) all Contracts that
require a consent to a change of control or to an assignment by operation of
Law, as the case may be, prior to the Effective Time, which Contracts are
material to the Company and its Subsidiaries, taken as a whole.
(b) Except as would not have
a Company Material Adverse Effect, as of the date hereof, neither the Company
nor any Company Subsidiary, nor to the knowledge of the Company any other party
to a Material Contract, has received notice of, nor is actually in, breach,
violation or default under, any of the terms or conditions of any Material
Contract in such a manner as would permit any other party to cancel or terminate
any such Material Contract, or would permit any other party to seek damages or
other remedies (for any or all of such breaches, violations or defaults, in the
aggregate). Except as would not have a Company Material Adverse
Effect, the Company or the applicable Company Subsidiary has performed all of
the obligations to be performed by it and is entitled to all benefits under, and
is not alleged to be in default of, any Material Contract. Except as
would not have a Material Adverse Effect, each of the Material Contracts is in
full force and effect and has not been amended in any material
respect.
(c) The Company has
furnished or made available to Parent true and correct copies of all Material
Contracts in effect as of the date hereof.
(d) Except as would not have
a Company Material Adverse Effect, with respect to each Government Contract or
outstanding Proposal to which the Company or any of its Subsidiaries is a party
as of the date hereof: (i) to the knowledge of the Company, the
Company and each of its Subsidiaries has complied with all terms and conditions
of such Government Contracts or Proposals; (ii) to the knowledge of the Company,
all representations and certifications made by the Company and its Subsidiaries
with respect to such Government Contracts or Proposals were accurate, current
and complete as of their effective dates, and the Company and its Subsidiaries
have complied with all such representations and certifications; (iii) to the
knowledge of the Company, the Company and each of its Subsidiaries has complied
with (A) all applicable requirements of Law or Order in relation to such
Government Contracts or Proposals and (B) any Contract with the U.S. Government;
(iv) no Governmental Authority nor any prime contractor on a Government Contract
to which the Company is a subcontractor has notified the Company or any of its
Subsidiaries, that the Company or any of its Subsidiaries has breached or
violated any statute, rule or regulation, certification or other Law in
connection with any Government Contract other than any of the foregoing that
have been resolved prior to the date hereof; (v) no termination for convenience,
termination for default, cure notice or show cause notice has been issued and
not resolved or cured; (vi) no cost incurred by the Company or any of its
Subsidiaries has been disallowed, other than those which have been resolved; and
(vii) no money due to the Company or any of its Subsidiaries has been withheld
or set off and not resolved. As used in this Agreement, (x) “Government Contract”
means any Contract, however denominated, including any procurement, task order,
work order, purchase order, job order, subcontract, Contractor Team Arrangement
(as defined in FAR 9.601), co-operative agreement or other transaction with the
U.S. Government or any other applicable foreign Governmental Authority at the
prime or subcontract level (at any tier) under a federal prime Contract, entered
into by the Company or any of its Subsidiaries for the provision of goods,
services or construction and (y) “Proposal” means any
proposal, bid, request for equitable adjustment, contract change proposal,
proposal for modification or indirect cost submission on a Government
Contract.
32
(e) To the knowledge of the
Company and except as would not result in a Company Material Adverse Effect, as
of the date hereof, (i) neither the Company nor any of its Subsidiaries nor any
of the directors or executive officers of the Company is (or within the last
three years has been) under administrative, civil or criminal investigation or
indictment or audit (other than routine audits) or suspension or debarment with
respect to any alleged misstatement or omission arising under or relating to any
Government Contract or Proposal; (ii) neither the Company nor any of its
Subsidiaries has made a Voluntary Disclosure pursuant to the U.S. Department of
Defense Fraud Voluntary Disclosure Program (or comparable disclosure to any
foreign Governmental Authority) or any mandatory disclosure pursuant to FAR
Subpart 3.1 and/or FAR 52.203-13 with respect to any alleged misstatement or
omission arising under or relating to any Government Contract or Proposal that
has led or would be reasonably expected to lead to any of the consequences set
forth in clause
(i) immediately above or any other damage, penalty, assessment,
recoupment of payment or disallowance of cost; (iii) no unresolved qui tam actions have been
brought against the Company or any of its Subsidiaries under the Civil False
Claims Act; (iv) there are no disputes involving the Company or any Subsidiary
of the Company related to a Government Contract; (v) there are no outstanding
claims or requests for equitable adjustment by the Company or any Subsidiary of
the Company relating to a Government Contract; (vi) there are no outstanding
claims or requests for equitable adjustment submitted by a subcontractor to the
Company under a Government Contract; (vii) no improper or false claims have been
made, whether certified or not, under the Contract Disputes Act of 1978 as
amended (41 U.S.C. §605 et
al.); and (viii) there is no violation of the Anti-Kickback Act (41
U.S.C. §51 et seq.) or
Covenant Against Contingent Fees (FAR Subpart 3.4).
3.15.
Permits;
Compliance.
(a) The Company and each
Subsidiary of the Company has all material federal, state, local or foreign
authorizations, licenses and permits and any similar authority necessary for the
conduct of its business as presently conducted, except for any authorizations,
licenses, permits or any similar authorities for which the failure to obtain or
hold would not prevent or materially delay consummation of the Offer or the
Merger or would not have a Company Material Adverse Effect. Each such
authorization, license, permit and similar authority is valid and in full force
and effect and neither the Company nor any Subsidiary of the Company
is in violation of or in default under any of such authorization, license,
permit or other similar authorities, except for such violation or defaults which
would not prevent or materially delay consummation of the Offer or the Merger or
would not have a Company Material Adverse Effect.
33
(b) To the knowledge of the
Company, no executive officer or director of the Company or any Subsidiary of
the Company is in violation in any material respect of any term of any Material
Contract or any material covenant (with the Company) relating to employment,
patents, proprietary information disclosure, noncompetition or
nonsolicitation.
3.16.
Compliance with the U.S.
Foreign Corrupt Practices Act and Other Applicable Anti-Corruption
Laws.
(a) Except as would not have
a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries has, directly or indirectly, (i) made or authorized any
contribution, payment or gift of funds, property or anything of value to any
official, employee or agent of any Governmental Authority of any jurisdiction or
(ii) made any contribution to any candidate for public office or political
party, in either case, where such contribution, payment or gift was, is or would
be prohibited or improper under any applicable anti-bribery, anti-corruption or
similar Law of any jurisdiction, as in effect on or prior to the Effective Time
applicable to the Company or any of its Subsidiaries or their respective
operations.
(b) Except as would not have
a Company Material Adverse Effect, and without limiting the generality of the
foregoing, neither the Company, any Subsidiary of the Company nor, to the
knowledge of the Company, any of its, or its Subsidiaries’, affiliates or
Representatives, is aware of or has taken any action, directly or indirectly,
that would result in a violation in any material respect by such Persons of the
U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including,
making use of the mails or any means or instrumentality of interstate commerce
corruptly in furtherance of any offer, payment, promise to pay or authorization
of the payment of any money, or other property gift, promise to give, or
authorization of the giving of anything of value to any “foreign official” (as
such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the
FCPA. The Company, each Subsidiary of the Company and, to the
knowledge of the Company, its affiliates and Representatives have at all times
conducted their respective businesses in compliance in all material respects
with the FCPA (including the record keeping provisions of the FCPA) and
currently have in place policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance in all
material respects therewith.
(c) The operations of the
Company and each of its Subsidiaries are in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority (collectively, the “Money Laundering
Laws”) and no Proceeding by or before any court or other Governmental
Authority involving the Company or any Company Subsidiary with respect to the
Money Laundering Laws is pending or, to the knowledge of the Company, threatened
which if adversely determined would have a Company Material Adverse
Effect.
34
(d) Neither the Company nor
any of its Subsidiaries nor, to the knowledge of the Company, any affiliates or
Representatives of the Company or any Subsidiary of the Company is in violation
in any material respect of any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department.
3.17.
Employment
Matters.
(a) Neither the Company nor
any Subsidiary of the Company has agreed to recognize any labor union or similar
organization, nor has any labor union or similar organization been certified as
the exclusive bargaining representative of any of its or their
employees. Neither the Company nor any Subsidiary of the Company is a
party to or bound by a collective bargaining or a similar agreement or
understanding with a labor union or similar organization, and no such agreement
or understanding is being negotiated. As of the date hereof, to the
knowledge of the Company, none of the employees of the Company is represented by
any labor union or similar organization, and there has not been and there is not
now pending a labor strike, slowdown, lockout, stoppage or other labor dispute
or proceeding with respect to the Company or any Subsidiary of the Company
(including any organizational campaign or representation petition) and no labor
strike slowdown, lockout, stoppage or other labor dispute or proceeding
(including an organizational campaign or representation petition) has been
threatened. Neither the Company, any Subsidiary of the Company, nor
to the knowledge of the Company, any employee or representative of the Company,
has committed or engaged in any unfair labor practice in connection with the
conduct of the business of the Company, except as would not have a Company
Material Adverse Effect.
(b) To the knowledge of the
Company, as of the date hereof, no officer, director, group of employees or any
individual listed in Section 3.17(b) of
the Company Disclosure Letter has any plans to terminate his, her or their
employment with the Company or Subsidiary of the Company. To the
knowledge of the Company, no employee of the Company or any Subsidiary of the
Company is in violation in any material respect of any confidentiality agreement
or technology assignment agreement with a prior employer of such
employee.
(c) Except as would not have
a Company Material Adverse Effect, there is no action, suit, claim, charge,
complaint, grievance or proceeding, or any governmental action, inquiry or
investigation against the Company or any Subsidiary of the Company, or
settlement thereof, pending or, to the knowledge of the Company, threatened or
reasonably anticipated relating to any labor or employment matters, including
those for (i) wages, salaries, commissions, bonuses, vacation pay, severance or
termination pay, sick pay or other compensation; (ii) employee benefits; (iii)
alleged unlawful, unfair, wrongful or discriminatory employment or labor
practices; (iv) alleged breach of contract or other claim arising under a
collective bargaining agreement, other labor contract or individual agreement,
or any other employment covenant whether express or implied; (v) alleged
violation of any statute, ordinance, contract or regulation relating to minimum
wages or maximum hours of work; (vi) alleged violation of occupational safety
and health standards; or (vii) alleged violation of plant closing and mass
layoff, immigration, workers’ compensation, disability, unemployment
compensation, whistleblower Laws, or other labor or employment Laws; and except
as would not have a Company Material Adverse Effect, the Company and each
Subsidiary of the Company is in compliance with all applicable Laws, rules and
regulations relating to labor and employment, including those Laws, rules and
regulations relating to the above-listed matters. All employees of
the Company and each Subsidiary of the Company are lawfully authorized to work
in the jurisdiction in which they are employed according to applicable
immigration Laws, and the Company and each Subsidiary of the Company are in
compliance with all applicable Laws relating to the documentation and
recordkeeping of their employees’ work authorization status, except as would not
have a Material Adverse Effect.
35
3.18. Environmental
Matters.
(a) Except as would not have
a Company Material Adverse Effect or except as set forth in Section 3.18(a) of
the Company Disclosure Letter, each of the Company, each Subsidiary of the
Company and, to the knowledge of the Company, each of their respective
predecessors, if any, has complied and is in compliance with all Environmental
Laws, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand or notice has been made, given, filed or commenced by
any Person, including any Governmental Authority, nor has any such making,
giving, filing, or commencement been threatened against it alleging any failure
to comply with the Environmental Laws, or seeking contribution towards, or
participation in, any remediation of any contamination of any property or thing
with Hazardous Materials.
(b) Neither the Company, any
Subsidiary of the Company, nor, to the knowledge of the Company, any of their
respective predecessors, has engaged or is engaging in any operations,
activities or conduct other than as set forth under Section 3.18(a)
of this Agreement so as to create or otherwise contribute to the
existence of a physical condition on or under any property that could give rise
to any investigative, remedial or other obligation under any Environmental Law,
or that could result in any kind of liability to the Company or any third party
claiming damage to Person or property as a result of such physical
condition. The Company has not received any written notice, report or
information regarding any actual or potential liabilities arising under any
Environmental Laws. To the Company’s knowledge, the Company has not
received written notice that it is a potentially responsible party under CERCLA
or any similar Law.
(c) To the Company’s
knowledge, the Company has provided or made available to Parent all internal and
external environmental audits and studies in its possession or control relating
to the Company and each Subsidiary and all correspondence on substantial
environmental matters relating to the Company and each Subsidiary.
(d) For purposes of this
Agreement, “Environmental Laws”
means all federal, state, and local Laws, regulations, ordinances, codes, rules,
permits, decisions, orders, or decrees relating or pertaining to the public
health and safety or the environment, or otherwise governing the generation,
use, handling, collection, treatment, storage, transportation, recovery,
recycling, removal, remediation, reporting, discharge, or disposal of air,
water, groundwater or Hazardous Materials and intended to address environmental
concerns, including but not limited to (i) the Solid Waste Disposal Act, 42
U.S.C. 6901 et seq., as
amended (“RCRA”), (ii) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
§9601 et seq., as
amended (“CERCLA”), (iii) the
Clean Water Act, 33 U.S.C. §1251 et seq., as amended (“CWA”), (iv) the Clean
Air Act, 42 U.S.C. §7401 et
seq., as amended (“CAA”), (v) the Toxic
Substances Control Act, 15 U.S.C. §2601 et seq., as amended (“TSCA”), (vi) the
Emergency Planning and Community Right To Know Act, 15 U.S.C. §2601 et seq., as amended (“EPCRKA”), (vii) the
Occupational Safety and Health Act, 29 U.S.C. §651 et seq., as amended, and
(viii) state and local counterparts to the Environmental Laws identified in (i)
– (vii) of this paragraph.
36
(e) For purposes of this
Agreement, “Hazardous
Materials” means, without limitation, (i) any “hazardous wastes” as
defined under RCRA, (ii) any “hazardous substances” as defined under CERCLA,
(iii) any toxic pollutants as defined under the CWA, (iv) any hazardous air
pollutants as defined under the CAA, (v) any hazardous chemicals as defined
under TSCA, (vi) any hazardous substances as defined under EPCRKA, (vii)
asbestos, (viii) polychlorinated biphenyls, (ix) petroleum or petroleum
products, (x) underground storage tanks, whether empty, filled or partially
filled with any substance, (xi) any substance the presence of which on the
property in question is prohibited under any Environmental Law, and (xii) any
other substance which under any Environmental Law requires special handling or
notification of or reporting to any Governmental Authority in its generation,
use, handling, collection, treatment, storage, recycling, treatment,
transportation, recovery, removal, discharge, or disposal.
3.19. Employee
Benefits.
(a) Section 3.19(a) of
the Company Disclosure Letter includes a list of each Current Employee Benefit
Plan.
