Attached files
file | filename |
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8-K - TECHTEAM GLOBAL INC | v200687_8k.htm |
EX-99.2 - TECHTEAM GLOBAL INC | v200687_ex99-2.htm |
EX-99.3 - TECHTEAM GLOBAL INC | v200687_ex99-3.htm |
EX-99.1 - TECHTEAM GLOBAL INC | v200687_ex99-1.htm |
Exhibit
2.1
AGREEMENT
AND PLAN OF MERGER
among
STEFANINI
INTERNATIONAL HOLDINGS LTD,
PLATINUM
MERGER SUB, INC.
and
TECHTEAM
GLOBAL, INC.
Dated as
of November 1, 2010
TABLE
OF CONTENTS
Page
|
||
ARTICLE
I. THE OFFER
|
2
|
|
Section
1.1.
|
The Offer.
|
2
|
Section
1.2.
|
Company Consent; Schedule
14D-9.
|
4
|
Section
1.3.
|
Stockholder
Lists.
|
5
|
Section
1.4.
|
Directors.
|
5
|
Section
1.5.
|
Section 1.5 Top-Up
Option.
|
7
|
ARTICLE
II. THE MERGER
|
8
|
|
Section
2.1.
|
The Merger.
|
8
|
Section
2.2.
|
Closing; Effective
Time.
|
8
|
Section
2.3.
|
Effects of the
Merger.
|
8
|
Section
2.4.
|
Certificate of Incorporation;
By-laws.
|
8
|
Section
2.5.
|
Directors and
Officers.
|
9
|
Section
2.6.
|
Meeting of Stockholders to Approve the
Merger.
|
9
|
Section
2.7.
|
Merger Without Meeting of
Stockholders.
|
10
|
ARTICLE
III. EFFECT OF THE MERGER
|
10
|
|
Section
3.1.
|
Conversion of
Securities.
|
10
|
Section
3.2.
|
Treatment of Equity
Awards.
|
11
|
Section
3.3.
|
Dissenting
Shares.
|
12
|
Section
3.4.
|
Payment Procedures; Surrender of
Shares.
|
12
|
Section
3.5.
|
Withholding
Taxes.
|
14
|
ARTICLE
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
|
14
|
|
Section
4.1.
|
Organization and Qualification;
Subsidiaries.
|
14
|
Section
4.2.
|
Certificate of Incorporation and
By-laws.
|
15
|
Section
4.3.
|
Capitalization.
|
15
|
Section
4.4.
|
Authority.
|
17
|
Section
4.5.
|
No Conflict; Required Filings and
Consents.
|
18
|
Section
4.6.
|
SEC Reports; Financial
Statements.
|
19
|
Section
4.7.
|
Contracts.
|
20
|
Section
4.8.
|
Properties.
|
23
|
Section
4.9.
|
Real Property.
|
23
|
TABLE
OF CONTENTS
(continued)
Page
|
||
Section
4.10.
|
Intellectual
Property.
|
24
|
Section
4.11.
|
Compliance.
|
25
|
Section
4.12.
|
Absence of Certain Changes or
Events.
|
25
|
Section
4.13.
|
Absence of
Litigation.
|
26
|
Section
4.14.
|
Employee Benefit
Plans.
|
27
|
Section
4.15.
|
Labor and Employment
Matters.
|
28
|
Section
4.16.
|
Insurance.
|
28
|
Section
4.17.
|
Tax Matters.
|
29
|
Section
4.18.
|
Environmental
Matters.
|
30
|
Section
4.19.
|
Affiliate
Transactions.
|
30
|
Section
4.20.
|
Schedule 14D-9; Offer Documents; Proxy
Statement.
|
31
|
Section
4.21.
|
Opinion of Financial
Advisor.
|
31
|
Section
4.22.
|
Brokers; Certain
Fees.
|
31
|
Section
4.23.
|
Takeover Laws.
|
31
|
Section
4.24.
|
No Other Representations or
Warranties.
|
32
|
ARTICLE
V. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
|
32
|
|
Section
5.1.
|
Organization.
|
32
|
Section
5.2.
|
Authority.
|
32
|
Section
5.3.
|
No Conflict; Required Filings and
Consents.
|
33
|
Section
5.4.
|
Absence of
Litigation.
|
33
|
Section
5.5.
|
Offer Documents; Schedule 14D-9; Proxy
Statement.
|
33
|
Section
5.6.
|
Brokers.
|
34
|
Section
5.7.
|
Financing.
|
34
|
Section
5.8.
|
Ownership and Operations of
Purchaser.
|
34
|
Section
5.9.
|
Solvency.
|
34
|
Section
5.10.
|
Certain
Arrangements.
|
35
|
Section
5.11.
|
Access to Information;
Disclaimer.
|
35
|
Section
5.12.
|
Other Matters.
|
35
|
Section
5.13
|
Guarantee.
|
35
|
ii
TABLE
OF CONTENTS
(continued)
Page
|
||
ARTICLE
VI. COVENANTS
|
36
|
|
Section
6.1.
|
Conduct of Business of the Company
Pending the Merger.
|
36
|
Section
6.2.
|
Access to Information;
Confidentiality.
|
38
|
Section
6.3.
|
No Solicitation; Change in
Recommendation.
|
39
|
Section
6.4.
|
Employment and Employee Benefits
Matters.
|
42
|
Section
6.5.
|
Directors’ and Officers’
Indemnification and Insurance.
|
43
|
Section
6.6.
|
Further Action;
Efforts.
|
46
|
Section
6.7.
|
Takeover Laws.
|
48
|
Section
6.8.
|
Public
Announcements.
|
49
|
Section
6.9.
|
Notification.
|
49
|
Section
6.10.
|
No Control of the Company’s
Business.
|
49
|
Section
6.11.
|
Company Compensation
Arrangements.
|
49
|
Section
6.12.
|
Section 16
Matters.
|
50
|
Section
6.13.
|
Stockholder
Litigation.
|
50
|
Section
6.14.
|
Delisting.
|
50
|
Section
6.15.
|
FIRPTA
Certificate.
|
50
|
ARTICLE
VII. CONDITIONS OF MERGER
|
50
|
|
Section
7.1.
|
Conditions to Obligation of Each Party
to Effect the Merger.
|
50
|
ARTICLE
VIII. TERMINATION, AMENDMENT AND WAIVER
|
51
|
|
Section
8.1.
|
Termination.
|
51
|
Section
8.2.
|
Effect of
Termination.
|
53
|
Section
8.3.
|
Termination Fee.
|
53
|
Section
8.4.
|
Expenses.
|
54
|
Section
8.5.
|
Amendment.
|
54
|
Section
8.6.
|
Waiver.
|
55
|
ARTICLE
IX. GENERAL PROVISIONS
|
55
|
|
Section
9.1.
|
Non-Survival of Representations,
Warranties, Covenants and Agreements.
|
55
|
Section
9.2.
|
Notices.
|
55
|
Section
9.3.
|
Certain
Definitions.
|
57
|
Section
9.4.
|
Severability.
|
60
|
Section
9.5.
|
Entire Agreement;
Assignment.
|
60
|
iii
TABLE
OF CONTENTS
(continued)
Page
|
||
Section
9.6.
|
Parties in
Interest.
|
60
|
Section
9.7.
|
Governing Law.
|
61
|
Section
9.8.
|
Headings.
|
61
|
Section
9.9.
|
Counterparts.
|
61
|
Section
9.10.
|
Performance
Guaranty.
|
61
|
Section
9.11.
|
Jurisdiction; Service of Process;
Waiver of Jury Trial.
|
62
|
Section
9.12.
|
Specific
Performance.
|
62
|
Section
9.13.
|
Interpretation.
|
63
|
iv
INDEX
OF DEFINED TERMS
Acceptable
Confidentiality Agreement
|
39
|
Encumbrance
|
57
|
|
Acquisition
Proposal
|
41
|
Environmental
Law(s)
|
57
|
|
Affiliate
|
57
|
ERISA
|
26
|
|
Agreement
|
1
|
ERISA
Affiliate
|
27
|
|
Antitrust
Condition
|
1
|
Exchange
Act
|
2
|
|
Antitrust
Laws
|
46
|
Expiration
Date
|
1
|
|
Audited
Balance Sheet
|
20
|
Financial
Statements
|
19
|
|
Book-Entry
Shares
|
13
|
Financing
|
34
|
|
Business
Day
|
57
|
Fully-Diluted
Basis
|
58
|
|
By-laws
|
15
|
GAAP
|
58
|
|
Certificate
of Incorporation
|
15
|
Government
Solutions Purchase Agreement
|
59
|
|
Certificate
of Merger
|
8
|
Governmental
Entity
|
18
|
|
Certificates
|
13
|
Guarantee
|
1
|
|
Claim
|
44
|
Guarantors
|
1
|
|
Closing
|
8
|
Hazardous
Materials
|
58
|
|
Code
|
57
|
HSR
Act
|
18
|
|
Common
Stock
|
1
|
Indemnification
Agreement
|
45
|
|
Company
Acquisition Agreement
|
40
|
Indemnitee
|
43
|
|
Company
Adverse Recommendation Change
|
40
|
Indemnitees
|
43
|
|
Company
Board
|
1
|
Independent
Directors
|
6
|
|
Company
Board Recommendation
|
18
|
Intellectual
Property
|
58
|
|
Company
Data
|
24
|
Knowledge
of the Company
|
58
|
|
Company
Disclosure Schedule
|
14
|
Law
|
18
|
|
Company
Employee
|
26
|
Liens
|
58
|
|
Company
Intellectual Property
|
24
|
Made
Available
|
59
|
|
Company
IT Systems
|
57
|
Material
Adverse Effect
|
58
|
|
Company
Meeting
|
10
|
Material
Contract
|
22
|
|
Company
Owned Intellectual Property
|
57
|
Maximum
Premium
|
45
|
|
Company
Pension Plan
|
26
|
Merger
|
1
|
|
Company
Plan
|
26
|
Merger
Consideration
|
10
|
|
Company
Requisite Vote
|
17
|
Minimum
Condition
|
2
|
|
Company
Stock Options
|
57
|
Nasdaq
|
3
|
|
Confidentiality
Agreement
|
5
|
Negotiation
Period
|
41
|
|
Continuing
Directors
|
6
|
New
Plans
|
42
|
|
Contract
|
18
|
Notices
|
55
|
|
Control
Time
|
36
|
Offer
Conditions
|
2
|
|
Current
D&O Policies
|
45
|
Offer
Documents
|
3
|
|
D&O
Tail Period
|
45
|
Offer
Price
|
1
|
|
D&O
Tail Policies
|
45
|
Old
Plans
|
43
|
|
DGCL
|
8
|
Other
Indemnitor
|
45
|
|
Dissenting
Shares
|
12
|
Other
Indemnitors
|
45
|
|
EDGAR
|
14
|
Outside
Date
|
51
|
|
Effective
Time
|
8
|
Parent
|
1
|
Parent
Benefit Plans
|
42
|
SEC
Reports
|
19
|
|
Paying
Agent
|
12
|
Securities
Act
|
17
|
|
Permits
|
25
|
Shares
|
1
|
|
Permitted
Encumbrances
|
59
|
Short
Form Threshold
|
10
|
|
Permitted
Liens
|
23
|
Solvent
|
34
|
|
Person
|
60
|
Subsidiary
|
60
|
|
Preferred
Stock
|
15
|
Superior
Proposal
|
42
|
|
Proceeding
|
26
|
Surviving
Corporation
|
8
|
|
Proxy
Statement
|
9
|
Takeover
Laws
|
32
|
|
Purchase
Time
|
5
|
Tax
Returns
|
30
|
|
Purchaser
|
1
|
Taxes
|
29
|
|
Purchaser
Material Adverse Effect
|
32
|
Tender
Agreements
|
1
|
|
Representatives
|
60
|
Termination
Fee
|
54
|
|
Restraints
|
50
|
The
Merger
|
8
|
|
Restricted
Stock
|
11
|
Third
Party
|
60
|
|
Schedule
14D-9
|
4
|
Top-Up
Option
|
6
|
|
Schedule
TO
|
3
|
Top-Up
Shares
|
6
|
|
SEC
|
3
|
vi
AGREEMENT
AND PLAN OF MERGER
AGREEMENT
AND PLAN OF MERGER, dated as of November 1, 2010 (this “Agreement”), among
STEFANINI INTERNATIONAL HOLDINGS LTD, a corporation organized under the laws of
England and Wales (“Parent”), PLATINUM
MERGER SUB, INC., a Delaware corporation and wholly-owned Subsidiary of Parent
(“Purchaser”),
and TECHTEAM GLOBAL, INC., a Delaware corporation (the “Company”).
WHEREAS,
the Boards of Directors of Parent, Purchaser and the Company have approved the
acquisition of the Company by Parent on the terms and conditions set forth in
this Agreement;
WHEREAS,
on the terms and subject to the conditions set forth herein, Purchaser has
agreed to commence a cash tender offer (such cash tender offer, as it may be
amended from time to time, the “Offer”) to purchase
all outstanding shares (the “Shares”) of the
Common Stock, par value $0.01 per share, of the Company (the “Common Stock”), at a
price of $8.35 per Share, net to the seller in cash, without interest (such
price, or any higher price as may be paid in the Offer in accordance with this
Agreement, in each case without interest, the “Offer
Price”);
WHEREAS,
following consummation of the Offer, on the terms and subject to the conditions
set forth herein, Purchaser will merge with and into the Company (the “Merger”) and each
Share that is issued and outstanding immediately prior to the Effective Time
(other than (1) Shares held in the treasury of the Company or owned by Parent,
Purchaser or any other direct or indirect wholly-owned Subsidiary of Parent or
the Company immediately prior to the Effective Time for which no consideration
will be paid and (2) Dissenting Shares) will be cancelled and converted into the
right to receive cash in an amount equal to the Offer Price, all upon the terms
and conditions set forth herein;
WHEREAS,
the Board of Directors of the Company (the “Company Board”) has
(i) resolved to recommend that holders of Shares tender their Shares pursuant to
the Offer and, if required by applicable law, adopt this Agreement, (ii)
determined that it is in the best interests of the Company and its stockholders,
and declared it advisable, to enter into this Agreement and (iii) approved the
execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby, including the Offer and
the Merger;
WHEREAS,
the Board of Directors of Purchaser has, on the terms and subject to the
conditions set forth herein, approved and declared advisable this Agreement and
Parent, in its capacity as the sole stockholder of Purchaser, has adopted this
Agreement;
WHEREAS,
as an inducement to and condition of Parent’s willingness to enter into this
Agreement, the persons listed in Annex V(A) have
entered into tender and support agreements (the “Tender Agreements”),
the form of which is attached as Annex V(B),
immediately prior to the execution and delivery of this Agreement;
and
WHEREAS,
concurrently with the execution of this Agreement, and as a condition and
inducement to the Company’s willingness to enter into this Agreement, the
persons listed on Annex VI(A) (collectively, the “Guarantors”) have
provided a guarantee (the “Guarantee”) in favor
of the Company, in the form set forth on Annex VI(B), with
respect to Parent’s and the Purchaser’s obligations under this
Agreement;
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, Parent,
Purchaser and the Company hereby agree as follows:
ARTICLE
I.
THE
OFFER
Section
1.1. The
Offer. (a) (i) Provided that this
Agreement has not been terminated in accordance with Article VIII hereto,
Purchaser will, and Parent will cause Purchaser to, promptly (but in no event
later than the tenth (10th) Business Day after (but not including) the date of
this Agreement) commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) the
Offer to purchase all Shares at the Offer Price; provided, however, that
Purchaser shall not be required to commence the Offer (and the ten (10) Business
day period referred above shall accordingly be extended) if (i) the Company
shall not have provided to Parent on a timely basis all information reasonably
requested by Parent in connection with the preparation of the Offer Documents or
the Company shall not have reviewed and provided comments to Parent on the Offer
Documents on a timely basis, or (ii) the Company is not prepared to,
concurrently with such commencement, file with the SEC and disseminate to the
holders of Shares the Schedule 14D-9. The obligation of Purchaser to
accept for payment Shares tendered pursuant to the Offer shall be subject only
to (i) the condition (the “Minimum Condition”)
that at least the number of Shares that shall constitute a majority of the then
outstanding Shares on a Fully-Diluted Basis shall have been validly tendered and
not withdrawn prior to the expiration of the Offer and (ii) the satisfaction of
each of the other conditions set forth in Annex I hereto (the
“Offer
Conditions”). The initial expiration date of the Offer will be
the twentieth (20th) Business Day (for this purpose, calculated in accordance
with Section 14d-1(g)(3) of the Exchange Act) following (and including the day
of) the commencement of the Offer. Purchaser expressly reserves the
right (but will not be obligated) at any time or from time to time in its sole
discretion to waive any Offer Condition or modify or amend the terms of the
Offer, except that, without the prior written consent of the Company, Purchaser
will not (1) decrease the Offer Price or change the form of the consideration
payable in the Offer, (2) decrease the number of Shares sought pursuant to the
Offer, (3) amend or waive the Minimum Condition or the condition set forth in
paragraph (g) on Annex
I, (4) add to the conditions set forth on Annex I, (5) modify
the conditions set forth on Annex I in a manner
adverse to the holders of Shares, (6) extend the expiration date of the Offer
except as required or permitted by Section 1.1(a)(iii) or (7) make any other
change in the terms or conditions of the Offer that is materially adverse to the
holders of Shares.
(ii) Subject
to the terms and conditions of this Agreement and to the satisfaction or waiver
by Purchaser of the Offer Conditions as of the time of any scheduled expiration
of the Offer, Purchaser will, and Parent will cause Purchaser to, accept for
payment and pay for Shares validly tendered and not withdrawn pursuant to the
Offer promptly after such scheduled expiration, and Purchaser will, and Parent
will cause Purchaser to, immediately accept and promptly pay for all Shares as
they are validly tendered during any “subsequent offer period” pursuant to Rule
14d-11 under the Exchange Act.
2
(iii) Purchaser
(1) shall, to the extent requested by the Company prior to the expiration date,
and otherwise may, in its discretion (and without the consent of the Company or
any other Person), extend the Offer for one or more periods of time of up to ten
(10) Business Days per extension if at any scheduled expiration of the Offer any
of the Offer Conditions (including, for the avoidance of doubt, the Minimum
Condition) are not satisfied; (2) shall extend the Offer for any period required
by any rule, regulation, interpretation or position of the Securities and
Exchange Commission (the “SEC”) or the staff
thereof or The NASDAQ Stock Market LLC (“Nasdaq”) applicable
to the Offer; (3) may, in its discretion, elect to provide a subsequent offering
period (and one or more extensions thereof) for the Offer in accordance with
Rule 14d-11 under the Exchange Act (unless Parent, Purchaser and their
respective Subsidiaries would beneficially own a number of Shares that is not
less than the Short Form Threshold (which Shares beneficially owned will include
Shares tendered in the Offer and not withdrawn) if the Purchase Time were to
occur immediately following the scheduled expiration of the Offer); (4) may
extend the Offer for one or more periods of up to an aggregate of ten (10)
Business Days (for all such extensions) if, assuming the Purchase
Time would occur immediately following the then-scheduled expiration of the
Offer, Parent, Purchaser and their respective Subsidiaries would beneficially
own more than eighty percent (80%) of the Shares outstanding at that time but
less than the Short Form Threshold (which Shares beneficially owned will include
Shares tendered in the Offer and not withdrawn) and (5) shall extend the Offer
in accordance with Section 6.3(c); provided, that
notwithstanding the foregoing, in no circumstance will Purchaser be required to
extend the Offer beyond the Outside Date. Purchaser shall not
terminate the Offer prior to its expiration date (as such expiration may or
shall be extended and re-extended in accordance with this Section 1.1(a)(iii)),
unless this Agreement is validly terminated in accordance with Section
8.1. If this Agreement is terminated pursuant to Section 8.1, then
Purchaser shall, and Parent shall cause Purchaser to, promptly (and, in any
event, within twenty-four (24) hours of such termination) irrevocably and
unconditionally terminate the Offer, shall not acquire any Shares pursuant to
the Offer and shall promptly return, and shall cause any depository acting on
behalf of Purchaser to return, all tendered shares of Common Stock to the
registered holders thereof.
(b) On
the date of commencement of the Offer, Parent and Purchaser shall file, or cause
to be filed, with the SEC a Tender Offer Statement on Schedule TO (collectively
with all amendments and supplements thereto, the “Schedule TO”) with
respect to the Offer that will contain the offer to purchase and forms of the
related letter of transmittal and summary advertisement and other ancillary
Offer documents and instruments pursuant to which the Offer will be made
(collectively with any supplements or amendments thereto, the “Offer Documents”) and
shall comply in all material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder. The Company
shall promptly furnish to Parent and Purchaser in writing all information
concerning the Company that may be required by applicable securities laws or
reasonably requested by Parent or Purchaser for inclusion in the Schedule TO or
the Offer Documents. The Company and its counsel will be given a
reasonable opportunity to review and comment on the Offer Documents prior to
their filing with the SEC or their dissemination to holders of
Shares. Parent and Purchaser agree (1) to provide the Company with,
and to consult with the Company regarding, any comments that may be received
from the SEC or its staff with respect to the Offer Documents promptly after
receipt thereof and prior to responding thereto and (2) to provide the Company
with any comments or responses thereto. Parent and Purchaser agree to
use their reasonable best efforts to respond promptly to the SEC or its staff
with respect to any comments received from them relating to the Offer
Documents. Parent and Purchaser agree to take all steps necessary to
cause the Offer Documents to be disseminated to holders of Shares to the extent
required by applicable federal securities Laws. Parent and Purchaser,
on the one hand, and the Company, on the other hand, agree to promptly correct
any information provided by it for use in the Offer Documents if and to the
extent that it has become false or misleading in any material respect or as
otherwise required by applicable Law. Parent and Purchaser further
agree to take all steps necessary to cause the Offer Documents as so corrected
to be filed with the SEC and disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities Laws.
3
(c) Parent
will provide or cause to be provided to Purchaser on a timely basis the funds
necessary to purchase any Shares that Purchaser becomes obligated to purchase
pursuant to the Offer.
Section
1.2. Company Consent; Schedule
14D-9. The Company hereby consents to the Offer to be
commenced in accordance with the terms and conditions set forth in this
Agreement. As soon as practicable on the date the Offer Documents are
filed, the Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (which shall include all of the information required
by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, to
the extent requested by Parent and as long as all of the applicable information
is provided to the Company on a timely basis) (together with all amendments and
supplements thereto, the “Schedule 14D-9”)
containing, subject to Section 6.3(c) and Section 6.3(d), the recommendations of
the Company Board described in Section 4.4(b). As of the date hereof,
the Company has been advised that all of its directors and executive officers
who own Shares intend to tender their Shares pursuant to the Offer. The Company
hereby consents to the inclusion of the recommendations of the Company Board
described in Section 4.4(b) in the Offer Documents and to the inclusion of a
copy of the Schedule 14D-9 with the Offer Documents mailed or furnished to the
Company’s stockholders. Except with respect to any amendments filed
in connection with an Acquisition Proposal or a Company Adverse Recommendation
Change, Parent and Purchaser will be given a reasonable opportunity to review
and comment on the Schedule 14D-9 prior to its filing with the
SEC. The Company agrees to (1) provide Parent and Purchaser with, and
to consult with Parent and Purchaser regarding, any comments that may be
received from the SEC or its staff with respect to the Schedule 14D-9 promptly
upon receipt thereof and prior to responding thereto, and (2) provide Parent and
Purchaser with any comments or responses thereto. The Company agrees
to take all steps necessary to cause the Schedule 14D-9 to be disseminated to
holders of shares of the Company’s capital stock to the extent required by
applicable federal securities Laws. The Company, on the one hand, and
Parent and Purchaser, on the other hand, agree to promptly correct any
information provided by it for use in the Schedule 14D-9 if and to the extent
that it has become false or misleading in any material respect or as otherwise
required by Law. The Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities Laws.
