AGREEMENT AND PLAN OF MERGER DATED AS OF APRIL 2, 2010 AMONG GDC HOLDINGS, INC., ROYAL ACQUISITION CORP. AND NATIONAL DENTEX CORPORATION
Exhibit 2.1
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
DATED AS OF
APRIL 2, 2010
AMONG
GDC HOLDINGS, INC.,
ROYAL ACQUISITION CORP.
AND
NATIONAL DENTEX CORPORATION
TABLE OF CONTENTS
Page | ||||
ARTICLE 1 THE MERGER |
1 | |||
Section 1.1. The Merger |
1 | |||
Section 1.2. Closing |
2 | |||
Section 1.3. Effective Time |
2 | |||
Section 1.4. Effects of the Merger |
2 | |||
Section 1.5. Articles of Organization |
2 | |||
Section 1.6. Bylaws |
3 | |||
Section 1.7. Officers and Directors |
3 | |||
Section 1.8. Effect on Capital Stock |
3 | |||
Section 1.9. Company Stock Options; Company ESPP; Other Company Equity Awards |
3 | |||
Section 1.10. Certain Adjustments |
6 | |||
ARTICLE 2 CONVERSION OF SHARES |
6 | |||
Section 2.1. Paying Agent |
6 | |||
Section 2.2. Payment Procedures |
6 | |||
Section 2.3. Undistributed Merger Consideration |
7 | |||
Section 2.4. No Liability |
7 | |||
Section 2.5. Investment of Merger Consideration |
7 | |||
Section 2.6. Lost Certificates |
7 | |||
Section 2.7. Withholding Rights |
8 | |||
Section 2.8. Further Assurances |
8 | |||
Section 2.9. Stock Transfer Books |
8 | |||
Section 2.10. Dissenting Shares |
8 | |||
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
9 | |||
Section 3.1. Organization and Qualification |
9 | |||
Section 3.2. Capitalization |
10 | |||
Section 3.3. Authorization |
12 | |||
Section 3.4. No Violation |
12 | |||
Section 3.5. Filings with the SEC; Financial Statements |
13 | |||
Section 3.6. Undisclosed Liabilities |
15 | |||
Section 3.7. Absence of Certain Changes |
15 | |||
Section 3.8. Anti-takeover Statutes; No Rights Agreement |
15 | |||
Section 3.9. Litigation; Orders |
16 | |||
Section 3.10. Permits; Compliance with Laws |
16 | |||
Section 3.11. Tax Matters |
17 | |||
Section 3.12. Intellectual Property |
18 |
Page | ||||
Section 3.13. Employee Benefits |
20 | |||
Section 3.14. Employee Matters |
22 | |||
Section 3.15. Contracts |
23 | |||
Section 3.16. Environmental |
25 | |||
Section 3.17. Company Real Property |
25 | |||
Section 3.18. Insurance |
26 | |||
Section 3.19. Suppliers |
26 | |||
Section 3.20. Affiliate Transactions |
27 | |||
Section 3.21. Opinion of Financial Advisor |
27 | |||
Section 3.22. No Brokers or Finders |
27 | |||
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB |
27 | |||
Section 4.1. Organization and Qualification |
27 | |||
Section 4.2. Authorization |
28 | |||
Section 4.3. No Violation |
28 | |||
Section 4.4. Litigation |
28 | |||
Section 4.5. Available Funds |
29 | |||
Section 4.6. No Brokers or Finders |
29 | |||
Section 4.7. No Prior Activities of Merger Sub |
29 | |||
Section 4.8. No Ownership of Stock of Company |
29 | |||
Section 4.9. Solvency |
29 | |||
Section 4.10. Management Arrangements |
30 | |||
ARTICLE 5 PRE-CLOSING COVENANTS |
30 | |||
Section 5.1. Covenants of the Company |
30 | |||
Section 5.2. Proxy Statement; Company Stockholders Meeting |
34 | |||
Section 5.3. Further Information |
37 | |||
Section 5.4. Reasonable Best Efforts |
37 | |||
Section 5.5. Acquisition Proposals |
39 | |||
Section 5.6. Indemnification; Directors and Officers Insurance |
43 | |||
Section 5.7. Public Announcements |
46 | |||
Section 5.8. State Takeover Laws |
46 | |||
Section 5.9. Notification of Certain Matters |
46 | |||
Section 5.10. Confidentiality |
46 | |||
Section 5.11. Employee Matters |
46 | |||
Section 5.12. Financing |
48 | |||
Section 5.13. Stockholder Litigation |
49 | |||
ARTICLE 6 CONDITIONS TO THE MERGER |
49 | |||
Section 6.1. Conditions to Each Party’s Obligation to Effect the Merger |
50 | |||
Section 6.2. Additional Conditions to Obligations of Parent and Merger Sub |
50 | |||
Section 6.3. Additional Conditions to Obligation of the Company |
51 |
Page | ||||
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER |
51 | |||
Section 7.1. Termination |
51 | |||
Section 7.2. Effect of Termination |
53 | |||
Section 7.3. Amendment |
55 | |||
Section 7.4. Waiver |
55 | |||
ARTICLE 8 MISCELLANEOUS |
55 | |||
Section 8.1. Non-Survival of Representations, Warranties and Agreements |
55 | |||
Section 8.2. Expenses |
56 | |||
Section 8.3. Notices |
56 | |||
Section 8.4. Entire Agreement |
57 | |||
Section 8.5. Assignment; Binding Effect |
57 | |||
Section 8.6. Governing Law; Waiver of Jury Trial; Specific Performance; Remedies;
Jurisdiction |
58 | |||
Section 8.7. Severability |
60 | |||
Section 8.8. Third Party Beneficiaries |
61 | |||
Section 8.9. Disclosure Schedule |
61 | |||
Section 8.10. Counterparts |
62 | |||
Section 8.11. Headings |
62 | |||
Section 8.12. Interpretation |
62 | |||
Section 8.13. No Presumption |
62 | |||
Section 8.14. Undertaking by Parent |
62 | |||
Section 8.15. Limitation of Liability |
62 | |||
Section 8.16. Definitions |
63 |
INDEX OF DEFINED TERMS
Defined Term | Section | |
Acceptable Confidentiality Agreement
|
8.16(a) | |
Acquisition Proposal
|
8.16(b) | |
Affiliates
|
8.16(c) | |
Agreement
|
Preamble | |
Applicable Consents
|
3.4(b) | |
Applicable Date
|
3.5(a) | |
Articles of Merger
|
1.3 | |
Bankruptcy and Equity Exception
|
3.3 | |
Business Day
|
8.16(d) | |
Capitalization Date
|
3.2(a) | |
Certificate
|
1.8(c) | |
Certificate of Merger
|
1.3 | |
Change in Company Recommendation
|
5.5(f) | |
Claim
|
5.6(a) | |
Closing Date
|
1.2 | |
Closing
|
1.2 | |
Code
|
2.7 | |
Company
|
Preamble | |
Company Benefit Plan
|
3.13(a) | |
Company Common Stock
|
Preamble | |
Company Copyrights
|
3.12(a) | |
Company Damages
|
8.15 | |
Company Disclosure Schedule
|
8.9(a) | |
Company Equity Awards
|
8.16(e) | |
Company ESPP
|
1.9(b) | |
Company Intellectual Property
|
3.12(a) | |
Company Licenses
|
3.12(b) | |
Company Patents
|
3.12(a) | |
Company Permits
|
3.10(a) | |
Company Recommendation
|
5.2(a) | |
Company Requisite Stockholder Vote
|
3.3(a) | |
Company Restricted Shares
|
1.9(c) | |
Company RSUs
|
1.9(d) | |
Company SEC Reports
|
3.5(a) | |
Company Stock Options
|
1.9(a) | |
Company Stock Plans
|
8.16(f) | |
Company Stockholders Meeting
|
5.2(b) | |
Company Trademarks
|
3.12(a) | |
Company Voting Debt
|
3.2(a) | |
Confidentiality Agreement
|
5.10 | |
Continuing Employees
|
5.11(a) | |
Continuing Party
|
5.5(d) |
Defined Term | Section | |
Contracts
|
8.16(g) | |
Control
|
8.16(c) | |
Conversion Shares
|
3.2(a) | |
Credit Agreement
|
5.1(vii) | |
D&O Insurance
|
5.6(b) | |
DGCL
|
1.1 | |
Dissenting Shares
|
2.10(a) | |
DOJ
|
5.4(b) | |
DSOS
|
1.3 | |
Effective Time
|
1.3 | |
Environmental Claim
|
8.16(h) | |
Environmental Laws
|
8.16(i) | |
Environmental Permits
|
8.16(j) | |
Equity Commitment Letter
|
Preamble | |
ERISA
|
8.16(k) | |
ERISA Affiliate
|
8.16(l) | |
ESPP Option
|
1.9(b) | |
Exchange Act
|
3.4(b) | |
Exchange Fund
|
2.1 | |
Excluded Shares
|
1.8(a) | |
Expenses
|
5.6(a) | |
FTC
|
5.4(b) | |
GAAP
|
3.5(b) | |
Go-Shop Period End Date
|
5.5(a) | |
Governmental Entity
|
3.4(b) | |
Guarantee
|
8.16(m) | |
Hazardous Substance
|
8.16(n) | |
HSR Act
|
3.4(b) | |
Indebtedness
|
8.16(o) | |
Indemnified Persons
|
5.6(a) | |
Intellectual Property Rights
|
3.12(b) | |
Internal Use Software
|
3.12(d) | |
Intervening Event
|
8.16(p) | |
knowledge
|
8.16(1) | |
Law
|
3.4(a) | |
Leased Property
|
3.17(b) | |
Licensed Intellectual Property
|
3.12(b) | |
Lien
|
8.16(r) | |
Litigation
|
3.9 | |
Material Adverse Effect on Parent
|
8.16(s) | |
Material Adverse Effect on the Company
|
8.16(t) | |
MBCA
|
1.1 | |
Merger Consideration
|
1.8(a) | |
Merger Sub
|
Preamble | |
Merger
|
Preamble |
Defined Term | Section | |
MSOS
|
1.3 | |
Multiemployer Plan
|
8.16(u) | |
Notice Period
|
5.5(f) | |
Off the Shelf Software
|
3.12(b) | |
Order
|
3.4(a) | |
Outside Counsel Only
|
5.4(c) | |
Owned Property
|
3.17(a) | |
Parent
|
Preamble | |
Parent Disclosure Schedule
|
8.9(a) | |
Parent Expenses
|
7.2(b) | |
Parent Liability Limitation
|
8.15 | |
Parent Parties
|
8.15 | |
Parent Welfare Benefit Plans
|
5.11(d) | |
Paying Agent
|
2.1 | |
Permitted Lien
|
8.16(v) | |
Person
|
8.16(w) | |
Personal Property
|
3.17(e) | |
Plan
|
3.13(a) | |
Preferred Stock
|
3.2(a) | |
Premium Limit
|
5.6(b) | |
Proxy Statement
|
5.2(a) | |
Real Property Lease
|
3.17(b) | |
Representatives
|
8.16(x) | |
Xxxxxxxx-Xxxxx Act
|
3.5(a) | |
SEC
|
3.5(a) | |
SERPs
|
5.11(b) | |
Securities Act
|
3.5(a) | |
Solicited Person
|
5.5(a) | |
Solvent
|
4.9 | |
Sponsor
|
Preamble | |
Subsidiaries
|
8.16(y) | |
Superior Proposal
|
8.16(z) | |
Surviving Corporation
|
1.1 | |
Tax Return
|
8.16(aa) | |
Taxes
|
8.16(bb) | |
Termination Date
|
7.1(b) | |
Termination Fee
|
7.2(c) | |
Trade Secrets
|
3.12(e) | |
WARN
|
3.14(b) |
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of April 2, 2010 (this “Agreement”), is among GDC
Holdings, Inc., a Delaware corporation (“Parent”), Royal Acquisition Corp., a Delaware corporation,
an indirect wholly owned subsidiary of Parent and a direct wholly owned subsidiary of GeoDigm
Corporation, a Minnesota corporation (“Merger Sub”), and National Dentex Corporation, a
Massachusetts corporation (the “Company”). Capitalized terms used but not defined elsewhere herein
have the meanings assigned to them in Section 8.16.
The respective Boards of Directors of Parent and Merger Sub and the Board of Directors of the
Company desire that Parent, Merger Sub and the Company enter into a transaction whereby Merger Sub
will merge with and into the Company (the “Merger”), and each issued and outstanding share of the
Company’s common stock, par value $0.01 per share (“Company Common Stock”), not owned directly or
indirectly by the Company, Parent, Merger Sub or any Subsidiary of the Company will, by virtue of
the Merger, be converted into the right to receive the Merger Consideration.
In furtherance thereof, the respective Boards of Directors of Parent and Merger Sub and the
Board of the Directors of the Company have determined that entering into this Agreement and the
consummation of the transactions contemplated hereby, including the Merger, are advisable. The
Board of Directors of the Company has (i) determined and declared that this Agreement and the
transactions contemplated hereby, including the Merger, are advisable and fair to, and in the best
interests of, the Company and its stockholders, (ii) adopted this Agreement, (iii) directed that
this Agreement be submitted to the Company’s stockholders for their approval and (iv) resolved to
recommend that the Company’s stockholders adopt and approve this Agreement and the Merger.
Parent, Merger Sub and the Company desire to make certain representations, warranties and
agreements in connection with, and to prescribe certain conditions to, the Merger.
Concurrently with the execution and delivery of this Agreement, Welsh, Carson, Xxxxxxxx &
Xxxxx XI, L.P., a Delaware limited partnership (the “Sponsor”), is entering into an equity
commitment letter with Parent, the sole stockholder of Parent, and the Company (the “Equity
Commitment Letter”), pursuant to which, among other things, the Sponsor is committing, subject to
the terms of the Equity Commitment Letter, to invest up to $139,000,000 in equity securities of
Parent (or its parent company) in order to allow Parent to satisfy its obligations under this
Agreement.
In consideration of the foregoing and the mutual covenants, representations, warranties and
agreements set forth herein, and intending to be legally bound, the parties agree as follows:
ARTICLE 1
THE MERGER
THE MERGER
Section 1.1. The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Massachusetts Business Corporation Act (the “MBCA”) and
the General Corporation Law of the State of Delaware (the “DGCL”), Merger Sub shall be
merged with
and into the Company at the Effective Time and the separate corporate existence of Merger Sub shall
thereupon cease. The Company shall be the surviving corporation in the Merger (the “Surviving
Corporation”) and shall continue to be governed by the Laws of the Commonwealth of Massachusetts,
and the separate corporate existence of the Company, with all its rights, privileges, immunities,
powers and franchises shall continue unaffected by the Merger, except as otherwise provided herein.
Section 1.2. Closing. The closing of the Merger (the “Closing”) shall occur as
promptly as practicable after the satisfaction or waiver of the conditions set forth in Article 6,
and in any event no later than 10:00 a.m., local time, on the second Business Day after the
satisfaction or waiver of the conditions set forth in Article 6, in each case, other than
conditions which by their nature are to be satisfied at Closing (but subject to the fulfillment or
waiver of such conditions), or such other time and date as Parent and the Company may agree in
writing, unless this Agreement has been theretofore terminated pursuant to its terms (the actual
time and date of the Closing is referred to as the “Closing Date”); provided, that Parent
may, by written notice given to the Company, delay the Closing and the Closing Date until the
earlier of (A) the Termination Date or (B) a date selected by Parent that is not more than five (5)
Business Days after the latest Closing Date otherwise permitted by this Section 1.2, if Parent
determines that such delay is necessary or appropriate in order to finalize any debt financing in
connection with the consummation of the Merger and the other transactions contemplated by this
Agreement. The Closing shall be held at the offices of Xxxxxxxxx Xxxxxxxxxx & Xxxx LLP, 800
Boylston Street, The Prudential Tower, Boston, MA 02199 or such other place as Parent and the
Company may agree in writing.
Section 1.3. Effective Time. At the Closing and subject to the terms and conditions
of this Agreement, the parties hereto shall: (a) file articles of merger in the form required by
Section 11.06 of the MBCA (the “Articles of Merger”) with the Secretary of State of the
Commonwealth of Massachusetts (the “MSOS”) as provided in Section 11.06 of the MBCA; (b) duly make
all other filings and recordings required by the MBCA in order to effectuate the Merger; (c) file a
certificate of merger in the form required by Section 252 of the DGCL (the “Certificate of Merger”)
with the Secretary of State of the State of Delaware (the “DSOS”) as provided by Section 252 of the
DGCL; and (d) duly make all other filings and recordings required by the DGCL in order to
effectuate the Merger. The Merger shall become effective at the later of (i) when the Articles of
Merger have been duly filed with, and accepted for record by, the MSOS and (ii) when the
Certificate of Merger has been duly filed with, and accepted for record by, the DSOS, or at such
later time as may be agreed to by Parent and the Company in writing and specified in the Articles
of Merger and the Certificate of Merger (the
date and time that the Merger becomes effective is referred to as the “Effective Time”).
Section 1.4. Effects of the Merger. The Merger shall have the effects set forth in
this Agreement and Section 11.07 of the MBCA and Section 252 of the DGCL.
Section 1.5. Articles of Organization. At the Effective Time, the restated articles
of organization of the Company, as amended, shall be the articles of organization of the Surviving
Corporation, until thereafter amended in accordance with applicable Law.
2
Section 1.6. Bylaws. At the Effective Time, the bylaws of the Company, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving Corporation (with
such changes, to be effective at the Effective Time, as Parent proposes), until thereafter amended
in accordance with applicable Law.
Section 1.7. Officers and Directors. The officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, until the earlier of their
resignation or removal or until their respective successors are duly elected and qualified, as the
case may be. The directors of Merger Sub immediately prior to the Effective Time shall be the
directors of the Surviving Corporation, until the earlier of their resignation or removal or until
their respective successors are duly elected and qualified, as the case may be.
Section 1.8. Effect on Capital Stock. At the Effective Time, pursuant to this
Agreement and by virtue of the Merger and without any action on the part of the holder of any
shares of Company Common Stock or any shares of capital stock of Merger Sub:
(a) Each share of Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares canceled pursuant to Section 1.8(d) below (the “Excluded Shares”)
and any Dissenting Shares) shall be canceled and converted into the right to receive an amount in
cash equal to $17.00, without interest (the “Merger Consideration”), payable to the holder thereof
in accordance with Article 2.
(b) All shares of Company Common Stock (other than the Dissenting Shares) shall cease to be
outstanding and shall be automatically canceled and retired and shall cease to exist.
(c) Each holder of a certificate that, immediately prior to the Effective Time, represented
any shares of Company Common Stock other than Dissenting Shares and Excluded Shares (a
“Certificate”) shall cease to have any rights with respect to such shares of Company Common Stock,
other than the right to receive the Merger Consideration. Each Dissenting Share shall be treated
in accordance with Section 2.10 below.
(d) Each share of Company Common Stock that is owned directly or indirectly by Parent, Merger
Sub, the Company or any Subsidiary of the Company immediately prior to the Effective Time shall be
automatically canceled and retired and shall cease to exist, and no consideration shall be made or
delivered in exchange therefor.
(e) Each share of common stock of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and nonassessable share of
common stock of the Surviving Corporation, which shall constitute the only outstanding shares of
capital stock of the Surviving Corporation.
Section 1.9. Company Stock Options; Company ESPP; Other Company Equity Awards.
(a) All outstanding options to acquire shares of Company Common Stock from the Company
(collectively, “Company Stock Options”) heretofore granted under any
3
Company Stock Plan shall
become in accordance with their terms exercisable and vested in full immediately prior to the
Effective Time and, if not exercised at or prior to the Effective Time, shall be terminated and
converted at the Effective Time, in settlement and cancellation thereof, into the right to receive
a lump sum cash payment from the Surviving Corporation, in accordance with Section 1.9(e), of an
amount, if any, equal to: (i) the excess, if any, of (A) the per share Merger Consideration over
(B) the exercise price per share of Company Common Stock subject to such Company Stock Option,
multiplied by (ii) the number of shares of Company Common Stock subject to such Company
Stock Option.
(b) As soon as practicable following the date of this Agreement, the Company’s Board of
Directors (or, if appropriate, any committee administering the Company’s Employees’ Stock Purchase
Plan (the “Company ESPP”)) shall adopt such resolutions or take such other actions as may be
required to provide that, with respect to the Company ESPP: (i) each individual holding an “Option”
(as defined in the Company ESPP) under the Company ESPP (an “ESPP Option”) as of the date of this
Agreement shall not be permitted (x) to increase the amount of his or her rate of payroll
contributions thereunder from the rate in effect when such ESPP Option was granted, or (y) to make
separate non-payroll contributions to the Company ESPP on or following the date of this Agreement;
(ii) no individual who does not hold an outstanding ESPP Option as of the date of this Agreement
may commence participation in the Company ESPP prior to the Effective Date; (iii) each outstanding
ESPP Option shall be terminated prior to the Effective Date as provided in the Company ESPP;
(iv) each Company ESPP participant’s accumulated contributions under the Company ESPP shall be
refunded by the Surviving Corporation promptly following the Effective Time in accordance with the
terms of the Company ESPP, and will not be converted into shares of Company Common Stock or the
right to receive the Merger Consideration and (v) the
Company ESPP shall terminate as of the Effective Date and no further rights shall be granted
or exercised under the Company ESPP thereafter.
(c) As of the Effective Time, shares of Company Common Stock awarded pursuant to a Company
Stock Plan and made subject to vesting or other lapse restrictions (“Company Restricted Shares“)
outstanding immediately prior to the Effective Time shall vest in full and become free of
applicable lapse restrictions as of the Effective Time.
(d) As of the Effective Time, each award of a right to shares of Company Common Stock pursuant
to a Company Stock Plan that is subject to vesting or other lapse restrictions (“Company RSUs”)
that is outstanding immediately prior to the Effective Time shall vest in full and become free of
applicable lapse restrictions as of the Effective Time and shall, as of the Effective Time, be
canceled and extinguished, and the holder thereof shall be entitled to receive from the Surviving
Corporation (in accordance with Section 1.9(e)) an amount in cash equal to the Merger Consideration
with respect to each share previously subject to such RSU and not previously delivered pursuant to
such Company RSU.
(e) Promptly after the Effective Time and not later than three (3) Business Days after the
Closing Date (unless additional time is required to process payments under the Company’s payroll
systems), Parent shall cause the Surviving Corporation payroll agent to pay to each holder of
Company Stock Options and Company RSUs the cash payments specified in
4
this
Section 1.9. The
Company’s payroll processor shall be instructed by the Surviving Corporation to promptly pay the
holders of Company Stock Options and Company RSUs the amounts they are entitled to receive
hereunder, less any amounts required to be withheld under any applicable law in accordance with
Section 2.7. No interest shall be paid or accrue on the cash payments contemplated by this Section
1.9. Parent shall at all times from and after the Effective Time cause the Surviving Corporation
to have (and the Surviving Corporation shall maintain) sufficient liquid funds to satisfy the
Surviving Corporation’s obligations to holders of Company Equity Awards pursuant to this Section
1.9.
(f) Prior to the Effective Time, the Company, the Board of Directors of the Company and the
Compensation Committee of the Board of Directors of the Company, as applicable, to the extent
permitted by the terms of the Company Stock Plans and any agreement governing the terms of the
Company Equity Awards, shall take all actions reasonably necessary to effectuate the provisions of
this Section 1.9, including the vesting of awards and the conversion of each Company Stock Option
and Company RSUs into the right to receive an amount in cash as described in Sections 1.9(a) and
1.9(d) respectively.
(g) The Company shall take all necessary actions as may be required to cause to be exempt
under Rule 16b-3 promulgated under the Exchange Act any dispositions of Company Common Stock
(including derivative securities with respect to Company Common Stock) in connection with the
transactions contemplated by this Agreement by each individual who is subject to the reporting
requirements of Section 16(a) of the Exchange Act.
(h) For the avoidance of doubt, as of the Effective Time, all Company Equity Awards that are
issued and outstanding immediately prior to the Effective Time shall no longer be outstanding and
shall be canceled and retired and shall cease to exist in accordance with Article 1 hereof. The
consideration paid pursuant to this Section 1.9 upon the surrender or exchange of all Company
Equity Awards shall be deemed to have been paid in full satisfaction of all rights pertaining to
such Company Equity Awards, and, from and after the Effective Time, there shall be no further
registration of transfers on the records of the Company of Company Stock Options or Company RSUs
which were outstanding immediately prior to the Effective Time. Prior to the Closing, the Company
shall take all steps necessary (including any amendments thereto as are necessary) so that as of
the Effective Time, the Company Stock Plans (and all outstanding award agreements and other
agreements relating to Company Equity Awards) shall terminate, and the provisions in any other
Contract or Company Benefit Plan providing for the issuance, transfer or grant of any Company
Common Stock shall be void and of no effect as of and from the Effective Time, and the Company
shall take all necessary actions (including any amendments thereto as are necessary) to ensure
that, after the Effective Time, no holder of any Company Equity Award or any participant in or a
party to the Company Stock Plans or other Contract or Company Benefit Plan shall have any right
thereunder to acquire, in respect of Company Equity Awards or benefits granted prior to the
Effective Time, any Company Common Stock or any other equity interest in the Surviving Corporation.