(b) The following documents
have been made available to Parent: (i) true, correct and complete
copies of each Current Employee Benefit Plan (or, in the case of any unwritten
Current Employee Benefit Plan, a written summary of the terms of such Plan) and
related trusts (including tax-exempt trusts, secular trusts, VEBAs and “rabbi
trusts”), if applicable, including all amendments thereto, and all associated
contracts (including insurance contracts, HMO agreements, recordkeeping
contracts, trustee contracts and third party administrator contracts), (ii) the
three most recently filed Forms 5500 (and any associated financials, schedules
and actuarial reports) and the summary plan description for each Current
Employee Benefit Plan required to file such report or description, and (iii) the
most recent favorable determination letter or opinion letter from the IRS, or,
if currently outstanding, each filing to obtain such letter, with respect to
each Current Employee Benefit Plan intended to be qualified within the meaning
of Section 401(a) of the Code (“Qualified Employee Benefit
Plan”).
(c) Neither the Company nor
any Commonly Controlled Entity (defined below) sponsors, maintains, contributes
to or has an obligation to contribute to, and has not at any time within six
years prior to the Effective Time sponsored, maintained, contributed to, or had
an obligation to contribute to (i) any employee benefit plan within the meaning
of Section 3(3) of ERISA that is or was subject to Title IV of ERISA, Section
302 of ERISA or Section 412 of the Code or (ii) any multiemployer plan within
the meaning of Section 3(37) of ERISA. In addition, except as would
not have a Company Material Adverse Effect, neither the Company nor any
Subsidiary has any liability with respect to any Employee Benefit Plan
sponsored, maintained or contributed to by any Commonly Controlled Entity that
is not a Subsidiary.
37
(d) Except as would not have
a Company Material Adverse Effect, or as otherwise set forth in Section 3.19(d) of
the Company Disclosure Letter, with respect to the Current Employee Benefit
Plans:
(i) Each of the Current
Employee Benefit Plans has been operated and administered in all respects with
applicable Law, including, but not limited to, ERISA, the Code and in each case
the regulations thereunder;
(ii) Each
Qualified Employee Benefit Plan has received a favorable determination letter or
opinion from the Internal Revenue Service, or has pending an application for
such determination from the Internal Revenue Service with respect to those
provisions for which the remedial amendment period under Section 401(b) of the
Code has not expired, and, to the knowledge of the Company, there is no reason
why any such determination letter would be reasonably expected to be
revoked;
(iii) No
Current Employee Benefit Plan provides benefits, including, without limitation,
death or medical benefits (whether or not insured), with respect to current or
former employees or directors of the Company or any Commonly Controlled Entity
beyond their retirement or other termination of service, other than (A) coverage
mandated by applicable law, (B) death benefits or retirement benefits under any
“employee pension plan” (as such term is defined in Section 3(2) of ERISA) or
(C) benefits required to be provided to the Company’s President and Chief
Executive Officer pursuant to his Employment Agreement dated April 11,
2006;
(iv) All
contributions required to be made to each Current Employee Benefit Plan pursuant
to its terms, the Code or any other applicable Law have been timely
made;
(v) No
act, omission or transaction has occurred that would reasonably be expected to
result, directly or indirectly, through its own liability, indemnification or
otherwise, in imposition on the Company or, to the Company’s Knowledge, any
fiduciary of any Current Employee Benefit Plan of (A) any fiduciary duty
liability damages under Section 409 of ERISA, (B) any liability under Section
502 of ERISA or (C) any excise tax imposed pursuant to Chapter 43 of Subtitle D
of the Code;
(vi) There
are no pending, threatened or anticipated claims (other than routine claims for
benefits) by, on behalf of or against any of the Current Employee Benefit Plans
or any trusts related thereto which could reasonably be expected to result in
any liability of the Company and there is no matter pending (other than routine
qualification determination or opinion letter filings) with respect to any
Current Employee Benefit Plan before the IRS, the Department of Labor, the PBGC,
or other governmental authority; and
(vii) Each
Current Employee Benefit Plan that is a “non-qualified deferred compensation
plan” within the meaning of Section 409A of the Code (A) meets the
requirements of Section 409A of the Code as to the form of the plan and (B) has
been operated in compliance with the requirements of Section 409A of the Code
and the regulations thereunder.
38
(e) Except as set forth in
Section 3.19(e) of the Company Disclosure Letter, neither the execution of this
Agreement nor the consummation of the transactions contemplated hereunder
(either alone or in connection with any other event) will result in any payments
of money or other property, acceleration of benefits, or provisions of other
rights have or will be made hereunder, under any agreement contemplated herein,
or under the Employee Benefit Plans that would result, individually or in the
aggregate, in imposition of the sanctions imposed under Sections 280G and 4999
of the Code, whether or not some other subsequent action or event would be
required to cause such payment, acceleration, or provision to be
triggered.
(f) With
respect to any Foreign Plan, if intended to qualify for special tax treatment,
each such Foreign Plan meets the requirements for such treatment in all material
respects.
(g) For purposes of this
Agreement (i) “Commonly Controlled
Entity” shall mean any corporation, trade, business, or entity under
common control with the Company within the meaning of Section 414(b), (c), (m),
or (o) of the Code or Section 4001 of ERISA; (ii) “Current Employee Benefit
Plan” shall mean each Employee Benefit Plan that is sponsored,
maintained, or contributed to by the Company or any Subsidiary for the benefit
of the employees, former employees, independent contractors, or agents of the
Company or any Subsidiary or with respect to which the Company or any Subsidiary
has any obligations or liability (contingent, secondary or otherwise); (iii)
“Employee Benefit
Plan” shall mean (A) each employee benefit plan within the meaning of
Section 3(3) of ERISA (including, but not limited to, employee benefit plans,
such as foreign plans, which are not subject to the provisions of ERISA) and (B)
each employment, consulting, bonus, incentive or deferred compensation,
vacation, stock option or other equity-based, severance, termination, retention,
change of control, profit-sharing, fringe benefit or other similar plan,
program, agreement or commitment; (iv) “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended; (v) “PBGC” shall mean the
Pension Benefit Guaranty Corporation; and (vi) “Foreign Plan” means a
Current Employee Benefit Plan maintained primarily for the benefit of employees
of the Company or any Subsidiary located outside the United States of America;
provided, that
Foreign Plan shall not include any employee benefit plan or arrangement required
to be maintained or contributed to pursuant to applicable Law.
(h) The Parties acknowledge
that certain payments may be made and certain benefits may be granted according
to employment compensation, severance and other employee benefit plans of the
Company, including the Current Employee Benefit Plans (collectively, the “Company
Arrangements”), to certain stockholders of the Company and holders of
other securities of Company (the “Covered
Securityholders”). The Company hereby represents and warrants
that all such amounts payable under the Company Arrangements (i) are being paid
or granted as compensation for past services performed, future services to be
performed, or future services to be refrained from performing by the Covered
Securityholders (and matters incidental thereto) and (ii) are not calculated
based on the number of shares tendered or to be tendered into the Offer by the
applicable Covered Securityholder. The Company also hereby represents
and warrants that the Board of Directors or the Compensation Committee thereof
(the “Company
Compensation Committee”), as applicable, (i) at a meeting duly called and
held at which all members of the Company Compensation Committee were present,
duly adopted resolutions approving as an “employment compensation, severance or
other employee benefit arrangement” within the meaning of Rule 14d-10(d)(1)
under the Exchange Act (an “Employment Compensation
Arrangement”) (A) each such Arrangement presented to the Company
Compensation Committee on or prior to the date hereof, (B) the treatment of the
Company Equity Awards in accordance with the terms set forth in this Agreement
and (C) the terms of Sections 5.9 and
5.10, which
resolutions have not been rescinded, modified or withdrawn in any way, and (ii)
has taken all other actions necessary to satisfy the requirements of the
non-exclusive safe harbor under Rule 14d-10(d)(2) under the Exchange Act with
respect to the foregoing arrangements.
39
(i) Notwithstanding
the foregoing or anything in this Agreement to the contrary, for the purpose of
clarity, the Parties agree and acknowledge that the Company is not providing any
representations or warranties with respect to the matters set forth in Section
2.13(a).
3.20.
Real
Property.
(a) Except as would not have
a Company Material Adverse Effect or as set forth in Section 3.20(a) of
the Company Disclosure Letter, the Company or one or more of its Subsidiaries
has good and marketable fee simple title to all real property owned by the
Company or any of its Subsidiaries free and clear of any Encumbrances other than
Permitted Encumbrances. Section 3.20(a) of
the Company Disclosure Letter contains a complete and correct list, as of the
date hereof, of all real property owned by the Company or any of its
Subsidiaries, and sets forth for each such parcel of real property the location
and street address.
(b) Except as would not have
a Company Material Adverse Effect, the Company and each of its Subsidiaries has
good leasehold title to the real property leased or subleased by any of them
free and clear of any Encumbrances other than Permitted
Encumbrances. Section 3.20(b) of
the Company Disclosure Letter contains a complete and correct list, as of the
date hereof, of the real property leased or subleased by the Company or any of
its Subsidiaries that is material to the Company and its Subsidiaries, taken as
a whole, including with respect to each such lease or sublease the date of such
lease or sublease and any material amendments thereto and the street address of
such real property. Except as would not have a Company Material
Adverse Effect, (i) all real property leases and subleases are valid and in full
force and effect except to the extent they have previously expired or terminated
in accordance with their terms, and (ii) neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any third party, has violated
any provision of, or committed or failed to perform any act which, with or
without notice, lapse of time or both would constitute a default under the
provisions of, any real property lease or sublease that is material to the
Company and its Subsidiaries, taken as a whole. Neither the Company
nor any of its Subsidiaries has entered into with any other Person (other than
another wholly owned Subsidiary of the Company) any sublease, license or other
agreement that is material to the Company and its Subsidiaries, taken as a
whole, and that relates to the use or occupancy of all or any portion of the
real property material to the Company or any of its Subsidiaries. The
Company has made available to Parent correct and complete copies of all real
property leases and subleases (including all material modifications, amendments,
supplements, waivers and side letters thereto) pursuant to which the Company or
any of its Subsidiaries thereof leases or licenses, as tenant, any real property
that is material to the Company and its Subsidiaries, taken as a
whole.
40
(c) As of the date hereof,
neither the Company nor any of its Subsidiaries has received written notice of
any pending, and to the knowledge of the Company there is no threatened,
condemnation proceeding with respect to any of the real property owned by the
Company or any of its Subsidiaries.
3.21. Interested Party
Transactions. Except as disclosed in the Company’s definitive
proxy statements included in the Company SEC Filings, since January 1, 2007, no
event has ever occurred and no relationship exists that would be required to be
reported by the Company pursuant to Item 404 of Regulation S-K.
3.22.
Top-Up
Option. The Board of Directors has duly and
validly approved and taken all corporate action required to be taken by the
Board of Directors to grant the Top-Up Option, to reserve for issuance and to
issue the Top-Up Option Shares upon the exercise thereof. The Top-Up
Option Shares, if and when issued in accordance with the terms of this
Agreement, and paid for by Merger Sub in accordance with this Agreement, will be
duly authorized, validly issued, fully paid and nonassessable and free and clear
of any Encumbrances.
3.23. Schedule 14D-9; Offer Documents;
Proxy Statement.
(a) None of the information
supplied or to be supplied in writing by or on behalf of the Company for
inclusion in the Offer Documents will, at the times such documents are filed
with the SEC, at the time they are disseminated to stockholders of the Company
and at the time of consummation of the Offer, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they are made, not misleading. The Schedule 14D-9 and each
other document filed by the Company with the SEC or distributed or disseminated
to the stockholders by the Company in connection with the Offer (the “Company Disclosure
Documents”) will not, at the time they are filed with the SEC and at all
times prior to the purchase of shares of Common Stock by Merger Sub pursuant to
the Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by the Company
with respect to information supplied by Parent, Merger Sub or any affiliate or
Representative of Parent or Merger Sub which is contained in the Company
Disclosure Documents. The Company Disclosure Documents will comply as
to form in all material respects with the provisions of the Exchange
Act.
(b) None of the information
supplied or to be supplied by the Company for inclusion or incorporation by
reference in the proxy statement or information statement to be disseminated to
the stockholders of the Company in connection with the Company Meeting, if one
is required (such proxy statement or information statement, as amended or
supplemented, the “Proxy Statement”)
will, at the date it is first disseminated to the stockholders of the Company
and at the time of the Company Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. The Proxy
Statement will, at the time of the Company Meeting, comply as to form in all
material respects with the requirements of the Exchange
Act. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent,
Merger Sub or any affiliate or Representative of Parent or Merger Sub which is
contained or incorporated by reference in the Proxy Statement.
41
3.24. Section
203. Assuming that the representations of Parent and Merger
Sub contained in Section 4.6 are
accurate, the Board of Directors has taken all actions necessary under the DGCL,
including approving the Tender Agreements and approving the transactions
contemplated by this Agreement, to ensure that the restrictions on Business
Combinations (as defined in Section 203 of the DGCL) do not, and will not, apply
to the transactions contemplated hereby, if any such transactions are
consummated in accordance with the terms of this Agreement. Neither
the execution and delivery by the Company of the Tender Agreements nor this
Agreement nor the consummation of the Offer, the Merger and any of the other
transactions contemplated hereby will prohibit for any period of time, or impose
any stockholder approval requirement with respect to, the Offer or the Merger,
except in the case of the Merger, the Company Stockholder Approval (if required
under the DGCL).
3.25. Takeover
Laws. Assuming that the representations and warranties of
Parent and Merger Sub contained in Section 4.6 are
accurate, no Takeover Law or other comparable takeover provision of the
Certificate of Incorporation or Bylaws applies to the Tender Agreements, this
Agreement, the Offer or the Merger, prohibits the consummation of the Offer or
the Merger or imposes any additional stockholder approvals or conditions with
respect to the Offer or the Merger.
3.26.
Opinion of
Financial Advisor. The Board of Directors has received the
opinion of America’s Growth Capital, LLC, dated as of the date of this
Agreement, to the effect that, as of such date and subject to the various
limitations, qualifications and assumptions contained therein, the Per Share
Amount in cash proposed to be received by holders of shares of Common Stock in
the Offer and the Merger pursuant to this Agreement is fair from a financial
point of view to such holders.
3.27. Tender
Agreements. All of the Persons listed in Section 3.27 of the
Company Disclosure Letter have executed and delivered to Parent Tender
Agreements.
3.28. Brokers’ and
Finders’ Fees. Other than those payable to the Persons
identified on Section
3.28 of the Company Disclosure Letter, the Company has not incurred, nor
will it incur, directly or indirectly, any liability or obligation to pay
brokerage or finders’ fees or agents’ commissions or investment bankers’ fees or
any similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.29.
No
Reliance.
(a) The Company and its
Subsidiaries acknowledge and agree that except for the representations and
warranties contained in ARTICLE FOUR and
except as otherwise expressly set forth in this Agreement or in the agreements
or certificates entered into in connection herewith or contemplated hereby, none
of Parent and Merger Sub nor any other Person on behalf of Parent or Merger Sub
makes any other representation or warranty of any kind or nature, express or
implied, in connection with the transactions contemplated by this
Agreement.