4
Section
1.3. Stockholder
Lists. In connection with the Offer, the Company will cause
its transfer agent to, promptly (but in any event within five (5) Business Days
after the date hereof), furnish Parent and Purchaser with mailing labels,
security position listings and readily available computer files containing the
names and addresses of the record holders of the Shares as of the latest
practicable date and will furnish Parent and Purchaser with such information and
assistance (including periodic updates of such information) as Parent or
Purchaser or their agents may reasonably request in communicating the Offer to
the record and beneficial holders of the Shares. Subject to the
requirements of applicable Law, and except for such actions as are reasonably
necessary to disseminate the Offer Documents and otherwise to perform its
obligations hereunder, from the date hereof until the Purchase Time, each of
Parent and Purchaser will hold all information and documents provided to it
under this Section 1.3 in confidence in accordance with the Confidentiality
Agreement by and between Parent and the Company dated May 8, 2009, as amended
(the “Confidentiality
Agreement”), and shall use such information and documents only in
connection with the Offer, and if this Agreement will have been terminated by
Parent or Purchaser, will deliver to the Company all such information and
documents (and all copies thereof).
Section
1.4. Directors. (a) Promptly
upon the purchase by Purchaser pursuant to the Offer of such number of Shares to
satisfy at least the Minimum Condition (the “Purchase Time”), and
from time to time thereafter, Purchaser will be entitled to designate such
number of directors, rounded up to the next whole number, on the Company Board
as will give Purchaser representation on the Company Board equal to the product
of (x) the total number of directors on the Company Board (after giving effect
to any increase in the number of directors pursuant to this Section 1.4(a))
multiplied by (y) the percentage that such number of Shares so purchased bears
to the total number of then-outstanding Shares, and the Company will, upon
request by Purchaser, promptly increase the size of the Company Board or use
commercially reasonable efforts to seek the resignations of such number of
directors as is necessary to provide Purchaser with such level of representation
and will use commercially reasonable efforts to cause Purchaser’s designees to
be so elected or appointed. Subject to the applicable requirements of
Nasdaq, the Company will also, upon request by Purchaser, use commercially
reasonable efforts to cause individuals designated by Purchaser to constitute
the same percentage of each committee of the Company Board as the percentage of
the entire Company Board represented by individuals designated by
Purchaser. Following the Purchase Time, subject to applicable Law,
the Company will also, upon request by Purchaser, use commercially reasonable
efforts to cause individuals designated by Purchaser to constitute the same
percentage of each board of directors of each Subsidiary of the Company (and
each committee thereof) as the percentage of the entire Company Board
represented by individuals designated by Purchaser. The Company’s
obligations to appoint designees to the Company Board will be subject to Section
14(f) of the Exchange Act. In connection with the performance of its
obligations to cause Purchaser’s designees to be elected or appointed to the
Company Board, at the request of Purchaser, the Company shall include the
information required by Section 14(f) of the Exchange Act, and Rule 14f-1
promulgated thereunder, with the Schedule 14D-9. Parent and Purchaser
shall supply to the Company all information with respect to themselves and their
respective executive officers, directors and Affiliates required by Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, and Parent and
Purchaser shall be solely responsible for such information.
5
(b) Following
the election or appointment of Purchaser’s designees pursuant to Section 1.4(a)
and prior to the Effective Time, any amendment, modification or termination of
this Agreement requiring action by the Company Board, any amendment or
modification of the certificate of incorporation or by-laws of the Company, any
extension of time for the performance of any of the obligations or other acts of
Parent or Purchaser under this Agreement, any waiver of compliance with any of
the agreements or conditions under this Agreement that are for the benefit of
the Company, any exercise of the Company’s rights or remedies under this
Agreement and any action to seek to enforce any obligation of Parent or
Purchaser under this Agreement (or any other action by the Company Board with
respect to this Agreement, the Offer or the Merger if such other action
adversely affects, or could reasonably be expected to adversely affect, any of
the holders of Shares other than Parent or Purchaser) may only be authorized by
(and such approval shall constitute the authorization of the Company Board and
no other action on the part of the Company, including any action by any other
director of the Company, shall be required to authorize), and shall require the
authorization of, a majority of the directors of the Company then in office who
are directors of the Company on the date hereof or their successors as appointed
by such continuing directors (the “Continuing
Directors”); provided, however, that if
there will be no Continuing Directors as a result of such individuals’ deaths,
disabilities, resignations or refusal to serve, then such actions may be
effected by majority vote of the Independent Directors, or, if no Independent
Directors are then in office, by a majority vote of the Company
Board. Such Continuing Directors or Independent Directors, as
applicable, shall have the authority to retain counsel (which may include
current counsel to the Company) at the expense of the Company for the purpose of
fulfilling either Parent’s or Purchaser’s obligations hereunder, and shall have
the authority following the election of Purchaser’s designees to the Company’s
Board pursuant to this Section 1.4, to institute any action on behalf of the
Company to enforce the performance of this Agreement in accordance with its
terms. The parties will use commercially reasonable efforts to ensure
that at least two of the members of the Company Board will, at all times prior
to the Effective Time, be Continuing Directors.
(c) In
the event that Parent’s designees are elected or appointed to the Company Board
pursuant to Section 1.4(a), until the Effective Time, (1) the Company Board will
have at least such number of directors as may be required by the Nasdaq rules or
the federal securities Laws who are considered independent directors within the
meaning of such rules and Laws (“Independent
Directors”) and (2) each committee of the Company Board that is required
(or a majority of which is required) by the Nasdaq rules or the federal
securities Laws to be composed solely of Independent Directors will be so
composed; provided, however, if the
number of Independent Directors is reduced below the number of directors as may
be required by such rules or Laws for any reason whatsoever, the remaining
Independent Director(s) will be entitled to designate persons to fill such
vacancies who will be deemed to be Independent Directors for purposes of this
Agreement or, if no Independent Director then remains, the other directors will
designate such number of directors as may be required by the Nasdaq rules and
the federal securities Laws, to fill such vacancies who will not be stockholders
or Affiliates of Parent or Purchaser, and such Persons will be deemed to be
Independent Directors for purposes of this Agreement.
6
Section
1.5. Top-Up
Option. (a) The Company hereby irrevocably grants
to Purchaser an option (the “Top-Up Option”),
exercisable in Purchaser’s discretion, but only after the acceptance by
Purchaser of, and payment for, Shares tendered in the Offer, to purchase (for
cash or a note payable) that number (but not less than that number) of Shares
(the “Top-Up
Shares”) equal to the lesser of (i) the lowest number of Shares that,
when added to the number of Shares owned by Parent or Purchaser at the time of
such exercise, will constitute one share more than ninety percent (90%) of the
total Shares then outstanding on a Fully-Diluted Basis (assuming the issuance of
the Top-Up Shares) at a price per Share equal to the Offer Price and (ii) the
aggregate number of Shares held as treasury shares by the Company and the number
of Shares that the Company is authorized to issue under its certificate of
incorporation but which (A) are not issued and outstanding, (B) are not reserved
for issuance pursuant to the Company Stock Plans and (C) are issuable without
the approval of the Company’s stockholders; provided, however, that (1) the
Top-Up Option will be exercisable only once and only on or prior to the fifth
(5th) Business Day after the later of the Expiration Date or the expiration date
of any subsequent offering period and (2) the Top-Up Option may not be exercised
if any provision of applicable Law (including the Nasdaq rules) or any judgment,
injunction, order or decree of any Governmental Entity prohibits, or requires
any action, consent, approval, authorization or permit of, action by, or filing
with or notification to, any Governmental Entity or the Company’s stockholders
in connection with the exercise of the Top-Up Option or the delivery of the
Top-Up Shares in respect of such exercise, which action, consent, approval,
authorization or permit, action, filing or notification has not theretofore been
obtained or made, as applicable. Purchaser will, concurrently with
the exercise of the Top-Up Option, give written notice to the Company that as
promptly as practicable following such exercise, Purchaser intends to (and
Purchaser will, and Parent will cause Purchaser to, as promptly as practicable
after such exercise) consummate the Merger in accordance with Section 253 of the
DGCL as contemplated by Section 2.7.
(b) The
aggregate purchase price payable for the Shares purchased by Purchaser pursuant
to the Top-Up Option shall be determined by multiplying the number of such
Shares by the Offer Price. Such purchase price may be paid by
Purchaser, at its election, either entirely in cash or by paying in cash an
amount equal to not less than the aggregate par value of such Shares and by
executing and delivering to the Company a promissory note having a principal
amount equal to the balance of such purchase price, or any combination of the
foregoing. Any such promissory note, in the form attached as Annex IV, (i) shall
bear interest at the rate of 5% per annum, (ii) shall mature on the first
anniversary of the date of execution and delivery of such promissory note, and
(iii) shall be full recourse to Parent and Purchaser and may be prepaid in whole
or in part without premium or penalty.
(c) In
the event that Purchaser wishes to exercise the Top-Up Option, Parent or
Purchaser shall deliver to the Company a notice setting forth: (i)
the number of Shares that Purchaser intends to purchase pursuant to the Top-Up
Option; (ii) the manner in which Parent or Purchaser intends to pay the
applicable exercise price; and (iii) the place and time at which the closing of
the purchase of such Top-Up Shares by Purchaser is to take place. The
Company shall, as soon as practicable following receipt of such notice, notify
Parent and Purchaser of the number of Shares then outstanding, the number of
Shares then outstanding on a Fully-Diluted Basis and the number of Top-Up
Shares. At the closing of the purchase of such Top-Up Shares, Parent
or Purchaser shall cause to be delivered to the Company the consideration
required to be delivered in exchange therefor, and the Company shall cause to be
issued to Purchaser a certificate representing such Top-Up
Shares. Any certificates evidencing Top-Up Shares may include any
legends required by applicable securities laws.
(d) Parent
and Purchaser understand that the Shares that Purchaser 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 Purchaser represent and
warrant to the Company that Purchaser is, and will be upon exercise of the
Top-Up Option, an “accredited investor” (as defined in Rule 501 of Regulation D
promulgated under the Securities Act). Purchaser agrees that the
Top-Up Option and the Top-Up Shares to be acquired upon exercise thereof are
being and will be acquired 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.
7
(e) The
parties agree and acknowledge that any dilutive impact on the value of the
shares of Common Stock as a result of the issuance of the Top-Up Shares will not
be taken into account in any determination of the fair value of any Dissenting
Shares pursuant to Section 262 of the DGCL as contemplated by Section
3.3.
ARTICLE
II.
THE
MERGER
Section
2.1. The
Merger. Upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware (the “DGCL”), at the
Effective Time, Purchaser will be merged with and into the
Company. As a result of the Merger, the separate corporate existence
of Purchaser will cease and the Company will continue as the surviving
corporation of the Merger (the “Surviving
Corporation”).
Section
2.2. Closing; Effective
Time. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the provisions of the DGCL, The
closing of the Merger (the “Closing”) will take
place at the offices of Ropes & Gray LLP, 1211 Avenue of the Americas, New
York, New York, promptly, but in no event later than the second (2nd) Business
Day, after the satisfaction or waiver of the conditions set forth in Article VII
(excluding conditions that, by their terms, cannot be satisfied until the
Closing, but subject to the satisfaction or waiver of such conditions at the
Closing), or at such other place or on such other date as Parent and the Company
may mutually agree. At the Closing, the parties hereto will cause the
Merger to be consummated by filing a certificate of merger (the “Certificate of
Merger”) with the Secretary of State of the State of Delaware, in such
form as required by, and executed in accordance with, the relevant provisions of
the DGCL (the date and time of the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, or such later time as is specified
in the Certificate of Merger and as is agreed to by the parties hereto, being
hereinafter referred to as the “Effective Time”) and
will make all other filings or recordings required under the DGCL in connection
with the Merger.
Section
2.3. Effects of the
Merger. The Merger will have the effects set forth herein and
in the applicable provisions of the DGCL. Without limiting the
generality of the foregoing and subject thereto, at the Effective Time, all the
property, rights, privileges, immunities, powers and franchises of the Company
and Purchaser will vest in the Surviving Corporation and all debts, liabilities
and duties of the Company and Purchaser will become the debts, liabilities and
duties of the Surviving Corporation.
Section
2.4. Certificate of
Incorporation; By-laws. (a) At the Effective Time,
the certificate of incorporation of the Company will, by virtue of the Merger,
be amended and restated in its entirety to read in the form of Annex II, and, as so
amended, will be the certificate of incorporation of the Surviving Corporation
until thereafter amended in accordance with its terms and as provided by
applicable Law.
8
(b) At
the Effective Time, the by-laws of the Company will be amended and restated in
their entirety so as to read in the form of Annex III, and, as so
amended, will be the by-laws of the Surviving Corporation until thereafter
amended in accordance with their terms, in accordance with the certificate of
incorporation of the Surviving Corporation and as provided by applicable
Law.
Section
2.5. Directors and
Officers. Unless otherwise determined by Parent prior to the
Effective Time, the directors and officers of Purchaser immediately prior to the
Effective Time will be the initial directors and officers of the Surviving
Corporation immediately after the Effective Time, in each case until the earlier
of his or her resignation or removal or until his or her successor is duly
elected and qualified.
Section
2.6. Meeting of Stockholders to
Approve the Merger.
(a) If
the adoption of this Agreement by the stockholders of the Company is required
under the DGCL, as promptly as practicable after the Purchase Time, the Company
shall prepare and file with the SEC, print and mail to the stockholders of the
Company, a proxy statement or information statement for the Company Meeting
(together with any amendments and supplements thereto, the letter to
stockholders, notice of meeting, forms of proxy and any other soliciting
materials to be distributed to stockholders in connection with the Merger, the
“Proxy
Statement”) relating to the Merger and this Agreement. Parent
and the Purchaser will use their reasonable best efforts to supply information
necessary for the Proxy Statement, if any, as promptly as practicable after the
Purchase Time. Parent, the Purchaser and their counsel shall be given
a reasonable opportunity to review the Proxy Statement before it is filed with
the SEC, and the Company shall give due consideration to the reasonable
additions, deletions or changes suggested thereto by Parent, the Purchaser and
their counsel. The Company shall include the Company Board
Recommendation in the Proxy Statement. The Company, on the one hand,
and Parent and the Purchaser, on the other hand, agree to promptly supplement
and/or correct any information provided by it for use in the Proxy Statement, if
and to the extent that such information shall have become false or misleading in
any material respect or as otherwise required by applicable Law, and the Company
agrees to cause the Proxy Statement, as so supplemented and/or corrected, to be
filed with the SEC and, if any such correction is made following the mailing of
the Proxy Statement, mailed to holders of Shares, in each case as and to the
extent required by the Exchange Act. The Company shall provide
Parent, the Purchaser and their counsel with copies of any written comments, and
shall inform them of any oral comments, that the Company or its counsel may
receive from time to time from the SEC or its staff with respect to the Proxy
Statement promptly after the Company’s receipt of such comments, and any written
or oral responses thereto. Parent, the Purchaser and their counsel
shall be given a reasonable opportunity to review any such written responses and
the Company shall give due consideration to the reasonable additions, deletions
or changes suggested thereto by Parent, the Purchaser and their
counsel. In the event that the Company receives any comments from the
SEC or its staff with respect to the Proxy Statement, it shall use its
reasonable best efforts to (i) respond promptly to such comments and (ii) take
all other actions necessary to resolve the issues raised therein.
9
(b) If
the adoption of this Agreement by the stockholders of the Company is required
under applicable Law to consummate the Merger, the Company, acting through the
Board of Directors, shall, in accordance with and subject to the requirements of
applicable Law: (i) as promptly as practicable after the Purchase
Time, in consultation with Parent, duly set a record date for, call and give
notice of a special meeting of its stockholders (such meeting or any adjournment
or postponement thereof, the “Company Meeting”) for
the purpose of considering and taking action upon this Agreement (with the
record date to be set in consultation with Parent for a date after the Purchase
Time); (ii) as promptly as practicable after the Purchase Time, file the Proxy
Statement with the SEC, cause the Proxy Statement to be printed and mailed to
the stockholders of the Company and convene and hold the Company Meeting; and
(iii) use its reasonable best efforts to solicit from its stockholders proxies
in favor of the adoption of this Agreement and approval of the Merger, and
secure any approval of stockholders of the Company that is required by
applicable Law to effect the Merger.
(c) At
the Company Meeting or any postponement or adjournment thereof, Parent shall
vote, or cause to be voted, all of the Shares then owned of record by Parent or
the Purchaser or any other Subsidiary of Parent or with respect to which Parent
or the Purchaser otherwise has, directly or indirectly, sole voting power in
favor of the adoption of this Agreement and approval of the Merger and to
deliver or provide, in its capacity as a stockholder of the Company, any other
approvals that are required by applicable Law to effect the Merger.
Section
2.7. Merger Without Meeting of
Stockholders. If, following the Offer and any subsequent
offering period or the exercise of the Top-Up Option, Parent and Purchaser
(together with any other direct or indirect wholly-owned Subsidiary of Parent),
will hold in the aggregate at least ninety percent (90%) of the outstanding
shares of each class of capital stock of the Company that would otherwise be
entitled to vote on the adoption of this Agreement under applicable Law and the
Company’s certificate of incorporation and by-laws (the “Short Form
Threshold”), each of Parent, Purchaser and the Company will (subject to
Section 7.1) take all necessary and appropriate action to cause the Merger to
become effective, promptly after the consummation of the Offer, without a
meeting of stockholders of the Company, in accordance with Section 253 of the
DGCL.
ARTICLE
III.
EFFECT OF
THE MERGER
Section
3.1. Conversion of
Securities. At the Effective Time, by virtue of the Merger and
without any action on the part of Purchaser, the Company or the holders of any
of the following securities, the following will occur:
(a) each
Share issued and outstanding immediately prior to the Effective Time (other than
any Shares described in Section 3.1(b) and any Dissenting Shares) will be
converted into the right to receive the Offer Price in cash (the “Merger
Consideration”), payable to the holder thereof upon surrender of such
Shares in the manner provided in Section 3.4;
(b) each
Share held in the treasury of the Company or owned by the Company or any direct
or indirect wholly owned Subsidiary of the Company and each Share owned by
Parent, Purchaser or any direct or indirect wholly owned Subsidiary of Parent or
Purchaser immediately prior to the Effective Time will be cancelled and retired
without any conversion thereof, and no consideration shall be delivered in
exchange thereof; and
10
(c) each
share of common stock of Purchaser issued and outstanding immediately prior to
the Effective Time will be converted into one share of common stock, par value
$0.001 per share, of the Surviving Corporation.
All
Shares that have been converted into the right to receive the Merger
Consideration as provided in this Section 3.1 shall be automatically cancelled
and shall cease to exist, and the holders of certificates which immediately
prior to the Effective Time represented such Shares shall cease to have any
rights with respect to such Shares other than the right to receive the Merger
Consideration in accordance with Section 3.4. If, during the period
from the date of this Agreement through the Effective Time, the Shares are
changed into a different number or class of shares by reason of any stock split,
division or subdivision of shares, stock dividend, reverse stock split,
consolidation of shares, reclassification, recapitalization or other similar
transaction, or if a record date with respect to any such event shall occur
during such period, then the Merger Consideration shall be appropriately
adjusted.
Section
3.2. Treatment of Equity
Awards. (a) The Company Board (or, if appropriate,
any committee thereof administering each Company Stock Plan) shall take all
actions so that each Company Stock Option, whether vested or unvested, that is
outstanding and unexercised immediately prior to the Purchase Time will, by
virtue of the occurrence of the Purchase Time and without any action on the part
of Parent, Purchaser, the Company or the holder thereof, be cancelled and will
solely represent the right to receive from the Company in exchange, at the time
set forth in Section 3.2(e), an amount in cash equal to the product of (1) the
number of shares of Common Stock subject to such Company Stock Option and (2)
the excess, if any, of the Offer Price, without interest, over the exercise
price per share of Common Stock subject to such Company Stock
Option.
(b) For
the avoidance of doubt, pursuant to such action of the Company Board (or, if
appropriate, any committee thereof administering each Company Stock Plan)
described in clause (a), if the exercise price per share of Common Stock subject
to an Company Stock Option, whether vested or unvested as of the Purchase Time,
is equal to or greater than the Offer Price, then by virtue of the occurrence of
the Purchase Time and without any action on the part of Parent, Purchaser, the
Company or the holder thereof, the Company Stock Option will be cancelled
without payment of any consideration to the holder.
(c) The
Company Board (or, if appropriate, any committee thereof administering each
Company Stock Plan) shall take all actions so that each share of unvested
restricted Common Stock (whether performance-based, time-based or otherwise)
granted under the Company Stock Plans (each such share, a “Restricted Stock ”)
that is outstanding immediately prior to the Purchase Time will, by virtue of
the occurrence of the Purchase Time and without any action on the part of
Parent, Purchaser, become fully vested and such thereafter the holders of such
shares shall (i) to the extent such shares are validly tendered during a
subsequent offer commenced by the Purchaser in accordance with Section 1.1, be
entitled to receive the consideration accordance with Section 1.1 or (ii) be
entitled to receive the Merger Consideration in accordance with Section 3.1
(other than any Dissenting Shares).
11
(d) The
Company Stock Plans will terminate as of the Purchase Time, and any and all
rights under any provisions in any Company Plan providing for the issuance or
grant of any other interest in respect of the capital stock of the Company
(other than the right to receive the payment contemplated by Section 3.2(a))
will be cancelled as of the Purchase Time, except that all administrative and
other rights and authorities granted under the Company Stock Plans to the
Company, the Company Board or any committee or designee thereof will remain in
effect and will reside with the Company following the Purchase
Time.
(e) The
Surviving Corporation shall pay the holders of the Company Stock Options the
cash payments described in Section 3.2(a) and Section 3.2(c), subject to
withholding Taxes described in Section 3.5, on or as soon as reasonably
practicable after the date on which the Effective Time occurs, but in any event
within five (5) Business Days thereafter.
Section
3.3. Dissenting
Shares. (a) Notwithstanding anything in this
Agreement to the contrary, Shares that are issued and outstanding immediately
prior to the Effective Time and that are held by holders of Shares that have
properly demanded and perfected their rights to be paid the fair value of such
Shares in accordance with Section 262 of the DGCL (the “Dissenting Shares”)
will not be converted into the right to receive the Merger Consideration, and
the holders thereof will be entitled only to such rights as are granted by
Section 262 of the DGCL; provided, however, that if any
such holder fails to perfect or effectively waives, withdraws or loses such
holder’s rights under Section 262 of the DGCL, such holder’s Shares will not
constitute Dissenting Shares and instead will thereupon be deemed automatically
to have been converted, at the Effective Time, into, and represent only, the
right to receive the Merger Consideration, as set forth in Section 3.1 of this
Agreement, without any interest thereon.
(b) The
Company will give Parent (1) reasonably prompt notice of any appraisal demands
received by the Company, withdrawals thereof and any other instruments served
pursuant to Section 262 of the DGCL and received by the Company, and (2) the
opportunity to direct all negotiations and proceedings with respect to the
exercise of appraisal rights under Section 262 of the DGCL. The
Company will not, except with the prior written consent of Parent or as
otherwise required by applicable Law, make any payment with respect to any such
exercise of appraisal rights or offer to settle or settle any such
rights.
Section
3.4. Payment Procedures;
Surrender of Shares. (a) Prior to the Effective
Time and from time to time after the Effective Time, Parent will deposit (or
cause to be deposited) with a bank or trust company designated by Parent and
reasonably acceptable to the Company (the “Paying Agent”)
sufficient funds to timely make, and will cause the Paying Agent to timely make,
all payments pursuant to Section 3.4(b). Such funds shall, pending
its disbursement, be invested by the Paying Agent as directed by Parent in (i)
short-term direct obligations of the United States of America, (ii) short-term
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, (iii)
short-term commercial paper rated the highest quality by either Moody’s
Investors Services, Inc. or Standard and Poor’s Ratings Services or (iv) money
market funds investing solely in combination of the foregoing. Any
interest or income produced by such investments will be payable to the Surviving
Corporation or Parent, as Parent directs. Parent shall promptly
replace any funds deposited with the Paying Agent lost through any investments
made pursuant to this paragraph.