(i) Promptly following the Effective Date and not later than three (3) Business Days after the
Closing Date, Parent shall cause Surviving Corporation’s payroll agent to pay each of the
individuals named on Section 1.9(i) of the Company Disclosure Schedule a
5
cash bonus in the amount
set forth opposite each such individual’s name on Section 1.9(i) of the Company Disclosure
Schedule; provided, however, that if any such individual exercises any of such individual’s
options set forth on Section 1.9(i) of the Company Disclosure Schedule in whole or in part, the
cash bonus to be paid to such individual listed on Section 1.9(i) of the Company Disclosure
Schedule shall be reduced dollar-for-dollar by an amount equal to the excess, if any, of the (i)
Merger Consideration payable with respect to the Shares issuable upon exercise over (ii) the
exercise price paid by such individual for such exercised option shares.
Section 1.10. Certain Adjustments. If, between the date of this Agreement and the
Effective Time: (a) the outstanding shares of Company Common Stock shall have been increased,
decreased, or changed into or exchanged for a different number of shares or different class, in
each case, by reason of any reclassification, recapitalization, stock split, split-up, reverse
split, combination or exchange of shares; (b) a stock dividend or dividend payable in any other
securities of the Company shall be declared with a record date within such period; or (c) any
similar event shall have occurred, then in each instance referred to in the preceding clauses (a)
through (c) the Merger Consideration shall be appropriately adjusted to provide the holders of
shares of Company Common Stock (and Company Equity Awards) the same economic effect as contemplated
by this Agreement prior to such event.
ARTICLE 2
CONVERSION OF SHARES
CONVERSION OF SHARES
Section 2.1. Paying Agent. At or prior to the Effective Time, Parent shall designate,
and enter into an agreement with, a bank or trust company reasonably acceptable to the Company to
act as paying agent in the Merger (the “Paying Agent”). At or prior to the Effective Time, Parent
shall deposit, or cause to be deposited, with the Paying Agent, for the benefit of the holders of
shares of Company Common Stock, cash sufficient to effect the payment of the Merger Consideration
to which such holders are entitled pursuant to Section 1.8(a), Section 1.9 and this Article 2
(including any interest or other earnings therein, the “Exchange Fund” ).
Section 2.2. Payment Procedures. As promptly as practicable, but in no event later
than three (3) Business Days after the Effective Time, Parent shall cause the Paying Agent to mail
to each holder of shares of Company Common Stock immediately prior to the Effective Time, whose
shares were converted into the right to receive the Merger Consideration pursuant to Section
1.8(a): (a) a letter of transmittal in customary form as reasonably agreed to by the Company and
Parent (which shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying Agent); and (b)
instructions for use in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent, together with
such letter of transmittal, duly executed and completed, and such other documents as the Paying
Agent may reasonably require, the holder of such Certificate shall be entitled to receive the
Merger Consideration in exchange for each share of Company Common Stock formerly represented by
such Certificate in the form of a check, to be promptly mailed, and the Certificate so surrendered
shall forthwith be canceled. No interest shall be paid or accrue on the Merger Consideration. If
any portion of the Merger Consideration is to be paid to a Person other than the Person in whose
name the applicable surrendered Certificate is registered, then it shall be a
6
condition to the
payment of such Merger Consideration that (i) the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and (ii) the Person requesting such
payment shall have (A) paid any transfer and other Taxes required by reason of such payment in a
name other than that of the registered holder of the Certificate surrendered or (B) established to
the reasonable satisfaction of Parent that any such Taxes are not payable. Subject to Section 2.10
hereof, the Merger Consideration paid in accordance with the terms of this Article 2 shall be
deemed to have been paid in full satisfaction of all rights pertaining to the Company Common Stock
represented thereby.
Section 2.3. Undistributed Merger Consideration. Any portion of the Exchange Fund
that remains undistributed to holders of Certificates on the date that is one year after the
Effective Time shall be delivered to the Surviving Corporation, and any holders of Certificates who
have not theretofore complied with this Article 2 shall thereafter look only to the Surviving
Corporation for the Merger Consideration to which such holders are entitled pursuant to Section
1.8(a) and this Article 2. Any portion of the funds made available to the Paying Agent pursuant to
Section 2.1 that remains unclaimed by holders of
Certificates on such date immediately prior to such time as such amounts would otherwise
escheat to or become property of any Governmental Entity shall, to the extent permitted by Law,
become the property of the Surviving Corporation, free and clear of all claims or interests of any
Person previously entitled thereto.
Section 2.4. No Liability. None of Parent, Merger Sub, the Company, the Surviving
Corporation, the Paying Agent nor their respective directors, officers, employees and
representatives shall be liable to any Person in respect of any Merger Consideration delivered to a
public official pursuant to any applicable abandoned property, escheat or similar Law.
Section 2.5. Investment of Merger Consideration. The Paying Agent shall invest the
Exchange Funds as directed by Parent or Surviving Corporation on a daily basis in obligations of or
guaranteed by the United States of America and backed by the full faith and credit of the United
States of America; provided, however, that no gain or loss thereon shall affect the amounts
payable to holders of Certificates pursuant to Section 1.8(a) and this Article 2. To the extent
that there are any losses with respect to any investments of the Exchange Fund, the Exchange Fund
diminishes for any reason below the level required for the Paying Agent to promptly pay the cash
amounts contemplated by this Article 2, or all or any portion of the Exchange Fund is unavailable
to promptly pay the amounts contemplated by this Article 2 for any reason, Parent shall, or shall
cause the Surviving Corporation to, promptly replace or restore the cash in the Exchange Fund so as
to ensure that the Exchange Fund is at all times fully available for distribution and maintained at
a level sufficient for the Paying Agent to make such payments contemplated by this Article 2. Any
interest and other income resulting from such investments shall become part of the Exchange Fund,
and any amounts in excess of the amounts payable under Section 1.8(a) and this Article 2 shall
promptly be paid to Surviving Corporation.
Section 2.6. Lost Certificates. If any Certificate shall have been lost, stolen or
destroyed, then, upon the making of an affidavit of that fact by the Person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the
posting by such Person of a bond in such reasonable amount as the Surviving Corporation may direct
as indemnity against any claim that may be made against it with respect to such
7
Certificate, the
Paying Agent shall deliver in exchange for such lost, stolen or destroyed Certificate the
applicable Merger Consideration with respect to the shares of Company Common Stock formerly
represented thereby.
Section 2.7. Withholding Rights. The Paying Agent, the Surviving Corporation and
Parent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant
to this Agreement to any holder of shares of Company Common Stock or a Company Equity Award such
amount that any of them is required to deduct and withhold with respect to the making of such
payment under the Internal Revenue Code of 1986, as amended (the “Code”), or any provision of any
other Tax Law. To the extent that amounts are so deducted and withheld by the Paying Agent,
Surviving Corporation or Parent (i) such amounts shall be paid over to the appropriate taxing
authority and (ii) the amounts so deducted and withheld shall be treated for all purposes of this
Agreement as having been paid to the former holder of such shares of Company Common Stock or
Company Equity Award in respect of which such deduction and withholding was made by the Paying
Agent, Surviving Corporation or Parent, as the case may be, and the Paying Agent, the Surviving
Corporation or Parent shall provide to the former holder of such securities written notice of the
amounts so deducted or withheld.
Section 2.8. Further Assurances. At and after the Effective Time, the officers and
directors of the Surviving Corporation will be authorized to execute and deliver, in the name and
on behalf of the Company or Merger Sub, all deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of the Company or Merger Sub, all other actions and things
to vest, perfect or confirm of record or otherwise in the Surviving Corporation all right, title
and interest in, to and under all of the rights, properties or assets acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
Section 2.9. Stock Transfer Books. The stock transfer books of the Company shall be
closed immediately upon the Effective Time, and there shall be no further registration of transfers
of shares of Company Common Stock thereafter on the records of the Company. At or after the
Effective Time, any Certificates presented to the Paying Agent, Parent or the Surviving Corporation
for any reason shall, subject to compliance with the provisions of this Article 2 by the holder
thereof, be canceled and converted into the right to receive the Merger Consideration with respect
to the shares of Company Common Stock formerly represented thereby.
Section 2.10. Dissenting Shares.
(a) Notwithstanding anything to the contrary contained in this Agreement, shares of Company
Common Stock held by a holder who is entitled to demand and has prior to the vote for the approval
of this Agreement at the Company’s Stockholders Meeting, given notice of his, her or its intent to
demand for appraisal of such shares in accordance with, and to the extent provided in, the MBCA and
has not voted in favor of the approval of this Agreement (any such shares being referred to as
“Dissenting Shares“ until such time as such holder fails to perfect or otherwise loses such
holder’s appraisal rights under the MBCA with respect to such shares) shall not be converted into
or represent the right to receive Merger Consideration in accordance with Section 2.1, but shall be
entitled only to such rights as are granted by the MBCA to a holder of Dissenting Shares.
8
(b) The Company will give Parent: (i) prompt notice of any written demand for appraisal
received by the Company prior to the Effective Time pursuant to the MBCA, any withdrawal of any
such demand, and any other demand, notice or instrument delivered to the Company prior to the
Effective Time pursuant to the MBCA that relate to such demand and
(ii) the opportunity to participate in all negotiations and proceedings with respect to any
such demand, notice or instrument prior to the Effective Date, and to direct all such negotiations
and proceedings after the Effective Date. The Company will not, except with the prior written
consent of Parent, make any payment or settlement offer prior to the Effective Time with respect to
any such demand, notice or instrument.
(c) If the Dissenting Shares lose their status as such (through failure to perfect or
otherwise), then, as of the later of the Effective Time or the date of loss of such status, such
shares shall automatically be converted into and shall represent only the right to receive Merger
Consideration in accordance with Section 2.1, without interest thereon, upon surrender of the
Certificates representing such shares in accordance with this Article 2. Parent shall or shall
cause the Surviving Corporation to comply in all respects with Section 13 of the MBCA.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in (i) the Company Disclosure Schedule (which shall be prepared in
accordance with, and qualify such representations and warranties in the manner and to the extent
provided in, Section 8.9) or (ii) other than with respect to the representations and warranties
contained in Section 3.2, the Company SEC Reports filed after March 11, 2009 and prior to the date
hereof (other than any disclosure in such Company SEC Reports (A) that is set forth in any “Risk
Factors” or “Forward Looking Statements” sections thereof, or (B) any other disclosures in such
Company SEC Reports which are forward-looking in nature), in each case, if, and only if, the nature
and content of the applicable disclosure in such Company SEC Report is such that its applicability
to a representation or warranty contained in this Article 3 is reasonably apparent from a reading
of such disclosure, the Company represents and warrants to Parent and Merger Sub as follows:
Section 3.1. Organization and Qualification. Each of the Company and its Subsidiaries
is a corporation or other entity duly organized, validly existing and in good standing under the
Laws of the jurisdiction of its incorporation or organization. Each of the Company and its
Subsidiaries has full corporate or other power and authority to own, operate and lease the
properties owned or used by it and to carry on its business as and where such is now being
conducted, except where the failure to be in such standing has not had, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. Each
of the Company and its Subsidiaries is duly licensed or qualified to do business as a foreign
corporation, and is in good standing as a foreign corporation, in each jurisdiction wherein the
character of the properties owned or leased by it, or the nature of its business, makes such
licensing or qualification necessary, except where the failure to be so licensed or qualified has
not had, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. The copies of the articles of organization and the bylaws, or
similar organizational documents, of the Company and its Subsidiaries, including any
9
amendments or
restatements thereto, that have been made available by the Company to Parent prior to the date of
this Agreement are correct and complete copies of such instruments as presently in effect.
Section 3.2. Capitalization.
(a) The authorized capital stock of the Company consists entirely of 8,000,000 shares of
Company Common Stock and 500,000 shares of Preferred Stock, par value $0.01 per share (the
“Preferred Stock”). As of the close of business on March 31, 2010 (the “Capitalization Date”),
5,870,714 shares of Company Common Stock were issued and outstanding and no shares of Preferred
Stock are issued and outstanding, which number of outstanding shares of Company Common Stock
includes 109,351 shares to be issued pursuant to the conversion of Company ESPP Options effective
as of March 31, 2010 (the “Conversion Shares”). No shares of Company Common Stock are held in the
Company treasury or by any Subsidiary of the Company. Since the Capitalization Date, no shares of
capital stock of the Company, no capital stock or other equity interests of any of its
Subsidiaries, and no other securities directly or indirectly convertible into, or exchangeable or
exercisable for, capital stock of the Company, or capital stock or other equity interests of any of
its Subsidiaries, have been issued, other than shares of Company Common stock issued upon the
exercise of Company Stock Options outstanding as of the close of business on the Capitalization
Date or the settlement of Company RSU’s outstanding as of the close of business on the
Capitalization Date and the Conversion Shares. All issued and outstanding shares of capital stock
of the Company and all outstanding shares of capital stock or other equity interests in its
Subsidiaries are validly issued, fully paid and nonassessable. As of the close of business on the
Capitalization Date, there were issued and outstanding (w) Company Stock Options representing in
the aggregate the right to acquire 741,511 shares of Company Common Stock under the Company Stock
Plans, (y) Company Restricted Shares relating to, in the aggregate, 8,450 shares of Company Common
Stock (which, for the avoidance of doubt, are included in the number of issued and outstanding
shares of Company Common Stock set forth in the second sentence of this Section 3.2(a)) and
(z) Company RSUs relating to, in the aggregate, 10,762 shares of Company Common Stock. As of the
close of business on March 31, 2010, the plan year for the Company ESPP beginning on April 1, 2009
concluded and participants in such plan year purchased and are entitled to receive the number of
Conversion Shares noted above. The enrollment period for the Company ESPP plan year commencing on
April 1, 2010, closed on March 22, 2010, and 274 employees of the Company and its Subsidiaries
elected to participate in the Company ESPP for such plan year, and all contributions to the Company
ESPP for such plan year will be treated in the manner described in Section 1.9(b). Section 3.2(a)
of the Company Disclosure Schedule sets forth a correct and complete list, as of the close of
business on the Capitalization Date, of the number of shares of Company Common Stock subject to
outstanding Company Stock Options and RSUs (vested and unvested), the number of outstanding
unvested Company Restricted Shares, the number of outstanding rights to purchase shares of Company
Common Stock or other outstanding rights to purchase or receive Company Common Stock, or benefits
based on the value of Company Common Stock, granted under the Company Stock Plans, and for each
category of shares or rights, the holders thereof, the dates of grant, the exercise prices thereof
and the vesting provisions thereof (if any). The Company has made available to Parent copies of
all award agreements, grant documents or similar documents related to any and all Company Equity
10
Awards and any other outstanding rights to purchase or receive Company Common Stock, or benefits
based on the value of Company Common Stock. 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 holders of capital stock of the
Company may vote (“Company Voting Debt”) are issued or outstanding. There are no outstanding
obligations of the Company or its Subsidiaries, contingent or otherwise, to repurchase, redeem or
otherwise acquire any shares of capital stock or other equity or voting interests of the Company or
any of its Subsidiaries or any obligations binding on the Company or any of its Subsidiaries to
grant or extend such rights. Except as set forth above, no shares of capital stock or other voting
securities of the Company have been issued or reserved for issuance or are outstanding, other than
the shares of Company Common Stock reserved for issuance under the Company Stock Plans and the
Company ESPP and the Conversion Shares. Except as set forth above, there are no options, warrants,
rights, convertible or exchangeable securities, “phantom” stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or undertakings of any kind to
which the Company or any of its Subsidiaries is a party or by which any of them is bound: (A)
obligating the Company or any of its Subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or other equity interest
in, the Company or any of its Subsidiaries or any Company Voting Debt; (B) obligating the Company
or any of its Subsidiaries to issue, grant, extend or enter into any such option, warrant, call,
right, security, unit, commitment, Contract, arrangement or undertaking or (C) pursuant to which
any Person is or may be entitled to receive any payment or other consideration or value based upon
or valued by reference to the capital stock of the Company or capital stock or other equity
interests of its Subsidiaries, dividends paid on the capital stock of the Company or dividends paid
or distributions made on the capital stock or other equity interests of its Subsidiaries or the
revenue, financial performance, stock or equity performance or other attribute of the Company or
any of its Subsidiaries (other than ordinary course payments to employees of the Company or its
Subsidiaries (including bonus payments)). The Company has prior to the date of this Agreement
provided Parent with a correct and complete copy of each Company Stock Plan. Neither the Company
nor any of its Subsidiaries is party to or, to the knowledge of the Company, bound by any Contracts
or understandings with respect to the voting (including voting trusts and proxies) or sale or
transfer (including agreements imposing transfer restrictions) of any shares of its capital stock
or other equity interests.
(b) As of the close of business on April 1, 2010, there was no outstanding Indebtedness of the
Company or its Subsidiaries other than Indebtedness identified in Section 3.2(b) of the Company
Disclosure Schedule.
(c) The Company owns, directly or indirectly, beneficially and of record, all of the issued
and outstanding shares of capital stock and other equity interests of its Subsidiaries, free and
clear of all Liens. No shares of capital stock or other voting securities of any Subsidiary of the
Company has been reserved for issuance to anyone other than the Company or any of its Subsidiaries.
A correct and complete list of all of the Company’s Subsidiaries, together with the jurisdiction
of incorporation or organization of each Subsidiary and the holder(s) of their respective
outstanding capital stock or other equity interests is set forth in Section 3.2(b) of the
11
Company
Disclosure Schedule. Except for its interest in the Subsidiaries, the Company does not own,
directly or indirectly, any capital stock interest, equity membership interest, partnership
interest, joint venture interest or other equity interest in any Person. Neither the Company nor
any of its Subsidiaries is obligated to make any contribution to the capital of, make any loan to
or
guarantee the debts of any Person (excluding the Company’s wholly-owned Subsidiaries). No
shares of capital stock of, or other equity interests in, any Subsidiary of the Company are
reserved for issuance.
Section 3.3. Authorization. The Company has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby, subject, in the case of the consummation of the Merger, to the
approval and adoption of this Agreement and the Merger by the affirmative vote of the holders of at
least a majority of the outstanding shares of Company Common Stock entitled to vote on the Merger
(the “Company Requisite Stockholder Vote”) and the filing and recordation of appropriate merger
documents as required by the MBCA and the DGCL. Without limiting the generality of the foregoing,
the Board of Directors, at a meeting duly called and held on April 2, 2010, by unanimous vote of
all directors (i) determined and declared that this Agreement and the transactions contemplated
hereby, including the Merger, are advisable and in the best interests of the Company and its
stockholders, (ii) adopted this Agreement, (iii) directed that this Agreement be submitted to the
stockholders of the Company for their adoption and approval; (iv) the Merger Consideration for
outstanding shares of Company Common Stock is fair to the Company’s stockholders and (v) resolved
to recommend that the stockholders of the Company approve this Agreement and the Merger. The
execution and delivery of this Agreement by the Company, the performance by the Company of its
obligations hereunder, and the consummation by the Company of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the Company, and no
other corporate proceedings on the part of the Company or its stockholders are necessary to
authorize this Agreement and to consummate the transactions contemplated hereby, other than, with
respect to the consummation of the Merger, the approval of this Agreement and the Merger by the
Company Requisite Stockholder Vote and the filing and recordation of appropriate merger documents
as required by the MBCA and the DGCL. This Agreement has been duly executed and delivered by the
Company and, assuming the due authorization, execution and delivery of this Agreement by Parent and
Merger Sub, constitutes a valid and legally binding obligation of the Company enforceable against
the Company in accordance with its terms, subject (as to enforceability) to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles in a proceeding at law or in
equity (the “Bankruptcy and Equity Exception” ).
Section 3.4. No Violation.
(a) The execution and delivery of this Agreement by the Company do not, and the performance by
the Company of its obligations hereunder and the consummation by the Company of the Merger and the
other transactions contemplated hereby will not: (i) constitute or result in any violation of any
provision of the articles of organization, bylaws or similar organizational document of the Company
or any of its Subsidiaries, as amended or restated; or (ii) except as set forth on Section 3.4(a)
of the Company Disclosure Schedule, subject to
12
obtaining or making the consents, approvals, Orders,
authorizations, registrations, declarations and filings referred to in Section 3.4(b) (or any
section of the Company Disclosure Schedule relating thereto), (A) conflict with, or result in any
violation of, or constitute (with or without
notice or lapse of time, or both) a default (or give rise to a right of termination,
modification, cancellation or acceleration of any obligation or loss of material benefit) under,
require a consent or waiver under, constitute a change in control under, require a payment of a
material penalty under or result in the imposition of any Lien (other than a Permitted Lien) on the
Company’s or any of its Subsidiaries’ properties, rights or assets under, any of the terms,
conditions or provisions of any Company Benefit Plan, Contract or insurance policy to which the
Company or any of its Subsidiaries is a party or by which any of them or any of their respective
properties, rights or assets may be bound; or (B) violate, result in a breach of or constitute a
default under, or result in a right of revocation or termination under or loss of, any judgment,
injunction, ruling, order, arbitral award or decree (each, an “Order”), any material Company
Permit, or any constitution, treaty, statute, law, principle of common law, ordinance, rule or
regulation of any Governmental Entity (each, a “Law”) applicable to the Company or any of its
Subsidiaries or any of their respective properties, rights and assets, except, in the case of this
clause (ii), as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company.
(b) No consent, approval, Order or authorization of, notice to, or registration, declaration
or filing with, any supranational, national, state, provincial, municipal, local or foreign
government, any instrumentality, subdivision, court, arbitrator, administrative agency or
commission or other authority thereof, or any quasi-governmental or private body exercising any
regulatory, judicial, administrative, taxing, importing or other governmental, quasi-governmental
authority or any stock market or stock exchange on which shares of the Company Common Stock are
listed for trading (each, a “Governmental Entity”), or any other Person is required with respect to
the Company or any of its Subsidiaries or their respective properties, rights or assets in
connection with the execution and delivery of this Agreement by the Company, the performance by the
Company of its obligations hereunder or the consummation of the Merger and the other transactions
contemplated hereby, except for those required under or in relation to: (i) the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the “HSR Act”); (ii) the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”); (iii)
the MBCA with respect to the filing and recordation of the Articles of Merger; (iv) the DGCL with
respect to the filing and recordation of the Certificate of Merger; (v) those items identified on
Section 3.4(b) of the Company Disclosure Schedule; (vi) the requirements of the NASDAQ Global
Market with respect to the Merger; and (vii) such consents, approvals, Orders, authorizations,
registrations, declarations and filings the failure of which to make or obtain would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
Consents, approvals, Orders, authorizations, registrations, declarations and filings required under
or in relation to any of clauses (i) through (vii) above are referred to as the “Applicable
Consents.”
Section 3.5. Filings with the SEC; Financial Statements.
(a) The Company has filed all forms, certifications, reports, statements and other documents
(including all exhibits, supplements and amendments thereto) required to be
13
filed by it with the
Securities and Exchange Commission (the “SEC”)
since December 31, 2006 (the “Applicable Date”) (collectively, with any amendments thereto
filed prior to the date of this Agreement, the “Company SEC Reports”). No Subsidiary of the
Company was or is required to file any registration statement, prospectus, report, schedule, form,
statement or other document with the SEC. None of the Company SEC Reports, as of their respective
filing dates (or, if amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. All of the Company SEC Reports,
as of their respective filing dates (and as of the date of any amendment to the respective Company
SEC Report), complied as to form in all material respects with the applicable requirements of the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the
“Securities Act”), the Exchange Act and the Xxxxxxxx-Xxxxx Act of 2002, as amended (the
“Xxxxxxxx-Xxxxx Act”), as the case may be, and the rules and regulations thereunder applicable to
such SEC Reports. As of the date of this Agreement, there are no outstanding or unresolved
comments in comment letters received from the SEC.
(b) Each of the financial statements (including, in each case, the related notes and schedules
thereto) of the Company included in the Company SEC Reports, as of their respective dates (and as
of the date of any amendment to the respective Company SEC Report) complied as to form in all
material respects with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared in all material respects in accordance with
generally accepted accounting principles in the United States (“GAAP”) (except, in the case of
unaudited statements, as permitted by the SEC on Form 10-Q under the Exchange Act) applied on a
consistent basis during the periods and the dates involved (except as may be disclosed in the notes
thereto) and fairly present, in all material respects, the consolidated financial position and
consolidated results of operations and cash flows and changes in stockholders’ equity of the
Company and its Subsidiaries as of the respective dates or for the respective periods set forth
therein, subject, in the case of the unaudited interim financial statements, to the absence of
notes and normal year-end adjustments.