42
(b) Except for the
representations and warranties expressly set forth in this Agreement or in the
agreements or certificates entered into in connection herewith or contemplated
hereby, the Company has not relied on any representation or warranty, express or
implied, with respect to Parent or Merger Sub or with respect to any other
information provided or made available to the Company in connection with the
transactions contemplated by this Agreement. None of Parent and
Merger Sub nor any other Person will have or be subject to any liability or
indemnification obligation to the Company or any other Person resulting from the
distribution to the Company, or use by the Company of any such information,
including any information, documents, projections, forecasts or other material
made available to the Company or management presentations in expectation of the
transactions contemplated by this Agreement.
ARTICLE
FOUR
REPRESENTATIONS
AND WARRANTIES OF PARENT AND MERGER SUB
Parent
and Merger Sub jointly and severally hereby represent and warrant to the Company
as follows:
4.1. Organization and
Standing. 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, has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted and to execute, deliver and
perform this Agreement and to carry out the transactions contemplated
hereby.
4.2. Authorization. The
execution, delivery and performance by each of Parent and Merger Sub of this
Agreement, and the consummation by each of Parent and Merger Sub of the
transactions contemplated hereby, have been duly and validly authorized by all
necessary corporate action other than the adoption of this Agreement by the sole
stockholder of Merger Sub. This Agreement has been duly and validly
executed and delivered by each of Parent and Merger Sub and constitutes a legal,
valid and binding obligation of Parent and Merger Sub enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and
other Laws relating to creditors’ rights and to general principles of
equity. The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not violate any
provision of Law and will not violate or conflict with, or result in the breach
of any of the terms, conditions or provisions of, constitute a default under, or
require a consent or waiver under, the certificate of incorporation or bylaws of
Parent or Merger Sub (each as amended to date) or any indenture, lease,
agreement, or other instrument to which either of Parent or Merger Sub is a
party or by which either of them or any of their properties is bound, or any
decree, judgment, order, statute, rule or regulation applicable to either of
Parent or Merger Sub.
4.3. Governmental
Authorities and Consents. Except pursuant to the applicable
requirements of the Exchange Act and except for the filing of the Certificate of
Merger, neither Parent nor Merger Sub is required to submit any notice, report
or other filing to or with any Governmental Authority in connection with the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby. No consent, approval or
authorization of any Governmental Authority or any other party is required to be
obtained by Parent or Merger Sub in connection with the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
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4.4. Company Disclosure Documents; Proxy
Statement; Other Information.
(a) None of the information
provided by Parent or its Subsidiaries to be included in the Company Disclosure
Documents will, at the time such documents are filed with the SEC, at the time
such documents are first disseminated to the stockholders of the Company or at
the time of the consummation of the Offer, 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. The
Schedule TO and each other document filed by Parent or Merger Sub with the SEC
or distributed or disseminated to the stockholders of the Company by Parent or
Merger Sub in connection with the Offer (the “Parent Disclosure
Documents”) will not, at the time they are filed with the SEC and at all
times prior to the purchase of shares of Common Stock by Merger Sub pursuant to
the Offer, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading, except that no representation or warranty is made by Parent or
Merger Sub with respect to information supplied by the Company or any affiliate
or Representative of the Company which is contained in the Parent Disclosure
Documents. The Parent Disclosure Documents will comply as to form in
all material respects with the provisions of the Exchange Act.
(b) None of the information
supplied or to be supplied by Parent or Merger Sub for inclusion or
incorporation by reference in the Proxy Statement, if one is required, will, at
the date the Proxy Statement is first disseminated to the stockholders of the
Company and at the time of the Company Meeting, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
4.5. Sufficient
Funds. As of the date of this Agreement, Parent has, and as of
the respective dates of consummation of the Offer, the Merger and the other
transactions contemplated hereby shall have, available funds in an amount
sufficient to enable Merger Sub to purchase the shares of Common Stock pursuant
to the Offer and to consummate the Merger on the terms contemplated hereby and
perform its other obligations under this Agreement.
4.6. Ownership of
Shares. As of the date of this Agreement, none of Parent,
Merger Sub or their controlled affiliates owns (directly or indirectly,
beneficially or of record) any shares of Common Stock and none of Parent, Merger
Sub or their controlled affiliates holds any rights to acquire or vote any
shares of Common Stock except pursuant to this Agreement.
4.7. Litigation. As
of the date of this Agreement, there is no Proceeding pending or, to the
knowledge of Parent, threatened, against Parent or Merger Sub, or any of its or
their respective properties or assets in or before any Governmental Authority or
before any mediator or arbitrator that would have a material adverse effect on
Parent’s or Merger Sub’s ability to consummate the Offer, the Merger and the
other transactions contemplated by this Agreement.
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4.8. Ownership of
Merger Sub; No Prior Activities. Except for obligations or
liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement, Merger Sub has not and will not
prior to the Effective Time 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.
4.9. No Reliance.
(a) Each of Parent and
Merger Sub acknowledges and agrees that except for the representations and
warranties contained in ARTICLE THREE and
except as otherwise expressly set forth in this Agreement or in the agreements
or certificates entered into in connection herewith or contemplated hereby, none
of the Company and its Subsidiaries nor any other Person on behalf of the
Company and its Subsidiaries makes any other representation or warranty of any
kind or nature, express or implied, in connection with the transactions
contemplated by this Agreement.
(b) Except for the
representations and warranties expressly set forth in this Agreement or in the
agreements or certificates entered into in connection herewith or contemplated
hereby, neither Parent nor Merger Sub has relied on any representation or
warranty, express or implied, with respect to the Company and its Subsidiaries
or with respect to any other information provided or made available to Parent or
Merger Sub in connection with the transactions contemplated by this
Agreement. None of the Company and its Subsidiaries 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 Parent
or Merger Sub, or use by Parent or Merger Sub of any such information, including
any information, documents, projections, forecasts or other material made
available to Parent or Merger Sub or management presentations in expectation of
the transactions contemplated by this Agreement.
4.10. Rule
14d-10(d). The Parties acknowledge that certain payments are
to be made and certain benefits are to be granted according to certain
employment compensation, severance and other employee benefit plans to which
Parent is a party (the “Parent Arrangements”)
to the Covered Securityholders. Parent hereby represents and warrants
that all such amounts payable under the Parent Arrangements (a) are being paid
or granted as compensation for future services to be performed, or future
services to be refrained from performing, by the Covered Securityholders (and
matters incidental thereto) and (b) were not, and are not calculated based on
the number of shares tendered or to be tendered into the Offer by the applicable
Covered Securityholder. Parent also hereby represents and warrants
that (a) the adoption, approval, amendment or modification of each Parent
Arrangement since the discussions relating to the transactions contemplated
hereby between the Company and Parent began has been or will be approved as an
employment compensation, severance or other employee benefit arrangement solely
by independent directors of Parent in accordance with the requirements of Rule
14d-10(d)(2) under the Exchange Act and the instructions thereto, and (b) the
“safe harbor” provided pursuant to Rule 14d-10(d)(2) is otherwise applicable
thereto as a result of the taking of all necessary actions by the Board of
Directors of Parent (the “Parent Board”), or
the Management Organization and Compensation Committee of Parent Board, to cause
such safe harbor to be applicable to such Parent Arrangements. A true
and complete copy of any resolutions of Parent Board, or the Management
Organization and Compensation Committee of Parent Board, reflecting any
approvals and actions referred to in the preceding sentence to the extent taken
prior to the date of this Agreement will be provided to the Company within five
Business Days following the execution of this Agreement.
45
ARTICLE
FIVE
ADDITIONAL
AGREEMENTS
5.1. Proxy Statement; Stockholders
Meeting.
(a) If the Company
Stockholder Approval is required under the DGCL to effect the Merger, as soon as
reasonably practicable following the Acceptance Date, the Company shall, with
the assistance of Parent (not to be unreasonably withheld, conditioned or
delayed), prepare and file with the SEC the Proxy Statement and shall respond to
and resolve all SEC comments with respect to the Proxy Statement as soon as
practicable after receipt thereof. Subject to applicable Laws, the
Company and Parent (with respect to itself and Merger Sub) each shall, upon
request by the other, furnish the other with all information concerning itself,
its Subsidiaries, directors, officers and stockholders and such other matters as
may be reasonably necessary or advisable in connection with the Proxy Statement.
Parent, Merger Sub and the Company each agrees promptly to correct any
information provided by it for use in the Proxy Statement which shall have
become false or misleading in any material respect. The Company shall
provide Parent and Merger Sub with (in writing, if written), and shall consult
with Parent regarding, any comments (written or oral) that may be received by
the Company or its counsel from the SEC or its staff with respect to the Proxy
Statement promptly after receipt thereof. Parent and its counsel
shall be given a reasonable opportunity to review any such written and oral
comments and proposed responses before they are filed with the
SEC. The Company shall give reasonable and good faith consideration
to any comments made by Parent and its counsel.
(b) Subject to the other
provisions of this Agreement, if the Company Stockholder Approval is required
under the DGCL to effect the Merger, as soon as reasonably practicable following
the clearance of the Proxy Statement by the SEC, the Company, acting through its
Board of Directors, shall (i) take all action necessary in accordance with the
DGCL and its Certificate of Incorporation and Bylaws to duly call, give notice
of, convene and hold a meeting of its stockholders for the purpose of obtaining
the Company Stockholder Approval (such meeting or any adjournment or
postponement thereof, the “Company Meeting”);
provided, that
the record date for any such Company Meeting shall be after the Acceptance Date,
and, if the Top-Up Option is exercised by Parent, after the date on which the
closing of the purchase of the Top-Up Option Shares occurs pursuant to Section 1.3, (ii)
subject to Section
5.3, include in the Proxy Statement the Recommendation and (iii) subject
to Section 5.3
of this Agreement, use commercially reasonable efforts to solicit from its
stockholders proxies in favor of the adoption of this Agreement. Once
the Company Meeting has been called and noticed, the Company shall not postpone
or adjourn the Company Meeting without the consent of
Parent. Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not be required to hold the Company Meeting if this
Agreement is terminated. Parent shall vote, or cause to be voted, all
of the shares of Common Stock held by Parent, Merger Sub and their respective
affiliates in favor of the adoption and approval of this Agreement and the
Merger in accordance with applicable law.
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(c) Notwithstanding the
foregoing, if a Short-Form Merger may be effected in accordance with Section 2.7 and
Section 253 of the DGCL, the Company, Parent and Merger Sub shall take all
necessary and appropriate action to cause the Merger to become effective on the
dates specified in Section 2.2 without a
Company Meeting, in accordance with Section 253 of the DGCL.
5.2. Access to Information;
Confidentiality; Financial Statements.
(a) From the date hereof to
the Effective Time, the Company shall, and shall cause the Company
Representatives to, permit Parent and the Parent Representatives to have
reasonable access during normal business hours upon reasonable notice to the
Company Representatives and the plants and other facilities, books, records,
Contracts and documents of or pertaining to the Company or its Subsidiaries, and
shall furnish Parent and Merger Sub with all financial, operating and other data
and information as Parent or Merger Sub, through its Representatives, may
reasonably request. Any such information shall be deemed “Evaluation Material”
under the Confidentiality Agreement. Notwithstanding the foregoing,
any such investigation or consultation shall not include any intrusive testing
or environmental sampling of any kind and shall be concluded in such a manner as
not to interfere unreasonably with the business or operations of the Company and
its Subsidiaries. Neither the Company nor any of its Subsidiaries
shall be required to provide access to or to disclose information where such
access or disclosure would (i) breach any agreement with any third party
(provided that the Company has used commercially reasonable efforts to find an
alternative means, not constituting a breach of any such agreement with a third
party, to provide the access or information contemplated by this Section 5.2(a)), (ii)
constitute a waiver of the attorney-client or other privilege held by the
Company or any of its Subsidiaries or (iii) otherwise violate any applicable
Law.
(b) In the event of the
termination of this Agreement in accordance with ARTICLE SEVEN, Parent
and Merger Sub shall, and shall use reasonable best efforts to cause their
respective Representatives to, return promptly every document furnished to them
by the Company or any Representative of the Company in connection with the
Merger and all copies thereof in their possession, and cause any other parties
to whom such documents may have been furnished promptly to return such documents
and all copies thereof.
5.3. No Solicitation of
Transactions.
(a) Subject to Section 5.3(b), until
the Effective Time or, if earlier, the Termination Date, the Company shall not,
and shall not authorize or permit any of its Subsidiaries or any of its or their
directors, officers, employees, financial advisors, attorneys, accountants,
agents and other representatives (collectively, “Representatives”),
directly or indirectly, to (i) solicit, initiate, or take any action to
knowingly encourage or facilitate (including by way of furnishing non-public
information) any inquiry, proposal or offer or afford access to the employees,
business, properties, assets, books or records of the Company or any of its
Subsidiaries with respect to, or the making or completion of, any Acquisition
Proposal, (ii) enter into, continue or otherwise participate in any discussions
or negotiations regarding, or furnish to any Person any information or data with
respect to, or otherwise cooperate in any way with, any Acquisition Proposal or
(iii) resolve, propose or agree to do any of the foregoing. Subject to Section 5.3(b), the
Company shall, and shall cause each of its Subsidiaries and the Representatives
of the Company and its Subsidiaries to, (x) immediately cease and cause to be
terminated all existing discussions or negotiations with any Person (other than
Parent and its affiliates) conducted heretofore with respect to any Acquisition
Proposal and (y) promptly request and use commercially reasonable efforts to
obtain the prompt return or cause the destruction of all copies of confidential
information previously furnished to any such Person.
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(b) Notwithstanding anything
to the contrary in Section 5.3(a), if at
any time following the date of this Agreement and prior to the Acceptance Date,
(i) the Company receives a bona fide written Acquisition Proposal, (ii) such
Acquisition Proposal did not result from a breach of this Section 5.3, (iii)
the Board of Directors determines in good faith (after consulting with outside
counsel and a financial advisor of nationally recognized reputation selected by
the Board of Directors (the “Company Financial
Advisor”)) that such Acquisition Proposal constitutes or could reasonably
be expected to lead to a Superior Proposal and (iv) the Board of Directors
determines in good faith (after consulting with outside legal counsel) that not
taking the actions referred to in clause (x) and (y) below would be
inconsistent with its fiduciary duties to the stockholders of the Company under
applicable Law, then the Company may at any time prior to the Acceptance Date
(but in no event after such time) (x) furnish and make available information and
data with respect to the Company and its Subsidiaries to the Person making such
Acquisition Proposal pursuant to (and only pursuant to) an Acceptable
Confidentiality Agreement; provided, that the
Company provides Parent with written notice of its intention to enter into such
Acceptable Confidentiality Agreement and the Company advises Parent of any
information provided to any Person substantially concurrently with its delivery
to such Person and substantially concurrently with such delivery the Company
delivers to Parent all such information not previously provided to Parent and
(y) enter into, maintain and participate in discussions or negotiations with the
Person making such Acquisition Proposal or otherwise cooperate with or assist or
participate in, or facilitate, any such discussions or
negotiations. The Company shall not terminate, waive, amend, release
or modify any material provision of any confidentiality or standstill agreement
to which it or any of its Subsidiaries is a party with respect to any
Acquisition Proposal, and shall enforce the material provisions of any such
agreement.