12
(b) Promptly
after the Effective Time (and, in any event, within two (2) Business Days), the
Surviving Corporation shall cause to be mailed (A) to each record holder, as of
the Effective Time, of an outstanding certificate or certificates that
immediately prior to the Effective Time represented Shares (collectively, the
“Certificates”), a
form of letter of transmittal (which will be in customary form reasonably
acceptable to the Company and shall specify that delivery will be effected, and
risk of loss and title to the Certificates will pass, only upon proper delivery
of the Certificates to the Paying Agent) and instructions for use in effecting
the surrender of the Certificates for payment of the Merger Consideration and
(B) to each holder of Shares whose Shares are non-certificated and represented
by book-entry (“Book-Entry Shares”),
instructions for use in effecting the surrender of Book-Entry Shares in exchange
of the Merger Consideration. Upon surrender to the Paying Agent of a Certificate
or Book-Entry Shares, together with such letter of transmittal, duly completed
and validly executed in accordance with the instructions thereto, and such other
documents as may be customarily required pursuant to such instructions by the
Paying Agent, the holder of such Certificate or Book-Entry Shares will be
entitled to receive in exchange therefor an amount equal to the product of (x)
the number of Shares represented by such holder’s properly surrendered
Certificates and/or Book-Entry Shares, as applicable, multiplied by (y) the
applicable Merger Consideration. No interest will be paid or accrued for the
benefit of holders of the Certificates on the Merger Consideration payable in
respect of the Certificates. If payment of the Merger Consideration is to be
made to a Person other than the Person in whose name the surrendered Certificate
is registered, it will be a condition of payment that the Certificate so
surrendered will be properly endorsed or will be otherwise in proper form for
transfer and that the Person requesting such payment will have paid any transfer
and other Taxes required by reason of the payment of the Merger Consideration to
a Person other than the registered holder of the Certificate surrendered or will
have established to the satisfaction of the Surviving Corporation that such Tax
is not applicable. Until surrendered as contemplated by this Section 3.4(b),
each Certificate will be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the applicable Merger
Consideration as contemplated by this Article III.
(c) At
any time following the date that is six (6) months after the Effective Time,
Parent will be entitled to require the Paying Agent to deliver to it or any
designated Subsidiary thereof any funds (including any interest received with
respect thereto) that have been made available to the Paying Agent and that have
not been disbursed to holders of Certificates and thereafter such holders will
be entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the Merger Consideration payable upon due surrender of their
Certificates. The Surviving Corporation will pay all charges and
expenses, including those of the Paying Agent, in connection with the exchange
of Shares for the Merger Consideration.
(d) After
the Effective Time, the stock transfer books of the Company will be closed and
thereafter there will be no further registration of transfers of Shares that
were outstanding prior to the Effective Time, and holders of Certificates that
were outstanding immediately prior to the Effective Time shall cease to have any
rights as stockholders of the Company. After the Effective Time,
Certificates presented to the Surviving Corporation for transfer will be
cancelled and exchanged for the consideration provided for, and in accordance
with the procedures set forth in, this Article III.
13
(e) In
the event that any Certificate has been lost, stolen or destroyed, upon the
holder’s delivery of an affidavit of loss to the Paying Agent, the Paying Agent
will deliver in exchange for the lost, stolen or destroyed Certificate the
applicable Merger Consideration payable in respect of the Shares represented by
such Certificate pursuant to this Article III. No interest shall be
paid or will accrue on any cash payable to holders of Certificates pursuant to
the provisions of this Section 3.4(e).
Section
3.5. Withholding
Taxes. Notwithstanding anything in this Agreement to the
contrary, Parent, Purchaser, the Surviving Corporation and the Paying Agent
shall be entitled to deduct and withhold (or cause to be deducted and withheld)
from the consideration otherwise payable pursuant to the Offer, the Merger or
otherwise pursuant to this Agreement (including, with respect to the treatment
of equity awards, Section 3.2) such amounts as may be required to be deducted
and withheld with respect to the making of such payment under the Code or under
any provision of state, local or foreign Tax Law. To the extent that
any such amounts are properly withheld and are paid to the appropriate
Governmental Entity in accordance with applicable Law, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the Shares or other Person in respect of which such deduction and
withholding was made.
ARTICLE
IV.
REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
Except as
set forth in the SEC Reports filed with the SEC on or after January 1, 2010 and
publicly available on the Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR”) (excluding any
disclosures set forth in any section of any SEC Reports entitled “Risk Factors”
or “Forward-Looking Statements” or any other disclosures included in such
document that are general cautionary, predictive or forward-looking in nature)
or in the correspondingly numbered section of the disclosure schedule delivered
by the Company to Parent and Purchaser concurrently with the execution of this
Agreement (the “Company Disclosure
Schedule”) (provided, however, that a
matter disclosed with respect to one representation or warranty shall also be
deemed to be disclosed with respect to each other representation or warranty to
which the matter disclosed reasonably relates, but only to the extent such
relationship is reasonably apparent on the face of the disclosure contained in
the Company Disclosure Schedule with respect to such matter), the Company hereby
represents and warrants to Parent and Purchaser as follows:
Section
4.1. Organization and
Qualification; Subsidiaries. Each of the Company and its
Subsidiaries is a duly organized and validly existing corporation or other
entity in good standing (where applicable) under the Laws of its jurisdiction of
incorporation or organization, with all corporate or other entity power and
authority to own its properties and conduct its business as currently conducted
and is duly qualified and in good standing (where applicable) as a foreign
corporation or entity authorized to do business in each of the jurisdictions in
which the character of the properties owned or held under lease by it or the
nature of the business transacted by it makes such qualification necessary,
except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
14
Section
4.2. Certificate of Incorporation
and By-laws. The Company has heretofore Made Available to
Parent true, correct and complete copies of the certificate of incorporation and
by-laws of the Company as currently in effect (respectively, the “Certificate of
Incorporation” and “By-laws”) and of the
certificate of incorporation and by-laws (or similar governing documents) as
currently in effect for its Subsidiaries, and all amendments thereto currently
in effect.
Section
4.3. Capitalization.
(a) The
authorized capital stock of the Company consists of 45,000,000 shares of Common
Stock and 5,000,000 shares of preferred stock, par value $0.01 per share (“Preferred
Stock”). As of October 29, 2010, (1) 11,190,781 shares of
Common Stock were issued and outstanding (which for the avoidance of doubt,
includes any Shares of Common Stock set forth in clause (5) of this Section
4.3(a)), (2) no shares of Preferred Stock were issued or outstanding, (3) no
shares of Common Stock were held in the treasury of the Company, (4) 1,646,350
shares of Common Stock were reserved for issuance upon exercise of Company Stock
Options issued and outstanding, (5) 349,567 shares of Restricted
Stock are issued and outstanding, and (6) no shares of Common Stock
were authorized and reserved for future issuance pursuant to the Company Stock
Plans (other than shares of Common Stock authorized and reserved for future
issuance upon exercise of Company Stock Options issued and outstanding as of the
date hereof). Each issued and outstanding share of capital stock of
the Company is, and each share of Common Stock reserved for issuance pursuant to
Company Stock Options as specified above shall be, upon issuance on the terms
and conditions specified in the instruments pursuant to which it is issuable,
duly authorized, validly issued, fully paid, nonassessable and free of
preemptive rights. As of October 29, 2010, options or warrants
exercisable for, securities convertible into, or commitments with respect to the
issuance of 1,646,350 shares of capital stock of the Company have been issued,
granted or made.
(b) Except
for Company Stock Options issued and outstanding, as of the date hereof, there
are no outstanding subscriptions, options, calls, contracts, commitments,
understandings, restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security, instrument or
other agreement and also including any rights plan or other anti-takeover
agreement, obligating the Company or any Subsidiaries of the Company to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
Common Stock (including Restricted Stock) or any other shares of capital stock
or other securities of the Company or its Subsidiaries or obligating the Company
or any of its Subsidiaries to grant, extend or enter into any such agreement or
commitment. There are no obligations, contingent or otherwise, of the
Company or its Subsidiaries to repurchase, redeem or otherwise acquire any
shares of Common Stock (including Restricted Stock) or the capital stock or
other equity interests of any Subsidiaries of the Company or obligating the
Company to grant, extend or enter into any such agreements. There are
no outstanding stock appreciation rights or similar derivative securities or
rights of the Company or any of its Subsidiaries. There are no bonds,
debentures, notes or other indebtedness of the Company having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of the Company may vote. Other
than customary insider stock trading policies, there are no voting trusts,
irrevocable proxies or other agreements or understandings to which the Company
or any Subsidiary of the Company is a party or is bound with respect to the
voting of any shares of Common Stock or restricting any Person from purchasing,
selling, pledging or otherwise disposing of (or granting any option or similar
right with respect to) any shares of Common Stock (including Restricted
Stock). The Company has not agreed to register any securities under
the Securities Act or under any state securities law or granted registration
rights to any Person (except rights which have terminated or
expired). There are no obligations by the Company or any of its
Subsidiaries to make any payments based on the price or value of any Common
Stock or dividends paid thereon or revenues, earnings or financial performance
or any other attribute of the Company. No direct or indirect
Subsidiary of the Company owns any Common Stock of the Company. Since
June 30, 2010, the Company has not issued any shares of its capital stock or any
securities convertible into or exchangeable or exercisable for any shares of its
capital stock, other than Restricted Stock or pursuant to Company Stock Options
referred to above, that are outstanding as of the date of this Agreement or are
hereafter issued without violation of Section 6.1 hereof.
15
(c) The
Company has previously Made Available to Parent complete and correct copies of
each Company Stock Plan. Section 4.3(c) of the Company Disclosure
Schedule sets forth a complete and correct list as of October 29, 2010, of all
Company Stock Options then issued and outstanding, setting forth with respect to
each such Company Stock Option the name of the holder thereof, the name of the
Company Stock Plan under which such option was granted, the number of shares of
Common Stock remaining subject to each such option, the exercise price per share
of Common Stock, the vesting schedule of each such Company Stock Option, and the
maximum term of each such Company Stock Option. Complete and correct
copies of the relevant forms of written agreements, including forms of
amendments thereto, evidencing the grant of Company Stock Options have been Made
Available to Parent by the Company. All Company Stock Options have
been validly issued and properly approved by the Company Board (or a duly
authorized committee or subcommittee thereof) in compliance with all applicable
Laws. The per share exercise price of each Company Stock Option was
not less than the fair market value on the date on which the grant of such
Company Stock Option was to be effective and recorded on the Company financial
statements in accordance with GAAP, and no such grants, to the Knowledge of the
Company, involved any “back dating,” “forward dating” or similar practices with
respect to such grants.
(d) Section
4.3(d) of the Company Disclosure Schedule sets forth a complete and correct list
as of October 29, 2010, of all shares of Restricted Stock then issued and
outstanding, setting forth with respect to each award of Restricted Stock the
name of the holder thereof, whether such award is a restricted stock, restricted
stock unit, phantom restricted stock, deferred stock unit or other type of award
described in Section 3.2(c) hereof, the name of the Company Stock Plan under
which such award was granted, the number of shares of such Restricted Stock
award and the vesting schedule for such Restricted Stock
award. Complete and correct copies of the relevant forms of written
agreements, including forms of amendments thereto, evidencing the grant of
Restricted Stock have been Made Available to Parent by the
Company. All Restricted Stock have been validly issued and properly
approved by the Company Board (or a duly authorized committee or subcommittee
thereof) in compliance with all applicable Law and recorded on the Company
financial statements in accordance with GAAP.
16
(e) All
the outstanding shares of capital stock of, or other equity interests in, each
Subsidiary of the Company (except for directors’ qualifying shares or the like)
are owned directly or indirectly, beneficially and of record, by the Company
free and clear of all Liens and transfer restrictions, except for such transfer
restrictions of general applicability as may be provided under the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(the “Securities
Act”), and other applicable securities laws. Section 4.3(e) of
the Company Disclosure Schedule sets forth a list of all Subsidiaries of the
Company, including those that are not, directly or indirectly, wholly-owned by
the Company (except for directors’ qualifying shares or the like), and the
ownership percentage of each such Subsidiary owned by the Company and/or any of
its Subsidiaries. Except as set forth in Section 4.3(e) of the
Company Disclosure Schedule, (i) each outstanding share of capital stock of each
Subsidiary of the Company, which is held, directly or indirectly, by the
Company, is duly authorized, validly issued, fully-paid, nonassessable and free
of preemptive rights and (ii) there are no subscriptions, options, warrants,
rights, calls, contracts or other commitments, understandings, restrictions or
arrangements relating to the issuance, acquisition, redemption, repurchase or
sale of 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 agreement. Neither the Company nor any
of its Subsidiaries has agreed or is obligated to make, or is bound by any
Contract under which it may become obligated to make, any future investment for
securities in, or capital contribution to any other Person.
(f) All
outstanding shares of Common Stock (including Restricted Stock), options, and
other securities of the Company and its Subsidiaries have been issued and
granted in material compliance with: (i) all applicable securities
laws, the Code and all other applicable Laws; and (ii) all requirements set
forth in applicable Contracts.
Section
4.4. Authority. (a) The
Company has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and, subject to the
adoption of this Agreement by the Company’s stockholders under the DGCL to the
extent required by applicable Law, to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly and validly authorized by all
necessary corporate action, and no other corporate proceeding on the part of the
Company is necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than adoption of this Agreement by the
holders of at least a majority in combined voting power of the outstanding
Shares (the “Company
Requisite Vote”), and the filing with the Secretary of State of the State
of Delaware of the Certificate of Merger as required by the
DGCL). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery hereof by Parent and Purchaser, constitutes a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and any implied covenant of good faith and
fair dealing.
17
(b) The
Company Board (at a meeting or meetings duly called and held at which all
directors of the Company were present) has unanimously: (1)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, are advisable and fair to and in the best
interests of, the Company and its stockholders; (2) adopted and approved this
Agreement; (3) directed that this Agreement be submitted to the holders of
Shares for adoption as promptly as practicable after the Purchase Time (unless
the Merger is consummated in accordance with Section 253 of the DGCL as
contemplated by Section 2.7); and (4) resolved to recommend that the
stockholders of the Company accept the Offer and tender their Shares to
Purchaser pursuant to the Offer, and if applicable, vote in favor of the
adoption of this Agreement (the “Company Board
Recommendation”).
Section
4.5. No Conflict; Required
Filings and Consents. (a) Except as set forth on Section 4.5
of the Company Disclosure Schedule, the execution, delivery and
performance of this Agreement by the Company, the consummation of the Offer,
and, subject to the adoption of this Agreement by the holders of Shares under
the DGCL to the extent required by applicable Law, the consummation by the
Company of the transactions contemplated hereby do not and shall not (with or
without notice or lapse of time), (1) conflict with or violate the Certificate
of Incorporation or By-laws, or the certificate of incorporation or bylaws or
equivalent organizational documents of any Subsidiary of the Company, (2)
assuming that all consents, approvals, actions, non-actions, and authorizations
contemplated by clauses (1) through (5) of subsection (b) below have been
obtained, and all filings described in such clauses have been made, conflict
with or violate any federal, state, local or foreign statute, law, ordinance,
rule, regulation, order, judgment, decree or legal requirement (“Law”) applicable to
the Company or any of its Subsidiaries or by which any of their respective
properties are bound, or (3) (A) result in any breach or violation of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) or (B) result in the creation of any material Lien on
any of the properties or assets of the Company or its Subsidiaries under any
note, bond, mortgage, indenture, contract, agreement, lease, license, warrant,
option, permit or other instrument, obligation, commitment or undertaking (each,
a “Contract”)
to which the Company or its Subsidiaries is a party or by which the Company or
its Subsidiaries or any of their respective properties are bound, (4) contravene
or conflict with or result in a violation of any of the terms or requirements
of, or give any Governmental Entity the right to revoke, withdraw, suspend,
cancel, terminate or modify, any material Permit that is held by the Company or
any of its Subsidiaries, or (5) result in the transfer of any material asset of
the Company or any of its Subsidiaries to any Person other than as contemplated
by this Agreement, except, in the case of clauses (2) through (5), for any such
conflict, violation, breach, default, loss, right or other occurrence that would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(b) The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the Merger and the other transactions
contemplated hereby do not and shall not require any consent, approval,
authorization or permit of, action or non-action by, filing with or notification
to, any federal, state, local or foreign governmental or regulatory authority,
agency, court, commission, or any other governmental body (each, a “Governmental
Entity”), except for (1) applicable requirements of the Exchange Act, the
Securities Act and the rules and regulations promulgated thereunder (including
the filing of the Schedule TO and the Proxy Statement), and state securities,
takeover and “blue sky” laws, (2) compliance with the applicable requirements of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (3) the
applicable requirements of Nasdaq, (4) the filing with the Secretary of State of
the State of Delaware of the Certificate of Merger as required by the DGCL, and
(5) any such consent, approval, authorization, permit, action, filing or
notification the failure of which to make or obtain would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
18
Section
4.6. SEC Reports; Financial
Statements. (a) The Company has filed, furnished or
otherwise transmitted on a timely basis all forms, reports, schedules,
registration statements, proxies, certifications, statements and other documents
(including all exhibits, amendments and supplements thereto) required to be
filed or transmitted by it with or to the SEC under the Securities Act or the
Exchange Act since January 1, 2008 (such documents filed or otherwise
transmitted since January 1, 2008 including all items incorporated by reference
therein, the “SEC
Reports”). The Company has Made Available to Parent (to the
extent not available on EDGAR) accurate and complete copies of all SEC Reports,
as well as all comment letters received by the Company from the SEC and all
responses to such comment letters provided to the SEC by or on behalf of the
Company since January 1, 2008. None of the Subsidiaries is subject to
the reporting requirements of Section 13(a) or 15(d) of the Exchange
Act. As of their respective effective dates (in the case of SEC
Reports that are registration statements filed pursuant to the requirements of
the Securities Act) and as of their respective SEC filing dates (in the case of
all other SEC Reports), the SEC Reports complied as to form in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act, as the case may be, and the rules and regulations promulgated thereunder,
each as in effect on the date so effective or so filed, as the case may
be. Except to the extent amended or superseded by a subsequent filing
with the SEC made prior to the date hereof, as of their respective dates (and if
so amended or superseded, then on the date of such subsequent filing), none of
the SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by reference therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) The
audited and unaudited consolidated financial statements (including the related
notes thereto) of the Company included (or incorporated by reference) in the SEC
Reports (the “Financial
Statements”), as amended or supplemented prior to the date of this
Agreement, have been prepared in accordance with GAAP in all material respects
applied on a consistent basis throughout the periods covered (except (i) as may
be indicated in the notes thereto or (ii) as permitted by Regulation S-X) and
fairly present in all material respects the consolidated financial position of
the Company and its Subsidiaries at the respective dates thereof and the
consolidated statements of operations and cash flows, as well as the
stockholders’ equity (deficit) for the periods indicated therein (subject, in
the case of unaudited Financial Statements, to normal and recurring year-end
audit adjustments and condensed notes).
(c) The
Company has implemented and maintains a system of “internal control over
financial reporting” (as required by Rule 13a-15(a) and defined in Rules
13a-15(f) and 15d-15(f) under the Exchange Act) that is designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of consolidated financial statements for external purposes, and, to
the Knowledge of the Company, such system of internal control over financial
reporting is effective. For purposes of this Section 4.6(c) only,
“Knowledge of the Company” means the actual knowledge of the Chief Executive
Officer and the principal financial officer of the Company, and shall not have
the meaning ascribed thereto in Section 9.3(n). The Company has not
received (nor, to the Knowledge of the Company, have the Company’s outside
auditors received): (i) any oral or written notification of (A) any
“significant deficiencies” and “material weaknesses” in the design or operation
of its internal controls over financial reporting or (B) any fraud, whether or
not material, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting; or (ii) any
complaint, allegation, assertion or claim alleging, asserting or claiming that
the accounting or auditing practices, procedures, methodologies or methods of
the Company or any Subsidiary of the Company (or their respective internal
accounting controls) fail to comply with generally accepted accounting
principles, generally accepted auditing standards or applicable
Law. For purposes of this Agreement, the terms “significant
deficiency” and “material weakness” shall have the meanings assigned to them by
the Public Company Accounting Oversight Board in Auditing Standard No.
2.
19
(d) The
Company has implemented and maintains “disclosure controls and procedures” (as
required by Rule 13a-15(a) of the Exchange Act) that are designed to ensure that
information required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time frames specified by the SEC’s rules and forms (and such
disclosure controls and procedures are effective), and has disclosed, based on
its most recent evaluation of its system of internal control over financial
reporting prior to the date of this Agreement, to the Company’s outside auditors
and the audit committee of the Company Board (A) any significant deficiencies
and material weaknesses known to it in the design or operation of its internal
control over financial reporting (as defined in Rule 13a-15(f) of the Exchange
Act) that would reasonably be expected to adversely affect the Company’s ability
to record, process, summarize and report financial information and (B) any fraud
known to it, that involves management or other employees who have a significant
role in the Company’s internal controls over financial reporting.
(e) Neither
the Company nor any of its Subsidiaries has any accrued, contingent or other
liabilities of any nature, either matured or unmatured, which would be required
to be reflected or reserved against on a consolidated balance sheet of the
Company prepared in accordance with GAAP (applied on a consistent basis during
the periods involved, other than as a result of any change in GAAP) or the notes
thereto, other than liabilities (1) as and to the extent reflected or reserved
against on the Audited Balance Sheet or in the notes thereto, (2) incurred in
the ordinary course of business consistent with past practices since December
31, 2009, (3) arising from contractual obligations under Contracts set forth in
Section 4.7 of the Company Disclosure Schedule, (4) liabilities or obligations
arising from or as a result of this Agreement or otherwise in connection with
the transactions contemplated hereby, (5) investment banking, accounting and
legal fees incurred by the Company in connection with the negotiation, execution
and delivery of this Agreement, or (6) liabilities that have not had and would
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. The “Audited Balance
Sheet” means the consolidated balance sheet of the Company dated as of
December 31, 2009 included in the Company’s Annual Report on Form 10-K for the
twelve (12)-month period ended December 31, 2009 filed with the SEC prior to the
date hereof.
Section
4.7. Contracts. (a) Section
4.7 of the Company Disclosure Schedule lists, and the Company has Made Available
to Parent true, complete and correct copies of, all Contracts as of the date
hereof to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries or any of their respective properties or
assets is bound and which are currently in effect or under which the Company or
any of its Subsidiaries has any continuing rights or obligations
that:
20
(i) constitutes
a “material contract” (as such term is defined in Item 601(b)(10) of Regulation
S-K promulgated under the Securities Act);
(ii) contains
covenants that restrict in any material respect the ability of the Company or
its Subsidiaries (or that, following the consummation of the Merger, would
restrict the ability of the Parent or any of its Affiliates) (A) to engage in
any line of business or make use of any material Company Owned Intellectual
Property, (B) to compete with, or solicit any customer of, any other Person or
in any business or geographic area, (C) to acquire any product or other asset or
any services from any other Person; (D) to develop, manufacture, sell, supply,
distribute, offer, support or service any product or any product, technology or
other asset to or for any other Person; or (E) to perform services for any other
Person;
(iii) (A)
relating to the employment of, or the performance of services by, any Company
Employee with compensation in excess of $150,000 per year; (B) pursuant to which
any of the Company or any of its Subsidiaries is or may become obligated to make
any severance, termination, tax gross-up, or similar payment to any Company
Employee; (C) pursuant to which the Company or any of its Subsidiaries is or may
become obligated to make any bonus, deferred compensation or similar payment
(other than payments constituting base salary and ordinary course sales
commission) in excess of $50,000 to any Company Employee; or (D) that provides
for indemnification, or for reimbursement of any legal fees or expenses, of any
Company Employee;
(iv) other
than Contracts evidencing Company Stock Options or Restricted
Stock: (A) relating to the acquisition, issuance, voting,
registration, sale or transfer of any Company securities; or (B) providing any
Person with any preemptive right, right of participation, right of maintenance
or similar right with respect to any capital stock of the Company or any of its
Subsidiaries;
(v) any
Contract that contemplates payments or the delivery of other consideration by or
to the Company or any of its Subsidiaries during any 12-month period of more
than $1,000,000 individually or $2,500,000 in the aggregate;
(vi) that
relates to the formation, creation, operation, management or control of any
partnership or collaboration or any joint venture, joint marketing or similar
arrangement that has a value of more than $1,000,000
individually;
(vii) that
involves or relates to (A) indebtedness for borrowed money or (B) the deferred
purchase price of goods or services and having an outstanding principal amount
in excess of $1,000,000 individually, or (C) any exchange traded,
over-the-counter or other swap, cap, floor, collar, futures contract, forward
contract, option or any other derivative financial instrument or
contract;
(viii) relate
to an acquisition, divestiture, merger or similar transaction that contains
representations, covenants, indemnities or other obligations (including
indemnification, “earn-out” or other contingent obligations), that are still in
effect and, individually, could reasonably be expected to result in payments by
the Company or any of its Subsidiaries in excess of $1,000,000 individually or
$2,500,000 in the aggregate for all such agreements;
21
(ix) relate
to any guarantee or assumption of other obligations of any third party or
reimbursement of any maker of a letter of credit, except for agreements entered
into in the ordinary course of business consistent with past practice which
agreements relate to obligations which do not individually exceed
$100,000;
(x) are
exclusive license agreements;
(xi) prohibits
the payment of dividends or distributions in respect of the capital stock of the
Company or any of its wholly-owned Subsidiaries, prohibits the pledging of the
capital stock of the Company or any wholly owned Subsidiary of the Company or
prohibits the issuance of guarantees by any wholly owned Subsidiary of the
Company; or
(xii) any
other Contract, if breach of such a Contract or the termination of such Contract
would reasonably be expected to have a Material Adverse Effect.