(c) The Company has disclosed, based on the most recent evaluation of internal control over
financial reporting, to the Company’s auditors and the audit committee of the Company’s Board of
Directors (A) all “significant deficiencies” and “material weaknesses” in the design or operation
of internal control over financial reporting which are known to the Company and that are reasonably
likely to adversely affect the Company’s ability to record, process, summarize and report financial
information and (B) any fraud, known to the Company, whether or not material, that involves
management or other employees who have a significant role in the Company’s and its Subsidiaries’
internal control over financial reporting. Since the Applicable Date and as of the date hereof, to
the knowledge of the Company, no material complaints from any source regarding accounting, internal
accounting controls or auditing matters, and no concerns from Company employees regarding
questionable accounting or auditing matters, have been received by the Company. The Company has
made available or
provided access to or otherwise disclosed to Parent all matters referred to in the first
sentence of this Section 3.5(c).
14
(d) The Company has designed disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act) intended to ensure that material information relating to the
Company, including its Subsidiaries, is made known to its principal executive officer and principal
financial officer by others within those entities. As of the date of this Agreement, neither the
Company nor any of its Subsidiaries has outstanding, “extensions of credit” to directors or
executive officers of the Company within the meaning of Section 402 of the Xxxxxxxx-Xxxxx Act. The
Company is in compliance in all material respects with the applicable listing and other rules and
regulations of The Nasdaq Global Market.
Section 3.6. Undisclosed Liabilities. Except (i) to the extent disclosed or
reserved or reflected in the consolidated balance sheet of the Company as of December 31, 2009
(including the notes thereto) included in the Company SEC Reports filed prior to the date of this
Agreement, (ii) liabilities incurred on behalf of the Company or any Subsidiary in conjunction or
accordance with or as contemplated by this Agreement, (iii) liabilities incurred in the ordinary
course of business, consistent with past practices, since December 31, 2009 or (iv) as set forth on
Section 3.6 of the Company Disclosure Schedule, neither of the Company nor its Subsidiaries have
any liabilities, absolute or contingent, required by GAAP to be set forth in a consolidated balance
sheet of the Company or in the notes thereto, except for any such liabilities which do not have,
and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company.
Section 3.7. Absence of Certain Changes. Except as set forth on Section 3.7 of the
Company Disclosure Schedule, since December 31, 2009 through the date of this Agreement, except for
the execution and performance of this Agreement and the discussions and negotiations related
thereto, the Company and each of its Subsidiaries has conducted its business in all material
respects only in the ordinary course of business consistent with past practice and there has not
been or occurred:
(a) any change, event, occurrence or circumstance, that has had, or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on the Company; and
(b) any other action or event that would have been prohibited by (assuming the Parent did not
consent thereto) the provisions of Section 5.1 had such action or event occurred after the date of
this Agreement and prior to the Effective Date.
Section 3.8. Anti-takeover Statutes; No Rights Agreement.
(a) The Company and the Board of Directors of the Company have taken all action necessary to
exempt this Agreement, the Merger and the transactions contemplated hereby
from the requirements of the provisions of Chapter 110C and Chapter 110F of the Massachusetts
General Laws and any other takeover, anti-takeover, moratorium, “fair price,” “control share,” or
similar Law that may be applicable to the Company or any of its Subsidiaries. To the knowledge of
the Company, other than Chapters 110C and 110F of the Massachusetts General Laws, there are no
takeover, anti-takeover, moratorium, “fair price,” “control share,” or similar Laws that are
applicable to the Company or any of its Subsidiaries. The Company has validly opted out of the
15
requirements and provisions of Chapter 110D of the Massachusetts General Laws in its Restated
Articles of Organization and therefore Chapter 110D is not applicable to this Agreement, the Merger
and the transactions contemplated hereby. There are no anti-takeover provisions in the Company’s
Restated Articles of Organization or bylaws or similar documents of any Subsidiary of the Company.
(b) The Company is not party to or subject to a rights agreement, a “poison pill” or similar
agreement or plan.
Section 3.9. Litigation; Orders. Except as set forth in Section 3.9 of the Company
Disclosure Schedule, there is no claim, action, suit, arbitration, proceeding, investigation or
inquiry, whether civil, criminal or administrative (“Litigation”), pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, except as does not have,
and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect on the Company. None of the Company, any of its Subsidiaries or any of their respective
businesses or assets is subject to any Order of any Governmental Entity that does have, or would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the
Company. To the knowledge of the Company, no director or officer of the Company or any of its
Subsidiaries is a defendant in any material Litigation to which the Company or any of its
Subsidiaries is not also a defendant, including as a nominal defendant, in connection with his or
her status as a director or officer of the Company or any of its Subsidiaries. Except as set forth
in Section 3.9 of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is a party to any material settlement agreement with material ongoing obligations relating to any
Litigation involving the Company or any of its Subsidiaries or any of their respective businesses
or assets.
Section 3.10. Permits; Compliance with Laws.
(a) Except as does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, the Company and its Subsidiaries hold all
permits, licenses, franchises, variances, exemptions, certificates, Orders and approvals of all
Governmental Entities that are necessary for the operation of their respective businesses as now
being conducted (collectively, the “Company Permits”), and no suspension or cancellation of any of
the Company Permits is pending or, to the knowledge of the Company, threatened. The Company and
each of its Subsidiaries has been and is in compliance with the Company Permits, except, for
instances of noncompliance where the failure to comply does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
(b) The Company and its Subsidiaries are, and since the Applicable Date have been, in
compliance with any applicable Laws and Orders, except for failures to comply or violations that do
not have, and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. Without limiting the foregoing, each of the Company and
its Subsidiaries is, and has been, in compliance with the applicable provisions of all state and
federal health care Laws, state and federal privacy and security Laws applicable to individually
identifiable patient information, and the Federal Food, Drug, and Cosmetic Act,
16
as amended, and the
applicable rules, regulations, and requirements adopted by the Governmental Entities related to
such Laws, except where non-compliance does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 3.11. Tax Matters. Except as would not reasonably be expected, individually
or in the aggregate, to be material to the Company or its Subsidiaries:
(a) Each of the Company and its Subsidiaries have timely filed (taking into account valid
extensions of time within which to file) with the appropriate Tax authorities all income and other
Tax Returns required to be filed by the Company and its Subsidiaries. All such Tax Returns when
filed were complete and accurate. Except as set forth in Section 3.11(a) of the Company Disclosure
Schedule, all Taxes of the Company and its Subsidiaries (whether or not shown on Tax Returns),
except those not yet due and payable, have been paid. Neither the Company nor any of its
Subsidiaries has received written notice of any claim by any authority in a jurisdiction where
neither the Company nor its Subsidiaries files any Tax Returns that either is or may be subject to
the imposition of any Tax by that jurisdiction and, to the Company’s knowledge, no such claim has
been made verbally.
(b) There is no Litigation now pending, or to the Company’s knowledge, threatened against the
Company or any of its Subsidiaries with respect to any liability for Taxes of the Company or any of
its Subsidiaries. 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 a Tax assessment
or deficiency. Neither the Company nor any of its Subsidiaries has issued to any Person a power of
attorney with respect to any Tax of the Company or any of its Subsidiaries.
(c) The Company and each of its Subsidiaries has timely withheld and paid to the appropriate
Governmental Entity all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder or other third Person,
and the Company and each of its Subsidiaries has complied with all associated reporting and
recordkeeping requirements.
(d) Except as set forth on Section 3.11(d) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries (nor any predecessor) has been a
member of an affiliated group of corporations (within the meaning of section 1502 of the Code)
filing a consolidated federal income Tax Return (other than a group the common parent of which has
been the Company). Neither the Company nor any of its Subsidiaries has any liability for the Taxes
of any Person (other than the Company and its Subsidiaries) under Treasury Regulations Section
1.1502-6 (or any analogous or similar provision of state, local or foreign law or regulation), as a
transferee or successor, by contract, or otherwise.
(e) 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 taxable period (or portion
thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a
taxable period (or portion thereof) ending on or prior to the Closing
17
Date, (ii) “closing
agreement” as described in section 7121 of the Code (or any corresponding or similar provision of
state, local or foreign law), (iii) installment sale or open transaction disposition made on or
prior to the Closing Date or (iv) prepaid amount received on or prior to the Closing Date.
(f) The Company has made available to Parent or its representatives true and complete copies
of (i) all Tax Returns of the Company and each of its Subsidiaries, including any such Tax Returns
filed or included in any consolidated Tax Returns of the Company for the past three (3) years and
for any other tax year with respect to which there is a pending audit, and (ii) all written
communications relating to any Tax Returns or to any deficiency or claim proposed and/or asserted
with respect thereto, irrespective of the outcome of such matter. Except as set forth in Section
3.11(f) of the Company Disclosure Schedule, there are no pending audits of any Tax Returns.
(g) Except as set forth in Section 3.11(g) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries (i) is or has ever been a partner in a partnership or an owner
of an interest in an entity classified or treated as a partnership for federal income Tax purposes,
(ii) is subject to Section 999 of the Code, (iii) is a party to an agreement relating to the
sharing, allocation, or payment of, or indemnity for, Taxes.
(h) There are no Liens (other than Permitted Liens) for Taxes upon any of the assets of the
Company and its Subsidiaries, taken as a whole.
(i) Neither the Company nor any of it Subsidiaries has been a “distributing corporation” or a
“controlled corporation” within the meaning of Code section 355(a)(1)(A).
(j) Neither the Company nor any of it Subsidiaries has participated in any reportable or
listed transaction as defined under Treasury Regulations section 1.6011-4.
(k) Neither the Company nor any of its Subsidiaries has been a United States real property
holding corporation within the meaning of section 897(c)(2) of the Code during the applicable
period specified in section 897(c)(l)(A)(ii) of the Code.
(l) Except as set for on Section 3.11(l) of the Company Disclosure Schedule, neither the
Company nor any of its Subsidiaries is obligated to make any payment in the nature of compensation
that would not be deductible under Code section 162.
Section 3.12. Intellectual Property.
(a) Section 3.12(a) of the Company Disclosure Schedule lists all patents and patent
applications owned by the Company or any of its Subsidiaries that are material to the Company’s
operations (“Company Patents”); all registered trademarks and registrations and applications
therefor and all unregistered trademarks owned by the Company or any of its Subsidiaries that are
material to the Company’s operations (“Company Trademarks”); and all registered copyrights and
unregistered copyrights owned by the Company or any of its Subsidiaries that are material to the
Company’s operations (“Company Copyrights”). Except as does not have, and would not reasonably be
expected to have, individually or in the aggregate,
18
a Material Adverse Effect on the Company: (i)
the Company Patents and all claims incorporated therein, and all Company Trademarks and Company
Copyrights, are valid, subsisting and enforceable in the jurisdictions in which they are filed or
issued; (ii) the Company and its Subsidiaries have good title to the Company Patents, Company
Trademarks, and Company Copyrights; (iii) to the knowledge of the Company, with respect to items
other than the Company Patents, Company Trademarks and Company Copyrights, the Company and its
Subsidiaries have sufficient rights to use such Intellectual Property Rights in the conduct of
their respective businesses (together with the Company Patents, Company Trademarks and Company
Copyrights, all of the foregoing items are hereinafter referred to as the “Company Intellectual
Property”); and (iv) except as listed on Section 3.12(a) of the Company Disclosure Schedule, to the
knowledge of the Company, the Company and its Subsidiaries are the sole owners of all Company
Intellectual Property, and none of the Company Intellectual Property is in the possession, custody,
or control of any Person other than the Company or a Subsidiary of the Company.
(b) Section 3.12(b) of the Company Disclosure Schedule identifies each material item of
Intellectual Property Rights (“Licensed Intellectual Property”) that is used by the Company or any
of its Subsidiaries pursuant to any license, sublicense or other agreement, other than licenses
arising from the purchase of “off the shelf” software products or any software embedded in any
equipment or product purchased by the Company from a third Person (“Off the Shelf Software”, and
the licenses required to be set forth on Section 3.12(b) of the Company Disclosure Schedule, the
“Company Licenses”) and identifies, to the extent applicable, each Company License pursuant to
which such Licensed Intellectual Property is licensed. Except as does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the
Company: (i) the Company and its Subsidiaries use the Intellectual Property Rights of third parties
only pursuant to valid, effective written license agreements; (ii) the Company Licenses are in full
force and effect; and (iii) the transactions contemplated by this Agreement will not affect the
right of the Company or any of its Subsidiaries to use, license, or sell any Licensed Intellectual
Property.
(c) Except as set forth on Schedule 3.12(c) of the Company Disclosure Schedule, as of the date
hereof, neither the Company nor any of its Subsidiaries has received any written, or to the
knowledge of the Company, any oral, charge, complaint, claim, demand or notice alleging any
interference, infringement, misappropriation or violation by the Company or any of its Subsidiaries
with any of the Intellectual Property Rights of any other Person (including any claim that the
Company or any of its Subsidiaries must license or refrain from using any
Intellectual Property Rights of any third party in connection with the conduct of the business
of the Company and its Subsidiaries or the use of the Company Intellectual Property or Licensed
Intellectual Property). To the knowledge of the Company, neither the Company nor any of its
Subsidiaries requires any material Intellectual Property Rights to conduct the business of the
Company and its Subsidiaries substantially as presently conducted that the Company and its
Subsidiaries do not already own or license or could purchase or license on commercial terms. The
Company has no knowledge of any infringement or misappropriation by others of material Intellectual
Property Rights owned by the Company or any of its Subsidiaries. To the knowledge of the Company,
the conduct of the businesses of the Company and its Subsidiaries does not infringe on or
misappropriate any material Intellectual Property Rights of others, except where
19
such infringement
or misappropriation does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company.
(d) Except as does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, (i) the Company and its Subsidiaries own
or have valid and enforceable rights to use all computer software and all source code, object code
and related documentation thereof used by them in the operation of their respective businesses
(“Internal Use Software”), without any known conflict with the Intellectual Property Rights of
other Persons; (ii) to the knowledge of the Company, the Company or a Subsidiary of the Company
possesses or controls the source code, object code and documentation for all Internal Use Software
other than Off the Shelf Software; (iii) the Company and its Subsidiaries have disclosed source
code to Internal Use Software that is proprietary to the Company and other than Off the Shelf
Software only pursuant to written confidentiality terms that reasonably protect the Company or any
of its Subsidiaries’ rights in such Internal Use Software; (iv) no Internal Use Software is subject
to any obligation that would require the Company or its Subsidiaries to divulge to any person any
source code or trade secret that is part of any material Software and that is also proprietary to
the Company, or make payments for the use thereof, except for license fees and (v) the Internal Use
Software owned or licensed by the Company and any of its Subsidiaries, and the rights of the
Company and its Subsidiaries with respect to the Internal Use Software are adequate in all material
respects to serve the needs of the business of the Company and its Subsidiaries as currently
conducted.
(e) For purposes of this Agreement, “Intellectual Property Rights” means all (i) trademarks,
service marks, brand names, certification marks, collective marks, d/b/a’s, Internet domain names,
software, logos, symbols, trade dress, trade names, and other indicia of origin, all applications
and registrations for the foregoing, and all goodwill associated therewith and symbolized thereby,
including all renewals of same; (ii) inventions and all patents, registrations, invention
disclosures and applications therefor, including divisions, continuations, continuations-in-part
and renewal applications, renewals, extensions and reissues; (iii) confidential information, trade
secrets and know-how, including processes, schematics, business methods, formulae, drawings,
prototypes, models and designs (collectively, “Trade Secrets”); and (iv) published and unpublished
works of authorship, whether copyrightable or not, copyrights therein and thereto, and
registrations and applications therefor, and all renewals, extensions, restorations and reversions
thereof.
Section 3.13. Employee Benefits.
(a) Section 3.13(a) of the Company Disclosure Schedule sets forth a complete and accurate list
of all material Plans which the Company or any of its Subsidiaries maintains or sponsors in whole
or in part, or to which the Company or any of its Subsidiaries contributes or is obligated to
contribute, or under which the Company or any of its Subsidiaries has or may have any liability, or
which benefits any current or former employee, officer or director, consultant or independent
contractor of the Company, any of its Subsidiaries, or the beneficiaries or dependents of any such
Person (each, a “Company Benefit Plan”). For purposes of this Agreement, the term “Plan” means any
plan, program, agreement or arrangement that is: (i) an “employee welfare benefit plan” within the
meaning of Section 3(1) of ERISA; (ii) an “employee
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pension benefit plan” within the meaning of
Section 3(2) of ERISA; (iii) a stock bonus, stock purchase, stock option, restricted stock or
similar equity-based plan; or (iv) any other deferred-compensation, retirement, welfare-benefit,
bonus, incentive or fringe-benefit plan or similar arrangement, agreement, practice or policy. For
purpose of this Section 3.13, any reference to Company or Subsidiary shall be deemed to refer also
to any entity which is under common control or affiliated with the Company within the meaning of
Section 4001 of ERISA, and the rules and regulations promulgated thereunder and/or Sections 414(b),
(c), (m) or (o) of the Code.
(b) The Company has made available to Parent true, correct and complete copies of all
documents, summary plan descriptions, insurance contracts, third party administration contracts and
all other documentation created to embody, or relating to, all material Company Benefit Plans
(including, where applicable, the most recent determination letter from the IRS).
(c) Except as otherwise disclosed in Section 3.13(c) of the Company Disclosure Schedule, each
Company Benefit Plan is in compliance in all material respects with the terms of such Company
Benefit Plan, the applicable requirements of the Code, ERISA and all other applicable Law, except
as does not have, and would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company. To the Company’s knowledge, each Company Benefit Plan
intended to be qualified under Section 401(a) of the Code and each related trust intended to be
exempt from tax pursuant to Section 501(a) of the Code satisfies, both in form and operation, the
requirements for such qualification and exemption in all material respects.
(d) There are no pending, or to the Company’s knowledge, threatened claims, suits,
proceedings, prosecutions, inquiries, hearings, audits, investigations or disputes under the terms
of, or in connection with, the Company Benefit Plans other than routine claims for benefits which
are payable in the ordinary course of business consistent with past practice.
(e) Except as set forth in Section 3.13(e) of the Company Disclosure Schedule, neither the
execution and delivery of this Agreement nor the consummation of the transactions contemplated
hereby will: (i) entitle any Person to (or accelerate the timing of) any material payment,
forgiveness of Indebtedness, vesting, distribution, or material increase in benefits under or with
respect to any Company Benefit Plan or (ii) trigger any obligation to fund
any Company Benefit Plan. Except as set forth in Section 3.13(e) of the Company Disclosure
Schedule, no payment to be made in connection with a change in control contemplated by this
Agreement would fail to be deductible by reason of Code section 280G or result in the imposition of
an excise tax on any Person pursuant to Code section 4999.
(f) No liability has been or would reasonably be expected to be incurred by the Company under
or pursuant to Title I or IV of ERISA or the penalty, excise tax or joint and several liability
provisions of the Code or ERISA relating to the Company Benefit Plans and, to the Company’s
knowledge, no event, transaction or condition has occurred or exists that could result in such
liability of the Company or, following the Effective Time, the Surviving Corporation, Parent or any
such Company Benefit Plan.
21
(g) At no time has the Company contributed to, been required to contribute to, or incurred any
withdrawal liability (within the meaning of Section 4201 of ERISA) with respect to any Plan which
is a Multiemployer Plan.
(h) Each “group health plan” (within the meaning of Section 4980B of the Code) maintained by
the Company has been administered, in all material respects, in compliance with the coverage
continuation requirements contained in the Consolidated Omnibus Budget Reconciliation Act of 1985
and as provided under Section 4980B of the Code, except would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
(i) Except as disclosed on Section 3.13(i) of the Company Disclosure Schedule or as required
under Section 601 et seq. of ERISA, no Company Benefit Plan provides benefits or coverage in the
nature of life or disability insurance or health or medical benefits (whether or not insured)
following retirement or other termination of employment.
(j) Except as does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company, each “nonqualified deferred compensation
plan” (within the meaning of Code section 409A(d)(1) and applicable regulations) with respect to
any service provider to the Company (i) complies, in all respects, and has been operated in
compliance, in all respects, with the requirements of Code section 409A and regulations promulgated
thereunder or (ii) is exempt from compliance under the “grandfather” provisions of IRS Notice
2005-1 and applicable regulations and has not been “materially modified” (within the meaning of IRS
Notice 2005-1 and Treasury Regulations §1.409A-6(a)(4)) subsequent to October 3, 2004.
(k) Except as disclosed on Section 3.13(k) of the Company Disclosure Schedule, each Company
Benefit Plan and any related Contracts may be amended or terminated without material penalty other
than (i) the payment of benefits, fees or charges accrued or incurred through the date of
termination and (ii) as may be prohibited by the express terms thereof.
(l) With respect to each Company Benefit Plan that is subject to legal requirements of a
jurisdiction outside the United States, except as does not have, and would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, such plan has been established and administered, in all respects, in accordance with
such requirements and has been registered (if applicable) and is, and has been, in good standing
with applicable Governmental Entities.
Section 3.14. Employee Matters.
(a) Neither the Company nor any of its Subsidiaries is a party to or bound by any collective
bargaining agreement and to the Company’s knowledge there are no labor unions or other
organizations representing, purporting to represent or attempting to represent any employees of the
Company or its Subsidiaries. During the last three (3) years, there has not occurred nor, to the
Company’s knowledge, has there been threatened any strike, slowdown,
22
picketing, walkouts, work
stoppage, concerted refusal to work overtime or other similar material labor activity with respect
to any employees of the Company or its Subsidiaries. There are no labor disputes currently subject
to any grievance procedure, arbitration or Litigation and there is no representation petition
pending or, to the Company’s knowledge, threatened with respect to any employee of the Company or
any of its Subsidiary seeking recognition of a bargaining representative.
(b) The Company and its Subsidiaries are in compliance with all Laws relating to labor and
employment, including those relating to wages, hours, overtime, collective bargaining, unemployment
compensation, worker’s compensation, equal employment opportunity, discrimination, retaliation,
immigration control, employee classification as exempt or non-exempt for overtime purposes,
classification of Persons as independent contractors or employees, information privacy and
security, payment and withholding of Taxes and continuation coverage with respect to group health
plans and occupational health and safety, except as does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on the Company.
Neither the Company nor any of its Subsidiaries has incurred any liability or obligation under the
Worker Adjustment and Retraining Notification Act (“WARN”) or any similar state or local Law which
remains unsatisfied, and neither the Company nor any of its Subsidiaries has planned or announced
any “plant closing”, workforce reduction or “mass layoff” as contemplated by WARN affecting any
site of employment or facility of the Company or any of its Subsidiaries. As of the date hereof,
there is no Order that limits or restricts in any material respect the Company or any of its
Subsidiaries from relocating or closing any of the material operations of the Company or any of its
Subsidiaries.
Section 3.15. Contracts.
(a) Section 3.15 of the Company Disclosure Schedule lists the following Contracts 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 (each a “Material Contract”):
(i) any loan or credit agreement, indenture, note, debenture, mortgage, pledge,
security agreement or capital lease or any surety or guarantee relating to any Indebtedness
or any Guarantee;
(ii) any Contract (other than a purchase order for supplies, raw materials or inventory
entered into in the ordinary course of business consistent with past practice and that does
not contain any minimum purchase or similar requirement) that by its terms calls for, or
would reasonably be expected to result in aggregate payments by or to the Company or any of
its Subsidiaries under such Contract of more than $125,000 per annum;
(iii) any Contract that is filed with the SEC under Item 6.01 of Regulation S-K of the
Exchange Act or disclosed on a Current Report on Form 8-K;
23
(iv) any Contract that by its terms materially restricts the conduct of any current or
future line of business by the Company or any of its Subsidiaries or Affiliates, or, after
the Effective Time, would by its terms materially restrict the conduct of any current or
future line of business by Parent or any of its Subsidiaries or Affiliates or would prevent
any of them from entering into any territory, market or field, or any Contract that includes
a grant to any Person of most-favored nation rights or similar rights;
(v) any Contract that provides for or otherwise relates to a material joint venture,
partnership, strategic alliance or similar arrangement;
(vi) any Contract involving the acquisition or disposition, directly or indirectly (by
merger or otherwise), of a material amount of the assets of any Person, business or of
capital stock or other equity interests that (A) is currently in effect or (B) pursuant to
which the Company has continuing indemnification, “earn-out” or other liabilities or
obligations (other than acquisitions or dispositions of inventory in the ordinary course of
business consistent with past practices);
(vii) any Company License;
(viii) (A) any employment or consulting agreement or bonus agreement, (B) any Contract
providing for the payment, increase or vesting of any material benefits or compensation in
connection with the transactions contemplated hereby, (C) any Contract providing for change
of control benefits, severance or a similar arrangement and (D) any Contract providing for
indemnification, in each of clauses (A) through (D), with any executive officer or any other
employee of the Company or any of its Subsidiaries earning a base annual salary in excess of
$125,000, or a member of the Company’s or any of its Subsidiaries’ board of directors or
similar governing body;
(ix) any Real Property Lease;
(x) any Contract that prohibits payment of dividends or distributions in respect of the
capital stock or equity interests of the Company or any of its Subsidiaries,
prohibits the pledging of the Company’s or any of its Subsidiaries’ capital stock or
equity interests, or prohibits the issuance of guarantees by the Company or any of its
Subsidiaries; and
(xi) any other material Contract not entered into in the ordinary course of business
consistent with past practices.