48
(c) Except as permitted in
this Section
5.3(c), the Board of Directors shall not (x) (A) fail to make the
Recommendation to the stockholders of the Company or withdraw (or modify or
qualify in any manner adverse to Parent or Merger Sub) the approval,
Recommendation or declaration of advisability by the Board of Directors of this
Agreement, the Offer, the Merger or any of the other transactions contemplated
hereby, (B) adopt, approve, recommend, endorse or otherwise declare advisable
the adoption of any Acquisition Proposal (it being understood that, only with
respect to a tender offer or exchange offer, taking a neutral position or no
position (other than in a communication made in compliance with Rule 14d-9(f)
promulgated under the Exchange Act) with respect to any Acquisition Proposal
shall be considered a breach of this clause (B)) or (C)
resolve, agree or publicly propose to take any such actions (each such foregoing
action or failure to act in this clause (c) (x) being
referred to herein as an “Adverse Recommendation
Change”), (y) cause or permit the Company to enter into any letter of
intent, memorandum of understanding, agreement in principle, acquisition
agreement, merger agreement, option agreement, joint venture agreement,
partnership agreement or other agreement constituting or directly related to, or
which is intended to or would be reasonably likely to lead to, any Acquisition
Proposal (each, an “Alternative Acquisition
Agreement”), other than any Acceptable Confidentiality Agreements, or (z)
resolve, agree or publicly propose to take any such
actions. Notwithstanding the preceding sentence, at any time prior to
the Acceptance Date (but in no event after such time) the Board of Directors
may, if the Board of Directors determines in good faith (after consulting with
outside legal counsel) that the failure to do so would be inconsistent with its
fiduciary duties to the stockholders of the Company under applicable Law, taking
into account all adjustments to the terms of this Agreement that may be offered
by Parent pursuant to this Section 5.3(c), (x)
make an Adverse Recommendation Change in response to a Superior Proposal
received after the date hereof and that does not otherwise result from a breach
of this Section
5.3 or (y) solely in response to either a Superior Proposal received
after the date hereof and that did not otherwise result from a breach of this
Section 5.3,
cause the Company to terminate this Agreement pursuant to Section 7.1(d)(ii);
provided, however, that, in the
case of a Superior Proposal, (A) (1) no Adverse Recommendation Change may be
made and (2) no such termination of this Agreement may be made, in each case,
until after the third Business Day following Parent’s receipt of written notice
from the Company advising Parent that the Board of Directors intends to make an
Adverse Recommendation Change or cause the Company to terminate this Agreement
pursuant to Section
7.1(d)(ii), as the case may be, and specifying the relevant terms and
conditions of (including the identity of the Persons making the Superior
Proposal) any Superior Proposal that is the basis of the proposed action by the
Board of Directors (it being understood and agreed that any material amendment
to the financial terms of such Superior Proposal shall require a new written
notice by the Company to Parent and an additional two Business Day period), and
(B) during such three Business Day period (or any additional two Business Day
period), the Company shall, and shall cause its financial and legal advisors to,
negotiate with Parent in good faith (to the extent Parent seeks to negotiate) to
enable Parent to make a counteroffer and make such adjustments to the terms and
conditions of this Agreement as would enable the Board of Directors to proceed
with its recommendation of this Agreement and not make such an Adverse
Recommendation Change or cause the Company to terminate this Agreement and (C)
the Board of Directors shall not make such an Adverse Recommendation Change or
cause the Company to terminate this Agreement unless prior to the expiration of
such three Business Day period (or any additional two Business Day period)
Parent makes a definitive written proposal to amend this Agreement or the Offer
or enter into an alternative transaction and the Board of Directors shall have
considered such definitive written proposal in good faith and, after the
expiration of such three Business Day period (or any additional two Business Day
period), the Board of Directors shall have determined in good faith (after
consulting with outside legal counsel and the Company Financial Advisor) that
such Acquisition Proposal still constitutes a Superior Proposal.
49
(d) From and after the date
hereof, the Company shall promptly advise Parent, orally and in writing, and in
any event no later than 24 hours after receipt, in the event the Company or any
of its Subsidiaries or its or its Subsidiaries’ Representatives receives any
Acquisition Proposal together with the material terms and conditions (including
the identity of the Persons making such Acquisition Proposal) of such
Acquisition Proposal and a copy of any written documentation delivered to the
Company or any of its Subsidiaries or its or its Subsidiaries’ Representatives
in connection therewith. The Company shall keep Parent informed on a
timely basis of the status and details (including, within 24 hours after the
occurrence of any material amendment or modification) of any such Acquisition
Proposal, including of all material developments with respect to any such
Acquisition Proposal and shall provide Parent with copies of any additional
written documentation delivered to the Company or any of its Subsidiaries or its
or its Subsidiaries’ Representatives in connection therewith.
(e) Any violation of the
provisions of this Section 5.3 by the
Company’s Subsidiaries or the Company’s or its Subsidiaries’ Representatives
shall be deemed to be a breach of this Section 5.3 by the
Company.
(f) Neither the Company nor
the Board of Directors shall take any action to (i) exempt any Person (other
than Parent, Merger Sub and their respective affiliates) from the restrictions
on “business combinations” contained in Section 203 of the DGCL (or any
restrictive provision of any other Takeover Law) or otherwise cause such
restrictions not to apply (except to the extent that the execution of this
Agreement has such an effect or to the extent that the Tender Agreements are
deemed to have such an effect with respect to such other Person) or (ii) render
the Rights Agreement inapplicable to any transaction included in the definition
of Acquisition Proposal, or resolve or agree to do any of the foregoing, in each
case, unless such actions are taken concurrently with a termination of this
Agreement pursuant to Section
7.1(d)(ii).
(g) Nothing contained in
this Agreement shall prohibit the Company or its Board of Directors from (i)
taking and disclosing a position contemplated by Item 1012(a) of Regulation M-A,
Rules 14e-2(a) or 14d-9 promulgated under the Exchange Act or (ii) making any
disclosure to the stockholders of the Company if, in the good faith judgment of
the Board of Directors (after consulting with and receiving the advice of
outside legal counsel) failure to do so would violate the disclosure
requirements under applicable Law; provided, however, that in no
event shall this Section 5.3(e) affect
the obligations of the Company specified in Section 5.3(a), Section 5.3(b) and
Section 5.3(c);
and provided,
further, that,
unless such disclosure consists solely of a “stop, look and listen”
communication containing only statements contemplated by Rule 14d-9(f) under the
Exchange Act, any such disclosure will be deemed to be an Adverse Recommendation
Change (including for purposes of Section 7.1(c)(i))
unless the Board of Directors publicly reaffirms the Recommendation within five
Business Days.
(h) For purposes of this
Agreement:
(i) “Acceptable Confidentiality
Agreement” means a customary confidentiality agreement containing
confidentiality terms no less favorable in any material respect to the Company
in the aggregate than those set forth in the Confidentiality Agreement; provided, that such
confidentiality agreement shall not prohibit compliance with any of the
provisions of this Section 5.3, and
shall not restrict the other party from making an Acquisition Proposal to the
Company or negotiating with the Company with respect thereto.
(ii) “Acquisition Proposal”
means any proposal or offer from any Person (other than Parent, Merger Sub or
any of their affiliates) or “group” (as defined in Section 13(d) of the Exchange
Act) relating to, or that could be reasonably expected to lead to, (A) the
direct or indirect acquisition or purchase (whether in a single transaction or a
series of related transactions) of assets of the Company and its Subsidiaries
(including securities of Company Subsidiaries) equal to 20% or more of the
Company’s consolidated assets or to which 20% or more of the Company’s revenues
or earnings on a consolidated basis are attributable, (B) the direct or indirect
acquisition (whether in a single transaction or a series of related
transactions) of 20% or more of any class of equity securities of the Company,
(C) a tender offer or exchange offer that if consummated would result in any
Person or “group” (as defined in Section 13(d) of the Exchange Act) beneficially
owning 20% or more of any class of equity securities of the Company or (D) a
merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries, in each case, other than the transactions contemplated by this
Agreement.
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(iii) “Superior Proposal”
means any bona fide written Acquisition Proposal that the Board of Directors
determines in good faith (after consulting with outside legal counsel and the
Company Financial Advisor), taking into account all legal, financial,
regulatory, estimated time of completion and other aspects of the Acquisition
Proposal and the Person making the Acquisition Proposal, including the financing
terms thereof, that is more favorable to the stockholders from a financial point
of view than the transactions contemplated by this Agreement (taking into
account any adjustment to the terms and conditions proposed by Parent in an
offer that is in writing in response to such Acquisition Proposal pursuant to
Section 5.3(c);
provided, that
for purposes of this definition of “Superior Proposal,”
references in the term “Acquisition Proposal”
to “20% or more” shall be deemed to be references to “50% or more.”
5.4. Governmental Filings;
Effort.
(a) Subject to the terms and
conditions set forth in this Agreement, each of the Parties shall use its
commercially reasonable efforts promptly to take, or cause to be taken, all
actions, and do, or cause to be done, and to assist and cooperate with the other
Parties in doing, all things necessary and appropriate to consummate the Offer
and to consummate and make effective, and to satisfy all conditions to, in the
most expeditious manner practicable, the Merger and the other transactions
contemplated by this Agreement, including (i) the obtaining of all necessary
actions or nonactions, waivers, consents, clearances, approvals, and expirations
or terminations of waiting periods from Governmental Authority and the making of
all necessary notices, registrations and filings and the taking of all steps as
may be necessary and appropriate to effect the foregoing, or to avoid an action
or proceeding by any Governmental Authority, (ii) the obtaining of all consents,
approvals or waivers from, and the making of all notices to, third parties to
the extent that any such consent, waiver or notice is (A) required under the
terms and conditions of any Material Contract in order to consummate the Offer,
the Merger and the other transactions contemplated hereby or (B) otherwise
necessary or appropriate to permit the Parties to consummate the Offer, the
Merger and the other transactions contemplated hereby; provided, however, that nothing
in this Section
5.4(a) shall require any of the Parties to commence or participate in
litigation or administrative proceedings in any forum with respect to any
objections or opposition raised by any Governmental Authority or other third
party, and (iii) the execution and delivery of any additional instruments
necessary to consummate the transactions contemplated by this
Agreement. The Company and Parent and their respective counsel shall,
subject to applicable Law, promptly (x) cooperate and coordinate with the other
in the taking of the actions contemplated by clauses (i), (ii) and (iii) immediately
above, and (y) supply the other with any information that may be reasonably
required in order to effectuate the taking of such actions. Each
Party shall inform the other Party or Parties, as the case may be, as promptly
as practicable, of any communication from any Governmental Authority regarding
any of the transactions contemplated by this Agreement. If the
Company or Parent receives a request for additional information or documentary
material from any Governmental Authority with respect to the transactions
contemplated by this Agreement, then it shall use commercially reasonable
efforts to make, or cause to be made, as soon as reasonably practicable, and
after consultation with the other party, an appropriate response in compliance
with such request, and, if permitted by applicable Law and by any applicable
Governmental Authority, provide the other party’s counsel with advance notice
and the reasonable opportunity to participate in any meeting with any
Governmental Authority in respect of any filing made thereto in connection with
the transactions contemplated by this Agreement. Neither Parent nor
the Company shall commit to or agree (or permit their respective Subsidiaries to
commit to or agree) with any Governmental Authority to stay, toll or extend any
applicable waiting period under applicable Antitrust Laws, without the prior
written consent of the other (such consent not to be unreasonably withheld,
conditioned or delayed). Notwithstanding anything to the contrary in
this Section
5.4(a), materials provided to the other party or its counsel may be
redacted (i) as necessary to comply with contractual arrangements and (ii) as
necessary to address good faith legal privilege or confidentiality concerns;
provided, however, that in the
case of (ii)
such materials shall be provided to outside counsel in unredacted form pursuant
to a joint defense agreement (“Joint Defense
Agreement”) so long as the producing party has the legal right to provide
such materials to outside counsel for the other party pursuant to such Joint
Defense Agreement.
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(b) Without limiting the
generality of the undertakings pursuant to Section 5.4(a)
hereof, the Parties shall (i) provide or cause to be provided as promptly as
reasonably practicable to Governmental Authorities with jurisdiction over the
Antitrust Laws (each such Governmental Authority, a “Governmental Antitrust
Authority”) information and documents requested by any Governmental
Antitrust Authority as necessary and appropriate to permit consummation of the
transactions contemplated by this Agreement, including preparing and filing any
notification and report form and related material or any consents and filings
under any Antitrust Laws as promptly as practicable following the date of this
Agreement and thereafter to respond as promptly as practicable to any request
for additional information or documentary material that may be made under any
applicable Antitrust Laws and (ii) subject to the terms of Section 5.4(c), use
their commercially reasonable efforts to take such actions as are necessary and
appropriate to obtain prompt approval of the consummation of the transactions
contemplated by this Agreement by any Governmental Authority or expiration of
applicable waiting periods. For the avoidance of doubt, each Party
shall assist the other in gathering, preparing and submitting information or
making any filing to any Governmental Antitrust Authority.
(c) Notwithstanding anything
to the contrary herein, nothing in this Agreement shall require Parent or any of
its Subsidiaries to, nor shall the Company or any of its Subsidiaries without
the prior written consent of Parent agree or proffer to, divest, hold separate,
or enter into any license or similar agreement with respect to, or agree to
restrict the ownership or operation of, any business or assets of Parent, the
Company or any of their respective Subsidiaries if, in the reasonable judgment
of Parent, any such divestiture, holding separate or entry into any license or
similar agreement may have a materially detrimental effect or impact on the
current or future business models, plans or structures of Parent and its
Subsidiaries (taking into account the acquisition of the Company).
5.5. Certain
Notices. From and after the date of this Agreement until the
Effective Time, each Party hereto shall promptly notify the other Party of (i)
the occurrence, or non-occurrence, of any event that would be likely to cause
any condition to the obligations of any Party to effect the Merger and the other
transactions provided for in this Agreement not to be satisfied or (ii) the
failure of the Company, Merger Sub or Parent, as the case may be, to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it pursuant to this Agreement which would reasonably be expected to result in
any condition to the obligations of any Party to effect the Merger and the other
transactions provided for in this Agreement not to be satisfied; provided, however, that the
delivery of any notice pursuant to this Section 5.5 shall not
cure any breach of any representation or warranty requiring disclosure of such
matter at or prior to the execution of this Agreement or otherwise limit or
affect the remedies available hereunder to the Party receiving such
notice.
52
5.6. Public
Announcements. Parent, Merger Sub and the Company shall
consult with each other, and to the extent practicable, agree, before issuing
any press release or otherwise making any public statement with respect to this
Agreement and the transactions contemplated hereby (including the Offer and the
Merger), and shall not issue any such press release or make any such public
statement prior to such consultation, except as may be required by applicable
Law or any listing agreement with a national securities exchange, in which case
reasonable best efforts to consult with the other Parties hereto shall be made
prior to any such release or public statement; provided, however, that the
provisions set forth in this Section 5.6 shall not
apply to any press release or public statement made or proposed to be made by
the Company pursuant to Section 5.3 or any
disclosure of Parent or Merger Sub in response thereto or in connection
therewith.