Each such
Contract described in clauses (i) through (xii) is referred to herein as a
“Material
Contract.” Each Material Contract is in written form, and
accurate and complete copies of each Material Contract have been Made Available
to Parent by the Company (it being understood that to the extent any Material
Contract is based on a standard-form Contract, the Company has only Made
Available the standard-form Contract unless such Material Contract deviates in
any material respect from such standard-form Contract, in which case the Company
has also provided an accurate and complete copy of such Material
Contract).
(b) Except
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (1) each Material Contract is valid, binding on, and
enforceable in accordance with its terms against, the Company or its applicable
Subsidiary and to the Knowledge of the Company, on each other party thereto and
is in full force and effect, and (2) the Company and its Subsidiaries have
performed and complied with all obligations required to be performed or complied
with by them under each Material Contract. Except in any case of
default as has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (A) there is no
default under any Material Contract by the Company or its Subsidiaries or, to
the Knowledge of the Company, by any other party, and (B) no event has occurred
that with the lapse of time or the giving of notice or both would (1) constitute
a default thereunder by the Company or its Subsidiaries, or to the Knowledge of
the Company, by any other party, (2) give any Person the right to receive or
require any rebate, chargeback, penalty or change in the delivery schedule
thereunder, (3) give any Person the right to accelerate the maturity or
performance thereof; or (4) give any Person the right to cancel, terminate or
modify such Material Contract. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect,
to the Knowledge of the Company, the Company has not received any notice from
any counterparty that such counterparty intends to terminate, or not renew, any
Material Contract, or is seeking the renegotiation thereof in any material
respect or substitute performance thereunder in any material
respect.
22
Section
4.8. Properties. Except
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, the Company or a Company Subsidiary has good and valid
title to all tangible personal properties purported to be owned by it or a valid
leasehold interest in all tangible personal properties purported to be used by
it, including (i) all personal properties reflected in the latest balance sheet
included in the SEC Reports as being owned by the Company or any of its
Subsidiaries or acquired after the date thereof (except for properties sold or
otherwise disposed of since the date thereof pursuant to the Government
Solutions Purchase Agreement or in the ordinary course of business); and (ii)
all other personal properties reflected in the books and records of the Company
and its Subsidiaries as being owned by the Company and its
Subsidiaries. All of said personal properties which are owned by the
Company or its Subsidiaries are owned by them, free and clear of all Liens,
except (1) statutory Liens for Taxes or other governmental charges not yet due
and payable or the amount or validity of which is being contested in good faith
by appropriate proceedings, (2) Liens arising under worker’s compensation,
unemployment insurance, social security, retirement and similar legislation, (3)
mechanics’, materialmen’s, architects’, carriers’, workmen’s, warehousemen’s,
repairmen’s, landlords’ and other similar Liens arising or incurred in the
ordinary course of business, either securing payments not yet due or that are
being contested in good faith by appropriate proceedings and for which
appropriate reserves have been set aside by the Company, (4) purchase money
Liens and Liens securing rental payments under capital lease arrangements, (5)
such imperfections or irregularities of title, claims, Liens, charges, security
interests, easements, encroachments, covenants and other restrictions or
Encumbrances (other than Permitted Encumbrances) as do not materially affect the
use of the properties or assets subject thereto or affected thereby or otherwise
materially impair business operations at such properties, (6) mortgages or deeds
of trust, (7) security interests or other Encumbrances (other than Permitted
Encumbrances) on title related to indebtedness reflected on the latest balance
sheet and the notes thereto included in the Financial Statements, (8) zoning,
building codes and other land use laws, imposed by any Governmental Entity
having jurisdiction over such the Company’s or its Subsidiary’s owned real
property, that regulate the use or occupancy of such owned real property and (9)
other Liens being contested in good faith in the ordinary course of business or
that would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect (collectively, the “Permitted
Liens”).
Section
4.9. Real
Property. Neither the Company nor any of its Subsidiaries owns
any real property. Section 4.9 of the Company Disclosure Schedule
sets forth a complete list of all real property leased by the Company or any of
its Subsidiaries as of the date hereof. Except as would not,
individually or in the aggregate have a Material Adverse Effect, the Company or
a Subsidiary of the Company has valid leasehold interests in all of its leased
properties, sufficient to conduct their respective businesses as currently
conducted, free and clear of all Liens (except in all cases for Permitted Liens)
and Encumbrances (except in all cases for Permitted Encumbrances), assuming the
timely discharge of all obligations owing under or related to the leased
property. Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (a) all leases
under which the Company or any of its Subsidiaries lease any real property are
valid and in full force and effect against the Company or any of its
Subsidiaries and, to the Knowledge of the Company, the counterparties thereto,
in accordance with their respective terms, and (b) there is not, under any of
such leases, any existing breach or default by the Company or any of its
Subsidiaries, or to the Knowledge of the Company, any other party to any of such
leases, and no event has occurred or failed to occur or circumstance exists
which, with the delivery of notice, the passage of time or both, would
constitute such a breach or default, or permit the termination, modification or
acceleration of rent under such lease.
23
Section
4.10. Intellectual
Property. (a) Section 4.10(a) of the Company
Disclosure Schedule sets forth a true and complete list as of the date hereof of
all material Intellectual Property owned by the Company.
(b) Except
as set forth in Section 4.10(b) of the Company Disclosure
Schedule: (a) the Company and its Subsidiaries have sufficient rights
to use all material Intellectual Property reasonably necessary in the conduct of
the business of the Company and its Subsidiaries as currently conducted
(collectively, the “Company Intellectual
Property”); (b) no claims are pending or, to the Knowledge of the
Company, threatened, (i) challenging the ownership, enforceability or validity
of any Company Owned Intellectual Property or (ii) alleging that the Company or
any of its Subsidiaries is violating, misappropriating or infringing the rights
of any Person with regard to any Intellectual Property owned by a third party;
(c) to the Knowledge of the Company, no third party is infringing any Company
Owned Intellectual Property; and (d) to the Knowledge of the Company, the use of
the Company Intellectual Property and the operation of the business of the
Company and its Subsidiaries as currently conducted do not violate,
misappropriate or infringe the Intellectual Property of any third party, and the
Company is unaware of any facts that would give the Company the reasonable
belief that it is violating misappropriating or infringing the Intellectual
Property of any third party.
(c) All
material data contained in any databases of, or maintained on behalf of, the
Company or its Subsidiaries and all other information and data compilations used
by, or necessary to the business of, the Company or it Subsidiaries (“Company Data”) is
owned by the Company or its Subsidiaries or is used by or on behalf of the
Company or its Subsidiaries: (i) pursuant to a valid Contract, (ii) provided to
the Company by its customers, or (iii) is freely available (e.g., government and
other free data sources) or in the public domain.
(d) Except
as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (i) all Company IT Systems have been properly
maintained by technically competent personnel to ensure proper operation,
monitoring and use and (ii)the Company IT Systems are in good working condition
to effectively perform all information technology operations necessary to
conduct the business of the Company and its Subsidiaries as they are currently
being conducted. The Company and its Subsidiaries have not
experienced within the past year any material disruption to, or material
interruption in, the conduct of business attributable to a defect, bug,
breakdown or other failure or deficiency of the Company IT
Systems. The Company and its Subsidiaries have taken commercially
reasonable measures to provide for the back-up and recovery of the data and
information necessary to the conduct of the business of the Company and its
Subsidiaries.
24
(e) Each
of the Company and its Subsidiaries has established an information security
program that, in all material respects: (i) includes safeguards
designed to protect the security, confidentiality, and integrity of transactions
and/or the proprietary nature of the Company Data; and (ii) is designed to
protect against unauthorized access to the Company IT Systems or Company Data
and the systems of any third party service providers that have access to Company
Data or Company IT Systems. To the Knowledge of the Company, none of
the Company or any of its Subsidiaries has suffered a material security breach
with respect to the Company Data in the past three years. No Company
or Subsidiary has notified any Person of any information security breach
involving Personal Data in the last three years. To the Knowledge of
the Company, each of the Company and its Subsidiaries is in compliance with all
applicable internal privacy policies and all applicable Laws related to
information privacy and security, except for such failures to comply as have not
had, or would not reasonably be expected to have, a Material Adverse
Effect.
Section
4.11. Compliance.
(a) The
Company and its Subsidiaries are, and since January 1, 2008 have been, in
compliance with all Laws applicable to the Company or any of its Subsidiaries,
except for such non-compliance as has not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect. None of the Company and its Subsidiaries has received any
notice or other communication from any Governmental Entity or other Person or to
the Knowledge of the Company, there has been no circumstance regarding any
actual or possible violation of, or failure to comply with, any Law, except for
such violations or failures to comply that have not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(b) The
Company and each of its Subsidiaries hold all licenses, franchises, permits,
certificates, approvals and authorizations from Governmental Entities necessary
to be held at this time in order to enable them to conduct their business in the
manner in which such business is currently conducted (collectively, “Permits”), except
where the failure to hold the same would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. All such Permits
are valid and in full force and effect in all material respects. The
Company and each of its Subsidiaries are, and since January 1, 2008 have been,
in compliance with the terms and requirements of such Permits, except for such
non compliance as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect. None of the Company and its
Subsidiaries has received any communication from any Governmental Entity
regarding any asserted failure by it to have obtained any such Permits, or any
past and unremedied failure to obtain any such Permits. To the
Knowledge of the Company, there have been no circumstances regarding any failure
to comply with any material term or requirement of any such Permit, or any
actual or threatened revocation, withdrawal, suspension, cancellation,
termination or modification of any such Permit.
Section
4.12. Absence of Certain Changes
or Events. Except as set forth in Section 4.12 of the
Disclosure Schedule, since June 30, 2010, the business of the Company and its
Subsidiaries has been carried on and conducted in all material respects in the
ordinary course of business consistent with past practice, and there has not
been any change, event, effect or occurrence that has had or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
25
Section
4.13. Absence of
Litigation.
(a) Except
as set forth in Section 4.13 of the Company Disclosure Schedule, there is no
claim, action, suit, litigation, arbitration, hearing, inquiry, audit,
investigation or proceeding by or before or otherwise involving any Governmental
Entity (each, a “Proceeding”) pending
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries or any of its or their properties, other than any such
Proceeding that has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither
the Company nor its Subsidiaries nor any of their respective properties is
subject to any outstanding order, writ, injunction or decree. To the
Knowledge of the Company, no event has occurred, and no claim, dispute or other
condition or circumstance exists that would reasonably be expected to give rise
to or serve as a basis for the commencement of any such Proceeding or the
issuance of any order, writ, injunction or decree.
(b) To
the Knowledge of the Company, as of the date hereof, no executive officer or
director of the Company or any of its Subsidiaries is a defendant in any
Proceeding in connection with his or her status as an executive officer or
director of the Company or any of its Subsidiaries, and, to the Knowledge of the
Company, as of the date hereof, no such Proceeding is
threatened.
26
Section
4.14. Employee Benefit
Plans. Section 4.14(a) of the Company Disclosure Schedule
lists each material “employee benefit plan” (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) and each
bonus, pension, profit sharing, deferred compensation, incentive compensation,
stock ownership, stock purchase, stock option, phantom stock, stock appreciation
right, retirement, vacation, severance, change of control, retention,
disability, death benefit, hospitalization, medical, worker’s compensation,
supplementary unemployment benefits, or other material plan or arrangement
(whether or not legally binding), other than employment agreements providing
compensation or benefits to any employee of the Company or any of its
Subsidiaries (each a “Company Employee”) or
sponsored, entered into, maintained or contributed to, as the case may be, by
the Company or any of its ERISA Affiliates or with respect to which the Company
or any of its ERISA Affiliates otherwise have any liabilities or obligations
(each, a “Company
Plan”). The Company has Made Available to Parent correct and
complete (in all material respects) copies of (a) each Company Plan that has
been formalized in writing, (b) the most recent annual reports on Form 5500
required to be filed with the IRS with respect to each Company Plan (if any such
report was required), (c) the most recent written summary plan description for
each Company Plan for which a summary plan description is required and (d) each
trust agreement and insurance or group annuity contract relating to any Company
Plan. Each Company Plan has been administered in compliance with its
terms and in compliance with the applicable provisions of ERISA, the Code and
all other applicable laws, except for any instances of noncompliance that would
not reasonably be expected to have a Material Adverse Effect. There
are no pending or, to the Knowledge of the Company, threatened claims (other
than claims for benefits in the ordinary course) with respect to any Company
Plans that would reasonably be expected to have a Material Adverse
Effect. The Company has, in connection with the transactions
contemplated hereby, complied with its fiduciary obligations with respect to
“Qualifying Employer Securities” held under the TechTeam Global Retirement
Savings Plan, in accordance with the terms thereof. All Company Plans
that are “employee pension benefit plans” (as defined in Section 3(2) of ERISA)
that are intended to be tax qualified under Section 401(a) of the Code (each, a
“Company Pension
Plan”) have received a favorable determination letter from the IRS or
have filed a timely application therefor and, to the Knowledge of the Company,
no event has occurred since the date of the most recent determination letter or
application therefor relating to any such Company Pension Plan that would
adversely affect the qualification of such Company Pension Plan, except as would
not reasonably be expected to have a Material Adverse Effect. The
Company has Made Available to Parent a correct and complete copy of the most
recent determination letter received with respect to each Company Pension Plan,
as well as a correct and complete copy of the Form 5500 or similar form for each
pending application for a determination letter, if any. Neither the
Company nor any of its Subsidiaries, nor to the Knowledge of the Company, any
trade or business that, together with the Company or any of its Subsidiaries,
would be deemed a single employer within the meaning of Section 4001 of ERISA
(an “ERISA
Affiliate”) maintains or contributes to, or has maintained or contributed
to during the previous six years, any multiemployer plan (as defined in Section
3(37) or Section 4001(a)(3) of ERISA) or any defined benefit plan (as defined in
Section 3(35) of ERISA) subject to Title IV of ERISA. No Company Plan
that is an “employee welfare benefit plan” (as defined in Section 3(1) of ERISA)
provides material benefits to former employees of the Company or its
Subsidiaries, other than pursuant to Section 4980B of the Code or any similar
Law. Except as expressly contemplated hereby or as set forth on
Section 4.14(b) of the Company Disclosure Schedules, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (either alone or in conjunction with any other event) result in,
cause the accelerated vesting or delivery of, or increase the amount or value
of, any payment or benefit to any current or former employee, officer, director
or independent contractor of the Company or any Subsidiary. Neither
the execution of this Agreement nor the consummation of the transactions
contemplated hereby (whether alone or in connection with any subsequent
event(s)) shall result in any payment that would constitute an “excess parachute
payment” (as such term is defined in Section 280G(b)(1) of the Code) to any
current employee of the Company or its Subsidiaries. Each Company
Plan is that is a “nonqualified deferred compensation plan” (within the meaning
of Section 409A(d)(1) of the Code) has been operated in material compliance with
Section 409A of the Code, and the Treasury Regulations issued under Section 409A
of the Code, and any subsequent guidance relating thereto, and no additional tax
under Section 409A(a)(1)(B) of the Code has been or is reasonably expected to be
incurred by a participant in any such Company Plan, and no employee of the
Company or its Subsidiaries is entitled to any gross-up or otherwise entitled to
indemnification by the Company, or any Subsidiary for any violation of Section
409A of the Code, except in each case, as would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect. This Section 4.14 constitutes the sole and exclusive
representation and warranty of the Company regarding employee benefit, and
pension matters, or liabilities or obligations, or compliance with Laws,
relating thereto.
27
Section
4.15. Labor and Employment
Matters. Except as set forth on Section 4.15 of
the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is or has been a party to any collective bargaining agreement or other labor
union contract applicable to individuals employed by the Company or any of its
Subsidiaries, and, to the Knowledge of the Company, there are no organizational
campaigns, petitions or other unionization activities seeking recognition of a
collective bargaining unit in respect of employees of the Company or any of its
Subsidiaries. The Company and each Subsidiary are currently in
compliance in all respects, and have been in compliance during the applicable
statutes of limitation period in all respects, with all Laws relating to the
employment of labor, including those related to wages, hours, collective
bargaining, employee classification issues and the payment and withholding of
Taxes, except for any instances of noncompliance that have not had or would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Within the past twelve months, neither the Company
nor any of its Subsidiaries has engaged in any mass layoff, plant closing,
workforce reduction, or other action that has resulted in or triggered notice
requirements or liability under the WARN Act or any similar state or local plant
closing notice law
Section
4.16. Insurance. Except
as has not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect, with respect to each material
insurance policy issued in favor of the Company, or pursuant to which the
Company or any of its Subsidiaries is a named insured or otherwise a
beneficiary, as well as any historic incurrence-based policies still in force,
(1) such policy is in full force and effect and all premiums due thereon have
been paid, (2) the Company is not in breach or default, and to the Knowledge of
the Company, neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action that with notice or the lapse of time, would
constitute such a breach or default, or permit termination or modification of,
any such policy, and (3) no notice of cancellation or termination has been
received with respect to any such policy. Section 4.16 of the Company
Disclosure Schedule accurately sets forth the most recent annual premium paid by
the Company with respect to its director and officer insurance
policies.
28
Section
4.17. Tax
Matters. (a) Except as set forth on Section 4.17 of
the Company Disclosure Schedule or as would not have a Material Adverse
Effect: (i) the Company and each of its Subsidiaries has prepared (or
caused to be prepared) and timely filed (taking into account valid extensions of
time within which to file) all Tax Returns required to be filed by any of them
and all such filed Tax Returns (taking into account all amendments thereto) are
true complete and accurate in all material respects; (ii) the Company and each
of its Subsidiaries timely paid all Taxes that are owed by it (whether or not
shown on any Tax Returns) and the accruals and reserves with respect to Taxes on
the respective books of the Company and each of its Subsidiaries are adequate
(and until the Effective Time will continue to be adequate) to pay all Taxes not
yet due and payable and have been determined in accordance with GAAP; (iii) as
of the date of this Agreement, there are not pending any audits, examinations,
investigations or other proceedings in respect of any Taxes of the Company or
any of its Subsidiaries; (iv) the Company has provided to Parent and Purchaser
true, complete and correct copies of all federal income Tax Returns and all
other material Tax Returns of the Company and each of its Subsidiaries with
respect to which the statute of limitations has not yet expired; (v) there are
no Liens for Taxes on any of the assets of the Company or any of its
subsidiaries other than Permitted Liens; (vi) none of the Company or any of its
Subsidiaries has been a “controlled corporation” or a “distributing corporation”
in any distribution occurring during the two-year period ending on the date
hereof that was purported or intended to be governed by Section 355 of the Code
(or any similar provision of state, local or foreign Law); (vii) all amounts of
Tax required to be withheld by the Company and each of its Subsidiaries have
been timely withheld and paid over to the appropriate Governmental Entity;
(viii) no deficiency for any Tax has been threatened, asserted or assessed by
any Governmental Entity in writing against the Company or any of its
Subsidiaries, except for deficiencies which have been satisfied by payment in
full, settled or been withdrawn; (ix) neither the Company nor any of its
Subsidiaries has waived any statute of limitations in respect of Taxes or agreed
to any extension of time with respect to an assessment or deficiency for Taxes
(other than pursuant to extensions of time to file Tax Returns obtained in the
ordinary course); (x) neither the Company nor any of its Subsidiaries (A) has
been a member of an affiliated group filing a consolidated federal income Tax
Return (other than a group the common parent of which was the Company) or (B)
has any liability for the Taxes of any person (other than the Company or any of
its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law), as a transferee or successor, or
pursuant to any Tax indemnification agreement, Tax allocation agreement or Tax
sharing agreement or similar written or unwritten agreement or arrangement that
could give rise to a payment or indemnification obligation (other than
agreements among the Company and its Subsidiaries and other than customary Tax
indemnifications contained in credit or other commercial agreements entered into
in the ordinary course of business consistent with past practice (all of which
have been Made Available to the Purchaser) the primary purpose of which does not
relate to Taxes); (xi) neither the Company nor any of its Subsidiaries has
engaged in any “listed transaction” within the meaning of Treasury Regulation
Section 1.6011-4(b)(2); (xii) neither the Company nor any of its Subsidiaries is
nor has ever been a United States real property holding corporation within the
meaning of Section 897 of the Code; (xiii) neither the Company nor any of its
Subsidiaries has, or has had, any “permanent establishment” as defined in any
applicable tax convention, outside the country of such entity’s place of
organization and neither the Company nor any of its Subsidiaries have received
any written notice from any taxing authority in a jurisdiction where such entity
has not filed Tax Returns that it may be subject to taxation in such
jurisdiction; (xiv) any material related party transaction involving the Company
or any of its Subsidiaries is in compliance with applicable U.S. and foreign
transfer pricing principles and is supported by appropriate transfer pricing
documentation requirements; (xv) neither the Company nor any of its
Subsidiaries, nor any separate unit of any such entity, has incurred a dual
consolidated loss within the meaning of Section 1503 of the Code; (xvi) neither
the Company nor any of its Subsidiaries will be required to include any item of
income in, or exclude any item of deduction from, taxable income for any period
(or portion thereof) ending after the Effective Time as a result of any (A)
change in method of accounting for a period ending on or prior to the Effective
Time, (B) “closing agreement” described in Section 7121 of the Code (or any
corresponding or similar provision of state, local, or foreign Tax law) entered
into on or prior to the Effective Time, (C) intercompany transactions or any
excess loss account described in Treasury Regulations under Section 1502 of the
Code (or any corresponding or similar provision of state, local, or foreign Tax
law) occurring or arising on or prior to the Effective Time, (D) installment
sale or open transaction disposition made on or prior to the Effective Time, (E)
prepaid amount received on or prior to the Effective Time or (F) election
pursuant to Section 108(i) of the Code made effective on or prior to the
Effective Time; (xvii) none of the Tax attributes (including net operating loss
carryforwards and general business Tax credits) of the Company or any of its
Subsidiaries is limited by Sections 382, 383 or 384 of the Code (or any
corresponding or similar provision of state, local or foreign Tax law); and
(xviii) neither the Company nor any of its Subsidiaries is a party to a gain
recognition agreement under Section 367 of the Code.
29
(b) For
purposes of this Agreement: (i) “Taxes” shall mean any
and all federal, state, local or foreign taxes, fees, levies, duties, tariffs,
imposts, and other similar charges (together with any and all interest,
penalties and additions to tax) imposed by any governmental or taxing authority
including: taxes or other charges on or with respect to income,
franchises, windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers’ compensation,
unemployment compensation, or net worth; taxes or other charges in the nature of
excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes;
license, registration and documentation fees; and customs’ duties, tariffs, and
similar charges, together with any interest or penalty, addition to tax or
additional amount imposed by any Governmental Entity and (ii) “Tax Returns” shall
mean returns, reports, claims for refund, declarations of estimated Taxes and
information statements, including any schedule or attachment thereto or any
amendment thereof, with respect to Taxes required to be filed with the IRS or
any other governmental or taxing authority, domestic or foreign, including
consolidated, combined and unitary tax returns.