The Company has made available to Parent a true and complete copy of each Material Contract
required to be listed on Section 3.15(a) of the Company Disclosure Schedule.
(b) Except as does not have, and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company: (i) each Material Contract to which the
Company or any of its Subsidiaries is a party is in full force and effect and is valid and binding
on and enforceable against the Company and/or its Subsidiaries, as
24
applicable, in accordance with
their terms and, to the knowledge of the Company, no other Person that is a party thereto has
alleged that it is not binding on and enforceable to them; (ii) neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any other party to any such Material Contract,
is in material breach thereof or material default thereunder, and no event has occurred that, with
the giving of notice or the lapse of time or both, would constitute a material breach thereof or
material default thereunder; and (iii) each of the Company and its Subsidiaries and, to the
knowledge of the Company, the other Person or Persons party thereto has materially performed all of
its material obligations required to be performed by it under each Material Contract to which the
Company or any of its Subsidiaries is a party.
Section 3.16. Environmental. Except as does not have, and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on the Company, (i)
the Company and each of its Subsidiaries are and have been in material compliance with all
applicable Environmental Laws and have obtained all Environmental Permits necessary for their
operations as currently conducted; (ii) to the knowledge of the Company, there have been no
Releases of any Hazardous Substance that could form the basis of any Environmental Claim against
the Company or any of its Subsidiaries; (iii) to the knowledge of the Company, there are no
Environmental Claims pending or, to the knowledge of the Company, threatened against the Company or
any of its Subsidiaries; and (iv) neither the Company nor any of its Subsidiaries is subject to any
written order, judgment, decree, letter or memorandum by or with any Governmental Entity imposing
any liability or obligation under any Environmental Law on the Company or any of its Subsidiaries.
Section 3.17. Company Real Property.
(a) Section 3.17(a) of the Company Disclosure Schedule sets forth a true, correct and complete
list of all of the real property owned in fee by the Company or any of its Subsidiaries (the “Owned
Property”), including the address of the Owned Property and the name of the fee owner. The Company
or one of its Subsidiaries has good, valid, and marketable title in fee simple to all of the Owned
Property, free
and clear of Liens, except for Permitted Liens. With such exceptions as do not have, and would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on
the Company, to the knowledge of the Company, neither the Company nor any of its Subsidiaries is in
material default under any restrictive covenants, declarations or restrictions affecting the Owned
Property, which default remains uncured.
(b) Section 3.17(b) of the Company Disclosure Schedule sets forth a true, correct and complete
list of all of the real property leased, subleased, or otherwise occupied by the Company or any of
its Subsidiaries (the “Leased Property”), including the address of such Leased Property, and
identifying the applicable lease or other agreement, including the landlord tenant and expiration
date of the current term (each, a “Real Property Lease”). The Company has made available to Parent
true, correct and complete copies of the Real Property Leases, including all amendments, extension
notices, estoppels, subordination, non-disturbance and attornment agreements. The Company or one
of its Subsidiaries has a valid leasehold interest and right to the use and occupancy of each
Leased Property, and except as does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse
25
Effect on the Company, neither the Company or
any of its Subsidiaries nor, to the knowledge of the Company, any other Person, party to such Real
Property Lease in question, is in material breach of, or material default under, any such Real
Property Lease, and no event has occurred that, with the giving of notice or the lapse of time or
both, would constitute a material breach of, or material default under, any such Real Property
Lease.
(c) Other than the rights of owners of the Leased Properties and the rights of the Company and
its Subsidiaries, to the knowledge of the Company and subject to matters of record, the Owned
Property and the Leased Property are free of any right of possession or claim of right of
possession of any other party.
(d) There is no pending or, to the knowledge of the Company, threatened eminent domain,
condemnation or similar proceeding affecting any Owned Property or, to the knowledge of the
Company, there is no pending or threatened eminent domain, condemnation or similar proceeding
affecting any Leased Property.
(e) Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on the Company, the Company and each of its Subsidiaries has good and
marketable title to, or, in the case of property held under a lease or other Contract, an
enforceable leasehold interest in, or right to use, all of the personal properties, rights and
assets, whether tangible or intangible currently used in the operation of its business (“Personal
Property”). Except as disclosed in Section 3.17(e) of the Company Disclosure Schedule, none of the
Personal Property is subject to any Lien, except for Permitted Liens and such matters which do not
have, and would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company. The property and equipment of the Company and its Subsidiaries
that are used in the operations of business are in materially good operating condition (subject to
normal wear and tear), except as does not have, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company.
Section 3.18. Insurance. Section 3.18 of the Company Disclosure Schedule sets forth a
complete and accurate list of all currently effective insurance policies issued in favor of the
Company and its Subsidiaries. Such policies are valid and, to the knowledge of the Company, are
customary and adequate for companies of similar size in the industries and locations in which the
Company and its subsidiaries operate. Neither the Company nor any of its Subsidiaries has received
any written notice of cancellation or modification, and there is no existing default or event
which, with the giving of notice or lapse of time or both, would constitute a default, by any
insured thereunder, except for defaults that do not have, and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on the Company. To the knowledge
of the Company, there is no material claim pending under any of such policies as to which coverage
has been questioned, denied or disputed by the underwriters of such policies and there has been no
threatened termination of, or material premium increase with respect to, any such policies.
Section 3.19. Suppliers. The Company and its Subsidiaries have adequate sources of
supply for the operation of the business of the Company and its Subsidiaries as presently
26
conducted. Except as does not have, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect on the Company, the Company has not received any
written notice of the intention of any material supplier to: (a) cease doing business or reduce or
adversely alter in any material respect the business transacted with the Company or any of its
Subsidiaries or (b) terminate any contract with the Company or any of its Subsidiaries.
Section 3.20. Affiliate Transactions. All transactions, agreements, or arrangements
between the Company or any of its Subsidiaries, on the one hand, and any Affiliate of the Company
(other than its Subsidiaries), on the other hand, that are required to be disclosed in the Company
SEC Reports in accordance with Item 404 of Regulation S-K under the Securities Act have been so
disclosed.
Section 3.21. Opinion of Financial Advisor. The Board of Directors of the Company has
received the written opinion of Signal Hill Capital Group LLC, dated April 2, 2010, to the effect
that, as of the date of such opinion and based upon and subject to the factors and assumptions set
forth therein, the Merger Consideration is fair, from a financial point of view, to the holders of
shares of Company Common Stock, and a copy of such opinion has been delivered to Parent.
Section 3.22. No Brokers or Finders. With the exception of the engagement of BB&T
Capital Markets and Signal Hill Capital Group LLC by the Company, none of the Company and its
Subsidiaries has any liability or obligation to pay any fees or commissions to any financial
advisor, broker, finder or agent with respect to the transactions contemplated hereby. The Company
has prior to the date of this Agreement provided Parent with a correct and complete copy of any
engagement letter or other
Contract between (i) the Company and BB&T Capital Markets relating to the Merger and the other
transactions contemplated hereby, and (ii) the Company and Signal Hill Capital Group LLC relating
to the issuance of a fairness opinion with respect to the Merger and the other transactions
contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:
Section 4.1. Organization and Qualification. Each of Parent and Merger Sub is a
corporation that is duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and has full corporate power and authority to own, operate and
lease the properties and assets owned or used by it and to carry on its business as and where such
is now being conducted and is qualified, licensed or admitted to do business and is in good
standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of
its assets or properties or conduct of its business requires such qualification, license or
admission, except where the failure to be so qualified, licensed or admitted or to have such power
or authority would not reasonably be expected to have a Material Adverse Effect on Parent. Parent
has made available to the Company complete and correct copies of Parent’s
27
organizational documents,
each as amended to the date hereof, and each as delivered is in full force and effect.
Section 4.2. Authorization. Each of Parent and Merger Sub has full corporate power
and authority to execute and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Parent and Merger Sub and the consummation
by Parent and Merger Sub of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Parent and Merger Sub, and no other corporate proceedings
on the part of Parent, Merger Sub and no vote or other actions of their respective stockholders are
necessary to authorize this Agreement and to consummate the transactions contemplated hereby.
Parent, Merger Sub and GeoDigm Corporation, as sole stockholder of Merger Sub, have taken all
action necessary to approve this Agreement, the Merger and the other transactions contemplated
hereby. This Agreement has been duly executed and delivered by Parent and Merger Sub and, assuming
due authorization, execution and delivery of this Agreement by the Company, constitutes a valid and
legally binding obligation of Parent and Merger Sub enforceable against Parent and Merger Sub in
accordance with its terms, subject to the Bankruptcy and Equity Exception.
Section 4.3. No Violation.
(a) The execution and delivery of this Agreement by Parent and Merger Sub do not, and the
consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby
will not, conflict with or result in any violation of, or constitute a default (with or without
notice or lapse of time, or both) under, or give rise to a right of, or result by its terms in the,
termination, amendment, cancellation or acceleration of any obligation or the loss of a material
benefit under, or to increased, additional, accelerated or guaranteed rights or entitlements of any
Person under, or create any obligation to make a payment to any other Person under, or result in
the creation of a Lien on, or the loss of, any assets of Parent or any of its Subsidiaries pursuant
to: (i) any provision of the organizational documents of Parent, Merger Sub or any of their
respective Subsidiaries; or (ii) subject to obtaining or making the consents, approvals, Orders,
authorizations, registrations, declarations and filings referred to in Section 4.3(b) of the Parent
Disclosure Schedule, any Contract to which Parent, Merger Sub or any of its Subsidiaries is a party
or by which any of their respective properties or assets is bound or any Order or Law applicable to
Parent, Merger Sub or any of their respective Subsidiaries or their respective properties or
assets, except, in the case of this clause (ii), as would not prevent or delay the consummation of
the transactions contemplated hereby.
(b) Except as set forth on Section 4.3(b) of the Parent Disclosure Schedule, no consent,
approval, Order or authorization of, or registration, declaration or filing with, any Governmental
Entity or any other Person is required by or with respect to Parent or any of its Subsidiaries in
connection with the execution and delivery of this Agreement by Parent or the consummation of the
Merger and the other transactions contemplated hereby, except for the Applicable Consents.
Section 4.4. Litigation. There is no Litigation pending or, to the knowledge of
Parent or Merger Sub, threatened against Parent, Merger Sub or any of their Affiliates or any of
their
28
respective officers or directors (in such capacity) or any of their respective businesses or
assets, at law or in equity, before or by any Governmental Entity, whether or not covered by
insurance, except as would not reasonably be expected to have a Material Adverse Effect on Parent.
Section 4.5. Available Funds. Assuming the accuracy of the representations and
warranties set forth in Section 3.2 and the Company’s performance of its obligations, covenants and
agreements contained in Section 5.1, Parent and Merger Sub will have as of the Effective Time
available to them, when combined with the Company’s cash and cash equivalents, all funds necessary
to consummate the Merger and the other transactions contemplated hereby and to perform their
obligations hereunder. As of the date of this Agreement, (i) the Equity Commitment Letter has not
been amended or modified, and (ii) the commitments contained therein have not been withdrawn or
rescinded in any respect. As of the date of this Agreement, the Equity Commitment Letter, in the
form so delivered, is in full force and effect and is a legal, valid and binding obligation of
Parent and Sponsor. No event has occurred which, with or without notice, lapse of time or both,
would constitute a default or breach on the part of Parent, Merger Sub or Sponsor under any term or
condition of the Equity Commitment Letter.
Section 4.6. No Brokers or Finders. No financial advisor, broker or finder is
entitled to any fee or commission with respect to the transactions contemplated hereby based on
arrangements made by or on behalf of Parent or Merger Sub.
Section 4.7. No Prior Activities of Merger Sub. Except for obligations or liabilities
incurred in connection with its incorporation or the negotiation and consummation of this Agreement
and the transactions contemplated hereby (including any financing), Merger Sub has not incurred any
obligations or liabilities, and has not engaged in any business or activities of any type or kind
whatsoever, or entered into any agreements or arrangements with any Person or entity. As of the
Effective Time, Merger Sub’s common stock will be the only class or series of its capital stock
that is issued and outstanding and all of such stock shall be owned directly by Parent or by a
wholly-owned Subsidiary of Parent.
Section 4.8. No Ownership of Stock of Company. Neither Parent, nor Sponsor, nor, to
the knowledge of Parent, their respective Affiliates, including Merger Sub, taken together as a
group, beneficially own in excess of 1% of the lesser of the aggregate number of outstanding
Company Common Stock and neither Parent, nor Sponsor, nor to the knowledge of Parent, any of their
respective Affiliates, including Merger Sub, is or has been deemed to be, within three years prior
to the date of this Agreement an “interested stockholder” or an “affiliate of an interested
stockholder” for purposes of Chapter 110F of the General Laws of Massachusetts.
Section 4.9. Solvency. Assuming (a) that the Company is Solvent immediately prior to the
Effective Time, (b) the satisfaction of the conditions to Parent’s and Merger Sub’s obligations to
consummate the Merger, or waiver of such conditions, (c) the accuracy and completeness of the
representations and warranties of the Company set forth in Article 3 (without giving effect to any
knowledge, materiality or “Material Adverse Effect on the Company” qualifications or exceptions
contained therein or in the defined terms used therein) and (d) that the Company financial
statements set forth in the SEC Reports fairly present in all material respects the consolidated
financial condition of the Company as of the end of the
29
periods covered thereby and the
consolidated results of operations of the Company for the periods covered thereby, and after giving
effect to the Merger, including the payment of the aggregate Merger Consideration, payment of all
amounts required by this Agreement to be paid in connection with the consummation of the Merger,
and payment of all related fees and expenses (with respect to fees and expenses of the Company
incurred prior to the Effective Time, assuming the material accuracy of the estimates set forth on
Section 4.9 of the Company Disclosure Schedule), each of Parent and the Surviving Corporation will
be Solvent as of the Effective Time and immediately after the consummation of the Merger and the
transactions contemplated thereby. For the purposes of this Agreement, the term “Solvent” when used
with respect to any Person means that, as of any date of determination, (i) the amount of the “fair
saleable value” of the assets of such Person will, as of such date, exceed (A) the value of all
liabilities of such Person that have been disclosed to, or are otherwise known to, Parent,
including contingent and other liabilities that have been disclosed to, or are otherwise known to,
Parent, as of such date, as such terms are generally determined in accordance with applicable Laws
governing determinations of the insolvency of debtors, and (B) the amount that will be required to
pay the known and probable liabilities of such Person on its existing debts (including contingent
and other liabilities that have been disclosed to, or are otherwise known to, Parent) as such debts
become absolute and mature, (ii) such Person will not have, as of such date, an unreasonably small
amount of capital for the operation of the businesses in which it is engaged or proposed to be
engaged following such date and (iii) such Person will be able to pay its liabilities, including
contingent and other liabilities that have been disclosed to, or are otherwise known to, Parent, as
they mature. For purposes of this definition, “not have an unreasonably small amount of capital for
the operation of the businesses in which it is engaged or proposed to be engaged” and “able to pay
its known liabilities, including contingent and other liabilities that have been disclosed to, or
are otherwise known to, Parent, as they mature” means that such Person will be able to generate
enough cash from operations, asset dispositions or refinancing, or a combination thereof, to meet
such obligations as they become due.
Section 4.10. Management Arrangements. As of the date of this Agreement, none of
Parent, Merger Sub, Sponsor nor any of Sponsor’s Affiliates, or, to the knowledge of Parent, any of
the other Affiliates of Parent or Merger Sub (other than Sponsor and its Affiliates), has entered
into any contract, agreement, arrangement or understanding, oral or written, with any of the
officers or directors of the Company, or any Person known by Parent to be an Affiliate of any
director or officer of the Company, that is currently in effect or that would become effective in
the future (upon consummation of this Agreement and transactions contemplated thereby or otherwise)
and that has not been disclosed to the board of directors of the Company.
ARTICLE 5
PRE-CLOSING COVENANTS
PRE-CLOSING COVENANTS
Section 5.1. Covenants of the Company.
(a) During the period commencing on the date of this Agreement and continuing until the
Effective Time, except as specifically contemplated and permitted by this Agreement, described in
Section 5.1 of the Company Disclosure Schedule or as otherwise approved in advance by Parent in
writing (such approval not to be unreasonably withheld,
30
conditioned or delayed); provided,
however, that consent of Parent shall be deemed to have been given if Parent does not
object within five (5) Business Days from the date on which written request for such consent is
provided by the Company to Parent:
(i) Ordinary Course. The Company shall, and shall cause each of its
Subsidiaries to, conduct its business in all material respects in the ordinary and usual
course of business consistent with past practice. The Company shall, and shall cause each
of its Subsidiaries to, use its commercially reasonable efforts to: (A) preserve
substantially intact the business organization of the Company and its Subsidiaries and their
respective material rights and material properties, (B) to keep available the services of
their respective present officers and key employees, (C) operate in all material respects in
compliance with all applicable Laws, (D) maintain and preserve, in all material respects,
the current relationships of the Company and its Subsidiaries with customers, licensees,
suppliers and other Persons with which the Company and its Subsidiaries has a business
relationship and (E) maintain in effect the current insurance coverage set forth on Schedule
3.18 of the Company Disclosure Schedule maintained by the Company or any of its Subsidiaries
or comparable replacement insurance coverage.
(ii) Governing Documents. The Company shall not, and shall not permit any of
its Subsidiaries to, make any change or amendment to its articles of organization, bylaws or
similar organizational documents.
(iii) Dividends. The Company shall not, and shall not permit any of its
Subsidiaries to, declare, set aside, pay or make any dividend or other distribution or
payment (whether in cash, stock or other property) with respect to any shares of its capital
stock or any other voting securities, other than dividends and distributions by a Subsidiary
to the Company or another Subsidiary of the Company.
(iv) Changes in Share Capital. The Company shall not, and shall not permit any
of its Subsidiaries to, (i) purchase or redeem any shares of its capital stock or any other
securities or any rights, warrants or options to acquire any such shares or other
securities, (ii) adjust, split, reverse split, combine, subdivide or reclassify any of its
capital stock or any other securities or (iii) make any other changes in its capital
structure (except, in the case of clauses (i) and (iii) only, the issuance of the Conversion
Shares, the issuance of the Company Common Stock pursuant to the exercise of Company Stock
Options outstanding as of the close of business on the Capitalization Date, the settlement
of any Company RSUs outstanding as of the close of business on the Capitalization Date, the
forfeiture of any Company Restricted Shares, the surrender of shares of Company Common Stock
to the Company or the withholding of shares of Company Common Stock by the Company to cover
withholding obligations).
(v) Company Benefit Plans. The Company shall not, and shall not permit any of
its Subsidiaries to, (i) amend, suspend or terminate any provision of any Company Benefit
Plan, except to the extent necessary to comply with applicable Law, (ii) adopt or enter into
any arrangement that would be a Company Benefit Plan, (iii) increase or accelerate the
vesting or payment of the compensation, bonus opportunities or
31
severance, change in control
or other benefits of or grant or pay any benefits to, any director, officer or employee or
any other Person, or take any similar action, except, in the case of this clause (iii), (A)
to the extent required under the terms of any agreements, trusts, plans, funds or other
arrangements existing as of the date of this Agreement and listed on Section 3.13(a) of the
Company Disclosure Schedule, (B) to the extent required by applicable Law or (C) in the
ordinary course of business, consistent with past practice, to non-executive employees of
the Company or its Subsidiaries who receive less than $125,000 per year in base salary from
the Company and its Subsidiaries, and (iv) grant any severance or termination pay to any
present or former director, officer or employee or consultant of the Company or its
Subsidiaries, other than as required pursuant to a Company Benefit Plan in effect as of the
effectiveness of this Agreement and disclosed in the Company Disclosure Schedule.
(vi) Issuance of Securities. Except for the issuance of Company Common Stock
upon the exercise of Company Stock Options, the settlement of Company RSUs, and the issuance
of the Conversion Shares, in each case outstanding as of the close of business on the
Capitalization Date in accordance with their current terms, the Company shall not, and shall
not permit any of its Subsidiaries to: (i) grant, issue or sell any shares of capital stock
or any other securities, including Company Voting Debt, (ii) issue any securities
convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to
subscribe for, calls or commitments of any character whatsoever relating to, or enter into
any Contract with respect to the issuance of, any shares of capital stock or any other
securities, including Company Voting Debt or (iii) take any action under or amend the terms
of the Company Stock Plans, Employee Benefit Plans or otherwise with respect to Company
Stock Options, Company Restricted Shares, Company RSUs, or options under the Company ESPP
that is inconsistent with the treatment contemplated by Section 1.9.
(vii) Indebtedness. The Company shall not, and shall not permit any of its
Subsidiaries to, incur or otherwise become liable for any Indebtedness or guarantee
Indebtedness of another Person other than borrowings under Second Amended and Restated Loan
Agreement by and between Bank of America, N.A., the Company and the Subsidiaries of the
Company therein named (as amended from time to time, the “Credit Agreement”) so long as the
aggregate outstanding borrowings or other extensions of credit thereunder do not exceed
$27,500,000.
(viii) No Acquisitions. Except for (A) purchases of inventory items or
supplies in the ordinary course of business consistent with past practice or (B) capital
expenditures in compliance with Section 5.1(a)(xii), the Company shall not, and shall not
permit any of its Subsidiaries to, acquire: (i) by merging or consolidating with, or by
purchasing stock or assets of, or by making any investment in or loan or advance to, or by
any other manner, any business or any corporation, partnership, association or other
business organization or division thereof, (ii) any real property or (iii) assets with an
aggregate value greater than $100,000.
32
(ix) No Dispositions. The Company shall not, and shall not permit any of its
Subsidiaries to, lease, sublease, license, mortgage or otherwise encumber, or sell, transfer
or otherwise dispose of or compromise or release, any of its material properties, rights or
assets (including capital stock or other equity interests of Subsidiaries of the Company),
except for sales of inventory in the ordinary course of business consistent with past
practice, or fail to renew or extend the term of any Real Property Lease where the option or
right to renew or extend the term thereof is required to be renewed or extended prior to the
Effective Time.
(x) Taxes. The Company shall not, and shall not permit any of its Subsidiaries
to, make revoke or change any material Tax election, change in any material respect any
method of Tax accounting or Tax accounting period, settle or compromise any audit, claim or
assessment or material liability for Taxes, enter into any closing agreement, file any
amended Tax Return involving a material amount of additional Tax, surrender any right to
claim a Tax refund or consent to any extension or waiver of the statue of limitations period
applicable to any income and any other material Taxes, in each case except as required by
GAAP or applicable Law.
(xi) Settlement of Litigation. The Company shall not, and shall not permit any
of its Subsidiaries to, settle any Litigation, except where such settlement (i) involves
potential payments of less than $250,000, in the aggregate, by the Company or its
Subsidiaries, (ii) does not require the Company or any of its Subsidiaries to admit
liability, (iii) does not involve the Company or any of its Subsidiaries consenting to
non-monetary relief and (iv) is not expected to have a material impact on Parent or the
Surviving Corporation after the Closing Date.
(xii) Capital Expenditures. The Company shall not, and shall not permit any of
its Subsidiaries to, make or commit to make any capital expenditures in respect of any
capital expenditure project, other than: (i) as contemplated by the capital expenditure
budget attached as Section 5.1(a)(xii) of the Company Disclosure Schedule, (ii) those
capital expenditures for the repair or replacement of the Company’s property that has been
damaged or destroyed and is funded by the proceeds of any casualty insurance covering such
property and (iii) other capital expenditures not exceeding $250,000 in the aggregate.
(xiii) Accounting Methods. The Company shall not, and shall not permit any of
its Subsidiaries to, implement or adopt any change in its material financial or tax
accounting principles, practices or methods, except to the extent required by GAAP, the
rules or policies of the Public Company Accounting Oversight Board or Regulation S-X under
the Securities Act.