5.7. Conduct of
Business of the Company. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement in accordance with the terms set forth in ARTICLE SEVEN and the
Effective Time, except to the extent expressly contemplated by this Agreement or
with the prior written consent of Parent, such consent not to be unreasonably
withheld, conditioned or delayed, the Company shall, and shall cause each of its
Subsidiaries to, use commercially reasonable efforts to conduct its business in
the ordinary course of business consistent with past practice, and the Company
shall not, and shall cause each of its Subsidiaries not to, engage in any
conduct or practice, take any action or enter into any transaction other than in
the ordinary course of business consistent with past
practice. Without limiting the foregoing, (a) the Company shall, and
shall cause each of its Subsidiaries to, (i) pay debts and Taxes when due unless
contested in good faith and properly reserved against, (ii) pay or perform all
other obligations when due unless contested in good faith and properly reserved
against and (iii) use commercially reasonable efforts, consistent with past
practice and policies, (A) to preserve intact its business organizations and
material assets (ordinary wear and tear excepted), (B) to keep available the
services of its officers, directors and employees, (C) to comply in all material
respects with all applicable Laws and the requirements of all of its Material
Contracts and (D) to maintain satisfactory relationships with customers,
lenders, suppliers, distributors, licensors, licensees and others having
business relationships with it, and (b) no matter included in the Company
Disclosure Letter shall modify or be deemed to modify any of the provisions in
this Section
5.7 or in Section 5.8 unless
disclosed with particularity in Section 5.7 or Section 5.8 of the
Company Disclosure Letter.
5.8. Actions Requiring
Parent’s Consent. Without limiting the generality of Section 5.7, during
the period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement in accordance with the terms set forth in
ARTICLE SEVEN
and the Effective Time, without the prior written consent of Parent, such
consent not to be unreasonably withheld, conditioned or delayed, or except as
otherwise expressly permitted by this Agreement, the Company shall not, nor
shall it permit any of its Subsidiaries to:
53
(a) amend
or propose to amend the Certificate of Incorporation or Bylaws or any of the
Subsidiary Charter Documents;
(b) (i)
make, declare, set aside or pay any dividends on, or make any other
distributions (whether in cash, stock, property or otherwise) in respect of any
of, or enter into any agreement with respect to the voting of, any capital stock
or equity interests of the Company or any of its Subsidiaries, except that a
wholly owned Subsidiary of the Company may make, declare, set aside and pay
dividends or distributions to the Company or another wholly owned Subsidiary
thereof, (ii) split, combine or reclassify any capital stock or equity interests
of the Company, (iii) issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock or equity
interests of the Company or any of its Subsidiaries or (iv) purchase, redeem or
otherwise acquire, directly or indirectly, any capital stock or equity interests
of the Company, except for acquisitions of shares of Common Stock by the Company
in satisfaction by holders of any options or rights granted under the Company’s
stock option or similar benefit plans or the applicable exercise price or
withholding taxes;
(c) issue,
deliver, sell, exchange, grant, pledge, encumber or transfer, or authorize or
propose the issuance, delivery, sale, exchange, grant, pledge, encumbering or
transfer of, or purchase or propose the purchase of, any shares of capital stock
or other equity interests or securities convertible into, or subscriptions,
rights, warrants or options to acquire any such shares or equity interests or
other convertible securities of the Company or any of its Subsidiaries, other
than the issuance of shares of Common Stock pursuant to the exercise or
settlement of stock options, warrants or other rights therefor outstanding as of
the date of this Agreement;
(d) (i)
other than in the ordinary course of business, transfer, license, sell, lease,
encumber or otherwise dispose of any assets other than assets described below in
clause (ii) (whether by way of merger, consolidation, sale of stock, sale of
assets, liquidation, dissolution or otherwise) or (ii) transfer, sell, encumber
or otherwise dispose of capital stock or other equity interests in any
Subsidiary of the Company, in any case with a fair market value in excess of
$100,000 in the aggregate with respect to all such transfers, licenses, sales,
leases or other dispositions described in clauses (i) and (ii)
above;
(e) enter
into any collective bargaining agreement;
(f) except
in the ordinary course of business, enter into or amend or modify in any
material respect, or consent to the termination of (other than at its stated
expiry date), any Material Contract or any material real property lease or any
other Contract or lease that, if in effect as of the date hereof would
constitute a Material Contract or a material real property lease
hereunder;
(g) make
any material change in any method of financial accounting principles or
practices, in each case except for any such changes required by a change in GAAP
or applicable Law after the date of this Agreement;
54
(h) fail
to use its commercially reasonable efforts to maintain in effect material
existing insurance policies or comparable replacement policies to the extent
available for a reasonable cost;
(i) terminate
or waive any right or rights that individually or in the aggregate would
reasonably be expected to be material in value to the Company, other than in the
ordinary course of business or consistent with past practice or other than as
may be permitted by any of the other clauses of this Section
5.8;
(j) except
in the ordinary course of business consistent with past practice or as required
by applicable Law or any Current Employee Benefit Plan or Contract in effect as
of the date hereof, (i) increase in any manner (including by means of
acceleration of payment) the base salary or bonus payable or to become payable
to any of its past or present officers, employees other service providers; (ii)
enter into any new or amend in any material respect any existing employment,
severance, retention or change in control agreement, plan or arrangement with
any of its past or present officers, employees or other service providers, (iii)
promote any officers, employees or service providers, (iv) except as
contemplated by Section 2.13,
establish, adopt, enter into, amend (including by way of repricing of the
exercise or base price of any Company Equity Award) or take any action to
accelerate rights under any Current Employee Benefit Plan (including Company
Equity Awards outstanding under any Current Employee Benefit Plan) or under any
plan, agreement, program, policy, trust, fund or other arrangement that would be
a Current Employee Benefit Plan if it were in existence as of the date of this
Agreement; or (v) make any contribution to any Current Employee Benefit Plan,
other than contributions that are required by Law, or by the terms of such
Current Employee Benefit Plan as in effect on the date hereof, provided, that the
terms set forth in clauses (ii) and
(iv)
immediately above shall not prohibit the Company and its Subsidiaries from
entering into offer letters or their equivalent with non-executive officer
employees hired after the date of this Agreement in the ordinary course of
business consistent with past practice; provided, further, that the
terms set forth in clauses (ii) and
(iv) shall not
prohibit the Company from amending its change in control agreements or other
arrangements with the individuals set forth in Section 5.8(j) of the
Company Disclosure Letter in the limited manner described in Section 5.8(j) of the
Company Disclosure Letter; and provided, further, that except
as set forth in Section 5.8(j) of the
Company Disclosure Letter the consummation of the transactions contemplated by
this Agreement (either alone or together with any other event) shall not give
rise to the right of any such person to receive any severance, retention or
change in control payments;
(k) settle
or compromise any material Proceeding, other than settlements or compromises of
such Proceeding (i) for an amount less than or equal to the liability or reserve
in respect thereof that has been reflected or accrued on the most recent balance
sheet of the Company included in the Company SEC Documents (it being agreed that
the amounts paid in respect of any settlement or compromise effected pursuant to
this clause (i)
shall not be applied toward the monetary threshold set forth in the immediately
following clause
(ii)), (ii) that involve only the payment of monetary damages not in
excess of $250,000 in the aggregate (or not in excess of $250,000 in the
aggregate above the amount of the liability or reserve in respect thereof that
has been reflected or accrued on the most recent balance sheet of the Company
included in the Company SEC Documents) or the imposition of nonmaterial
equitable relief on the business and operations of the Company or any of its
Subsidiaries, (iii) that are immaterial and in respect of which no liability or
reserve in respect thereof has been reflected or accrued on the most recent
balance sheet of the Company included in the Company SEC Filings or (iv) entered
into in the ordinary course of business consistent with past practice with
respect to Proceedings; provided, that in the
case of clauses
(i), (ii), (iii) and (iv), such settlement
or compromise does not contain as a term thereof the imposition of equitable
relief on, or any material restrictions on the business and operations of, the
Company or any of its Subsidiaries that would result in a Company Material
Adverse Effect;
55
(l) acquire
or offer or agree to acquire (whether by way of merger, consolidation,
acquisition of stock, acquisition of assets or otherwise) any Person or any
division or assets thereof (other than the acquisition of assets in the ordinary
course of business, including the acquisition of information technology and
related assets from a customer (or the stock or other equity interests of a
Subsidiary of such customer, the principal business of which is to hold such
assets) in connection with the execution by the Company or any Subsidiary
thereof of a new or expanded services Contract with such customer in the
ordinary course of business consistent with past practice), or make any loans,
advances or capital contributions to or investments in any Person (other than
the Company or any wholly owned Subsidiary of the Company); provided, that the
foregoing shall not prohibit the Company and its Subsidiaries from making any
such acquisition, loan, advance, capital contribution or investment (i) so long
as the aggregate consideration paid (including the amount of any indebtedness
for borrowed money assumed) or amounts loaned, advanced or invested, as the case
may be, does not exceed $250,000 with respect to any individual acquisition,
loan, advance, capital contribution or investment or $500,000 in the aggregate
with respect to all such acquisitions, loans, advances, capital contributions or
investments, (ii) pursuant to any Contract that is in effect as of the date
hereof and disclosed in Section 5.8(l) of the
Company Disclosure Letter or (iii) that constitutes the extension of trade
credit to any customer of the Company or any Subsidiary thereof so long as such
extension of trade credit is made by the Company or such Subsidiary in the
ordinary course of business consistent with past practice;
(m) (i)
redeem, repurchase, prepay, defease, incur or otherwise acquire any indebtedness
for borrowed money (it being agreed that this covenant expressly does not apply
to capital expenditures of any kind, including capital, synthetic or similar
leases) or issue any debt securities or assume, guarantee or otherwise become
responsible for, the obligations of any Person (other than the Company or a
wholly owned Subsidiary of the Company) for borrowed money, except (A) for the
incurrence of any indebtedness in the ordinary course of business under the
credit facilities of the Company and its Subsidiaries that are in effect as of
the date hereof, (B) the Company and its Subsidiaries may take any of the
foregoing actions in respect of indebtedness owing by any wholly owned
Subsidiary of the Company to the Company or any other wholly owned Subsidiary of
the Company, (C) for the acquisition or assumption of indebtedness in connection
with acquisitions permitted pursuant to Section 5.8(l) or (D)
that the foregoing shall not limit or restrict the ability of the Company or any
Subsidiary thereof to enter into or arrange any customer supported financing
transactions in the ordinary course of business consistent with past practice or
(ii) voluntarily subject any of its material assets or material properties to
any Encumbrances, other than Permitted Encumbrances;
(n) except
as required by Law, change any material election in respect of Taxes, make any
material election in respect of Taxes which is inconsistent with past practice,
adopt or change any material accounting method in respect of Taxes, file any
material Tax Return or any amendment to a material Tax Return, enter into any
material closing agreement, settle any material claim or assessment in respect
of Taxes (other than the settlement or compromise of any such Tax claim or
assessment for an amount not materially greater than the liability or reserve in
respect thereof that has been reflected or accrued on the Latest Balance Sheet)
or consent to any extension or waiver of the limitation period applicable to any
material claim or assessment in respect of Taxes;
56
(o) fail
to give all notices and other information required to be given to the employees
of the Company, any collective bargaining unit representing any group of
employees of the Company and any applicable Governmental Authority under the
WARN Act, the National Labor Relations Act, the Code, the Consolidated Omnibus
Budget Reconciliation Act and other applicable Law in connection with the
transactions provided for in this Agreement;
(p) enter
into any material agreement, agreement in principle, letter of intent,
memorandum of understanding or similar Contract with respect to any joint
venture, strategic partnership or alliance, which in each case, is material to
the Company and its Subsidiaries, taken as a whole;
(q) create
any new material business division;
(r) enter
into any new material line of business;
(s) other
than with respect to wholly owned Subsidiaries of the Company, adopt a plan of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any
Subsidiary of the Company (other than this Agreement and the Merger and other
transactions contemplated hereby);
(t) except
for (i) expense reimbursements and advances in the ordinary course of business
consistent with past practice and (ii) transactions in the ordinary course of
business consistent with past practice with affiliates of any non-employee
member of the Board of Directors, enter into any Contract with any officer or
director of the Company or any of its Subsidiaries or any of their immediate
family members (including their spouses);
(u) enter
into any Material Contract having terms that (i) provide for the making of any
payment as a result of the transactions contemplated by this Agreement, (ii)
would result in the occurrence of a material and adverse change in the rights or
obligations of the Company or any of its Subsidiaries as a result of the
transactions contemplated by this Agreement or (iii) would result in the
occurrence of a material change in the rights or obligations of the counterparty
thereto as a result of the transactions contemplated by this
Agreement;
(v) amend
or propose to amend the Rights Agreement; or
(w) breach,
repudiate or waive compliance with any term of the Tender
Agreements.
57
5.9 Indemnification
of Directors and Officers.
(a) Without
limiting any additional rights that any officer, director or employee may have
under the Certificate of Incorporation or the Bylaws (or the charter documents
of the Company’s Subsidiaries), from the Effective Time through the sixth
anniversary of the date on which the Effective Time occurs, Parent shall, and
shall cause the Surviving Corporation to, indemnify and hold harmless each
current (as of the Effective Time) and each former officer and director of the
Company or its Subsidiaries (collectively, the “Indemnified
Parties”), from and against any and all claims, losses, liabilities,
damages, judgments, inquiries, fines and fees, costs and expenses, including
actual attorneys’ fees and disbursements (collectively, “Costs”) incurred in
connection with any Proceeding, whether civil, criminal, administrative or
investigative, arising out of or pertaining to the fact that the Indemnified
Party is or was an officer, director or fiduciary of the Company or the
Subsidiaries at or prior to the Effective Time, whether asserted or claimed
prior to, at or after the Effective Time, to the fullest extent that the Company
would be permitted under applicable Law and required under the Certificate of
Incorporation or the Bylaws (or, as relevant, those of the applicable
Subsidiary) as at the date hereof. In the event of any such
Proceeding, each Indemnified Party shall be entitled to advancement of expenses
incurred in the defense of any Proceeding from Parent or the Surviving
Corporation to the fullest extent that the Company would be permitted under
applicable Law and the Certificate of Incorporation or the Bylaws (or, as
relevant, those of the applicable Subsidiary) as at the date hereof, and in
accordance with the terms of the indemnification agreements between the Company
and each of the directors and officers of the Company. Notwithstanding anything
to the contrary herein (but subject to any superior rights contained in
Certificate of Incorporation or the Bylaws (or, as relevant, those of the
applicable Subsidiary) or applicable indemnification agreements to which any of
the Company or its Subsidiaries is a party), prior to making any payment or
advance in respect of the indemnification obligations set forth in this Section 5.9, the
Person who is requesting such indemnification or advance shall agree to repay
such payments or advances if it is ultimately determined that such Person is not
entitled to indemnification. Subject to any superior rights contained in the
Certificate of Incorporation or the Bylaws (or, as relevant, those of the
applicable Subsidiary) or applicable indemnification agreements to which any of
the Company or its Subsidiaries is a party, no Indemnified Party shall settle,
compromise or consent to the entry of any judgment in any threatened or actual
Proceeding for which indemnification could be sought by an Indemnified Party
hereunder unless Parent consents in writing to such settlement, compromise or
consent (which consent shall not be unreasonably withheld, conditioned or
delayed).