Section
4.18. Environmental
Matters. Except for those matters that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
(a) each of the Company and its Subsidiaries is and has been in compliance with
all Environmental Laws, which compliance includes obtaining, maintaining or
complying with all Permits required under Environmental Laws for the operation
of their respective businesses, (b) there is no investigation, suit, claim,
action or proceeding relating to or arising under Environmental Laws that is
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries or any real property now or previously owned, operated
or leased by the Company or any of its Subsidiaries, (c) neither the Company nor
any of its Subsidiaries has received any notice of or entered into any
obligation, liability, order, settlement, judgment, injunction or decree
involving uncompleted, outstanding or unresolved requirements relating to or
arising under Environmental Laws and (d) since the later of January 1, 2008 or
the date of acquisition of the relevant Subsidiary or property, there has been
no release of any Hazardous Material into the environment by the Company or any
of its Subsidiaries. This Section 4.18 constitutes the sole and
exclusive representation and warranty of the Company regarding environmental and
health and safety matters, or liabilities or obligations, or compliance with
Laws, relating thereto.
Section
4.19. Affiliate
Transactions.
(a) No
officer or director of the Company or any of its Subsidiaries and to the
Knowledge of the Company, no other Person currently owning five percent (5%) or
more of the Shares, is a party to any Contract with or binding upon the Company
or any of its Subsidiaries or any of their respective properties or assets or
has any interest in any property owned by the Company or any of its
Subsidiaries, or, to the Knowledge of the Company, has engaged in any
transaction with the Company or any of its Subsidiaries or Affiliates within the
last twelve (12) months, in each case, that is of a type that would be required
to be disclosed under Item 404 of Regulation S-K under the Securities Act that
is not disclosed in the proxy statement most recently filed with the SEC prior
to the date of this Agreement.
(b) Between
the date of such proxy statement and the date of this Agreement, no event has
occurred that would be required to be reported by the Company pursuant to Item
404 of Regulation S-K promulgated by the SEC under the Securities
Act.
30
Section
4.20. Schedule 14D-9; Offer
Documents; Proxy Statement. (a) None of the
information supplied or to be supplied by or on behalf of the Company or any
Affiliate of the Company for inclusion in the Offer Documents shall, at the time
such documents are filed with the SEC, at the time they are mailed to the
holders of Shares, and at the time any amendment or supplement thereto is filed
with the SEC, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The Schedule 14D–9 shall not, at the time it is filed
with the SEC, at the time it is mailed to the holders of Shares, and at the time
any amendment or supplement thereto is filed with the SEC, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, no representation or
warranty is made by the Company with respect to information supplied by or on
behalf of Parent, Purchaser or any Affiliate of Parent or Purchaser that is
included in the Offer Documents or the Schedule 14D-9. The Schedule
14D–9 will, at the time it is filed with the SEC, at the time it is mailed to
the holders of Shares, and at the time any amendment or supplement thereto is
filed with the SEC, comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations of the SEC
thereunder.
(b) The
letter to stockholders, notice of meeting, Proxy Statement and any schedules
required to be filed with the SEC, in each case provided to stockholders of the
Company in connection with the Merger, shall not, at the time the Proxy
Statement is filed with the SEC and first mailed to stockholders of the Company,
at the time any amendment or supplement thereto is filed with the SEC, and at
the time of any 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 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 in writing by Parent,
Purchaser or any Affiliate of Parent or Purchaser expressly for inclusion in the
Proxy Statement. The Proxy Statement, at the time it is filed with
the SEC and first mailed to stockholders of the Company, at the time of the
Company Meeting, and at the time any amendment or supplement thereto is filed
with the SEC, shall comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder.
Section
4.21. Opinion of Financial
Advisor. Prior to the execution of this Agreement, Houlihan
Lokey Capital, Inc. has delivered to the Company Board its opinion, dated on or
about the date hereof, to the effect that, as of such date and based upon and
subject to the matters set forth therein, the consideration to be received by
holders of Shares (other than Parent, Purchaser and their respective Affiliates)
in the Offer and the Merger, taken together, is fair, from a financial point of
view, to such holders.
Section
4.22. Brokers; Certain
Fees. Except for Houlihan Lokey Capital, Inc., no broker,
finder or investment banker is or will be entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by and on behalf of the Company or any of
its Subsidiaries.
Section
4.23. Takeover
Laws. The Company Board has, prior to the execution of this
Agreement, adopted a resolution approving, for purposes of Section 203 of the
DGCL, this Agreement, the transactions contemplated hereby, including the Offer
and the Merger, which actions and resolutions have not, as of the date hereof,
been subsequently rescinded, modified or withdrawn in any way. To the
Knowledge of the Company, there are no “moratorium,” “control share
acquisition,” “business combination,” “fair price” or other form of
anti-takeover Laws or regulations (collectively, “Takeover Laws”)
applicable to this Agreement or the transactions contemplated
hereby.
31
Section
4.24. No Other Representations or
Warranties. Except for the representations and warranties made
by the Company in this Article IV, the Company Disclosure Schedule and any
certificates delivered pursuant to this Agreement, neither the Company nor any
other Person makes any representation or warranty with respect to the Company or
its Subsidiaries or their respective business, operations, assets, liabilities,
condition (financial or otherwise) or prospects, notwithstanding the delivery or
disclosure to Parent or Purchaser of any documentation, forecasts or other
information with respect to any one or more of the foregoing.
ARTICLE
V.
REPRESENTATIONS
AND WARRANTIES OF PARENT AND PURCHASER
Parent
and Purchaser, jointly and severally, hereby represent and warrant to the
Company as follows:
Section
5.1. Organization. Each
of Parent and Purchaser is a corporation or other entity duly organized, validly
existing and in good standing (where applicable) under the laws of the
jurisdiction in which it is incorporated or organized and has the requisite
corporate or other entity power and authority to own, operate or lease its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing or in good standing (where
applicable) or to have such power or authority would not, individually or in the
aggregate, reasonably be expected to have a Purchaser Material Adverse
Effect. Parent owns beneficially and of record all of the outstanding
capital stock of Purchaser free and clear of all Liens. Purchaser was
formed solely for the purpose of engaging in the transactions contemplated by
this Agreement and has engaged in no business activities except as contemplated
by this Agreement. “Purchaser Material Adverse
Effect” means any change, effect, event or occurrence that has a material
adverse effect on the ability of Parent or Purchaser to timely perform their
respective obligations under this Agreement or to timely consummate the
transactions contemplated hereby.
Section
5.2. Authority. Each
of Parent and Purchaser has all necessary corporate or other entity power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by each of Parent and
Purchaser and the consummation by each of Parent and Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
necessary action of Parent and Purchaser, and no other corporate or other entity
proceedings on the part of Parent or Purchaser are necessary to authorize this
Agreement, to perform their respective obligations hereunder, or to consummate
the transactions contemplated hereby (other than the filing with the Secretary
of State of the State of Delaware of the Certificate of Merger as required by
the DGCL). This Agreement has been duly and validly executed and
delivered by Parent and Purchaser and, assuming due authorization, execution and
delivery hereof by the Company, constitutes a legal, valid and binding
obligation of each of Parent and Purchaser enforceable against each of Parent
and Purchaser in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and any implied covenant of good faith and fair dealing.
32
Section
5.3. No Conflict; Required
Filings and Consents. (a) The execution, delivery
and performance of this Agreement by Parent and Purchaser, do not and shall not
(1) conflict with or violate the respective certificates of incorporation or
by-laws (or similar governing documents) of Parent or Purchaser, (2) assuming
that all consents, approvals, actions, non-actions, and authorizations
contemplated by clauses (1) through (5) of subsection (b) below have been
obtained, and all filings described in such clauses have been made, conflict
with or violate any Law applicable to Parent or Purchaser or by which either of
them or any of their respective properties are bound or (3) (A) result in any
breach or violation of or constitute a default (or an event that with notice or
lapse of time or both would become a default) or (B) result in the loss of a
benefit under, or give rise to any right of termination, cancellation, amendment
or acceleration of, or (C) result in the creation of any material Lien on any of
the properties or assets of Parent or Purchaser under, any Contracts to which
Parent, Purchaser or any of their respective Subsidiaries is a party or by which
Parent, Purchaser or any of their respective Subsidiaries or any of their
respective properties are bound, except, in the case of clauses (2) and (3), for
any such conflict, violation, breach, default, acceleration, loss, right or
other occurrence that would not reasonably be expected to have, individually or
in the aggregate, a Purchaser Material Adverse Effect.
(b) The
execution, delivery and performance of this Agreement by each of Parent and
Purchaser and the consummation of the transactions contemplated hereby by each
of Parent and Purchaser do not and shall not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any
Governmental Entity, except for (1) the applicable requirements, if any, of the
Exchange Act and the rules and regulations promulgated thereunder, and state
securities, takeover and “blue sky” laws, (2) compliance with the applicable
requirements of the HSR Act, (3) the applicable requirements of Nasdaq, (4) the
filing with the Secretary of State of the State of Delaware of the Certificate
of Merger as required by the DGCL, and (5) any such consent, approval,
authorization, permit, action, filing or notification the failure of which to
make or obtain would not reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect.
Section
5.4. Absence of
Litigation. Except as would not reasonably be expected to have
a Purchaser Material Adverse Effect, there is no pending or, to the knowledge of
Parent, threatened, legal or administrative proceeding, claim, suit or action
against Parent or any of its Subsidiaries, nor is there any injunction, order,
judgment, ruling or decree imposed upon Parent or any of its Subsidiaries, in
each case, by or before any Governmental Entity.
Section
5.5. Offer Documents; Schedule
14D-9; Proxy Statement. (a) None of the Offer
Documents shall, at the time such documents are filed with the SEC, at the time
they are mailed to the holders of Shares, and at the time any amendment or
supplement thereto is filed with the SEC, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in light of the
circumstances under which they are made, not misleading, except that no
representation is made by Parent or Purchaser with respect to information
supplied in writing by or on behalf of the Company or any Affiliate of the
Company expressly for inclusion therein. The Offer Documents shall
comply as to form in all material respects with the provisions of the Exchange
Act and the rules and regulations promulgated thereunder.
33
(b) None
of the information supplied by or on behalf of Parent, Purchaser or any
Affiliate of Parent or Purchaser for inclusion in the Proxy Statement or the
Schedule 14D-9 shall, at the times such documents are filed with the SEC, at the
time any amendment or supplement thereto is filed with the SEC and, in the case
of the Proxy Statement, at the time the Proxy Statement is mailed to
stockholders of the Company and at the time of any 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
light of the circumstances under which they were made, not
misleading.
Section
5.6. Brokers. Except
for Fredericks Michael & Co., no broker, finder or investment banker is or
will be entitled to any brokerage, finder’s or other fee or commission from the
Company in connection with the transactions contemplated by this Agreement based
upon arrangements made by and on behalf of Parent or Purchaser.
Section
5.7. Financing. Parent
has, and as of the Purchase Time and as of the Closing will have, available
sufficient cash, cash equivalents and access to financing to satisfy its
obligations to permit Purchaser to purchase and pay for Shares pursuant to the
Offer and to consummate the Merger and the other transactions contemplated by
this Agreement.
Section
5.8. Ownership and Operations of
Purchaser. Parent owns beneficially and of record all of the
outstanding capital stock of Purchaser. Purchaser has been formed
solely for the purpose of engaging in the transactions contemplated by this
Agreement and prior to the Effective Time will have engaged in no other business
activities and will have incurred no liabilities or obligations other than as
contemplated herein.
Section
5.9. Solvency. Neither
Parent nor Purchaser is entering into the transactions contemplated hereby with
the intent to hinder, delay or defraud either present or future
creditors. Immediately after giving effect to all of the transactions
contemplated hereby, including any arrangement by Parent of any financing to be
consummated prior to or contemporaneously with the Closing in respect of the
transactions contemplated by this Agreement (any such arrangements, the “Financing”), any
alternative financing and the payment of the aggregate Offer Price and the
aggregate Merger Consideration, assuming (a) satisfaction of the conditions to
Parent’s obligation to consummate the Merger as set forth herein, or the waiver
of such conditions, (b) the accuracy of the representations and warranties of
the Company set forth in Article IV hereof (for such purposes, such
representations and warranties shall be true and correct in all material
respects) and (c) any estimates, projections or forecasts of the Company and its
Subsidiaries have been prepared in good faith based upon reasonable assumptions,
and payment of all related fees and expenses, the Surviving Corporation will be
Solvent. For purposes of this Section 5.9, the term “Solvent” with respect
to the Surviving Corporation means that, as of any date of determination, (x)
the amount of the fair saleable value of the assets of the Surviving Corporation
and its Subsidiaries, taken as a whole, exceeds, as of such date, the sum of (i)
the value of all liabilities of the Surviving Corporation and its Subsidiaries,
taken as a whole, including contingent and other liabilities, as of such date,
as such quoted terms are generally determined in accordance with the applicable
federal Laws governing determinations of the solvency of debtors, and (ii) the
amount that will be required to pay the probable liabilities of the Surviving
Corporation and its Subsidiaries, taken as a whole on its existing debts
(including contingent liabilities) as such debts become absolute and matured;
(y) the Surviving Corporation will not have, as of such date, an unreasonably
small amount of capital for the operation of the business in which it is engaged
or proposed to be engaged by Parent following such date; and (z) the Surviving
Corporation will be able to pay its liabilities, including contingent and other
liabilities, as they mature.
34
Section
5.10. Certain
Arrangements. There are no Contracts between Parent or
Purchaser, on the one hand, and any member of the Company’s management or
directors, on the other hand, as of the date hereof that relate in any way to
the Company or the transactions contemplated hereby. Prior to the
Company Board approving this Agreement, the Merger and the other transactions
contemplated hereby for purposes of the applicable provisions of the DGCL,
neither Parent nor Purchaser, alone or together with any other Person, was at
any time, or became, an “interested stockholder” thereunder or has taken any
action that would cause any anti-takeover statute under the DGCL to be
applicable to this Agreement, the Merger, or any transactions contemplated
hereby.
Section
5.11. Access to Information;
Disclaimer. Parent and Purchaser each acknowledges and agrees
that it (a) has had an opportunity to discuss the business of the Company and
its Subsidiaries with the management of the Company, (b) has had reasonable
access to the electronic data room maintained by the Company through Merrill
Corporation for purposes of the transactions contemplated hereby, (c) has been
afforded the opportunity to ask questions of and receive answers from officers
of the Company, and (d) has conducted its own independent investigation of the
Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, and has not relied on any representation, warranty or other
statement by any Person on behalf of the Company or any of its Subsidiaries,
other than the representations and warranties of the Company expressly contained
in Article IV of this Agreement and that all other representations and
warranties are specifically disclaimed.
Section
5.12. Other
Matters. Notwithstanding anything contained in this Agreement
to the contrary, each of Parent and Purchaser acknowledges and agrees that (a)
neither the Company nor any Person on behalf of the Company is making any
representations or warranties whatsoever, express or implied, beyond those
expressly given by the Company in Article IV hereof, the Company Disclosure
Schedule or any certificate delivered pursuant to this Agreement, and (b) none
of Parent or Purchaser has been induced by, or relied upon, any representations,
warranties or statements (written or oral), whether express or implied, made by
any Person, that are not expressly set forth in Article IV of this Agreement or
any certificate delivered pursuant to this Agreement. Without
limiting the generality of the foregoing, each of Parent and Purchaser
acknowledges that no representations or warranties are made with respect to any
projections, forecasts, estimates, budgets or prospect information that may have
been Made Available to Parent, Purchaser or any of their respective
Representatives.
Section
5.13. Guarantee. Concurrently
with the execution of this Agreement, the Guarantors have delivered to the
Company the Guarantee, dated as of the date hereof, in favor of the Company, in
the form set forth in Annex
VI(B). The Guarantee is in full force and
effect.
35
ARTICLE
VI.
COVENANTS
Section
6.1. Conduct of Business of the
Company Pending the Merger. Except as provided in or
contemplated by this Agreement, as set forth in Section 6.1 of the Company
Disclosure Schedule or as required by applicable Law, during the period from the
date of this Agreement to the earlier of (1) such time as designees of Parent
first constitute at least a majority of the Company Board pursuant to Section
1.4(a) and (2) the Effective Time (such earlier time, the “Control Time”), the
Company shall conduct its operations according to its ordinary course of
business consistent with past practice. Without limiting the
generality of the foregoing and except as provided in or contemplated by this
Agreement, as set forth in Section 6.1 of the Company Disclosure Schedule or as
required by applicable Law, during the period from the date of this Agreement to
the Control Time, without the prior written consent of Parent, which consent
will not be unreasonably withheld, delayed or conditioned, the Company will not,
and will cause its Subsidiaries not to:
(a) amend
or otherwise change its certificate of incorporation or by-laws or any similar
governing instruments;
(b) (i)
issue, sell or grant any shares of its capital stock, or any securities or
rights convertible into, exchangeable or exercisable for, or evidencing the
right to subscribe for any shares of its capital stock, or any rights, warrants
or options to purchase any shares of its capital stock, or any securities or
rights convertible into, exchangeable or exercisable for, or evidencing the
right to subscribe for, any shares of its capital stock; provided, that the
Company may issue shares of Common Stock required to be issued upon exercise or
settlement of Company Stock Options or other equity rights or obligations under
the Company Stock Plans or Company Plans of the Company outstanding on the date
hereof in accordance with the terms of the applicable Company Stock Plan or
Company Plan of the Company in effect on the date hereof; (ii) redeem, purchase
or otherwise acquire any of its outstanding shares of capital stock, or any
rights, warrants or options to acquire any shares of its capital stock, except
(A) pursuant to commitments in effect as of the date hereof or (B) in connection
with withholding to satisfy tax obligations with respect to Company Stock
Options or in connection with the forfeiture of equity awards, or acquisitions
in connection with the net exercise of Company Stock Options; (iii) and for any
dividend or distribution to the Company by any of its Subsidiaries, declare, set
aside for payment or pay any dividend on, or make any other distribution in
respect of, any shares of its capital stock; or (iv) split, combine, subdivide
or reclassify any shares of its capital stock;
(c) (i)
acquire or agree to acquire by merging or consolidating with, or by purchasing a
substantial portion of the assets of or equity in, or by any other manner, any
business or any corporation, limited liability company, partnership, association
or other business organization or division thereof or otherwise acquire or agree
to acquire any assets other than in the ordinary course of business or (ii)
authorize, make or agree to make any new capital expenditure or expenditures, or
enter into any Contract or arrangement that reasonably may result in payments by
or liabilities of the Company, in excess of $1,000,000 in the aggregate in any
twelve (12) month period;
36
(d) sell
any of its properties or assets that are material to the Company and its
Subsidiaries taken as a whole, except (i) sales, leases, rentals and licenses in
the ordinary course of business, (ii) pursuant to Contracts in force on the date
of this Agreement, previously Made Available to Parent and Purchaser (iii)
dispositions of obsolete or worthless assets or (iv) transfers among the Company
and its Subsidiaries;
(e) amend
in any material respect, terminate, or grant any release or relinquishment of
any material rights under, any Material Contract other than in the ordinary
course of business consistent with past practice;
(f) (i)
incur any indebtedness (excluding any letters of credit issued in the ordinary
course of business) having an outstanding principal amount in excess of
$1,000,000 in the aggregate, (ii) make any loans or advances to any Person
(other than the Company and any wholly-owned Subsidiary of the Company), or
(iii) prepay any accounts payable except in the ordinary course of
business;
(g) (i)
increase the compensation payable or to become payable (including bonus grants),
pay any bonuses to or increase or accelerate the vesting of the benefits
provided to its directors, executive officers or employees or other service
providers, except for increases in compensation, acceleration of vesting or
payment of bonuses (A) required by contract as in effect on the date of this
Agreement, and Made Available to Parent or (B) increases in the ordinary course
of business in salaries or wages of employees of the Company or any of its
Subsidiaries (provided that payments of bonuses consistent with past practice
shall not constitute an increase in compensation) other than officers or
directors of the Company or any Subsidiaries, (ii) grant any severance or
termination pay or benefit rights to, or enter into any employment, severance,
retention, change in control, consulting or termination agreement with, any
director, executive officer or other employee or other service providers of the
Company or of any Company Subsidiary, except pursuant to a policy or agreement
in effect on the date of this Agreement and Made Available to Parent or as
required by applicable Law, provided that the Company may (A) issue or enter
into employment offer letters, employment agreements and consulting agreements
(other than with officers and directors of the Company), and (B) grant benefit
rights (except stock-based compensation) to new employees hired in accordance
with clause (A) in each case of clauses (A) and (B), in the ordinary course of
business, consistent with past practice, or (iii) enter into any collective
bargaining agreement, except as required by Law or in the ordinary course of
business;
(h) make
any material changes to financial or tax accounting methods, principles or
practices (or change an annual accounting or period), except insofar as may be
required by applicable Law, including without limitation a change in
GAAP;
(i) except
as required by Law or as otherwise is in the ordinary course of business (i)
make any material change (or file any such change) in any method of Tax
accounting or any annual Tax accounting period; (ii) make, change or rescind any
material Tax election; (iii) settle or compromise any material Tax liability; or
(iv) file any amended Tax Return involving a material amount of additional
Taxes;
(j) adopt
a plan or agreement of complete or partial liquidation or dissolution;
or
37
(k) agree
to take any of the actions described in Section 6.1(a) through (j).
Section
6.2. Access to Information;
Confidentiality. (a) Subject to the restrictions
imposed by the HSR Act or other applicable Laws, from and after the date of this
Agreement until the Control Time, the Company will (i) give Parent and Purchaser
and their respective Representatives reasonable access during normal business
hours to those employees, facilities, books, Contracts and records of the
Company and its Subsidiaries and such other information concerning its business
and properties as Parent or Purchaser may reasonably request (other than any
publicly available document filed by it pursuant to the requirements of Federal
or state securities Laws); (ii) reasonably cooperate with Purchaser regarding
Purchaser’s evaluation of Company Employees for continued employment, including
granting reasonable access to Company Employees for interviews; (iii) furnish to
Parent and its Representatives such financial and operating data and other
information as such Persons may reasonably request and use its commercially
reasonable efforts to cause Ernst & Young LLP to furnish its work papers in
respect of the Company and its Subsidiaries; and (iv) instruct its
Representatives to cooperate with Parent and its Representatives in its
investigation; provided, that
Parent, Purchaser and their respective Representatives shall conduct any such
activities in such a manner as not to interfere unreasonably with the business
or operations of the Company; provided, however, that the
Company shall not be obligated to provide such access or information if doing so
would, on the advice of counsel, violate applicable Law or a Contract or
obligation of confidentiality owing to a third party and may restrict the
foregoing access to the extent that any applicable law requires the Company to
restrict or prohibit access to any such properties or information, or such
disclosure would, based on the advice of such party’s counsel, result in a
waiver of attorney-client privilege, work product doctrine or any other
applicable privilege applicable to such information.
(b) Information
obtained by Parent or Purchaser or their respective Representatives pursuant to
Section 6.2(a) will be subject to the provisions of the Confidentiality
Agreement. No information or knowledge obtained by any investigation
pursuant to this Section 6.2 shall affect or be deemed to modify any
representation or warranty made by any party hereto.
(c) Nothing
in this Section 6.2 will require the Company to permit any inspection, or to
disclose any information, that in the reasonable judgment of the Company would
(1) violate any of its respective obligations with respect to confidentiality,
provided that the Company will use commercially reasonable efforts to obtain the
consent of such third party to such inspection or disclosure and will disclose
or describe such information to the fullest extent possible consistent with such
obligations, (2) result in a violation of applicable Law, including the HSR Act
or (3) result in loss of legal protection, including the attorney-client
privilege and work product doctrine.
38
Section
6.3. No Solicitation; Change in
Recommendation. (a) Except as permitted by this
Section 6.3, from the date of this Agreement until the Effective Time or, if
earlier, the termination of this Agreement in accordance with Article VIII, the
Company shall not, shall cause each of its Subsidiaries not to, and shall direct
each of its Representatives not to, directly or indirectly, (i) solicit,
initiate or knowingly facilitate or encourage (including by way of furnishing
non-public information or affording access to the business, properties, assets,
books or records of the Company or any of its Subsidiaries) any inquiries
regarding, or the making of any proposal or offer that constitutes, or could
reasonably be expected to lead to, an Acquisition Proposal, (ii) engage in,
continue or otherwise participate in any discussions or negotiations regarding
an Acquisition Proposal, or (iii) enter into any Contract or agreement in
principle with respect to an Acquisition Proposal; provided that, it is
understood and agreed that any determination or action by the Company Board
permitted under Section 6.3(b), Section 6.3(c), Section 6.3(d) or Section
8.1(d)(iii), shall not, in and of itself, be deemed to be a breach or violation
of this Section 6.3(a) or, in the case of Section 6.3(b), give Parent a right to
terminate this Agreement pursuant to Section 8.1(c)(ii). The Company
shall, and shall cause its Subsidiaries and direct each of their Representatives
to, immediately cease and cause to be terminated all existing discussions or
negotiations with any Persons conducted prior to the execution of this Agreement
by the Company, any of its Subsidiaries or its or any of their Representatives
with respect to any Acquisition Proposal.