(xiv) Material Contracts. The Company shall not, and shall not permit any of
its Subsidiaries to, (i) modify, amend, terminate or waive any material rights under any
Material Contract, (ii) enter into any Contract, which if entered into prior to the date of
this Agreement would have been a Material Contract (other than in the ordinary course of
business consistent with past practices and not of the type referred to in Xxxxxxx
00
0.00(x)(x), (xx), (x), (xx), (xxxx), (x) or (xi)) or (iii) enter into any new Contract that
contains a change of control or similar provision in favor of the other party or parties
thereto or would otherwise require a payment to or give rise to any rights to such other
party or parties in connection with the transactions contemplated by this Agreement.
(xv) Confidentiality Agreements. The Company shall not, and shall not permit
any of its Subsidiaries to (A) waive, release, grant or transfer any right of material
value, other than in the ordinary course of business and consistent with past practice or
(B) agree to modify in any material adverse respect, or fail to enforce or consent to any
material matter with respect to which the Company’s or its Subsidiaries’ consent is
required, under any material confidentiality, standstill or similar agreement to which the
Company or its Subsidiaries are party.
(xvi) WARN. The Company shall not, and shall not permit any of its
Subsidiaries to, effectuate or permit a “plant closing” or “mass layoff”, as those terms are
defined in WARN, affecting in whole or in part any site of employment, facility, operating
unit or employee of the Company or any of its Subsidiaries.
(xvii) Dissolution and Reorganization. The Company shall not, and shall not
permit any of its Subsidiaries to, adopt a plan or agreement of complete or partial
liquidation or dissolution, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Subsidiaries.
(xviii) SEC Filings. The Company shall file its reports, statements and other
documents with the SEC as required under the Securities Act or the Exchange Act or the rules
and regulations promulgated thereunder.
(xix) No Related Actions. The Company shall not, and shall not permit any of
its Subsidiaries to, authorize or enter into any agreement, commitment, or arrangement to do
any of the foregoing set forth in Sections 5.1(a)(ii)-(xviii).
(b) No Control of the Company’s Business. Parent acknowledges and agrees that: (i)
nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control
or direct the Company’s or the Company’s Subsidiaries’ operations prior to the Effective Time and
(ii) prior to the Effective Time, the Company shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its Subsidiaries’
respective operations.
Section 5.2. Proxy Statement; Company Stockholders Meeting.
(a) As soon as practicable (and, in any event, within fifteen (15) Business Days) after the
date of this Agreement, the Company shall prepare and file with the SEC a preliminary proxy
statement and proxy card with respect to the Merger and the other transactions contemplated hereby
(collectively, including all amendments or supplements thereto, the “Proxy Statement”). Subject to
Section 5.5, the Board of Directors, shall include in the Proxy Statement the recommendation of the
Board of Directors that the stockholders of the Company vote to approve the Merger and this
Agreement (the “Company Recommendation”) and will
34
use reasonable best efforts to include the
written opinion referred to in Section 3.21. Parent, Merger Sub and the Company shall cooperate
with each other and provide reasonable assistance to each other in connection with the preparation
of the Proxy Statement and shall promptly provide to each other any information regarding such
party that is necessary to include in the Proxy Statement. Without limiting the generality of the
foregoing, (i) the Company shall provide Parent a reasonable opportunity to review and comment on
the Proxy Statement and shall consider in good faith and include such comments reasonably proposed
by Parent and (ii) each of Parent and Merger Sub will furnish to the Company in writing the
information relating to it required by the Exchange Act and the rules and regulations promulgated
thereunder to be set forth in the Proxy Statement. Parent shall ensure that such information
supplied by it in writing specifically for inclusion in the Proxy Statement will not, on the date
it is first mailed to the stockholders of the Company and at the time of the Company Stockholders
Meeting, contain any statement which, at the time and in the light of the circumstances under which
it is made, is false or misleading with respect to any material fact, or which omits to state any
material fact necessary in order to make the statements therein not false or misleading or
necessary to correct any statement in any earlier communication with respect to the solicitation of
a proxy for the same meeting or subject matter which has become false or misleading. Subject to
Parent’s and Merger Sub’s compliance with this Section 5.2(a), the Company shall use its reasonable
best efforts to have the Proxy Statement cleared by the SEC and mailed to its stockholders as
promptly as practicable after its filing with the SEC; provided, however, that the Company
shall not be required to mail the Proxy Statement to its stockholders or to call, give written
notice of, convene and hold the Company Stockholders Meeting on or prior to the Go-Shop Period End
Date. The Company shall, as promptly as practicable after receipt thereof, provide Parent with
copies of all written comments, and advise Parent of all oral comments, with respect to the Proxy
Statement received from the SEC and the Company shall provide Parent a reasonable opportunity to
review and comment on such comments to the Proxy Statement and shall consider in good faith and
include such comments reasonably proposed by Parent. If, at any time prior to the Effective Time,
any information relating to the Company, or any of its Subsidiaries, officers or directors, should
be discovered by Parent or the Company that is required to be set forth in an amendment or
supplement to the Proxy Statement so that such document would not include any statement which, at
the time and in the light of the circumstances under which it is made, is false or misleading with
respect to any material fact, or which omits to state any material fact necessary in order to make
the statements therein not false or misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy for the same meeting or subject matter
which has become false or misleading, then the party that discovers such information shall promptly
notify the other parties hereto and, to the extent required by Law, the Company shall promptly file
with the SEC and disseminate to its stockholders an appropriate amendment or supplement describing
such information. Prior to filing or mailing the Proxy Statement (or any amendment or supplement
thereto) or responding to any comments of the SEC with respect thereto, the Company shall provide
Parent with a reasonable opportunity to review and comment on such document or response and
consider in good faith and include such comments reasonably proposed by Parent. The Company shall
ensure that the Proxy Statement (i) will not, on the date that it is first mailed to stockholders
of the Company and as of the time of the Company Stockholders Meeting, contain any statement which,
at the time and in the light of the circumstances under which it is made, is false or
35
misleading
with respect to any material fact, or which omits to state any material fact necessary in order to
make the statements therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of a proxy for the same meeting or subject
matter which has become false or misleading, and (ii) comply as to form in all material respects
with the applicable requirements of the Exchange Act. Notwithstanding the foregoing, the Company
shall not be responsible for information supplied by or on behalf of Parent or Merger Sub in
writing specifically for inclusion in the Proxy Statement.
(b) The Company shall use its reasonable best efforts to have the SEC confirm that it has no
further comments on the Proxy Statement as soon as reasonably practicable after its filing with the
SEC and, as soon as reasonably practicable after the SEC confirms that it has no further comments
on the Proxy Statement, duly take, in accordance with all applicable Law, the articles of
organization and bylaws of the Company and the Rules of The Nasdaq Global Market, all action
necessary to call, give written notice of, convene and hold a meeting of its stockholders (the
“Company Stockholders Meeting”) for the purpose of obtaining the Company Requisite Stockholder Vote
with respect to the transactions contemplated hereby and shall take all reasonable and lawful
action to solicit the approval and adoption of this Agreement by the Company Requisite Stockholder
Vote; provided, however, that the Company will not be required to mail the Proxy Statement
to its stockholders, call, give written notice of, convene and hold the Company Stockholders
Meeting on or prior to the Go-Shop Period End Date. The Company (and its Board of Directors and any
special committee thereof formed to evaluate an Acquisition Proposal): (a) shall take all action
that is reasonable and lawful to solicit from the stockholders of the Company proxies in favor of
this Agreement and the Merger and shall take all other action reasonably necessary or advisable to
secure the Company Requisite Stockholder Vote in the manner required by the rules of The Nasdaq
Global Market and the MBCA to obtain such approvals and (b) subject to Section 5.5(f) and Section
5.5(g), shall not withhold, withdraw or modify, or publicly propose or resolve to withhold or
modify, the Company Recommendation. Notwithstanding anything to the contrary contained in this
Agreement, the Company, after consultation with Parent, may adjourn or postpone the Company
Stockholders Meeting (i) with Parent’s consent, as necessary to ensure that any required supplement
or amendment to the Proxy Statement is provided to the Company’s stockholders within a reasonable
amount of time in advance of the Company Stockholders Meeting, (ii) if as of the time for which the
Company Stockholders Meeting is originally scheduled (as set forth in the Proxy Statement) there
are insufficient shares of Company Common Stock represented (either in person or by proxy) to
constitute a quorum necessary to conduct the business of the Company Stockholders Meeting or (iii)
for the duration and pendency of any Notice Period then in effect and for a reasonable time
thereafter (not to exceed two (2) Business Days) in order to permit notification to be sent to the
Company’s stockholders regarding such adjournment or postponement (provided, however, this
clause (iii) shall not apply if Parent, in its sole and absolute discretion, elects in a written
notice to the Company to forego any such pending Notice Period). For the avoidance of doubt,
unless this Agreement is terminated pursuant to Section 7.1, the Company shall be obligated to
undertake the foregoing actions described in this Section 5.2 irrespective of whether a Change in
Company Recommendation shall have occurred. Parent and the Company shall each be responsible to
pay fifty percent (50%) of any and all fees and expenses incurred, indirectly or directly, by the
Company in connection with the filing, printing and mailing of the Proxy Statement and the holding
of the Company Stockholders’ Meeting, unless this Agreement is
36
terminated pursuant to Section
7.1(b), 7.1(d), 7.1(e), 7.1(g) or 7.1(h), in which case the Company shall be solely responsible for
such fees and expenses.
Section 5.3. Further Information. Prior to the Effective Time, the Company shall, and
shall cause its Subsidiaries to, upon reasonable notice, afford Parent and its counsel,
accountants, consultants, other authorized Representatives and prospective lenders, financing
sources and their Representatives reasonable access, during normal business hours, subject in each
case to such reasonable limitations on the time of day and the manner of the access to maintain
confidentiality, to the officers, employees, properties, books and records of the Company and its
Subsidiaries; provided, that Parent and its Representatives shall conduct their review in
such a manner as not to unreasonably interfere with the business or operations of the Company and
its Subsidiaries; and provided further, however, that the foregoing shall not
require the Company to permit any inspection or disclose any information that in the reasonable
judgment of the Company would result in the disclosure of any trade secrets of third parties in
violation of a confidentiality obligation of the Company or any of its Subsidiaries. Without
limitation of the foregoing, the Company shall cause its and its Subsidiaries’ officers and
employees to furnish such financial and operating data and other information as may be reasonably
requested by Parent from time to time. All of the requirements of this Section 5.3 shall be
subject to: (i) any prohibitions or limitations of applicable Law, (ii) the terms of any Contract
entered into prior to the date hereof to which the Company or any of its Subsidiaries is a party to
the extent disclosure thereof to Parent would reasonably be expected to violate the terms of such
Contract (it being agreed that the parties shall use their reasonable efforts to cause such
information to be provided in a manner that does not cause such violation or prohibition), (iii)
any restrictions which the Company reasonably believes are necessary to preserve the
attorney-client privilege of the Company or any of its Subsidiaries and (iv) the Confidentiality
Agreement.
Section 5.4. Reasonable Best Efforts.
(a) Subject to Sections 5.4(c) and 5.5, each of the Company and Parent shall reasonably
cooperate with and assist the other party, and shall (and shall cause their respective Subsidiaries
and Representatives to) use all of their respective reasonable best efforts, to promptly: (i) take,
or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable Law to consummate the transactions contemplated hereby as soon as
practicable, including preparing and filing as promptly as practicable all documentation to effect
all necessary filings, notices, petitions, statements, registrations, submissions of information,
applications and other documents and (ii) obtain and maintain all (A) approvals, consents,
registrations, permits, authorizations and other confirmations required to be obtained from any
other Person, including any Governmental Entity, that are necessary, proper or advisable to
consummate the Merger and other transactions contemplated hereby and (B) any notices or consents
disclosed or required to be disclosed on the Company Disclosure Schedule or required to prevent the
occurrence of an event reasonably likely to have an adverse effect on the Company or its
Subsidiaries (or their respective rights, properties or assets) after the Effective Time, in each
case, in the most expeditious manner practicable, but in any event before the Termination Date.
Subject to Section 5.4(c), except as otherwise expressly contemplated hereby, each of the Company
and Parent shall not, and shall cause its respective Subsidiaries not to, take any action or
knowingly omit to take any action
37
within its reasonable control where such action or omission
would, or would reasonably be expected to, result in (A) any of the conditions to the Merger set
forth in Article 6 not being satisfied prior to the Termination Date or (B) a material delay in the
satisfaction of such conditions.
(b) In furtherance and not in limitation of the foregoing, as soon as reasonably practicable
following the execution of this Agreement, each party hereto shall (and/or, if applicable, cause
its ultimate parent to) file with the Antitrust Division of the Department of Justice (the “DOJ”)
and the Federal Trade Commission (the “FTC”) a Notification and Report Form relating to the Merger
and the transactions contemplated hereunder pursuant to the HSR Act, and use commercially
reasonable efforts to obtain early termination thereunder; provided, however, that the
parties shall not be required to file such Notification and Report Forms until the second Business
Day after the Go-Shop Period End Date unless Parent shall elect otherwise and notifies the Company
in writing a reasonable period of time prior to filing. Each party shall promptly supply the other
party with any information which may be required in order to effectuate such filing and supply as
promptly as practicable any additional information and documentary material that may be requested
pursuant to the HSR Act. Parent and the Company shall each pay fifty percent (50%) of all filing
fees under the HSR Act.
(c) In connection with this Section 5.4, the parties hereto shall (and/or, if applicable,
cause its ultimate parent to) (i) cooperate in all respects with each other in connection with any
filing, submission, investigation or inquiry related to the Merger and other transactions
contemplated hereby, (ii) promptly inform the other party of any communication (written or oral)
received by such party from, or given by such party to, the DOJ, FTC or any other Governmental
Entity and of any material communication (written or oral) received or given in connection with any
proceeding by a private party, in each case, regarding any of the transactions contemplated hereby,
(iii) have the right to review in advance, and to the extent practicable, each shall consult the
other on, any filing made with, or written materials to be submitted to, the DOJ, the FTC or any
other Governmental Entity or, in connection with any proceeding by a private party, any other
Person, in connection with any of the transactions contemplated hereby and (iv) consult with each
other in advance of any meeting, discussion, telephone call or conference with the DOJ, the FTC or
any other Governmental Entity or, in connection with any proceeding by a private party, with any
other Person, and to the extent not expressly prohibited by the DOJ, the FTC or any other
Governmental Entity or Person, give the other party the opportunity to attend and participate in
such meetings and conferences, in each case, regarding any of the transactions contemplated hereby;
provided, that all such obligations pursuant to clause (i)-(iv) above shall be deemed void
or limited if or to the extent such actions would in the opinion of the applicable party’s outside
legal counsel violate any applicable Law; and provided, further, that no party shall be
required to, and the Company (and, with respect to the effects listed in clauses (i) and (ii)
below, Parent) shall not and shall cause its Subsidiaries not to (without the prior written consent
of Parent or the Company, as the case may be), enter into any agreements or commitments or take any
other actions to resolve any such objections or actions if such agreement, commitment or other
action would reasonably be expected, individually or in the aggregate, to (i) prevent consummation
of any of the transactions contemplated by this Agreement, (ii) result in any of the transactions
contemplated by this Agreement being rescinded following the Effective Time, (iii) limit or
otherwise adversely affect the right of Parent (or any Affiliate thereof) to own or vote
38
any shares
of capital stock of the Surviving Corporation, control the Surviving Corporation or operate all or
any portion of the business of the Company and its Subsidiaries or (iv) require or compel the
Company, any of the Company’s Subsidiaries, Parent or any Affiliate of Parent to dispose of all or
any portion of its properties or assets. The parties hereto may, as each deems advisable and
necessary, reasonably designate any competitively sensitive material provided to the other under
this Section 5.4 as “Outside Counsel Only.” Such materials and the information contained therein
shall be given only to the outside legal counsel (and experts and consultants retained by such
outside counsel) of the recipient and will not be disclosed by such outside counsel to employees,
officers or directors of the recipient unless express permission is obtained in advance from the
source of the materials (the Company or Parent, as the case may be) or its legal counsel.
Notwithstanding anything to the contrary in this Section 5.4, materials provided to the other party
or its counsel may be redacted to remove references concerning the valuation of the Company and its
Subsidiaries.
Section 5.5. Acquisition Proposals.
(a) Notwithstanding any other provision of this Agreement to the contrary, during the period
beginning on the date of this Agreement and continuing until 11:59 p.m., Boston, Massachusetts
time, on May 12, 2010 (the “Go-Shop Period End Date“), the Company and its Subsidiaries and their
respective Representatives shall have the right, acting under the direction of the Company’s Board
of Directors, to directly or indirectly: (i) initiate, solicit and encourage (including in any
press release announcing this transaction), Acquisition Proposals, including by way of making
public disclosure relating to such solicitation and by way of providing access to non-public
information to any Person (each a “Solicited Person“), subject to first entering into an Acceptable
Confidentiality Agreement with each such Solicited Person; provided, that the Company shall
promptly (and in any event within 48 hours) provide or make available to Parent any non-public
information concerning the Company or its Subsidiaries that is provided or made available to any
Solicited Person given such access which was not previously provided or made available to Parent;
and (ii) enter into and maintain, or participate in, discussions or negotiations with respect to
Acquisition Proposals or otherwise cooperate with or assist or participate in, or facilitate any
such inquiries, proposals, discussions or negotiations.
(b) Subject to Sections 5.5(c), (d), and (f), from the Go-Shop Period End Date until the
Effective Time or, if earlier, the termination of this Agreement in accordance with Article 7, the
Company shall not, and shall cause its Subsidiaries and its and their respective officers and
directors not to, and shall instruct and use reasonable best efforts to cause its and its
Subsidiaries’ other Representatives not to, directly or indirectly: (i) initiate, solicit,
knowingly facilitate or encourage (including by way of providing non-public information or access
to its employees to initiate, solicit, knowingly facilitate or encourage an Acquisition Proposal)
the submission of any Acquisition Proposal (or inquiries or requests that relate thereto or could
reasonably be expected to lead thereto) or engage in any discussions or negotiations with respect
thereto (or that could reasonably be expected to lead to an Acquisition Proposal) or otherwise
cooperate with or assist or participate in or facilitate any such requests, proposals, offers,
discussions or negotiations, (ii) take any action to make the provisions of any “moratorium”,
“control share”, “fair price”, “affiliate transactions”, “business combination” or other
anti-takeover laws and regulations of any state, including, without limitation, the provisions of
39
Chapter 110F of the Massachusetts General Laws, as amended, inapplicable to any transactions
contemplated by an Acquisition Proposal, (iii) adopt, approve or recommend, or resolve to or
publicly propose to adopt, approve or recommend, an Acquisition Proposal, or enter into any merger
agreement, letter of intent, agreement in principle, acquisition agreement or agreement (other than
an Acceptable Confidentiality Agreement) providing for or relating to an Acquisition Proposal or
consummate any such transaction, or enter into any agreement or understanding requiring the Company
to abandon, terminate or fail to consummate this Agreement or the transactions contemplated hereby
or breach its obligations hereunder, or (iv) terminate, amend, release, modify or fail to enforce
any provision of, or grant any permission, waiver or request under, any standstill, confidentiality
or similar agreement entered into by the Company in respect of or in contemplation of an
Acquisition Proposal, or propose to do any of the foregoing.
(c) If at any time following the Go-Shop Period End Date and prior to obtaining the Company
Requisite Stockholder Vote, the Company or any of its Subsidiaries has received a written
Acquisition Proposal from a third party (other than a written Acquisition Proposal that was
intentionally or knowingly solicited in violation of this Agreement or that directly or indirectly
resulted from a material breach of this Section 5.5) that (i) the Board of Directors believes in
good faith to be bona fide and (ii) the Board of Directors determines in good faith, after
consultation with its outside financial and legal advisors, that the failure to take such action
would be inconsistent with or in violation of the directors’ fiduciary duty under applicable Law
and that such Acquisition Proposal constitutes or could reasonably be expected to result in a
Superior Proposal, then, the Company may (A) furnish information with respect to the Company to the
Person making such Acquisition Proposal and (B) participate in discussions or negotiations
(including, as a part thereof, making any counterproposals) with the Person making such Acquisition
Proposal regarding such Acquisition Proposal; provided, that the Company (x) shall not, and
shall not allow any of its Subsidiaries or its or their respective Representatives to, disclose or
make available any non-public information to such Person without first entering into an Acceptable
Confidentiality Agreement, and (y) will promptly (and in any event within 48 hours) provide or make
available to Parent any nonpublic information concerning the Company provided or made available to
such other Person which was not previously provided or made available to Parent.
(d) (i) Notwithstanding the provisions of Section 5.5(b), the Company may take any of the
actions described in Section 5.5(c) from and after the Go-Shop Period End Date and prior to
obtaining the Company Requisite Stockholder Vote with respect to any party or any of its Affiliates
(each such party, a “Continuing Party”) that has made a written Acquisition Proposal which was
received by the Company after the date hereof and prior to the Go-Shop Period End Date and with
whom the Company is having ongoing discussions or negotiations as of the Go-Shop Period End Date
regarding such Acquisition Proposal, provided that, in each case, the Board of Directors
believes in good faith that such Acquisition Proposal is bona fide and determines in good faith,
after consultation with its outside financial and legal advisors, that such Acquisition Proposal
constitutes or would reasonably be expected to result in a Superior Proposal. Any determination by
the Board of Directors that any such Acquisition Proposal received prior to the Go-Shop Period End
Date meets the requirements described in this Section 5.5(d)(i) shall be made not later than 48
hours after the Go-Shop Period End Date. No later than 72 hours following the Go-Shop Period End
Date, the Company shall notify Parent, in writing, of
40
the identity of each Continuing Party and
shall provide Parent a copy of each Acquisition Proposal received from any Continuing Party. From
and after the Go-Shop Period End Date, the Company shall keep Parent reasonably informed on a
current basis (and in any event within 24 hours) as of the status of any material developments,
modifications, discussions and negotiations concerning all Acquisition Proposals from Continuing
Parties.
(ii) Notwithstanding anything contained in this Section 5.5(d) to the contrary, any
Continuing Party shall cease to be a Continuing Party for all purposes under this Agreement
at such time as its Acquisition Proposal fails to satisfy the requirements of Section
5.5(c)(i) and (ii) or otherwise expires or is withdrawn. The Company shall promptly (and in
any event within 24 hours) notify Parent in writing when a Continuing Party ceases to be a
Continuing Party. Subject to Section 5.5(c), at the Go-Shop Period End Date, other than with
respect to Continuing Parties, the Company shall, and shall cause its Subsidiaries and
Representatives to, immediately cease and cause to be terminated any solicitation,
encouragement, discussion or negotiation with any Person conducted theretofore by the
Company, its Subsidiaries or any of their respective Representatives with respect to any
Acquisition Proposal and use its (and will cause its Subsidiaries and their respective
Representatives to use their) commercially reasonable efforts to cause to be returned or
destroyed all confidential information provided or made available to such Person on behalf
of the Company.
(e) After the Go-Shop Period End Date, the Company shall promptly (and in any event within 48
hours) notify Parent in writing if it receives (or after it becomes aware that one of its
Representatives has received): (A) an Acquisition Proposal from a Person or group of related
Persons (other than a Continuing Party) or written or verbal indication that such Person or group
is considering making an Acquisition Proposal, including the material terms and conditions thereof
and the identity of the Person making or proposing to make such Acquisition Proposal, to the extent
known, (B) any request by any Person or group of related Persons for non-public information
relating to the Company other than requests in the ordinary course of business, consistent with
past practices, and reasonably believed by the Company to be unrelated to an Acquisition Proposal
or (C) any inquiry or request for discussions or negotiations regarding any Acquisition Proposal by
any Person or group of related Persons. Without limiting the foregoing, the Company shall inform
Parent in writing within 48 hours, in the event that it determines to begin providing information
or engaging in discussions or negotiations concerning an Acquisition Proposal pursuant to Section
5.5(c). The Company shall keep Parent reasonably informed on a current basis (and in any event
within 24 hours) as to the status of any material developments, modifications, discussions,
negotiations concerning all Acquisition Proposals from any such Persons.