(b) Except
as may be required by applicable Law, Parent and the Company agree that for a
period of six years from the Effective Time, all rights to indemnification and
exculpation from liabilities for acts or omissions occurring at or prior to the
Effective Time and rights to advancement of expenses relating thereto now
existing in favor of any Indemnified Party as provided in the Certificate of
Incorporation or the Bylaws (or, as relevant, those of the applicable
Subsidiary) or in any indemnification agreement between such Indemnified Party
and the Company or the Subsidiaries shall survive the Merger and continue in
full force and effect, and for a period of six years from the Effective Time
shall not be amended, repealed or otherwise modified in any manner that would
adversely affect any right thereunder of any such Indemnified
Party.
(c) Prior
to the Effective Time, Parent shall pay for and cause to be obtained, and to be
effective at the Effective Time, one or more prepaid “tail” insurance policies
for the Persons who, as of the date hereof, are covered by the Company’s and its
Subsidiaries’ existing directors’ and officers’ insurance policies (“D&O Insurance”),
with a claims period of at least six years from the Effective Time with terms
and conditions (including scope and coverage amounts) that are, taken as a
whole, at least as favorable as the Company’s and its Subsidiaries’ existing
D&O Insurance, for claims arising from facts or events that occurred at or
prior to the Effective Time, covering without limitation the transactions
contemplated hereby; provided, that the
maximum aggregate premium for such “tail” insurance policies that Parent shall
be required to expend shall not exceed three hundred percent (300%) of the
annual D&O Insurance premium for the Company’s and its Subsidiaries’ current
fiscal year, which annual premiums are set forth in Section 5.9(c) of the
Company Disclosure Letter; and if such amount is not sufficient to purchase
insurance in such maximum amount, then Parent shall purchase such amount of
insurance with the best available coverage as can be purchased for an aggregate
amount that is equal to three hundred percent (300%) of the annual premium for
such policies for the Company’s and its Subsidiaries’ current fiscal year.
Parent shall cause the Surviving Corporation to comply with its obligations
under such policies for the full term of at least six years.
58
(d) Notwithstanding
anything herein to the contrary, if any Proceeding (whether arising before, at
or after the Effective Time) with respect to which an Indemnified Party is
entitled to indemnification is instituted against any Indemnified Party on or
prior to the sixth anniversary of the Effective Time, then the provisions of
this Section
5.9 shall continue in effect until the final disposition of such
Action.
(e) The
indemnification provided for herein shall not be deemed exclusive of any other
rights to which an Indemnified Party is entitled, whether pursuant to Law,
Contract or otherwise. The provisions of this Section 5.9 shall
survive the consummation of the Merger and, notwithstanding any other provision
of this Agreement that may be to the contrary, expressly are intended to
benefit, and shall be enforceable by, each of the Indemnified Parties and their
respective heirs and legal representatives.
(f) In the event that the
Surviving Corporation or Parent or any of their respective successors or assigns
(i) consolidates with or merges into any other Person and is not the continuing
or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all of its properties and
assets to any Person, then, and in each such case, proper provision shall be
made so that the successors and assigns of the Surviving Corporation or Parent,
as the case may be, shall succeed to the obligations set forth in this Section
5.9.
5.10.
Employee
Matters. As of the Effective Time, Parent shall provide the
employees of the Company who are employed by Parent or one of its Subsidiaries
after the Effective Time (the “Continuing
Employees”) and their dependents, as applicable, with either, or a
combination of, (a) comparable types and levels of employee benefits as those
provided to similarly situated employees of Parent or its Subsidiaries and their
dependents, as applicable, pursuant to the terms of the employee benefit
arrangements of Parent (such arrangements the “Parent Benefit
Arrangements”), or (b) benefits under the Current Employee Benefit Plans,
all or some of which Parent may continue to sponsor on and after the Closing
Date (the “Continued
Plans”). To the extent Parent elects to provide employee
benefits to the Continuing Employees and their dependents, as applicable,
pursuant to clause
(b) above, the Continuing Employees shall be entitled to participate in
the Continued Plans from and after the Closing Date until such time that Parent
suspends participation in or terminates such Continued Plans (the “Transition Period”);
provided, that
in any event, the Continuing Employees shall be entitled to participate in the
Continued Plans for the remainder of the calendar year in which the Effective
Time occurs. Upon the expiration of the Transition Period, the
Continuing Employees shall then be entitled to participate in the Parent Benefit
Arrangements. To the extent the Continuing Employees participate in a Parent
Benefit Arrangement, Parent shall, for purposes of determining eligibility to
participate, vesting and entitlement to benefits where length of service is
relevant (including for purposes of vacation accrual) under such Parent Benefit
Arrangement, provide that such Continuing Employees shall receive service credit
under such Parent Benefit Arrangement for their period of service with the
Company and its Subsidiaries and predecessors prior to the Effective Time,
except where doing so would cause a duplication of benefits. Parent
shall waive all limitations as to preexisting condition exclusions (or actively
at work or similar limitations), evidence of insurability requirements and
waiting periods with respect to participation and coverage requirements in
connection with the medical, dental and vision benefits that such Continuing
Employees may be eligible to receive pursuant to a Parent Benefit Arrangement
after the Effective Time. Parent shall also provide the Continuing
Employees with credit for any co-payments, deductibles and offsets made pursuant
to the applicable Current Employee Benefit Plans described in Section 3.19(f) for
the purposes of satisfying any applicable deductible or out-of-pocket expenses
under any Parent Benefit Arrangement in the calendar year, plan year or policy
year (as applicable under the terms of such Parent Benefit Arrangement) in which
the Effective Time occurs. Any vacation or paid time off that is
accrued and unused by a Continuing Employee prior to the Effective Time shall be
credited to such Continuing Employee following the Effective Time and thereafter
shall be carried forward subject to Parent’s policies and procedures. Nothing in
this Section
5.10 shall be construed to limit the right of Parent or any of its
Subsidiaries (including, following the Closing Date, the Company and its
Subsidiaries) to amend or terminate any Continued Plan or other Employee Benefit
Plan, to the extent such amendment or termination is permitted by the terms of
the applicable plan, nor shall anything in this Section 5.10 be
construed to prohibit Parent or any of its Subsidiaries (including, following
the Closing Date, the Company and its Subsidiaries) from terminating the
employment of any particular Continuing Employee following the Closing
Date. Without limiting the generality of Section 8.7, nothing
in this Section
5.10 shall: (a) grant any rights or benefits to any Person other than the
Parties or (b) amend, or may be construed as amending, any Current Employee
Benefit Plan, Parent Benefit Arrangement or any other employee benefit
plan.
59
5.11.
Takeover
Laws. If any Takeover Law shall become applicable to the
Offer, the Merger or the other transactions contemplated hereby, each of the
Company and Parent and the members of their respective boards of directors shall
grant such approvals and take such actions as are reasonably necessary so that
the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act reasonably to
eliminate or minimize the effects of such Takeover Law on the Offer, the Merger
and the other transactions contemplated hereby.
5.12.
Section 16
Matters. Prior to the Effective Time, the Company shall take
all such steps as may reasonably be necessary and permitted to cause the
transactions contemplated by this Agreement, including any dispositions of
shares of Common Stock (including derivative securities with respect to such
shares of Common Stock) by each individual 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.
60
5.13. Rule 14d-10(d).
(a) The Company shall
provide to Parent within five Business Days following the execution date of this
Agreement a true and complete copy of any resolutions of the Board of Directors,
or the Company Compensation Committee, reflecting any approvals and actions
referred to in the last sentence of Section 3.19(g) to
the extent taken prior to the date of this Agreement. Notwithstanding
anything in this Agreement to the contrary, the Company and its Subsidiaries
will not, after the date hereof, enter into, establish, amend or modify any
plan, program, agreement or arrangement pursuant to which compensation is paid
or payable, or pursuant to which benefits are provided or to be provided, in
each case to any current or former director, officer, employee, independent
contractor or consultant of the Company or any of its Subsidiaries (“Company
Personnel”).
(b) In the event that,
during the period beginning on the date of this Agreement and ending not less
than five days prior to the Expiration Date, Parent requests that the Company
Compensation Committee consider whether any plan, program, agreement or
arrangement that Parent proposes to enter into, establish, amend or modify
pursuant to which compensation is paid or payable, or pursuant to which benefits
are provided, in each case to any Company Personnel (each such plan, program,
agreement or arrangement, a “Post-Signing
Arrangement”), would constitute an Employment Compensation Arrangement
and provides the Company with such information with respect to such Post-Signing
Arrangement as the Company may reasonably request, the Company Compensation
Committee will promptly, and in any event prior to the Expiration Date, consider
such Post-Signing Arrangement at a meeting duly called and held. In
the event that, following such consideration, the Company Compensation Committee
determines in good faith that such Post-Signing Arrangement constitutes an
Employment Compensation Arrangement, at such meeting the Company Compensation
Committee shall take all such steps as may be necessary to (i) approve as an
Employment Compensation Arrangement such plan, program, agreement or arrangement
and (ii) satisfy the requirements of the non-exclusive safe harbor under Rule
14d-10(d)(2) promulgated under the Exchange Act with respect to such plan,
program, agreement, arrangement, understanding, payment or benefit.
(c) At the time of any
action by the Company Compensation Committee described in this Section 5.13, each
member of the Company Compensation Committee shall be an “independent director”
in accordance with the requirements of Rule 14d-10(d)(2) promulgated under the
Exchange Act.
5.14. Stockholder
Litigation. The Company shall give Parent the opportunity to
participate in the defense of any stockholder litigation against the Company or
its officers or directors relating to the transactions contemplated by this
Agreement.
5.15.
Stock
Exchange Delisting. After the date hereof and prior to the
Acceptance Date, the Company shall use commercially reasonable efforts to take,
or cause to be taken, all actions, and do or cause to be done all things,
reasonably necessary and appropriate on its part under applicable Laws and rules
and policies of NYSE AMEX and the other exchanges on which the Common Stock is
listed to maintain the Company’s listing thereon. Prior to the
Closing Date, the Company shall cooperate with Parent and use commercially
reasonable efforts to take, or cause to be taken, all actions, and do or cause
to be done all things, reasonably necessary and appropriate on its part under
applicable Laws and rules and policies of NYSE AMEX and the other exchanges on
which the Common Stock is listed to enable the delisting by the Surviving
Corporation of the shares of Common Stock from NYSE AMEX and the other exchanges
on which the Common Stock is listed and the deregistration of the shares of
Common Stock under the Exchange Act as promptly as practicable after the
Effective Time.
61
5.16.
Environmental
Matters. In the event that the Parties are unable to secure a
determination from the New Jersey Department of Environmental Protection
(“NJDEP”) in the form of a Letter of Non-Applicability that the transactions
contemplated by this Agreement are not subject to ISRA, or the parties do not
otherwise agree that ISRA is inapplicable, then the Parties agree to the
following:
(a) In
connection with the transactions contemplated by this Agreement, the Company
shall initiate compliance with the requirements of ISRA within five days of
execution of the Agreement, and thereafter shall either obtain a Final
Remediation document as defined at N.J.A.C.
7:26B-1.4, or submit a
Remediation Certification accompanied by a Remediation Funding Source, in
accordance with the procedures and requirements set forth in N.J.A.C. 7:26B-4 et
seq. and N.J.A.C. 7:26B-6.1 4 et seq. as well as any and all
notices as set forth in N.J.A.C. 7:26B-3.1 4 et seq. to NJDEP;
and
(b) The
Company is responsible and liable for all requirements and liabilities set forth
in and that may arise from ISRA. The Company, at its reasonable cost
and expense, shall take any and all steps required by ISRA, including without
limitation, preparation and implementation of sampling plans, cleanup plans,
underground storage tank closure plans, closure or post-closure activities,
health and safety plans, preliminary assessment plans and reports, remedial
investigation plans and reports, remedial action plans and reports, risk
assessment or the equivalent.
5.17.
Closing
Conditions. Subject to any exceptions contained in Section 5.4(c), (a)
each of the Parties shall use its commercially reasonable efforts to effectuate
the transactions contemplated hereby and to fulfill and to cause to be fulfilled
the conditions to closing under this Agreement and (b) each Party hereto, at the
reasonable request of another Party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
ARTICLE
SIX
CONDITIONS
TO THE MERGER
6.1. Conditions to Each Party’s
Obligation to Effect the Merger.
(a) Unless the Merger is
consummated pursuant to Section 253 of the DGCL, the Company Stockholder
Approval shall have been obtained.
62
(b) Any waiting period (and
any extension thereof) applicable to the Merger under any Antitrust Law shall
have been terminated or shall have expired, and no restrictive order or other
requirements shall have been placed on the Company, Parent, Merger Sub or the
Surviving Corporation in connection therewith.
(c) No Governmental
Authority having jurisdiction over any party shall have enacted, promulgated,
issued, enforced or entered any Laws or Orders, whether temporary, preliminary
or permanent, that make illegal, enjoin or otherwise prohibit consummation of
the Merger.
(d) Merger Sub shall have
accepted for purchase and payment the shares of Common Stock validly tendered
and not properly withdrawn pursuant to the Offer in accordance with the terms
hereof and thereof; provided, however, that neither
Parent nor Merger Sub shall be entitled to assert the failure of this condition
if, in breach of this Agreement or the terms of the Offer, Merger Sub fails to
purchase and pay for any shares of Common Stock validly tendered and not
properly withdrawn.