(b) Notwithstanding
anything to the contrary contained in Section 6.3(a), if at any time on or after
the date of this Agreement and until the Purchase Time, the Company or its
Representatives receives a bona fide, unsolicited written Acquisition Proposal
from any Person or group of Persons, which Acquisition Proposal was made on or
after the date of this Agreement and which did not arise or result from any
breach of this Section 6.3, if the Company Board, or any committee thereof,
determines in good faith, after consultation with the Company’s independent
financial advisors and outside legal counsel, that such Acquisition Proposal
constitutes, or is reasonably likely to lead to, a Superior Proposal and the
Company Board, or any committee thereof, determines in good faith, after
consultation with the Company’s outside legal counsel, that the failure to take
such action would be inconsistent with its fiduciary duties under applicable
Law, then the Company and its Representatives may (A) furnish, pursuant to an
Acceptable Confidentiality Agreement, information (including non-public
information) with respect to the Company and its Subsidiaries to the Person or
group of Persons who has made such Acquisition Proposal; provided, that the
Company shall promptly provide to Parent any material non-public information
concerning the Company or its Subsidiaries that is provided to any Person given
such access which was not previously provided to Parent or its Representatives;
and (B) engage in or otherwise participate in discussions and/or negotiations
with the Person or group of Persons making such Acquisition
Proposal. Notwithstanding anything to the contrary contained in
Section 6.3(a), the Company shall be permitted to grant a waiver or release to
any Person or group of Persons subject to an Acceptable Confidentiality
Agreement for the sole purpose of allowing such Person or Group of Persons to
submit an Acquisition Proposal that the Company Board, or any committee thereof,
determines in good faith is reasonably likely to lead to a Superior Proposal if
the Company Board determines that the failure to take such action would be
inconsistent with its fiduciary duties under applicable Law. For the
purposes of this Agreement, “Acceptable Confidentiality
Agreement” means (i) any pre-existing confidentiality agreement between
the Company and any such Person and (ii) any confidentiality agreement entered
into after the date of this Agreement that contains provisions that are no less
favorable in the aggregate to the Company than those contained in the
Confidentiality Agreement, provided that any
such agreement under (i) or (ii) shall permit the Company to comply with the
terms of this Section, and provided further that
a copy of any such agreement shall be promptly (and in any event within 24 hours
of execution) provided for informational purposes to Parent. The
Company shall notify Parent promptly (but in no event later than 24 hours) after
it obtains knowledge of the receipt by the Company or any of its Subsidiaries or
Representatives) of any Acquisition Proposal, or any request for non-public
information relating to the Company or any of its Subsidiaries or for access to
the business, properties, assets, books or records of the Company or any of its
Subsidiaries by any Person that is seeking to make or has made after the date
hereof an Acquisition Proposal. The Company shall provide such notice
in writing and shall identify the Person making, and the terms and conditions
of, any such Acquisition Proposal or request. The Company shall keep
Parent informed, on a prompt basis (but in any event within 24 hours), of the
status and material terms of any such Acquisition Proposal, including any
material amendments or proposed amendments as to price and other material terms
thereof. The Company agrees that it and its Subsidiaries will not
enter into any confidentiality agreement with any Person subsequent to the date
hereof which prohibits the Company from providing such information to
Parent.
39
(c) Except
as expressly permitted by this Section 6.3(c), the Company Board shall not
(i)(A) fail to make, change, qualify, withdraw or modify, or publicly propose to
change, qualify, withdraw or modify, in a manner adverse to Parent, the Company
Board Recommendation, (B) take any action or make any recommendation or public
statement in connection with a Third Party tender offer or exchange offer other
than a recommendation against such offer or a “stop, look and listen”
communication by the Company Board pursuant to Rule 14d-9(f) of the Exchange
Act, (C) approve or recommend, or publicly propose to approve or recommend to
the stockholders of the Company an Acquisition Proposal, or (D) resolve or agree
to take any of the foregoing actions (any action described in this clause (i)
being referred to as a “Company Adverse
Recommendation Change”) or (ii) authorize the Company or any of its
Subsidiaries to enter into any letter of intent, merger, acquisition or similar
agreement with respect to any Acquisition Proposal (other than an Acceptable
Confidentiality Agreement) (each, a “Company Acquisition
Agreement”). Notwithstanding anything to the contrary
herein:
(x) the
Company Board may effect a Company Adverse Recommendation Change other than with
respect to an Acquisition Proposal, if the Company Board determines in good
faith, after consultation with outside legal counsel, that the failure to take
such action could reasonably be determined to be inconsistent with its fiduciary
duties under applicable Law; provided, that, the Company
Board shall not make a Company Adverse Recommendation Change pursuant to (x)
unless (1) the Company promptly notifies Parent, in writing at least three full
Business Days prior to taking such action, of its intention to effect such
Company Adverse Recommendation Change, (2) during such notice period, if
requested by Parent, the Company engages in good faith negotiations with Parent
to amend this Agreement in such a manner that failure to effect such a Company
Adverse Recommendation Change is no longer inconsistent with the fiduciary
duties under applicable Law and (3) the Company Board determines in good faith,
after consultation with outside legal counsel, following the conclusion of such
three Business Day notice period, that the failure to make such a Company
Adverse Recommendation Change would still be inconsistent with its fiduciary
duties under applicable Law, and
40
(y) if
the Board of Directors of the Company receives an Acquisition Proposal that the
Board of Directors of the Company determines in good faith, after consultation
with the Company’s independent financial advisors and outside legal counsel,
constitutes a Superior Proposal, the Company Board may effect a Company Adverse
Recommendation Change or authorize the Company to enter into a Company
Acquisition Agreement with respect to such Superior Proposal, if such Board
determines in good faith, after consultation with outside legal counsel, that
the failure to take such action could reasonably be determined to be
inconsistent with its fiduciary duties under applicable Law and the Company
concurrently terminates this Agreement pursuant to Section 8.1(d)(iii), provided that, the Company
Board shall not make a Company Adverse Recommendation Change pursuant to (y)
unless: (1) the Company promptly notifies Parent, in writing at least
three full Business Days prior to taking such action, of its intention to effect
a Company Adverse Recommendation Change, specifying the material terms and
conditions of such Superior Proposal, including the identity of the Person
making such offer (and attaching a copy of the proposed definitive Company
Acquisition Agreement relating thereto, which shall be in final form in all
material respects and include all schedules, annexes and exhibits thereto) (it
being understood and agreed that any change to the consideration payable in
connection with such Superior Proposal or any other material modification
thereto shall require a new two Business Day advance written notice hereunder);
(2) during any such notice period(s), if requested by Parent, the Company
engages in good faith negotiations with Parent (to the extent Parent desires to
negotiate) to amend this Agreement, and (3) the Company Board determines in good
faith, after consultation with outside legal counsel, following the conclusion
of such notice period(s), that the failure to make a Company Adverse
Recommendation Change would still be inconsistent with the Company Board’s
fiduciary duties under applicable Law (taking into account any changes to the
terms of this Agreement proposed by Parent), and provided further that the
Company Board shall not authorize the Company to enter into a Company
Acquisition Agreement with respect to such Superior Proposal during such notice
period(s).
Notwithstanding
anything to the contrary in this Agreement, to the extent the Offer is scheduled
to expire during any of the notice period(s), as extended, set forth in
paragraphs (x) and (y) of this Section 6.3(c) above (the “Negotiation Period”)
, (i) the Purchaser shall, and Parent shall cause Purchaser to, promptly (within
24 hours of delivery of the notice of the intent to effect a Company Adverse
Recommendation Change in accordance with Section 6.3(c) and in any event prior
to the scheduled expiration of the Offer) extend the Offer Period until the 5
p.m. (eastern time) of the Business Day immediately following expiration of the
Negotiation Period and (ii) the Outside Date shall be extended until such time
and date.
(d) Nothing
in this Section 6.3 shall prohibit the Company Board from taking and disclosing
to the stockholders of the Company a position contemplated by Rule 14e-2(a),
Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act,
or other applicable Law, if such Board determines, after consultation with
outside legal counsel, that failure to so disclose such position could
constitute a violation of applicable Law. In addition, it is
understood and agreed that, for purposes of this Agreement (including Article
VIII), a factually accurate public statement by the Company that describes the
Company’s receipt of an Acquisition Proposal and the operation of this Agreement
with respect thereto, or any “stop, look and listen” communication by the
Company Board pursuant to Rule 14d.9(f) of the Exchange Act, or any similar
communication to the stockholders of the Company, shall not constitute a Company
Adverse Recommendation Change or a withdrawal or modification, or proposal by
the Company Board to withdraw or modify, such Company Board’s recommendation of
this Agreement or the transactions contemplated hereby, or an approval or
recommendation with respect to any Acquisition Proposal.
41
(e) As
used in this Agreement, “Acquisition Proposal”
shall mean any bona fide inquiry, proposal or offer from any Person (other than
Parent and its Subsidiaries) relating to, in a single transaction or series of
related transactions, any (i) acquisition of assets of the Company and its
Subsidiaries (including securities of Subsidiaries, but excluding sales of
assets in the ordinary course of business) 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, (ii) acquisition of 20% or
more of the outstanding Shares, (iii) tender offer or exchange offer that if
consummated would result in any Person beneficially owning 20% or more of the
outstanding Shares, (iv) merger, consolidation, share exchange, business
combination, recapitalization, extraordinary dividend, significant corporate
reorganization or similar transaction involving the Company or any of its
Subsidiaries pursuant to which the stockholders of the Company immediately prior
to such transaction hold, directly or indirectly, less than 80% of the equity
interests in the surviving or resulting entity of such transaction, (v)
liquidation or dissolution of the Company or any of its Subsidiaries or (vi) any
combination of the foregoing types of transactions if the sum of the percentage
of consolidated assets, consolidated revenues or earnings and Shares involved is
20% or more; in each case, other than the transactions contemplated by this
Agreement.
(f) As
used in this Agreement, “Superior Proposal”
shall mean any bona fide, unsolicited written Acquisition Proposal on terms
which the Company Board determines in good faith, after consultation with the
Company’s outside legal counsel and independent financial advisors, to be more
favorable from a financial point of view to the holders of Shares than the
transactions contemplated by this Agreement (including the Offer and the
Merger), taking into account all the terms and conditions of such proposal
(including the likelihood and timing of consummation thereof), and this
Agreement (including any changes to the terms of this Agreement committed to by
Parent to the Company in writing in response to such proposal or otherwise) and
is reasonably capable of being consummated on the terms proposed, taking into
account all financial, legal, regulatory and other aspects of such Acquisition
Proposal; provided, that for purposes of the definition of “Superior Proposal,”
the references to “20%” and “80%” in the definition of Acquisition Proposal
shall be deemed to be references to “50%”.”
Section
6.4. Employment and Employee
Benefits Matters. (a) After the Effective Time and
continuing until the end of the first calendar year commencing after the Control
Time, the Surviving Corporation shall provide or cause to be provided after the
Effective Time to each Company Employee that remains employed with the Company
or any of its Subsidiaries, (i) base salary and incentive compensation
opportunities and (ii) employee benefits that are, in either case, not less
favorable, in the aggregate than as provided by the Company on the date hereof;
provided, however, that nothing in this Section 6.4 or elsewhere in this
Agreement shall limit the right of Parent or the Surviving Corporation to amend
or terminate the employment of any individual or to amend or terminate any
employee benefit plan, program or arrangement. Nothing in this
paragraph shall be interpreted to require Parent to provide for the
participation of any Continuing Employee in any benefit plan of Parent (the
“Parent Benefit
Plans”).
42
(b) For
all purposes (including purposes of vesting, eligibility to participate and
level of benefits) under the employee benefit plans of Parent and its
Subsidiaries providing benefits to any Company Employee after the Control Time
(including the Company Plans) (the “New Plans”), each
Company Employee shall be credited with his or her years of service with the
Company and its Subsidiaries and their respective predecessors before the
Control Time, to the same extent as such employee of the Company was entitled,
before the Control Time, to credit for such service under any similar Company
employee benefit plan in which such Company Employee participated or was
eligible to participate immediately prior to the Control Time; provided, that the
foregoing shall not apply to the extent that its application would result in a
duplication of benefits with respect to the same period of
service. In addition, and without limiting the generality of the
foregoing, (i) each Company Employee shall be immediately eligible to
participate, without any waiting period, in any and all New Plans to the extent
coverage under such New Plan is replacing comparable coverage under a Company
Plan in which such Company Employee participated immediately before the Control
Time (such plans, collectively, the “Old Plans”), and (ii)
for purposes of each New Plan providing medical, dental, pharmaceutical and/or
vision benefits to any Company Employee, Parent shall cause all pre-existing
condition exclusions and actively-at-work requirements of such New Plan to be
waived for such Company Employee and his or her covered dependents, to the
extent such conditions were inapplicable or waived under the comparable Old
Plans of the Company or its Subsidiaries in which such Company Employee
participated immediately prior to the Control Time. Parent shall cause any
eligible expenses incurred by any Company Employee and his or her covered
dependents during the portion of the plan year of the Old Plan ending on the
date such Company Employee’s participation in the corresponding New Plan begins
to be taken into account under such New Plan for purposes of satisfying all
premium, deductible, coinsurance and maximum out-of-pocket requirements
applicable to such Company Employee and his or her covered dependents for the
applicable plan year as if such amounts had been paid in accordance with such
New Plan.
(c) Nothing
in this Section 6.4 shall prohibit the Surviving Corporation from amending or
terminating any particular Company Plan to the extent permitted by its terms or
applicable Law. Nothing in this Section 6.4 shall be interpreted to
require Parent to provide for the participation of any Company Employee in any
benefit plan of Parent. This Section 6.4 is not intended, and shall
not be deemed, to confer any rights or remedies upon any Person other than the
parties to this Agreement and their respective successors and permitted assigns,
to create any agreement of employment with any Person or otherwise to create any
third party beneficiary hereunder, or to be interpreted as an amendment to any
plan of Parent or any affiliate of Parent. Furthermore, nothing in
this Agreement shall be construed to create a right in any Company Employee to
employment with Parent, the Surviving Corporation or any other Subsidiary of
Parent and, subject to any agreement between a Company Employee and Parent, the
Surviving Corporation or any other Subsidiary of Parent, the employment of each
Company Employee shall be “at will” employment.
43
Section
6.5. Directors’ and Officers’
Indemnification and Insurance.
(a) From
and after the Effective Time, Parent shall, and shall cause the Company and the
Surviving Corporation to indemnify and hold harmless each individual who at the
Effective Time is, or at any time prior to the Effective Time was, a director or
officer of the Company or of a Subsidiary of the Company (each, an “Indemnitee” and,
collectively, the “Indemnitees”) with
respect to all claims, liabilities, losses, damages, judgments, fines,
penalties, costs (including amounts paid in settlement or compromise) and
expenses (including, but not limited to, fees and expenses of legal counsel,
experts and litigation consultants as well as any appeal bonds) in connection
with any claim, suit, action, proceeding or investigation (whether civil,
criminal, administrative or investigative), whenever asserted, based on or
arising out of, in whole or in part, (A) the fact that an Indemnitee was, or was
or is deemed to have status as, a director or officer of the Company or such
Subsidiary or (B) acts or omissions by an Indemnitee in the Indemnitee’s
capacity as a director, officer, employee or agent of the Company or such
Subsidiary or taken at the request of the Company or such Subsidiary (including
in connection with serving at the request of the Company or such Subsidiary as a
director, officer, employee, agent, trustee or fiduciary of another Person
(including any employee benefit plan)), in each case under clause (A) or (B),
at, or at any time prior to, the Effective Time (including any claim, suit,
action, proceeding or investigation relating in whole or in part to the
transactions contemplated hereby), to the fullest extent permitted under
applicable Law. All obligations of the Company and such Subsidiaries
to the Indemnitees in respect of advancement, indemnification and exculpation
from liabilities for acts or omissions occurring at or prior to the Effective
Time as provided in (A) the Certificate of Incorporation and By-laws and the
organizational documents of such Subsidiaries as currently in effect and (B) the
indemnification agreements listed on Section 6.5 of the Company Disclosure
Schedule, shall survive the transactions contemplated hereby and continue in
full force and effect in accordance with their respective terms, in each case,
whether or not the Company’s insurance covers all such costs, for a period of
six years following the Effective Time. From and after the Effective
Time, Parent and the Surviving Corporation shall be jointly and severally liable
to pay and perform in a timely manner such indemnification, advancement and
exculpation obligations. Without limiting the foregoing, Parent, from
and after the Control Time until the later of (x) six years from the Effective
Time and (y) expiration of the applicable statute of limitations for any item
set forth in clause (i) above, shall cause the certificate of incorporation and
by-laws of the Surviving Corporation to contain provisions no less favorable to
the Indemnitees with respect to limitation of liabilities of directors and
officers and advancement and indemnification than are set forth as of the date
of this Agreement in the Certificate of Incorporation and By-laws, which
provisions shall not be amended, repealed or otherwise modified in a manner that
would adversely affect the rights thereunder of the Indemnitees. In
addition, from and after the Effective Time, Parent shall cause the Company and
the Surviving Corporation to pay any expenses (including, but not limited to,
fees and expenses of legal counsel, experts and litigation consultants, as well
as any appeal bonds) of any Indemnitee under this Section 6.5 (including in
connection with enforcing the advancement, indemnity and other obligations
referred to in this Section 6.5) as incurred to the fullest extent permitted
under applicable Law; provided, that the
person to whom expenses are advanced provides an undertaking to repay such
advances to the extent, and only to the extent, required by applicable
Law.
(b) An
Indemnitee shall have the right, but not the obligation, to assume and control
the defense of any litigation, claim or proceeding relating to any acts or
omissions covered under this Section 6.5 (each, a “Claim”) with counsel
selected by the Indemnitee, which counsel shall be reasonably acceptable to
Parent; provided, however, that Parent
(i) shall be permitted to participate in the defense of such Claim at its own
expense and (ii) shall not be liable for any settlement effected without
Parent’s written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Each of Parent, the Company, the Surviving
Corporation and the Indemnitees shall cooperate in the defense of any Claim and
shall provide access to properties and individuals as reasonably requested and
furnish or cause to be furnished records, information and testimony, and attend
such conferences, discovery proceedings, hearings, trials or appeals, as may be
reasonably requested in connection therewith.
44
(c) Parent
shall bear the full cost of, and shall cause the Company to maintain in effect,
for at least six years commencing on and immediately following the Effective
Time, one or more director and officer tail policy(ies) as described below
(collectively, the “D&O Tail
Policies”). Prior to the Purchase Time, the Company shall
obtain one or more prepaid, fully-earned and non-cancellable D&O Tail
Policies applicable on and after the Effective Time, for a period equal to the
greater of (i) six years immediately following the Effective Time and (ii) the
statute(s) of limitations applicable to the acts and omissions of the directors
and officers of the Company up through and including the Effective Time (the
greater of such periods, the “D&O Tail
Period”), in lieu of the current policies or directors and officers
liability insurance maintained by the Company. Such D&O Tail
Policies shall provide at least the same coverage with respect to amounts, terms
and conditions, as the directors and officers liability insurance policies
(including, but not limited to, both primary and any and all excess policies)
maintained by the Company on the date hereof (collectively, the “Current D&O
Policies”), or policies with at least the same coverage limits and
amounts as the Current D&O Policies, containing terms and conditions which
are no less favorable to the individuals or the Company covered by such Current
D&O Policies, than the terms of such policies, so long as the Company is not
required to pay a premium in excess of 200% of the last annual premium paid in
the aggregate by the Company for such Current D&O Policies (the dollar
amount of such percentage being the “Maximum
Premium”). If the Company is unable to obtain, or unable to
cause to be obtained, the insurance described in the prior sentence for an
amount less than or equal to the Maximum Premium, it shall instead obtain as
much comparable insurance as possible for a director and officer tail premium
equal to the Maximum Premium for the D&O Tail Period. Neither
Parent nor Surviving Corporation shall take, or allow to be taken, any action to
terminate, or which could reasonably be expected to result in the termination
of, the D&O Tail Policies, during the D&O Tail Period.
(d) The
provisions of this Section 6.5 are (i) intended to be for the benefit of, and
shall be enforceable by, each Indemnitee, his or her heirs and his or her
representatives and (ii) in addition to, and not in substitution for, any other
rights to indemnification or contribution that any such Person may have by
contract or otherwise. The obligations of Parent and the Surviving
Corporation under this Section 6.5 shall not be terminated or modified in such a
manner as to adversely affect the rights of any Indemnitee to whom this Section
6.5 applies unless (x) such termination or modification is required by
applicable Law or (y) the affected Indemnitee shall have consented in writing to
such termination or modification (it being expressly agreed that the Indemnitees
to whom this Section 6.5 applies shall be third party beneficiaries of this
Section 6.5).
45
(e) Parent
and Purchaser hereby acknowledge that Indemnitee has or may, in the future, have
certain rights to indemnification, advancement of expenses and/or insurance
provided by other entities and/or organizations not associated with Parent,
Company and their insurers (collectively, the “Other Indemnitors”
and, individually, an “Other
Indemnitor”). Parent, Purchaser and the Company hereby agree
that, with respect to any advancement or indemnification obligation owed, at any
time, to Indemnitee by Parent, Purchaser, the Company, the Surviving Corporation
or any Other Indemnitor, whether pursuant to any certificate of incorporation,
by-laws, partnership agreement, operating agreement, indemnification agreement
or other document or agreement and/or pursuant to Section 6.5 of this Agreement
(any of the foregoing is herein an “Indemnification
Agreement”) (i) the Surviving Corporation shall, at all times,
be the indemnitor of first resort (i.e., its obligations to Indemnitee shall be
primary and any obligation of the Other Indemnitors to advance expenses or to
provide indemnification for the same expenses or liabilities incurred by
Indemnitee shall be secondary), (ii) it shall, at all times, be required to
advance the full amount of expenses incurred by Indemnitee and shall be liable
for the full amount of all expenses, judgments, penalties, fines and amounts
paid in settlement to the extent legally permitted and as required by the terms
of this Agreement or any Indemnification Agreement), without regard to any
rights Indemnitee may have against the Other Indemnitors, and (iii) it
irrevocably waives, relinquishes and releases the Other Indemnitors from any and
all claims against the Other Indemnitors for contribution, subrogation,
indemnification or any other recovery of any kind in respect
thereof. Parent, Purchaser and the Company hereby further agree that
no advancement, indemnification or other payment by the Other Indemnitors on
behalf of Indemnitee with respect to any claim for which Indemnitee has sought
indemnification from the Company or the Surviving Corporation shall affect the
foregoing, and the Other Indemnitors shall have a right of contribution and/or
be subrogated to the extent of such advancement, indemnification or other
payment to all of the rights of recovery of Indemnitee against the Company or
the Surviving Corporation, and the Company and/or the Surviving Corporation
shall jointly and severally indemnify and hold harmless against such amounts
actually paid by the Other Indemnitors to or on behalf of
Indemnitee.
(f) In
the event that Parent, the Surviving Corporation 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 Parent and the
Surviving Corporation shall assume all of the obligations thereof set forth in
this Section 6.5.
Section
6.6. Further Action;
Efforts.