(f) Subject to Section 5.5(g), the Board of Directors shall not directly or indirectly (i)
withdraw, withhold, qualify or modify in a manner adverse to Parent, publicly propose or resolve to
withhold, withdraw, qualify or modify in a manner adverse to Parent, the Company Recommendation,
(ii) fail to include, or publicly propose not to include, the Company Recommendation in the Proxy
Statement, (iii) publicly propose to accept an Acquisition Proposal (iv) after the
Go-Shop Period End Date, fail to publicly reaffirm the Company Recommendation within 48
hours after Parent so requests in writing in response to an Acquisition
41
Proposal that has been
publicly made or publicly disclosed or announced and not withdrawn; provided, that the
Company shall not be required to publicly reaffirm the Company Recommendation during any pending
Notice Period; and provided further, the foregoing proviso shall not apply if Parent,
in its sole and absolute discretion, elects in a written notice to the Company to forego any such
pending Notice Period), or (v) fail to recommend against any Acquisition Proposal subject to
Regulation 14D under the Exchange Act (whether or not applicable) in a Solicitation/Recommendation
Statement filed on Schedule 14D-9 or other public communication by or on behalf of the Company with
respect to such Acquisition Proposal (it being understood and agreed that a “stop, look and
listen” or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange
Act shall not constitute a failure for purposes of clause (iv) above or this clause (v))
(each of the actions or omissions described in clauses (i) through (v) above, a “Change in
Company Recommendation”); provided, that at any time prior to obtaining the Company
Requisite Stockholder Vote, if the Company receives an Acquisition Proposal (including from a
Continuing Party) after the date hereof and the Board of Directors concludes in good faith, after
consultation with its outside financial and legal advisors, that such Acquisition Proposal
constitutes a Superior Proposal and that the failure to effect a Change in Company Recommendation
would be inconsistent with the fulfillment of its fiduciary duties under applicable Law, the Board
may (i) cause the Company to terminate this Agreement pursuant to Section 7.1(h) to concurrently
enter into a definitive agreement with respect to such Superior Proposal and/or (ii) effect a
Change in Company Recommendation; provided, however, that the Company shall not terminate
this Agreement pursuant to the foregoing clause (i) and any purported termination pursuant to the
foregoing clause (i) shall be void and of no force and effect, unless concurrently with such
termination the Company pays the Termination Fee payable pursuant to Section 7.2(c);
provided, further, that the Company may not terminate this Agreement pursuant to
the foregoing clause (i) and the Board of Directors may not effect a Change in Company
Recommendation pursuant to the foregoing clause (ii) unless the Company shall have provided prior
written notice to Parent, at least four (4) Business Days in advance (the “Notice Period“), of its
intention to effect a Change in Company Recommendation or terminate this Agreement to enter into a
definitive agreement with respect to such Superior Proposal, which notice shall include a written
summary of the material terms and conditions of such Superior Proposal (including the identity of
the Person or group of Persons making such Superior Proposal), and shall have contemporaneously
provided a copy of the relevant proposed transaction agreements with the Person or group of Persons
making such Superior Proposal and any other material documents relating thereto. During the Notice
Period, the Company shall, and shall cause its Representatives to, negotiate with Parent and Merger
Sub in good faith (to the extent Parent and Merger Sub desire to negotiate) to make adjustments in
the terms and conditions of this Agreement and the Equity Commitment Letter, and the Board of
Directors shall take into account any changes to the financial and other terms of this Agreement
and the Equity Commitment Letter proposed by Parent in response to any such written notice by the
Company in evaluating whether the Acquisition Proposal ceases to constitute a Superior Proposal (it
being understood and agreed that any amendment to the financial terms or other material terms of
such Superior Proposal shall require a new written notice by the Company and a new Notice Period,
except that such new Notice Period shall be two (2) Business Days; and provided, further,
that the Company shall not be permitted to terminate this Agreement pursuant to the foregoing
clause (i) in order to accept a Superior Proposal (and any purported termination pursuant to the
foregoing clause (i) shall be void and of no force and effect) if such Superior
42
Proposal was
knowingly and intentionally solicited in violation of this Agreement or that directly or indirectly
resulted from a material breach of this Section 5.5).
(g) Notwithstanding anything to the contrary contained in this Section 5.5 or elsewhere in
this Agreement, the Board of Directors may, prior to obtaining the Company Requisite Stockholder
Vote and solely in response to an Intervening Event, effect a Change in Company Recommendation, if
the Board of Directors determines in good faith (after consultation with its outside legal
advisors) that the failure to take such action would be inconsistent with the fulfillment of its
fiduciary duties; provided, however, that prior to taking such action, (i) the Board of
Directors shall have given Parent at least four (4) Business Days’ prior written notice of its
intention to take such action and a description of the Intervening Event, (ii) the Company shall,
and shall cause its Representatives to, negotiate with Parent and Merger Sub in good faith (to the
extent Parent and Merger Sub desire to negotiate) to make adjustments in the terms and conditions
of this Agreement and the Equity Commitment Letter and (iii) the Board of Directors shall have
taken into account any changes to the financial and other terms of this Agreement proposed by
Parent in response to any such written notice by the Company and shall have determined in good
faith, after consultation with its outside legal advisors, that failure to effect a Change in
Company Recommendation in response to an Intervening Event would be inconsistent with the
directors’ fiduciary duties under applicable Law.
(h) Nothing contained in this Section 5.5 or elsewhere in this Agreement shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated by Rule 14d-9 or
Rule 14e-2(a) promulgated under the Exchange Act (whether or not applicable) or from otherwise
making any disclosure to its stockholders that is required by applicable Law; provided,
however, that any communications to stockholders under such rules other than a “stop, look and
listen” or similar communication of the type contemplated by Rule 14d-9(f) under the Exchange Act
(whether or not applicable), an express rejection of any applicable Acquisition Proposal or an
express reaffirmation of its recommendation in favor of the Merger, shall be deemed to be a Change
of Company Recommendation.
(i) For purposes of this Section 5.5, “Board” or “Board of Directors” means the Board of
Directors of the Company or a special committee of the Board of Directors appointed by the Board of
Directors to evaluate any Acquisition Proposal.
Section 5.6. Indemnification; Directors and Officers Insurance.
(a) Without limiting any additional rights that any director, officer, trustee, employee,
agent, or fiduciary may have under any employment or indemnification agreement or under the
respective articles of organization, certificates or articles of incorporation or bylaws (or
comparable organizational documents) of the Company or any of its Subsidiaries, for a period of six
(6) years from and after the Effective Time, Parent and the Surviving Corporation shall: (i)
indemnify and hold harmless current and former officers and directors of the Company or any of its
Subsidiaries, and any Person prior to the Effective Time serving at the request of the Company or a
Subsidiary of the Company as a director or officer (or similar fiduciary agent of another
corporation, partnership, trust, employee benefit plan or other enterprise), as provided in
43
the
respective certificates or articles of incorporation or bylaws (or comparable organizational
documents) of the Company or any of its Subsidiaries (collectively, the “Indemnified Persons”) to
the fullest extent authorized or permitted by applicable Law, as now or hereafter in effect, in
connection with any Claim and any judgments, fines, penalties and amounts paid in settlement
(including all interest, assessments and other charges paid or payable in connection with or in
respect of such judgments, fines, penalties or amounts paid in settlement) resulting therefrom; and
(ii) promptly pay on behalf of each of the Indemnified Persons, to the fullest extent authorized or
permitted by applicable Law, as now or hereafter in effect, any Expenses incurred in defending,
serving as a witness with respect to, or otherwise participating in any Claim in advance of the
final disposition of such Claim, including payment on behalf of or advancement to the Indemnified
Person of any Expenses incurred by such Indemnified Person in connection with enforcing any rights
with respect to such indemnification and/or advancement, in each case without the requirement of
any bond or other security, but subject to Parent’s or the Surviving Corporation’s, as applicable,
receipt of an undertaking by or on behalf of such Indemnified Person, if required or permitted by
applicable Law, to repay such Expenses if it is ultimately determined under applicable Law that
such Indemnified Person is not entitled to be indemnified. The indemnification and advancement
obligations of Parent and the Surviving Corporation pursuant to this Section 5.6(a) shall extend to
acts or omissions occurring at or before the Effective Time and any Claim relating thereto
(including with respect to any acts or omissions occurring in connection with the approval of this
Agreement and the consummation of the transactions contemplated hereby, including the consideration
and approval thereof and the process undertaken in connection therewith and any Claim relating
thereto). All rights to indemnification and advancement conferred hereunder shall continue as to a
person who has ceased to be a director or officer of the Company or the Subsidiaries after the date
hereof and shall inure to the benefit of such person’s heirs, executors and personal and legal
representatives. For purposes of this Section 5.6(a): (x) the term “Claim” means any threatened,
asserted, pending or completed claim, proceeding, investigation or inquiry, whether instituted by
any party hereto, any Governmental Entity or any other party, that any Indemnified Person in good
faith reasonably believes might lead to the institution of any such claim, proceeding,
investigation or inquiry, whether civil, criminal, administrative, investigative or other,
including any arbitration or other alternative dispute resolution mechanism, arising out of or
pertaining to matters that relate to such Indemnified Person’s duties or service as a director or
officer of the Company or any of the Subsidiaries, at or prior to the Effective Time at the request
of the Company or any of the Subsidiaries; and (y) the term “Expenses” means reasonable attorneys’
fees and all other reasonable out-of-pocket costs, expenses and obligations (including, without
limitation, experts’ fees, travel expenses, court costs, retainers, transcript fees, duplicating,
printing and binding costs, as well as telecommunications, postage and courier charges) paid or
incurred in connection with investigating, defending, being a witness in or participating in at the
request of Parent or Surviving Corporation (including on appeal), or preparing to investigate,
defend, be a witness in or participate in at the request of Parent or Surviving Corporation, any
Claim for which indemnification is authorized pursuant to this Section 5.6(a), including any action
relating to a claim for indemnification or advancement brought by an Indemnified Person. Neither
Parent nor the Surviving Corporation shall settle, compromise or consent to the entry of any
judgment in any Claim in respect of which indemnification has been sought by such Indemnified
Person hereunder unless: (i) such settlement, compromise or judgment includes an unconditional
release
44
of such Indemnified Person from all liability arising out of such Claim, (ii) such
Indemnified Person otherwise consents thereto, or (iii) Parent or the Surviving Corporation
acknowledges that such Claim is subject to this Section 5.6.
(b) Prior to the Effective Time, the Company shall purchase, and following the Effective Time,
Parent and the Surviving Corporation shall maintain in effect for a term of six (6) years after the
Effective Time, without any lapse in coverage, one or more so called “tail” or “run-off” directors
and officers liability insurance policies with respect to wrongful acts and/or omissions committed
or allegedly committed by the Indemnified Persons at or prior to the Effective Time (including, but
not limited to, any acts or omissions in connection with this Agreement and the consummation of the
transactions contemplated hereby) (“D&O Insurance”). Such D&O Insurance shall have a maximum
premium of 300% of last year’s annual premium for the Company’s existing directors and officers
liability insurance policy (the “Premium Limit”), an aggregate coverage limit over the term of such
policy at least as great as the aggregate annual coverage limit under the Company’s existing
directors’ and officers’ liability insurance policy, with a term of at least six (6) years and
shall also be as near as possible in all other material respects to such existing policy; provided,
however, that if the premium for six (6) years of D&O Insurance on such terms will exceed the
Premium Limit, the Company may modify the term or coverage amounts so long as the premium does not
exceed the Premium Limit.
(c) Parent shall cause the Surviving Corporation to possess sufficient assets in order for the
Surviving Corporation to fulfill its obligations under this Section 5.6, provided, however, that to
the extent the Surviving Corporation is unable to fulfill its obligations hereunder, Parent shall
assume all such obligations. The provisions of this Section 5.6 shall survive the consummation of
the Merger for a period of six years and are expressly intended to be for the benefit of, and shall
be enforceable by, each of the Indemnified Persons and their respective heirs and representatives;
provided, however, that in the event that any claim or claims for indemnification set forth in this
Section 5.6 are asserted or made within such six-year period, all rights to indemnification in
respect of any such claim or claims shall continue until disposition of any and all such claims.
If Parent and/or the Surviving Corporation, or any of their respective successors or assigns (i)
consolidates with or merges into any other Person, or (ii) transfers or conveys all or
substantially all of their businesses or assets to any other Person, then, in each such case, (A)
to the extent necessary, a proper provision shall be made so that the successors and assigns of
Parent and/or Surviving Corporation, as the case may be, shall assume the obligations of Parent and
Surviving Corporation set forth in this Section 5.6 and (B) prompt notice thereof shall be provided
to the Indemnified Persons.
(d) For a period of six (6) years from and after the Effective Date, the articles of
organization and by-laws of the Surviving Corporation shall contain provisions no less favorable
with respect to indemnification, advancement of expenses and exculpation of individuals who were
directors and officers prior to the Effective Time than are presently set forth in the Company’s
restated articles of organization, as amended, and bylaws, which provisions shall not be amended,
repealed or otherwise modified for a period of six years from the Effective Date in any manner that
would adversely affect the rights thereunder of any such individuals.
45
Section 5.7. Public Announcements. Subject to the Company’s rights under Section
5.5(a), neither Parent nor the Company shall issue any press release or otherwise make any public
statement with respect to the transactions contemplated hereby without the prior written consent of
the other (which consent shall not be unreasonably withheld, conditioned or delayed), unless Parent
or the Company (as the case may be) determines that the issuance of such press release or the
making of such other public statement is required by applicable Law or by obligations pursuant to
any applicable listing agreement with any national securities exchange, in which case the party
required to make the release or announcement shall use its reasonable best efforts to allow the
other party reasonable time to comment on such release or announcement in advance of such issuance.
Section 5.8. State Takeover Laws. If any “moratorium”, “control share acquisition”,
“fair price”, “affiliate transaction”, “business combination” or similar Law is or shall become
applicable to the transactions contemplated hereby, then each of Parent, Merger Sub the Company and
the Board of Directors of the Company shall, to the extent within their power or control, grant
such approvals and take such actions as are necessary so that the transactions contemplated hereby
may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of any such statute or similar Law on the transactions contemplated hereby.
Section 5.9. Notification of Certain Matters. Parent shall use its reasonable best
efforts to give prompt written notice to the Company, and the Company shall use its reasonable best
efforts to give prompt written notice to Parent, of: (a) the occurrence, or non-occurrence, of any
event the occurrence, or non-occurrence, of which such party is aware and that would be reasonably
likely to cause the conditions set forth in Section 6.1, 6.2 or 6.3 not to be satisfied or result
in such satisfaction being materially delayed or (b) any material failure of such party or of any
officer, director, employee or Representative thereof, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this Agreement;
provided, however, that the delivery of any notice pursuant to this Section 5.9 shall not
limit or otherwise affect the remedies available under this Agreement to the party giving or
receiving such notice; and provided further, that no party shall have the right not to
close the Merger or the right to terminate this Agreement as a result of the failure of delivery of
such a notice by another party hereto if the underlying breach would not result in such party
having such rights under the terms of Articles 6 and 7 hereof.
Section 5.10. Confidentiality. Each of the Company and Parent acknowledges and
confirms that (a) the Company, Sponsor and Parent have entered into a Confidentiality Agreement,
dated February 19, 2010 (the “Confidentiality Agreement”), (b) all information provided by a party
hereto to another party hereto pursuant to this Agreement is subject to the terms of the
Confidentiality Agreement and (c) the Confidentiality Agreement shall remain in full force and
effect in accordance with its terms and conditions.
Section 5.11. Employee Matters.
(a) Parent hereby agrees that, for a period of one year immediately following the Effective
Time, it shall, or it shall cause the Surviving Corporation to, (i) provide each
46
employee of the
Company and its Subsidiaries who remains employed with the Surviving Corporation, Parent or any
other Affiliate of Parent (the “Continuing Employees”) as of the Effective Time, during such
continued employment (if any), with at least the same level of base salary, cash incentive
compensation and other cash variable compensation (on an aggregate, not component-by-component,
basis) that was provided to each such Continuing Employee immediately prior to the Effective Time,
and (ii) provide the Continuing Employees with employee benefits (other than equity-based
compensation) that are no less favorable, determined in the aggregate on a Plan-by-Plan basis, than
those provided to such Continuing Employees immediately prior to the Effective Time (provided, that
Parent’s obligations under the preceding clauses (i) and (ii) shall be limited to compensation and
employee benefits disclosed to Parent and its Representatives by the Company not later than the
date of this Agreement). The Company, Parent and Merger Sub agree that this Section 5.11 is not
intended to, and does not, alter the at-will nature of the employment of any Continuing Employee,
to the extent that the employment of such Continuing Employee prior to the Effective Time is
at-will in nature.
(b) From and after the Effective Time, Parent and its successors and assigns, shall guarantee
the payment and performance of the Surviving Corporation with respect to, and cause the Surviving
Corporation, and any successors or assigns, to assume, honor, perform and pay, in accordance with
their terms, all supplemental employee retirement plans and other deferred compensation plans of
the Company and its Subsidiaries as in effect immediately prior to the Effective Time that are
applicable to any current or former employees or directors of the Company or any of its
Subsidiaries. Parent shall not and shall cause the Surviving Corporation not to impair, encumber,
borrow against or otherwise take any actions adverse to the beneficiaries of the Company’s
supplemental employee retirement plans and other deferred compensation plans, including such life
insurance policies that are maintained solely to satisfy identified obligations under such plans,
other than borrowings against the policies that are used solely to make payments to the
beneficiaries in accordance with the terms of the plans as and when required thereunder. Parent,
and its successors and assigns, shall cause the Surviving Corporation and any and all of its
successors and assigns to expressly assume the Company’s Supplemental Executive Retirement Plans
described in Section 3.13(a) of the Company Disclosure Schedule (the “SERPs”). Parent shall
establish a Rabbi Trust prior to the Effective Date, in form and substance reasonably acceptable to
the Company, to separately hold each and every underlying insurance contract maintained solely to
satisfy identified obligations under any SERP. In no event shall Parent (or any of its successors,
assigns or Affiliates) allow any Lien or other security interest of any nature or kind to attach to
any of the life insurance policies that are maintained solely to satisfy identified obligations
under the SERPs (except as may arise under applicable Law).
(c) Continuing Employees shall receive credit for all purposes (including, for purposes of
eligibility to participate, vesting and eligibility to receive benefits) under any employee benefit
plan, program or arrangement (including vacation plans, programs and arrangements) established or
maintained by Parent, the Surviving Corporation or any of their respective subsidiaries under which
each Continuing Employee may be eligible to participate on or after the Effective Time for service
with the Company and any ERISA Affiliate through the Effective Time to the same extent recognized
by the Company and any ERISA Affiliate under comparable Plans immediately prior to the Effective
Time. Such employee benefit plan, program
47
or arrangement shall credit each such Employee for
service accrued or deemed accrued on or prior to the Effective Time with the Company and any ERISA
Affiliate; provided, however, that such crediting of service shall not operate to duplicate any
benefit or the funding of any such benefit.
(d) With respect to the welfare benefit plans, programs and arrangements maintained, sponsored
or contributed to by Parent or the Surviving Corporation (“Parent Welfare Benefit Plans”) in which
a Continuing Employee may be eligible to participate on or after the Effective Time, Parent shall,
subject to applicable Law, (a) use reasonable efforts to waive, or cause its insurance carrier to
waive, all limitations as to preexisting and at-work conditions, if any, with respect to
participation and coverage requirements applicable to each Employee under any Parent Welfare
Benefit Plan to the same extent waived under a comparable Company Benefit Plan, and (b) provide
credit to each Continuing Employee for any co-payments, deductibles and out-of-pocket expenses paid
by such Employee under the Company Benefit Plans during the relevant plan year, up to and including
the Effective Time.
(e) Nothing in this Section 5.11, whether express or implied, shall confer upon any current or
former employee of the Company or any of its Subsidiaries or Affiliates, any rights or remedies
including any right to employment or continued employment for any specified period, of any nature
or kind whatsoever under or by reason of this Section 5.11. No provision of this Section 5.11 is
intended to modify, amend or create any employee benefit plan of the Company, Parent or any of
their respective Subsidiaries or Affiliates.
Section 5.12. Financing.
(a) Parent and Merger Sub shall take (or cause to be taken) all actions, and do (or cause to
be done) all things, necessary, proper or advisable to obtain the Equity Financing contemplated by
the Equity Commitment Letter, including (i) maintaining in effect the Equity Commitment Letter,
(ii) using their reasonable best efforts to satisfy on a timely basis all conditions applicable to
Parent and Merger Sub set forth in the Equity Commitment Letter that are within their control and
(iii) subject to the conditions set forth therein to consummate the financing contemplated by the
Equity Commitment Letter on the terms and conditions set forth therein.
(b) The Company shall provide all cooperation reasonably requested by Parent in its efforts to
obtain debt financing in connection with the transactions contemplated by this Agreement, provided
that such requested cooperation does not unreasonably interfere with the ongoing operations of the
Company and its Subsidiaries. Without limiting the generality of the preceding sentence, prior to
the Closing, the Company shall, and shall cause its officers, Subsidiaries and other
Representatives to (i) when requested by Parent, participate on a timely basis in a reasonable
number of meetings during normal business hours with potential providers of debt financing to
Parent, a reasonable number of due diligence sessions during normal business hours and a reasonable
number of sessions with rating agencies during normal business hours and provide direct contact
between executives of the Company and the Company’s other Representatives and potential providers
of the debt financing to Parent during normal business hours, (ii) furnish Parent and potential
providers of debt financing to Parent with unaudited
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monthly financial statements of the Company
and its Subsidiaries when requested in writing when available, (iii) assist Parent with the
preparation of bank information memoranda, lender presentations, rating agency presentations and
similar documents and materials as may be reasonably requested by Parent, and (iv) use commercially
reasonable efforts to obtain such consents and instruments which may be reasonably requested by
Parent in connection with the debt financing, including customary payoff letters, Lien releases,
and landlord consents and access agreements, and use commercially reasonable efforts to facilitate
the pledging of collateral, including cooperating in obtaining appraisals, financial analyses,
surveys, environmental assessments, third party consents and estoppels, mortgage financeability and
title insurance; provided, that the Company shall not be required to pay any costs of any
appraisals, surveys or environmental assessments or any commitment or similar fee in connection
with such financing prior to the Effective Time; and provided further that the
Company’s failure to obtain any of the foregoing, after using commercially reasonable efforts to do
so, shall not constitute a breach of this Section 5.12(b) nor a failure to satisfy the conditions
to closing set forth in Section 6.2(b). The Company hereby consents to the use of its logo in
connection with the potential debt financing described in this Section 5.12, provided that its logo
is used solely in a manner that is not intended to or reasonably likely to harm or disparage the
Company or its Subsidiaries, or the reputation and good will of the Company and its Subsidiaries.
Parent and Merger Sub each acknowledge and agree that the obtaining of any debt financing in
connection with the transactions contemplated by this Agreement is not a condition to the Closing.
All non-public information provided by the Company or any of its Subsidiaries or their
Representatives in accordance with this Section 5.12 shall be kept confidential in accordance with
the Confidentiality Agreement.
(c) In the event this Agreement is terminated pursuant to Section 7.1, Parent agrees to
promptly (and in any event within two (2) Business Days), upon request by the Company, reimburse
the Company for all reasonable and documented out-of-pocket costs incurred by the Company and its
Subsidiaries in complying with this Section 5.12, and shall indemnify and hold harmless the
Company, its Subsidiaries and their respective Representatives from and against any all losses,
damages, claims, costs or expenses suffered or incurred by any of them in connection with or
arrangement of any such debt financing and any information used in connection herewith, except with
respect to any information prepared or provided by the Company or any of its Subsidiaries.
Section 5.13. Stockholder Litigation. The Company shall give Parent prompt (and in
any event within 24 hours) notice of, and copies of any documents filed or served in, any
stockholder litigation against the Company and/or its directors relating to this Agreement and the
transactions contemplated hereby. The Company shall give Parent and its Representatives the
opportunity to participate in the defense and settlement of any stockholder litigation against the
Company or its directors relating to this Agreement and the transactions contemplated hereby and no
such settlement shall be agreed to without Parent’s prior written consent such consent not to be
unreasonably withheld, delayed or conditioned.
ARTICLE 6
CONDITIONS TO THE MERGER
CONDITIONS TO THE MERGER
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Section 6.1. Conditions to Each Party’s Obligation to Effect the Merger. The
respective obligations of Parent, Merger Sub and the Company to effect the Merger shall be subject
to the satisfaction on or prior to the Closing Date of the following conditions:
(a) Stockholder Approval. The Merger and this Agreement shall have been approved and
adopted by the Company Requisite Stockholder Vote at a Company Stockholders Meeting where a quorum
is present in accordance with applicable Law.
(b) Legality. No Law or Order (whether temporary, preliminary or permanent) shall
have been enacted, entered, promulgated, adopted, issued or enforced by any Governmental Entity
that has the effect of making the Merger illegal or otherwise prohibiting the consummation of the
Merger, and no Governmental Entity shall have initiated proceedings seeking to prevent, prohibit or
impose adverse conditions with respect to the Merger.
(c) HSR Act. The waiting period applicable to the Merger under the HSR Act shall have
expired or been terminated.