ARTICLE
SEVEN
TERMINATION,
AMENDMENT AND WAIVER
7.1. Termination. This
Agreement may be terminated and the Merger may be abandoned at any time prior to
the Effective Time, whether before or after the adoption of this Agreement by
the stockholders of the Company:
(a) by mutual written
consent of Parent, Merger Sub and the Company (subject to Section
1.4(b));
(b) by either the Company or
Parent, if:
(i) the Acceptance Time has
not occurred by March 15, 2010 (the “Outside Date”), provided, however, that the
right to terminate this Agreement pursuant to this Section 7.1(b)(i)
shall not be available to any Party whose breach of this Agreement has been the
primary cause or
primarily resulted in the non-satisfaction of any condition to the Offer set
forth in Annex B; or
(ii) if any Order issued by
a court of competent jurisdiction or by a Governmental Authority, or Law or
other legal restraint or prohibition in each case making the Merger or any other
material transaction contemplated by this Agreement illegal or permanently
restraining, enjoining, or otherwise preventing the consummation thereof shall
be in effect and shall have become final and nonappealable;
(c) by Parent prior to the
Acceptance Date, if:
(i) (A) an Adverse
Recommendation Change shall have occurred, (B) in the event of any tender or
exchange offer that is commenced or an Acquisition Proposal that is made in
writing to the Company and publicly disseminated, within ten Business Days after
a written request from Parent that it do so, the Company shall not have made
public a statement unconditionally reaffirming the Recommendation or (C) the
Company or the Board of Directors shall have knowingly and intentionally
violated or breached in any material respect its obligations under Section
5.3;
63
(ii) the Company shall have
breached any of its representations or warranties or failed to perform in any
material respect the obligations to be performed by it under this Agreement,
which breach or failure to perform (1) would give rise to the failure of a
Tender Offer Condition set forth in paragraphs (i) or
(ii) of clause (c) of Annex B and (2) is
incapable of being cured by the Company or has not been cured by the Company
within 30 days after written notice has been given by Parent to the Company of
such breach or failure to perform; provided, however, that at the
time of the delivery or receipt of such written notice, each of Parent and
Merger Sub shall not be in breach of any of its obligations under this
Agreement; or
(iii) a Company Material
Adverse Effect shall have occurred since the date of this Agreement and such
Company Material Adverse Effect is not curable within 30 days after the
occurrence of such Company Material Adverse Effect;
(d) by the Company, if prior
to the Acceptance Date:
(i) Parent or Merger Sub
shall have (A) failed to perform in any material respect the obligations to be
performed by it under this Agreement or (B) breached any of Parent’s or Merger
Sub’s representations and warranties, which breach or failure to perform, in
each case such that it would reasonably be expected to, individually or in the
aggregate, materially adversely affect Parent’s or Merger Sub’s ability to
consummate the transactions contemplated by this Agreement or such that the
conditions set forth in Section 6.1 would not
be satisfied and, in the case of either clause (A) or (B) is incapable of
being cured by Parent or Merger Sub, as applicable, or has not be cured by
Parent or Merger Sub, as applicable, within 30 days after written notice has
been given by the Company to Parent of such breach or failure; provided, that at the
time of the delivery or receipt of such written notice, the Company shall not be
in breach of any of its obligations under this Agreement; or
(ii) the Board of Directors
authorizes the Company, in compliance with Section 5.3, to enter
into a definitive agreement (not including an Acceptable Confidentiality
Agreement) in respect of a Superior Proposal; provided, that the
Company substantially concurrently with such termination, pays to Parent in
immediately available funds the fee required to be paid pursuant to Section 7.3(a)(iii)
and the Board of Directors concurrently approves, and the Company concurrently
enters into, a definitive agreement providing for the implementation of such
Superior Proposal.
The Party
desiring to terminate this Agreement shall give written notice of such
termination to the other Party. Where a Party may terminate this
Agreement pursuant to one or more provisions of this Section 7.1, such
Party may designate the provision pursuant to which such termination shall be
treated for purposes of Section
7.3.
7.2. Effect of
Termination. Upon the termination of this Agreement pursuant
to Section 7.1,
this Agreement shall forthwith become null and void except for the provisions of
(a) Section 7.3
and (b) ARTICLE
EIGHT, which shall survive such termination; provided, that
nothing herein shall relieve any party from liability or damages for any willful
or intentional breach of this Agreement or fraud, in which case the aggrieved
party shall be entitled to all rights and remedies (including damages) available
at Law or equity. The Confidentiality Agreement between Parent and
the Company dated September 10, 2009 (the “Confidentiality
Agreement”) shall survive termination of this Agreement and shall
continue in effect in accordance with its terms.
64
7.3. Fees and
Expenses.
(a) In
the event that:
(i) (A)
an Acquisition Proposal shall have been made to the Company or shall have been
made directly to its stockholders generally following the date of this
Agreement, and thereafter (B) this Agreement is terminated by the Company or
Parent pursuant to Section 7.1(b)(i)
solely as a result of the failure to satisfy the Minimum Condition and (C) the
Company consummates a transaction contemplated by any Acquisition Proposal
(replacing “20%” in the definition thereof with “50%”) within 12 months of the
date this Agreement is terminated;
(ii) this Agreement is
terminated by Parent pursuant to Section 7.1(c)(i);
or
(iii) this Agreement is
terminated by the Company pursuant to Section
7.1(d)(ii);
then in
any such event under clause (i), (ii) or (iii) of this Section 7.3(a), the
Company shall pay to Parent a termination fee of $2,000,000 (the “Termination
Fee”). Any payment of the Termination Fee required to be made
pursuant to clause
(i) of this Section 7.3(a) shall
be made to Parent substantially concurrently with consummation of the
transaction contemplated by the Acquisition Proposal referred to therein; any
payment of the Termination Fee required to be made pursuant to clause (ii) of this
Section 7.3(a)
shall be made to Parent promptly following the termination of the Agreement
pursuant to Section
7.1(c)(i); and any payment of the Termination Fee required to be made
pursuant to clause
(iii) of this Section 7.3(a) shall
be made at the time provided for in Section
7.1(d)(ii).
(b) In the event that the
Termination Fee is payable to Parent pursuant to Section 7.3, then in
addition to the Termination Fee, the Company also shall pay to Parent $1,000,000
in reimbursement of out of pocket fees and expenses (including legal and other
third party advisors fees and expenses) incurred by Parent and its affiliates on
or prior to the termination of this Agreement in connection with the
transactions contemplated by this Agreement (the “Parent
Expenses”). The Company shall pay to Parent the Parent
Expenses payable pursuant to this Section 7.3(b)
concurrently with the Termination Fee.
(c) All
such payments to be made to Parent pursuant to this Section 7.3 shall be
made by wire transfer of immediately available funds to an account to be
designated by Parent or, if Parent fails to timely designate an account, by
cashier’s check payable to the order of Parent delivered to Parent at the
address specified in Section
8.3.
65
(d) Except as set forth in
Section 7.3(b),
fees and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement shall be paid by the Party incurring
such expenses, whether or not the Merger is consummated.
(e) In the event that the
Company shall fail to pay the Termination Fee and/or Parent Expenses required
pursuant to this Section 7.3 when due,
such Termination Fee and/or Parent Expenses, as the case may be, shall accrue
interest for the period commencing on the date such Termination Fee and/or
Parent Expenses, as the case may be, became past due, at the rate of interest
per annum equal to LIBOR plus 300 basis points from such date to the date of
payment. In addition, if the Company shall fail to pay such
Termination Fee and/or Parent Expenses, as the case may be, when due, the
Company shall also pay to Parent all of Parent’s reasonable costs and expenses
(including reasonable attorneys’ fees) in connection with efforts to collect
such Termination Fee and/or Parent Expenses, as the case may be.
(f) The Company acknowledges
that the agreements contained in this Section 7.3 are an
integral part of the Agreement and the transactions contemplated hereby and
that, without these agreements, Parent and Merger Sub would not enter into this
Agreement. Each of the Parties acknowledges that the Termination Fee
and the Parent Expenses are not penalties, but rather reasonable amounts that
will compensate Parent and Merger Sub for the costs, expenses, efforts and
resources expended and opportunities foregone while negotiating this Agreement
and in reliance on this Agreement and on the expectation of the consummation of
the transactions contemplated hereby, which amount would otherwise be impossible
to calculate with precision. Each of Parent and Merger Sub
acknowledges and agrees on behalf of itself and its affiliates that in the event
that the Termination Fee and the Parent Expenses become payable and is paid by
the Company pursuant to this Section 7.3, except
as provided below and except for any amounts payable pursuant to Section 7.3(e), the
right to receive the Termination Fee and/or Parent Expenses shall constitute
each of Parent’s and Merger Sub’s and each of their affiliates’ and
Representatives’ sole and exclusive remedy under this Agreement; provided, however, that with
respect to any termination pursuant to Section 7.1(c)(i)(C),
or in the event of a willful or intentional breach of this Agreement or fraud as
described in Section
7.2, in addition to the Termination Fee, the Company will not be relieved
of any liability for damages to the extent set forth in Section
7.2.
66
7.4. Extension;
Waiver. At any time prior to the Effective Time, the Parties
may, to the extent permitted by applicable Law, subject to Section 7.5 and Section 1.4(b), (a)
extend the time for the performance of any of the obligations or other acts of
the other Parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto or (c)
waive compliance with any of the agreements or conditions contained herein;
provided, however, that after
any approval of this Agreement by the Company’s stockholders, there may not be
any extension or waiver of this Agreement which decreases the Merger
Consideration or which adversely affects the rights of the Company’s
stockholders hereunder or otherwise requires the approval of stockholders in
accordance with applicable Law or the rules of the NYSE Amex without the
approval of such stockholders. Any agreement on the part of a Party
to any such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such Party. The failure of any Party
to assert any of its rights under this Agreement or otherwise shall not
constitute a waiver of those rights.
7.5. Amendment. This
Agreement may be amended by the Parties by action taken by or on behalf of their
respective boards of directors (subject to Section 1.4(b)) at
any time prior to the Effective Time; provided, however, that, after
any approval of the Agreement by the stockholders of the Company, no amendment
may be made without further stockholder approval which, by Law or in accordance
with the rules of any relevant stock exchange, requires further approval by such
stockholders. This Agreement may not be amended except by an
instrument in writing signed by the Parties.
ARTICLE
EIGHT
GENERAL
PROVISIONS
8.1. Non-Survival of
Representations and Warranties. None of the representations
and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This ARTICLE EIGHT, the
agreements of Parent, Merger Sub and the Company contained in Section 7.3 and 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 shall
survive the consummation of the Merger.
8.2. Parent
Guarantee. Parent shall cause Merger Sub to comply in all
respects with each of the representations, warranties, covenants, obligations,
agreements and undertakings made or required to be performed by Merger Sub under
this Agreement, the Offer, the Merger and the transactions contemplated hereby
and thereby. As a material inducement to the Company’s willingness to
enter into this Agreement and perform its obligations hereunder, Parent hereby
unconditionally guarantees full performance and payment by Merger Sub of each of
the covenants, obligations and undertakings required to be performed by Merger
Sub under this Agreement, the Offer, the Merger and the transactions
contemplated hereby and thereby and hereby represents, acknowledges and agrees
that any breach of, or other failure to perform, any such representation,
warranty, covenant, obligation, agreement or undertaking of Merger Sub shall
also be deemed to be a breach or failure to perform by Parent, and the Company
shall have the right, exercisable in its sole discretion, to pursue any and all
available remedies it may have arising out of any such breach or nonperformance
directly against either or both of Parent and Merger Sub in the first
instance.
67
8.3. Notices. All
notices, requests, claims, demands, and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by cable, telecopy, telegram, or telex or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective Parties at the following addresses (or at such other address for a
party as shall be specified in a notice given in accordance with this Section
8.3):
if to Parent, Merger Sub or
the Surviving Corporation:
Crane
Co.
100 First
Stamford Place
Stamford,
Connecticut 06902
Attention: Augustus
I. DuPont
Fax: (203)
363-7350
with a
copy to:
K&L
Gates LLP
599
Lexington Avenue
New York,
New York 10022
Attention: Eric
Simonson
Fax: (212)
536-3901
if to the
Company:
Merrimac
Industries, Inc.
41
Fairfield Place
West
Caldwell, New Jersey 07006
Attention: Mason
N. Carter
Fax: (973)
882-5989
with
copies to:
Katten
Muchin Rosenman LLP
575
Madison Avenue
New York,
New York 10022
Attention: David
H. Landau
Fax: (212)
940-8776
8.4. 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 Merger is not affected in any
manner materially adverse to Parent or the Surviving
Corporation. Upon such determination that any term or other provision
is invalid, illegal, or incapable of being enforced, the Parties shall negotiate
in good faith to modify this Agreement in a mutually acceptable manner so as to
effect the original intent of the Parties as closely as possible with respect to
the consummation of the Merger.
68
8.5. Entire
Agreement. This Agreement (together with the Annexes,
Exhibits, Company Disclosure Letter, the Tender Agreements and the other
documents delivered pursuant hereto) and the Confidentiality Agreement,
constitute the entire agreement of the Parties and supersede all prior
agreements and undertakings, both written and oral, between the Parties, or any
of them, with respect to the subject matter hereof and thereof and, except as
otherwise expressly provided herein, are not intended to confer upon any other
Person any rights or remedies hereunder.
8.6. 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. 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.
8.7. Parties in
Interest. Nothing in this Agreement, express or implied, is
intended to or shall confer upon any Person other than the parties and their
respective successors and permitted assigns any legal or equitable right,
benefit or remedy of any nature under or by reason of this Agreement, other than
(a) with respect to the provisions of Section 5.9,
which shall inure to the benefit of the Persons benefiting therefrom, who are
hereby intended to be third-party beneficiaries thereof, (b) the right of
the Company on behalf of its stockholders to pursue damages in the event of
Parent’s or Merger Sub’s willful or intentional breach of this Agreement, (c)
after the Effective Time, the rights of the holders of Common Stock to receive
the Merger Consideration in accordance with the terms and conditions of this
Agreement and (d) after the Effective Time, the rights of the holders of
Company Stock Options and restricted stock to receive the payments contemplated
by the applicable provisions of Section 2.13 in
accordance with the terms and conditions of this Agreement, which rights are
hereby acknowledged and agreed by Parent, Merger Sub and the
Company.
8.8. Specific
Performance. The Parties hereto agree that irreparable damage
may occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement or to enforce
specifically the performance of the terms hereof, in addition to any other
remedy at Law or equity.
8.9. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
8.10. Jurisdiction. Each
of the Parties irrevocably agrees that any legal action or proceeding with
respect to this Agreement and the rights and obligations arising hereunder, or
for recognition and enforcement of any judgment in respect of this Agreement and
the rights and obligations arising hereunder brought by the other party hereto
or its successors or assigns, shall be brought and determined exclusively in the
Delaware Court of Chancery and any state appellate court therefrom within the
State of Delaware (or, if the Delaware Court of Chancery declines to accept
jurisdiction over a particular matter, any state or federal court within the
State of Delaware). Each of the Parties hereby irrevocably submits
with regard to any such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal jurisdiction of the
aforesaid courts and agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated by this Agreement in any court
other than the aforesaid courts. Each of the Parties hereby
irrevocably waives, and agrees not to assert as a defense, counterclaim or
otherwise, in any action or proceeding with respect 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 in accordance with this
Section 8.10,
(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 the 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 matter hereof, may not be enforced in or by such
courts.
69
8.11.
Waiver of
Jury Trial. EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.12.
Headings. The
descriptive headings contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
8.13. Interpretation. When
a reference is made in this Agreement to an Article or Section, such reference
shall be to an Article or Section of this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.” The words “hereof,” “herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant to this Agreement unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument
or statute defined or referred to herein or in any agreement or instrument that
is referred to herein means such agreement, instrument or statute as from time
to time amended, modified or supplemented, including (in the case of agreements
or instruments) by waiver or consent and (in the case of statutes) by succession
of comparable successor statutes and references to all attachments thereto and
instruments incorporated therein.
8.14.
Counterparts. This
Agreement may be executed and delivered (including by facsimile or electronic
transmission) 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.