(a) Subject
to the terms and conditions of this Agreement, each of the parties hereto shall
cooperate with the other parties hereto and use (and shall cause their
respective Subsidiaries to use) their respective reasonable best efforts to
promptly (i) take, or cause to be taken, all actions, and do, or cause to be
done, all things, necessary, proper or advisable to cause the conditions to the
Offer to be satisfied as promptly as practicable and to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated hereby, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents
(including any required or recommended filings under applicable Antitrust Laws),
and (ii) obtain all approvals, consents, registrations, permits, authorizations
and other confirmations from any Governmental Entity or third party necessary,
proper or advisable to consummate the transactions contemplated
hereby. For purposes hereof, “Antitrust Laws” means
the Sherman Act, as amended, the Clayton Act, as amended, the HSR Act, the
Federal Trade Commission Act, as amended, all applicable foreign antitrust laws
and all other applicable Laws issued by a Governmental Entity that are designed
or intended to prohibit, restrict or regulate actions having the purpose or
effect of monopolization or restraint of trade or lessening of competition
through merger or acquisition.
46
(b) In
furtherance and not in limitation of the foregoing, (i) each party hereto agrees
to file an appropriate Notification and Report Form pursuant to the HSR Act with
respect to the transactions contemplated hereby as promptly as practicable and
in any event within ten (10) business days of the date hereof, and to supply as
promptly as practicable any additional information and documentary material that
may be reasonably requested pursuant to the HSR Act and use its reasonable best
efforts to take, or cause to be taken, all other actions consistent with this
Section 6.6 necessary to cause the expiration or termination of the applicable
waiting period under the HSR Act (including any extensions thereof) as soon as
practicable; and (ii) the Company and Parent shall each use its reasonable best
efforts to (A) take all action necessary to ensure that no state takeover
statute or similar Law is or becomes applicable to any of the transactions
contemplated hereby and (B) if any state takeover statute or similar Law becomes
applicable to any of the transactions contemplated hereby, take all action
necessary to ensure that the transactions contemplated hereby may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise minimize the effect of such Law on the transactions contemplated
hereby.
(c) Each
of the parties hereto shall use its reasonable best efforts to (i) cooperate in
all respects with each other in connection with any filing or submission with a
Governmental Entity in connection with the transactions contemplated hereby and
in connection with any investigation or other inquiry by or before a
Governmental Entity relating to the transactions contemplated hereby, including
any proceeding initiated by a private party, and (ii) keep the other parties
hereto informed in all material respects and on a reasonably timely basis of any
material communication received by such party from, or given by such party to,
the Federal Trade Commission, the Antitrust Division of the Department of
Justice, or any other Governmental Entity and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby. Subject
to applicable Laws relating to the exchange of information, each of the parties
hereto shall have the right to review in advance, and to the extent practicable
each will consult the other on, all the information relating to the other
parties hereto and their respective Subsidiaries, as the case may be, that
appears in any filing made with, or written materials submitted to, any third
party and/or any Governmental Entity in connection with the transactions
contemplated hereby, other than “4(c) documents” as that term is used in the
rules and regulations of the HSR Act
(d) In
furtherance and not in limitation of the covenants of the parties contained in
this Section 6.6, each of the parties hereto shall use its reasonable best
efforts to resolve such objections, if any, as may be asserted by a Governmental
Entity or other Person with respect to the transactions contemplated
hereby. Without limiting any other provision hereof, Parent and the
Company shall each use its reasonable best efforts to (i) avoid the entry of, or
to have vacated or terminated, any decree, order or judgment that would
restrain, prevent or delay the consummation of the transactions contemplated
hereby, on or before the Outside Date, including by defending through litigation
on the merits any claim asserted in any court by any Person, and (ii) avoid or
eliminate each and every impediment under any Antitrust Law that may be asserted
by any Governmental Entity with respect to the transactions contemplated hereby
so as to enable the consummation of the transactions contemplated hereby to
occur as soon as reasonably possible (and in any event no later than the Outside
Date). Notwithstanding anything to the contrary herein, Parent shall
be under no obligation to (A) propose, negotiate, commit to or effect, by
consent decree, hold separate order, or otherwise, the sale, divestiture or
disposition of any assets or businesses of Parent, the Company (or any of their
respective Subsidiaries) or (B) otherwise take or commit to take actions that
limit Parent or its Subsidiaries’ freedom of action with respect to, or its
ability to retain, one or more of the businesses, product lines or assets of
Parent, the Company, or any of their respective Subsidiaries, in each case,
regardless of whether such measures could avoid the entry of, or effect the
dissolution of, any injunction, temporary restraining order, or other order in
any suit or proceeding, which would otherwise have the effect of preventing or
materially delaying the consummation of the transactions contemplated hereby.
The Company shall take such of the foregoing actions as Parent may request;
provided, that any such action is conditioned upon the consummation of the
Merger.
47
Section
6.7. Takeover
Laws. The Company will, upon the request of Parent or
Purchaser, (a) take all reasonable steps to exclude the applicability to the
Merger or any other transaction contemplated by this Agreement of any Takeover
Laws, and (b) assist in any challenge by Parent or Purchaser to the validity, or
the applicability to the Offer, the Merger or any other transaction contemplated
by this Agreement, of any Takeover Laws.
Section
6.8 Proxy
Statement.
(a) Unless
the Merger is consummated in accordance with Section 253 of the DGCL as
contemplated by Section 2.7, promptly after the consummation of the Offer, (i)
the Company will prepare and file with the SEC, the Proxy Statement in
preliminary form, as required by the Exchange Act and the rules and regulations
promulgated thereunder, (ii) as soon as practicable thereafter mail to its
stockholders the Proxy Statement and all other proxy materials for such meeting,
and if necessary in order to comply with applicable securities Laws, and (iii)
after the Proxy Statement shall have been so mailed, promptly circulate amended,
supplemental or supplemented proxy material, and if required in connection
therewith, re-solicit proxies. Subject to Delaware law, the Proxy
Statement shall contain the unanimous recommendation of the Company Board to the
stockholders of the Company to grant the Company Required
Vote. Parent and Purchaser and their counsel will be given a
reasonable opportunity to review and comment on the Proxy Statement before such
document (or any amendment or supplement thereto) is filed with the
SEC.
(b) The
Company will (i) obtain and furnish the information required to be included in
the Proxy Statement, (ii) as promptly as practicable following receipt thereof,
provide Parent, Purchaser and their counsel with copies of any written comments,
or advise Parent and its counsel of any oral comments, that may be received from
the SEC or its staff with respect thereto, (iii) provide Parent and its counsel
with a reasonable opportunity to review the Company’s proposed response to such
comments, (iv) provide Parent and its counsel a reasonable opportunity to
participate in any discussions or meetings with the SEC, and (v) cause the Proxy
Statement in definitive form to be mailed to the Company’s
stockholders. The Company, on the one hand, and Parent and Purchaser,
on the other hand, agree to promptly correct any information provided by it for
use in the Proxy Statement if and to the extent that it has become false or
misleading in any material respect or as otherwise required by
Law. The Company further agrees to take all steps necessary to cause
the Proxy Statement as so corrected to be filed with the SEC and disseminated to
holders of shares of the Company’s Common Stock, in each case as and to the
extent required by applicable federal securities Laws.
48
Section
6.8. Public
Announcements. Each of the Company, Parent and Purchaser
agrees that no public release or announcement concerning the transactions
contemplated by this Agreement will be issued by any party without the prior
consent of the Company and Parent (which consent will not be unreasonably
withheld or delayed), except as such release or announcement may be required by
applicable Law or any rule or regulation of Nasdaq or any other stock exchange
to which the relevant party is subject or submits, wherever situated, in which
case the party required to make the release or announcement will use
commercially reasonable efforts to allow each other party reasonable time to
comment on such release or announcement in advance of such issuance, it being
understood that the final form and content of any such release or announcement,
to the extent so required, will be at the final discretion of the disclosing
party. The restrictions of this Section 6.8 will not apply to
communications by the Company regarding an Acquisition Proposal or a Company
Adverse Recommendation Change.
Section
6.9. Notification.
(a) The
Company will give reasonably prompt notice to Parent, and Parent will give
reasonably prompt notice to the Company, upon obtaining knowledge of the
occurrence or non occurrence of any event that has resulted or is reasonably
likely to result in the failure of such party to comply with or satisfy any
Offer Condition.
(b) Each
of the Company and Parent shall promptly notify the other of:
(i) any
written notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement or any written notice from any Governmental
Entity in connection with the transactions contemplated by this Agreement;
and
(ii) any
Proceeding commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting the Company or any of its Subsidiaries or the
Parent, Purchaser or any of their Subsidiaries, as applicable and in each case
as the case may be, that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to this Agreement as the case may
be, or that relate to the consummation of the transactions contemplated by this
Agreement;.
Section
6.10. No Control of the Company’s
Business. Nothing contained in this Agreement will give
Parent, directly or indirectly, the right to control or direct the Company’s or
any of its Subsidiaries’ operations prior to the Control Time. Prior
to the Control Time, the Company will exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its
Subsidiaries’ respective operations.
Section
6.11. Company Compensation
Arrangements. Prior to the scheduled expiration of the Offer
(as it may be extended hereunder), the Company (acting through the compensation
committee of the Company Board) shall take all such steps as may be required to
cause to be exempt under Rule 14d-10(d) promulgated under the Exchange Act any
employment compensation, severance or other employee benefit arrangement entered
into prior to, on or after the date hereof by the Company or any of their
respective Affiliates with current or future directors, officers or employees of
the Company and its Affiliates and to ensure that any such arrangements fall
within the safe harbor provisions of such rule. The Company shall
give Parent and its counsel a reasonable opportunity to review and comment on
any board of director or compensation committee resolutions proposed to be
adopted pursuant to this Section 6.11 prior to adoption thereof.
49
Section
6.12. Section 16
Matters. The Company, Purchaser and Parent shall take all
reasonable steps as may be required to cause the transactions contemplated by
Section 3.2(a) and Section 3.2(c) and dispositions of Company equity securities
(including derivative securities) or any acquisitions of Parent equity
securities in connection with this Agreement by each individual who is a
director or officer of the Company, or who will upon the Effective Time is or
will become an officer or director of Parent, to be exempt under Rule 16b-3
promulgated under the Exchange Act.
Section
6.13. Stockholder
Litigation. The Company shall give Parent the opportunity to
participate in the defense, settlement or compromise of any litigation by or on
behalf of one or more stockholders (or former stockholders) of the Company
against the Company and/or its directors or officers commenced prior to the
Effective Time and concerning the transactions contemplated by this Agreement,
and no such settlement or compromise shall be agreed to without Parent’s prior
written consent.
Section
6.14. Delisting. From
the Purchase Time to the Closing Date the Company shall cooperate with Parent to
enable the de-listing by the Surviving Corporation of the Common Stock from
Nasdaq and the deregistration of the Common Stock under the Exchange Act as
promptly as practicable after the Effective Time.
Section
6.15. FIRPTA
Certificate. On or prior to the Closing Date, the Company
shall deliver to Purchaser a duly authorized and executed FIRPTA Certificate in
a form reasonably acceptable to Purchaser certifying that the interests in
Company are not “U.S. real property interests” in accordance with Treasury
Regulations under Section 897 and 1445 of the Code.
ARTICLE
VII.
CONDITIONS
OF MERGER
Section
7.1. Conditions to Obligation of
Each Party to Effect the Merger. The respective obligations of
each party to effect the Merger will be subject to the satisfaction (or, to the
extent permissible under applicable Law, waiver by the party entitled to the
benefit thereof) at or prior to the Closing of each of the following
conditions:
(a) If
and to the extent required by the DGCL and the certificate of incorporation of
the Company, this Agreement shall have been duly adopted by the Company
Requisite Vote.
(b) No
Law, injunction, judgment or ruling enacted, promulgated, issued, entered,
amended or enforced by any Governmental Entity (collectively, “Restraints”) shall be
in effect enjoining, restraining, preventing or prohibiting consummation of the
Merger or making the consummation of the Merger illegal; provided, however, that prior
to invoking this Section 7.1(b), each party shall have used its commercially
reasonable efforts to have such Law, injunction, judgment or other prohibition
lifted.
50
(c) Purchaser
shall have accepted for purchase and paid for the Shares validly tendered (and
not withdrawn) pursuant to the Offer; provided, however, that neither
Parent nor Purchaser shall be entitled to assert the failure of this condition
if, in breach of this Agreement or the terms of the Offer, Purchaser fails to
purchase any Shares validly tendered (and not withdrawn) pursuant to the
Offer.
ARTICLE
VIII.
TERMINATION,
AMENDMENT AND WAIVER
Section
8.1. Termination. This
Agreement may be terminated and the Offer and the Merger may be abandoned at any
time prior to the Effective Time, notwithstanding adoption thereof by the
stockholders of the Company:
(a) by
the mutual written consent of the Company and Parent duly authorized by each of
their board of directors; or
(b) by
either of the Company or Parent:
(i) if
the acceptance and payment for the Shares pursuant to the Offer shall not have
been consummated on or before March 1, 2011 (the “Outside Date”); provided, however, that the
right to terminate this Agreement pursuant to this Section 8.1(b)(i)
shall not be available to a party if the failure to consummate the acceptance
and payment for the Shares pursuant to the Offer on or before the Outside Date
was primarily due to the failure of such party to perform any of its obligations
under this Agreement;
(ii) if
any Restraint enjoining, restraining, preventing or prohibiting consummation of
the Merger or making the consummation of the Merger illegal or enjoining,
restraining, preventing or prohibiting the commencement or closing of the Offer,
or making the commencement or closing of the Offer illegal, shall be in effect
and shall have become final and nonappealable; provided, however, that the
right to terminate this Agreement under this Section 8.1(b)(ii) shall not be
available to a party if the issuance of such final, non-appealable Restraint was
primarily due to the failure of such party to perform any of its obligations
under this Agreement;
(c) by
Parent:
(i) at
any time prior to the Purchase Time, if the Company shall have breached or
failed to perform any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform (x)
would cause any of the conditions set forth in Annex I to not be
satisfied, (y) shall have been notified by Parent by a written notice delivered
to the Company and (z) cannot be cured by the Outside Date or at least thirty
(30) days shall have elapsed since the date of delivery of a written notice to
the Company of such breach and such breach shall not have been cured in a manner
such that such breach no longer results in the applicable condition set forth in
Annex I not
being satisfied; provided, however, that the
right to terminate this Agreement under this Section 8.1(c)(i) shall not be
available to Parent if the Company’s breach or failure to perform any of its
representations, warranties, covenants or other agreements contained in this
Agreement was primarily due to the failure of Parent or Purchaser to perform any
of their obligations under this Agreement;
51
(ii) (A)
the Company Board or any committee thereof shall have effected or resolved to
effect a Company Adverse Recommendation Change, (B) the Company fails to include
the Company Board Recommendation in the Schedule 14D-9, (C) the Company Board or
any committee thereof shall have resolved to take any of the actions described
in clause (A) and (B) of this Section 8.1(c)(ii), (D) the Company shall have
entered into, or publicly announced its intention to enter into any Company
Acquisition Agreement, or (E) the Company or its Representatives shall have
intentionally and materially breached any of its obligations under Section 6.3
which resulted in an Acquisition Proposal being announced, commenced, submitted
or made; or
(d) by
the Company:
(i) if
Parent or Purchaser shall have (A) failed to commence the Offer within ten (10)
Business Days following the date of this Agreement, (B) terminated
the Offer without having accepted any Shares for payment thereunder, unless such
action or inaction under (A) or (B) shall have been caused by or resulted from
(x) the failure of the Company to perform, in any material respect, any of its
covenants or agreements contained in this Agreement or the material breach by
the Company of any of its representations or warranties contained in this
Agreement or (y) the failure of the Antitrust Condition or the condition set
forth in paragraph (a) of Annex I to be
satisfied, (C) failed to timely accept for payment and purchase all Shares that
have been validly tendered and not withdrawn pursuant to the Offer in accordance
with Section 1.1 if all Offer Conditions shall have been satisfied or waived as
of the expiration of the Offer (including any extensions thereof within the
Extension Period) or (D) shall have taken any of the actions set forth in
clauses (1) through (7) of the last sentence of Section 1.1(a)(i) without the
prior written consent or waiver of the Company;
(ii) at
any time prior to the Purchase Time, if Parent or Purchaser shall have breached
or failed to perform any of their respective representations, warranties,
covenants or other agreements contained in this Agreement, which breach or
failure to perform (x) would cause any of the conditions set forth in Annex I to not be
satisfied, (y) shall have been notified by Company by a written notice delivered
to the Parent and Purchaser and (z) cannot be cured by the Outside Date or at
least thirty (30) days shall have elapsed since the date of delivery of a
written notice to Parent and Purchaser of such breach and such breach shall not
have been cured in a manner such that such breach no longer results in the
applicable condition set forth in Annex I not
being satisfied; provided, however, that the
right to terminate this Agreement under this Section 8.1(d)(ii) shall not be
available to the Company if the Parent’s or Purchaser breach or failure to
perform any of their respective representations, warranties, covenants or other
agreements contained in this Agreement was primarily due to the failure of the
Company to perform any of its obligations under this Agreement
or
52
(iii) in
order to enter into a transaction that is a Superior Proposal, if, prior to the
purchase of Shares pursuant to the Offer, (A) the Board of Directors of the
Company determines that it has received a Superior Proposal, (B) the Company has
complied in all material respects with its obligations under Section 6.3, (C)
prior to or concurrently with such termination, the Company pays the fee due
under Section 8.3, (D) (1) the Company promptly notifies Parent, in writing and
at least three full Business Days prior to such termination, of its intention to
terminate this Agreement and to enter into a binding definitive agreement in
respect of a Superior Proposal, specifying the material terms and conditions of
such Superior Proposal, including the identity of the Person making such offer
(and attaching a copy of the proposed definitive Company Acquisition Agreement
relating thereto, which shall be in final form in all material respects and
include all schedules, annexes and exhibits thereto) (it being understood and
agreed that any change to the consideration payable in connection with such
Superior Proposal or any other material modification thereto shall require a new
two Business Day advance written notice hereunder), (2) during any such notice
period(s), if requested by Parent, the Company engages in good faith
negotiations with Parent to amend this Agreement, and (3) at the end of any such
notice period(s), the Company Board determines in good faith, after consultation
with outside legal counsel, that such offer is still a Superior Proposal (taking
into account any changes to the terms of this Agreement proposed by Parent) and
that the failure to take such action would be inconsistent with the fiduciary
duties of the Company Board under applicable Law, and (E) the Company enters
into such binding definitive agreement concurrently or immediately following
such termination.
The party
desiring to terminate this Agreement pursuant to this Section 8.1 (other than
pursuant to Section 8.1(a)) shall give notice of such termination to each other
party hereto.
Section
8.2. Effect of
Termination. (a) Any termination of this Agreement
by Parent pursuant to this Article VIII will also constitute an effective
termination by Purchaser.
(b) In
the event of the termination of this Agreement as provided in Section 8.1,
written notice thereof shall be given to the other party or parties, specifying
the provision hereof pursuant to which such termination is made, and this
Agreement shall forthwith become null and void (other than Section 6.2(b),
Section 8.2, Section 8.3, Section 8.4, Article IX and the Confidentiality
Agreement in accordance with its terms, all of which shall survive termination
of this Agreement), and there shall be no liability on the part of any party (or
any directors, officers, employees, agents, legal and financial advisors or
other representatives and Affiliates of such party), except to the extent the
Company is required to pay the Termination Fee pursuant to Section 8.3;
provided, that, subject to Section 8.3(b), nothing shall relieve any party to
this Agreement from liability for fraud or any intentional or knowing material
breach of its covenants or agreements set forth in this Agreement.
Section
8.3. Termination
Fee. (a) In the event that:
(i)
(A) a bona fide Acquisition Proposal shall have been publicly
disclosed after the date hereof and not withdrawn prior to the termination of
this Agreement, and (B) following the occurrence of an event described in the
preceding clause (A), this Agreement is terminated by the Company or Parent
pursuant to Section 8.1(b)(i) or by Parent pursuant to Section 8.1(c)(i) and (C)
within 12 months of the date this Agreement is terminated, the Company enters
into a definitive agreement with respect to, or recommends to its stockholders,
any Acquisition Proposal or any Acquisition Proposal is consummated; provided, that for
purposes of clause (C) of this Section 8.3(a)(i), the references to “20%” and
80% in the definition of Acquisition Proposal shall be deemed to be references
to “50%;” or
(ii)
this Agreement is terminated by the Company pursuant to Section
8.1(d)(iii); or
53
(iii)
this Agreement is terminated by Parent pursuant to Section
8.1(c)(ii);
then, in
any such event under clause (i), (ii) or (iii) of this Section 8.3(a), the
Company shall pay as directed by Parent the Termination Fee (as defined below),
by wire transfer of same day funds to an account designated by the Parent, it
being understood that in no event shall the Company be required to pay the
Termination Fee on more than one occasion. “Termination Fee”
shall mean an amount equal to $2,800,000.
(b) Each
of the parties hereto acknowledges that the agreements contained in this Section
8.3 are an integral part of the transactions contemplated by this Agreement;
accordingly, if the Company fails to timely pay any amount due pursuant to this
Section 8.3, and, in order to obtain the payment, the Company shall pay the
Parent its reasonable and documented costs and expenses (including reasonable
and documented attorneys’ fees) in connection with any action taken to collect
payment (including the prosecution of any lawsuit or legal action), together
with interest on the overdue amount at the publicly announced prime rate of Bank
of America or any successor thereto in New York City in effect on the date such
overdue amount was originally required to be paid, from the date such amount was
first payable to the date it is actually paid to
Parent. Notwithstanding anything in this Agreement to the contrary
(including Section 8.2), in the event that the Termination Fee is paid in
accordance with this Section 8.3, the payment of such Termination Fee shall be
the sole and exclusive remedy of Parent, Purchaser, and their respective
subsidiaries, shareholders, Affiliates, officers, directors, employees and
Representatives against the Company or any of its directors, officers,
employees, Representatives or Affiliates with respect to (i) any loss or damage
(including consequential, special, indirect or punitive damages) suffered,
directly or indirectly, as a result of the failure of any transactions
contemplated hereby, including the purchase of the Shares pursuant to the Offer
and the Merger, to be consummated, (ii) the termination of this Agreement, (iii)
any liabilities or obligations arising under this Agreement, or (iv) any claims
or actions arising out of or relating to any breach, termination or failure of
or under this Agreement.
Section
8.4. Expenses. Except
as otherwise specifically provided herein, each party will bear its own expenses
in connection with this Agreement and the transactions contemplated hereby,
provided that the Company and Parent shall share equally all filing fees payable
pursuant to the HSR Act.
Section
8.5. Amendment. Subject
to Section 1.4(b), this Agreement may be amended by the parties hereto by action
taken by or on behalf of their respective Boards of Directors at any time prior
to the Effective Time, whether before or after adoption of this Agreement by the
holders of Shares; provided, however, that, (1)
after Purchaser purchases any Shares pursuant to the Offer, no amendment will be
made that decreases the Merger Consideration, and (2) after adoption of this
Agreement by the holders of Shares, no amendment may be made that by Law or any
applicable rule or regulation of any stock exchange requires the further
approval of the holders of Shares without such further approval. This
Agreement may not be amended except by an instrument in writing signed by each
of the parties hereto.
54
Section
8.6. Waiver. Subject
to Section 1.4(b), at any time prior to the Effective Time, Parent and
Purchaser, one the one hand, and the Company, on the other hand, may (1) extend
the time for the performance of any of the obligations or other acts of the
other, (2) waive any inaccuracies in the representations and warranties of the
other contained herein or in any document delivered pursuant hereto, and (3)
subject to the requirements of applicable Law, waive compliance by the other
parties with any of the agreements or conditions contained herein, except that
the Minimum Condition may only be waived by Purchaser with the prior written
consent of the Company. No failure on the part of any party to
exercise any power, right, privilege or remedy under this Agreement, and no
delay on the part of any party in exercising any power, right, privilege or
remedy under this Agreement, shall operate as a waiver of such power, right,
privilege or remedy; and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of
any other power, right, privilege or remedy. No party shall be deemed
to have waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such party; and any such waiver shall
not be applicable or have any effect except in the specific instance in which it
is given.
ARTICLE
IX.
GENERAL
PROVISIONS
Section
9.1. Non-Survival of
Representations, Warranties, Covenants and Agreements. None of
the representations, warranties, covenants and agreements in this Agreement or
in any instrument delivered pursuant to this Agreement, including any rights
arising out of any breach of such representations, warranties, covenants and
agreements, will survive the Effective Time, except for (1) those covenants and
agreements contained herein that by their terms apply or are to be performed in
whole or in part after the Effective Time and (2) this Article IX.