Section 6.2. Additional Conditions to Obligations of Parent and Merger Sub. The
respective obligations of Parent and Merger Sub to effect the Merger shall be further subject to
the satisfaction or waiver (where permissible) on or prior to the Closing Date of the following
conditions:
(a) Representations and Warranties. The representations and warranties (i) set forth
in Section 3.7(a) shall be true and correct in all respects, (ii) set forth in Sections 3.1 (first
sentence only), 3.2(a), 3.2(b), Section 3.3, 3.4(a)(i), 3.8 and 3.21 disregarding all
qualifications therein (or in defined terms used therein) relating to materiality or the term
Material Adverse Effect on the Company, shall be true and correct in all material respects at and
as of the Effective Time as if made at and as of the Effective Time (except to the extent such
representations and warranties relate to a specific date, in which case the representation and
warranty shall be true and correct as of such specified date) and (iii) set forth in Article 3
hereof (other than the Sections of Article 3 described in clause (i) or (ii) above), disregarding
all qualifications contained therein (or in defined terms used therein) relating to materiality or
the term Material Adverse Effect on the Company, shall be shall be true and correct at and as of
the Effective Time as if made at and as of the Effective Time (except to the extent such
representations and warranties relate to a specific date, in which case the representation shall be
true and correct as of such specified date), except, in the case of this clause (iii) only, to the
extent the failure of any such representation and warranty to be true and correct would not
reasonably be expected to have (taken together with all other breaches or violations of
representations, warranties, covenants and agreements of the Company hereunder), individually or in
the aggregate, a Material Adverse Effect on the Company. Solely for the purposes of clause (ii)
above, if one or more inaccuracies in Section 3.2(a) or 3.2(b) would cause the aggregate amount
required to be paid by Parent to effectuate the Merger or refinance the Company’s Indebtedness and
consummate the related transactions to be consummated on the Closing Date and pay all fees and
expenses in connection therewith, including pursuant to Section 1.9 or Article 2 to increase by
$500,000 or more, such inaccuracy or inaccuracies will be considered material for purposes of
clause (iii) of this Section 6.2(a).
50
(b) Covenants. The Company shall have performed in all material respects its
obligations and complied in all material respects with its covenants required by this Agreement to
be performed or complied with by it on or prior to the Closing Date.
(c) Material Adverse Effect on the Company. Since the date of this Agreement, there
shall not have occurred any effect, change, event, occurrence, circumstance or development that,
individually or in the aggregate, has had, or would reasonably be expected to have, a Material
Adverse Effect on the Company.
(d) Officer’s Certificate. The Company shall have delivered to Parent a certification
of the Chief Executive Officer or the Chief Financial Officer of the Company certifying that each
of the conditions specified in Sections 6.2(a), (b) and (c) is satisfied in all respects.
Section 6.3. Additional Conditions to Obligation of the Company. The obligation of
the Company to effect the Merger shall be further subject to the satisfaction or waiver (where
permissible) on or prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties made by Parent
and Merger Sub in this Agreement shall be true and correct in all respects (disregarding all
qualifications therein (or in defined terms used therein) relating to materiality or the defined
term Material Adverse Effect on Parent) at and as of the Effective Time as if made at and as of the
Effective Time (except to the extent they relate to a specific date, in which case the
representation shall be true and correct as of such specified date) except to the extent the
failure of any such representation and warranty to be true and correct would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent.
(b) Covenants. Parent and Merger Sub shall have performed in all material respects
their obligations and complied in all material respects with their covenants required by this
Agreement to be performed or complied with by it on or prior to the Closing Date.
(c) Officer’s Certificate. Parent shall have delivered to the Company a certification
of the Chief Executive Officer or the Chief Financial Officer of Parent to the effect that each of
the conditions specified above in Sections 6.3(a) and (b) is satisfied in all respects.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
TERMINATION, AMENDMENT AND WAIVER
Section 7.1. Termination. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time and, except as provided in Section 7.1(h) below,
whether before or after receipt of the Company Requisite Stockholder Vote:
(a) By mutual written consent of the Company and Parent;
(b) By either Parent or the Company, if the Merger shall not have been consummated on or prior
to 5:00 p.m. (Boston, Massachusetts time) on September 15, 2010, or such other date as Parent and
the Company may agree in writing (the “Termination Date”);
51
provided, however, that the
right to terminate this Agreement pursuant to this Section 7.1(b) shall not be available to any
party that has breached its obligations under this Agreement in any manner that shall have been a
proximate cause of the failure of the Merger to be consummated on or before the Termination Date;
(c) By either Parent or the Company, if (i) a Law shall have been enacted, entered or
promulgated prohibiting the consummation of the Merger on the terms contemplated hereby, or (ii) an
Order shall have been enacted, entered, promulgated or issued by a Governmental Entity of competent
jurisdiction permanently restraining or enjoining or otherwise prohibiting the consummation of the
Merger on the terms contemplated hereby, and such Order has become final and non-appealable; in
each case having the effect of causing the condition Section 6.1(b) to not be satisfied;
provided, however that the right to terminate this Agreement pursuant to this Section
7.1(c) shall not be available to any party whose breach of this Agreement shall have been a
proximate cause of the imposition of such legal restraint;
(d) By either Parent or the Company, if the Company Requisite Stockholder Vote shall not have
been obtained by reason of the failure to obtain such required vote at a Company Stockholders
Meeting at which a vote on such approval was taken (provided, that the right to terminate this
Agreement under this Section 7.1(d) shall not be available to the Company if the Company has
breached in any material respect any of its obligations under Sections 5.2 or 5.5 and such breach
shall have been a proximate cause of the failure to obtain the Company Requisite Stockholder Vote);
(e) By Parent (unless Parent is then in material breach of its obligations, covenants or
agreements, or its representations and warranties under this Agreement that would result in the
conditions to Closing set forth in Section 6.3(a) or Section 6.3(b) not being satisfied), if all of
the following shall have occurred: (i) the Company shall have breached or failed to perform any of
its representations, warranties, covenants or other agreements contained in this Agreement, (ii)
such breach or failure to perform would entitle Parent not to consummate the Merger under Section
6.2(a) or 6.2(b) and (iii) such breach or failure to perform is incapable of being cured by the
Company prior to the Termination Date or, if such breach or failure to perform is capable of being
cured by the Company prior to the Termination Date, the Company shall not have cured such breach or
failure to perform within twenty (20) Business Days after receipt of written notice thereof (but no
later than the Termination Date);
(f) By the Company (unless the Company is then in material breach of its obligations,
covenants or agreements, or its representations and warranties under this Agreement, that would
result in the conditions to Closing set forth in Section 6.2(a) or 6.2(b) not being satisfied), if
all of the following shall have occurred: (i) Parent or Merger Sub shall have breached or failed to
perform any of its representations, warranties, covenants or other agreements contained in this
Agreement, (ii) such breach or failure to perform would entitle the Company not to consummate the
Merger under Section 6.3(a) or 6.3(b) and (iii) such breach or failure
to perform is incapable of
being cured by Parent or Merger Sub prior to the Termination Date or, if such breach or failure to
perform is capable of being cured by Parent or Merger Sub prior to the Termination Date, Parent or
Merger Sub shall not have cured such breach or failure
52
to perform within twenty (20) Business Days
after receipt of written notice thereof (but no later than the Termination Date);
(g) By Parent, if (i) the Company’s Board of Directors or a special committee thereof shall
have effected a Change in Company Recommendation (or publicly proposed to take any such action),
whether or not permitted by the terms of this Agreement, (ii) the Company’s Board of Directors or a
special committee thereof shall have adopted, approved or recommended to the stockholders of the
Company an Acquisition Proposal (or shall have publicly proposed to do so), whether or not
permitted by the terms of this Agreement, (iii) the Company shall have entered into any letter of
intent or similar document or any contract accepting an Acquisition Proposal (other than an
Acceptable Confidentiality Agreement), whether or not permitted by the terms of this Agreement, or
(iv) the Company, its Board of Directors or any special committee thereof shall have publicly
announced its intention to do any of the foregoing; or
(h) By the Company, prior to receipt of the Company Requisite Stockholder Vote, in order to
concurrently enter into a definitive agreement with respect to a Superior Proposal pursuant to, in
accordance with and to the extent permitted by Section 5.5(f); provided however, that such
termination under this Section 7.1(h) shall not be effective until the Company has paid the
Termination Fee as required by Section 7.2(c).
Any party desiring to terminate this Agreement pursuant to Section 7.1(b) through 7.1(h) shall give
written notice of such termination to the other parties specifying the provision hereof pursuant to
which such termination is made.
Section 7.2. Effect of Termination.
(a) In the event of the termination of this Agreement pursuant to Section 7.1, this Agreement
shall be of no further force or effect without liability of any party or parties hereto, as
applicable (or any partner, member, stockholder, director, officer, employee, affiliate, agent or
other Representative of such party or parties) to the other party or parties hereto, as applicable,
except (a) for the terms of Section 5.2(b) (last sentence only), Section 5.7, Section 5.10, Section
5.12(c), this Section 7.2, Section 7.3, Section 7.4 and Article 8, each of which shall survive the
termination of this Agreement, and (b) subject to Section 7.2(b), Section 7.2(c), Section 7.2(d),
Section 8.6 and Section 8.15, neither the Company nor Parent or Merger Sub shall be relieved or
released from any liabilities arising out of its material breach of, or fraud in connection with,
this Agreement to the extent such breach or fraud was a proximate cause of the failure of the
Merger to be consummated prior to the termination of this Agreement; provided, that a party
may not seek punitive or multiple damages against another party. For the avoidance of doubt, no
termination of this Agreement shall affect the obligations of the parties hereto set forth in the
Confidentiality Agreement, all of which obligations shall survive the termination of this Agreement
in accordance with its terms.
(b) If (i) Parent or the Company terminates this Agreement pursuant to Section 7.1(d) or
Parent terminates this Agreement pursuant to Section 7.1(e), in either case, under circumstances in
which the Termination Fee (as defined in Section 7.2(c)) is not then
53
payable pursuant to Section
7.2(c), then the Company shall pay as promptly as possible (but in any event within five (5)
Business Days following receipt of a reasonably detailed invoice therefor) all of the actual and
reasonably documented out-of-pocket fees and expenses (including reasonable and documented legal
fees and expenses and fees and expenses of accountants, financial advisors, consultants, lenders
and other agents and advisors) actually incurred by Parent and its Affiliates on or prior to such
termination of this Agreement in connection with the transactions contemplated hereby and the
related financing transactions (“Parent Expenses”) as directed by Parent in writing, which amount
shall not be greater than $2,000,000; provided, that (A) the existence of circumstances which could
require the Termination Fee to become subsequently payable by the Company pursuant to Section
7.2(c) shall not relieve the Company of its obligations to pay the Parent Expenses pursuant to this
Section 7.2(b); (B) the payment by the Company of Parent Expenses pursuant to this Section 7.2(b)
shall not relieve (except as provided in clause (C) of this proviso) the Company of any subsequent
obligation to pay the Termination Fee pursuant to Section 7.2(c); and (C) if the Company has paid
the Parent Expenses under this Section 7.2(b) and is subsequently required to pay the Termination
Fee under Section 7.2(c), the Termination Fee payable under Section 7.2(c) shall be reduced by the
full amount of Parent Expenses previously paid by the Company under this Section 7.2(b).
(c) If (i) Parent terminates this Agreement pursuant to Section 7.1(g), (ii) the Company
terminates this Agreement pursuant to Section 7.1(h) or (iii) Parent or the Company terminates this
Agreement pursuant to Section 7.1(b) or Section 7.1(d) or Parent terminates this Agreement pursuant
to Section 7.1(e) and, in the case of any such termination pursuant to Section 7.1(b), 7.1(d) or
7.1(e), (A) at any time after the date of this Agreement and prior to such termination an
Acquisition Proposal shall have been publicly announced or otherwise publicly communicated to the
senior management, Board of Directors or stockholders of the Company and (B) prior to the date that
is twelve months after the effective date of such termination, the Company shall enter into a
definitive agreement with respect to an Acquisition Proposal or an Acquisition Proposal is
consummated (in each case regardless of whether the Acquisition Proposal is the same one referred
to in clause (A)), then, subject to clause (C) of the proviso contained in Section 7.2(b), the
Company shall pay to Parent a termination fee equal to $4,150,000 (the “Termination Fee”),
provided, however, that “Termination Fee” shall mean $3,150,000 if the Acquisition Proposal
that directly results in the action or event that forms the basis for such termination is submitted
by a Continuing Party or any Affiliate of a Continuing Party. The Company shall satisfy its
obligation under the preceding sentence by the wire transfer of immediately available funds to an
account that Parent designates (x) in the case of a termination pursuant to clause (i) above, not
later than 2 Business Days following such termination, (y) in the case of termination pursuant to
clause (ii) above, not later than the date of such termination and (z) in the case of clause (iii)
above, not later than the date on which the Company executes and delivers a definitive agreement
with respect to (or, if earlier, consummates) an Acquisition Proposal. For purposes of clause (B)
of item (iii) of this Section 7.2(c) only, references in the definition of “Acquisition Proposal”
to “20% or more” shall be deemed to be references to “50% or more.” In no event shall payment of
more than one Termination Fee be made. Notwithstanding anything to the contrary
contained in this Agreement, but subject to Sections 7.2(b), 7.2(d) and 8.6(g), from and after the
time that this Agreement has been terminated pursuant to Section 7.1 and Parent becomes entitled to
receive and has received such Termination Fee, Parent’s receipt of the Termination Fee pursuant to
this
54
Section 7.2(c) shall be Parent’s sole and exclusive remedy against the Company or any of its
Affiliates, stockholders, directors, officers, employees, agents or Representatives for any loss,
claim, damage, liability or expense suffered as a result of the failure of the Merger or any of the
transactions contemplated hereby to be consummated in circumstances giving rise to the obligation
of the Company to pay the Termination Fee under this Section 7.2(c).
(d) Each of Parent and the Company acknowledges that the agreements contained in Sections
7.2(b) and 7.2(c) are an integral part of the transactions contemplated hereby and that, without
these agreements, the parties would not enter into this Agreement. Accordingly, if the Company
fails to pay the amounts payable under Section 7.2(b) or 7.2(c) then the Company shall pay to
Parent all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by
Parent and its Affiliates in connection with the collection of such overdue amounts and the
enforcement of its rights under Section 7.2(b) or 7.2(c), as applicable, together with interest on
such overdue amounts at a rate per annum equal to the “prime rate” (as announced by the Wall Street
Journal or any successor thereto) in effect on the date on which such payment was required to be
made.
Section 7.3. Amendment. This Agreement may be amended by Parent and the Company, by
action taken or authorized by their respective Boards of Directors, at any time before or after the
Company Requisite Stockholder Vote is obtained; provided, however, that after the Company
Requisite Stockholder Approval is obtained, this Agreement may not be amended in a manner that
would require further approval by the stockholders of the Company under applicable Law, without
obtaining such further stockholder approval. This Agreement may not be amended except by a written
instrument signed on behalf of each of the parties hereto.
Section 7.4. Waiver. At any time before the Effective Time, any party hereto may,
subject to applicable Law, by action taken or authorized by its board of directors, (a) extend the
time for the performance of any of the obligations or other acts of the other parties hereto under
or pursuant to this Agreement, (b) waive any inaccuracies in the representations and warranties
made by the other parties hereto in this Agreement or in any document delivered pursuant hereto and
(c) waive compliance with any of the agreements or covenants hereunder made by the other parties
hereto, or any of the conditions benefiting such waiving party contained, in this Agreement. Any
agreement on the part of any party hereto to any such extension or waiver shall be valid only as
against such party and only if set forth in a written instrument signed on behalf of such party. In
addition, no failure or delay by any party in exercising any right under this Agreement shall
operate as a waiver thereof, and no such extension or waiver shall apply to any time for
performance, inaccuracy in any representation or warranty, or non-compliance with any agreement,
covenant or condition, as the case may be, other than that which is specified in the signed written
extension or waiver.
ARTICLE 8
MISCELLANEOUS
MISCELLANEOUS
Section 8.1. Non-Survival of Representations, Warranties and Agreements. None of the
representations, warranties, covenants and agreements contained in this Agreement or in any
55
document delivered pursuant hereto shall survive the Effective Time, except that any covenant or
agreement of Parent, Merger Sub or the Company that by its terms contemplates performance after the
Effective Time, including, but not limited to, the agreements set forth in Section 1.9 (Company
Stock Option; Company ESPP; and Other Company Equity Awards), Article 2, Section 5.6
(Indemnification; Directors and Officers Insurance), 5.11 (Employee Matters) and Article 8 shall
survive the Effective Time.
Section 8.2. Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement, the Merger and the other transactions
contemplated hereby shall be paid by the party incurring such expenses, except as otherwise
provided in Sections 5.2(b) (last sentence only), 5.4(b), 5.12(c), 7.2(b), 7.2(c), 7.2(d) and 8.6.
Section 8.3. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed duly given or made as of the date of receipt if delivered personally,
on the day of confirmation of receipt if sent by facsimile prior to 5:00 pm Boston, Massachusetts
time on any Business Day (or the first Business Day following such confirmed receipt if the date of
such receipt is not a Business Day or such receipt occurs after 5:00 pm Boston, Massachusetts time
on any Business Day), one Business Day after being sent for next Business Day delivery, fees
prepaid, if sent via a reputable nationwide overnight courier or four Business Days after being
sent by registered or certified mail (return receipt requested, postage prepaid), in each case, to
the parties at the following addresses or facsimile numbers (or at such other address or facsimile
number for a party as shall be specified by like notice):
If to the Company:
National Dentex Corporation
0 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
0 Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx, Chief Executive Officer
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxxx Xxxxxxxxxx & Xxxx LLP
The Prudential Tower
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
The Prudential Tower
000 Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: | Xxxxxx X. Xxxxxx, P.C. Xxxxx X. Xxxxxxx, Esq. |
Facsimile: (000) 000-0000
If to Parent or Merger Sub:
c/o GeoDigm Corporation
0000 Xxxx Xxxxx Xxxx
0000 Xxxx Xxxxx Xxxx
00
Xxxxxxxxxx, XX 00000
Attention: Facsimile: |
Xxxxxx Xxxxxxxxxx (000) 000-0000 |
with a copy (which shall not constitute notice) to:
Welsh, Carson, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Facsimile: |
Xxxx X. Xxxxxxx (000) 000-0000 |
with a copy (which shall not constitute notice) to:
Ropes & Xxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Facsimile: |
Xxxxxxxxxxx X. Xxxx (000) 000-0000 |
Section 8.4. Entire Agreement. This Agreement, the Equity Commitment Letter and the
Confidentiality Agreement constitute the entire agreement, and supersede all prior understandings,
agreements or representations, by or among the parties hereto with respect to the subject matter
hereof and thereof. EACH PARTY HERETO AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN THIS AGREEMENT, NEITHER PARENT AND MERGER SUB, ON THE ONE HAND, NOR THE COMPANY, ON
THE OTHER HAND, MAKES ANY REPRESENTATIONS OR WARRANTIES TO THE OTHER, AND EACH PARTY HEREBY
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OR AS TO THE ACCURACY OR
COMPLETENESS OF ANY OTHER INFORMATION, MADE (OR MADE AVAILABLE) BY ITSELF OR ANY OF ITS
REPRESENTATIVES WITH RESPECT TO, OR IN CONNECTION WITH, THE NEGOTIATION, EXECUTION OR DELIVERY OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE
TO THE OTHER OR THE OTHER’S REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT
TO ANY ONE OR MORE OF THE FOREGOING.
Section 8.5. Assignment; Binding Effect. No party hereto may assign this Agreement or
any of its rights, interests or obligations hereunder (whether by operation of Law or otherwise)
without the prior written approval of the other parties hereto, and any attempted assignment
without such prior written approval shall be void and without legal effect; provided,
however, that Parent or Merger Sub may assign its rights or its obligations hereunder to a direct
or indirect wholly-owned Subsidiary of Parent, provided that no such assignment shall relieve the
assigning party of its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be
57
binding upon and inure to the benefit of the parties hereto and their respective permitted
successors and permitted assigns.
Section 8.6. Governing Law; Waiver of Jury Trial; Specific Performance; Remedies;
Jurisdiction.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED,
CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH, AND ANY CLAIM DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF INSOFAR AS SUCH PRINCIPLES WOULD CAUSE THE LAWS OF
ANOTHER JURISDICTION TO APPLY, EXCEPT THAT MATTERS RELATING TO THE FIDUCIARY DUTIES OF THE BOARD
AND INTERNAL CORPORATE AFFAIRS OF THE COMPANY SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF INSOFAR AS SUCH PRINCIPLES
WOULD CAUSE THE LAWS OF ANOTHER JURISDICTION TO APPLY.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY DIRECTLY OR INDIRECTLY
ARISE OUT OF OR RELATE TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE EQUITY COMMITMENT LETTER OR THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY.
(c) The Parties hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed by the parties hereto in accordance with their
specific terms or were otherwise breached. Accordingly, the parties agree that money damages or any
other remedy at law would not be a sufficient or adequate remedy for any breach or violation of, or
default under, this Agreement or the Equity Commitment Letter by them and that, in addition to all
other remedies available pursuant to this Agreement, each party shall be entitled, to the fullest
extent permitted by applicable Law, to seek an injunction or injunctions restraining such actual or
threatened breach, violation or default and to any other equitable relief, including specific
performance and to seek to enforce specifically the terms and provisions of this Agreement and the
Equity Commitment Letter to the fullest extent permissible by applicable Laws and this right shall
include the right of the Company to cause Parent and Merger Sub to seek to fully enforce the terms
of the Equity Commitment Letter against the Sponsor to the fullest extent permissible pursuant to
the Equity Commitment Letter and applicable Laws and to thereafter cause the Merger and the
transactions contemplated by the Merger to be consummated on the terms and subject to the
conditions thereto set forth in this
58
Agreement. Each of the parties hereto hereby waives and
agrees not to assert any defense in any action for specific performance that a remedy at law would
be adequate.
(d) Notwithstanding Section 8.6(c) above, the Company hereby covenants and agrees that
specific performance of this Agreement by Parent and Merger Sub and specific performance of the
Equity Commitment Letter by Sponsor shall be the Company’s sole and exclusive remedies (but for the
avoidance of doubt, the Company may, subject to this Section 8.6(d) and Section 8.6(e) below and
Section 8(d) and Section 8(e) of the Equity Commitment Letter, plead and seek monetary damages
solely as alternative relief if specific performance were to be denied) under or in connection with
this Agreement, the Equity Commitment Letter, any document or instrument delivered in connection
herewith or therewith, and the transactions contemplated hereby and thereby and, except as provided
in Section 8.6(e) below and in Section 8(e) of the Equity Commitment Letter, that it may not seek
or accept any other form of relief that might otherwise be available under or in connection with
this Agreement, the Equity Commitment Letter, any document or instrument delivered in connection
herewith or therewith, or the transactions contemplated hereby and thereby (including monetary
damages).
(e) If a court of competent jurisdiction described in Section 8.6(f) below has declined to
specifically enforce the obligations of Parent and Merger Sub to consummate the Merger and the
obligations of Sponsor under the Equity Commitment Letter pursuant to a claim for specific
performance brought by the Company against Parent, Merger Sub and Sponsor under Section 8.6(d)
above and Section 8(d) of the Equity Commitment Letter, the Company shall, as an alternative
remedy, be entitled to seek monetary damages. If such court has under such circumstance entered a
judgment awarding damages against Parent or Merger Sub, the Company may enforce such judgment as
its sole remedy; provided, that the Company covenants and agrees that it will not seek to
enforce such judgment without giving effect to Section 8.15 and until ten (10) Business Days after
such judgment is no longer subject to appeal or other review, and then only if Parent and Merger
Sub have not within such ten (10) Business Day period irrevocably committed in writing to the
Company to consummate the Merger in accordance with the terms and provisions of this Agreement and
Sponsor has not within such ten (10) Business Day period irrevocably committed in writing to the
Company to consummate the transactions contemplated by the Equity Commitment Letter in accordance
with the terms and provisions of the Equity Commitment Letter, in each case, as promptly as
practicable. Should Parent, Merger Sub and the Sponsor express such irrevocable commitments, the
parties hereto will cooperate with one another to consummate the Merger as promptly as practicable
and in any event within fifteen (15) Business Days of the giving of such irrevocable commitments.
If the Merger is not consummated within such fifteen (15) Business Day period as the result of the
failure of Parent, Merger Sub or the Sponsor to comply with such irrevocable commitments, the
Company shall be entitled to enforce such judgment. The Company agrees to cause any pending
proceeding to be dismissed with prejudice at such time as Parent and Merger Sub consummate the
Merger in accordance with this Agreement. For the avoidance of doubt, each of the parties hereto
acknowledges and agrees that the provisions of this Agreement and the Equity Commitment Letter are
intended to and shall allow the Company only a single recovery against Parent, Merger Sub and the
Sponsor, which recovery under no circumstances shall exceed, in the aggregate, the Parent Liability
Limitation.