[Signature
Page Follows]
70
IN WITNESS WHEREOF, Parent, Merger Sub
and the Company have caused this Agreement to be executed as of the date first
written above by their respective officers thereunto duly
authorized.
|
CRANE
CO.
|
|||
|
By:
|
/s/ Eric C. Fast | ||
|
Printed
Name: Eric C. Fast
|
|||
|
Title:
|
|||
|
CRANE
MERGER CO.
|
|||
|
By:
|
/s/ Timothy J. MacCarrick | ||
|
Printed
Name: Timothy J. MacCarrick
|
|||
|
Title:
|
|||
|
MERRIMAC
INDUSTRIES, INC.
|
|||
|
By:
|
/s/ Mason N. Carter | ||
|
Printed
Name: Mason N. Carter
|
|||
|
Title:
Chairman, President and Chief Executive Officer
|
|||
[Signature
page to Agreement and Plan of Merger]
ANNEX
A
INDEX OF
DEFINED TERMS
|
Defined
Term
|
Section
|
|
|
Acceptable
Confidentiality Agreement
|
Section
5.3(h)(i)
|
|
|
Acceptance
Date
|
Section
1.1(f)
|
|
|
Acquisition
Proposal
|
Section
5.3(h)(ii)
|
|
|
Adverse
Recommendation Change
|
Section
5.3(c)
|
|
|
Agreement
|
Introduction
|
|
|
Alternative
Acquisition Agreement
|
Section
5.3(c)
|
|
|
Antitrust
Laws
|
Section
3.4(b)
|
|
|
Appraisal
Shares
|
Section
2.8(b)
|
|
|
Board
Actions
|
Section
3.3
|
|
|
Board
of Directors
|
Introduction
|
|
|
Board
Percentage
|
Section
1.4(a)
|
|
|
Business
Days
|
Section
1.1(a)
|
|
|
Bylaws
|
Section
3.1
|
|
|
CAA
|
Section
3.18(d)
|
|
|
CERCLA
|
Section
3.18(d)
|
|
|
Certificate
of Incorporation
|
Section
3.1
|
|
|
Certificate
of Merger
|
Section
2.3
|
|
|
Certificates
|
Section
2.8(a)
|
|
|
Closing
|
Section
2.2
|
|
|
Closing
Date
|
Section
2.2
|
|
|
Code
|
Section
2.9(d)
|
|
|
Common
Stock
|
Introduction
|
|
|
Commonly
Controlled Entity
|
Section
3.19(g)
|
|
|
Company
|
Introduction
|
|
|
Company
Arrangements
|
Section
3.19(h)
|
|
|
Company
Compensation Committee
|
Section
3.19(h)
|
|
|
Company
Disclosure Documents
|
Section
3.23(a)
|
|
|
Company
Disclosure Letter
|
Introduction
|
|
|
Company
Equity Awards
|
Section
2.13(d)
|
|
|
Company
Financial Advisor
|
Section
5.3(b)
|
|
|
Company
Financial Statements
|
Section
3.7(b)
|
|
|
Company
Form 10-K
|
Section
3.1
|
|
|
Company
IP Agreements
|
Section
3.12(c)
|
|
|
Company
Material Adverse Effect
|
Section
3.4(a)
|
|
|
Company
Meeting
|
Section
5.1(b)
|
|
|
Company
Personnel
|
Section
5.13(a)
|
|
|
Company
Restricted Stock Units
|
Section
2.13(b)
|
|
|
Company
SEC Filings
|
Section
3.7(a)
|
|
|
Company
Stock Option Awards
|
Section
2.13(a)
|
|
|
Company
Stock Plans
|
Section
2.13(a)
|
|
|
Company
Stockholder Approval
|
Section
3.3
|
|
|
Confidential
Information
|
Section
3.12(i)
|
|
|
Confidentiality
Agreement
|
Section
7.2
|
|
|
Continued
Plans
|
Section
5.10
|
|
|
Continuing
Employees
|
Section
5.10
|
|
|
Contract
|
Section
3.4(a)
|
|
|
Costs
|
Section
5.9(a)
|
|
|
Covered
Securityholders
|
Section
3.19(h)
|
|
|
Current
Employee Benefit Plan
|
Section
3.19(g)
|
B-1
|
Defined
Term
|
Section
|
|
|
CWA
|
Section
3.18(d)
|
|
|
D&O
Insurance
|
Section
5.9(c)
|
|
|
DGCL
|
Introduction
|
|
|
Effective
Time
|
Section
2.3
|
|
|
Employee
Benefit Plan
|
Section
3.19(g)
|
|
|
Employment
Compensation Arrangement
|
Section
3.19(h)
|
|
|
Encumber
or Encumbering
|
Section
3.9
|
|
|
Encumbrance
|
Section
3.9
|
|
|
Environmental
Laws
|
Section
3.18(d)
|
|
|
EPCRKA
|
Section
3.18(d)
|
|
|
Equity
Award Restrictive Covenants
|
Section
2.13(d)
|
|
|
ERISA
|
Section
3.19(g)
|
|
|
ESPP
|
Section
2.13(c)
|
|
|
ESPP
Exercise Date
|
Section
2.13(c)
|
|
|
Exchange
Act
|
Section
3.4(b)
|
|
|
Expiration
Date
|
Section
1.1(d)
|
|
|
FCPA
|
Section
3.16(b)
|
|
|
Final
Remediation Document
|
Section
5.16(a)
|
|
|
Foreign
Export and Import Laws
|
Section
3.5(b)
|
|
|
Foreign
Plan
|
Section
3.19(g)
|
|
|
GAAP
|
Section
3.7(b)
|
|
|
Government
Contract
|
Section
3.14(d)
|
|
|
Governmental
Antitrust Authority
|
Section
5.4(b)
|
|
|
Governmental
Authority
|
Section
3.4(b)
|
|
|
Hazardous
Materials
|
Section
3.18(d)
|
|
|
Indemnified
Party
|
Section
5.9(a)
|
|
|
Independent
Director
|
Section
1.4(a)
|
|
|
Intellectual
Property
|
Section
3.12(b)
|
|
|
IRS
|
Section
3.10(o)
|
|
|
ISRA
|
Section
3.4(b)
|
|
|
Joint
Defense Agreement
|
Section
5.4(a)
|
|
|
Knowledge
|
Section
3.5(b)
|
|
|
Latest
Balance Sheet
|
Section
3.8
|
|
|
Law
|
Section
3.1
|
|
|
Material
Contract
|
Section
3.14(a)
|
|
|
Merger
|
Introduction
|
|
|
Merger
Consideration
|
Section
2.8(a)
|
|
|
Merger
Sub
|
Introduction
|
|
|
Minimum
Condition
|
Annex
B
|
|
|
Money
Laundering Laws
|
Section
3.16(c)
|
|
|
NJDEP
|
Section
5.16
|
|
|
NYSE
AMEX
|
Section
1.1(d)
|
|
|
Offer
|
Introduction
|
|
|
Offer
Documents
|
Section
1.1(a)
|
|
|
Open
Source Software
|
Section
3.12(k)
|
|
|
Option
Award Consideration
|
Section
2.13(a)
|
|
|
Order
|
Section
3.4(a)
|
|
|
Outside
Date
|
Section
7.1(b)(i)
|
|
|
Owned
Registered Intellectual Property
|
Section
3.12(a)
|
|
|
Parent
|
Introduction
|
|
|
Parent
Arrangements
|
Section
4.10
|
B-2
|
Defined
Term
|
Section
|
|
|
Parent
Benefit Arrangements
|
Section
5.10
|
|
|
Parent
Board
|
Section
4.10
|
|
|
Parent
Disclosure Documents
|
Section
4.4(a)
|
|
|
Parent
Expenses
|
Section
7.2(b)
|
|
|
Party
or Parties
|
Introduction
|
|
|
Paying
Agent
|
Section
2.9(a)
|
|
|
Payment
Account
|
Section
2.9(b)
|
|
|
PBGC
|
Section
3.19(g)
|
|
|
Per
Common Share Price
|
Section
1.3(a)
|
|
|
Per
Share Amount
|
Section
1.1(a)
|
|
|
Permitted
Encumbrances
|
Section
3.11
|
|
|
Person
|
Section
3.10(o)
|
|
|
Post-Signing
Arrangement
|
Section
5.13(b)
|
|
|
Preferred
Stock
|
Section
3.2(a)
|
|
|
Proceeding
|
Section
3.6
|
|
|
Proposal
|
Section
3.14(d)
|
|
|
Proxy
Statement
|
Section
3.23(b)
|
|
|
Qualified
Employee Benefit Plan
|
Section
3.19(b)
|
|
|
RCRA
|
Section
3.18(d)
|
|
|
Recommendation
|
Section
3.3
|
|
|
Regulation
S-K
|
Section
3.7(b)
|
|
|
Representatives
|
Section
5.3(a)
|
|
|
Restricted
Stock Unit Consideration
|
Section
2.13(b)
|
|
|
Rights
|
Introduction
|
|
|
Rights
Agreement
|
Introduction
|
|
|
Schedule
14D-9
|
Section
1.2(b)
|
|
|
Schedule
TO
|
Section
1.1(a)
|
|
|
SEC
|
Section
1.1(a)
|
|
|
Section
262
|
Section
2.8(b)
|
|
|
Securities
Act
|
Section
1.3(a)
|
|
|
Short-Form
Merger
|
Section
2.7
|
|
|
Software
|
Section
3.12(b)
|
|
|
SOX
|
Section
3.7(e)
|
|
|
Subsidiary
|
Section
3.1
|
|
|
Subsidiary
Charter Documents
|
Section
3.1
|
|
|
Superior
Proposal
|
Section
5.3(h)(iii)
|
|
|
Surviving
Corporation
|
Section
2.1
|
|
|
Takeover
Laws
|
Section
3.3
|
|
|
Tax
or Taxes
|
Section
3.10(o)
|
|
|
Tax
Return
|
Section
3.10(o)
|
|
|
Taxing
Authority
|
Section
3.10(o)
|
|
|
Tender
Agreements
|
Introduction
|
|
|
Tender
Offer Conditions
|
Section
1.1(a)
|
|
|
Termination
Fee
|
Section
7.3(a)
|
|
|
Top-Up
Option
|
Section
1.3(a)
|
|
|
Top-Up
Option Shares
|
Section
1.3(a)
|
|
|
Transition
Period
|
Section
5.10
|
|
|
TSCA
|
Section
3.18(d)
|
|
|
U.S.
Export and Import Laws
|
Section
3.5(b)
|
B-3
ANNEX B
CONDITIONS TO THE
OFFER
Notwithstanding any other provision of
the Offer, Merger Sub shall not be required to, and Parent shall not be required
to cause Merger Sub to, accept for payment or, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) promulgated under the
Exchange Act (relating to Merger Sub’s obligation to pay for or return tendered
shares of Common Stock promptly after termination or withdrawal of the Offer),
pay, and (subject to any such rules or regulations) may, to the extent expressly
permitted by this Agreement, delay the acceptance for payment for, or the
payment for, any shares of Common Stock validly tendered and not properly
withdrawn, and, to the extent permitted by this Agreement, may amend or
terminate the Offer if: (a) there shall not have been validly
tendered and not properly withdrawn on or prior to the Expiration Date the
number of shares of Common Stock which, when taken together with the shares of
Common Stock, if any, beneficially owned by Parent, Merger Sub or any of their
affiliates, represents at least a majority of the total outstanding shares of
Common Stock immediately prior to the Acceptance Date ((i) assuming the issuance
of all shares of Common Stock (other than the Top-Up Option Shares and any
shares of Common Stock reserved for issuance pursuant to the Rights) upon the
exercise, conversion or exchange of all outstanding options, warrants,
convertible or exchangeable securities and similar rights; provided, that only
such outstanding options that vest on or before December 31, 2010 shall be
included for this calculation but regardless of the conversion or exercise price
or other terms and conditions thereof, and (ii) excluding shares of Common Stock
tendered in the Offer pursuant to guaranteed delivery procedures as to which
delivery has not been completed as of the applicable time) (the “Minimum Condition”);
(b) all applicable waiting periods under any applicable Antitrust Laws shall not
have expired or been earlier terminated or (c) at any time after the date of
this Agreement and before the Expiration Date, any of the following events shall
occur and be continuing as of the Expiration Date:
(i) any of the
representations and warranties of the Company set forth in this Agreement (other
than in Sections 3.2, 3.3, 3.24 and 3.26) shall not be true and correct
(disregarding all qualifications or limitations as to “materiality” or “Company
Material Adverse Effect” or other similar qualifiers set forth therein) as of
the Expiration Date as though made on and as of such date (unless any such
representation or warranty is made only as of a specific date, in which case as
of such date), except where the failure of any such representations and
warranties to be so true and correct has not had, and would not have, a Company
Material Adverse Effect;
(ii) any of the representations and
warranties set forth in Sections 3.2, 3.3, 3.24 and 3.26 of this Agreement shall
not be true and correct in all material respects as of the Expiration Date as
though made on and as of such date (unless any such representation or warranty
is made only as of a specific date, in which case as of such date);
(iii) the Company shall have
failed to perform in any material respect the obligations, and failed to comply
in any material respect with the agreements and covenants, required to be
performed by, or complied with by, it under this Agreement, and such failure to
perform and such failure to comply shall not have been cured at or prior to the
Expiration Date;
B-4
(iv) a Company Material
Adverse Effect shall have occurred since the date of this
Agreement;
(v) Parent shall not have
received a certificate, signed on behalf of the Company by the Chief Executive
Officer and Chief Financial Officer of the Company (solely in his or her
capacity as an officer of the Company without personal liability), to the effect
that the conditions set forth in paragraphs (i)-(iv) hereof have been satisfied
as of the Expiration Date;
(vi) there shall be any
injunction, judgment, ruling, order, decree, action, proceeding or litigation
instituted, issued, entered, commenced or pending by any Governmental Authority
that would or that seeks or is reasonably likely to (A) restrain, enjoin,
prevent, prohibit or make illegal the acceptance for payment, payment for or
purchase of some or all of the shares of Common Stock by Merger Sub or Parent or
the consummation of the transactions contemplated by this Agreement, (B) impose
limitations on the ability of Merger Sub or Parent to effectively exercise full
rights of ownership of the shares of Common Stock, including the right to vote
the shares of Common Stock purchased by them on all matters properly presented
to the Company’s stockholders on an equal basis with all other stockholders
(including the adoption of the Agreement and approval of the transactions
contemplated by this Agreement), (C) restrain, enjoin, prevent, prohibit or make
illegal, or impose material limitations on, Parent’s, Merger Sub’s or any of
their affiliates’ ownership or operation of all or substantially all of the
businesses and assets of the Company and its Subsidiaries, taken as a whole, or,
as a result of the transactions contemplated by this Agreement, of Parent and
the Company Subsidiaries, taken as a whole or (D) subject to Section 5.4(a)(iii)
and Section 5.4(c), compel Parent, Merger Sub or any of their affiliates to
dispose of any shares of Common Stock, or, as a result of the transactions
contemplated by this Agreement, compel Parent, Merger Sub or any of their
affiliates to dispose of or hold separate any portion of the businesses or
assets of the Company and its Subsidiaries taken as a whole, or of Parent and
its Subsidiaries, taken as a whole; or
(vii) this Agreement shall
have been terminated in accordance with its terms.
The foregoing conditions are for the
benefit of Parent and Merger Sub and may, solely to the extent permitted by
Section 1.1 of this Agreement, be waived by Parent and Merger Sub, in whole or
in part, at any time and from time to time prior to the Expiration Date in their
sole and absolute discretion.
B-5