Section
9.2. Notices. All
notices, requests, claims, demands and other communications (“Notices”) hereunder
shall be in writing (unless specifically required under this Agreement to be
given orally) and shall be given: (1) when delivered, if delivered in person;
(2) when sent, if sent (A) by confirmed facsimile (which shall mean the
confirmation of date and time of transmission by the transmitting equipment
sending such facsimile), or (B) by confirmed email (which shall mean the
confirmation of receipt of the email by either the party receiving such Notice
or such party’s legal counsel listed below, by email) (and each party hereby
covenants and agrees to provide such confirmation of receipt of the email either
directly or via such party’s legal counsel upon receipt), provided, that except with
respect to Notices delivered pursuant to Section 6.3(b), in each of cases (1),
2(A) or 2(B) Notices delivered after 5:00 p.m. of such recipient’s local time on
a Business Day at the place of delivery shall be deemed given at 9:00 a.m. of
such recipient’s local time on the next Business Day or (3) by confirmed
overnight delivery via an internationally recognized overnight delivery service
(cost prepaid)(which shall mean the confirmation of date and time of delivery by
the courier service) for next day delivery; provided, that Notices pursuant
to method (3) shall only be a permitted means of delivery in the event that
confirmation is not received pursuant to 2(A) or 2(B), and provided further that
Notices sent via method (3) shall be deemed to have been delivered two (2)
Business Days after sending, if sent. Such Notices shall be sent in
each case to the respective parties at the following addresses below (or at such
other address or person as a party may designate by notice to the other
parties), and in the case of Notices sent by means other than (2)(B) above,
parties shall also deliver, simultaneously or immediately following delivery of
notice, a confirming copy of such Notice (which delivery shall not constitute
notice hereunder except as provided in (2)(B)) to the email addresses designated
below (or to such other email address or person as a party may designate by
notice to the other parties):
55
(a) if
to Parent or Purchaser:
c/o
Stefanini IT Solutions SA
Avenida
Brigadeiro Faria Lima, 1355
19°
Floor
Sao Paulo
SP
001452-002
Brazil
Attention:
Antonio Carlos Barretto
Facsimile:
011 55 11 3815-2800
Email:
abarretto@stefanini.com
with
additional copies (which will not constitute notice) to:
7 Welbeck
Street
London
W1G 9YE
United
Kingdom
Attention: Antonio
Carlos de Mattos Barretto
Facsimile:
011 55 11 3815-2800
Email:
abarretto@stefanini.com
and
DLA Piper
LLP (US)
2000
University Avenue
East Palo
Alto, California 94303
Attention: Diane
Holt Frankle, Esq.
Facsimile: 1-650-687-1168
Email: diane.frankle@dlapiper.com
(b) if
to the Company:
TechTeam
Global, Inc.
27335
West 11 Mile Road
Southfield,
MI 48033
Attention: Michael
A. Sosin, Esq.
Facsimile: (248)
357-2570
Email: MSosin@techteam.com
with an
additional copy (which will not constitute notice) to:
Ropes
& Gray LLP
Prudential
Tower, 800 Boylston Street
Boston,
MA 02199
56
Attention: Jeffrey
R. Katz, Esq.
Facsimile: (617)
235-0617
Email: Jeffrey.Katz@ropesgray.com
Section
9.3. Certain
Definitions. For purposes of this Agreement, the following
capitalized terms shall have the meanings as set forth in this Section
9.3:
(a) “Affiliate”
of a Person means a Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
first mentioned Person.
(b) “Business
Day” means any day other than (i) a Saturday or Sunday, (ii) any day
on which the principal offices of the SEC in Washington, D.C. are open to accept
filings or (iii) any day on which banks are not required or authorized by law to
close in New York, New York or Sao Paolo, Brazil.
(c) “Code”
means the Internal Revenue Code of 1986, as amended.
(d) “Company
IT Systems” means all information technology and computer systems (including
computer software, data files, source and object codes, tools, user interfaces,
manuals and other specifications and documentation (and all know-how relating to
the foregoing), information technology and telecommunication hardware and other
equipment) relating to the transmission, storage, maintenance, organization,
presentation, generation, processing or analysis of data and information,
whether or not in electronic format, used in or necessary to the conduct of the
business of the Company or any of its Subsidiaries.
(e) “Company
Owned Intellectual Property” means all material Intellectual Property owned by
the Company or any of its Subsidiaries, including all registered trademarks,
trade names, brand names, service marks and trade dress.
(f) “Company
Stock Options” means options to acquire shares of Common Stock granted under or
pursuant to the Company Stock Plans.
(g) “Company
Stock Plans” means the Platinum 2004 Incentive Stock and Awards Plan and the
Platinum 2006 Incentive Stock and Awards Plan as amended and restated effective
April 23, 2010.
(h) “Encumbrance”
shall mean any mortgage, deed of trust, lease, license, condition, covenant,
restriction, hypothecation, option to purchase or lease or otherwise acquire any
interest, right of first refusal or offer, conditional sales or other title
retention agreement, adverse claim of ownership or use, easement, encroachment,
right of way or other title defect, third party right or encumbrance of any kind
or nature.
(i)
“Environmental Law(s)” means any and all applicable international, federal,
state, or local Laws or rule of common Law, permits, restrictions and licenses,
which regulate or relate to (1) the condition, protection or clean up of the
environment, or the preservation or protection of waterways, groundwater,
surface water, drinking water, land, soil, air, wildlife, plants or other
natural resources; (2) the generation, manufacturing, labeling, warning,
notification, use, treatment, storage, transportation, handling, disposal,
presence or release of Hazardous Substances; or (3) impose liability or
responsibility with respect to any of the foregoing, including without
limitation the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. § 9601 et seq.), California’s Proposition 65, or any other Law of
similar effect.
57
(j) “Fully-Diluted
Basis” means as of any time, the number of Shares outstanding, together with all
shares of Common Stock (if any) that the Company would be required to issue
pursuant to the exercise or conversion of any vested “in the money” Company
Stock Options and all warrants and other rights to acquire, or securities
convertible into, or exchangeable for, Common Stock, that are outstanding and
that are vested (or that will be vested) immediately prior to the Purchase
Time.
(k) “GAAP”
means United States generally accepted accounting principles.
(l)
“Hazardous Materials” means any substance that may harm, injure or affect human
health, safety or the environment, including but not limited to any substance
defined, classified or regulated, controlled, or subject to remediation under
any Environmental Law as toxic, infectious, carcinogenic, reactive, corrosive,
ignitable, flammable or hazardous, whether solid, liquid or gas, and including
without limitation, any quantity of asbestos in any form, urea formaldehyde,
PCBs, radon gas, crude oil or any fraction thereof, all forms of natural gas,
petroleum products or by-products, mixtures or derivatives.
(m) “Intellectual
Property” means all patents, patent applications, trademarks and service marks
(and all goodwill associated therewith and all registrations and applications
therefor), trade names, copyrights (and all registrations and applications
therefor), Internet domain names, software, trade secrets, and know how, in each
case, to the extent protectable by applicable Law.
(n) “Knowledge
of the Company” means, with respect to the Company or any of its Subsidiaries,
the actual knowledge of the individuals listed on Section 9.3(n) of the Company
Disclosure Schedule.
(o) “Liens”
means any mortgage, deed of trust, deed to secure debt, title retention
agreement, pledge, lien, encumbrance, security interest, right of first refusal,
option, conditional or installment sale agreement, charge or other claims of
third parties of any kind.
58
(p) “Material
Adverse Effect” means any change, effect, event or occurrence that has a
material adverse effect on (i) the business, financial condition, operations or
results of operations of the Company and its Subsidiaries, taken as a whole, or
(ii) the ability of the Company to consummate the Offer, the Merger or any of
the other transactions contemplated by this Agreement; provided, however, that none of
the following, and no effect arising out of or resulting from the following,
shall constitute or be taken into account in determining whether a Material
Adverse Effect has occurred or may, would or could occur: (1) any
changes, events, occurrences or conditions generally affecting (A) the IT
outsourcing industry so long as such changes, events, occurrences or conditions
do not have a materially disproportionate effect on the Company and its
Subsidiaries, taken as a whole, compared with other companies operating in the
IT outsourcing industry or (B) the economy, credit, financial or capital markets
in the United States or elsewhere in the world, including changes in interest or
exchange rates; (2) changes, events, occurrences or effects arising out of,
resulting from or attributable to changes or prospective changes in Law, in
generally accepted accounting principles or in accounting standards, or any
changes or prospective changes in the interpretation or enforcement of any of
the foregoing, or changes or prospective changes in regulatory or political
conditions, (3) the loss or departure of employees from the Company or the loss
or adverse developments in the Company’s relationships with customers or
suppliers of the Company or its Subsidiaries, in each case as a result of the
announcement or performance of this Agreement or the consummation of the
transactions contemplated hereby, (4) changes, events, occurrences or effects
arising out of, resulting from or attributable to acts of war (whether or not
declared), sabotage or terrorism, or any escalation or worsening of any such
acts of war (whether or not declared), sabotage or terrorism, pandemics,
earthquakes, hurricanes, tornados or other natural disasters, so long as such
changes, events, occurrences or conditions do not have a materially
disproportionate effect on the Company and its Subsidiaries, taken as a whole,
compared with other companies operating in the IT outsourcing industry, (5) any
action taken by the Company or its Subsidiaries as required by this Agreement or
with the Parent’s or Purchaser’s written consent, or the failure to take any
action by the Company or its Subsidiaries if that action is prohibited under
this Agreement, (6) any litigation commenced by or involving any current or
former stockholders of the Company (on their own or on behalf of the Company)
arising out of or related to this Agreement or the transactions contemplated
hereby, which, based on the underlying merits of such legal proceedings, are not
reasonably expected to result in an award of material damages or injunctive
relief against the Company or its directors, (7) any change in the Company’s
credit ratings, (8) any decline in the market price, or change in trading
volume, of the capital stock of the Company, (9) any failure to meet any
internal or public projections, forecasts or estimates of revenue or earnings or
(10) the consummation of the transactions contemplated by the Stock Purchase
Agreement, dated as of June 3, 2010 by and among the Company and the buyer
parties thereto, as amended (the “Government Solutions
Purchase Agreement”); provided, that the
exceptions in clauses (7), (8) and (9) shall not prevent or otherwise affect a
determination that the underlying cause of any decline, change or failure
referred to therein (if not otherwise falling within any of the exceptions
provided by clause (1) through (6) above) is a Material Adverse
Effect.
(q) “Made
Available” shall mean, with respect to any documents or other materials relating
to the Company or its Subsidiaries, that such documents or other materials were
either (1) actually delivered by the Company to Parent or its counsel, or were
uploaded in the electronic data room organized by the Company in connection with
the diligence investigation conducted by the Parent at least two Business Days
prior to the date of this Agreement or (2) filed by the Company with the SEC and
available on EDGAR, except to the extent available in full without redaction on
the SEC’s web site through EDGAR two days prior to the date of this
Agreement.
(r) “Permitted
Encumbrances” means easements, rights-of-way, encroachments, licenses,
restrictions, conditions and other similar encumbrances incurred or suffered in
the ordinary course of business and which, individually or in the aggregate, (i)
are not substantial in character, amount or extent in relation to the applicable
real property and (ii) do not and would not materially and adversely impact the
use (or contemplated use), utility or value of the applicable real property or
otherwise materially and adversely impair the Company’s present or contemplated
business operations at such location.
59
(s) “Person”
means an individual, corporation, partnership, limited liability company,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act).
(t) “Representatives”
mean officers, directors, employees, affiliates of the applicable party to this
Agreement and any such party’s consultants, agents, advisors and other
representatives retained in connection with the transactions contemplated
hereby.
(u) “Subsidiary”
of the Company, the Surviving Corporation, Parent or any other Person means any
corporation, partnership, joint venture or other legal entity of which the
Company, the Surviving Corporation, Parent or such other Person, as the case may
be (either alone or through or together with any other Subsidiary), owns,
directly or indirectly, voting stock or other equity interests having ordinary
voting power to elect a majority of the board of directors or other governing
body of such corporation or other legal entity.
(v) “Third
Party” means any Person or “group” as defined in Section 13(d) of the 1934 Act,
other than Parent or any of its Affiliates or Representatives.
Section
9.4. Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, the remaining provisions
of this Agreement will be enforced so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated by this Agreement are fulfilled to the fullest extent
possible.
Section
9.5. Entire Agreement;
Assignment. This Agreement (including the Annexes hereto), the
Company Disclosure Schedule and the Confidentiality Agreement constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter
hereof. This Agreement and any rights, interests and obligations
hereunder will not be assigned by operation of law or otherwise without the
prior written consent of each of the other parties, and any attempted assignment
without such consent shall be void and of no effect, except that Parent may
assign all or any of its rights and obligations hereunder to any direct or
indirect wholly-owned Subsidiary of Parent; provided, however, that no such
assignment will relieve Parent from any of its obligations
hereunder.
Section
9.6. Parties in
Interest. This Agreement will be binding upon and inure solely
to the benefit of each party hereto and such party’s successors and permitted
assigns. Nothing in this Agreement, express or implied, is intended
to or will confer upon any Person (other than the parties hereto) any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except for rights, benefits and remedies granted to Indemnified Persons under
Section 6.5. Notwithstanding the immediately preceding sentence,
following the Effective Time, the provisions of Article III
relating to the payment of the Merger Consideration shall be enforceable by
holders of Certificates. For the avoidance of doubt, it is expressly
understood and agreed that the provisions of Section 6.4 are statements of
intent and no employees or other Person (including any party hereto) will have
any rights or remedies, including rights of enforcement, with respect thereto
and no employee or other Person is, is intended to be or will be deemed to be a
third-party beneficiary thereof.
60
Section
9.7. Governing
Law. This Agreement and any claim arising out of or relating
to it, its negotiation, terms or performance, or the transactions contemplated
hereby, will be governed by, construed in accordance with, and enforced pursuant
to, the laws of the State of Delaware, without giving effect to any choice 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.
Section
9.8. Headings. The
descriptive headings contained in this Agreement are included for convenience of
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
Section
9.9. Counterparts. This
Agreement may be executed and delivered (including by facsimile transmission) in
two or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed will be deemed to be an original but
all of which taken together will constitute one and the same
agreement.
Section
9.10. Performance
Guaranty. Parent hereby guarantees the due, prompt and
faithful performance and discharge by, and compliance with, all of the
obligations covenants, terms, conditions and undertakings of Purchaser and the
Surviving Corporation under this Agreement in accordance with the terms hereof
including any such obligations, covenants, terms, conditions and undertakings
that are required to be performed discharged or complied with following the
Control Time. Parent agrees to take all action necessary to cause
Purchaser or the Surviving Corporation, as applicable, to perform all of its
respective agreements, covenants and obligations under this
Agreement. Parent unconditionally guarantees to the Company the full
and complete performance by Purchaser or the Surviving Corporation, as
applicable, of its respective obligations under this Agreement and shall be
liable for any breach of any representation, warranty, covenant or obligation of
Purchaser or the Surviving Corporation, as applicable, under this
Agreement. This is a guarantee of payment and performance and not
collectability. Parent hereby waives diligence, presentment, demand
of performance, filing of any claim, any right to require any proceeding first
against Purchaser or the Surviving Corporation, as applicable, protest, notice
and all demands whatsoever in connection with the performance of its obligations
set forth in this Section 9.10.
61
Section
9.11. Jurisdiction; Service of
Process; Waiver of Jury Trial. (a) All parties irrevocably
agree that any action and proceeding arising out of or relating to this
Agreement, its negotiation, terms or performance, or the transactions
contemplated hereby, or for recognition and enforcement of any judgment entered
in any such action or proceeding, shall be brought and determined exclusively in
the Chancery Court of the State of Delaware and any state appellate court
therefrom within the State of Delaware (or, if the Chancery Court of the State
of Delaware declines to accept jurisdiction over a particular matter, any state
or federal court within the State of Delaware) and each of the parties hereto
hereby irrevocably submits with regard to any such action or proceeding for
itself and in respect of its property, generally and
unconditionally, to the exclusive personal
jurisdiction and venue of such courts in any such action or
proceeding and agrees that it will not bring any such action in any court other
than the aforesaid courts. Each of the parties hereto hereby
irrevocably waives and agrees not to assert as a defense, counterclaim, by way
of motion, or otherwise, in any such action or proceeding: (i) any
claim that it is not personally subject to the jurisdiction of the above named
courts, (ii) any claim that it or its property is exempt or immune from the
jurisdiction of any such court or from any legal process issued by such courts
(whether through service of notice, attachment prior to judgment, attachment in
aid of execution of judgment, execution of judgment, or otherwise) and (iii) to
the fullest extent permitted by the applicable Law, any claim that (x) such
action or proceeding in such court is brought in an inconvenient forum, (y) the
venue of such action or proceeding is improper or this Guarantee, or the subject
mater hereof, may not be enforced in or by such courts. The consents to
jurisdiction set forth in this paragraph shall not constitute general consents
to jurisdiction in the State of Delaware and shall have no effect for any
purpose except as provided in this paragraph and shall not be deemed to confer
rights on any Person other than the parties hereto. The parties
hereto agree that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by applicable law.
(b) Service
of process, or of any other notice, pleading, order or other document of any
kind in connection with any such action or proceeding, by delivery in the manner
provided pursuant to Section 9.2 or any method permitted by Delaware Law or any
other jurisdiction in which a party is organized or has assets or operations,
shall be and shall conclusively be deemed to be, valid and effective service
upon each party thus served.
(c) Notwithstanding
anything to the contrary expressed or implied in this Agreement, each party
acknowledges and agrees that: (i) an action or proceeding to enforce
or collect upon any order or judgment issued by any of the courts specified in
Section 9.11(a) in any action or proceeding contemplated by Section 9.11(a) may
be brought in any jurisdiction where such party, or any direct or indirect
subsidiary of such party, is located or has assets; and (ii) each party
irrevocably waives any objection to registration, exequatur, execution,
enforcement or collection of any order or judgment within subclause (i) in any
such enforcement or collection action or proceeding.
(d) EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING BETWEEN OR AMONG THE PARTIES HERETO ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section
9.12. Specific
Performance. The parties agree that irreparable damage would
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in the courts as specified in Section
9.11 without proof of actual damages or otherwise (and each party hereby waives
any requirement for the securing or posting of any bond or other
security). The parties further agree not to assert that a remedy of
specific performance is unenforceable, invalid, contrary to law or inequitable
for any reason, nor to assert that a remedy of monetary damages would provide an
adequate remedy. Specific performance pursuant to this provision
shall be in addition to any other remedy to which the parties are entitled at
law or in equity.
62
Section
9.13. Interpretation. When
reference is made in this Agreement to a Section, such reference will be to a
Section of this Agreement unless otherwise indicated. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they will
be deemed to be followed by the words “without limitation.” The words
“hereof,” “herein,” “hereby” and “hereunder” and words of similar import when
used in this Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement. The word “or” will not be
exclusive. Whenever used in this Agreement, any noun or pronoun will
be deemed to include the plural as well as the singular and to cover all
genders. This Agreement will be construed without regard to any
presumption or rule requiring construction or interpretation against the party
drafting or causing any instrument to be drafted. Every statement
made in the Company Disclosure Schedule shall be deemed to be a representation
of the Company in this Agreement as if set forth in Article IV.
[The
remainder of the page is intentionally left blank.]
63
IN
WITNESS WHEREOF, each of Parent, Purchaser and the Company has caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
STEFANINI
INTERNATIONAL
HOLDINGS
LTD
|
|||
By:
|
/s/ Marco Antonio Stefanini
|
||
Name:
Marco Antonio Stefanini
|
|||
Title:
Chairman
|
|||
PLATINUM
MERGER SUB, INC.
|
|||
By:
|
/s/ Antonio Barretto
|
||
Name:
Antonio Barretto
|
|||
Title: Secretary
|
|||
TECHTEAM
GLOBAL, INC.
|
|||
By:
|
/s/ Michael A. Sosin
|
||
Name:
Michael A. Sosin
|
|||
Title: Corporate
Vice President,
General
Counsel and Secretary
|
Annex I
CONDITIONS TO THE
OFFER
Capitalized
terms used in this Annex I and not otherwise defined herein will have the
meanings assigned to them in the Agreement to which it is attached.
Notwithstanding
any other provision of the Offer, Purchaser shall not be required to accept for
payment any Shares tendered pursuant to the Offer, and may extend, terminate or
amend the Offer, if (i) immediately prior to the expiration of the Offer, the
Minimum Condition shall not have been satisfied, (ii) the waiting period (and
any extension thereof) applicable to the transactions contemplated by the
Agreement (including the Offer and the Merger) under the HSR Act shall not have
expired or been terminated prior to the expiration of the Offer (the “Antitrust Condition”)
or (iii) at any time on or after the date of this Agreement and prior to the
expiration of the Offer, as the same may be extended from time to time (the
“Expiration
Date”), any of the following conditions shall exist:
(a) there
shall be instituted or pending any Proceeding initiated by any Governmental
Entity, (i) challenging or seeking to make illegal delay materially or otherwise
directly or indirectly restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some or all of the Shares by Parent or
Merger Subsidiary or the consummation of the Offer or the Merger, (ii) seeking
to restrain or prohibit Parent’s ownership or operation (or that of its
Affiliates) of all or any significant portion of the business, assets or
products of Parent, the Company or their respective Subsidiaries, or to compel
Parent or any of its Affiliates to dispose of, license (whether pursuant to an
exclusive or nonexclusive license) or hold separate all or any material portion
of the business, assets or products of Parent, the Company or their respective
Subsidiaries, (iii) seeking, directly or indirectly, to impose or confirm any
significant limitations on (A) the ability of Parent or any of its Affiliates
effectively to acquire, hold or exercise full rights of ownership of any Shares
or any shares of common stock of the Surviving Corporation, including the right
to vote the Shares or the shares of common stock of the Surviving Corporation
acquired or owned by Parent, Merger Subsidiary or any of Parent’s other
Affiliates on all matters properly presented to the Company’s stockholders or
(B) the ownership or operation by Parent (or any of its Subsidiaries) of all or
any material portion of businesses or assets of Parent, the Company or their
respective Subsidiaries, (iv) seeking to require divestiture by Parent, Merger
Subsidiary or any of Parent’s other Affiliates of any Shares or any material
business or assets of Parent, the Company or their respective Subsidiaries or
(v) which would reasonably be expected to impede, interfere with, prevent or
materially delay the Offer or the Merger; or
(b) since
the date of this Agreement, any change or development shall have occurred that
has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
I-1
(c) (i) the
representations and warranties of the Company set forth in Section 4.3(a) shall
be true and correct in all respects except to the extent of any differences
which are no more than de
minimis in extent and (ii) any other representation or warranty of the
Company contained in this Agreement (without giving effect to any references to
any Material Adverse Effect or materiality qualifications and other
qualifications based upon the concept of materiality or similar phrases
contained therein) shall fail to be true and correct in any respect when made or
at the consummation of the Offer as if made at and as of such time, except the
representations and warranties that relate to a specific date or time (which
need only be true and correct as of such date or time), provided that the
condition set forth in this paragraph (c)(ii) shall be deemed to have been
satisfied unless the impact of the failure to be true of the representations and
warranties of the Company contained in this Agreement would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect;
(d) the
Company shall have breached or failed, in any material respect, to perform or
comply with any agreement or covenant to be performed or complied with by it
under this Agreement and such breach or failure shall not have been cured prior
to the scheduled expiration of the Offer (including any extensions thereof
within the Extension Period);
(e) the
Company shall not have furnished Parent with a certificate signed on the
Company’s behalf by its Chief Executive Officer or Chief Financial Officer
attesting, as of the Expiration Date, to the absence of the conditions set forth
in items (b), (c) and (d) of this Annex I; or
(f) (i)
a Company Adverse Recommendation Change shall have occurred, or (ii) the Company
shall have entered into, or publicly announced its intention to enter into, a
Company Acquisition Agreement; or
(g) this
Agreement shall have been terminated in accordance with its terms.
The
foregoing conditions are for the sole benefit of Parent and Purchaser and may be
waived by Parent or Purchaser, in whole or in part at any time and from time to
time, in the sole discretion of Parent or Purchaser.
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