59
(f) The parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement, the
Equity Commitment Letter, or the transactions contemplated hereby or thereby shall be exclusively
brought, heard and decided in the Delaware Court of Chancery (or (i) if, but only if, the Delaware
Court of Chancery has declined to accept jurisdiction over such suit, action or proceeding, the
United States District Court for the District of Delaware or (ii) if, but only if, the Chancery
Court and the United States District Court for the District of Delaware each declined to accept
jurisdiction over such suit, action or proceeding, the United States District Court for the
District of Massachusetts, or (iii) if, but only if, such Chancery Court, and each such United
States District Court have declined to accept jurisdiction over such suit, action or proceeding,
the Business Litigation Session of the Massachusetts Superior Court located in Boston,
Massachusetts), and each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by applicable Law, any objection that it
may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any
such court or that any such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum; provided, that any party may institute a suit, action or
proceeding in a court other than the above-named courts solely for the purpose of enforcing an
Order of one of the above-named courts, and further provided, that in the event that, and
for so long as, the Delaware Court of Chancery does not decline to accept jurisdiction over a
particular suit, action or proceeding, the parties hereto waive any right that they may have to
remove such suit, action or proceeding to a federal court, under 28 U.S.C. Section 1441 or
otherwise. Process in any such suit, action or proceeding may be served on any party anywhere in
the world, whether within or without the jurisdiction of any such court, consistent with applicable
Law. Without limiting the foregoing, each party agrees that service of process on such party by
personal delivery or by overnight courier as provided in Section 8.3 shall be deemed effective
service of process on such party. The parties further agree that each will jointly request or
consent to a motion brought by another party that any such suit, action or proceeding brought
pursuant to Section 8.6(d) hereof (or appeal therefrom) be heard and decided in an expedited manner
as may be permitted by the rules of the court in which such suit, action or proceeding is pending.
(g) If any party commences any suit, action or proceeding pursuant to this Agreement, in
addition to any amounts that may be owed pursuant to this Agreement, the prevailing party (as
determined by the court) shall recover its costs and expenses reasonably incurred in connection
therewith, including reasonable fees and expenses of attorneys and experts.
Section 8.7. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Law or public policy, then all other terms
and provisions of this Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party hereto. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
60
possible in an acceptable manner so that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.
Section 8.8. Third Party Beneficiaries. Except for (i) (A) the rights of the Company’s
stockholders to receive the Merger Consideration pursuant to and in accordance with Article 2, (B)
the rights of the holders of the Company Restricted Shares, Company Stock Options and Company RSUs,
and participants in the Company ESPP to receive the amounts described in Section 1.9 and (C) the
rights of the Indemnified Persons under Section 5.6 and (ii) the rights of the Parent Parties under
Section 8.15, Parent, Merger Sub and the Company hereby agree that their respective
representations, warranties, agreements and covenants set forth herein are solely for the benefit
of the other parties hereto, and this Agreement is not intended to, and does not, confer upon any
Person other than the parties hereto and their successors and permitted assigns any rights or
remedies hereunder, including the right to rely upon the representations and warranties set forth
herein. The parties hereto further agree that the rights of third party beneficiaries described in
clause (i) of the first sentence of this Section 8.8 shall not arise unless and until the Effective
Time occurs. The representations and warranties in this Agreement are the product of negotiations
among the parties hereto and are for the sole benefit of the parties hereto and their successors
and permitted assigns. Any inaccuracies in such representations and warranties are subject to
waiver by the parties hereto in accordance with Section 7.4 without notice or liability to any
other Person. In some instances, the representations and warranties in this Agreement may represent
an allocation among the parties hereto of risks associated with particular matters regardless of
the knowledge of any of the parties hereto. Consequently, Persons (other than the parties hereto)
may not rely upon the representations and warranties in this Agreement as characterizations of
actual facts or circumstances as of the date of this Agreement or as of any other date.
Section 8.9. Disclosure Schedule.
(a) The disclosure schedule delivered by the Company to Parent prior to the execution and
delivery of this Agreement (the “Company Disclosure Schedule”) and the disclosure schedules
delivered by Parent to the Company prior to the execution and delivery of this Agreement (the
“Parent Disclosure Schedule”) shall be arranged in sections and subsections corresponding to the
numbered Sections and lettered subsections of this Agreement, and the exceptions and disclosures in
each such section and subsection of the Company Disclosure Schedule or the Parent Disclosure
Schedule, as the case may be, shall apply to the correspondingly numbered Section and lettered
subsection of this Agreement and to each other numbered Section(s) or lettered subsection(s) of the
Agreement to the extent it is readily apparent on the face of each disclosure that such disclosure
is responsive to such other Section(s) or subsection(s).
(b) The inclusion of any information in the Company Disclosure Schedule or the Parent
Disclosure Schedule accompanying this Agreement will not be deemed an admission or acknowledgment,
in and of itself, solely by virtue of the inclusion of such information in such schedules, that
such information is required to be listed in such schedules or that such information is material to
any party or the conduct of the business of any party.
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Section 8.10. Counterparts. This Agreement may be executed by facsimile or electronic
transmission in pdf format and in one or more counterparts, each of which shall be deemed an
original but all of which together will constitute one and the same instrument, and shall become
effective when one or more counterparts have been signed by each of the parties and delivered to
the other parties.
Section 8.11. Headings. The Article and Section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or interpretation of
this Agreement.
Section 8.12. Interpretation. Any reference to any supranational, national, state,
provincial, municipal, local or foreign Law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context otherwise requires, and in each case as
amended or otherwise modified from time to time. When a reference is made in this Agreement to
Sections, Schedules or Exhibits, such reference shall be to a Section of or Schedule or Exhibit to
this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including”
are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”
Whenever the phrase “made available” is used in this Agreement, such phrase shall mean made
available, provided access to or otherwise disclosed in writing prior to 8:30 pm on April 2, 2010.
Section 8.13. No Presumption. With regard to each and every term and condition of
this Agreement, the parties hereto understand and agree that the same have or has been mutually
negotiated, prepared and drafted, and if at any time the parties hereto desire or are required to
interpret or construe any such term or condition or any agreement or instrument subject hereto, no
consideration shall be given to the issue of which party hereto actually prepared, drafted or
requested any term or condition of this Agreement or any agreement or instrument subject hereto.
Section 8.14. Undertaking by Parent. Parent shall cause Merger Sub to perform when
due all of Merger Sub’s obligations under this Agreement.
Section 8.15. Limitation of Liability. Notwithstanding anything in this Agreement to
the contrary, the maximum aggregate liability of Parent and Merger Sub under or in connection with
this Agreement and the transactions contemplated hereby shall be limited to $139,000,000 (the
“Parent Liability Limitation”) and in no event shall the Company seek multiple or punitive
damages against Parent or Merger Sub, or any recovery, judgment or damages or any kind against
Parent or Merger Sub in excess of the Parent Liability Limitation. The Company acknowledges,
covenants and agrees that it has and shall have no right of recovery against, and no liability
shall attach to, including in each case with respect to any actual or claimed loss or damages of
any kind of the Company and its Subsidiaries, Affiliates, Representatives or stockholders or any
other Person claiming by, through or for the benefit of the Company (“Company Damages”),
any of the Parent Parties (as defined below) (other than the Company’s right to recover against
Parent and Merger Sub to the extent provided in this Agreement or against the Sponsor to the extent
provided in the Equity Commitment Letter), through Parent or otherwise, whether by or through
attempted piercing of the corporate, limited partnership or
62
limited liability company veil, by or
through a claim by or on behalf of Parent, by the enforcement of any assessment or by any legal or
equitable proceeding, by virtue of any applicable Law, through a claim based in tort, contract,
statute or otherwise. Specific performance of the Sponsor’s obligations to the Company under the
Equity Commitment Letter shall (subject to the Company’s right to receive damages pursuant to the
terms, conditions and limitations of Section 8(e) of the Equity Commitment Letter) be the sole and
exclusive remedy of the Company and its Subsidiaries, Affiliates, Representatives and stockholders,
and any other Person claiming by, through or for the benefit of the Company, against the Sponsor
and any other Parent Party (other than Parent and Merger Sub to the extent provided in this
Agreement) in respect of any liabilities or obligations arising under, or in connection with, this
Agreement, the Equity Commitment Letter, any document or instrument delivered in connection
herewith or therewith, or the transactions contemplated hereby or thereby, including any claim for
Company Damages. For purposes hereof, “Parent Parties” shall mean, collectively, Parent,
Merger Sub, the Sponsor, any debt financing sources of Parent, and any and all of their respective
former, current or future, direct or indirect directors, officers, employees, agents, equity
holders or investors (whether such investor or holder is a limited or general partner, member,
stockholder or otherwise), controlling persons, general or limited partners, managers, management
companies, members, stockholders, Affiliates or assignees, any former, current or future directors,
officers, employees, agents, general or limited partners, managers, management companies, members,
stockholders, Affiliates or assignees of any of the foregoing, and any and all former, current or
future heirs, executors, administrators, successors or assigns of any of the foregoing.
Section 8.16. Definitions. For purposes of this Agreement,
(a) “Acceptable Confidentiality Agreement” means a confidentiality agreement substantially in
the form approved by the Board of Directors of the Company or a special committee thereof;
provided, that such Acceptable Confidentiality Agreement shall contain (i) standstill
provisions that are no less favorable to the Company than those contained in the Confidentiality
Agreement and at least as long in duration as those set forth in the Confidentiality Agreement, and
(ii) provisions concerning the confidentiality of non-public information no less favorable to the
Company than those contained in the Confidentiality Agreement.
(b) “Acquisition Proposal” means any inquiry, proposal or offer from any Person or groups of
Persons other than Parent or Merger Sub or any of their respective Affiliates (in each case,
whether or not in writing and whether or not delivered to the stockholders of the Company
generally) relating to: (i) any direct or indirect acquisition or purchase of a business or assets
of the Company or any of its Subsidiaries that constitute 20% or more of the consolidated revenues,
net income or assets of the Company or of 20% or more of any class of equity securities of the
Company or any of its Subsidiaries (whether by merger, reorganization, share exchange,
consolidation, business combination, sale of assets, recapitalization, liquidation, dissolution or
other form of transaction or series of related transactions); (ii) any tender offer or exchange
offer that, if consummated, would result in any Person beneficially owning 20% or more of any class
of equity securities of the Company; and (iii) any merger, reorganization, share exchange,
consolidation, business combination, recapitalization, liquidation, dissolution or other form of
transaction (or series of related transactions) involving the Company or any of its
63
Subsidiaries
pursuant to which any Person or the stockholders of any such Person would own 20% or more of any
class of equity securities of the Company or any successor entity.
(c) “Affiliates” means, as to any Person, any other Person that, directly or indirectly,
controls, or is controlled by, or is under common control with, such Person. As used in this
definition, “Control” (including, with its correlative meanings, “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the powers to direct or cause the
direction of management or policies of a Person, through the ownership of securities or partnership
or other ownership interests, by contract or otherwise.
(d) “Business Day” means any day on which banks are not required or authorized to close in the
City of Boston, Massachusetts or New York, New York.
(e) “Company Equity Awards” means the RSUs and the Company Stock Options.
(f) “Company Stock Plans” means the 1992 Long Term Incentive Plan, the Amended and Restated
2001 Stock Plan and the Employees Stock Purchase Plan, each as amended.
(g) “Contracts” means any written or binding oral agreement, contract, loan or credit
agreement, note, mortgage, bond, indenture, lease, benefit plan, permit, franchise, license or
other legally binding instrument or arrangement.
(h) “Environmental Claim” means a notice from any Person (i) that the Company or its
Subsidiaries has been identified by the EPA or similar state authority as a potentially responsible
party under CERCLA or any comparable State law with respect to a site listed or proposed to be
listed on the “National Priorities List,” as in effect as of the Closing Date, of hazardous waste
sites or any similar state list; or (ii) that Hazardous Materials which the Company has generated,
transported, or disposed of has been found at any site at which a Person has conducted, is in the
process of conducting or has ordered that the Company conduct a remedial investigation, removal, or
other response action pursuant to any Environmental Laws.
(i) “Environmental Laws” means any federal, state or local law, the purpose of which is the
protection of the environment, including, without limitation, the Federal Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA), as amended, 42 U.S.C. 9601 et
seq., the Federal Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Federal Resource
Conservation and Recovery Act as amended, 42 U.S.C. 6901 et seq., the Federal Hazardous Material
Transportation Act, the Federal Clean Air Act, and the Federal Water Pollution Control Act.
(j) “Environmental Permits” means permits that are required by Environmental Laws for the
operation of the Company as currently conducted.
(k) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
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(l) “ERISA Affiliate” means any entity required to be aggregated with the Company under
section 414(b), (c), (m), or (o) of the Code.
(m) “Guarantee” means, with respect to any Person, (a) any guarantee of the payment or
performance of, or any contingent obligation in respect of, any Indebtedness or other liability of
any other Person, (b) any other arrangement whereby credit is extended to any obligor (other than
such Person) on the basis of any promise or undertaking of such Person (i) to pay the Indebtedness
or other liability of such obligor, (ii) to purchase any obligation owed by such obligor, (iii) to
purchase or lease assets under circumstances that are designed to enable such obligor to discharge
one or more of its obligations or (iv) to maintain the capital, working capital, solvency or
general financial condition of such obligor and (c) any liability as a general partner of a
partnership or as a venturer in a joint venture in respect of Indebtedness or other liabilities of
such partnership or venture.
(n) “Hazardous Substance” means: (i) any petroleum, hazardous or toxic petroleum-derived
substance or petroleum product, flammable or explosive material, radioactive materials, asbestos in
any form that is or could become friable, urea formaldehyde foam insulation, foundry sand or
polychlorinated biphenyls (PCBs); (ii) any chemical or other material or substance that is
regulated, classified or defined as or included in the definition of “hazardous substance,”
“hazardous waste,” “hazardous material,” “extremely hazardous substance,” “restricted hazardous
waste,” “toxic substance,” “toxic pollutant,” “pollutant” or “contaminant” under any applicable
Law, or any similar denomination intended to classify substance by reason of toxicity,
carcinogenicity, ignitability, corrosivity or reactivity under any applicable Law; or (iii) any
other chemical or other material, waste or substance, exposure to which is prohibited, limited or
regulated by or under any applicable Law.
(o) “Indebtedness” means, with respect to any Person, all obligations (including all
obligations in respect of principal, accrued interest, penalties, fees and premiums) of such Person
(without duplication): (i) for borrowed money (including obligations in respect of drawings under
overdraft facilities), (ii) evidenced by notes, bonds, debentures or similar Contracts, (iii) for
the deferred purchase price of property, goods or services (other than trade payables or accruals
incurred in the ordinary course of business consistent with past practices), (iv) under capital
leases (in accordance with GAAP), (v) in respect of outstanding letters of credit and bankers’
acceptances or (vi) for Contracts relating to interest rate protection, swap agreements and collar
agreements.
(p) “Intervening Event” means a material event on or relating to the business, results of
operations or financial condition of the Company and its Subsidiaries taken as a whole that was not
known to the Board of Directors or senior management of the Company on the date of this Agreement
(or if known, the consequences of which were not known to or reasonably foreseeable by the Board of
Directors or senior management of the Company as of the date hereof), which event, or any material
consequences thereof, becomes known to the Board of Directors of the Company prior to the time at
which the Company receives the Company Requisite Stockholder Approval; provided, however,
that (i) in no event shall the receipt, existence or terms of a Acquisition Proposal or any matter
relating thereto or consequence thereof constitute an Intervening Event and (ii) in no event shall
the Company
65
meeting or exceeding any internal or published estimates, projections, forecasts or
predictions relating to revenues, earnings or profits for any period constitute an Intervening
Event.
(q) “knowledge” or “known” means, with respect to the Company, the actual conscious awareness
of one or more of the individuals set forth on Section 8.16(q) of the Company Disclosure Schedule
and, with respect to Parent, the actual conscious awareness of one or more of the individuals set
forth on Section 8.16(q) of the Parent Disclosure Schedule.
(r) “Lien” means a lien, pledge, charge, easement, covenant, restriction or other similar
matter affecting title, encumbrance or other security interest of any nature whatsoever.
(s) “Material Adverse Effect on Parent” means any effect, change, event, occurrence,
circumstance or development that, individually or in the aggregate, prevents, materially delays or
materially affects, or would reasonably be expected to prevent, materially delay or materially
affect, the ability of Parent or Merger Sub to consummate the transactions contemplated by, or to
perform its obligations under, this Agreement prior to the Termination Date; provided,
however, that, a “Material Adverse Effect on Parent” shall not be deemed to mean or include any
such change, effect, condition, factor or circumstance to the extent arising as a result of the
pendency and/or investigation of the Merger by a Governmental Entity.
(t) “Material Adverse Effect on the Company” means any effect, change, event, occurrence,
circumstance or development that (i) has, or would be reasonably expected to have, a material
adverse effect on the business, results of operations, properties or financial condition of the
Company and its Subsidiaries taken as a whole or (ii) prevents, materially delays or materially
affects, or would reasonably be expected to prevent, materially delay or materially affect, the
ability of the Company to consummate the transactions contemplated by, or to perform its
obligations under, this Agreement prior to the Termination Date; provided, however,
that, a “Material Adverse Effect on the Company” shall not be deemed to mean or include any such
change, effect, condition, factor, circumstance or development to the extent arising as a result
of: (i) general changes, factors or developments in the industries in which the Company and its
Subsidiaries operate, except, in each case, to the extent those changes, factors or developments
that disproportionately impact (relative to similarly situated businesses) the business, results of
operations, properties or financial condition of the Company and its Subsidiaries taken as a whole;
(ii) changes, after the date of this Agreement, in Laws of general applicability or interpretations
thereof by courts or other Governmental Entities, except to the extent any of the same materially
disproportionately impacts the Company as compared to other companies in the industry in which the
Company and its Subsidiaries operate; (iii) changes, after the date of this Agreement, in GAAP or
the rules or policies of the Public Company Accounting Oversight Board; (iv) any act or omission by
the Company or any of its Subsidiaries taken with the prior written consent of Parent in
contemplation of the Merger; (v) costs or expenses reasonably incurred or accrued in connection
with the Merger (and not otherwise in breach of this Agreement); (vi) a change to the United States
economy in general or global economic conditions that do not disproportionately affect the Company
and its Subsidiaries as compared to other similarly situated companies in the Company’s industry;
(vii) the announcement, of this Agreement or the Merger, including the identity of Sponsor, Parent,
and Merger Sub, the
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execution, delivery or performance of this Agreement, including, without
limitation in any such case, the impact thereof on relationships with customers, employees or
suppliers to the extent caused by such announcement, execution or performance (in each case, other
than as relates to any breach of any representation or warranty contained in Section 3.4 or any
other representations and warranties relating to required notices, waivers, consents or approvals
arising from or relating to a change in ownership or control of the Company or any of its
Subsidiaries, the consummation of the Merger and other transactions contemplated hereby or the
execution, delivery or performance of this Agreement); (viii) any failure by the Company to meet
any internal or published estimates, projections, forecasts or predictions relating to revenues,
earnings or losses for any period ending on or after the date of this Agreement and prior to the
Closing (provided, that the underlying causes of such failure or changes shall not be excluded,
unless excluded by another clause of this proviso); (ix) a decline in the stock price of the
Company Common Stock on The NASDAQ Global Market or the delisting of the Company Common Stock from
the NASDAQ Global Market (provided, that the underlying causes of such decline or delisting shall
not be excluded, unless excluded by another clause of this proviso); or (x) the outbreak or
escalation of hostilities involving the United States, the declaration by the United States of a
national emergency or war or the occurrence of any other calamity or crisis, including an act of
terrorism in each case, occurring after the date hereof.
(u) “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section
4001(a)(3) of ERISA.
(v) “Permitted Liens” shall mean (a) statutory liens for Taxes, assessments or other charges
by Governmental Entities not yet due and payable or the amount or validity of which is being
contested in good faith and by appropriate proceedings and for which adequate reserves have been
established in the financial statements contained in the Company SEC Reports, (b) mechanics’,
materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s, landlords’ and similar liens
granted or which arise in the ordinary course of business and which are not delinquent or the
amount or validity of which is being contested in good faith and by appropriate proceedings and for
which adequate reserves have been established in the financial statements contained in the Company
SEC Reports, (c) with respect to property other than Owned Property or Leased Property, such other
liens, encumbrances or imperfections that are not material in amount or do not materially detract
from the value of or materially impair the existing use of the property affected by such lien,
encumbrance or imperfection and (d) with respect to any parcel of Owned Property or Leased
Property, (i) easements, rights-of-way, encroachments, restrictions, conditions and other similar
encumbrances incurred or suffered in the ordinary course of business and which, individually or in
the aggregate, (y) are not material in character, amount or extent in relation to the applicable
Owned Property or Leased Property and (z) do not and would not reasonably be expected to materially
impair the use (or contemplated use), utility or value of the applicable Owned Property or Leased
Property or otherwise materially impair the present or contemplated business operations at such
location by the Company or any Subsidiary thereof and (ii) zoning, entitlement, building and other
land use regulations imposed by Governmental Entities having jurisdiction over such Owned Property
or Leased Property, which are not violated by the current use and operation of such Owned Property
or Leased Property.
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(w) “Person” means an individual, a corporation, a partnership, a limited liability company,
an association, a trust or any other entity or organization, including a Governmental Entity.
(x) “Representatives” means with respect to any Person, that Person’s officers, directors,
employees, auditors, investment bankers, counsel, agents and other representatives.
(y) “Subsidiaries” of any Person means any corporation or other form of legal entity with
respect to which such Person owns or controls, directly or indirectly through one or more of its
Subsidiaries, an amount of the outstanding voting securities that is sufficient to elect at least a
majority of its board of directors or other governing body or the right to receive 50% or more of
the residual net assets of such entity available for distributions to the holders of outstanding
equity interests upon a liquidation or dissolution of such entity.
(z) “Superior Proposal” means a bona fide written Acquisition Proposal made by any Person or
group of Persons other than Parent or Merger Sub or any of their respective Affiliates that the
Board of Directors of the Company or a special committee of the Board of Directors formed to
evaluate such Acquisition Proposal determines in good faith, after consultation with its financial
advisor and outside legal counsel, is more favorable from a financial point of view to the
Company’s stockholders (solely in their capacity as such) than the transactions contemplated hereby
(including, to the extent applicable, any proposal or offer by Parent for an adjustment to the
terms and conditions of this Agreement pursuant to Section 5.5(f)), after taking into account all
relevant factors, including all legal, financial (including, the certainty of any financing
commitment therefor relative to the commitment set forth in the Equity Commitment Letter),
regulatory and other aspects of such proposal, and is reasonably likely to be consummated on the
terms proposed; provided, that for purposes of the definition of “Superior Proposal”, the
references to “20%” in the definition of Acquisition Proposal shall be deemed to be references to
“50%”.
(aa) “Tax Return” means a return, report, estimate, claim for refund or other information,
form or statement relating to, or required to be filed or supplied in connection with, any Taxes,
including, where permitted or required, combined or consolidated returns for a group of entities
and including any amendment thereof, including any schedule or attachment thereto.
(bb) “Taxes” means (i) all taxes, charges, fees, levies, or other assessments, of any kind
whatsoever, imposed by any Governmental Entity, including income, excise, real property, personal
property, sales, use, transfer, escheat, franchise, capital stock, license, payroll, withholding,
social security, unemployment, disability, estimated, value added, alternative or add-on minimum or
other taxes, including any interest and penalties (civil or criminal) on or additions thereto,
whether disputed or not, and (ii) any liability for the payment of the amounts specified in clause
(i) of this definition as a result of being a member of an affiliated, consolidated, combined or
unitary group for any period, or a result of transferee or successor liability in respect of Taxes
imposed by contract, tax sharing agreement, tax indemnity agreement or any similar agreement or
otherwise.
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[The next page is the signature page.]
69
The parties hereto have executed this Agreement and Plan of Merger under seal as of the
date first written above.
GDC HOLDINGS, INC. |
||||
By: | /s/ Xxxxxx Xxxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxxx | |||
Title: | President and Chief Executive Officer | |||
ROYAL ACQUISITION CORP. |
||||
By: | /s/ Xxxxxx Xxxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxxx | |||
Title: | President and Chief Executive Officer | |||
NATIONAL DENTEX CORPORATION |
||||
By: | /s/ Xxxxx X. Xxxxx | |||
Name: | Xxxxx X. Xxxxx | |||
Title: | Chairman and Chief Executive Officer | |||